ARTICLE XIX.-The American group, the Hongkong & Shanghai Banking Corporation, the Deutsch-Asiatische Bank and the Banque de l'Indo-Chine may, subject to all their obligations under this agreement, transfer or delegate all or any of their rights, powers and discretions thereunder to any American, British, German or French company, directors, or agents, with power of further transfer and subdelegation; such transfer, subtransfer, delegation or subdelegation to be subject to the approval of the Imperial Chinese Government. ARTICLE XX.-This agreement is signed by the Board of Finance under the authority of an imperial edict dated the 17th day of the third moon of the third year of His Imperial Majesty Hsuan T'ung, corresponding to the 15th day of April, 1911, western calendar, which will be officially communicated to the ministers of the United States of America, Great Britain, Germany and France in Peking by the Wai-wu Pu. ARTICLE XXI.-Eight sets of this agreement are executed in English and Chinese, four sets to be retained by the Imperial Chinese Government and one set by each group and/or bank. In the event of any doubt arising regarding the interpretation of this contract the English text shall rule. Signed at Peking this 17th day of the third moon of the third year of His Imperial Majesty Hsuan T'ung, being the 15th day of April, one thousand nine hundred and eleven, western calendar. [Signatures.] STATEMENT OF EXPENDITURES FOR CURRENCY REFORM. [In accordance with Article VIII (b).] Taels. The coinage of standard and subsidiary coins in the seven head and branch mints 3,333,330 10,000,000 The coinage of standard and subsidiary coins will require at least the half-yearly use of approximately 60,000,000 Included in the above is the sum of taels 20,000,000 to be devoted to currency in Manchuria. STATEMENT OF MANCHURIAN EXPENDITURES. [In accordance with Article VIII (c).] Taels. For expenditures in connection with the promotion of immigration, reclamation, and pastoral enterprises, approximately 14,000,000 For expenditures in connection with forestry and other agricultural enterprises in Heilungkiang Province, approximately 4,000,000 For expenditures in connection with gold mining at Mo Ho, Kuang Yin Shan, and San Hsing, and other mining enterprises, approximately.. 2,000,000 For expenditures in connection with branch mints the sum of.... 20,000,000 approximately will be appropriated from the currency bureau. Should the above enterprises or the amounts decided upon be found inappropriate the matter of changing the same may be taken into consideration at the time, but the principle of the promotion of industries shall be adhered to. The Chinese Board of Finance to the Bankers. RECEIVED MAY 6, 1911. The Representatives of the American Group, the Hongkong & Shanghai Banking Corporation, the Deutsch-Asiatische Bank, the Banque de l'Indo-Chine, Peking. GENTLEMEN: I beg to inform you of the receipt of a letter from His Excellency Chao, the Viceroy of Manchuria, requesting that from the advance of one million pounds (£1,000,000) provided for in Article VIII, section 4, of the Imperial Chinese Government Five Per Cent Currency Reform and Industrial Development Sinking Fund Gold Loan, signed on the 17th day of the third moon (April 15, 1911) the sum of £400,000 be transferred as a first installment to meet Manchurian requirements. A statement clearly setting forth the purposes to which the Viceroy proposes to apply these funds is herewith presented for your approval with the request. that if the same is considered satisfactory the banks will, as soon as possible, deposit with the Shanghai branch of the Ta Ching Bank to the credit of the Manchurian development account the silver equivalent of the sum of £400,000, the rate of exchange for the same to be settled between the Ta Ching Bank in Shanghai and the transferring banks on the same day. STATEMENT OF ENTERPRISES IN MANCHURIA FOR WHICH THE FIRST INSTALLMENT OF LOAN FUNDS IS REQUIRED. (a) For the repayment of funds borrowed from official sources, from various banks, and from merchants for plague prevention £300,000 (b) For initial expenses in connection with agricultural enterprises: 1. Establishment of administrative bureaus, deputies, renting premises, etc. 3. For investigations into conditions and reporting thereon. 4. For compiling reports and making translations of foreign books relat- 30,000 5. The making of materials used in house building, such as bricks, timber 6. Analyzing mining products 35,000 (d) For iron designing works with a view to the manufacture of agricultural and other implements, machinery, etc. 30.000 (e) For the Chen-An cattle ranges.. 5,000 Grand total £400,000 Signed and sealed by HSUAN T'UNG, 3d year, 4th moon, 5th day. Note. The negotiations for the currency loan were initiated by the Chinese Government with the American group, with whose representative the following preliminary agreement was concluded on October 27, 1910: Preliminary Agreement for Currency Reform and Industrial Development Loan, October 27, 1910. "Preliminary agreement made between the Board of Finance acting on behalf of the Imperial Chinese Government hereinafter called the Government, of the first part " and "Messrs. J. P. Morgan & Company, Messrs. Kuhn, Loeb & Company, the First National Bank and the National City Bank, all of New York City, constituting the American group, hereinafter called the Group, of the second part. 46 Whereas the Government desiring to facilitate certain changes in the administration of Imperial and Manchurian Finance and to undertake certain Industrial Enterprises in Manchuria, proposes to create and issue Imperial Chinese Government Sinking Fund Gold Bonds, hereinafter known as the Bonds in an aggregate principal amount not exceeding fifty million dollars United States gold coin ($50,000,000) and to negotiate a loan in the manner and form to be hereafter determined. 