In case of doubt or disagreement the French text shall alone be accepted for the interpretation of the contract.

The present contract must be submitted through the proper channel for Imperial sanction, and, when said sanction shall have been obtained, the Tsung-liYamên must advise, by official dispatch, the Belgian Representative at Peking and eventually the representative at Peking of the foreign Government to which the title may be officially notified (auquel le titre sera notifié).

Done in Shanghai, the twenty-sixth of the month of June eighteen hundred ninety-eight.

The Engineer representing the Société d'Etudes des Chemins de fer en Chine, (s.) HUBERT.

The Director-General of the Chinese Railway Company,

The Representatives of the Imperial Chinese Government:
The Viceroy of Hupeh.

The Viceroy of Chihli.

Note.

In Rockhill, pp. 225, 230, are also given the following translations of (I) the provisional loan contract, May 27, 1897, and (II) the additional protocol, July 27, 1897

(I)

Loan for the Railway from Lu-kou-chiao to Hankow.-May 27, 1898. (Provisional) contract between the Chinese Railway Company and the Société financière et industrielle belge en Chine, the following has been agreed upon:

ARTICLE 1.-The Chinese Government has granted a concession for the railway line from Lu-kou-chiao, near the city of Peking, to Hankow, to the Chinese Railway Company which has already a capital of thirteen millions of taels.

"The said Company is authorized by the Imperial Government to negotiate a loan of four million five hundred thousand pounds sterling to be applied solely to the building and working of the line from Lu-kou-chiao to Hankow; the provisions hereafter set forth must be observed by the Chinese Railway Company as well as by the Société financière et industrielle belge en Chine.

"ARTICLE 2.-Said loan, of a nominal value of four million five hundred thousand pounds sterling, with ten per cent discount, or a real value of four million fifty thousand pounds sterling, is agreed to by the Société financière et industrielle belge en Chine. It will be paid in four installments of one million twelve thousand five hundred pounds sterling, representing the real value, and at the following dates:

'These payments will be made into a Belgian bank of Brussels, chosen by the Chinese Railway Company which is at liberty to transfer this sum as it sees fit.

"ARTICLE 3.—The loan agreed to by the Société financière et industrielle belge en Chine, shall bear annual interest of four per cent. Said interest shall be paid in January and July of each year.

ARTICLE 4.-The Chinese Railway Company agrees to reimburse the loan provided for in the present convention, after the first ten years, in twenty annuities of two hundred and twenty-five thousand pounds sterling, payable yearly after January 3, 1909.

"The payment of interest and annuities will be made in China, into a bank designated by the Société financière et industrielle belge en Chine, and in conformity with the table of amortization annexed to the present convention.

“Article 5.—With the authorization of the Imperial Chinese Government, the payment of interest and the refunding of the loan will be guaranteed by the railway line from Lu-kou-chiao to Hankow as also by all the property and material connected therewith.

"It is understood that the guarantees given for the loan provided for in the present convention, are reserved for the subscribers to the present loan and that the guarantees given for subsequent loans can nowise prejudice that now granted the Société financière et industrielle belge en Chine.

"ARTICLE 6.-Except in case of force majeure, the work of building must be finished and the railway from Lu-kou-chiao to Hankow put in operation before the expiration of five years, that is to say of 1903.

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ARTICLE 7.-The contracting parties may not invoke a state of war existing in any part of the world not to keep their engagements. If said state of war should exist in China, the Belgian staff shall remain in the employ of the Chinese Railway Company, unless its assistance is asked for by the Imperial Chinese Government.

"ARTICLE 8.-The Société financière et industrielle belge en Chine, shall choose an experienced, reliable and honest engineer to represent it and who shall be charged with controlling the technical work; he shall, furthermore, be charged with drawing up plans and carrying them out under the exclusive authority of the General Director of the Chinese Railway Company, under whose direct orders he shall be. This Controlling Engineer will be under the absolute direction of the General Director of the Chinese Railway Company. The Chinese Railway Company reserves all rights of management of the railway. It will be responsible until the expiring of the present contract for the salary of this Controlling Engineer as fixed upon in agreement with the Société financière et industrielle belge en Chine.

ARTICLE 9.-The foreign staff needed by the Chinese Railway Company for building and operating the line, during the life of the present contract, shall be chosen and presented by the technical Controlling Engineer representing the Société financière et industrielle belge en Chine; it will be appointed by decision of the Director General of the Chinese Railway Company. The Chinese Railway Company is at liberty to settle for itself as regards its foreign staff, the form of engagement to be used, adopting long or short term contracts.

