the indebtedness shall have been paid off, the railway with all its appurtenances in good working condition shall revert to the possession and management of the Chinese Government according to the provisions of this agreement.

ART. 9. As remuneration for all services rendered by the corporation during construction of the railway, the corporation shall receive the sum of £35,000, half of which shall be paid when the construction work is half completed, but not later than 18 months after commencement of construction, and the other half upon completion of the line. This amount shall be regarded as a commutation of all commissions to which the corporation and its agents would properly be entitled, and of payments of all services rendered in the construction equipment of the railway, in respect of the present loan; but in the event of any branch lines being decided upon by the Chinese Government for construction in connection with this railway, and if the Chinese Government decide to build the same by issue of a foreign loan and not from its own resources, then the corporation shall have the first option of tendering for such loan, and a further payment, proportionate to the amount of such supplementary loan, and calculated at the same rate as the commutation hereinabove mentioned, shall be made to the corporation as commutation of its commission for all services in respect of construction.

In return for this commuted commission, the Viceroy is entitled to require the corporation to superintend the purchase of all materials required for the construction and equipment of the railway, which shall be purchased in the open market at the lowest rate obtainable, it being understood that all such materials shall be of good and satisfactory quality. At equal rates and qualities, goods of British manufacture shall be given preference over other goods of foreign origin. Invoices and inspector's certificates are to be submitted to the Viceroy.

With a view to encouraging Chinese industries, Chinese Government and other materials are to be preferred, provided price and quality are suitable.

No commission shall be allowed to the corporation on the purchase of materials except as above provided. All trade discounts or rebates, if any, are, during construction, to go to the construction account, and after completion, to the credit of the railway.

ART. 10. In the construction of the line, in the working of the railway, and in the. performance of the different kinds of business connected with the railway, no interference or obstruction by Chinese or foreigners will be permitted. The Chinese Government will provide protection for the railway while under construction or when in operation, and all the properties of the railway, as well as Chinese and foreigners employed thereon, are to enjoy the utmost protection from the local officials.

The railway may maintain a force of Chinese police with Chinese officers, their wages and maintenance to be wholly defrayed as part of the cost of the construction and maintenance of the railway. In the event of the railway requiring further protection by the military forces of the Imperial or provincial Governments, the same will be duly applied for by the head office and promptly afforded, it being understood that such military forces shall be maintained at the expense of the Government or the province.

ART. 11. All receipts and earnings of the railway shall be regularly paid into the railway's account with the Hongkong & Shanghai Banking Corporation, and on such funds, whether on daily balance or on fixed deposit, the bank's usual rate of interest shall be allowed.

5

All expenses of working and maintaining the line shall be paid from the receipts and earnings, and any remainder thereof shall be charged with the service of the loan. If, after payment of these expenses, and making due provision for payment of interest at per cent per annum on the bonds, and for repayments of principal due in accordance with the amortization schedule hereto attached, there remain surplus funds unappropriated and properly available for other purposes, such funds shall be at the disposal of the Chinese Government to be used in such manner as the Viceroy may decide, provided always that after completion and opening of the line to traffic the amount sufficient for regular payments of interest and repayments of principal shall be deducted from such surplus funds, if any, and shall be deposited with the Hongkong & Shanghai Banking Corporation six months before the date at which such payments

fall due.

In the event of there being no surplus funds available as aforesaid from the earnings of the railway, the amount required for payments of interest and repayments of principal shall be provided in accordance with the conditions of article 14 hereinafter. ART. 12. The corporation are hereby appointed trustees for the bondholders, and in any future negotiations respecting these loans, or matters arising in connection

therewith, which may take place between the Viceroy and the corporation, the corporation shall be taken as representing the bondholders, and as such, empowered to act on their behalf. In view of the fact that the corporation's responsibility to the bondholders continues after construction, whereas, as stated in article 9, its commuted commission for services rendered is limited to the period of construction, and the corporation is not thereunder entitled to any further remuneration during the period of the loan, the corporation shall receive as remuneration for its services and responsibility in acting as trustees for the bondholders, the sum of £1,000 per annum, such remuneration to commence from the date of issue of this loan and to terminate upon its complete redemption.

