and confirmation of the arrangements and conditions herein contained by affixing your signature to the statement to this effect below, retaining one of the two copies of this Letter so executed for your files and returning the other to the undersigned.

I hereby accept and confirm on behalf of the Tientsin-Pukow Railway Administration the arrangements and conditions herein contained.

Peking 12th August, 1912.

(S'd)
(Seal)

STATEMENT.

(Extract of the Estimate for the month of August, 1912, signed by the Chief Accountant Mr. Brickner on July 27th, 1912.)

Letter of Agreement for Advances by Chinese Central Railways for Tientsin-Pukow Railway, August 28, 1912.

CHINESE CENTRAL RAILWAYS LIMITED.

The Honourable Mr. Chu Chi-Chien,

SIR,

Minister of Communications, Peking.

Peking, August 28th, 1912.

I have the honour to inform you that, as the final series of bonds of the Chinese Government 5% Tientsin Pukow Railway Supplementary Loan has not yet been issued, and with a view to permit of the uninterrupted continuance of the work of construction and maintenance, Chinese Central Railways Limited, London, has, in compliance with your request, consented to make advances not exceeding £300,000 sterling, in instalments to meet the urgent requirements of the Tientsin Pukow Railway, Southern Section, under the following terms and conditions:

1. Chinese Central Railways Limited agree to make the said advances, not exceeding £300,000 (Three Hundred Thousand pounds) in monthly instalments as required, up to March 31st 1913, bearing interest at the rate of 7% per annum from the date of each instalment: these advances together with previous advances already made by_Chinese_Central Railways Limited to be repaid with interest by deduction by Chinese Central Railways Limited from the final issue of the Tientsin Pukow Railway Supplementary Loan bonds, or in any case on March 31st 1913.

2. The unissued part of the bonds of the Tientsin Pukow Railway Supplementary Loan (London issue) are hereby hypothecated as security for this present and all former advances made by Chinese Central Railways Limited to the Tientsin Pukow Railway Administration, and these bonds will in like manner be given as security for any future advances for the completion of construction which Chinese Central Railways Limited may agree to make to the Railway Administration.

3. It is hereby agreed that these advances will be applied solely to the following purposes:

a. Payment of the Southern Section's outstanding obligations, and the provision of the necessary rolling stock and ferry between Pukow and Nanking.

b. Continuance of construction work on the Southern section.

4. These advances shall be kept in the Hongkong and Shanghai Banking Corporation until actually required for the purposes specified in Clause 3 and shall be drawn upon as hereinafter provided.

5. Requisitions on these advances will be drawn by orders issued and signed by the foreign Chief Accountant of the Tientsin Pukow Railway Southern Section and approved and countersigned by the Managing Director, or his representative.

6. Until complete repayment with interest of these advances and of all other advances made by Chinese Central Railways Limited to the Railway Administration the latter will treat their traffic receipts on the Southern Section as funds for construction works and/or loan service, and will deposit with the Hongkong and Shanghai Bank such amounts thereof as the Engineer-in-Chief will not require immediately for construction purposes. The foreign Chief Accountant of the Southern Section shall every ten days furnish to the Managing Director for the information of the Engineer-in-Chief a statement of earnings from all sources. The conditions for drawing on the earnings so deposited with the Hongkong and Shanghai Bank will be the same as those provided in Clause 5 above.

7. In the event of the Chinese Government having bona fide Chinese funds at their disposal for carrying on the work of construction, they may at any time utilise such funds for repaying with interest any advances as may then have been made, and thereby render the arrangements made under this letter of agreement null and void.

8. The terms and conditions of this Letter of Agreement will forthwith be communicated by the Ministry of Communications to the Waichiaopu and will by the Waichiaopu be officially communicated to the Minister for Great Britain in Peking.

This letter is in duplicate in English and Chinese and it is understood that in the event of any doubt arising regarding the interpretation of its terms the English text shall rule.

I have the honour to request that you will be good enough to signify your acceptance and confirmation of the arrangements and conditions herein contained by affixing your signature to the statement to this effect below, retaining one copy of the letter so executed for your files and returning the other to the undersigned.

I have the honour to be, Sir,

(S'd)

Your obedient servant,

S. F. MAYERS,

For Chinese Central Railways Limited.

I hereby accept and confirm on behalf of the Tientsin-Pukow Railway Administration the arrangements and conditions herein contained.

CHINESE CENTRAL RAILWAYS LIMITED.

The Honourable Mr. Chu Chi-Chien,

SIR,

Minister of Communications, Peking.

Peking, August 28th, 1912.

