thousand three hundred and thirty-three (H-P-H-P taels 458,333); on the 9th day of May 1910 the second instalment of Hong-Ping-Hua-Pao taels four hundred and fifty-eight thousand three hundred and thirty-three (H-P-H-P taels 458,333); and on the 29th April 1911 the third instalment of Hong-PingHua-Pao taels four hundred and fifty-eight thousand three hundred and thirtyfour (H-P-H-P taels 458,334).

5. The redemption amount is to be paid in the Hong-Ping-Hua-Pao taels without any deduction of discount whatsoever. The responsibility for remittance charges between Shansi and Pekin together with the interest on money borrowed in advance for this purpose shall be borne by the Province of Shansi.

6. This case originated in a request of the Shansi Bureau of Trade which was granted by the Governor of Shansi and afterwards authorized by the Throne on a memorial from the Tsung-li Yamên. Now, since the Province of Shansi is providing funds to redeem and cancel the covenants, the Wai-wu-pu should be moved to instruct the Governor of Shansi to see to it that the money is paid by the Bureau of Trade on the due dates not permitting any excuse.

7. The Province of Shansi having recovered control of its mining affairs for its own working and the Pekin Syndicate having surrendered all its rights under the principal and supplementary agreements for the opening of mines, working of iron and transport of minerals, the Province of Shansi has no intention whatsoever of raising a foreign loan, but seeing that the Pekin Syndicate has hereby made a complete surrender of all its privileges if by any possible chance the Province of Shansi shall hereafter desire to raise a foreign loan in connection with mines, working of iron, or transporting of minerals, the Province of Shansi shall notify the Pekin Syndicate and if the Pekin Syndicate's proposals are in all respects fair and moderate shall then proceed to further negotiations, otherwise arrangements with others may be made for a loan and neither party shall object.

8. All that the Pekin Syndicate possesses at Ping-ting-chou in the way of compounds and buildings shall be evacuated and with all machinery now there shall be delivered over to the Bureau of Trade within three months of the signing of this settlement. The Syndicate will surrender any and every property acquired in any of the five areas mentioned in the original convenant.

9.-All claims for compensation on the part of employees of the Syndicate, whether engineers or otherwise, for loss of occupation and prospects shall be borne by the Syndicate.

10. The amount for indemnity shall be raised in advance by the Bureau of Trade from the people of Shansi by appropriating the whole of the funds of the Shansi Province acreage tax (mu-chuan) which is a fund managed by the people as a whole for the general good of the Province and should therefore be used to redeem the mineral resources which are the inheritance of the people as a whole. This acreage tax shall not be changed in character nor reduced so long as any part of the indemnity remains unpaid to the Syndicate. Should the acreage tax prove insufficient for the purpose it shall be supplemented, as required, by the provincial authorities from other funds.

11. As the original covenant in twenty articles was confirmed by the

Tsung-li Yamên so this document of a settlement should also be confirmed by the Wai-wu-pu and recognized by the British Minister who respectively guarantee its fulfilment by their respective nationals.

12. Done in English and Chinese this 21st day of January 1908 in duplicate one copy being held as evidence by each party.

Signed on 21st of January 1908.

By LIU TU CH'ING,

(Head of the Shansi Bureau of Trade.) GEORGE BROWN,

(General Agent Pekin Syndicate.)

Note.

The text of the supplementary covenant of 1905 is not available: the regulations of May 21, 1898, are reprinted in Rockhill, p. 305, from China, 1899, No. 1, p. 112, as follows: Regulations for Mining Purposes, etc., in Shansi, May 21, 1898.

"Regulations agreed upon by the Shansi Bureau of Trade and the Pekin Syndicate for mining purposes, ironworks, and transporting mine products of all kinds in the Province of Shansi.

"1.-The Governor of Shansi having sanctioned the request of the Shansi Bureau of Trade for the special right to open and work coal and iron mines throughout the districts of Yu-hsien and Ping-ting-chou, and the Prefectures of Luan-fu, Tsechow-fu and Pingwang-fu and also petroleum wherever found, the several concessions granted are now transferred for operation to the Pekin Syndicate for the period of sixty years.

