(JAPAN AND CHINA)
Preliminary Agreement for Loan for Railways in Manchuria and Mongolia—September 28, 1918
The following preliminary agreement has been concluded between the Government of the Chinese Republic (hereinafter called the Government) and the Industrial Bank of Japan, representing the Industrial Bank of Japan, the Bank of Taiwan and the Bank of Chosen (hereinafter called the Banks), with the object of concluding a loan contract for the purpose of building a railway between Jehol and Taonan, a railway between Changchun and Taonan, a railway between Kirin and Kaiyuan by way of Hailung, and a railway to a certain seaport (hereinafter called the Four Railways of Manchuria and Mongolia).
Banks to raise all the funds required for building the Jehol-Taonan, Changchun-Taonan, Kirin-Kaiyuan Railways, and the railway between a point on the Jehol-Taonan Railway to a certain seaport, by means of Chinese Government bonds of the Jehol-Taonan Railway, bonds of the Changchun-Taonan Railway, bonds of the Kirin-Kaiyuan Railway, and bonds of the....railway respectively (hereinafter called the gold bonds of the Four Manchuria and Mongolian Railways). Provided, however, that the route of the railway from a point on the Jehol-Taonan Railway to a certain seaport shall be decided upon by consultation
ARTICLE I.—The Government shall permit the between the Government and the Banks.
ARTICLE II.—The Government shall speedily determine the expense for constructing the Four Railways of Manchuria and Mongolia and all other expenses necessary, and shall obtain the approval of the Banks.
ARTICLE III.—The term of the gold loan of the Four Railways of Manchuria and Mongolia shall be forty years. The redemption of the principal, to be refunded by annual instalments, shall commence after eleven years, counting from the issue of the loan.
ARTICLE IV.—With the conclusion of the loan contract, the Government shall consult the Banks as to the plan of work to be started according to the plan agreed upon, with a view to speedy construction.
ARTICE V.—The Government shall offer the following to the Banks as security for the payment of the principal and interest on the loans:—All the property and revenue of the Four Railways of Manchuria and Mongolia, at present and in the future.
The Government shall not offer the above-mentioned property and revenue of other parties unless the approval of the Banks is obtained.
ARTICLE VI.—The issue, interest, net amount to be received by the Government, and other conditions, shall be agreed upon between the parties in as favourable terms as possible to the Government when the loan is issued.
ARTICLE VII.—Matters which are not provided for in the foregoing Articles shall be agreed upon by consultation between the Government and the Banks.
ARTICLE VIII.—A formal loan contract shall be concluded within four months after the conclusion of the present preliminary agreement.
ARTICLE IX.—With the conclusion of the preliminary contract the Banks shall advance twenty million yen of Japanese currency to the Government.
The advance shall be delivered without charging any commission.
ARTICLE X.—Interest on the advance shall be paid at the rate of eight per cent. per annum or Yen Eight per Yen 100.
ARTICLE XI.—The advance shall be delivered in the form of the discount of Treasury Bills issued by the Government.
ARTICLE XII.—The Treasury Bills mentioned in the preceding paragraph shall be renewed every six months, and an amount shall be paid into the Banks equal to six months' interest.
ARTICLE XIII.—After the final agreement for the loan for the Four Railways in Manchuria and Mongolia has been effected, the Government shall repay previous advances preferentially and without delay from the funds obtained by the issue of a public loan.
ARTICLE XIV.—The collection, repayment, payments of the previous advances, shall be made at Tokyo, Japan.
Two sets each in Japanese of the preliminary agreement shall be prepared and signed, and the Government and the banks shall retain a copy of each.
In case a dispute should arise concerning the interpretation of this preliminary agreement, it shall be interpreted according to the Japanese text.
September 28, 7th Year of Taisho.
(Signed) Industrial Bank of Japan,
Eijiro Ono,
Vice-President.
Chang Tsung-hsiang,
Envoy Extraordinary and Minister Plenipotentiary of China.