All other uncertificated Indian opium shall, for a period of two months from the date of the signature of the agreement, be landed at the ports of Shanghai and Canton only, and at the expiration of this period all treaty ports shall be closed to uncertificated opium, provided the Chinese Government have obtained the consent of the other treaty Powers.

The Imperial Maritime Customs shall keep a return of all uncertificated Indian opium landed at Shanghai and Canton during this period of two months, other than opium marked and labelled as provided above, and such opium shall pay the new rate of consolidated import duty, and shall not be re-exported in bond to other treaty ports.

In addition to the annual reduction of 5,100 chests already agreed upon, His Majesty's Government agree further to reduce the import of Indian opium during each of the years 1912, 1913, and 1914 by an amount equal to one-third of the total ascertained amount of the uncertificated Indian opium in bond in Chinese treaty ports and in stock in Hong Kong on the date of signature plus one-third of the amount of uncertificated Indian opium landed during the ensuing two months at Shanghai and Canton.

Done at Peking this 8th day of May in the year 1911, being the 10th day of the 4th month of the 3rd year of Hsüan T’ung.

(L. S.) J. N. JORDAN.
(Signed in Chinese characters),
(L. S.) TSOU CHIA-LAI.

Sir J. Jordan to Prince Ch'ing.

Peking, May 8, 1911.

Your Highness, With reference to the Opium Agreement signed this day and the enquiry which your Highness's Board addressed to me regarding the taxation to be imposed on certificated opium, I have the honour to state that certificated opium removed from bond at the treaty ports or imported into China after the signature of the agreement will be liable to the new duty of 350 taels per chest of 100 catties.

With reference to the statement in the 6th article of the Opium Agreement which has been signed to-day to the effect that the Chinese Government will levy a uniform excise tax on all native opium, I have the honour to inform your Excellency that the Board of Finance has now decided to levy a tax of 230 taels on every 100 catties of native opium, which is equivalent to the increased rate of duty on Indian opium, such tax to take effect at the same time as the new duty on Indian opium.

I avail &c.

Prince CH'ING.

Note 1.

An imperial edict, of which the translation from the Chinese original is as follows, was issued on May 9, 1911, in pursuance of this agreement:

Imperial Edict supplementing Anglo-Chinese Opium Agreement, May 9, 1911. "On May 9, 1911, the grand secretariat received an imperial edict based on a memorial submitted by the Board of Foreign Affairs containing supplementary regulations governing the prohibition of opium.

A period of ten years was formerly agreed upon for the purpose of gradually putting a stop to the use of opium because the evil habit had become deeply ingrained and a somewhat long period was necessary to put an end to it. But to ensure the absolute removal of the evil as soon as possible action should be taken at once to the end that the malady may be forever cured.

The memorial received to-day from the Board of Foreign Affairs states that three years of the opium prohibition period having elapsed, supplementary regulations had been agreed upon with the British Minister whereby within the seven unexpired years of the period should native opium be entirely prohibited then the import of foreign opium should also be entirely prohibited, and further that this procedure should also be applicable in any one of the provinces.

"The prohibition of the import of foreign opium should be carried out with due regard for the prohibition of the cultivation of native opium. It is now proposed that the matter be carried out by provinces. Should native opium be prohibited one day earlier then the importation of foreign opium should be stopped one day earlier. The plan proposed is satisfactory.

As regards increasing the duties and likin taxes on foreign opium and increasing the duties at the same time on the native drug, it should be stated that this is done with a view to concealing prohibition under the guise of a tax. This proposal should be put into effect at once.

"The various restrictions imposed on wholesale trade in opium in the provinces and the farming of the tax on opium should be stopped at once in order that confusion may be avoided.

66

'Additional taxes should be newly imposed but only sufficient to cover the deficiency. Although the finances are limited, the Throne, having the welfare of the people at heart, does not desire to retain a source of revenue from opium.

"After the prohibition of the importation of opium has been put into effect in the provinces, measures should be taken to supply the loss in revenue thereby resulting. At this time we can only issue a stern prohibition in the hope of getting at the root of the matter. The Boards of the Interior and of Finance and the Viceroys and Governors of the provinces are instructed to carry out strictly the measures relating to the prohibition of the cultivation, the smoking, and the importation of opium, and to issue orders at once with a view to arriving at entire prohibition. It is hoped that thereby harmony may be maintained between government and people and international friendship fostered. "Respect this! "I K'UANG (Prince Ch'ing). "NA T'UNG.

