No. 38.

FRANCE.

CONCESSION FOR BUILDING A RAILWAY FROM PAKHOI TO THE WEST RIVER.@

M. HANOTAUX TO M. PICHON.

[Translation.]

(PARIS,) 2 May, 1898.

The recent reports of our Consular Agents show the interest we have in developing means of access (voies de pénétration) in the region of Kwangtung and Kwangsi which borders the Gulf of Tongking. Be good enough to ask the Chinese Government for the Concession, to a French Company, of a railway destined to connect the port of Pakhoi with a point to be fixed upon on the course of the West River: such concession to be made on the lines of the contract entered into in June 1896, for a railway from Dong-dang to Lungchow.

M. PICHON TO M. HANOTAUX.

(PEKING,) 28th May, 1898.

The Chinese Government consents to our request for a railway from Pakhoi to the West River. It is understood that the French, or the Franco-Chinese Company only, may construct all railways having Pakhoi as their starting point.

280

a Documents Diplomatiques, Chine, 1894–1898, pp. 53, 54.

No. 39.

GREAT BRITAIN.

CONTRACTS FOR THE SHANGHAI-NANKING RAILWAY.

1. PRELIMINARY AGREEMENT, SIGNED MAY 13, 1898.

2. FINAL AGREEMENT, SIGNED JULY 9, 1903.

I.

PRELIMINARY AGREEMENT FOR BUILDING A RAILWAY FROM SHANGHAI TO NANKING.

SIGNED AT SHANGHAI MAY 13, 1898.

This preliminary agreement is made between Sheng Tajen Director General of the Chinese Imperial Railway Administration acting under authority of the Imperial Chinese Government of the one part and the British Firm of Jardine, Matheson & Company for themselves and on behalf of the Hongkong and Shanghai Banking Corporation representing as joint Agents a British Syndicate hereinafter called The Syndicate.

It is agreed as follows:

1. The said Director General of the Chinese Railway Administration authorises the Syndicate to issue a sterling loan for an amount not exceeding three million sterling in such manner and on such terms as the Syndicate may decide, but on terms and conditions as between the Syndicate and the said Director General of the Chinese Railway Administration as are hereinafter detailed.

The loan shall be issued as soon as possible after the signing of a final agreement and is designed to raise the capital for building which the said Sheng Tajen is authorised by Chinese Imperial Edict to construct from Shanghai to Nanking.

2. The building capital thus provided for is to include interest on itself during the period of construction and the said Chinese Railway Administration undertakes to buy and pay for the land required for the sections now referred to i. e. Shanghai to Nanking in accordance with plans and surveys to be approved by the Agents of the aforesaid Syndicate and the said Director General.

3. The rate of interest for the loan shall be 44% (four and one-half per cent) on the nominal principal issued by the Syndicate and shall

be paid by the Syndicate out of the monies so raised for three years from date of issue or up to such nearer date as that on which the lines referred to are completed. After the said three years the said interest shall be provided by the said Railway Administration in Shanghai in accordance with the amounts and dates of a schedule to be drawn up. 4. The terms of loan shall be fifty years and commencing two years after completion of the lines referred to or in any case five years after payment of loan in whole or in part repayment of principal shall be made by a sinking fund which shall be paid by the said Chinese Railway Administration in half yearly instalments in accordance with the amounts and dates of the said schedule and the amortization shall not be increased nor reduced nor shall the loan be converted or redeemed by the Chinese Railway Administration or in any other manner without the assent of the said Syndicate provided always that on twelve months notice being given by the said Railway Administration they have the right to redeem the whole loan still outstanding at par at the end of twenty five years from from date of the Final Agreement or at 102 after 12 years.

5. The total half yearly payment due for amortization and interest shall be paid as aforesaid to the Agents of the said Syndicate in Shanghai fourteen days before the due dates mentioned in the aforesaid schedule in Shanghai Sycee sufficient to meet such payments in sterling in London the rate of exchange for which shall be settled with the Hongkong and Shanghai Bank on the said date of payment.

6. To provide for the possibility of the revenue of the aforesaid railway at any time being insufficient to cover the sums so due for interest and amortization a clause is to be mutually agreed to as to satisfactory security before signature of the Final Agreement.

7. The Syndicate shall issue and is hereby authorised to issue to subscribers to the loan now contracted Bonds for the total amount of the loan in pounds sterling in such and for such respective amounts as may appear advisable to the Syndicate which shall arrange the wording in agreement with the Director General of the Chinese Imperial Railway Administration and these Bonds shall be sealed or signed by the Minister for China in London and the Director General of Chinese Railway Administration subject to Final Agreement.

