fixed therefor. If, at any time, the earnings of the Railway, together with funds available from the proceeds of the Loan, are not sufficient to meet the interest on the Bonds and the repayment of capital in accordance with the amortisation schedule hereto attached, the Viceroy shall devise means for supplying the deficiency, and should his inability to do so appear probable, he shall memorialise the Government to take measures to make up the deficiency from other sources, and thus be ready to pay off the indebtedness, so that the required amount may be placed in each case at least fourteen days previous to the due dates of such payments, in the hands of the Hongkong and Shanghai Banking Corporation,

ARTICLE 15.—The Corporation may, subject to all its obligations, transfer or delegate all or any of its rights, powers, and discretions, to its successors or assigns, but the Corporation, which is a Corporation formed under English law, shall not transfer its rights under this agreement to any other nation, or people of any other nationality, except British or Chinese. Similarly, the Chinese Government's rights and authority under this Agreement shall not be transferred to persons of other nationality.

It is further understood that the Chinese Government will not build another line competing with this Railway to its detriment.

ARTICLE 16-The term of the Loan, as stated in Article 1, shall be thirty (30) years. Repayment of principal shall commence after the expiry of 121⁄2 years from the date of the Loan and shall be completed in 1711⁄2 years by yearly payments to the Hongkong and Shanghai Banking Corporation as Agents for the service of the Loan, acting for the Corporation under the terms of this Agreement, in accordance with the amortisation schedule hereto attached.

If, at any time after the expiry of 121⁄2 years from the date of the Loan, the Imperial Chinese Government should wish to redeem the outstanding amount of the Loan, or any portion of it, not yet due under the provisions of the amortisation schedule hereto attached, not less than six months' notice shall be given in writing by the Viceroy to the Representative of the Corporation, declaring the number of additional Bonds so required to be redeemed, whereupon the Representative of the Corporation shall immediately proceed to make such arrangements as may be necessary and usual for the redemption of the number of Bonds specified, which, when duly redeemed after payment by the Imperial Chinese Government of the proper amount due thereon, shall be cancelled and delivered to the Viceroy.

All Bonds thus redeemed, in excess of the amount specified in the amortisation schedule hereto attached, before the expiry of 25 years from the date of the Loan, shall be paid for with a premium of 22% over their face value, (i. e. £102.10 will be required to pay for £100), but after 25 years Bonds may be redeemed over and above the amounts specified in the schedule without premium upon notice being given in the manner above specified.

As soon as the Loan has been completely redeemed, this Agreement shall become null and void and the mortgage shall be cancelled.

ARTICLE 17.—If, during construction, any proceeds of the sale of the Bonds ‡ Amortisation schedule is omitted here.

1

are lying unused and bearing interest on their deposit whilst the construction of the Railway is going on, such interest is to be credited to the general account of the Railway in order that the Railway may enjoy the full advantage thereof.

It is also agreed that, if the Corporation shall think it expedient before the sale of any of the Bonds to advance any money for the work, such advances, together with the interest thereon not exceeding a charge of 6% per annum, shall be deducted from the proceeds of the sale of the Bonds.

ARTICLE 18-The junction of the sections of the Railway from Canton to the boundary of the Kowloon leased territory under British control, and from the said boundary to the port of Kowloon respectively, and the subsequent joint working of the two sections, shall be arranged by agreement between the Viceroy of Canton and the Governor of Hongkong.

ARTICLE 19.-This Agreement is signed under the authority of an Imperial Edict dated the seventh day of February, 1907, which has been officially communicated to the British Minister in Peking by the Waiwupu.

ARTICLE 20.—This Agreement is executed in quintuplicate in English and Chinese, one copy to be retained by the Viceroy, one by the Waiwupu, one by the Board of Communications, one by the British Minister, and one by the Corporation, and should any doubt arise as to the interpretation of the Agreement the English text shall be accepted as the standard.

Signed at Peking by the contracting parties this twenty-third day of the first month of the thirty-third year of the Emperor Kwang Hsü, being the seventh day of March, nineteen hundred and seven.

[Seal of Waiwupu.]

[Seal and Signature of His Excellency TANG SHAO-YI,

Note.

Further advances on account of the Canton-Kowloon Railway were arranged on June 6, 1913, in the terms of the following letter (as given in Wang, p. 391):

Letter of Agreement for Advances on Canton-Kowloon Railway, June 6, 1913.
The British and Chinese Corporation, Limited.

The Hon. Mr. Chu Chi-Chien,
Minister of Communications, Peking.

Peking, June 6th, 1913.

Sir,

I have the honour to inform you that the Board of Directors of the British and Chinese Corporation Limited have now consented to the proposed arrangements for advances on account of the Canton-Kowloon Railway, on the following terms and conditions.

1. The British and Chinese Corporation Limited agrees to advance to the Ministry of Communications the sum of Fifty Thousand Pounds Sterling (£50,000)_to_be placed to the credit of the Canton-Kowloon Railway in the Hongkong and Shanghai Bank, London. This sum will be advanced in one amount or in instalments, as the Ministry of Communications may decide, for the term of 2 years, calculated from the date of payment of the first instalment. Interest will be at the rate of 7% per annum, calculated from the date of payment of each instalment.

2. Of the aforementioned advance the sum about £35,000 will be applied to the purchase of rolling stock and other urgent requirements of the Canton-Kowloon Railway, and about £15,000 to the repayment of the Peking-Mukden Railway for rolling stock supplied to the Canton-Kowloon Railway.

3. The Ministry of Communications on behalf of the Chinese Government unconditionally accepts direct responsibility for this advance and hypothecates as security therefor the rolling stock purchased or to be purchased under Clause 2. Repayment will be made either by 4 instalments of £12,500 every six months calculated from the date of payment of the first instalment, or in one amount at the expiration of 2 years, calculated from the date of payment of the first instalment, as the Ministry of Communications may decide: payments of interest will cease as and when instalments are repaid.

