proceeds of the Loan in instalments and on dates in proportion to, and based on, the terms of subscription to the Loan, as stated in the prospectus. No further payment in respect of commutation of profits will be allowed on any supplementary Loans.

ARTICLE 21.-After payment of interest and repayment of principal of the Loan for any current year, the Yuchuanpu shall deposit with the Hongkong and Shanghai Banking Corporation in Shanghai any surplus of the net revenue of the Railway line for that year up to the amount required to pay the following year's instalments of interest on the loan; the rate of interest on the deposit being arranged with the Bank from time to time with due regard to the conditions of the market.

ARTICLE 22.-The Corporation may, subject to all its obligations under this Agreement, transfer or delegate all or any of its rights, powers or discretions thereunder to any British Company, Director or Agent, with power of further transfer and subdelegation, such transfer, subtransfer, delegation or subdelegation, ⚫ to be subject to the approval of the Yuchuanpu.

ARTICLE 23.-This Agreement is signed under authority of an Imperial Decree of this date which has been officially communicated to the Minister of Great Britain in Peking by the Waiwupu.

ARTICLE 24.-Three sets of this agreement are executed in English and Chinese, two sets to be retained by the Imperial Chinese Government and one by the Corporation; in the event of any doubt arising regarding the interpretation of the contract the English text shall rule.

Signed at Peking by the contracting parties this fourth day of the second month of the thirty-fourth year of the Emperor Kuang Hsu, being the sixth day of March nineteen hundred and eight.

[Seal of Waiwupu].

[Signed in Chinese]

HU WEI-TEH.
LIANG SHIH-YI.
KAO ERH-CH'IEN.

For the British and Chinese Corporation, Ltd.,

J. O. P. BLAND, Representative in China.

Note.

The construction of the railway was in fact undertaken by Chinese provincial enterprise the Shanghai-Fengching section by the Kiangsu Provincial Railway Company, and the section from there to Ningpo by the Chekiang Provincial Railway Company,-under concessions from the Central Government.

The Far Eastern Review of July, 1913 (vol. X, p. 72) gives, without indication of date or source, the following version (presumably translated from a Chinese text) of an agreement for the nationalization of the Kiangsu section of this railway:

Agreement with Provincial Company for Nationalization of Kiangsu Section of

Shanghai-Hangchow-Ningpo Railway.

'Agreement made between the Kiangsu Railway Company (hereinafter called the Company) represented by Yang Ting-tung (hereinafter called the Representative) of the one part, and the Ministry of Communications (hereinafter called the Ministry) of the other part, for the nationalization of a Railway line belonging to the Company, under the following terms and conditions:

"Article 1.-The Company hereby agrees to surrender completely to the Government, according to the resolution of the Shareholders' Meeting of the Company, all the properties and privileges of the Shanghai-Kashing Line, i.e. the Railway Line from Shanghai to Fengching, which shall be controlled and managed direct by the Ministry; and to cancel the concession of all privileges previously granted to the Company by the Government.

"Article 2.-The Ministry hereby agrees to refund to the Company all the Capital of the line, namely:-Proper Shares $3,476,523 and Interest Shares $1,073,895 (the latter amount is not yet considered settled until proper calculation is made), by issuing to the Company a number of Bonds of fixed dates. This Capital shall be repaid in five years from the date of the taking over of the line, and the repayment shall be made in three instalments in each year, in accordance with the separate schedule. It is, however, understood that any of the instalments of each year may be made before the stipulated time, provided two months' previous notice shall be given by the Ministry to the Company to this effect.

"Article 3.-From the date of the taking over of the line, the Capital which has not yet been repaid by the Ministry shall also bear yearly interest at the usual rate originally decided upon by the Company, and this interest shall be paid by the Ministry at the same time together with the repayments of the Capital, when the instalments become due.

"Article 4.-All Bonus or Founder's Shares which formerly existed shall be null and void. They shall not be considered as Capital nor shall they be entitled to the repayment of principal or the payment of interest.

Article 5.-Of the 14 Regulations regarding Deposits of the Kiangsu and Chekiang Railways, drawn up by the former Board of Posts and Communications on the 15th day, 3rd month, of the 34th year of Kuang Hsü in the late Ching Dynasty, all those which refer to the Kiangsu Railway shall be annulled from the date of the taking over of the line.

Article 6.-After the closing of the Company, an organ of account-calculation shall be established. How this organ is to be established shall be decided_separately.

"Article 7.-All the liabilities and assets which really belong to the Company shall be transferred to the Ministry, but the amounts of them shall be determined by those contained in the 6th Report of the Company.

"

Article 8.-After the signing of this Agreement and before the taking over of the line, the Company shall be fully responsible for all the properties, incomes and expenses of the Company itself.