ART. 13. All materials of any kind that are required for the construction and working of the railway, whether imported from abroad or from the provinces to the scene of the work, shall be exempted from likin so long as such exemption remains in force in respect of other Chinese railways. The bonds of this loan, together with their coupons and the income of the railway, shall be free from imposts of any kind by the Government of China.

ART. 14. It is agreed that during the time of the construction of the railway, the. interest on the bonds and on any advances made by the corporation is to be paid from the proceeds of the loan. The accruing interest from any proceeds of the loan not used during the period of construction, and the earnings derived by the Chinese Government from the working of any sections of the railway as they are built, are to be used to make up the amount required for the payment of the said interest, and if any deficiency remains it is to be met from the proceeds of the loan.

When the construction of the railway is wholly completed, the interest on the bonds is to be paid, from the income or earnings of the railway received by the Chinese Government, every half year on the first day of June and the first day of December. It is hereby agreed that the amount required for the payment of interest and the repayment of principal, together with a sum of one-quarter of 1 per cent on such amounts, to cover commission to the Hongkong & Shanghai Banking Corporation, who are hereby appointed agents for the entire service of repaying the loan, shall be paid to them 14 days before the due dates in Hongkong or in Canton (at the option of the Viceroy when settling exchange) in local currency sufficient to meet such payments in sterling in London, exchange for which shall be settled with the Hongkong & Shanghai Banking Corporation, the Viceroy having the option of settling exchange at any date or dates within six months previous to any due date for the repayment of interest and principal.

The Chinese Government unconditionally undertakes, and hereby promises, to pay the principal of the loan and the interest on the loan on the due dates fixed therefor. If, at any time, the earnings of the railway, together with funds available from the proceeds of the loan, are not sufficient to meet the interest on the bonds and the repayment of capital in accordance with the amortization schedule hereto attached, the Viceroy shall devise means for supplying the deficiency, and should his inability to do so appear probable, he shall memorialize the Government to take measures to make up the deficiency from other sources, and thus be ready to pay off the indebtedness, so that the required amount may be placed in each case at least 14 days previous to the due dates of such payments, in the hands of the Hongkong & Shanghai Banking Corporation.

ART. 15. The corporation may, subject to all its obligations, transfer or delegate all or any of its rights, powers, and discretions to its successors or assigns, but the corporation, which is a corporation formed under English law, shall not transfer its rights under this agreement to any other nation, or people of any other nationality, except British or Chinese. Similarly, the Chinese Government's rights and authority under this agreement shall not be transferred to persons of other nationality.

It is further understood that the Chinese Government will not build another line competing with this railway to its detriment.

ART. 16. The term of the loan, as stated in article 1, shall be 30 years. Repayment of principal shall commence after the expiry of 12 years from the date of the loan and shall be completed in 17 years by yearly payments to the Hongkong & Shanghai Banking Corporation as agents for the service of the loan, acting for the corporation under the terms of this agreement, in accordance with the amortization schedule hereto attached.a

If, at any time after the expiry of 12 years from the date of the loan, the Imperial Chinese Government should wish to redeem the outstanding amount of the loan, or any portion of it, not yet due under the provisions of the amortization schedule hereto attached, not less than six months' notice shall be given in writing by the Viceroy

a Amortization schedule is omitted here.

to the representative of the corporation, declaring the number of additional bonds so required to be redeemed, whereupon the representative of the corporation shall immediately proceed to make such arrangements as may be necessary and usual for the redemption of the number of bonds specified, which, when duly redeemed after payment by the Imperial Chinese Government of the proper amount due thereon, shall be canceled and delivered to the Viceroy.

All bonds thus redeemed, in excess of the amount specified in the amortization schedule hereto attached, before the expiry of 25 years from the date of the loan, shall be paid for with a premium of 2 per cent over their face value (that is, £102.10 will be required to pay for £100), but after 25 years bonds may be redeemed over and above the amounts specified in the schedule without premium upon notice being given in the manner above specified.

As soon as the loan has been completely redeemed, this agreement shall become null and void and the mortgage shall be canceled.

ART. 17. If, during construction, any proceeds of the sale of the bonds are lying unused and bearing interest on their deposit whilst the construction of the railway is going on, such interest is to be credited to the general account of the railway in order that the railway may enjoy the full advantage thereof.

