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shall be paid to the bondholders half-yearly through the bank. The interest shall run from the date on which amounts of the proceeds of the loan shall have been placed to the credit account of the board with and in the bank, and the same notified to the board, and shall be paid by the Imperial Government of China in the first place out of the revenue of the Peking-Hankow Railway (after deducting the amounts required for payment of the principal and interest of the Chinese Imperial 5 per cent. gold loan of 1908 and of the Peking-Hankow Railway redemption loan of the same year), but should it be found that the above revenue is not sufficient to meet the amount required, then out of such revenue as the Imperial Government of China may deem fit to use for the purpose. The said payment shall be made to the bank in half-yearly instalments according to the amounts specified in the schedule attaclied to this agree- ment, and ten days before their due dates.
The terms inentioned herein and elsewhere in this agreement shall be calculated according to the solar calendar.
Art. 4. The term of the loan shall be twenty-five years.
Repayment of the principal shall commence, by annual drawings, after the expiry of ten years from the date of the loan, and shall be made by yearly amortisation to the bank by the Imperial Government of China in the first place out of the revenue of the Peking-Hankow Railway (after deducting the amounts required for payment of the principal and interest of the Chinese Imperial 5 per cent, gold loan of 1908 and of the Peking-Hankow Railway redemption loan of the same year), but should it be found that the above revenue is not sufficient to meet the amount required, then out of such revenue as the Imperial Government of China may deem fit to use for the purpose, according to the amounts specified in the schedule attached to this agreement, and ten days before their duc dates.
Art. 5. If at any time after the lapse of ten years from the date of the issue of this loan the Imperial Government of China should desire to redeem the whole outstanding amount of the loan, or any part thereof, not yet due for repayment according to the schedule of repayment hereto attached, they may do so until the end of the twentieth year by payment of a premium of 24 per cent. on the face value of the bonds, that is to say, by payment of 1024 yen for each 100-yen bond and after the twentieth year at par, but in each and every case of such extra redemption the Imperial Government of China through the board shall give six months prior notice to the bank, and each redemption shall be effected by additional drawings of bonds to take place on the date of an ordinary drawing.
Art. 6. The bank having been appointed agent for the service of the loan, the payments due for amortisation and interest referred to in articles 3 and 4 sball be made in accordance with the amounts of the schedule attached to this agreement as fixed by articles 3 and 4 to the bank by the board, who shall hand to the said bank in Shanghai or in Tien-tsin funds in Shanghai or in Tien-tsin sycee or in new national currency after its circulation sufficient to meet such payments in gold in Japan, exchange for which shall be settled with the said bank on the basis of exchange rate of the same day, the board having, however, the option of settling exchange with the bank at any date or dates within six months previous to any due date for the payment of interest and the repayment of principal. These payments may, however, be made in gold, if the Imperial Government of China should happen to have gold funds bond fide at their disposal in Japan, Europe, or (and) America, not remitted from China for the purpose, and desire so to use them.
In reimbursement of the expenses connected with the payment of interest and the repayment of principal of the loan, the bank will receive a commission of 2 yen per every 1,000 yen, or 22 per milli [sic] on the aunual loan service.
Art. 7. The Imperial Government of China hereby engages that the interest and principal of this loan shall duly be paid in full, and should the revenue of the Peking- Hankow Railway not be sufficient to provide for the due and full payment of interest and repayment of principal, the board shall memorialise the Throne, and the Imperial Government of China will thereupon make arrangement to ensure that the amount of deficiency shall be met from other sources and handed over to the bank on the date upon which funds are required, to complete full payment of interest and repayment of principal.
Art. 8. This loan is secured by the first charge, free from all encumbrances, upon the revenue of the Board of Finance (Tuchi Pu), under the item of the "Tribute- Grain Conversion Tax" of the Province of Kiangsu in the Empire of China, to the amount of 1,000,000 Kuping taels.
In the event of default of payment of instalment of the principal and (or) interest
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of this loan on due date, the Imperial Government of China will instruct the proper authorities in control of the said revenue to hand it over to the bank in the interest of bondholders.
It is agreed that so long as this loan or any part thereof shall remain unredeemed, the same shall have priority, both as regards principal and interest, over all future loans, charges, and (or) mortgages charged on the above-mentioned revenue, and it is further agreed that any and all future loans, charges, and (or) mortgages on the said revenue shall be made subject to this loan, and it shall be so expressed in every agreement for such future loan, charge, and (or) mortgage, and that previous to conclusion of any such agreement express notice thereof shall be given to the bank.
Art. 9. The bank is hereby authorised to issue to the subscribers to the loan bonds for the total amount of the loan. The form of the bonds shall be settled by the bank, in consultation with the Chinese Minister in Tokyo. The bonds shall be engraved in Japanese and Chinese, or in Chinese, Japanese, and English, according as found convenient; they shall, besides bearing fac-simile of the signature of the president of the board and of his seal of office, also bear fac-simile of the signature of the Chinese Minister in Tokyo and of his seal of office, latter particularly as a proof that the issue and sale of the bonds are duly authorised by and binding upon the Imperial Govern- ment of China, and the representatives of the bank in Japan shall countersign the bonds as agents for the issue of the loan.
In the event of bonds issued for this loan being lost, stolen, or destroyed, the bank shall thereupon immediately notify the board and the Chinese Minister in Tokyo, who shall authorise the bank to insert advertisement in the public newspapers notifying that payment of the same has been stopped, and to take such other steps as may appear advisable or necessary according to the laws and customs of the country
concerned.
All expenses to be incurred under this article shall be borne by the bank. Art. 10. All bonds and coupons and payments made and received in connection with the service of this loan shall be exempt from all Chinese taxes and imposts during the currency of this loan.
Art. 11. All details necessary for the prospectus, or connected with payment of the interest and repayment of the principal of the loan, not herein explicitly provided for, shall be left to the arrangement of the bank in consultation with the Chinese Minister in Tokyo.
The bank is hereby authorised to issue the prospectus of the loan as soon as possible after the signature of this agreement, and the Imperial Government of China will instruct the Chinese Minister in Tokyo to sign the prospectus of the loan if deemed necessary, and to co-operate with the bank in any matters requiring conjoint action.
Art. 12. The loan shall be issued by the bank to the public in one series as soon as possible after the signature of this agreement, and after issue of the loan, amounts of the proceeds of the loan received shall be notified to the board, and shall be placed to the credit account of the board with and in the bank to the disposal of the board.
The above funds may be transferred, at the request of the board from time to time, either to China or any other country or countries, or may be deposited temporarily in Japan to earn interest, such transactions being always effected through the bank.
Art. 13. The bank agrees to advance to the board, within one month after and from the date of signing this agreement, a sum not exceeding 2,000,000 yen, for the service of which interest at the rate of 6 per cent. per annum shall be paid, commencing from the date of such advance, and it is further agreed and understood that repayment of the sum so advanced, with the interest accrued thereon, shall be made in full and at once out of the proceeds of the first instalment of subscriptions to this loan.
All transactions connected with transferring, depositing, or disposal of these funds shall be done according to the second clause of article 12 of this agreement.
Art. 14. This agreement is signed by the president of the Board of Posts and Communications, under the authority of an Imperial edict, dated the day of the month of the third year of Hsuan Tung, corresponding to the day of the month of the forty-fourth year of Meiji (
, 1911), which will be
officially communicated by the Wai-wu Pu to the Minister for Japan in Peking.
Art. 15. Five sets of this agreement are executed in English, Chinese, and Japanese, three sets to be retained by the Imperial Government of China and two by
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