Papers Relating to the Foreign Relations of the United States, With the Annual Message of the President Transmitted to Congress December 3, 1906, (In two parts), Part II
Ambassador Wright to the Secretary of State.
Tokyo, October 15, 1906.
Sir: I have the honor to inclose a revised copy of the translations of the government order relating to the organization of the South Manchurian Railway Company and the articles of incorporation which accompanied my dispatch No. 47, of August 18 last.
I have, etc.,
government order.
To Masatake Terauchi, chairman of the organizing commission of the South Manchurian Railway Joint Stock Company, and 80 other members of the commission:
The following orders are hereby given respecting the several matters relating to the organization of the South Manchurian Railway Joint Stock Company, all matters pertaining to the management of which have been intrusted to the commission.
- Isaburo Yamagata,
Minister of Communications. - Yoshiro Sakatani, LL.
D.,
Minister of Finance. - Viscount Tadasu
Hayashi,
Minister for Foreign Affairs.
Article 1. In accordance with the additional agreement of the Japan-China treaty relating to Manchuria, signed on December 22, 1905, the company shall engage in the traffic of the following railways: Tairen-Changchun, Nankuanling-Port Arthur, Tafangshen-Liushutun, Tashichiao-Yinglow, Yentai-Yentai Coal Mine, Sukiatun-Fushun, Mukden-Antunghien.
Art. 2. The railways mentioned in the preceding article shall be changed to the 4 feet 8.5 inch gauge within three years, counting from the day on which the company commences its operations.
On the Tairen-Changchun Railway the tracks between Tairen and Sukiatuna shall be doubled.
Art. 3. The company shall make the various arrangements necessary for the lodging and meals of the passengers, as well as for the storage of goods at the principal stations on the line.
At the points on the harbors and bays touched by the railways the necessary arrangements shall be made for connecting water and land transportation.
Art. 4. For the convenience and the profit of the railways, the company may engage the following accessory lines of business: Mining, especially the operation of the coal mines of Fushun and Yentai; water transportation; electrical enterprises; sale on commission of the principal goods carried by the railways; warehousing; business relating to the land and buildings on the land attached to the railways. In addition, any business for which government permission has been given.
Art. 5. The company shall, subject to the permission of the Government, make the necessary arrangements for engineering works, education, sanitation, etc., within the area of lands used for the railways and the necessary lines of business.
Art. 6. To defray the expenses necessary for the arrangements mentioned in the preceding article, the company may, subject to the permission of the Government, collect fees of those who live within the area of lands used for the railways and the necessary lines of business, or make any other assessment for necessary expenses.
Art. 7. The total amount of the company’s capital stock shall be 200,000,000 yen, of which 100,000,000 yen shall be furnished by the Imperialb Government.
Art. 8. The capital to be furnished by the Government mentioned in the preceding article shall consist of the following properties: The existing railways; all properties belonging to the railways, except those in the leased territory specially designated by the Government; the coal mines at Fushun and Yentai.
Art. 9. The rolling stock now being used by the Government and the rails, as well as the accessories, of the Mukden-Antunghien temporary railway shall be sold to the company at a reasonable price.
Art. 10. The shares not owned by the Government shall be open to subscription by Japanese and Chinese subjects.
Art. 11. When the dividend of the company for any business year is less than 6 per cent per annum on the paid amount for the shareholders other than the Governments of Japan and China (hereafter to be styled merely “the shareholders”), the Government shall supply the deficiency for a period of fifteen [Page 1011] years only (or for thirty business years if the calendar year be divided into two business years), commencing from the day of the registration of the company’s establishment. However, the amount of money to be furnished by the Government to supply the deficiency referred to shall under no circumstances exceed 6 per cent per annum on the capital paid in by the shareholders.
Art. 12. When the dividend of the company for any business year does not exceed 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 Government.
The Government shall guarantee the payment of interest on the debentures which the company may issue for the reconstruction of the railways, or for the operation of the necessary business, and on those which the company may issue for consolidating or redeeming these debentures. The Government shall, if necessary, guarantee the repayment of the principal.
