fixes their mutual relations as well as the rules for their consultations in common and their resolutions.

"Par. 10.-All documents and declarations of the Board are binding on the Company if they are signed with the written, stamped or printed name of the Company and countersigned by at least two members of the Board or by one member of the Board and one procurist with an addition showing that he signs as such.

"b) Supervisory Committee.

Par. 11.-The Supervisory Committee consists of at least 12, at most 30 members to be elected by the General Meeting. At least 5 members shall reside in Berlin and including these at least three quarters of all the members at the time shall be German subjects, residing in the German Empire.

66

The election holds good up to the end of that General Meeting which passes upon the Balance Sheet of the fourth business year after the election, not counting the business year during which the election takes place.

"At each ordinary General Meeting at least 5 and besides so many members of the Supervisory Committee shall retire as that the term of office for each individual member will be finished at latest by the end of the fifth ordinary Meeting after his election. The succession of resignations is decided by the seniority of the members and in case of doubt by lots.

"As long as the number of the members of the Supervisory Committee still remains 12 or more, a new election or by-election may be omitted.

All declarations of the Supervisory Committee are legally executed if they are done under the style Der Aufsichtsrat der Schantung Eisenbahn Gesellschaft' with the signature of the president or his substitute (vice-president) and of a member of the Committee. "Par. 12.-The members of the Committee draw no salaries but they receive reimbursement of the outlays arising out of the execution of their duties and a compensation according to Par. 26 of these rules. The distribution thereof shall follow the detailed regulations of a standing-order to be established by the Supervisory Committee.

"Par. 13.-The Supervisory Committee elects a president and a vice-president (substitute) immediately after each ordinary General Meeting in a session at which the members present meet without being specially called. The president shall be a German subject residing

in Berlin.

"Par. 14.-The president or his substitute (vice-president) shall convene the Committee as often as business requires or when moved by at least three of its members or by the Board of Directors. In convening the meeting the agenda are as far as possible to be stated. Five members form a quorum. On matters not enumerated in the agenda the Committee can only give a valid decision if at least half of its members are present and none of them objects. In urgent cases valid resolutions may be passed by the medium of writing, telegraph or telephone.

"All members of the Supervisory Committee have equal votes. Resolutions shall be passed by majority of votes, votes being equal the president to have a casting vote.

"If at an election by the Supervisory Committee no majority of votes is obtained in the first ballot, a second ballot shall take place for those two persons who have received the highest number of votes. If each then obtains an even number of votes, lots will be drawn for decision.

"Par. 15.-The Supervisory Committee resolves its own standing orders regulating therein as well, whether and how votes have to be taken of Committee members residing outside Germany.

"Par. 16.-Beyond the powers given to the Supervisory Committee by law and elsewhere in these rules the Committee shall especially be authorised:

1) to engage and dismiss Directors,

2) to approve of the annual budget of salaries to be submitted by the Board of Directors and to confirm the selection of officials receiving annual salaries of M 10,000 and more or to be engaged for a longer term than three years, as well as to grant extraordinary remunerations, bonuses and pensions to the members of the Board of Directors and the Company's officials,

3)

4) to determine the instructions for the management class of business affairs (man

agers, &c.) as well as to appoint either members from their midst or third persons to substitute Directors,

5) to resolve on the acquisition and the sale of land properties destined for the Company's own business use,

6) to decide on the annual general condition of income and expenditure to be submitted by the Board of Directors and to fix the principles according to which the money of the Company is to be handled,

7) to approve contracts, if their object exceeds M 30,000 or if the Company is bound thereby for a longer term than three years,

8) to deliberate on matters provided for in Par. 2, sections 1-7, and to decide thereon in so far as an increase of original capital or the taking up of loans is not required, 9) to establish the Balance Sheet and the Profit and Loss Account for the purpose of being submitted to the General Meeting,

10) to submit to the General Meeting the financial statements in order to be discharged and to propose the amounts to go out of the profits to Special Reserve Fund as well as those for division of profits,

11) to resolve upon payments to be called for on shares,

12) to dispose of the Special Reserve Fund according to Par. 28,

13) to appoint one or more special committees from among the members of the Committee and to transfer special business affairs or classes of such to these special committees.