8. This loan shall be secured by mortgage now entered into in equity and to be hereafter entered into specifically on the railway now being completed between Woosung and Shanghai and also on all lands material rolling stock buildings and property and premises of every description purchased and to be purchased by the said Railway Administration for the railways herein referred to and on the revenue of all descriptions derivable therefrom and the Chinese Imperial Railway Administration hereby order and guarantee that no further mortgage or loan shall be created or permitted on the said lines and other securities without the written sanction of the aforesaid Syndicate.

9. The Deed of Agreement shall be executed in quadruplicate and confirmed by Chinese Imperial Edict; one copy to be retained by the Railway Administration one by the Tsungli yamen one by the British Minister in Peking and one by the Syndicate and should any doubt arise as to the interpretation of this agreement the English text is to be accepted.

10. All Bonds and Coupons and payments made and received with the service of this loan shall be exempt from Chinese taxes and imposts of all or every description for ever and all material of every kind or description also to be imported into China or to be brought from the Provinces of China to the scene of work free from taxation of every nature whether Imperial Provincial or Municipal during the currency of this loan, and further it is agreed by the Imperial Chinese Government that no tax or impost of any kind shall be enacted or levied on the revenue of the said Railway Administration or on passenger tickets or freight notes thereby.

All details necessary for the prospectus and connected with the service of the Bond-holders anent interest or amortization of this loan not herein explicitly provided for shall be left for arrangement by the Syndicate who at its own expense shall issue and are hereby authorised to issue a prospectus of the loan as soon as possible after the signing of a Final Agreement. The Tsungli yamen will instruct the Minister for China in London to give the Syndicate all assistance in any matters where his cooperation may be deemed helpful.

11. In order to provide for final authority in matters of construction or administration it is agreed that before the Final Agreement is made. a clause is to be drafted mutually acceptable to the Agents of the Syndicate and to the Director General of the Chinese Imperial Railway Administration providing for a "Board of Control" to be composed of the Director General of the Chinese Imperial Railway Administration as Chairman and a nominee of his together with the representative of the Agents of the Syndicate and the chief Engineer and Secretary hereinafter mentioned.

12. The Railway Administration shall during the continuance of the loan maintain the railway buildings works rolling stocks and dependencies in good order and condition and shall increase the rolling stock to such extent as the Board of Control during the period of the aforesaid sterling loan may find necessary for the requirements of the traffic.

13. The residue of the net profits in each year after paying the sum annually due for interest and redemption of the loan and all other sums which may for whatsoever cause be due to the Syndicate shall be divided into five shares one to be paid to or retained by the said Syndicate and the others to be paid or retained by the Railway Administration but after completion of the lines now provided for and on their revenue proving sufficient to meet the interest and redemption of loan,

there is to be deducted before division of profits interest at the rate of 6% per annum on the value of land purchased by the Chinese Railway Administration and entered in a Land Register Book and in consideration of this the earnings and administration of the Woosung and Shanghai line are to be treated in like manner as the Nanking section and thus go to the general profit and loss account and the Syndicate are to participate therein as in the Nanking section, subject however to a charge of 6% interest on about Taels 500,000 being cost of the Woosung line. The title deeds for land already or subsequently acquired and hypothecated to this Syndicate shall be delivered to the Agents after entry in the Land Register Book which is to be kept by the account; the book shall also contain exact entries of the sums paid for such lands thus showing the aggregate sum so expended.

14. The accounts of the Railway Administration shall be kept in Shanghai currency.

15. The Chief Engineer taking charge of the construction and the working of the railway shall be nominated by the Agents for the Syndicate with the concurrence of the said Director General and shall be paid by the Railway Administration. In like manner a European Secretary and Accountant shall also be appointed and paid; and the Chief Engineer will subject to the assent of the Board of the Control nominate the entire staff of Railway Officials.

16. The Syndicate will on completion of a survey report map and estimate (to be approved by the said Director-General) now to be commenced by Engineers nominated by them name a definite price at which they engage to take the said loan; it will be based on a current quotation of 82 dated 24th April but it is necessarily subject to the state of London money market at date of final agreement; due advantage also being given to the Railway Administration in case of improvement. In the event of the price named not being acceptable to the Railway Administration the cost of the survey will be borne by the Syndicate but otherwise will form part of the rail construction charges.

17. The books of the Administration shall be kept both in English and Chinese and all monies provided by the Syndicate shall be dealt with through an account to be kept in Shangai with the Hongkong & Shanghai Bank; this account will be disbursed for the construction of the lines and for expenses consequent thereon upon the Chief Engineer's certificate. The whole accounts of the Railway Administration shall be subject to the inspection of the Syndicate and it is further agreed that the revenue or earnings of the railway shall be paid into the said account with the Hongkong & Shanghai Bank for final treatment but at places where the Hongkong & Shanghai Bank has no Agency and the Imperial Bank of China is established disbursements and receipts will be dealt with through the latter in accordance with the final agreement.