5
from the proceeds of the loan or for other sources, and afterwards, in the first place, out of the revenues of the railways, and then from such other revenues as the Chinese Government may think fit to use for the purpose, in half-yearly instalments according to the amounts specified in the schedule attached to this agreement, and twelve days before their due dates (Western calendar), as calculated half-yearly from the date on which the loan is issued to the public.
Art. 5. The term of the loan shall be forty years. Repayment of principal shall commence after the expiry of ten years from the date of the loan, and, except as provided in article 6 hereinafter, shall be made by yearly amortisation to the banks in half-yearly instalments out of the revenues of the lines, or such other revenues as the Chinese Government may think fit to use for the purpose, according to the amounts specified in the schedule attached to this agreement, but twelve days before their due dates (Western calendar), as calculated half-yearly from the date on which the loan is issued to the public.
Art. 6. If at any time after the lapse of ten years from the date of the loan the Imperial Chinese Government should desire to redeem the whole outstanding amount of the loan or any part of it not yet due for repayment in accordance with the. schedule of repayments hereto attached, it may do so up to the end of the seventeenth year by payment of a premium of 24 per cent. on the face value of the bonds, that is to say, by the payment of 102. 10s. for each 1001. bond, and after the lapse of seventeen years without premium; but in each and every case of such "extra redemption the Imperial Chinese Government will give six months' previous notice in writing to the banks, and sucli redemption shall be effected by additional drawings of bonds to take place on the date of an ordinary drawing as provided for in the prospectus of the loan.
When the loan has been fully repaid this agreement will immediately become null and void. Bonds and interest coupons which have matured will be collected in due order and cancelled by the banks as they are presented for payment, and will be delivered by them to the Chinese Ministers in Great Britain, Germany, France, and the United States of America. The banks will refund in full to the Imperial Chinese Government the amounts of any drawn bonds and [or] interest coupons which have not been presented for payment within thirty years from the respective due dates for redemption or payment of interest.
Art. 7. The half-yearly payments due for amortisation and interest referred to in articles 4 and 5 shall be made in accordance with the amounts of the schedule attached to this agreement, and twelve days before their due dates as fixed by articles 4 and 5, in equal shares to the banks by the Ministry of Posts and Communi- eations, which shall hand to the banks in Shanghai or Hankow, twelve days before the said due dates, funds in Shanghai "kuei-yuan" sycee or Hankow "yang-li" sycee and [or] coin of the national currency (so soon as the said currency shall have been effectively established), sufficient to meet such payments in gold in Europe and the United States of America, exchange for which shall be settled with the banks on the same day, the Ministry of Posts and Communications having, however, the option of settling exchange with the banks simultaneously at any date or dates within six months previous to any due date for the payment of interest and [or] principal. These payments may, however, be made in gold in Europe and [or] in the United States of America twelve days before their due dates if the Imperial Chinese Government should happen to have gold funds bond fide at their disposal in Europe and [or] in the United States of America not remitted from China for the purpose,
and desire so to use them.
In reimbursement of expenses connected with the payment of interest and repayment of principal of the loan the banks will receive from the Chinese Government a commission of per cent. on the annual loan service.
Art. 8. The Imperial Government of China hereby engages that the interest and principal of this loan shall duly he paid in full, and should the revenues of the railways and [or] the proceeds of the loan not be sufficient to provide for the due and full payment of interest and repayment of principal, the Ministry of Posts and Communications shall memorialise the Throne, and the Imperial Government of China will thereupon make arrangements to ensure that the amount of deficiency shall be met from other sources and handed over to the banks on the date
upon which funds are required to complete full payment of interest and repayment of principal.
Art. 9. The present loan of 6,000,000l., together with the second series thereof, provision for the issue of which is made under the terms of article 15 hereinafter, is hereby secured, in respect to both principal and interest, as a first charge upon :-----
1. Hupei general li-kin amounting to 2,000,000 Haikwan taels a-year.
2. Hupei additional salt tax for river defence amouuting to 400,000 Haikwan taels a-year.
3. Hupei new additional 2-cash salt tax of September 1908, amounting to 300,000 Haikwan taels a-year.
4. Hupei collection of Hukuang inter-provincial tax on imported rice, to the amount of 250,000 Haikwan taels a-year.
5. Hunan general li-kin, amounting to 2,000,000 Haikwan taels a-year.
6. Hunan salt commissioner's treasury regular salt li-kin, to the amount of 250,000 Haikwan taels a-year.
The above provincial revenues, amounting to a total of 5,200,000 Haikwan taels a-year, are hereby declared to be free from all other loans, charges, or mortgages.
So long as principal and interest of this loan are regularly paid there shall be no interference with these provincial revenues, but if principal or interest of the loan be in default at due date, then, after a reasonable period of grace, li-kin and other suitable internal revenues of the provinces of Hupei and Hunan, sufficient to provide the amounts above stated, shall forthwith be transferred to and administered by the Imperial Maritime Customs in the interests of the bondholders. And so long as this loan or any part thereof shall remain unredeemed it shall have priority, both as regards principal and interest, over all future loans, charges, and mortgages charged on the aforesaid provincial revenues. No loan, charge, or mortgage shall be raised or created which shall take precedence of or be on an equality with this loau, or shall in any manner lessen or impair its security over the aforesaid provincial revenues, and any future loan, charge, or mortgage charged on the said provincial revenues other than the second series of the present loan provided for in article 15 aforementioned shall be made subject to this loan, and it shall be so expressed in every agreement for every such future loan, charge, or mortgage.
After redemption of the existing gold bonds, referred to in article 2 of this agreement, it is understood and agreed that, so long as this loan is unredeemed, the railways shall under no circumstances be mortgaged nor their receipts given as security to any other party.
In the event of the 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 li-kin and provincial revenues, and, on the other hand, that whatever li-kin is required to provide the security of this loan shall neither be decreased nor abolished except by previous arrangement with the banks, and then only in so far as an equivalent is substituted for it in the shape of a first charge upon the increase of customs revenue consequent upon such revision.
Art. 10. The banks are hereby authorised to issue to the subscribers to the loan bonds for the total amount of the loan in gold, for such amounts as may appear advisable to the banks. The form and language of the bonds shall be settled by the banks in consulta- tion with the Ministry of Posts and Communications or the Chinese Minister in Berlin, London, Paris, or Washington; they shall bear the facsimile of the signature of the Minister of Posts and Communications and of his seal of office, in order to dispense with the necessity of signing them all in person, and the Chinese Minister in Berlin and [or] London and [or] Paris and [or] Washington 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. The representatives of the banks in Berlin, London, Paris, or New York, as the case may be, shall countersign the bonds as agents for the issue of the loan.
In the event of any bond or bonds issued for this loan being lost, stolen, or destroyed, the group and [or] bank or banks concerned shall immediately notify the Ministry of Posts and Communications and the Chinese Minister in Berlin, London, Paris, or Washington, as the case may be, who shall authorise the group and [or] bank or banks concerned to insert an advertisement in the public newspapers notifying that payment of such bond or bonds 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, and should any bond or bonds be destroyed, or should such lost or stolen bond or bonds not be recovered after a lapse of time to be fixed by the group and [or] bank or banks concerned, the Chinese Minister in Berlin, London, Paris, or Washington,
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