No. 49.

GREAT BRITAIN AND UNITED STATES.

MEMORANDUM OF AGREEMENT BETWEEN BRITISH AND CHINESE CORPORATION AND AMERICAN CHINA DEVELOPMENT COMPANY.@

SIGNED FEBRUARY 1, 1899.

day of

Memorandum of Agreement made the -, 189-, between the British and Chinese Corporation (Limited) (hereinafter called the Corporation), a Corporation formed under the laws of Great Britain and Ireland, of the first part, and the American China Development Company (hereinafter called the Development Company), a Corporation formed under the laws of the State of New Jersey, United States of America, of the second part.

Whereas the Corporation is organized to obtain Contracts, Decrees, and Concessions, and to construct and maintain railways and other public works and undertakings in the Empire of China;

And whereas the Development Company has the same general objects, and both the Corporation and the Development Company are organized in kindred communities which have the same general theories of law, trade, commerce, and justice, and each intend to furnish the necessary capital to exploit the enterprises they may respectively undertake, and to provide for the management of the

same;

And whereas having regard to the difficulties in the way of procuring such capital by reason of the fear that Contracts entered into by the Corporation and the Development Company in China may not enjoy the same inviolability that they receive in Great Britain and Ireland, and in the United States of America, it is desirable to endeavour to procure all protection possible for the upholding of such Contracts;

And whereas it is believed by the Corporation and Development Company that the Governments of their respective countries, by uniting in the assurance of protection of the rights of their respective subjects and citizens on which they have hitherto respectively relied in embarking capital in foreign countries will afford an effectual force for the protection of such enterprises;

« British Parliamentary Blue Book, China, No. 1 (1899), p. 325. This agreement is no longer in force, having determined under the provisions of article 7.

And whereas it is believed that such united action by their respective Governments will be promoted if arrangements are made for the co-operation and joint action of their respective subjects and citizens engaged in business in China, and in particular by the joint action of the Corporation and the Development Company:

Now this Memorandum witnesseth for the consideration of the mutual covenants herein contained each party hereto agrees with the other as follows:

1. Each party hereto shall offer to the other a participation of onehalf of its own interest in any business hereafter obtained by it in the Empire of China a reasonable time after the same shall have been obtained, and the party to whom such participation shall have been offered shall have the option to accept or reject the same within a reasonable time, and shall be under no obligation to accept such participation. Any such offer, if not accepted within a reasonable time, shall be deemed to be rejected.

2. In addition to the business to be hereafter acquired by the respective parties, this Agreement shall apply to the preliminary Contract which the Development Company has already entered into for the construction of a railway from Hankow to Canton, and to the preliminary Contract with Messrs. Jardine, Matheson, and Co., on behalf of the Corporation, have entered into for the construction of a railway from Canton to Kowloon, but this Agreement shall not extend to any of the following Contracts or Concessions which the Corporation has already entered into, or to any extensions or modificatiens thereof, viz.:

(a.) Preliminary Agreement for financing and working of a railway from Shanghae to Nanking, and for the working in conjunction therewith of the existing railway from Shanghae to Woosung.

(b.) Preliminary Agreement for financing the construction and working (as extensions of the above lines) of railways from Soochow to Hangchow and Ningpo.

(c.) Agreement for financing the extension of the Northern Railway of China to Newchang.

(7.) Agreement (co-existent with the last Agreement) for mining. This Agreement shall not extend to any Contract or Concession in which either party is now interested, and which, by the terms thereof, or by any other Agreement already entered into by them, they are prohibited from offering any share or participation therein to the other party.

3. With such offer as aforesaid, full detailed particulars of all preliminary expenses which have been incurred by the party offering the same in and about the obtaining of the business to which such offer relates shall be furnished to the party to whom the participation shall be offered, and one-half of such expenses shall be paid by the other party if they shall accept such participation.

4. For the purpose of convenience and mutual information, it is understood and agreed that the representative of the Corporation shall receive notice of and be entitled to be present at the meetings of the Managing Body of the Development Company in New York when any business in which the Corporation have accepted a participation is discussed, and that the representatives of the Development Company shall also receive notice of and be entitled to be present at the Board meetings of the Corporation in London when any business in which the Development Company have accepted a participation is discussed. Each party shall, as soon as practicable, appoint a representative for the purposes aforesaid, and shall give notice of such appointment to the other party.

5. Each party hereto shall use their best endeavours to obtain the support of the Government of their respective countries to the common undertaking of the parties expressed in these presents, and to render all such mutual assistance to each other in the furtherance of their common enterprise in the Empire of China as circumstances may require, it being the intention of these presents that, so far as is practicable and possible, the parties hereto shall act in alliance and together in all undertakings obtained or prosecuted by either or both in the Empire of China, whether both parties shall participate in the business

or not.

6. Each party shall only be responsible for themselves and not for the other, and nothing herein contained shall be deemed to constitute a partnership between the parties.

