NUMBER 1908/5.

GREAT BRITAIN (British and Chinese Corporation, Limited) AND CHINA. Agreement in regard to the Shanhaikuan-Sinminting section of the PekingMukden Railway.*-March 25, 1908.

THIS AGREEMENT is made at Peking on the twenty-third day of the second month of the thirty-fourth year of Kuang Hsu, corresponding to the twenty fifth day of March 1908, between the Director General of the Imperial Railways office of the Board of Communications, hereinafter referred to as the Director General of the one part, and the British and Chinese Corporation Limited hereinafter called " The Corporation" of the other part.

WHEREAS:

1.—In the year 1899 the Chinese Imperial Railway 5% Gold Loan was issued for the total sum of £2,300,000 sterling in 23,000 Bearer Bonds of £100 each, the said loan being unconditionally guaranteed by the Imperial Government of China and each of the said bonds being sealed by the Chinese Minister in London and being, by the terms of the bond, declared to be entitled to a first charge upon the permanent way rolling stock and entire property with the freight and earnings of the then existing railway lines then partly constructed or in the course of construction or about to be constructed from Shanhaikuan to Sinminting and from a point on the last mentioned line near Shih-san-chan to Yingtzu and (by way of a branch line) from Nu-erh-ho to the collieries of Nanpiao and each of the said bonds being expressed to be issued subject to and with the benefit of the agreement next hereinafter stated.

2. Under an Agreement (hereinafter called the "Loan Agreement") dated the 10th October 1898 † and made between H. E. Hu Governor of Peking as Director General of the Railways of North China within and without Shanhaikuan acting under the authority of the Imperial Chinese Government of the one part, and the Hongkong and Shanghai Banking Corporation (hereinafter called "the said Bank") for themselves and on behalf of the firm of Jardine Matheson & Company representing as Joint Agents the Corporation of the other part, the said loan was issued on behalf of the Director General aforesaid by the Corporation.

3. By the provisions of the loan agreement the proceeds of the loan were to be paid over in London to the order of the Director General and were to be applied (amongst other purposes) to the construction of the said railways mentioned in the said bonds as being then partly constructed or in course of construction or about to be constructed including the said branch line from Nu-erh-ho to the collieries of Nanpiao.

4. The said railways mentioned in the said bonds as being then partly constructed or in course of construction or about to be constructed (except the said *Text as printed in Wang, p. 169.

† No. 1898/20, ante.

branch line from Nu-erh-ho to Nanpiao) have now been constructed and opened for traffic and it is contended by the Director General that the several purposes for which the proceeds of the said loan were applicable under the loan agreement except the construction of the said branch line to Nanpiao have been fulfilled.

5. In accordance with the provisions of the said bonds and of the loan agreement, bonds to the aggregate amount of £57,500 were drawn and paid off in each of the years 1905, 1906 and 1907 (except certain drawn bonds which have not yet been presented for payment) with the result that the outstanding bonds of the said loan do not in the aggregate exceed the sum of £2,127,500.

6. All interest which has accrued due under the bonds of the said loan up to the date of this agreement has been duly paid.

7. At the time of the issue of the said loan it was believed that good coal could be obtained from Nanpiao for general purposes and in particular for the purposes of working the said railways mentioned in the said bonds. The Imperial Chinese Government have now ascertained that the coal at Nanpiao is generally of an inferior quality and in particular is of little use for locomotive purposes and consequently the Director General refuses to proceed with the construction of the said branch line to Nanpiao.

8. The estimated cost of the branch line from Nu-erh-ho to Nanpiao was £150,000, which estimate is more than covered by the remainder of the capital of the loan so far unexpended and lying in the Hongkong and Shanghai Bank in London to the credit of the Imperial Railways of North China.

9. Under the circumstances the Corporation are satisfied that it will be generally for the benefit of the security of the said bonds that such arrangement shall be effected (subject to the sanction of the High Court in England) as is hereinafter expressed.

NOW IT IS HEREBY AGREED AS FOLLOWS:

1. The Director General and the Imperial Chinese Government shall be free and discharged from any obligation either under the said bonds or under the loan agreement to construct the branch line from Nu-erh-ho to Nanpiao or any part thereof.