"Mining engineers shall first be sent to find in what township and hills the mines are situated and what they produce, and make maps thereof with explanations inserted which shall be submitted to the Governor of Shansi, that he may see that local conditions present no obstacle to the proposed works; and he shall report thereon to the Tsung-li Yamen for record, and at the same time issue a permit for the mines to be opened without the least delay. If mining lands belong to the people, lease or purchase shall be made by arrangement with the owners for a reasonable price; if it be Government land, the tax to be paid on it shall be double the ordinary land tax for that locality.

"2.-The Governor of Shansi has authorized the Bureau of Trade to negotiate a foreign loan not to exceed 10,000,000 taels. Should the mining engineers employed find this sum insufficient, the Bureau may borrow more only of the Pekin Syndicate.

"3.-All matters of administration, exploitation, employés, and finances shall be controlled by the Board of Directors of the Pekin Syndicate, and the Chief of the Shansi Bureau of Trade shall co-operate.

4. Each mine must have one foreign and one Chinese manager, the foreigner to control the works, the Chinese to attend to all matters between natives and foreigners. Accounts will be kept by the foreign system; receipts and payments of money to be controlled by the foreign manager and audited by the Chinese manager. At all mines Chinese should be employed as much as possible. All salaries to be paid by the Syndicate.

"5.-When prospecting for mines, if there be any boring or sinking of pits to examine mineral deposits, an arrangement should first be made with the land-owner to compensate him for any crops injured. If any mine be opened on private land, an arrangement must be made with co-operation of the local officials to lease or buy the land for a price fair to both parties as a measure of justice. Whenever land leased or bought for mines contains cemeteries or mortuary shrines, some plan must be devised to avoid them; there must be no excavation. After mines are opened, should there be damage to life or buildings from subsidence in the mines, the Syndicate shall make charitable compensation.

"6.-Wherever mines are worked there shall be paid yearly to the Chinese Government as producers tax (lo-ti-shui') 5 per cent. on the cost of extracting the output of the mines. From the profits shown by the yearly accounts there shall first be paid 6 per cent. on the capital employed, and next 10 per cent. shall be set aside as a sinking fund for 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 Syndicate for its own disposition. In future, wherever capital is used to work coal or iron mines in China this rule for a 5 per cent. Government tax on the output shall be enforced, so that all may be treated alike. This capital being money lent by merchants for mining purposes, the Chinese Government will not in any way be responsible for losses incurred in the business.

"7.-The area of the mineral districts of Yu-hsien, Ping-ting-chou, Tsechou-fu, Luan-fu is very extensive, and many mines may be worked therein. But 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.

8.-All machinery, materials, and supplies needed for the mines shall on importation be subject to the rules in force with the Kaifung and other mining Companies, and pay one custom duty and a half to the maritime customs, and shall be exempt from all inland li-kin taxes. The products of the mines when exported from a seaport shall pay export duty according to the Customs Tariff.

"9.-The Syndicate is to control the mines for sixty years, on expiration of which term all the mines of the Syndicate, whether new or old, profitable or not, shall, with all plant, materials, buildings, land, railways, bridges, and all property acquired by the capital of the mines, be handed over gratis to the Chinese Government, and in due time the Bureau shall request the Governor of Shansi to send Deputies to take delivery.

"10.-It is important that at each mine measures should be taken to prevent discord between officials and people. For this purpose the Bureau should request the Governor to appoint a Deputy, and the Syndicate should nominate one of the gentry, the salaries of both to be paid by the Syndicate.

"11.-On first opening of the mines foreigners must, of course, be employed as mining engineers and foremen, but later on the Bureau and the Syndicate should arrange to select for such positions any Chinese who may be proficient in mining, engineering, or managing work. For subordinate positions of little responsibility Chinese should be entirely employed, and Shansi natives as much as possible, so as to encourage improvement.

