"CHAPTER II.-Shares

"ARTICLE 7.-The share certificates of this company shall all be registered, and each share shall be two hundred (200) Yen.

"ARTICLE 8.-The certificates of shares of this company shall be of the following seven denominations:

"One-share certificates "Five-share certificates "Ten-share certificates "Fifty-share certificates

"One hundred-share certificates "One thousand-share certificates

"Ten thousand-share certificates

"ARTICLE 9.—The certificates of shares of this company shall bear the name of the company, the date of registration, the total amount of capital, the amount of each share, the amount paid up, and the number of the certificate. They shall bear the signature and seal of the President.

"ARTICLE 10.-As to the payments upon the shares, twenty (20) Yen per share shall be paid in at the first call. For the second and subsequent calls on the shares, the President shall determine the amount to be paid in as well as the time of payment, and notice of the same shall be sent to each shareholder at least sixty (60) days in advance. However, each call on the shares shall not exceed twenty (20) Yen per share. "ARTICLE 11.—If a shareholder fails to make payment by the date fixed for payment on the shares, delay interest shall be charged him at the rate of four (4) sen per day per one hundred (100) Yen on the amount due.

"ARTICLE 12.-If a shareholder fails to make payment within fifteen (15) days from the date fixed for the first payment on the shares, the company may demand that payment be made within thirty days; and if the money is not paid in by that time the company may notify him that his rights as a shareholder of this company shall be forfeited.

"In the case mentioned in the previous paragraph, where rights are lost, the application money previously paid shall not be refunded.

"ARTICLE 13.-If at the second and subsequent calls on the shares a shareholder fails to make payment within fifteen (15) days after the date fixed for payment, the company may notify such shareholder that payment must be made within thirty (30) days, and that, in the case of failure to comply, his rights as a shareholder of this company shall be forfeited.

"When, in the case mentioned in the previous paragraph, a shareholder has forfeited his rights as such, the company shall notify each assignor [i.e., one who has previously held the shares] of shares that payment must be made within fifteen (15) days, and the assignor who first pays the amount in arrears shall acquire the shares. If no assignor pays, the company shall sell the shares at auction. If the amount realized by the auction is not sufficient to cover the amount in arrears, the previous shareholder shall be required to make good the deficit. If the previous shareholder does not make good within fourteen (14) days, the company shall demand performance of the assignors.

"ARTICLE 14.-The liability of the assignors mentioned in the preceding Article is extinguished after two years from the time when the assignment was entered in the Register of Shareholders.

"ARTICLE 15.-If a company or any other legal person, public or private, owns the shares of this company, it shall appoint its representative and have his name entered in the Register of Shareholders of this company. If shares are held by two or more persons in common, they are required to appoint one person to exercise their rights as shareholder. Persons holding shares in common are jointly and severally liable to the company for the payment upon the shares.

"ARTICLE 16.-When shares are to be assigned, the parties concerned shall make a written statement in accordance with the form prescribed by this company and apply for the alteration of the certificates of shares. However, when a person inherits shares by virtue of succession, bequest or any decision rendered by a court of law, such person is required to attach to the statement referred to a certificate of the census official or other documents as evidence that the company may deem necessary.

"The assignment of any share shall not be valid unless the name and domicile of

the assignee are entered in the Register of Shareholders and the name of the said assignee is entered on the share certificate in question.

"ARTICLE 17.-Should any certificate of shares be destroyed, mutilated or lost, the shareholder may apply for a new certificate of shares by presenting to the company a statement giving the facts in the case and signed by two or more persons as guarantors. However, in case of loss, a public notice to that effect shall be given at the expense of the applicant, and the new certificate of shares shall be issued only when no objection is raised within sixty (60) days from the date of the said public notice.

"ARTICLE 18.-If any shareholder wishes to change the denominations of his certificates of shares, the said certificates shall be presented to the company together with the application.

"ARTICLE 19.-For the registration of a change of an owner's name on a certificate of shares, the issue of a new certificate of shares or the alteration of the denomination of a certificate of shares, the prescribed fees of the company shall be collected from the applicant.

"ARTICLE 20.-During a period not exceeding thirty (30) days immediately preceding each ordinary general meeting of shareholders, the company shall suspend the assignment of shares.

"CHAPTER III.-Shareholders

"ARTICLE 21.-The shareholders of this company shall be limited to the Governments of Japan and China, and the subjects of Japan and China.

"ARTICLE 22.-The Imperial Japanese Government shall furnish the following properties as capital, and the company shall deliver to the Government five hundred thousand (500,000) shares, amounting to Yen 100,000,000, which is the value of the said properties:

"The existing railways (except the rolling stock now actually in use, as well as the rails and accessories of the Mukden-Antunghsien temporary railway).

"All properties attached to the railways referred to, except such properties within the leased territory as may be designated by the Government.

"The coal-mines at Fushun and Yentai.

"ARTICLE 23.-Each shareholder shall have the right to one vote for each share owned by him.

"ARTICLE 24.-The shareholders and their legal representatives shall report to the company their domiciles, names and a copy of their legal seals, when they acquire shares. When any alteration in the above facts has taken place, similar measures shall be taken.