It is also agreed that, if the corporation shall think it expedient before the sale of any of the bonds to advance any money for the work, such advances, together with the interest thereon not exceeding a charge of 6 per cent per annum, shall be deducted from the proceeds of the sale of the bonds.

ART. 18. The junction of the sections of the railway from Canton to the boundary of the Kowloon leased territory under British control, and from the said boundary to the port of Kowloon respectively, and the subsequent joint working of the two sections, shall be arranged by agreement between the Viceroy of Canton and the Governor of Hongkong.

ART. 19. This agreement is signed under the authority of an imperial edict dated the seventh day of February, 1907, which has been officially communicated to the British Minister in Peking by the Waiwupu.

ART. 20. This agreement is executed in quintuplicate in English and Chinese, one copy to be retained by the Viceroy, one by the Waiwupu, one by the Board of Communications, one by the British Minister, 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 Peking by the contracting parties this twenty-third day of the first month of the thirty-third year of the Emperor Kuang Hsu, being the seventh day of March, nineteen hundred and seven.

(Seal and signature of His Excellency Tang Shao-yi, representing the Waiwupu.) Witnessed by

For the British & Chinese Corporation (Ltd.):

Appendix 6.-TIENTSIN-PUKOW RAILWAY.

RAILWAY AGREEMENT.

This agreement is made at Peking on the 10th day of the 12th Moon of the 33d year of Kuang Hsu, corresponding to the 13th day of January, 1908, and the contracting parties are:

His Excellency Liang Tun Yen, Acting Junior Vice President of the Waiwupu, duly authorized to act on behalf of the Imperial Government of China of the one part, and (a) the Deutsch-Asiatische Bank, Shanghai, (b) the Chinese Central Railway (Ltd.), London, hereinafter called The Syndicate, of the other part.

ARTICLE I. The Imperial Government of China authorizes the syndicate to issue a 5 per cent gold loan for an amount of £5,000,000. The loan shall be of the date on which the first series of bonds is issued to the public and shall be called the "Imperial Chinese Government Five Per Cent Tientsin-Pukow Railway Loan."

ART. II. The loan is designed to provide capital for the construction of a government railway line from a point connecting with the Imperial Railways of North China at or near Tientsin through Tehchow and Tsinanfu to Ihsien near the southern frontier of Shantung, hereinafter known as the Northern Section of the TientsinPukow Railway Line, and from Ihsien to a point at or near Pukow (opposite Nanking on the Yangtze-kiang), hereinafter known as the Southern Section of the TientsinPukow Railway Line. The total length of these two sections being about 1,085 kilometers, equal to about 2,170 Chinese li. The survey line shall be open to revision by the director general of the railway.

ART. III. The capital so provided shall be solely devoted to the construction of the railway line, including the purchase of land, rolling stock, and other equipment, and to the working of the line and to payment of interest on the loan during the period of construction, which is estimated at four years from the actual beginning of the works, the commencement of the works not to be delayed beyond six months after this agreement has been signed, within which period the syndicate shall notify the director general that the sum of £500,000 has been placed at his disposal, to be held in Europe or remitted to China as he may direct, as a first installment on account of the proceeds of the loan. This amount of £500,000, or whatever portion thereof is actually advanced, together with interest thereon not exceeding a charge of 6 per cent per annum, shall be deducted from the proceeds of the first sale of the bonds. ART. IV. The rate of interest for the loan shall be 5 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 revenue of the railway, and then from such other revenues as the Chinese Government may think fit to use for the purpose in half-yearly installments according to the amounts specified in the schedule attached to this agreement, and 14 days before their due dates, Western Calendar, as calculated half-yearly from the date on which the loan is issued to the public.

ART. V. The term of the loan shall be 30 years. Repayment of principal shall commence after the expiry of 10 years from the date of the loan and except as provided in article VI hereinafter, shall be made by yearly amortization to the Deutsch-Asiatische Bank and the Hongkong & Shanghai Banking Corporation in half-yearly installments out of the revenues of the line or such other revenue as the Chinese Government may think fit to use for the purpose, according to the amount specified in the schedule attached to this agreement, but 14 days before their due date, Western Calendar, as calculated half-yearly, from the date on which the loan is issued to the public.