4. In consideration of the above advance the British and Chinese Corporation Limited shall continue to act as purchasing agents of the Canton-Kowloon Railway for a period of five years from the date of the first instalment on the same terms and conditions as hitherto at a commission of five per cent (5%).

5. The terms and conditions of this letter of agreement will be communicated by the Ministry of Communications to the Waichiaopu for communication by them to the Minister for Great Britain in Peking.

I have the honour to request that you will be good enough to signify your acceptance and confirmation of the arrangements and conditions herein contained by affixing your signature to the statement to this effect below, retaining one copy of the letter so executed for your files and returning the other to the undersigned.

I have the honour to be, Sir,

I hereby accept and confirm on behalf of the Ministry of Communications the arrangements and conditions herein contained.

[Chinese Signature and Seal]

NUMBER 1907/3.

JAPAN AND CHINA.

Convention regarding the Hsinmin-Mukden and Kirin-Ch'angch'un Railways.* -April 15, 1907.

Gonsuke Hayashi, Envoy Extraordinary and Minister Plenipotentiary of Japan, and Na-t'ung, Ch'u Hungchi, and Tong Shao-i, Ministers of the Imperial Chinese Board of Foreign Affairs, having been appointed thereto by their respective governments, have agreed upon the following Articles :

I. The Chinese Government, being desirous of purchasing the Hsin-min Fu-Mukden Railway, constructed by Japan, hereby agrees that the purchase price thereof shall be Japanese Gold Yen 1,660,000, to be paid through the Yokohama Specie Bank at Tientsin.

The status of this railway shall be changed by the Chinese Government to that of the lines built by China herself, and it is agreed that one-half of the capital needed for that part of the line east of the Liao River shall be borrowed from the South Manchuria Railway Company.

II. The Chinese Government, being about to construct a railway line herself from Kirin to Changchun Fu, agrees to borrow from the aforesaid Company one-half of the capital needed for this work.

III. The conditions of the loans provided for in Articles I and II, with the exception of the periods within which they are to be repayable, shall be in all respects similar to those of the loan contracts of the Railways Inside and Outside Shan-hai Kuan. The most important conditions are mentioned below. The Regulations for the management of the railway lines shall correspond with the methods at present employed by the General Office of the Railway Lines Inside and Outside Shan-hai Kuan.

and

(a) The periods within which the loans shall be repaid shall be

for that part of the Hsin-min-Mukden Line east of the Liao River 18 years,

for the Kirin-Changchun Line 25 years.

No repayment in full of these loans shall be allowed before the expiration of the periods named.

(b) The security for the loan from the South Manchuria Railway Company for that part of the Hsin-min-Mukden Line east of the Liao River shall be the real property of the aforesaid section and its earnings.

The security for the mercantile shares to be issued by the Kirin-Changchun Railway Administration as well as for the loan to be made from the South Manchuria Railway Company shall be the real property of the said Railway and its earnings.

*Translation from the Chinese text as printed in Wang, p. 127. Printed also in For. Rel., 1907, p. 776: Hertslet, p. 397; F. E. Review, vol. XI, p. 391. See Note to this document, post, p. 629.

So long as these loans are not repaid by the Chinese Government, the aforesaid property and earnings of the above-named lines shall not be pledged as security for any other loan.

During the periods of these loans the Chinese Government agrees that the buildings, machinery, rolling-stock, and road-bed of the section of the Hsinmin-Mukden Railway east of the Liao River and of the Kirin-Changchun Railway shall be kept in good condition, and furthermore that such additions will be made to the rolling-stock from time to time as may be required to satisfy demands of the traffic.

If the Kirin-Changchun Line should hereafter build branch lines or an extension, the construction of such lines shall rest of right with the Chinese Government, but, if there should be a lack of capital, application shall be made to the (South Manchuria Railway) Company for an arrangement. Should China, however, appropriate funds herself for the construction of any other railway lines than those mentioned, it shall not concern the South Manchuria Railway Company.

(c) The loans and the interest thereon are guaranteed by the Chinese Government, and should there be any failure to make payment of interest or repayment of principal at the proper periods, the Company shall at once notify the Chinese Government, which shall pay over to the Company the amount of the shortage. If the Chinese Government, after such notification by the Company, shall be unable to make good the deficit in the payments of principal or interest, the line in question with its real property shall be handed over to the temporary control of the Company until the shortage is made good, after which it shall be returned to the control of the Railway Administration.

If, however, the shortage be for a small amount only, an extension of time shall be granted as an accommodation, but never for more than three months.

(d) During the periods of these loans the Engineer-in-Chief employed shall be a Japanese, and should there be an insufficient supply of Chinese for the various posts in the service of the railways, Japanese may be employed with the Chinese. If at any time it shall become necessary to change the Engineer-inChief, consultation must first be had with the (South Manchuria Railway) Company before appointment may be made. There shall also be appointed one Japanese accountant, who must be thoroughly qualified, and who shall have entire responsibility for the arrangement and over-sight of the various accounts of the railways, but in his supervision of receipts and expenditures he must consult and act with the Director General.

(e) The railways mentioned being Chinese Government lines, the latter shall have the right to transport soldiers and subsistence over either line free of charge whenever military affairs or measures of relief shall require.

(f) All earnings of the railways in question must be deposited in Japanese banks. As to the terms upon which such deposits shall be made, satisfactory arrangements shall be agreed upon by the parties concerned when the loan contracts are drawn up.

IV. The Chinese Government immediately after the purchase of the present Hsin-min-Mukden Railway shall enter into a contract with the South Man