No. 40.

GREAT BRITAIN.

PEKING SYNDICATE AGREEMENT. a

MAY 21, 1898.

Regulations agreed upon by the Shansi Bureau of Trade and the Peking Syndicate for mining purposes, ironworks, and transporting mine products of all kinds in the Province of Shansi.

1. The Governor of Shansi having sanctioned the request of the Shansi Bureau of Trade for the sole right to open and work coal and iron mines throughout the districts of Yu-hsien and Ping-ting-chou, and the Prefectures of Luan-fu, Tsechow-fu and Ping-wang-fu and also petroleum wherever found, the several concessions granted are now transferred for operation to the Peking Syndicate for the period of sixty years.

Mining engineers shall first be sent to find in what township and hills the mines are situated and what they produce, and make maps thereof with explanations inserted which shall be submitted to the Governor of Shansi, that he may see that the proposed works are not injurious to the place; and he shall report thereon to the Tsung-li Yamên for record, and at the same time issue a permit for the mines to be opened without the least delay. If mining lands belong to the people, lease or purchase shall be made by arrangement with the owners for a reasonable price; if it be Government land, the tax to be paid on it shall be double the ordinary land tax for that locality.

2. The Governor of Shansi has authorized the Bureau of Trade to negotiate a foreign loan not to exceed 10,000,000 taels. Should the mining engineers employed find this sum insufficient, the Bureau may borrow more only of the Peking Syndicate.

3. All matters of administration, exploitation, employés, and finances shall be controlled by the Board of Directors of the Peking Syndicate, and the Chief of the Shansi Bureau of Trade shall co-operate.

4. Each line must have one foreign and one Chinese manager, the foreigner to control the works, the Chinese to attend to all matters between natives and foreigners. Accounts will be kept by the foreign system; receipts and payments of money to be controlled by the

a British Parliamentary Blue Book, China No. 1, 1899, p. 112. 27938-04-20

305

foreign manager and audited by the Chinese manager. At all mines Chinese should be employed as much as possible. All salaries to be paid by the Syndicate.

5. When prospecting for mines, if there be any boring or sinking of pits to examine mineral deposits, an arrangement should first be made with the land-owner to compensate him for any crops injured. If any mine be opened on private land, an arrangement must be made with co-operation of the local officials to lease or buy the land for a price fair to both parties as a measure of justice. Whenever land leased or bought for mines contains cemeteries or mortuary shrines, some plan must be devised to avoid them; there must be no excavation. After mines are opened, should there be damage to life or buildings from subsidence in the mines, the Syndicate shall make charitable compensation.

6. Wherever mines are worked there shall be paid yearly to the Chinese Government as producers tax ("lo-ti-shui") 5 per cent. on the cost of extracting the output of the mines. From the profits shown by the yearly accounts there shall first be paid 6 per cent. on the capital employed, and next 10 per cent. shall be set aside as a sinking fund for yearly repayment of capital and consequent reduction of interest, payments to sinking fund ceasing when the invested capital is wholly repaid; and from the remaining net profit 25 per cent. shall be paid to the Chinese Government, and the remainder shall go to the Syndicate for its own,disposition. In future, wherever capital is used to work coal or iron mines in China this rule for a 5 per cent. Government tax on the output shall be enforced, so that all may be treated alike. This capital being money lent by merchants for mining purposes, the Chinese Government will not in any way be responsible for losses incurred in the business.

7. The area of the mineral districts of Yu-hsien, Ping-ting-chou, Tsechou-fu, Luan-fu is very extensive, and many mines may be worked therein. But the accounts and profits of each mine must be kept distinct from the others; the gains of one mine should not be made to offset the losses of another, and so cause the Government income to suffer reduction.

8. All machinery, materials, and supplies needed for the mines shall on importation be subject to the rules in force with the Kaifung and other mining Companies, and pay one custom duty and a half to the maritime customs, and shall be exempt from all inland li-kin taxes. The products of the mines when exported from a seaport shall pay export duty according to the Customs Tariff.

9. The Syndicate is to control the mines for sixty years, on expiration of which term all the mines of the Syndicate, whether new or old, profitable or not, shall, with all plant, materials, buildings, land, railways, bridges, and all property acquired by the capital of the mines,

be handed over gratis to the Chinese Government, and in due time the Bureau shall request the Governor of Shansi to send Deputies to take delivery.

10. It is important that at each mine measures should be taken to prevent discord between officials and people. For this purpose the Bureau should request the Governor to appoint a Deputy, and a Syndicate should nominate one of the gentry, the salaries of both to be paid by the Syndicate.

11. On first opening of the mines foreigners must, of course, be employed as mining engineers and foremen, but later on the Bureau and the Syndicate should arrange to select for such positions any Chinese who may be proficient in mining, engineering, or managing work. For subordinate positions of little responsibility Chinese should be entirely employed, and Shansi natives as much as possible, so as to encourage improvement.

12. The miners employed should be chiefly Shansi men, and should be paid fair wages. After the mines are opened the Bureau and the Syndicate should select from European and American Mining Regulations suitable ones to apply to questions of compensation to miners for injuries while at work, to pensions for the aged after long service, the limit of daily working hours, &c., and obtain for such Regulations the approval of the Governor.