"CHAPTER IV.-General meeting

"ARTICLE 25.-An ordinary general meeting shall be called by the President twice every year in the months of June and December. An extraordinary general meeting shall be called by the President when the President or the Inspectors deem it necessary to do so, or when the shareholders owning at least one-tenth or more of the total number of shares have presented a request to that effect, stating the object of the general meeting and the reasons for calling the same. When the shareholders have requested a general meeting to be called, the President shall take steps for calling the same within fourteen (14) days.

"ARTICLE 26.-The discussion at a general meeting shall be confined to the subjects previously announced.

"ARTICLE 27.-The date, time and place of a general meeting shall be determined by the President, and a notice to that effect shall be sent out to the shareholders at least thirty (30) days in advance of such meeting.

"ARTICLE 28.-The President shall act as chairman of a general meeting. "ARTICLE 29.-The shareholders may appoint only shareholders of this company as their representatives and their powers of attorney shall be presented to the company. "ARTICLE 30.—The chairman of the general meeting shall be allowed to exercise his right to vote as a shareholder.

"ARTICLE 31.-Resolutions of a general meeting shall be adopted by a majority vote of the shareholders present. In case of a tie, the chairman shall have the casting vote. "ARTICLE 32.-The issuance of company debentures or amendments to the Articles of Incorporation shall be decided by a majority vote, with more than one-half of the

total number of shareholders and also of shareholders representing a half or more of the capital stock present.

"If, in the case mentioned in the preceding paragraph the necessary quorum is not present, a provisional decision may be made by a majority of the shareholders present. A notification giving the essential details of the said provisional decision shall be sent to each shareholder, and another general meeting shall be called in not less than one month.

"At the second general meeting the said provisional decision shall be confirmed or rejected by a majority vote of the shareholders present.

"ARTICLE 33.-The minutes of a general meeting shall be recorded in the Proceedings of the general meetings, and the same shall bear the signatures and seals of the President and chief officers present.

"ARTICLE 34.-The chairman of the general meeting may adjourn the meeting or change the place of meeting. The discussion at an adjourned meeting shall be confined to the subjects on which no decision was made at the preceding meeting.

"CHAPTER V.-Chief officers

"ARTICLE 35.-The chief officers of this company shall be as follows:

"ARTICLE 36.-The term of office of the President and Vice-President shall be five years, and they shall be appointed by the Government subject to the Imperial sanction. "The term of office of the Directors shall be four years, and they shall be appointed by the Government from among those who own fifty (50) shares or more.

"The term of office of the Inspectors shall be three years, and they are to be elected by the shareholders at a general meeting of the shareholders.

"ARTICLE 37.-The remunerations and allowances of the President, Vice-President and Directors shall be determined by the Government.

"The remuneration of the Inspectors shall be determined by a resolution of a general meeting of the shareholders.

"ARTICLE 38.-The Directors are required, during their term of office, to deposit with the Inspectors fifty (50) snares of the company owned by them. These shares shall not be returned to their owners even on their retirement from office until all affairs transacted during their term of office shall have been approved at a general meeting.

"ARTICLE 39.-In the event of the office of any Inspector becoming vacant, an extraordinary general meeting of the shareholders shall be called for the purpose of a byelection, and the new Inspector shall hold office during the remainder of the term of office of his predecessor.

"However, a by-election may be postponed until the next general meeting of the shareholders, except when the number of Inspectors has decreased to two or less.

"ARTICLE 40.-The President shall represent the company and have general control of all its affairs.

"The Vice-President shall represent the President when he is prevented from discharging his official duties, and shall act as President when that office is left vacant. "The Vice-President and the Directors shall assist the President, and each shall take charge of a part of the business of the company.

"The Inspectors shall inspect the affairs of the company.

"ARTICLE 41.-During their respective terms of office the President, Vice-President and Directors shall not engage in any other occupation or business under any name whatever without the permission of the Government.

"ARTICLE 42.-The President shall keep at the head-office as well as the branch office copies of the Articles of Incorporation and of the Record of Resolutions of the general meetings of shareholders. He shall also keep at the head-office the Register of Shareholders and the Ledger of Debentures.

"ARTICLE 43.-The President shall submit the following documents to the Inspectors seven (7) days in advance of the date set for the ordinary general meeting of shareholders:

“(1) An inventory of the company's properties.

"(2) A balance sheet.

"(3) A report on the company's works.

"(4) An account of the profits and losses.

"(5) Proposals relating to the reserve funds and to the dividends.

"ARTICLE 44.-The President shall have in readiness at the head-office before the day of an ordinary general meeting of the shareholders the documents mentioned in the preceding Article and the Inspectors' report.

"ARTICLE 45.-The President shall submit to an ordinary general meeting of the shareholders the documents mentioned in Article 43 and obtain its approval.

"The President shall publish the balance sheet when he has obtained the approval mentioned in the preceding paragraph.

"ARTICLE 46.-The Inspectors are required to examine the documents to be subImitted by the President to a general meeting of shareholders and to report their views at the said meeting.

