the Company in the XXIII Year of Kuanghsü (1897) to cut timber and mine coal for the use of the railway, it is now agreed to allow the Company to fell timber at its pleasure in the forests on government lands, each tree to be paid for at a price to be fixed by the Engineer-in-Chief or his deputy in consultation with the local authorities, but not higher than the local market rate. But no forests on property in the province of Shengking belonging to the Imperial Family, or on sites that affect the feng-shui being under the direct control of the Peking Government may be injured or disturbed.

The Company shall also be allowed in the regions traversed by this branch line to mine such coal as may be needed for the construction or operation of the railway, the price of which coal shall be fixed by the Engineer-in-Chief or his Deputy in consultation with the local authorities but shall not exceed the royalty paid by other parties in the same locality.

ARTICLE V. Within the leased territory on the Liao-tung Peninsula Russia may fix the Customs Tariff to suit herself, and China may levy and collect duties at the boundaries on all goods going from the leased territory to the interior or from the interior to the leased territory. In dealing with this matter China may arrange with Russia for the latter Government to establish the Customs at Dalny and from the date of the opening of the said port to international trade to appoint the Chinese Eastern Railway Company to act as the Agent of the Chinese Imperial Board of Revenue to open and manage the Customs and in its behalf to levy and collect duties. The said Customs shall be under the sole control of the Peking Government, to which the said Agent shall from time to time report its management. In addition there shall be appointed a Chinese civil official to be stationed as Deputy at the said Customs. All baggage of passengers and all goods brought from railway stations within the Russian boundaries by the said line into the territory leased to Russia in the Liao-tung Peninsula, or shipped from the said leased territory into the Russian Empire shall be entirely free of all Customs duties as well as of all Inland Transit and Likin dues. Goods shipped by rail from the interior of China to the leased territory or from the leased territory to the interior must pay export or import duties respectively according to the Imperial Maritime Customs Tariff without increase or reduction.

ARTICLE VI.-The Company may at its pleasure assume the responsibility of establishing a line of sea-going vessels flying the

Company's flag, to be operated under the Regulations for Foreign Mercantile Shipping. Should these vessels or the management of the business in connection therewith occasion any financial loss, the Chinese Government shall not be held responsible. Passenger fares and freight rates shall be established by the Company to suit itself, and shall in no wise concern the railway. The period of the management of the said enterprise being of course unlimited, the provisions of Article XII of the Contract between the Chinese Government and the Russo-Chinese Bank of the XXII year of Kuanghsü (1896) fixing a price for the purchase of the railway, and a date for its reversion to China without payment, shall not apply to this undertaking.

ARTICLE VII.-As to the location of the Southern Manchurian Railway Line, and the determination of the places through which it shall pass, it will be necessary to wait until the Engineer-inChief shall have surveyed the route through Manchuria and made report of the conditions to the Head Office of the Company when the Company or its Agent in Peking shall consult with the Director General of the Railway and decide the matter.

Note.

To the text as printed in Customs is appended the reading of a telegram of which the translation is as follows:

"In accordance with Treaty of Peking of 6th of Third Moon and Special Articles of Intercalary Moon, extension of Chinese • Eastern Railway Company, to build and operate a branch line from station to be selected on main line to sea-ports Port Arthur and Dalny in Liao-tung. Careful compliance with provisions of Russo-Chinese Bank's contract. Supplementary Articles proposed as follows:

"1. This Branch line, extending to Port Arthur and Dalny, shall be known as the Southern Manchurian Branch of Chinese Eastern Railway.

"2. Original Agreement, Article IV, (provides) Chinese Government to take steps to facilitate transport by land or water of materials for construction of railway. Company permitted to employ steamships or other vessels flying Company's flag which may enter Liao River and branches and proceed to Ying-k'ou and all sea-ports in Neutral Zone and there unload materials.

"3. In order to facilitate shipment of materials and provisions, Company permitted to construct temporary branch lines from Southern Manchurian line to Ying-k'ou and sea-ports in Neutral

Zone, but when the work of building railway is completed and whole line open to traffic, all these temporary branch lines to be removed at pleasure of Chinese Government.

"4. The Chinese Government in First Moon last year granted permission to obtain coal and wood. Company now allowed to fell timber in forests on government lands, price of each tree to be fixed by local authorities in conference with Engineer-in-Chief, but not to be made higher than local market rate. But, forests in province of Shengking, property of Imperial Family, affecting Feng-shui, under control of Peking Government, not allowed to be touched.

"Company also permitted in localities through which this branch line passes to mine coal, payment for same also to be determined by conference but not to be more than paid by others.