With reference to the Letter of Agreement of today's date for advances up to £300,000 from Chinese Central Railways Limited to the Tientsin Pukow Railway, Southern Section, to be repaid on or before March 31st 1913, and in consideration for which the unissued bonds of the Tientsin Pukow Railway Supplementary Loan (London issue) are hypothecated as security it is understood that if it is possible before 31st March 1913 to issue the balance of the loan, the Chinese Central Railways Limited will be duly authorised to take the necessary steps as on the occasions of previous issues: should no issue appear possible, Chinese Central Railways Limited will notify the Railway Administration one month prior to the date upon which these advances are due for repayment, and if the Railway Administration is unable to repay all advances at due date it is understood that Chinese Central Railways Limited shall have the option to purchase at 88 sufficient bonds to repay these and previous advances. This price of £88 for each £100 bond is based on the present market price less interest and commission.

I shall be glad if you will favour me with a reply granting this option to Chinese Central Railways Limited, and assuring them that in the event of its being exercised the Chinese Minister in London will be called upon to cooperate in taking the steps which would be necessary to obtain quotation of these bonds on the London Stock Exchange.

I have the honour to be,

Sir, (S'd)

Your obedient servant,

S. F. MAYERS,

FOR CHINESE CENTRAL RAILWAYS LIMITED.

In connection with this agreement see also the agreement of January 13, 1908 (No. 1908/1, ante).

NUMBER 1910/5.

FRANCE (Banque de l'Indo-Chine), GERMANY (Deutsch-Chinesische Eisenbahn Gesellschaft), GREAT BRITAIN (British & Chinese Corporation, Limited, and Chinese Central Railways, Limited) AND UNITED STATES (American Group).

Agreement concerning loans for railway purposes.*-November 10, 1910. MEMORANDUM OF AGREEMENT made the Tenth Day of November One thousand nine hundred and ten Between THE BRITISH AND CHINESE CORPORATION LIMITED having its registered office at 3 Lombard Street in the City of London (hereinafter called "the Corporation") of the first part CHINESE CENTRAL RAILWAYS LIMITED having its registered office at 110 Cannon Street in the said City (hereinafter called "the Central Company ") of the second part THE BANQUE DE L'INDO CHINE having its office at 15bis Rue Laffitte Paris (hereinafter called "the French Bank ") of the third part THE DEUTSCH-CHINESISCHE EISENBAHN GESELLSCHAFT m. b. H. having its office at 31 Unter den Linden Berlin (hereinafter called "the German Company ") of the fourth part MESSRS. J. P. MORGAN & CO., MESSRS. KUHN, LOEB & CO., THE FIRST NATIONAL BANK and THE NATIONAL CITY BANK all of New York (hereinafter called "the American Group") acting as to the United Kingdom by Messrs. Morgan Grenfell & Co. of 22 Old Broad Street in the City of London as to Germany by Messrs. M. M. Warburg & Co. of Hamburg and as to France by Messrs. Morgan Harjes & Co. of Paris and Messrs. M. M. Warburg & Co. (all hereinafter collectively called "the American Agents ") of the fifth part. WHEREAS the parties hereto have expressed their willingness to enter into a general understanding for the purpose of governing their action in connection with the negotiations for and making to the Chinese Empire loans for railway purposes NOW IT IS HEREBY AGREED by and between the parties hereto as follows:

1.-IN the matter of this Agreement the French Bank is acting on behalf of the French Syndicate for Chinese business consisting of the parties whose names are set forth in the First Schedule hereto, the German Company is acting on behalf of the German Syndicate for Chinese business consisting of the parties whose names are set forth in the Second Schedule hereto, and the American Agents are acting on behalf of the American Group. The French Bank the Germany Company and the American Group reserve to themselves the right of increasing or reducing in each special case the number of parties interested in the French and German Syndicates and the American Group respectively and a similar right is reserved to the Corporation but so that in any such case any party dropping out in any special case shall still remain bound by the restrictive

* In connection with this agreement see also the Anglo-German bankers' agreement of September 2, 1898 (see p. 266, ante), Anglo-French bankers' agreement of October 2, 1905 (No. 1905/11, ante), and Hukuang Railway loan agreement of May 20, 1911 (No. 1911/5, post). See Note to this document, post, p. 833.

provisions hereof, and any party coming in in any special case shall become subject to the restrictive provisions hereof.

2. THIS Agreement relates to all loans and advances for railway purposes to be floated out of the Chinese Empire which may be made with the Chinese Imperial Government and/or with Government Departments and Companies having Chinese Imperial or Provincial Government guarantees but does not relate to loans to be floated within the Chinese Empire nor to any loans in connection with the Hankow-Canton and Hankow-Chengtu Railways.