"The election of the Chief Technical Managers as well for the Railway as for the Mines requires the confirmation of the Imperial German Government.

"c) General Meeting.

"Par. 17.-Every shareholder may take part in the General Meetings. In order to be authorised to vote at these Meetings the shareholders must at least three days before the General Meeting and, should that day be a Sunday or a public holiday on the preceding working day, at the office of the Company's cashier or at such other places as may be indicated and advertised publicly:

a) hand in a list in duplicate, showing the numbers arithmetically arranged of the shares intended for participation. b) deposit such shares or warrants therefor issued by the Reichsbank' or by the 'Bank des Berliner Kassenvereins' and leave them there up to the end of the General Meeting.

"The obligation b) can as well be complied with by a deposit with a German notary. "Each share entitles to one vote. Saving legal representation, a proxy in writing is necessary and to be handed in to represent shareholders at a General Meeting. Partnerships, commandite companies and companies limited by shares, syndicates and companies limited by subscription as well as associations and juristic persons by public law may be represented by a member of their legal representative bodies or by an agent authorised to sign per procuration, even if otherwise for the binding of the represented body the joint action of several is required.

"Par. 18.-General Meetings shall be held in Berlin and be convened without prejudice to the regulations contained in Par. 254 of the Commercial Code by the Board of Directors or the Supervisory Committee through a notice given so that there are at least thirty days between the date of issue of the Reichsanzeiger' containing the publication and the date the meeting is to be convened, both dates not included.

"Within the first six months of every business year an ordinary General Meeting shall be held, an extraordinary Meeting is to be convened whenever there is a special cause therefor. "The agenda to be before the Meeting shall be published at the time the notice appears convening the Meeting. The General Meeting may however pass valid resolutions if the motion thereto has been published at least one week before the end of the term set for the deposit of shares. Should however the resolution require a larger than a simple majority of votes, publication of such motion must have taken place at least two weeks before the expiration of the date set for deposit of shares.

Par. 19.-Except in cases, in which the Company must liquidate by order of law, the liquidation or dissolution of the Company, furthermore the reorganisation of the Company by expansion or alteration of the object of its enterprise or its amalgamation with another Aktiengesellschaft' can only be decided on in an extraordinary General Meeting convened solely for the purpose of passing such resolutions.

“To make such resolutions legally valid, it is necessary that at least three quarters of the original share capital is represented in the Meeting. If this is not the case, another extraordinary General Meeting can be called for the same purpose within the next six weeks, in which the resolution can be passed with legal validity even if less than three quarters of original share capital are represented.

"In both cases it is further necessary for the validity of the resolution that such is passed by a majority of at least three quarters of the votes represented in the Meeting and that it is approved of by the Imperial German Government.

"Par. 20.-Alterations and additions to the rules, excepting the cases mentioned in Par. 19 and those cases in which a three quarters majority is prescribed by law can only be passed by a majority of at least two thirds of the votes represented in the voting and with the consent of the Imperial German Government.

"The redeeming of bonus shares (Par. 5) requires an alteration of the rules. All holders of bonus shares are subject to an agreement as to their redemption, if such agreement is approved by at least two thirds of the votes represented in the voting at a meeting of bonusshare-holders, to be convened by a notice (Par. 4) stating the business before the meeting.

In this meeting each bonus share shall entitle to one vote, the further proceedings at the meeting are to be decided on by the Supervisory Committee.

"Par. 21.-At the General Meeting the president of the Supervisory Committee or his substitute (vice-president) or in their absence a member of the Supervisory Committee appointed thereto by the Committee shall take the chair. In case of none of the Committee members being appointed the Chairman shall be elected by the General Meeting under the presidency of the shareholder having registered the largest number of shares. The Chairman conducts the discussion, fixes the succession of the items on the agenda as well as the modus of taking votes and appoints the scrutineers when necessary.

46

'The minutes of the General Meeting shall be written by a notary and shall be signed by the Chairman. A statement of the individual shareholders present in the meeting shall not be embodied into the text of the minutes, but a separate list, signed by the Chairman, giving names of shareholders present and/or represented shall be attached to the minutes, this list to be present for general inspection before the first voting of the Meeting takes place. Proxies handed in need not be attached to the minutes.

