Hupei, Hunan and Kuangtung the sum of one million one hundred thousand pounds sterling payable as set forth in Clause 7 below. The exact division of the responsibility for this sum will be settled and announced later.

2. The term of the loan shall be ten years calculated from the sixth day of October 1905 and repayment of principal shall be made by ten equal instalments of Pounds one hundred and ten thousand (£110,000) each commencing on the sixth day of October 1906, provided that at any time after the payment of the fifth annual instalment the three Provinces shall be at liberty on giving six calendar months notice beforehand to pay off the whole amount of the principal then outstanding with interest up to the date of such paying off only and thereupon this Agreement shall cease and terminate.

3.—Interest on the loan shall be paid at the rate of four and a half per cent. calculated half-yearly on the amount of principal from time to time outstanding.

4. All payments of interest and repayments of principal shall be made in accordance with the amounts and dates of the schedule attached to this Agreement to the Treasurer of Hongkong at Hongkong in sterling sight drafts or in the equivalent of sterling amount at the option of the Government of Hongkong.

5. This Loan shall be secured by a first mortgage on the Opium Revenues of the three Provinces of Hupei, Hunan and Kuangtung and shall as regards security for principal and interest rank before any Loan hereafter raised on the security of those revenues and the priority of this Loan shall be expressly stated in any agreement for such subsequent loan secured wholly or in part on the said Opium Revenues. Should hereafter the Opium Revenues of the three Provinces not suffice to meet payments the Viceroy of Hukuang may agree with the Hunan and Kuangtung Governments which province's quota is insufficient and such province shall supplement the above Opium Revenues by other revenues for the service of the present Loan; but in case of default with regard to payments of interest or repayment of principal of the present Loan the Viceroy may be called upon by His Britannic Majesty's Government to agree with Kuangtung and Hunan which province is in default and that province shall appropriate and place under administration of Imperial Maritime Customs further approved revenues as its security.

6.—This Loan shall be further secured by deposit with His Britannic Majesty's Consul-General at Hankow of sterling Likin yearly Bonds equal in value altogether to the total amount of the Loan, principal and interest, sealed by the Viceroy of the Hukuang Provinces and countersigned by the foreign Commissioner of Customs at Hankow. In the event of the money to meet a payment of interest or instalment of principal not being handed to the Hongkong Treasurer at Hongkong on due date these Likin Bonds shall become available for the payment of likin in the Hukuang Provinces and Kuangtung; and the provincial authorities shall be instructed accordingly.

7. Of the proceeds of this Loan the Government of Hongkong on the 6th day of October 1905 shall remit £400,000 to the Hongkong and Shanghai Bank Hankow to the credit of the Viceroy Chang and shall on the said 6th day of October 1905 also remit £700,000 to New York to the credit of the Chinese Minister His Excellency Liang; and the Hongkong Government may require

from the Viceroy through His Britannic Majesty's Consul General at Hankow such evidence as he may deem satisfactory of the due employment of the funds for the object stated.

8. Before the execution of this Agreement the Viceroy has reported to the Throne and obtained an Imperial Decree approving and sanctioning this Loan Agreement which Decree will be communicated to His Britannic Majesty's Minister at Peking by the Wai Wu Pu officially.

9. The Viceroy has by telegraph consulted the Viceroy of the Liangkuang who has replied consenting to the pledging of the Opium Revenues of Kuangtung and to the terms of this Agreement so far as they affect that Province.

10. This Agreement is executed in six parts in English and Chinese one copy to be retained by the Hukuang Viceroy, one copy by the Canton Viceroy, one copy by the Hunan Governor, one copy by the Government of Hongkong, one copy by His Britannic Majesty's Minister at Peking and one copy by His Britannic Majesty's Consul-General at Hankow.

In the event of any doubt arising as to the interpretation of the Contract the English text shall rule.

Signed at Wuchang by the contracting parties this eleventh day of the eighth moon of the year thirty one of the Reign Kuang Hsü being the ninth day of September 1905, Western Calendar.

H. B. M.'s Consul General, Hankow,

for the Government of Hongkong.
[Signature and Seal]

Viceroy

[Signature and Seal]

Note.

