CO129-383 - Public Offices - 1911 — Page 460

[This Document is the Property of His Britannic Majesty's Government.]

C.0

AFFAIRS OF CHINA,

19637

CONFIDENTIAL.

Rec

TREE? 16 JUN 11

[May 8.]

SECTION 1.

No. 1.

[17267]

(No. 162.) Sir,

Sir J. Jordan to Sir Edward Grey.-(Received May 8.)

Peking, April 19, 1911. WITH reference to my despatch No. 155 of the 12th instant, I have the honour to enclose the copy of the loan agreement for 10,000,000 yen signed between the Yokohama Specie Bank and the Chinese Board of Posts and Communications.

The following additional points in this transaction may be briefly noted:- The repayment of principal and the payment of interest are to be made in the first place out of the revenue of the Peking-Hankow Railway, due account being taken of the prior claims of the British loan of 1908. Should the revenue of the Peking-Hankow Railway be insufficient, the Chinese Government are to make arrangements to ensure that the deficiency shall be net from other sources. The loan is secured, as a first charge, on the revenue derived from the grain tribute of the province of Kiangsu to the amount of 1,000,000 taels. In default of payment, the above revenue is to be handed over to the bank in the interest of the bondholders. The Japanese had therefore good reason for the statement that the security was ample.

The purpose of the loan is to redeem another loan which is described rather vaguely in the preamble. It is, however, scarcely a secret that the Board of Communications have borrowed funds from the Naval Board for the purposes of the Peking-Hankow Railway, the permanent way of which is in a notoriously defective state, and that these further borrowings are required to adjust the accounts of those two departments of the Government.

I have, &c.

J. N. JORDAN.

Enclosure in No. 1.

Agreement between the Board of Posts and Communications and the Yokohama Specie Bank (Limited), respecting 5 per Cent. Gold Loan of the 3rd year of Hsuan T'ung (1911).

(Confidential.)

WHEREAS the Board of Posts and Communications of the Imperial Government of China has, for the purpose of redeeming a loan item which has been contracted for and in connection with the Government railway, and is due to another department of the Government, decided to raise a gold loan for au amount of 10,000,000 yen, this agreement is now made at Peking on this 24th day of the 2nd month of the 3rd year of Hsuan Tung, corresponding to the

day of the

month of the 44th year ol Meiji (24th March, 1911), between the Board of Posts and Communications, hereinafter called the board, representing the Imperial Government of China, of the one part, and the Yokohama Specie Bank (Limited), hereinafter called the bank, of the other part.

Article 1. The Imperial Government of China hereby authorises the bank to issue a 5 per cent. gold loan for an amount of 10,000,000 yen.

The loan shall be of the date on which the same is issued to the public, and shall be called "The Imperial Chinese Government 5 per Cent. Railway Loan of the 3rd

year of Hsuan Tung."

Art. 2. The price of the bonds agreed upon is 95 per cent, of the nominal face value, that is to say, the Imperial Government of China shall receive 95

yen for each 100-yen bond, and at the time of the repayment of the loan, which will be made according to the schedule attached to this agreement, the bondholders shall receive the face value of the bonds in full, that is to say, 100 yen for each bond.

Art. 3. The rate of interest for the loan shall be 5 per cent. per annum on the nominal principal, that is to say, 5 yen per every 100 yen face value, and the interest

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