petroleum, &c., there shall be paid to the Chinese Government, as producer's tax, 5 per cent. on the value of the output of the mines. Export duty shall be paid according to the existing Rules now in force. The Szechuan Mining Bureau shall authorize the Hua Yi Company to collect the producer's tax and to compare the same with the rent, and thus there will be no difference or shortage. No officer shall be deputed for this purpose, so as to save unnecessary expense. The export duty is to be collected by the custom-house, and after the export duty is paid, no inland li-kin dues will be required. As regards the taxes to be charged on precious metals of all kinds, they are to be decided by the Board of Revenue.

7.—The Hui Tung Company is to send engineers to find out all the mines that are to be opened and to consult with the Hua Yi Company, which submits the same for the approval of the Mining Bureau. Should a mine be found in a Government hill, the opening of which will not be injurious to the place, permission will be granted to open it. The ordinary land tax on such land would, however, be too small a sum for the Company to pay the Government for its use. In the case of Government land, therefore, the 5 per cent. rent and the 5 per cent. producer's tax are to be collected at the same time, and both paid to the Chinese Government; but 10 per cent. of the rent is to be reserved to pay the expenses of the Mining Bureau and the Hua Yi Company. The Hui Tung Company is to pay the export duty.

8.-The area of Szechuan is very extensive, and all sorts of mines exist. Chinese who work on their own property are only required to obtain the necessary permission, pay the necessary taxes, according to the Rules in force, and they are in no way restrained. But if foreign merchants undertake to work the mines, their operations must be limited in some way or other. They must confine themselves to certain intendancies, prefectures, or districts, and not take the whole province as their sphere of work. Now work must be started in the interior first, and at the boundaries afterwards. The Hui Tung Company shall then send engineers to find out first where are mines to be opened and what mines they are: if the same be in districts apportioned to savages, the Hui Tung Company must wait till they find out whether the advantage will be greater than the injury, and devise other means to open them. The Hui Tung Company in such event cannot compel the Hua Yi Company to buy the land quickly and hand it over for working. Any possible cause of disturbance must be avoided.

9. When prospecting for mines, if any boring or sinking of shafts be necessary to examine mineral deposits, an arrangement should first be made by the Hua Yi Company with the land-owner for the Hui Tung Company to compensate him according to market prices for any crops, &c., injured. After the mines are opened, should there be any damage to life or buildings caused by landslips or subsidence in the mines, the Hui Tung Company shall make charitable compensation. If after mines are opened cemeteries or mortuary shrines are met with, some plan must be devised to avoid them if the owners do not like to remove them for money given; no excavation will be allowed. In excavating, as long as the galleries dug below the ground are not injurious to the soil above,

rascals are not to be allowed to obstruct the work on the grounds that it is injurious to "Feng Shui." Local authorities must be applied to for protection. The Hui Tung Company is not, however, allowed to claim compensation on these grounds in case it cannot succeed.

10. Whenever it may be necessary to make roads, build bridges, open or deepen rivers, erect sheds, make tools, or other necessaries for mining purposes, and land is required for such purposes, the Hua Yi Company is to buy the land and the Hui Tung Company to pay for it. If water power is required for machinery, and enormous work is done on it, no other person is allowed to make use of it. If branch railways have to be constructed in order to connect the mines with the usual trade routes, a thorough survey must be made of the proposed lines and maps drawn with explanations attached. These must be submitted to the Mining Bureau, which will forward them to the Szechuan Viceroy and head office at Peking for record and sanction. Nothing of the kind should be undertaken without such sanction. If telegraphs and telephones are wanted for connecting the various mines, the same are to be submitted to the Mining Bureau for approval.

11.-The Hua Yi Company is to deal with all matters of negotiation, and the collection of rent and taxes; the Hui Tung Company to superintend and work all mines. Each has its own sphere of work, but each Company may inquire into the other's affairs. A Chinese Manager and a foreign Manager should be appointed for each mining work, whose salaries shall be paid by the Hui Tung Company. The majority of the overseers should be Chinese, and all the miners natives of the province. All are to receive adequate wages, and further Rules must be made on this subject by the Hua Yi and Hui Tung Companies. Later on, the Mining Bureau should instruct the Company to select for important positions any Chinese who may have become proficient in mining engineering. They are to be treated the same as foreigners, to encourage improvement.

