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 Cheng Ju-chiang from the complete text of letter received from Chinese Eastern Railway, omitting unimportant words and phrases, this third day of Fourth Moon, Kuang Ésu XXIV Year (May 22, 1898).

NOTE. The substance of the agreement was telegraphed on May 22, 1898, and the final text was prepared on June 24, 1898. The only important change was the addition in the final text of article V, providing for the appointment of a Chinese deputy to be stationed at the customs in Dalny.

STATUTES OF THE CHINESE EASTERN RAILWAY CO.

1. On the strength of the agreement concluded on August 27, 1896, by the Imperial Chinese Government with the Russo-Chinese Bank, a company is formed under the name of the Chinese Eastern Railway Co., for the construction and working of a railway within the confines of China, from one of the points on the western borders of the Province of Heilungkiang to one of the points on the eastern borders of the Province of Kirin, and for the connection of this railway with those branches which the Imperial Russian Government will construct to the Chinese frontier from Trans-Baikalia and the Southern Ussuri lines.

The company is empowered, subject to the sanction of the Chinese Government, to exploit, in connection with the railway, or independently of it, coal mines, as also to exploit in China other enterprises mining, industrial, and commercial. For the working of these enterprises, which may be independent of the railway, the company shall keep accounts separate from those of the railway.

The formation of the company shall be undertaken by the Russo-Chinese Bank. With the formation of the company all rights and obligations are transferred to it in regard to the construction and working of the line ceded in virtue of the abovenamed agreement of August 27, 1896.

The company shall be recognized as formed, on the presentation to the Minister of Finance of a warrant of the State Bank, certifying the payment of the first instalment on the shares. In any case, such payment must be made not later than two months from the day of confirmation of the present statutes.

The succeeding instalments on the shares shall be paid in such order of gradation that the shares shall be fully paid up at their nominal value not later than one year from the day of formation of the company.

Owners of shares of the company may only be Russian and Chinese subjects.

2. In virtue of the agreement with the Chinese Government the company shall retain possession of the Chinese Eastern Railway during the course of 80 years from the day of the opening of traffic along the whole line.

3. In recognition that the enterprise of the Chinese Eastern Railway will be realized only owing to the guaranty given by the Russian Government in regard to the revenue of the line for covering working expenses as well as for effecting the obligatory payments on the bonds (sections 11 and 16) the company on its part binds itself to the Russian Government, during the whole term of the concession, under the following obligations:

(A) The Chinese Eastern Railway, with all its appurtenances and rolling stock, must be always maintained in full order for satisfying all the requirements of the service of the line in regard to the safety, comfort, and uninterrupted conveyance of passengers and goods.

(B) The traffic on the Chinese Eastern line must be maintained conformably with the degree of traffic on the Russian railway lines adjoining the Chinese line.

(C) The trains of all descriptions running between the Russian Trans-Baikal and Ussuri lines shall be received by the Chinese Eastern Railway and dispatched to their destination, in full complement, without delay.

(D) All through trains, both passenger and goods, shall be dispatched by the Chinese Eastern Railway at rates of speed not lower than those which shall be adopted on the Siberian Railway.

(E) The Chinese Eastern Railway is bound to establish and maintain a telegraph along the whole extent of the line, and to connect it with the telegraph wire of the Russian adjoining railways, and to receive and dispatch without delay through telegrams sent from one frontier station of the line to another, as also telegrams sent from Russia to China, and conversely.

(F) Should, with the development of traffic on the Chinese Eastern Railway, its technical organization prove insufficient for satisfying the requirements of a regular

and uninterrupted passenger and goods traffic, the Chinese Eastern Railway shall immediately, on receipt of a notification on the part of the Russian Railways to augment its capacity to a corresponding degree, adopt the necessary measures for further developing its technical organization and traffic on it. In the event of a difference of opinion arising between the above-mentioned railways, the Chinese Eastern Railway shall submit to the decision of the Russian Minister of Finance. If the means at the command of the Chinese Eastern Railway prove insufficient for carrying out the necessary work of its development, the board of management of the railway may at all times apply to the Russian Minister of Finance for pecuniary assistance on the part of the Russian Government.