"Par. 22.-Resolutions of the General Meeting shall be passed, provided the law or these rules (Par. 19 & 20) do not compulsorily order otherwise, by simple majority of votes taken at the voting, in case of votes being eveh the resolution shall be considered lost.

"If at elections objection is raised against any other modus proposed, the voting has to be effected by handing in ballot-papers and by simple majority. Such majority not being attained at the first voting, a ballot limited to those who have received the two highest numbers of votes shall take place. When votes are even at the limited ballot, decision shall be by lot.

Par. 23.-As a rule the General Meeting only votes on such proposals as are laid before it by the Board of Directors or by the Supervisory Committee.

Motions brought forward by individual shareholders shall be dealt with according to the regulations fixed by law.

"IV. BALANCE SHEET, ASCERTAINING PROFITS.

66 Reserve Fund.

"Par. 24.-The business year begins with the 1st of January and ends with the 31st December of every year.

"Par. 25.-The annual financial statement shall be drawn as for the 31st December in accordance with legal regulations and sound commercial principles, it shall be presented to the General Meeting within the first six months of the following year.

"Net profits shall be understood as profits in hand after deducting such amounts as the Supervisory Committee annually resolves on as contribution towards the Renovation Fund. This Fund is to bear mainly the costs incurred in renewing locomotives, tenders and rolling stock respectively single parts thereof as fireboxes, boilers, cylinders, boilertubes, springs, axles, wheels, steel tyres, brakes, watertanks, bodies of carriages and compartments as well as in renewing rails, sleepers, siding, crossings and small iron parts of the permanent way. On the other hand this Fund is to be credited, in addition to the annual contribution, with the proceeds of sale of the corresponding old material as well as the interest of the Fund itself.

66

Par. 26.-Out of the net profit thus resulting is:

1) 5% to be transferred to the Reserve Fund (Par. 27) required by law, so long as this Fund does not exceed the tenth part of the original capital,

2) an amount not exceeding 5% according to the proposal of the Supervisory Commit

tee to be transferred to the Special Reserve Fund to be formed,

3) a dividend up to 5% on the share capital paid up to be granted.

Of the balance remaining:

33% shall go to bonus-share-holders,

66%% shall go as superdividend on the share capital paid up, after however having first deducted:

5% for the Supervisory Committee and

the contribution to the Government as provided for in Par. 11 of the instrument of concession, dated 1st June, 1899.

"The compensation due to the Supervisory Committee is guaranteed at M 2000 annually for each member and with any possible deficit shall be reckoned in the costs of administration.

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All dividends as well as the contribution to the Government are to be paid at latest in the course of July of the year following the business year accounted for.

"Par. 27.-Agio profits, i. e. what shareholders in case of increase of share capital will have to pay for shares above the nominal value of such new shares, after having deducted thereof all costs of issue shall be placed to the Reserve Fund. (Cf. Par. 26, section 1). This Reserve Fund is solely intended for the purpose of covering a saldo of loss shown by the balance sheet.

"Par. 28.-From the Special Reserve Fund formed according to Par. 26, section 2,

extraordinary losses and expenses, especially for renovations may be met by resolution of the Supervisory Committee.

"V. NOMINATION OF CHANCELLOR'S COMMISSIONERS.

"Par. 29.-The Imperial Chancellor may nominate one or more Commissioners entitled to take part in the meetings of the Supervisory Committee and in the General Meetings and to demand at any time a report from the Supervisory Committee on the affairs of the Company also to inspect the books and documents of the Company.

"VI. LIQUIDATION.

"Par. 30.-The regulations provided by law in case of liquidation shall only apply in so far as the General Meeting deciding on the liquidation does not resolve otherwise. This Meeting shall particularly be authorised to alter for the time of liquidation the powers of the Supervisory Committee, to resolve that during liquidation no regular retiring of members of the Committee shall take place and to stipulate the bonus to be paid to the Supervisory Committee as well as the authority to be given to the liquidators. The holders of bonus shares shall be entitled to 33%% of the surplus remaining after paying off all liabilities including the original capital.”

NUMBER 1900/4.

GERMANY (Schantung Bergbau Gesellschaft) AND CHINA.