“ARTICLE 47.—The Inspectors may at any time demand the President to report on the business of the company, and may examine the management of its affairs and the condition of its properties.

"CHAPTER VI.-Supervisors

"ARTICLE 48.—The Supervisors of the South Manchuria Railway Joint Stock Company may at any time inspect the arrangements of the company's work, or examine the safes and books of the company, as well as the various documents and articles belonging to it.

"The Supervisors may, whenever they deem it necessary, order the company to report on the various business accounts and the condition of the company.

"The Supervisors may attend the general meetings of the shareholders or any other meetings and express their opinions, but they are not entitled to vote.

"CHAPTER VII.-Accounts

"ARTICLE 49.-The account of this company shall be settled by dividing a year into two periods. From April to September of every year shall be the first half year and from October to the following March shall be the second half year.

"ARTICLE 50.-This company shall set aside as a reserve fund one-twentieth (1/20) or more of the profits, whenever they are apportioned, until the reserve fund amounts to one-fourth (1/4) of the capital.

"Special reserve funds other than that provided for in the preceding paragraph shall be determined by a resolution of a general meeting.

"ARTICLE 51.-The dividends to the shareholders shall be paid according to the Register of Shareholders as it stands on June 1 and December 1.

"ARTICLE 52.-When the dividend of the company for any business year is less than six (6) per cent per annum on the paid up capital for the shareholders other than the Governments of Japan and China (hereafter to be styled merely 'the shareholders'), the Imperial Japanese Government shall supply the deficiency for a period of fifteen (15) years commencing from the day of the registration of the company's establishment. However, the amount of money to be supplied by the Government shall, under no circumstances, exceed six (6) per cent per annum on the capital paid in by the shareholders.

"ARTICLE 53.-When the dividend of the company does not exceed six (6) per cent per annum on the capital paid in by the shareholders, the dividend on the shares owned by the Government need not be paid.

"The shares owned by the Chinese Government shall be dealt with in a similar way to those owned by the Imperial Japanese Government.

"ARTICLE 54. The payment of interest on the debentures which the company may issue for the reconstruction of the railways, or for the operation of the accessory business, and on those which the company may issue for consolidating or redeeming old debentures, shall be guaranteed by the Imperial Japanese Government.

"The reimbursement of the principal may also, if necessary, be guaranteed by the Imperial Japanese Government. The amount of the face value of the debentures to

be guaranteed by the Imperial Japanese Government shall not exceed the amount remaining when the capital paid in by the shareholders other than the Imperial Japanese Government is subtracted from the total of the capital (Yen 100,000,000) subscribed by them.

"The debentures mentioned in the first paragraph of this Article shall be redeemed within twenty-five (25) years.

"ARTICLE 55.-For the debentures issued in accordance with the provisions of the first paragraph of the preceding Article, the Government shall supply the amount corresponding to the interest on the debentures.

"When the dividend on the capital paid up by the shareholders exceeds six (6) per cent per annum, the surplus shall first be applied to the payment of the interest on the debentures. However, in this case the amount of surplus shall be deducted from the money to be supplied by the Government mentioned in the preceding paragraph.

"ARTICLE 56.—When there is any surplus after paying the interest on the debentures, as mentioned in the preceding Article, out of the profits of the company's business, the said surplus shall be apportioned to the shares owned by the Governments of Japan and China until the rate is equal on the respective amounts paid up by all shareholders.

"ARTICLE 57.-The money to be supplied by the Imperial Japanese Government, as provided for in Articles 52 and 55, shall bear interest at six (6) per cent per annum. The interest shall be added annually to the principal, and the total shall be the company's indebtedness to the Imperial Japanese Government.

"When the dividend for all shares exceeds ten (10) per cent per annum, the surplus shall be devoted to the redemption of the company's debt mentioned in the preceding paragraph.

"CHAPTER VIII.—Expenses for organizing the company

"ARTICLE 58. The expenses for organizing the company shall not exceed 50,000 Yen. "Of the amount mentioned in the preceding paragraph that advanced by the Government shall be reimbursed by the company.

"Supplementary Article

"ARTICLE 59. The provisions in Articles 52 to 57 shall be confirmed upon being approved by the Imperial Diet."

Under date of July 31, 1917, were issued the following imperial ordinances regarding the organization of the South Manchuria Railway Company, and the turning over to its management of the Korean (Chosen) system of railways:

Organization of the South Manchuria Railway Company

"(Imperial Ordinance No. 89, July 31, 1917)

[Translation]

"Imperial Ordinance No. 142 of 1906 shall be revised as follows:

"In Article 7, 'One President, One Vice President,' shall be revised to 'the Chairman of Directors.'

"Article 8, paragraphs one to four, shall be revised as follows:

The Chairman of Directors on behalf of the Company shall execute the affairs of the Company according to the orders of the Governor General of Kwantung Province. When the Chairman of Directors is prevented (from attending office) a Director designated by the Government shall represent him in the discharge of his duty.

"In Articles 9 to 11 'President and Vice President' shall be revised to 'Chairman of Directors.'

"Supplementary Rule. This Ordinance shall be effective from the date of its promulgation."