12.-On opening the mines, the Hui Tung Company shall establish a School of Mining and Railway Engineering in some locality convenient to the mines, and there shall be selected twenty or thirty promising youths by the local officials and gentry to study in this school, under foreign instructors, and be thus prepared for future employment on railways and in mines.

13. At places where mines are opened, the Mining Bureau should apply to the local authorities for protection. Such mines should also obey their rules, and enrol volunteers to guard against thieves, &c. If the natives should enrol themselves as volunteers of their own accord to protect the localities, the Hui Tung Company should also subscribe towards their expenses.

14. The Mining Bureau, acting as intermediary between the superiors and subordinates, is to attend to all negotiations between natives and foreigners and matters of protection. The work involved, as well as the expenses, will be great. The Hui Tung Company should therefore start work within three months after the signing of this Agreement, and pay the Mining Bureau the sum of 100 taels per month for its working expenses for each mine, reckoning from the day when work is started. There will be no other charges besides this. If work be not started after six months this Agreement is considered cancelled, and

the Hua Yi Company will be at liberty to invite other merchants to take up the work. It will be no concern of the Hui Tung Company.

15.—The Hui Tung Company shall work all the mines according to the existing Rules adopted by the head office. After paying the producer's tax and the export duty, if there should be a profit by the annual accounts, there shall first be paid 6 per cent. interest on the capital employed, next 10 per cent. of the remainder of the profit shall be set aside as a sinking fund for the yearly repayment of capital and consequent reduction of interest, payments to sinking fund ceasing when the invested capital is wholly repaid, and from the remaining net profit 25 per cent. shall be paid to the Chinese Government, and the remainder shall go to the Hui Tung Company for its own disposition.

16.—The Hui Tung Company is to open not one mine, but a large number. The accounts and profits of each mine must be kept distinct from the others; the gains of one mine should not be made to offset the losses of another, and so cause the Government income to suffer reduction.

17.—At the end of every year, the Hui Tung Company shall make up distinct accounts of the different mines, whether profitable or not, and the same must be audited by the foreign and Chinese Managers, and when found correct, a printed account of profit and loss shall be rendered by each mine to the Mining Bureau for approval. A general account of profit and loss for all the mines shall then be prepared and submitted to the head office at Peking, the Board of Revenue, and the Viceroy of Szechuan for audit. Payments due to the Government shall be remitted at the same time. The report shall show the real amount of money due to the Government in order to avoid all discrepancies in the accounts. The Chinese Government and the Hua Yi Company are not to be held responsible in case of loss.

18.-The Hui Tung Company is to have control of all the mines opened by them for a period of fifty years, reckoning from the date on which each mine is opened, on expiration of which term all the mines, whether profitable or not, shall, with all plant, machinery, materials, buildings, roads, and all property acquired by the capital of the mines, be handed over gratis to the Chinese Government without asking for compensation, and in due time the Mining Bureau of Szechuan shall report to the head office at Peking, and the Viceroy of Szechuan shall send Deputies to take delivery of the same. The land rented by the Hua Yi Company shall be handed back to the original owners.

19.-The Hui Tung Company being formed of Chinese and foreign shares shall, at its own choice, sell and buy its shares according to the fluctuation of the market rates. If the Hua Yi Company, or any Chinese gentry or merchants, shall, within the said term of fifty years, acquire three-fourths of all the shares. in the Hui Tung Company, the mines may then be taken over from the Hui Tung Company, and the Mining Bureau shall report upon the same and direct the said shareholders (merchants) to take charge of the mines.

20. Should any mines opened on land bought by the Hua Yi Company and handed over to the Hui Tung Company, be stopped on account of no profits

Although it is understood that no work has yet been undertaken, it appears that as recently as 1915 there was some discussion of a payment by the Chinese Government to the assigns of Mr. Morgan in liquidation of the rights accruing under these regulations.

being made, and the rent cease to be paid, then the Hua Yi Company has the option of adopting other means to open such mines, or use the land for any other business. This, of course, is to prevent the money spent on the land from being wasted, and, consequently, has nothing to do with the Hui Tung Com

pany.