"5. Within the Leased Territory Russia to determine for herself the Customs Tariff. China must collect duties on goods at the boundary of Leased Territory. With respect to this matter arrangements may be made permitting Russia on opening of Dalny to international trade to establish the Customs at that port and appoint the Company to act as Agent of Chinese Imperial Board of Revenue, levying and collecting duties, under direct control of Peking Government, and reporting its management to same from time to time. Goods coming from railway stations within the Russian boundaries into the leased Territory or from the latter into Russia to be free of all Customs duty and likin charges; those going by railway from leased territory into the interior of China or from interior to leased territory to pay duty according to tariff of Imperial Maritime Customs without increase or reduction.

"6. Company allowed to establish line of merchant steamships flying Company's flag. If any financial loss, China not responsible; this business not to involve the railway, and not to be dealt with under provisions of original contract fixing price for purchase (of railway) and date for reversion (without payment).

"7. Location of line of Southern Manchurian Railway and determination of places through which it will pass to await surveys in Manchuria by Engineer-in-Chief when Company or its Agent in Peking will consult with Director General and decide.

"The above is translated by Ch'êng Ju-chiang from the complete text of letter received from Chinese Eastern Railway, omitting unimportant words and phrases, this third day of Fourth Moon, Kuanghsü XXIV Year (May 22, 1898)."

APPENDIX XII

First Supplement to Charter of Chinese Eastern Railway.February 17, 1899.

"1. In accordance with the treaty, entered upon on June 24 (July 6, 1898, by the Chinese Eastern Railway Company and the Chinese Imperial Government, this company is authorized to construct a branch line from one of the stations of the main line to the ports of Talien-wan and Port Arthur, situated on the Kuantung Peninsula, also to operate this branch which shall be named 'the Southern Manchurian Line,' of the Chinese Eastern Railway.

"2. By Imperial order of May 29 (June 10), 1898, the company is authorized to construct a commercial port on the Talienwan Bay.

The Company is also authorized to exploit this port.

"3. According to the Imperial order of June 12 (24), 1898, the Chinese Eastern Railway Company is permitted to establish its own steamship service in the waters of the Pacific Ocean.

"This steamship service is for the purpose:

(a) of securing, during the construction of the Chinese Eastern Railway, the timely delivery of the necessary freight, materials and workmen, and thus cooperate in the successful course of the construction of this railway.

(b) during the exploitation of the Chinese Eastern Railway, of joining by means of steamship service the terminal points of the railway Vladivostok and Talien-wan (i. e., Dalny) with the principal ports of China, Japan, and Korea and thus securing regular and speedy transfer of passengers and freight, going from Russia and Western Europe to the Far East and back.

"Moreover, upon the refusal of Commercial Councillor Sheveleff to maintain from January 1 (13), 1900, regular steamship communication between the ports of the littoral, the Primorski District (the line of the Tartary Strait and that of Peter the Great), also between Vladivostok and the open ports of Korea, Japan and China, the duties and obligations of Commercial Councillor Sheveleff devolve upon the Chinese Eastern Railway Company, beginning with January 1 (13), 1900.

"The further determination as to the direction of the steamship lines is left to the Board of Directors of the Company upon approval of the Russian Minister of Finance.

"4. In order to facilitate the conveying of the necessary materials and provisions for the construction of the Southern Manchurian Line, the Company is authorized to establish branch lines to the port of Ind-tsi (Ying-tzu = Niuchwang) and other ports of the neutral zone with the proviso that, upon completion of the line and the establishment of regular traffic on the same, the branch lines to the above named ports should be destroyed by the Company, should the Chinese Government formulate that demand.

"5. The construction and exploitation of the Southern Manchurian Line and the branch lines mentioned in par. 4, as well as the construction and exploitation of the commercial port at Talien-wan (i. e., Dalny), also the establishment and exploitation of the steamship service, the Company is under obligation to run strictly according to the rules of its charter, and to the stipulations of the treaty concluded on June 24 (July 6), 1898, between the Company and the Imperial Chinese Government. However, no term is set to the exploitation by the Company of the steamship lines, as well as of the commercial port at Talien-wan, and the stipulations of par. 12 of the treaty of August 27 (Sept. 8), 1896, entered upon by the Russo-Chinese Bank and the Chinese Government with regard to the terms of purchase and the free transfer of the railway to the above named Government, do not extend to the Company with regard to the steamship lines and the commercial port.

"6. The baggage of passengers, as well as the merchandise sent through over one of the branches of the railway from one of the Russian frontier stations to some part of the Liao-tung Peninsula leased by Russia, are not subject to any custom duties; they are likewise exempt of all taxes and interior dues. Merchandise sent by rail from the territory leased by Russia into the interior of China, as well as those brought from the interior of China to that territory, are subject to the payment of import and export duties of Chinese seaports without any increase or diminution of the same.

"7. The maximum of seaport duties to be collected in the commercial port of Talien-wan, as well as the maximum tariff for the carrying of passengers and freight on the steamships of the Company, as well as the supplementary payments to be made for their conveyance, are determined by the Russian Minister of Finance upon their being laid before him for approval by the Board of the Company. The amount of seaport dues, the tariff for transportation by sea and supplementary dues for the same