(G) For all transit conveyance of passengers and goods, as also for the transmission of telegrams, there will be established by agreement of the company with the Russian Government, for the whole term of duration of the concession, maximum tariffs, which can not be raised without the consent of the Russian Government during the whole term above referred to. Within these limits the tariffs of direct communication, both for railway carriage and telegrams, will be fixed by the board of management of the company, on the strength of a mutual agreement with the Russian Minister of Finance.

(H) The Russian letter and parcels post, as also the official accompanying them, shall be carried by the Chinese Eastern Railway free of charge.

For this purpose the company shall set apart in each ordinary passenger train a carriage compartment of three fathoms in length. The Russian postal authorities may, moreover, if they deem it necessary, place on the line postal carriages, constructed by them at their own cost; and the repair, maintenance (interior fitting excepted), as well as the running of such carriages with the trains, shall be free of charge and at the cost of the railway.

The above-mentioned engagements, by which, as already stated, the grant of a guaranty by the Russian Government is conditioned, and the consequent realization of the enterprise of the Chinese Eastern Railway, shall be binding on the railway until the same, after the expiration of the 80 years' term of the concession, shall, without payment, become the property of the Chinese Government (section 29). The redemption of the line from the company before the above-mentioned term, in accordance with section 30 of the present statutes, shall not in any way diminish the effect of the above-specified engagements, and these latter, together with the railway, shall be transferred to its new proprietor.

In the same manner, during the course of the whole 80 years' term of the concession (section 2) the following privileges granted to the railway by the Imperial Chinese Government shall remain in force:

(a) Passengers' luggage, as also goods, carried in transit from one Russian station, shall not be liable to any Chinese customs duties, and shall be exempt from all internal Chinese dues and taxes.

(b) The rates for the carriage of passengers and goods, for telegrams, etc., shall be free from all Chinese taxes and dues.

(c) Goods imported from Russia into China by rail, and exported from China to Russia in the same manner, shall pay respectively an import or export Chinese duty to the extent of one-third less as compared with the duty imposed at Chinese seaport customhouses.

(d) If goods imported by the railway are destined for conveyance inland, they shall in such case be subject to payment of transit duty to the extent of one-half of the import duty levied on them, and they shall then be exempted from any additional imposts. Goods which shall not have paid transit duty shall be liable to payment of all established internal carrier and likin dues.

4. In regard to the place of acquisition of material for the requirements of the railway, the company shall not be liable to any limitations. If materials be obtained beyond the confines of Russia, they shall on importation through Russian territory be freed from payment of Russian customs duties.

5. The breadth of the railway track must be the same as that of the Russian lines (5 feet).

The company must commence the work not later than August 16, 1897, and conduct it in such a manner that the whole line shall be completed not later than six years from the time when the direction of the line shall be finally determined and the neces sary land assigned to the company.

When tracing the line of the railway, cemeteries and graves, as also towns and villages, must, so far as possible, be left aside of the railway.

When effecting the connection, in accordance with section 1 of these statutes, of the Chinese Eastern Railway with the Russian Trans-Baikal and South Ussuri lines, the company shall have the right, with a view of reduction of expenditure, of abstaining from building its own frontier stations, and of utilizing the frontier

stations of the above-named Russian lines. The conditions on which they shall be so utilized shall be determined by agreement of the board of the company with the boards of the respective railways.

6. The tariffs for the carriage of passengers and goods, as also for supplementary carriage rates, shall be determined by the company itself within the limits indicated in section 3.

7. Crimes, litigation, etc., on the territory of the Chinese Eastern Railway shall be dealt with by the local authorities, Chinese and Russian, on the basis of existing treaties.

In regard to the carriage of passengers and goods, the responsibility for such conveyance, the lapse of time for claims, the order of recovering money from the railway when adjudged, and the relations of the railway to the public shall be defined in rules drawn up by the company and established before the opening of the railway traffic; and these rules shall be framed in accordance with those existing on the Russian railways.

