New York office: 43-49 Exchange Place. Head office in Philippine Islands: Manila.

Appendix 2. CHINESE EASTERN RAILWAY.

AGREEMENT FOR THE CONSTRUCTION AND OPERATION OF THE CHINESE EASTERN RAILWAY, AUGUST 27/SEPTEMBER 8, 1896.

[Translation from French.]

Between the undersigned, His Excellency Shu King-chen, minister plenipotentiary of His Majesty the Emperor of China, at St. Petersburg, acting by virtue of an imperial edict, dated Kuang Hsu, 22d year, 7th month, 20th day (August 16/28, 1896), of the one part, and the Russo-Chinese Bank, of the other part, it has been agreed as follows: The Chinese Government will pay the sum of 5,000,000 kuping taels to the RussoChinese Bank, and will participate in proportion to this payment in the profits and losses of the bank, on conditions set forth in a special contract.

The Chinese Government having decided upon the construction of a railway line, establishing direct communication between the city of Chita and the Russian South Ussuri Railway, entrusts the construction and operation of this railway to the RussoChinese Bank upon the following conditions:

1. The Russo-Chinese Bank will establish for the construction and operation of this railway a company under the name of the Chinese Eastern Railway Co.

The seal which this company will employ will be given to it by the Chinese Government. The statutes of this company will be in conformity with the Russian usages in regard to railways. The shares of the company can be acquired only by Chinese or Russian subjects. The president of this company will be named by the Chinese Government, but paid by the company. He may have his residence in Peking.

It will be the duty of the president to see particularly to the scrupulous fulfillment of the obligations of the bank and of the railway company toward the Chinese Government; he will furthermore be responsible for the relations of the bank and of the railway company with the Chinese Government and the central and local authorities. The president of the Chinese Eastern Railway Co. will likewise be responsible for examining all accounts of the Chinese Government with the Russo-Chinese Bank. To facilitate in local negotiations, the Russo-Chinese Bank will maintain an agent at Peking.

2. The route of the line will be determined by the deputies of the president (named by the Chinese Government) of the company, in mutual agreement with the engineers of the company and the local authorities. In laying out this line, cemeteries and tombs, as also towns and villages, should, so far as possible, be avoided and passed by. 3. The company must commence the work within a period of 12 months from the day on which this contract shall be sanctioned by imperial decree, and must so carry it on that the whole line will be finished within a period of six years from the day on which the route of the line is definitely established and the lands necessary therefor are placed at the disposal of the company. The gauge of the line should be the same as that of the Russian railways (5 Russian feet, about 4 feet 24 inches Chinese).

4. The Chinese Government will give orders to the local authorities to assist the company to the extent of their ability in obtaining, at current prices, the materials necessary for the construction of the railway, as also laborers, means of transport by water and by land, the provisions necessary for the feeding of men and animals, etc.

The Chinese Government should, as needed, take measures to facilitate such transportation.

5. The Chinese Government will take measures to assure the safety of the railway and of the persons in its service against any attack.

The company will have the right to employ, at will, as many foreigners or natives as it may find necessary for the purpose of administration, etc.

Criminal cases, lawsuits, etc., upon the territory of the railway, must be settled by the local authorities in accordance with the stipulations of the treaties.

6. The lands actually necessary for the construction, operation, and protection of the line, as also the lands in the vicinity of the line necessary for procurring sand, stone, lime, etc., will be turned over to the company freely, if these lands are the property

of the State; if they belong to individuals, they will be turned over to the company either upon a single payment or upon an annual rental to the proprietors, at current prices. The lands belonging to the company will be exempt from all land taxes ("impot foncier ").

The company will have the absolute and exclusive right of administration of these lands. ("La société aura le droit absolu et exclusif de l'administration de ses terrains.")

The company will have the right to construct on these lands buildings of all sorts, and likewise to construct and operate the telegraph necessary for the needs of the line. The income of the company, all its receipts, and the charges for the transportation of passengers and merchandise, telegraphs, etc., will likewise be exempt from any tax or duty. Exception is made, however, as to mines, for which there will be a special arrangement.

7. All goods and materials for the construction, operation, and repair of the line will be exempt from any tax or customs duty and from any internal tax or duty.

8. The company is responsible that the Russian troops and war material, dispatched in transit over the line, will be carried through directly from one Russian station to another, without for any pretext stopping on the way longer than is strictly necessary. 9. Passengers who are not Chinese subjects, if they wish to leave the territory of the railway, should be supplied with Chinese passports. The company is responsible that passengers who are not Chinese subjects should not leave the territory of the railway if they do not have Chinese passports.

10. Passengers' baggage, as well as merchandise dispatched in transit from one Russian station to another, will not be subject to custom duties; they will likewise be exempt from any internal tax or duty. The company is bound to dispatch such merchandise, except passengers' baggage, in special cars, which, on arrival at the Chinese frontier, will be sealed by the office of the Chinese customs, and can not leave Chinese territory until after the office of the customs shall have satisfied itself that the seals are intact; should it be established that these cars have been opened on the way without authorization, the merchandise would be confiscated.

Merchandise imported from Russia into China by the railway, and likewise merchandise exported from China into Russia by the same route, will respectively pay the import and export duty of the Chinese Maritime Customs, less one-third.

If merchandise is transported into the interior it will pay in addition the transit duty-equivalent to a half of the import duty collected which frees it from any further charge.

Merchandise not paying the transit tax will be subject to all the barrier and likin duties imposed in the interior.

