16), the Company, on its part, binds itself to the Russian Government during the whole term of the Concession under the following obligations:

"(a) The Chinese Eastern Railway with all its appurtenances and rolling-stock must be always maintained in full order for satisfying all the requirements of the service of the line, in regard to the safety, comfort, and uninterrupted conveyance of passengers and goods;

"(b) The traffic on the Chinese Eastern line must be maintained comformably with the degree of traffic on the Russian railway lines adjoining the Chinese line;

"(c) The trains of all descriptions running between the Russian Trans-Baikal and Ussuri lines shall be received by the Chinese Eastern Railway and dispatched to their destination in full complement without delay;

"(d) All through trains, both passenger and goods, shall be dispatched by the Eastern Chinese Railway at rates of speed not lower than those which shall be adopted on the Siberian Railway;

"(e) The Chinese Eastern Railway is bound to establish and maintain a telegraph along the whole extent of the line and to connect it with the telegraph-wire of the Russian adjoining railways, and to receive and dispatch without delay through telegrams sent from one frontier station of the line to another, as also telegrams sent from Russia to China, and conversely;

"(f) Should, with the development of traffic on the Chinese Eastern Railway, its technical organization prove insufficient for satisfying the requirements of a regular and uninterrupted passenger and goods traffic, the Chinese Eastern Railway shall immediately, on receipt of a notification on the part of the Russian railways to augment its capacity to a corresponding degree, adopt the necessary measures for further developing its technical organization and the traffic on it. In the event of a difference of opinion arising between the above-mentioned railways, the Chinese Eastern Railway shall submit to the decision of the Russian Minister of Finances. If the means at the command of the Chinese Eastern Railway prove insufficient for carrying out the necessary work of its development, the Board of Management of the railway may at all times apply to the Russian Minister of Finances for pecuniary assistance on the part of the Russian Government;

"(g) For all transit conveyance of passengers and goods, as also for the transmission of telegrams there will be established by agreement of the Company with the Russian Government for the whole term of duration of the Concession (§ 2), maximum tariffs, which cannot be raised without the consent of the Russian Government during the whole term above referred to. Within these limits the tariffs of direct communication both for railway carriage and telegrams will be fixed by the Board of Management of the Company on the strength of a mutual agreement with the Russian Minister of Finances;

"(h) The Russian letter and parcels-post, as also the officials accompanying the same, shall be carried by the Chinese Eastern Railway free of charge.

"For this purpose the company shall set apart in each ordinary passenger train a carriage compartment of 3 fathoms in length. The Russian postal authorities may, moreover, if they deem it necessary, place on the line postal carriages, constructed by them at their own cost; and the repair, maintenance (interior fittings excepted) as well as the running of such carriages with the trains shall be free of charge and at the cost of the railway.

"The above-mentioned engagements, by which, as already stated, the grant of a guarantee by the Russian Government is conditioned and the consequent realization of the enterprise of the Chinese Eastern Railway, shall be binding on the railway until the same, after the expiration of the eighty years' term of the Concession, shall without payment become the property of the Chinese Government (§ 29). The redemption of the line from the Company before the above-mentioned term in accordance with § 30 of the present Statutes shall not in any way diminish the effect of the above specified engagements, and these latter, together with the railway, shall be transferred to its new proprietor.

"In the same manner during the course of the whole eighty years' term of the Concession (2) the following privileges granted to the railway by the Imperial Chinese Government shall remain in force:

"(a) Passengers' luggage, as also goods, carried in transit from one Russian station shall not be liable to any Chinese customs duties, and shall be exempt from all internal Chinese dues and taxes;

"(b) The rates for the carriage of passengers and goods, for telegrams, &c., shall be free from all Chinese taxes and dues;

"(c) Goods imported from Russia into China by rail and exported from China to Russia in the same manner shall pay respectively an import or export Chinese duty to the extent of one-third less as compared with the duty imposed at Chinese seaport custom-houses.

"(d) If goods imported by the railway are destined for conveyance inland they shall in such case be subject to payment of transit duty to the extent of one-half of the import duty levied on them, and they shall then be exempted from any additional imposts. Goods which shall not have paid transit duty shall be liable to payment of all established internal barrier and likin dues.

"Immunities of the Company in Regard to Russian Customs Dues. §4. In regard to the place of acquisition of materials for the requirements of the railway, the Company shall not be liable to any limitations.