2. No part of the unexpended loan funds shall be reserved for the construction of the branch line from Nu-erh-ho to Nanpiao, but all of the said unexpended loan funds so far as they are not already applicable by the Imperial Railways of North China to reimbursement for work of construction, improvement and equipment already performed by the latter, shall be disposed of under the terms of the original loan agreement of 1898, that is to say, in the further construction of extensions or improvement of existing lines or railway equipment under the terms of the said loan agreement other than the construction and equipment of the said branch line from Nu-erh-ho to Nanpiao.

3. Each of the said bonds remaining outstanding is hereby declared to be entitled to a first charge upon the permanent way rolling stock and entire property with the freight and earnings of the railway already constructed from Peking to Tungchow and also of all railways and railway equipment the construction or purchase of which or of any part of which shall be paid for out of the said funds standing to the credit of the Imperial Railways of North China as aforesaid and

so that all the agreements and provisions of the said bonds and of the loan agreement for the security of the said bonds or the benefit of the bondholders shall, so far as may be, apply in respect of the said railways and property of every kind included in this present charge in like manner as if such railways and property had been originally included in the security of the said bonds.

4. The Director General will execute and do or cause to be executed and done all (if any) instruments acts and things which according to the law of China may be necessary or proper to effectuate this agreement and the charge herein contained.

5. All the costs, charges, and expenses of the Corporation of and incidental to the negotiations for and the preparation and execution of this agreement and of and incidental to the carrying the same into effect including the costs charges and expenses of all parties of and incidental to the proceedings to be taken under the next following clause shall be paid out of the said funds at the said Bank.

6.-Proceedings shall forthwith be commenced in the High Court of Justice in England for obtaining the sanction of the said Court to this agreement on behalf of the holders of the said bonds.

7. This agreement is to be sealed with the official seal of the Chinese Minister in London in testimony of the authority of the Director General to execute and effectuate this agreement.

IN WITNESS WHEREOF the contracting parties have signed this agreement this twenty third day of the second month of the thirty fourth year of Kuang Hsu, corresponding to the twenty fifth day of March 1908.

(Sgd.) LIANG,

Director General. (Sgd.) J. P. BLAND,

for The British and Chinese Corporation Limited.

NUMBER 1908/6.

RUSSIA (Chinese Eastern Railway Company) AND CHINA (Heilungkiang Province).

Agreement for the felling of timber in Heilungkiang Province.*-April 5, 1908.

ARTICLE I.-The Chinese Eastern Railway Company is hereby granted the privilege of felling all kinds of timber in the Province of Heilungkiang: (1) Huo Liao Kou, near branch line No. 384, in length not more than thirty Chinese li, in breadth not more than ten Chinese li; (2) P'i de I, near Pa Lin Station, in length not over thirty li, in breadth not more than ten li; (3) along

*Translation from Chinese text. Russian text printed in Soglashenia, p. 46.

In connection with this agreement, see the similar agreement in regard to Kirin Province, August 30, 1907 (No. 1907/15, ante).

the banks of the Ch'uan Lin River, from the point where it enters the Sungari River, upstream for the distance of fifty li, in breadth twenty li on the right bank and fifteen li on the left bank.

ARTICLE II.-The said railway company shall, before commencement of the operations of felling any timber, notify the Chief Bureau of railway relations of the region, of the quantity and kinds of timber the said company intends to fell, and request the authority of the said Bureau that a license be issued in which are enumerated the desired quantity and kinds of timber. The said license shall be issued after one-third of the fee required for the enumerated quantity and kinds of timber has been received; the other two-thirds shall be paid after the quantity as enumerated in the license has been felled.

ARTICLE III.-A timber license shall be issued annually on the first day of August (Russian Calendar) in favor of the said railway company, which license is to last one year. All fees of the previous year shall be fully paid at the above date. If at the end of the year the quantity of timber felled is not equal to one-third of that stated in the license, the fees already paid shall, according to the Chinese Treasury rules, not be refunded. If on the contrary, the quantity of timber felled exceeds one-third, a proportionate fee, shall, however, be paid, according to the rate fixed in this agreement. In case the license fee due at the end of the stated period is not paid, or the said company fails to comply with the articles of this agreement, the license already issued shall be nullified and the privilege of felling timber withdrawn. If the said company duly pays the license fee, and acts according to the articles of this agreement, the Chinese authority shall, in accordance with the provisions of this agreement, renew the license annually on the dates stated above.