It is understood that, in connection with this agreement, Viceroy Chang Chih-tung on September 9, 1905, gave to the British Consul General at Hankow (Mr. Everard H. Fraser) a letter of which the following is a translation:

Letter of Hukuang Viceroy regarding Preference to British Nationals in Railway Construction in Hupeh and Hunan.-September 9, 1905.

"In view of your services in obtaining for me the present loan for the redemption of the Canton-Hankow Railway and the very fair terms on which it has been arranged, I have the honor to give the following assurance which binds the viceroys and governors of the three provinces of Hupeh, Hunan, and Kuangtung and their successors in office who have power to deal with railways:

66

As regards funds for the future construction of the Canton-Hankow Railway, in case it is necessary to borrow abroad in addition to the amount China may herself provide, the first application shall be made to England, and if the British tender is, as regards interest and issue price, equal to the tenders of other countries, British financiers shall have the first option of undertaking the business; if in the above and other respects the tenders of other countries are fairer and more favorable than England's, China will be free to choose the fairest and most favorable and make other arrangements for borrowing.

"If funds for constructing the Canton-Hankow Railway have been borrowed from England, then for the machinery and materials required for that line, apart from what China has of her own making, if bought abroad, British firms and works shall first be applied to, and if their tenders are of similar cost to those made by other countries' firms and works, the British works shall have the first option of undertaking the orders; if the wares of other countries are excellent and the price moderate, China shall be free to contract for purchase from the most suitable.

'Beyond this, if within the jurisdiction of Hupeh and Hunan there are other railway construction enterprises which likewise necessitate loans from abroad, they shall be dealt with on the system set forth above as applicable to the Canton-Hankow Railway loans.

"With regard to the engineers needed for the construction of the railways, I declare that one-half will be of the nation that lends the funds and the other half will be Japanese. The work will be divided into sections for undertaking, and each nation will attend to its own business. China will retain control as regards all railway companies, their employees, selection of land, management of lines, and running of cars; the engineers will only attend to the affairs of the requisite works within their sections and may not interfere in anything else.

"I am communicating officially with the officers concerned, and I have, etc., etc. (Seal of Hukuang Viceroy.) Under date of June 21, 1918, it is understood, the Chinese Ministry for Foreign Affairs had occasion to address to the British Legation in Peking a note in which it was stated that, "with reference to the note formerly given the British Consul at Hankow by the Hukuang Viceroy, it is clearly stated in Article 2 of the Hongkong agreement that when the capital and interest have been paid the agreement shall be cancelled. The note referred to was an addendum to the said agreement. The capital and interest specified in the agreement have long been paid, and so the agreement has now no force; so any addendum to the agreement has also ceased to have force."

NUMBER 1905/10.

INTERNATIONAL AND CHINA.

New agreement for the Huangpu conservancy.*-September 27, 1905.

The Chinese Government, being desirous of substituting for the terms of the Protocol of 1901, having reference to the establishment of a River Board for the Huangpu and the functions and revenues of such Board, a new method of procedure whereby the Chinese Government itself will undertake the work and defray the whole of the expense thereof; and the Powers signatory to the final Protocol having assented to this proposition, the following conditions have been agreed upon :

ARTICLE I.-The Customs Taotai and the Commissioner of Customs at Shanghai are entrusted with the general management of the work of improving the course of the Huangpu and of ameliorating the condition of the bar, both at this and the other side of Woosung, as well as of the maintenance of such works.

With regard to the river and sanitary police, lighting and buoying, pilot service, etc., the former regulations will continue to be in force.

ARTICLE II.-Three months after signature of the present agreement China will herself select an engineer experienced in matters of river conservancy, and if a majority of the representatives of the Powers signatory to the final Protocol consider that the engineer thus chosen possesses the requisite qualifications, China will immediately appoint him to undertake the work.

* Translation from the French text as printed in U. S. Treaty Series (No Number). French text printed also in Customs, Vol. I. p. 342; Traités et Conventions, p. 200; Hertslet, p. 199; other translation in Malloy, p. 2013, and U. S. Treaty Series.

In connection with this agreement see also the final protocol of September 7, 1901, for the settlement of the disturbances of 1900 (No. 1901/3, ante), and the Huangpu regulations attached thereto as Annex No. 17; also the Huangpu agreement of April 9, 1912 (with the supplementary article of 1915) (No. 1912/6, post).

