Provinces and the Governor of Mukden agreed upon with the Japanese Consul General in the fortieth year of Meiji, corresponding to the thirtythird year of Kuangshu.1 Detailed regulations in respect of such mines shall, in due course, be arranged by the Viceroy and the Governor with the Japanese Consul General.2

ART. 5.-The Government of Japan declares that it has no objection to the extension of the Peking-Mukden Railway to the city wall of Mukden. Practical measures for such extension shall be adjusted and determined by the local Japanese and Chinese authorities and technical experts.3 In witness whereof, the undersigned, etc., etc.

Note 1

In connection with this agreement see also the Sino-Japanese treaty and exchanges of notes respecting South Manchuria and Eastern Inner Mongolia, May 25, 1915 (No. 35, post).

At p. 117 of For. Rel., 1909, is printed the following translation (from the Chinese text) of a memorandum concerning mines along the line of the Antung-Mukden Railway, signed in 1907 by the Viceroy of Manchuria and the Japanese Consul General at Mukden :

Memorandum concerning Mines along Antung-Mukden Railway, 1907

"1. The Japanese Consul General hereby declares that when the present military railway between Antung and Mukden is changed to standard gauge the present route may be slightly changed but will not follow an entirely different route.

"2.-The Japanese who are temporarily residing along the line of the railway will be prohibited by the Japanese Consul General from surveying mining properties. Hereafter such work will be carried on under the provisions of Article 3.

"3.-All coal, iron, tin and lead mines situated near the railway may be worked conjointly after officials of both countries have made an inspection. The operators concerned should specify exactly the localities to be worked and petition the Viceroy of Manchuria and the Governor of Fengtien, who, after giving their consent, will ask for an edict permitting the work to be carried on. The conditions of working the mines will be similar to those contained in the Agreement of Lin-ch'eng Hsien. [See the agreement of March 22, 1905 (MACMURRAY, vol. 1, p. 493).]

1 Quoted in Note 1 to this document, infra.

For correspondence between the American and the Chinese and Japanese Governments concerning the effect of this provision, see For. Rel., 1909, pp. 116-124. In the course of that correspondence, the Chinese Foreign Office, under date of November 18, 1909, stated to the American Legation that "the reference in the said agreement to joint Chinese-Japanese exploitation of mines along the two railways mentioned does not involve a monopoly of the rights and privileges of opening mines in the designated territory, nor confer any exclusive rights to mines therein upon Japanese subjects, but that mines in the territory mentioned may with the consent of the Chinese Government be exploited by third parties also." Under date of November 25, 1909, the Japanese Ministry for Foreign Affairs likewise advised the American Embassy that "the provisions of the agreement of September 4 last, in reference to joint exploitation of mines along the said railways do not and were not intended in any way or to any extent to involve a monopoly of the right to discover, open, and operate mines in Manchuria, to the exclusion of American citizens, or any other persons."

See Note 3 to this document, post, p. 132.

An agreement for the extension of the Peking-Mukden Line was signed at Mukden, September 2, 1911 (MACMURRAY, vol. 1, p. 795).

"4.-If in future operators of other nationalities are permitted to work coal mines and are given better terms than those of the agreement of Lin-ch'eng Hsien in Chihli Province, thereafter the coal mines along the line of this railway which are permitted to be worked jointly shall on petition be granted the same privileges. The iron, tin, and lead mines, which are worked jointly shall pay taxes and dues according to such regulations as may hereafter be issued by the Board of Agriculture, Industries, and Commerce.

"5.-If hereafter operators of other nationalities are permitted to work iron, tin, or lead mines in the province of Fengtien and if after paying the taxes and dues fixed by the board they enjoy any special privileges, thereafter such companies of Chinese and Japanese as may be permitted to work these three sorts of mines along the line of the railway shall on petition be accorded the same privileges."