ARTICLE IV. The area granted to the said company on which to procure timber shall be marked out clearly in the locality at the said company's expense. The said company shall not procure timber beyond the limits thus marked out. The Chinese authority shall not grant the privilege of felling timber within the said areas to any other party. The Chinese authority will make every effort to stop the unauthorized felling of timber within the said areas by any other party.

ARTICLE V.-Sufficient space must be reserved in the said timber areas near the railway for public roads, spacious enough for the passage of vehicles, horses, etc.

ARTICLE VI. The said railway company may make any arrangements within the said timber areas for the felling of timber, the storage of the same, the establishment of sawmills, the rection of dwelling houses, the repair of branch lines for the transportation of wood. Chinese police must be permitted to enter said areas for the arrest of criminals. Chinese subjects shall not be prevented from entering the said areas for the purpose of hunting and the collection of ginseng roots. Chinese authority shall be at liberty to dispose of any tillable land that may be found within the said areas to Chinese subjects for agricultural purposes; the said company shall not exercise any interference. The inhabitants of the said timber area may procure there from such timber as is used for building material and fuel, but this must be made known to the said railway company through the deputy residing in the areas, who will

designate the locality, make an estimate of the quantity of timber, and issue a special certificate, but the wood thus procured shall not be sold to another party. If any pasturage is found within the said areas, the said company may breed cattle thereon, and procure therefrom hay for sheep and goats. One kopeck shall be paid to the Chinese government treasury for each pood of hay.

ARTICLE VII.—The said company shall procure such timber from the said areas as are stated in the license. Four-tenths (4/10) of a kopeck shall be paid for each arshin (twenty-eight English inches) length and one vershok (1.75 English inches) in thickness of wood; this applies to lumber sixteen inches (Russian inch same as English), Russian measure, in diameter, and twelve feet (Russian foot same as English), Russian measure, in length only; for any size exceeding this, half a kopeck shall be paid for each arshin (twenty-eight English inches) length and one vershok (1.75 English inches) in thickness of wood. One rouble shall be paid for every cubic sazhen (one sazhen equals seven English feet) of wood used for fuel. Three and one-half kopecks shall be paid for each piece of track wood (sleeper?). The diameter of any lumber of large size shall be measured by the small end. Any fraction more than six-tenths of an inch shall be considered as one inch; if less than six-tenths the fraction shall be dropped. As to lengths, such sizes as reach one-fourth of a foot will be taken into account. This tariff shall continue in force for five years after the date on which this agreement is signed. After the expiration of that period, the license questions shall be taken up for reconsideration. If the said railway company shall purchase any lumber from merchants who received their permission from the Chinese authorities, the said company shall pay license fees according to the tariff of this article, upon receiving the consignment of lumber.

ARTICLE VIII.-The Chinese authority shall appoint deputies to reside in the areas above stated, who will, in conjunction with the Russian officers, keep records of the varieties, sizes and quantities of lumber procured from the said areas, for the purpose of calculating the license fee.

ARTICLE IX. For every shang (0.6 acre) of government land, without reference to quality of soil, that may be occupied for the purpose of the building of dwelling houses, the storage of lumber, and the establishment of factories at the junction of roads, the said company shall pay three roubles annually as rental. If it be private land, the annual rental shall be agreed upon with the owner.

ARTICLE X.-As the forests are subject to the conservation measures of the Chinese Government, the privilege of felling timber granted to the said railway company shall not interfere with any regulations that may be promulgated by the government for the conservation of forests.

ARTICLE XI.-According to the present condition of the railway in Heilungkiang Province, two hundred thousand cubic sazhen are consumed annually as fuel, eight hundred thousand pieces of track wood (sleepers?), and two hundred thousand pieces of timber of considerable size. If, in future, the railway prospers and consumes or requires more wood than the present estimates, the Chinese authorities may grant more.

ARTICLE XII.-The said railway company may sell such of its superfluous wood, but tax must be paid according to the prevailing tariff.