(Signed)

"[Seal of the Prince Regent.]"

"HSU SHIH-CH'ANG.
"TSOU CHIA-LAI.

Note 2.

Ten Year Agreement for Suppression of Exports of Opium from India,

January 24(?), 1908.

"1. The entire export of opium from India to any country whatsoever is limited to 51,000 chests annually and, beginning with 1908, this amount shall be reduced annually by 5,100 chests, so that at the end of 10 years the entire export shall be terminated.

"2. China shall dispatch officials to Calcutta to keep watch over the packing and export of opium, but who shall meddle with no other matters.

3. The duty on foreign opium shall be doubled; but further consideration shall be given to the subject before the tax on native opium is increased.

“4. Opium prepared in Hongkong shall not be exported to China. Each nation shall take measures to prevent the smuggling of opium into its own territory, and the importation of prepared opium into China from Hongkong and vice versa shall be publicly prohibited.

"5. The sale and smoking of opium in the foreign concessions of China are to be

stopped. If the Chinese authorities begin to put these rules into operation without the concessions, then the municipal councils shall without further notification put them into effect within the concessions.

"6. The restriction of the importation of morphia and hypodermic needles must wait until all the treaty powers consent thereto."

NUMBER 1911/5.

FRANCE (Banque de l'Indo-Chine), GREAT BRITAIN (Hongkong & Shanghai Banking Corporation), GERMANY (Deutsch-Asiatische Bank), UNITED STATES (American Group) AND CHINA.

Final agreement for the Hukuang Imperial Government Railways.*—
May 20, 1911.

THIS AGREEMENT is made at Peking on the twenty second day of the fourth month of the Third year of the Emperor Hsuan T'ung, corresponding to the twentieth day of May, One thousand nine hundred and eleven, Western Calendar, and the Contracting Parties are:

His Excellency the KUNG-PAO SHENG HSUAN-HUAI, Minister of POSTS AND COMMUNICATIONS, duly authorized by IMPERIAL DECREE to act on behalf of the IMPERIAL GOVERNMENT OF CHINA, of the one part,

AND

THE DEUTSCH-ASIATISCHE BANK,

THE HONGKONG & SHANGHAI BANKING CORPORATION,
THE BANQUE DE L'INDO-CHINE, AND

Messrs. J. P. Morgan & Company, Messrs. Kuhn, Loeb & Company, The First National Bank, and The National City Bank, all of New York, constituting THE AMERICAN GROUP, hereinafter called the "BANKS" of the other part, WITNESSETH as follows:

ARTICLE I-The Imperial Government of China authorizes the Banks to issue a Five per cent Gold Loan for an amount of Six Million Pounds Sterling (£6,000,000). The Loan shall be of the date on which the bonds are issued to the public, and shall be called "THE IMPERIAL CHINESE GOVERNMENT FIVE PER CENT HUKUANG RAILWAYS SINKING FUND GOLD LOAN OF 1911."

ARTICLE II.-This Loan is designed to provide capital, first

For the redemption at a premium of Two and one-half per cent, with accrued interest, of certain unredeemed Gold Bonds of the total par value of Dollars Two million two hundred and twenty-two thousand United States Currency, (G. $2,222,000) issued by The American China Development Company on behalf of the Imperial Chinese Government, and secondly

For the construction of a Government railway main line from Wuchang, the capital of the Hupei Province, through Yo-chou and Chang-sha, the capital *Text as printed by the banking groups. Printed also in Wang, p. 547.

See Note 1 to this document, post, p. 880.

of the Hunan Province, to a point in the District of Yi-chang-hsien in the Prefecture of Ch'en-chou on the southern boundary of Hunan, connecting with the Kuang-tung section of the Canton-Hankow Railway line, the total length of this line, hereinafter known as "The Hupei-Hunan Section of the CantonHankow Railway line," being an estimated distance of 1,800 Chinese li, or 900 kilomètres, and of

A Government railway main line from a point at or near Kuangshui in the Province of Hupei, connecting with the Peking-Hankow Railway line and passing through Hsiangyang, and Chingmenchou to Ichang, an estimated distance of 1,200 Chinese li, or 600 kilometres, and from Ichang to Kueichoufu in the Province of Szechuan, an estimated distance of 600 Chinese li, or 300 kilometres, -this latter section of the main line having been added in substitution for the branch line from Chingmenchou to Hanyang originally agreed upon,-the total length of this main line, hereinafter known as "The Hupei Section of the Szechuan-Hankow Railway line " being about 1,800 Chinese li, or 900 kilometres.

The survey lines shall be open to revision by the Ministry of Posts and Communications.

The Chinese Imperial Government undertakes to call in, after having received from the Banks application in writing to do so, the aforesaid Gold Bonds, and the Banks will apply the amount necessary for the said redemption out of the proceeds of the Loan, and will deliver the redeemed Bonds to the Chinese Government after having made the Bonds valueless. The Chinese Imperial Government will, after receipt of the redeemed Bonds, cancel the inscription of the pledge of the Canton-Hankow Railway Line in their archives, and will advise the Banks in writing after having done this.

It is understood that any surplus of the nominal amount of Five hundred thousand pounds Sterling (£500,000) hereby allotted for the redemption of the Gold Bonds issued by the American China Development Company, aforesaid, which may remain after complete redemption of those bonds, shall be allotted to the above named Railway Lines.

ARTICLE III.t-After deduction of the amount required for the redemption of the Gold Bonds referred to in Article II of this Agreement, the balance of the Loan proceeds shall be solely devoted to the construction of the aforesaid railway lines, including the purchase of land, rolling stock and other equipment, and to the working of the lines, and to payment of interest on the Loan during the period of construction, which is estimated at three years from the actual beginning of the works, a longer period, however, being allowed for the completion of the section from Ichang to Kuei-choufu in consideration of the engineering difficulties to be encountered. Work shall be commenced simultaneously at Wu-chang, Chang-sha, Kuang-shui and Ichang within six months after this Agreement has been signed, within which period the Banks shall notify the Ministry of Posts and Communications that the sum of Six Hundred Thousand Pounds Sterling (£600,000) has been placed at its disposal, in case funds should be required for survey or construction purposes, or for ordering of materials, and for the resumption by the Imperial Chinese Government of the † See Note 2 to this document, post, p. 895.

portion of these lines already constructed by the Provinces concerned, the said sum to be held in Europe and/or in the United States of America or remitted to China as the Ministry may direct as a first instalment on account of the proceeds of the Loan. This amount of £600,000, or whatever portion thereof is actually advanced, together with interest thereon at the rate of Six per cent per annum, shall be deducted from the first proceeds of the sale of the Bonds.

It is understood that the lines of railway already constructed by the two Provinces of Hupei and Hunan prior to the signature of this Agreement with capital provided by those Provinces themselves, together with the property of those two Provincial Railways shall henceforward be taken over by and incorporated in the Canton-Hankow and the Szechuan-Hankow Government Railways Administration, and further that any supplementary funds which may be furnished in the future by the Ministry of Posts and Communications on account of a deficiency in the amount required for the construction of the Canton-Hankow and Szechuan-Hankow main lines within the boundaries of the two Provinces of Hupei and Hunan, as provided for in Article XV of the present Agreement, shall also rank as capital of the Canton-Hankow and Szechuan-Hankow Railway main lines within the boundaries of the two Provinces aforesaid. But the returns due upon such capital shall not in any manner impair the arrangements for payment of interest and repayment of principal of the present Loan.

ARTICLE IV. 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 either from the proceeds of the Loan or from other sources, and afterwards, in the first place, out of the revenues of the railways, and then from such other revenues as the Chinese Government may think fit to use for the purpose, in half yearly instalments according to the amounts specified in the schedule attached to this Agreement, and twelve days before their due dates, Western Calendar, as calculated half-yearly from the date on which the Loan is issued to the public.

ARTICLE V. The term of the Loan shall be Forty Years. Repayment of Principal shall commence after the expiry of Ten years from the date of the Loan and except as provided in Article VI hereinafter, shall be made by yearly amortization to the Banks in half-yearly instalments out of the revenues of the lines, or such other revenues as the Chinese Government may think fit to use for the purpose, according to the amounts specified in the Schedule attached to this Agreement, but twelve days before their due dates, Western Calendar, as calculated half-yearly from the date on which the loan is issued to the public.

ARTICLE VI.-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 part of it not yet due for repayment in accordance with the Schedule of repayments hereto attached, it may do so up to the end of the seventeenth year by payment of a premium of Two and one-half per cent on the face value of the bonds, that is to say, by the payment of £102 10/- for each £100 bond, and after the lapse of seventeen years without premium: but in each and every case of such extra redemption the Imperial Chinese Government