Note 2

The following is a translation, from the Japanese text printed at p. 44 of Shina Kankei Tokushu Joyaku Isan, of the detailed regulations for the Fushun and Yentai Mines, signed on May 12, 1911:

Detailed Regulations for Fushun and Yentai Mines, May 12, 1911

"The delegates of Japan and China, having been duly clothed with authority by their respective Governments, do establish the following detailed regulations in regard to the Fushun and Yentai mines, based on the provisions of Article 3 of the agreement in regard to Manchurian affairs which was concluded by the Governments of Japan and China at Peking on the 4th day of the 9th month of the 42nd year of Meiji (20th day of the 7th moon of the first year of Hsüan T’ung: i.e., September 4, 1909).

"ART. 1.-The South Manchuria Railway Company, hereinafter referred to as the Company) agrees to pay to the Chinese Government a mining tax for the coal of the Fushun and Yentai mines (hereinafter referred to as the two mines), which shall be fixed at five per cent. of its value at the mouth of the mine, provided that as long as the output of coal is less than 3000 tons of coal per day the amount of the tax shall be computed by fixing the price at the mouth of the mine at one Kuping tael per ton, and when the output per day exceeds 3000 tons, at one yen (Japanese currency) per ton.

"ART. 2.-The Company agrees to pay to the Chinese maritime customs for the coal of the two mines exported from a point of maritime navigation an export tax which shall be computed at one-tenth of a Haikwan tael per ton, that is to say, at the rate of one mace silver.

"The export tax for coal of the two mines exported overland through Chosen or Russia shall be separately decided afterwards.

"ART. 3.-The tax to be paid mentioned in Article 2 shall apply to coal from the date of the agreement in regard to Manchurian affairs, which was entered into at Peking, that is to say the fourth day of the ninth month of the 42nd year of Meiji (20th day of the 7th moon of the first year of Hsüan T'ung). The Company shal! pay to the Chinese Government a mining tax for coal mined subsequent to that date. The export tax which was paid in excess to the Chinese maritime customs from that day shall be refunded by the Chinese Government to the company at the rate of 2 mace per ton.

"With reference to the mining tax in future, the company shall pay to commissioners designated by the Chinese Government for collecting the taxes the amount for the preceding three months four times each year, that is to say in January, April, July and October of the Japanese calendar. The amount of the export tax shall be paid each month for the preceding month as soon as possible to the Chinese maritime customs. "ART. 4.-In case coal from the two mines is loaded into a vessel for its own consumption, it shall be treated according to the usual rule of the maritime customs.

"ART. 5.-The Company need not pay a mining tax for coal for its own use, provided however, this amount shall be fixed at 700 tons per day.

"ART. 6.—In addition to taxes in accordance with Articles 1 and 2, there shal be no other taxes for the coal of the two mines such as the imposition of likin and other fees, but in case the taxes in respect to other coal are fixed at a rate lower than that for the two mines, the Company also shall have the right to have the taxes made equal.

"In lieu of the likin and other taxes mentioned in the foregoing paragraph, the Company shall pay to the Chinese Government yen 50,000 per annum in four instalments in the same manner as mentioned in paragraph 2 of Article 3.

"The Chinese authorities shall take steps to make it known generally in the various provinces that the coal has been freed from likin and other charges.

"ART. 7.-The boundaries of the two mines shall be in accordance with a map which shall be fixed after a conference of the commissioners of the two Governments. "ART. 8.-The Chinese Government will agree not to allow anyone outside the Company to prospect or mine within the boundaries of the two mines, and speedily to cancel permission which may already have been granted to anybody.

"ART. 9.-When there is anybody who mines coal or attempts to mine_coal within the borders of the two mines without the permission or consent of the Company, it shall report it to the Chinese authorities. In such an event the Chinese authorities shall strictly prohibit it.

"ART. 10.-The Chinese authorities will agree to afford sufficient facilities in mining, transportation of coal and the hiring of laborers.