In case, after commencement of the works, it should be necessary, for reasons considered valid by a majority of the Ministers interested, to take steps to replace him, the selection and appointment of the new engineer would be effected in the same manner as above mentioned.

ARTICLE III.-All contracts for undertaking the whole or part of the river conservancy works, for purchase of material or of machinery, etc., shall be submitted to public tender and awarded to the party offering the most advantageous

terms.

ARTICLE IV. Every three months a detailed report upon the work done and a statement of expenses incurred will be drawn up and submitted for examination to the Consular Body at Shanghai.

ARTICLE V. The sanction of the Taotai and of the Commissioner of Customs in Shanghai will be required for constructing wharves and jetties as well as for the establishment of all pontoons or floating houses in the river.

ARTICLE VI.-The Taotai, and the Commissioner of Customs at Shanghai will have the right to expropriate the existing permanent moorings and to establish a system of public moorings in the river.

ARTICLE VII.-The sanction of the Taotai and of the Commissioner of Customs will be necessary for the prosecution of all dredging and other work.

ARTICLE VIII.-The Taotai and Commissioner of Customs will have the right to acquire all land, situated outside the foreign concessions, necessary for the execution of the work of improving and conserving the Huangpu, and to dispose of the said land. If, in this connection, it should be considered necessary to expropriate land, and if such land should be the property of foreigners, the price therefor will be determined by a commission composed of :

(1) A person selected by the Consular authority having jurisdiction over the owner.

(2) A person selected by the Taotai and the Commissioner of Customs. (3) A person selected by the Dean of the Consular Body.

Should the Dean of the Consular body be also the Consul of the proprietor, the third member of the Commission would be chosen by the Consul next in seniority to the Dean.

The Consul having jurisdiction over the party interested will give effect to the decision of the commission.

In case of Chinese property, the Customs will proceed to estimate and settle the price, and will carry out the decision under analogous conditions.

Riparian landowners, Chinese as well as foreigners, will have the right of preference in the purchase or lease of all accretions of land in front of their properties by the deposits effected in improving the river channel. The price at which such lands may be acquired will be fixed by a commission constituted similarly to that described in the preceding paragraph, or according to the case, by the Custom authorities.

ARTICLE IX.-The Chinese Government takes upon itself the whole of the expense of the river improvement, without levying any tax or contribution either upon riparian property or upon trade or navigation.

Article X.-China specifies, and gives as guarantee for the total expense

of the river improvement works, the whole of the duties on opium of Szechuen and of Soochoufu in Kiangsu. In conformity with the provisions of the Protocol of 1901, she will devote annually to these works, and for twenty years, the sum of 460,000 Haikuan taels.

If during the course of any year after commencement of the works, the purchase of material or machines, etc., should necessitate exceptional expenditure, China, in order to meet it, may raise a loan by means of bonds secured on the revenue derived from the above-mentioned opium duties.

For the amortisation and the service of this loan as well as for expenses of all kinds connected with the execution of the works or with the maintenance of the works already completed, China will furnish annually a minimum of 460,000 Haikuan taels.

The provincial authorities concerned will remit this sum by equal monthly payments into the hands of the Taotai and Commissioner of Customs at Shanghai. Should the revenues indicated become insufficient, the Chinese Government must provide the sum specified from other sources.

ARTICLE XI.-If the works should not be prosecuted with diligence, care, and economy, the Consular Body, acting upon a majority of votes, may notify the Taotai and the Commissioner of Customs of the fact and request them to instruct the engineer to take the necessary remedial measures: should the execution of the works continue to be unsatisfactory, the Consular Body may, in the same way, recommend the dismissal of the engineer as well as the selection and appointment of another in the manner set forth in Article II.

In case the Taotai and the Commissioner of Customs at Shanghai should not act upon these representations, the Consular Body may lay the matter before the representatives of the Powers interested.

ARTICLE XII.-When the present articles have been discussed, agreed upon and signed, the regulations contained in paragraph B of Article XI, and in Annex 17 of the Protocol of 1901, shall be suspended, but, if China should fail to furnish annually sufficient funds, in accordance with this new agreement, in such manner that the execution of the works should be thereby impeded, or, should she omit to conform to any other essential stipulation of the present arrangement, the original provisions of the Protocol of 1901 and of Annex 17 thereto, will immediately come again into force.