File No. 893.77/1534
Minister Reinsch to the Secretary of State
Peking, May 23, 1916.
The Chinese Government has concluded preliminary contract with Carey for finance and construction of 1500 miles railway. Construction commission of 8%; American company also to have control over operation during life of bonds, 50 years, receiving one-fourth net earnings. The agreement is an important departure in Chinese railway practice, indicating readiness to allow foreign capitalists greater share in control and proceeds, thus giving them a more direct continued interest in welfare of enterprise. Carey proceeding to New York.