All the staff employed by the Chinese Railway Company and attached to the working of the line, with the exception of the Controlling Engineer, will be required to obey the Chinese delegates of the Director General of the Company and work harmoniously with all the Chinese and foreign staff of other nationalities, chosen and appointed by the Director General to any position, and this in the interest of the Railway Company

"If disputes arise between European and Chinese agents, they shall be impartially settled by the Director General, aided by the representative of the Belgian Company.

"The Director General of Chinese Railways shall always be at liberty to designate foreigners of whatever nationality to inspect the works under way; the Belgian Company shall never have the right to prevent it.

"Nevertheless, the duty of the persons designated shall only consist in inspecting works and they shall never have the right to give orders to the staff employed in building and working the line. Such persons may likewise make reports to the Director General of Chinese Railways on the results of their inspections.

The staff employed in building and operating shall furnish all necessary facilities to foreigners entrusted with an inspection, and that in the interest of the Chinese Railway Company.

ARTICLE 10.-In case one of the foreign employés referred to in articles 8 and 9, irrespective of duties, should through carelessness, incapacity, disobedience of the orders of the Director General, insubordination, drunkenness, or bad conduct, be held to be unfit for the service, the Director General shall have the right to cancel the contract and the dismissed agent shall leave at once the service of the Chinese Railway Company.

ARTICLE 11.-The materials necessary for the Chinese Railway Company, exclusive of all that can be manufactured in China or of that that can be manufactured there later on, shall be bought abroad.

"The Director General shall decide, in consultation with the Controlling Engineer, the amount of materials to ask bids on; said quantity, however, shall never exceed fifty per cent of that required.

"The award shall be made without any special favor for the Société financière et industrielle belge en Chine. If this Company agrees to furnish at perfect equality of con

ditions as to quality, price and carriage with those secured by the Chinese Railway Company, the Belgian Company shall have the furnishing of said materials; but if said Company is unable to supply under the above-mentioned conditions, the Chinese Railway Company will make its purchase where it likes; the Belgian Company shall in no way prevent it so doing. "As to the materials which cannot be divided in accordance with paragraph 2 of the present article (50 p. c. maximum asked for), if the Belgian Company agrees to furnish at perfect equality of conditions as to quality, price and carriage with those secured by the Chinese Railway Company, the furnishing shall be granted the Belgian Company; in the contrary case, the Chinese Railway Company will buy where it chooses; the Belgian Company shall in no way prevent it so doing.

"The Chinese Railway Company reserves to itself the right to use all means it may deem good to inform itself as to the best prices for supplying all its materials, without the Belgian Company interfering in any way with its inquiries.

"ARTICLE 12.-As a premium, the Chinese Railway Company will pay the Belgian Company a sum of five per cent. on the net value, less the cost of transportation, insurance, etc., on all materials bought abroad. The materials for the branch from Lu-kou-chiao to Paoting is not subject to the premium provided for in the present article because nearly the whole amount of said materials has already been bought.

"ARTICLE 13.-The taking over of material bought in Belgium will be in the factories making it and by a commission consisting of a delegate of the Chinese Railway Company and of a delegate of the Société financière et industrielle belge en Chine; in case of disagreement, these two delegates shall choose an umpire to decide the question. The expenses of the delegates shall be borne by the Company designating them. The expense of the umpire shall be borne by the losing party.

"ARTICLE 14.-The Société financière et industrielle belge en Chine and its chosen agent, shall deal with no other persons or accept any other authority than the Chinese Railway Company. The latter, on its side, shall only recognize the Société financière et industrielle belge en Chine, established at Brussels, in 1897, to the exclusion of every other company. "During the life of the present contract, the Belgian Company shall in no wise be managed by manufacturers or subjects of other countries, and the Belgian Company shall not be at liberty to transfer this contract to any other country, nor to the subjects of another country.

"ARTICLE 15.-If the provisions set forth in the present convention are regularly adhered to by the Chinese Railway Company, the Société financière et industrielle belge en Chine agrees, in case of necessity, to study means, in conjunction with the said Company, to secure to it special facilities for extendinig the terms of paying off the annuities and interest.

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'In case extensions are granted, the amounts which should have been refunded shall bear the same interest as that provided for the loan in the present convention.

