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 necessary 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 § 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 utilising the frontier stations of the above-named Russian lines. The conditions on which they shall be so utilised 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 § 3.

7. Crimes, litigation, etc., on the territory of the Chinese Eastern Railway, shall be dealt with by 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 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 amortisation 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 Finances 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 1000 shares at 5000 nominal credit roubles. The shares are to be issued at their nominal value.

The guarantee 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 Finances. 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 Finances.

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

For the realisation of these bonds the Company must have recourse to the Russo-Chinese 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 interestbearing securities purchased with the same by permission of the Russian Minister of Finances, under the special supervision of the Russian Ministry of Finances.

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 realised by it in the emission of its bonds.

13. On the payment of the first allotment on the shares the founders shall receive temporary certificates, on which subsequently, when the Board of Management of the Company shall have been formed, the receipt of the further instalments 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 which 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 (§ 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 towards 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 labourers not on the permanent list.

(c) Outlays for materials 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) Expenditure connected with the adoption of the measures and instructions of the Board of Management for ensuring 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 Russian Minister of Finances. 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 guarantee, 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 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 shareholders, and the subjects that shall come under their notice.

22. Order of convening general meetings.

23. Conditions under which general meetings shall be recognised as legally held.

24. Participation of shareholders in proceedings of general meetings.

25. Local management of works of construction.

26. Local management of railway when in working order.

27. Questions to be submitted for confirmation by Russian Minister of Finances.

28. Committee of audit.

29. In accordance with the Agreement concluded with the Chinese Government the latter, after the expiration of eighty 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 guarantee (§ 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 eighty years in respect of the guarantee 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 thirty-six 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 amortised by drawing, and the part of the debt owing to the Russian Government under the guarantee, and repaid out of the net profits (§ 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 in the Russian State Bank the necessary purchase-money. 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 of the shareholders.

APPENDIX A.-No. 5.

TEXT OF IDENTIC NOTE EXCHANGED THE 28TH DAY OF APRIL 1899 BETWEEN COUNT MOURAVIEFF, RUSSIAN MINISTER FOR FOREIGN AFFAIRS, AND SIR CHARLES SCOTT, BRITISH AMBASSADOR AT ST. PETERSBURG.

GREAT Britain and Russia, animated by a sincere desire to avoid in China all causes of conflict on questions where their interests meet, and taking into consideration the economic and geographical gravitation of certain parts of that Empire, have agreed as follows:

1. Russia engages not to seek for her own account or for Russian subjects any railway concessions in the basin of the Yangtsze, nor to obstruct, directly or indirectly, in that region any applications for railway Concessions supported by the British Government.

2. Great Britain, on her part, engages not to seek for her own account or for British subjects any railway concessions north of the Great Wall of China, or to obstruct, directly or indirectly, in that region any applications for railway concessions supported by the Russian Government.

The two Contracting Parties, having nowise in view to infringe in any way the sovereign rights of China or existing Treaties, will not fail to communicate to the Chinese Government the present Arrangement, which, by averting all cause of complications between them, is of a nature to consolidate peace in the Far East, and serve the primordial interests of China herself.

TEXT OF SUPPLEMENTARY NOTES EXCHANGED AT THE SAME TIME RESPECTING THE NEWCHWANG RAILWAY.

To complete the notes exchanged this day respecting the partition of spheres for concessions and working of railways in China, it has been agreed to record in the present Additional Note the Arrangement arrived at in regard to the line Shan-hai-kuan-Newchwang, for the construction of which a loan has been already contracted by the Chinese Government with the Shanghai Hong Kong Bank, acting on behalf of the British and Chinese Corporation.

The general Arrangement established by the notes referred to above is not to infringe in any way the rights acquired under the said Loan Contract, and the Chinese Government may appoint both an English engineer and European accountant to supervise the construction of the line in question, and the expenditure of the money appropriated to it.

But it remains understood that this fact cannot be taken as constituting a right of property or foreign control, and that the line in question is to remain a Chinese line under control of the Chinese Government, and cannot be mortgaged or alienated to a non-Chinese Company.

As regards the branch line from Siaoheichan to Sinminting, in addition to the aforesaid restrictions, it has been agreed that it is to be constructed by China herself, who may permit European (not necessarily British) engineers