ARTICLE 21.

If any proceeds of the sale of Bonds are lying unused and bearing interest on their deposit whilst the construction of the railway is going on, such interest to go to the General Account of the Chinese Railway Administration in order that the Railway Administration may enjoy the full advantage thereof.

It is also agreed that if the Corporation shall find it necessary, before the sale of any of the Bonds, to advance any money for the work, the expense of effecting such advances, together with the interest thereon not exceeding a charge of six per cent per annum, shall be deducted from the interest derived from the above-mentioned unused proceeds of the sale of the Bonds or otherwise to be provided for in the construction accounts. It is further agreed that the proceeds of the first sale of the Bonds immediately following any such advance, shall be used to pay off the said advances so as to save the cost of the aforesaid charge.

any

ARTICLE 22.

If of the Bonds still remain unredeemed when the fifty years of the term of the Loan are about to expire, the Director General will, within two years preceding the expiry of the said term, negotiate by writing with the Corporation for an extension of the term of the Loan and if six months shall have expired after such negotiations in writing and no definite arrangements shall have been come to, the Chinese Government shall be at liberty to take steps to devise means for procuring elsewhere funds to pay off the Loan, and to redeem the Bonds and cancel the mortgage.

ARTICLE 23.

The existing Woosung-Shanghai Line, (as soon as the price agreed upon is ready to be handed over to the Railway Administration) shall be taken over as part of the Shanghai-Nanking system, and the earnings and administration of this section shall be treated in like manner as the Shanghai-Nanking line. The price of the Shanghai-Woosung line shall be taken at Tls. 1,000,000 and this amount shall be paid to the Chinese Railway Administration out of the proceeds of the Loan.

ARTICLE 24.

Immediately after the signature of this Agreement and before the issue of any Prospectus of the Loan to the public, the Director General shall memorialize the Throne and obtain an Imperial Edict confirming and sanctioning the provisions of this Agreement. The Imperial Edict so received shall then be officially communicated without delay to the British Minister in Peking by the Wai Wu Pu.

ARTICLE 25.

This Agreement is executed in quintuplicate in English and Chinese, one copy to be retained by the Railway Administration, one by the Wai Wu Pu, one by the Bureau of Railways and Mines at Peking, one by the British Minister in Peking, and one by the Corporation, and should any doubt arise as to the interpretation of the Agreement the English text shall be accepted as the standard.

Signed at Shanghai by the contracting parties this fifteenth day of the intercalary fifth month of the twenty-ninth year of the Emperor Kwang-Hsu, being the ninth day of July nineteen hundred and three of the Western Calendar."

For the Hongkong & Shanghai Bank,

JARDINE, MATHESON & Co.
DAVID LANDALE.

H. M. BEVIS, Manager.

The BRITISH & CHINESE CORPORATION LTD.
Witness to the Signatures of David Landale and H. M. Bevis:
BYRON BRENAN.

a Contracts on the same lines as the above have been signed for the construction of lines from (1) Kowloon to Canton, (2) from Suchou to Hangchou, and (3) from Pukou (on the north bank of the Yang-tze River facing Nanking) to Hsin-yang. They have not been made public. On the Pukou-Hsin-yang line, see supra, p. 285, Art. 24.

No. 40.

GREAT BRITAIN.

PEKING SYNDICATE AGREEMENT.a

MAY 21, 1898.

Regulations agreed upon by the Shansi Bureau of Trade and the Peking Syndicate for mining purposes, ironworks, and transporting mine products of all kinds in the Province of Shansi.

1. The Governor of Shansi having sanctioned the request of the Shansi Bureau of Trade for the sole right to open and work coal and iron mines throughout the districts of Yu-hsien and Ping-ting-chou, and the Prefectures of Luan-fu, Tsechow-fu and Ping-wang-fu and also petroleum wherever found, the several concessions granted are now transferred for operation to the Peking Syndicate for the period of sixty years.

Mining engineers shall first be sent to find in what township and hills the mines are situated and what they produce, and make maps thereof with explanations inserted which shall be submitted to the Governor of Shansi, that he may see that the proposed works are not injurious to the place; and he shall report thereon to the Tsung-li Yamên for record, and at the same time issue a permit for the mines to be opened without the least delay. If mining lands belong to the people, lease or purchase shall be made by arrangement with the owners for a reasonable price; if it be Government land, the tax to be paid on it shall be double the ordinary land tax for that locality.

2. The Governor of Shansi has authorized the Bureau of Trade to negotiate a foreign loan not to exceed 10,000,000 taels. Should the mining engineers employed find this sum insufficient, the Bureau may borrow more only of the Peking Syndicate.

3. All matters of administration, exploitation, employés, and finances shall be controlled by the Board of Directors of the Peking Syndicate, and the Chief of the Shansi Bureau of Trade shall co-operate.