"If the Chinese Railway Company wishes to refund the whole loan before the date on which it falls due, it will be at liberty to do so and the interest will cease from the day of such refunding, and the contract shall be declared void from that day.

"ARTICLE 16.-All the above provisions are agreed upon in the provisional contract made this day; this provisional convention is signed by the Director General of the Chinese Railway Company on the one part, and stamped with his seal, and, on the other part, by the two representatives of the Société financière et industrielle belge en Chine, and viséed for authentication by the Consul of Belgium at Hankow.

"Within two months from the date of signing of the provisional contract, the Chinese Railway Company and the Société financière et industrielle belge en Chine, will sign again so as to confirm the provisional contract which shall then become final.

"These formalities complied with, the contract shall receive the seals of Their Excellencies the Viceroys of Pechihli and of Hu-Kwang, and also that of H. Ex. the Minister of Belgium, at Peking.

ARTICLE 17.-The present contract has been drawn up in the French and Chinese languages; when necessity arises for consulting the contract, the two texts, absolutely identical, shall both be authoritative.

"Done at Wuchang, the 27 of the month of May, 1897.

"The Chinese Railway Company being represented by H. Ex. Sheng-Hsuan-Huai, its Director General.

"The Société financière et industrielle belge en Chine being represented by MM. Masy and Rizzardi."

(II)

Additional Protocol to the Contract relating to the Loan for Four Million Five Hundred Thousand Pounds Sterling for the Railway from Hankow to Lu-kou-chiao.— July 27, 1897.

"A provisional contract was made, at Wuchang, the twenty-seventh day of the month of May one thousand eight hundred and ninety seven (twenty-sixth day, fourth month, twentythird year of the present reign) relating to the loan for the railway from Lu-kou-chiao to Hankow.

"The General Company of Chinese Railways, established by Imperial decree of the twentieth October one thousand eight hundred and ninety six (fourteenth day, ninth month, twenty-second year of the present reign), and to which was granted, by the same decree, the concession for the said line,

of the first part,

"And the Belgian Company, established by authentic act dated the third March one thousand eight hundred and ninety seven, published in the Moniteur Belge (official newspaper) of the twenty-second, twenty-third March one thousand eight hundred and ninety-seven, of the second part.

"This contract was authorized by Imperial decree of the twenty-fifth May one thousand eight hundred and ninety-seven (twenty-fourth day, fourth month, twenty-third year of the present reign). The decree of that date will be communicated to H. E. the Minister of Belgium at Peking through the Tsung-li Yamên.

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The Chinese Railway Company, represented by H. E. Sheng, its Director General, duly authorized for that purpose by the above mentioned decree and the Belgian Company, represented by M. Alexis Dufourny, Chief Engineer, Director of the Ponts et Chaussées at Brussels, and by M. Edouard Walin, First class Engineer of the Ponts et Chaussées, Director of the intercommunal waterworks Company at Brussels, duly_authorized, on their side, by the Belgian Company, authority confirmed by a telegram of H. E. the Belgian Minister at Peking, sign anew, in the name of the interested parties, the provisional contract according to the terms of article sixteen of the latter, so as to confirm it and make it final, and agree furthermore on the following:

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ARTICLE I-The above mentioned Belgian Company will make a complete study of the line from Hankow to Lu-kou-chiao for the Chinese Railway Company; it undertakes to make the surveys, levelling, longitudinal and sectional cuts, to make all plans, drafts of masonry works, bridges, buildings, shops, stations and outhouses of whatever nature, as also the measurements and specifications, all charges for which are included in the fortyhundredths per cent. of additional interest mentioned hereafter in Article III.

"A similar study will be made for the rolling and fixed stock. But in conformity with article eight of the contract, the drafts and plans shall be successively submitted to the approval of the General Director. It is well understood that all these works are to be carefully done, without any omission; they are not to occasion any additional expenses. "Field work for the carrying out of the works must be finished within a year from the date of the conclusion of the last formalities of approval of the contract. They must be carried out with the necessary activity to permit of the embankment work being begun within six months of the above mentioned date.

“ARTICLE II.—The Belgian Company surrenders its right to a premium on materials, conferred on it by article twelve of the contract, and therefore said article is considered as void.