8. The Chinese Government has undertaken to adopt measures for securing the safety of the railway and of all employed on it against any extraneous attacks. The preservation of order and decorum on the lands assigned to the railway and its appurtenances shall be confided to police agents appointed by the company. The company shall for this purpose draw up and establish police regulations. 9. The whole amount of the capital of the company shall be determined according to the cost of construction, calculated on the basis of estimates framed when the survey of the line was carried out. The foundation capital shall be charged with (a) the payment of interest and amortization of the foundation capital during the construction of the railway; (b) the purchase from the Russian Government of the results of the surveys of the direction of the railway to Manchuria which were made by Russian engineers; the sum payable for these surveys will be determined by agreement of the Russian Minister of Finance with the company. The capital of the company shall be formed by the issue of shares and bonds.

10. The capital of the company shall be fixed at 5,000,000 nominal credit roubles, and divided into 1,000 shares at 5,000 nominal credit roubles.

The shares are to be issued at their nominal value.

The guaranty of the Russian Government does not extend to them.

11. The remaining portion of the capital of the company will be formed by the issue of bonds. The bonds will be issued in measure of requirement, and each time with the special sanction of the Minister of Finance. The nominal amount and value of each separate issue of bonds, the time and condition of the issue, as also the form of these bonds, shall be subject to the sanction of the Minister of Finance.

The Russian Government will guarantee the interest on and amortization of the bonds.

For the realization of these bonds the company must have recourse to the RussoChinese Bank, but the Russian Government reserves to itself the right of appropriating the bond loan at a price which shall be determined between the company and the bank, and to pay to the company the agreed amount in ready money.

12. As payments are received for bonds guaranteed by the Russian Government, the company shall be bound to keep such sums, or interest bearing securities purchased with the same by permission of the Russian Minister of Finance, under the special supervision of the Russian Ministry of Finance.

Out of the above receipts the company shall have the right to make the following payments:

(a) According to actual fulfilment of the work in progress and execution of orders, and at the time when various expenditure shall become necessary, such payments to be made on the scale and on the conditions specified in the working estimates. (b) During the construction of the line, of interest, as it becomes due on the bonds issued by the company, subject to the conditions of their issue, and the company shall pay the sums necessary for the above purpose within the limits of the amount realized by it in the emission of its bonds.

13. On the payment of the first allotment on the shares the founder shall receive temporary certificates, on which subsequently, when the board of management of the company shall have been formed, the receipt of the further installments on the shares will be inscribed.

When the shares shall be fully paid up, the temporary certificates issued to the founders shall be replaced by shares.

The shares of the company are issued to bearer, under the signature of not fewer than three members of the board of management. To the shares will be attached a coupon sheet for the receipt once yearly under them of any dividend that may be payable. On the coupon sheets becoming exhausted new sheets will be issued. A dividend on the shares out of the net profits of any year, supposing such accrue,

shall be payable on the adoption by the general meeting of shareholders of the annual report for that year, and the dividend shall be payable at the offices of the company, or at such places as it may indicate.

The company shall notify for general information in the Official Gazette and in the Finance Messenger, as also in one of the Chinese newspapers, the extent and place of payment of the dividend.

14. The reserve capital is destined:

(a) For the capital repair of the railway, its buildings, and appurtenances.

(b) For defraying extraordinary expenditure of the company in repairing the railway and its appurtenances.

The reserve capital of the company is formed out of annual sums put aside from the net profits of the working of the railway (section 17).

The reserve capital must be kept in Russian State interest-bearing securities, or in railway bonds guaranteed by the Russian Government.

At the expiration of the term of possession of the railway by the company the reserve capital shall be first of all employed in the payment of the debts of the company, including among them sums due to the Russian Government, if such exist; and after the debts of the company shall have been paid the remainder of the reserve capital shall be divided among the shareholders. In the event of the redemption of the railway by the Chinese Government, the reserve capital becomes the property of the shareholders.

