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 procuring 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 (impôt foncier).

The Company will have the absolute and exclusive right of administration of its lands. (La Société aura le droit absolu et exclusif de l'administra tion 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, despatched 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 despatched in transit from one Russian station to another, will not be subject to customs duties; they will likewise be exempt from any internal tax or duty. The Company is bound to despatch 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 cannot 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.

*See Note 6 to this document, post, p. 90.

§ See Note 4 to this document, post, p. 88.

See Note 5 to this document, post, p. 90.

¶ See the Agreement of October 7, 1907, in regard to the working of the Railway's telegraph lines (No. 1907/7, post).

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 onethird.

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. allotted for the work and thereafter for a further eighty years from the day on which the line is finished and traffic is 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 thirty-six years from the day on which the entire line is finished and traffic is 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 is in operation, the Company will make to the Chinese Government a payment of five million Kuping taels (Kuping Tls. 5,000,000).

Kuang Hsü, 22nd year,
8th month, 2nd day.
(Signed) SHU.

Berlin, August 27/September 8, 1896.
RUSSO-CHINESE BANK
(Signed) ROTHSTEIN.

(Signed) PRINCE OUKHTOMSKY.

+ See the Experimental Regulations for the establishment of customs houses in North Manchuria, agreed upon by an exchange of notes between the Chinese and Russian Governments, July 6 and 8, 1907 (No. 1907/10, post), and the Provisional Regulations for the working of Chinese customs houses at the stations of Manchuria and Pogranichnaya (Suifenho), May 30, 1908 (attached to No. 1907/10, post).

See Note 7 to this document, post, p. 91.

Note 1.

The Russo-Chinese Bank was subsequently merged with the Banque du Nord under the name of the Russo-Asiatic Bank (Banque Russo-Asiatique) by a charter approved by the Russian Minister of Finance on July 30/August 12, 1910 (Sobranie Uzakonenii i Rasporyazhenii Pravitelstva, § 719, October 2/15, 1910, No. 96, Section 1). For extracts embodying the substance of the original charter of the Russo-Chinese Bank, under date of December 10/22 see Rockhill, p. 207. At page 185 of Shina Kankei Tokushu Joyaku Isan is given the Japanese translation of an agreement stated to have been concluded on the 20th day of the 7th moon of the 22nd year of Kuang Hsü (August 28, 1896) in regard to the Russo-Chinese Bank Association. The text, apparently translated from a Chinese original, is obscure; but the following is an approximate rendering:

Alleged Agreement between China and Russia regarding Russo-Chinese Bank Association.-August 28, 1896.

"Hsu, Chinese Minister Plenipotentiary to Russia, in pursuance of Imperial Orders of the 20th day of the 7th month of the 22nd year of Kuang Hsü, signed the following agreement in regard to the Russo-Chinese Bank Association:

"1.-The Chinese Government shall contribute a capital of 5,000,000 Kuping taels, and undertake the business in the form of an association under the name of the Russo-Chinese Bank. That is to say that, from the date that this amount is handed over to the Bank, all profit and loss will be borne in proportion to shares.

"2.-When a general account is made up on the first day of the first month of the Russian calendar, the account of profit and loss of the Chinese Government up to the end of the year shall be calculated in Kuping taels, in proportion to the shares held by the Chinese Government.

"3. With regard to the profits which are obtained in accordance with the Statutes of the Bank, after first deducting a certain portion which is to be offered to the Bank Manager(s) as a bonus in reward for diligence, the remainder of the profits shall be divided between the Chinese Government and the Bank in proportion to the shares held by each. Provided, however, that 10% shall be deducted from the profits of the dividends as a reserve fund, and that when the profit exceeds 6% of the capital, 20% shall be deducted from the amount that exceeds 6%, and shall be given as a bonus to the Manager(s). If there is a loss in the business, the loss for which the Chinese Government is liable shall be paid out of the reserve fund.

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4-The monthly and annual reports of the said Bank shall, after obtaining the consent of the general meeting of shareholders, be transmitted by the Manager of the Bank residing in China to the Manager of the Chinese Eastern Railway appointed by the Chinese Government. After he has inspected them, the reports shall be returned.

"5.-If the Bank in question is closed as a result of circumstances or on account of losses, what remains of the capital is to be returned to the Chinese Government if, after balancing the accounts, the loss is found to be small."

Note 2.

