[Inclosure.—Summary.]
Currency Reform and Industrial Development
Loan Agreement of April 15, 1911, between the Chinese
Government and the quadruple group of bankers.
In pursuance of the tripartite group’s preliminary agreement of
October 27, 1910, and the supplementary agreement admitting the
American bankers, the Chinese Government agreed on April 15,
1911, with the resultant quadruple group:
To authorize the banks to issue what should be called the
“Imperial Chinese Government Five-per-cent Currency-reform and
Industrial-development Sinking-fund Gold Loan of 1911,” the
proceeds to be used for Chinese currency reform and industrial
development in Manchuria.
The loan to be a direct charge or liability of the Chinese
Government; all advances, interest, and repayments of principal
to be a first charge on the following revenues to the annual
amount mentioned in Kuping taels (a) Tobacco and spirits in
Manchuria, 1,000,000; (b) production tax in Manchuria, 700,000;
(c) consumption tax in Manchuria, 800,000; (d) newly added
surtax on salt in all China, 2,500,000; total revenues pledged,
5,000,000 taels per annum, all free from other incumbrances; if
these prove insufficient China to supply the deficit from other
sources.
The revenues not to be interfered with as long as payments are
regularly made, but upon default sufficient revenues to satisfy
it to be transferred to and administered by the Maritime Customs
for the account of the bondholders.
On the date of signing the agreement the Chinese Board of Finance
to hand to the banks: (a) The Regulations for the Unification of
the Currency on a Silver Basis authorized by Imperial edict and
otherwise known as “the program of currency reform”; (b) a
statement showing in what amounts the proceeds of the loan are
to be applied to the various expenditures incident to the
operation of said program; (c) a statement specifying the nature
of the proposed enterprises in Manchuria and showing in what
amounts the allotted portion of the proceeds of the loan is to
be applied thereto.
The banks to have six months to study the regulations and
statements and to plan all matters pertaining to them; upon
acceptance thereof as the bases for the bonds, said acceptance
to be conveyed to the Board of Finance and the bonds to be
issued as soon as possible.
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The price to the Chinese Government to be 95% of the face of the
bonds, that Government to be the preferred applicant;
subscriptions to be next invited on equal terms in China, the
United States, and Europe.
An advance of £1,000,000 for industrial developments in Manchuria
to be made, if desired, upon execution of the agreement and
satisfaction given the bankers as to the nature of such
industrial developments. A further sum of £1,000,000 for the
preliminary expenses of currency reform to be held by the banks
in America and Europe at the disposal of China.
The rate of interest for the loan to be five per cent, payable
semiannually.
The term of the loan to be 45 years; repayment to begin with the
eleventh year by yearly amortization in half-yearly
payments.
Article 16 provides that if China should desire to borrow in
foreign parts, in addition to this loan, funds for continuing or
completing the operations contemplated in the agreement, the
banks are to be the first to be invited to furnish such funds;
but if China and the banks fail to agree on the terms, other
financial groups may be invited.