"Article 9-With the exception of cases having special reasons, all the terminable agreements and contracts of employment, transportation, lease, etc., entered into between the Company and other parties, shall continue to be in force until the expiration of their respective terms.

"Article 10.-On the signing of this agreement, the Ministry shall depute officials to the Company to calculate carefully the accounts, and the Company shall instruct its responsible officers to prepare detailed lists of properties together with all the books, documents and vouchers, and to submit them to the Ministerial Officials for comparison and signature. "Article 11.-It is mutually agreed that the taking over of the line shall be effected on the 1st day of the 7th month, of the 2nd year of the Republic [i.e., July 1, 1913].

"Article 12.-The Ministry shall not be responsible for the repayment of any money that has not been stipulated in this agreement.

'Article 13.-Should any detailed procedure be required for carrying out the terms and conditions of this agreement, it shall be decided by the Representative and the Ministry after mutual agreement."

The Ministry of Communications thereafter (on February 14, 1914), concluded with the British and Chinese Corporation, Limited, a memorandum of agreement for the pay

ment, from the proceeds of the loan of 1908, of the funds required for the redemption and nationalization of this section of the railway, the text of which agreement is thus given in Wang, p. 497:

Agreement with British & Chinese Corporation regarding Nationalization of Kiangsu Section of Shanghai-Hangchow-Ningpo Railway, February 14, 1914. "WHEREAS arrangements have been concluded between the Ministry of Communications (hereinafter called 'the Ministry') and the Kiangsu Provincial Railway Company (hereinafter called the Company') for the resumption as a Government Railway of the railway constructed by the Company from Shanghai to Fengching :

"and WHEREAS the said railway was placed on January 1, 1914, under a Managing Director appointed by the Ministry and it is now necessary to commence making payment of the instalments of redemption money which the Ministry has agreed to pay to the Company:

"and WHEREAS the British and Chinese Corporation Limited (hereinafter called 'the Corporation') has agreed that the Company shall be paid from the funds of the Chinese Government 5% Shanghai-Hangchow-Ningpo Railway Loan of 1908 such amount as may represent the actual value of the said railway, on condition that the said railway be forthwith administered as a Government line in a satisfactory manner:

"This AGREEMENT between the Ministry, of the one part, and the Corporation, of the other part, WITNESSETH AS FOLLOWS:

"1.-The Ministry declares the said railway to be free from all mortgage of property or charge on revenue, and that all outstanding liabilities of the Company are provided for in the payments which the Ministry has agreed to make to the Company.

"2. The actual value of the railway having been estimated by the Ministry and the Corporation at Shanghai Taels 3,150.000 it is hereby agreed that the following amounts shall be paid from the loan funds aforesaid on the dates herein stated, namely:

On February 20th, 1914, Shanghai Taels
On May

20th, 1914, Shanghai Taels

On August 20th, 1914, Shanghai Taels
On November 20th, 1914, Shanghai Taels

1,150,000

920,000

770,000

310,000

"The said amounts will be held available to the order of the Ministry by the Hongkong and Shanghai Banking Corporation, Shanghai.

"3. From the date of the first payment of loan funds as above agreed the railway will be effectively administered by the Ministry, and it has been agreed by the Company that they will from that date relinquish all their rights in respect to the railway and will look solely to the Chinese Government for the payment of all further instalments, without recourse against the Railway: a declaration to which effect will be stamped on the Chinese Government bonds which are to be issued to the Company by the Ministry.

"4.-The administration of the railway will be conducted by a Chinese Managing Director. An Engineer-in-Chief, a Traffic Manager and a Chief Accountant, all of whom shall be British subjects acceptable to the Corporation, shall be appointed forthwith, together with the necessary staff. The aforesaid officers shall be under the orders of the Managing Director or his duly authorised representative.

The connection of the railway with the Shanghai-Nanking Railway shall be undertaken by the Administration of the railway without delay.

"5.-The Chief Accountant shall have sole charge under the authority of the Managing Director of all receipts and disbursements of railway funds, and shall sign in conjunction with the Managing Director all documents appertaining to the disbursements of railway funds. The receipts of the railway will be deposited by him to the credit of the railway account with the Hongkong and Shanghai Banking Corporation at Shanghai: and any net revenue after payment of working expenses will be available for the payment of interest on the bonds of the Shanghai-Hangchow-Ningpo Railway loan of 1908.

"6.-This Memorandum of Agreement is made subject to and in amplification of the Shanghai-Hangchow-Ningpo Railway loan agreement of March 6th, 1908. In the event of any doubt arising regarding its interpretation the English text shall rule.

Signed at Peking, this fourteenth day of February, 1914, corresponding to the fourteenth day of the second month of the third year of the Chinese Republic.

