instalments in accordance with the amounts and dates of the Schedule attached to this Agreement.

3. The term of the loan shall be forty-five years and repayments of principal shall be made by yearly sinking fund of One hundred and fifteen thousand two hundred and thirty-two pounds sterling which shall be paid by the Chinese Imperial Government to the Banks in monthly instalments in accordance with · the amounts and dates of the schedule attached to this agreement. During the said term of forty-five years the amortization shall not be increased nor the loan redeemed nor converted by the Chinese Imperial Government.

4. The total monthly payment due for amortization and interest, and amounting to sixty nine thousand six hundred and two pounds thirteen shillings and four pence sterling shall be made in equal shares and in accordance with the amounts and dates of the schedule attached to this Agreement, to the Hongkong and Shanghai Banking Corporation and the Deutsch-Asiatische Bank by the Chinese Imperial Government, who shall hand to those Banks at their Branches in Shanghai on the dates named in the schedule funds in Shanghai sycee sufficient to meet each such payment in sterling in Europe, the rate of exchange for which shall be settled with those two Banks on the same day. The Banks retain the right to rearrange the service of interest and repayments of principal to the Bondholders on such terms as they deem advisable.

In reimbursement of expenses incurred in connection with the distribution of the service to Bondholders of the principal and interest of the loan, the Banks shall receive from the Chinese Imperial Government a commission of a quarter percent on the annual loan Service, say an amount of two thousand and eighty eight pounds one shilling and eight pence sterling per annum, to be paid to the Banks on the dates provided in the schedule attached to this Agreement.

5. The Banks shall issue, and are hereby authorized to issue to subscribers to the loan, Bonds for the total amount of the loan in pounds sterling, in such form, in such languages and for such amounts as shall appear advisable to the Banks; and these Bonds shall be sealed by the Minister for China in London or Berlin as evidence that the Chinese Imperial Government is bound. thereby.

In the event of Bonds issued for this loan being lost, stolen or destroyed, the Banks shall immediately notify the Chinese Minister in London or Berlin thereof, who shall authorize the Banks to insert an advertisement in the public newspapers notifying that payment of the same has been stopped and to take such other steps as required by the laws of the country: should such Bonds not be recovered after the lapse of time provided by the law the Chinese Minister in London or Berlin shall, without further authority from the Chinese Imperial Government, seal and execute duplicate Bonds for a like amount and hand them to the Banks, by whom all expenses in connection therewith shall be defrayed.

6. This entire loan of Sixteen Million pounds sterling shall be secured as follows:

(1) By a charge on the revenues of the Imperial Maritime Customs of

China, subject to previous loans already charged on the security thereof and not yet redeemed.

(2) By a first charge, free from all encumbrances, upon the following revenues to be forthwith placed under the control of the Inspector General of Maritime Customs:

General Lekin of Soochow, estimated at..

Tls.

800,000

This entire loan of Sixteen million pounds Sterling shall have priority, both as regards principal and interest, over all future loans, charges or mortgages, so long as this loan or any part thereof shall be unredeemed. No loan, charge or mortgage 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 over the said Customs and lekin revenues, so far as required for the Annual Service of this loan, and any future loan, charge or mortgage charged on the said Customs or lekin revenue shall be made subject to this loan, and it shall be so expressed in every Agreement for any such future loan, charge or mortgage.

The Chinese Imperial Government undertake that the administration of the Chinese Imperial Maritime Customs service shall remain as at present constituted during the currency of this loan.

In the event of the Customs and lekin revenues specified and pledged by this clause being at any future time insufficient for the service of principal and interest of this loan, either owing to depreciation of Silver, diminution of revenue or any other cause the Chinese Imperial Government hereby engages to appropriate, and forthwith place under the control of the Inspector General of Maritime Customs, further revenues sufficient to complete the amount required.

In the event of the Chinese Government, during the currency of this loan, entering upon negotiations for a revision of Customs tariff accompanied by stipulations for decrease or abolition of lekin, it is hereby agreed, on the one hand, that such revision shall not be barred by the fact that this loan is secured by lekin and, on the other hand, that whatever lekin is pledged for the service of this loan shall neither be decreased nor abolished except by 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 on such revision.

7. This loan shall be further secured by Customs/lekin Annual Bonds for the total amount in sterling of the loan, principal and interest, issued and sealed by the Tsungli Yamen and the Board of Revenue Peking, and countersigned

by the Inspector General of Maritime Customs, and all such Customs/lekin Annual Bonds shall contain the Clause No. 6 of this Agreement from its commencement as far as the words:" for any such future loan charge or mortgage ". These Customs/lekin Annual Bonds shall be handed in equal shares to the Hongkong and Shanghai Banking Corporation and the Deutsch-Asiatische Bank before payment to the Chinese Imperial Government of the proceeds of the loan.

8. This loan shall also be further secured by deposit with the Hongkong and Shanghai Banking Corporation and Deutsch-Asiatische Bank of sterling Customs/lekin monthly Bonds equal in value altogether to the total amount of the loan, principal and interest, sealed by the Chinese Superintendent of Customs at Shanghai and by the Viceroy of the Liang-kiang Provinces, and countersigned by the Foreign Commissioner of Customs at Shanghai. These Customs/lekin monthly Bonds shall be handed to the Hongkong and Shanghai Banking Corporation and Deutsch-Asiatische Bank at their Branches at Shanghai in equal shares on or before the first day of June next and, in the event of the money to meet a payment of interest and/or sinking fund not being handed to the Hongkong and Shanghai Banking Corporation and Deutsch-Asiatische Bank at their Branches at Shanghai on due date shall be available everywhere in China for payment of Imperial Maritime Customs duties and/or lekin dues or in such other manner as stated in the Bonds and the Provincial Authorities shall be instructed by Imperial Edict accordingly.

