agreements in regard to the interpretation of the meaning of this agreement will be decided by the Japanese text. 12th day of the 10th month of the 6th year of the Republic of China. Minister of Finance. Minister of Communications. 12th day of the 10th month of the 6th year of Taisho. Representative of the South Manchuria Railway JAPAN (Industrial Bank of Japan, Bank of Chosen, and Bank of Taiwan) AND CHINA Preliminary agreement for a loan for the construction of the KirinHueining Railway.'-June 18, 1918 For the purpose of constructing the railway from Kirin, in the Republic of China, to Hueining, through the Southern part of Yenchi (Chientao) and the Tumen River, the Government of the Republic of China (hereinafter called A) hereby enters into the present preliminary agreement with the three Japanese Banks, the Industrial Bank of Japan, the Bank of Chosen and the Bank of Taiwan, represented by the Industrial Bank of Japan (hereinafter called B) as the basis of a formal loan agreement for the same Railway: ARTICLE 1.—A shall with due promptness outline the amount of funds required for the construction of the railway and other items of necessary expenditure and bring it to the notice of B for its consent. In accordance with the amount of funds required as referred to above, B shall issue 5 per cent. public loan bonds of the Republican Government of China in gold currency for A. ARTICLE 2.-The period for the redemption of the present loan shall be limited to forty years. Redemption of the loan shall begin from the 11th year calculating from the date of the issue of the bonds and the method of yearly instalment redemption shall be followed. ARTICLE 3. As soon as the formal agreement for the Kirin-Hueining Railway loan is signed, A shall begin to construct the line so as to hasten its completion. 1 MACMURRAY, vol. II, p. 1430, translation from Chinese text as published in the Government Gazette of June 29th, 1918. See also Note to this document, post, p. 200. ARTICLE 4.—A shall build the railway bridge over the Tumen River conjointly with the Railway Department of the Office of the Japanese Governor General for Korea and shall share half of the expenses thereof. Regarding the through traffic between this railway and the railway in Korea, a separate agreement shall be entered into with a view to developing the traffic and securing the smooth co-operation of the two railways concerned. ARTICLE 5.-A shall pledge the following assets to B as security for payment of interest and redemption of the present loan bonds: All the property owned by and the revenue due to the railway either at present or in the future. Without the approval of B, A shall not offer either the property or the revenue of the railway to others as loan security. ARTICLE 6.—The actual amount of funds to be received by 4 out of the issue of the present loan bonds shall be such as to be more profitable to A than what is stipulated in the Ssupingkai-Chengchiatun1 Railway Loan Agreement concluded on December 17 of the 4th year of the Republic. The rate at which the present loan bonds are to be issued shall be fixed according to the circumstances under which they are issued. ARTICLE 7.-Regarding the particulars which are not provided for under the foregoing articles, they shall be decided upon by A and B in accordance with the Tientsin-Pukow Railway Loan Agreement signed on the 10th of the 12th moon of the 33rd Year of Kuanghsu.2 ARTICLE S.-The present preliminary agreement shall be the basis of the formal agreement for the Kirin-Hueining Railway Loan, which shall be concluded within six months after the conclusion of the present preliminary agreement. ARTICLE 9.-Upon the conclusion of the present preliminary agreement, B shall pay to A an advance of $10,000,000 in full without any deduction for commission. ARTICLE 10. The advance referred to above shall bear 71⁄2 per cent. interest per annum; that is, 71⁄2 yen shall be paid for the yearly interest of every 100 yen. ARTICLE 11.-The advance shall be paid to A in specie in exchange for the Treasury Notes issued by A. ARTICLE 12.-The Treasury Notes mentioned in the foregoing article shall be subject to change every six months. At each occasion of their change for new ones, the interest due for the said period shall be paid to B. ARTICLE 13.-After the conclusion of the formal agreement for the Kirin-Hueining Railway Loan, the advance shall have the preferential right 1 No. 37, ante. 1 MACMURRAY, vol. 1, p. 684. of being repaid with the proceeds from the issue of the loan bonds referred to above. ARTICLE 14. The payment of the advance, its redemption and the payment of its interest and other transactions in connection therewith shall be carried out at Tokio. Two copies of the present preliminary agreement shall be written in the Chinese language and two copies in the Japanese language and A and B shall each keep one copy written in each language. In case any dispute arises with regard to the interpretation of the agreement, the text of the one written in Japanese shall be considered as authoritative. Note The Peking Times of July 2nd, 1918, printed the following statement concerning the report of the Minister of Communications in regard to this agreement: "The following is the official report of Mr. Tsao Ju-lin, Minister of Communications, concerning the Kirin-Hueining Railway loan. This report was sent to President Feng for approval on the twenty-fifth June and it was sanctioned on the twenty-ninth of that month: ""The Kirin-Hueining line will pass through the southern part of Yenchi (Chientao) and the Tumen river to Hueining, Korea, travelling fertile districts full of iron and other mineral deposits. According to the third article of the Sino-Japanese agreement signed in the thirty-third year of the reign of Kuanghsü (1907) concerning the construction of the Fengtien-Hsinmintun and Changchun-Kirin lines [Agreement of April 15, 1907 (No. 15, ante) ], it was stipulated that, in case of need, an extension of the Changchun-Kirin railway be built with Chinese funds; but if Chinese capital cannot be procured for the purpose, then the Chinese government should consult the Japanese government about same. Further, this was also mentioned in the sixth article of the