Regulations for Mining in Shantung.*-March 21, 1900.

His Excellency the Governor of the Province of Shantung Yuan Shih-kai and His Excellency the Lieutenant General Yin Chang, upon petition of the Governor of Shantung especially delegated by Imperial decree to these negotiations, on the one side, and the managing Board of the Shantung Mining Company at Tsingtau, represented by Messrs. H. Michaelis and K. Schmidt, on the other side, have, in order to prevent excitements and disturbances of any kind, which may arise through the commencement of mining operations by the Schantung Bergbau Gesellschaft in the Province of Shantung and in order to maintain friendly relations between its population and the Company, agreed upon the following Mining Regulations with regard to the mining concession reserved and granted to German subjects by the Imperial Chinese Government within a zone of 30 li on both sides of the railway lines to be built in conformity with Article 4 of the Kiauchow Convention, subject to the approval of the Supervisory *Translation from German text.

A Japanese version of the Regulations is printed in Shina Kankei Tokushu Joyaku Isan, p. 423.

In connection with these Regulations, see the Convention for the Lease of Kiaochow, March 6th, 1898 (No. 1898/4, ante), particularly Section II, Art. IV; also Regulations for the Kiaochow-Tsinan Railway, March 21st, 1900 (No. 1900/3, ante), and particularly the Rules of February 12th, 1913, annexed thereto at p. 243.

Another translation of this agreement is printed (at p. 37) in the Claim of China for direct Restitution to herself of the Leased Territory of Kiaochow, the Tsingtao-Chinan Railway and other German Rights in respect of Shantung Province, as presented by the Chinese Delegation to the Preliminary Peace Conference at Paris in February, 1919.

See Note to this document, post, p. 252.

Committeee of the Schantung Bergbau Gesellschaft, and reduced to writing in Chinese and German texts of like tenour.

Art. 1.-By virtue of Article 4, section 2, of the aforesaid Kiauchow Convention a German-Chinese Company shall be formed, according to the rules of this Company shares shall be issued which may be purchased by German as well as by Chinese subjects. This Company shall for the present be exclusively under German management, it shall half-yearly notify the Chiao Se Chue at Tsinanfu how many shares have been purchased by Chinese. As soon as the amount of such shares has reached Taels 100,000 the Governor of the Province of Shantung shall to look after the interest of the Chinese shareholders, appoint a Chinese official to co-operate at the Company's siege.

Art. 2.-Should in future branches of the Administration of the Company be established in Shantung one Chinese official shall be delegated to each of them.

Art. 3.-Land used for preliminary examinations with regard to the mining enterprises, for boreholes and prospecting shafts, etc., shall be rented by the Company at an adequate compensation provided the Company should not prefer to buy such land. Spoiled crops or other damages shall be fully paid for according to local market prices. The beginning of such operations has to be notified to the local authorities fifteen days in advance in order to enable them to issue instructions to the population.

Art. 4.-Officials or respectable citizens shall be consulted upon the lots of lands to be selected for digging shafts, or erecting workshops, depots, houses for workmen, etc., in order to prevent, as far as possible, injury being done to the interest of the people. To avoid difficulties in negotiations, these shall be conducted on the Chinese side by Chinese officials, delegated by the Governor of Shantung.

The technical determination and selection of the mining fields and of the surface plots needed to erect the buildings of the mining establishments shall be left to the engineers of the Mining Company.

A ground-plan of these establishments done on a scale of 1:25,000 has to be submitted to the Governor of Shantung for information and only thereafter land may be purchased. The construction itself shall not begin before the title deed to such land is duly made out.

Landowners shall not be permitted to protest against subterranean mining works necessary for production of coal or other minerals except at places mentioned in Art. 7.

The purchase of land has to be proceeded with peacefully and quickly, there shall be no detention of mining work through land purchase or through difficulties raised by individual owners. In order to prevent all such difficulties the abovementioned Chinese official shall act as mediator when land is to be purchased and he shall settle all disputes arising. The land shall be purchased in an honest way according to the locally customary ruling price. The Company shall not be allowed to buy more land than necessary for erection of the surface plants including depots, railroads and roads leading to the mines and possible future extensions.