"12.-The miners employed should be chiefly Shansi men, and should be paid fair wages. After the mines are opened the Bureau and the Syndicate should select from European and American Mining Regulations suitable ones to apply to questions of compensation to miners for injuries while at work, to pensions for the aged after long service, the limit of daily working hours, &c., and obtain for such Regulations the approval of the Governor.

"13.-In opening the mines the Syndicate shall establish a school of engineering on mining 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 thus prepare for future employment on railways and in mines. The expenses for this school to be met by the Syndicate.

"14.-The 10,000,000 of silver taels to be loaned to the Bureau of Trade by the Pekin Syndicate is an estimated sum. After the capital necessary for opening each mine has been supplied by the Syndicate, the Syndicate will be authorized to print shares, certificates, and conditions for the capital furnished, and fix the time of sale. Chinese merchants who apply for shares within a fixed time shall be allowed to buy of shares for sale any number they wish.

15.-Chinese merchants who wish to buy shares may get them from the Bureau, who will procure them at current market rates; or they may themselves buy or sell the shares at pleasure. If any Chinese gentry or merchants shall, within the term of sixty years, acquire three-fourths of all the shares of any one mine, that mine may then be redeemed from the Syndicate, and the Bureau shall report upon same, and direct that shareholder to take charge of the mine.

"16.-If within the area authorized for opening mines there be mines already worked by the people, such private mines shall not be appropriated, but if a proprietor be willing to lease or sell his mine the Bureau and the Syndicate shall offer a reasonable price for it, but no compulsion shall be used.

"17.-Whenever it may be necessary for any mine to make roads, build bridges, open or deepen rivers or canals, or construct branch railways to connect with main lines or with water navigation to facilitate transport of Shansi coal, iron, and all other mineral products from the province, the Syndicate on reporting to the Governor of Shansi is authorized to proceed with the works, using its own capital, without asking for Government funds. Regulations for branch railways are to be made in due time. With reference to the Chengting to Taiyuan Railway, for the construction of which the Bureau has borrowed capital from others, the Pekin Syndicate, to avoid disputes, shall not construct any railway within 100 li on each side of it. Private land required for the works authorized as above shall be leased or bought according to the Rules already in force with other public Companies. No encroachment of private property shall be allowed, and the local authorities must be applied to for protection.

"18.-At the end of every year a printed account of profit and loss shall be rendered

by each mine to the Bureau, and each mine shall appoint one Chinese and one foreign auditor to examine the accounts and certify that they are correct; and a general account of profit and loss for all the mines shall be jointly prepared and submitted to the Governor, who will send copies to the Tsung-li Yamên and Board of Revenue for audit. Payments due to the Government shall be reported at the same time.

"19.-These mines being under the sovereignty of China, should China ever be at war with another country, the Syndicate will obey the orders of the Chinese Government prohibiting any aid to the enemy.

20. These Regulations shall be made out both in Chinese and foreign text; each party to have a copy for reference.

Signed in Peking on this 21st day of May, 1898, being the second day of the fourth month of the twenty-fourth year of the Emperor Kuang Hsü.

Seals of Mr. A. Luzzatti, General Agent of the Pekin Syndicate (Limited), and of the Shansi Bureau of Trade."

NUMBER 1908/3.

GREAT BRITAIN (British & Chinese Corporation, Limited) AND CHINA. Agreement for the Imperial Chinese Government five per cent. Shanghai-Hangchow-Ningpo Railway Loan.*-March 6, 1908 .

This Agreement is made at Peking on the fourth day of the second month of the thirty-fourth year of Kuang Hsu, corresponding to the sixth day of March 1908, and the contracting parties are:

The Waiwupu (Board of Foreign Affairs) and

The Yuchuanpu (Board of Communications), acting under the authority of an Imperial Decree, of the one part, and the British and Chinese Corporation, Limited (hereinafter called "The Corporation") of the other part.

