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National City Bank, all of New York, constituting the American group; the Hong Kong and Shanghai Banking Corporation; the Deutsch-Asiatische Bank; the Banque de l'Indo-Chine, hereinafter called "the banks," of the other part, witnesseth as follows:-
Whereas the Imperial Chinese Government, desiring to reform and to render uniform its currency system in accordance with a programme which has been prepared, and to undertake certain industrial enterprises in Manchuria, proposes to negotiate a loan for these purposes and to evidence the same by the issue of Imperial Chinese Government sinking fund gold bonds, hereinafter called "the bonds," in an aggregate principal amount not exceeding 10,000,0007., in manner and form as herein- after set forth; and
Whereas the preliminary agreement providing for the negotiation of this final agreement for the loan for the purposes above mentioned was duly signed by the Board of Finance with the American group at Peking on the 25th day of the 9th moon of the 2nd year of Hsuan Tung, being the 27th day of October, 1910, Western calendar, and was subsequently ratified by Imperial edict; and
Whereas the American group being now associated with the Hong Kong and Shanghai Banking Corporation, the Deutsch-Asiatische Bank, and the Banque de l'Indo-Chine, the Imperial Chinese Government has consented that these banks shall, with the American group, participate in the issue of the loan hereunder;
Therefore it is agreed as follows :----
Article 1. The preliminary agreement hereinbefore mentioned shall be considered binding only as interpreted by this agreement.
Art. 2. The Imperial Chinese Government authorises the banks to issue a 5 per cent. sinking fund gold loan for an aggregate amount of 10,000,0001. The loan shall be of the date on which the bonds are issued to the public, and shall be called “the Imperial Chinese Government 5 per cent. currency reform and industrial develop- ment sinking fund gold loan of 1911.”
Art. 3. The proceeds of the loan shall be used and applied as hereinafter determined, for the following purposes.
(a) To provide funds for the reform of, and to render uniform, the Imperial Chinese currency system.
(b.) To provide funds for the promotion and extension of industrial enterprises in the three Manchurian provinces.
Art. 4. This loan shall constitute a direct liability and obligation of the Imperial Chinese Government, which hereby pledges its good faith and credit for the punctual payment of the principal and interest of the loan and for the performance of all the undertakings on its part herein assumed.
Art. 5. All advances made under the terms of sections 4, 5, and 6 of article S hereunder, and the payments of interest and the repayments of principal of this loan, and all other amounts required for, or incident to, the service of the loan, shall be, and hereby are, made a first charge on the following revenues:--
(a.) Duties on tobacco and spirits in the three Manchurian provinces, amounting to 1,000,000 Kuping taels per annum.
(b.) Production tax in the 700,000 Kuping taels per annum.
(c) Consumption tax in the three Manchurian provinces, amounting to 800,000 Kuping taels per annum.
three Manchurian provinces, amounting to
(d.) Newly added surtax upon salt of all the provinces of China (authorised by Imperial edict in the 5th moon of the 34th year of His Imperial Majesty Kuang Hsú, amounting to 2,500,000 Kuping taels per annum.
The revenues above pledged amount to 5,000,000 Kuping tacls per annum.
2. The above provincial revenues are hereby declared to be free from all other loans, liens, charges, or mortgages.
3. Should the above-mentioned revenues be insufficient to meet the payments of interest and repayments of principal and all other charges on due dates, the Imperial Chinese Government will, first from Manchurian and then, if necessary, from other sources, supply the balance required to meet such payments.
4. So long as the principal and interest of this loan and all other charges are regularly paid there shall be no interference with the revenues herein pledged, but if
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principal and [or] interest be in default at due date, then, after a reasonable period of grace, the revenues above pledged, or such part thereof as may be sufficient to provide and
pay the amounts stated, shall forthwith be transferred to, and shall be adminis- tered by, the Imperial Maritime Customs for the account and in the interest of the bondholders.
5. So long as this loan shall remain unredeemed it shall have priority, both as regards principal and interest, by way of a lien or charge upon the above revenues over all future loans, charges or mortgages which may be charged on the aforesaid revenues. No loan, mortgage or other charge shall be raised or created which shall take precedence of, or be on an equality with, this loan, or which shall in any manner lessen or impair its security charged upon the aforesaid revenues; and any future loan, charge or mortgage charged on the said provincial revenues, shall be made subject to this loan, and it shall be so expressed in every agreement for every such future loan, charge or mortgage.
6. In the event of the Imperial Chinese Government, during the currency of this loan, entering upon definite arrangements for the revision of the customs tariff, accompanied by stipulations for the decrease or abolition of li-kin, it is hereby agreed on the one hand that such revision shall not be barred by the fact that this loan is secured by the above-named revenues, and on the other hand that the revenues required to provide the security of this loan shall neither be abolished nor decreased, except by previous arrangement with the banks and then only in so far as an equivalent satisfactory to the banks is substituted therefor in the shape of a first lien or charge upou other revenues consequent upon such revision.
Art. 6. The banks are authorised to issue to the subscribers to the loan, gold bonds for the total amount of the loan for such amounts as shall be determined by the banks. The form and language of the bonds shall be settled by the banks in consultation with the Board of Finance or the Imperial Chinese Ministers in Washington, Londou, Berlin, or Paris.
2. The bonds shall be printed and [or] engraved and shall bear the facsimile of the signature of the president of the Imperial Chinese Board of Finance, and of his seal of office, in order to dispense with the necessity of his signing them all in person, and the Imperial Chinese Minister in Washington and [or] London and [or] Berlin, and [or] Paris at the option of the banks, shall, previous to the issue of the bonds, put his seal upon each bond, with a facsimile of his signature as a proof that the issue and sale of the bonds are duly authorised by, and binding upon the Imperial Chinese Government.
3. The representatives of the banks in New York, London, Berlin, and Paris, as the case may be, shall countersign the bonds as agents for the issue of the loan.
Art. 7. All details necessary for the prospectus of the loan and connected with the payment of interest and repayment of principal of the loan, and with the withdrawing of bonds for redemption," not herein "explicitly provided for, shall be left to the arrangement of the banks in consultation with the Imperial Chinese Ministers in Washington, London, Berlin, and Paris.
2. The banks are hereby authorised to issue the prospectus of the loan as soon as possible after the fulfilment of the conditions in article 8 hereunder made precedent to the issue of the loan, and the Imperial Chinese Government will instruct the Imperial Chinese Ministers in Washington, London, Berlin, and Paris to co-operate with the banks in any matters requiring conjoint action, and to sign the prospectus of the loan.
Art. 8. On the date of the signature of this agreement the Board of Finance shall hand to the banks :-
(a.) "The regulations for the unification of the currency on a silver basis," authorised by Imperial edict, hereinafter called "The Programme of Currency Reform."
(b.) A statement showing in what amounts the proceeds of the loan are to be applied to the various expenditures incident to the operation of the said programme.
(c.) A statement specifying the nature of the proposed enterprises in Manchuria and showing in what amounts the allotted portion of the proceeds of this loan is to be applied thereto.
2. The programme and the two statements above referred to shall be handed to the banks on the date of the signature of this agreement. The banks shall be given a period not exceeding six months from the said date for the consideration and planning
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