CO129-388 - Governor Sir Lugard - 1912 [1-2] — Page 114

4

13

-

112

Detailed plans and estimates of cost, whether of the respective sections of the Railway, or of any alterations of the same, are to be subunitted for the approval of the Viceroy, by the Engineer-in- Chief through the Managing Director.

Article 3.

The Loan shall be secured by mortgage declared to be now entered into in equity by virtue of this Agreement, and shall, as soon as posible hereafter be secured by a specific and legal first mortgage in favour of the Corporation upon all lands, materials, rolling stock, buildings, property and premises of every description purchased or to be purchased for the Railway, and on the Railway itself, as and when constructed, and on the revenue of all descriptions derivable therefrom.

The provisions of this Article in respect of the mortgage, are to be construed and treated as equivalent in purport and effect to a mortgage custoinarily executed and delivered in England to a Trustee for the purposes of securing Loans and Bond Issues upon Railway properties in foreign

countries.

Article 4.

It is hereby agreed that in six (6) months after this Agreement is signed, the Corporation shall provide the amount necessary to proceed with the detailed survey of the Railway, and for preliminary construction work if necessary, whether this amount comes from the sale or hypothecation of the Bonds, or from advances made, provided that Bonds for the required amount shall have beeu executed and delivered to the Corporation. If, after expiration of eight (8) months from the date of the ratification hereof, the work of construction shall not have been begun on the Railway, this Agreement is to become null and void, but if failure to commence construction be due to any cause of force majeure, a reasonable extension of this time limit shall be arranged between the Viceroy and the Corporation.

Of the proceeds realised from the sale of the Bonds, after deducting so much of them as may be required to be kept in England for the purchase of materials and the payments of contracts there, or for repayment of advances, such amounts as may be estimated and certified to by the Engineer-in- Chief to the Viceroy through the Managing Director, as being actually required for the construction of any particular section of the Railway, may be ordered by the Viceroy, after consideration, to be transferred to Hongkong to be kept in the Hongkong and Shanghai Bank, and placed to the credit of the construction account of the Railway for the exclusive purpose of constructing the Railway in the manner herein provided for under the supervision of the Head Office and the Viceroy.

On each occasion of a remittance being made to China, the amount realised in Sycee will be reported to the Viceroy, and any portion which may not be required shall be placed at interest. Similarly, the balance in England shall be placed at interest, to be allowed at the usual rate.

The accounts of the money spent from time to time in Eugland, and of the money transferred to the credit of the construction and other accounts for use in China, are to be submitted quarterly to the Head Office for report to the Viceroy for the information of the Wai-wu-pu, and for his further report to the Board of Revenue, and the Board of Communications, for record therein, after snch accounts have been approved and signed by him.

Article 5.

As to the form of the Bond, it is to be agreed upon by the Viceroy or by the Chinese Minister in London and the Corporation, as soon as possible after the signature of this Agreement, but if, hereafter, the money markets in London or other countries require any modification of the form of the Bond, except in anything that affects the amount of the Loan and the liability of the Chinese Govern- ment, which are not to be touched at all, such slight modifications may be made to meet the views of the money markets by the Corporation in consultation with the Chinese Minister in London.

Any modifications are to be reported at once by the Corporation to the Viceroy for the approval of the Wai-wu-pu.

The Bonds are to be engraved entirely in the English language, and shall bear the fac-simile of the signature of the Viceroy and of his seal of office, in order to dispense with the necessity of signing them all in person, but the Chinese Minister in London shall, previous to the issue of any Bonds, put his seal upon each Bond with a fac-simile of his signature, as a proof that the issue and sale of the Bonds are duly authorised and binding upon the Chinese Government.