66 It is agreed as follows: "ARTICLE 1.-The government agree to issue and the group agree to offer on behalf of the government a gold loan hereinafter referred to as the loan, for an amount not exceeding fifty million dollars United States gold coin ($50,000,000) on the terms and subject to the conditions to be stated in a final agreement to be negotiated as hereinafter provided. ARTICLE II.-The loan shall constitute a direct liability and obligation of the Imperial Government of China which hereby pledges its good faith and credit for the punctual payment of the principal and interest of the loan. ARTICLE III. The rate of interest on the loan shall be 5% per annum; the group shall take the bonds at 95 flat. The net proceeds of the loan shall be deposited with the group or its duly authorized representatives in New York or elsewhere subject to withdrawal for the requirements of the operations contemplated under the loan, and the conditions governing such deposit and withdrawal, the term of the loan, the manner and form of payment of the interest and amortization charges, also the date from when interest upon the bonds is to commence and to cease, the creation of a sinking fund and other provisions necessarily incident to the service and redemption of the loan shall be settled in a mutually satisfactory manner and stated in the final agreement.. "ARTICLE IV.-Interest and amortization payments and other expenses incident to the service of the loan shall be made the first charge upon such revenues as shall be suitable and sufficient for the purpose to be hereafter agreed upon and stated in the final agreement. "ARTICLE V.-This preliminary agreement is subject to ratification by imperial edict, which imperial edict when issued shall be officially communicated to the American legation at Peking by the Wai Wu Pu with the request that the group enter at once upon negotiations of the final agreement with the board or the high official to be designated by the Imperial Government of China. "ARTICLE VI.-This agreement is executed in duplicate in English and Chinese, one set to be retained by the government and the other set by the American group. In case there be any misunderstanding arising from a difference between the English and Chinese texts the matter shall be settled by a mutually satisfactory arrangement. In the event of it being impossible to come to a mutual understanding regarding the points not already settled then this_preliminary agreement will be cancelled. "Signed at Peking by the contracting parties this twenty-fifth day of the ninth moon of the second year of Hsuan T'ung, corresponding to the 27th day of October, 1910, western calendar." Thereafter, at the instance of the American group, and upon the solicitation of the American Government, the Chinese Government consented to the participation of the British, French and German Banks, with which the American group had associated itself for the purpose of China business. The outbreak of the revolution against the Manchu Dynasty intervened before satisfactory arrangements had been completed for the flotation of the loan under the terms of the Agreement of April 15, 1911, with this "Four-Power Consortium"; and under the altered conditions resulting, the banks postponed further action on this project, in order to undertake a reorganization loan required by the newly established Republican Government. In reference to the subsequent accession of the Japanese and Russian banks to the consortium, the withdrawal of the American group, and the conclusion of the reorganization loan agreement of April 26, 1913, consult No. 1913/5, post. Despite the withdrawal of the American Group in March, 1913, the American Govern ment has for its part maintained its interest in the project of currency reform; and on October 20, 1917, it communicated through its Legation at Peking to the Chinese Government the following statement: "Quite apart from any individual contractual interest accruing to 'The American Group' under the Currency Loan Agreement of April 15, 1911, the Government of the United States considers that the whole history of the currency loan project-notably the appeal made to it by the Chinese Government in January, 1904, the conferences with Dr. Jenks in 1903 and 1904, and the request for a loan for the purpose of monetary reform which in 1910 the Chinese Government addressed not to any individuals but directly to the American Government-constitutes in behalf of the Government of the United States such an interest in the project as entitles it to be considered in reference to any action which the Chinese Government may contemplate with a view to carrying that project into effect. This interest has never been abandoned by the Government of the United States." It is understood that advances totaling £400,000 have been made to the Government under this agreement. The F. E. Review, vol. VIII, p. 376, prints the following as the text of a letter from President Yuan to the representatives of the four banks, in regard to one such advance of Shanghai taels 1,100,000: Letter of Agreement for Advance upon Currency Loan, March 9, 1912. "REPUBLIC OF CHINA. "Peking, March 9th, 1912. "To E. G. Hillier, Esq., C. M. G., Agent, Hongkong & Shanghai Banking Corporation, Monsieur Casenave, Manager, Banque de l'Indo-Chine, H. Cordes, Esq., Deutsch-Asiatische Bank, and Willard D. Straight, Esq., Special Representative American Group. "Gentlemen: "I am in receipt of your letter of today's date informing me that, having obtained the sanction of your Governments to advance to the Chinese Provisional Government funds for their urgent requirements, as stated in the letter of the 2nd March addressed to you by the Acting-Minister of Finance, your Banks are now prepared to hold at the disposal of the Chinese Provisional Government, against the receipts of the Ministry of Finance, the sum of Shanghai Taels One million one hundred thousand (Shanghai Taels 1,100,000) and I note the arrangements proposed for making this sum available. "It is understood and agreed: "1. That the said advance of Shanghai Taels One Million One Hundred Thousand will be treated in conjunction with the advance of Shanghai Taels 2,000,000 made in Shanghai to the Chinese Provisional Government on the 28th day of February last, and that sterling exchange for the same will be settled by the Banks in Shanghai today. "2.