"ART. 11.-In case the Company requires private land within the boundaries of the mines, which is necessary for mining purposes, or requires the extension of the railway, it shall be reported to the Chinese authorities, and a decision shall be reached after a mutual consultation.

"When the Company has finished mining it shall restore to the Chinese Government the land that was used for mining.

"ART. 12. When the Company requires the removal of graves or houses within the land that it uses for mining, it shall confer with the owner and shall pay him a suitable fee for removal. In case any damage is done in these matters on account of mining, it shall agree to pay a suitable indemnity.

"ART. 13.-The Company shall agree to establish appropriate provisions for the control of laborers and for relief.

"ART. 14.-These detailed regulations shall be effective for sixty years from the date of their enforcement. If when this period is reached the mines are not exhausted, the period shall be extended.

"These detailed regulations shall be drawn up in Chinese and Japanese, four copies of each. After they have been signed and sealed by the commissioners of each country, the two Governments shall attest them by furnishing one copy in Japanese and one copy in Chinese apiece to the South Manchuria Railway Company and the Governor General of the Three Eastern Provinces.

"Hou Kuan Taotai Ch'i Ku-yi is to sign in a few days upon returning to China.”

Note 3

The following agreement between the Chinese Government and Messrs. Okura & Company, the Japanese holders of the Penhsihu Mine, dated May 22, 1910, is given in COLLINS, p. 279:

Agreement for Penhsihu Coal Mining Company, Ltd., May 22, 1910

1. After this Agreement shall have been sanctioned by the Chinese Government the Penhsihu Coal Mining Enterprise will be registered as a Sino-Japanese Company. The Company will be called the Penhsihu Coal Mining Company, Limited, hereinafter referred to as "the Company." The Japanese firm is hereinafter referred to as "Messrs. Okura & Company."

2. The Chinese Government has agreed on a valuation of the properties of the Penhsihu Mine at 350,000 dollars. After the signing of this contract the Company will hand over shares to the value of 350,000 dollars to the Chinese Government. 3. The capital of the Company will be 2,000,000 Peiyang dollars. One-half will be subscribed by Chinese merchants, but in view of the fact that the Chinese Government has already 350,000 dollars invested in the mining properties only 650,000 dollars will be subscribed to complete the Chinese shares. Messrs. Okura & Company will be responsible for the subscription of the remaining 1,000,000 dollars. Interest on mine-shares and the cash-shares will begin to run on the day the Company starts operations in the former case and on the day cash is paid up in the latter case. 4. The profits of the Company will be divided as follows:

(a) Profits up to 8 per cent. will be paid on the 2,000,000 dollars as interest. In case the profit is insufficient for payment of 8 per cent. a lower interest will be paid.

(b) After paying the 8 per cent. interest, any profits will be divided into ten equal parts, one of which is to be put aside as a reserve fund, 21⁄2 parts will be paid to the Chinese Government as a contribution, and 61⁄2 parts will be equally divided among the Chinese and Japanese shareholders. When the shareholders consider the reserve fund to be sufficient they may, by mutual agreement, cease putting aside further sums to reserve. No interest is to be paid on the reserve fund.

5.-There will be two Directors-in-chief, one Chinese and the other Japanese. The rest of the posts on the staff will be equally divided amongst Chinese and Japanese by the mutual consent of the two Directors-in-chief. Any enterprise concerning engineering or financial matters must receive the sanction and signatures of the two Directors-in-chief before being put into execution. The Directors-in-chief must make reports to the Director-General on each occasion. All documents and accounts will be managed by qualified officials of the Company in the most up-to-date manner possible and kept in both the Chinese and Japanese languages so that each Director-in-chief may be able to examine the contents. All the Company's affairs will be controlled and directed by the two Directors-in-chief of their representatives under the Company's seal, and under the signatures of the two Directors-in-chief. Chinese dates will be used in book-keeping and the paying out of dividends.