The amount of the face value of the debentures to be guaranteed by the Government should not exceed the amount remaining when the capital paid in by the shareholders other than the Government is subtracted from the total of the capital subscribed by them.a
The debentures mentioned in the first paragraph shall be redeemed within twenty-five years, counting from the year of their issuance.
Art. 14. For the debentures issued in accordance with the provisions in 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 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.
Art. 15. 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 the shareholders.
Art. 16. The money to be supplied by the Government, as provided for in articles 11 and 14, shall bear interest at 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 Government.
When the dividends for all the shares exceed 10 per cent per annum, the surplus shall be devoted to the redemption of the company’s debt mentioned in the preceding paragraph.
Art. 17. Any surplus of funds raised by means of the debentures mentioned in article 13 shall be deposited with the division of deposits in the department of finance.
Art. 18. The company shall determine estimates of the capital to be paid up and the debentures floated during each business year, their face value, issuing price, rate of interest, date of issuance, etc., and shall receive the Government’s approval.
Art. 19. The company shall determine the regulations relating to its finances and business, and shall secure the Government’s approval.
When the company desires to alter the regulations mentioned in the preceding paragraph and the articles of incorporation, similar steps shall be taken.
Art. 20. The plans of the company’s business, the estimate of the cost of operation, the budget of income and expenditures connected with the company’s business, the settlement of the same, and the rate of the dividend for each business year shall be submitted to the Government for approval. When the company desires to alter the foregoing items, similar steps shall be taken.
Art. 21. At the designation of the Government the company shall report on the following matters: The present condition of the cost of operation as well as the income and expenditures connected with the company’s business. The actual condition of the company’s work in general.
Art. 22. Without the permission of the Government the company shall not dispose of its principal rights and properties, nor give the same for security.
Art. 23. When the Government deems it necessary, it may order the freight charges to be reduced, but only under special conditions.
[Page 1012]Art. 24. The Government may, when it deems necessary, order the company to make new works arrangements or modify the existing ones.
Art. 25. At the designation of the Government the company shall be under obligation at any time to place the railways, land, and any other articles at the service of the Government.
Art. 26. The articles and paragraphs relating to the funds to be supplied by the Government and the government guarantees mentioned in the present order shall be confirmed upon the approval of the Imperial Diet.
the articles of incorporation of the south manchurian railway joint stock company.
Chapter I.—General provisions.
Article 1. This company shall be called the South Manchurian Railway Joint Stock Company and is established in accordance with imperial ordinance No. 142 of 1906 and in obedience to the order of the Imperial Japanese Government.a
Art. 2. The liability of the shareholders of this company is limited to the value of the shares owned by them.
Art. 3. This company shall establish its head office at Tokyo and its branch office at Tairen.a
Art 4. The objects of this company are as follows:
- I.
- To engage in the transportation business of the following railways in Manchuria: Tairen-Chanchung Railway, Nankuanling-Port Arthur Railway, Tafangshin-Liushutun Railway, Tashichiao-Yingkow Railway, Yentai-Yentai Coal-Mine Railway, Sukiatun-Fushun Railway, Mukden-Antunghien Railway.
- II.
- To engage in the following lines of accessory business for the benefit of the railways: Mining, especially the operation of the coal mines at Fushun and Yentai; water transportation; electrical enterprises; warehousing; business relating to the land and buildings on the land attached to the railways. Any other business for which the permission of the Government may be given.
Art. 5. The capital of this company shall be 200,000,000 yen. However, the amount of the first subscription of shares shall be 20,000,000 yen, not including the shares to be owned by the Imperial Japanese Government. The second and subsequent subscriptions shall be opened from time to time, as necessity may require, upon the resolution of a general meeting of the shareholders.
Art. 6. The public notices of this company shall be published in the newspapers in which the public notices of the court of law are published to whose jurisdiction the company is subject in Tokyo,b and in the newspapers in which the public notices of the Government General of Kwantung are published at Tairen.
