bankments or breakages of bridges, etc., public traffic shall not be reopened before all these difficulties have been removed.

Art. 26. Should the Railway Company apply for soldiers to protect the preparatory work, the construction or the traffic of the railway, the Governor of the Province of Shantung shall at once and effectually comply with such application. The amount to be contributed by the Company for the troops dispatched shall be the subject of a further understanding.

Art. 27. In the German leased territory the rights of sovereignty are safeguarded by the Governor of Tsingtau. In the districts of the remaining part of the Province of Shantung through which the railway is running, the rights of sovereignty are safeguarded by the Governor of the Province of Shantung. Art. 28.-It shall be the subject of further agreements when and under what conditions the Chinese Government may in future take over the railway. The foregoing regulations after being approved shall be notified to the Authorities of the Shantung Province and to the officials of the railway. Thereupon they shall be duly observed.

Should it in future be deemed necessary to have alterations made of some of the above regulations or to have drawn up supplementary rules, this can only be done by mutual agreement between the then Governor of the Province of Shantung and the Shantung Railway Company.

This agreement is executed in two exemplars each of which contains a Chinese as well as a German version of like tenour. Each of the contracting parties has received one exemplar.

TSINANFU, the 21st of March 1900.

The Governor of the Province of Shantung

[Seal and signature of GOVERNOR YUAN SHIH Kai]
H. I. M.'s Special Delegate, Lieut. General,
[sig.] YIN CHANG.

Die Betriebsdirection der Schantung-Eisenbahn-Gesellschaft,
[sig.] H. HILDEBRAND.

Note.

In connection with these regulations, see the Convention for the lease of Kiaochow, March 6, 1898 (No. 1898/4, ante); and the Exchange of notes between Germany and China in regard to the extension of the Shantung Railway, December 31, 1913 (No. 1913/16, post). The Schantung Eisenbahn Gesellschaft was a joint German and Chinese enterprise operating under a German charter or "concession" dated June 1, 1899, of which the following translation is given in Rockhill, p. 363:—

Charter of Schantung Eisenbahn Gesellschaft.-June 1, 1899.

"In response to a request made by the Deutsch-Asiatische Bank (German-Asiatic Bank), representing the Syndicate, formed for the establishment of a German-Chinese Company with the title of Schantung-Eisenbahn-Gessellschaft' (Shantung Railway Company), the Imperial Government agrees to grant to said company a concession for the construction and operation of a railway in the Chinese Province of Shantung, from Tsin-tao via Weihsien to Tsinan Fu with a branch line, starting from a point on the main line, to Poshan, according to the provisions of the German-Chinese Treaty of March 6, 1898, and under the following conditions:

"§1.-The construction and maintenance of the railway shall be proceeded with by a German-Chinese Company, to be organized by the Syndicate upon the basis of the contract hereto attached.

"This company will have its domicile at first in Berlin but will nevertheless remove the same to Tsin-tao within six months from the date of the granting of the concession. "§2.-The capital for the construction and operation of the railway is fixed at 54 Million Marks.

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'Care is to be taken that Germans as well as Chinese may participate in the public subscription to the stock of the Company. More especially, shall subscriptions be opened in the suitable commercial centers of East Asia, and the amounts there subscribed shall receive proper consideration.

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§3.-The management of the_railway shall be domiciled at Tsin-tao. The election of the President of the Board of Directors as well as the Chief Operating Official must be approved by the Imperial Government.

§4.-The following regulations govern the construction of the railway:

'I.—In the building of the railway lines the special preparatory work shall determine the best possible connection with the most important coal fields, more especially with those of Weihsien and Tzechuan as well as the chief cities and towns between Tsin-tao and Tsinan Fu, which, on account of their population or other significance, must be considered in their relation to railway traffic.

"In the construction of the railway station at Tsinan Fu consideration is to be given to the connection with the Hoang ho and the continuation of the railway on the one side to the southern boundary of the Province of Shantung in the direction of Kua-chou (Chinkiang), on the other side following the North Boundary of the same Province in the direction of Tientsin and Cheng-ting.

"The Company must obtain from the Imperial Government permission to carry out the railway line, in accordance herewith, in the territory of Kiau-chou, outside this territory the permission of the Imperial Minister in Peking is to be obtained.

"The lines may be built for single track; however sufficient land for the construction of a double track must be provided.

"The gauge shall measure 1.435 meter.

"II.-German material shall be used, as far as possible, in the construction of the

railways.