4. Each line must have one foreign and one Chinese manager, the foreigner to control the works, the Chinese to attend to all matters between natives and foreigners. Accounts will be kept by the foreign system; receipts and payments of money to be controlled by the

a British Parliamentary Blue Book, China No. 1, 1899, p. 112. 27938-04

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305

foreign manager and audited by the Chinese manager. At all mines Chinese should be employed as much as possible. All salaries to be paid by the Syndicate.

5. When prospecting for mines, if there be any boring or sinking of pits to examine mineral deposits, an arrangement should first be made with the land-owner to compensate him for any crops injured. If any mine be opened on private land, an arrangement must be made with co-operation of the local officials to lease or buy the land for a price fair to both parties as a measure of justice. Whenever land leased or bought for mines contains cemeteries or mortuary shrines, some plan must be devised to avoid them; there must be no excavation. After mines are opened, should there be damage to life or buildings from subsidence in the mines, the Syndicate shall make charitable compensation.

6. Wherever mines are worked there shall be paid yearly to the Chinese Government as producers tax ("lo-ti-shui") 5 per cent. on the cost of extracting the output of the mines. From the profits shown by the yearly accounts there shall first be paid 6 per cent. on the capital employed, and next 10 per cent. shall be set aside as a sinking fund for yearly repayment of capital and consequent reduction of interest, payments to sinking fund ceasing when the invested capital is wholly repaid; and from the remaining net profit 25 per cent. shall be paid to the Chinese Government, and the remainder shall go to the Syndicate for its own disposition. In future, wherever capital is used to work coal or iron mines in China this rule for a 5 per cent. Government tax on the output shall be enforced, so that all may be treated alike. This capital being money lent by merchants for mining purposes, the Chinese Government will not in any way be responsible for losses incurred in the business.

7. The area of the mineral districts of Yu-hsien, Ping-ting-chou, Tsechou-fu, Luan-fu is very extensive, and many mines may be worked therein. But the accounts and profits of each mine must be kept distinct from the others; the gains of one mine should not be made to offset the losses of another, and so cause the Government income to suffer reduction.

8. All machinery, materials, and supplies needed for the mines shall on importation be subject to the rules in force with the Kaifung and other mining Companies, and pay one custom duty and a half to the maritime customs, and shall be exempt from all inland li-kin taxes. The products of the mines when exported from a seaport shall pay export duty according to the Customs Tariff.

9. The Syndicate is to control the mines for sixty years, on expiration of which term all the mines of the Syndicate, whether new or old, profitable or not, shall, with all plant, materials, buildings, land, railways, bridges, and all property acquired by the capital of the mines,

be handed over gratis to the Chinese Government, and in due time the Bureau shall request the Governor of Shansi to send Deputies to take delivery.

10. It is important that at each mine measures should be taken to prevent discord between officials and people. For this purpose the Bureau should request the Governor to appoint a Deputy, and a Syndicate should nominate one of the gentry, the salaries of both to be paid by the Syndicate.

11. On first opening of the mines foreigners must, of course, be employed as mining engineers and foremen, but later on the Bureau and the Syndicate should arrange to select for such positions any Chinese who may be proficient in mining, engineering, or managing work. For subordinate positions of little responsibility Chinese should be entirely employed, and Shansi natives as much as possible, so as to encourage improvement.

12. The miners employed should be chiefly Shansi men, and should be paid fair wages. After the mines are opened the Bureau and the Syndicate should select from European and American Mining Regulations suitable ones to apply to questions of compensation to miners for injuries while at work, to pensions for the aged after long service, the limit of daily working hours, &c., and obtain for such Regulations the approval of the Governor.

13. In opening the mines the Syndicate shall establish a school of engineering on mining in some locality convenient to the mines, and there shall be selected twenty or thirty promising youths by the local officials and gentry to study in this school under foreign instructors, and thus prepare for future employment on railways and in mines. The expenses for this school to be met by the Syndicate.

14. The 10,000,000 of silver taels to be loaned to the Bureau of Trade by the Peking Syndicate is an estimated sum. After the capital necessary for opening each mine has been supplied by the Syndicate, the Syndicate will be authorized to print shares, certificates, and conditions for the capital furnished, and fix the time of sale. Chinese merchants who apply for shares within a fixed time shall be allowed to buy of shares for sale any number they wish.

15. Chinese merchants who wish to buy shares may get them from the Bureau, who will procure them at current market rates; or they may themselves buy or sell the shares at pleasure. If any Chinese gentry or merchants shall, within the term of sixty years, acquire three-fourths of all the shares of any one mine, that mine may then be redeemed from the Syndicate, and the Bureau shall report upon same, and direct that shareholder to take charge of the mine.

16. If within the area authorized for opening mines there be mines already worked by the people, such private mines shall not be appropriated, but if a proprietor be willing to lease or sell his mine the