15. The net revenue of the company shall be the remainder of the gross receipts after deduction of working expenses. Under these expenses are classed

(a) General outlays, including assignments toward pension and relief funds if such be established on the line.

(b) Maintenance of the staff of the board of management, and of all the services, as also the maintenance of employees and laborers not on the permanent list.

(c) Outlays for material and articles used for the railway, as also expenditure in the shape of remuneration for using buildings, rolling stock, and other various requisites for the purposes of the railway.

(d) Outlays for the maintenance, repair, and renewal of the permanent way, works of construction, buildings, rolling stock, and other appurtenances of the railway.

(e) Expenditures connected with the adoption of the measures and instructions of the board of management for insuring the safety and regularity of the railway service.

(f) Expenditure for the improvement and development of the railway, as also for creating and developing its resources.

16. Should the gross receipts of the railway prove insufficient for defraying the working expenses and for meeting the yearly payments due on the bonds, the company will receive the deficient sum from the Russian Government, through the Minister of Finance of Russia. The payments referred to will be made to the company as advances, at a rate of interest of 6 per cent per annum. Sums paid in excess to the company, in consequence of its demands and on account of the guaranty, will be deducted from succeeding money payments.

On the presentation to the general meeting of shareholders of the annual report of the working of the railway for a given year, the company shall at the same time submit to the general meeting, for confirmation, a detailed statement of the sums owing by the company to the Russian Government, with the interest that has accrued thereon. On the confirmation of this statement by the general meeting the board of management shall deliver to the Russian Government an acknowledgment of the company's debt, to the full determined amount of the same, and this acknowledgment, until its substitution by another, shall bear annually interest at the rate of 6 per cent.

The acknowledgment above mentioned, given by the board of management to the Russian Government, shall not be subject to bill or deed stamp tax. Subjects of minor importance are dealt with in the following sections:

17. Distribution of net profits of the railway.

18. Functions of the board of management, the seals of which will be at Peking and St. Petersburg.

19. Constitution of the board, which is to consist of nine members, elected by the shareholders. The chairman is to be appointed by the Chinese Government. The vice chairman is to be chosen by the members of the board from among themselves.

20. Order of transaction of the business of the board.

21. General meetings of the shareholders, and the subjects that shall come under their notice.

22. Order of convening general meetings.

23. Conditions under which general meetings shall be recognized as legally held. 24. Participation of shareholders in proceedings of general meetings.

25. Local management of railway when in working order.

26. Local management of works of construction.

27. Questions to be submitted for confirmation by the Russian Minister of Finance. 28. Committee of audit.

29. In accordance with the agreement concluded with the Chinese Government, the latter, after the expiration of 80 years of possession of the railway by the company, enters into possession of it and its appurtenances.

The reserve and other funds belonging to the company shall be employed in paying the money due to the Russian Government under the guaranty (section 16) and in satisfaction of other debts of the company, and the remainder shall be distributed among the shareholders.

Any money that may remain owing by the company to the Russian Government at the expiration of 80 years in respect of the guaranty shall be written off. The Russo-Chinese Bank will incur no responsibility in respect of the same.

30. In accordance with the agreement concluded with the Chinese Government, on the expiration of 36 years from the time of completion of the whole line and its opening for traffic, the Chinese Government has the right of acquiring the line, on refunding to the company in full all the outlays made on it, and on payment for everything done for the requirements of the railway, such payments to be made with accrued interest.

It follows as a matter of course that the portion of the share capital which has been amortized by drawing, and the part of the debt owing to the Russian Government under the guarantee, and repaid out of the net profits (section 17), will not constitute part of the purchase money.

In no case can the Chinese Government enter into possession of the railway before it has lodged the necessary purchase money in the Russian State Bank.

The purchase money lodged by the Chinese Government shall be employed in paying the debt of the company under its bonds, and all sums, with interest, owing to the Russian Government, the remainder of the money being then at the disposal 1 of the shareholders.