"III. The completion and opening of the main line from Tsin-tao to Tsinan Fu, and of the branch line to Poshan must follow within a period of 5 years, dating from the grant of the concession, and that of the railway section from Tsin-tao to Wei-hsien within a period of 3 years. Should the Company be prevented from the fulfilment of these obligations by force major, the fixed periods shall be respectively extended.

"§ 5. The following stipulations shall obtain for the operation of the railways: "I.-The Governor of Kiau-chou is to be notified of the proposed opening of the railway on any one section at least three days in advance of the time set.

"II. The railway is to be equipped in due time with rolling stock according to the requirements of traffic. The material used shall be, as far as possible, of German origin. "The Company binds itself to permanently maintain the railways, buildings, workshops and rolling stock, including the telegraph plants, in good order and condition, in order that transportation may be made with security and according to the stipulations of the present contract. The company shall be held responsible therefor by the Imperial Government, but no stricter regulations shall be issued for railways outside of the Protectorate than those in force on the majority of the railways in China, built and operated under similar circumstances. The railway police regulations applicable within the Protectorate shall be in force along the line of railroad operation.

"III.-The number of trains to be despatched is left to the discretion of the company, but it must meet the necessities of traffic as far as possible. The establishment of a schedule and changes therein are subject to the approval of the Governor of Kiau-chou, with the understanding that no greater obligations shall be required of the company than in the case of the majority of other railways built and operated under similar circumstances in China.

"The time table is to be made public in due time.

"IV.-The fixing of the tariff for transporting passengers and freight on every railway section is left to the discretion of the company for the first ten years, beginning on January 1st following the opening of the railway, but the maximum rates for the transportation of coal, to be fixed by the Imperial Government after consultation with the company, may not be exceeded. Subsequent to this time, that is after the expiration of the ten years specified above, it is optional with the Imperial Government to fix the maximum rates for the various classes of passengers and goods every five years; within these limits the company shall be at liberty to fix the charges of transportation. All maximum rates to be fixed by the Imperial Government shall, however, not be lower than the maximum rates of the majority of railways built and operated under similar circumstances in China.

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"Rates for transportation as well as changes therein must be made known to the Governor before adoption, and shall be published in due course. Increased rates, should they not be approved by the Governor, shall come into force three months after publication only. V-Use of the railway is to be granted to everybody under similar conditions. Especially the rates fixed for transportation are to apply equally to all persons or goods of the same class. Facilities of transportation which under fulfillment of the same conditions do not benefit everybody are inadmissible. Exceptional tariffs require the approval of the Governor of Kiau-chou.

"Upon demand of the Imperial Government the Company is obliged to allow other contractors to connect with the railway by means of private connecting tracks or junction railways, upon refunding to the Company the expenses incurred thereby, should the Company itself not build connecting tracks or junction railways within a reasonable time. The Company is further obliged to undertake the operation of the private connecting tracks and furnish the necessary means of transportation, for which it is to receive suitable compensation, and further, for a likewise reasonable compensation, to allow the passage of the necessary transportation material of the junction railways.

§6.-Should the Company culpably offend against one of the obligations imposed upon it by this document and not comply in due time with the injunction given by the Imperial Government to make good the offense, the Imperial Government may hold the company responsible for the losses accruing to the traffic through its fault, in an adequate sum of money.

"Whether there has been a culpable offense on the part of the company, and whether in consequence of such offense the order of the Imperial Government has not been properly complied with, and what amount shall be paid for accrued damages, shall be finally determined by a Court of Arbitration to be formed as provided for in Section 7.

"All moneys hereafter to be paid by the Company shall be paid into the Treasury of the Imperial Government of Kiau-chou.

"Should a culpable action of the Company relative to one of the imposed obligations contained in this document result in the railway section not being constructed or operated in due course, the Imperial Government is authorized to take over itself, or to cause to be taken over by a third party, the construction or extension of the railway and the organization or continuation of the traffic, all at the expense of the Company. The question as to whether such a culpable action on the part of the Company exists is also to be finally decided by the Court of Arbitration to be formed according to paragraph 7 of this document.

"87.-The Court of Arbitration, provided for in Article 6, shall be formed in such manner that each party appoints two arbitrators and these shall elect an umpire. The Imperial Government will name its arbitrators to the Company and, at the same time, request the Company to appoint their arbitrators within four weeks, counting from the day of the handing in of the summons, and to name them to the Imperial Government. If the Company does not comply with this summons in due time, the Imperial Government will also elect the necessary arbitrators. The umpire is elected by a majority vote. In the case of a tie the umpire will be appointed by the President of the Hanseatic Upper District Court. The regulations of the Tenth Book of the Civil Process, unless otherwise stated in this document, shall hold good for the arbitration proceedings.