-That this advance of Shanghai Taels 1,100,000 as in the case of the previous advance of Shanghai Taels 2,000,000 above referred to, will be covered by delivery to the Banks, so soon as arrangements permit, of sterling Treasury Bills bearing date the 9th day of March, 1912, and for such amounts as, after being discounted at a rate to be arranged, shall yield the sterling equivalent of the said advance, the said Treasury Bills to be secured, subject to the existing charges, upon the revenue of the Salt Gabelle. 3.-That the Banks hold a firm option for the provision of the further monthly requirements of the Chinese Government for the months of March, April, May, June and possibly July and August which the Four Groups have already been requested to finance, against the delivery of additional sterling Treasury Bills on terms to be arranged. "4.-That in consideration of the assistance rendered by the Groups to China in the present emergency and of their services in supporting her credit on the foreign markets, the Chinese Government assures to the Groups (provided their terms are equally advantageous with those otherwise obtainable) the firm option of undertaking the comprehensive loan for general reorganization purposes already proposed to them, to be floated as soon as possible, and to be applied in the first instance to the redemption of the sterling Treasury Bills aforesaid. "I hereby confirm the arrangements and conditions above stated, and request you to proceed immediately in accordance therewith. "I am, Gentlemen, "Yours faithfully, In January, 1914, the Chinese Government promulgated a national currency law, and regulations for the enforcement thereof, of which the following translations were printed in the Peking Daily News of January 21, 1914: The Law for the National Currency.-January, 1914. ARTICLE 1.-The right of minting and issuance of national currency shall solely belong to the Government. ARTICLE 2.-The unit of the national coins shall be called yuan, and the yuan shall contain six mace, four candareens and eight li (kuping weight) or 23.97795048 grammes of pure silver. ARTICLE 3.-The different kinds of national coins are as follows: ARTICLE 4.-The value of the national coin shall be in decimal progression. One tenth of a yuan shall make a chio or a 10 cent piece. One hundredth of a yuan shall make 1 fen or cent, and one thousandth of a yuan shall make one li. ARTICLE 5.-The weight and fineness of the coins shall be as follows: 1.-1 yuan, gross weight 72 candareens with 90 per cent. silver and 10 per cent. copper. 2.-50 cent piece, gross weight 32.4 candareens, with 70 per cent silver and 30 per cent. copper. 3.-20 cent piece, gross weight 12 candareens, with 70 per cent silver and 30 per cent copper. 4.-10 cent piece, gross weight 6 candareens, with 70 per cent silver and 30 per cent copper. 5.-5 cent nickel piece, gross weight 7 candareens, with 25 per cent nickel and 75 per cent copper. 6.-2 cent copper piece, gross weight 28 candareens, with 95 per cent copper, 4 per cent pewter and 1 per cent lead. 7.-1 cent copper piece, gross weight 18 candareens, with its fineness same as 2 cent copper piece. 8.-5 li copper piece, gross weight 9 candareens, with its fineness same as above. 9.-2 li copper piece, gross weight 4.5 candareens, with its fineness same as above. 10.-1 li copper piece, gross weight 2.5 candareens, with its fineness same as above. ARTICLE 6.-No restrictions shall be placed upon the use of 1 yuan piece. The amount of 50 cent pieces involved in one transaction shall not exceed twenty dollars. The amount of 20 cent and 10 cent pieces involved in one transaction shall not exceed five dollars. The amount of nickel or copper pieces involved in one transaction shall not exceed one dollar. This restriction shall not be applied to the collection of taxes and the exchanges in the national banks. ARTICLE 7.-The designs of the national coins shall be promulgated by a Provisional Order. ARTICLE 8.-The ratio of the difference between the weight of each silver coin and that of the legal tender shall not exceed 3/1000. The ratio of the difference between the total weight of per 1000 pieces of the silver coin and the legal weight of that amount of coins shall not exceed 3/10,000. ARTICLE 9. The ratio of the difference between the fineness of any piece of silver coin and the legal fineness shall not exced 3/1000. ARTICLE 10. When on account of wear and tear, the 1 yuan silver piece loses one per cent of its weight, it may be exchanged at the government banks for a new dollar. When, on account of wear and tear, the 50 cent silver piece and other kinds of coins lose five per cent of the legal weight, they may be exchanged at the government banks for new coins. ARTICLE 11.-When a coin is found to be mutilated purposely no one shall be compelled to accept it. ARTICLE 12.-The Government consents to coin 1 yuan silver pieces for those who give to it silver bullion, and 6 li per yuan shall be charged as minting fee. ARTICLE 13.-This law shall be in force on the day of its promulgation. |