File No. 6625/10–11.

Ambassador Wright to the Secretary of State.

No. 258.]

Sir: Referring to my dispatch, No. 238, of April 25, last,b I have the honor to transmit herewith translation of the text of the agreement recently signed between Japan and China relating to the Simmintun-Mukden and Kirin-Changchun railways, as published in the Official Gazette of the 4th instant.

I have, etc.,

Luke E. Wright.
[Page 777]

File No. 6625/10–11.

[Inclosure.—Translation.]

[Official Gazette, May 4, 1907.]

Department of Foreign Affairs—Notification No. 8.

The following agreement relating to the Simmintun-Mukden and the Kirin-Changchun railways was signed on the 15th ultimo by the envoy extraordinary and minister plenipotentiary of Japan to China and the Chinese ministers for foreign affairs.

Viscount Tadasu Hayashi,
Minister for Foreign Affairs.

May 4, 1907.

Gonsuke Hayashi, envoy extraordinary and minister plenipotentiary of Japan to China, and Na Tung, Chun Hungchi, Tuan Chai-kwei, ministers of foreign affairs of China, being duly authorized by their respective Governments, have agreed upon the following articles:

Article 1.

In connection with the purchasing of the railway constructed by Japan between Simmin-fu (Simmintun) and Fengtien-fu (Mukden), the Chinese Government shall pay 1,660,000 yen in Japanese currency, which is the price mutually agreed upon, to the Yokohama Specie Bank at Tientsin. The Chinese Government agrees to reconstruct and maintain the said railway on its own account and to borrow one-half of the funds required for the line east of “the Liao River from the South Manchurian Railway Company.

Article 2.

In connection with the construction on its own account of the railway from Kirin-fu (Kirin) to Changchun-fu (Changchun), the Chinese Government further agrees to borrow one-half of the funds required for the purpose from the South Manchurian Railway Company.

Article 3.

The terms of the loans mentioned in articles 1 and 2 shall be determined according to the terms of the loans of the railways in and out of Shanghaikwan, except the provisions for the periods of redemption. The following are the principal points: All the regulations relating to the conduct of the general affairs of the railways shall be determined on the basis of the present regulations of the bureau of railways in and out of Shanghaikwan.

(a) The periods of redemption shall be eighteen years with respect to the loan for the portion of the Simmintun-Mukden Railway east of the Liao River, and twenty-five years with respect to the loan for the Kirin-Changchun Railway. Prior to the expiration of the periods referred to the whole of both loans shall remain unredeemed.

(b) The property and receipts of the portion of the Simmintun-Mukden Railway east of the Liao River shall be offered as security for the South Manchurian Railway Company’s loan on behalf of the said line.

The property and receipts of the Kirin-Changchun Railway shall be offered as security both for future contracts of the Kirin-Changchun Railway bureau and for the South Manchurian Railway Company’s loan.

Prior to the redemption of the loans the Chinese Government shall not offer the property and receipts of the above-mentioned railways as security for any other loan.

During the periods of the loans the Chinese Government shall maintain in good condition the premises, workshops, rolling stock, land, movables, etc., of the railway east of the Liao River and the Kirin-Changchun Railway, and shall endeavor to replenish the rolling stock from time to time in order to meet the requirements of traffic. Should in future branch lines of the Kirin-Changchun Railway be constructed or the same railway be extended, the Chinese Government shall undertake the construction on its own account. In case there is a [Page 778] lack of funds an application shall be made to the companya for a loan. In case the Chinese Government should construct any other railways on its own account, it shall not be necessary to consult with the South Manchurian Railway Company.

(c) The Chinese Government guarantees the payment of the principal and interest of the loans. In case of failure to fulfill the stipulations on the date set for payment of the principal and interest the Chinese Government shall, on receipt of a notification from the company, pay the required sum. In the event of the Chinese Government failing to pay the principal and interest in arrears after receiving the said notification, the railways mentioned above and the whole of their properties shall be held and maintained by the company until the said principal and interest shall have been paid. If, however, the amount of principal and interest in arrears is small, a grace not exceeding three months may be granted.

(d) During the periods of the loans a Japanese shall be engaged as chief engineer. Should the number of Chinese be insufficient for the conduct of the railway business, Japanese shall be engaged. The change of the chief engineer, if necessary, shall be effected upon consultation with the company. Besides this, an experienced Japanese shall be engaged as railway accountant. He shall have full responsibility for the arrangement and superintendence of all departments of the railway accounts. The business of superintending the railway finances shall be transacted in consultation with the (Chinese) director-general of railways.

(e) Since the railways mentioned above are public highways of the Chinese Government, troops and provisions belonging to the Chinese Government in time of war or famine shall be transported free of charge.

(f) All the receipts of the railways mentioned above shall be deposited with Japanese banks. The method of paying in the deposits shall be determined on the occasion of concluding the loan contracts.

Article 4.

The Chinese Government shall, after the purchase of the existing Simmintun-Mukden Railway, conclude, as soon as possible, the contract with the South Manchurian Railway Company relating to the loan for the railway east of the Liao River. In order to estimate the expenditure required for the Kirin-Changchun Railway, the Chinese Government shall dispatch Chinese engineers and cause them to survey the route in cooperation with Japanese engineers. Within six months after the conclusions of the said survey the loan contract shall be concluded with the company.

Article 5.

Both the Simmintun-Mukden and the Kirin-Changchun railways, which are to be constructed and maintained by China, shall be connected with the South Manchurian Railway. All the regulations relating to this matter shall be determined by commissioners to be appointed by the Tientsin-Linyu (Shanhaikwan) railway bureau and the South Manchurian Railway Company.

Article 6.

The actual proceeds of the loans mentioned in articles 1 and 2 shall be equitably determined on the basis of the latest loan contract concluded by China with a third country.

Article 7.

The Simmintun-Mukden Railway shall be handed over to the commissioners of the Chinese railway bureau within one month after the payment of the price.

(Signed)
Gonsuke Hayashi.

(Signed)
Na Tung.

(Signed)
Chun Hung-chi.

(Signed)
Tuan Chai-kwei.

  1. Not printed.
  2. South Manchurian Railway Company.