In connection with this contract see also the following documents:

1. Convention between Russia and China for the lease of the Liaotung Peninsula, March 27, 1898 (No. 1898/5, post);

2. Additional Agreeement between Russia and China, defining the boundaries of the leased and neutralized territory in the Liaotung Peninsula, May 7, 1898 (No. 1898/9, post); 3. Agreement between the Chinese Eastern Railway Company and the Chinese Government for the Southern Manchurian Branch of the Railway, July 6, 1898 (No. 1898/15, post);

4. Exchange of Notes between Great Britain and Russia with regard to their respective railway interests in China, April 28, 1899 (No. 1899/3, post.);

5. Declaration of the Chinese Government in regard to railways north and north-east of Peking, June 1, 1899 (1899/5, post);

6. Agreement between Russia and China with regard to Manchuria, April 8, 1902 (No. 1902/3, post);

7. Treaty of peace between Japan and Russia, September 5, 1905 (No. 1905/8, post); 8. Treaty and Additional Agreement between Japan and China relating to Manchuria, December 22, 1905 (No. 1905/18, post);

9. Convention and Protocol relating to Japanese and Russian railway connections in Manchuria, June 13, 1907 (No. 1907/9, post);

10. Political Convention between Japan and Russia, July 30, 1907 (No. 1907/11, post); 11. Political Convention between Japan and Russia, July 4, 1910 (No. 1910/1, post); 12. Agreement between Great Britain and Russia respecting the inclusion of British

subjects within the scheme of municipal administration and taxation established in the area of the Chinese Eastern Railway, December 3, 1914 (No. 1914/14, post); and

13. Treaty between Japan and Russia in regard to cooperation in the Far East, July 3, 1916 (No. 1916/9, post).

It was long persistently rumored that the concession for the Chinese Eastern Railway was a first-fruit of a secret political agreement between China and Russia, which attained notoriety under the name of "The Cassini Convention." In its issue of October 30, 1896, the North China Herald published what purported to be a translation of that Convention, in an article which is of sufficient historical interest to warrant its reproduction in full, as follows:

The Cassini Convention.

"28th Oct.

"As our Peking correspondent told us in his last letter, Count Cassini, the Russian Minister, left Peking for Russia on the 30th of September. His baggage had been packed for three or more weeks, and the carts and mule litters were actually standing in the courts of the Russian Legation, but the Minister would not go until he could take with him duly signed and sealed ‘an important agreement supposed to be the right of way for the Siberian railway across northern Manchuria.' With great difficulty we have succeeded in obtaining a copy of this agreement, and we now proceed to give an English translation of it. The numbers to the various clauses in this Convention have been added by us for convenience' sake:

"His Imperial Majesty the Emperor of China having received the various benefits arising from the loyal support of His Imperial Majesty the Emperor of Russia at the close of the late war between China and Japan, and being desirous that the communications between the frontier territories of their respective empires and the international commerce of the two countries be managed to their mutual advantage, has commanded the mutual settlement of certain matters in order the better to consolidate the basis of friendship between the two empires. In this connection, therefore, H.I.M. the Emperor of China has specially appointed the Imperial High Commissioners the Princes and Great Officers of the Crown composing the Imperial Chinese Ministry of War, with plenipotentiary powers, to confer and agree upon certain matters, at Peking, with His Excellency Count Cassini, Envoy Extraordinary and Minister Plenipotentiary of H.I.M. the Emperor of Russia to the Court of China, concerning the connecting of the railway system of the Three Eastern Provinces [Fêngtien, Kirin, and Heilungchiang] with that of the Imperial Russian railway in the province of Siberia, with the object of facilitating the transport of goods between the two empires and of strengthening the frontier defences and seacoasts. And, furthermore,.to agree upon certain special privileges to be conceded by China to Russia as a response to the loyal aid given by Russia in the retrocession of Liaotung and its dependencies.

66

'1.-Owing to the fact that the Russian Great Siberian Railway is on the point of completion, China consents to allow Russia to prolong her railway into Chinese territories (a) from the Russian port of Vladivostock into the Chinese city of Hunch'un in the province of Kirin, from thence northwestwards to the provincial capital of Kirin, and (b) from a railway station of some city in Siberia to the Chinese town of Aiyun in Heilungchiang province, from thence southwestwards to the provincial capital of Tsitsihar and from thence to the town of Petunê, in Kirin province, and from thence southeastwards to the provincial capital of Kirin.

"2.-All railways built by Russia into the Chinese provinces of Heilungchiang and Kirin shall be built at the sole expense of Russia and the regulations and building thereof shall be solely on the Russian system, with which China has nothing to do, and the entire control shall be in the hands of Russia for the space of thirty years. At the end of the said period China shall be allowed to prepare the necessary funds wherewith, after proper estimation of the value of the said railways, she shall redeem them, the rolling stock, machine shops, and buildings connected therewith. But as to how China will at that date redeem these railways shall be left for future consideration.

"3.-China is now in the possession of a railway which she intends to extend from Shanhaikuan into the provincial capital of Fêngtien, namely, Moukden (Shengking), and from Moukden to the provincial capital of Kirin. If China should hereafter find it inconvenient to build this road she shall allow Russia to provide the funds to build the railway from the city of Kirin, on behalf of China, the redemption of which road shall be permissible to China at the end of ten years. With reference to the route to be taken by this railway, Russia shall follow the surveys already made by China in connection therewith, from Kirin to Moukden, Newchwang, etc.