13. In opening the mines the Syndicate shall establish a school of engineering on mining in some locality convenient to the mines, and there shall be selected twenty or thirty promising youths by the local officials and gentry to study in this school under foreign instructors, and thus prepare for future employment on railways and in mines. The expenses for this school to be met by the Syndicate.

14. The 10,000,000 of silver taels to be loaned to the Bureau of Trade by the Peking Syndicate is an estimated sum. After the capital necessary for opening each mine has been supplied by the Syndicate, the Syndicate will be authorized to print shares, certificates, and conditions for the capital furnished, and fix the time of sale. Chinese merchants who apply for shares within a fixed time shall be allowed to buy of shares for sale any number they wish.

15. Chinese merchants who wish to buy shares may get them from the Bureau, who will procure them at current market rates; or they may themselves buy or sell the shares at pleasure. If any Chinese gentry or merchants shall, within the term of sixty years, acquire three-fourths of all the shares of any one mine, that mine may then be redeemed from the Syndicate, and the Bureau shall report upon same, and direct that shareholder to take charge of the mine.

16. If within the area authorized for opening mines there be mines already worked by the people, such private mines shall not be appropriated, but if a proprietor be willing to lease or sell his mine the

Bureau and the Syndicate shall offer a reasonable price for it, but no compulsion shall be used.

17. Whenever it may be necessary for any mine to make roads, build bridges, open or deepen rivers or canals, or construct branch railways to connect with main lines or with water navigation to facilitate transport of Shansi coal, iron, and all other mineral products from the province, the Syndicate on reporting to the Governor of Shansi is authorized to proceed with the works, using its own capital, without asking for Government funds. Regulations for branch railways are to be made in due time. With reference to the Chengting to Taiyuan Railway, for the construction of which the Bureau has borrowed capital from others, the Peking Syndicate, to avoid disputes, shall not construct any railway within 100 li on each side of it. Private land required for the works authorized as above shall be leased or bought according to the Rules already in force with other public Companies. No encroachment of private property shall be allowed, and the local authorities must be applied to for protection.

18. At the end of every year a printed account of profit and loss shall be rendered by each mine to the Bureau, and each mine shall appoint one Chinese and one foreign auditor to examine the accounts and certify that they are correct; and a general account of profit and loss for all the mines shall be jointly prepared and submitted to the Governor, who will send copies to the Tsung-li Yamên and Board of Revenue for audit. Payments due to the Government shall be reported at same time.

19. These mines being under the sovereignty of China, should China ever be at war with another country, the Syndicate will obey the orders of the Chinese Government prohibiting any aid to the enemy. 20. These Regulations shall be made out both in Chinese and foreign text; each party to have a copy for reference.

Signed in Peking on this 21st day of May, 1898, being the second day of the fourth month of the twenty-fourth year of the Emperor Kuang Hsu.

Seals of Mr. A. Luzzatti, General Agent of the Peking Syndicate (Limited), and of the Shansi Bureau of Trade.

No. 41.

RUSSIA.

PRELIMINARY AGREEMENT AND CONTRACTS CONCERNING THE CHENGTING-TAI-YUAN (CHENG-TAI) RAILWAY.

1898-1903.

(1) DRAFT OF AGREEMENT BETWEEN FANG, SUPERINTENDENT OF THE LIU-LIN-TAIYUAN RAILWAY Co. (UNDERSTOOD TO BE ACTING UNDER AUTHORITY FROM THE GOVERNOR OF SHANSI) AND POKOTILOW, DIRECTOR OF THE RUSSO-CHINESE BANK, FOR THE PROVISION OF A LOAN TO CONSTRUCT A RAILWAY FROM LIU-LIN (I. E., CHENGTING, A POINT ON THE PEKING-HANKOW LINE TO THE SOUTH OF THE HU-TO RIVER) TO TAI-YUAN-FU IN SHANSI.

The line is to run from Chengting to the coal mines on the Wei-shui river to the north of Pingting, and thence to Taiyuan. The costincluding "official profits" (kuan-li)—is estimated at Tls. 6,800,000. As it is impossible to raise this amount in China, Fang agrees to accept a temporary advance from the Russo-Chinese Bank on the following

terms:

1. A Company will be formed to construct the railway, and the Company will borrow Tls. 6,800,000 necessary from the Bank. Interest 6 per cent. from the date of advance.

2. The exact amount required will be determined after the completion of the surveys and estimates.

Until the railway is opened to traffic the interest will accrue, and be added to the principal of the loan. Should the traffic receipts during the two years following the opening be insufficient to pay the interest the deficiency will also be added to the loan capital. At the close of these two years, all the moneys owing to the bank by the Company on principal and interest must be reckoned up and interest paid on the full amount at 6 per cent. per annum. All surplus profits, excluding "official profits" (kuan-li) made within five years from the opening of the railway to be deposited in the Bank, the amount to go to the redemption of the loan at the end of the five years. The Bank to pay 4 per cent. on the amounts so deposited.

Dating from the sixth year after the opening of the line the Company agree to pay off the interest and principal due to the Bank by