21.—If the Hui Tung Company sends out engineers who discover certain mines in certain places, and report the same to be rich, but cannot guarantee the same, and it is exceedingly difficult to purchase the necessary land for working such mines, the Hui Tung Company should in such cases pay the purchasemoney for the land to the Hua Yi Company, who shall have the said land purchased and handed over for working. This will prevent the purchase-money being wasted. If a mine is discovered in the land purchased, the price paid for the land will be repaid to the Hui Tung Company by deducting the rent of 5 per cent. until the whole purchase-money is paid off, when the Hua Yi Company shall again collect the rent of 5 per cent. as usual. Should there be no mine in the land purchased, no rent shall be payable to the Hua Yi Company, and the Hui Tung Company, being unable to recover the purchase-money, shall not deduct the same, with interest, from any other mine. This is agreed to by both parties, and a further guarantee will be given at the time.

22.-All machinery, materials, and supplies needed for the mines opened by the Hui Tung Company shall, on importation, be subject to the Rules in force for the Kaiping and other Mining Companies, and pay one full duty and one-half duty to the Maritime Customs, and shall be exempt from all inland li-kin dues.

23. These mines being under the sovereignty of China, should China ever be at war with another country, the said Company shall obey the orders of the Chinese Government, and grant no aid to the enemy.

24. The Hua Yi Company and the Hui Tung Company shall obey all Rules and Regulations adopted and memorialized by the head office, even if the same be not stipulated in this Agreement.

25. This Agreement, with Regulations agreed upon, shall be made out both in Chinese and English, in eight copies, to be signed by Director Li Tai Ching, of the Hua Yi Company, and Foreign Assistant Director Morgan and Chinese Assistant Director Liu Hsio Shun, of the Hui Tung Company, and to be sealed by the seal of the Mining Bureau of Szechuan. One copy each of this Agreement is to be sent to the Mining and Railway Board at Peking, the Tsung-li Yamên, the Board of Revenue, the Viceroy of Szechuan, and the Treasurer of Szechuan, for reference. Of the remaining three copies, the Szechuan Mining Bureau, the Hua Yi Company, and the Hui Tung Company are to keep one each as proof. If there be any mistakes in the translation, the Chinese text shall hold good.

Signed this 14th day of April, 1899.

NUMBER 1899/2.

GERMANY AND CHINA.

Agreement concerning the establishment of a maritime customs office at Tsingtao (together with (A) an Agreement concerning inland waters steam navigation, April 17, 1904; (B) an Amendment to the agreement, December 1, 1905; (C) an Ordinance regulating procedure in customs matters in the Kiaochow Territory, December 2, 1905; and (D) an Ordinance concerning manufactures in the German territory, April 17, 1907.) *—April 17th, 1899.

1-The Commissioner or the Chief of the Maritime Customs Office at Tsingtao is to be of German nationality. The Inspector General of Customs will come to an understanding with the German Legation at Peking in case of appointing a new Commissioner.

2. The members of the European staff of the Maritime Customs Office at Tsingtao shall, as a rule, be of German nationality; in case, however, of a suddenly occurring vacancy or of temporary requirements of the service, members of other nationalities may be provisionally sent to Tsingtao.

3. The Inspector General of Maritime Customs will inform the Governor of Kiaochow beforehand about all changes in the staff of the Customs Office at Tsingtao; this, however, does not apply to the employés of the Chinese staff. 4. All correspondence between the Customs Office at Tsingtao and the German Authorities and German merchants shall be conducted in the German language. Should, however, merchants of other nationalities come to reside at Tsingtao, they shall be at liberty to correspond in their language; correspondence in Chinese shall be likewise permitted.

5.-On merchandise brought by sea to Tsingtao no import duty shall be levied. Import duty according to existing Treaties shall be levied by the Maritime Customs Office on all merchandise or products passing the German frontier of Kiaochow into the interior of China.

The German Authorities agree to take suitable measures to assist as far as it is possible in the prevention of merchandise passing the German frontier when not provided with a Permit or Pass by the Maritime Customs Office.

6. When Chinese merchandise or products brought from the interior of China into the German territory of Kiaochow are shipped from Tsingtao to other places, they will pay the export duty according to existing Treaties. Produce raised in, and merchandise manufactured from produce raised in or imported by sea, into the German territory of Kiaochow shall pay no export duty. The duty to be paid by articles manufactured in the German territory from materials brought there from the interior of China will be settled later.

*Texts as printed in Customs, Vol. II, pp. 215, 219, 221, 225, 237.

In connection with these agreements, see the Convention for the lease of Kiaochow, March 6, 1898 (No. 1898/4, ante), and the Agreement between Japan and China concerning the reopening of the Maritime Customs office at Tsingtao, August 6, 1915 (No. 1915/12, post). The Tsingtao customs-house was opened on July 1, 1899.