Sino-Japanese treaty about the Tumen river frontier signed in the first year of the Hsuantung reign of the defunct Taching Court. [No. 28, ante.] Hence after the completion of the second loan for the Kirin-Changchun line last year [No. 41, ante] the Ministry of Communications was approached by the Peking representative of the Japanese Industrial Bank in May last for the construction of the Kirin-Hueining line. After considerable negotiations on both sides, a draft agreement was signed by them on the 18th June, 1918, consisting of fourteen articles. It was agreed that after the signing of the agreement, the Japanese Industrial Bank, the Bank of Taiwan and the Bank of Chosen would immediately advance the sum of ten million dollars to the Chinese government at the rate of seven and half per cent per annum without commission. In pursuance of this condition, ten million dollars were paid into the Tokio office of the Sino-Japanese Exchange Bank on the nineteenth June to the credit of the Peking government who are at liberty to use it without condition. "With regard to the construction of the Kirin-Hueining Railway, the actual amount will be decided by the Chinese government and the above-mentioned three banks will then issue bonds in Japan on its behalf. The bonds will be issued in gold currency to be refunded within forty years from date of issue with the railway and its incomes as securities. "The construction of the Tumen river iron bridge will be undertaken in conjunction with the railway department of the Chosen Government-General and the cost is to be equally divided by the contracting parties. All other conditions which are not mentioned in the draft agreement will be drawn up by the two contracting parties in accordance with the Tientsin-Pukow Railway Loan signed in January, 1908. [MACMURRAY, vol. i, p. 684.]' "Mr. Tsao says that this line will be completed in four years and that with the exception of this there is no other railway loan with foreign capitalists at this moment." No. 43 JAPAN (Exchange Bank of China, in association with the Japanese Banking Syndicate consisting of the Industrial Bank of Japan, the Bank of Chosen, and the Bank of Taiwan) AND CHINA Agreement for a loan for gold mining and forestry in the Provinces of Heilungkiang and Kirin (Manchuria).'—August 2, 1918 The following terms have been agreed upon by the two parties in the matter of a loan by the Government of the Republic of China (hereinafter called A) from the Exchange Bank of China (hereinafter called B) of yen 30,000,000 in Japanese gold as a fund for the development of gold mining and forestry in the two provinces of Heilungkiang and Kirin: 1. The amount of the loan shall be yen 30,000,000 in Japanese gold. 2. The loan shall be for a period of ten years reckoned from the date of signing the agreement, that is to say up to the 1st day of the 8th month. of the 17th year of Taisho, or the 1st day of the 8th month of the 17th year of the Republic of China; provided, however, that upon the expiration of this period it may be extended by mutual consent. 3. After five full years have elapsed, reckoning from the signing of this agreement, a portion of the loan may be repaid at any time upon the giving of notice of six months in advance. 4. The interest on this loan shall be payable at the rate of 7.5 per cent., that is to say, yen seven sen fifty per hundred yen in Japanese gold; provided, however, that in the case of extension as provided in Article 2, the rate may be raised or lowered by mutual agreement, according to the prevailing rate, with the purpose in view of making it as favorable to A as possible. 5. The first payment of interest shall be reckoned at a per diem rate from the date of the delivery of the amount of the loan to the 14th day of the 1st month of the 8th year of Taisho, and shall be paid in advance. The portions for the ensuing six months shall be paid in advance on January 15 and July 15; provided, however, that the amount of the last period shall be reckoned at a per diem rate up to the date of the expiration of the loan. 1 MACMURRAY, vol. 11, 1434, translation from the Japanese text as made public by the Japanese Government on April 16, 1919. A translation from the Chinese text of this agreement (without the annexed letters) was printed in Peking Leader of April 17, 1919. In connection with this agreement, see the agreement concerning mines and railways in Manchuria, September 4, 1909 (No. 27, ante). 6. The amount of the loan shall be delivered without any discount. 7. The delivery of the amount of the loan, its redemption, payment of interest, and all other payments, shall all take place at Tokyo, Japan. 8. A shall offer B as security for the payment of principal and interest the following: I. The gold mines and national forests in the Heilungkiang and Kirin Provinces. II. The Government's revenue from the said gold mines and national forests. 9. In case A, within the period of the operation of this loan agreement, desires to make a loan from others in respect to mines, national forests and their revenues, or to dispose of them, it shall first consult with B. 10. This loan agreement shall automatically be cancelled as a result of the repayment of its principal and interests. Two copies each in Japanese and Chinese of this agreement shall be prepared and sealed, one each to be retained by the Ministries of Agriculture and Commerce and of Finance on the one part, and by B on the other. If any doubts arise as to the interpretation of the agreement, it shall be interpreted according to the Japanese text. 2nd day of the 8th month of the 7th year of Taisho. 2nd day of the 8th month of the 7th year of the Republic of China. (Signed) TIEN WEN-LIEH, Minister of Agriculture and Commerce of the TSAO JU-LIN, Minister of Finance of the Republic of China. LU TSUNG-YU, President of the Exchange Bank of China. TSUNEJIRO KAKIUCHI, Managing Director of the Exchange Bank of THE EXCHANGE BANK OF CHINA TO THE MINISTRIES OF AGRICULTURE AND COMMERCE, AND OF FINANCE Gentlemen: This bank having now concluded a loan agreement in connection with gold mining and forestry in Heilungkiang and Kirin provinces by obtaining capital from the Industrial Bank of Japan, the Bank of Taiwan, and the |