provincial funds above named, shall then be charged with the service of this loan. Payments of interest and repayments of principal shall be made in equal monthly instalments, and in accordance with amounts and dates of a yearly Schedule, which will be furnished to the Administrator-General by the Bank. These payments shall be made by the Administrator-General to the Hong Kong and Shanghae Banking Corporation, Tien-tsin, in Kungp'ing sycee sufficient to provide the sterling amount due to the bondholders in terms of the prospectus of the loan, the rate of exchange for these payments being fixed by that Bank as each such payment becomes due. In reimbursement of expenses incurred in connection with the distribution of the service to the bondholders of the principal and interest of the loan, the Hong Kong and Shanghae Banking Corporation, Tien-tsin, shall receive from the Railway Administration a commission of per cent. on the annual loan service, which will be included in the yearly Schedule for the same.

9. The term of the loan shall be forty-five years, and, subject to the modification mentioned hereinafter, repayment of principal shall be made, so far as regards the bondholders, in forty equal annual instalments, commencing with the sixth year.

10. Interest on the loan shall be charged at the rate of 5 per cent. per annum on the nominal principal, and shall be calculated on the balance of such principal at any time outstanding, payments of interest being made by the Administrator-General in accordance with the amounts and dates specified in the yearly Schedule to be provided.

11. The loan will be redeemed by annual drawings in London as provided for in the prospectus. Besides the drawings as provided for, the Administrator-General may, on giving three months' notice to the Corporation, call for exra drawings to be held, for any amount. Bonds so drawn to be redeemed by the Railway Administration at 20 per cent. premium on their par value. Any such extra drawings must take place on the date of the ordinary drawing provided by the prospectus.

In the event of such extra drawings taking place, subsequent payments of interest will be adjusted in the yearly Schedule to be provided, but repayments of principal shall continue unaltered in terms of clause 9 of this Agreement until the loan is redeemed.

The Imperial Government of China hereby engages that this loan shall not be redeemed or converted otherwise than as herein provided.

12. The price agreed upon for this loan is 90 per cent. net of the nominal principal, but should an unfavourable state of the market prevail at the time of issuing the prospectus, the Corporation is hereby authorized to reduce the price of the loan, at its own discretion, to not less than 88 per cent. net to the Railway Administration.

13. The Corporation are hereby authorized to issue to subscribers to the loan bonds for the total amount of the loan in pounds sterling,

in such form and for such amounts as shall appear desirable to the Corporation, and the Minister for China in London will seal all such bonds with his official seal, as evidence that the Imperial Government of China is bound thereby. Each such bond shall bear the following clause:

"The Imperial Government of China, pursuant to an Imperial Edict, dated unconditionally guarantees and declares itself responsible for the payment of the principal moneys and interest hereby secured, and in faith thereof it has specially authorized the Chinese Minister in London to seal this bond with his official seal."

14. All bonds and coupons and payments made and received in connection with this loan shall be exempt from Chinese taxes and imposts for ever.

15. All details necessary for the prospectus and connected with the service to the bondholders of the interest and repayment of principal of this loan, not herein explicitly provided for, shall be left to the arrangement of the Corporation, who are hereby authorized to issue a prospectus of the loan as soon as possible after the signing of this Agreement.

The Tsung-li Yamên will instruct the Chinese Minister in London to co-operate with the Corporation in any matters requiring conjoint action.

16. The loan shall be issued to the public as soon as possible after the signing of this Agreement, and shall date from the first day of the month of its issue. Payment of the entire proceeds will be made in London to the order of the Administrator-General not later than the 31st day of March, 1899; of the above proceeds, the Corporation will advance to the order of the Administrator-General in London, on or before the 31st day of October next, the sum of 250,0007.; this advance will bear interest at the rate of 5 per cent. per annum until such time as the first instalment of the loan proceeds shall be available, when it shall be deducted from those proceeds by the Corporation.

17. In the event of an unfavourable state of the market rendering the issue of this loan, and the payment of its proceeds to the Railway Administration impossible on the terms named without loss to the Corporation, the Corporation shall be granted such extension of time for the performance of its contract with the Administrator-General as the circumstances demand, any advances or instalments of proceeds already made to the Railway Administration being in that case treated as regards payment of interest, repayment of principal, security, and Imperial Chinese Government guarantee in terms of this present Agreement, and as forming part of the principal amount of this loan. Similar extension of time for the issue of this loan and payment of its proceeds shall also be granted in the event of the Deutsch-Asiatische Bank, Berlin, objecting to its issue before the month of April next, in

accordance with the terms of clause 9 of the Agreement for the Chinese Imperial Government 44 per Cent. Sterling Loan of 1898.