ART. VI. If at any time after the lapse of 10 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 until the twentieth year, by payment of a premium of 21 per cent on the face value of the bonds (that is to say, by payment

of £102 10s, for each £100 bond) and after the twentieth year without premium; but in each and every case of such extra redemption, the Imperial Chinese Government shall give six months' notice in writing to the syndicate and such redemption shall be effected by additional drawings of bonds, to take place on the date of an ordinary drawing, as provided for in the prospectus of the loan.

ART. VII. The Deutsch-Asiatische Bank and the Hongkong & Shanghai Banking Corporation having been appointed by the German and British parties of the syndicate, respectively, agents for the service of the loan, the half-yearly payments due for amortization and interest, referred to in articles IV and V, shall be made, in accordance with the amounts of the schedule attached to this agreement, and 14 days before their due dates as fixed by articles IV and V, to these banks by the director general of the railway, who shall hand to said banks in Shanghai or Tientsin 14 days before the said due dates in shares to be arranged by the banks, funds in Shanghai or Tientsin sycee sufficient to meet such payments in gold in Europe, exchange for which shall be settled with the said banks on the same day, the Railway Administration having, however, the option of settling exchange with the two banks at any date or dates within six months previous to any due date for the repayment of interest and principal. These payments may, however, be made in gold, if the Imperial Chinese Government should happen to have gold funds bona fide at their disposal in Europe not remitted from China for the purpose and desire so to use them.

In reimbursement of expenses connected with the payment of interest and the repayment of principal of the loan, the Hongkong & Shanghai Banking Corporation and the Deutsch-Asiatische Bank will receive a commission of one-quarter of 1 per cent on the annual loan service.

ART. VIII. The Imperial Government of China hereby engages that the interest and principal of this loan shall duly be paid in full, and should the revenue of the railway or the proceeds of the loan not be sufficient to provide for the due and full payment of interest and repayment of principal, the director general shall memorialize the Throne and the Imperial Government of China will thereupon make arrangements to ensure that the amount of the deficiency shall be met from other sources and handed over to the banks on the date upon which funds are required to complete full payment of interest and repayment of principal.

ART. IX. The loan is hereby secured:

1. By likin and internal revenues of the province of Chihli to the amount of 1,200,000 Haikwan taels a year.

2. By likin and internal revenues of the province of Shantung to the amount of 1,600,000 Haikwan taels a year, and

3. By revenue of the Nanking likin collectorate (to the amount of 900,000 Haikwan taels a year) and of the Huai-an native customs (to the amount of 100,000 Haikwan taels a year) in the Province Kiangsu.

The principal revenues as above stated are hereby declared to be free from all other loans, charges, or mortgages.

So long as principal and interest of the loan are regularly paid, there shall be no interference with these provincial revenues; but if the principal or interest of the loan be in default at due date, then, after a reasonable period of grace, likin and suitable internal revenues of the three Provinces sufficient to provide the amounts above stated shall forthwith be transferred to and administered by the Imperial Maritime Customs, in the interest of the bondholders. And so long as this loan or any part thereof shall remain unredeemed, it shall have priority as regards both principal and interest over all future loans, charges, and mortgages charged on the above-mentioned revenues of the three Provinces. No loan, charge, or mortgage shall be raised or created which shall take precedence of, or be on equality with this loan, or which shall in any manner lessen or impair its security over the revenues of the three Provinces as above stated; and any future loan, charge, or mortgage charged on the said revenues of the three Provinces shall be made subject to this loan, and it shall be so expressed in every agreement for every such future loan, charge, or mortgage.

It is understood and agreed that so long as this loan is unredeemed the railway shall under no circumstances be mortgaged nor its receipts given as security to any other party.

In the event of the Chinese Government, during the currency of this loan, entering upon definite arrangements for the revision of customs tariff accompanied by stipulations for decrease or abolition of likin, it is hereby agreed, on the one hand, that such revision shall not be barred by the fact that this loan is secured by likin and provincial revenues, and, on the other hand, that whatever likin is required to provide the security of this loan shall neither be decreased nor abolished except by previous arrangement with the syndicate, and then only in so far as an equivalent is substituted