9.-The Chinese Imperial Government hereby undertakes to pay the entire balance of the Indemnity due on the eighth day of May next to the Imperial Japanese Government out of the proceeds of this loan. No further loan shall be issued by the Chinese Imperial Government except through the Banks, until a period of twelve months has elapsed after the issue of the total amount of this loan.

10.-All Bonds and coupons and payments made and received in connection with the service of this loan shall be exempt from Chinese taxes and imposts forever.

11. All details necessary for the Prospectus and connected with the service to the Bondholders of the interest and repayments of the principal of this loan, not herein explicitly provided for, shall be left to the arrangement of the Banks, who shall issue, and are hereby authorized to issue a Prospectus of the loan as soon as possible after the signing of this Agreement. The Chinese Imperial Government will instruct the Chinese Ministers in London and Berlin in communication with the Commissioner of Chinese Customs in London to cooperate with the Banks in any matters requiring conjoint action, and the Chinese Minister in Berlin shall sign the Prospectus of the loan as required by the rules of the Berlin stock-exchange.

12. The Banks hereby take the loan firm at the price of eighty three percent net on the nominal principal to the Chinese Imperial Government, and will hold the net proceeds, namely thirteen million two hundred and eighty thousand pounds sterling to the order of the Chinese Imperial Government in London and/or Berlin as follows:

On the sixth day of May, one thousand eight hundred and

ninety eight

..£12,000,000

On the sixth day of June, one thousand eight hundred and

ninety eight

Total thirteen million two hundred and eighty thousand pounds sterling

1,280,000

..£13,280,000

13.—In the event of any extraordinary political or financial crisis taking place in Europe or elsewhere by which the markets are so violently affected as to render the successful floating of this loan impossible on the terms herein named the Banks have the right to withdraw from this contract with the Chinese Imperial Government, and it shall in that case become null and void.

14.-Immediately on the signature of this Agreement, and before the Prospectus of the Loan shall be issued to the public the Tsungli Yamen shall memorialize the Throne and obtain an Imperial Edict confirming and sanctioning the provisions of this Agreement, and shall then instruct the Inspector General of Maritime Customs to assume control forthwith over the revenues therein indicated; the Imperial Edict so received shall be communicated officially, and without delay, by the Tsungli Yamen to the Ministers for Great Britain and Germany in Peking.

15. The Hongkong and Shanghai Banking Corporation and the DeutschAsiatische Bank shall take the loan in equal shares and without responsibility for each other.

16.-Quadruplicate sets of this Agreement are executed in English and Chinese, one set to be retained by each contracting party and one set by the Inspector General of Maritime Customs. In the event of any doubt arising regarding the interpretation of this contract the English text shall be accepted as the standard.

Signed at Peking by the contracting parties this ninth day of the second month of the twenty fourth year of the Emperor Kuang-hsü being the first day of March one thousand eight hundred and ninety eight, Western Calendar. For the Hongkong and Shanghai Banking Corporation,

(Sgd.)

For the Deutsch-Asiatische Bank,

E. G. HILLIER, Agent

and the same payment of sixty nine thousand six hundred and two pounds thirteen shillings and four pence shall be repeated on the fifth day of each month of the year one thousand eight hundred and ninety nine Western Calendar and of each succeeding year until the fifth day of February one thousand nine hundred and forty three inclusive, that being the last payment when the loan will be extinguished.

In addition to the payment of principal and interest scheduled above, the Chinese Imperial Government shall on the fifth day of February of each year, commencing with the fifth day of February one thousand eight hundred and ninety nine, pay to the Banks in equal shares at their Branches in Shanghai the sum of Two thousand and eighty eight pounds one shilling and eight pence being the commission of one quarter percent on the Annual Service of the loan, provided for in clause four of the accompanying Agreement.

(Sgd.) (Sgd.)

E. G. HILLIER.
RUMP.

NUMBER 1898/4.

GERMANY AND CHINA.

Convention respecting the lease of Kiaochow.*-March 6, 1898.

The incidents connected with the Mission in the Prefecture of Tsao-chau-foo, in Shantung, being now closed, the Imperial Chinese Government consider it advisable to give a special proof of their grateful appreciation of the friendship

*Translation from the German text as printed in Customs, Vol. II, p. 208. The German text of Section 1 was printed in Das Staatsarchiv, vol. 61, No. 11518; translations from that_version_and from an unofficial version of Sections II and III are printed in Rockhill, p. 45; Am. Int. Law Journal, Supplement, 1910, p. 285; Hertslet, p. 350; Kent, p. 259. See also China, 1899, No. 1, pp. 67 and 152.

In connection with this convention see also the following documents:

1. Anglo-German Declaration respecting Weihaiwei, April 20, 1898 (attached to No. 1898/14, post);

2. Anglo-German bankers' arrangement respecting spheres of interest in railway construction, September 2, 1898 (attached to No. 1900/5, post);

3. Declarations made to the United States regarding the open-door policy, March 20, 1900 (No. 1900/2, post);

4. Anglo-German Declaration defining their mutual policy in China, October 16, 1900 (No. 1900/5, post);

5. Declaration of war by Japan against Germany, August 23, 1914 (No. 1914/9, post); 6. Treaty between Japan and China respecting the Province of Shantung (with accompanying exchanges of notes), May 25, 1915 (No. 1915/8, post); and

7. Treaty of Peace between the Allied and Associated Powers, and Germany, June 28, 1919 (No. 1919/1, post).

Concerning customs matters, see the following:

1. Agreement between Germany and China for the establishment of a maritime customs