6. The Company will be considered formally constituted on the day the Chinese Government shall register it.

7. After the formation of the Company, when it is considered necessary by the two Directors-in-chief to increase the capital or to contract loans, the shareholders will be consulted. Then the shareholders of each nationality will be responsible for half the amount. Loans may not be contracted from persons of any nationality other than Chinese and Japanese. The Company's properties will not be mortgaged unless there be urgent necessity for loans. The shareholders may not sell their shares without the Company's consent. Only Chinese workmen will be employed in the mines.

8.-The term of this agreement is thirty years, beginning on the day the Company is registered by the Chinese Government. At expiration of this Agreement the Company will enter into voluntary liquidation. The Chinese Government will then return the mine-share certificates to the Company and in return take back the mining area. The Company will as quickly as possible sell off its movable property, rails, mine-timbers and buildings at a fair price. The shareholders of each nationality will take one-half of the proceeds of sale and of the reserve fund. At this time all share certificates will be returned and cancelled unless by mutual consent this agreement is renewed. After expiration of this agreement, should the Chinese Government desire to carry on the undertaking by itself it can do so by taking back the mining area and paying adequate compensation for the movable property, rails, minetimbers and buildings.

9. For every long ton of coal produced the Company will pay likin of .06 K'u p'ing tael of sycee silver and a tax of .10 K'u p'ing tael of sycee silver. For the mining area the Company will pay .2 K'u p'ing tael of sycee silver for each mow occupied. As export tax the Company shall pay .1 K'u p'ing tael of silver as customs duty. In case, however the Chinese shall concede any lower rate of taxation to any Sino-Foreign company in the future, this Company may demand the same rate. When the new mining laws are promulgated by the Board of Agriculture, Industry and Commerce, the Government may, through the Governor of Manchuria, order the Company to alter this Agreement in order to comply with the new laws.

10.-All the materials needed and purchased by the Company will be exempted from likin, but must pay the usual taxes to the maritime customs.

11. In consideration of the capital spent on the mine by Messrs. Okura & Company, in 1905 and 1909, the Company will take over all the property, including engines, buildings, construction and warehouse goods, etc., at a valuation of 1,000,000 dollars, which will be the Japanese capital. Messrs. Okura & Company will make a clear return of all the proceeds from sale of coal produced within that period. The Company will repay all the money spent by Messrs. Okura & Company, between the third moon and the formation of the Company, on new machinery, etc., and this machinery, etc., will be handed to the Company. Messrs. Okura & Company will hand in all proceeds from the sale of the coal produced within the period, and the coa! at surface or in store will be handed to the Company without claim for any payment thereon.

12. After the formation of the Company official surveyors will be despatched to make a surface survey of the concession, so as to fix its boundaries. The map will be sent to the Company as the official survey. If during the Company's mining operations any ancient objects of art be found these will be handed to the Chinese Gov

ernment.

13. Should the Company be in need of any land a fixed price will be paid as its rent. In case it be found necessary to pull down any buildings, or to remove any tombs, the case will be laid before the local official, who will notify the landowner of the fact, but the Company must pay fair compensation.

14. After signing this agreement, the Director-General will, within three months, instruct a representative to draft a set of the Company's Regulations together with Messrs. Okura & Company, preparatory to the operation of the Company. This set of articles will be handed to the Director-General for perusal and for forwarding to the Governor.

15. This Agreement will be drawn up in Chinese and Japanese. In case of dispute the Chinese version will be held to rule. There will be five copies of this Agreement: One copy will be kept at the Governor's Yamen, one at the Bureau of Foreign Affairs, one by Messrs. Okura & Company, one at the Company's Office, and one at the Japanese Consulate.

Dated May 22, 1910.

Signatures:

HAN KUO CHUN,

Commissioner of Foreign Affairs. HSIAO CHIH CHANG TSAO,

OKURA & COMPANY.

Japanese Consul.