The Chinese Government must install customs offices at the two frontier points on the line.

11. The charges for the transportation of passengers and of merchandise, as well as for the loading and unloading of merchandise, are to be fixed by the company, but it is obliged to transport free of charge the Chinese official letter post, and, at half price, Chinese land or sea forces and also Chinese war materials.

12. The Chinese Government transfers to the company the complete and exclusive right to operate the line on its own account and risk, so that the Chinese Government will in no case be responsible for any deficit whatsoever of the company, during the time alloted for the work and thereafter for a further 80 years from the day on which the line is finished and traffic in operation. This period having elapsed, the line, with all its appurtenances, will pass free of charge to the Chinese Government.

At the expiration of 36 years from the day on which the entire line is finished and traffic in operation, the Chinese Government will have the right to buy back this line upon repaying in full all the capital involved, as well as all the debts contracted for this line, plus accrued interest.

If-in case the profit realized exceeds the dividends allowed to the shareholders-a part of such capital is repaid, that part will be deducted from the price of repurchase. In no case may the Chinese Government enter into possession of this line before the appropriate sum is deposited in the Russian State Bank.

The day when the line is finished and traffic in operation, the company will make to the Chinese Government a payment of 5,000,000 kuping taels. Kuang Hsu, 22nd year, 8th month, 2nd day.

SHU.

Berlin, August 27/September 8, 1896.
Russo-Chinese Bank.
ROTHSTEIN.

PRINCE OUKHTOMSKY.

AGREEMENT CONCERNING SOUTHERN MANCHURIAN BRANCH
CHINESE EASTERN RAILWAY CO.

[Translation from Chinese.]

OF

PREAMBLE.-Hsü (Ching-ch'êng), ambassador (?) of the Imperial Chinese Government, and Yang (-ju), minister of the Imperial Chinese Government to Russia, have received an imperial decree of the 7th of the Fifth Moon, XXIV year of Kuang Hsu, that is the 13th of June, 1898, Russian calendar (June 25, 1898, new style), authorizing them to draw up a contract with the Chinese Eastern Railway Co. in accordance with the provisions of the treaty between China and Russia, entered into at Peking on the 6th of the Third Moon, XXIV year of Kuang Hsu, i. e. March 15, 1898, Russian calendar (March 27, 1898, N. S.) and those of the special supplementary articles to the same, agreed upon at St. Petersburg on the 17th of the Intercalary Third Moon— April 25, 1898 (May 7, 1898, N. S.) to the effect that, from the date of the signing of said treaty by the Chinese Government, in accordance with the permission given in the XXII year of Kuang Hsu (1896) to the Chinese Eastern Railway Co. to construct certain railways, a branch line might be built and operated, which should begin at a station, to be selected on the main line of the Chinese Eastern Railway, and extend to the seaports, Dalny and Port Arthur in the Liaotung Peninsula: the said branch line to be dealt with in careful compliance with the terms of the contract of the 2d of the Eighth Moon, XXII Year of Kuang Hsu, August 27, 1896, Russian calendar (Sept. 8, 1896, N. S.) between the Chinese Government and the Russo-Chinese Bank. In accordance with the foregoing provisions the following articles relating to the construction and operation of a railway through Manchuria are now agreed upon, to-wit:

ARTICLE I. This branch of the Chinese Eastern Railway, extending to the seaports of Port Arthur and Dalny, shall be known as the Southern Manchurian Branch of the Chinese Eastern Railway.

ART. II. In accordance with article IV of the contract of the 2d of the Eighth Moon, XXII year of Kuang Hsu, August 27, 1896 (Sept. 8, 1896, N.S.), which provides that the Chinese Government shall take steps as occasion may require to facilitate the bringing in of the materials needed for the construction of the line, whether transported by water or by land, it is now agreed that the company may employ steamers or other vessels, and such vessels flying the company's flag shall be permitted to proceed up the Liao River or any of its branches, and to enter Yingkow (the port of Newchwang) or any port in the neutral territory which may prove advantageous to the work of constructing this line, and may there discharge cargo.

ART. III. In order to facilitate the bringing in by the Chinese Eastern Railway Co. of the materials and provisions needed in the construction of the Southern Manchurian Branch, it is permitted the company to build temporary branch lines from this road to Yingkow and to seaports in the neutral zone, but when the work of building the line is completed and the road is open for traffic the company must at the notice of the Chinese Government remove these branch railways; that is to say, within eight years from the date of the survey and determination of the line and the appropriation of the land for its construction these temporary branch lines must be removed.

ART. IV. In accordance with the permission granted to the company in the XXIII year of Kuang Hsu (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.

ART. V. Within the leased territory on the Liaotung Peninsula Russia may fix the customs tariff to suit itself, 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 Co. 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 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 Liaotung 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.

ART. VI. The company may at its pleasure assume the responsibility of establishing a line of seagoing 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 nowise 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 RussoChinese Bank of the XXII year of Kuang Hsu (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.

ART. 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 in chief 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.

Appended is the text of the above agreement, as telegraphed by the Chinese Eastern Railway Co. to the Tsung Li Yamen.

PREAMBLE OF AGREEMENT. In accordance with treaty of Peking of 6th of Third Moon and special articles of Intercalary Moon, extension of Chinese Eastern Railway Co., to build and operate a branch line from station to be selected on main line to seaports Port Arthur and Dalny in Liaotung. 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 Yingkow and all seaports 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 Yingkow and seaports 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 itself 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 Revenues, 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