"§ 8.-During the life of the concession, conveyed in this document, the Imperial Government will not grant to any other contractor the right to construct a railway section, running parallel in the same direction with the concessionary lines to the same points, or touching at several of their principal places.

"§9.-The Imperial Government of Kiau-chou shall cede to the Company such land in the Protectorate necessary for the construction of the railway, provided it is property of the Government and, according to the declaration of the Governor, not indispensable for Government purposes, upon payment of the price prevailing in the locality, but which shall not exceed 125,000 marks. The Imperial Authorities will, as far as possible, assist the Company at their request to acquire more land if necessary, should it lie in the Protectorate or in the Province of Shantung.

"§ 10.-The Imperial Government will grant to the Company, upon their request, the concession for the construction and operation of the railways from Tsinan Fu to I-chou Fu and from Tsin-tao to I-chou Fu, under conditions corresponding to those contained in this document.

"As regards these railways, the company is free to await the end of the year 1908 before presenting this request. The concessions not solicited in due time can be otherwise granted by the Imperial Government.

"11.-The Company shall pay a contribution from the yearly net profits of the railway to be applied to the expenditures of the Government for the harbor works in the Bay of Kiau-chou and also to the general running expenses of the Protectorate, which contribution is to be estimated as follows:

"If after the opening of the traffic of the railway from Tsin-tao to Tsinanfu, the

net earnings of the railway would permit the payment of a yearly dividend of more than 5 per cent of the paid up capital which is used in operating the railway, there shall be paid into the Government funds of Kiau-chou the twentieth part of any surplus over 5 to 7 per cent, the tenth part of any surplus over 7 to 8 per cent, the fifth part of any surplus over 8 to 10 per cent, the third part of any surplus over 10 to 12 per cent, and the half of any surplus over 12 per cent.

"§ 12.-The Imperial Government reserves the right to purchase the railways to be constructed by the Company in accordance with this concession, after the end of sixty years, calculated from the date of the grant of the concession. The Imperial Government further reserves the right to buy at the end of every five years, including a one year's previous notice, all establishments, rolling stock, appurtenances, inclusive of the reserve and renewal funds earned by the railway enterprise, upon payment of twenty-five times the amount of the average dividends paid during the last five years from its earnings, or, at least, however, the commercial value of the actual existing railway plants, workshops and rolling stock. In case there should be any doubt in ascertaining the value, a Court of Arbitration, formed according to Article 7, shall decide. Should no sum obtain the majority of the votes cast the one nearest the average of sums named by the individual arbitrators shall be accepted. The decision of the Court is final.

"§ 13.-The transfer, in whole or in part of the concession granted to the Company, according to this document, the rights and obligations appertaining to it in exercise of the same, under maintenance of its concessionary character, as well as any alteration in the contract, must, to become valid, have the approval of the Imperial Government.

"The transfer of the concession itself or parts thereof to another Company, not German or German-Chinese, is prohibited.

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§14.-The Imperial Government reserves the right of appointing a commissioner according to Article II of the second part of the German-Chinese Treaty of March 6, 1898. "§ 15.-A copy of this concession document will be delivered to the Company as soon as the Company is regularly formed by the Syndicate.

"§ 16.-The charges for all expenses incurred in this document, especially the stamp duties, shall be borne by the Company.

"Baden-Baden June 1, 1899.

By a Decree of the German Imperial Chancellor, dated March 13, 1913, the scope of the railway enterprise was extended to include the exploitation of the mines of the Schantung Bergbau Gesellschaft (No. 1900/4, post); the increase of the share capital to 60,000,000 Marks was approved; and the adoption of the following Rules (dated February 12, 1913) was sanctioned:

Rules of the Shantung Railway Company.

"I. GENERAL STIPULATIONS.

"Par. 1.-By virtue of the preceding Concession of the 1st June, 1899, granted by the Imperial German Government an Actiengesellschaft' has been formed under the style of Schantung Eisenbahn Gesellschaft' which has its siege in Tsingtau; the Company shall be under the laws and jurisdiction of the Court of Tsingtau for all affairs except those between the Company and its shareholders and/or the Company and its executive bodies arising from their Company-relations. For such cases the Company shall be subject to the jurisdiction of the competent Courts in Berlin.

"The duration of the Company is not limited to a fixed time.

"Par. 2.-The object of the enterprise is the exploitation of the concession mentioned in Par. 1 by constructing and operating a railway from Tsingtau to Tsinanfu including a branch line from Changtien to Poshanhsien as well as the exploitation of the concession dated 1st June, 1899, for mining in the Chinese Province of Shantung granted to the Schantung Bergbau Gesellschaft and transferred to the Shantung Eisenbahn Gesellschaft. "Par. 3.-With sanction of the Imperial German Government this Company shall be authorised:

1) to build equip and run other railways in China,

2) to undertake the running of other railways established in East Asia and to acquire such as property.