"4.—The railway to be built by China beginning from Shanhaikuan, in Fêngtien, to Newchwang, to Kaiping, to Chinchou, to Lushunk'ou [Port Arthur], and to Talienwan, and their dependencies, shall follow the Russian Railway regulations in order to facilitate the commercial intercourse between the respective Empires.

"5. With reference to the railways to be built by Russia into Chinese territory, the routes along which the said roads shall pass must be protected, as usual, by the local civil and military officials of the country. They shall, moreover, afford all facilities and aid to the civil and military officials of Russia at the various railway stations, together with all the Russian artisans and labourers connected therewith. But owing to the fact that the said railways will pass for the greater part through barren and sparsely inhabited territory in which it will be difficult for the Chinese authorities to be always able to grant the necessary protection and aid, Russia shall be allowed to place special battalions of horse and foot soldiers at the various important stations for the better protection of the railway property.

"6.—With reference to the Customs duties to be collected on goods exported from and imported into the respective countries by the said railways, they shall follow the regulations provided by the Treaty of Commerce between China and Russia, ratified in the 1st year of the reign of T'sung Chih, 4th day, 2nd moon [20th February 1862 O.S.], regulating overland transit of goods between the two empires.

"7.-There has always been in existence a rule prohibiting the exploitation of the mines in Heilungchiang and Kirin provinces and in the Ch'angpai mountains [Long White Mountain range]. After the ratification of this treaty, Russians and subjects of the Chinese empire shall be permitted hereafter to exploit and open any of the mines therein mentioned; but before doing so they shall be required first to petition the Chinese local authorities on the subject who, on the other hand, shall grant the necessary commissions (huchao) in accordance with the mining regulations in force in China Proper.

"8-Although there exist certain battalions of foreign-drilled troops (Lienchun) in the Three Eastern Provinces, yet the greater portion of the local territorial army corps thereof still follow the ancient regulations of the empire. Should, therefore, China in the future require to reform in accordance with the Western system the whole army organization of the said provinces, she shall be permitted to engage from Russia qualified military officers for that purpose and the rules for the guidance of this arrangement shall be in accordance with those obtaining in the Liangkiang provinces in regard to the German military officers now engaged there.

"9.-Russia has never possessed a seaport in Asia which is free from ice and open all the year round. If, therefore, there should suddenly arise military operations in this continent it will naturally be difficult for the Russian Eastern Seas and Pacific fleets to move about freely and at pleasure. As China is well aware of this she is willing to lease temporarily to Russia the port of Kiaochou [Chiaochou] in the province of Shantung, the period of such lease being limited to fifteen years. At the end of this period China shall buy all the barracks, godowns, machine shops and docks built there by Russia [during her occupation of the said port]. But, should there be no danger of military operations, Russia shall not enter immediately into possession of the said port or hold the important points dominating the port, in order to obviate the chance of exciting the jealousy and suspicions of other Powers. With reference to the amount of rent and the way it is to be paid, this shall form the subject of consideration in a protocol at some future date.

"10-As the Liaotung ports of Lushunk'ou [Port Arthur] and Talienwan and their dependencies are important strategical points. it shall be incumbent upon China to properly fortify them with all haste, and to repair all their fortifications, etc., in order to provide against future dangers; Russia shall therefore lend all necessary assistance in helping to protect these two ports and shall not permit any Foreign Power to encroach upon them. China, on her part, also binds herself never to cede them to another country; but, if in future the exigencies of the case require it and Russia should find herself suddenly involved in a war, China consents to allow Russia temporarily to concentrate her land and naval forces within the said ports in order the better to enable Russia to attack the enemy or to guard her own position.

'11-If, however, there be no dangers of military operations in which Russia is engaged China shall have entire control over the administration of the said ports of Lushunk'ou and Talienwan, nor shall Russia interfere in any way therein But as regards the building of the railways in the Three Eastern Provinces and the exploitation and opening of the mines therein, they shall be permitted to be proceeded with immediately after the ratification of this Convention and at the pleasure of the people concerned therein. With reference to the civil and military officers of Russia and Russian merchants and traders traveling [in any part of the territories herein mentioned], wherever they shall go, they shall be given all the privileges of protection and facilities within the power of the local authorities, nor shall these officials be allowed to put obstructions in the way or delay the journeys of the Russian officers and subjects herein mentioned.

"12-After this Convention shall have received the respective signatures of their Imperial Majesties [the Emperors of China and Russia], the articles included therein shall go into immediate force, and, with the exception of the clauses regarding Port Arthur, Talienwan, and Kiaochou, shall be notified to the various local authorities of the two Empires. As to the place for the exchange of ratifications, it shall be left to be decided at some future time, but the exchange shall take place within the space of six months.