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matured will be collected in their due sequence by the banks and be delivered by them to the Chinese Ministers in Great Britain, Germany, France, and America; and the banks will refund in full the principal or interest due on any drawn bonds and interest coupons which are not presented for payment within thirty years from the respective due date for redemption or payment of interest."
Article 7-The yearly payments due for amortisation and interest, besides com- plying with the conditions named in articles 4 and 5, shall be made by the director- general of the railways in accordance with the amounts and dates of the schedule attached to this agreement, by handing to the banks in Shanghai or in Hankow funds in silver currency having a círculation in China, sufficient to meet such payments in gold in western countries, exchange for which shall be settled with the banks on the same day.
If and when in the course of time the Chinese new national currency has been issued, this provision shall admit of payments being made in national currency at Shanghai or Hankow. The exchange between gold and silver shall be calculated at the rate generally accepted in the international market at the time, or this may be settled at any time within six months before any due date for the payment of interest and (or) capital.
(Iere follow a few characters apparently redundant.)
These payments may, however, be made in gold in Europe or America, &c. (as in original to end of article.)
Article 8-No change.
Article 9.--For "Haikuan taels " in 1, 2, 3, 4, 5 and 6 read "Kuping taels." The six classes of provincial revenue enumerated above amount approximately to 5,200,000 Kuping taels, and this sum of 5,200,000 Kuping taels shall be converted into terms of Haikuan taels.
The above provincial revenues cannot be, &c. (correction in Chinese required here) and irrespective of the amount yielded in any year by these revenues only this amount of Kuping taels converted into terms of 5,200,000 Haikuan taels will form the security for this loan. If the amount yielded exceeds this figure such surplus will not be included in the security.
So long as principal and interest of this loan are paid in accordance with this agreement the banks shall not interfere with these provincial revenues; but if principal or interest cannot be paid in accordance with this agreement at the due dates, then, after a reasonable period of grace, the Chinese Government will instruct the provinces concerned to pay over the six classes of provincial revenue enumerated above to the extent of such an amount as will fully supplement the deficiency in payments of principal or interest in order that the rights of the bondholders may be safeguarded. In the future, if these provincial revenues are again offered as security, the principal and interest of the present loan shall always enjoy priority of repayment. Before any part of this loan has been repaid or before it has been completely repaid, if the li-kin revenues of the two provinces are employed as security for other loans, the arrangements necessary for payments of principal or interest cannot be made to take precedence of this loan or be on an equality with this loan, or in any manner lessen or impair its security over the aforesaid li-kin revenues of the two provinces and any future loan, &c. (as in original from top of p. 5 to end of article).
Article 10,-The banks
as may appear advisable to the banks.
The form and wording of the bonds shall be proposed by the banks and be submitted by them to the Board of Communications for approval. But their form and wording in the four countries of Great Britain, France, Germany, and America must not vary, though the language shall be that prevailing in each country, respectively, in order that purchasers of these bonds may easily understand their terms.
When the form and wording of the bonds have been approved, they shall be impressed with the facsimile of the signature of the president of the Board of Communications and of the board's seal, in order to dispense with the necessity, &c. (as in original, to end of article, with addition of words "Washington" and "New York," in the proper places).
Article 11-No alteration.
Article 12.-No alteration, except addition of the word "Washington" in proper place.
Article 13. Add the word "America" after "Europe" and "Americans" after "Europeans."
Penultimate line: For "seven days" read "fourteen days."
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Article 14.--The proceeds of the loan shall be paid to the credit of a Canton- Hankow (Hupei and Hunan sections) and Szechuan-Hankow (Hupei section) Railways account, with the Hong Kong and Shanghai Banking Corporation, the Deutsch- Asiatische Bank, the Banque de l'Indo-Chine, and the International Banking Corporation, in China, England, Germany, France, or America, as the case may be. Payments of loan proceeds into the credit of this account shall be made in instalments and on dates conforming to the conditions allowed to the subscribers to the loan.
Interest at the rate of 4 per cent, per annum shall be granted on the credit balance of the portion of this account kept in London, Berlin, Paris, and New York; and after provision has been made for the purchase of foreign materials, it shall rest with the Board of Communications to settle exchange as required and transfer funds to China. The portion of the loan funds in silver, kept in China, shall be deposited, at the discretion of the Board of Communications, to the extent of one-half in the Board of Communications bank (Chiao Tung Bank), the Ta Ching Bank, and the Imperial Bank of China, and to the extent of one-half in the banks nominated by the British, German, French, and American parties to this agreement, namely, the Hong Kong and Shanghai Bank and the Deutsch-Asiatische Bank, either at current account or on fixed deposit. Interest on these funds shall be granted at the most favourable rates obtainable in the local market.
Subject to the payments and deductions to be made from the loan proceeds in the terms of articles 2 and 3. ... (as in original, substituting " Board of Communications or "the International Banking director-general" for "director-general," and adding Corporation." after "the Banque de l'Indo-Chine," down to the words "20,000%,” and continue), and the transferred funds shall remain ou deposit with the aforesaid Chinese and foreign banks until required to be withdrawn in equal proportions for railway purposes, at the discretion of the Board of Communications or the director- general of the railways. (Here follow some redundant characters.)
With the exception of the funds held by the Chinese banks, all the funds to be used for and on account of the Canton-Hanków Railway within the boundaries of the two provinces of Hunan and Hupei, for construction purposes, shall be deposited with the Hong Kong and Shanghai Bank, and all the funds to be used for and on account of the Szechuan-Hankow Railway, within the boundaries of the province of Hupei, for construction purposes, shall be deposited with the Deutsch-Asiatische Bank.
Requisitions on these construction accounts will be drawn in amounts to suit the progress of construction of the railway lines by orders upon the Chiao Tung Bank, the Ta Ching Bank, the Imperial Bank of China, or the Hong Kong and Shanghai Bank, or Deutsch-Asiatische Bank, signed by the Board of Communications and the director- general of the railways, or of his duly authorised representative, who shall moreover, two days previous to the presentation of such order, issue in duplicate a certificate stating clearly the object of the funds to be drawn, handing one copy to the auditor (Note "hereinafter referred to" omitted) and one copy to the bank concerned.
The accounts of the railway will be kept in Chinese and English (Note-" and (or) German" omitted) in accordance with (as in original to end of article. By
"the banks are here entitled the "syndicate Or company." Article 15.-If after deduction (as in original to the words "will be the same as in the present agreement." Note.--Full stop in lieu of comma.)
Continue (omitting stipulation that price shall be actual rate of issue less five and a-half points.)
error
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If after completion of the lines there should be a balance at the credit of the railways' account, such unused balance will be transferred to the credit of the interest reserve fund hereinafter mentioned in article 20 as a provision for payments for which the Imperial Chinese Government is responsible under this agreement, or will be devoted, if necessary, to the improvement of these railways, or otherwise to their advantage.
Article 16.-On last line of p. 7 for "eighteen months " read "twelve months." Article 17.-The construction and control of the railway lines shall be entirely and exclusively vested in the Imperial Chinese Government. For the work of con- struction the Imperial Chinese Government will itself select for employment a British subject as engineer-in-chief for the construction of the Canton-Hankow Railway within the boundaries of the two provinces of Hupei and Hunan, and similarly will itself select a German subject for employment as engineer-in-chief for the construction of the Szechuan-Hankow Railway within the boundaries of the province of Hupei. If the banks have objections to offer against the engineers-in-chief thus selected for employment, they shall, in stating their objections, have valid reasons therefore.
[1985 k-37
C
287
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