18. Immediately after the signature of this Agreement, and before the issue of the prospectus of the loan to the public, the AdministratorGeneral will memorialize the Throne and obtain an Imperial Edict confirming and sanctioning the provisions of this Agreement, the Imperial Edict so received being then communicated officially and without delay by the Tsung-li Yamên to the British Minister in Peking.

19. The Corporation may, subject to all its obligations, transfer or delegate all or any of its rights, powers, and discretions to any British Company, Directors, or Agents, in consultation with the Administrator-General, with or without power of further transfer and sub-delegation.

20. This Agreement is executed in quadruplicate in English and Chinese, one copy to be retained by the Administrator-General, one by the Tsung-li Yamên, one by the British Minister in Peking, and one by the Corporation. Should any doubt arise as to the interpretation of the contract, the English text shall be accepted as the standard. Signed at Peking by the Contracting Parties this 25th day of the eighth month of the twenty-fourth year of the Emperor Kuang-Hsü, being the 10th day of October, 1898, Western Calendar.

27938-04-22

No. 47.

CHINA.

REGULATIONS CONCERNING FOREIGN LOANS IN CHINA FOR MINING AND RAILWAY PURPOSES.

OCTOBER 26, 1898.

On October 26th, 1898, the Tsung-li Yamên sent the following instruction to the Chinese diplomatic representatives:

On the 4th day of the eleventh moon in the seventeenth year of Kwang-hsu (December 4, 1891), this Yamên transmitted to the representatives of foreign powers at Peking-copies of a joint memorial presented on the 24th day of the tenth moon in the seventeenth year of Kwang-hsu (November 25, 1891), by the Board of Revenue and this Yamên, which provides that in the negotiation of a foreign loan by Chinese officials, of whatever rank, the agent for the interested foreign capitalists is required to report first to the representative of his country at Peking-and ascertain from the Tsung-li Yamên whether the matter has been reported to and sanctioned by the Throne before making the loan; and that if a loan is made privately, notwithstanding the fact that there is no evidence of imperial sanction, the Government will neither recognize the claim nor undertake to compel restitution in case of trouble, though the official seal may have been affixed to the contract. On the 7th day of the eleventh moon (December 7, 1891), copies of the above-mentioned memorial were sent to the diplomatic representatives of China abroad with the request that copies be communicated to the departments for foreign affairs of the respective countries to which they were accredited, in order that the same might be published for the information of foreign capitalists.

On the 24th day of the sixth moon in the twenty-fourth year of Kwang-hsu (August 11, 1898), a memorial was presented to the Throne by the Department of Mining and Railroads, reporting the establishment of that department at Peking and recommending that the various propositions started by officials and private individuals before the establishment of the department but not adopted should not be deemed as settled, and was duly approved by the Emperor.

Now, on the 28th day of the seventh moon (September 13, 1898) copy of a memorial to the Throne presented by Hu Yu-fên, governor of Peking, was received from the privy council, proposing that the

Tsung-li Yamên be commanded to inform all the Diplomatic Representatives of foreign powers at Peking, with the view of their notifying the capitalists of their respective countries, that all contracts for foreign loans entered into by the provincial authorities for the opening of mines and the construction of railroads without the written. approval of the Imperial Government shall be deemed null and void, together with an imperial decree ordering the Tsung-li Yamên to devise means for carrying the same into effect.

In view of the undeveloped state of the mineral resources of the various provinces of the Empire and the initial stage in the construction of trunk and branch lines of railroads, it has been this Yamên's policy to allow foreign capital to be used for these purposes, to the end that both Chinese and foreigners may derive advantages therefrom. But, in order to obtain good results, affairs must be well managed and money must be economically expended. It is feared that there may be unscrupulous Chinese persons who, claiming with fraudulent intent to be concessionnaires of this road or that mine, may enter into private agreements with foreign capitalists for the purpose of obtaining money under false pretenses, and that foreign capitalists may become unwitting victims of such fraud and waste their substance to no purpose. This certainly is not the object of our Government in developing the resources of the Empire, by opening mines and constructing railroads for the mutual benefit of Chinese and foreigners. Now, this Government desires to give it the widest publicity, that all contracts for foreign loans to be expended for the opening of mines and construction of railroads in China, in order to be valid, must be certified and approved by the Department of Mining and Railroads, and that all agreements privately entered into with foreign capitalists without the certification and approval of the Department, no matter how large the amount of subscribed capital may be for the purpose of opening mines and constructing railroads, shall be deemed null and void, so as to put a stop to all fraud and deception and encourage fair and honest dealing.

Copies of this communication have been transmitted to the Diplomatic Representatives of foreign powers at Peking, and you "are requested to communicate a copy of the same to the Secretary of State for his information, and when you have received his reply to send a copy to this Yamên.

Dated this 12th day of the ninth moon in the twenty-fourth year of Kwang-hsu (October 26, 1898).

a That is to say the Chinese Minister at Washington, who communicated the above to the Secretary of State.