Chapter II.—Shares.
Art. 7. The share certificates of this company shall all be registered, and each share shall be 200 yen.
Art. 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.
Art. 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.
Art. 10. As to the payments upon the shares, 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 notices of the same shall be sent to each shareholder at least sixty days in advance. However, each call on the shares shall not exceed 20 yen per share.
[Page 1013]Art. 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 4 sen per day per 100 yen on the amount due.
Art. 12. If a shareholder fails to make payment within fifteen 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.
Art. 13. If at the second and subsequent calls on the shares, a shareholder fails to make payment within fifteen days after the date fixed for payment, the company may notify such shareholder that payment must be made within thirty 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 assignora of shares that payment must be made within fifteen 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 days, the company shall demand performance of the assignors.
Art. 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.
Art. 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 shareholders. Persons holding shares in common are jointly and severally liable to the company for the payment upon the shares.
Art. 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 certificate 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.
Art. 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 days from the date of the said public notice.
Art. 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.
Art. 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.
Art. 20. During a period not exceeding thirty days immediately preceding each ordinary general meeting of shareholders, the company shall suspend the assignment of shares.
Chapter III.—Shareholder’s.
Art. 21. The shareholders of this company shall be limited to the Governments of Japan and China, and the subjects of Japan and China.
[Page 1014]Art. 22. The Imperial Japanese Government shall furnish the following properties as capital, and the company shall deliver to the Government 500,000 shares, amounting to 100,000,000 yen, 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-Antunghien 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.
Art. 23. Each shareholder shall have the right to one vote for each share owned by him.
Art. 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 measure shall be taken.
Chapter IV.—General meeting.
Art. 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 days.
Art. 26. The discussion at a general meeting shall be confined to the subjects previously announced.
Art. 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 days in advance of such meeting.
Art. 28. The president shall act as chairman of a general meeting.
Art. 29. The shareholders may appoint only shareholders of this company as their representatives, and their powers of attorney shall be presented to the company.
Art. 30. The chairman of the general meeting shall be allowed to exercise his right to vote as a shareholder.
Art. 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.
Art. 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.
Art. 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.
Art. 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.
Art. 35. The chief officers of this company shall be as follows: President, 1; vice-president, 1; directors, 4 or more; inspectors, 3 to 5.
Art. 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 50 shares or more.
[Page 1015]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.
Art. 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.
Art. 38. The directors are required, during their term of office, to deposit with the inspectors 50 shares 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.
Art. 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 by-election, and the new inspector shall hold office during the remainder of the term of office of his predecessor.
However, a by-election may he postponed until the next general meeting of the shareholders, except when the number of inspectors has decreased to two or less.
Art. 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.
Art. 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.
Art. 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.
Art. 43. The president shall submit the following documents to the inspectors seven 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 of the company’s works. (4) An account of the profits and losses. (5) Proposals relating to the reserve funds and to the dividends.
Art. 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.
Art. 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.
Art. 46. The inspectors are required to examine the documents to be submitted by the president to a general meeting of shareholders and to report their views at the said meeting.
Art. 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.
Art. 48. The supervisors of the South Manchurian 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.
Art. 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.
[Page 1016]Art. 50. This company shall set aside as a reserve fund one-twentieth or more of the profits, whenever they are apportioned, until the reserve fund amounts to one-fourth 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.
Art. 51. The dividends to the shareholders shall be paid according to the register of shareholders as it stands on June 1 and December 1.
Art. 52. When the dividend of the company for any business year is less than 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 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 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.
Art. 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 (100,000,000 yen) subscribed by them.
The debentures mentioned in the first paragraph of this article shall be redeemed within twenty-five years.
Art. 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 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.
Art. 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.
Art. 57. The money to be supplied by the Imperial Japanese Government, as provided for in articles 52 and 55 shall bear interest at 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 exceed 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.
Art. 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.
Art. 59. The provisions in articles 52 to 57 shall be confirmed upon being approved by the Imperial Diet.