'ARTICLE III.-On the other hand, as compensation for the concessions mentioned above in Articles I and II, and to guarantee its expenses of organization, mission abroad and issuing (the loan), inclusive of all disbursements whatsoever relating thereto, and finally its general expenses during the whole time of the loan, the Belgian Company shall receive an increase of forty-hundredths per cent (four per thousand) on the rate of interest provided for in article three of the contract. This additional interest of four per thou sand will be paid in the same manner as the yearly interest of four per cent; consequently the rate of interest of four per cent, together with all the general expenses, is raised, in effect, to four and forty per cent (4.40 p. c.). No charge whatsoever in excess of this rate of interest shall be asked for.

"ARTICLE IV. The payments provided for in article two of the contract shall be made into the Belgian Bank at Brussels, designated by the name of "Société Générale pour favoriser l'Industrie Nationale." and the Chinese Railway Company will transfer (thereto) the sums paid into the Commercial Bank of China at Shanghai, organized by imperial decree under date of the twelfth November one thousand eight hundred and ninety-six (eighth day, tenth month, twenty-second year of the present reign). The payments of interest and annuities will be made in pounds sterling into the above mentioned Commercial Bank.

ARTICLE V.-It is understood that the guarantee of the railway line, referred to in article five of the contract, has absolutely priority of rank.

"

ARTICLE VI. The present protocol shall be stamped with the seal of Their Excellencies

the Viceroys of Pechihli and of Hu-Kwang, and also with that of H. E. the Minister of Belgium at Peking.

The present protocol has been made out in four copies in the French and Chinese languages; both versions are equally authoritative.

seven.

Done at Shanghai, the twenty-seventh of July one thousand eight hundred and ninety.

"DUFOURNY."

"The Chief Engineer, Director of Ponts et Chaussées, For the French texts of these agreements, see Wang, pp. 13, 35.

The following correspondence is also attached to the texts of the contracts as printed in Rockhill, p. 246:

LETTER OF HIS EXCELLENCY SHENG RELATIVE TO THE ARBITRATION CLAUSE.
"IMPERIAL ADMINISTRATION OF CHINESE RAILWAYS,

"As the contentions and disagreements referred to in Article 26 of the loan contract and in Article 7 of the operating contract relating to the Railway from Hankow to Peking, may relate to interest and the amortization of the loan, the undersigned Sheng Hsüan-huai, Director General of the Chinese Railway Company, duly authorized thereto by the Tsung-li Yamên, declares, from the present date, that the arbitrator to judge finally all such contentions and disagreements, will be the Minister at Peking of the foreign country which shall have taken part in the subscription for the loan. [Official Seal of the Chinese Railway Administration.]

[s]

"SHENG HSUAN-HUAI, 'Director General of Railways."

LETTER OF HIS EXCELLENCY SHENG RELATIVE TO THE PREFERENTIAL RIGHT TO THE
HANKOW-CANTON LINE.

"IMPERIAL ADMINISTRATION OF CHINESE RAILWAYS,

"The undersigned, Sheng Hsüan-huai, Director General of the Chinese Railway Company, declares that he reserves to the Société d'Etudes des Chemins de fer en Chine, a preferential right as regards the railway to be built from Hankow to Canton, in case the provisional contract, as drawn up in Washington between His Excellency Sheng and the American Syndicate (Carey-Washburn), should not become a definitive one.

"It is well understood that this preferential right is granted to the Société d'Etudes des Chemins de fer en Chine, under the terms of Article 14 of the Wuchang contract, which formally prohibits the Société Belge d'Etudes des Chemins de fer en Chine from transferring any of its rights to any company of foreign nationality. [Official seal of the Chinese Railway Administration.]

[s]

"SHENG HSUAN-HUAI, "Director General of Railways."

Rockhill, p. 247, notes that in connection with the letter of Sheng Hsüan-huai given above and relating to the preferential right of the Belgian Syndicate to build the Hankow-Canton railway in case the contract made with the American China Development Company should not become definitive, the following dispatch from the British Chargé d'Affaires in Peking to Lord Salisbury, published in the British Parliamentary Blue Book, China, No. 1 (1900), pp. 155-156, is of interest.

"MR. BAX-IRONSIDE TO THE MARQUESS OF SALISBURY.

"[Extract.]

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'PEKING, May 15, 1899.

"I had the honour to receive a telegram from your Lordship on the 28th ultimo, informing me that the prospectus issued by the Belgian Syndicate for the Peking-Hankow Railway Loan states that the Syndicate have a preferential right to the Hankow-Canton line in the event of the Contract with the American Syndicate not being finally arranged.

"Your Lordship also inquired whether the Chinese Government had ever communicated the text of the Peking-Hankow Agreement in accordance with an undertaking which they had previously given us.