ARTICLE 1.-The Imperial Government of China authorizes the Corporation to issue a five per cent gold loan for the amount of £1,500,000 sterling. The loan shall be of the date on which it is issued to the public and shall be called "The Imperial Chinese Government five per cent Shanghai-Hangchow-Ningpo Railway Loan."

ARTICLE 2.—The loan is designed to provide capital for the construction of a railway line (hereinafter called “the railway") from a point connecting with the Shanghai-Nanking Railway at or near Shanghai in Kiangsu to the cities of Hangchow and Ningpo in Chekiang. The railway shall follow a line from Shanghai through Fengchingchen to Kahsingfu; and thence to Hushu and Hangchow; and thence from Chiangkan to Ningpo, on which line certain construction work has already been locally undertaken under authority of the Imperial Chinese Govern

ment.

The survey line shall be open to revision by the Yuchuanpu.

ARTICLE 3.-The Chinese Government guarantees that the capital so provided shall be solely devoted to the construction of the railway including the

* Text as printed in Wang, p. 467. Printed also in "China's foreign railway agreements," in supplement, November, 1909, F. E. Review, vol. V, p. 127. See Note to this document, post, p. 711.

purchase of rolling stock and other equipment and to the working of the line during construction; it is understood, however, that the cost of the land required for the railway and the payment of interest on the Loan during construction are not to be met out of Loan funds, but will be paid by the Imperial Chinese Government from other sources. It is understood that the railway will be completed within three years from the date of signature of this Agreement; and that within a period of six months from that date the Corporation shall notify the Yuchuanpu that the sum of £100,000 has been placed at their disposal, to be held in Europe. or remitted to China as they may direct, as a first instalment on account of the proceeds of the Loan. This amount of £100,000, or whatever portion thereof is actually advanced, together with interest thereon not exceeding a charge of six per cent per annum, shall be deducted from the proceeds of the sale of the bonds.

ARTICLE 4.-The rate of interest for the Loan shall be five per cent per annum on the nominal principal and shall be paid to the bondholders half-yearly. The said interest shall be calculated from the date on which the Loan is issued to the public and shall be paid by the Imperial Chinese Government during the time of construction from Chinese sources, and afterwards, in the first place out of the revenues of the railway, and should these be insufficient then from the surplus earnings of the Imperial Railways of North-China (excluding the section of the Hsinmintun-Mukden line to the East of the Liao River) and thereafter, if necessary, from such other revenues as the Chinese Government may see fit to use for the purpose, in half-yearly instalments according to the amounts specified in the schedule attached to this Agreement and fourteen days before their due dates, Western Calendar, as calculated half-yearly from the date on which the Loan is issued to the public.

ARTICLE 5.-The term of the Loan shall be thirty years. Repayment of principal shall commence after the expiry of ten years from the date of the Loan, and, except as provided in Article 6 hereinafter, shall be made by yearly amortisation to the Hongkong and Shanghai Banking Corporation in half-yearly instalments, out of the revenues of the railway, and should these be insufficient, then from the surplus earnings of the Imperial Railways of North-China (excluding the section of the Hsinmintun-Mukden line to the East of the Liao River) and thereafter, if necessary, from such other revenues as the Imperial Chinese Government may think fit to use for the purpose, according to the amounts specified in the schedule attached to this Agreement, and fourteen days before their due dates, Western Calendar, as calculated half-yearly from the date on which the Loan is issued to the public.

ARTICLE 6.-If at any time after the lapse of ten years from the date of the Loan, the Imperial Chinese Government should desire to redeem the whole outstanding amount of the Loan, or any portion of it, not yet due for repayment in accordance with the schedule of repayments hereto attached, it may do so until the twentieth year by payment of a premium of 21⁄2 per cent on the face value of the bonds (that is to say, by payment of £102.10/- for each £100 bond) and after the twentieth year, without premium; but in each and every case of such extra redemption the Imperial Chinese Government shall give six months.