THE

"[Chinese signature of

and seal of

“CHU CH’I-CH’IEN.

for THE BRITISH AND CHINESE CORPORATION LIMITED.”

(Seal)

The Kiangsu Railway had meanwhile been mortgaged, at the time of the revolution, as security for a loan of Yen 3,000,000 from Okura & Company to the Nanking Provisional Government; and the funds for the redemption of that mortgage were borrowed by the Chinese Government from the British and Chinese Corporation under an agreement of February 14, 1914, of which the text is thus given in Wang, p. 503:

Agreement for a Loan for Redemption of Mortgage on Kiangsu Section of ShanghaiHangchow-Ningpo Railway, February 14, 1914.

"WHEREAS AN AGREEMENT dated January 27th, 1912, was made between the NANKING PROVISIONAL GOVERNMENT and MESSRS. OKURA of Japan for a loan of Yen three millions, secured by mortgage of the Kiangsu Section of the ShanghaiHangchow-Ningpo Railway:

AND WHEREAS the Chinese Government is now desirous of redeeming the said loan and lifting the said mortgage which conflicts with the Shanghai-Hangchow-Ningpo Railway loan agreement of March 6th, 1908, the present AGREEMENT is made between the Government of the Republic of China acting through its Ministry of Communications, of the one part, hereinafter called the Ministry, and the British and Chinese Corporation Limited, hereinafter called the Corporation,' of the other part.

"ARTICLE 1.-The Ministry hereby contracts to borrow from the Corporation a loan of £375,000 to be evidenced by the issue of Chinese Government bonds for that amount which the Corporation is hereby authorised to prepare in such form and for such amounts as the Corporation shall decide in consultation with the Chinese Minister in London. The bonds shall bear the facsimile of the signature of the Minister of Communications and of his seal of office, and the Chinese Minister in London shall sign and seal them in the usual manner as a proof that their sale is duly authorised by and binding upon the Chinese Government. The loan shall be entitled: The Chinese Government 6% Shanghai-Fengching Railway Mortgage Redemption loan of 1914.'

"The proceeds of the loan will be placed by the Corporation to the credit of the Ministry at the Hongkong and Shanghai Banking Corporation in London on the date upon which duly executed bonds (or provisional certificates representing the same) are handed to the Corporation by the Chinese Minister in London.

64

ARTICLE 2.-These bonds shall bear interest at the rate of six per cent. (6%) per annum on the nominal principal which will be paid to the Corporation half-yearly. The said interest shall be calculated from the date on which the bonds (or provisional certificates representing the same) are handed to the Corporation and shall be paid by the Ministry from Chinese Government sources, and should these be insufficient then from the surplus earnings of the Peking-Mukden Railway, as laid down in Article 4 hereinafter.

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The payment of interest to the Corporation will be made through its duly appointed Agents, the Hongkong and Shanghai Banking Corporation, in accordance with the amounts of the schedule attached to this agreement and 14 days before their due date, by the Ministry, who shall hand to the said Bank in Shanghai 14 days before due date, funds in Shanghai sycee and/or coin of the National Currency so soon as the said currency shall have been effectively established, sufficient to meet such payment in sterling in London, exchange for which shall be settled with the Bank. These payments may however be made in Gold if the Ministry should happen to have Gold funds bona fide' at their disposal in Europe and desire so to use them.

"In reimbursement of expenses connected with the payment of interest and repayment of principal of the loan the Hongkong and Shanghai Banking Corporation will receive a commission of 4% on the annual loan service.

66

ARTICLE 3.-The term of the loan shall be 20 years. Repayment of principal shall commence after the expiry of 10 years from the date on which the bonds (or provisional certificates representing the same) are handed to the Corporation, and shall be made by yearly amortisation to the Hongkong and Shanghai Banking Corporation from the surplus earnings of the Peking-Mukden Railway as laid down in Article 4 hereinafter, and if necessary, from such other sources as the Ministry may think fit to use for the purpose, according to the amounts specified in the schedule attached to this agreement, and 14 days before their due dates, as calculated from the date on which the bonds (or provisional certificates representing the same) are handed to the Corporation.

"If at any time after the lapse of 10 years from the date on which the bonds (or provisional certificates representing the same) are handed to the Corporation the Ministry should desire to redeem 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 by payment of a premium of 22% on the face value of the bonds, that is to say by payment of £102. 10/-for each £100 bond.

"ARTICLE 4.-The Government of the Republic of China hereby engages that the interest and principal of this loan shall duly be paid in full, and pledges as security for the loan the surplus earnings of the Peking-Mukden Railway (excluding the section of the Hsinmintun-Mukden line to the East of the Liao River) that is to say, that after deducting from the net earnings of that railway the amounts required to meet the pay