3. ANY business of the kind hereinbefore defined to which the Agreement relates which may be offered to any of the contracting parties of the first third fourth and fifth parts (hereinafter jointly referred to as "the lenders ") must be dealt with jointly by them in accordance with the stipulations of this Agreement. 4. AS regards joint action in respect of financial operations for railway purposes not having such guarantees special Agreements will have to be made. in each separate case.

5. THIS Agreement is made on the principle of equality namely equal terms in every respect between the lenders and each of the lenders enters into this Agreement for their respective groups and shall take an equal share in all operations and jointly sign all contracts except as hereinafter provided and shall bear in equal shares all charges in connection with any business (except stamp duties and any charges of and connected with the realisation by each of the lenders in their respective markets of their participation in the operations) and conclude all contracts with equal rights and obligations as between themselves PROVIDED ALWAYS that in cases where the introduction of third parties is calculated to prejudice the success of the negotiations any business falling within the scope of this Agreement may be entertained and negotiations entered upon by any one of the lenders alone but with notice to be given to the other lenders as soon as possible and should it appear in the course of such negotiations that the conditions. imposed upon the business preclude joint negotiations and/or joint signatures by the lenders in terms of this Agreement the negotiating party may if mutually agreed upon by the lenders conclude the negotiations and sign the Agreement alone but upon the terms of the other lenders being entitled to all rights or participation under this Agreement other than those involving or arising from joint negotiation and joint signature but it is understood that all the lenders will use their best endeavors to obtain the joint signatures to any contract except where by mutual consent of those lenders who are prepared to participate this is found to be impracticable when the party signing the contract shall by the insertion of a special clause or execution of a separate declaration of trust or otherwise ensure to the other lenders the same rights as regards the taking over the issue and service of the loan which it has obtained under the contract for itself and also the authority required for obtaining official quotations in the respective markets of the said other parties.

6.-ALL contracts shall so far as possible be made so as not to impose joint liability on the lenders, but each of the parties to the said contracts shall severally liquidate its own engagements and liabilities towards the party of the other side in China. The parties to the said contracts will so far as possible come to an

understanding with regard to the realization of the operations but so that such realization in whatever manner this may take place shall be for the separate benefit of each of the lenders as regards their respective participations therein.

7.-IN the event of any of the lenders declining a participation in any business proposed either at the outset or at any time during the course of the negotiations the other lenders shall have the option of taking up and carrying out the business either jointly or if only one takes up the business separately on their or its respective accounts and in their or its respective markets without prejudice to the provisions of this Agreement.

8. THE lenders will endeavor to secure in their respective markets a successful issue of any loan the subject-matter of contracts entered into with them jointly or in which they may be jointly interested.

9.—SUBJECT to the provisions of the Agreement referred to in paragraph 14 hereof any participation given in its own market by any one of the lenders shall be for its own account only but any participations given by and in the mutual interest of all the lenders who may be parties to or interested in any contract to any banks or banking firms outside of England France Germany and America respectively shall be borne in equal shares by the parties interested.

10.-ALL offers shall be made to the Chinese Authorities and loans accepted on terms of control which involve as a minimum:

(A) The appointment of Engineers in Chief to be approved by the lenders or lender taking a participation in the business and the Chinese to be required to make appointments approved by such lenders or lender alternately according to the order of the parties to this Agreement except where the interest of any other group can be shown to predominate and in that case the Engineer shall be appointed by that Group.

(B) Until actually required for construction proceeds of Loans to remain under the control of such lenders on terms not less favorable to the lenders than are contained in the Hukuang Loan Agreement initialled Sixth June One Thousand nine hundred and nine and in the corresponding official despatch.†

(C) Provision for proper account keeping and financial control under the direction of a Chief Accountant to be approved by such lenders or lender.

11. THE orders for materials required for any railway as far as possible shall be equally divided between the lenders or lender participating and the commission receivable from the Chinese on such purchases after provision for the expenses of earning such commission is to be shared between the lenders or lender participating equally or as may be arranged.

12. THE Central Company consents to be bound by the terms of this Agreement to the extent of giving effect thereto by granting to each of them the German Company and the American group one fourth interest in all loans for railway purposes obtained by it in connection with any part of the Chinese Empire north of the Yangtse River and the German Company and the American Group each agrees to grant to the other of them one-fourth interest in any loans for Railway purposes secured by it in the said area and also agrees to grant to the

Quoted in note to final agreement for Hukuang Railway Loan, May 20, 1911 (No. 1911/5), p. 880, post.