7. This Agreement shall continue in force until determined by either party giving to the other at their chief office six months' notice in writing of their intention to determine same, and at the expiration of that time this Agreement shall cease and determine, except so far as may relate to business in which a participation has been accepted as aforesaid.

8. The address of the Corporation for service of notices and offers is No. 3, Lombard Street, London, and the address of the Development Company for the same purpose is No. 80, Broadway, New York, United States of America.

In witness whereof the Corporation and the Development Company have hereunto caused their common seals to be affixed, the day and year first above written.

No. 50.

CHINA.

REGULATIONS FOR THE WORKING OF MINES IN SZECHUAN, UNDER CHINESE AND FOREIGN DIRECTION, BY THE HUA YI COMPANY, ESTABLISHED FOR THE PURPOSE BY THE SZECHUAN MINING BUREAU AND THE HUI TUNG COMPANY ACTING IN CO-OPERATION.a

APRIL 14, 1899.

1. The Szechuan Mining Bureau establishes the Hua Yi Company, by whom an Agreement is drawn up with the Hui Tung Company that the work is to be done by Chinese and foreigners conjointly to their mutual benefit. Profits are to be divided proportionately, so as to avoid trouble and disputes.

Both Companies shall obey all the Regulations mentioned in the Agreement and the existing Rules memorialized and adopted by the head office.

2. The Hua Yi Company is to subscribe a sum of 1,000,000 taels for the purchase of land. This must be Chinese and not foreign money. This Company is to buy and own all mining lands and carry out all negotiations. The Hui Tung Company have no interest in the prices of land, whether dear or cheap, nor with the amount of capital spent or reserved. When the Hua Yi Company has bought the land and obtained the right to open mines, the same is to be handed over to the Hui Tung Company for working. In the Hui Tung Company there are foreign merchants; they are not to be allowed to buy mining property from any other Chinese, so as to avoid all complications.

3. The Hui Tung Company, with a Chinese Managing Director and a foreign Assistant Director, is to prepare a working capital of 10,000,000 taels, to be formed first of 50 per cent. Chinese shares and next 50 per cent. of foreign shares.

Shareholders of all nationalities are allowed to take shares out of the 50 per cent. allotted to foreigners. There can be no monopoly for any one country. Now Mr. Morgan, an English merchant, has taken shares, and undertakes to assist in carrying out the work. Shareholders of all other nationalities who should hereafter take shares will be supplied with share certificates, paid dividends, and refunded capital according to the number of shares they take. Should any other a British Parliamentary Blue Book, China. No. 1 (1900), p. 135.

country also start a Company on the same lines, with both Chinese and foreign shareholders, the mines of the one Company will have to be kept distinct from those of the other. Different Prefectures and districts will be granted to each Company to work in, and their proceedings should be regularly reported to the head office, but the Rules and Regulations of this Agreement must, however, be complied with by all to prevent any unfairness. Any Company composed of foreign shareholders only and no Chinese shareholders shall not be allowed to work any mines.

4. The Hui Tung Company is to send out mining engineers to find out what mines are worth opening. This Company is then to consult with the Hua Yi Company to make maps and insert explanations, and submit the same to the Mining Bureau of Szechuan. If these mines are not already being worked by officials, gentry, or merchants, and if they are not injurious to the place, land is to be at once bought; such land is only to be enough for the shafts and the necessary buildings. If the lands belong to the people, the lease or purchase shall be made by the Hua Yi Company by arrangement with the owners for a reasonable price. It can also be taken as a subscription of capital, and a proportionate value of shares granted to the owner. If it be public property, such as a monastery, temple, &c., the owners have the option of leasing it, renting it, or subscribing it as capital. The Hui Tung Company must wait till land is properly purchased before starting work, and no compulsory purchase or seizure of the land will be allowed.

5. After each mining property is bought by the Hua Yi Company, it is to be handed over to the Hui Tung Company for working. From the mines worked by the Hui Tung Company, such as coal, iron, petroleum, &c., the Hua Yi Company is allowed to collect rent at the rate of 5 per cent. on the value of the output, no matter whether such mines make money or not. To reckon the producing capacity and the prices of products, whether dear or cheap, the rent is to be paid on the real price at which the Hui Tung Company sells the products. The value must not be under estimated, and any undue advantage gained. With regard to gold sand obtained from gold mines, a rent of 5 per cent. will be charged on the pure gold obtained after the gold sand has been thoroughly washed, but not on the sand before it has been washed.

6. Of the mines worked by the Hui Tung Company, such as coal, iron, petroleum, &c., there shall be paid to the Chinese Government, as producer's tax, 5 per cent. on the value of the output of the mines. Export duty shall be paid according to the existing Rules now in force. The Szechuan Mining Bureau shall authorize the Hua Yi Company to collect the producer's tax and to compare the same with the rent, and thus there will be no difference or shortage. No officer