3) to intrust a third party with the running of its own railways,

4) to enter into agreements with the administrations of other connecting lines of railroads operating or in course of construction, about mutual utilization of their lines or to participate in any other way in other railway enterprises of East Asia, 5) to erect on its stations or in connection therewith the necessary warehouses for storage of goods and to issue warrants for the goods taken in charge as well as to provide for the forwarding of persons and of goods to and from the stations,

6) to produce and turn to profit also outside the district covered by the concession of

the Schantung Bergbau Gesellschaft, both within and without the Province of Shantung, products of the country and minerals, to establish and to acquire whatever plants may be necessary for this purpose and to operate these and other establishments which may promote the interests of the Company, or to participate therein, 7) to set up branch establishments.

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'Par. 4.-The notices of the Company appear with legal validity by publishing them in the 'Deutscher Reichsanzeiger.'

"II. ORIGINAL CAPITAL, SHARES, DEBENTURES.

"Par. 5.-The original capital of the Company amounts to 60 million Marks divided into 60,000 bearer shares of a nominal value of M. 1000 each. [Note: (not in translated text) Amended to read: 70 million and 70,000, respectively, by resolution of 5th June, 1914.]

"Annexed to each of these shares are dividend-coupons covering ten years and renewal slips. The renewal slips empower a new issue of dividend-coupons for ten years and a new renewal slip to the same effect.

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Shares or interim certificates, if any, shall be executed by signatures, or facsimiles, of the Board of Directors and of the president of the Supervisory Committee or his substitute (vice-president). For the rest the forms of shares, interim certificates, dividend-coupons and renewal slips are to be decided on by the Supervisory Committee.

The original subscribers who have floated the railway enterprise with a foundation capital of 54 millions of Marks have received a bonus share on each share subscribed by them, the privileges of these bonus shares are laid down in Par. 20, 26 & 30.

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The General Meeting may with the consent of the Imperial German Government resolve on an increase of the share capital and on issuing the new shares at an agio above their nominal value. New shares shall be issued to bearer provided not otherwise resolved. The nominal value of shares and the minimum value below which the issue of shares shall not take place are to be stipulated by the General Meeting.

Par. 6.-In case shares, interim certificates, dividend-coupons and renewal slips have by damage or defacement become unsuitable for circulation but their essential content and distinctive marks are still recognisable with certainty, the entitled holder may demand of the Company to execute and deliver to him in exchange for the damaged or defaced document a new one. He has to pay in advance all expenses incurred thereby.

'In case shares, debentures, bonus shares or interim certificates are lost or have been destroyed they may be declared invalid by the legal proceeding of public notice. The costs of such proceedings as well as the cost of executing new documents and all expenses incurred thereby are not to be borne by the Company but by the concerned, who has to advance the costs.

"Dividend-coupons and renewal slips need not be declared invalid. Dividend-coupons belonging to shares or interim certificates declared invalid, and not yet due at the time of such declaration, are also invalid.

"Matured dividend-coupons become invalid in favor of the Company's accounts unless collected within 4 years, counted from the 31st December following the date on which they have become due.

To anyone, however, who gives notice to the Board of Directors of the loss of coupons before expiry of said term, proving their former possession by production of the shares or interim certificates or otherwise in a reliable manner the amounts due on such coupons, given notice of and not yet presented up to the expiration of the said term, shall be paid against receipt.

"When the owner of a share or interim certificate, before issue of new coupons has taken place has filed a protest against their delivery to the owner of the renewal slip such coupons shall not be handed to the renewal slipholder but to the owner of the principal document on production of such document by him.

"Par. 7.-By subscription for or purchase of shares, bonus shares or interim certificates the shareholder subjects himself to the competent Courts of Berlin in respect of all controversies with the Company arising out of Company relations.

"Par. 8.-With the consent of the Imperial German Government the Company shall be authorised to issue debentures.

"III. ADMINISTRATION.

"a) Board of Directors.

"Par. 9.-The Board consists of two or more Directors appointed by the Supervisory Committee, this Committee is also authorised to appoint Acting-Directors (substitutes for the Directors). These appointments shall be recorded notarially or judicially and must be published. The Chairman of the Board must be approved by the Imperial German Govern

ment.

The Board may appoint procurists only with the approval of the Supervisory Committee. The Supervisory Committee divides the business among the members of the Board, and