"If materials be obtained beyond the confines of Russia, they shall, on importation through Russian territory, be freed from payment of Russian customs duties.

"Technical Conditions; Periods of Time for the Commencement and Termination of the Work.-§5. The breadth of the railway track must be the same as that of the Russian lines (5 feet).

"The Company must commence the work not later than the 16th August, 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 as 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 utilizing the frontier stations of the above-named Russian lines. The conditions on which they shall be utilized shall be determined by agreement of the Board of the Company with the Boards of the respective railways.

"Tariffs. §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.

"Order of Examination of Legal Suits, and the Establishment of Rules for Railway Conveyance.-§7. Offences, litigation, &c., 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; these rules shall be framed in accordance with those existing on Russian railways.

"Maintenance of Security and Order on the Railway.-§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 law and order 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. "Foundation Capital of the Company.-§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 amortization 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 being 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.

"Share Capital.-§10. The share capital of the Company shall be fixed at 5,000,000 nominal credit roubles, and divided into 1,000 shares at 5,000 nominal credit roubles.

"The shares are to be issued at their nominal value.

"The guarantee of the Russian Government does not extend to them. "Bond Capital; Guarantee of Russian Government on Bonds.-§11. The remaining portion of the capital of the Company will be formed by the issue of bonds. The bonds will be issued as required, 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 amortization of the bonds.

"For the realization 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 the Company the agreed amount in ready

money.

"Guarantee of Realized Bond Capital.-§12. As payments are received for bonds guaranteed by the Russian Government, the Company shall be bound to keep such sums, or interest bearing 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 expenditures 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 realized by it in the issue of its bonds.

"Shares.-§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 amount and place of payment of the dividend.

"Reserve Capital. §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; 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.

"Net Revenue.-§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 employés and labourers not on the permanent list; "(c) Outlays for materials and articles used for the railways as also expenditure in the shape of remuneration for the use of 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 insuring 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.

"Additional Payments by the Russian Government Under the Guarantee, and the Order of Settlement of Accounts between the Company and the Russian Government in Respect of these Additional Payments. $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.

"8 19. Constitution of the Board, which is to consist of nine members elected by the shareholders. The Chairman is to be apponited by the Chinese Government; the Vice-Chairman is to be chosen by the members of the Board from among themselves. "S 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 recognized as legally held. "824. 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.]

"Gratuitous Entrance into Possession of Railway by Chinese Government.§ 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 Com pany, 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. "Right of the Chinese Government to Acquire the Railway on the Expiration of Thirty-six Years.-§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 amortized 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."

See, also, the first supplement to the charter, February 5/17, 1899, printed post, p. 50, as an annex to the agreement concerning the Southern Manchurian Branch of the Chinese Eastern Railway, July 6, 1898 (No. 6, post).

Note 4

See in this connection the agreements of July 5/18, 1901 (No. 10, post) and January 1/14, 1902 (MACMURRAY, vol. 1, p. 321), in regard to the jurisdiction over Chinese subjects. As to the jurisdiction over Russian subjects in the zone of the Chinese Eastern Railway, consult the Ukaz to the Governing Senate on that subject, under date of July 20/August 2, 1901-originally secret, but subsequently made public in the course of a judicial proceeding-of which the translation is as follows:

Russian Imperial Ukaz regarding Jurisdiction in Chinese Eastern Railway Zone.

August 2, 1901

"The construction of the Chinese Eastern Railway and the realization of the enterprises dependent upon it have attracted a great number of Russians to the line of the railway, which passes through the territories of China, where Our subjects, by virtue of the treaties concluded between the Imperial Government and the Government of the Bogdokhan, have the right of being judged in accordance with Russian laws. Desiring to place on a firm basis of justice the actions that may arise between Russian subjects on the line of exploitation of the above-mentioned railway. We have found it good to submit these actions to the competence of the nearest tribunals of the Empire.

"Having studied and approved the proposals elaborated on this subject by a Special Commission under Our orders, We decree:

"1. In order to enforce justice and preventive measures upon the line of exploitation of the Chinese Eastern Railway, in matters which are within the competence of the Russian judicial authorities, to establish the posts of Justices of the Peace, submitting the above-mentioned line of exploitation to the jurisdiction of the nearest district courts of the Empire.

"2.-To define as follows the jurisdiction of the judicial institutions mentioned in §1: