MASTER NEGATIVE NO . 94-82205 COPYRIGHT STATEMENT The copyright law of the United States (Title 17, United States Code) governs the making of photocopies or other reproductions of copyrighted materials including foreign works under certain conditions. In addition, the United States extends protection to foreign works by means of various international conventions, bilateral agreements, and proclamations. Under certain conditions specified in the law, libraries and archives are authorized to furnish a photocopy or other reproduction. One of these specified conditions is that the photocopy or reproduction is not to be "used for any purpose other than private study, scholarship, or research." If a user makes a request for, or later uses, a photocopy or reproduction for purposes in excess of "fair use," that user may be liable for copyright infringement. The Columbia University Libraries reserve the right to refuse to accept a copying order if, in Its judgement, fulfillment of the order would involve violation of the copyright law. Author: U.S. Dept. of Commerce Title: Far Eastern markets for railway materials... Place: Washington, D.C. Date: 1919 qg-^^^os A COLUMBIA «.\ivj:.3:7v .i^ "AF :<-o PR£SERVa"''Gi\ ^iVi3jC\ BiBLioGRAPhic mkcrofc!r:\/: target *.hS-ZF neqat.ve # ORIGINAL MATERIAL AS FILMED - EXISTING BIBLIOGRAPHIC RECORD U. S. />«;7^. oflcQmmerce. ... Far Eastern markets for railway materials, equipment, ■nd supplies, by Frank Rhea, trade commissioner . . . Wash- ington, Govt, print, off., 1919. S39 p. Incl. 1 lUus., tables, front., fold, map, plates. 25*''". At head of title: Oepartment of commerce. Bureau of foreign and domestic commerce. B. S. Cutler, director. Special agents series — no. 180. Most plates printed on both sides. Appendixes: 1. Directories.— 2. Chinese eastern railway.— S. Peking- Hankow railway. — 4. Peking-Newchwang railway.- 5. Canton-Kowloon railway. — 6. Tlentsin-Pukow railway. — ^7. Pauling & co. loan.— 8. Huku- ang railways.— 9. Ssupingkai-Chengchiatun raUway. X- Railroads— East (Far East)— Equipment and supplies. 2. Rail- roads — China — Equipment and supplies. 3. Railroads — Japan — Equip- ment and supplies. 4. Railroads — Korea — Equipment and supplies. 5. Railroads— Philippine Islands— Equipment and supplies. ^Rhea, Frank, ii. U. S. ^^^ Bureau of foreign and domestic commerce (Dept, of ^H commerce) in. Title. Library of Congress ^^ HD9712.U52A4 1919 Copy 2. is20j2i 19—26846 >■- \ \ I J IsrmcnoNS on use: TECHNICAL MICROFORM DATA HLM SIZE: ^Sm(\ REDUCTION RATIO: \d^t IMAGE PLACEMENT: lA /IIA) IB IIB DATE RLMED: ^-i^Q ^^ INITIALS = _^ TRACKING # : /ts^ 022Qy RLMED BY PRESERVATION RESOURCES. BF~:^l.JHE^:, : ftjiyfl iaMii| ■"■■"I CD as I. r^ ||g||BM||||||| VJhjiiiiiijjP !-♦ ^g^ K I' ggiP* ^IllillP^ X 'O ""<. JO N .(/) C,A.I ^S "^~~ .^11 ^ OOM ■i jJHHk CJI 3 "J ft) ^ -^ o rn QfQ qqTD -^ N INI 'i^, C^^^. J C^i C^^B. ^*' ^J*** O o 3 i Ul o 3 3 ^,^- III ^-^^V^ ^^J?^; ^ s 3 o i^l^ils o^ 00 s k) I 1.0 mm 1.5 mm 2.0 mm ABCOEFGHIJKLMNOPORSIUVWXY^ abcdvtghijklmtiopqrsluvwxy/ 1 234 56 7890 ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyzl234567890 ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz 1234567890 ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz 2.5 mm 1234567890 ^ tr 4^ '*" i^ ^^^ &5^ To V* \f O O "o m Ti z z ^ o rn I > C M ^ 30 5 ^ O 00 m 3D O /-ev '' ""V. ■^. '^. '!i?' CJI •JMP' flfl 3i ii So MM O >< • CD 0) Too cnx ^-< 00 Nl o ' Colnintria (Snikientftp LIBRARY School of Business *thlB book is due two weeks from the last d«te •tamped below, and if not returned or renewed at or before that time a fine of five cents a day will be incurred. 1 'iiir iiiri 1 II iiiiir ill ill m w CO o z m .2 *c (D M •M C 9 < 'o Q. W DEPARTMENT OF COMMERCE BUREAU OF FOREIGN AND DOMESTIC COMMERCE B. S. CUTLER, Director SPECIAL AGENTS SERIES— No. 180 FAR EASTERN MARKETS FOR RAILWAY MATERIALS, EQUIPMENT, AND SUPPLIES FRANK RHEA Trade CommissioiMr PRICE, 35 CENTS Sold by the Superintendent of Documents. Government Printing Office, Washington, D. C. WASHINGTON GOVERNMENT PRINTING OFFICE 1919 MIMMlii ^v«#<^ Zjma^^"^^ CONTENTS. Page. Letter of submittal 15 Part 1.— CHINA. Introduction 17 I. General information ]g Geographical location and area ig Climate . . . . , jg Population jg Language 19 Weights and measures 19 Currency and foreign exchange 19 Agriculture and pastoral pursuits 23 Mineral production 24 Coal 24 Iron 25 Other metals 26 General manufacturing 26 Railway manufacturing 27 II. Chinese commerce 29 General conditions 29 Imports and exports 29 Likin 29 Tariffs 3^ Treaty ports 3^ Concessions and settlements 3]^ Trade laws 32 Trading centers 32 Industrial centers 32 III. General transportation conditions 33 Primitive means of travel 33 Character of Chinese highways 33 The Great Wall '**'"']!!!!^!^^'*!!! 34 Coastal carriers 3^ River and canal carriers _ _ 34 Development of Chinese railways 35 Historical survey 35 Introduction. 35 Period from 1863 to 1894 35 Period from 1895 to 1905 .'.'.*.' 37 Period from 1906 to 1911 ." 37 Development in recent years .• 3g Spheres of influence 4^ Railway map of China 42 Classification of existing lines 42 Gauge ]!]!]!]]] 44 Proposed new lines 44 Railway agreements 46 3 CONTENTS. CONTENTS. IV. Chinese Government Railwava Introduction Investment aaaets '*.'*.'''"'" Construction costs Operating revenues Page. 52 52 53 55 Interest charges and taxes., ' * ^^ Surplus or deficit 57 Organization and activities" of Mini^tr'; o*f C^mmunkaVions ?« Development and general functions ^^ Accounts 58 Purchases [[[[ 5'J Construction of new lines ".*..' ^^ Regulation of fares and rates. .'.'.* .' ^^ Passenger fares 60 Preightratea 61 Organization of Chinese Go;;;Bmeni Railways I'f rurchaseof stores by railways.. ""^ Operating methods .....T. ^^ Signaling 68 Construction and maintenance methods' ^* Boadway and bridge materials ^^ Bridges.. ' 72 Buildings .*.'.'..'.'."* ^^ Crossties 72 Bail, --.-^ -.'**.'.' *.***.' ' 73 Rail faatenings .""***" ^^ Frogs and switches ,' ' ' 74 Rail anchors ' " 74 Amount of rolling stock. ..*''...... ^^ General characteristics oi rolling "stock." .".*.* ^^ Locomotives 77 Train brakes _ ' 78 Puiaenger equipment .*..'....* ^^ Freight cars ''}" 79 Car wheels 79 80 _ •- 80 Histo,rical survey " ' — 80 Source of capital. .'..',' ' 81 Present control **.'.'.'.*" ^^ Character of t,rafric .'.'*.".'**.* ' Present, nrnfif,a ' " " Servi,ce cars Peking-Mukden (Ching- Feii^* Rail^;; Location and extent 82 Present profits * ' '" " 82 Roadway and track materials" .*.*.".'."". ' * ' " " ^^ Rolling stock 83 Workshops , ' 83 Tangshan Railway and Alining ColWe* " ^^ Organization and personnel ^^ Purchase of stores 84 Peking-Suiyuan (Kin-Sui) Railway. .*.'].".'.'.'.' ^^ Location and extent. ^^ Historical survey .'.".'.'."."."." ^^ Source of capital ^5 87 IV. Chinese Government Railways— Continued. Peking-Suiyuan (Kin-Sui) Railway— Continued. Present control Class of traffic Present profits and outlook for future Extensions Roadway and track materials Rolling stock Workshops Organization and personnel Purchase of stores Tientsin-Pukow (Tsin-Pu) Railway Location and extent Historical survey Source of capital Present control Class of traffic , Present profits and outlook for future , Extensions Roadway and track materials Page. 87 87 87 88 .............. 88 89 ............... o9 89 89 89 90 90 90 91 91 91 Rolling stock 92 Workshops 92 Organization and personnel 92 Purchase of stores. 93 Peking-Hankow (Kin-Han) Railway 93 Location and extent 93 Historical survey 93 Source of capital 94 Present control 9 ^ Class of traffic 95 Present profits 95 Roadway and track materials 95 Rolling stock gg Workshops 9^ Organization and personnel 95 Purchase of stores qjj Cheng-Tai (Shansi) Railway 9^ Location and extent 93 Historical survey 93 Class of traffic - 97 Present profits and outlook for future 07 Roadway and track materials— Rolling stock ■ 97 Workshops t^g Organization and persomiel 93 Purchase of.stores 93 Taokow-Chinghua (Tao-Ching) Railway ps Location and extent oq Historical survey ^^-^^^l!'*'"'";;^^;;;;!];" 93 Present profits and outlook for future 99 Materials and equipment— Workshops 93 Organization jqq Purchase of stores. iqq Kaifeng-Honan (Pienlo-Lunghai) Lines 100 Location and extent 100 Historical survey 100 CONTENTS. IV. Chinese Go.verii,in.eiil Railways—Continued Kaifeng.Ho,ian(Pienlo-Li,^ viftss 01 traffic. Present profits and outlook for future Roadway and track materials-Rolling Btocklworksh Organization and personnel Purchase of stores ' ' Shanghai-Nankin.o: (Hu-Ning) Railway.'.".* ' " " ' ' Location and extent Historical survey Present cintrol. '[[[] Class of traffic ' Present profits and outlook for future^ '. Rcadway and track materials , . ." .'.*. ' ' Rolling stock *. ' Workshops Organizati«ui ' Purchase of Htf'ires ' ire. fihanghai-HangcIiow-Ningpo (IIu-Hang-l^Jn.^ Railwav' " " " " Location and extent , ' Extensions suggested Historical survey ' *, Present control and ortfanization Class of traffic— Out I( K.k for iuUie'.l '. * * * * Roadway and track materials. ....'.' ^ ^ .' Rolling stock Workaliops "' Purchase of stores ' " C*nton-Hankow (Yiieh-IIan,)' Raii^v "f^ysteni" ' Location and extent '. _ ' " HMtorical sun-o}- Source of capital and present control Claw of traffic. , Present earning capacity ami m^,ook for futui Koadwa}- and track materials Rolling stock WorkshoM.. . Organization and personnel ' ] ] ' * ' Purchase of stores ' ' * * Cant^jn-Kowloon (Cliui-Kuang) Eailwav'(f'hirim> Fec-tirm) Location and extent Historical 8ur\-ey., '*""'"." • Operating revenues and expenses . ' ' ' Roadway and track matenals-Pu,.Hirj Vtrck O'l^ganization— Purchase of st. ires . . Canton-Kowloon Railway (British .-■ectirn).V.^i^ ' Historical 8ur\-e}- "' ' Earning capacity ' " " Roadway and track matoriaJs-R-^aline sh rkl^...\Vr 'ri'^u rV " Admmietrati >n and purchsFc of stc-res' "'" ' ien (Chang-Hsia ) Railway: Changchow-Anmv Location and extent . . , , ' Historical 8ur\^ey * ' * Operating revenues: and expenaes^Fu ture'prr'^'rcci" J Roadway and track materiale-B,olIing st* ;ck Administratioii and purdiase of stores. ... Page. .. 101 .. 101 .. JOl .. 102 .. 102 . 103 . 103 - 103 . 104 . 104 . 104 . 104 - 105 . 105 . 105 105 . 105 105 106 1C6 107 107 107 108 108 108 108 108 109 111 111 112 112 113 113 114 114 114 114 115 115 .116 116 116 116 117 J17 117 117 117 117 118 118 118 CONTENTS. V. Chinese private railways Sunning (llsinning) Railway Location and extent Historical survey Roadway and track materials— Rolling stock— Workshops. Administration and purchase of stores Swatow-Chaochow (Chao-Shan) Railway Location and extent History Earning capacity Equipment — Administration VI. Chinese provincial railways Introduction Kiangsi (Nan-Shan) Railway Location and extent Historical survey Traffic and profits _ ^ Equipment and purchases Nanking City Railway Location and extent _ History Equipment and traffic VII. Chinese industrial railways Introduction Tayeh Railway (Han-Yeh-Ping Co.) *.'.'.".'.'.'*.*.' Location and ownership Traffic and equipment Management Kailan Mining Administration Railways (Kaiping coal field). . . Location Historical survey Output of mines— Numher of employees , Management Extensions and improvements Tai-Tsao Railway (Ching Using Coal Co. ) " Vlll. ioreign-concession railways Introduction Yunnan (Tien-Yueh) Railway "....... Location and extent Historical survey Extensions contemplated Materials and equipment " Management and purchases *****.......""' Sliantung (Santo) Railway *''"*** Location and extent ^ ^ Historical survey The port of Tsingtau ..........'.* Class of traffic Profits " ' Possible extensions * * Roadway and track materials .....'."*** Rolling stock '...*.. 1 '.'. ." Workshops * Organization and management Purchases Page. Ill) 119 119 119 120 120 120 120 120 120 121 122 122 122 122 122 122 123 123 123 123 123 124 124 124 124 124 125 125 125 125 126 126 126 126 127 127 127 127 127 129 12!l 129 130 130 130 131 131 131 132 133 133 133 135 8 CONTENTS. CONTENTS. 9 IX. Tramwaw Introduction , '.'.'.'.7.'. Tientsin tramways. .'.'."*.*."'.'.'"* Slianghai tramways [[[]] ' Hongkong tramways. Peak tram,wavs. . . Part 2.— JAPAN. Pag©. i;:6 lull ISO 137 139 139 Introduction 1. General information '.'.'.'.','.'.]'.'. ' ^"^^ Geograpliical location and area* *.".*." ' ' ^^^ Population , 143 Climate 143 Agriculture and pastoral pursuits ^^'^ Mineral production ''' ' ^-44 Coal ^* ■ 144 Iron 144 Copper and other minerals" ' * ' ' ' ' ^'^'^ General manufacturing. . . ^^'^ Manufacturing of rail wa>' equipment ^'*^ II. Commercial and industrial conditions. . . ' ' ^^^ Domestic commerce , ,, [ ' ^^^ Exports and imports ^47 Tariffs ..*.'.'*.***"** ^^'^ Trading centers ] ' ■ 147 Industrial centers. *" ^^"i^ Industrial labor , ' ' * * ' ' 147 _ 'Railway employees and wages* ^'^^ ML General transportation conditions ' " .* ^^^ Coastal sMpping 151 Highways , *" " 151 Character and develnnmont ^.f r<,^^ -. 151 ,„ J"" "«^«?Jopment oi Japanese railways ,., CIa8sili,cation 151 Historical survey 151 Nationalization of railways " ^^^ ^\'idening of gauge '. . . .*.*.'' .*".*'.*.* ^^^ Japanese railway policy . ^^^ Government control and regiihiti^n* V * " ' Jf ^ Construction program ■''^^ IV. Imperial Go\-ernment Rail wavs of Janan ' ^^^ Extent...,.., .; ^ 157 ganization and operating methods ' * ' ^^^ ^ 157 Traffic and rates. Ocean ferrv «Arv-iV.<^ Ocean ferry service . 158 Budget a,nd accounts V.V." * * .'.'.'.' ^'"^^ Investment asseta ,' * ' * ' 159 Earnings and e.i,pen,ses " ' ." ^^*^^ Net income and surplus ^^^ Roadway and track .'.'.',.**."*' ^^^ Locomotives [[[ ' ' 16 1 Passenger cars ' '- 1^2 s wagons , _'*_'*' ' 163 ice cars , 163 Workshops _' * _'_\' 163 Personnel "^ * 163 Steeaaiid purchases..*.".".'.' '^^ * 164 Page. V. Private railways and light railways 166 Introduction 166 Construction cost and capitalization 166 Operating results and profits 166 Employees and wages 168 Officials— Purchases 168 VI. Tramways 169 Introduction 163 Extent of lines 169 Historical survey 170 Construction cost and capitalization 171 Traffic and rates 171 Earnings and expenses 172 Employees and wages 172 Roadway and track 172 Rolling stock 173 Power plants and substations 173 Officials — Purchases 173 Part 3.— CHOSEN. I. General introduction 175 Introduction 175 Products of the country 175 Exports and imports 176 Manufacturing 170 Trade centers 17G Labor conditions 176 Railway situation 177 II. Korean Government Railways 178 Introduction 178 Extent of lines 178 Historical survey 178 Extension under way 179 Construction cost— Capitalization— Per formance statistics V60 Organization and op3rating methods 181 Traffic and rates 181 Earnings, expenses, and profits 182 Employees and wages 182 Roadway and track 134 Locomotives i84 Passenger cars I84 Freight cars igj Workshops 185 Officials— Purchases , I86 III. Kort an light railways and tramways 187 Introduction I87 Keijyo (Seoul) Electric Co I88 Zenhoku Light Railway Co 188 Korean Gas & Electric Co 18 i Kanko Coal Mining Co 189 Korean Light Railway Co 18;J Industrial tramwajs 189 I'O COJN-TENTS. Part 4.-MANrin'RrA. I. General information . , II. Manchiirian railways' '""'*'''." ' ' South Manchuria Railway Co .**.''"" Iiitrociiiction''^~-Ex,tent of lines' ' Financial 8tati«,tic8^0p.rating reaults; ] ; Oiitside undertakings. '. . . ' * Historical survey-...- Organization ' Operating m,ethods ' i onstruction coef s and rt n i t .1 1 ; ,. , , *. ^ ' 1 raihc an,d rates Earnings,, expensrs, and pr()fits' Results of outside undertakings. .".'.*' " Employees and wages ?..*'*" .Roadway and track ','.','.'.'" " " Locomotives. ' * .Passenger cars ' Pteiglii cars. . Working equipment ' "' orkshops .Purchases ' Kirin-Changdiun Railway. .'.*." ****.' *.*.'.'.*.' " Location and extent .' ' Historical survey O>nstrurtion cost and investment as8.pt8 I^ unds and control " ' Extensions suggested ... ' Traffic :; _'* ■ -■ Earnings and expenses ..'.""*." " ' Income charges and lews.. Roadway and t rack , . * * * Rolling stock., . ., ' Worksliops ' Officials-- Purchases' .'*"**''*'" ^ Signing of Contract for Kirin-Hwcin'in^' pV;i " " Sflupmgk,ai~< lengchiatun Railway . **^*;'"^^8^ ^^'^'' li<>c'ation and extensions HisCctrieal survey ' .Funds and control ... * ' IfU . m I9:i 196 198 19.S 198 1 9. J 200 200 201 202 202 203 203 203 205 205 it- Of.) 200 206 206 207 207 207 207 208 ay . (;^.)usf:roction cost and capital liahU iu;.; .Roadway and track Rolling stock .\\" * * ' Worksliops ' Traffic and earnings Officials Pur(„-hases.,... . * ' Russian ,railwa}-s in ,Manchuria aiid'.U^r'..V,." "i' 'Jit ot lines C<..)nM,niction cost and capital liabilities 208 208 210 210 210 210 211 211 211 212 212 213 les 3 Traflie Oi^aiiization a,n,d opc^rating me.,.,..,.. .Koad way and t,raek ^ Rolli,ng stock [, " ■ Workshops , Oficwb-Purch-ases' '. 215 215 215 ^ 1(1 210 216 216 2RJ 217 CONTENTS. IV. ^fanchurian and Vladivostok tramways Dairen and Fushun tramways Mukden horse tramways Vladivostok tramways Tsitisihar (Angangki) Light Railway Part 5.--PHILIPPINE ISLANDS. I. General information Introduction Area and popiilation Agricultural and pastoral products ' Forestry products Mineral products Manufacturing Commerce Ports and trade centers Coastal shipping General railway situation II. Manila Railroad Co. (Ltd.) Location and extensions Present ownership and control Historical survey Capital obligations Investment assets Traffic ^ Working results and lose Operating methods Employees and wages Roadway and track Locomotives Passenger and freight cars Workshops ^ Organization Purchases III. Philippine Railway Co Location of lines — Source of capital Historical survey— Capital obligations In \estinent assets Traffic Working results , Employees and wages Roadway and track Locomotives Passenger and freight cars ^\'orkshop3 Purchases ly. ^Faiiila Electric Railroad & Lighting Corporation— Manila Suburban Railways Co. Location and extent Source of capital and present control / Historical survey— Capital obligations Investment assets Traffic and other business ^ * Working results Page. 218 218 218 218 219 221 221 221 z2Z 999 223 223 223 225 226 227 227 227 227 228 229 229 230 230 230 231 232 233 234 234 235 235 235 236 236 237 237 237 237 238 239 239 239 239 240 240 240 12 CO^NTENTS, . Manila Electric Railmiid *i T ii»^.f,-r,^ n,,. j.- ^ Killing stock ' Worksliopa—Organization. . .','','.'.'.'.'.'.[ ' ' P'urcliases , * Fart 6. -CONCLUSIONS AND SUGGESTION'^ Past progreia: , , ' ■ - - Future prospects , ■•••-- , CoiBoIkktioii of Chinese Goi^nmeiit' RaOways IVograin of construction ' ■ Cltt»cter of lines ' ' * ' Roiil way and ec|nipment standards* '.'.'.'.',"."*.'.".".'.' ' * inancing extensions and bettermenfa. ' ' Bii}iiig additional equipment "** ' ' Kind and amount (.f equipment needed .'. '" ' Work equipment needed ^%arf and harbor equipment.... '.'.'*.'."."** ' Shop machinery and tools '*'"*" Electrified light railways and short-line" tramways" " * * * *" Organization and methods of operation " ' Foreign experta in Chinese railway sef vice ' " Rolling-stock specifications , . .'. "" ' ' ' * * * ■ Contracting and coMtruction plant] I'^'^'Z " " Bridge and building materials *.*.'.' ' Coal and water etatiom ] Commodity handling plantar.'.'.'.* ***.'*"' ' "•■• •Rail and fastenings .'..'.[[[', I'rosstiea and timber '.I'.'.'.l'.'.'.',' " Feociiig niaterials •-•••• Frogs and switch,e3 ,*]"]]**' " " ' Roadway and track tools *.''**""**,'.' Signals and telephones [[][ ' ■ Oils and storage. H] ' ' Business metlioA *.*.*. * .* *.*.".'*." ' ' Representation 7.'*.'.* Chinese students, in United States.'. ']*.'*]*]'*'] Distribution of catalogues Technical and otlier useful publicatlo'iis*.'.'.'.* [ * * " " " Appexdix 1.- -DIRECTORIES. p!ZrMir°J^' ^r^'- ^^""^ of -CoMmunications 1 eiiiig~:Mu,kden (Chmg-Feng) Railway. . Pekiiig-Suiyuan (Kin-Sui) Railway. . ' Tientsin-Pukow Railway ,....'.'*** ' " Cheng-Tai (Shansi) Rail way'.'.** '.". ' ' ' Peking-Hankow Railway, .".' ' ' " ' Shangliai-Hangchow-Ningpo aiu-Hang^;,;;g)' ^i^Z. W«.o,gliai-Nanking (Hu-Ning) Railway Kaifeng-Honan lines. , ' " ' ' Hukuaog (Han-Yiieh-Chnan)' RaUwaya *Z' "' " ' Clunese provincial railways " 'Canion-Kowioon (chui-KMiing) Railway::::::::::::::::;::::::::; Page. 241 242 242 243 243 243 244 2^16 248 248 24J) 249 249 250 251 251 if 52 252 253 254 254 255 255 255 255 256 256 25(i 257 257 257 259 2G0 2Ga 2«1 2G2 202 203 263 20 J 204 20 J 265 200 267 CONTENTS. Chinese private railways Chinese industrial railways Foreign railways in China Tramways in China Imperial Government Railways of Japan South Manchuria Railway Co Kirin-Changchun Railway Ssupingkai-Chengchiatun Railway Manila Railroad Co. (Ltd.) Philippine Railway Co Manila Electric Railroad & Lighting Corporation Appendix 2.— CHINESE EASTERN RAILWAY. Agreement for the construction and operation of the Chinese Eastern Railway. . Agreement concerning Southern Manchurian branch of Chinese Eastern Rail- way. Statutes of the Chinese Eastern Railway Co Appendix 3.— PEKING-HANKOW RAILWAY. Loan for the railway from Lukowkiao to Hankow Additional protocol to the contract relating to the loan for £4,500,000 for the railway from Lukowkiao to Hankow Loan contract 1 . . . Operating contract : Contract for the supplementary loan for the purpose of completing the line from Peking to Hankow Appendix 4.— PEKING-NEWCHWANG RAILWAY. -Preliminary agreement between the Hongkong & Shanghai Banking Corpo- ration and Director General Hu, respecting the Peking-Newchwang Rail- way loan. Defmite agreement between the British & Chinese Corporation (Ltd.) and Director General Hu, respecting the Peking-Newchwang Railway loan.... Appendix 5.— CANTON-KOWLOON RAILAVAY. Agreement between the Waiwupu (Board of Foreign Affairs of the Chinese Government) and the British & Chinese Corporation (Ltd.) for the issue and regulation of a loan Appendix G.-TIENTSIN-PUKOW RAILWAY. Railway agreement Appendix 7.~PAULING & CO. LOAN. Agreement providing for the financing and construction of a railway Supplementary agreement providing for cancellation Appendix 8.— HUKUANG RAILWAYS. Final agreement Dispatch from the Minister of Communications Reply of the banks Memoranda of September 12, 1913 Memorandum of procedure for the transfer and expenditure of funds Appendix 9.— SSUPINGKAI-CHENGCHIATUN RAILWAY. Agreement for construction 13 Page. 267 268 268 268 269 270 272 272 272 273 274 276 278 283 285 286 2S1 293 294 295 299 300 312 320 329 330 331 332 334 'ilL' 'Si' 'CONTENTS. 1. 2. tj> 4. 5. 7. o O. if* 10. . JEit Jl ■* 14. i.D''. 17, 18. 19'. iSfIa 21. 22. ZJ. 24. 25. 27. 28, 29. 32 J 33. 37. 38. Sir • 40. 41. 4tK ILLUSTRATIONS. Facing Central Station. Tokyo,, Japan,. . ., Railway map of China. • - - - - • • ■ Tsinanfu station on the German section of the Tieiitsin-Pukow Rai,l- way • ■ ■ Tsinanfu station on the Shantung Railway , , , Tientsin station of the Peking-Mukden Railway Chinese post office at Tientsin • - . • Typical way station on the (ierman-bnilt railways in, China Typical way station on the Chinesc-l)uilt reking-Suiyuan Railway. . . Overhead footbridge between track,8 at Tsinanfu on the Tientsin- Pufcow Railway - O'verhead footbridge between tracks at Tangshan -on the Peking- Mukden ,Railway • Typical Chineee .graveyard at Tangshan . . ,. , Bridge on the French Yunnan Railway, showing stringer track con- 8tructio,n. • - ■ Bridge on the Peking-Hankow Railway after 1917 floods. . , Steel ties (sleepers) of Belgian manufacture on the Canton-Samshui Railway • r ■ ■ Steel tiee (sleepers) on the ,Fre:ncli, Yunnan Railway, Indo-China linee........ -..■ •. .• ■ ai,iiie8e standard section of action text figure on page. . Typical exani,ples of signaling on the Chinese Government Railways. . ,Device used on the Peking-Hankow Railway in an attempt to prevent croBsties from checking - • - - Tjrpical ewitch, switch stand, and rail fastenings on the Peking- Hankow Railway • ■ • - Derail and rail ,fa8tening8 on the Peki,n,g-,Hankow Railway. . , Locomotive on the Peking-Hankow Railway - Freight-caj* truck on the Peking-Hankow Railway , ,D,ining car on the Peking-Mukden Railway Platform baggage truck on the Peking-Hankow Railway Type of box car need on the Chinese CJovernment Railways Type of tank car for handling refined petroleum products on the Chinese Government Railways ' Four-wheel gO'Ods car and caboose on the Shantung Railway ,Low-Bide gondola car on the Shantung Railway Special car for handling bulk lime on the Shantung ,Railway , . . Tramway cars and trailers, Tientsin • • ' Raillese trolley care in Shanghai ■ -- Multiple-unit electrified equipment used in Tokyo suburban district. Japanese-built superheater locomotive • Section of goods train on Japanese Government Railways Locomotive drawing Baguio Special, Philippine Islands Baguio Special leaving station • • Oldest type of Philippine thkd-claa8 passenger car (side entrance)... Typical Philippine four-wheel goods wagon. Sheltered waiting station, Manila street railways. . . , - . - . Track reconstruction, Manila street railway • Center-entrance car, M.an,ila street railways ,End-«nir*iM;e car, ,M,aEiIa itre«t railwayi. pane. 1 56 5® 57 57 G4 64 65 65 65 72 72 73 73 75 76 76 LETTER OF SUBMITTAL. 77 77* 96 m 97 97 116 116 132 133 133 138 — m 139 162 103 163 232 232 233 233 240 240 241 241 Department of Commerce, Bureau of Foreign and Domestic Commerce, Washington, June 2, 1919. Sir: There is submitted herewith a report on the markets for railway materials, equipment, and supplies in China, Japan, Chosen (Korea), Manchuria, and the Philippine Islands, prepared by Trade Commissioner Frank Rhea. The information is in the same general form as that in Special Agents Series No. 156, ''Railway Materials, Equipment, and Supphes in Austraha and New Zealand." On account of its present importance and future possibilities, China is taken up first, at length and in detail. Japan is considered second, although in the future that country is likely to be a competitor of the United States rather than a customer. Chosen is third and Manchuria fourth. Although the latter is Chinese territory, it has very close relations with Japanese and Korean railways and business enterprises. This is particularly true with respect to the activities of the South Manchuria Railway Co., w^hich is managed under the auspices of the Japanese Government. The administration of that company is a branch of the Colonial Department of the Empire. The Phihppine Islands appear last, though the situation there, in Mr. Rhea's opinion, is far from the least important. Particular attention is given to the Chinese Government Railways, especially the possibilities of selling them rolling stock, of which these lines have an entirely inadequate supply at the present time. The report is so arranged that it should serve as a ready-reference manual covering the railways of all these countries. ' Respectfully, B. S. Cutler, Director. To Hon. William C. Redfield, Secretary of Commerce. 15 ■iilii FAR EASTERN MARKETS FOR RAILWAY MATERIALS, EQUIPMENT, AND SUPPLIES. Part L— CHINA. INTRODUCTION. In preparing this report on Chinese markets for railway materials, equipment, and supplies, it will be assumed that the reader is suffi- ciently informed concerning general conditions to warrant a some- what cursory treatment of such features and a concentration of attention upon matters relating to transportation. At first it was not the writer's intention to take up the matter of the railway loan agreements as affecting the Chinese railway markets, but after a survey of all the factors in the situation it was decided (not without reluctance) that any report would be fundamentally lacking if such a discussion was not included. The consideration of this subject, however, is confined chiefly to the features that are believed to be interesting from the viewpomt of an engineer, with relatively little emphasis on the financial and diplomatic aspects. The history of Qiinese engineering and transpoi tation is as engross- mg as any other part of Chma's wonderful history. Without doubt, China at one time had the best general transportation facilities of any nation then existmg, as is still evidenced bv the remains of the caravan roads, the canals, and the examples of well designed and constructed masonry highway bridges— many now in excellent serviceable con- dition, though some of them are many hundred years old. As the wi-iter ascertained by personal inspection, the Great Wall well deserves all that has been said of it as a monument of engineering organization, and everlasting persistence. Without question there have been gi-eat changes in recent years m the attitude of the whole population, especially regarding modern (or rather occidental) utihties. Instead of encountering opposition to these occidental innovations, one is now rather impressed with the search that is being made, particularly by the Chinese gentry, for means to overcome some of the handicaps growing out of the "Battle for Concessions," the "spheres of influence," and the loan agreements, and to insm^e an opportunity for China to develop alono- natural economic lines. "^ The statement seems fully warranted not only that the averat^e man m the more important walks of Chinese life will assist in tSe development of Chma's many resources by introducing western improvements, but also that a great many of the more advanced thinkers are keenly dissatisfied with certain conditions that tend to restrain the progress of the nation. If the nation is given the propei opportunity, and the present trend is not entu-ely upset, one seems justified in predicting that bhma will see greater changes than probably any other nation in the world in the next 25 years. 106229°— 19- 17 I. GENERAL INfOlMATION- GEOGIAPHICAL LOCATION AND AMBA. The southern limit of China is at about the twentieth degree of latitude, which is well within the tropical zone, and the northern limit of Manchuria is above the fiftieth degree, being in about the same latitude as the most southeik part of Hudson Bay. The China Year Book for 1916 stows the area of all Chmese terri- tory as folbws^: '•' Square miles. Tlie 18 PTO\in«s of China propc^r • • 1| 532, 800 Tlie 3 PrO'Viiicea of Manchuria • ■ 363, 700 Mongolia . . . . . 1, 367, 053 Til»€»i - . - ^"•*' ^^^ Cliinea© Turkestan ■ ■ • • ^^0, 579 • •»-- • •••••••••-•••»• *i '"^ "> daft It is rather interesting to note that the average area of the ^18 Provinces of China proper k 85^000 square miles, as compared with an average of 63,000 square miles for the 48 States of the United States. Szechwauj^ the largest Province, has an area of 218,530 square miles and Chekiang, the sm,allest, an area of 36,680, against 265,900 and 1,250 for Texas and Rhode Island, the Urges t and "smallest of the American States. ., , , i The area of Manchuria is only 33,000 square miles less than the combined area of the four northwestern Statm of Washmgton, Oregon, Idaho, and Montana and only 3,000 square mdes less than the area of our largest State, Texas," with Arkansas and Louisiana added. Manchmia has an area 25 per cent greater than either France or Germany. CLIMATE. China has aU the varietiea of climate that one findd in the United States from Florida to Montana. , The .greater part of Chma, however, has a rainy and dry season somewhat comparable to that of the northwest coast of the United States. The seasons in China—in fact, m all the Far East— foUow the movement of the sun much more closely than is the cme> in the eastern and central parts of the United States. In northern Man- churia the people say, with some truth, that they have only two seasons, summer and winter, with no real spring or autumn. Ihis is accounted for by the changes in the prevailing winds, which occur at nearly the same tuna from, year to year. POPULATION. An actual enumerating census, along the lines of those in occidental countries, has never been taken in China. The population of the 18 Provinces is variously estimated by the d.ifferent authorities, the m CHINA. • 19 figures ranging from less than 300,000,000 to more than 400,000,000. I ho Chmese customs authorities in 1910 estimated the total popula- tion of the 18 Provinces at 421,425,000 and of the 3 Provinces of Manchuria at 17,000,000. This population is densest along the seacoast and the navigable streams. In some places the only way to appreciate this density is actually to see it; no descriptions or illustrations that the writer had ever seen had given him an adequate conception of the facts. Farther in the interior the population is much less dense; in fact, many places are somewhat sparsely settled. ^/^ ^xception is the Provmce of Szechwan, on the upper stretches of the Yangtze River, which is quite densely settled; its area is about 218,530 square miles, and the Chinese customs authorities esthnate Its population at 78,700,000. LANGUAGE. While the Chinese literature of all parts of the country is written with the same characters, and can be read and miderstood by the educated Chinese, the pronunciation varies to such a degree that conyersaticm can not readily be carried on by people of different sections. The ''mandarin'^ is the dialect used by persons in official It is the general policy of the large foreign commercial concerns in Lhina to have younor men entering their service take up the study of Chmese. The writer was sm prised at the progress that some of these men had made at the end of two or three years; at the end of five years many of them apparently speak Chmese very well—at least they can carry on a conversation in Chinese without kny notice- able effort. It seems well worth the effort of young or middle-aged men entering the service of commercial concerns in China to take u]> the study of Chinese, which undoubtedly will prove of weat assistance to them in a business way. ^ WEIGHTS AND MEASURES. It has been the purpose in preparing this report to avoid, so far as possible, reference to foreign weights, measures, and currency and such umts have been employed only where it was not practical to rSw d ^^^ ^^ *^™^^ ^^^^ ^ ^^® preparation oi American Distances and dimensions have m all cases been reduced to miles feet, and inches, although much of the data secured was in metric measurements. In some of the references the Chinese ''IV is men- tioned. This seems to be a somewhat variable distance, but in gen- eral It may be considered equal to about 0.37 of a mile. In some of the Chuiese references, catties and piculs are mentioned- these are equal to li and 133| pounds avokdupois, respectively. CURRENCY AND FOREIGN EXCHANGE.' There are three principal kinds of currency m China^thc cash, the dollar, and the tael. The cash is a small bronze coin, pierced iii the center for strmgmg, which is familiar in this country as a curiosity. 1 hough it is bemg super seded to a considerable extent by the frac- ir/i7h*i'l^f''°" ^^5 been taken, for the most part, from Spceial Agents Series No 172 "FlPffnVai n^wi. Chin^'' '^^ ^ Vladivostok." and Mik-ellkneous Lies nS! 7o' ''The Conduct o! BSL^^Sfh m BAILWAY MATERIALS, EQUIPMENT, AKB SUPPLIES, tional dollar currency, it is still the coiiimoii,est coin, especiftHy outside of the larff© ports, for small retail transactions, in which the Chinese alone are coiicemed. It is almost never used by foreigners, and does not enter into foreign trade. It is customary to reckon tlie cash as roughly equal to one- tenth of a Chinese cent, but its actual value is constantly fluctuating. It is independent of any gold or silver standard. The dollar currency is t.he oiieial circulating medium of China. le basic unit is a silver dollar, sometimes called the "Yuan Shi-kai ar/' adapted from, the Mexican dollar and containing 0.779976 of an, ounce of fine silver.. According to the quarterly statement of the Director of the Ignited States Mint with regard to the vahie of foreign, coins, the Chuiese doll,ar is equal approximately to 0.644 of a liaikwan tael: therefore it is equivalent to 0.7174 of a Shanghai tael,, at the official, .ratio between tlie two taels., (See ■paragraphs on the tael.) The new dola.r circulates freely and is becom,ing mom and more the standard co.i.n. of the count:ry,, thougli it is still discounted in cer- tam ioctlitiea, es.pecially m the*sout.h. It is indicated by the same Bign (f) as the United Sta,t.es dollar, and siuns in United States ciirreiicv are distingi,i..ished locally % the letter *''G" (gold). The officia,! Hongkonf!: doMar is common in South China, and several other local doMars are in ci.rculation. The word, '*doia,rs" is frequently; ap- plied, in China t.o other cu..,rrency units originally based on the Mexican dollar — even to the Indo-C'h.ina piaster and the Phihpp.ine peso. ^ In the district under Japanese control the Chinese dollar or its ©quiva- lent is sometimes called a "silver yen" (SY). Prices in silver cfoUars of any Mnd are u.sually quoted* as **Mex." Wherever the term **S Mex." is used in the present report, the Chinese silver, or ** Yuan," dollar is. meant. The national currency includes 8.ilTer 20 .and 10 cent pieces and bronze cents, 'which fluctuate independently of the dollar of which they .are nominally .fractions. 'Tliis fractional currency is .locally knowTi as "sm.all money/' to d,i9tingu.i8h it from the integral dollar currency, w-liich is called "b.ig .money." As far as foreigners are c-on- cemed, the ** small money" appears only in minor ret.a,il transactions; but it is necessary to ■understand th.e distinction because it. usually exchanges with **l>ig money" at a discount of 10 to 20 per cent of its face value. .In the annual statement of a company operating a street .railway .in one of the treaty ports, a deduction of 20 per cent wiLs made from gross eaimings on' .accoun.t of the depreciation of "small co.in8." The Chuiese Government issues no paper currency, but the Govern- ment-con ti'0.11©d Bank of China and Bank of Communications issue notes, which are not at present fmdj redeemed in specie and .circulate only at heavy discounts. The foreigii-exchange ba.nks issue in dollar currency notes that ckculate at par in the locahty where issued and at a sm,a,l, d.is.count (usually about 2 per cent) in. other parts of Chma. The do.llar currency is beyond doubt the coming standard of China, though the tael will continue to rule for a long time in com- mercial transactions. The dollar is now the medium for all cash payments in which foreigners are concerned, for most small personal tank accounts, and to an increashig degree for general retail business. It is used little in wholesale bus.kess and Ytrj rarely in foreign trade. CMIKA, 21 tZ^Jm f #??* f T"" ^^^ \^^^g^t of silver of a given fineness. The weight of the haikwan, or Maritime Customs, tael is the same as the standard tael weight (IJ ounces), and its relation, feed by flX^Sm AA^Qof^"" ™P^^^^S,^ taels, is as follows: 100 haikwan l^d in i'lti 1^?""^ ^^ Treasury, taels, 105.215 Tientsin taels, ?na A qI Shanghai taek One hundred kuping taels are equal to eZm.r^f.Tf.tl ^^' 1^^ ""^^^ ""^ ^^^ ^^^^^^ ^^ ^^^^^^ «ther ?rr^Th 1 ? ^ '^ ^^f ^^"^ ^"^^ i^ t"^^ ^y ^^^ customs authori- ties. Ihe haikwan and kupmg taels are the only important ones distinguished by their use;, for the other taels the cFiSion k OT^ taef ^^^^^^ ^^^^ important commercial center having its f^ t^ ^^^^I ^^ ^1 coined taels, payments in this medimn are supposed of ingots of a peculiar shape knowTi as ''shoes," which weigh about 50 taels each. Between foreigners and Chinese fii-ms, however tael ^ciX^ '^^'f t.^ "^"^ by negotiable paper or' by c^wei^fon ifcal ^^a S%* '' inconvenience is driving the tael out of use m casH and retail transactions, it is maintained as the standard currency of the countrj- by the conservatism of the people the in- The tael IS not used in Hongkong and is less dominant in the trade mirif China than in that of the center and north. The Govern! r^i^Shfn rr^:"' '•^^"''^ *^^ ^'^°- ^^ ^^^^ ™Sf f^^;w.P"^Th''"i'^''^,^^""'''/'"" S''^'^ »»"* ««J1« h« imported ^.mW nf T i ^*»?.f *d values to-day are equivalent to a certain nuniber of taels, while to-morrow they may be quite different r^aulefci^t*^' fluctuation m the number of tae\ that wiU be w wnen tlie puce of silver is lugh and miports are slack. When S w'^oWa^ ^"^"' can get more gold dollar for his silver money" ana when there is no rush of imports there is no comnetifion in th^u^^"t^ ''^^■"" ^°^ r^'^ *■>? "° '''''^'^^ to raise the pnce of goU fin,rfM/h"^ r % '°^'i''^V On the other hand, the exSr fands it the best tune to sell when the opposite conditions prevail Trade is tiierefore sympathetic to some Stent with theTaSatlon, noui- to horn- by the banks. A compl eating feature is the fact th«> SwlVr?'"'! •' ^''''''^^' indepenJlently o1 intematronal exchange and local fluctuations may make it difficult to nrI= « * » X„. 7 ■ t ' time in a given district. "uncuit to bell goods at a particular Dno,^„«J™f* r^'^ ¥i ^<'\^^^J^ "cheap" in China, owing to the S the wnr&"frT °S '^7' -^y ^^'' ^''"^S nations aid to tie drop nnces m Mexico, bo far as exchange only is concemetl the l««f f«w years have been favorable to the p,2-chas Jof goodsTbroad but pt^ £r±r ^,T TIT''"* -^^^y "t'^^' ^^«toi^, such L extrS; of the S fvfc J'''TK"n' "2*^ ^"^-^^J-tainty as to the continuant conditions l?;\>^- Tbe trade of Chma, under the complex war conditions, has been generally prosperous; but in the long nln it has .lAILWAY MATiaiIALS> B;QUIPM:EISrT, ANB SUPPLIES. "been found tliat a low exc!lMi|e rate is more favorable to an actiTO foreign trade becanae the Chinese obtain the money to pnrcbaso foreign goods from, the sale of Chinese products for export. NormaO v, therefore, a high excliange rate limits' exports and thereby indirectly limits impofts. When foreign goods are pnrcbased, the Chinese buyer or the import- ing bouse enters into an exchange contract with a "bank in the port of iiiiporfcation, which acts m agent for that bank in tlie country of origin to which the documents covering the purchase are hypothe- cated. Th«e cOntracte are usually arranged by exchange brokers. If the contract calls for the purcliase of goods at a price in ,^old, tlie ibuyer usually paj^s for the goods on, a c. i. f. b.asis and, in addi- tion , pays tfie interest on the draft and the profit of the import- ing house. Contracts made at a silver price often stipulate that the importing house is to look after the bank and other charges. In such cises^ the price that is paid by the Chinese buyer includes the importer's profit and the inte-rest on the draft, and the goods are said to be sold on a c. i. f. c. i. basis; i, e., cost, insurance, freight., pins commission (more properly, profit) and interest. Both methods are common; the practice ' varies with the importance of the trans- action and the nature of the goods. ^ •' Tlie fluctuations in exchange make it difficult to state accurately in United States currency domestic prices, in China, local coste of production, etc. The f ©Mowing table shows the average exchange rates. of Shanghai taels and silver dollars for 1912 and 1913, and for each month from January, 1914, to March, 1918. Actual quotations for the silver dollar for this period are not available; the rates given were obtained by multiplying the Shanghai tael by 0.7174: Tears and ni'Cinlhs. Shanehal iaels. silver 1812 mm mAn Mil... , .m ATS Mit: Jmniary .§2: .441 'Fabriiar J. M .448 Mmth ., , M .4.!i3 is?:::::::::::::::::.::: M .4*il .m .450 Jimc. .11 .441 July., .« .m AllfUSt ,m «: ■ jSflf fiBptcmtar , - . .m ,4m October .53 ,9m NoveinlKsr. .at ,9m I)ri.i May June jfuiijir • « .« • HI Ht M OctOlMif. .. N«ivi*ml.,»r. .DOiMin'toCT. IMI: January . . . Ptbnjary.. M'arcli April... ... M:ay. June iiUiJIjli M « «. * •■ «. W .Aogust.... fcptemlier. Oototwr. .. Novtm!»r. neooinljof. 1918.: January... Fabruary.. Marcb Sbanghai taeis. IM 1.0tli 1.021 Silver dallmrs. to. 443 • §1 f .4m .m .fi3l .501 ,475 .508 .5.23 . iPOsl .'Wi .500' .614 .m .508 .WO .031 .657 . 722 .827 tuna .724 .733 ■.7:m .731 CHINA. 23 No attemnt will be made in the present report to convert silver dollars to United States currency or any other equivalent; this is considered impracticable on account of the constantly changing price of silver, which has varied greatly in the last few years. A person doinff business in China soon learns (of necessity) to think in terms of "Mex." currency. Unless otherwise indimted, the i sign in the Chi- nese sections of this report means Chinese silver currency. With special reference to the railway situation, it may be well to revert for a moment to the subject of depreciated currencies. The earnings of the steam railways are not affected by the "small" silver coinage or the "copper cent," since their charges are based on the "large" money. To support the paper issues of the Bank of Communications and the Bank of China, both of which have been at a heavy discount, these issues liave been accepted for some time by some of the railways at their face value in payment for fares and freight charges. But in paying interest charges and expenses the rail- ways have had to bear this discount loss, which has had quite an appreciable effect on the earnings of the lines north of the Yangtze River. However, as this was an expedient to assist the Government m supporting these issues, it is felt that it need not be considered as a permanent feature of the railway earnings. The tramways promptly reduce their "small money" and "copper cents" to a "large" money oasis. AGRICULTURE AND PASTORAL PURSUITS. China is prinaarily an agricultural country, and the wide range of climate, the rich sod, and the simple wants of the people make it one of the few countries m the world that can, if necessary, be self-sup- porting. The products are very varied. Rice is the principal crop and staple food in South and Central China, but in the colder parts of North China millets very largely take the place of rice. One of toese, known as kaohaug, provides a food substitute for rice and is the principal fodder crop, while the stalks and roots are one of the prmcipal sources of domestic fuel. Wheat is a secendary cmp but is gi-owing in importnnce. Where transportation is avaUable special crops are being raised mth much success m many instances— for example, sova beans iii Manchuria, potatoes along parts of the Peking-Suiyuan RaUway peanuts alMg the Peking-Hankow Railway, and tobacco alone the bhantung Radway. ^ ^ While the cultivation in many instances is what might be called intensive, the methods are very simple and the implements almost primitive, usually necessitating a great amount of human labor. Une feature that is particularly noticeable is the wide areas usuallv under cultivation with uo fences whatever. The Chinese apparentlv do not believe in wasting good material for such a purpose as separat- ing one another s crops but, rather curiously, thev close in their low- bmit dweUings with high mud or brick walls, doubtless as a means of protection. Pastoral pursuits in Cliina are entirely secondary to agriculture, aitnou^h m the aggregate the products are very considerable, par- ocularly froni the interior regions in the form of hides, wool, and hair. lUe marketing of some of these articles involves a large amount of tra.nsportation and will mean a considerable source of railwav f reic^ht as 18 illustrated by the traffic over the Peking-Suiyuan line at presSntl 9 A MltWAY MATERIALS, EQIJIPM'ENT, AND SUPPLIES. IIINBIAL PRODUCJTION. COAIk CHIFA. 25 CliiM,, no doubt, has very lare;©, varied, and valuable coal resources, 1)ii,t it is diffictilt to obtain definite data concerning them. The Japanese have tlioronghilj proved the fields they control in South Maneliuria., at Fiisliun/Yentai, and Penchihu. 'fhe Fushun field on the Fushun Branch of the South Manchuria Railway; 236 miles north of Dairen, contains about 800,000,000 long tons and carries a high percentage of nitrogen, and there is a very complete Mond gas nlant, producing^ a consideral)le amount of ammonia. The Yentai field near the mainline of the South Manchuria Railway, about 225 miles north of Dairen, contains a much smaller (juantity of steaming coal. These two fields are controlled by tlio Soiith'4Ianchuria Railway and are both equipped with modern apparatus; 'with a total of approximately 20,000 employees, they are now producing about 2,225,000 toiB^ a ,year. The Penchihu field, 47 miles from Mukden on the Antung Branch of the South Manchuria Railway, while hmited as to quantity, con- tains some very good coking coal. This is of much importance to the Japanese interests in connection with the two 150-ton iron fur- naces at Penchihu, the two new 250-ton furnaces of the South Man- churia Railway at Anshan, about 190 :miles north of Dairen, and the new iron plant at Pingyang on the Korean Railways in Korea. The coaljiron-ore, and lim.estone deposits and the iron furnaces at Penchihu are controlled by the Okura'Co., of Japan, and' the present coal production is about 300,000 long tons a year. The only other instance in which the writer was able to see data 'Iiroving the quantity and quality of the coal was that of the Kaiping tield, controlled by* the Kailan 'Mining Administration, which is lo- cated on the mainline of the Peking-Mukden Railway about 80 miles northeast of Tientsin. Here there is a proved amount of about 1,000,000,000 long tons of lirst-claas coal, a considerable portion of mMch will coke. With about 20,000 men the present production is approximately 3,250,000 tons a year, with a production of about 100,000 tons of coke now produced by the^ Chinese process. It was ■stated by a well-informed authority that the Kailan Mi.ning Admin- istration contemplates improvements, amounting to approximately $10,000,000 United States' currency in the way of washmg and by- iproduct processes, these improvements to be undertaken as soon as possible after the end of the war. The greater part of the coal now exported from China proper comes from this field, and the average rail haul to Chinwangtao, the principal coal-exporting port, is about 75 miles. This is the only port of Morth China on the Gulf of Chihli that is free from ice diirmg the long winters of this section, except Dairen, which is under Japanese control. The next largest producing mines are the Pinghsiang collieries of the Han-Yeh-Ping Iron & Coal Co., in Kiangsi, about 260 miles south- west of Hankow. The annual production is about 1,000,000 tons, and all the fuel and coke for the Han-Yeh-Ping Iron Works at Hanyang^, ne» Hankow, come from these mines. There 'is no doubt of the fact that extensive and^ valuable fuel do- posits occur in many parts of China, particularly in C'hihli, Shansi, Honan, and Kiangsi, but so far .as could be learned none of the fields other than those mentioned have been conclusively proved up m to quantity and quality. The best statement of the recent production situation was published in the Far Eastern Review for October, 1917. As this publication prepares its data with much care, the followint' information is given substantially as printed. The total present coal production of China from all classes of mines is about 18,000,000 tons, of which about 8,000,000 tons come from the larger mines where more or less modern methods prevail and which are, in the main, under foreign control or administration. According to figures collected by the Geological Survey of China for the year 1915, the most recent year for which figures are available, the output of the principal mines was as follows: Name of mining enterprise. Location. Kalian Mining Administration. Pinghsiang Colliery Peking Syndicate Linchong Coal Mining Administration. . Chunghsing Coal MiningAdministration TsingciUng Mining Administration Paochmg Co Linhokou Coal Mining Co Tunphlng Co SnMotal Fushun Colliery , Penchihu Total Tangshan-KTaip- Pinghsiang Chaotso I^incheng Yishien Tsingching Yangchuan Linhokou Mentowkow... . Province, Nationality, Produc- tion in long tons. Fushun Yontai. Penchihu.. and Chihli Kiangsi Ilonan Chihli Shantung,.. Chihli....... Shansi Ilonan Chihli, Manchuria. do..... Shio-Britlsh Chinese .. British Sino-Belgian.. Chinp.se Sino-German.. Chinese do 8ino-British.... Japanese do 2,9n,TO2 927,463 480, 875 259,703 244, 825 179, 154 131,396 91,S22 80,000 5,367,030 2,034,856 275, 777 7,677,663. •^^ j^^!?i*^i?^ ^^ ^^^ above, the Japanese military administration mined 259 611 tons in 1915 and 443.368 tons in 1916 from the mines 3if S^Ji^^V'^g R^jW and it was expected by the Japanese autnorities at Ismgtau that this amount would be increased in 1917 and again m 1918. In the above-mentioned article the rather sur- Vommi\''t^^^^^^^ ^^^^ even now China is importing from 1,000,000 to 1,600,000 tons and that in normal times there would wl? ^T ^V'^P*'^^ """"^'^ exports. Even with the present rail^ ways, If adequate equipment and arrangements were provided, there IS every re^on to think that Cliina should become an exporter of coal instead of an importer. It would appear that many of the developments have not had the possible measure of success because ^rovm^was insufficient to determine the best scheme of develop- rrt.n h.!£?^fP.^'^'KV^^^^^^ ^^ the matter of drainage, which Has been the cause of trouble m many of the operations, IKON. diLl^TT?^^^ ?^^^'^ ^^^} ?^>? ^^"^ ^^ important iron-ore deposits but the obtaimng of definite information regarding the proving data was found to be even more difficult than in the case of the coal resources. ^ «.«i^e ui wl^L^i""^?^? '^^^^ ?^ the Far Eastern Keview also referred to the nfor i rn^. ^ A Pf?^"*^^^ ^ ^f Chma, statuig that at present the total Pig-U'on production of Chma, aside from Japanese production in lanchuria, is about 300,000 tons. One-half o! tliis is the output of Sl s 26 MILWAY MATERIAL, EQUIPMENT, A^D SUPPLIES. lie Haii-Yeli-Piog Co. at Hankow; the remamder, produced by entered native ■pliints, is nearly all consumed locally. The Han- 1 ell-Ping works consist of two 100-ton and two 250-ton ™ maces, but at present one of the 250-ton furnaces is not beiiii? operated, on account of lack of power. In addition, there are in couree of erection two 400-ton furnaces near Hwangchow, about 70 miles below Hankow, on the Yangtze Kiver. Theselast furnaces are on the river at the point where the ore is brought from the Tayefi mines by means of a 2-foot-gauge railway. At present about 250 tons a day are converted into steel and iron i>roducts, and all the rest of the pig iron goes to the Japanese. This plant has the only rail mill m China, the maximum capacity of which is 120 tons a day. It IS understood that there is a Japanese loan to the Han-Yeh-PiiiE Co. amounting to $12,000,000 (gold), the principal and interest of Winch IS to be paid in 40 years, in iron ore and pig iron. This loan arrangement for the pig iron is at the price of $21 (gold) per ton of .2,241) pounds for the 40-year period. It is estimated that the present production cost is S18 (gold) per ton, 'Tlie loan agreement also provide that 2 tons of ore go to Japan for every one that is smelted by thi3 Han-leh-Pmg Co., and the minimum amount going to Japan IS es'timated to be 1,000,000 tons a year. The two 150-ton Pencliihu furnaces of the Okura Co. (Japanese) are now producing about 70,000 tons a year, and the new Anshan plant of the South Manchuria Railway is expected to have the first 250-ton furnace completed and in blast before the end of 1918 and the second 250-ton furnace before the end of 1919. The production from both these plants, as well as that from, the new Pingvang plant, m Korea, which may use both fuel and ore from Penchihu, is con- trolled for Japanese consumption. As soon as the work can be carried out it is planned to install a complete steel plant at Anshan particularly for the production of plates for shipbuilding, of which Japan is m such urgent need and anxious to have its own supply. In any event, all the production tliat can reasonably be expected in the next few years will fall far short of taking care of the combined needs of China and Japan, even when one includes all the possibl© production in Japan proper. onn MRAiA China is said to produce in commercial quantities 26 different minerals, of which antimony ranks firet in value. As with the coal and iron resourc«, there is great, uiid urgent need for scientific inves- tigation of these mineral deposite, so that they can be properly and B.uccessfullj developed. The transportation of mmerals other than coal and iron is at present of no considerable volume and is not hkely to^ iniuence materially the building of new lines of railway rather, the building of new lines will influence the development ol certain of thffie mineral resources, which, in some c^a^es is ,iiow much handicapped on accomit of slow or expensive transportation. G:BNE11A,L MANWACTIJIING. NotwithfltandiiME 'wiiat appear to 'be very slow, primitive, and expensive methods of transportation, there is a great amount of .native manufactured articles that ar© somehow gotten to porta for CHIlfA. 27 export. A good illustration of tlie peasant products is straw braid from North China, particularly Sliantung, which is exported in considerable quantities from Chefoo, to which port it is transported by Chinese methods. A good example of a community product is chinaware at Kiukiang, on the Yangtze River, where quantities are manufactured by native methods much in excess of the local needs &UCJ1 examples of native manufacturing can be noted in many parts The manufacturing in China of distinctively foreign articles is con- stantly becoming more important from year to year, and, on account of the vast supply of cheap labor and the adaptabihty of the Chinese there IS every reason to believe that China, in the course of time' will become a most miportant source for many lines of products requu-mg a laree amount of labor. The number of modern cotton ^lnf,v P^^'^^^ly ?^^ noticeable, but other lines that warrant attention are cement, sugar, flour, etc. KAftWAY MANUFACTURING. The CJhinese railways have in most instances reasonablv well- 3!frf ll^'T'^^^'Pf"' ^"- H'^^ ,r^ primarily for the purpose of making all da^sses of repairs to rolling stock in order to insure a very long hfe-this being the general policy of all railwavs in the Far fwi? '"" Australia. The exceptions to the general rule that work- shops are only for repairs are the Tangshan workshops of the Peking- s^nSran^llTflv''^''^ "'^ ^ 2."' for erecting locomotives! ^af- sengci and freight cars, and the Shanhaikwan bridge works of the ^n^^^lf l'^^'T' 't''^ '^''' ^""^^xr^^ ^^^ ^^^ fabrication of new br dS and aU kinds of structures. Both of these works followed Brit^h ItockZd TlrLT'*"^*^?^^^ ^^ ^^'^ I^"^P^^^ *^ ^""^^ ^U rolling stock and fabricate aU bridges and structures for new as well as Srfn^^^^^^^^^ Government railways. This conditiorh^not pic' wtn If ;n fi.Pf *; ^""^ T^ seems warranted in concluding that it will not m the future. In the witer's opinion, if the present ten- although this may seem very inconsistent with what is said in this (Shrka^oT^n 'CthXnSi^'^ "''''''^ --^'^^^ ^^ ^«^- h,}hl^l»T ''^""led that the Han-Yeh-Ping Iron Works would .»;i ^1j ^- r»"^»ys in China, but as this company's maximum rail production is only about 30,000 tons a year and tWewTem SXlytm not^'boln "^ S^^^^^ ^«^ ^^ ^^ ^^^d Ld of "merican'"maiXHf "* """r^^.f^'ing P'ant from the standpoint stmcS maf^ri« L i= T'\,?^, T''^?.^ Cqu pment and fabricated RaHw^ r^ It. n^-*^^ Shakako shops of the South Manchuria ttaiiway to. near Dairen. This is a well arranged and eaninnpH Sfrin^^^^^^h or 10.96 per cent, cUe from the United States. For the same year the total exports were n„]^ff ^K*^-^ aggregate this looks large, when it is considered on a SS^n? i t^^ I t°vf ^^.''^■n V "'^'^ ^>« ^^^ «•"«" and there is every J^t tK^i^ . i''* '*'^? ^^ .""""^ mcreased in the future. In the past the imports have included a moderate amount of materials and equipment for transportation purposes, and while it is difficult to pick out the actual amount of business, there really has been more tW Wn _^1^/^ i*? ''^^° expected in view of the restrictions of the loan agreements that are mentioned later. are St1fnKli!?fJ^ K ^""^ ^'<^^P?^^^^ materials and equipment ^„w f fi,? u^ ^ *'" very considerable in the future, and a large amount of this business should come to American manufacturers if Ste'A^ * •" f "^^'^ ^ ^''"'''^ i"^ accordance with the bLt in t^ hi^^ilP^ .T^ transportation needs. China's transportation can tnan witn that which follows the hnes of continental nractiro «« U weU Illustrated on the South Manchuria and Korean Wwaj^' LIKIN. oaiEri^kfn'"l?l?fI^ •"'' ^^^ iiterproyince and native commerce a tax CWn«'« intpr^^f !f "nq^eftionably retarding the development of L^na s mtemal trade as well as putting an unwarranted r^triction on the natural movement of traffic, partfcularly over the present rail Sts CZ^d,*'"- ' **^■'' 'r'^^ ^'^^' *^« forei^Ser who adClorS Tttk^T''^^ is aUowed to pay this taxT,y a nominal from th^^„. y f ^?^lf his goods to the various interior points canof nnX^r- *i ^Y^ *^ ?.^*'^^ V^^^*" ^"^ tl^« substantial Lndi- v^ience rrn "»l'''id mipositions of this likin, causing much mcon- venience as well as additional mduwt expense and lols. That the lATLWAY MATERIALS, EQU1PMET7T, AND SI"PPLrES. Oil Chin \v>v g-i:iinij£ow' ii,anwBy, ,.„ ., ,„ .,, ^^ ^ .„,,„,.,*.., v.,. .... ...,tv;*,^,.«. railwajTi piiblislicci in the Chinese Social and Political ,! 1. i*,,'r 1 • _ A I . ■i'"^ ,1 ^ -^ ^ __ • Science RctiO'W and repiiblisliccl in the l)cce^n,ber, 1917, iiiimlier of the Far Eas^tem KeTiew. The following is what Dr. Wans buys on this subject: :Siiiee likin, only Uxm tl» Irwlier. oiw may qiwstioa why we eliould advoratft ila •bolition in connection niili milwiiv finance. The wasoo is tliat likin bamew bother il» tmder directly and hinder the milway indirertlv. Kailwavs, wv nuiv say oiice for all, deiwiifl upon the trader.. What hiirtB the trader immediately \mm the railroad eventually. T}"'-refr>re, in order to iiwiire the prosperity of tlie raiJnmd one niiiit endeavor to i- ... , ■ tlic? difficulties wliicli lie in the way of tlie trader Cri'-iiv-rally Bpeaking, there .is .hardly any other i.ii8titiitii.>u lliat is retarding tlie de- velopment of railway traffic umto seriously than the ini.poffl.tion of likin along tlio railways.. The ciidicult)- d(.M?g. not lie so much in the amonnt which ii collected m It does in the delay and dafna..|?ep; the cost of paying the tax«, and other inconvc- iiiencee^ w.hich ariae from th ' i ions. Indeed, the costs of the trader in Mving hiB taxea; ans' often more than liif ta,xc3 themwlves. The reported corruption ext.or- tion,, and purpiMely .committed damage t.o gowis bv the likin collectors uix»n lielplesa traderB are too notorious to need emphasis. When thcM- facts are taken into account it :» really a credit to onr traders, tliat they can still survive. ' .But wi'tliout goin|i further into the question, we feel it Kife to say t.hat. the abolition of .such barri.er8. wi.ll not only m,eet mth the heart,/ welcome of the honest trader but will m well prove a boon to the commerce of the whole countr>'. And it is bv the development of our commerce tkat our railwa^-s may earn more money thiw prepa:ri..n^ to meet the approaching fin.anci.al difficiiltiee. What is lost by the aboli- tion of li.kin will Ixs inoro than made up bv t.he inciWBe of railway revenue To make up the lew of funds of the M„in.,igtrv of Finance, resulting from this abolition the Government can easily reqnire the rail wave to crudit the Slinistry with a lump iuiii. every year .eoml to t.lie hkiu revenue derived from, railway tame, which the railways are probably wi.lling to do. By so.doi.ng,, t,he Government mill have everv- thing to ,gaii.n and noth,i.og to lost?. So it is .8a.fe to say that this is one o.f t..he very few reiormii w,liich ■will bring benefit to all .and harm to none. The only ijeople that will .stitier from tliis reform mil !» the .liki,n ,rua,Bere, and it is very likely that thev will ,»ai«j every opposition. The competition between our commerce and indu8t,ry and those ol other countries algo dem..a,«d.a the removal of tlie likin obstacles along the raEways. In this ,regard we ,h,ave to remark t.liat not only the cu.sioms t.ari„,i!8 but also all atate railways, and to a certain extent even private m,i„,|,wav8, in other countries invariably make sijeciul ciorts t.o help domestic indiisUj^, GernMi.iiy,, Belgium, Switzerland, France, Japan etc., are some ol the most obvious iE8t.ance8 where customs: and railway tariffs' are^ well ,known to ,h.:ave been useil to protect h':»!j:i.:' industn', and their resufts are iusti- :f)iing^_t|ie:!xp:nicl But we liave Iwen .foUowing a diametrically different .policy. Instead of helping our liou.te commerce and indwtry by showing them favora" "ire olMtru<:t t.hem in tlieir uphill struggle .against foreign competition and pkce tliem .ai, .a ,great disadvantaee by subjecting them to the numerous i,nland impositions wh,i„le exemptriig t,he foreign conipetitofH. For it is only imported goods that can be lrtii68,hipped to any opm prt in the cou,nlr>' ujwn paying a nominal ad valorem duly at t_he p >.rt of entry, while there la no way oimju to tlie home trader by whidi ho ,ri in V ii va. 1 1 1 1 1, inse 1 1 oi s i ,i ,j i i lar ini in u ni i k^B . This is not on 1 y harn,if ul , but u,n,j ust and .d n aloiK,,' IS enough to p,revent ou,r trade and industry from cairJiing ui) wilt I i,,i„H„«:; iisiness,. Dr.V. K.Wellington Koo's '''Status of Ai,iBiis in Qmm ' ' and Dr. ,M. T. Z,. Ty aii's * " Treaty Obligations Between ^ fina and Other States''' are botli interesting reading to students of this subject and form very haiul\- reference works for foreigners residing and doing business in China. It is probably tni,e that tliese publications are written from the Cliinese viewpoint on many of the points in controversy, but tliey are certainly reliable as regards information and m a.(!dition, are good examples of the feeling of many of the educated Chinese concerning Uieir present position and condition. TIAIING CENTEta The order of importance of the several trade centers from the standpoint of imjiorts, ex|'>orts, and sliipping is probably as follows: iShanghai, Hongkong, Hankow, Tientsin, and Canton.* Dairen, of course, is a very important port, but the Japanese '''sphere of influ- ence" m all of Soutli Manchuria puts this trade center in a class by Itself. Th.e same remarks apply -to Tsingtau. Both these porta have nnasually good harbor facilities. It should he rememhered that Peking is the political center of ^CMna, and particularly that this is the headquarters of the Ministry of Communications, the branch of the Chinese' Government in control of the railwavs and the postal, electrical, and shipping departments It can fairly be said that there is a growing tendency to control pur- chases for the various lines of the Government railways through the Ministry of Communications, and it is quite probable that m time ail general contracts for materials an(l equipment for these lines will he handled from Peking. Shanghai, at present, is the lai-gest importing and exporting center, hut Hankow may in tiiiio justify 'its title of tlie "Chicago of China/^ on account of its growing' importance as an exporting center, and, particularly, its proximity to the somrce of supply of many of the exported products. WDUSTEIAL. CENTEES. At present the industrial centers are, in general, largely the same as the trade centers, but a forecast of future development is far beyond the scope of the writer's investigation. It seems natural to conclude, however, that this development will follow past precedents and that localities having the natural advantages of ample labor, fuel, and shipping m,aterials (such as the neighborhood of the port of Chin- wangtao) will see important developments in the future. Hankow, no doubt, Will become one of the very important points, although this place will be somewhat handicapped by the fact that the Hupeh man is not nearly so robust and capable of standing hard work as tte laborers from some other parts of China. Pukow, on the Yangtet Kivcr, IS suggested as one of tlie pointa havmg considerable ftdvaa- tage from, the standpoint of railway and Aipp:ing facilities. m, GENERAL TRANSPORTATION CONDITIONS. PEIMITIVE MEANS OF TRAVEL. It is probably true that the ordinary means of transportation in vogue to-day m China represent in general more primitive methods than those of any other country, not excepting India. The traveler on larid can be conveyed by horse, sedan chair, cart, w-heelbarrow, mule, litter, camel, jinrikisha (drawn by coolies), or he can walk. Commodities are carried by wheelbarrows, carts, pack horses, mules, donkeys, oxen, camels, and, to a very surprising extent by vehicles drawm or carried bv human beings. 'One of the earlv objei tions to railways was that they would produce unemployment among the multitude of people employed in transportation pursuits, but even these classes seem now to appreciate that the railwavs increase the opportunity for this kind of labor— and at rather be*tter wa^cs than formerly prevailed. Persons interested in primitive transporla- tion can certa,inly find a most interesting field of study from one end of China to the other. o j u A Chinese horse or mule— somewhat undersized—carries from 250 to 325 pounds, depending somewhat on the bulk. Camels carry probably 50 per cent more, but are used onlv in the north. Wheel- harrows carry from 250 to 400 pounds, but seldom make more than 16 miles a day and frequently less. Carts carrv varving loads, de- pending on the number of cooMes, mules, donkevs, or Chinese horses ctrawmg them. The combinations of donkevs r coolies, mules, etc., that are seen from place to place drawing vehicles are never ending. f M ?f ^ . i^?***®*" photographed, very much to the displeasure ot ttie Mongol driver, a camel hitched to a cart— an unusual com- bination even for this part of China, which is most interesting from a transportation standpoint. CHAKACTER OF CHINESE HIGHWAYS. China's reputation* for bad roads and streets is quite deserved In the south, where wheelban-ows are most used, the paths are unil lormly bad. In the central and northern parts of the Republic some even of the most important highways are had almost beyond aescription, but m other places roads were seen that were quite passa- and Droh?htv^w!ilT^^^^ ^^/'' highways were substantially built and probably well mam tamed, as is evidenced by the really ^ood Yi!nfRivr?n Tn'l ""ft^ ""T"'^^^ ^^^ ^^' at^Kalgan, oief the vn .5. ! i! V • ^ ''^''^' i ^^^ ¥^'' ^''^^^' ^is ^^'^S^ is undoubtedly ^1^ f -41. '"^ i^ good condition. The mortar appears to he pure hme, with no san^ or other materials as a filler. ' %is bridge firms ^'.^T:^^!^^^!! ^^^^^^^^^^12^ ^^ ^^3? ^<>«t important caravan routes of the world. "The traffic from"KalVa7To'P(rHni^l^ by the Peking-Suiyuan Railway. The to TJrZ« fn ifT*^ routes from Kalgan are, one to the northwest bv thf pivi,? «*? '^^ ^^^K^ Suiyuan. The latter ^yill be replaced by the Pekmg-biuyuaa Railway, upon the completion of the line 10C229°— 19 S Sit S4 BAILWAY MATBEIAM, EQUIFMES-T, A:WB SUPPLIES. CHINA- 35 from Fengdian, to Siiiyiian, which is n,ow under construction, Tliero is no wheeled traffic over this old caravan road, everything being carried by pack animals. In sonie of the cities of North China, the writer saw comiderable work in progress in the streets.. This was particularly the case in Peking, where some very substantiai work 'was being carried out. A movement for the building of better roads appears 'to be getting under way,, and one of the stimulating influences, is the great deliglit nianifested by the Chin^ese in running any kind of an automobile that they are able to acquire. There is a good deal of modern road-making machinery in Cliina, particularly one make of British steam road roller, and there is likely to be a very considerable demand for high- way building materials and machinery in the course of the next few years. In connection with the above caravan road passing through Nan- kow Pass., it Sieems proper at this point to mention the GreatWali of Oiina. The Peking-Suiyuan Railway follows the same gorge as the caravan road,, and passes under the ridge of the West Hills only a few hundred feet from the gate^ where 'the caravan road passes through the wall. The wall in this vicinity is very substantially built, and although it is doubtless m,any years since repairs have been made, much of rt is still in surprisingly good condition. All tlie mortar aeeniB to have been pure 'time, with no .sand or other filler. COASTAL 'CARRIERS. With sneh. a laige population living along the soacoasts and navi- mble riversi tllere has natiir:al,.ly grown up a very extensive coastal Miipping business. A :niim,li« of these: companies have been very profitable. The principal ones are under the British, Japanese, Chinese, and French fl.ags.-~thia order representing their relative prew.ar importance. The carrying of Chinese products, as well as^ foreign goods, between treaty ports on the Chinese co.ast by sliips under the Hags of foreign nations is the only instance in the world m which such a considerable f-ercentage' of a large co,astwise traffic is carried in foreign botto.ms. n other countries this^ business is usually reservetl exclusively for the ships of the countrv. .In .ma.ny instances the foreign control of Chinese shipping facdities haa a very ,grea.t influence m causing the business, to go to the countries controlhng the shipping. W?1R AND' CANAL CARIIBKS. The many navigable rivers, par^ticularly the 'Yangtze, and the .great number of canals (many of them, small streams canalized) .have, ^ througjhout historic times, borne a large volume of tr.affic. The Chin.e.se junk, which is much tlie same t.o-day as it was centuries ago, seems capable of navigat,ing all kinds of wat.ercourses, from the high seas to canals through h,ighly cultivated areas where the junks sometimes present the appearance of moving through grain fields on wheels., A number of the sam,e strong companies that carry on the coastal shipping also liave fleets on the navigable rivers, par- ticularly the Yangt», and here again one finds the very unusual arrangement of foreign bottoms carrying native products as well as foreign goods on this inland waterway. In all other important countries aliens are excluded from such business. That these coastal and inland water carriers are real competitors for. business is shown by the low freight rates that the Shanghai-Nanking Railway has to frant to attract business between Shanghai and Chinkiancy and lanking. Without question, it would be to the great advantage of China m a whole, and in the end to the interest of most of the holders of the treaty loans, if all future construction of transportation facilities were carried out as part of a comprehensive scheme for the entire country; and in the planning of such a complete system careful consideration should be given to the fullest possible utilization of these waterways. Particular attention should be given to this matter in connection with the proposed construction of competinP"?f:»! «^ }^^ Kaiping coal field, now consolidated under the Kailan Mining Administration. Mr. Hsu's division seems i^l Te folio we?^ of the Chinese railway markets and will accord- PBBIOD PROM 1863 TO 1891. All authorities agree that the first railway proposed in China was a line from Shanghai to Soochow, the proposal taking the form of a petition under date of July 20, 1863, fiom 27 foreign firms to Li 36 RAILWAY MATKRIALS', EQUIPMEHT, AWD SUPPLIES. Hung ■Oifog, Aen, govern,or of Kiangs^u. The petition met with dec'itled clisai.>proval and the project was finally dropped. The next incident was a proposal for the construction of a com- preheii8iT(,» system* of railways thronghont China proper, prepared and presentecl to the Manclin Government in 1864 by Sir MacDonald Steptienson, a distingu.ished British engineer who liad for about 20 years been prominently connected witli'" the railwa}^ in India. The proposal w:as based on liis view that " a comprehensive system decided on at the outset — all lines to be made in conformity with it — would avert the evils of the English want of such a system, where in many cases double capital has been laid out to perform work which one expendit'ure could have adequately provided for, seriously prejudic km the shareholders on both lines, 'and depriving the pidblic of the full, economical advantage which under a sound, organised system would have obtained," There was then, as now, no room for (iifler- cnce of opinion as to the co:rrectness of his basis, though there might 'be some cpiestion as to the correctness of the locations 'oi Ms system. The facts probably arc that had his proposal been accepted and carried out, with Oliina retaining actual control, under the guidance of effective foreign direction (as '"in the case of the M'aritime Customs and, the hiter Salt Gabelle Administration), the progress of China as II whole would have 'been much enhanced, and the nation would not be' confronted with the unfortnnate com plica ti one, in the shape of railwav treaty loans, that now restrain its development. Sir MacDonald Stephenson, by virtue of his credentials and high professional standing, was accorded an attentive hearing, but liis proposals were never acted on by the Cyhinese authorities, whatever 'consideration they m.ay have had. ,, China thus faileil to derive iidvantage from, invaluable advice such as probably ,no other nation ever had at such an opportune time — proposals that would 'have 'benefited not on„ly the railway situation but the entire industrial development of the country. The first railway actually 'bu,ilt in, China w,as a line of 2-foot 6-inch fauge from Shanghai to W'oosung, ,a distance of more than 12 miles. Ms line was first proposed ,in 1865, but because of a series of delays ,it was not finally co,aipleted until December, 1876. There is con- ■iderable difference ''of „ 'opinion regarding the circumstances in con- nection with the construction of this line, but, whatever the ,facts are, the result was that the Ch:inese authorities p'urchased the rights of Jardine, Matheson & Co. and other interested parties and, on final payment of purchase m,oney on October 20, 1877, service was di,8- continued, the track was torn up, and the m,aterial and equip,ment were shipped to the island of Formosa, where apparently no use was m,ade of tuem,. The ,next incident was the building in 1878 of 7 miles of a. mule tramway in connection with the development of the Tangshan Col- liery. This was the begi,n,ning of the most successful railway built thus far in China. The primary object of this tramway was to trans- ort coal from these mines for the use of the China Merchants Steam Navigation Co., the director general of which was then a very able C'liinese named Tong Kin,g Sing, who has not been given duo credit lor his efforts in advancmg tlie industrial development of China. li Hung Chang was then viceroy of Chihli, and instead of opposing the project he lent his powerful influence in favor of it. Tong King CHIKA. 37 Sing ably forwarded the building of this line by his assistance and influence. Mr. R. R. Burnett (British) was chiel engineer, and early m the development Mr. C. W. Kinder (British) was made resident engineer. Mr. Burnett retired in 1882; Mr. Kinder then became chief engmeer and retained the position for many years, durino' the developments leading up to the present Peking-Mukden Railway system. It was, no doubt, largely because of his foresight and resourcefulness that this line was not built on a narrow gauge. He appreciated the vast importance of the wider gauge and to-day China has at least one factor in its railway development for which to be thank-ful, namely, the almost complete uniformity of gauge. This result is probably due, to a large extent, to Mr. Kinder's action on this initial Ime. Although this first line was clearly authorized as a mule tramway and the use of other motive power was prohibited, Mr. Kinder, recognizing that success meant the use of steam, made his plans from the first with that in view. The first locomotive was homemade and was known as ''The Rocket of China." In 1882 extensions were undertaken: the project then became known as the Kaiping Railway Co., and Mr. Wu Ting Fang was made general manager. While these developments met with much oppo- sition and many discouragements, one addition after another was made until, at the opening of the Chino-Japanese war in 1894, the line was completed and m operation between Tientsin and Shanhai- kwari, a distance of 174 miles, and an additional 40 miles northeast of the latter point was under construction and nearing completion Surveys had also been made for a distance of about 160 miles of a proposed extension to Kirin, the capital of the Province of Kirin, in central Manchuria, about 450 miles from Shanhaikwan. The results of the war and the ** Battle for Concessions" rendered impracticable such extensions under Chinese control. PERIOD FROM 1895 TO 1905, The second period might be divided into two parts. First, the con- test to secure railway concessions was one of the chief features of the Battle for Concessions" waged from the close of the Chino-Japanese war until the Boxer uprising in 1900. '^Spheres of influence^' were marked out and claimed during this time. The second part of this period was marked by the diverging interests of some of the powers during the Boxer uprising, particularly the efforts to secure control of the Peking-Mukden hne and the extension of this line into the Ir^'if f^l^ ""^ ^'^ ""'^I ""^ ^ti^^: ^^'^ ^^^s foUowed by what might be caUed the policy of consolidating these concessions. PERIOD FHOM 1906 TO IMl- bef^^eitr/rhfr'hi^ '^'^ ^^.^''^ ""^ ?^^^^^^^ i^ ^^^^' Detoie cittier the Chmo- Japanese or the Russo-Japanese war, this reahzation became much more potent after the latter war and has lesulted in a very ^general desire among all classes of Chinese to see the construction of railways carried out in all parts of the country. , lUe period be^^mnmg with the year 1906 may also be divided m^nf^r f^'^'-^T^' ^^'^^ \^^V^ ^'' Sheng Hsuan-huai's advance- ZTmM "" f *^^^^^TI ""^ ^¥ ^^i^istry of Communications in Janu- ary, 1911, and second, from that date to the present writrng.' During BAILWAY MATllIALS, .EQUIPME¥T, AND SUPPLIES. this first interval mEch interest was manifested by the provincial authorities, many efforts were made to raise money among the Chinese, and a number of concessions were granted to provmciaJ organizations to build lines, particularly in Hupeh and Honan. In general, however, these efforts did not accomplish any material results. The Board of Communications, which is now known as the Ministry of Communications, and will be so referred to hereafter, was creftted by Imperial Edict November 6, 1906, to control the rail- ways, posts, telegraphs, and telephones, Mr. Tsen Chun-hsuan, when president of the Ministry ot Communications in 1907, peti- tioned the Throne, recom,monding that China's railways be brought 'under unified management, but no action resulted. During tliis period the cen;tral Government was negotiatiner the Hukuang R.ail- way Loan (that is, the -.Loan of FourlTatioiis?' England, Gelmany. Prance, and the United States), but each Province was desirous of building its own railways, m many thought that in this way the several sections of China would secure the lajg© profits that were expected to accrue. Grand Councilor Chang Chih-tune formulated a scheme that at the time seemed likely to satisfy both the provincial authorities and the central Government^ — a plan that might hav© prevented the revolution and powihly saved tne Manchu D3masty — • but his death in October, 1909, left no one to conclude this settle- ment. It should be added that his plan, while it might have pre- vented or deferred some of China's trouble, would hardlj' have afforded an ultimately satisfactory solution of Chinese railway problems. The end of this first period found China's autiiorities much divided, with intense feeling between the central Government and the various provincial organizations, .and with the Powers press- ing their demands for the condusion of the Hukuang Railway Loan. DITILO'PM'INT IN KECINT YIAES. The second part of this period has witnessed one advance after another, so tlmt, notwithstanding the great political changes that have occurred during this time, Chuia to-day has on the whole a well- crystalized working arrangement for the nationalizing of ite rail- ways, particularly wh^en one considers the m.any difficult obstacles that nave had to be overcome and the discouragmg restrictions con- nected with some of the railway loans. Mr. Sheng was raised to the j>residency of the Mmistry of Communi- cations .in Janu.ary, 1911. .He was one of China's foremost men of CHINA* 39 s period. He .had had. extensive business and administrative expe- rience ; he was one of the lareest stockholders of the China Merchants St€^a.m Navigation Co. .and the Han-Yeh-Ping Iron and Steel Works, manager of the Clii.na Merchants Steam Navigation Co., the Pinghsi- ang colliery and .railway, the Tayeh iron. m,ines, and the Han-Yeh- Ping iron and steel plant, director of Government telegraphs, admin- istrator general of the .Pek,ing-Han.kow Rai.iway, and vice president of the 'Muiistry of Com.,niunications. Mr. Sheng was highly regarded bv both, the .Peking au.tho.rities and the Chinese gentry, and his .aDility was recognized by foreigners and natives alike. However, after .he had put through m.easures that went far to solve some of China's .railway difficulties, there arose a storm of objections from various sources, particularly from the Chinese gentry, resulting in the confusion of revolutionary occurrences in 1911. He was dismissed on October 26, 1911. was escorted by detachments from the legations to Tientsm, escaped to Tsingtau, and later went to Japan, where he died in 1916. His first actions early in 1911 were to negotiate loans for £2,000,000 and £500,000 and next to contract with the Four Nations banking group for £10,000,000. On the announcement of these loans, the people became much excited and the last loan was never actuallv floated. Mr. Sheng realized that China must have a settled and continued railway policy. He apparently decided that a strong centralized organization was the proper one to adopt. He then proceeded to carry out his conclusions, with the result to himself above men- tioned. With support of Prince Ching's cabinet he obtained the approval of the Throne, and on May 9, 1911, a most important Imperial Edict was issued, proclaiming in part as follows: After careful and repeated deliberations, the conclusion ie reached that the Nation must possess a complete system of trunk lines to and from the four quarters of ita JPTntory in order to ad minister the Government by a grasp on the central pivot . * * * Therefore, we desire to proclaim explicitly to the world that all the tnmk railway! shall he btate-oWned ; thia shall be the fixed policv. Trunk railways in the Provinces that were under private management by companies established before the third year of Hsuan Tung (1911) and that have been delayed in construction shall immediately be taken over by the Government as State-owned, and their building work shall be pushed on with energy. With the exception of the branch railways, which shall continually be allowed to be undertaken bv the people according to their abilitv all perimssion for trunk railways formerly granted shall be canceled . With regard totho details of the manner of taking them over, let the Ministers of Finance and of Com- munications and Posts gravely obey this decree and devote their whole attention to devising the fulfillment of it. Tins was followed by action to take over the Canton-Hankow and hzechwan-Hankow lines, then in the hands of organizations of the Chinese gentry for financmg and construction. This was very shortly followed by the announcement of the signing of the Hukuang KaiJway Loan. These actions caused much excitement, and vigorous protests were made, particularly against the settlements proposed in return for the expenditures made on the projects named above The Government, through Mr. Sheng as president of the Ministry of Lommunications, followed the nationalizing policy with firmness and showed no signs of changing the policy in the face of the impend- ing crisis. To support this action, troops were moved into the disturbed districts; this fmther excited the people, with the ultimate result that Szechwan passed from agitation to revolt, shortly followed by Hupeh and Hunan. The avowed revolutionists and cons titu- IK?!:' ?/^^^^lf grasped this as their long-awaited opportunity, and r&!%^" of the Manchu Dynasty and the establishment of the Unnese Kepubhc. The assertion that the revolution was caused by the policy to nationalize the railways and the concluding of the fi^^Zfi f ailway Loan is probably an overstatement of tie basic tacts but those certainly were the incidents over which the factions joined issue. It is interesting to note that the policy of nationaliza- K. 1 r ^^1''^'^ through to a measurable degree by the Repub- have &!^.n 'K^rf W '^ extremely doubtful whether this would nave been done had the Manchu Dynasty survived iinH n/i mTf^'^l^^ Provisional Government in power from the later i^ond illlftl ^^^^^1\^^ ^^}h ^^ P^^io^ between the First and oecoud Kevolutions, was to retam for the central Government aU M' BAILWAY MATEBIALS, EQl'lPMENT, AXD SUPPLIES. tli0 borrowing powers. This was strongly opposed by the provincial interests, as it was innng the former jieriocl, and was one of the principal causes precipitating the Second Revolution in July, 1913. .Diirmg this time. President Yuan Slii Kai empowered Dr. Sun Yat ben to organize a national corporation to finance and construct future raiwajs for the Chinese Government. This resulted in the organ- Ration of the "Chinese National Railway Corporation, with Dr. Sun m director general and Mr. George Bronson Rea, of the Far Eastern R-eview, as technical secretary, A system of railways approaching 10,000 miles in length and extending t^o all parts of the country was proposed to be financed and constriictef 1 on a 'program, of from 1 to 1 5 .years, wntemplating an expenditure of some '1500,000,000 (gold'). when Dr.. Sun was implicateii in the Second Revolution, President Yuan a.nnulled his powers as director general and dissolved the corpo- ration. One substantial result of this incident was the iieg<.tiating agreement , as rc|>rescnting the type of railway loan granting the m;08t favorable terms to Oiina, is referred to at*" farther along in this report, under the heading of "Railway ments.' agi'ee- Since the establishment of tlie Republic after the Second R.ovolu- tion, notwithstanding the lack of funds, the many changes in officials, and the discouraging restrictions of the railway loan agreements, very considerable further progress has been made in nationalizing the Chinese railways except the concessioned lines. At the present writing, nearly '3,7110 miles of line are, so far as the loan agreements will permit, under the control of the central Government t.hrou,eh the Ministry o'f Communications. This does not include two branch lines in Manchuria amounting to 130 miles, now practicaEy under Japanese^ management, although nominally Chinese Government lines. ^ There is also nearly 3,000 miles contracted for construction through loan agreement, and this will probably be added to in the course of time. This does not include a considerably lai'ger mileage proposed .and claimed as under agreement 'by several of tne Powers; while much of tliis will probably be built in the course of time, the agreements,^ no doubt, will be much mod,ified before the lines are undertaken. The objections of the Provinces have either been over- come or have disappeared to a large extent; they probably will not obstruct progress m the future, particularly if the needed railways are* 'built — ^wfiich seems to be the chief concern at present. During this period, however, on account of the lack of funas and other con- ditions, there has 'been a constant tendency to complicate matters bv making further loans on any available as^t, and this has been and is now a -constant handicap, hindering progress along the best lines. Some examples of these loans are those on the Nan-Shan (Kiangsi) Railway, the Pinghsiang colliery, the Tayeh iron min^es, and the Han- Yeh-Ping iron works of the 'Han-Yeh-Pmg Co., and 'the later instances of the long-time loan on the Kirin-Changchun Railway and the short- time loan on the Peking-Suiyuan Railway. Most of these loans are in foreign hands, and in some instances are held to the considerable disadvantage of China's future development. Regulations have been issued from time to time that have im- proved th© situation. Oae of the very credita'ble achievements has CHINA. 41 been the working out and adoption by all the Government lines of a very excellent system of uniform accounts, which will be referred to later. SPHERES OF INFLUENCE. ''Spheres of influence" or "spheres of interests," as they are called, were established as the result of the "Battle for Concessions." One of the principal objects sought was the granting of concessions for budding and opratmg railways. The United States has never made any claims lor a "sphere of influence" but has consistently contended for the maintenance of the "open door" for all, with opportunity for China to develop as a whole. The difficulties encountered by the Siems-Carey projects, and a further study of conditions prevailing in the country, will show the great obstacles in the way of China's developing a comprehensive system of its own railways, particularly if not carried out with exclu- sively Chinese capital. The history of the Tientsin-Pukow Railway— the northern part built with German capital, materials, and equipment and the southern part with British capital and different materials and equipment— is alone sufficient to demonstrate the character of existing conditions. The claimants for concessions have insisted on the right to fur- nish capital in their spheres of influence for any projects undertaken by the Chinese for which other than Chines© capital is used. Re- etrictions have varied all the way from the simple provision just mentioned to long-time leases for portions of territory, with conces- sions for the claimant nation to budd and operate railways, includin*» zones under the police and business control of the lessor; in some instances these concessions have carried the right to develop and operate other resources such as coal and iron mines, as is the case in Shantung and Manchuria. A number of Cliinese authorities claim that the principal cause for tlie Boxer uprising was the opposition to the granting of concessions during this period, particularly to the course followed by the Germans m Shantung and the Russians in Manchuria. There are grounds to support this belief. The Shantung man is the most vigorous of the tlimese people and at least the equal mentally of any of the others. A large number of these Shantung men yearly go to South Mandiuria. 1 tie people where th© uprising originated thus came in contact with tJie new railways and the rigorous handling of the natives which, It IS clauned, occurred m both, instances. Contrary to the opinion sometimes entertained, the knowledge of such conditions spreads with surprising rapidity among all classes of the Chinese. In this connection it was interesting to find that Cliinese newspaper are published m many parts of China, and many of these are quite as sensational as some of the extreme publications in Occidental countries. It is probably true that the two most strikmg occur- rences m recent Chinese history— the Boxer uprising and the fall of the Manchu Dynasty, followed by the establishment of the Republic of Chma—werc largely precipitated by the radway concessions and loans. BAILWAY MAP OF CHINA. Opposite this page is a map of the railways of China, showing tlieu* relation to other systems. This appeared in the Far Eastern IHi 42" KATLWAY MATERIALS, EQUIPMENT, AND SUPPLIES. Review for Februarv, 1919, and therefore presents a tlioroughly up-to-date view of the situation with respect to the lines actually in operation/ CLASSIFICATION OF IDOSTING UNES. The total railway mileage of all classes of lines in all parts of China at present is slightly more than 6,500 miles. This does not include street railways or tramways, which will be referred to later. These railways can'b© divided into two general classes — first, loan-built rail- WB^js owned or controlled by the Chinese; second, " concessioned " or foreign railways that have been built with foreign capital and are now subject to foreign control and operation. The CJhinese railways can again be divided into four groups, as follows: First, the Chinese Government railways, under the direc- tion of the Ministry of Communications; second, private (stock-owned) railways; third, provincial railways; and fourth, industrial railways, usually owned by the industries served. The foreign railways were all built for strategic or political reasons, and at the time of their construction their commercial utility was a matter of secondary importance. Both the South Manchuria and Shantung railways have assumed in recent years much importance commercially; this is also true of the Chinese Eastern Railway and will be increasingly so regardless of what the developments may be in Russia proper. Following is a tabulation of all the Chinese railways, following the above classification. This table shows the English name, the gener- ally used Chinese name, the miles of line, the gauee of the track, the source of th© capital, and the Provinces in which the railways are located. A special effort was made to include practically all the commercial railways in China. The mileage given in most cases was taken from the annual reports for the raUways themselves or from data obtained from the Ministry of Communications, but in a few instances the mileage shown has been approximated. At present 28 miles of Hne of 2-foot 5-inch gauge are being constructed in Yunnan to connect with the French Yunnan line at Pechechi, and a further extension of this line, for a distance of about 45 miles, is contemplated. This line is being built to develop tin mines at Kotcheou. _ OEOUP NO. 1: CHINESE GOVERNMENT RAILWAYS. Sagbiiii. umm «f railway. :P®MBg-Makdcn 'FiHiig-Siii'fiWii Ticntsin-Pulow Piklng-Hankow StoMi Taatow-CMiiRhua Kalteng-Hman Bhanghai-Naiiking . . Sliaoghai - Hangchow - Niiigpo. CMnese name of railway. Ching-Feig,- KiM-Sui Tsin-Fu Kin-Han Ch®ng-Tai Tao-CMng Plen- Lo and LuBg-Hai. Hu-Ning Hu-Hang-Yung... Miles oOlne. GOO mam 688 814 151 m Mi 203 178 Cauge. Ft. In. 4 8| 4 4 * ''if Meter. Ft. In. 4 81 4 4 Source ol capital. Anglo-Chinese Anglo-German.... Franco-British.... Franco-Belgian.... Anglo-Chinese Franco- Belgian.... Anglo-Chinese. Anglo-Chinese. rrovlnces in which railway is located. Chihli and Sheng- king. Chihli and Shansi. Chihli, Shantung. Ktangsu, and Anhwei. Chihli, Honan, and Hu[>eh. Chihli and Shansi. Honan. Honan and Kiang- su. Kiangsu. . Kiangsu and Ch©- kiang. I This man was inserted hy the Bureau of Foreign B.hea notes an inaccunwy with respect to the Omur .line but is conneoted witli it by a braucti. and Domestic Commerce. Trade Commissioner Kailway. Blagovyestchensk is not on the maiu v> u m u CI O CHINA. GROUP NO. 1: CHINESE GOVERNMENT RArLWAYS-Continned. 43 English name of railway. Canton-Hankow. Chinese name of railway. Miles of line. Canton-Samshui Canton-Kowloon Changchow-Amoy... . Kirm-( hangchun Ssupingkai-Chengchiatun Total Group 1. Yueh-Haa. Kwan?-Sam Chui-Kuang Chang-Hsia..... Chi-Chang. 269 30 89 20 Gauge. Ft. In. 4 8J 3,773 80 52 3,905 4 4 Si 8^ Source of capital. Four Nations (Hu kuang) Provinces in which railway is located. Chinese Kwant^tung. Anglo-Chinese Chinese Hupeh, Hunan, ^ and Kiangsu. 4 4 8i 8| Sino-Japanese. Japanese Kwangtung. Fukien. Klrin (Manchuria). Kirin (Manchuria). GROUP NO. 2: CHINESE PRIVATE (STOCK-OWNED) RAILWAYS. Sunning Kwangtung-Yueh-Han Railway Co. (Ltd.) Swatow-Chaochow Total Group 2. Hsin-Ning... Yueh-Han... Chao-Shan . fi7 140 27 234 Ft. In. 4 8i 4 SJ 4 8i Cliinese Chinese Sino-Japanese Kwangtung. Kwangtung. Kwangtung. GROUP NO. 3: CHINESE PROVINCIAL RAILWAYS. Kiangsi.. Tsitsihar. Nanking City Railway. Total Group 3..., Nan-Shan. Chao-Shan . 87 17 8 112 Ft. In. 4 S.J Meter. Ft. In. 4 8J Sino-Japanese Chinese.. Chinese. Kiangsu. Heilungkianf ( Manchuria). Kiangsu. GROUP NO. 4: CHINESE INDUSTRIAL RAILWAYS. Taveh 17 6 27 Ft. In. 2 4 81 4 SJ Sino-Japanese Anglo-Chinese Chinese Kailan Mining Adminis- Hupeh. Chihli. Shantung. tration. Tai-Tsao Tai-Tsao Total Group 4 50 1 GROUP NO. 5: "CONCESSIONED" (FOREIGN) RAILWAYS. Chinese Eastern Tung-Ching Nanmani 1,078 692 277 *287 22 Ft. In. 5 4 8J 4 Si Meter. 4 8i Russian JananRi^ South Manchuria KirinandHeilung- kiang (all in Man- churia). Shengking and Kirin (all x n Manchuria). Shantung. Yunnan Kwangtung. Shantung Yuiman Santo> (Chlao- Chi). Tien-Yueh Chiu-Kuang Sino Japanese Canton-Kowloon British .• Total Group 5 2,356 > Japanese names. « Does not include the 24S miles of tiiis line in French Indo-Chiaa. f 'lAttWAY MATERIALS, 1Q,U'IPMBHT, AND SUFPLIBS, a U JM.. JulJiL ll IT • CHIKA. HUKUANQ BAILWAY8. 45 miles of line. MIlei: of line of yarions gwigei. Omips. ,5 feet {Eussi,au). 4 feet 81 indi'OS (standard). 3 feet 3.37 Indies (meter). 2 feet. Group No. 1 : Chineaw: (I'Overttmenl railways Croiip No. 2: Chinese private railways, CJroiip No. 3: Cliiiiese proTtncIal railways,, , - . . G roup No. 4: Chinese Industrial railways Tola! dilnese railways, Groaps N as. 1 , 2, 3, and 4 , Croup No. 5: Foreipi rail irays. 3,,fMIJS 234 112 50 3,754 234 m 33 151 "if 17 4,,301 ,...,. 2,356 l,©78 4,116 Wl 168 287 17 Total all railways In, 'CWna 6,657 1,,078 5,107 455 17 GAUGIL This seems an opportune p,Iacc to call attention to tlie small amo'imt of ,railway of other than 4 feet Si inches gauge. The latter m,ay well he termed the standard gauge of China, p.articiilarly as regards the Chinese Government Railways. Only 168 m,iles out of a total of 4,251 miles of commercial railways (foreign and indus- trial railways not included)^ or only about 4 per cent, is of other than the standard gauge; th„,i,s 168 miles is all meter gauge, and most of it was huilt with the mistaken idea of building a cheap line. This fortunate result could hardly have been expected in -view of ■the fact that the lines were bui,rt by engineers of m,imy d,ifFerent ,Eationalities mad with different ,kijMl8 of materials ^and equipment. PIOPOBID NEW LINIS,, The writer's investigation did ,not contemplate ,aii attempt to analyze the j,)roposals for now ,Ene8, but it seems proper at „,this point to outline briefly the most important projects that are in course of construction or for which fai.rly definit*^ agi-eements have been made, Tfa,e most important of these .are the Flukuang Railways (Four Nations ,Loan) , the Pukow-Sinyang Railway (Chinese Central Rai,lway3, Ltd., Briti,sh),,, the Shasi-Shin^gyifu Railway (Pauling & Co., Ltd,., Bri,tish), and the Sietes-CJarey (American) projects, as well of the first four, and the last two will be referred to later in connec- tion with the existing lines. There are a great many other projects, but ,most of them have had oidy paper consideration or reconnois- sance at the m,ost. To give any considerable number of these even passing mention would take a .great am,ount of space and would be iiuidvisable for the rea,son that very few of these projects are likely to be carried out without first being considerably modified. The extensions of the Ki,rin-Changchun and the Ssupingkai-Chengchiatun lines will be ,menti,on,ed in connection with Manchuria and the South ,Manchu,ria Railway (Japanese), by which they are actually con- trolled, although nominally Chinese Government Railways. These proposed railways consist of two trunk Iineg™^ne between Oanton and Hankow and the other between Hankow and Chengtu. *he capital of the Province of Szechwan. J if £a^nton-Hankow line and branches total about 685 miles, of wHich 269 miles on the Hankow end is now practicaJly completed. Vn tHe south end 140 mdes is completed and is now beincr operated by a private company, but on the completion of the rest of'this trunk line It will be taken over by the Ministry of Communications This leaves about 250 miles to be finished. This is considered by far the most important raOway in China to be completed. It will connect the thickly populated part of South China with Peking and Hankow and the other parts of Central and North China. No tloubt, as soon as conditions warrant, steps will be taken to secure further loans for the completion of the work. The witer was informed that location surveys have been practically completed for the remaining parts of the line, and this should enable more accurate estimates to be made on the cost than has been the rule with many of the other Hnes. Ihe Hankow-Szechwan hne totals about 800 miles. No pai't of workZa wK^^^ very little effective constraction work lias yet been done, for the reason that the portion near Ichanff par% completed by the provincial authorities before the taking ove? to J^M^l iL f wf'^^^ i C«T^"^ii<^ations has been abandoned Ann^i!^fv r^^ ^^^^ ^^^^^'^^ be secured by the change of route. and^Sv^r^i^^*''^ ^ ''''^^ ""^ f^ ^"^^ Hukuang Loan Agr<^ement and several subsequent notes under date of March 1, 1913. March 3 inter'esTi^tfe'^^^^^^^^ 'f' ''"f- /his agreement may be of particul^ interest in the event of negotiations for further funds, in view of the fof thetiiildwl^f Jfio^^^ and American funds have been utilized tr«lJv .arniw^/^ f ? "^^ i ^^^ Canton-Hankow line now prac- tically completed and m view of the controversy that arose reffardin^ the awarding of some of the business in this connection. '^^*^'*"^ PUKOW-SINYANG BAILWAY. TTiis proposed line is to connect with the Tientsin-Pukow line at Wui, a short distance north of Pukow, using the latter line's Pukow termmds, and is to extend west about 350 nScs through the Propel of Anhwei and Honan, connecting with the Peking-Hankow Une^ Sinyangchow, about 135 miles north of Hankow .h„ ffnl^'t^''"'^.*^^*""''"* ^""^ ^^ ""e was "signed in 1899, but the final agreement was not actuaUy executed by the MinistiTr of bvX'Srr"" t" ^T^T'^'^'' }A\ Tt^ agreement wrs&ed by the Lhm^e CentraJ Railway (Ltd.) as a purely British under- taking providmg for the appointment of BritL engine"^ and the use ofBntish materials an/equipment, but it is claimed that a con! fiTandsTCn'lf «^ *^«,«?««^ «f the company Wpsed Zo ly.Lz^ t*^?^ *'^°* and Belgians, who will thus be entitled to their share of the profit of this enterprise. The terms of this agreement b^rna^'*%' "^ ^^, Tientsin-Pu^ow conditions referred tTlater as ta^.rJT'^^^ ^'■°™ ^^ ^'^^^ standpoint than the rXay ac^PoSTr^ ""^ ■ ^ ^^''^'T *° t'^'^t t™« The Tientsin-Pukow agreement is shown m Appendix 6. conmi^fewl^^ ^1°'"' ^\^° ^^"^ """"^ amortization was to hare commenced with the eleventh year from the date of the loan, Janu- MILWAY MATERIALS, EQUIPMENT, AND SUPPLIES. My 13, 1908, but on accoimt of the ddt^y occasioned by tbe war tins will hardlT apply. Yery little progress has been made in con- nection with the actual construction of thia line, but it is believed to be one of the projocte that will, be taken in hand as^ soon as funds can 'be secured mar the war. 8M'A8I-8:HIN<1YIFU RMLWAT. Thislne is to conn^ect Shasi on the Yangtze River in the Province of Hupeh, ftbout 200 miles above Hankow, with Shingyifu in the Province of Kweichow, a distance of about 655 miles. A branch is to connect Changtehfu on this line with Changsha, about 105 miles distant, where it would connect with the Canton-Hankow Railway. This loan iigreement was substituted, with little modification, for the Canton-ChingkunE agreement made by the Chinese National Railway Corporation, of which Dr. Sun Yat Sen was director general and Mr. George Bronson Rea technical secretary. This loan agreement ia with Pauling & Co. (Ltd.) (British), who are to carry out the con- struction on a b«is of cost plus a percentage for their services and proit. The Government, after the dissolution of the Chinese National Railway Cornoration, refused to recognisMj the validity of any agree- ment entered into by Dr. Sun, but realizing the advantage of thia form of agr^eement, it proceeded to negotiate another contract with the same firm for the construction of what is considered the more import^ant line from Shasi to Shingyifu. This last agreement was signed by the Ministry of Communications in July, 1914. The loan is to ran 40 years. There are many points in this arrangement that are considered to be of relatively great advantage to the Chinese Government as compared with any previous form of railway loan Hgreement. It is probable that the Ministry of Communications will contend, so far as practicable, for these general terms in all future agreements. A copy of thk agreement is. shown in Appendix No. 7. BIEMa.-CA,l«.Y 'PBOJECTS.. The Siems-Carey Co. is an American corporation that has entered the field in China in recent years and that has a preliminary agree- ment for financing and constructing several hundred miles of rail- ways for the Ministry of Communications. There are a number of lines for which surveys and field studies of the rout« are being made, and from these data estimates and conclusions are being arrived at regarding the cost and advisabihty of buUding the several Hnes under consideration. Under the circumstances, their construction is certainly very deeirable, but a most serious difficulty has been en- countered in the objections raised bj persons who assert that the rights of their concessions .are being mvaded. BMLWAY ACa:llBM..IEffn. RailwOT agreements in China can bo divided into two distinct classes—first, railwav concessions, which are really not agreements in a strict sense, and second, the class that can fairly be called rail- way loan agreements. It is well to understand that a railway loan in China is not the usual commercial transaction that it is in most other parts of the world, particularly in the United States or Canada, CHINA. 47 but is in fact apolitical i&sue between two or more nations of whirh China IS one of the. principals. canons, oi wnicti As stated previously it was thought that it would not be necessarv SaXon'railw^'"' ^i^f ^ Weements in prepari^ thl m"no^ Sndl fW^^^ ^^^"^' ^"* ^ brief study led to the conclusion that this would be a necessary or at least a votv desirable Lt'madf^^^^^^^ ^^^^^ conclusirsT^d su^^^^ SssTd and w^^H J !i Jl'^l^T^^ agreemente of China have leen aiscussed and wiitten about to a considerable extent, but this an- pears to have been done in most cases from eitherthe poh^^^^^^ the financial viewpoint, a, is very natural, since tLrwWframed so large y from those standpomts. The WiterV studT Wpv.^^^ :z^:L'rz:tf ^'^^^^^f ^^^ -gmTef ^onfSd wirh's construction, mamtenance, and operation of these line^ nnH thl Cthu'J'^T''^' ^q"'P°>«?t> aSd supplies to the bS ^dv^ntat dovobnmrt'n r„ffi"r ^^^ ^"'"'^ 4^""^"^ considered wLtKe and Z n1^1/i ®/ }.^tween the several railways and the grouping and consolidating of the management of the various linJ in thS Sr eraTr^""^ airai^ement. ^This should he permisSe .i^ce atSiran^^rrt S"!* *^^ '^^"-^^^''*^- of thtrl^^L^; anl^th^lt?^ ^^^ ""y'^T features of both classes of arrangements r^JL^b e"'eZdt?n: IfZ ^'"^ "^^ StL^gT 'ch"in*a Toft^^^ T^^* ^ o^taS^^tS^n^as^-ciinr ?Sbes°U^? of r£^ sUn^tion '^^u"^ """^ *° '"•'''•^ ^^t^'^^ «^P^ ^ the deSment OI tnis situation. However, copies have been added of thp TT„Wo„„ ttVlurZV£ Sie^^ /-<-rP-tationX'tt*reaZ™thaf which iS^'inte^nrfb^fflT'S^ *Theri^- "T ^ coDv of fhft <=lQiini,i,,i.*.; nu Y v "^^^'^-.^v, prcaent. Iheie is also a s^ndn J the &^/^f ^f |- '''^t"" ^"'^^^^ agreement, as repre- wUh tL liLrbTiL S^^ilf L M ""^^P*"^^- ?.g>-e«ment in connection will fn, JIT ^. .\ ■" Manchuria with Japanese loaa^ which Sfniri?LC;*Vsfe^-^' '^ *^''"**^' ^^ ^''' '^^ *^« ^^ nof eveSj ^MW T^^ ^?^°^ *" ^^^ nmnerous agreements- c r4;f thrift l^l^^i^^\£n^ IhlT/^'^'lr "nd apeemente with and c^ncemin' China coT eS^JwpTllr ? Ta M T '"'' ^ '^''' indusive:" und'er the legatSfn PeWn/ Tbt S'^'Y,'-^^'"*^/**^^ t^« American CHINESE EA8TEBN BAILWAT AaREEMBNT. firi^^i^f "*'''' -^ contains translations of document; relatinc' to fhn fii^t conc^ion (and one of the most important) for^d fro^ ChSl >i \\ ,IIA,ILWAY MATERIALS., EQUIPMENT, AND SUPPLIES. during tlie " Battle for ConcessioBs." 'The first document (seep. 274) B the agreement for the constraction and operation of the Chinese Eastern Railway from, Pojjanichnaya (Smfenho, Chinese name) on the eastern border to Manchuria (Manchouli) on the western border of Manchuria, now forming part of the ■Trans-Siberian route. The original of this agreement k in Chinese and French. The translation in the Appendix is from the French text and h the same as will appear in Mr. MacMurray's compilation. "Tlie text shown by Mr. Kent in his "Railway Enteri>rise'in China*' is a translation from the Chines^e. taken fiom Rockhill's "Treaties and conventions entered into by China between 1894 and 1901" Wliile these trans- lation.? differ in some details the substance is practically the same, but it is probable that the Fieoch text h the one that guided the R/iissians m their handling of this situation. The seconcT document i:n Appendix 2 (see p. 276) is a translation of the supplemental agi-ee- ment for the construction and operation of the South Manchurian Branch (then so-called) from Harbin to Port Arthur. This is the tianslation from, the Chineso text .as shown by Rockhill's "Treaties." The name of the Russo-Chinase Bank hw since been changed to the Russo-Asiatic Bank. The concluding section of Appendix 2 (s'ee p. 278) shows the "Stat- utes of the Chinese Eastern Railway Co./' which aie given in order to show the scope of the powers .granted to the i ailway company to develop and operate the reaourc« of this territory in addition to the construction and operation of a railway. Tliis text is taken from Kent's "liailway Enterprise in China." The writer was unid)le to identify the text from, which this translation was made, but in view of the accuracy of all of Mi . Kent's data, no doubt is entertained with respect to its correctness. ^ Reference to the taking over of the southern part of the Soutn Manchurian Branch (or wnat is now the South Manchuria Railway Co.'s line) from. Russia by Japan as a result of the Russo- Japan eao War and the extending of this concft«ion. to a total of 99 years will, be made later in connection with the South Manchuria Railway Co. FBK,I,NO-HAHKOW a,A,i;LWAY AOBBKMENT. Tn this ^ case it may b© considered that the arrangem,ent was first a ^ concision and at a later date wm changed to a loan agi-eement. The first section of Append,ix 3 (see p. 285) .is the translation from tho French text^ as shO'wn by Rockhill's "Treaties." The second section has to do with a 8upplem,entary loan,. This is a. translation from the French text as printed in Mr;. C. C. Wang's "R,ailway Loan ,Agi-ee- m,enis." The history of these negotiations is lo,ng and complicated but the outstanding points are as follows: The project was £T=it undertaken bj Grand Councilor Chang and Mi-. Sheng, both previously men- tioned, who endeavored to raise two-tliii-ds of the necessary capital among the Chinese. When this failed and when negotiations were in progress with the Carey-Washburn group of American interests, the Belgians appeared and their teims seemed so attractive that Director General Sheng proceeded to close on what, at tiiat tune, he regarded as the best ternas. Wlien the details came to be settled, however, many of the apparently good terms had to be modified. It is probable thai this is one o! the loans in which there will he CHINA. 49 tTS?lnnrf!l!n?n/ '^ ^^l^ ovcrcomiug all the res trie tion.s, • tlioug*! a good deal of progiess has ah-eady been made to that end. PEKmO-NEWCHWANG RAILWAY AGREEMENT. If V'af 7h^}tt ^^^ v-^l^*ir agreement of any magnitude negotiated. 1-nf n 1! L T '# 7^'^^ ^^^ Chinese gave all the actual management f9o}\' ^"""^ ""^ foreigners The fii^t section of Appendix 4 (see VJ}r!nArF ""• f^ P/^H^^^^ry agreement of June 7, 1898, and the second section is the final agreement of October 10 1898— both taken from Kent's -Railway Enterprise in China.'' tL Sreement ^nlhZiflTT}^^^^^^ & ^r^:^ ^ encroachi^ on Its sphere of influence m Southern Manchuria and constituting what the Russians called ''foreim control of the fine. " ^ men^fZTf^'lZT'^T if ^¥^^.^ ^^^ ^^^^^^ ^^^^h^^l ^'^^ agree- ment that the h tter shouklconfine its activities to Manchuria and territory north of the Great Wall and England to the YangtzrVallev w' wlr \^' "^t^" ^"1^^^^ ^^^^^ ^^^^^^^«ff and sfr Charles tec.S''''^T{^T*''*'' ^^'' agreement and the success of the Peking-Mukden Railway gave the British an opportunity, wh^ch CANTON-KOWLOON BAILWAT AOREEMEKT. n,.'!l!,j"w ft^ '° *''* ''''^"Se of conditions for railway loans was Ko?i^^Iw.^TT* ^°' '^' Chinese portion of tie CantoS! STd 2qfl^S ™ ^f /'gned March 7, 1907. Appendix 5 "TW-ani; " TnT^„VP^ ?^ ^^ agreement, as given in*Rockhill'a in recenTveaJ th^»«^'"'f ??■ °^ "'^''^'^^ \*^° a^eements in China in recent years the terms of this agreement have been referred tn «« typical of the conditions claimed ty British interests to c^titute the best arrangement for the constriction of railways 1^0^^^?*^ monejr raised on foreign loans. This agreement provide, that the administration and control of the fundi shall be under a Chinese XlltfdS'tKr"*'?'* 'y '^f viceroy and that ther^ shaU be tesociated with the managing director a British chief en<'ineer and a atinn^it'^ accountant nominated by the British & CwC Corpor! the effect oTCi?f ^^ *^' ^T^^" A^^^^ '^^^ ^^ ^een said aCt tlie ettects of thjs arrangement, but it has worked out to what mitrht be caUed a dual controf, with the British chief en^neer Tnd Britth chief accountant in techmcal control of the adminittration. HENT8lN-PnK0W BAILWAY AQKEEMENT. The next advance in the development of the loan conditions was Tht '.Tl^ "^ l^^ Tientsin-Pukow agreement Janu^y 13 190^ TArma"" T°^ r" r'^P-^ ^'^'^^ ^"^"i «« <-»!« "Tientsin-Pukow Sn wf f "f^ » dJstmct type of loan agreement. Appendix I terms^of thk foan tirl"" f "?? ^^ RocSnll's "TreatiS." The terms ol this loan were more to China's hking than the conditions of any loan made up to that time. It put in t£e hands of the Chinese director general control of funds derived from the loan The Britfsh 106229''— 19 4 H I i 'If' #*l oil lAItWA¥ MATEBIALS, EQITIPMENT, A¥D SUPPLIES. and German cMef eogio^eera are subordiQat© to the-maoagiii*' director on their respective sections. There is no provision for the'" appoint- ment of foreimi accountants, l>ii;t the agreement does properly give the loan syndicate the right to examine the accounts. It permits the purchase of materials and equipment on a better basis for China, which succeeded m obtaining those more favorable conditions by taking advantaffe of the competition for the securing of the loan. One particular leature^ of Ms loan is that the railway itself is not mortgaged m collateral security. Another important point is that, 111 case of default, the collection of the mortgaged revenue is to bo administered by the Chinese Maritime Customs. The last sliep in the improvement of Oiincse railway loan terms was achieved by the signi:ng of the Shasi-Shingyifu agreement, winch has become generally known as the Pauling ty|>e' of agreement. The firet section of Appendix, 7 (see' p. 312) is a copy of the final agreement, and the second^ section is a copy of a supplemental agreement. This tjjm of ^agreement is. considered as extending to China the most favorable terms of anv that has. yet been signed. Some of the important features are as follows: The work is to be constructed at cost plus a Dcrcentage for the services and profit of the contracting firm. The decision as to the location of the line, the preparation of plans ^and specifications,, and the supervision of the work of con- i: T 7 . "*»■• '■'^'^^ , "! ° •'«**"«**e; • J. a^«5 mi y wr is w cooperate wi i,,n a ftrm of foreign consulting engineers w^hose representative in Clnna ,1,8 to be a ,Bn,tish engineer, who during the co,nstruction period is to be called engmeer-in-chief of co,n3truct,ion. ,A fi,rm of foreign account- ants ,is to keep the accounts of the loan, subject to inspection by .accountants representing the Chinese managing director. Specifi- cations a,nd estimates of cost must be approved by the Chinese auth.orities befo,re the work of cOtat,ruction is proceeded with. The managing di,rector calls. ,f or and accepts, tenders, subject to the approval of the engineer-m-chief of co,nstruction. The agreement provides for the u.se of Cli,i,n:es© standards for ro.adway, track, bridges, and equip- ment, when such standards m.aj be adopted by the Cfiinese Govern- ment R.ailways, and also provicfes. for the 'Use of the unified system of C„..bin,.ese Railway accounts. The loans are secured on the ,railway and properties in connection theremith and .are also to be guaranteed by the Oiinese Government After completion the property is to continue under the direction of a Cliinese managing director and the engineer-in-cliief shall be a British subiect. , Thf apccments so far entered into by the Siems-C?arey Railway & Canal Co. (American) conform,, in general, to the above type of agreement. The types of .agrecmenis already mentioned am intended to show the general classification and the stop-by.-s.tep development of this situation m China. In addition, the Hiikuang agreement will now be referred to on account of the probabilitv of further loans beinc undertaken in this connection, particularly for the completion of the CHWA. Ox agreement for the builcli';;^,';ft£ Sni^^^^ ctun RXaXr/r^'*' '? ^l^T l^^P^ ofThe'Lt KiHn^anJ a tmnd^i nnL *v ''«•■««""««*' I'"* the writer was unable to obtam to prS "greement that he considered sufficiently reliable HUKUANO EAIIWAYS LOAN: of tKukuaif K«ilw»il"'*^^ * "^^y °^ *^« °"^°«^ English text oi me xiukuang Kailways loan agreement, as well as cnnio- nf ti,„ mZSauZTl^tS'^- r^'^'^'^''^'^ anfthe^^hl't frnv^^t W„„ ®*^V}P^°^ ^^^"^ ^^ occasioned considerable coii- toXt^J;:'S^ht A^xLlta^prtli^Xa^^^^^ ^T^T^t ^ Srfrof th^ra'raVf stu bT "S'v tenT ^''''^''^- ^'^1 guaxaaty that the JildniiU rn,aintreSni^;'^re1. " ^'^'"""^ of the S^ehwan-Hankow Raifwa^^ thf ^ericar^ ?h^ iX?/ Kweichowfu section of the Szechwan-Ha^o^line^o The Sni the section of the latter railway from Kweichowfn tA fT,Pnft,! n agreement aH the available British and iS^eS fun^ bf ™ K^ used m completing the constnipfinr. «i ti^v"! l • '^^^^. °^^ the Canton JankowRXrytoChanJha ^'*'^^'^^'«'» «««t>«n of SSUPIlfOKAI-CHENGCHIATUN KAILWAY AGllEEMBNT. metn£n frl%t^ F^fr f ^^^Ssupingkai-Chengchiatun agree- uieiii., taKen irom the b ar Eastern Review for Mav IQl 7 Thm ;JT translation from the Chinese text. It is Ttated ^i^L l',. .k •. ^^ be an excellent translation. '''' ^"""^ authority to co?vi£t*n^^^^^^ 1 the agreements mentioned wiU afford t^ouvincing prool of the need of action (such as i<4 latAi- aii««^.+ri w remove the restrictions that impede SiHrog^of c4Zf™i ^i and Its railways in particular. """ P™g^^ «« ^^una in general IV. CHINBSE GOVERNMENT RAILWAVS. Tb© taWe beginiiing on page 42 shom^ the existing railways that constitute the system known as the Chinese Government Railways, with a total of 3,900 miles of line. AM these railways are under the control of the Ministry of Comm,nnications except the last two, which are only nominally so; the actual control of these two branch lines is now to a great extent in the hands of the Japanese, and they prac- tically come under the administration of the South Manchuria Kail- way Go., which wil be referred to later in connection with the Japa- nese activities in Manchuria. From the standpoint of markets for American railway materials and equipment, tne CJhinese Government Railways and the new lines, extensions, and additions that wil be built in the future under the direction of the Ministry of Communications constitute a more important field than any other in the Far East, and accordingly they will be discussed at greater length than any of the o'l ©• railways covered by this^ report. Upon reference to the railway map facing page 42, it will be noticed that the lines included in the first subtotM (in the table on p. 53) radiate from Peking and Tientsin, connection being made at Nanking by ferry across the Yangtze River. It is .fuither apparent that, by the use of a ferry, the Canton-Hankow lino can be connected with the other parts of the system. There is one small line about 20 miles long — the Changchow-Amoy Railway — that has no connection with this system of raiways; the writer was unable to obtain reMable data reg.arding this line. The investment assets, construction costs, opera tin? results, inter- est chaises, and surplus earninp of these railways wOl first be con- sidered; then the status of the Ministry of Communications as regards its direction of the financing, construction, maintenance, and opera- tion of these railways will be taken up; and, finally, a brief account will be given of the special features of each line. These points, taken together, will form, the basis of the suggestions, and recommendations beginning on page 243 of this report. At this point it seems proper to state that, notwithstanding the restrictions of the railway loan agreements, the Chinese Government, through the medium of the Mimstry of Communications, has made steady and rather surprising progress in securing control and unify- ing tlie operation of tiiese railways. This has particularly been the caso since the middle of the year 191 1, and the conclusion seems war- raoted that this control wil be gradually extended as the railway loans are amortized in the course .of time. This situation should be given thorou|?h study by American manufacturers of railway mate- rials and ec|uipment in their efforts to secure the large amount of business that wil be awarded in the building of the new lines and the extensions and additions to the ejosting lines. '03 \jrX.XXXH £tLm 53 INVESTMENT ASSETS. The first of the following tables shows the total investment assets of the Chmese Government Railways, with the exception of the two branch lines (already mentioned) in Manchuria and the Changchow- Amoy hne in Fukien. The investment assets, according Ibo the Lhinese classification on the general balance sheet, include cost of road and equipment, cost of other physical property, and cost of nonphysical assets. INVESTMENT ASSETS AND INTEREST CHARGES OF THE CHINESE GOVERNMENT RAILWAYS. Nam© of railway. Peking-Mukden Pekinp-Suiyuan Tientsin-Pukow Peking-Hankow Cheng-Tai Taokow-Chinghua Kaifeng-Honan Bhangliai-Nanking Shanghai- Hangchow- Ning- po Date of data. Total invest- ment assets. Miles of line. Invest- ment assets per mile of line. Subtotal Chuehow-Pinghsiang Canton-Kowloon , Canton-Samshui , Total. 1916 1915 1916 1916 1915 1915 1915 1916 1916 1915 1915 1915 dollars. 60,467,577 25,649,763 99,803,208 100,298,991 23,559,212 70281,141 13,355,784 30,484,417 21,307,378 382,207,469 4,743,045 16,708,406 3,262,491 406,741,411 600 267 678 814 151 95 115 203 178 3,101 60 89 30 3,280 Mex. dollaTS. 100,779 98,067 147,202 121,217 156,021 76,614 116,137 150,170 119,704 For year 1916— Interest on funded debt. . 123,253 79,051 187,735 108,750 124,007 Mcx. dollars. 773,033 "4'776,"267' 2,320,917 65'1,741 380,000 697,464 1,318,358 643,369 Surplus of net income. 11,557,149 '*'*76i,'747" 12,253,896 Mex. dfdlars. 8,184,449 1,380,448 385,369 10,770,381 174,396 ""'22,'953' 491,444 DeOcit of net income. Mex. dailurs. 21,409,440 51,775 "*388,'i38" 21,849,353 1,048,085 20,801,268 261,076 261,078 "m',m 1,(M8,085 SUMMARY OP BALANCE SHEETS. Items. ASSETS OR DEBIT BAL- ANCES. Investment assets: Cost of road and equipment Cost of other assets... Total Working assets: stores Other working assets. Deferred debit items: Temporary adv ances to Government Other deferred debits Peking- Mukden. Peking- Suiyuan. Mex. dollars, 59,942,844 624,733 60,467,577 Mex. dolktrt. 25,557,601 92, 162 Tientsin- Peking- Pukow. Hankow. 25,649,763 Mex, dollars. 99,803,208 99,803,208 3,930,186 4,431,576 1,300,630 Total Accumulated deficit . Gcaad total.... 9,662,392 1,558,251 2,149,098 76,256 1,268,825 1,163,351 2,508,432 3,707,849 1,437,079 1,437,079 Mex. dollars. 97.807,196 2,491,795 Shanghai- Nanking. Mex. dollars. 30,484,417 Shanghai- Hang- chow- Ningpo. 100,298,991 2,357,966 1,830,534 856, 036 6,044,536 1,147,884 3,953,081 4,437,467 720,880 30,484,417 911,481 640, 444 49,752 Mex. dollars. 121,307,376 Total. Mex. dollars. 334,902,642 3,108,690 21,307,376338,011,332 I 9,111,428 73,837,318 29,595,274 1,147,884 5,793,878 111,789,506 10,112,914 10,112,914 119,523,333 1,601,677 188, 172 1,976,628 2,164,800 7,135,611 41, 386, .505 l,565,937j 12,794,907 493,7561 13,102,602 82,8951 4,173,544 2,142,588 30,071,053 1,958,914 1,958,914 1,031,339 1,746,423 18,782,517 20,528,940 13,960,828 26,440,217,402,572,153 5jl "4 RAILWAY MATERIALS, EQUIPMENT, ANB SUPPLIES. SIIXM1,KY O'P BALANCE SHBETS-ContitittwI,. Items. Pekfaf- Miikden. Pckfng- ,8uiyi:ian. Tiealain- Pukow. ■Peking- Hankow. filianghai- Nanking.. SbanghaE- eang- chow- Ningpo. Total. .U*BIU:iIl:S 0« CEEMT »ALA.MC'E:9. Capital liabiljttes: I%r m a nm t (i o v era - ■tnent i iix-est meots. . Otter capital liabili- ties..... Jfti. ioiivn. », 903;, 398 19,576,5M Mm. ioiiOTB. 23,562,»7 Ma. doUurs. 3, ,589, 350 i5,M9,974 Ma. Mtan. 40,369,,3Bi: SS,4M,.« Ma. ■dfdhn. ,3,, 672, 671 29,955,514 Mex, Mes. (folterff. dollar 9. 4,989,707100,086,739 18,405,015 221,637,703 TMal 43, m, 009;' 23, 562, 237 «, 839, 824 98,819,964 33,6M,185 23, 39t. 722 321, 724,441 W «! • * iW' «. in ■, fii iH i. Land. ....... .Formation •*•«. a «, a, «, .p, ,„ ^ Eolling ijtock. Maintcnante . . . . .... .DwItJi, and. wli»r?e« . . .. Flott,t.ing equipment. . . . Total, pwll....... Peking- Mukden. Met', doiims. 1.0,099 ti06 2,283 3,774 I'b', 0O8 295 .3,74 21., .tM 1,457 7,573 3, 752 ;2il,186 .263' '2M 219 ■peking- Kalgan. H|, '4llll .lift*. dollar s. 7, ,897' 564 3,804. 7,619 3,il}9 %U4 67 784 M-M m ■lifiitiiWIIlJ' am 7,3il 1,»7 159 27, SOS 1,.S01 Tientsin- Fukow. .Jftx tfollar<. 15|tt5' l.,094 5, ,520 o, J i *> 31,310 330 t,M 39,182 926 9, ,397 1,789) 'Tlf!iiii 1,6> ISO' I 3,749 978 Peklng- Uaiik.ow. Mit. iloite'i'S. 13,872 6* 4, 1& 7, .184 fm 17,35t't 0'5' 445 *J, 9.«4 929 6,867 830 SOS 1, 207 SO, 8,14 .2,323 Sli,an|!iiai- .Nai'ilcing. 87,1,89 ,125,790 99, W9 .JlSfi. ioIkir$, 11,760' 14,699 .10,254 1,847 331 515 35. »» '445 12,506 2,792 '632 ■2;i,9H8 f O'lf .1 205 I Stiangbai- obow- :po. Met. dnUoTi, 3,359 54 3, 1,30 1,:266 "'"6*«'4' 8 142 8,745 130 1,529 374 S, 018 All Chinese Cio V- ernment Rail- ways. Avoragu cost per juife. A3«I, '6*16' 28,, 4 19 Met. doflas s. 12,080 488 4,906 7,219 498 lOf 2.19 5581 • Is LOO 18. 8*»' 1.62 .44 .12 CHINA. 5'5 AVERAGE CONSTRUCTION COST PER MILE OF LINE, DISTRlBtTTED TO ACCOUNT'? OF SIX TYPICAL CHINESE GOVERNMENT HAILWAYS-Continued. Items. Peking- Mukden. n. FINANCIAL ACCOUNTS, _ ^ Mex. Ma. Interest during con- itmar$. dolUrs. struf tion. Exchan.ee i-"."'.*Cl.* .**!.' .'.'.' 14' Unclassified i Peking- Kalgan. Tientsin- Pukow. Total part II Total parts I and II. . ; Deduct recreipts on cap- ital account. Total cost of road and equipment. 96,406 96,406 14 87,203 Mex. dofJars. 20,161 7 3,174 Foking- irankow. 87,203 23,342 149, 132 11.082 Met. dollari. 15,076 Shanghai- Nanking. Mex. dollars. 15,451 909 3, 227 Shanghai- Hang- chow- N.iJigpo. 33,381 19,587 138,050 132,460 9,101 123,359 153,243 3,163 130,080 Mex. dollirs. -12,184 - 1.319 29,633 All Chinese Go V- ernmont Rail- ways, Average ■ p cost per ' ' *'' mile. Mex. d*>ilar». 10, 2.'»3 -' ' 177 7.196 cent. 16,130 17,272 44,549 44,549 115,847 110,467 98,575 It Will be noted that the information with regard to investment assets IS shown for different years. That for the year 1916 has been taken from the annual reports of the several lines. For the Peking- buiyuan Ime the figures have been taken from the 1915 annual re- port. The data for the other lines have been taken from the Ministry of Oommumcations consohdated report for the year 1915 This ^J^t^A^TJr ^*'"'>*° * considerable extent, approximated. baW« Tp«t« nf ^t P?"«*d^g tables is an analysis o'f the general anmX»T;^.^= TK^ ^"^^"^ ^""^ T^""^ *^^ ^t^' ^«« "^^e to obtain ^^^^} f^P^ r- ^^^? ^^ *" J*^'/^® y^"^ e'^ded December 31, 1916, except the Pekmg-Smyuan, which is for the year 1915. It is inter- ^.fniL .r^*^**' "^n"'' consideration is given to the accumukted S f .K ^^"»^« Government actually owns approximately one- Sw tif- *''*"•.' ^^"'Jy '?,**'® investment assete of these railways and that this equity is steadily growmg from year to year. CONSTHUcnON COSTS. The %ures shown above as investment assets really represent the atSh'/Z f/""* of the property, but the last of the above tables shows the average construction cost per mile of line (distributed to accounte) of lines that have been selected as typical, so ^ to enable ^^eT Kvu \'- r'^^- '^ri fifl'r'^ ^«^ fuinish^d by Mr treorge A Kyle, chief engineer of the Siems-Carey projects, and were fl^Hhl^ ^'"' •"" ^'^T''^ " ""^^'T '^^t™**^^ of costs of The raa^^ Stbnr ™ •contemplates building for the Ministry of Commun^ ;„ 2i.^^ ''T ««j<"=ted the Peking-M-ukden is the oldest, was built ^un?^T,f r«c "^^^^ *'^^", " ^^"7 P«>fit'^ble line, and runs through w^S? onlt tw^ftf 1^^' "f ^"^^ moderately rough, for railway building, Ztion thi W ?lf °M ''"y/»««ide'-''ble size. The Pekiig-Kalgan wa^Cilt Lf^Lf nu^ "^ Represent Peking-SuiyuanllaUwV, rfr fK„ w f #n y ^^°*®^ engineers. The point, about 25 mil^ over the West Hills, where the Tine passes under the Great Wall 100.00 do IMLWAY MATERIALS, EQUIPMENT, AHD SUPPLIES. is in a rough, broken mountain countiy, and a 3J per cent grade lias been used for the east slope. The Tientsin-Pukow is the British- German-built line, running through a somewhat more difficult country than the Peking-Mukden and with more expensive bridge construc- tion. The Peking-Hankow is the Franco-Belgian-built hne, and probably represents a very fair average of all the railways in China; it is rather interesting that in all respects the figures for this line are near the average for all the lines. The bridge on this line crossing the Yellow River is the longest bridge that has been built on any of the lines. The ifth line selected, the Shanghai-Nanking, runs through a densely settled country; the high cost of this line has been much criticized by the Chinese, but it is very substantially built, with rock- ballasted track and somewhat ornate stations. The sixth and last line selected is the Shanghai-Hangchow-Ningpo, which was largely built by Chinese engineers ; it was hnally taken over and is now oper- ated in connection with the Shanghai-Nanking. This line also runs through a densely populated country, and the conditions are quite comparable to those on the Shanghai-Nanking. This line was built at a lower cost per mile than any other line, but it is not so substan- tially built as the Shanghai-Nanking and the stations are more simple in design. ^ It is not the purpose of this report to discuss the merits of the difference-in-cost controversy, hut it is regarded as pertinent to refer at this point to photographs of some of the stations, as illustrating the different features of construction. Figure 3, facing this page shows the station at Tsinanfu on the German section of the Tientsin- Pukow line. Figure 4 sho^vs the Shantung Railway station, about 1,000 feet from the first station on an air hne but more than half a mile by road. Both, as shown by the illustrations, are very substan- tial and ornate buildings. Figure 5 shows the Peking-Mukden station at Tientsin, handling satisfactorily one of the largest volumes of passenger travel in China. Figure 6 shows the Chinese post office at Tientsin, a substantial and well-built structure, but not so ornate as the stations at Tsinanfu. Figure 7, facing page 64, shows a way sta- tion that is typical of those on the German section of the Tientsin- Pukow line and on the Shantung Railway, while figure 8 shows one of the neat and well-arranged way stations on the Peking-Kalgan line. Figure 9 shows the crossover bridge between "loops" at Tsinanfu, and figure 10 shows the crossover bridge at Tongshan, an equally important station on the Peking-Mukden Railway. One item of construction expense in China that has caused much comment in the past has been the removal of graves. Figure 1 1 shows one of these graveyards, which, it will be noted, is located in the mid- dle of a cultivated area. This is a typical illustration, and these small graveyards occur all over China, literally by the thousands. It is probable that the growing sentiment in favor of railways and the Gov- ernment regulations for buildifig new lines will greatly simplify this trouble in the future. OPERATING REVENUES. The following table shows the operating results for the same group of railways included in the first table on page 63. This covers operat- Speclal Agents Series No. 180. FIG. 3.— TSINANFU STATION ON THE GERMAN SECTION OF THE TIENTSIN- PUKOW RAILWAY. FIG. 4.— TSINANFU STATION ON THE SHANTUNG RAILWAY. i 1 INTENTIONAL SECOND EXPOSURE 56 RAILWAY MATERIALS, EQUIPMENT, AND SUPPLIES. is in a rough,, broken mountain country, and a 3|- per cent grade luis been used for the east slope. The Ti'entsin-Pukow is the British- (ictiiuin-l)uilt line, rniniing tlirougli a somewhat more difficult country than the Peking-Mukden and with more expensive bridge construc- tion. Tlie Peking-Hankow is tlie Franco-Belgian-built line, and ])robabIy represents a very fair average of all the railways in Cliina; it is ratiier interesting tliat in all respects the figures for "this line are near tlie average for all the lines. The bridge on this line crossing the Yellow Iviver is tlie longest bridge that has l>een built on any of the lines. The fifth line selected, the Shanghai-Nanking, runs tlu-ough a densely settled country; tlie high cost of tliis line lias been mucii criticized l»y the Chinese, ])ut it is very substantially built, with rock- ballasted track and somewhat ornate stations. The sixth and last line selected is the Shangiiai-Hangchow-Ningpo, which was largely built l)y Chinese engineers; it was tinallv taken over and is now oper- ated in connection with tlic Shanghai-Jsanking. Tliis line also runs througli a densely populated countr3^ and the conditions are cpiite comparable to tliose on tlie Sfianghai-Nanking. This line was built at a lower cost per mile tlian any otlier line, l)ut it is not so sul)stan- tiiilly })uilt as the Sliangliai-Nanking and the stations are more simple in design. It is not tlie purpose of tliis report to discuss the merits of the difi'erence-in-cost controversy, l)ut it is rc^garded as ])ertinent to refer Pukow line. Figure 4 shows tlie Sliantung Railway station, about 1,000 feet from tlie first station on an air line but more than half a oiile by road. Both, as shown by the illustrations, are very substan- tial and ornate buildings. Fimire 5 shows the PekinVl -Mukden station at Tientsin, handling satisfactorily one of the largest volumes of passenger travel in China. Figure 6 sho^ra the Chinese post office at Tientsin, a sul)stantial and well-built structure, but not so ornate as the stations at Tsinanfu. Figure 7, facing page 64, shows a way sta- tion that is typical of tliose on tlie German section of the Tieiitsin- Pukow line and on the Shantung Railway, wliilc figui-e 8 shows t)no an equally important station on the Peking-Mukden Railwa.}-. One item of construction expense in China that has caused much comment in the past has been the removal of graves. Figure 1 1 shows one of these graveyards, wliicli, it will be noted, is located in tlie mid- dle of a cultivated area. This is a typical illustration, and these small grave}' ards occur all over China, literally by tlie thousands. It is prol)al>le tliat the growing sentiment in favor of railways and tlie Gov- ernment regulations for buildiAg new lines will greatly simplify this trouble in the future. OPEEATING KEVENUES. of The following table shows the operating results for the same group railways included in the first table on page 53. This covers operat- Special Agents Series No. 180. iic-. 1 FIG. 3.— TSINANFU STATION ON THE GERMAN SECTION OF THE TIENTSIN- PUKOW RAILWAY. S I 1 III i FIG. 4.— TSINANFU STATION ON THE SHANTUNG RAILWAY. Special Agents Series No. 180. FIG. 5.— TIENTSIN STATION OF THE PEKING-MUKDEN RAILWAY. FIG. 6.— CHINESE POST OFFICE AT TIENTSIN. I I CHINA. 57 ill. I ing expenses and net results for operating only and is not intended to include any other figures: OPERATING RESULTS OF CHINESE GOVERNMENT RAILWAYS FOR YEARS ENDED DEC. 31, 1915 AND 1916. Name of railway. Operating revenues. operating expenses. Operating ratio. Net operating revenue 1915 1916 1915 1916 1915 1916 1915 1916 Peking-Mukden. . . Peking-Suiyuan. . . Tientsin-Pukow. . . Peking- Hankow . . . Cheng-Tai Met. dollars. 15,277,931 3,613,394 8,525,038 17,141,100 2,111,500 633,400 1,156,200 3,418,058 1,914,242 Mex. dollars. 14,809,724 3,895,780 10,188,976 20,466,622 2,184,027 834,945 1,286,794 3,818,270 1,798,504 Mex, dollars. 1 ,o7y, oyy 1,956,504 5,307,034 7,120,200 1,319,500 379,800 531,700 2,023,654 1,468,402 Mex. dollars. 5,953,576 2,317,139 5,121,879 7,027,542 1,290,367 380,717 668,290 1,904,016 1,444,826 49.6 («) 60.9 42.0 63.0 60.0 46.0 59.2 76.7 40.3 59.5 50.4 34.3 59.0 45.5 44.0 49.9 80.3 Mex. dollars. 7,698,332 1,656,890 3,218,004 10,020,900 792,000 253,600 624,500 1,394,404 445,840 Mex. dollars. 8,856,148 1,578,641 5,067,097 13,439,080 893,660 454,228 718,504 1,914,254 353,678 Taokow-CWnghua . Kaifeng-Honan (Pi- enlo) Shanghai-Nanking. Bh anghai-Hang- chow-Ningpo Subtotal Chuchow-Pingh- siang 53,790,863 (») 805,800 850,600 59,283,642 744,566 794,223 962,09! 27,686,393 (6) 804,500 480,000 26,008,352 690,123 829,663 487,435 5L3 (ft) 99.0 56.0 44.1 92.7 104.5 50.7 26,104,470 (*) 1,300 370,600 33,275,290 54,443 -35,440 474,656 Canton-Kowloon. . . Cauton-Samshui. . . Total 55,447,263 61,784,522 65,447,263 28,670,893 28,015,573 28,015,673 52.3 45.3 26,476,370 33,768,949 26,476,370 +6,337,259 -955,320 +7,292,579 a A part of the Kalgan-Suiyuan section was under construction during the year 1915. b Figures for 1915 not available. Name of railway. Total gross income. Peking-Mukden Tien tsm-Pukow Peking-Hankow Shanghai-Nanking Shanghai-Hongchow-Nin^o X UvCU«*a w •■••■•■••••••a 1915 1918 Total operating ex- penses. Mex. dollars. 15,42.5,999 8,556,346 17,237,012 3, 442, 596 2,072,400 46,734,353 Mex. dollars. 1 5,194,515 10,315,314 20,553,456 3,&37,845 1,875,488 51,776,616 1915 Mex. dollars. 7,579,599 5,307,034 7, 120, 173 2,023,654 1,468,402 23,498,832 1916 Mex. dollars. 5,95.3,576 5,121,879 7,027,542 1,904,016 1,444,826 21,451,839 Total net income. 1915 Mex. dollars. 7,846,400 3,249,312 10,116,839 1,418,942 603,998 23,235,491 1916 Mex. dollars. 9,240,939 5,193,435 13,525,914 1,933,829 430,660 30,324,777 Name of railway. Total fixed charges and taxes. 1915 Peking-Mukden Tientsin-Pukow Peking- Hankow Shanghai-Nanking Shaughai-Hangchow-Ningpo Total Mex. dollars. 2,437,962 5,976,695 4,047,267 1,906,154 909,464 1916 ■urplus or deficit. 1915 15,277,542 Mex. dollars. 3,351,690 4,987,533 4,774,001 1,442,386 691, 736 15,247,346 Mex. dollars. 5,408,438 -2,727,383 6,069,572 - 487,212 - 305,466 1916 7,957,949 Mxe. dollars. 5,889,249 205,902 8,751,913 491,443 -281,076 15,077,431 INTEREST CHARGES AND TAXES. The last three columns of the first table on page 53 show interest on funded debt and surplus or deficit of net income. These figures INTENTIONAL SECOND EXPOSURE CHINA. 57 Special Agents Series No. 180. FIG. 5.— TIENTSIN STATION OF THE PEKING-MUKDEN RAILWAY. FIG. 6.— CHINESE POST OFFICE AT TIENTSIN. ing expenses and net results for operating only and is not intended to include any other figures: OPERATING KESULTS OF CHINESE COVERNMENT RAILWAYS FOR YEARS ENDED DEC. 31, 1915 AND 1916. Name of railway. Operating revenues. Operating expenses. Operating ratio. Net operating revenue 1915 1916 1915 1916 1915 1916 1915 1916 Pcking-Miikden. . . I'cking-Suiyuan. . . Tientsin-Piikow. . . Peking-Hankow . . . Chcng-Tai Taok ow-Chinghua . Kaifeng-Honau (Pi- cnlo) Shan g] 1 ai- Nank ing. Shanghai Hang- chow-Ningpo Mex. dollars. 15,277,931 3,613,394 8,. 525, 038 17,141,100 2,111,5(X) 633,400 1,156,200 3,418,058 1,914,242 Mcx. dollars. 14,809,724 3,895,780 10,188,976 20,466,622 2,184,027 834,945 1,286,794 3,818,270 1,798,-504 Mex. dollars. 7,579,599 1,956,504 5,307,034 7,120,200 1,319,500 379,800 .531,700 2,023,654 1,468,402 Mex. dollars. 5,953,576 2,317,139 5,121,879 7,027,542 1,290,367 380, 717 568,290 1,904,016 1,444,826 49.6 («) 60.9 42.0 63.0 60.0 46.0 59.2 76.7 40.3 59. 5 ,50.4 34. 3 59. 45.5 44.0 49. S 80.3 3fex. dollars. 7,698,332 1,656, 89(: 3,218,004 10,020,9(X 792,000 253,600 624,500 1,394,404 445,840 Mcx. dollars. 8,858,148 1,578,641 5,067,097 13,439,080 893,660 454, 228 718,504 1,914,254 353,678 Subtotal Clnichow-Pingli- siang 53,790,863 (ft) 805,800 850,6(y3 59,283,642 744,566 794,223 962,09! 27,080,393 (ft) 804, .500 480,000 26,008,352 690,123 829,663 487,435 51.3 (ft) 99.0 56.0 44.1 92.7 104. 5 50.7 20,104,470 (ft) 1,300 370,600 33, 275, 290 54,413 -35,440 474,656 Canton-Kowloon. . . Canton-Samshui. . . Total 55,447,263 61,784,522 55,447,263 28,970,893 28,015,573 28,015,573 52.3 45.3 26,176,370 33,768.949 26,476,370 +6,337,259 -955,320 +7,292,579 a A part of the Kalgan-Suiyuan section was under construction during the vcar 1915. b Fifiirns fnr IQIK nnJ ii.v;iiln.hlo 6 Figures for 1915 not available Name of railway. Peking-Mukden Tientsin-Pukow Peking- Han kow Shanghal-Nanknig Bhanghai-Hangchow-Nmgpo . . Total Total gross income. 1915 Mex. dollars. 15,42.5,999 8,556,346 17,237,012 3,442,596 2,072,400 46,734,353 1916 3fex. dollars. 1 5,194,515 10,315,314 20,553,4.56 3,837,845 1,875,489 51,776,616 Total operating ex- penses. 1915 Mex. dollars. 7,579,599 5,307,034 7, 120, 173 2,023,651 1,468,402 23,498,832 1916 Mex. dollars. 5, 953, 576 5,121,879 7,027,542 1,904,016 1,444,828 21,451,839 Total net income. 1915 Mcx. dollars. 7,846,400 3,249,312 10,116,839 1,418,942 603,998 23,235,491 1916 Mcx. dollars. 9,240,939 5,193,435 13,525,914 1,933,829 430,660 30,324,777 Name of railway. Total fixed charges and taxes. 1915 Peking-Mukden Tien tsin-Pukow Pek i ng-IIankow Shanghai-Nanking Shanghai-Hangchow-Ningpo Total Mex. dollars. 2,437,962 5,976,695 4,047,267 1,906,154 909, 464 15, 277, 542 1916 Surplus or deficit. 1915 1916 Mcr. dollars. 3, .351, 690 4, 9S7, 533 4,774,001 1,442,386 691, 736 15,247,346 Mcx. dollars. 5,408,438 -2,727,3H3 6, 069, 572 - 487,212 - 305,466 Mxe. dollars. 5,889,219 205,902 8,751,913 491,443 -261,076 7,957,949 15,077,431 INTEREST CHARGES AND TAXES. The last three columns of the first table on page 53 show interest on funded debt and surplus or deficit of net income. These figures 68 BAILWAY MATEBIALS, EQUIPMENT, AMD SUPPLIES. CHIHA. I I show oiilj the interest on funded debt and do not include any aUow- ance on the permanent investments of the Chinese Government. IMS mtormation is mven to show the margin of safety that the thmese Government has m meeting the fixed expenses on this grouo of railways. It shouMJ>e realized, of course, that as loans are amoi-- tized tills margin of safety will be increased from year to year. SUKPLUS OK, BEPICIT. The Chinese Govemnient has a good margin of sur|>lus at the pres- fhtwT« *^®f ^^g ^b« i^^<5^«^s* charges on the funded debt, and tlie funded debt on the Hukuang Kailways, which for the present makes a considerable reduction; when these lines are completed teri;'- ?^ ^oummB not be long before thejr will be meeting ali fc^r "^^f^l^^'^^^^^ probably producW a surplus, ft is felt by the writer that the financial status of the Chinese Government JKaiiways 18 really much better than has been generally supposed. ItT il!r ^T^ "^ '^^^ coiinection that probably deserves explana^ iicm— tuat IS, the equity of the property added from surplus earn- ings; but the action of the Peking^Mukden bondholdera m a^eein*^ fl J# ^r'^tT^'n,^^, f^ Peking-Suiyuah road from surpluf earn- ingh of the FekiDg-Mufcden hne would seem to have disposed of this 2to7ernme'?t * ^'^"''*''^ ^""^'^^^^ ^ ^^ advantage of the Chinese OlGANKATIOIf AND ACTIVITIES OP MiNlSTIlf OP COMMUNICATIONS. :i»!¥EI.OPMENT ANB GBN1«AL FUNCTIONS. .Jt^i^'f^ ^i*"^ ^"^^^ the organization of a board for the central control of railways was an edict issued in 1898. Kent gives a trans- lation of a portion of this edict, as foUows: Railwaye and miees are nowadaye tlie moat important enterpmeo in thia Empire Fml; J.JX®*r^' however, appfelieMive, in view of the number of Provincefi in the Empire and tlie vanoiia conditiona of men wlio will attempt to open mines ofall aorta whi.i! w ^"i^' t** * ^^T'^^y ^^ '^^**^* *«*^ «™"i^ confusion mil be the reault which would, of coupe, be detrimental to the principal object we have of eettinTthe fnllest advMtageii obtainable ont of each and every undertaldng iS this dScfn It la therefore highly important that there shoGld be a ceXlbureaTto dWt under a aingle ayateni, the worMng and exploitation of LnTs aL Xay^ i^h^ Empire and we hereby command that a Bureau of Control for Kail wave MdTfinea be eatablMhed m Peking, to the two chief commiasioneXiB ofTidTwe^o^^^^ cCgTS^*' ™"'''" "^ "^ ^™^^-^^ ^*^™^'^' '^"^^' wCg wrxri ♦I. J^ir^^ *T ^.^^®^ commiaeionera ahall from henceforth have apecial control over the opemng of mines and construction of railwaya throughout the^mpire and com. I»Mea formed for the above purnoaee will in future be rlquiied to applTioX commMBioneri fof penniasion anf guidance in their operatfona. ^ This board went out of existence when the Tsung-li Yamen was criscontmucd. The next step was the estabhshment of the Board of ^' ommunications (Yu Chuan Pu, Chinese name) by the imperial edict of November 6, 1906, to control the systems of railways, posts telegraphs and telephones, and steam navigation. This name was changed to the Ministrv of Communications (Chiaotung Pu) after the establishment of the Republic, and the latter designation has been generally employed in this report. There is a president and vice president, with a staff for the direction of the several departments.. 59 The genera? administration of the departments of posts and tele- graphs and telephones is handled by the Ministry of Communications. The railway administration is in general along the following lines: The Chiaotung Pu (Ministry of Communications) is the contract- ing branch of the Chinese Government for the financing and con- struction of new railways and the extensions, additions, and better- ments to existing lines. ACCOUNTS. A Commission for the Unification of Kailwav Accounts and Statis- tics was created in 1913. Hon. K. C. Yih, then director-general of railways and now vice president of the Ministry of Communications, was and still is chairman; Dr. C. C. Wang, then associate director and now managing director of the Peking-Hankow Kailway, was and still is vice chairman; and Dr. Henr;^ C. Adams, of the United States, acted as adviser. The result of this commission has been the working out and adoption for use on all the Chinese Government Railways of an excellent system of unified accounts and statistics. The membership of the present standing committee is as follows: Chairman: Hon. Yih Kung-Chau, vice president, Ministry of Communications. Vice chairman: Dr. Wang Ching-chun, managing director Peking-Hankow Railway. Member: C S Liu, chief accountant, Ministry of Communications. Member: H. C. Chang, Ministry of Communications. Member: Y. C. Wang, Ministry of Conamunications, Member: S. F. Yih, Ministry of Communications. Afember: H. G. Yu, Ministry of Communications. Member: H. Y. Hu, Ministry of Communications. Jlember: C. K. Tsao, Ministry of Communications. Member: W. Henderson. Peking-Mukden Railway. Member: H. C. Lee, Feking-Suivuan Railway. Member: K. Y. Pao, Tientsin-Pukow Railway. Member: T. K. Tcheng, Peking-Hankow Railway. Member: B. Billion, Peking-Hankow Railway. Member: T. Cheu, Cheng-Tai Railway. Member: A. Louillet, Pienlo Railway. Member: Souen-Souen, Pienlo Railway. Member: C. P. Yin. Shanghai-Nanking Railway. Member: H. Middleton, Shanghai-Nanking Railway. Member: T. G, J. Brown, Canton-Hankow Railway. Member: C. L. Chen, Canton-Hankow Railway. The system of accounts is certainly one of the best, if not actually the best, that has ever been worked out in any country up to this time. It provides for classification of capital expenditures, operating revenue, operating expenses, income account, profit and loss account, and general balance sheet, and, in addition, provides a very excellent arrangement of a classified surplus appropriation account, which might be adopted to advantage in the American system of railway accounts, "^ In adopting the various features careful study was made of all the other systems of accounts in use, and, as the methods on the various railways m China represented nearly all known practices, full advan- tage was taken of the good points of each. In view of the beneficial results accruing from the work of this commission, the outlook would seem hopeful for unifying some of the other features of the Chinese railways as suggested later in this report. 60 :MILWAY M ATBIOALS, EQtJIPMEHT, AHD SUPPLIES. ' As a rale, purdiases^ar© mtde by the m.an„iigenients of tlie different railways, particularly in a number of cases wbere a certain procedure m required by tbe railwajrjoan agreement; but there bave been a number of instances in which certain purchases have been directed or consummated by the Ministry of Communications, and it appears that there is a decided tendency on the part of the Ministry to take over the handhng of certain classes of purchases. The purchases for the departments of posts and telegraplis and telephones are largely handled directly by the Ministry of Communications, and it is very likely that m the course of thne this practice will increase in connec- tion with the purchase of railway requirements, with the ultimate result that all purchases for all these departments will be handled by this central organization. Equipment for the joint use of a number of the lines (such, for instance, as freight care) m„ight be bought throueh an equipment trust certiOcate scheme, and this may be regarded as a probable future arrangement. Such negotiations wiU probably be handled by the Ministry of Communications. C30NSni»CTI0N Of NIW MNESL Tlie general direction of all new lines of railway is under the juris- diction of the Ministry of Communications. For the larger projects such as the Hukuang Railways, it is the rule to have a director general in charge of the entire set of projects and, in addition, a managing director m charee of the different railways, such as the Canton- Hankow line. He approval of locations, plans, and specifications and the inviting and acceptmg of tenders are supervised through the director general and the managing directors. "' RIGllUnON OP FAII18 AND lUVIS. There is, it may be said, no commorcial traffic department in the Chinese Government railways oi^anization. The conduct of trans- portation and the commercial arrangements both come under what (as on the Australian raiways) is called the traffic department. The shortage of freight equipment of all classes has been chronic on all the Imes for several years past, and the railways have moved what freight they could handle with the equipment they had, so tliere has been little occasion to have an organization for soliciting business. One result of this condition has been that there is very little interchange of business between the different lines, since each railway will not aUow its cars to get away onto the other lines although the per diem is usually U Mex. for a 20-ton car and a pro rata charge for cars of lai^er capacity. There are seldom through rates in effect between the different lines. In a number of mstances there are forwarding companies that take the shipments on the originating line, look after trans-shipments at junction points, and follow over the termmatmg line; but such companies, of course, have to make their profits and pay all the various kinds of expenses, 80 the combined cost is high-^-especially when there is any '^squeeze" prevailing, which is said ffequently to ne the case. , The Ministiy of Communications exercises veiy little actual direc- tion over the commercial traffic; instead, this comes almost entirely under Ihe direction of the management of the several railways, each CHIFA. 61 system issuing its own tariffs and traffic regulations, issued by the Ministry of Communications. No tariffs are PASSENGER FARES. First-class, second-class, and third-class fares prevail on all the lines, and on some lines, such as the Tientsin-Pukow, there is what m called a "coolie rate," which in effect is a workman's or laborer's rate. The fares on the Peking-Mukden and Tientsin-Pukow, which can be considered tvpical, are approximately as follows: First- class, 6 cents; seconcf class, 4 cents; third class, 2 cents; Tientsin- Pukow coolie rate, 1 cent. All these are Mexican cents. On the Peking-Suiyuan line the rates are 6.5 cents (Mex.), 4f cents, and 2J cents, but the passenger travel on this line is light as compared with that on the Peking-Mukden line. The Shanghai-Nanking fares, on account of water competition, are lower than those above men- tioned and are approximately as follows: First class, 4.25 cents (Mex.); second class, 2.35 cents; third class, 1.15 cents; coolie class, 0.75 cents. The percentage of first and second class travel is small, and the third class constitutes the bulk of the business on all the lines. The following table — an analysis of passenger service during 1916 — shows these percentages on the Pelking-Mukden and Tientsin-Pukow lines, which are considered typical. The total number of passengers carried on the Peking-Mukden was 3,671,2^4, from which the revenue was $6,215,460 Mex., and the Tientsin-Pukow carried 2,914,188, from which the revenue was $4,273,746 Mex. Class of service. Ordinary: First class Second class Third class coolie Government: Civil Military Privilege Excursion and season tickets. Excess fares Sleeper charges Baggage Postal Total Peking-Mukden. Number carried. Per cent. 1.73 2.20 90.83 .00 .19 .45 .08 Passenger miles. Revenue. Tientsin-Pukow. 100.00 Percent. 1.98 2.39 88.27 .00 .70 5.83 .74 .09 100.00 Percent. 5.57 4.42 78.28 .00 .38 3.65 .43 .10 .08 .32 2.50 2.45 Number Passenger carried. miles. Percent. .43 .63 60.72 32.41 (a) 5.33 .05 .43 100.00 Percent. 2.09 1.60 60 00 21.27 (a) 13.71 .26 1.07 100.00 Revenue. Per etnt. 6.72 3.44 64,76 lass («) 8.21 .17 .71 .m .81 3.12 o Less than one-half of 1 per cent. First-class passengers are usually allowed 150 pounds of baggage free, second class 100 pounds, an3 third class 80 pounds. Excess is charged at the rate of i cent (Mex.) per mile for each picul (133 J pounds). As a matter of fact, particularly in the case of third-class passengers, a very large amount of luggage is carried in the cars by the passengers. This tendency is accentuated by the fact that the registermg (checking) is attended with some trouble and risk of loss and the payment for lost baggage is rather small, amounting in no case to more than 150 Mex. for a piece of first-class baggage and less for the lower classes. On most lines, however, there is an 62 aULlTAY MATERIALS, EQUIPMENT, AKB SUPrLIES, trraiigement for msiiraace of baggage wlieo it is checked. TI10 allowable amouiit-s are from $50 to $200 Mex., and the premiimi ia at. the rate of 1 per cent. ^ Fgiire 25, facing pme 97, shows a typo of bam^ago truck used on tt'Mi 1: ekiEg-HaEkow Kailwaj, and the luggage shown is typical of the niiscellaneous materi,ala shipped as passengera' bagga4. nBGin* M;AT£». Agam taking the Peki:ng-Mukden as typicsl of the Chuiese Govem- iiicnt Railways, one finds the freight rates per mile and classifications .111 effect as shf)wn by the following table. This same table shows the rates m effect on the Peking-Siiiyoan line: B.sil«ay nd nnits of 'Wffgbt. KKIMiMlinCDlS EAILWAY, 'Per pic'til (l,33i potinds).,. . , Fer ton of .our-aicryiag mpad ty , f ■iwo-awrrwjiM .sailway. 'OUS. pictil ( 1 331 poands) Per loo (a, WO pounds) per miJe. , Jlkx. 0.ft» .073 ..§73 l.'''iU3wi X. wi«l3IS •. Ik am .osoo .00.W • "jwiil'iylW Ma, Mietn. a. '003.3 .0»0 .«M7 .W70 Class 3. Mex. iftllurs. 0.0025 .0175 .0320 Class 4. Ma. dtdiart,. 0.0023 .0300 Dangerous .and, offensi ire '-goods are included in the "dangerous" classi,faca.tion. Class 1 inckdfts the m,.ajo.ri.ty of merchandise. The Fetang-SuiyM,an classification tends to give actually .a lower rate for the reMon that there are .nio,re articles m the lower d[,asses. ' On the Peking-Mukden the .m.inimum hanl charged for is 3.5 miles, except m. some special cases, wlien this .13 reduced to 30 m..iles A demur.rage charge of 110 Mex. 'per day is made for a 20- ton car and cars of other capacit.ies are chargedMor pro rata for any time in exctw of 1 2 hours for unloading or ioacling. the .Peking-Sui Wan .rate 18 f§, .Mex., for a 20-ton car, with cars of other capacities pro rata Wo car-performance statistics arc avaOable for the Chinese Govern- ment Railw.ays, but it is quite obwous that they are getting full use of their equipment. It is stated t,hat the average fre:ight car com- ptetes a fni cycle of loading, niovement, and unloading every five days. "^ the roles regarding .fines that are effective on the Peking-Suiyuan Inie s«em sufficiently mteresthig to warrant the reprinthig of the -actual text of the.m: Rum 4,— The conripior must report to theetotioa master the e.xact weiglit in piruls .tiid the nti,m.ber ol pieces of retailed ,good,B, and if tliia is .falsely declared he will be inec| 5 tiiiies the ordinary freiglit on any excess weight witlim 10 piculs, 10' tiinea mi,th.i,ii, m piculs, .and 30 tim« when it is over 20 picuE, Rule 5.— Cars should be load,ed according to their tonnagC' capacity. A 10-ton car can J.>e loaded 1 picul over ite ca.rryiii.g capacity,, a 20-ton car 2 picula, and a 30-ton car i jMciJls. The co^Esignor will be fined 5 tiroes the ordinary freight on my excess weight up to 1 ton, 10 tim,e8 up to 2 ton.s, and 30 times when it is over 2 torn ^ licLE 6.^Sevent3r per cent of the fines charged on exceii weight found eitlier at intermediate or .receiving stations will belong to tlie station, and 30 per cent will be .awarded to the diacoverers:. On the other hand., if the man who weighed the goods at the stations purpowly gave t wrong weight, then them men and the ownere of the good,8 .mufit each, imj luilf the .ine, or they m^ be i>u.t under arrest if the caiae is Berioua, ^LJ JL.JL JL JL^ iCm9 Oii* OBGANIZATIOM OF CHINESE GOVERNMENT RAn.WAYS. As already stated, the Mmistry of Communications is oi^anized for the reorulation rather than for participation in the administration of the railways. At present there is a closer supervision of the accounts than of any other branch of the railway department, with a tendency toward extending the supervision or direction of purchases, which may, in the course of tims, be centrahzed in Peking so far as the loan agreements will permit this to be done. General regulations govern- ing the organization, grading of salaries, free travel, and similar matters are promulgated from time to time. The following is a translation from the Chinese text of the regula- tions promulgated August 31, 1916, covering the organization for the construction period and for maintenance and operation after the completion of construction. It represents, in general, the organiza- tion now in effect on all the principal railways coming under the direction of the Mmistry of Commimications. It should be under- stood that these regulations are in no way effective on any of the foreign railways. 1. Previous to the establishment of the official system the organization of Govern- ment railway offices shall be in accordance with these regulations. t. Administration offices and construction offices of Government railwayi shall be under the immediate control of the Ministry of Communications. The names of such offices and the lines under their control will be designated in the regulations governing the organization of those offices. 3. Railway administration offices shall have charge of the traffic, maintenance, business, and accounts of the whole line and of all other matters pertaining thereto. The extension of new lines and the addition of branch lines shall be carried out liy the administration offices concerned. 4. Railway administration offices shall establish the following departments for the management of the affairs listed in article 3: (1) General department, (2) traffic department, (3) engineering department, (4) locomotive department, and (5) accounts department. These departments may, according to special cwcumstances existing in a particular administration office, be combined, or the duties of a particular department may be attended to by an officer of another department. 5. Railway construction offices shall nave charge of the siu^ey, construction, estab- lishment, and accounts of the whole line and of all matters pertaining thereto. In case traffic is commenced on one section before the construction of the whole line is completed, the traffic business shall be managed by the construction office. Upon the completion of construction work the construction office shall be changed to an administration office. (>. Railway construction offices shall establish the following departments for the management of the affairs listed in article 5: (1) General department, (2) engineering department, and (3) accounts department. Construction work may be divided into sections and a construction department cieated. The proATsions given in paragraph 2 of article 4 may be applied to railway construc- tion offices. Upon the commencement of traffic on any one section a traffic department may l)e estaolished for the management of tliat business. 7. The officers of an administration office or a construction office shall be as follows: Director, assistant director, chief of construction department, chiefs of departments, chiefs of Bubdepartments, general officers, chiefs of sections, assistant chiefs of sections, station masters, assistant station masters, chiefs of train squads, chief engineer, engineers, engineering assistants. There are chiefs and assistant chiefs of sections in the traffic, engineering, and loco- motive departments. There are engineera and engineering assistants in the engineer- ing and locomotive departments. The officers listed in paragraph 1 may be appointed according to the individual re- quirements of the railway offices. Il4: lAILWAY MATERIALS., EQUIPMENT, AND SUPPLIES. » 8. The director of a railway shall be appointed by the Minister of Communications and iluill receive bis orderefrom the Minwter of Conmmnications regarding all matters concemiiig his itilway and shall have supervision of all subordinate oflficere under him. 9. The asilatiiit director of a railway shall be appointed by the Minister of Commu- nications tO' aniBt' the director in the 'management of affain,. 10. The chief engineer, chief of consitraction department, and chiefs of departments shall be appointed by the Minister of Communications and shall ol>ey the orders of their superior officers in the management of the affairs of their respective departments. 11. Chiefs of BUbdepurtnients, engineers, and chiefs of sections shall be appointed bv the Minister of Conunnnicationfl upon the recomm'en'dation of the director and shall ooey the orders of their superior officers in the performance of their respective duties. 12. Genenll officers, anistant chiefs of sections, station masters, assistant station masters, and engineering aiiiittants shall be appointed by the director, but all such appointments shall be reported to the Minister of Communications for record. 13. Kailway administration offices and railway construction offices, according t« the length of the line and the amount of busiu'ess,, shall be classified as first-class, second- ckfis, or third-cla.is officei. The grading of these offices and the number of officers in them m^ill 'be deined in a separate ta'ble. 14. Railway administration and construction offices may employ such clerks and wiiteni aS' niay^ be 'required. 15. K.Milations i^overning the appoinlaifint of officers of Government railway offices, their .grading, 'salaries, and the employment of clerks and writers, 'will be promulgated ee'parately. 16. Any provisionii in these regnlations that may be in conflict with mandates or agreements concerning Government railways may,, be considered as void in these speciiii: 'CSDeB* 17. These regulations shall take effect one month from the date of promulgation. The salaries of officers are governed by regulations issued by the Ministry of Commxinications. Station masters (station agents), as- sistant station masters, and chiefs of train squads (train conductors) are ranked as officials. The following is a translation from the Chinese text of the regulations now m effect on the Government railways, issued under date of October 20, 1916, and effective Novem- ber 1 of that year: 1. The salailefi of all officers of Government railways, except those engaged under contmctB, ahall be paid in accordance with these regulations. 2. The salaries of officers of Government railways shall be divided into 48 grades, in accordance with the form showing the grading o! monthly salaries. 3. Officers of Government railways are classified as follows: Officers of first-class offices shall be paid according to classification No. 1. Officers of second-ckss offices shall be paid according to classification No. 2. Officers of third-class offices shall be paid according to classification No. 3. 4. The grading of directora, aaeifltant direct*)rs, chief engineers, chiefs of construc- tion departmenta, chiefs of traffic, locomotive, engineering, and accounts departments shall be determined by the Minister of Communications. The grading of chiefs of subdepartmentB, engineers, and chiefs of sections shall be determined by the Minister of Communications on the recommendation of the director. The grading of general officers, assistant chiefs of sections, station masters, assistant station masters, chiefs of train squads, and en^eerin§ assistants shall be determined by the director, but shall be reported to the Minister of Communications for record. 6. In the grading of officers of Government railways the Minister of Communications or the directors shall consider the work of the officer, his cjualifications, his performance of duty, and the results attained in his work. Promotion above the twenty-seventh grade will not be made for service of less than one year, and below the twenty -seventh grade for lesa^ than, half a year's service. . „ The directors shall report to the Minister of Communications all promotions of officers unc'erthem. 6. Directors, assistant directors, chiefs of construction departments, and chief engi- neers may be given special allowances. The amounts shall be determined by the Minister of CommunicationB b«t shall not exceed hall a month's salary. 7. In the matter of traveling tllowances the directors shall follow the rules as fixed by the Ministry of Finance governing the traveling expenses of Government officials. 8. There shall be detailed regnktions governing the payment of salariei and deduc- tion of salary for absence. ©. These regulationi shall take effect from November 1. Special Agents Series No. 180. FIG. 7.— TYPICAL WAY STATION ON THE GERIVIAN-BUILT RAILWAYS IN CHINA. FIG. 8.— TYPICAL WAY STATION ON THE CHINESE-BUILT PEKING-SUIYUAN RAILWAY. INTENTIONAL SECOND EXPOSURE I -•J* •Ml 64 RAILWAY MATERIALS, EQUIPMENT, AND SUPPLIES. 8. The director of a railway sball be appointed l)y the ^rinister of Commimicationa and flhall receive his orders from the Minister of Communications regarding all matters concerning his railway and ehall have eupervision of all siil;ordinate officers under him. 9. The assistant director of a railway shall lie appointed by the Minister of Commu- nications to assist the director in the management of affairs. 10. The chief engineer, chief of construction department, and chiefs of departments shall be appointed by the Minister of Communications and shall obey the orders of their superior officers in the management of the affairs of their respective departments. 11. Chiefs of sulidepartments, engineers, and chiefs of sections shall be appointed Ity the Minister of Communications upon the recommendation of the director and shall obey the orders of their superior officers in the performance of their respective duties. 12. General officers, assistant chiefs of sections, station masters, assistant station masters, and engineering assistants shall be appointed by the director, but all such appointments shall he reported to the Minister of Communications for record. J3. Railway administration offices and railway construction offices, according to the length of the 'line and the amount of business, shall l>e classified as first-class, second- class, or third-class offices. The grading of these offices and the numlier of officers in them will be defined in a separate table. 14. Railway administration and construction offices may employ such clerks and ■writers as may be required. 15. Regulations governing the appointment of officers of Government railway offices, their grading, salaries, and the employment of clerks and writers, will be promulgated separately. 16. Any provisions in these regulations that may l)e in conflict Avith mandates or agreemen'ts concerning Government railways may be considered as void in these 8i>eciaJ cases. 17. These regulaticns shall take effect one month from the date of promulgation. Tlio salaries of ofHeers are governed by regulations issued by the inistry of Communieations. Station masters (station agents), as- sistant 'station masters, and chiefs of train squads (train conductors) are ranked as officials. The following is a translation from the Chinese text of the regulations now in effect on the Government railwaj's, issued under date of October 20, 1916, and effective Novem- ber 1 of that vear: 1. The salaries of all officers of Government railways, except those engaged under contracts, shall be paid in accordance with these regulations. 2. The salaries of officers of Government railways shall be divided into 48 grades, in accordance with the form showing the grading of monthly salaries. 3. Officers of Go\'ernment railways are classified as follows: Officers of first-class offices shall be paid according to cla&siti cation No. 1. Officers of second-class offices shall be paid according to classification No. 2. Officers of third-class oftices shall l)e paid according to classiii cation No. 3. 4. The grading of directors, assistant directors, chief engineers, chiefs of construc- tion departments, chiefs of trafiic, locomotive, engineering, and accounts departments shall be determined by the Minister of Communications. The grading of chiefs of sulidepartments, engineers, and chiefs of sections shall be determined by the Minister of Communications on the recommendation of the director. The grading of general officers, assistant chiefs of sections, station masters, assistant station masters, chiefs of train squads, and engineering assistants shall be determined by the director, but shall lie reported to the Minister of Communications for record. 5. Jn the grading of officers of Government railways the Minister of Communications or the directors shall consider the work of the officer, his cjualifications, his performance of diitv, and the results attained in his w^ork. Promotion above the twenty-seventh grafle will not be made for service of less than one year, and below the twenty-seventh grade for less than half a year's service. The directors shall report to the Minister of Communications all promotions of officers uiu^er them. , , . , t>. Directors, assistant directors, chiefs of construction departments, and chief engi- neers may be given special allowances. The amounts shall be determined by the Minister of Communications but shall not exceed half a month's salarj-. 7. In the matter of traveling allowances the directors shall follow the rules as fixed by the Ministry of Finance governing the traveling expenses of Government officials. '8. There shall be detailed regulations governing the payment of aalariea and deduc- tion of salary for absence. 9. These regulations shall take effect from November 1. Special Agents Series No. 180. *-r I FIG. 7.— TYPICAL WAY STATION ON THE GERMAN-BUILT RAILWAYS IN CHINA. I FIG. 8.— TYPICAL WAY STATION ON THE CHINESE-BUILT PEKING-SUI YUAN RAILWAY. if CHIN-A. 65 special Agents Series No. 180. The monthly salaries of officers of Government Railways are: FIG. 9.— OVERHEAD FOOTBRIDGE BETWEEN TRACKS AT TSINANFU ON THE TIENTSIN-PUKOW RAILWAY. FIG. 10.— OVERHEAD FOOTBRIDGE BETWEEN TRACKS AT TANGSHAN ON THE PEKING-MUKDEN RAILWAY. FIG. 11.— TYPICAL CHINESE GRAVEYARD AT TANGSHAN. Grade. Amount. Grade. Amount. Grade. Amoimt. Grade. Amount. 1 Mex. dollars. 800 750 700 650 600 550 500 475 450 425 400 380 13 Mex. dollars. 360 340 320 300 285 270 255 240 2?5 210 200 190 25 Mex. dollars. 180 170 160 150 140 130 120 110 100 95 90 85 37 Mex. dollars. m 2 14 26 38 75 3 . .. 15 27 39 70 4 16 28 40 65 5 17 29 41 60 6 18 30 42 55 7 19 31 43 fiO 8 20 32 44 ^. 45 ^. '45 9 21 33 40 10 - .. 22 34 46 35 11 23 35 47 30 12 24 35 48 25 The following table shows the classification of salaries on the Chinese Government R ailways : Employees. Directors Assistant directors Chiefs of construction departments Chiefs of departments Chiefs of suodepartments General officers Chiefs of sections Assistant chiefs of sections Station masters Assistant station masters Chiefs of train squads Chie f engineers Engineers Engineering assistants Classifica- Classifica- tion No. 1. tion No. 2. Grade. Grade. Ito 3 4 to 7 5 to 7 7 to 13 5 to 7 7 to 13 8 to 14 11 to 16 16 to 23 20 to 26 25 to 43 27 to 44 15 to 35 18 to 36 25 to 43 27 to 44 28 to 43 30 to 36 37 to 46 39 to 48 37 to 46 39 to 48 Ito 3 4 to 7 11 to 30 14 to 32 25 to 43 27 to 44 Classifica- tion No. 3. Grade. 7 to 12 13 to IS 13 to 18 16 to 20 23 to 28 29 to 45 20 to 37 29 to 45 33 to 48 39 to 48 39 to 48 7 to 12 16 to 33 29 to 45 Note.— Chiefs of shops in railways of the first class may be graded up to the eleventh grade, those in railways of the second class to the fifteenth grade, and those in railways of the third class to the ei^teenth grade. For each of the principal Chinese Government Railways the Min- istry has outlined a detailed administrative organization. The following is a translation from the Chinese text ot the regulations promulgated October 20, 1916, for the Peking-Mukden Railway. These are similar to the regulations issued for the other lines, such as the Tientsin-Pukow and Peking-Hankow: 1. The Peking-Mukden Railway administration office shall have charge of the railway line between Peking and Mukden and its branch lines. 2. The Peking-Mukden Railway administration shall have charge of such matters as are outlined in article 3 of the regulations governing the organization of Govern- ment railways. 3. The PeWMukden railway administration shall, in accordance with the pro- visions of article 4 of the regulations governing the organization of Government rail- ways, have the following departments: (1) General department, (2) traffic depart- ment, (3) engineering department, (4) locomotive department, and (5) accounts department. 4. The general department shall be divided into the following subdepartments for the distribution of work: The secretarial department shall have charge of all clerical work, files, confidential matters, the seal, the receipt and dispatch of correspondence, and the efficiency records of all employees of the railway. 106229"— 19 5 INTENTIONAL SECOND EXPOSURE CHINA. 65 Special Agents Series No. 180. Tlie montlily salaries of officers of Government Railways are: f .■■,•# FIG. 9.— OVERHEAD FOOTBRIDGE BETWEEN TRACKS AT TSINANFU ON THE TIENTSIN-PUKOW RAILWAY. 1 I FIG. 10.— OVERHEAD FOOTBRIDGE BETWEEN TRACKS AT TANGSHAN ON THE PEKING-MUKDEN RAILWAY. FIG. 11.— TYPICAL CHINESE GRAVEYARD AT TANGSHAN. Grade. Amount. Grade. Amount. Grade. 1 Amount. | Grade. Amount. 1 Mex. dollars. 800 750 7(M) 660 600 550 5(X) 475 450 425 400 380 1.? Mcx. dollars. 360 34!) 320 300 285 270 255 240 225 210 200 190 25 Mex. ': dollars. ISO 170 ■ ir.0 150 140 I 130 120 ! 110 ' 100 1 95 90 ; 85 I 37 38 30 Mex. dollars. 80 2 14 26 75 :* 15 27 70 4 16 2« 40 41 65 n 1 17 . .. 29 60 6 is: .:.. 30 42 55 7 ' 19 31 43 50 8 20.: 32 44 45 •) 21 33 45 :. 40 10 22 34 46 35 n 23 35 47 30 12 24 3G 48 25 1 i The following table shows the classification of salaries on the Chinese Government Railways: Employees. Classifica- tion No. 1. Classifica- tion No. 2. Classifica- tion No. 3. Dirottors Grade. Ito 3 5 to 7 5 to 7 8 to 14 16 to 23 25 to 43 15 to 35 25 to 43 28 to 43 37 to 4f. 37 to 46 Ito 3 11 to 30 25 to 43 Grade. 4 to 7 7 to 13 7 to 13 11 to 16 20 to 26 27 to 44 18 to 38 27 to 44 30 to 36 39 to 48 39 to 48 4 to 7 14 to 32 27 to 44 Grade. 7 to 12 Asf^istant directors 13 to 16 Chie f s of constmction departments 13 to 16 Chiefs of departments 16 to 20 Chiefs of su .)departmcnts 23 to 28 General officers 29 to 45 Chiefs of sections 20 to 37 Assistant chiefs of sections 29 to 45 Station masters 33 to 48 Assistant station masters 39 to 48 Chiefs of train squads 39 to 43 Chief engineers Engineers 7 to 12 16 to 33 Engineering assistants .' 29 to 45 Note.— Chiefs of shops in railways of the first class may be graded up to the eleventh grade, those in railways of the second class to the fifteenth grade, and those in railways of the third class to the eighteenth grade. For each of the principal Chinese Government Railways the Min- istry has outlined a detailed administrative organization. The folloAving is a translation from the Chinese text oi the reo:ulations promulgated October 20, 1916, for the Peking-Mukden Railway. These are similar to the regulations issued for the other lines, such as the Tientsin-Pukow and Peking-Hankow: 1. The Peking-Mukden Railway administration office shall have charge of the railway line between Peking and Mukden and its branch lines. 2. The Peking-Mukden Railway administration shall have charge of such matters as are outlined in article 3 of the regulations governing the organization of Govern- ment railways. 3. The Peking-Mukden railway administration shall, in accordance with the pro- visions of article 4 of the regulations governing the organization of Government rail- ways, have the following departments: (1) General department, (2) traffic depart- ment, (3) engineering department, (4) locomotive department, and (5) accounts department. 4. The general department shall be divided into the following subdepartments for the distribution of work: The secretarial department shall have charge of all clerical work, files, confidential matters, the seal, the receipt and dispatch of correspondence, and the efficiency records of all employees of the railway. 106229°— 19 5 66 MIIiWAY MATKKIALS', BQUIPMEHT, A¥D SUPPLIES. "i; CHINA. 67 /i The stores departmeEt ahal! have chaige of the piireliaee and digtribution of stores. 1 He tomalation department shall be reeponsible for oompiktions and translationg and^ all matters of negotiation with foreignere, ,T**^2J*'"*™?"'i^P^"*?"*.**^'-' ^^ chM^ of special transportation, improvement of tralic, and other regular bnaineai. The compilation department sliall have charge of atatiatica, reenlationa compilations and investigations. ■ ' The electrical department shall have charge of the telegraph and telephone systemi 01 tne jjiiiway* The police department shall be responsible for the policing and medical service of the railway. Thegeneal-affaire department shall 'have charge of all miscellaneous general mattera *°5i ?r ' ®' matters not under the chaige of other departments. The Hsinho Stores department shall be responsible for the care, receipt, issue, and niartang of materials. 4i,''-j^®v'^**^ department shall be divided into the following subdepartments for tne amriontion of work: The secretarial subdepartment sh^all have charge of the ilea, clerical work, and the efficiency records of the members of the department not under the control of any other depart.ment. The tnmsportation department shall have charge of the business of transportation. cats,, and water transportation. f^ ^ uu, The checking department shall have charge of the checking of mile««e and passenger ana .freight tickets. ^ *- © Tiiffic sectioM and siibiectioEa shall be responsible for all tmflic mattew in their leAective seetiona Stalipna shall 'he :rw!pon8ible for all matters in th6ir respective districts. J ®l^^f. enpneerinff department shall be divided into the following departments iJT the 'distrihotion of work: The secretarial department shall liave charge of the files, clerical work of the depart- ment, and the efficiency records of the members of the department not under the eoo^trol of any other' department. The construction depwrtment shall have charge of the planning, mappinir. and •3Cecntion of work and of all 'ttiaterials of construction and tacid. EMineering di\iBion8 and snbdiwiona ahai ho fesponaible for the engineering work IE 'their respective divisions. en The Shanhaikwan Iron WorbiioM shall be iresponsible for the making of all iron mm stieel machmery and parti' and for the 'repair of bridges. 7. The locomotive department shall be divided into the following subdepart- ■ments for the distnbution of work: Th« secretarial department shall have chaige of the files and clerical work of the Hiepaitnaent .and the .efficiency n!cord.8 of the mem.her8 of the depar'tment not under the control of any •other department... The works department shall have charge of the planning, mapping, and execution of work: and loconjotives. The Tangshan workahO'ps shii.Il be .resoonsib.le for the repair' and erection of cars, locomotoves, and machinery and the 'tiaming' of mechanicaf workmen. The Kaopantie branch workshops shall be responsible for the making, repair, and erection of cais^and .madiMiery. '^ _Locomotive sectioiis and subsections shall be responsible for all locomotive affairs within ^ their respective sections. 8. The accounts department shall be divided into the following subdepartments .for 'the diateibntion of work: The secretarial department shall have chiiig© of the files and clerical work of the department and the efficiency 'necords of the 'members of the department not under the control of any other department. The accountiM department shall have charge of the budgets and statements of accounts, the anditiiig of accounts, the transfer of funds, and account books. The caAier departneiit ahall be rwponsiWe for the receipt and disbursement of moneys of the railway. The checking department shall check all passenger and freight tickets and shall bo responahle for 'their prin'ting. 9. There ahai be one chief to each subdepartment provided for in these regulations. and one su'permtendent m charee of each workahop. *- ^^- T^fJ^tJe® and number of officera of the Peking-Mukden Ettlway administra- tion shall be .as Mated below. 11. Foreign employees of the Peking-Mukden Railway administration shall per- form such duties as are specified in their contracts. In case of a chanj^e or extension of contract, tho approval of the Minister of Communications must first be obtained. In case Chinese employees are engaged in fulfillment of conditions of agreementj with the approval of the Minister of Communications, where the positions are not provided in the regulations governing the organization of Government railways, such employees shall retain their old titles in the performance of their respective duties. 12. The detailed regulations for the ofl^ce, subdepartments, workshops, and police of the Peking-Mukden Railway administration shall be prepared by the director and submitted to the Minister of Communications for approval. 13. These regulations ahall take effect from the date of promulgation. The list of titles and number of officers in the Peking-Mukden Bailwaj administration are as follows: Director, 1; assistant direc- tor, 1; chiefs of departments, not more than 5; superintendents of workshops, 4; chiefs of subdepartments, not more than 19; general officers, not more than 100; chiefs of sections, 1 for each section; chiefs of subsections, 1 for each subsection; station masters, 1 for each station; assistant station masters, not more than 60; chiefs of train squads, not more than 70; chief engineer, 1; engineers, not more than 9; eDgineering assistants, not more than 16. It will be noticed from the aboTe that this organization is typical of the so-called departmental organization, or what the writer termed the "branch '^ organization in his Australasian report (Special Agents Series No. 156). This remark will apply also to the Japanese Imperial Eailways and the South Manchuria Kailway Co. in South Manchuria and Chosen (Korea). Plll€HASE OP STORES BY RAILWAYS. In each instance the purchase, care, and distribution of stores are handled by a subbranch of the general department and, as a rale, this subbranch is a part of or directly connected with the financial subbranch. On account of the great distance from the source of supply, it is a matter of ^eat importance to carry such stores as will actually be needed, particularly m emergencies, and at the same time not have an unwarranted amount of money tied up in a supply of parts that may become obsolete in the course of time. The considerations with respect to stores constitute one of the very potent influences tendin(r toward the longer life of equipment that prevails in all the Far Eastern countries. The much more complex method of payment for stores, with all the involved questions of exchange, is alone suffi- cient reason for requiring the stores^branch to be closely supervised by the financial branch. There is a growing practice of advertising for tenders covering rMuirements by the various lines, and the following are typical of advertisements that are now frequently appearing in the Peking, Shanghai, Tientsin, and Hankow papers: KiN-HAjf Railway Invites Tkndbrs for Supply of Steel Bbibges amd Miscbii- LANEOU8 Materials. Janu Jrjvms'™' ^^ ^^^^ °* ^ "'*°'^ '*^ ^*^^ '^"^^es to be opened oo the 5th of op|ie^d SuZ^Jst oM^^^^ °^"'"""'^ ^'' "'^^^"^^ ^""^"^ "^ ^ ^hZ^o^}noZf^^''''lL^^^^ ^'p^^^ Kin-Han RaUway (Technical Secretariat), mar be oS^^ '''' ^^^ ^^\ ""^ November, plans, drawings, and g)ecificationa BMLWAY MATERIALS, EQ:UIPMENT, AND SUPPLIES. Turn 'TiiMTBiN-PuKow Railway .Admiuistratioii. Notiication No'. 2'65. Imtitatio^ or Tekbehs (138/2). Tbc public ii: hereby notified lhiit'teiKier» are invited for the mipply to Ma railway of the followinf qtiantities of eleepein, bridge tiee and crowing timbers, \dz: One hundred and wvenly thonaiind pieces of first-clase Japanese oak or other hard- wood of similar quality railway sleepera to be delivered, cost, insurance, and freieht, mdudinf custtftti duty and war risk, at our Ghentwigchuang wharf. Three hundred and seventy-nine pieces of firet-class Japanese oak or hailin or Oregon pme or other hardwood of similar quality crossing timbers to be delivered: cost, insurance, and freight, including customs duty and war risk, at our Ghentang- chuang wharf. Thirty thousand pieces of first-claas Japanese oak or other hardwood of similar quality railway sleepers to be delivered, cost, insurance, and freight, including cuitoma duty and war risk, at our Pukow wharf. ' ^ One thouamd five hundred pieces of first-class Japanese oak or other hardwood of similar quality bridge ties to be delivered, coat, insurance, and freight, including customs duty and war risk, at our Pukow wharf. One thousand two hiuidred pieces of first-class Japanese oak or hailin or Oregon pine or other hardwood of similar quality cwesing timbers to be delivered, 'SmL inwtrance, and freight, including customs duty and war risk, at our Pukow wharf. Tender forms attached with specifications and full particulara may be obtained free of charge on application to the head ofiice of the railway, Tientsin, Hopei. TendeiB must be signed, sealed, and marked ** tender for the supply of sleepers. bridge ties, and crossing timbens" and addressed to the managing director, Tientsin- Pukow Railway Administration, Tientaiu. The same must reach the above address on or before 12 o'clock, noon, of the 12th day of November, 1917, and will be opened at 3 o'clock m the afternoon of the same dav. The (wder or orders for the goods wiU be given to the tendering firm or firms, whose tmders: have been .accepted, not later than the 26th of November, 1917, during which tiiiie and including which date the prices of all tenders must hold good. Mo teDden will bo entertaiiied. ualeae presented within the time given and made on, the fomia 'supplied by this^ railway. The managing director does not bind himself to accept the lowest or any of the lenders aud reserves the right of pkcing the order in lota. (S%ned) 8. C. Shu, _ Mrnmgmgmedor, _ . , « , *^ TimtMTh-Pttkow MaUwtm Atbmnistmtwn, TllNTSiN, tsm Ocioher, 1917. It will be noticed from the Peking-Hftukow (Kin-Han) advertise- inent that there is a charge for the specificationa and plans. Such II clifirgB is th0 genera! practice of all the lines, but as a rule specifica- tions are fumished without charge to the established concerns from which It is desired to secure bids. The second item of the Peking- Hankow invitation represents the first instance in wMch invitations have been issued for tenders covering miscellaneous merchandise supplies. It is probable, however, that annual or-even two or three year contracts for miscellaneous merchandise supplies will become the rule on the Oiinese Government Railways. This practice prevails on the Australian State Kailways, and there seems to be a decided ten- dency for government owned and operated railways to buy their miscellaneous merchandise requirements, so far as practicable, by this method of purchase. The bridges wanted by the Peking-Hankow line are to replace the considerable number of bridges lost during the unusual fioods in the summer of 1917, OPERATING MEfHODS. Tie svstem of train-movement control is the "station-master method' of operation, its the writer termed the arrangement em- CHINA. 69 ''viI^IIBH^Vp' ployed on Australian railways. The practice of putting in the hands of the station master the responsibility for the movement of all traffic is even more pronounced in China than in Australia. It may be said to represent the adaptation of the British and Continental methods to the situation in China, where there are many factors in labor and class conditions that justify such an arrangement. In fact, it would probably be impossible to use successfully the American dispatching methods with the train crews carrying out such orders without other direction. All employees of the Cliinese Government Eailways are Chinese, except for a lew salaried official positions that are filled by foreigners, usually serving under definite contracts. Educated Chinese are employed to fill many of the salaried official positions, but the less important employees, in station, train staff, and similar service, have been recruited from the less-educated classes, and they require educa- tion and training to make them capable railway servants. Therefore the "station-master method" of operation seems without question to be the most desirable practice for railways in the Far East, and it is the method in general use. There is no doubt that this method requires more men and is less expeditious than the methods in vogue in the United States, particularly in the running of passenger trains, but this is not a serious handicap. SIGNALING. The government of train movements is usually by block control. Some kmd of staff is generally in use on single-track lines and a very large percentage of all the mileage is single track. All stations where trains may meet or pass are provided with '"'station loops," which are really very short stretches of double track. Separate station platforms are provided for the passenger traffic in each direction. At the more important stations, particularly at junction stations, the main- track switches are interlocked; at other stations interlocking of various degrees of completeness is provided; while at some stations — in fact, in a large number of instances — only hand-thrown switches, locks, and signals are pirovided. In all cases the direction of the han- dling of this apparatus is imder the jurisdiction of the station master. The method of signaling is usually in accordance with the practices of the country that has provided the loan funds for building the line, but in the mam, the general practice can be said to conform approxi- mately to the British Board of Trade practice. In view of the ex- gerience in Australia, it would seem, if the Chinese Government Railways should be able to make their practice uniform in the next few years, that it would be wise for them to adopt the American three-position, thi-ee-speed system of signaling. It is also probable that the arrangement of selective telephones with central control, as mstalled on the New South Wales Railways, could be adopted with M^u J **^^^.^^*^*^g® on some of the lines, such as portions of the Peking- Mukden line, where the traffic is growing to such an extent as to require increased capacity of the present single track. Ihe signaling practice, as already stated, conforms to the practice 01 the country furnishing the loan funds, but the signaling as a rule is very simple, and approaches closely the British Board of Trade prac- tice. J?igures 17 and 18, facing page 76, show typical instaUations, n BAILWAY MATERIAL, BQIFIPMEXT, A¥D SUPPLIES. and are good ©xamples of tE© two airais placed horizontaUy on sepa- rate dolls instead of vertically on one mast, ,as is the American prac- tice. It would he of most decided advantage if all tlie Chinese raU- ways were to adopt at once the American practice instead of doing so later (m they probably will) at a considerable cost. It will bo noticed m.^both the dlustrations mentioned above that the signal arms point to the left, because. aE the roads in China run left-handed. The block-working apparatus is largely of British manufacture. CONSTEUCTION AND MAINTENANCE METHODS. All the pr©»nt railways have been built almost entirely by hand labor, chiely on account of the large supply of cheap and industrious labor in all parts of China. This applies even to the breaking of rock ballast, which has been done bj hand. Bridge masonry, buildings, *****'^^J^ P^^^-^^w^s, and much similar work has been contracted for with Chinese subcontractore, and in some instances this procedure lias been followed in the case of earth and rock grading work (called m CMna "formation"). With the supply of good cement, stone, and cshieap jabor, and m mew of the scarcity and high price of lumber, there is a .growing tendency to use concrete in every way possible, particularly as mmi Chinese laborers seem' to make as good concrete workers, as stonem,asons. The maintenance methods and tools are much the same on the ieveral railways. The following data furnished bv A. C. Clear, engineer in chief and general manager of the Shanghai-Nanking and the bhanghai-Hangchow-Ningpo Railways, and m. Ivon Tuxford, maintenance engineer of the same line, are fairiy typical of all the lines, but the methods are probably worked out iii more complete detaii than is the case on some of the other lines. On this system the engineer in chief is in general charge of roadways, bridges, buildings, etc., tlM work being under the direct charge of a maintenance engineer, mith district engmeera in charge of districts. The district engineers have assistant engineers, usually in charge of about 100 miles of line, and, for the dwect admiiustration of the work, these assistant engineers have inspectors, who do not have more than 70 miles of line. The mspectoi-s' territory is divided into sections of about 15 miles, and these again are divided into subsections, usuallv of 5 miles. There is a section foreman for each of the 15-mile sections, a gang for each 5-mile subsection, and a flying (extra) gang for each 20 miles of line. The regular gangs for the 5-m,ile subsections consist of 1 ganger (foreman), 2 leadmg coolies, 10 coolies, and 1 cook, and the flying gangs consist of 1 ganger, 10 coolies, and 1 cook. Permanent ^ans:- houses, consisting of three rooms and a kitchen, are provided for the regular gangs. The flying gangs, being constantly on the move, receive m Mex. per month for house rent. The followmg are the rates of pay for tlio above gangs; they are approximately the same as are paid in other parts of CMiia for men of equal Qualifications: Section foreman, $25 Mex. to |35 Mex. per ' month. Subsection gangs— Ganger (foreman), $15 Mex. to $20 Mexrper nionth; leading coolies, 110.50 Mex. ; coolies, $8 Mex. : cooks. 1.50 Mex. $9 Mex.; $5 Mex.; level-crossing keepers (crosshig watchmen), $.6.i '*7^-^ ,/®'ngs— Ganger, $21 Mex. per month; coolies, $ cook, 15 Mex. I CHINA. 71 It wiM be noticed from the above that some of the wages are scaled. The section foremen, being seasoned, tried men, are paid according to expenence. The development of this force and the scale of pay is explained m the following excerpt from a paper by Mr. Ivon Tuxford, published in the 1914-15 proceeding of the jfcingineermg Society of China: Gaogera are mentioned from time to time in tbe montWy report bv the divisional permanent way inspector, and if no complaint has been recordeafor six months thev receive an mcrea^ m pay of $1 per month, and m long as the section is maintained ZS^'^'^ri^L^ 1??^ "" ^ 1?^*" ""^ efficiency, without any complaints being ^tfl l^^r^ ""' ^^ per month every SIX months is given until tfie maximum pay for a ganger, $20 per month, m obtained. Gangers receiving $20 per month are eligible for promotion to section fcMfemen. Leading coolies are eligible for promotion foitTTO*^^'"^^^^"** ""^^'^ ^^ ^^ monthly report against gangers are dealt with aa af^H-j;^! turning out the png in time, leaving work too aoMi, not carrving out in- Btnictions promptlj^, a lowing coolies to neglect their work, not keeping' the section neat and tidy, or similar misdemeanors gangers are punished in the fi^t case by a reduction m pay of $1 per month; second case, $2 per month; third case, dismissaf If. liowew, a ganger receives good reports for six months after the first complaint he receives his former ^y, and such complaint does not stop his f uither ad^-ancement Alter two complamta the ganger must receive good reports for six months before Zh^oA^nS"^ t3\ir^ ^"^ temdnation of I2 months' good conduct he rev^^ Jl«!Lc.7? V ^l' !"^ ^^ complaints do not stop his further advancement. The 1^1^ i?mTde complaints are still recorded against the ganger when an5 Kl7r;??^?f ^*"'^^ ^^ ''^F® is medically examined, particularly aa to eight »"« heanng, this being necessary for obvious reasons •« " ^ui, The Sunday holiday has also been introduced. This has a good effect on thp m^n ?bi*^iir"\^ obtained, by. giving them this day off, enabC^em t^lcSk aTex ^m^ f^.T:.^^*^^- ^1 relieving the monotony of continnoue toick work. At the same time inspection of track on Sundays is not neglected, the line beine mtrol «d ^ol^nl^^,"^''^ ^"^^^^^ g^ger and second leading coolie; third Sunday! Each section is patrolled twice a day. The section foremen make surprise visits at irregular inten-als to see whether the S^^iW Cd^v^;^^? *^" permanent-way inspector of the districTliro^kL an ^i^ Sunday trip to see that the patrol work is being properly carried out tid?^d ut?J*5.^^±^^^ '""nt^^ *^^ ^^ ^^r> their sec^S n^t and JMv and up to the ret^mred st^dard, a», if the section gets out of order or dirtv thro.wh day^frmon A a^^^^^ of die coolie weanng it. Being always paid on the sanie &TJJkTd*p^t^^^^^ -hat time to leave with thp r>av rWi' a^ i^ nearest stauon. Ihe permanent-way inspector travels ^iv b^f^rrL'^Sdn"^^^ n^'^^& ^- manent-wav i^tT T^mSTw W^ ^°'^' the empty bag back to the per- man's pay i so Vo^rtiJ^ ff^lLr^i^^ ^ ^^'''Pif ^"^ ^^^ ""^^ P^«** Each can satWv himse?fTa^^rt fLTt^ ^^ ?^'"^' *-^^ the permanent-^-ay inspector the coolie stm further ^^ if ii^ *^^ ""f ° ^^^ '■'''«^'''^ ^ ^^"^^^ pay. To protect pug. a dXue aU^rnc^is d?duc?eT^mTh^ Y '^ ^°^ *^ ^^ ^"^ ^^ '^^ for this piu-pose '^riZ^r rZ 1,^ ^f """^^^ ^y ^""^ ^^'®° t<> the ^^^ This is cinsi& to L^rSpr m.??^^f^'^^'*-^' overcharge them for their" foSd. cif the gang's money toSesZ^^ of handing the whole getting hi piov^ZTl^ZZ^^^ \'^'^^^^^^ punisHed by fina ^^ «tlioufc any deductions except from thoae who have been 72 .lAILWAY MATEKIALS, EQUIPMENT, AND SUPPLIES. I The railway has in use a very soccessful and interesting system of reports, using a "picture" language, because the men are not suffi- ciently educated in their own or the English language to make satis- factory reports in either. This system requires their knowing only the Enslisn numerals 1 to 0'. EOADWAY AND BRIDGE MATEKIALS. In general, it may be said that on all the lines built with foreign loans the practices and standards of the country furnishing the money were very largely foHowed. On the Imes buift by Chinese engineers with Chinese money a considerable amount of American roadway and bridge materials, as weM as American rolling stock, was always used, the most noticeable instance being the Peking-Suiyuan line, built in two sections — the first 125 miles Known as the Peking-Kalgan and the second section as the Kakan-Suiyuan, the last 110 miles of the latter being not yet completed. wmmGwa. One seriou* handicap from which the Chinese railways are now ioffcring and which it will be very expeuBive to remedy is the fact that all the bridges that have been built carry what American railway men consider virv light loads. In only a>w cases does the loaS exceed the equivalent of Cooper E-40, and in a number of instances it is as low as Cooper E-35. A good example is the Shantung Rail- way^ where the Japanese manaffement is desirous of using heavier motive power, but is unable to do so because the bridges only carry a load Univalent to Cooper E-35; there are about 1,000 strictures iiivi)lved,>ut most of them are short smgle spans. Each nation hm followed its pecular practice. The Germans, French, and Belgians us© a style of floor system with a stringer carrying the rail, with no bridge ties and the space inside and outside the rails filled with metal plates. (See fig. 12.) This makes failure of the structure almost cer- tain in case of derailment. This type of construction has been used on the Peking-Hankow, Cheng-Tai, Pienlo, and Shantung lines and the German section of the Tientsin-Pukow. The British have fol- lowed their standard practice (which applies also to all materials fabricated at the Shanbaikwan bridge works of the Peking-Mukden Railway), but their floor system is very similar to the American prac- tice anaAoes not have the above diJivantage in case of deraihSent. It is also apparent that on some of the lines sufficient! v large open- ings have pot been provided. This has been, forcibly dfemonstrated during the last year, particularly on the Peking-Hankow and the German section of the Tientsin-Pukow. On the first line the bridge construction has been much criticized. While the bridges are unques- tionably very %ht, it is doubtful whether any set of engineers would have provided sufficient openings to take care of the excessive floods of the past year in this part of China. Figure 13 shows one of these bridges with both approaches washed away. The fact is that some of the lines will be compeled to do considerable reconstruction of their bridges in the future. BUIUHMGS. Special Agents Series No. 180. FIG. 12.— BRIDGE ON THE FRENCH YUNNAN RAILWAY, SHOWING STRINGER TRACK CONSTRUCTION. 4 On account of the great scarcity and high pricq^f lumber, there is II decided tendency to construct railway buildings of all classes with FIG. 13.— BRIDGE ON THE PEKING-HANKOW RAILWAY AFTER 1917 FLOODS. INTENTIONAL SECOND EXPOSURE Mm /111 72 BAILWAY MATEKIALS, EQUIPMENT, AND SUPPLIES. ^i F"^ I; L .ji'lli. I, The railway has in use a very successful and interesting system of reports, using a "picture" language, because the men are not sufii- eiently educated m their own or the Enghsh language to make satis- factory reports in either. This system requires their knowmg only the English numerals 1 to 0. ROADWAY AND BRIDGE MATERIALS. In general, it may be said that on all the lines built with foreign loans the practices and standards of the country furnishing the money were very largely followed. On the lines built by Chinese engineers with Chinese money a considerable amount of American roadway and bridge materials, as well as American rolling stock, was always used, the most noticeable instance being the Pekm^-Suiyuan line, built in two sections — the first 125 miles known as the Peking-Kalgan and tlie second section as the Kalgan-Suiyuan, the last 110 miles of the latter being not yet completed. One serious- handicap from which the Chinese railways are now suffering and which it will be very expensive to remedy is the fact that all the bridges that have been 'built carry what American railway men consider very light loads. In only a few cases does the load exceed the equivalent of Cooper E-40, and in a number of instances it is as low as Cooper E-35. A good example is the Shantung Rail- way, where the Japanese management is desirous of using heavier motive power, but is unable to do so because the bridges only carry a load equivalent to €/Ooper E-35; there are about 1,000 structures involved, but most of them are short single spans. Each nation has followed its peculiar practice. The Germans, French, and Belgians use a style of floor system with a stringer carryuig the rail, with no bridge ties and the space inside and outside the rails filled with metal plates. (See fig. 12.) This makes failure of the structure almost cer- taui in ease of derailment. This type of construction has been used on the Peking-Hankow, Cheng-Tai, Pienlo, and Shantung lines and the German section of the Tientsin-Pukow. The British have fol- lowed their standard practice (which applies also to all materials fabricated at the Shanhaikwan bridge works of the Peking-Mukden Railway), but their floor system is very similar to the American prac- tice and does not have the above disaclvantage in case of derailment. It is also apparent that on some of the lines sufficientlv large open- ings have not been provided. This has been, forcibly demonstrated during the last year, particularly on the Peking-Hankow and the Geraian section of the Tientsin-Pukow. On the first line the bridge constraction has been much criticized. While the bridges are unques- tionably very light, it is doubtful whether any set of engineers would have provided suflicient openings to take care of the excessive floods of the past year in this part of China. J'igure 13 shows one of these bridges with both approaches washed away. The fact is that some of the lines will be compelled to do considerable reconstruction of their bridges in the future. BUILDINGS. On account of the great scarcity and high pricq^of lumber, there is ft decided tendency to construct railway buildings of all classes with Special Agents Series No. 180. ■•Ui;* PIG. 12.— BRIDGE ON THE FRENCH YUNNAN RAILWAY. SHOWING STRINGER TRACK CONSTRUCTION. FIG. 13.— BRIDGE ON THE PEKING-HANKOW RAILWAY AFTER 1917 FLOODS. M I. Special' Agents Series No. 180. FIG. 14.— STEEL TIES (SLEEPERS) OF BELGIAN MANUFACTURE ON THE CANTON-SAMSHUI RAILWAY. CHINA. 73 FIG. 15.— STEEL TIES (SLEEPERS) ON THE FRENCH YUNNAN RAILWAY, INDO-CHINA LINES. brick, stone, or concrete. On most of the lines very substantial build- ings of all classes have been provided, and, as akeady mentioned, m some instances these are elaborate and ornate. In many cases the buildings are erected by local contractors. CROSSTIES. The supply of crossties (sleepers) is a matter of the greatest impor- tance to an the Chinese railways. No part of China, except portions of Manchuria, has any timber suitable for ties. In the past most of the ties used have come from the North Island of Japan, and this wiU probably remain the main source of supply for some years to come. These ties are termed Japanese oak, but about 70 per cent are oak and the other 30 per cent a mixture of Japanese katsura and tanao. In addition, apitong, Australian jarrah, mixed hardwoods, Haihn pme or Manchurian red pine, and Oregon pine have been used in vairmg quantities. The usual dimensions have been 6 by 9 inches by 8 feet, except in the case of the jarrah, which was 5i by 9 inches by 8 feet. The apitong and jarrah, both being very dense, have to have holes bored for the track spikes. , The Tientsin-Pukow Railway advertisement shown on page 68 is a very good illustration of the present requirements and the methods of purchasing crossties. , , „. ^ x> -i v Mr. G. A. Kyle, chief engineer of the Siems-Carey Railways, has made a careful analysis of the available data and the following table shows his conclusions; this is based on the use of untreated timber and ordinary track spikes, without tie-plates : Items. Japanese oaVs. Apitong. Jarrah. Hard- woods. Hailin pine. Oregon pine. ESTIMATED LIFK. Tn Nnrth China .. . ••- Years. 9 8 7 Years. 10 9 7 Years. 18 16 14 Years. 7 6 5 Years. 5 4 3 Years, 7 Tti Con tral China a In South China 5 AirArof7A ff\T ftll r^Viimi. .... ..... 8 9 16 6 4 6 COST. A mmt-m^A Itnof Af f t«» t^fAlVPTPA ............. Mexican dollars. 2.25 Mexican dollars. 2.75 .04 .13 .80 Mexican dollars. 6. 00 .04 .13 .30 Mexican dollars. 2.20 Mexican dollars. 1.59 Mezictn dollars. 2.60 Cost 01 Doriiig lour noies lor spih.es Orto*- r\t fntlT ♦rttf»lr QTiilrPQ ................. .13 .30 .13 .30 .13 .30 .13 Cost of putting in track and spiking .30 T/\+nl /»/\cf f\f f\0 in trftfilc .....•.«..-• 2.fi8 .16 3.22 .19 6.47 .39 2.63 .16 1.93 .llh 3.03 interest at 6 per cent per annum .IS Total cost for life of tie 2.84 3.41 6.86 2.79 2.04^ 3.21 Cost per year .36i .38 .43 .46i .51 .53i Equivalent initial cost compared to 2.51 4.95 1.68 1.02 i.7:| 1 ■\ This shows that the present practice of using the Japanese ties is the most economical. One reason for the short life in South China is found in the ravages of white ants. The item of interest is figured on the assumption that the tie is paid for one year before being placed in the track. , • • v The Germans used a very substantial pressed-steel tie m the con- struction of the Shantung Railway; it has given satisfactory results, INTENTIONAL SECOND EXPOSURE Special Agents Series No. 180. lip FIG. U.— STEEL TIES (SLEEPERS) OF BELGIAN MANUFACTURE ON THE CANTON-SAMSHUI RAILWAY. t .4 .4 FIG. 15.— STEEL TIES (SLEEPERS) ON THE FRENCH YUNNAN RAILWAY, INDO-CHINA LINES. CHINA. 73 brick, stone, or concrete. On most of the lines very substantial build- ings of all classes have been provided, and, as already mentioned, in some instances these are elaborate and ornate. In many cases the buildings are erected by local contractors. CROSSTIES. The supply of crossties (sleepers) is a matter of the greatest impor- tance to all the Chinese railways. No part of China, except portions of Manchuria, has any timber suitable for ties. In the past most of the ties used have come from the North Island of Japan, and this will probably remain the main source of supply for some years to come. These ties are termed Japanese oak, but about 70 per cent are oak and the other 30 per cent a mixture of Japanese katsura and tamo. In addition, apitong, Austrahan jarrah, mixed hardwoods, Haihn pme or Manchurian red pine, and Oregon pine have been used in varymg quantities. The usual dimensions have been 6 by 9 inches by 8 feet, except in the case of the jarrah, which was 5i by 9 inches by 8 feet. The apitong and jarrah, both being very dense, have to have holes bored for the track spikes. The Tientsin-Pukow Kailway advertisement shown on page 68 is a very good illustration of the present requirements and the methods of purchasing crossties. Mr. G. A. Kyle, chief engineer of the Siems-Carey Railways, has made a careful analysis of the available data and the following table show^s his conclusions; this is based on the use of untreated timber and ordinary track spikes, without tie-plates: Items. Japanese oa' s. Apitong. Jarrah. Hard- woods. Hailin pine. Oregon pine. ESTIMATED LIFE, In North China Years. 9 8 7 Years. 10 9 7 Years. 18 16 14 Years. 7 6 5 Years. 5 4 3 Years, 7 In Pontral China 6 In South China 5 Averas:e for all China 8 9 16 6 4 6 COST. Assumed cost of tie delivered - Mexican dollars. 2.25 Mexican dollars. 2.75 .04 .13 .30 Mexican dollars. 6.00 .04 .13 .30 Mexican dollars. 2.20 Mexican dollars. 1.50 meiicin doUnrs. 2.60 Cn*- --l-d in KAIL rASTENlNGa. The details of angle bars, joint bolts, and track spikes in General use are shown on page 75 llus applies particularly to the iDies on which the Chmeae standard section of 85-pound rail is used It w^M ^,»n™v^* ^* ^^^A '^ ^ typical dog-eared British track spike usually spoben of as a dog spike." Except for the jarrah and apiW ties, It IS not the rule to bore the spike holes or seat the rail Screl ^ikes have been used on a very considerable portion of the pS^h-^ Hankow bne Figures 20 and 21, facing page 77, show these scrnw spikes, and the appUcation b very simiTai! tS the general American practice where tie pktes are used. On the GemStn section of the tW^"^""^\^f™""li.^'^ P*»**1 *°*!, ^"^^ «P*«« 1»»^« been used that are different from those employed on any other line in China and, agam, on the pressed steel ties on the Shantung RaUwav a different fastemng of German design was used «auway a ROG8 AND SWnCHBg. In the Chinese Government RaUways system of uniform accounts ^^ J!fj'T''^. i'"^ *"'* s'-itches), signals and interlocking gear, and electnc staff apparatus all come under one construct on account, which is divideS'^into three subaccounto. TlL^^S^ o^f CHINA. 75 : SCALE l:a Chinese Standard Sectio^i FIG. 16. 76 |iM • t 1 ,i RAILWAY MATERIALS, EQUIPMENT, AND SUPPLIES. switch Stand shown m figure 20 is in very general use on all the lines, although in some instances the lever throws parallel to the track instead of across as on this line, the Peking-Hankow. All the other materials coming under this account conform, in general to the IfThlTjI ^^^.^^^^7 furnishing the loan funds for t?ie cons'truction 11 Iif ?f • ^ ^^J? ?^ ^^^^^ ^ typical construction of switch used on ! l!«L TTi ^^^^'^^ t""^ ^r°^^ ^V"^- These are made from a heavy rolled form, which is planed down, making a very robust switch pomt ; and it wiU be noticed that the installation is substantial with a heavy iron plate extending the entire length of the point. The frogs used are of the same general design. The British design of points and crossings is very similar to the American switch-and-frot' practice. There is a growmg tendency for all the lines to manufac- ture their own switches, frogs, and switch stands in their own work- shops and, in doing so, to follow the general lines of the British practice, figure 21 shows one of the various types of derailers- S/L^IWa?^ '^^^^'^ "^^ f^^^ ^^* ^° ^^^^^3^ all instances they might be called "home-made ' devices. RAIL ANCHORS. '^T.t^Z^^ ^®^ anticreepers or rail anchors have been used on liny of the Chinese Government Railways, but it is apparent at manv places that their use would be very beneficial, although rock ballast SI / • xT*^^ I .q"»S^i!;^es has been used on many of the lines. The 51ianghai-]Manking Railway has used some rail anchors with satisfac- tory results. AMOUNT OP ROLLING STOCE, One of the great needs of the Chinese Government Railwavs at preseiit 13 a very considerab^^^^ increase in freight cars and locomotives. On the Peking-Mukden Railway there has been an increase of 50 per cent in freight traffic in the last five years, with only a 22 per cent increase in Ireight cars and a 21 per cent increase in locomotives to handle this gi-owing business. The following table shows a compari- son of rolling stock: ^ NameofrailTmy. Miles of line. Locomotives. Passenger cars. Freight cars. ' Num- ber Num- tier. Per mile. Num- ber. Per mile. Number Per mile. of service cars. PeMnR-Miikden Pekini-Siiyuan, Tientsin-Pulcow.. ** 600 291 688 814 381 142 m M 129 73 332 93 223 187 218 3,203 S53 1,266 2,675 954 38 8 Pekine-Biinkoir , 61iftiig&al-Niia:kiiif and Slungliai- Hangchflfir-Ningpo 123 41 18 Total , , 2,774 504 0.18 1,053 0.38 8,951 3.23 228 Im'periiil Govemment RaOways of Japan (1916). ,. 5,757 2,680 .47 6,838 1.19 42,700 7.42 942 €€nnanj (1013) , 38,154 29,520 .77 86,568 2.29 671,096 17.60 United, States (1916) 231,179 61,267 .26 104,290 .45 2,277,970 9.85 97, 112 III Special Agents Series No. 180. FIGS. 17 AND 18.— TYPICAL EXAMPLES OF SIGNALING ON THE CHINESE GOVERNMENT RAILWAYS. FIG. ""^.-DEVICE USED ON THE PEKING-HANKOW RAILWAY IN ATTEMPT TO PREVENT CROSSTIES FROM CHECKING. AN INTENTIONAL SECOND EXPOSURE 76 lAILWAY MATEKIALS, EQUIPAIEXT, AND SUPPLIES. switch Stand shown in figure 20 is in very general use on all the lines, although in some instances the lever throws parallel to the track mstea;! of across as on this line, the Peking-Hankow. All the other materials coming under this account conform, in general, to the pi-actice of the country furnishing the loan funds for the construction 01 the lioi?. 1^ igure 20 shows a typical construction of switch used on ail the Germa^i Belgian, and French lines. These are made from a heavy rolled form, which is planed down, making a very robust switch point; and it will be noticed that the installation is substantial with a heavy iron plate extending the entire length of the point. The irogs usee are of the same general design. The British design of points and crossings is very similar to the American switch-antl-froc^ practice. Ihere is a growing tendency for all the lines to manufac^ tiire their own s-witehes, frogs, and switch stands in their own work- shops and, in doing so, to follow the general lines of the British practice. I^igure 21 shows one of the various types of derailers- there IS a very great variety of these, but in nearly all instances they might be called "home-made '^ devices. ^ RAIL ANCHORS. Thus far very few anticreepers or rail anchors have been used on any of the Chinese Government Railways, but it is apparent at many places that their use would be very beneficial, although rock balla^'t ci *^^^l^ '^^^^l .quantities has been used on many of the lines. The Shanghai-Banking Railway has used some rail anchors with satisfac- tory results. AMOUNT OF ROLLING STOCK. One of the great needs of the Chinese Government Railways at present is a very considerable increa^ in freight cars and locomotives. IM the reking-Mukden Railway there has been an increase of 50 per cent m freight traffic in the last five years, with only a 22 per cent increase in freight cars and a 21 per cent increase in locomotives to handle this growing business. The following table shows a comnari- son of rolling stock: ^ Name of railway. Miles of line. Locomotives. Passenger cars. Freight cars. Num- ber Num- ber. Per mile. Num- ber, Per mile. Number 1 Per mile. of service cars. Peki ng- Mukden rekiiig-Suiyuan Tien t sin-I*{ikow I^ekiiig-Harikow, " Shai luhai-Naii k in « a nd Shangliai- Hangchow-Niiigpo 600 291 688 814 381 142 66 94 129 73 * * * 332 93 223 187 218 3,203 8.53 1,266 2,675 954 38 8 123 41 18 Total , 2,774 504 0.18 1,053 0.38 8,951 3.23 228 Imperial Government Railways of Japan (1916) '. . . 5,757 2,680 .47 6,836 1.19 42,700 7.42 M2 Germany { 1913) 38, 154 29,520 .77 86,568 2.29 671,096 17. 60 United States (1916) 231,179 61,267 .26 104,290 .45 2,277,970 9.85 97, 112 Special Agents Series No. 180. ^i FIGS. 17 AND 18.— TYPICAL EXAIVIPLES OF SIGNALING ON THE CHINESE GOVERNMENT RAILWAYS. FIG. 19.— DEVICE USED ON THE PEKING-HANKOV\^ RAILWAY IN AN ATTEMPT TO PREVENT CROSSTIES FROM CHECKING. CHINA. 77 Special Agents Series No. 180. FIG. 20.— TYPICAL SWITCH, SWITCH STAND, AND RAIL FASTENINGS ON THE PEKING-HANKOW RAILWAY. If FIG. 21.— DERAIL AND RAIL FASTENINGS ON THE PEKING-HANKOW RAILWAY. From the above figures it will be noticed that these six lines, including the most important of the Chinese Government Railways, are provided with much less equipment per mile than the railways of Japan, Germany, or the United States, and the disparity becomes even more striking when the earnings are compared. This group of Chinese railways earned in 1916 $19,700 (Mexican) per mile of line, against $10,150 (gold) for the Japanese railways and $15,600 for the railways of the United States. The earnings ot the German railways for 1913 (the last year available) were $22,300 (United States currencv) per mile. With the prevailing price of silver, the earnings of the Chinese railways were actually higher than those of the Japanese railways and were practically equal to those of the railways of the United States. Further attention will be called to this situation in the suggestions made later concerning the possibility of American interests furnishing rolling stock to these Chinese Go\rernment Railways, to be handled through an equipment- trust scheme similar to the arrangements by which many American railways have bought rolling stock in the past. GENERAL CHARACTERISTICS OF ROLLING STOCK. • The initial equipment on all the lines (particularly those first con- structed) is more representative of the practices of the nations fur- nishing the loan funds than is the case with the subjects already mentioned. As a result, the Chinese railways to-day have, as a whole, a more miscellaneous assortment of equipment than any other equal mileage of railways in the world. A considerable part of the rolling stock (particularly the locomotives and goods wagons first acquired) is light and of small carrying capacity. This was very unfortunate, for the reason that the railway Dusiness of China is not natually a classified-goods business but rather the transportation of commodities, a^d thl tendency, as the raUways are extended and the traffic grows, will probably become more pronounced. Therefore, the advantage of freight cars of large capacity and heavy motive power, along the lines of American practice, is readily apparent. The character of the early roUine stock forms the explanation for the light design of the bridges, miich will have to be corrected at much expense before the type of equipment demanded by this class of traffic can be used. The average tractive effort of aU locomotives on the Chinese Government Raih^^ays is now approximately 21,000 pounds, the average carrying capacity of all passenger cars is 67.5 persons per car, and the average carrying capacity of all freight cars IS 50,350 pounds. In connection with me locomotives, however, it should be mentioned that on the Peking-Suiyuan line, which is equipped with 60 American locomotives out of a total of 66, the average tractive effort of all locomotives is about 30,000 pounds, which has the effect of reducing the average of all locomotives on the other lines to about 18,700 pounds. It is also surprising to find the small amount of freight equipment that is equipped with air brakes. In one instance this lack of power brakes is limiting the coal traffic that one of the roads can handlp) during the winter when it should be handling the maximum tonnage, l^e Peking-Suiyuan |ine, on account of tne heavy grades over tne West Hills, is well equipped with air brakes on all its equipment, and INTENTIONAL SECOND EXPOSURE Special Agents Series No. 180. CHINA. 77 FIG. 20.— TYPICAL SWITCH, SWITCH STAND, AND RAIL FASTENINGS ON THE PEKING-HANKOW RAILWAY. Jir 1 « FIG. 21.— DERAIL AND RAIL FASTENINGS ON THE PEKING-HANKOW RAILWAY. From the above figures it will be noticed that these six lines, including the most important of the Chinese Government Railways, are provided with much less equipment per mile than the railways of Japan, Germany, or the United States, and the disparity becomes even more striking when the earnings are compared. This group of Chinese railways earned in 1916 $19,700 (Mexican) per mile of line, against $10,150 (gold) for the Japanese railways and $15,600 for the railways of the United States. The earnings oJf the German railways for 1913 (the last year available) were $22,300 (United States currency) per mile. With the prevailing price of silver, the earnings of the Chinese railways were actually higher than those of the Japanese railways and were practically equal to those of the railways of the United States. Further attention will be called to this situation in the suggestions made later concerning the possibility of American interests furnishing rolling stock to these Chinese Government Railways, to be handled through an equipment- trust scheme similar to the arrangements by which many American railways have bought rolling stock in the past. GENERAL CHARACTERISTICS OF ROLLING STOCK. The initial equipment on all the lines (particularly those first con- structed) is more representative of the practices of the nations fur- nishing the loan funds than is the case with the subjects already mentioned. As a result, the Chinese railways to-day have, as a whole, a more miscellaneous assortment of equipment than any other equal mileage of railways in the world. A considerable part of the reviling stock (particularly the locomotives and goods wagons first acquired) is light and of small carrying capacity. This was very unfortunate, for the reason that the railway Dusiness of China is not natually a classified-goods business but rather the transportation of commodities, and this tendency, as the railways are extended and the traffic grows, will probably become more pronounced. Therefore, the advantage of freight cars of large capacity and heavy motive power, along the lines of American practice, is readily apparent. The character of the early rolling stock forms the explanation for the light design of the bridges, wliich will have to be corrected at much expense before the type of equipment demanded by this class of traffic can be used. The average tractive effort of all locomotives on the Chinese Government Railways is now approximately 21,000 pounds, the average carrying capacity of all passenger cars is 67.5 pei-sons per car, and the average carrying capacity of all freight cars IS 50,350 pounds. In connection with the locomotives, however, it should be mentioned that on the Peking-Suiyuan line, which is equipped with 60 American locomotives out of a total of 66, the average tractive effort of all locomotives is about 30,000 pounds, which has the efiect of reducing the average of all locomotives on the other lines to about 18,700 pounds. It is also surprising to fuid the small amount of freight equipment that is equipped with air brakes. In one instance this lack of power brakes is limiting the coal traffic that one of the roads can hamHe; during the winter when it should be handling the maximum tonnage. The Peking-Suiyuan line, on account of tne heavy grades over the West Hills, is well equipped with air brakes on all its equipment, and I 78 BAILWAT MATEEIAI^, EQUIPMENT, AND SUPPLIES, Jh! i^ • ♦ "i^"^ °" ^^^ ""^""r ^^ »« »n additional restriction on the free interchange of traffic between this line and throther Lm not so Mmpped Tie Janney-Penn couple is usetl very eenerallv on all the lines and nrnhshlir ita »<,« ;= ^ ^_ i • " geueiauy on of anv othn; nn„ -?i^:„t ^ li ^'^ ™*'/? °®"^y univereal than that oi any other one device on the Chinese Government Railways, LOCOMOnVIS. f«-T^'",^™?**T ®''**'^,' probably to a greater extent than any other feature the tendency of each nation to foUow its home DraoL^o^fn fanushmg equipment for the Chinese railways ATrefu It k^h^ ttiere are four distinct types of locomotive conHtmn.;!f^ 1 I- British. Franco-Belgian, ^nnan,'Zr]^:ricriThtTast^\ted' being present tea greater or less cktent on aU the lines and nrS natmg on U,o Chinese-built lines, such as the PekLg^^i^an^IndX fw^"^'"S^«*'r-Ni^P°- f"««^ 22, facing pje % Zws a S^t^^S'T locomotivl on th^ PekinV^Lkow m7 U «UK^* ^ . type of frame and truck construction, and also the elaborate pilot construction as contrasted with the tv\)ical buH nn«! puot of Bnt^h practice. All locomotives except the ISerican S^ the plate or fabricated frame constniction. tLb vnite^^s cSiSSr however, favored the American bar-framo constnicHm. fir^f K^ ' this type of construction seem, sSued rt^e d^ J trS ^on^fr^lf ?X^' r^„*^°z^ '^'';^ pr«a i»1-eTon'S^it"a'ii^ It^Z^^'^f^^'- '^•"^ °' ^*'*' advantage in shipping space, it being stated that there is a savmg of more than one-thii5^in this connection^ wl^i-^l?"*'*^*^" manuTacturere are provided with adequa"rpla"t facilities the Amencan typ gives the lowest firet cost iSut not f«« clanned by compet tors) tL Fowcst quality. T^e A^^erican enjn^ ditTori^?;.T'f i^.S'r.*''^ T'f '"« requirements and repairing fon! ditions m Chma, and the wnt«r feeis, therefore, that Amencan man, {he deranls^'o^frf.:,**"' ^""^ ''l'^^ t^^'^'^'^ and not accede ^ t.tlt^cSri4raa"''^ire^^^^^ of their own par- &" '''^£' .^-S^ com'Jh^-rinThXttL'?,^^^^^^^^ STen^or tl^ ^'rL^^'i^^JP'^?^' «-• The Ttnfiali an^n»„~. r-— -- ".»~ ujjoiuvc »(>eciai mention. The British engmcers, as a rule favor the Belpaiii type of locomotive xes, clauning tfuit with Chinese shop labor they can b^ ' inspected and filwanli/ fvnimf«;««.i . L^a *i.^__# •! \ %*!l«^^J?r^i.i ^-^^^ --"^''^"is Mwi, wiLo i^mnese snop labor ihev can \m E^^'^ '^'P-'**^ «.«d cheaply maintained; and VheS!whe^ ^ S^ulcture,^%'CM'^' ^^A^ ""? »PP''^"t "'"^O" ^hy Ameri" ifinas uoiier lUDes, the writer feels that when these are sneciiied mm D^e'^«?r^«^ made accordindy, as tWs is largelyTmaTtenf Qy^lor ^T dZoZT^'^^ nec^saiy an alternate price can KXllo^ ^h.« * account of the distance from source of supplies ine smaller value of scrnn «th4 tfco fo»* tk^* ii.- m.- "kk">^i the smaUer value rf-screp-"ai.d the rcrtrarre ChTr 'Ty^ Zir^:^LTt\u^i}^J'Z^b'^J '^ point is one S 6 rass Wu<.*„^„ ^^^ *»wit;A puor irooworKers, tins point m Ana rif SBiXfrt'" ^''^ ^^"^ *^^^^ connection Ctherp^^^^^^^ Sm Imhlul ^Z:^ ^T^^ "'^ IMS qtiestion is the long life^Z will probabiv prevail for all classes of romng stock in niini. r.n aceottnt of fel^ percentage of the fiiBt cost^haTis chameaWe to of what might otherwise he considered obsolete equipment It k CHINA. 79 not believed that the type of franie construction affects this last consideration, but it is possible that, particularly in C^ina, the copppr and brass plates and tubes may have a bearing in this connection. TRAIN BRAKES. When used, air brakes are usually of the Westinghouse design of the nation furnishing the equipment. It is not usual for other nations to put as much braking on the locomotive and tenders as is the American practice. The passenger equipment, as a rule, is well equipped with air brakes, but no air train signals are in use on any of the lines. As already stated, the freight equipment is only partly equipped with air brakes. Most of the fines depend on hand' brakes. As a rule, every fifth or sixth car is equipped with a small shelter; the train is arranged for two of these to come together, and the braking is done by hand, PASSENGER EQUIPMENT. Sleepers and first-class passenger cars are usually of the compart- ment-corridor type. The Peking-Mukden, Tientsin-Pukow, Peking- Hankow, and Shanghai-Nanking own and operate their own sleeping cars, and on all these lines the same equipment performs the service of first-class passenger car and sleeping car. These are the only lines running sleeping cars. These four lines and the Peking-Suiyuan own and operate their own dining cars. The second-class equipment is usually provided with serviceable wooden seats and the third-class sometimes with cheaper seats but frequently with benches; iii some instances, particularlv when the coolie class is carried, no seats of any kind are provided. Figure 24 shows the vestibules and one end of a diner on the Peking-Mukden Kailway. It will be noticed that there are no steps to the vestibule platforms. This requires all station platforms to be built with only a low step from the vestibule. In no instance noted by the writer was any passenger equipment heated from the locomotive, the only hose connection being the one for airbrakes, PRMGHT CARS. The initial equipment on the first Chinese railways (except that purchased from America) was of small capacity, and much of it can best be termed goods wagons, but the tendency has steadily been toward eqmpment of greater capacity until to-day practicaUy all new freight cars are of 67,200 pounds or 30 long tons capacity. All the C hinese railways use the British practice of a loading gauge. The size of equipment is somewhat restricted, and it would appear very desirable to increase this in the case of new railway construction to permit of the utilization of larger equipment as the traffic develops —particularly if this development should be along commoditv lines [?gure 23 shows a freight-car truck (bogie) in general useW the reking-iiankow line and somewhat similar in construction to the locomotive truck shown on the same page. Figure 26, facing page 1 1 6 shows a typical box car used on most of the Chinese railways. It w^as stated that tliM type of construction is quite satisfactory on all the lines north of the Yangtze River, but that the deterioration of the sneet iron on the southern lines, such as the Shanghai-Nanking is 80 BAILWAY MATEBIALS, EQtllPMENT, AND SUPPLIES. quite Rcnous. With the scarcity of lumber in China however tl,!, design would seem to have much merit. The low^nfusf r Jion nn ,{,« same page shows a tank oar of a type n inerarus^ bv theX"^^^^ Oil Co and the Asiatic Petroleum'^bo. for Sporting reS £ &"L areo^pry. -^ -^^ "- -^y — froWe^'atn^^ CAB Wita'wta The British have used their typical steel-tired whe*.! ,i«,«iw -^*i. w^ra of all classes and capacities. The Germans have ^one the S with a wheel 100 centimeters (39.37 inches) in diameter On ^! American equipment, particularly freichf raram^f^^f !i. u , have been o? t6e re^llar cUXLSn t^inTaccord W To^fh'" information obtainaTile, have given sa^ffa^rv^'urV^S! ^t Jk" suggestions that the wnter heard m on fin„rjl^ results. One of the tbp rfAai™».:i;«^ .^*Ti. >^ neara mentioned a number of times was the^ deairabilty of the Chinese Government Railways adonting s«^ rf.tlUn'^^/'^*' of car wh«,l as can be satisf actoKr^Slith a cmued cast-iron wheel and fb^n mniHnn *»,„:. „ " i""*'"^"" ."'". * ThisseemsnrftcticftbU whl ^^°. I •^x*''^''^ "'^ ^"PP^y «>* wheeb. n«r.t!i ^r! F*^"'^^'^ when one takes into account the supply of iron ore and fuel together with the fact that many of the Ctrn^ oh^n laborers make good foundry molders. ^ *^ ^''P anmcBCABa On account of the large amount of ehean Inhnr in oil t,^-^^ „* m.- veiy litUe attention hal been Sven to uwif^l;„„ ^^^ °^ ^^^ the nrenent AniiVnrn^ ; i ^ ? labor-saving service cars, and invX^S;,,^ Ff^"i.1 »l?»«»t entu-ely confined to that which ^lernHv^errSL^r^f ^'^'•'r "" ^''^^^ «^ ^°*- One of the m(^t EtimV,Tl,-Sr?f "* /P^^'S equipment is the smaU derrick cm'. !E^^ ^^^ ^^ /?™ "' * «»»" locomotive crane St^ shovels and steam wrecking cars are practical I v nAv oieam It seems proper to refer now to the history ^d Jpe'ckd Ltures of the several Imes. The foregoing has been an effort to co™r%ti?; general characteristics particullrly the comparaWe feXr^'^'Sf many of the lines hZfeXZ^^S^ £lt'ori^ S a^^^bJ'oM have been compUed aU aSe & Sed alf f^L^T" -'P*' "'^"^^ dix. beginning on page 26T ''•''"S P'^"**^*'' »" together, m an appen- »KING.Bn)KDEN (CMING-FENG) BAaWAY. LOCAnOM AND utent. TWs line connects Peking with Mukden, a distance of 524 miles Ott^f^te*/""^*!^ ** *^" Chengyaiigmen Gate in the cS^S l^ity of Peking. The Chengyangmen Qate is the moat imnonw feSn 0..^f ^""^ City and is within a short XanTe^Cf the fcfsouth^f^;«.^'/?^«f-*^r r^^ ^t"***"" ''t Peting i^ Suiyuan RaU^ayf "S^unTthe^K'' wTh 'termla^' ^'''^- Peking-Mukden sUon and li^!^^\ndlfZ bL^SZ ZtA^n CHINA. 81 which is the Peking-Smjnian's main station just outside the north- west corner of the Tartar City of Peking. At Fengtai connection is made with a branch of the Peking-Hankow Railway and with the East Terminal of the Peking-Suiyuan Railway. Connection is made with the Tientsin-Pukow at Tientsin and the South ^fanchuria Railway at Mukden. A very important branch leaves the main line a short distance south of Sh'anhaikwan and runs to the ice-free port of Chinwangtao, at which point the Kailan (also known as Kaiping) coal is handled to seagoing shim. Important branches extend from Kowpangtze to Yingkow or Newchwang and from Peking to Tungchow, the latter being practically Peking "s port on one of the grand canals. There is also a short branch from Lienshan to the port of Hulutao in the extreme northwestern part of the Gulf of Liaotung, which is the northern part of what is usually known as the Gulf of Chihli. There are a number of spurs to coal mines of the Kailan Mining Administration operating the Kaiping coal field at Tongshan. HISTORICAL SURVEY. Tlie history of this line has already been referred to at some length m connection with the Tangshan Colliery Tramway started in 1878, the name of which was changed in 1882 to the Kaiping Railway Co., with Wu Ting Fang as general manager, and agam in 1887 to the China Railway Co., extensions being made during each interval. In 1891 the name of the Imperial Railways of North China was adopted, at which time the enterprise, to all intents and purposes, was taken ovet by the Imperial Chinese Railway Administration. At the openmg of the Chino-Japanese war the line was completed from Tientsin to Shanhaikwan, with an extension beyond the latter point M»iring completion. The outbreak of the Boxer uprising found the line extended to Machiapu, outside the Chinese City of Peking, and m the northeast the line had been completed to the neighborhood of Chmehow, with the construction well under way of the extensions to Hsmmmtmg and Yingkow (Newchwang)— about 30 miles of the latter branch havmg been completed at the Yingkow end. During the occupation period following the Boxer uprising, the British in charge of the Pekmg section took advantage of the occasion and extended the line from Machiapu to the present Chengyangmen terminus in the Chinese City, as already mentioned, the line runnmg just outside the south wall of the Tartar City for about two-thirds of the distance across this part of the city. At the same time the branch was built to IMngchow. These extensions were built without agreements of any kind and the Chinese accepted them without protest. The Boxer uprismg greatly delayed the completion of the New- chwang branch and the extension to Hsinminting, both of which were finalJy completed in 1903. The connection between Hsmmin- ting and Mukden was first a narrow-gauge 3-foot 6-inch line built by the Japanese duruig the Russo-Japanese War, but by agreement between Japan and China this section was turned over to the Imperial Railway Administration of China in 1907, and the gauge was changed to 4 feet 8i inches. I^ir. C. W. Kinder was connected with the work from the beginning, mitil liis retirement from the position of engineer in chief on April 1, 1909. 100229°— 19 6 So lAILWAY MATERIALS;, BQIIIFMEMT, AHD SUPPLIES. TOUICB OP CAFITAI.. CiimA. 83 The ormnal, eapittil used was in coimection with the devolim- .meiit of the A.aipmg coal field and was iargelv Chinese, but with a coiisideraMo British .■interest and under British supervision." Moneir was... later sacttred from various sources until the British loan "for 16,000,000 taels was made in 1898. at which time the priiicinal Banking Corporation, tota mg l,24O..000 taels, the Russo4^hi,lese Oiow^ Russo-Asiatic) Bank, 600,000 taels, and the Deutnciv Aswtische Bank 7004)00 taels..-~a total of 2,540,000 ' taels, all "of which was refunded with the above loan. " As shown ty_*»J«, tabic? on pa^e 53, the total investment assets lA'^'2^^.^^^^''¥''?.^'"^^*y' ^^^^^^r ^h 1916, amounted to W0,46^,.57/, against which theie are outstanding obligations amount- m;g to I43v480,007~-€hinese shareholders, $26,142; Chinese Govern- ment $25, ,903,392; Briiisli-held bonds, 119,320,000; and Japanese- held, bonds, $230,47.3. It will be noticed from this that t^Ze iiwstnient assets of this property amounting to I16,«}87.570 for w,h,ich there a,re no outstanding securities. ' WtHKIfT' COWmOL. ^ Miilo the provisions of the agreement of 1898 are still norainallv m force ,and a Brit,LsIi engineer in cliief is in charge of the' property on account of the great margin, of safety on this loan there have been conce&sions of consitlorable extent to tlio Chinese in the control and management of this system, particular! v as to the releasin,ff of «:» surplus funds to the Chinese 'Government for other uses ' One Buehnm has been the building of the Peking^Suiyuan' line with the profits from the operation of the Peki,n,g-Mukden system. Thus far, However, the B,rit»h have ,r©t,amed .rather closely the prerO'O-atives m to purchase' of matftri,al,s, equipment, and ^. supplies. c:ha,iii,ct:mi Of niAfnc. 'The operating receipts for 191,6 amounted to S14.542,,518, of wliich 46 per cent^w'as from, passenger traffic and 54 per cent from freight bus,ittes8. ^ Ot,her revenues are .not included in' these figures' 'but 'are ,in,€luded in the gross, ©anilngs shown in the table on page 57. ,lieferen:ce has ,already b©en made to the djisses of passenger travel and the division of earnings in tUs connection. Sixty-f our per cent of the tonnage carried and 42 per cent of tlie ,r0venue 'for 1916 represented mineral products (largely coal), 10 per cent of ' the tonnage wid 23 per cent of the revenue .agricultural, products, and 9 per .cent ol the to,nnage and 17 jwr cent of the revenue manu- factured products. PBESENT ,rEof rrs. For the year ended December 31, 1916, the operating revenues 1 rf!L'"51'*^f^l ""^ \f^''^^^^ ^>^* <>F™ti,ng expenses were' 'also ,ie<,luce5l .11,626,023, so there wm a balance to net revenue from opw-afcions of .18,856,148. Th,e operating ratio w.as .reduced from 49.61 per cent m, 1915 to 40.32 per cent in 1916. TIm: opera,ti.n.g ratio of this lin.e has alw,ays been very low and the results prohtable, and there is no doubt that, with proper m,ana"e- ment, tliis will remain a very profitable railway property in the lUiiure. At the present writing no extensions of this system are contem- plated and, so far as can be predicted, none are likely to bo under- taken, except short branches. ROADWAY AND TKACK MATEEULS. All construction and maintenance methods and materials aro along the recognized lines of British practice. PracticaUy all the bridges are permanent structures, and recently all structural require- ments have been fabricated at the Shanhaikwan bridge works of the railway. The bridge over the Liao River about 40 miles from Mukden consists of twenty 100-foot spans, is one of the longest bridges in China, and was fabricated at the above-mentioned bridtre works The track is laid mostly with 85-pomid rail and is generally well ballasted with broken stone. A number of places were noticed where rail anchors could have been used to much advantao-o to prevent rail movement, but apparently little had been done toward anchoring the rail. All track is laid with square joints, in accord- ance with the general British and Continental practice. KOIXING STOCK. For some years past most of the rolling stock for this line, with the exception of a few iimerican locomotives recently purchased has Ijeen erected at the Tangshan shops. Most of this rolluic stock conforms, m general, to British practice, and the materials used are largely from British sources. A certain amount of this equipment has been budt along the special lines followed in China, but there 13 a growuig tendency toward the use of freight cars of lar^^er capacity, and most of the recent equipment has been built w?th four-wheel trucks (bogies). Figures 26 and 27 show some of tho equipment budt at these works in recent years. The average tractive capacity of the Peking-Mukden passenc^er- seryice locomotives is approxunately 20,000 pounds and that of "tho freight locomotives about 31,000 pounds. The average capacity ot passenger cars is about 65 people per car and the average capacifc v fJ'^y^ll •'*''" ^^""^ ^^'f *^ P?^^^ r^ ^^^- Nearly "all freight cars bmit in recent years have been of 66,800 pounds capacity, or 30 long tons, and very few four-wheel wagons Uve been built for some years. ^ ^^^iv mi WORKSHOPS. «i3.! P/^^^^P^ workshops are those at Tangshan, which have anaSd 3 S'^^'^'u "" ''^^!' ""{ '™^?- ^^^'^ ^W are well Ks^S 1 fll ""'^^^ n^^Wed and are in close proximty to the ThZxLl fi^^lr. Jeme T^en-YowS who graduated fiom Yale in 1881 and has since become the most prominent Chinese civU engineer (be W now d^rin^*"' ^^T'^ ■''^ the Hukuaijg KaUways) u^ chiK|iSeJ^ during the construction to Kalgan. Mr. K. Y. Kwone who I3n ated from Ma^achusetts Institute of Technology in ° 881 Ind l^ow chief engineer of the North Section of the Ti^5tsS-P^,knw R»^w was chief engineer during the constructiorto fSc^ "^''"^' ine LJunese have good reason to be proud of the' buildino^ nn«l rd"h''rbl?^u^77i,"^'''^ vi";-^^^^^^^ ^iWui^kLrifl"^^ operated from the standpoint both of ThrhisS stSmlf^tSflf^ retuiTjs on the cost of construction. «e mstoncai statement with regard to these linfii,000 tae.ki.. MOOND-a'TT .■MA.MCH LIM.1. The m.aln linC' of thia^ railway originates; from Pengfiiij, passing' Kwanganmen and li.sichihnien « the capital in a northerly direction. Tlid'inhabitiati .Hiring' neat 'these locali..tie8 enjoy tlie privilege of traveling by train, while those fnmi'tiie various, places in the eastern and northern parts of tlie city are still experiencing great incon- veiuence in traveling by rick3h.aw8, mule carts, and carriages. In the third year of the Repubhc of China (1914) the Ministry of Communicafions, in order to improve twnsportation facilities in the metropolitan municipa,lity, petitioned the Government for authority to construct a .roimd-city branch line., propo3i.ng that the cons.truction work and the ,rai8i..ng of .fundi be undertaken bv the Peking-Kalgan Railway. The ,petiti.on waa approved .in a mandate issued on the 28th day of May of the same year. CHIKA. §7 Accordingly the line wag snnreyed and estimates and plana were prepared- but the construction work was temporarily postponed for want of funds In March of this year this administration received, through the Ministry of Com- muiucations, inatmctioiw from the State Department as to the necessity of haying a branch hne from Hsiciiihmea to Chengyangraen conatructed at the earliest noa«.ibIe date Consequently the work was begun on the 16th day of June and the time fixed for Its connection with the Tungchow Junction of the Peking-Mukden line at Tun*-- diihmen, and thence to Chengyar^:men, was six montha. This line passes en route the four gates namely, Teshingmen, Antingmen, Tungchihmen, and Chaoyangmen. covenng 23 h (7 miles). The cost of construction was e?timated at 441,000 odd dSE SOURCE OF CAPITAL. As alreadv stated, this Hne has been built entirely with Chine^-c- conti-olled funds and mostly from surplus earnings' of the Pekin**-- Miikden Railway. In two mstances short-time loans were made but these were paid out of 1914 earnings, and during the latter part of 1917 a one-year loan for 11,000,000 was floated in China. In the summer of 1918 a new short-time loan was advertised, being for $4,000,000 at 7i per cent, repayable by annual drawings of $1,000,000 each year to 1922, inclusim s *• ." ";""" PRESENT CONTROL. The present control is entirely in the hands of the Chinese Gov- ernment, CLA»5 OP ■TRAFFIC. Revenue from freight on this line constitutes about 75 per cent of the earmngs, leaving 25 per cent for passenger business. This is tlie largest proportion of earnings from goods business on any of the lines of the Chinese Government Railways. The preponderance of vTlTM\^r'^^A^^^i^^ and the Fengtai connection with the Peking-Mukden and Pekuig-Hankow railways, this giving the ad- vantage of a down-grade haul oyer the West HiEs^ .V^icultural and pastoral products constitute the largest part of the bSiness. PIMSENT PROFITS AND OUTLOOK FOR FUTURE. fJt^ ^^i^^'^'^^I^^T ^^i^^Jin^ ^ K^tean it has shown a satis- factory profit, and wdl no doubt continue to do so in the future, par- ticuJariy if branches are bmlt as contemplated and the growing of iw rlsTwlfh ?h!^rt'/^°^ '^^ ^fV' deyeloped, such Ts is ZL!n tL ■ ^ ^'''^f'' crop raised between Ifeuanhuafu and tfteen^a^^Xrf ^'^ ^'"^^ '^^ ^^^ Peking-Kalgan section Items. H unhies h vjxmses 1913 J'lu.'k:;. Mex. Mts. 2,86rt,400 1,298,025 1,567,375 1914 Mei. dolls. 3, 755, 000 3,114,000 1915 641,000 Mex. dolLf. 2,721,500 2,052,700 G? *'"' %"P^ ^PV>^^^^> KuWai Khan, more than ^a^n^J'^^^"^ provided an iiiland waterway from Hangchow to Peking This canal was used for transporting to the imperial court at Peking the grains, silks, and other products from the rich S'^'^V^uin^ Southeast China. The distance fiom the central sta? on at lientein (where connection is made with the Pekin<'-Mukden R«S J^ .'' w""^^ J^ Shantung ("Santo," Japanese name) i«^/™^' **■ Hsuchowfu connection is made with the Pienio system, v*«w msTOBICAI. SUBVBY. t;.^® original concession was for a railway from Tientsin to Chin- Son ^nrTif^ ^^^^t* i"* a Chinese named Yung Wing, with per- ■?hiinnfio Shanghai-Nankmg RaUway, the southern terminus of J Rivi from ±"ir' \^^^r'\ ^'^''^^ '^ '^"^^^y '"''•^ the Yangtze J lliver from the Shanghai-Nankmg terminal. Yung undertook to 90 RAIT.WAY MATEEIALS, BQtllPMEWT, ANB SI7PPLTES. raise the ncf essar,y capital in England and America, but when Ger- many seized Kia<>chow the Kaiser's Government demanded pref- erential rights for tdl railway concessions in the Province of Shantung and the contract that Yung had made for $27,500,000 gold had to bo canceled on account of German objections. During tlie '■VBtittle of Concessions'" Germany affeed to confine its^ railway activities to Shantung and the Hwang Mo (Yellow River) Valley and England to the Yangtze VaJJey, and a worl^ing agreement was reached that Ger- many shouM finance aiwl construct t.he northern section of "the Tieiitsin-Pukow line, from Tientsin to the southern boundary of Sliaiitung,, a distance of 390.5 inOes, and that England should finance and constnict the southern section from the above boundary to Pukow, a distance of 236.5 miles. This, arrangement has been 'con- tinued up to the present time in the maintenance and operation of the line, though there is apparently no reason why one organization should not handle tlie situation economically and satisfactorily in 0vpry way. Tfie preliminary agreement was not finally negotiated until May, 1899; before the final agreement was concluded 'the Boxer uprising occurred and negotiat:ions were suspended until 1902; the final agree- ment, .as shown by appendix 6, was. not formally signed untOJan- tiary, 190S. The conditions of this loan are known as the ''Tientsin- . jr ujtkO iv J. eirma ■ amilCK OP CAPFTAL. As already stated, the loan funds were furnished in accord^ance with the Anglo-Cierman agreement of January, 1908. The general balance sheet for D'ecember 31,1 916, shows the investment assets .as amounting to $99,803,208, against which there are outstanding capital liabilities totaling 198,839,324, divided as. follows; Permanent Government (Chi- iie8.e) inves.tments, $3,589,350; mortgage bonds, $84,526,884; other 'Secured indebtedness, $10,723,090, The obligations other than the permanent Government investmenta are divided as follows: Deutach-ilsiatische Bank, Shanghai branch, $61,391,364; Chinese Central Railways (Ltd.), London (the banking connection of which is the Hongkong & Shanghai Banking Corpora- tion), $33,858,610. It is assumed in connection with the table on page 42 that all the securities are of ownership other than Chinese, tut the writer was unable to .ascertain the facts regarding the details of this ownersWp. .riESENT CONTROL. After the completion of construction the management was not con- solidated as was.' app.arently the intention of the loan agreement, l)ut., with one Chinese man.aging director for the entire line, the foreign staffs were ret.ained for the two sections. Thk arrangement continued until China severed relations with Germany in 1917, when the German staff on the northern section was dismissed and replaced by Chinese, except in one instance, in which a British boiler inspector was ap- pointed at the Tsinanf u workshops , The British s t aff is s till employed in the m.aiiitenaiicc and operation of the southern section. 'CI^&SS OF TMAPriC. For the year ended Deoeni.ber 31, 1916, earnings from passenger service amounted to $4,457,837 Mex, and the freight business to CHIHA. 91 $5,323,963 Mex. Rouglily, therefore, the paaeenger earnings were 45 per cent and the freight 55 per cent. The business of this railway IS probably quite typical of that to be expected on a new line, and the probabdity is that tliere will be a constantly increasing traffic in min- eral products, as has happened on the Peking-Mukden and also, to a ndticeable extent, on the Peking-Hankow hne. PHESENT PROPrrs AND OUTDOOK FOR POTtlHE. The result of operations in 1913 was a deficit of approximately $1,965,000 Mex. It was impossible to secure reliable figures on the 1914 earnings. The results of operations for the jestrs 1915 and 1916 are shown by the table on page 57. A total accumulated dehcit of $5,793,877 was left at the end of the year 1916. The very disastrous floods along the north end of this hne during the last four months of 1917 may have reduced the proflts for that year, but this condition will be only temporary and there are o-ood ^rounds for thbiking that this line will be reasonably profitable in the future. The following is an excerpt from the annual report for 1916: i«In f^r'nL*^^*^''/ eoEsiderable increase in transportation of agricaltural producta la to be noted, and still better results could have been realized but for the shortage ^!J^°'''^^'^^ ^i ^"""^-^ ^^?"'' «^"^^ t« "^^^^^ a great deal of cai^o could notbe . yarned and was often diverted to the old routes by canal or road. tS overcome thia difficulty in 8ome way amngementa were made mth the Lunghai (Pienlo) Railway ' nnWprt S-nr^A^"'"^ '^^"""f ,^«; ^^'^ ^^f.^^ of ca«, and 50 (30-ton) covered cars were I ordered from America; but t le latter did not arrive even up to the end of the year owing to the shortage ot ireight steamers from that country to China. t/li!^ statement is typical of the conditions existing on practically m the Lhmese Government Railwaj-s, and, in connection with the statement on page 77, is in support of the suggestions and recom- mendations made later regarding an arrangement for these railways to purchase equipment by means of equipment trust certificates. i EXTENSIONS. ; At present no extensions are contemplated. In fact, it came to the notice of the writer, in the case of the development of a coal mine requmng a branch of some 20 miles, that the coal company was evidently told that it would have to build the branch an J, in addi- tion, furmsli 100 coal cars as its share of the necessary equipment for the reason that the railway at present was not in aToSHo bu d this branch or buy the additional eciuipment. It would appear however, from a study of the map ot tfiis part of China anci the Il?r ''^r'il''^^ '}^ territoiyT that the Ltural and econom^^^^^^ Z^^nT^v^ ""Tl^ ^"-^^ construct and later maintam and operate these additional lines in connection with the Tientsin-Pukow fine Jo S TlonW 't' ^^'1 '^ ^^*^^'"^? ^^^^^y ^« '^^'^ over radwa s operated m connection with this system of BOADWAY AND TBACK MATERIALa are^ m^^'i'InT ""^ n '^ l^^ 'f^^^^ substantially budt and all structures chti^^ T^^- ^'' -^^^ 5^^™^^, ^^*^*^«^ ^^ materials were pur- chased in Germany, including a large amount of rail for the fi^^t section constructed, although it was clearly the intention that tS i •- lAILWAY MATEBIALS, "EQUIPMENT, AND SUPPUBS, should be funiislied from the Han-Yeh-PiDg plant, as was the case on the &uthem or British section ; what wm ordered later from these works was a special German section of 67.'l pounds to the yard. On the southern section anything that coidd be purchased in China was bought there and al, other materials and equipment were opened to competition, wi,th the result that the cont.racts were placet! with British," Continental, and American concerns and China secui-ed these railwa}^' requirements at better prices than in any previous instance. A considerable part of this line s maintenance requirements, such as switch stands, irogs^, and switches, are being manufactured in the workshoi» at" Tsinanfu and Pukow, although in connection with the reqirements for the German section there is such a large stock on hand that m,any of the materials will last for a great number of ycai-s — in fact, in some instances they may never be used. lOLLIMQ STOCK. CHINA. 93 On the German section all the rolling stock was purchased in Gei-many, and it is claimed, with rerj^' good reasons to support the belief, that much of this equipment was actually on the wav to China before the invitations for tenders were published in Tientsin ;to comply with the terms^ of the loan, agreement. 'On the British section tenders were iii'vited for aU, the equipment, with the result that considerable portions of this came from countries other than the IMited Kingdom. Hall of the first 200' freight cars came from, Belgium, ,2 of the fi,rst 10 locomotives from ,America, all the rail and fastenings from, the Han-Yoh-Ping iron works, and most of the cement from, the" Hankow plant of the Chee Hsi,n,g Co., which also has a plant at Tangshan. This line is in need of additional rolling stock, as is indicated by the quotation on page 91 from the 1916 annual report. During the early part of 19174ne Pressed Steel Car Co. furnished the li,ne 50 very eieelleot covered cars somewhat similar to 'the one shown in, figure 26. 'fPOlEIIIIIiOPS. There are very well aiTan,ged and equipped workshops on both Bections, ,involving unwarranted expense for the construction, m,ai,ntenance, operation, and overhe,ad expense of two complete general workshops when, one such shop as that at Tsinanfu would Save been entirely adequate. The shops on the German section are located at Tsinanfu and are equippecf entirely with German shop m,ach,inery. ■Th,is shop, with its present f acihties and by utihzing part of those now instaled at Puchen, would be capable of taking care of the general repairs of all rolling stock for the enth-e Tientsin- Pukowfine and also the Shantung 11 ailwaj, running from Tsinanfu to Tsingtau. The shops o„n the British section are located at Puchen, about 10' miles from tne Pukow terminal. These shops are not so extensive or bo co,mBletel,y equipped as those at Tsinanfu. The sliop ■machinery has been 'purchased on the open market hke the other requ,i,rem,ents, but m,ost of it is of British manufacture. ORGIMBITION' AND PESSONHKL. Under date of October 20, 1916, regulations for an organization similar to that of the Pekin-Mukden were promulgated, but, as already explained, while the administration is under one managin*' director for the entire line, with a hmited number of general officers*^ there are in addition the district staffs, retained on each of the con- struction sections, which are now termed the Tsinhan District for the north or German section and the Hanpu District for the south or British section. A list of the principal officers for the general office and each district is given in the directory beginning on page 262. PURCHASE OP STORES. The purchase and supervision of stores come under a subdepart- ment of the general department, and the official in charge is the secretary and general storekeeper, whose office is at Tientsin, In addition, there are district storekeepers at Tsinanfu and Pukow, The district storekeeper at Tsinanfu, since the Germans were dis- missed, is a Chinese and comes under the usual regulations for the Chinese Government Kailways, but the district storekeeper at Pukow is under the general jurisdiction of the engineer-in-chief of the Hanpii District. It is now the general practice of this line to mvite tenders by advertisements, such as the one shown on page 68. Ihis Ime recently lost considerable stretches of its roadway at the northern end of the Tsinhan District, and the permanent repairs will probably require some additional bridge materials to replace the lost bridges or to provide additional openings. PEKING-HANKOW (KIN-HAN) RAILWAY. LOCATION AND EXTENT, The northern terminus of this line is south of the Chengyan^men gate m Peking, as mentioned in connection with the Pekinl-Mukden Kailway The total length of the mam line is about 750 miles and tiie southern terminus is Hankow on the Yangtze River, which is in about the same latitude, as New Orleans. Hankow is about the same distance south and west of Peking as New Orleans is of Indiana- polls. 1 his at present is the longest journey that can be made on the Chmese Government Radways without change of cars. There are five branches, mostly to coal mines, with a total of about 60 miles of hne, the longest of these branches bemg 26 miles. mSTORICAL SURVEY. tofnZfp fttl?'!??^ T^ other considerations, it is rather difficult ,^ tht klm^ T. -^ ^*'"'"^' "i *5^ ^^'^"■•y °^ **"« l"ie in a report of this kind Tills was one of the earliest railway projects con- Sd Se XSon'of foreS'ci" Uaf ' The'^fcf ^^"^"""^^ fc aZ'rHrZ''^ *^' Sntjine was the^^^izatiin ftsOG ^ t^LJ^ n^^' "^'"T^ "^ Hukiiang, of the Chinese Eailway of Sn nn^nn^^l^^T1*• f^r ^^t'^'i ^'t^^ "^^ authorized capita raise onlvTnnnn'nn'*^''^''^'.^"'^^!?'"' ^^^ Chinese were able to S|tal wL'Sr *''^' "''*'' "'"'^'^ '''' "^'"'^'^ °^ ^"^^'^ by ^nft'^rl^lltl*!'"?'^'''',!'^^^ ^ American syndicate represented Cant Rich «nH ir^ ' l""' ^^""^ ^'^^^y^ ''?«' estimates were made by ^ apt. Kich, and one of whose assistan ts was Mr. K. S. Low, already men- BAILWAY MATERIA,LS, EQUIPMENT, AMD SITPPLIES. CHINA. 95 1 m maimging director of tlie southera section of the Tientsin- w line., tor .some time in 1897 it looked as though the con- tioneci. Piikow struction of this line would go to this American syndicate* aitliou<^h ftt the same time- there wero in progress negotiations hy British mterestfi. During this interval Mr. Sheng Kung-Pao was made doctor general of the company ; he took an actire part in carrying the project to a conclusion and continued his activities in th,e 'railway situation up to his dismissal in 1911. During the time tliese surveys were being m,a.ile and negotiations were in progress, a Belgian syncfi- cate mmed the Soci6t6 Fiiinnci^re et Industrielle Beige en f^liine entered the field without attracting serious attention and concluded the preliminary agreements of 1897, as shown by the documents in api>endix 3 . This sjTidicate, as developments have since cleari v shown, was a Franco-Belgian combination operating with Russian assistance and mtercst As quickly developed, the financiere of these in- terested nations could not obtain' the necessary funds under tlie terms of the prelimmary coiitrjict, with tlie result that resort was had to a sewes of concessions secured through extended negotiatioiis (supported^by diplomatic pressure from Russia, France, and Belgium) and resultm|r in the final agreement under which the line \\-i\s constructed by La Soci(5t6 d'Etude des Chcmins de Fer en Chine. The concluding of these negotiations was the particular event that precipitated one of the acute periods of the '^Battle for Concessions/' The supplementary loan of 1905, as shown, bv appendix 3, provided the necessary fmids for tlie fin.al completion o! the railway. In 1907 the net profits amounted to approximately ' $2,000,000 Mexican, ;and the Chkese concluded that the line was gomg to be very profitable, as it has since proved to he; but as the Belgian syndicate was entitled to 20 per cent of the annual profits, it was decided to pay the 5 per cent premium and redeem the original loan. This was successf lily accomplished in 1908 by the flotation of the present Anglo-French loan for £5,000,000. The line was taken over by the Chinese Government on January 1; 1909, and has since been operated by the Mmistry of Communications un.der the terms of this lo«i agreement. :BO«KC« OF CAFrriL- Tbe original loan, finaly ■ aggregating about £4,500,000, is said to have been distributed about threc-fiftlis to Frencli subscribers and two-fifths to Belgian. The wiiter was a^ble to obtaui no reliable inform-ation as to the division between British and French subscribers. of the present iyiglo-French loan of £5,000,000. Special attention 18 called to the table on page 54 as showing that tie Chinese Gov- ernment, tlttoi^h the owneiship of the perm,anent investments and the additions from surplus, now actually owns about 50 per cent of the capital cost of tliis system. WMKNT' CONTKOL. 'Notwithstanding the fact that the present loan has eliminated the ^concession features, a considerable French technical staff is retiiined in the maintenance and operation of the property and all statistical and technical infofmation is prmted in French or Chkese. This French staff appears to have a very considerable authority m the administration of the property. CLASS Of TRAFFIC. Tlie traffic on this Ime may be roughly divided into 30 per cent passenger and 70 per cent freight. Mineral products, of which a large part is* coal, represent more than 40 per cent of this traffie agricultural products more than 15 per cent and manufactured prod- ucts less than 15 per cent. The Cheng-Tai and Taokow-Chinghua Imes both turn over to this line a considerable amount of coal, and this will probably increase from year to j-ear. This line and the Canton-Hankow Railway (when the latter is completed) will con- stitute tlie principal north-and-south trunk line from the populous center of Canton through a densely settled country to the coming mdustnal center of Hankow and then to the city of Pekincr PKESENT PBOFFTS. In 1912 this line earned $5,246,300 net; in 1913 it earned $7,548,600 tR r;Ar4o ' rl^^ all fixed charges and taxes, net earnings wero W ?oi 7^'i: ''''^ ^""'^ ^^^^ ^^f^ ^^^^ ^^ $8,751,912. The net earnings for 1917, however, were adversely affected by the very disastrous i^'^n.^Kr'^Vf 1?''^*'*/'' Pr^ ""^ ^^ territory, which destroved con- siderable stretches of railway and a number of expensive ^bridges. A « f 'f K T'^'"''' ^^ ^''* ^""^y * temporary effect, and tliere is no doubt Uiat this line will continue to be profitable and will in time Mquidato Its entire indebtedness out of earnings. ^ P^^sent no extensions are contemplated other than those in ROADWAY AND TRACK MATERIALS. PracticaUy all of the rail and fastenmgs come from the Han-Yeh- ring worte. The rail weighs 76 pounds per yard and is a B^WiRn lurnished from Belgium or France, except in a very limited number factTr^^^'Vl";,'^'^ '""'^ ^^f P^fhased froi^ ChinLe JJ^^nu- iw.„^ 1 Tu ^ * T®"^ considerable number of bridges on this te'ln rc,S''i''T?,'?' one over the Yellow River, which is 9,87! itet in length, about 1 1 feet above high water, partlv through trii«P« ;iaKL^pu£'"S'TT4^ ^"PP^'^^^'l oL^l'j^^edl"^:!" m B^fnJ^^n^ f^^' ,9 ^^'*» ■°^,^^^ superstructure was fabricated o SiStZ,.^ t^» °*!^,f ilf" "1 France, and the floor system is aU ale^v SonS ' Th I *?* ^f^^^g^Wfin with metd plates, ^s line WXen^nV. Trif ^^^^^""^ ^^ all the other bridgis on this cnrrv nTlX ^ cnticued as not being of sufficient strength to ♦Ki7ff P "^ t^e motive power that is being used. It was itated thh s'tZmen? ^Pr'^^"}^^ ?f ^^^ structm-e^ would seem to warrin[ .„„!i! . *; ^® advertisement reproduced on paee 67 was for tenders to replace some of the bridged lost durin- tlTe dest^tivl KLtt^ff^thnifr^'^ '^•^''^ "V'J'^ ""^ "^ lan. It?repor ed uiat mo:.t of this business was awarded to an American concera. m EAILWAY MATERIALS, EQUIPMENT, AND SUPPLIES. ROLLING STOCK. The rolling stock is all of Belgian or French manufacture. It is illustrated in figures 22 and 23. This line, as is the case with the other Chinese Government Kailways, is short of freight-car equipment for handling all the business offered. WORKSHOPS. There are three workshops on this hne, the largest and niost important being at Changhsintien, about 32 miles from Peking. The Chingchow shops are district repair shops about 430 miles from Pekmg, and the Hankow district repair shops are only a few miles from that end of the line. None of these shops are laid out on the lines of the Tongshan or Tsinanfu shops, and in the course of time they will no doubt need considerable additional shop machinery. The present shop equipment is quite varied, and a considerable num- ber of the machme tools are of American manuf actm-e. ORGANIZATION AND PERSONNEL. The organization for this line is very similar to that shown for the Peking-Mukden and was promulgated the same date, October 20, 1916. In the directory given on page 263 the writer was not entirely able to reconcile the titles with the requkements of the promulgated organization, PURCHASB OF STORES. The administration and purchase of stores come under a sub- department of the general department, but the present managing director, Mr. C. C. Wang (Chinese) , gives all important purchases iiis personal attention. In purchasing all supphes by pubhc tender, this railway has probably taken steps in advance of any of the other Chinese Government Kailways. The Peking-Hankow is the only line that has so far made any move toward the purchase of miscel- laneous merchandise requirements by the arrangement of annual contracts. CHENG-TAI (SHANSI) RAILWAY. LOCATION AND EXTENT. This is the only meter-gauge line of the Chinese Government Rail- ways and connects with the Peking-Hankow at Shihchiachuang, about 172 miles south of Peking. The Une extends westward 151 miles through a very rough country to Taiyuanfu, the capital of the Province of Shansi, which is about 2,600 feet above sea level. The highest point on the line is about 3,500 feet in altitude. There are 21 tunnels on the line, but the longest is only about 960 feet in length. There is also a large number of bridges and viaducts, some of them of very considerable size. HISTORICAL SURVEY. The first reconnoissance and estimates for this loan were made by a French engineer for the Riisso-Chinese Bank and the Comptoir d'Escompte in 1897. In May, 1898, the Russo-Chinese Bank made a prelimmary agreement with the Chinese Government to furnish 25,000,000 francs for the construction of this line, but after resurvey Special Agents Series No. 180. FIG. 22.— LOCOIVIOTIVE ON THE PEKING-HANKOW RAILWAY. I FIG. 23.— FREIGHT-CAR TRUCK ON THE PEKING-HANKOW RAILWAY. i INTENTIONAL SECOND EXPOSURE 96 KAILWAY MATERIALS, EQUIPMENT, AND SUPPLIES. ROLLING STOCK, The rolling stock is all of Belgian or French manufacture. It is illustrated in figures 22 and 23. Tliis line, as is the case with the other Chinese Government Railways, is short of freight-car equipment for handling all the business oU'ered. WORKSHOPS. There are three workshops on this line, the largest and most important being at Changhsintien, about 32 miles from Peking. Tlie Cliingchow shops are district repair shops about 430 miles from Peking, and the Hankow district repair shops are only a few miles from tliat end of tlie line. None of these sliops are laid out on the lines of the Tongshan or Tsinanfu shops, and in the couree of time they will no doubt need considerable additional shop machinery. The present shop equipment is quite varied, and a considerable num- ber of tlie machine tools are of American manufacture. OKGANIZATION AND PERSONNEL. The organization for this line is very similar to that shown for the Peking-Mukden and was promulgatecl the same date, October 20, 1016. In the directory given on page 263 the writer was not entirely able to reconcile the titles with the requirements of the promulgated organization. PUICHASE OF STORES. The administration and purchase of stores come under a sub- department of the general department, but the present managing director, Mr. C. C. Wang (Chinese), gives all important purchases his personal attention. In purchasing all supplies by public tender, this railway has probably taken steps in advance of any of the other Cliiiicse Government Railways. The Peking-Hankow is the only lino that has so far made any move toward the purchase of miscel- laneous merciiandise requirements by the arrangement of annual contracts. CHENG-TAI (SHANSI) RAILWAY, LOCATION AND EXTENT. Tliis is the only meter-gauge line of the Chinese Government R ail- ways and connects with the Peking-Hankow at wShihchiachuang, about 172 miles south of Peking. The line extends westward 151 miles through a very rougli country to Taiyuanfu, tlie capital of the Province of Shansi, wliich is about 2,600 feet above sea level. The highest point on the line is about 3,500 feet in altitude. There are 21 tunnels on the line, but the longest is only about 960 feet in length. There is also a large number of bridges and viaducts, some of tliem of very coiisiderabte size. HISTORICAL SURVEY. The first reeonnoissance and estimates for this loan were made by a French engineer for the Russo-Chinese Bank and tlie Comptoir d'Escompte in 1897. In May, 1898, the Russo-Chinese Bank made a preliminary agreement with tlio Chinese Government to furnish 25,000,000 francs for the construction of this line, but after resurvey Special Agents Series No. 180. n II • FIG. 22.— LOCOMOTIVE ON THE PEKING-HANKOW RAILWAY. I FIG. 23.— FREIGHT-CAR TRUCK ON THE PEKING-HANKOW RAILWAY. Special Agents Series No. 180. FfG. 24.— DJNING CAR ON THE PEKING-MUKDEN RAILWAY. FIG. 25.— PLATFORIVI BAGGAGE TRUCK ON THE PEKING-HANKOW RAILWAY. CHINA. 97 and better estimates this amount was increased to 40,000,000 francs. The final agreement was formally ratified September 7, 1902, by an Imperial decree. The loan bears 5 per cent interest and was issued at 90. Amortization began September 1, 1911, and runs for 20 years, but the balance due can be paid any time after the above date. The loan is guaranteed by the Chinese Government. The Belgian com- pany previously mentioned as building the Peking-Hankow line was also given the contract for building this line. Construction was started in 1903, the first rail was laid in 1905, and the line was opened for traffic in 1907. While this loan was handled by the Russo-Chinese Bank it is probable that most of the funds came from French or Belgian sub- scribers. Some years ago the Russo-Chinese Bank disposed of all its interest, and the loan is now entirely under French control. CLASS OF TRAFFIC. Roughly, the earnings of this line, amounting to something over $2,000,000 a year, are derived 25 per cent from passenger traffic and 75 per cent from freight, and more than 75 per cent of the freight earnmgs are from the coal business. The coal deposits along this Ime are among the best in China, and much of the present product IS a good quahty of semianthracite, which is handled in blocks about 10 by 12 by 16 mches in size. The present coal operations on this line are m territory of the Peking Syndicate concession, mentioned later m connection with the Taokow-Chinghua Railway (see p. 98). PRESENT PROFTTS AND OUTLOOK FOR FUTURE. The operating expenses are about $1,000,000 and interest charges are $900,000, with the result that there is only a small margin of profit. While the road's business may increase in the future, the Ime will probably never be one producing large returns, particularly on account of the handicap of the meter gauge, requiring trans- slupment of all freight and passengers at the junction with the Peking-Hankow railway. So far as could be learned no extensions of this fine are now con- templated Wlien It was built it was thought that it might be the nucleus of a very extensive ovstem, but until the gauge is made 4 feet 8i mches it is not likely that any long lines wHl be built extend- ing this railway. ROADWAY AND TRACK MATERIALS— ROLLING STOCK. fh J^^^r^'^L^ Belgian section weighing approximately 60 pounds to wn.lZ n??^' with the fastenings, came from the Han-Yeh-Ping work.. Otherwise the remarks regarding the roadway materials on the Peking-Hankow Railway apply in aU details to this Hne. As on the Pekmg-Hankow, all the rolhng stock is of French and Belgian design and manufacture. This line has 57 locomotives 51 Et?0^T..n/^ f^^'^' •''' ^'''^^' .^^^^' ^^^ 1^3 service ca^ 7^dn^ J?i^ ^^^/L*' ""^ ^^'^ equipment consists of cars suitable for car- wS k biXl ^^^^?^^ capacity of all cars is over 46,000 pounds, Star" S'4NoT87iSTaS^^^ '^^ ^^"'^"^^^ ^" ^^^ ^^^ ^ ^^^^ 106229 ''--19 7 i INTENTIONAL SECOND EXPOSURE Special Agents Series No. 180. FIG. 24.— DINING CAR ON THE PEKING-MUKDEN RAILWAY. FIG. 25.— PLATFORM BAGGAGE TRUCK ON THE PEKING-HANKOW RAILWAY. CHINA. 97 and better estimates this amount was increased to 40,000,000 francs. The final agreement was formally ratified September 7, 1902, by an Imperial decree. The loan bears 5 per cent interest and was issued at 90. Amortization began September 1, 1911, and rmis for 20 3-ears, but the balance due can be paid any time after the above date.* The loan is guaranteed by the Chinese Government. The Belgian com- pany previously mentioned as building the Peking-Hankow line was also given the contract for building this line. Construction was started in 1903, the first rail was laid in 1905, and the line was opened for traffic in 1907. Wliile this loan was handled by the Russo-Chinese Bank it is probable that most of the funds came from French or Belgian sub- scribers. Some years a^o the Russo-Chinese Bank disposed of all its interest, and the loan is now entirely under French control. CLASS OF TRAFFIC. Roughly, the earnings of this line, amounting to something over $2,000,000 a year, are derived 25 per cent from passenger traffic and 75 per cent from freight, and more than 75 per cent of the freio-hfc earnnigs are from the coal business. The coal deposits along this Ime are among the best in China, and much of the present product is a good quahty of semianthracite, which is handled in blocks about 10 by 12 by 16 mches m size. The present coal operations on this line are in territory of the Peking Syndicate concession, mentioned later m connection with the Taokow-Chinghua Railway (see p. 98). PRESENT PROFITS AND OUTLOOK FOR FUTURE. '^IL^i^f ^*^^"^. ^^Pf^nses are about $1,000,000 and interest charges are $900 000 with the result that there is only a small margin of profit. While the road's business may increase in the future, the Jme will probably never be one producing large returns, particularly on account of the handicap of the meter gauge, requiring trans- shipment of all freight and passengers at the junction with the Pcking-Hankow railway. So far as could be learned no extensions of this line are now con- templated. TOien It was built it was thought that it might be the nucleus of a very extensive cystem, but until the gauche is made 4 S^is^rSl^a^." ^'' ^'^^^ '^^'^ "^^ ^'''^ ^^ wUl^e l^ui^t; Sd^ ROADWAY AND TRACK MATERIALS-ROLLING STOCK. thJ'varH'VnJ* wtr?l"'>'? '^''^^'"- approximately 60 pounds to " ,,.Z" nX ' ^'*'i. ^'"' fastenings, came from tlic Han-Yeh-Ping feki,?jR^V ^ ^'i^" •'i'"""''' '•'■garding the roadway materials oS tl.o Fekin^-Hankow RaUway apply m aU details to this line. As on the Peking-Hankow, all the rolling stock is of French and i. fZn'"'""" ^"d ™'1""facture. This linS has 57 locomotives, 51 Abou^l'o ner cent n^ fv''°'' ''' ^T^^' ■'•'''' ^'^ ''''^ ^'^'^^'^ «^^ rv nf^^ai' f.?* °^ ^^'^ equipment consists of cars suitable for car- wl 1 ;= » '• T- "^^ a^verage capacity of all cars is over 46,000 pounds Stt;: KfoTs^^^^^Ug^' *'^ *^'^^^""^* '^ ^^^ ^- - c^- 100229^—19 7 99 MttWAY MATERIALS, .BQUIPMEFT, AND SUPPLIES. WOlKBHOPa. «,n J^t^n !i/re^ *^1' "^J^^^ ** Shihchiacfauang, near tho TOnnection with the PdHtig-Hanfcow R*ilway. These are am a) I shops; they are only for the makiiig of aU tiakua of repaire to tho TtLpSr^ *^ ^^ *'"* •*" m*aufactoring of eq^uJL^t k OWIiAIIKilllllf AND PlllM»Mli||^. TMs lina, wMle oi^anized along the general airaegeiiietit called' for hZ tt^^^I*^^^^ 1^' IS am^pariiig director (Oiinese), !i^iw f^\?**^ '^' ^\ F^t' ^"sLiiig true to an men greater extent tlian on the rddng-Haiikow RailwaF Th« numA shown for this liii^ in the UnivS DireXy^'S^aTofS and liosenstock's Directory of China is the Tdieng-T'ai Rwlway niMUMii m wmwma. For som* tmc pmtihe purchases, of this line have been verv limited, and when conditions again hemma normal the former policv of mmking .all iKMihle purch,ises from ..France will prohaWv he rZ Biimed to a very comiderahle extent, (apeciallj ,.as ki as thm Jirmmit French staff is in ■techmail control oi tile .lina ^"^"^^ ^'^'^ ^'^''''^ TAOKOW-CffllNGHeA, ,CrAO-CHIN€) KAILWIY. I-OCITION' AND HTTINT. mJrZkZ ti!!^*''''^ ^ T^^?™ Honan,ihe northeastern end being mt lnotow, where connection is made mth river and canal tranaoor^ ,.,fteect»ii to ChiBghna and the Jamieeon mines, with a total leiiirth #1 l« of95 mies The Peyti|.Hankow Eail^ k cr^^S Hsmhsiwighswn at about the mildle of the line, and this point is fm iippoxima*«!y the half^-waj point between Pekinir and rfankow fc^iT'lf • ™I«/rom Peking and about 380 mil^from Hankow! What IS more important than tie railwav in this connection is tho .wcateon and fflctant of the mining concession covered bv the Pekinir . Syiid«.ate This stil indnd^ all of Honan north o7 the Ydlow oiZ'wi ^^f r^i^ ^oi^ Pit)vince of Shansi sonth of th^ lireat Wall— a triangle mcluding many thousand square miles and SnKLJt^ '^" of theg^atest^oal fields in IC worid^LS shiS^rt wJfZf^^^^ ^'^^ ^^^^^y ^"4 ^ar^l« of standing long BHipment without deterioration. The Pekiiig Syndicate etUl retains irfr!i?if''^''''' •^*''' northern Honan, but the Chinese authorities IltC^ ^^f!T^'^''^^^ ^^ payment of 2,750,000 taels, lf,SL.l;^^^^ 5^'*^'^^ ^^ prefereatiia rights ii^ furnishing capital, for future developments in .this .area. ■ftWMMCAi. mmm. The first steps to secure this concession were taken bv an Itahan Commendatore Amgelo Luzatti. who visited Cliiiia in 1896 and who .wyareetly studied^ carefullj tlie mineral .resources of thiL district He organized a syndicate m 1897 of Britiali and Ilalian finand^ CHmjL 99 with a capital of £20,000; this was laier increased to £1,500,000 and the object of the syndicate was the develo}>ment of the rich mineral resources of this dktiict and the transportation and marketinE of them. Ha was ably assists by a Chinese named Ma Kie-chon«T who spoke English and French, In the couree of time the project beca«e«tirdy British, and linmHy an agreement was made with the British & Chinese (British) Corporation to practically pool inter- ests in the further mming and railway developments north of tho X angtze xviver. In July, 1905, the Chinese Government entered into an agreement to take over tills hne by payment in gold bonds at 90, be^rinS interest at o per cent to the amount of the actual cost plus 10 pei- cent— the syiidicate still to receive 20 per cent of the net profits. The amount *'l^''?nL*^^ "^^ £700,000, to run for 30 years and redeemable after 19 lo, „/Tl!® fr^"?* *^^' "^ ^? railway, whUe nominaUy in the hands ^ii,L^'f"f^V'^ Communications, is actually British througli the medium of the Peking Syndicate. Of the earnings of this Une ahout 20 per cent are from passen-rer bS fa,rc(^ "^ '^^ ^"^ ^'^'^^^' ^'"'"' *^ P^' '*"* ^'^ '*>« ^»"«i" HasENT Fsrarrs and ovtuoos. fob putubb. 10??* «Pf ating Tevenue of this Hne was approximately |;835,000 in .ffi ~^®*'^"^'. *^^*^ *^<' payment of taxes and other income SynEe. °°°"" '"^ ' ^° ^^' "^^ "^ ''^''"'^ ^oes to the Peking w^^h^hf^i '^^ ^yn'l''*^ to build the ext«nsiTB system of rail- ZT fh^rL- ^^ fF°^o^*^ has been a subject of lon^ controversy with the Oimese Ciovemmait authorities. Several W Unes We at^'Sr^^ ' P?f*i-i-'y««n° **" ^r^ River at^P&^^t at present no active step are bemg taken in the building of any S™*„f b f, P'<'''»*'k*l'«* forther extensior^ will be b,£lt in tho Sw^^^i •*''* •»?l5'°^ •? t"?f district, in which event the line should become mcroBiagly profitable as the coal traffic grows esne- cally on account of the high quality of the cod and tWj^cS '>Jlity of tmnsportmg it to several seaports. At present shinmenta iTne ^d tr P J'owl;- ^^e^tuhz ""^l^^tP^^ tSow. '^'^ ^'^^ ^"^ *'""^ shipments c'aa ^^'b^mJTi^ MATOaua JtMD BQtarMEMT— WiORSSHOPa. British materials and practice have prevailed entirely on this Une moTLl^'^^^P"'^"* "^ ^^ ^^ "^7^ ^'^^<^' there being 10 loco^ BriS^dJi^n^TJI^uSi^'^ ''' '^^'* •''-• "-"^^ «- «^ waStntiT w^l ^^^"^^^ ^^^ extensive shops than would seem fliZ^W.I»™- *^ above amount of equipment. ApparenUy M wIl ' '^^ °^ '''^''"^ ^ ^^^ "^i^'g equipment 1:00 lADLWAir MATEBIALS, IQUIPMElirT, ABB SUPPLIES. OMQiWIlATWII. The Peking Syndicate (Ltd.) acts as manaeer and administrator of this line. There is a managing director (Chinese), but the staff IS all British. The Peking Syndicate is represented in PekiBg by a resident ^ent general and engineer in chief, witJi offices m the ligation Quarter at Peking. PIJBCIIASE OF STOBBS. The purchases of this line have been very small for some time, but the writer was advised by Mr. Frodsham/ assistant agent general of the Peking Syndicate, that it expects to undertake considerable work at the conclusion of the war, and that it will continue its policy of making purchases so far as practicable from British sources. Until such time as the Chinese take more active control of this Hne it wiU, probably remain practically a closed market. KAIFENG-HOMAM (PIENLO-LUNGHAI) LINES. This system is known by a variety of names, but the official Eng- Hsh name used by the Ifinistry of Communications as Kaifeng- Honmn Lines. The Chinese name for the central or original section is Pienlo, and the system is frequently so designated. The eastern section IS known as the Eastern Lungfiai, and the western section as the Western Lunghai. The system is often referred to as the Lmighai Lines, and at times as the Pienlo-Lunghai Lines. LOCATION AND' EITINT. The eastern terminus is: at Hsuchowfu, where connections are made with the Tientsin-Pukow. This point is about 210 miles north of Pukow, to which port on the Yangtze Eiver a considerable por- tion of the business origkiating on this line is taken. The line runs in a westerly direction through western Kiangsu and northern Honau to Kwanyintang (a total of 344 miles), passing through the important Chinese cities of Kaifengfu and Honanfu and crossing the Peking-Hankow Railway at Changchow, about 430 miles south of Peking and 320 miles north of Hankow. An extension of this line 18 now under construction farther west to Sianfu, the capital of the Province of Shensi. A considerable part of this line runs through the section ©f China that is frequently subject to floods, which at times cause much damage. The railway has been a means of afford- ing relief to people made destitute by these floods. There are exten- sive coal deoosite along the central and western portions of the line but up to the present time there have been no extensive develop- ments. HISTORICAL S'URVET. Tlie Pienlo section of this line from Kaifengfu to Hunanfu, a dis- tance of about 120 mOes, was first suggested in 1899. The pre- himnary agreement was made in 1902 between Mr. Sheng, then director general of the Chinese Imperial Raiways, and Monsieur Armand louffant, representing a Belgian company, the Compagnie Wnerale des Chemins de Fer et Tramways en Chine. This contract provided a loan of £1,000,000, issued at 90 and bearing 5 per cent mteresi, to run a total of 30 years, amortization to begin the eleventii CHINA. year, but with the important privilege of refunding at par any time after the beginning of amortization. The construction of this part of the line was carried out very expeditiously, to the satisfaction of the Chinese authorities. In 1912 and 1913 the Chinese authorities decided to extend this line, and as they could not raise the necessary funds from native sources and the above agreement gave this Belgian company pref- erence for furnishing further funds, an additional loan of 250,000,000 francs was negotiated and issued at 94 par, 5 per cent interest, amor- tization beginning the eleventh year of the loan, and the loan to run a total of 40 years, with the right of redemption of part or all of the loan any time after tlie tenth year at 102J. This new agreement made a very important revision in the first agreement, in cancelling the clause for the Belgian company to receive 20 per cent of the net profits. The new loan does not grant the company this portion of the net profits. Both these agreements are, in all features, very similar to the Peking-Hankow original agreement, in which case the loan was refunded by the Anglo-French loan in 1908. Payment of interest and principal is guaranteed by the Chinese Government, and the railway property is also security for this loan. Wliile this loan was with a Belgian company, most of the actual funds came from French subscribers. The control of the loan is still Franco-Belgian, with the French mterests largely predominating, no doubt. CLASS OF TRAFFIC In 1916 the traffic earnings on the original line, the Pienlo section, were about equally divided between passenger and freight receipts, but with the extensions and development of business there will probably be a greater increase of freight traffic than of passenger traffic. The larger part of the freight traffic consisted of mineral and agricultural products, coal being the largest item. PRESENT PROFITS AND OUTLOOK FOR FUTURE. The Pienlo section, with earnings of nearly $1,287,000 in 1916, showed a surplus approaching 123,000 after payment of all operating expenses and income charges. As already mentioned, this line is now being extended to Sianfu, the capital of the Province of Shensi. Several further extensions are considered and probably will be made in the course of time, particularly one to Lanchowtu, the capital of the Province of Kansu a distance of some 300 miles. It has also been proposed to extend this line to a port east of Hsuchowfu, but the building of this exten- sion is probably somewhat remote and hardly seems warranted in view of the present connections with the Peking-Hankow and Tien- tsin-Pukow Kailways, which make available through interchange of traffic to the Yangtze River ports of Hankow and Fukow. ROADWAY AND TRACK MATERULS— ROLLING STOCK— WORKSHOPS. Portions of this hne, particularly the western parts, run through a rough country, which has made construction both difficult and expensive, reqmriug a considerable number of tunnels and bridges. lOi EAILWAY MATERIALS, EQUIPMENT, AND SUPPLIES. The line, however, is well and substanfciallv buOt, althougli, as on other Chines© railways, the bridges are designel and constructed along the hnes of those on the Pekmg-Hankow. All the roadway and track materials follow the Franco-Belgian standards and practice, and most of them came from Belgium or France, including the first rail, which was in 12-meter (47-foot 3-inch) lengtlis. Tlie rail used for recent construction has been the SS-pound (Mmm section from the Han-Yeh-Ping works. This system, hke other Chinese Govommont Railways, has a rather anall amount of rolling stock. This is along the hnes of the Franco- Belgian praijtice and most of it is of French or Belgian manufacture but assembled m the workshops at Chengchow* The general repair shops are at Chengchow and are arranged for the aasembhng of manufacturing equipment and for the making of ail classes of repaii-s to the roUing stock of these lines, <*EC2Al«IlATION ASTO PBKSONN'H., There k a director general of these lines, who is now located at Peking. There are also at present sevenal managing directors, but It IS probable that, after the completion of the construction, the orgaEization of this line wil be changed to the usual operating »rrangem,eEt, with one managing director in charge of the' system^ who will probably be located at Chengchow. At present the tech- iijcal management is ahnost entirely m the hands of the Belgian staff. The writer was unable to obtain information enabhng him to prepare a complete directory of this Hue (see p. 205), particularly as reganls the separation of the permanent organization from* the temporary construction oi-ganization. PURCHASE OP STORES. Much, difficulty has been experienced in obtaining the needed materials for the construction of this Hne. Since the beginning of the war, much material has been bought from whateyor sources wore aYailable, when it could not be got in China. It is probable that this line will adopt the general pohcy of purchases already referred to m connection with the Pekmg-lJankow Hne; in fact, it seems Suite probable that in the course of time the purchases for the Peking- [ankow Railway, the Cheng-Tai Railway, and the Kaifeng-Honan 8¥stem may be consoHdated and supervised by the Ministry of Communications, especially as the rcciuirements'of these lines are more nearly alike than those of any otlier three lines in China that are ah physically connected. This hne will require a considerable amount of additional roiling stock for the operation of the extensions now nearkg completion, and it is not thought probable that the need for this can be deferred until such time as it can be furnished from Belgium or France after the end of the war. In fact, information has been received from the American commercial attach^ at Peking that the Kaifeng-Honan Railway administration, through the Belgian minkter at Peking, has made inquiry concerning tiie purchase of the equipment from American sources— not only rolhiig stock but also roadway and track iiiateri.ala. CHINA. SHANGHAI-NANKING (HU-NING) RAILWAY. LOCATION AND EITENT, 103 This hne starts at Shanghai, at present the most important trading center m Chma, and extends for 193 miles in a northwesterly direc- tion across the Province of Kiangsu and through the important Chinese cities of Soochow and Chinkiang to Nanking, on the south bank of the Yangtze River, where there is ferry connection with the Tientsin-Pukow Railway at Pukow. There is a 10.5-mile branch from Shanghai to the port of Woosung on the Yangtze River. mSTOBICAL SURVEY. This hne is the first Hnk of what at one tunc promised to be a very extensive system of British railways in Chma, to cover the entire length of the Yangtze River Valley and finally to connect with the Indian system of railways through Yunnan and Burma. The Eroposed Pukow-Sinyang line already mentioned was to be a second nk m this comiection, wliich would give entrance to Hankow over the Pekmg-Hankow Railway. Tlie next link was to be the proposed Hankow-Szechwan line to Chengtu, the capital of the rich and im- portant Provmce of Szechwan. The fourth link was to be a line from Chengtu to Yunnanfu and the fifth hnk a line from this point to the Burma frontier. The consummation of the plan for this system appears to be remote at the present writing. The preliminary agreement for the Shanghai-Nanking line was signed m May, 1898, between Mr. Sheng, then director general of the Clunese Impeiial Railway Administration, and the British & Chinese Corporation, for which concern the Hongkong & Shanghai Bankiiig Corporation were the bankei's. On account of the Boxer troubles the final agreement was not concluded until Julv, 1903, and the Ime was not finally completed and put in service^ until March, 1908. Ihis railway loan agreement provided for an amoimt not to exceed £3,250,000, to be issued at 90, bearing 5 per cent, and interest durin.'■ a ■ mcreasnig The roadway .and track materials, of this line are strictly along the lines of British pract.ice, and most of tlie materials &m of British manufacture, .altliough in, recent years some American devices have been used, such as rail anchors, .All 'bridges oa this line are perma- nent structures, fo.llowing British practice, and are somewhat heavier than the bridges on some of the other Chinese railways, particularly ■the Fekmg-Hankow. 'vxLIJMa* ROLLING STOCK. 105 All rolling stock is along the lines of British practice, and practi- cally all of it is of British manufacture. Since physical connections have been made with the Shanghai-Hangchow-Nrngpo Railway, interchange of rolling stock now prevails between these two railways, which are under ioint management. A considerable portion of the rolling stock on the latter line is of American design and manufac- ture. The table on nage 76 shows the amount of rolling stock on these two lines, which is proving inadequate to handle the growing business. WORKSHOPS. The general workshops are located at Woosung, about 10 mOes from Shanghai. These are reasonably well equipped and are arranged for the making of repairs to all classes of rolling stock for both the Shanghai-Nankmg and the Shanghai-Hangchow-Nmgpo Railways. Capt^city is also provided for the erection of a small number of freight and passenger cars. ORGANIZATION. The organization of this line conforms, in a general way, to the arrangement called for by the orders of the Ministry of Commimica- tions (see p. 63), but the British engineer-in-chief, according to the terms of the agreement, has verv extensive executive authority in connection with this line. The general staff of this line also has charge of the Shanghai-Hangchow-Nmgpo Ihie, as explained later. PURCHASE OP STORES. Purchases for this Ime and also for the Shanghai-Hangchow- Nmgpo are made through the chief storekeeper of the stores depart- ment, whose headquarters are at Shanghai. According to the loan agreement, preference is to be given to supphes from Chinese sources, but without doubt preference is next given to articles of British manufacture. Considerable amoimts of materials are bought from concerns m Shanghai, and some of these come from American sources. It is not the general practice for this line to advertise for tenders as extensively as certain other lines. SHANGHAI-HANGCHOW-NINGPO (HU-HANG-YUNG) RAILWAY. LOCATION AND EXTENT. This line starts in Shanghai, now using the same passenger station as the Shanghai-Nanking Ime, and rmis 116 miles m a southwesterly direction through the Provmces of Kiangsu and Chekiang to the important city of Hangchow, at the head of the Bay of Hangchow. At Shanghai there is a 4i.mile line to the first terminal built in Shanghai, but this is now used as a branch station and connections are made with the tlu-ough trams, which are all run from the Shanghai- Nanking station. Near Hangchow there is a 3i-mile branch. This project contemplates a car ferry across the river at Hangchow on the completion of the line to Nnigpo, a total distance of about 110 miles, of which 484 miles are now completed and in service from Nmgpo to the Tsao Ngo River. About 60 miles are stiE to be con- 106 :llAILWAf MATERIALS, .BQW'IPMENT, AND SUPPLIES. slractcd, and tWs work k now in progress but proceeding reir slowlv. .IMmgpo m a little sontli of east of Haiigchow and is one of tho 'important tmde centers of this densely populated part of Cliina. .■wwaioNB auoGnrip. It seema nroliaMe that in the courae of time this line will b© ex- tended sonthwestward from Hangchow tlirough the Provinces of Uiekiang and Kiangsi, connecting with the Kiangsi (Nan-Shan) llailwav near Nanchang, thus making rail connections from Shanghai to the Yangtze River port of Kiukiang and running through a coun- trj that would probably furnish a profitable local traffic, particularly 111 carrying agricultural and mineral products to the ports of Shanghai. Hangchow,, and Kiukiang. " ^ ' ^ A Mne has. abo heen projected between Hangchow and Wuhu, an important port on the Yanfftze River between Nanking and Kiu- kiang,^ and some work was clone on the Wuhu end of tins line, but there 18 httle probability of tWs line being completed in the imme- diate future. There has also been a suggestion (which seems entirely practical) to extend this hne farther from Nanchang to Shiuchow in the Prov- mce of Kwangtung, where connections would be made with the Lanton-Hankow hue when the latter is comp'leted, thus makmg an mtenor rail line from all the above-mentioned ports to the ports of ijanton and Hankow and the densely populated district in southern Uuna, Tins would tend to stabUize conditions in tliis part of China. While these hues, if budt, m,ighfc in some ways be considered as competing with water transportation, the result, in all probability would be a supplementing of both the water and rail transportation' particularly in the carrymg of agricultural products and minerals to these ports. In no instance would these additional lines paiallcl present water-transportation routes, as did the Shanghai-Nankinff Kailwiiy between Shanghai and Chinkiang and Nanking and the baanghai-Hangchow-Ningpo Railway between Shanghai and Hangchow. HlSronCAI. SIIITBY. The prelmiinapr agreement for this line, under the title of the Soochow, Hangchow & Nmgpo Railway, was made in 1898 and, as already mentioned, was one of the features of the ''Battle for Con- cessions," m which the British & Chinese Corporation secured this ^ncession and the concessions for the Shanghai-Nanking and Canton- Kowloon lines, which have since been built, and for the Pukow- hmyang hue, which is now under agreement, though Mttle is being done atjiresent on ite construction. The British & Chinese Corporation, after securing these conces- sions, devoted all Its attention and available funds to the completion of the bhanghai-Nanking and the Canton-Kowloon lines and did nothing with this concession. Mr. Shong, already mentioned several tones as then director general of the Chinese Imperial Goveriunent Railway Administration, notified the corporation in 1903 of the can- eellation of this concession, and on September 23, 1905, an unperial ©diet was issued confiming tliis cancellation and transferring tho right of construction and operation to a Provincial Railway Bureau the road to be built with Cliiiieae capital only. With this authority CHmA. 107 two companies, the Kiangsi Railway Co. and the Chekiang Railway ?e -Ano o^L^'^^f "^t^"^^*^'? ^^^^ ^^^h S3,000,000 and the second with «5,000,000, all subscribed and paid up by Chinese subscribers. After the Chinese had made this progress and had the work under way, the British & Chinese Corporation took the matter up energetically and would not accept the cancellation of the concession, but after much negotiation a compromise was effected and an agreement signed for a loan of £1,500,000, at 5 per cent. However, the funtls from this were never actually used in the construction of the railway, although the Chinese Government carried the loan for some five years and paid the interest on it, this condition prevaihng untd the road was nation- ateed in 1913 as a part of the present Chinese Government Railways under the direction of the Ministry of Communications. PRESENT CONTROL AND ORGANIZATION. At present there is a managing director in charge of both the Ti *^1;^?^^"^ ^^^'^ ^^^ ^"^^^ ^**^ headquarters at Shanghai: and the Bntish staff in charge of the Shanghaj-Nanking is in charge of the teclmical administration on this hne but does not have such executive authority as is exercised on the Shanghai-Nankin? line on which the loan agreement is still in fuU force. It might possiblv be correct to say that the duties of the British staff on the Shaiiffhai- Mangchow-Nmgpo line are chiefly technical and advisory, though they are administrative as well to a very considerable extent The staff of both hues IS parti V British and partly Chmese, the most im- portant positions being filled by the British. CLASS OF TRAFFIC— OUTLOOK FOR FITTURE. The political troubles in the Provmce of Chekiang for more than wXr*^' ^^ ^^ ^\^f «f 1916 affected advemly the earnings lor that year. In 1915 the passenger earnings were two and one- wli 1^*"% I ^"'^'f?'^ earnings, and in 1916 the passenger earnings were about three tunes the freight earnings. However since this line passes through a rich agricultural district and considerable in- fw a ^^Y^f Pf ^^t may be expected to take place, it is probable that the freight business wiU grow faster than the passenger business and that, m the course of time, the Hne will show a profit after pay- mg all operating expenses and income charges. ROADWAY AND TRACK MATERULS. The Chinese have pointed to this railway as an example of what should be the initial expense incurred in building Chinese radwavs of this class. The construction cost per mUe, as shown by Mr. Kyle's study, is a httle less than $45,000 per mile, against $188,000 for the Canton-Kowloon and $150,000 for the Shanghai-Nankiilg. British engmeers m China, on the other hand, state that this line is of very mferior construction and that poor, cheap materials were used rreference was given to roadway and track materials from Chinese sources. Ihe rails and fastenings came from the Han-Yeh-Puiff works and are mostly the 85-pound standard Chmese section. aB purchases were made m competition, and a good deal of the roadway ana track material was purchased from American sources. 1 AO RAILWAY MATEBIALS, 1%U1PM,BNT, AND SITPPLIES. lOitlNG .STOCK, This line has a deeided variet^v of :r()Iliii«: stock, aJl of which was purchased under competition anci furnished from .American, British, German.., and Chinese sonrces. Of the 36 locomotives, 11. are Ameri- can, 12 .B.rit.iish, and 13 German. Many of the passenger cars are of American manufactun^; some of them hmve heen criticized on account of .ma.k©sh.iffc chancres to .meet tlio specifications, but these faults seem, to have had their origin in the specifications' rather than in the wo.r.km.ftn.ship of t..he eciuipnient.. This situation, however, affords a very good example of t^he desirabihty (in fact, the necessity) of the Chi.n.ose Government Rai.lways. hei.ng pemiittod, without regard to the restrict.ions of the existing hmn agreements, to lav out standard desi.gn.s and .formulate definite spec.i.ficatio.ns for all their requirements. WOMESMCira. In addition to the Wooaimg shops of the Shanghai-Nanking Eail- way,, already mentio.ned, there a« workshops at Hangchow, where some repairs to the rolling stock are taken care of and where, some of the assembhng of the original eciuipnient was handled. FIJBCHASE OP STOllS. ^ Substantially the same remarks apply to the purchases for line as to those for the Shancjhai-Nankmg, the same chief storekc being in charge of stores and purchas.es for both .lines. torekeeper CANTON-HANKOW ■(YlfflH-HAN) EAttWAf SYSTEM. Tiiis system consists of tlie .line from Wucha..ng to Chucbow, the Chucbow-Pingbsiang R.a!lwav. the (.'anton-S.amshui (Kwang-Sam) Ilailway, and the .Ikw.angtung Yueh-Han .E.ail.w.ay Co. (Ltd.). .M)CATIO.N AND laiTENT. 'Tlie trunk line of this system is to connect Canton and its densely set.tlcd hinterland by a .line rmining nort.h through the Provinces of K.w.angtu.ng, .Hunan, and. Hupeh, with Wuchang, on the south bank of the Yangtze K.irer opposite Hankow, and, thi'ough this gateway, w.i.th :North CTIiina by way of th.e Peking-Hankow Railway .and with tlie Y.angtze River ports by the present river lines. Changsha is a very miportau.t citv on this line, about 200 miles south of Hankow; coiinection_ is m..ade there with water transportation lines. This railw.ay, without question, is the m.ost important line now being con- structed or contemplated in any part of 'China, .and its completion would doubtless do more tO' stabilize China as a whole than the co.inpletjon of .any other one line, except possibly a line to Chent^tu in Szechwan. ^ This S3^st«m is to be constituted by the ma..in trunk line from Can- ton to Wuchang, toMtlier with the present brandies from Canton to Sainshui and from. ■Chucbow to Finglisiang, both of which have been completed and in service for several yea.rs. The latter line is the one th.at, for several ve.ars, has transported tlie coal from the Ping- hsiang collieries to Chuchow, whence this supply of fuel has been taken to Hankow for the Han-Yeh-Ping Iron and Steel Works. Both these branches at present come under the direction of the Ministr;^ of Communications. The first is known as the Canton- Samshui (Kwang-Sam) line of the Chinese Government Railways. While this will ultimately become a part of the Canton-Hankow system, it will continue to be operated for some years as a separate Ime— probably until the main trunk line is completed. The line from Changsha to Pinghsiang known as the Chuchow-Pinghsiang line of the Chinese Government Railways, has also been operated a^ a separate line, but since the practical completion of the new line from Wuchang to Chajigsha this entire stretch of 265 miles from Wuchang to Pmghsiang is now being operated as the Canton-Hankow Railway, with headquarters at Wuchang. The line from Canton to Shiuchow, a distance of about 140 miles is practically completed but is being operated by a private corporal tion known as tlhe Kwangtung Yueh-Han Railway Co. (Ltd.). When the remainder of this trunk line is comnleted howp^vAr tKia section will be taken over as a part of the CantonlfiZkow mai^ line, under the direction of the Ministry of Communications to be operated as one of the Chinese Government Railwaj^s. ' There is do physical connection between the south end of this line and the Canton-Samshui lines at Canton. The city of Canton lies on the northeast side of the Pearl River. On this side the Kwang- tung Railway starts and runs in a northerly direction, while tlio Canton-Samshui starts on the- southwest side of the river, opposite the main city of Canton, and runs in a southwesterly direction There is also no physical connection between either of these lines and the Canton-Kowloon section of the Chinese Government Railways which will be mentioned later. The part of the main trunk line that remains to be completed, from Chuchow to Shiuchow (a dis- tance of less than 250 miles), is through a rough country where many tunnels and much bridging will be required. This condition with the present high prices of materials, will probably make the total cost of this work, upon completion, about $25,000,000 (gol.d). mSTOKICAL SURVEY. The history of this line is long and varied. The Canton-Hankow project at one tune constituted what to-day may be considered the only actual railway concession ever held by American interests in China. The Hukuang Radway loans and the Sienis-Carey projects can hardly be regarded as concessions, but are rather loan and con- struction agreements for the building of railways for the Chinese Government. The original agreement for this line was held by the American- Chinese Development Co. and was signed in April, 1898. Mr. Sheno- already mentioned several times, was then the director-general of this project and a so of the Peking-Hankow Railway. Senator Lalvin b. Brice, backed by strong American interests, was the head of the American syndicate. The amount of the loan was $40,000,000 (gold), issued at 90 per cent, paying 5 per cent interest, rumiin*^' for 50 years, and to be secured on the property of the railway and (Guar- anteed by the Chinese Imperial Government. In addition*" the syndicate was to receive 5 per cent for services and supervision of the purchase of materials, as well as 20 per cent of th© net earnings lAILWA'f MATERIALS,, .BQITIPMENT, AWD SUPPLIES. «fter payBient of opemtiiiof expeftsus and, a,H income charg'es. The Spaiiish-iimerican war first delayed act,ion on this project; next t!io ,l2iiipres8 Dow.ager, m control at ,Pel£.i„ng, apparently put obstructions Ml the way of progress; but in the coiiree of tim,0 sui-vevs were made, ,foll,owed, by 80:in,e construction wo,rk,, which ultimately resulted in the conip,letion of the Canton-Samshui and the Chuchow-Ping- hsiang ,s.ect,ion,8, now operatwi by the Ministry of CommunicatioiS., and the .Kwangtung Yuoh-Han Railwa}^ as already mentioned. "■' ^^^ Tlie death of Senator Brice removed the chief personal force of tliia 'enterprise and later :resulted in Belgiaji inte'reste' getting mar- j,o.rity control of the development company, though it wta. against tlie spirit (and probably the actual terms) of the .agreement to "allow tlie natioiiality of the control to change. ,Aft«r considerable agit,a- tJon and insistence on the part of the Chinese,, ,A,merican interests again obtained, control of the Developm,eut C#.: but the Chinese authorities wero' not satialied to .allow the work to proceed and th,e American int«rests were not energetic in pushi^ng the matter, with the result that the project was taken over by the Chinese Govern- ment and the transaction with the ,A,merican-Chinese Development Co. was .i,n,al,ly co,n.clude«:i in 1905 by the paymei,»t of I6>750,()00 (gold) for title to all the work done and the profits mnd good will of the entire enterprise. It was irst attempted to raise thwe funds iim,ong the Chinese gentry and the interests in .South €M,na that had so constantly .opfioaed, the construction of this Line by the Am,erican-Chinese Devet- .opmeiiit Co., but w,hen the time actually came to subscribe, the funds^ were not forthcoming,, and the above amount wma. 'iniilly ob.- taincxl from tlie government of the Britisli, colony of Hongkong and ^thtis became a British lo.an. It wis coii,'tiNii,p|iiated, after the eluiimation oi the A,m«i.can.-€hine8© Deveiopaoiii Co., that the Cli,.ii:i,ese^ should take the work in hand and com,pIete this line from native resources, liMt conditions finallv led to the Hukuang Railway lo.im„ thetlownfall of the ,M,iinchu dynasty,, and ,M,r. Sheng's dismissal, ihe Hukuang Eailw.ay ,loan airreement luis already been men- tioned, .as has the ooinbining of the funds from, the Amei-ican and B^ritish ,loaiis ,to ^(jom,p,leto the Wuc,l,iang-Ch.a.n,gBha section, which has Recently been nut in service but which h«^s exhausted all ' the ,ava,i,|ft,ble funda.. The question of additional funds to complete th,is important tra.nk line will doubtless come up in the com-se of a short 'time. The faittre of the Am,erican.-Ch,inese Development Co, to complete this project m-as no doubt a re,al mkfortune from, the standpoint of Cfimese interest and voiy regrettable from the American point of view. The Chuchow-Pinghsiang branch was surveyed by the American engineers., althouffh th,is branch line was not included in the orit'inal »gre.ement with the American-Chinese Development Co. Work was started ,in 1899 for the specific purpose of completing this line for the transportation of coal from the Anyuen coal mines at Pinghsiang to 'Chnchow, to be taken from there^ by water to the Han-Yeli-Piu'tr Iron Wo,rk8 at Hankow. Although the constniction was rather difiiciilt, the cost, accordi,ng to' Mr. Kyle's B.tiidy, totals a little less than .CHmA. 111 Work on the Canton-Samshui line was started in the latfcr part of 1902. The hrst section to Fatshan, which is double track, was completed and i)ut in service before the end of 1903, and the entire lino, the remamder of which is sinirle track, was completed and put m service SoDtember, 1905. The const,nict,ion cost of this line, arconimg to Mr Kyle's study, is about $107,500 per mile. The lnK> ruas through a verv densely populated district and has been |>rohtahle on account of the large passenger busmess can-ied ever snn-e the completion of the Hne, although the freight business u ne«j:Iigible. A connection from thk hne at Fatshan to Kono^moon a di taiice of about 40 miles, to connect with the Sunning (privately owned) radway has been discussed, but at present nothing tanijible ^'\pIl^^^*^**^"*' towaid its actual construction. The Kwangtung section, extending from Canton to the Kwangtung- Hunan border, a distance of about zlO miles, was taken in hand V)v the Kwan^tung mercantOe administration of the Yueh-Han Rail- way, a Chmese company with a nominal capital of S4,000,000, of which only a portion was paid up. This took place after the Amei i- can-Chmecje Development Co. interests had been bought out and taken over by the Chinese Grovernment. This Chinee company is now known as the Kwangtung Yueh- Man t.0. (Ltd.). The line from Kwangtung to Shiuchow, a 'distance of about 140 miles, has been put in service and surveys have been niade for the reniaming section of about 70 miles. The construction Of this latter will be rather difficult and expensive, because of the fact that the hne runs thfi;n:^h very rough country, where about 60 tunnels with a total lengtli of 10,000 feet will be lequired, as well as some rather expensive bridge work. SOURCE Of CAPITAL AND PRESENT CONTROL. Th^ writer was unable to obtain information that would make possible an understanding of the general balance sheets of the Canton- tianlsow svstem as a whole or even in part. The Chinese Govern- ment Railways consolidated report shows no interest changes for the thuchow-Pinghsiang and Canton-Samshui sections, leading to the conclusion that these lines are now coming entuely under the head of permanent Chinese Government investments—the invest- ment assets being S4,750,00O and $16,750,000, respectively. The Kwangtuiig lueh-Han RaQway Co. (Ltd.) seems to cany the oblio'a- tion of the loan from the Hongkong government for £1,150,000 which bears interest at 4J per cent and the proceeds of which were "- — ^x.5...ic. .... ffux^iiau^ L> tuvereu oy me Mukuang Itiulway loans, a^ ah-eady explamed, but the writer was unable tS Ob tarn the^ details of these amounts or their allocation to the different sections of the Hukuang railways, if theie is such an assignment of these expenditures. CLASS OF TRAFFIC. The Wuchang-Changsha section has not been in service long enough for one to arrive at any conclusion as to the traffic that will develoix However in view of the fact that about 85 per cent of tlie trathc on the Chuchow-Pmghsiang consisted of mmeral products 112 lAILWAY MATEB,IALS, WJUIPMENT, A1?D' S'UPPLIBS. CHINA. (noftrl? ai coal), it is probable that, notwitbstandinff water compe- tilbn from OiBchow and Changsba, considerable through^coal traffic will develop, particularly during the diy season wben water tram- portation is at times s'uspended. Traffic on the Canton-Samsbui line is almost entirely passenger business and, on account of the dense population in tliis section, this wi'll no doubt continue to constitute the largest pait of the busineas. The results from this line seem to justify the suggmtfon miide later concerning the construction of electric lines in this and similar districts of Cfliina for the handling of passenger and light goods busineiM- by electric railways, as has been 'done in Japan, par- ticularly in the Osaka indrntrial aistrict. The traffic on the Sunmng Railway, a private corporation in the same di:=i trie t (see p. 119), affords further evidence in support of thk suggestion, WWBfT ■AIMING CAFACITt AMU OUTLOOS TOl FtJTUlB. The Chuchow-Pinghsiang section has shown a sm,ail net pi-ofit for feveral years, hut it is doubtful whether this will be the c^ase with the line no'w from Wuchan.g to Pinghsiang, even including the trajfiac tO' the imnortant intermediata cent«re of Changsha and Yochow, bo'th of wnich have water transportation facilities. The Canton-Samshui has shown very satisfactory piofitB for several years, but it is not probable that thme will be materially increased until extensions are made to^ draw moie traffic over this line and also to develop freight traffic. The proposed connection with the Sun- ning 'Railway would doubtless benefit both lines. There aie no published leports O'f the Kwangtung Railway and it is impossible to obtain reliable data, but it is understood that this line shows no profit and probably will not do so until the main trunk line is completed and both through and local traffic developed. As regards the prospective caininff capacity of this system .as a whole, it is very likely, on account of the high costs up to tlie present time and the probable heavy expense for completion, that the system will not show any profits "for several years until the tlirough and local business has expanded — especially the coal traffic that may be expected to develop from the Finglidang fields to Canton and through that^ port to the other markets, of South China, Indo-China, the East Indies, and the Philippine Islands. IIOAPWAY AND TBACK MATEKIALS. A clear statement of the materials used in these lines' thus far is a rather difficult matter, on account of the length of time invoked and the changes of engi.neers during this interval. The materials used on the new line from Wuchang to Changsha have conformed, in .general, to British standards and practice, preference being given to Chinese sources^ and next to British manufacturers, although a good many of these articles have come from America. The bridges on this hne are largely from American concerns, although there was considerable controversy over the specifications, finally resulting in the recall of the first specifications and the sending out of invitations for second tenders. 'Tlie specifications were reduced from Cooper 'E-45 to Cooper E-40, although the increase in the price of steel in the meantime resulted in a substantially higher price for the lighter bridges. The Chuchow-Pinghsiang was built mostly with American mate- rials, but under the direction of a German engineer in charge of the coal mines who also had charge of this hne. Most of the renewals have been made with German materials. The Canton-Samshui line was also constructed mostly with Ameri- can materials, but a variety of materials have been used in the renewals. The rail is 75 pounds, American Society of Civil Engineers section, of American manufacture. The double-track section is now laid with steel ties of the same design as those mentioned later in connection with the Yunnan line (see p. 129 and figs. 14 and 15). These came from France or Belgium. White ants are very destruc- tive to wooden ties in this part of China, eating all kinds of ordinary timber. It is said that they do not attack creosoted timber, and about 80 per cent of this line is now laid with creosoted Oregon pine ties, which, it is stated, have a life of from seven to eight years. The roadway and track materials for the Kwangtung line that are not of Chinese manufacture came from American sources. The rail and fastenings were furnished from the Han-Yeh-Ping Works. ROLLIMG STOCK. As with the roadway and track materials, it is rather difficult to cover by a clear statement the situation with regard to rolHng stock on these lines. Tlie equipment on the Wuchang section conforms, in general, to British specifications and practices, and, although the last locomo- tives bought were of American manufacture, they were built to meet British specifications. This point gave rise to much controversy as to the interpretation of the terms of the loan agreement; the matter should be fully clarified in the making of any future joint loans. The original equipment of the Pinghsiang section was practically all of American manufacture and, as in the case of the road and track material, the German engineer in charge of the mines and of this hne has largely substituted equipment of German manufacture. The equipment on the Samshui line is mostly of ximerican manu- facture. The first three engines were small secondhand loco notives formerly used on the Manhattan Elevated Railways in New York. These are still in service. This hne at present has 6 large and 3 small locomotives, 33 passenger cars, 29 freight cars, and 3 service cars. Iho Kwangtung hne has 21 locomotives, 35 passenger cars, and 195 freight cars. Fifty-nine of the freight cars came from the rongshan shops of the Peking-Mukden Railway, and most of the other equipment is of ^imerican manufacture, particularly the loco- motives. A good many of the freight cars were originally used for construction and the handhng of ballast but are now being employed for commercial traffic. WORKSHOPS. The new section of this line has complete and up-to-date shops at Wuchang, which are capable of handhng all classes of repair work for the 264 miles of line, although the old shops of the Pinghsiang section will probably be continued in service. 10(1229*'— 19 8 HATIjWAY M'ATBHIALS. 'EOUIPMEXT. ANB SUPPJiIlS. Tlie sbops of tli0 Samsliui seciion are siimll and have relatively little equipnieiit, l)iit they seem to be capable of haedling the repaira for this 'short line. The Kwangtung Hne hm siii,a1I sbops in temporary build iiiga near Canton, bu.t tliwe are less capable than, the Samshui shops of handling classes of repair work necessary for the maintenance of the C(iuipm.ent. OBGANBATIflN' ANB PEBSOMMBL. The Wuchang section is under the general supervision of tb.e director general of the Hukuang Railwin^, Br. Jeme Tieii-Yow, tho well-known Chinese civil engin^c^r, whose licadquartere are at I lan- kow\ The administration of this section, is in the hands of a managing d:irector located at Wuchang, and the present technical staff is largely B'ritish, in accord an re with the terms of the loan. The fonncr sta,ff of Irhe Pinghsiang^section lias been merged with this ■stall and the separate organi,zatiou digcon tinned. There is a managing director and a small staff of Chinese for the Canton-Samshui line, with headquarters at Canton. There is also a director, a sm,all staff of Clii,nese,' and an American advisory engincei- for t:.lie kwa,ngtung line, with headquarters at Canton. For directo- ,rics of the officials of these lines,, see' pages 265 and 260. FUBCSASB OP STOBBS. The purcbas-es for the Wuchang section are handled by the chief storekeeper (British), who is located at Wuchang. The purchases of material for the cons tract! on, of this Hno were made under the terms of the Hukuang Railway loan, agreement, concerning which there has been considerable controversy as already m,entioned. It ,18 probable that there will be a continuance of the preference given to materials of British, origin, after those from CHnese sources. Chief En-incer Johnson (Chinese) of the Samsbui line has cbaree of technical niattere and recommends purchases, which are made through tlie managing director of this line, ,Iocated at Canton. On the ,Kwan-tiInc^ine the director, Mr. K. H. An, appears to have full authority in the matter of purchtees. Mr. I). S. William,3 (American) acts in an advisorj^ capacity in this connection. CANTON-KOWLOOM (Cmil-K'IIANG) MAIiWAY (CHINESE SECTION). LOCATION AN'P EH^ENT. Tins is the line between Canton and the British colony of Hong- kong and ,is in two sectio,ns. The Britisli section starts at Kowlooii, opi)Osite the city of Victoria on the ,isla.nd of Hongkong (there is a ferry connection between thc^o cities), and runs through the leased territory of Kowloon to Samchun, a distance of 22 miles. The Chinese section starts at S,amch,u,n and runs to the southeastern part of the Chinese city of Canton, a distance of 89 miles, making a total of 111 miles from, ,Kowl0on to C?anton. ,A, line around tho city of Canton has been suggested in connection with the Kwan|;tung ,line, but no aC'tion has been taken towtf d the actual construction of this li&k. Im/JlxX JN jELa mSTOBICAL SUKVEl. 115 niB. imLi lUP' Tlie island of Hongkong, by concession on the part of Cliina, became a British Crown colony in 1843. A perpetual lease for a small area on the mainland at Kowloon was made in 1858 and waa confirmed by the Imperial Chinese Government in 1860. In 1898 the agreement for the present leased territory was signed, this lease providing for British jurisdiction over this territorv for a term of 99 years. Hongkong has an excellent harbor and is one of the largest transshipping ports of the Far East -in fact, one of the largest in the world. The preliminary agreement for the Canton-Kowloon Kailwav waa ^}S^^^ in 1898. No progress was made in the constniction of this bne for several years, until the Britisli interests in Hongkong in 1905, realizing that the prospective completion of the Canton-Hankow Kaihvay and the possible provision of deep-water harbor facilities near C anton might affect very adversely Hongkong's strong shipping position, took vigorous action to force the building of the present line by the British & Chinese Corporation, with the result that in March, 1907, the final agreement was signed for the construction of the Chmese section by loans of £1,500,000, issued at 94, bearing 5 per cent interest, the total life of the loan to be 30 years. Amortiza- tion is to begin at the end of 121 years from the date of the loan and to bo completed at the end of the 30 vears by the payment of equal amounts annually. The loan can be redeemed at 102 from the end of the 12| years to the end of the twenty-fifth year, and for the re- mainder of the life of the loan at par. In this instance the corpora- tion received a lump sum of £35,000 for handling the purchase of the construction materials and equipment instead^ of the usual per- centage commission. . The line was completed in October, 191 1. The agreement provides for a British engineer-in-ehief and a British chief accountant The t^rms of this agreement represent what British interests have con- tended should be the form of contract to safeguard loan funds in the building of Chmese railways, and this form of agreement has become known as the ''Canton-Kowloon type." The cost of this line, according to Mr, Kyle's study, is more than $188,000 per mile, roughly divided as follows: Interest charges during construction, $37,000; general charges, $17,700; land. $19,000; grading, $21,000; bridges, $25,750; track, $30,900 ; stations ^l^o^o^'.*?^' S9,800; rolling stock, $14,200. The total is about ^"^^'00" higher than that for any other Chinese Government railway. I Ins line, bke the Shanghai-Nanking, competes with water trans- portation. Neither of these lines has been profitable, and, even with the lowest freight rates in China, they have to depend ahnost entirely on passenger business for their earnings. The capital for the Canton-Kowloon KaUway was entirely from British sources, and it is under British control at the present time, the terms of the agreement being still in full force. OPERATING EEVENUES AND EXPENSES. About 90 per cent of the earnings of this line are from passenger traffic, and practically aU of the freiglit traffic is handled with mixed trains. The operating revenues in 1916 were $794,223 and the operating expenses $829,663, giving an actual operating loss of $35,550, which, Ho BAILWAY MATERIALS, EQXnPMENT, AND SUPPLIES. with interest charges of $701,747 and other income charges, made a net deficit of $787,009 for the year. This line has been operated at a loss since it was first opened_, and is probably the only line of the presenrt Chinese Government Kailways under the actual control of the Ministry of Communications that will not show a profit for a long time, if ever. HOADWAY AMD' TKACK 1CATERIAI«S*— ^ROLLING STOCK* Tlie construction of this line, with the exception of the rail, was with British materials, and, as a rale, British practice has prevailed in the case of all maintenance and renewal materials. The rail is 85-pound Chinese standard section from the Han-Yeh-Ping Works. Most of the ties are Australian hardwoods. There are 46 steel bridges and 39 arches on this section. The rolling stock is of British design and manufacture, except certain of the freight-car bodies, part of which came from the Tang- shan shops and part from the Whampoa Dock Co. at Hongkong. The equipment of the line consists of 14 locomotives, 41 passenger cars, and 67 goods wagons. OICAKIIATION— PURCHASE OF STORES. /■ There is a managing director (Chinese) in charge of this line, with a small staff. The position of engineer-in-chief is filled by a British eijgioeer, as provided by the agreement. The directory of these officials is given on page 267. Preference is given to British materials, after those from Chinese sources. CANTON-KOWLdON MAILWAY (BRITISH SECTION). The main line of this railway is fully covered in the description of the Chinese section. In addition, there is a fine of 2-foot gauge from Fanling to Shatowkok and Mirs Bay, a distance of about 8 miles. HISTORICAL SURVEY. This line was constracted by the government of the British colony of Hongkong with the definite* object of protecting the large shipping iotcrests of this excellent port. The work was begun in 1905 and completed about the same time that the Chinese section was finished in 1911. This line being entirely id the Kowloon leased territory, no loan agreement was made with the Chinese Government, and the funds were supplied entirely bv the government of the colony of Hongkong. The fine, ranning through rough country, was expensive to construct, particularly in view of the high standard of the work. The total capital expenditure to the end of 1916 was about $14,500,000 Hongkong currency, not including about $90,000 Hongkong cur- rency for the construction of the Fanling branch. A considerable amount of reclamation has been done around the Kowloon terminal, and in 1916 a verv substantial and ornate passenger station was built at Kowloon— 'both included in the above expenditure. The remarks regarding the class of traffic on the Chinese section apply in all particulars to the British section. Tlirough ^ervice is maintained between Kowloon and Canton over the two sections. Special Agents Series No. 180. FIG 26.— TYPE OF BOX CAR USED ON THE CHINESE GOVERNMENT RAILWAYS. FIG. 27.— TYPE OF TANK CAR FOR HANDLING REFINED PETROLEUIVl PRODUCTS ON THE CHINESE GOVERNMENT RAILWAYS. INTENTIONAL SECOND EXPOSURE 116 RAILWAY MATERIALS, EQUIPIVIEXT, AND SUPPLIES. with iiitorest charges of $701,747 and other income charges, made a net deficit of $787,009 for the year. This line has been operated at a loss since it was first opened, and is probably the only line of the present Chinese Government Railways under the actual control of ttie ^linistry of Communications that will not show a profit for a long time, if ever. BOADWA¥ AND TRACK MATERIALS— ROLLINC3 STOCK. Tlie construction of this line, witli the exception of the rail, was with British materials, and, as a rule, Britisli practice has prevailed in tlie case of all maintenance and renewal materials. The rail is 85-pound Chinese s tan (bird section from the Uan-Yeh-Ping Works. Most of the ties are Australian hardwoods. There are 46 steel bridges and 39 arclies on this section. The rolling stock is of British desiLni and manufacture, except certain of the freight-car bodies, part of which came from the TAng- slian shops and part from the Wiampoa Dock Co. at Hongkong. The equipment of the line consists of 14 locomotives, 41 passenger cars, and 67 goods wagons. ORGANIZATION-PURCHASE OF STORES. There is a managing director (Chinese) in charge of this line, with a small staff. The position of engineer-in-cliief is filled by a British engineer, as provided by the agreement. The directory of these oilicials is given on page 267. Preference is given to British materials, after those from Chinese sources. CANTON-KOWLOON RAILWAY (BRITISH SECTION). The main line of this railway is fully covered in the description of the Chinese section. In addition, tliere is a line of 2-foot gauge from Fanling to Shatowkok and Mirs Bay, a distance of about 8 miles. HISTORICAL SURVEY. This line was constructed by the government of the British colony of Hongkong with the definite' object of protecting the large shipping interests of this excellent port. The work was begun in 1905 and completed about the same time that the Chinese section was finished in 1911. This line being entirely iri the Kowloon leased territory, no loan agreement was made witli tlie Chinese Government, and the funds were supplied entirely by the government of the colony of Hongkong. Tlie line, running througli rough country, was expensive to construct, particularly in view of the higli standard of the work. The total capital expenditure to the end of 1916 was about S 14,500,000 Hongkong currency, not including about $90,000 Hongkong cur- rency for the construction of the Fanling branch. A considerable amount of reclamation has been done around the Kowloon terminal, and in 1916 a very substantial and ornate passenger station was built at Kowloon— ijoth included in the above expenditure. Tlie remarks regarding the class of traffic on tlie Chinese section apply in all particulars to the British section. Through s^ervice is maintained between Kowloon and Canton over the two sections. Special Agents Series No. 180. FIG 26.— TYPE OF BOX CAR USED ON THE CHINESE GOVERNMENT RAILWAYS. FIG. 27.— TYPE OF TANK CAR FOR HANDLING REFINED PETROLEUM PRODUCTS ON THE CHINESE GOVERNMENT RAILWAYS. CHINA. 117 EARNING CAPACITY. Operating revenues in 1916 were S366,216 and operating expenses $296,692, leaving a balance to net operating income ol $69,624, which would fall far short of paying interest charges on the capital expenditure for this line. The net operating revenue for the year 1915 was $46,500, making a still poorer showing. ROADWAY AND TRACK MATERIALS— ROLLING STOCK— WORKSHOPS. The construction of this section was rather difficult. There are five tunnels; the longest is 7,256 feet, but the others are short, being 924, 350, 175, and 150 feet in length. All the track materials are from British sources; the rail is 85-pound British standard section and the ties ar« of Australian hardwoods. The rolling stock is all of British manufacture except one 2-foot- gauge locomotive of German manufacture, which was purchased in connection with a number of construction dump cars. The present equipment consists of 11 locomotives, 27 passenger cars, and 50 freight cars for 4i-foot gauge, and 3 locomotives, 6 passenger cars, and 3 goods wagons for 2-foot gauge. The Kowloon workshop is provided with shop facilities adequate for a line of this extent and any amount of equipment that it may be expected to have in the future. ADMINISTRATION AND PURCHASE OF STORES. The line is under the administration of a managing director and a small staff, all British. British materials are naturally given preference, though many of the requirements are bought from the various concerns in Hongkong. FUKIEN (CHANG-HSU) RAILWAY; CHANGCHOW-AMOY. LOCATION AND EXTENT. This line starts at Sungsu, on the mainland, about 3 miles across the bay from the city of Amoy. The line was projected to go to Changchow, a distance of about 33 miles, but construction was stopped at Kiangtungkiao, where the line will cross the Pakkoe River. The length of the completed line is about 20 miles. This line is located in the Province of Fukien, which is claimed by Japan as one of its "spheres of influence" — this claim including the right to finance all railways for which the Chinese can not raise money from native sources. HISTORICAL SURVEY.i The Merchants Fukien Railway Co. was organized in 1905 by Mr. Chen-Pao-chen, and it was proposed to build lines from Amoy to the Provinces of Kiangsi and Kwangtung. The original capital was $6,000,000, in shares or debentures of $5, but it is understood that even the subscriptions received were not paid in full. Many of the subscribers were said to be Chinese residents of the Straits Settlements. Surveys were made in 1906 and construction work was started some time later, but in 1909 all the available funds were exhausted 1 Based on Mr. Hsu's "Railway Problems of China". no ■ IJP' lAILWAY MATBllIALS, EQ,Ui:PM,ENT, AND SUPFivlBS. and a loan of 1500^,000 was mmile from the Bank of Communications, whicli inatitnlion is under tlie direction of the Ministrv' of Commuiii- •cationa. By 1914 only tli« present It'iigtli of line Iiad l>eeii con- structed ancl further subscriptions from the merchants could iiot^ t>.' secured. About this time the project, in some way, was transfcrr.^ii to the Ministry of Communications; the owners of the (lehent.iJr.M made some claims on account of their in ti^ rest, but these seeni t. > have been disallowed. Since that time tlie line has been operaU'.l as one of the Chinese Goveniinent Railways, under ihv ('lirecti'»n of the "Ministry 'Of Communications. It ijs generally understoDil that a Japanese loan is now held against this line and that any further extensions will be financed by the Japanese. OPEHATING KB¥B.M¥BS. AMD EIFENSES— FUTCEl MOSPSCITS. Tliero seems to be no funded debt on tliis line, but opc^rating revenues were insuflieient to meet operating expenses for both 1915 and 1916, and after the payment of all inct)me charges there was a deficit of more than $ 150,000 — this with less than $50,000 operating lY venues for both these years. This line is entirely disconnected and many miles away from any of the other Chinese. Government Railways, and it is not likely that it will be extended beyond Changchow for some years, although it m^as first planned to build this line to Cliaocbow, wliere it would connect with the privately owned line from, Swatow to Chaocliowfu, which project, in turn, may be extended to connect with the Canton- Kowloon at Sliikling, near the Canton end of this latter line. Tlio building of these extensions is probably remotFC, espt^cially as they are horn paralleled by •oc«.an trans|Kirtation lines. BOADWAY AND TRACK M ATB8IA.LS~BO'LLIHG STOCX. The rails for this line were furiiislied from the Han-Yeh-Ping Works,, the ties were purchased from Japan,, and the bridges and other track materials came from, American sources. Of the fi,rst two locomotives, one wiis of ,A,merican manufacture and the other German. The re,niiii.nder of the rolhng stock is largely of Americ.an manufacture. / The ad,ministration of this li,ne at present is under a managing director, ,Mr. Wang Ch,ing Hsien, with ,headquartera at Amoy/ A very small Chinese sta,ff is employed in the maintiMiance and o|H^r;t- tion of' the line. All purchases are made under the direction of the manasins director. V, CHINESE PRIVATE RAILWAYS/ SUNNING (HSINNING) RAILWAY. LOCATION AND EirTENT. This line, which is very frequently spoken of by foreigners as the Msummg Kailway (its Chmese name) , runs through the Province of ^wangtung from Kongmoon to the harbor of Samkaphoi, a short distance southwest of the Portuguese settlement of Macao The length of the line is about 67 miles, and it is stated that a population of consider ably more than one million people is now served directly by tins line. Sunning and Kungyi are two of the larger towns served in this densely populated district. Some extensions are contemplated, one of which has alreadv horn mentioned in connection with the Samshui line-to extend from l^atslian to Kongmoon, a distance of something more than 40 miles It would seem that a system combining the Sunnin<^ Kailway, the Samshui line and the contemplated extensions mi^ht be electnfied and be made to yield unusually good returns, like the electric lines in the Osaka industrial district of Japan Thia suggestion will be referred to later (see p. 252). HISTORICAL SUKVEY. This railway is the only real example of private railway mier- prise m Chma depending on the individual initiative of one man rbin rl tL tr f^^^^%^' constructed and operated by Mr. Hee Chm-Gee who was formerly a resident of Seattle, Wa^h.. worked on the Great Northern Railway, returned to China some yeai^ ago aui i'^n':^^ f'''''''^ '^ ^'^ '^' '^ '^' P^^i^^*' althougl/h^'E. n^^ qinte an ckicrly man. The lirat section built, from Kungyi to Sunning, a distance of 15 miles, was opened m January, 1908, and since that time extensions have been added from Kunpi to Kongmoon and frorSu^kTrto ftamkaphoi, making a total mileage of something more than 67 miles. Ihe original Sunning company had a capital of $2,660,000 • oaL fToi rw''""'^^ k" ^f '^^^«'12*>^«^which $f,000,000 r;pre;ents rfl lo ^ w^^^ merchants, particularly from Mr. Hee's Hongkong mrt of H^lnt^f .no mn ^^f 1^! P.'^'J^^^ ??^ represents an iSvest" He aki t^Zl t^'^^^^000 and that the road has, in general, paid well. f?l!lK f''^''''t ''''^^'^ l'^ ^^^* $3,000,000 Mex. in making exten- sions that would not only pay well themselves, but would also make ttie existmg hue show increased earnings. This hne is characterize*! boliof!.''!'?.!,^" A^^""''^^ ^^^^ ^f'^ designed to conform to Chinese one lesult being some rather sharp c urvatures in the alignment. HaSl'^SCfy^t^^StLS^ ^ ^'}r^ ^ P^t of the C^Z page 43. -jateai, anaougn at present it is privately operated and is ao ahown in the table »li 110 rras 120' BAILWAY MATBKIALS, EQUIPMENT, AND SUPPLIES. The greater part of the earnings are from passenger traffic, bnt sufficient freight traffic has been aeveloped to sliow the possibiUty of such lines if the enterprise of private ownership is pnt behind the development of tlie traffic. EOADWAY AMD TRACK MATEEIAIS-IOLLING STOCK-WOHKSHOPS. The rail is mostly 60-poun(L Some of the firet came from B^elgiiim^ and Gemiany. In recent years preference has been given to Chinese*' materiftls, and next, to those of American m,annfactnre. The present rolling stock consists of 15 locomotives (12 American and 3 German), about 50 passenger cars, and about 100 freight cars. These last are largely of American manufacture, although equipped ivith side buffers anil the screw-ball type of couplers. Two of ^ the locomotives were reeeiit-ly furnislied by one of the large American locomotive companies. . There are smaO shops at Sunning for the making of repairs to this equipment. ADM'INISTRATION AND PURCHASE OF STORIB. mil en B vail . Ms time, of which is president and general manager, and the railway is , under his direction with the assistance of a small Chinese has an office in Hongkong where he spends a portion of Mr. Hee gives his personal attention to all purchases, most are m,ade when he is in Hongkong. SWATOW-CHAOCHOW (CHAO-SHAN) RAILWAY. liOCATION AND EXTENr. This line starts at a point on one of the branches of the Han River across from the city of Swatow, and runs in a northerly direction to Yeekai, a distance *of about 27 miles. Yeekai is about 3 miles past Chaochow, a citv of some 400,000 people. The population of Swatow is estimated at about 31,000, of whom several hundred are foreigners. HISXORY* The Chaochow & Swatow Railway Co. (Ltd.), a distinctly Chinese company, was organized about 1903, when coiicesaions were granted to a Clmiese merchant named Chang Yu-nan, who had amassed a fortune in Java. The compan> is registered under the Hongkong ordinances .and has a director residing there. Construction work was started in 1904 and carried out under the direction and management of the Mitsui Bussan Kaisha (Japanese). 'The line was completed in November, 1906. The business consists larcelv of passenger traffic, and only a small amount of freight is carried. This is largely on account of the fact that the .line competes at all points with the Han River transporta- lENING CAPACrri. It is stated that in, some yeare this railway does not pay operatmg expenses. No dividends have ever been paid, and it is not probable that the line will show a profit untO extensions are built to develop districts where water competition will not prevail, particularly for the haiidUng of freight. It appears that tiiis is a district where elec- CHINA. JL *mt JL trifled lines would be much better adapted to sei-ve the traffic, a large part of which, in any event, would be passenger business. EQUIPMENT— ADMINISTRATION. The track materials came mostly from American- sources. The ties are Japanese hardwoods. The line was cheaply constructed, with a small amount of ballast. Most of the rolling stock is of American manufacture. The line is under the administration of a managing director gen- eral, Mr. Chong Hong Nam, who is located at Swatow. Mr. W. T. Cliing is secretary. Purchases are made by the managing diiector general. CHINA. 123 YL CHi:NiSE PROVINCIAL MILWAYS.' 'iifriucmoN, Til© earlier railways whoso constmctio'n was mndertafen with CMB.'esie capital were largely of tlie cliss that Miia hmsi. called 'pro- Tincial. 'These wnerally en'coiiiitered inancial diffi:CTilties of some sort ill the course of tma and have generally disappeared as' nroFiiieial ojects. Most of thfiiin h»ve been taken over by the Ministry of ^)omiiMiiiicalioii3 as Chines*^ Govemment Railways. The foibwing arc the only ones left, and it is unlikely that any provincial railways of liny large importance will be undertaken in the future, KIANGSI .(NAN-SHAN) RAILWAY. LOCATION AND BITENT. This line starts at tlic Yangtze River port of Kiiikiang and rans in a 81 intherly direct^^ion a (iist:a.iict:* of about/ 87 miles to Nanchang, at the iBt)uth of the Kan River, at the head of steam naYigat.ion on, Poyang Lake. Tlie extensic m of this lifio has been moTiticned in connection with the Shanghai-H,angchow-Ningl)o Railway (sec p. 106). :HIST01ICAL StTlfEY. This line was first projected in 1904. The funds were to he raised by native debenture subscriptions and by increasing the 'provincial salt tax. The project iiially received official sanction, uieludiiig pc^rmission from the Board of Commerce to raise capital by the issuance of lottery tickets. But these efforts, reisultecl in building only part of the present line, and in 1912 resort was had to loans from the" Japanese Bank of Taiwan, which linally made possible the com- pletion of the Bresent line of 87 miles. This Japanese loan, lias been much objected to by the local .merchants and genti,*\' who have inl,i„.'rcst,s in tlie project. T,he construction was under the d,iK»ction of Japanese engineers, and the first 20-m,ile section was ©iiened for service in Deceml)er, 191.0. The line to N'ancliaug was opened the latter part of 1916, hut with, one bridge inco:m|>lete, where traflic had to be transferred. It is understood tliat the Japanese loan carries tlie right to finance any other extensions that can not be taken care of by native sul>scription. TIAFHC ,ANP FKOFITS. Xo ,reliable data are obtainable regarding tlie traffic and revenues of this line,, but from, uivestigatioii on the ground it would seem that earnings depend on passenger traflic rat-lier than frei^glit business, and, as this line is paralleled throughout its entire length by the Poyang » The TaiW,tor (,„\ngaiig,ki) Li$I,:it Railway is m typitia,! Cliinft'MJ proTlnPial railway, but, on acawiit of its iMittg ,l3'ait0cl, in, ,4Iiinchuria ■A!i,ti"eon„ne:-led willi die C Wilts© Eastirii liailwty, it fa showa with tlie Mm- ilijyflaii, .group of railm'ay s on page 2,ld. Lake transportation lines, the conclusion seems warranted that profital>le business will not develop until the line is extended, par- ticularly m outlined in connection witli the Shanghai-IIangchow- Ningpo Railway. No information was obtained as to actual official results, hut it is understood that the line has shown no net profit to EQUIPMENT AND PURCHASES. The roadway and track materials are almost entirely from Chinese, Japanese, and American sources — largely the last-named. All the locomotives and a large part of the passenger and freight care are of American manufacture. Tlie head office of this railway is at Kiukiang, and the present stall is partly Chinese and partly Japanese. Considerable preference is probably given at the present time to material from Japanese sources. HANKING CITY RAILWAY. LOCATION AND EXTENT. Til is is what might be considered a heavy steam tramway using ordinary steam-railway equipment. It starts on the bank of the Yangtze Kiver near the landing hulks of the Yangtze River lines and not far from the Nanking terminal passenger station of the Shanghai- Nankmg Railwaj. It runs a distance of about 8 miles to the center of the Chinese city of Nanking, which at one time was the capital of the Chinese Empire. The greater part of the line is inside the walled city. It passes through the wall at a pomt less than 2 miles from the terminal on the bank of the Yangtze Kiver HISTORY. Mr. Tuan Fang, then viceroy of the Liang Kiang Provinces, built the line out of provincial funds, and it has been known as the ''Viceroy's Railway." The line was first opened for traffic in August, 1908. Mr. Leeme (British) was the engineer in charge of construction. Tho gauge of the track is 4 feet 8i mches. EQUIPMENT AND TRAFFIC. The roadway and track materials seem to have come from various sources, but a considerable amount is of American manufacture. This line has only a small amount of rolling stock. The two loco- motives are of American manufacture. The freight and passenger cai*s were formerly used on the Woosung branch of the Shanghai- Nanking Railway before this branch was taken over by the present administration. This equipment was refitted with Jamicy couplers and Westinghouse air brakes. When the writer inspected the lin© only one engine was in service; the other was undergomg badly needed repairs. The roUing stock was in a more or less run-down conJition, as was the track also. The traffic is mostly passenger business, and during the recent political troubles the use of tho line has been largely monopolized by tho provincial miUtaiy authorities. It is understood that the lino does not meet operating expenses — to say nothing of showing any profit — and this condition has prevailed for some time. Vila I^tlllll.l!n9.l!i IIl.Uy9IKlil,L MAifjWiilCI* INTIODUCTION. The following account does not attempt to cover all tlie short industrial 'Jrailways^ that may exist in China at present. In the case of those mentioned, the information was obtained chiefly in connec- tion with the industries that the lines serve. In each instance the lines discussed may in time come to assume mnch more importance than they possess at present, on account of the probable growth of the industries served and the fact that in the future such concerns wiH probably be required to provide most, if not all, of their indus- iritl-railway facilities. The prediction seems justified that, in tlie future railway develop- in,ent of China, the Ministry of Communications will largely direct, if not entirely control, the construction and operation of all com- mercial, railways, although, in conformity with the present policy, 'branch railways may be occasionally built and in some instances operated by provinckl or private interests. But it wiU be only a question of time until the control of all commercial railways will pass to the Ministry of Communications. It is felt, however, not only that industrial railways such as the following will be under the control of the industries served, but also that there will be a growing tend- ency to force the industries to build their own railways — ^including, in special instances, branches of considerable length. TAIEH EAUiWAY ^(HAN-YEH-PING CO.X ^WMaino'N AKP owi Tliis is a railway of 2-foot gauge, from the ore-shipping port of Hwangchow on the Yangtze River to the Sztse-Slian and Tien-Shan mines, generaiy known as the Tayeh iron deposits. The present line is 17 miles in length, with a considerable amount of tracks at each terminal, particularly at the mines. The Han-Yeh-Ping inter- ests are in charge of tliese operations, although the mines are sup- posedly worked for the Chinese Gpvernment. rhe writer was unable to ascertain the details of the arrangement. The products of these mines are depended u|>on entirely for the operations of the Han- Yeh-Ping Iron and Steel Works at Hanyang (Hankow) ; a consid- erable amount of the ore goes to the Japanese Imperial Steel Works at the port of Wakamatsu near Moji; and there are in course of construction two 400- ton blast furnaces on the Yangtze River near the present terminal of this line, which will also depend on these ores. TKAFFIC AND BQiUIPMENT. The traffic, of this Mne consists almost entirely in the handling of these ores; it is very heavy for this 2-foot-gauge railway, with its present small ec|uipment. "A number of the locomotives and some of the other rolling stock are of American manufacture, but most of CHIITA. 125 this equipment has been in service for a number of years and is now more or less obsolete, considering the advance in recent years in industrial railway equipment for the handling of iron ores. It seems probable that this railway will have to be largely rebuilt and a con- siderable amount of additional equipment provided to handle tliis growing, important traffic. MANAGEMENT. The line is under the management of a superintendent, Mr. C. Y. Wang (Chinese). Several members of the technical staff are Japa- nese, The chairman of the Han-Yeh-Ping interests is Mr. Sun Pao ill, and the general business manager is Mr. Wong Kokshan, both of whom are located in the company's Shanghai office at 36 Szechwan Road. Mr. Wong Kokshan has general direction of all purchases for the Han-Yeh-Ping interests, which include the Tayeh iron mines, the Pinghsiang coaJ mines, and the iron and steel plant at Hanyang (Hankow). Mr. S. O'Hara, Grosvenor Mansions, 76 Victoria Street, Westminster, London, S. W,, is resident agent in England for these interests. KAILAN MINING ADMINISTRATION RAILWAYS (KAIPING COAL FIELD). LOCATION. These are branches of 4-foot 8i-inch gauge, connecting the mines and works of the Kailan Mining Administration with the Pekino-- Mukden Railway where the latter passes tlirough the Kaiping Basin, which hes between the stations of Tangshan and Kuyeh, 168 and 183 miles, respectively, northeast of Tientsin. These branch rail ays are used entirely for the handling of this concern's products. The Kaiping Basin covers an area of about 95 square miles and is intersected bv the Peking-Mukden Railway at the above points. The coal of the " Permo-Carbonif erous " be'ds is deposited in some 13 seams, with a total thickness of from 40 to 60 feet at the Tangshan shafts in the southwestern part of the basin, 60 to 80 feet at the Machiako, 80 to 90 feet at the Chaokochwang shafts in the southwest- central and north-central parts of the basin, and 40 to 50 feet at the Linsi shaft in the northeastern part of the basin. The proving has shown that there are about 1,000,000,000 tons of coal in this mining concession. These coal deposits are miderlaid with seams of good fire clay. HISTORICAL SURVEY. The coal and fire-clay outcrops of the Kaiping Basin have no doubt been known and worked by Chinese methods for several thou- sand years. The present administration came into existence July 1, 1912, by the amalgamation of the Chinese Engineermg & Mmiiig Co. (Ltd.), a British company registered in London, and the more recent native concern known as the Lanchow Mining Co. This combination has a share capital of £2,000,000 and, in addition, an issue of £1,200,000 of 6 per cent debentures. As alreadv mentioned, the Tangshan mine was first opened in 1878 in connection with the mule tramway, 7 miles long, that was later extended until it became the Peking-Mukden Railway system. This is the oldest mine in China usmg modern methods. The Machiako mine represented the first operation of the Lanchow Mining Co. There are now five sets of mining operations, with the following daily capacity: Tangshan, 1:2'6 lAILWAY MATEITALS, 1Q:UIPME¥T, AND SUPPLIES. 2,200 tons (of 2,240 pou ctiiako, 2,500 tons,; Qiao total capacity, 10, ; Tan,,gslian, North Wast, 800 tons; Ma- "" waiig,, 2,500 itms; Linsi, 2,500 tons; OUTPUT or MINIS— MfllBM OP tMPLOTlffl. Tlie annual output of tlieso mines is about 3,250,000 long tons of reasonably good bituminous €oal» of wliicli al>out 100,000 tons ai-c. at present con'vertecl into coke. Tins concern also prociuces a vpry eonsiderable quantity of fire bricks, floor tiles., glAxed tiles, stoiu* ■piping, and aiinilar fire-clay products. It amiears fn-opcr to incntiofi in til is connection tliat tlie works of the Oioe fising Cement Co. (Ltd.) iri? located in the Kaiping Bas^in near Tangslian. The total number of cm|>lo\-c(s in the administration m,in,m is about 25,000, of wliifh 14,000 krt underground worlxci-^., (i.OOO over- ground, 1,000 in the fire-€la\' works, and 2,500 at the docks ([jarticu- larly at Chin'wangtao) — leuA'ing about 1,500 m,isrellaneous employees. MANAGEMENT. Mr. Yuan Ke Fung is direct^or-ffeneral of the administration. Mai. S. W. Natlian, 11. E., is general mianagcr in general cliarge of all departments. The head Cliinese ofliee is in, M^eadow Road, Tioitsin. Mr. A,. Docquier, located at Tangslian; is enginecr-in-chief and di- fectly in charge of operations iii the field. llT:EN9lOliB AMD IMFIlOViaii:ii»TS. The writer learned from, authoritative sources tliat this eoneem contemplates the expenditure of about £2,000',000 after the end of the W:ar, in extensions and improved by-pTodoet methods. The future prospects of thk project seem very bright, and one appears entirely m^aiTanted in saying that, m-itli the large deposits of roaaon- ,ably good coal controlled by this concession, the short railway haul (aviiraging m little more than 75 mMes) to the ice-free port of Chin- .wangtao, the very large markets easily reached by ocean shipping, and th© ample supply of robust labor in the district, this concern should find a reaciy market for any increased production. These conditions 8©€'m to point to large proti,ta in the fut^ure, justifying this very considerable expenditure in extensions &nd im,provemente, TAI-TSAO KAIiWAl (C^IN'G HSING COAL CO.X Tliis !in,e is located in tlic southern part of tlie Province of Shan- tung, connectingj the coal, mines north of Yihsien with the Grand Canal. Connections are iilst> made with the Tientsin-Pukow Rail- way. There are about 27 inEes of railway, of 4-foot 8§-inch gauge, mnd the concern has a large cod yard and wharf at its terminal o:n th,e Grand Canal. Jill materials and equipment are of German m,anofacture. The liead office is at No. 8 Taku RomI, Tientsin. Mr, C. von Hanneken and Mr. Hsu Shi Kang were the directors of this enterprise before China entered the war.'" All the otlier officials were Germans, and it is understood that the mtorprise was largely inancod with German capitaL though there were ' supposed tO' be a number of Chinese slmreholdefs. So far m can be learn^ed,, no extensions or improvements are con- templated. It was impossible to get deflriitc information regarding the probable future of mis development. ¥m. FOIEIGN-CONCESSION RAILWAYS. INTIODUCTION. Five different railways come under the above classification, as siiowB by^the table on page 43. The British section of the Canton- Kowloon Radway has already been covered (see p. 1 16). The Chinese Eastern Radway and the South Manchuria system, both of which are m Manchuria, will be included in the discussion of the Manchu- rian aroup of railways. This leaves the French Indo-China line from Haiphong to Yunnanfu (287 miles of which is in the Chinese Province of YuiiJian) tuid the Shantung (Santo) Railway, tlirough the Prov- ince of Shantung, formerly a German line but now under the control and management of the Japanese. ^ As already stated, these concessions, with the exception of the Can ton-Kowloon, were exacted from China during the ''Battle for Concessions," the lines were built with foreign funds, and they have been operated entirely in the interest of the foreign countries con- eerned.^ In all instances except that of the Canton-Kowloon the concessionaires have claimed the right to investigate and develop the resources of the regions traversed by the railways, particularly coal and other mineral deposits. YUNNAN (TIEN-YUEH) RAILWAY. LOCATION AND EXTENT. This Mne is located in Yunnan, one of the southwestern Provinces of Chma, lying next to Indo-China. Tliis railway crosses the Tong- king border at Laokai and runs in a northwesterly direction to lunnanfu, the capital of Yunnan, a distance of 287 mdes. The sec- tion of the line in French territory starts at the seaport of Haiphong find rilTYa in o -n/\inf k^*r/><3 4-^«.l^^ Al^^^ 4.1^^ i.T 1_ TT -- • ,1 i. -, *1 HISTORICAL SUBVEI* The history of the Chinese section of the Yunnan Railway is closely connected with that of the French Railway in Tongling The hrst railway in Tongking was of 60-centimeter (23.56-incE) gauge, and extended from Langson on the Kwangsi-Tongking border to Phulangthuong (Kent's ''Railway Enterprise in China"). This line was later changed to meter gauge when extended to Hanoi. It IS now tlie Hanoi-Langson section of the French Indo-Cliina Rail- ways and IS the line that has been suggested to extend to Lungchow^u and from this point to Manning, the capital of the Provmce of Kwan^i. The first step toward the present meter-gauge lines was token in the latter part of 1897 by M. Doumer, the new Governor General, who had assumed his duties in the early part of that year. He submitted to the Conseil Sup^rieure of Indo-China a scheme in- volving the construction of some 2,000 miles of line, which was 127 IBIIIII 128 BAILWAT MATERIALS, EQUIPMENT, AND SUPPLIES. C/X1.1.JM As 129 rench Chamber approved by that body after being passed upon by a c< it. "Do«mer next secured the passage of a law by the Frenc in 1898 authorizing the const.niction of this system of railways. In the meantime steps had been taken with the Chinese authorities to secure the ■necesea.ry coneeasions. As a result, one of the features, of the""B>attIe for Concessions" was^ that in April, 1898, China by convention ^granted this and other concessions to France. Mr. Keiu , in his '''Eailway Enterprise in China," states the terms as follows:' (1) 'K'waogdi.aiiwan to be Immi to France m a coali:!!^ station,., (2) The Tigfct to be gimated tO' 'FniEce to constnict m^ railway U Ynnmnfn from the ToiiRfcing froatier. ^ .-, .. f,:l"l ,A'promi» to be .given by Fnmce not to alienate any terntory in tbe tbree rr.'"» vi Of ea of Kwangtmig, ,K,waii|g8i, aad Yimnan,, which, border on th© Freach frontier. (4) The Cbineae Government to agree' that if ever it constitntea a postal depart- ment independent of the Maritime CuatoM, md if a European is to be appointed as director thereof. France shall have m eqvii^'n^t with that of other Towere to nominate a candidate for the post o,f director. (Note.— The prefent director general of the Chi„n,twc Post Office is now a Frenchman.) In addition, the Chinese subsequently granted the concession for the building of a line from Lungchow, and the French have advanced flaims at Tarious times that this concession al,so gives them the right to extend this line to Manning, the capital of the Province of Kwangsi. The building of the Laokai- Yunnan section and the oper- ation, of the entire li,ne from Haiphong to Yunnan was given by the French ■Groveni,m,ent to ,a syndicate of the principal financial houses in Pa,ris, who organized tfie Comp,agnie •Fran^aise des Chem„ins de Fer de Flndo-Chine et dii Yunnan^ and this conipany in turn sublet the construction work to the Soci^t^ de Construction^ des Chem,ins de Fer Indo-Ch,inois. The final a:greemeut with the Chinese authori- ties wm conduded m the fall of 1903. 'Mr. Hsu says ,regarding this sitnatinn: The Chinese' Government han no further oMlp,tiwii hv the photogranhs of tlic terminal stations (figs. 3 an.d 4).. Tliere are more 'than 25 branches, built to reach tlie .Posha.n ccial .mines; tlicsc branches connect wi,tli. the m,ain line about f50 miles f.ro.in Taiagtau... ■IBTOWCAl. SIJKVBY. 'Th.e ostensible cause for the Cferaian occn:pation of Kiaochow B^ay Ni"»Tei"nber 1.4, 1807, was the murder of two German m.i8sionai-ies earlv tha.t month in the ProTince of Shnntiing. In view of events that ha\-e since occurred it would appca.i- t.|iat 'the German occupa^ tion was deliberatelyj^ianncd and that the occurrence mentioned was ouIt a pretext. "Tlie Germans promptly followed the occupation 'b.v denmnds on tlic Chinese .Imperial Govern.ment at Peking, which were vigorouslv followed up and, in fact, added to from time to time, with the result that a lease wm signed March 6, 1808, for Kiaochow Bay and a definite land area (about 200 soiiare miles) that included the'" present, port and citv of Tsingtau. .At the same tim,e a eonventioii w:as"concluded for the buikiing of tlie present Shantung Railway and, in addition, prov.i,sion was made for the buildin|j' of two other lines- one from a 'junction near Kiaochow to .Icho'wfu and lilie second to complete the triangle to Tsinanfu on about tlie route, of the present Tientsin-Pukow line. Tlie concession included also the right to fur- nish the capital for all railways in Shantung that could _not be fin,anced .from native sources. The p.rov.ision wi.th regard to this last ni.atter .ia. .riven as. ■^^"'*''»™^a "^^^^ '^** W«i.i in 'li.i« *' RjmIwiiv Froblftma in China''': CMIWA, itji lows by Mr. .Hsu in his. "liailway .Problems in. China": ,lt at ftMV time tlie Cliinew ahoiilci l'or.iii a€*.€me3 for tlie developmont of Shaaturig, for t,b.e execution of wliidi it 13 nec-eaaary' to oblaiB .fore%B. capitiil,,,, the Chinese Goverii- .meat, or w:ha.tev.er Ch.io.eBe mav he iotefested ia .such schemes., ah,all, hi the tiret iii.- itance, apply to (ier.irjiii capitalists.. Application shall also be made to German marm- factu.rer8 for the neceaaary inacliinery and nmt«ria.Is before' the 1n2.nufact11.rer8 of any other Power are approaclied .. Sho.ul(t Gamaui «pil»liata' of iii«milactiir«.r8 d'O'Cline to take up the bmiieas. the *. "hiaese shall then t)e at liberty to ohtai.ii .money and. niateriak .Ironi sources of other natio.nali.ty than G.er.o;ian. There w.as keen competition among the Gcrm.an financial interests to obtai.n the concession from the German Government to build these lines,, with the resul.t that a co.iiibinat.ion of German financial houses w.a3 effected., and .in June., 1S89, the Schantui:ig Eisenbahn. GeseE- scliaft secured the co.n.cossion to bu.ild the line wit.h "joint Chinese and German c.apit.aL" Probably not a •sin^.le subscriber was Chiiics(\ The capital used .in the co.nstr action of tliis line and also in the de- velopment of the .resonrces along the line has been very largely, if not entirely, German.... 'This w.as .also tlie case, with the improvemen.ts socli as the port imd city of Tsingtau .and the new part of the town of Tsinanfu at the m^estem. terminal The above co.ncession also ca.rriod the right, .after the end of 1908, to build the line from the junction at Kiaochow to Ichowfu. In addition, the exclusive right to prove and daim the mineral resources for future development of the rail- way zone (consisting of a strip extending for about 10 miles on each side of the center line of the railway) was granted this syndicate. Work on the Shantung Railway was started promptly and the lino wag completed and put in service in 1904. ^Flie cost approached 150,000 (gold) per mile of line. Giving due weight to the reasons that have been advanced by various authorities for the German seizure and forcible occupation of this Chinese Province for their operations, the writer is convinced, after going over the ground, that one of the particular and very souiicl reasons from the German standpoint was tliat this action gave tho Germans control of a large number of the most robust and upstanding natives in China, capable of standing, and willing to do, hard work. In addition, this is one of the most healthful parts of China, and Tsing- tau is probably the most pleasant place of residence, all the year roimd, on the entire Chinese coast. TUB POHT OP TSINGTAU. One of the most important and interesting of the German develop- ments in Shantung was the very completelv equipped and well- arranged facilities at the port of Tsingtau. 'The area of the pro- tected harbor of Kiaochow Bay is approximatelv 200 square mih^s, in addition to the 200 square miles of so-called leased territory. The port facilities consist of a large basin and several slips for seagoing vessels of all drafts up to 35 feet and a smaller basin for native craft! The construction is of the most substantial and permanent character'. The slip between the two principal piers is capable of berthing the largest vessel in ajiy senice in the world to-dav or likelv to be built in the next generation. One of the disadvantages of the harbor IS the height of the tides, which is very considerable and causes eurrents rather troublesome for the navigation of large vessels through Ine somewhat crooked entrance of Kiaochow Bay, On© of the principal features of the port is a complete plant for the repau: of ships. In this connection there was originally a large floating dry dock, but since the occupation by the Japanese this has been taken to Kobe and is now in use at that place in takin^r care of the repairs to Japanese shipping. '^ ChASa or TRAFFIC Tlie service on this line, particularly as regards passenger accommo- dations, is somewhat restricted under the present Japanese manage- ment. Even under normal conditions it is probable that the freio-ht revenues will considerably exceed the passenger earnings, although a verj substantial passenger business is now done, which could probably 1)6 increased by additional service. The freight business comprises a large amount of agricultural products, one of the most important of which is Chinese strawbraid. In 1915 the coal handled amounted to about 260,000 tons (of 2,240 lbs.); in 1916 there was an increase to about 445,000 tons; and, with the improvements contemplated by the Japanese, there will probably be a further increase, althoucrh this is not likely to affect tlie ti-affic materially until 1919. PBOfJTS. The writer was unofficial! j advised that the Japanese administra- tion has concluded, as a result of its investigations, that the German 132 BAIWAY MATERIALS, EQUIPMENT, AND SUPPLIES. operating results were as follows (converted from German marks to United States currency at the rate of $0,238 to the mark) : Special Agents Series No. 180. YeMM. UMB 1907 1908 1909' ,. WW 1M3 Earnings. 1667,909 1,136.248 1,1M,578 1,105,534 1,426.855 1,627,199 1,965,956 Expenses. 135.1,240 408,682 421,422 342,570 396,901 43{,983 567,244 Profits. 1314,669 727,566 777, 156 762,964 1,029,955 1,191,740 1,398,712 For 1911 and 1912 the earnings were 13,496,000 Mex. and $4,211,000 Mex., respectively, hut expenses for these two years were not satis- factorily determined and are therefore not given. In 1915 and 1916 the results of the Japanese administration were shown in Japanese gold yen (yen = $0.4985) as follows: Earnings, 3,651,400 yen and 4,437,100 yen, respectively; expenses, 3,242,200 yen and 2,937,300 yen. The earnings for the first six months of 1917 showed a small improvement over the first six months of 1916. These figures are shown as above for the reason that conversion to a common value would have to be made on an arbitrary basis, and in this way the figures would lose much of their significance to anyone familiar with the rates of exchange in the Far East during this period. They jus- tify the conclusion that the financial results of this line under ordi- nary circumstances will be satisfactory. Notwithstanding the reduc- tion of the traffic as a result of the war, the earnings shown represent a steady growth which, with the return of normal conditions, will doubtless be continued. KMMIBLE EXTENSIONS. What the disposition of this railway will be after the end of the war can not be predicted at this tims. One of the present results is that until such time as a final conclusion is reached the Japanese claim succession to the German concessions in the Province of Shan- tung. So far as can be learne 1, no consideration has been given to the building of the line from Kiaochow to connect with the Tientsin- Pukow Railway near Ichowfu. However, there have been persistent rumors from time to time of Japanese efforts to secure concessions to extend the line west from Tsinanfu through western Shantung and southern Chihli to connect with the Peking-Hankow and also to reach the valuable deposits of good coal in southern Chihli, northern Honan, and southeastern Shansi. The Far Eastern Review for December, 1917, stated that the Jap- anese Department of Agriculture and Commerce has set aside 10,000,000 yen, one of the purposes being to develop and work during 1918 and 1919 the mineral resources of Shantung, particularly the iron mines of Chinlingchin, about 180 miles west of Tsingtau. If a large amount of iron ore is developed, this will probably involve the construction of some additional branch lines. ROADWAY AND TRACK MATERIALS. The materials for this line are all of German standards and manu- facture. There are more than 1,000 bridges of all spans, all of which FIGS. 28 AND 29.— FOUR-WHEEL GOODS CAR AND CABOOSE ON THE SHANTUNG RAILWAY. INTENTIONAL SECOND EXPOSURE X •f m Oil 132 BAILWAY MATERIALS, EQUIPMENT, AND SUPPLIES. operating results were as follows (converted from German marks to United States currency at the rate of $0,238 to the mark) : Yeare. Eanungs. Expenses. Profits. 1905 liWi , 1907 , !!""."""" If'tOS 1667,909 1,136.248 1,19.8,578 1,105,534 1,426.855 1,627,199 1,965.956 135:1,240 408, 682 421,422 312,570 396, 901 43J,983 567, 244 f 31 4, 669 727, 5(iG 777, 156 762 %4 19[)9 191,0 ,. , , '„'.. 1913 , l...[.'.""'y"l"" 1,029,95.5 1.191,740 1,398,712 For 1911 and 1912 the earninofs were .13,496,000 Mex. and $4,211,000 Mex., res j)ec lively, but (wpenses for these two years were not satis- factorily determined and are therefore not given. In 1915 and 1916 the results of the Japanese administration were shown in Japanese gold yen (yen = $0.4985) as follows: Earnings, 3,651,400 yen and 4,437,100 yen, resi)ectively; expenses, 3,242,200 ven and 2,937,300 yen. The earnings for the first six montlis of 1917 showed a small improvement over the first six months of 1916. These figures are showTi as above for the reason that conversion to a common value would have to be made on an arbitrary basis, and in this way the figures would lose much of their significance to anyone familiar with tlie rates of exchange in the B'ar East during this period. They jus- tify the conclusion that the financial results of this line under ordi- n_ary circumstances will be satisfactory. Notwithstanding the reduc- tion of the tralfic as a result of the waV, the earnings shown represent a steady growth which, with the return of normal conditions, will doubtless be continued. POSSIBLE EXTENSIONS. What the disposition of this railway will be after the end of the war can not be predicted at this time.* One of the present results is that until such time as a final conclusion is reached the Jai)anese claim succession to the German concessions in the Province of Shan- tung. So far as can be lenrnei, no consideration has been srivon to thel)uil(ling of the line from Kiaochow to connect with the tientsin- Pukow Railway near Ichowfu. Ho^\-ever, there have been persistent rumors from time to time of Japanese efforts to secure concessions to extend the line west from Tsinanfu through western Shantung and S(>uthern Chilili to connect witli the Pekiiig-nankow and also to reach the valuable deposits of good coal in southern Chihli, northern Honan, and southeastern Shansi. The Far Eastern .Review for Deceml)er, 1917, stated tiiat the Jap- anese Deiiartment of Agriculture and Commerce has set aside 10,000,000 yen, one of the pui'ixises being to develop and work during 1918 and 1919 the mineral resources of Shantung, particularly the iron mines of Cliinlingchin, about 180 miles west "of Tsingtau. If a large amount of iron ore is developed, this will probably involve ths construction of some additional branch lines. ROADWAY AND TRACK MATERIALS. The materials for this line are all of German standards and manu- facture. There are more than 1,000 bridges of all spans, all of which Special Agents Series No, 180. 1 "0 ,„.„, fi FIGS. 28 AND 29.— FOUR-WHEEL GOODS CAR AND CABOOSE ON THE SHANTUNG RAILWAY. Special Agents Series No. 180. . • M T' 1 i-^ .-' ss^lM jH^ t Hijii" /«■■■■ Iji?' 1 4 ' ^ : H mm i^ 1 Iliiiii iliilliiilllllliliilllllllilPlilllill .,_ . ^ ,.,— u,4j m (. ^"^^^ •ill FIG. 30.— LOW-SIDE GONDOLA CAR ON THE SHANTUNG RAILWAY. FIG. 31.— SPECIAL CAR FOR HANDLING BULK LIME ON THE SHANTUNG CHINA. 133 are designed for loading not in excess of Cooper E-35. These light bridges are handicapping the Japanese management in its desire to use heavier motive power. It will be exceedingly difficult, if not impracticable, to strengthen the present structures so as to carry sub- stantially heavier loads. A steel tie of robust design, provided with substantial fastenings, has been used for all tracks and appears lo have given entirely satisfactory results. The rail is a special German section for use on these steel ties; its weight is about 60 pounds, with, however, a head and girder strength probably equivalent to 70 pounds A. R. E. A. section. All the track materials are of typical German standard, and so far the Japanese have made little change in the way of renewals or additions— one reason being that there was a very considerable supply of most parts in stock when the Japanese assumed control. * As already mentioned, all the stations and other buildings on this line are of very substantial construction and in many cases of ornate design. All structures are permanent and adequate except as regards the loading capacity of the bridges, and also the turntables, which are not capable of turning heavier engines than those now in service. ROLLING STOCK. All the original rolling stock conforms in general to the German practice and came from German manufacturers. The present equip- ment consists of 53 locomotives (3 of which were recently furnished by an American locomotive company), 85 passenger cars, and 1,227 freight cars of all classes. In September, 1917, the Japanese manage- ment had under way negotiations for buying several additional American locomotives, but they were having serious difficulty in obtaining them. ^ . ^ Figures 28 and 29, facing page 132, show a typical covered four- wheel goods car and a caboose, part of which is used for handling package and express freight. An unusual feature of the caboose, from an American viewpoint, is the running board for the crew to go along the side of the car instead of over the top. Figure 30 shows a low-side gondola with the old-style buffers and safety chains, with the new automatic coupler of American manufactui*e installed by the Japanese since they took over operation of the line. The lower illus- tration on the same plate shows a special four-wheel car for handling bulk lime. The writer was very much inmressed with the utility of this. It will be noticed that the side buffers on this car have been removed since the installation of the automatic couplers. WORKSHOPS. There are well-equipped shops of moderate size for the making of all classes of repairs to the rolling stock. These shops are located a short distance from the Tsingtau terminal. There are also ample engine houses and equipment facilities along the line, particularly at all engine terminals. One feature in this connection with which' the writer was particularly impressed w^as the substantial and adequate water-station facilities provided. ORGANIZATION AND MANAGEMENT. Since the capitulation of the German garrison of Tsingtau in Decem- ber, 1914, the operation of this railway has been under the adminia- r' I t. INTENTIONAL SECOND EXPOSURE Special Agents Series No. 180. iPiMilb..ji J w ^%^kM 4 ■ 'Mm ^ f 'M ' ^ '•- . ■:ii.-^ ^^^miij WRJflCSiL^* ^ i FIG. 30.— LOW-SIDE GONDOLA CAR ON THE SHANTUNG RAILWAY. FIG. 31.— SPECIAL CAR FOR HANDLING BULK LIME ON THE SHANTUNG RAILWAY. CHINA. 133 are designed for loading not in excess of Cooper E-35. These li^ht bridges are handicapping the Japanese management in its desire^ to use heavier motive power. It will be exceedingly difficult, if m^t impracticable, to strengthen the present structures so as to carry sub- stantially heavier loads. A steel tie of robust design, provided wilh substantial fastenings, has been used for all tracks and appears to have given entirely satisfactory results. The rail is a special Germnii section for use on these steel ties; its weight is about 60 pounds, with, however, a head and girder stiength probably equivalent to 7(i pounds A. H. E. A. section. All the track materials are of typical German standard, and so far the Japanese have made little chaiii^o in the way of renewals or additions — one reason being that there was a very considerable supply of most parts in stock when the Japanese assumed control. As already mentioned, all the stations and other buildings on this line are of very substantial construction and in many cases of ornate design. All structures are permanent and adequate except as regards the loading capacity of the bridges, and also the turntables, which are not capable of turning heavier engines than those now in service. ROLLING STOCK. All the original rolling stock conforms in general to the German practice and came from German manufacturers. The present equip- ment consists of 53 locomotives (3 of which were recently furnished l)y an American locomotive company), 85 passenger cars, and 1,227 freight cars of all classes. In September, 1917, the Japanese manage- ment had under way negotiations for buying several additional American locomotives, but they were having serious difficulty in obtaining them. Figures 2S and 29, facing page 132, show a typical covered four- wheel goods* car and a caboose, part of which is used for handling package and express freight. An unusual feature of the caboose, from an American viewpoint, is the running board for the crew to go along the side of the car instead of over the top. Figure 30 sho^\^ a low-side gondola with the old-style buffers and safety chains, with the new automatic coupler of American manufacture installed by the Ja|)anese since they took over operation of the line. The lower 'illus- tration on the same plate shows a special four-wheel car for handlino- bulk lime. The writer was very much impressed witli the utihty o1 tins. It will be noticed that the side buffers on this car have been removed since the installation of the automatic couplers. WORKSHOPS. There are well-equipped shops of moderate size for the making of all classes of repairs to the rolling stock. These shops are located a short distance from the Tsingtau terminal. There are also anijile engine houses and equipment facilities along the line, particularly at all engine terminals. One feature in this connection with which" the writer was particularly impressed was the substantial and adequate water-station facilities provided. ORGANIZATION AND MANAGEMENT. Since the capitulation of the German garrison of Tsingtau in Decem- ber, 1914, the operation of this railway has been under the adminis- ii u m.i ^i so and foreigners of all, class..es are seldom seen in the street^ cars, but, as. a rule, travel in jinrikishas. or other conveyances. There has seemed to be a .growing tendency recently on the p.art of the less well-to-do class of foreigners to ride in the tramway cars, particu- larly in Shanghai, but the proportion of foreign passengers on all lines is very smal and practically aU. foreigners ride first class. THOTSIN TBAMWAYS. The Tientsin tramw.ays are operated by the Compagnie de Tram- wms et d''ficlaira|;e de Tientsin, Social Anonyne, with headquarters iii ""Bruss..els, Belgium. There are .about 8.2 m,iles of this system, located in the French, Japanese, Russian, Italian, and Austrian^ set- tlements. Service was first estabhshed in 1906. The track is of meter gauge, and the rail is all grooved girder weighing 46 kilos per 134i meter (92.8 pounds per yard). One particularly interesting feature of the construction of this track is the fact that no ordinary ties (sleepers) are used, but that, instead, the girder rails are laid on beds of broken stone 15 inches deep and 18 inches wide. The rails are held together with 12 tie rods for each set of raUs 18 meters (59 feet) l()ng, or one tie rod for each 5 feet. These tie rods are very robust and securely fastened to the web of the raU. After having had this construction explained, the writer took particular notice of the line and surface of this track at different points and was much surprised at its good average condition, which seemed to confirm the statement of Mr, Gaillard (the general manager) with regard to the satisfactory results given by this construction. The rolling stock consists of 64 double-motor trolley cars and 50 trailers, all of Belgian design and manufacture. Figures 32 and :i3 show a motor trolley car and the ends of two trailers. This company also furnishes the electric power for Tientsin. The total capital is 6,250,000 francs ($1,206,250 United States currency). This invest- ment is about equally divided between the tramway and electric plants. The gross tramway earnings for 1915 amounted to 64,524,183 copper cents, which, reduced to Mex. dollars at an average of 130 cents to the dollar, made about $496,800 Mex. First-class and second-class fares are charged to men, but Chinese women are allowed to ride first-class by payment of second-class fare. The second-class passengers are handled almost entirely in the traOers. Practically all foreigners ride first-class when they ride at all. All rides are on a single-fare basis. Part of the lines have a 2-copper-cent fare, the maximum distance being 3 kilometers, or about 1.9 miles. On the other routes 3-copper-cent fares are charged for a maximum ride of 5 kilometers, or about 3.1 miles. One very interesting feature of this system is that the amount of travel varies with the <}haracter of the season and the day. On fair days tiie daily collection averages about 250,000 copper cents, but on wet, disagreeable days the collection sometimes falls below 100,000 copper cents. These figures seem to indicate that, notwithstanding the in- dustrious habits of the Chinese, a very large part of the riding of these lines is for pleasure (or at least convenience) rather than travel to and from work. This is purely a Belgian concern; all materials and equipment con- form, in general, to Belgian practice and are usuaJJy of Belgian manu- facture. A good many purchases are made from concerns m Tientsin, and at present requirements are bought from whatever source they can be secured; but, upon the return of normal conditions, no doubt preference will again be given to materials from Belgian sources when these are again available. SHANGHAI TRAMWAYS. The lines of the Shanffhai Electric Construction Co, (Ltd.) are located in the foreign settlements (except the French) in Shanghai— or what is otherwise known as the International Settlement of Shanghai, The total length of the route is about 16.45 miles of rail lines and 1 mile of railless trolley. All the tracks of this company are substantially constructed and well maintained. The rolling stock consists of 90 motored trolley If r 138 RAILWAY MATERIALS, EQUIPMENT, AND SUPPLIES. cars, 70 trailers, and 7 railless trolley cars. Part of the power is generated in the company's own powerhouse and part is purchased irom outside. The total share capital of the company is £320,000. For the year ended December 31, 1917, there was a net profit of £49,510 and, after the appropriation of £10,000 for renewals and £5,000 for writing down the preliminary expenses account, 10 per cent dividends were paid on the above snare capital. These results show the possibili- ties of tramways in C^iiina where the developments are followed up from year to year by capable and enterprising management. First and third class (no second-class) fares are charged, but Ciiinese women ride first-class on payment of third-class fare. There is an arrangement of zone fares, the first-class fare for each zone being 3 copper cents. When fares are collected passengers are given a special number and colored slip. There are frequent instances of "surprise" checking by special inspectors, as a part of a very care- fully worked-out and maintained scheme to elimmate ' 'squeeze," or ** graft." It is claimed that this has been reduced to a very low point by the arrangement indicated. There is at present a very successful and well organized raUless trolley, with a route of a little more than a mile, rSnning through a very congested district. The service was first established in 1915 over a route of about seven-tenths of a mile, and was extended in 1916 to the present length. This service was objected to at first by the municipal police authorities, who give a great deal of attention to keeping traffic moving in the congested districts of Shanghai; but as a result of the successful operation of this equipment their attitude has become favorable and the Municipal Council has been consider- ing a proposal for a very considerable extension (about 9 miles) of this railless trolley service. Figures 34 ancf 35 show two views of these railless trollev cars. In the statement presented to the municipal council the claim is made that these cars occupy an area of 158 square feet while 28 jinrikishas carrying the same number of passengers would occupy 2,500 square feet to permit of proper movement. This means, practically, that at least two of these railless trolley cars would nave ample running space in one of these narrow streets and still permit the movement of other traffic, whereas the 28 jinrikishas would completely occupy the street without allowing other traffic to move. The average cost of the seven cars now in service was about $12,850 Hex. for each complete equipment, and the actual cost of the present instaHation, including the double trolley, was 1137,575 Mex., which included a contribution of $26,022 Mex. for street paving. As no additional land or buildings were added to the general plant, an arbitrary amount of $10,000 Mex. was added for determining return on capital. The detailed working ex|>eiisos have been very carefully watched, and the results for the last half of 1916 show a profit of about 15 per cent on the investment. The tire renewals were estimated at $0.03 Mex. per car mile, but have since been determined as less than $0,024 Mex. The mileage for tires will average more than 25,000 per tire; the mmimum so far has been 18,000 and the maximum almost 50,000 miles. The weight of the complete outfit (no load) is about 8,400 pounds. Motors are 20 horsepower and have been found ample. The power special Agents Series No. 180. FIGS. 32 AND 33.— TRAMWAY CARS AND TRAILERS, TIENTSIN. Notice pantagraph contact. INTENTJONAL SECOND EXPOSURE B (^ 138 BAILWAY .MATERIALS, EQUIPMEXT, A:N,D Sl'PPLIES. cars, 70 trtulcrs, and. 7 riiilless trolley cars. Part of tho ])owcr is j^eneniteil in the com j) any" s own powcrlioiiso and part is purchased from oiitsitle. The total share capital of the coni})any is £320,000. For the year ended DeccMnber 31, 1917, there was a net profit of £49,510 and, after the appropriation of £10,000 for renewals and £5,000 for writiiiji^ down the pi*« liininary ex|)oiise3 account, 10 per cent dividends were l>aid on tlie above share capital. Tiiese results show tlie p!:)ss!l)iii- ties of trarnways in CiUiia where the developments are followed up from year to year by (;a{>al)h:5 and enterprisinoj inanaji^ement. Fii'st and third class (no second-class) fares are charged, but (■'hiiiese women ride first-class on payment of third-class fare. Tliere is an arran^ijeinenfc of zone fares, tlie first-class fare for each zone bein^ :■■> cof)per cents. Wlien fares are collected passengers are given, a special number and colored slip, lliere are frequent instances of ** surprise" checking by special inspectors, as a part of a very care- full \' worked-ont and maintained scheme to elimniate ''squeeze,'' or * 'graft." It is claimed that this lias been reduced to a very low pi tint by the arrangement indicated. Tiiere is at present a vi^ry successful and well organized railless trolley, witli a route of a little more than a mile, running through a verv cotiiic-tcd district. The service was firet establislied in 1915 over a route of al)out seven-tenths of a mile, and was extended in 1916 to t^tie i>i-esent length. This ser\ ice was objected to at first by tlie municipal police authorities, who give a gi'cat deal of attention to kee|>ing trafli(! moving in tlie cong(\sted districts of Shanghai; but as a result of tlie succe-?sful operation of this equinment their attitude lias become favoraldt^ and tlie Muni< i}>al Council has been consider- ing a proposal for a very considerable extension (about 9 miles) of til is railless trolley service. Figiu'cs ;] 1 and 35 show two views of tliese railless trolley cars. In tlie statement presented to the municipal council the claim is iiiacle that these cars occupy an area of 158 square feet while 28 jini'ikislias carrying tlie same number of passengei's would occupy 2,500 square feet to ])ermit of ])roper movement. This means, practically, that at least two of tliese raiEess troEey cars wouhl Iiave ample running space in one of tliese narrow streets and still permit the movement of other traffic, whereas tlie 28 jinrikislias would completely occupy the street without allowuig othei' traliic to move. The average cost of the seven cars now in service was aliout $12,850 Mex. for each complete equipment, and the actual cost of tlie i)resent installation, including the double trolley, was $137,575 Mex., which included a contribution of S26,022 Mex. for strcH't ])aving. As no additional land or buildings were added to t'!(» gciK^ral plant, an arbitrary amount of SI 0,000 Mex. w^as aileiis{»s have been \-er\^ carefully wtitclied, and the results for the last lialf of 1916 show a profit of about 15 per cent on the investment. The tire renewals were estimated at $0.03 Mex. per car mile, but liave since been determined as less than $0,024 Mex. The mileage for tires will average more than 25,000 per tire; the minimum so far has been 18,000 aiui the maximum almost 50,000 miles. The weight of the complete outfit (no load) is about 8,400 pounds. Motors are 20 horsepower and have been found ample. The power Special Agents Series No. 180. FIGS. 32 AND 33.— TRAMWAY CARS AND TRAILERS, TIENTSIN. Notice pantagraph contact. I! I till CHINA. 139 Special Agents Series No. 180. consumption is about 0.8 of a kilowatt hour per mile. The cost of power is $0.0308 Mex. per kilowatt hour. The electrical equipment and most of the materials for these seven cars were purchased in England and were erected under General Manager McColl's direc- tion in Shanghai. This railless trolley system is the most successful installation of the kind that the writer ever investigated. The management of this system is entirel3r British, and, while a good many of the requirements are purchased in Shanghai, preference IS undoubtedly given to materials from British sources. A directory is given on page 268. HONGKONG TRAMWAYS. The Hongkong Tramways Co. (Ltd.) operates a system of well maintained and managed tramways extending from one end of the city of Victoria to the other, either on or near the water front. The city is stretched out for several miles on the island of Hongkong between the high ground and the harbor. For the year 1917 the profits from operations, after liberal de- S-eciation charges had been deducted, amounted to $248,915 (gold), ebenture interest totaled only $33,575, and $33,585 was paid aa an interun 9 per cent dividend, leaving the handsome amount of $179,755. This was added to the previous surplus balance and made the total accumulated surplus balance $261,050, from which it was proposed to pay an additional 3 per cent dividend, making a total of 12 per cent on the share stock. During June, 1917, General Manager and Chief Engineer J. J. S. Kennedy made a visit to Japan to mvestigate the procurement of immediately needed supplies, but, so far as could be learned, he made no purchases other than those to meet the present running require- ments.^ The occasion for this arrangement was the impossibility at that time of supplying these requirements from any other source. A directory of the officials of this system is given on page 268. PEAK TRAMWAYS. The Peak Tramways at Hongkong are what would be called, around Pittsburgh, an "incline." The service rendered is the con- veying of passengers by cable incline lift from a station near the foot of the slopes to a pomt a considerable distance up on the higher ground, the highest point of which is known as the Peak. The Peak is about 2,600 feet above sea level, and in this district there are many residences and a large hotel. The management of this concern is strictly British. A directory is given on page 269. FIGS. 34 AND 35.— RAILLESS TROLLEY CARS IN SHANGHAI. INTENTIONAL SECOND EXPOSURE Special' Agents Series No. 180. FIGS. 34 AND 35.— RAILLESS TROLLEY CARS IN SHANGHAI. I! CHINA. 139 consumption is ahout 0.8 of a kilowatt hour per milo. Tho cost of power is $0.0308 Mex. ])er kilowatt hour. The electrical equipment and most of the materials for these sev(Mi cars wei-c purcliased in Eno-land and were erected under General Manai^^er McCoU's direc- tion in Shanghai. This railless troll(-v system is the most successful installation of the kind that the writer ever investigated. The manaorement of this system is entirely British, and, while a good many of the requirements are ])urchased'in Slianghai, prefereiii-e is undoubtedly given to materials from British sources. A directory is given on page 268. HONGKONG TRAMWAYS. Tlie Hongkong Tramways Co. (Ltd.) operates a S3^stem of well maintained and managed tramways extending from one end of the city of Victoria to the other, cither on or near tlie water front. Tlio city is stretched out for several miles on the island of Hongkong between the high ground and the harbor. For the year 1917 the profits from o])cratiuns, after liberal de- preciation charges had been deducted, amounted to $248,915 (gold). Debenture interest totaled only $33,575, and $33,585 was paid as an intcrmi 9 per cent divick^ncl, leaving the handsome amount of $179,755. This was added to the ])revious surplus balance and made the total accumulated surplus balance $261,050, from wdiich it was proposed to pay an additional 3 per cent dividend, making a total of 12 per cent on the share stock. ^During June, 1917, General Manager and Chief Engineer J. J. S. Kennedy made a visit to Japan to investigate the ])rocurement of immediately needed supplies, but, so far as could be learned, he made no purchases other than those to meet the present running require- ments.^ The occasion for this an-angement was the impossibility at that time of supplying these requirements from any other source. A dh^ectory of the ollicials of tliis system is given on page 268. PEAK TRAMWAYS. The Peak Tramways at Hongkong are what would be called, around Pittsburgh, an ''incline." The service rendered is the con- veying of passengers b;^^ cable incline lift from a station near the foot of the slopes to a point a considerable distance u]) on the higher ground, the higliest point of which is known as the Peak. The Peak is about 2,600 feet above sea level, and in this district there are many residences and a large hotel. The nianagement of this concern is strictly British. A directory is given on page 269. ii f'i i ^^ Part 2.- JAPAN. INTRODUCTION. The Japanese railways are taken up in this place, instead of the Korean and the Manchurian, on account of the Japanese control of the Korean railways and also of all the Manchurian railways except the Chinese Eastern and the Tsitsihar Light Railway. This state- ment is intended to cover the Kirin-Changchun and the Ssupingkai- Chengchiatun lines, nominally Chinese Government railways but actually under Japanese control and management. "While American manufacturers have in the past furnished the Japanese railwavs — both in Japan proper and in Korea and South Manchuria — ^with a very considerable amount of railway materials, equipment, and suppHes, it is the writer's opinion that, in the future, while the United States will continue to supply all these lines with a very substantial share of their requirements, this will be entirely because of the elements of cheapness, maximum convenience in purchasing, and, in certain cases, superior quality. The business will be transacted very largely, however, through Japanese concerns with highly organized branches in this country. A considerable part of the profit will thus go to Japanese interests, even to the extent of the shipments going in Japanese bottoms. Not only will Japanese railways be our customers only when it is most convenient for them to so arrange their purchases, but State-aided Japanese manufacturers of railway materials and equipment, in Japan proper and South Manchuria and possibly parts of China, will be active competitors. They will be assisted in their efforts by their cheap supply of labor and cheap sources of materials. At this point it seems proper to quote from the annual report of the Imperial Government Railways of Japan for the year ended March 31, 1915, which states as follows: Shrinkage op Foreign Purchase. The attention of the authorities had long been directed to the importance of super- Bading imports by home products. Apart from the growth of domestic industry which has gradually come to meet the multifarious requirements of railways, the policy of self-sufficiency had recently begun to recommend itself with greater urgency than ever in view of the conditions surrounding Japanese finance and economy in general. The best endeavors have therefore been used in this particular direction, with the result that the amount of foreign purchase has markedly been decreased. The table following shows foreign purchases by the Imperial Government Railways for the years ended March 31, from 1911 to 1917, inclusive- 141 f» 142 BAILWAY MATERIALS, EQ:i:iPMEKT, A:ND SUPPLIES. Y«ra Home purc-liaaea. Foreign piirciiaMS. Total. Proportion of foreign purchases to total. 191ft-ll ,.. lflll-12 1912-13., 1913-14 , ; .'" 1914-15... , , '. 11M.V16 , , ' ■*'" 1916 17 llllll'.l'.l'.'. 1 Ii:i,9f'i4,f«» 1fi..SlK,080 !\ 071,301 l.'j,««0,(167 18,9!1.1,I»| 17, 1H8,784 18, 9.>5, S5.S »,252,ft13 3,649,118 3,025,658 1,444,387 -SOI, 991 1,6(H,578 2,595,214 117, 216, M2 20,4.M,198 21,096,959 16, 474; 444 19,798,075 18,773,362 21,551,072 Per cmt 18.9 17.8 ,14.3 &8 4.1 :as 12.4 'Tlic principal items purcliasccl in 1914-15 were m follows: Wheels aiicl axles for vehicles, f273,6;i5; fieisliod, steel girdere, $138,346; electric macliines and materials, $104,036; copper wii-e and No. 8 galYaiiized wires, 169,332 ; finished springs, $53,795; tires for vehicles and locomotives, 140,780; iron and steel, $34,373; tools and machines, $23,377. In 1915-16 the four largest items were: Steei girders, $1,049,695; iron and steel, $176,835; galvanized iron wire and copper wire, $158,075; fahrics, $55,34:0. In view of the conditions indicated ahove, the purpose of this report will be not so much %o point ont-the possibilities of new rail- way markets in Japan as to suggest steps to retain past and present mmrkets and also, in connection with Japan, and ,Manchnria, to point oii,t th,e possibilities of the com|)etition which, in the writer's opinion, may be ejected in the future in, the other markets of the Far East! Ill, a way these points, appear to interest principally the large concerns that have clone ,mo8t of the business in the past, some of which have now esiabhshed connections 'with the type of Japanese firms men- tioned—such arrangements providing tliat for a portion of the busi- ness, at least, the ,Jimerican m,anufacturer gets a fixed (and probably small) profit while the Japanese concern gets a similar profit and also, at times, a much. ,lapger additional profit. It does not seem that the situation as a whole warrants a very extensive analysis of the Japanese railways, but rather the presenta- tion of such infonnation as will enable anyone unfamiliar with the situation to acquire a general understandiiig of it. "In this connec- tion, however, it may be stated that from many standpoints the ■p©rform,ance records of 'the Japanese railways are 'very interesting. In some respects the performances compare favorably with tl,'ioS) of the American and German railways, which admittedly make the best showing, in their respective classes, of any railways in the world. if I. GENERAL INFORMATION. In view of the many accounts of the Japanese situation in recent years, it seems unnecessary in this report to make extended reference otiier than to mattei-s affecting transportation in general and the railways m particular. ^ r & ^ «*uu me GEOGRAPHICAL LOCATION AND AREA. Japan proper to which tliis report refers (Formosa and Saghalien ffjATV'^'Y'''^'^^ ^''''- f^ ^'"'.P^^^ consisting of four principal islands-Honshu, Hokkaido, Kyushu, and Shikoku, these betng giveii in he order of their areas. These and more than 500 othe? rfhH q'oaa "^""^^^"^^^ ^"^y ^^<^a of about 147,700 square miles, or about 8,000 square miles less than the land area of the State of La ifornia, the second largest American State, and only 700 square miles more than the total area of Afontano. the third largest ^tate. However, the total area of the four main islands on whicff aU of the wZ To ^^"^^f, t'^'^y P?'250 square miles. These islands lie between 31° and 35.5^ north latitude and between 124^ and 146^ 6&st longitUQ©, POPULATION'. Authorities seem to agree that the present total population of Japan proper is now somewhat in excess of 55,000,000, or about 3/0 pjjople per square mile, which Ls 1 1 times the density of the present population of the Unitetl States. There is, moreover, a KTer- centage of the land m Japan on which nobody lives, and this increases the actual density of the inhabited regions. The statistics of the Imperial Government Eailways for the year ended March 31 1917 pve the population of the four islands on which aU the radwavs are h^n™ ' wJ '"-'^ "^f "^ l^^'ty^ °^- ^ classes, including tiamways. When one considei-s that there Ls a population of only ^40 for each mile of steam raUways alone in the United States, one appreciates the small amount of railways in Japan per capita or of rluwav^ ^*'"**''*" '^''^ accurately, the large population jJer mile . CLIMATE. The climate of Japan is mild, on the whole, as it is influenced bv warm ocean currents The entire country receives L^e anS very dependable rainfall but at certain seasons very seriou^ storms ari and hilhv™?/ *r ' f * '\°'^ f *"'^ much damage to crops, railways, and higliways Construction to prevent damage by storim has been il^^l ) ^ lAILWAY MATERIALS, BQUIPMEMT, AMD SUPPLIES. AfillCUtlTOlB AND PASTORAL PURS'IJITS. 'The Jftpan, Year Book for 1917 estimat« that more than 75 per cent of the entire population is occupied in agricultural pursuits. It IS estimated that one person cultivates half an acre and that there are five productive persons per family, making the average farm in Japan 2| acres.; even in the northern parts of the main islands, where the largest farms occur, the average is not more than 7i tijcrm per f amfly. Rice is a crop of first importance, with harley and wheat next During the last seven years the average crop of rice has approximated 265 000,000 bushels, harley 50,000,000 bushels, and wheat 26,000,000 bushels. Pastoral pursuite in Japan are incoTOiderable, MifllAL PIOOTJCTION, Coal is one of Japan's most valuable and dependable resourc.es. Trade Commissioner J. Morgan Clements, in his report on the mineral resources, of Japan, gives the available, reserves of all classes of coal in Japan m about 8,000,000,000 metric tons, of which a very larm Sercentage is bituminous. The largest deposits are on the island of .yushu and those next in importance on the island of Hokkaido. The production for 1915 was about 22,700,000 short tons and for 1916 about 25,360,000 short toas. On account of the shortage of labor, this production does not seem (from preliminary information) to have been maintained in 1917 and probably will not be equalled in 1918. More than 75 per cent of the present production k from the Jlyushu fields, A considerable part of this is from mines with modern ©€|uipment, but there are still a number of mines worked by primi- tive Japanese methods. Future railway construction will be little affected by the coal traffic except, probably, for the buOding of some .additional mileage .on the North Island, noM. ■The' question of an adequate supply of iron and steel is- Japan's greatest industrial problem for future solution. Mr. Clements gives tlie probable consumption of .iron and steel for 1917 as L350 WO tons and it is estimated tliafc this will probably be increased to as much as 2,000,000 tons in 1920. During 1917 it is hardly likely that the total production of iion under Japanese control, includino* that from Ciiosen, Manchuria, and China, exceeded 750,000 tons, leaving 600 000 tons to come from, other so'urees— principaUv America. Japan is undoubtedly making a very careful study of future supplies not (wly of ffon, but of coal as wel, from Chosen, Manchuria, and China. I lie figures given by Mr. Clements show only about 18,000,000 tons of known iron deposits (estimated) and only about 45,000,000 tons of other possible deposits. COWrm AMB OTHM MWEBAW. ^ In recent years Japan's copper production and its value have both increased very largely. Mr. Clements gives the production in 1915 as mwlj 166,000,000 poundg, valued at $26,700,000 gold. In 1^16 JAPAN", 145 the production was mcreased to more than 221,000,000 pounds, and tlie value increased to more than $54,700,000 gold. It IS not probable, however, that the production of copper or anv of the other minerals will in the future have any substantial effect on tiie building of additional railways or the traffic for the present lines. GENERAL MANUFACTURING. As is doubtless known bjr anyone interested in reading this report, manufacturing of many kinds has made rapid progress in Japan in recent years, particularly since the beginning of tlie war. is the result of his investigation, the writer was impressed in both Australia and ef apan by the fundamental differences between those countries and the United States with respect to the manufacturing of railwav 3!^- f J!"'' P™^'^P^ ^^^ ^ divergence are the privat^ ownership of the radways m the United States and the enterprise of railway-eqmpment factories that depend solely on private initiative ajici ( apitai* The situation in Janan is interesting and instructive and is verv well covered by Dr. Toshihani Watarai, formerlv assistant councilor m the Imperial Board of Railways of Japan, in his Columbia Uni- versity study e^ititled -Nationalization' of Railwavs in Japan'' where in the preface he makes the following statcTiiont: ' Altboiigli ni..8t ec(>n.,inic pr<,bleiii8 r;in in 8:eneral not be ronsidered apart from oth^r disniasioiiB the probiem o railway nationalization is a partirnlarly Su Hne in that It ought to be diBriifised with equal care from the point of ^-ie^.v ..f state no lev and national defenBe, as well aa from that of economics. * * * \Vhat Xn Z^K« economic conditions in Japan? In my opinion, there are two ^re^ intelectn^and phvBicaJ obsta^^les m Japa^ which have hitherto hindered the deV^opmen of ?to economic life. They are the lack of the individiialifltic idea (or independent s^n'S of the per»p e and the lack of capital. The Japanese people, who wore fwa^on' S i^ Jl^« ^^i«liBtic-8tr.ie mfluen^^ Biiddliism and (i^nfoci.niam^ .^^H ^ S jected to the despotic pressure of the feudal system, have a very weak indenendonV emo ion Bo^that the economic life of the nation has naturallv be7n depre^edT^^^^^^^ level IJ ndermich conditions the 8tate-s.)cid^^^^ idea spreads mpidiramon^ thi people, ms IS siwwn by the fm that most of the great iriduBtries ^^/aLHa^f hel started or atded bp t^e Goyemment, The reader of this dissertation ivill re??ke that tha nationalization of the railways m Japan was effected under such political and economic circumstanres. . Our effort must, therefore, be to remedy these deSslI^^^^^ i^ai^muiumm ^n /apan-especially in the two pointe meiitioned-cmUralts^naZ with those m the United iStates. ^^twu«t sirongiy Tliese remarks no douht ^pply to the Japanese manufacturino- sit- uatior, m general as well as to the railways in particular. MANUFACTURING OF RAILWAY EQUIPMENT. While the Imperial Government Railways of Japan have a numher of extensive workshops reasonahly well equipped with modern machinery, the general function of these workshops is to handle reDiih-s to all cla.sses of equipment and materials rather than to carr/out extensive manufacturing, although a relatively small number of cai-s particularly good wagons, are manufactured in several of them' Most of the manufacturing of rolling stock, however, is carried out by eoncej-ns under fostering contracts from the railways. The Ittiperial bteel Works at the port of Wakamatsu (near Moii), on the Island of Kyushu, nominaUy supplies the iim and steel required by 106229''— 19 10 I ill .14 140 EAILWAY MATERIALS, BQITIPMENT, AKD SUPPLIES. tlie Japtiiiese railways, but at times, particularly since the beginning of the war, it has been fomnci convenient to buY a good deal of the iron and steel elsewhere, especially in the United States. Without (pestion, the above-mentioned steel works can not be considered a really private enterprise, and, while possibly not directly a Gov- ernment plant, it has been as fully protected ni its dc\'elopnient as thougli actually under Government control and management. The Kisha Seizo Kaisha, with works at Osaka and Tokyo, is the largest manufacturer of locomotives and cars, and the Kawasaki Dock Yards at Kobe are the next largest manufacturers of railway equip- ment; this latter company's production consists largely of 'locomo- tives, though both companies produce, at times, a considerable amount of structural materials. At the time the writer was in Japan these two concerns had orders totaling 152 locomotives for the Government railways. In addition, tliey had contracts for a number of locomotives for the private and light railways. There are also a number of smaller concerns manufacturing care— particularly goods wagons and tramway care'~"-for the Government railways and the private railways, light railways, and tramways. All these concerns have been or arc being developed In; fostering contracts from the railways, as indicated above by 'Mr. Watarai. n. COMMERCIAL AND INDUSTRIAL CONDITIONS. DOMESTIC COMMERCE. While the amount per capita of domestic commerce is small, yet for the amount of railways it is very considerable and consists of a great variety of articles, many of which arc a^icultural products. Shipments constitute, for the most part, what would be tenned in the United States ''classified business." The only portion that is handled on a commodity basis is the coal traffic, which amounts to more than 50 per cent of all the tonnage handled. The average haul in 1916-17 was 99.3 miles, representing a gradual increase from 84 miles in 1913-14. EXPORTS AND IMPORTS. As probably everybody knows who will be interested in this report, both the exports and the imports of Japan have grown rapidly in the last few years, particularly since the begmning of the war. As a result, the amount of business offered has been entirely beyond the capacity of the railways to handle satisfactorily. This has been especiaUy true of the freight trafl[ic, which in many instances has been badly congested, particularly at the principal ports and in the industrial districts of Osaka-Kobe, Yokohama-Tokyo, and Moji. The Japanese control of Pacific shipping has already very largely increased reshipping in Japanese ports, particularly Kobe. TARIFFS. The present Japanese tariffs w^ent into effect July 17, 1911, and are fully set forth in the Bureau of Foreign and Domestic Commerce Tariff Series No. 28, revised in June, 1912. The duties imposed are protective wherever there are Japanese manufacturers to protect, and this no doubt will be the future policy of the Japanese Government. TRADING CENTERS. YoKohama and Kobe are large trading centers and are important points for export and import business, but Tokyo is most important from the standpoint of railway markets for the reason that this is the headquarters of the Imperial Government Railways of Japan . Osaka is also an important trading center, being the center of the largest industrial and tramway district in Japan. INDUSTRIAL CENTERS. The largest all-round industrial center is the Osaka district, mcludmg Kobe, Kyoto, and the districts surrounding Osaka, Bay. Next in importance is the Tokyo- Yokohama district, including the districts surrounding Tokyo Bay, but the Moji-Shimonoseki district IS also very important and has the distinct advantage of close prox- 147 148 BAILWAY MATERIALS, EQUIPMENT, AXD SUPPLIES, imity to the fuel of fuel su on ike No a steel plant supply on the island of Kyuslra. Tlio aclTimtages ,y also lead to considerable industrial developiiient k:I, particularly at Mnroran, near wliicli tliere is now igli It can liardly be considered succass^ful thus far). INDUSTIIAL LABOE. One of the supposed aclvantaires of Japan is the large supply of clieirp and industrious labor, a discussion of which is "" beyonil* " tlio scope of this report. The witcr, however-, is inclined to belicYe that tins asset^ has been aonicwhat ovemited. In the first place, there is not the grwit supply of available labor that is supposed to exist. As a matter of fact,, there was a shortage of labor in all the hca.vy indua- tries when the writer was in Japan in 1917; at. least, this was the •cftse at the coal niines, at the shipping ports, and on the railways (particularly in the workshops). As long as the present largo percentage of people are occupied in agricultn,ral pursuits, the present labor supply is not going' to be materially augmented. In the heavier industries the Japanese labor is not particularly capable nor are the present methods of working efficient; but both of these conditions can and probably will be improved. One feature th,at^ini|)re8sed the investigator was the number of women employed m tlie henvy industri.es, pBTticularly coal mining and construction woiic. riie percentage of women in railway work is not nearly so great as in some other classes, of wo^rk. In 1917 the percenta,*^e of w<:»raen m railway employ was only 3.35 per cent of the whole, nioro than (Mie-lialf of them being employed m lagging grade crossings. {; ■areful observat.ion led to the conclusion tliat^ the Japanese .are better developed in tlie line of novelty iiidust.ries than in heavier inanulaeture and that lliis is particularly true of electrical work in wlii'di coimection they also show a deficfed teclmical adaptability. Ill ,i^gard to the wages paid in, tlie heavy industries, it w.as fmmd difhcult, to obtain data that would enable definite conclusions to bo MTived .at. Hjwever, in such works as the Kisiia Seizo Kaisha and the ^Jitwasaki Dock lards, it w.as ascertained that, from 1905 to the beginning of the war, such wages as .$0.20 to f 0.30 gold pc^i- day were paid for various fomis of common labor; m.ore or less skilled labor .around jliese shops w.as paid from S0.35 to possibly 10.45, and ^rood ineclianics seldoni received more tlian $0.50 per day. These figiires are/Mily approximate, and th.e wages seem to vary unaccountal}Iv in diierent sit.iiat.ion9. Wages since the bcguming of t.he war have lieen very generally advanced in, all classes of heavy industrial work, and UBW^iii the above works varicms forms of common labor vaty from ft. .2.3 to S0.50 (and probably higher for some of the better grades of la^lwr). .Skdled-niechanic labor now varies all the way from $0 50 to $2 per day, although it may be considered exceptional for wat'-es to *'f «'7, 5/ "50 per day. At .such points as N.agasaki Harbor, the su p- ply ol labor has been entirely inadequate; wag(« have been generally ;d()ubled and m some cases twbled or even more largely incre.aseer of employees. Average amount per month. oHrnals and engineers: lli;-;her grade Lower grade Clerks. .Assistant engineers '.'.'."." 11* Binployees * " S.crvants ...1111111111111 2 39 717 151 873 8,111 f 135. 10 51.65 10.22 13.19 5.01 4.34 4 71 1,286 290 2,570 14,391 1145. 43 57. 16 12.51 17.93 6.49 5.96 3 85 1,328 265 3,114 18,666 1144. 90 63. .53 16.30 22.79 7.42 6.64 Total.. 9,893 5.18 18,612 6.90 23,461 7.7i 150 lAILWAY MATERIALS, EQUIPMENT, ANB SUPPLIES. ClMiiofflnptoyMi. Oildals and atigineers: Higher gfiiiii.. •Lower gnide Clerks Asaiatont engineers. '.'.'.'.'.'. Bmployafi* aiinninte,... .„ im-io 191.4-1.5 Kraaber of employcfs. ID 441 4,492 1} Wl Zt|ef ore-mentioned American railways for lie years e ided June 30, 1913 and 1915, as 163.70 and $68.88. "^his shows that hari3L!3^L''''' *H-^''"''T. ?*^'^*y?>' .i^ round numbers, ■fci^nriSfi^ ^"^ "' ^'^^ ^ '^"^'^ "■" '^' •^^'*"^^*^ enEdC^^ ^^"^ y^^"^ 40,700 ton-miles (2,0«)0 pounX moved oill mUef wwS'h?^^^^^ employee. The, mhove-mentioned bulletins show that the trunk-line railways of fe United States, for the years ended June 30, 1914 and 1915, moved 166,050 and 195,700 ton-miles for each employee, or, 111 round iiiim.bers, hve tmes. as m.a^iiy ton.m..iles per employee as the Japanese Govemm.ciit .Railways. The same data show that the Japanese ^.Kailways for the yeare ended March 31, 1914, 1916 and 1917 carried 32,900, 32,300, and 37,800 passengers one Wile for each employee, aiid the American railways for the years ended June 30. llnU^l m' ""ZT^ f/^^ *"*^ 2¥^ passengers one mile for each employee More^ than 85 per cent of ,aU the Japanese passengers are .moved thn-d class and .less than 1 per cent are moved first d&ss thSti!^ Skwt^ytZ V^ i'^^r'*"'- commitation to decide me relative elliciency of the Japanese Government Railways as com- pared with the American railways. In the writer's opinion the Japanese perform efficient enough to warrant the statement that in all probabdity the Japanese will largely take care of their own maimfacturing of radway materials in the future and (at least at times) be active competitors in other railway-material business in the p ar tast. m. GENERAL TRANSPORTATION CONDITIONS. COASTAL SHIPPING. Japanese progress in shipping in recent years, particularly since the begmnmg of the present war, has attracted much attention. Ooastal shippmg m one form or another has for hundreds of years been a feature of Japanese domestic trade. At present the coastal shipping is very extensive and consists of a great variety of vessels from modern steamships to sailing vessels— the latter being similar m niany ways to the ordinary type of Chinese junks. All the indus- trial centers, particularly Osaka, Tokyo, and Moji, are served by this coastal shipping. The Osaka and Tokyo districts are both provided with a system of canals on which is moved a very considerable amount of traffic, practicaUy to the doors of the small factories that abound in both of these districts; this also applies to a number of the large plants. The writer observed the operations on these canals in Osaka and was very much impressed with the immense advantao^e to the district of this system of transportation, connecting with'^a protected basin in the Osaka harbor, where materials were received and deUvered directly from and to seagoing coastal vessels This arrangement, with the labor available, unquestionably affords a cheap and effective local handling of freight and greatly reUeves the street congestion of these crowded districts. HIGHWAYa Ther^ are several historical highways or roads of travel in Japan, of which the most noted is probably the Takaido, the ancient hi^^hwav from Tokyo to Kyoto and Osaka. There are roads over alf parts of Japan largely used for moving agricultural products in mule carts, hand carts, and to a considerable extent by carriers. Few of these roads are niacadamized, but since many of them are through the am- cultural districts where irrigation is extensive, particularly for the growing of rice, the general practice is to raise the road considerably above the surrounding ground, generaUy giving good drainage. These roads Ere usuaUy well maintained, and this method of construction m the course ot time has caused the roads to become surprisindv hard considering the class of material used m their construction ^ r rl^^ f?suli might be caUed an extreme case of the adaptation or sohdihcation increment as spoken of in the valuation of grading work, CHARACTER AND DEVELOPMENT OP JAPANESE RAILWAYS. CLASSIFICATION. Railways in Japan can be divided into three groups, as follows: (1) Imperial Government Radways of Japan; (2) privately owned and op- erated steam railways; (3) tramways. The second of these are agam divided into what are known as private railways and light railways. Ihe private railways are Imes not ordinarily having any guaranty from 151 i'lij Ml 152 llAILWAY MATEBIALS, EQ,UIPMENT, AHB SUPPLIES. the GoTemmeiit, altbougli some of these pnw&te railways in recent yeara Mm made extensions and additions to the extent of $1 296 075 rS T^Z^"" i^'^^'* ^"^^^ ^T' P^om«lgat^ in 1911 and revised in 1914 whereby private light railways are gnaranteed a profit, with «ie limit of 5 per cent of their construction expenses /for ^rii^htl wf f^ "^ of ooenmg for bnsiness!^ Most of thih light-railway mileage has been built since the Railway Nation- alizat^on Law was Bfwsed in 1906. although a few of the lines w(»re m existence as early as tki nineties, and one in 1888. Tramways. as shown later, can be subdivitied into electric, steam, eas-motor horse, and man-power, and can also bo subdivided into those munici! pally owned and operated and those privately owned and operatiMl No guaranty is made for any of these tramways, and they aiVtlicre^ fore ^ shown under one general group. " oflll'llif'!^'!!^^^^^^^^^^^^^ ^^^"^ ^^^' classification and general statistics of ai classes of railways m Japan as of March 31 , 1916. The mileac-ro far tie Government .milwmys had increased to 5,857.6 miles ' by Mar^li i : ■''? V ' f "* !f ■^■o™P%''*^ information for that year is not yet i^ailable the data for the previous year have been used: JAPAlf. Items. CiiBiber of ccunpiiiiles Milf 5 f line open. , Miles of III I tracks , "Ues 'Oi ill ,e Biidcr eonstniclioo Ill" II 1 1 1 1 Noniber of loooiaciiTes , ..,,.., Kuin,b«r of passenser f ars Awra* scatinf caiiarit y— pereons . ,,,l, Kiimber of goods wiiaioiis AviTaijT' ram: in? cai>tetty— pounds. , . , ,...11111 Kiimbf r of service can , I — - '-•■vnniKpap,nsMtilP,ifi,fli| Niiniher ol directors and gcnwal offlcm; iHuniriHT of other wnploviw Total number of employers . . .llllll'.llllllllll Awjca?© moBthly wmm ©f diwetors awl tenara! ofleers , ■■■ Av«rat»e nioiitlilY wastes ol other ereivlovees Average nwrnthly wages of all emplovees. .'.'.Ill' I" 'I Kfnd of railway. OoTim- meat. 8, 840,., I 7,W.O 4 Ml 12,640 21,, K5 PriTate. Llfhl. •*' "■is* 112,102 m 8 272.6 880.0 82.0 , i7i(,:mi>asseiv?cr-?arr\1ng carl b See Cgures on paec 149. ,H18TOBICAl StlB?l¥. ^ Dr. Watarai, in bis ''',Natio,nalization of Railways in Jap,aii "' gives tlie first proposals for railways as made by the Eiiglish amiissk- dor m 18611 which ,,^ after much opfositi,o,ii,, Snally resulted in tiie op«iing of the 18^m,ile line from fotyo to Yokohama in 1872-the first rai,lway in Japan con,8tructed and operated as a Government line. 1 he next iras a Government line between Kyoto and Osaka opeiied ,in Dwem,ber, 1873, and extended to Kobe in July 1874 " ' Dr. Watarai verjr properly divides the h,istory of the railway devel- opment m, Japan, between the Goyemment railways and the private 153 railways; he then divides each of these into three different periods. 1 he three neriods for the Government development are as follows: ( 1 ) From the beginning to the completion of the Tokaido Railway, covering the interval from 1872 to 1879; (2) from 1890 to the nation^ alization in 1906; and (3) from that time to the present. The three periods for the development of private railways are: (1) From 1882 to the war with China in 1894; (2) from 1895 to the nationalization in 1906; and (3) from that time to the present. Until 1882 the actual buildinsj of railways was done entirely by the Government,^ although private interests had considered several proj- ects. The first really private line was the I'eno-Kumairai line, 38 miles in length, opened in July, 1883. This line promptly showed a prohi of about 10 per cent, and from this time until the beoinning of the Lhmo-rlapanese War private interest ^\as active in building rail- ways, with the result that by the end of 1893 (or practically the beoin- ning of the war with China) there were 1,368 mile^s of private raik^ays against a total of 557 miles of Government railways. Many of these private railways were given assistance in the way of loans or other helj) and encouragement from the Government, "and from the finst their construction was regulated so that there never has been any destructive competition between the various lines. As a result of the war with China the need of railways was appre- ciated more than ever, particularly by tlie military authorities, and until the war with Russia there was a growing sentiment for the nationalization of all the important lines, thougli there was sufficient opposition to prevent such action. The result was that during this period Government building was accelerated but private buildino- still continued extensively. At the end of 1904 fpracticaBy the opening of the Russo-Japanese war) there were 1,470 miles ol Government mlways^ and about 40 private companies, with a mileage of about 3,2o0, ot which 2,340 miles were owned and operated by the six liirgast companies. Since the nationalization in 1906 the private railways have been gi-adually disappeaimg and the so-called light railways, for the devel- opment of the immediate country throudi which they are built are bemg encouraged and fostered by the authorities. NATIONALIZATION OF RAILWAYS. ^ The nation iilization of the Japanese railways is a very interesting incident m the world's railway history, and for a student of tliis sub- ject Dr. Watarai s book, above mentioned, will be found to mxe a very good account of how it was consummated and the attendant results up to the end of 1914. I^e fii-st move to nationalize the railways was made in 1891 by the Matsukata cabinet. This same cabinet made the second effort in 1H92. 1 he third movement was made by the Liberal Party in 1S99 as aresultof theChino-Japanese War. The fourth movement was by the Ipiagata cabinet in 1900, and the fifth and final effort was made in March, 1906. This law was pa^^sed by the Japanese Parlia- meiU in considerably less than a month by a large majority, notwith- standing the fact that if extended discussion had been allowed there would probably have been considerable opposition. It was first pro- posed to nationalize 32 of the largest lines, but the scope of the plan was reduced to include only the 17 most important railways. At RAILWAY MATJSRLILS, BQUIPMENT, AKD SUPPLIES. healings, Mr, Oislii leader of tlie Prog^ressivc Party and rhairmaii of the special nationalization eornm,itt€e, made formal inquiry on six points. Three of these questions and their answers are very inter- esting:, as is one question that was. not answered. Dr. Watar.ai eives these as f oMo'Ws : Q. What danger 18 there in the prwent system of private reilroada, regarded from the iMiiint of view of national defenae? A. (IJy I^Iinister of War Terauchi.) Natioml defenee is defensive and offensive an«i syBtematically related railroads are necewiry not only to passive but also to aetive protection. As concerns the first case, we liave had a most unfortunate ex- perience with the private roads; and in the other contingency, in which the coopera- tion of maritime mteresta is needed, the private roads have again proved themselves msiificient. It wm further ehowu in the war with Eussia that the operation of the prnmt^ railroads, constructed mth 'poor materials,, was ahsolutely deficient. Q. Does not the new Joan of about a half billion yen mean too great a burden upon the State exchequer, which has already been exlaust-ed by the war with Russia? I.*urther: WmU the daw of money to other countries be increased afld our system of hank notes weakened? •' A. {By MiniMer of Finance Sak ay a.) According to the inwstigation of the l^fin- fmr of Communications, the State roads will, ,yi,eld 50 million yen annually to tho State eicheq'uer, when, after 40 yearn, the amorti,»tion of the railroad loans has been completed . Although an addition to the State debts is not pleasant to contemplate" one need harbor no doubts, for the loan in question is a productive one- there wi,!'r' therefore,^ be no bu„rd,en upon the whole nation, because the accounting system used for ;the railrwid loans will be separated fhun t,he general budget. Q. ,After the actu,a,l nationahzation, will the tariff rates be lowered, and wiU tho present narrow gauge be replaced by the standard gaugf»? , A. (,By Minister of Com,ni,u,nications T. Yamaoata.) The administration is iilan- m,ing a lowenng of t«ri,ff rates, but it can give no further particulars concerning the exact rates; the qu^estion of the gauge is not yet ready for discussion Q. Do not the un,rem,u,n,erative lines Included in the resolution have a bad effect on State hnances? ' ' This question was not answered. The question of the compensation given to the private owners hy tlie Government is very interesting, hnt the reading of the law on this point IS not quite clear. The witer consulted several authorities but did not ohtain a translation that can he quoted. A careful study of the data, however, seems to warran,t the statement that the substan- tial result was the taking over of all the obligations by the Imperial Cjovemment of Japan in the form of bonds or similar liabilities bearing a fixed rate of interest. The capitalization of all the properties was then determined on a 5 per cent basis, after deducting what might be called the funded obligations mentioned above, and, as the roads had earned an average of something more than 9 per cent for tho three years preceding, this amounted to a very considerable profit to the private owners over the original cost of construction. The nationali- zation proceeded very prompdy after the passing of the law, and in less than one year after the promulgation of the law all of the 17 roads had been taken over. The total construction cost (including amounts that had been expended during the interval while arrange- ments were being made to take over the roads) totaled $120,455,650 gold, and the final price paid amounted to $235,565,300— an advance of $115,109,650— thus showing an actual profit of about 95 per cent on the ongmal investment, without consideration of return during the interval of private ownerehip. The above figures are taken from Dr. watarai's data. No loans were raised for the taking over of any of these lines, but the ownei-s accepted Government obligations bearing 5 per centfor tho entire amount. It m^as assumed, in the nationalization plan, that tho jAPAir. An}*} railwavs would self-amortize in about 40 years, but this anticipation 18 far from being realized for the reason that, although the lines have been fairly profitable, the progress of Japan has made it necessary to return to the property much more money than the profits have amounted to. This has been the usual result in all other similar sit- uations. In other words, the railways of a growing countiy ordinarily require much more money put into them in tlic way of betterments and additions than it is possible for the most profitable to earn. WIDENING OF GAIIG*. The gauge on the Government railways, private railways, and light railways is mostly 3 feet 6 inches. Ever since the Chino- Japanese war, and particularly since the Russo-Japanese war, there hms been a very decided sentiment in favor of widening the gaucre of the Government Railways to 4 feet 8 J inches. Both commercial and military reasons are given in support of this, but the arguments for national defense form, no doubt, the main considerations. A Bhort time before the beginning of the world war an Imperial Com- mission made a very careful study and recommended that the gauge on all Imes be widened. The estimated cost was almost equal to the total capitaUzation of the railways at that time, or about 1450,000,000 gold, and the program contemplated about 20 years for the making of the change. This length of time was later reduced to about eight or nine years, but this reduction of time involved no reduction in the estimated cost. This scheme, however, was not only for a widening of the gauge to 4 feet 8i inches, but was a most comprehensive pro- gram for actually reconstructing the most important lines by care- fully worked-out grade and curve reductions, which would have resulted in high-speed railways through the rough country of Japan where the securing of such hues would be very expensive in any event, At present there is under consideration a much less ambitious scheme proposed by Dr. Shima, chief of the mechanical department, consistm^ of an mgeniously worked out arrangement for exchanging axles and wheels of the different gauges under cars in transit (mostly goods wagons), and widening the gauge by successive sections. The motive power and most of the passenger equipment would be chantred permanently in progressive steps, but the exchange of axles and wheels under the goods wagons would extend over a very considera- ble period. This scheme contemplates a very small amount of bet- terment in the grade and ahgnment conditions but will mean only a fraction of the expense that would be involved in the more elaborate scheme. W^ile the writer appreciates the raslmess of hasty conclu- sions, still, m view of the recent developments m electrical construc- tion and the dense population of Japan, he feels warranted in stating that a plan for high-speed electric lines along selected routes giving the ultimate result of paralleHng the present steam routes has much to commend it, particularly when it is considered that the freight trafiic of Japan is largely highly classified business and only a small portion IS moved m commodity bulk. Further, allowance is to be made for the fact that the Japanese 3-foot 6-mch equipment is designed on the widest practicable measurements. The present equipment has a height of 12 feet 6 inches, which is equal to that on any British 3-foot 6-inch hne, and a width of 8 feet 10 inches, which i 'Mf i 156 lAILWAY MATEIIALS, EQUIPMEKT, A¥B SUPPLIES. exceeds that on most, ,if nol. ai, British lines of that gauge. Some of the passenger equipment is 36 feet between truck centers and 56 feet betwooii coupler knuckles. AM, of this indicates that the Japa- nese have gone to the limit in dimensions, and it is quite apparent tfiafc a plan designed to secure any substantia! benefit as a whole must nivolve the grade and afignment mprovements already mentioned. JAFAMISI 'IlAttWAf 'POLICY. The policT of the Imperial Government of Japan is for the Govern- meut to own and operate the truuk lines and' all important branch lines. This policy has been consistentlv foUowed since the nationali- zation of the priJicipal railwajs in 1906, and has involved the taking over of a number of the private railways since that time and the building of additional, Mnes and extensions. The so-called private railways are all being gradually taken over; two of these, totaling MJjniles. were taken, over (h,iring the year ended ,March 31, 19„1,8, leaviiijr only six private railway companies. The building of the light railways 'is strict^lv regulated under the law referred to on page 152. Oru> very interesting feature in connec- tion with the papient of the guaranteed subsidies is that when paitl the funds are taken from the Imperial Government Railway Depart- meut^^s budget, and not fro,m the general treasury funds 'as would naturally be e,xnect«l. There is probably good logic to support this procedure,, m that these hght ra,ilwavs are feeders to the main rail- wnTO and a,U,_ the business is a very sliort haul. The amount actually pa,id ,in subsidy for tlie year ended March 31, 1916,, ww 1449,876, * QOf IIWMBNT •COMTROiL AND MCSIIMTION. The control of the financing, construction, equipment, operation, and rates of the private railways or light railways and of all the tram- ways is vested in the ■"general department" of the Imperial Govern- ment Railways. This renjulation ' and control is very complete and painstaking m every particular, especially ,in what is included as cost of construction and also as to what standards of roadway and equip- ,iiient shall be used by all these Tarious classes of hues. ' CONSTWICTION' FKOCHAM,. ,For the future construction of the Imperial Government Railways and the light railways the Imperial Government has worked out a ve:ry carefiiily considered program and aU, construction must con- form to this scheme. The '''general department" of the Imperial ,Railways directly decides whether or not additional light railways or tramways shall be built. One feature kept constantly in mind is tliat. no duplicating lines are to be built unless there is a local need for them. This is undoubtedly a wise policy, and a similar arrange- ment should be worked out for every country that has not yet mea- surably completed its ,railway doyefopment. Such a complete and comprehensive scheme should be worked out in China, where very great be:ttefi,t wo'uld accrue. I¥. IMPERIAL GOVERNMENT RAILWAYS OF JAPAN. EXTENT. The preliminary data for the Imperial Government Railways of Japan for the year ended March 31, 1917, show a total of 5,856.6 miles of lines and a total of 9,029.2 miles of all trades, or 1.54 miles of aU tracks to 1 mile of line. As all the data for 1917 are not avail- able, the data referred to hereafter in this report, except where so stftt^d, will bo for the year ended March 31, 1916. The entire system is divided into five grand divisions. The eastern division, with headquarters at Tokyo, is composed of all the lines on the main island east and northeast of Tokyo, amounting to 1,846.0 miles. The central division, with headquarters at Tokyo, includes the linas between Tokyo and Mibara, amounting to 966.7 miles. The western division, with headouarter*5 at Kobe, includes the fines between Mibara and Shimonoseki, as well as all the lines on the island of Shikoku, amounting in all to 1,274.1 miles. The lines on the island of Kyushu, amounting to 725.1 miles, form the Kyushu division, with headciuarters at Moji; and the lines on the island of Hokkaido, amounting to 944.4 miles, form the Hokkaido division, with headquarters at Sapparo. ORGANIZATION AND OPERATING METHODa Tlie parfiamentary head of the Japanese Government Railways is the Prime Minister. The administrative and operating head is the president, who has under his direction a complete organization, con isting of a general staff and a director with a complete division staff in charge of each of the five divisions above mentioned. The system of operation is the departmental or branch method already mentioned, but there is superimposed the added feature of what might be termed a semimilitary organization. By this it is meant that each official is given a rank and grade, with the result that in every contingency there is a ranking official who will have authority to take action. The general adminktration, in charge of the president, has a vice president and a general staff divided Into six departments, or bureaus, as follows: Secretariat, general admin- istration, traffic, finance, engineering, and machhiery and rolling stock. The duties of the several bureaus are indicated by the titles, except the general admmistration bureau, which may be regarded as a commission for the control and regulation of the light railways, private railways, and tramways. This bm-eau consists of three members, one of whom is the dbector, one the secretary, and one an engineer. They supervise in every sense the actions and opera- tions of all the above classes of railways, even to the extent of the specifications for materials and equipment to be bought. 1&7 .»"♦ 158 'lAILWAY MATERIALS, EQ:UIPMEHT, AHD SUPPLIES. m mstliod of trftin operation, is the typical "station-master method IE all details, ao,ci, with the conditions present and the help available, this is admittedlf the eminently safe and proper arrant^e- ment,. Outside of the Tokyo electrified ilistrict the^simalinff is all m accordance with British Board of Trade practice, but the fines as a rule are madoauately 8,igiirfed., In, the Tokyo electrified zone some autoniatic signafa are installed, hut these are somewhat out of date and include several kinds of signals. With the amount of traffic on the Japanese Government Railways and the small amount of signal- ing at present, there is every reason why the most modern method of 8:ignalmg should be adoptcvd for future work. It is important that these lines be adequately signaled as the traffic grows, and they will ultimately require very intensive signaling. Another feature would be the extensive use of selective telephone appai-atus for establishing central control— by this means petaininff all the safeguardmg features of the station-master method of train operatim and stiU getting the permissible expedition of despatchinir nietmids. ^ ""^ TIIA,mC AND HATEa JAPAlf. 159 The followinc: Government Rai 1916, and 1917: ,giv< of jperformance iguree of the Imperial an for the years ended March 31, 1914, liens. Ifl3-H ii»is-ie MI!« of line opm , Total invM'tment assets . . . . Investmeiit assets iwr mile of tiM. , . Total wwktait reTmne Total wwkiiii? expaoscB... 0"P«r»tiii|[ ineome. Opuiratittf mtio. , „ , . Interest dhargas , ., Suteidi'W t© priTato liuht railways .Addition and ©xtemioii charges Total .iiKciiii» deduetioM BiliMin tosttrptas,. . , , , , Yearly workinir revenne per mfle of line - Yearly working expenses i>©r mile of line. Yearly operating income i»r mile id line. Niim:ber of passenger train-miles: Number of goods train-miles Nnm ber of mixed, train-miles I train miles. . . 5,470.7 Worllnfrmrioiie per train-mile Working expense* per train-mile O'perating income per train-miJc , . . . Number of pascngers carried NunilMr of passengers carried 1 milt , coaching eaminp , , Earnings per passenger carried 1 mile Num ber of tons (2M pounds) of goods carried . Niimfier of tons of .goods carried 1 mile , . . (Joodis earnings , , Eamlnits per ton of goods carried 1 mile .111'.'.'.'. .,., .|ll,37l,«i -percent-.! ^Al j II 7. 734, as ii,3tK<,ai7 ti,M7,4W no., 578 S5, 0ti5 Ci,4i3 22,.1M,JBi S7.'4tt,»3 $0,987 .| 10.473 -. j m.Bu I 16:;77.1,143 ...3,fi»,9«,tiI9 |27.»3,71S j m.mim ' 40,710,165 3,4»,3M.,9« ia6,«ll,.4I3 ■-•••• ! PI.W#1.0 5,75fi.S $510,277,620 ti»,(i25 t»,»3S,i80 '117, '71 7, 440 S32,20B,4aO 40.3 S18,339,te6 wm,m S1,I74,0»5 mt,m,m Sl.f,07S,;274 910, 4» $4,838 .35^ 100, €46 2l.M6,022 12,283,814 59,330,482 SI. 013 $a469 ia543 172. 290,015 3,8,56,536,966 128, .534, 246 10.00673 40,096,744 3,706,806,918 $28,436,177 10.00768 1916-17 5,856.6 $70,415. 7S1 111,490,027 .taB^iis;7S7 43.3 S19.84'7,m $3,010,330 $32,481,3841 $17,444,3n $12,120 $5,248 $6,873 M» 060, 413 36,571,150 11,921,812 64,613,374 $1,091 $0,473 $0,618 197,043,330 4,255,374.717 $33,390,396 t0.0066S 47,152,822 4,680,630,819 $34. 82.-). 7S2 lO. 0a73© sepamted from the ffen.era. State budiret The rai»ita ^Ji^lmle^ ''''°'**^' ^''^'''''^^ «*>*■" ^ defrayed out of the aimiml (2) The;n,ece:saai7 fimds for additions and improvements will be provided bv the operating jacoine _ Ii this does not .uffi,ce, a loan or some other form ofl iahii^^ ^vlil e con1:mc:led w;ludi « to be included in 'the railroad tccounte. The totol^mu ? tirmvw™. '*'"'' "*^' "''*^ '*'''''**''^ ^''** ^^"*^''"^*^* '*^ ^^'^ esthimtB for additions and *IlJ|.fl ill t'lllClU.'-'i'. puipaw? of managmg the railraids, the (.ovcrnnient may issue a new loan or a nil Iritoa!!!^^^ ''^'''^' "^^ "^'^^'^ aclministrationliZtm,?.;'oi nu2 Jlti^T"^ ^■^*** are fesiied for the State roads^indudinR those contracted (or llieir regiijatioiifir amortization, on the grounds mentioned above in 2 and 3 and rZ ^^T:';T^'t^'f^' ^^mtm^4 a;-cordinc; u the law of natiZfi^bifl^^ " not ) el i»,id ( !t , to be cliarged to the railroad debit account. The aums needed for the paymwit oi interest and sinking fund aw to be tra.iisferred from tteraS't^d a<-rmiirt to the boofe_oi the special fund for amortizing State debte, ' (,,ii Atter^:Hbtraet,tn|;' tJie amount destined by law '"'for the reserve fund the re^t ii ^^"^ ^ ^**? «Pl**>' *«*>'"'Ot. ,^ By '■'■gain^ h to be understood Zt'am^i^b^ wlncli the attttual receipte exceed the .annual expenditures. »"">imi.. oy 'The reffliits of this law have been henelicial, but it has not entirely prevent^ed pohtixjal control of the rnilwav " account: During tZ writers hret 'vwit to Japan the budgets for the Imperial Jamnese Railways, the SoulJi Manchuria Railwav, and the Korean Railwa'vs ■wi3i^ being considered by tlie Japaijeso Inmerial Diet, wiih the resiat that t le generd railwav offi,cers m Tokyo cWoted practioily aU their ^^I''''''^'^ m'formation in tiiis connection. Tfe. situation reminded one verv' much of the condition in the various departments in Washi'0|rt,on when t^heir appropriation allowances are being con- 8icie,nMl before the Appropriations Committees of Congress. liie *"sct-iip' of the Japanese liailwav account is in a way similar IJil^Zirr'' ^f^^^ ^^ indicated:' by the^perfo^anc^ ,figu,res aijeaii}' (iiioted. The data are quite complete; in fact, in some nar- timlara. tW are rather elaborate. One mteresting piint, however is that the Ja-imnese have not been any more successfuUh an America! I railways in allocating the expense between passenger and' freight mmSfllENT ASSBfS. 'The term, "■investm.ent assets" is used for the reason that tlie amount shown m capital, is somewliat misleading. The t^rm, used ZZTf tl.r^w'''''^ propc^^y as iisually underetood. This item is siiown^m the table on page 1 58 only for the year ended March 31 1916 ■S atLZI'l?!'?' '"'1' r ^^'"^ 5<«S8,625 per mile. Vbile tiijs appears .like a very lugh amount,, it .indicates the difficultv of railroad cwistruction .m most of Japan. Deducting 1115,109650 &fh!^r '^T*'*?' """^f^i! r'^'^'^'"% mentioned in connection wiih the n.ational,i.z.ation of the first 17 lines, and a.ssum.i.ng that the other figures .represent construction costs (which is probably a closa JAPA¥. 161 approximation, allowing only a small percentage for "cost plus"), the total construction costs would total $395,167,970, or in round num- bers S68,500 per mile of line. This figure is surprisingly close to what good authorities estimate the cost of the railways in the United States to be as a whole, but the comparison quickly loses its Umi^ when one considers the Japanese 3-foot 6-incb lines in comparison with the American 4-foot 8|-inch lines with their very low grades and sniaO amount of curvature. .EARNINGS .AND .EXPENSES. The year ended March 31, 1915, was not a representative vcar on account of the war and some other internal influences in Japan. For that year there was a falling off in the earnings and an undue increase of expense; therefore, that year will not be referred to except in the averages for the last five years. During the five years ended March 31, 1913 to 1917, there has been an increase of 639 miles of line; trafhc revenues have increased from $53,850,781 to $70,415,784 and operating expenses from $25,031,818 to S30,490,027, makinc^ an in- CTcase of operating income from §27,81 8,963 to $30,925,757 This #t?^'A^^^SH^ ^^^ increase of operating revenues of $16,565,003, that 11 1,105,794, or almost exactly two-thirds, was made effective as op- erating income, and the operating ratio during this interval was re- duced from 46 1 to 43.3 per cent. With the increase in wages and cost of materials, this performance during this particular five years certainly warrants attention from the railway managers in otlier parts of the worid, especidly when considered in connection with the average rates per passenger mile and per ton mile already given. NET INCOME AND SURPLUS. Interest charges for the year ended March 31, 1913, were $17 732 - 942, and for 1917 they %vere $19,847,931. Deducting all the other income charges, including the subsidies to the guaranteed light rail- ways, there was carried in 1913 a surplus balance of $9,786,582 and in 1917 of $17,444,371. Thus it is seen again that two-thirds of the mcrease m operating income was carried to surplus balance. In view of what has already beeti said regarding the amortizing of tlie nationalization loans, the question arises as to the disposition of this balance to surplus. The Japanese Railway accounts do not make i!i?. n^«\o^o"^ the Item shown as capitalization March 31, 1913, was f 4M,936,633 and the amount shown March 31, 1917, was $542,368 0'>8 an iiicrease of $77,431,375. The aggregate amount carried as surpFus for this same period was $55,752,681, leaving a difference of $21,678 - b94, which had to be raised from some other source than railwav revenues. -^ ROADWAY AND TRACK. The roadway construction in Japan is rather diflacult. Grades up to 2 per cent occur on many of the Imes, and in numerous cases they exceed this. Ihe alignment as a rule has a great amount of curva- ture; in some cases this is excessive The amount of tunneling is probably equal to that of any other similar amount of railways in the world, ihe matter of drainage and roadway protection is one reqiiir- 106220"— 19 11 11)1 m iirt BAILWAY MATEBIALS, EQUIPMENT, AND SUPPLIES. mg an unusual amount of attention, because of the fact that many of the lines run through rice-growing areas, and on account of the slip- ping tendency of much of the side-hill ground in Japan when dis- turbed by cuttings and embankments. All bridges are built with very large openings for the normal water flow. This is on account of the large volume of flood water during stol-m seasons. There are a good many very long bridges— sometimes 15 or more spans of con- siderable length. The greater number of these are over dry channels during ordinary weather, but these openings are sometimes inadequate during the typhoon seasons. Conditions in Japan and China in these respects are in many ways similar, the trouble in China being caused by the fact that the heavy rains run off very quickly on account of the lack of forests. Station buildings are somewhat along the lines of British and American practice and do not follow the general type of Japanese architecture. Figure 1 (the frontispiece of this book') shows the cen- tral station at Tokyo, which is modern in every respect. The lower floor is used m a station, including post ofliee, restaurant, check rooms, etc., while the top floors arc used, in part, as a very com- fortable European-plan hotel. The track arrangement and construction are Tery similar to Ameri- can and Canadian practice, although the details of track material tend toward British designs. The Japanese oaks and hardwoods are used almost exclusivelv for ti(>s (sleepei-s), and the track as a rule is liberally ballasted with broken stone or good gravel. As in Cliina, much of the rock ballast is broken by hand. Because of the exclusively left-hand running, all signaling is left- handed. LOCOMOTIVES. The total number of locomotives in service on March .31, 1917, was 2,727, but the details of these are lacking. On March 31, 1916, there was'a total of 2,661, of which 77 were of new superheater type fur- nished by contract that year. During the same year 16 light locomo- tives were transferred to the light railways. Of the 2,661 locomotives, 1,197 were of tank type and 1,365 were of ordinary type with tenders; 62 were Mallets, 25 were Abt, and 12 were electric locomotives. The latter were used on a 34 per cent grade at Kariuzawa, where there are 26 tunnels (all of considerable length) in a distance of 7 miles. Of the above locomotives, 2,272 use saturated steam and 389 are superheaters. For the superheater loco- motives the Friedman (Austrian) mechanical lubricator is generally used. Since the war these are being manufactured in Japan. Figure 37, facing page 163, shows one of the passenger locomotives recently built in Japan. The reader will notice that there is no bell and that the engine has the British type of pilot and the traction-engine type of whistle. The working weight of this engine with full tender is approximately 200,000 pounds, and the maximum over-all height is 12 feet 6 inches. The largest Mallet now in use weighs, in working order with full tender, approximately 220,000 pounds, with the same maximum over-all height. The present locomotive equipment represents a decided assortment of different makes. Many of the ordinary locomotives are of Ameri- can manufacture, but some purchased just prior to the war were o 00 o Z m 0) (n CD C bo < "a o a in :i * I INTENTIONAL SECOND EXPOSURE BAILWxVY MATERIALS, EQUIPMENT, AFD SUPPLIES. ifig an uiiiisual amount of attention, because of the fact that many of tlic lines run through rice-j;rowing areas, and on account of the slip- ping tendency of much of the side-hill ground in Japan when dis- turbed by cuttings and embankments. AH bridges are built with vcM-y liirge openings for tlie normal water flow. This is on account of the large volume of flood water during storm seasons. There are a good many very long bridges— sometimes 15 or more spans of con- sidtM-able length. The greater number of these are over dry channels during ordinary weather, but tlu^i' openings are sometimes inadequate during tlu^ typhoon seasons. C'onditions in Japan and China in tlu^se respects are in many ways similar, tlie ti-ouble in China being caused by the fact that the heavy rains run off very quickly on account of tlic^ lack of forests. Station buildings are somewhat along tlie lines of British and merican practice and do not follow the general type of Japanese chitecture. Figure 1 (tlie frontis|>iece of this book) shows the cvn- m tral station at Tokyo, which is modern in evei-y respect. The low(^r floor is used as a station, including post oilice, restaurant, clieck rooms, etc., wliik> the top iloors are uschI, in part, as a very com- fort al ) I (^ Euro|>ea n-})l an hot el . The track arrangement and construction are very similar to AmcM'i- can and Canadian practice, although the di^tails'of track material tend toward British designs. The rbipjinese oaks and hartl woods aro used almost exclusively for ties (sleejx^rs), and the ti-ack as a I'ule is lil)erally ballasted witli broken stone or good gravel. As in China, mncli of the rock I) a! last is l)roken l)y hand. Because of the exclusive! v left-hand running, all si2:ualinof is left- handed. LOCOMOTIVES. Tlie total number of locomotives in service on Marcli 31, 1017, was 2,727, l)Ut the details of tliese are lacking. On March 31, 19IG, there was' a total of 2,661, of whicli 77 were of new superheater type fur- nislied by contract that year. During the same year 16 light h)como- ti\es were transferred to the light railways. Of the 2,661 locomotives, 1,197 were of tank type and 1,36.") were of ordinary type with tenders; 62 were ^lallets, 25 were Abt, and 12 were electric locomotives. The latter were used on a 3} ])er cent grade at Kariuzawa, whore there are 26 tunnels (all of consldenihle length) in a distance of 7 miles. Of tlie above locornoti\x^s, 2.272 use saturated steani and 389 are superheaters. For the superheattn- loco- mot ivis the Friedman (Austrian) mechanical lul)iiccitor is generally used. Since the war thest^ are being manufactured in Ja|ian. Figure 37, facing page 163, shows one of the passenger locomotives recently built in Japan. Tlio reader will notice that tlie re is no bell and that the engine has tlie British type of pilot and the traction-engine type of whistle. Tlie working weight of tliis engine with full tender is api>i*oximately 200,000 pounds, and the maximum over-all height is 12 feet 6 inches. The largest Mallet now in use weighs, in working order witli full tender, approximately 220,000 pounds, with the same m.aximum over-all lieight. The present locomotive equipment represents a decided assortment of different makes. Many of tlie ordinary locomotives are of Ameri- caii manufacture, but soine purchased just prior to the war were o 00 o Z to (n w c « < u 0) a ■ ' -I I JAPAN. 163 Special Agents Series No. 180. FIG. 37.— JAPANESE-BUILT SUPERHEATER LOCOMOTIVE. FIG. 38.— SECTION OF GOODS TRAIN ON JAPANESE GOVERNMENT RAILWAYS. made in Germany, with the result that the present equipment con- sists of American, British, German, and Japanese locomotives, with a mixture of the corresponding national practices. The Japanese- built engines follow rather closely the general British practice. PASSENGER CARS. As already mentioned, passenger-car equipment is built on the Widest limits consistent with stabihty on track of 3-foot 6-inch gauge, even with the moderate speed of the Japanese railways. 1 his equipment includes aH the classes of cars needed to handle the three classes of passengers traveUng, including sleeping and dining cars. The maximum permissible height is 12 feet 6 inches and the maximum outside width 8 feet 10 inches; and the present maximum length IS approximately 56 feet between buffer faces and 36 feet between kingpins of trucks (bogies). Ball screw coupUngs of the British tyne are used with side buffers. Figure 36, facing page 2G9, shows multiple electrical equipment used m the Tokyo suburban service and illustrates the ball couplers and buffers used. The passenger rolling stock except that in this electrical district is equipped with vacuum brakes. The freight equipment, however, is generally only provided with hand brakes operated by side levers as illustrateci by figure 38. GOODS WAGONS. The term "goods wagons" is used for the reason that a very lar^-e portion of the freight equipment consists of four-wheeled open and covered wagons, as illustrated by the assorted outfit of cars shown In figure 38. Wheels on all equipment, except a small amount of American equipment, represent the typical British practice of tired wheels with wrought iron or steel centers. The wheels under passenger eq uipmen t usuaUv foUow the British standard of 42 inches, but there is a con- siderable variety of wheels under the goods wagons, these being in some cases as small as 24 inches in diameter. SERVICE CARS. On March 31, 1916, there was a total of 942 service cars of all classes of which 867 were construction cars—mostly of the grading type to shovel on and plow or shovel off. Twenty-three were snow plows 8 were accident cars, and all of the others were gas or water tank cars' There is very little equipment in the way of wrecking or special work outfits along the lines of recent American practice, particularly as regards steam wrecking outfits. WORKSHOPS. in??^^!*^^® ^^ workshops, in which, for the year ended March 31, 1916, there were 13,560 workshop employees, comprising 12,352 workmen, 820 laborers, and 338 coolies. The average daily waee for the above year was 35.34 cents. " » j & During the above year, after some two years of centralized con- trol this was abandoned and the shop control was decentralized by being returned to the jurisdiction of the several divisions. That IS the present arrangement. k I r mm I INTENTIONAL SECOND EXPOSURE JAPAI3'. 163 Special Agents Series No. 180. FIG. 37.— JAPANESE-BUILT SUPERHEATER LOCOMOTIVE. FIG. 38.— SECTION OF GOODS TRAIN ON JAPANESE GOVERNMENT RAILWAYS. Oil tho foot 6-incli made in Germany, with the result that the present equipment con- sists ol American, British, Gorman, and Japanese locomotives, with a inixture of the corresponding national practices. The Japanesc- built engines follow rather closely the general Britisii practice. PASSENGER CARS. As already mentioned, passenger-car equipment is built widest limits consistent with stabihty on track of 3-fooi ^-...., gauge, even with the moderate speed of the Japanese railways. I his efnupnient includes aH the classes of cars needed to handle the tliree classes of passengers traveling, including sleeping nnd dinincr cars. Ihe maximum i>ermissible height is 12 feet 6 inches and the maximum outside width 8 feet 10 inches; and the present maximum length is approximately o6 feet between buffer faces and 36 ^"eet hetwet^n kingpins of trucks (bogies). Ball screw couplings of the British tyne are used with side buffers. Figure 36, facing page 2G9, shows multi])le electrical equipment used in the Tokyo subur'oan service and illustrates the ball couplers and buffers used. The l)assenger rolling stock ' " ' ' ' ' ' with vacuum d ng stock except that in this electrical district is equipped bmkes. The freight equipment, however, is genendlv only iH'ovided with hand brakes operated hy side levers as iUustrated by figure 38. GOODS WAGONS. The terni ''goods wagons" is used for the reason that a very lar<^e portion ot the freight equii)ment consists of four-wheeled open and covered wagons, as illustrated by the assorted outfit of cars shown m iigure 38. Wheels on all equipment, except a small amount of American equipment, represent the typical British practice of tired wheels with wrought iron or steel centers. The wheels under passenger en uinment usually foUow the British standard of 42 inches, but tliere is a con- siderable variety of wheels under the goods wagons, these beino- in some cases as small as 24 inches in diameter. ^ "^ SERVICE CARS. On March 31, 1916, there was a total of 942 service cars of all classes ot which 867 were construction cars^mostly of the gradino- tyi)e to shovel on and plow or shovel off. Twenty-three were snow plows 8 were accident cars, and all of the others were gas or water tank cars' Ihere is very little equipment in the way of wrecking or special work outhts along the lines of recent American practice, ])articularlv as regards steam wrecking outfits. WORKSHOPS. 1 oTi^Tu ''^^'^ ^^ workshops, in which, for the year ended March 31, l.Ub, there were 13,560 workshop employees, comprising 12 352 workmen 820 laborers, and 338 coohes. The average daily wac^e for the above year was 35.34 cents. " ^ o During the above year, after some two years of centralized con- trol this was abandoned and the shop control was deceptrali/ed hy heing returned to the jurisdiction of the several divisions That IS the present arrangement. 1' •■ i|if ! 164 lAILWAY MATEKIALS, EQUIFMEJ^^T, AND SUPPLIES. JAPA2T. 165 The most importaot, or wliat might be called the main division, workshops in the order of their importance are as follows: Omiya, 16 miles north of Tokyo; Takatori, a short distance west of Kol^e; Kokiira, a short distance west of Moji; 0-i, in one of the districts of Tokjfo ; and Naebo, near Sapparo on the North Island. The principal fiinetion of the raihvay workshops is to make all classes of repairs to all classes of rolling stock, although, as stated, some manufacturing of goods wagons and passenger cars is done at certain of these shofis, particularly the 04 workshop, and there is also a consideral)le tendency in all of the larger sho|)s toward the manufacturing of track materials. FIISONNEL. A directory of the general staff and division staffs is given on page 269. Particular attention is cdled to the inspection bureau in tlio Metropolitan Life B^uilding, New York City, which is specially main- tained in connection with the purchasing of materials in the United States. 'The designations ' * engineer" and *'' secretary " are among the distin- guishing features of the organization of the Imperial Government Rail- ways of Japan, and the m,en tlius desigtiated are promoted along tlieir particular lines,, engineers in general administrative duties and secretaries along secretarial lines of work. STORES ANB PURCHASES. In 1913 a centralized system of stores, with a controller of general stores,, iras put into effect, but in 1915, after two years' trial, this was found unsatisfactory, and a decentrahzed arrangement was adopted by wliich the business was placed largely under the control of divisions. Requisitions for stores to he bought are prepared by the divisions and submitted to the general office in Tokyo, which handles purchasing as a section of the financial bureau. Mention has already been made of the proportion of foreign and domestic purchases, but in this connec^tion it seems proper to quote from the 1915 annual report as follows: In coMeqnenee of the policy of encoiirasing tlie purchase of articles of home manu- facture pursued coiisisteutiy by the Imperial Government Railways with the idea of Bupportmg domestic industr>', the value of orders placed in Japan has steadily riseu for these several years, with the corresponding shrinkage of foreign purchase. The foreign purchase for 191&-16 indicates a setback to the downward tendency of the preceding vears, which is accounted for by the falling-of! in the amount of domestic purchase on the one hand and on the other the abnormal appreciation of prices of imported articles due to the exi^ncies of the war. As referred to under the caption of "The War and Rolling Stock Materials," the war Feriously interfered with the supply of raw materials and finished articles from al)rr»ad, particularly in ri^gard to steel, iron, and other metals, which, with the outbreak O'f the war, jumped to practically double the pre-war level. In the 1914-16 year, li. 'wever, the rise in the quotations of these itenii did not affect materially the average • ■. ■ I i>er piece of the supplies, because no inconiiilerable amount of stores had been ( (Hitracted for before the wm. In the following year, 1915-16, a gain of more than 50 IM -r cent was shown in the average cost. The dirficulty was further aggravated b v t lie i !..;:■ I eik;.ed restriction on the supply, which, m .slated above, operated to 'hamper tlie execution of the programs. Notwithstandiiig the heavy rise in the price of iron, f teel, and other metals, the market of other supplies remained comparatively dull down to 1915, but the general level of quotations which took place thereafter resulted in the advance of 30 to 100 per cent in the price of coal, oils, cement, brick, timber, and other staple railway materials. The changed conditions might, indeed, liave brought about eeriO'Ua^ derangement in the railway financeSj were it not for the fact that before the war orders had been placed for the whole stock of coal and oils, the bulk of the cement and brick, and a part of the timber. Sleepers, too, rose in price as they were restricted in supply, but the railways maii- a.^ed to obtain them at the pre-war price under the coiiv'enient arrangements for securing them from the producers direct according to the practice in operation for several years. Dr, Y. Shima, chief of the machinery and rolling-stock bureau, made a trip to America the latter part o'f 1917 and the early part of 1918 in connection with the purchasing of railway materials. One subject to which Dr. Shima gave special attention was the matter of axles and wheels and other parts required for the proposed widening of the gauge. I f . FtlfATE lAttWA¥S AffP LIGHT RAlLWAYa WT'lOmJCTION. It is not easy to decide how mucli space should b© devoted to a consideration of private railways and light railways. While a study of these feeder railways, which have been built for the development of the yarious districts that they serve, would doubtless bo interest- ing, it is not felt that any extensive reference would be justified on account of the small amount of business that they may be expected to supply (at least directly) to American manufacturers. At times, however, considerable business might come through the class of Japanese concerns already mentioned (see p. 141). The lines are all short. In no case is there as much as 100 miles of all tracks for any eroup of these roads, and they are generally under the control of local Japanese interests and management. A considerable part of the requirements in the past has been supplied by the Japanese Gov- ernment Railways in the shape of light, second-hand materials or equipment. All mrcbases of new krticles must conform to the specifications of the general administration bureau of the Imperial ■Government Railways. Many of the lines are built through very rough country, with heavj grades and sharp curves, generally using light rail, some of which is second hand from the Government Rail- wavs,. The gauge of a .great part of these lines is 3 feet 6 inches, althougli there is a very considerable amount of 2-foot 6-inch line, as well as som,e other widths, including a verj^ small amount of 4-foot Of -men. CONSTEUCTION COST AND CAPITALIZATION The private railways, which are all of 3-foot 6-inch gang liad cost on March 31, 1916, an average of approximately $55,500' gold per mile of line. The 3-foot 6-inch light railways cost approximately 131,500, the 2-fooli 6-inch railways $17,700, and the average cost of all lines was 130,530. The aggregate construction cost of all these lines is shown as approximatelT $53,231,440, against which there is outstanding share capital, boncis, and floating debts of $74,739,555, or an average of $42,866 per mile of line. OPERATING RESULTS AND .PROFITS. The following table shows the performance statistics of all the Tivate railways and light railways in Japan, treated as one system, or the years ended March 31, 1912, 1914, and 1916: Mi!(js of line open M,iles of all tmcka,. , Average inileiif » worked, lor year . .. Total cost of comtruction of open Tmm.. Coiistruciion cost per mite of o|>en liiMs. 19U-12 1913-14 744.. 5 522.0 120,626,611 «M,114 1,120.8 1,365.2 845.0 •32,695,255 129,172 1915-16 1,713.07 2,111.37 1,522.00 $53,231,449 Iil0,53!l 166 iP JsLSTjnLJiJi • 167 Items. Total outstanding capital obligations Outstanding capital obligations per mile of open lines Total working revenue , Total working expenses and taxes Net income (not including subsidies received and with no dividends deducted) Fcrctmtage of expenses and taxes to working revenues Daily working revenue per mile of line Daily working expenses per mile of line Operating iucome per mile of line Operating ratio (percent) 1911-12 1913-14 Niiniber of passenger train-miles Number of goods train-miles Number of mixed train-miles Total train-miles Number of passengers carried Number of passengers carried 1 mile Coaching earnings Earnings per passenger carried 1 mile. Numl)er of tons (2,000 ptHmds) of goods hauled . Numlier of toas of goods hauled 1 mite Ooods earnings Earnings per ton carried 1 mile 12,453,604 $1,197,389 $1,256,215 51.2 «3,r»57,0.'>5 $l,f.9s,504 $1,658,551 53.4 657,343 332,052 2,342,832 3,332,229 28,827,996 209,422,229 $1,625,600 $0.0078 2,9R3,664 40,494,024 $498,>4g8 $0.0123 575,794 387,223 3,497,893 4,460,910 39,2fi7,in6 280,83«,412 $2,322,469 $0.0083 4,237,637 56,396,894 $892,973 $a0158 1915-16 $74, 739, 555 $42,866 $4,903,294 $2,69t>,065 $2,207,229 55.0 $8,959 $4,844 $3,966 53.9 743,111 563,303 6,518,231 7,824,645 51,390,295 361,913,312 83,123,712 to. 0086 5,790,479 76,263,090 $1,340, )^16 $0.0176 About two-thirds of the earnings are from passenger business and one-third from freight and sundry receipts. The average ride per passenger for 1915 was 9.6 miles on the private railways and 5.9 miles on the light railways, the average for the two being 7 miles. The average earnings per passenger mile for the private railways and the light railways were 0.86 cent. The average haul of freight was 18 miles for the private railways and 11 miles for the light railwa^-s, averaging 13.2 miles for both. The average earnings per ton-mile for the "(ii-ate railways were 1.49 cents and for the light railways 1.93 cen' , "the average for both being 1.76 cents. The!\€Tnings of the private railways for the year ended March 31, 1916, aggregated $1,654,487 and of the light railways $3,248,807, or a total of $4,903,294. The working expenses and taxes Df the private railways aggregated $710,396, leaving a profit of $944,090, equal to about 6.3 per cent on the cost of construction. The work- ing expenses and taxes of the light railways totaled $1,985,669, leaving a profit of $1,263,139, which amounted to about 3.4 per cent on the cost of construction. The profit on the cost of construction for both the private railways and the light railways was about 4.2 per cent, which was an increase of about 1 per cent over that for the previous year. Under the provisions of the Light Railway Law promulgated in 1911 and revised in 1914, the privately-owned light railways are gua-ranteed a profit of 5 per cent on the cost of construction for a period of 19 yeai-s after the date of opening of business. Under this provision 53 of these lines, whose construction cost aggregated $15,133,270, did not earn the necessary amount to pay this 5 per cent guaranty, and the sum of $499,876 was paid these 53 companies, the funds being suppHed from the budget of the Imperial Government li ail ways. The private railways, after payment of all interest and other income charges, showed a net profit of $984,469, of which $866,183 I RAILWAY MATERIALS, EQUIPMENT, AKD SUPPLIES. was i>aid in dividends and tlie remainder earried to surplus balanro- The light railways, including the 1449,876 paid them 'in snbsidirs, showed a net profit, after payment of interest and ot.her iiicofu''' fharges, of 11,1,91,450, of which 11,033,942 was paid in diYide]u;:s iind ilie remainder carried to surplus balance.. EMPLOYEES AND WAGES. As shown by the table on page 1.52, tlie private railwa3^s had 2,GSl employees for the year ended March 31, 1916, of whom 46 wvn^ directora or officials and 2,639 were wage employees. The light rail- ways had 9,810, of whom, 883 were directors or officials and 8,927 wage employees. The average monthly wage of the officials of' tlie private railways was $34.09 and tliat of the wage employees $5.64, milking the average monthly wage of all emplovees $7.94. There were seven of the directors of private railways who received no compensa.tion in the way of salary; tlie remaining directora and officials of the light railways received an average monthly salarv of S7..57 and the wage employees received $6.74, making the average monthly wage of ail employees of light railways $7.30. OFFICL4,LS~FURCHASES. 'Tlie writer ireiit O'Ver the situation to determine whether it was nracticable^ to locate these lines and prepare a directory of officials*-, Init decided that- it y^"ould he \-ery difficult and take a great deal of time, and tliat the lists wlien finished would probably" be of small vidue, so no attempt has been made to show the location of these various lines or to give lists of their officials. Purchases of most of these lines are han-dled in a very scattered way and almost entirely through Japanese concerns, although somo of the equipment has come^ from abroad, particularly the small loco- motives, c|uite a numbcsr of which are of German manufacture. VI. TRAMWAYS. INTRODUCTION. With 136 concerns, 1,255 miles of line in operation, and 289 miles iiiMfor construction on March 31, 1916, it wiU be seen that there is at frcseut an average of less than 11.4 miles of line for each tramway This is sufFicient to indicate that a great deal could be said about the tramway situation in Japan. However, the remarks regarding the jTivate radwaj-s and light railways apply to a considerable extent to the tramways, except that special lines of American products are employed— principally electrical equipment, which has been exten- sively used m the past and probably will be ih the future. The Imancial results of these lines are also interesting, as an indication of what might be expected from tramways in certain parts of China. EXTENT OF LENTES. The following table shows the performance statistics of all clashes of Japanese tramways for the year ended March 31, 1916: Items. Kind of tramway. Electric. Number of companies Miles of line open Miles of line under construction. Comtniction cost per mile of line of transportation property Total construction cost of trans- portation property Total construction cost of pro|> erty of outside undertakinsjs . . . Total construction cost Oi'' all property Total outstanding capital liabili- ties Total outstanding capitalliabiiil' ties per mile of line Total working revenue Total working expenses and in- terest charges Net income (no dividends 'de^ ducted) Daily working revenue per mile of open line Daily working expenses per mile of open line Daily operating income per mile of open line Operating ratio per cent ] . Working revenue per vehicle-mile. Working expenses per vehicle- mile Operating income i)er" vehicle^" mil© 64 667. 66 232.62 $163,060 1108,868,838 $29,224,195 «138,093,033 $155,305,675 $232,612 $19,275,165 $12,650,832 16,624,333 156.23 $26. 30 •29.93 46.8 $0. 116 $0,054 $a062 Steam. CJas motor. 22 211. 65 3&34 $11,793 $2,495,937 $103,891 12,659,828 $3,553,200 $12,650 $382,793 $249, 406 $133, 3S7 $5.29 $3.30 $1.99 62.4 $0,114 f 0.071 $a043 4 60.56 2.07 $15,680 $949, 538 $5S,610 $1,008,148 Horse. $148, 507 $104, 812 $43, 695 $6.40 $3.98 $2.42 62.1 SO. 082 $0. 051 $ao3i 34 244. 18 12.36 $4,328 $1,056,749 $31, 515 $1,056,749 $1,404,738 $5, 785 $290,074 $254,405 $35, 663 $3.08 $2.55 ?0.53 83.0 Man power. 14 70.40 3. 3 16,007 $317, 158 $105, 719 $422,877 $576,880 $8,1W $171,623 $149, 028 $22, 595 $3.60 $2.86 10.83 77.4 HI m 169 170 :eailwat materials, eqitipim'ext, afd supplies. Items. — — • a Kind of tramway. Elactrlo. Steam. Gas motor. Horse. Ma,n power. NiimlDer of ptesengers carried rassenger earnings Earnings iier pusaenpr ■carried... Kiimter of tons (2,000 pwmds) . of Roods hatilod , *;! oods earninp , . . , Einiiup, p«r ton, of goods liiiiiled: Ni! mfcer of looomoliTDs Niiiater of mrriigeis , . . K umlwr of gcwda wagons tl2„«,l57 taoits 524,337 ilWi,Ml 5 S,U9 251 S,42S,420 $302J>I5 $0.0470 3ai,,S77 $(,18,327 111223 ,1.47 I« 301 2.S22,ro2 1112,298 $0.0398 a\ 124 $2<'>. MVI m, 294 » 88 133 J 4.0«4,»aj $1»,0I7 10.0465 M9,2.S.'J Hit. 7S8 $o.,3n "'* W 677 277. 149 $12, '991 •0.047& 401,. W $74,11.'! $0. tvS3 in 51,9 The 668 miles J electric tramways are the most important and will he prm,cipaly reierred to in, this text. The largest tramway center at present is the (h&ku district, where there arc now more than 250 m,il,cs of line cmnectm^' Osaka with Kyoto, Kohe, Fara, and other parts of tks the most important industrial d,istriGt of Japan. Next m importance is the Tokyo district, with 81 m„iles of line and 46 5 miles under con,st ruction in the city of Tokyo, al under municii^al m,ajia|jeniont— m addition to a ,nura,bep" of other private tranmaVs inchiclmg one to Yokoh.am,a. Co,iisiderioR the imiiortance of tlio lloji industrial d„istrict, it has at present" a very limited tramway BeiT,ice,, there hei,ng only one line of about 20^ ,miles, from Moji tii lino. ^ ,rhe entire length of this lino parallels the water front which is a contmiioTO Ime of industrial plants, one of 'tliem heino* the Japanese Im,|)erial Steel Works ,In addit,ion, to the Tokyo system, the Osaka atv system of 35 m,des, the Kyoto city lines "of 15 miles, and the liobe city hues 'oi 15 m,iles are all, now municipally owned and oper- fl'®.*!* ^ the^other lines are priyately owned and operated. Tli© Keihan C-o,, with 33.7 ,miles in the Cteaka district, has the srentmt m,iJeag:e of any of the private companies. The loiigest steam tramway linc'is 29.7 m,il€s, the longest jr'ap-m,otor line IS 32.2 miles, the !on.g-est horse h,ne is 1,5.8 miles, aiid the loncrest man-power line is 18.25 miles. , •. t il lun^esc On March 31, 1916, there w:a8 under construction 232 62 miles of taie of all classes,, but there was projected at that time a \'ery consider- able additional m,ile,age, mmhut which will probably be built in the next few years. It seems, entirely safe to predict that the present mileage ot electric ,lmes will be very considerably increased 'in ^tho" n,ear future. ' ' .HISTOmCAL SlIKVEY. Tli,e foBowing from, the annual rejwrt of the Imperial Go\'e,rnment Itailways of Japan for tlie year ended March 31, 1916, is a brief state- ment ot the histo,ry of the tramway deyelopnient: The Japaiieee tramwayB date imm 1880,,, when, in Febniary an application was ten- fSJ.l n^^^^^^^^ '^ '^* '^f ^'"i '^^T T^'"/'^-*^ li«- C applies wL nanftionwi and the hue waa^ completed, and opened for traffic in June 1883 Thw w:a8 Boc»n ,fQl,l,owed by othen in rajiid succession, and, esp^ecially since 1888* everv year mtnefleed applications for four or five horse tramway nndertakinge The imuk was the promulgation of the Tram,way B.e|;ii,lat,ioi e by law Ko. 71. on August n 1891 by wtue of which horee tmm,wa)fs and similar meana of tran8portat,ion to be laid on public roadi for general traffic came to be authorized 8ul,;jcct to the special sanction of the MmiBter of lIo,me Affaii-a. On, October 22, ims, it wm proviSenrimpSkl JAPAK. 171 Ordinance No. 266 that application for the conetniciion of tramways under the Tra,m- ways Orders should also obtain the sanction of the Minister of Communications; this was subsequently revised by Imperial Ordinance No. 307, whereupon the control of the tramways, as to construction and working, came under the charge of the Imperial Government Railways. As alread;^ mentioned, the control and re;]:ulation is handled by the general administration bureau of the Goy eminent Railways. It is a matter of interest that the first cars used on this horse tramway in Tokyo in 1883 were secondhand cars purchased from one of the ^ew York City street railways. These were used in Tokyo until the lines were electrified, after which these cars and a quantity of light rail were sent to Mukden, in Manchuria, where they are still in sen ice on the 4 miles of horse tramways running from the railway statioii to the west gate of the inner walled city. <> I, CONSTRUCTION COST AND CAPITALIZATION. The total construction cost of the 667.66 miles of electric tramways was $138,093,033 up to March 31,191 6, but of this amount eS29,223, 195 was the cost of outside undertakings, leaying the construction cost of transportation property as $108,869,838, or about $163,060 per mile of line. Of this amount, $88,575 represents expenditures for permanent way and 146,965 expenditures for rolling stock, power equipment, and buildings, leaving $27,520 for general expenditures, \\4iich is the account carrying promotion expenditures and other similar expenses. On the aboye date there was outstanding $131,656,901 in capital shares and $23,648,774 in bonds and floating indebtedness, making the total outstanding capital obligations $155,305,675, or about $212,700 per mile of line. Tlie capital item, however, as shown in the 1916 annual report, is only $131,656,901, but this does not include the outstanding bonds, loans, and floating indebtedness. Separating the capital allowed by prorating the construction costs makes the amount to the transportation properties approximate $183,500 per mile of line, on which amount the Japanese electric tramways are paying returns in the form of interest or dividends amounting to about 5 per cent. These figures strongly support the statement that electrified lines of light railwa3^s should be successful in the densely populated parts of China, particularly when it is con- sidered that the average fare per passenger in Japan is slightly less than 2 cents gold per ride. TRAFFIC AND RATES. On the electric lines the traffic is about 97 per cent passenger travel and 3 per cent goods business. This division of trafiic varies greatly between the different lines. About 50 per cent of the lines do no goods business, among them being most of the city systems such as those in Tokyo and Osaka. On some of the small (but in some cases important) hues the goods business constitutes about 50 per cent of the traffic, varying from this figure down to a small percentage of the total. For the year ended March 31, 1916, the average earnings per pas- senger on all the electric lines was 1.98 cents, and the average earnmcrs per ton (2,000 pounds) of freight was 31.8 cents. The average earn- I'M I I l! 172 RAILWAY MATERI.VLS, EQUIPMENT, AND SUPPUES. ings por passengpr and per ton of freio:ht are shown by the tahlo on page 70 and it .s mteresting to note that a ton of freJght is moved with the lowest earnings on the man-power or "ricksha" lines As regards tlie fares on the electric lines, there is a variety of arningements. /one fares are used only to a limited extent in Jaoan an,l h«t and so,;ond class fares also prevail only in a few imtaX"' Jl,e Tokyo nnm.cpa system has a eisen (3-cent) fare tr a onow .; ri.le with transfer and a 10-sen (5-cent) fare for a round-trip ride nls^, mo ludmg transfer. In practice this an-angement seemi to work an |- v^rw'!v «"f'; f'""J"«has are Used generally in all the ,itu-. ^ f fi I ,i ««»-t"-<^o Japanese or foreigner ride on tlic tramways, u the latter arc used very extensively by tl.e working people in tu 1 ulustr.al r istncts. Most of the interiban hnes Tiave tcr mi i tto to^ini and I't uZrl iV ''"^^"^ ^"^^= '^'■^'^'^ aro^ouTt uu. terminals and at most of the important stations, but at otlipp points collections are made on cars, bn some of the ines on which the writer rode he was unable to determine how an accurate check-uD of fares could bo accomplished. ^ EARNINGS AND EXPENSES. For the vear ended March 31, 1916, the total traffic revenue, me udmg miscellaneous items, of the electric lines were $13 Oo" 88 and earnings from outs de undertakings and inv-nctm^^io V ^« 'iT-i 077 %„„i.:„ .1 "''"""" w;jviiigs ana investments were Sb.-<,>,9//, making the total gross income $19,275 165 Working expenses amounte irr; oVr.i>r.o«„ ^r «..* -j i "",'^"'g tntnlnH *•> iiRKAi-i ," f"?."/ o» J "0, expenses of outside undertakings totaled $2M5,44S, and interest charges amounted to S3 709 '^S-I- representing a total .leduction from ^oss earnings of $12 650 83" r?,i:r:"^ * r°^ii °^ *6,624,333, or 6.4 per cent on ti;' cost of c.M,stru(Uon after the payment of all fixed charges. The above results give an operatmg ratio of 46.8 per cent for &e electrL laiL! Sn b^theTK? ;Sl6^! ^-^ "^^- '"^^ °^ ^--^^ - siffei th EMPLOYEES AND WAGES. Of the 14,538 electric-line employees on March 31 lOifi >; qro were conductors and 5,003 were motormen or, as thev' are called in Jaoan "dnv^.' The writer was unable to'obta n what he con "; s'sniSt : tt"^ ■•'^^['^'"S ^T" ^° 'J^t* °° the detaiinf ent Railways! ^ "" ""'"' '"^P*"'* ''^ ^^^ ^'"P^"*! «°^ern- SOADWAY AND TRACK. to WwX'f 1'°".^ T*"? '■***'^'" '*'««">* ^ JiP«n, as applying to both city and mterurban lines, on account of the limitations in seeurmg adequate right of way or sufficient room on stree^and roLs many of which are crooked and narrow. Most of th^ older ^^^r' urban hnes were indiflFerently located and constructed but some of st'nic"?e7 L'^illnlrr ^r .^^? ^'f ^"^^"^ '^^ subsiLTy"eon! SL^^s'Xoutri mfle^tle^^lk^"'' '''^'''-''-^ tunnjls, Zetf JAPAm 173 The track work on all the lines is very similar to the ordinary American practice^ and a considerable amount of the special work is of American ma nnf act ure. A great variety of gauge has been used, hut h majority of the lines are 4 feet 8J inches. The rail, as one might expect, is of verjr great variety of weight and section. The overhead construction is mostly along American lines, with the ordinary single trolley. In a few instances pantagraph contacts are used. ROLLING STOCK. As would naturally he expected, there is a great variety of rolling stock on the different lines, but many of the trucks and car frames, as well as a considerable number of the car bodies, have been fur- nished in the past by American manufacturers. There are several concerns in Japan that have been paying close attention to the furnishing of tramway rolling stock in recent years, one of the most important being the Tokyo Works of the Kisha Seizo Kaisha. There is a very great variety of electrical equipment, but a major- ity of the motors and control are of American manufacture, furnished mostly by the companies that have connections with Japanese com- mercial and engineering contracting concerns. A very noticeable amount, however, of other electrical equipment has been used, par- ticularly German, English, and Swedish, in the order named. POWER PLANTS AND SUBSTATIONS. Practically the same remarks can be made about the power-house and converter equipment as about the electric car equipment. At present most of the power is furnished by steam plants, but there appears to be a decided tendency in such situations as the Osaka district to connect up to central power plants, and there is also a strong tendency to utihze hydroelectric sources where such are available. OFFICULS— PURCHASES. Tlie writer spent considerable time in determining what could be done m the way of the preparation of a directory, and although this was found to be practicable for some of the more important lines, the results as a whole were such that it was decided not to attempt to include the usual directoiy for any of the tramways. The mun^pipal tramways in each case are under the general dkection of the mayor. The large systems, particularly at Tokyo, Osaka, Kyoto, and Kobe (all municipally operated), and the Keihan, Nagoya, and other similar privately owned hnes, have organized purchasing branches, and while many of the requirements have been and will continue to be supplied from American sources, this business is closely controlled l)y the concerns now handling it. Large electrical companies are not only represented in all cases by strong Japanese commercial com- paiues, but as a rule they have their own representative in Japan cooperating with these Japanese concerns. Further, some of the most prominent American electrical companies have established well-equipped factories in Japan, which are not only handling the Japanese business but in some instances are sendmg their products to China, Manchuria, and Korea. Part 3.~CH0SEN (KOREA). I. GENERAL INFORMATION. INTRODUCTION. Cliosen (Korea) is an elongated peninsula between 33® and 43® north latitude and 124° and 131° east longitude. Its length from northwest to southeast is about 900 miles, and its width from north- east to southwest is something less than 250 miles. Its area is approximately 84,100 square miles, or about the same as that of the State of Minnesota. The estimates of the population, as in the case of most oriental countries, vary considerably, but roughly it may be said to comprise about 16,000,000 Koreans, 15,000 or 20,000 Chniese, 1,100 to 1,200 Europeans and Americans, and something less than 500,000 Japa- nese. The climate for the greater part of the yeiir is mild and dry. The northern and central parts of the country have cold, dry winters. There is a rainy season of something over a month beginning with great regularity before the middle of July and lasting until after the middle of August. During this period the weather is hot and con- siderable humidity prevails. The fauna of Chosen includes several species of deer, the tiger, leopard, wild boar, bear, wolf, fox, and numerous fur-bearing animals, among which the sable and sea otter are the most valuable. Game birds of considerable variety and all kinds of domestic fowls abound. The entire peninsula is well stocked with cattle, horses, and pigs. The history of Chosen goes back many centuries, like that of China. One of the results of the Russo-Japanese war was the establishment of a protectorate over Korea by Japan, this being followed by annexa- tion August 1, 1910. Chosen is now administered by a resident Japanese Governor General, the administration being under the Colonial Department of the Imperial Government of Japan. PRODUCTS OF THE COUNTRY. In the past Chosen has been largely an agricultural country, with rice the leading product and beans, oats, and wheat raised in con- siderable quantities. Lumber from northern Chosen is also an important product, but the cx^ntral and southern sections have been largely denuded of timber and extensive afforestation by the Japa- nese authorities is now under way. Coal is now the principal mineral product, and for the year ended March 31, 1916, it constituted the largest item of traffic over Korean railways. The largest deposits at present developed are those near Pingyang (Heijyo), about half way from Seoul to Antung, near the main line of the Korean railways. Considerable quantities of copper, gold, and graphite are produced — the copper in increasing quantities. 175 ^Mli .J—— >-* ■ 176 BAIL WAY MATERIALS, EQUIPMEXT, AXD SUPPLIES. Tlie do:Vf»lopnieiit. of iron iniiiiiig is being energetieally pursued near PiiigTaii|,, where a Japanese company" is erecting l)last furnaces, wliicli will depend entirel}^' upon Korean and Mancluiriau ores and fuel. Tlie principal Korean exporte^ are beans, ores, and rice; tbe prin- cipal imports are coal, sugar, tobacco, and manufactured* articles. Trie exports for tbe five years from 1911 to 1916 were practically the sfime from, year to year, but tbe imports increased anout fourfold. Many of tlie gO'Ods* represented by this increase, particularly the r.iihviiy ecjuipment, came from American sources, being handled liirgely by Japanese concerns or American concerns with branches in Japaii. MANOTACT0EING. Little modern manufacturing is done in Chosen. Korean railwaA^s liave complete workshops at Kynsan near Seoul, and there is a teii- dency to d;0 a very considerable amount of their own manufacturing in these shops. The tramways in Seoul are also doing most of their own car building at present, buying the necessary parts where they can be obtained to best advantage, TRADE CENTERS. Seoul (Keijyo) is the capital and principal business center of Koix\a; Chemulpo (Jinsen), 25 miles by rail from Seoul, is the principal port, but Ftisan is the southern t.ermlnus of the Korean railway, and for this reason is of growing importance, particularly as it is only about 10 hours' run for ve^ssels from Shim,onoseki. Shingishu (across the Yalu River from Antnng), tlie northern terminus of the Korean railway, is also of growing commercial importance, particularly on account of its harbor at the mouth of the Yalu River and the lumber coming down this river from the northern parts of Korea. Pingyang (Heijyo) , on account of its fuel and mineral resources, will probably become one of the important industrial centers of Chosen, and this will cause additional de comiected by CHOSEIT. 177 evelopment of the already important port of Chimiampo, y a 35-mile branch railway with Pingyang. LABOR CONDITIONS. Physically the native Koreans resemble in general the northern Chinese, and when properly handled make fairly good workmen for many lines of heavjr industrial work. of the 531 officials of various grades in the employ of Korean rail- wiiys ^farcli 31, 1916, all were Japanese; of the 8,699^ wage employees 5, ,3*5 9 were Japanese, 3,328 were Koreans, and 12 were Chinese. It is iisual, however, for the Japanese to fill the more or less skilled occupa- tioiis and to depend on the Koreans to do the labor. As illustrating ti'i-, it may be stated that aU of the administrative, technical, and 'Migineering employees of the Ryuzan workshops are Japanese, but al>uut 70 per cent 'of the artizans and laborers ai'e Koreans. In the railway shops the Koreans make very good workers, especially in foundry moulding, brass work, and wood work ; they do very well, also, on machine tools and erecting work. The writer was told by experienced mining engineers that the Koreans make excellent rock workers, and they anpear to make good grade and track workers. iNo attenipt was made to gather wage data, except as affecting the radway situation. RAILWAY SITUATION. With the exception that the gauge of the trunk line and principal branch railways is all 4 feet 8f inches instead of 3 feet 6 inches, the railway situation m Korea is similar to that in Japan. The railways can be classified as Government railways, including all the trunk lines and important branches, and the privately owned light railways and tramways. These latter might be subdivided into (1) commer- cial and (2) industrial light railways and tramways, there being a considerable and growing mileage of the industrial class. On March 31, 1916, there were 1,006.5 miles of Korean Government radways in service and 81.1 miles under actual construction, with a very considerable mileage projected. There were 111.8 miles of light railways and tramways in service and 165.4 miles under con- struction, and in this case also a good deal of additional mileage was projected. In addition, there are two short-line railways in north- eastern Chosen under the supervision of the Japanese mihtary author- ities. One of these runs from the port of Seikoshin to Kanko, where It will connect with the Kankyo fine when the latter is completed, Ihe other hue is from the port of Seishin, the northern terminus of the proposed Kankvo Hne, to Kwainei on the Tumen River; this line will become part of the Seishin-Kirin line when that is completed (see p, 1 iu). 106229"— 10- 12 ill CHOSEJT. 179 m. KOIMN GOTEENMENT RAILWAYS. HfTlODUCTION. On July 31, 1917, the admioistration of the Korean Government Kailways was oomoidated 'with that of the South Manchuria Rail- way to., and this pouit will be referred to later in connection with the latter company. One of the reasons for this consohdation eiidouhtedly was. to give the Korean raiways the benefit of opera- tion with the South Manchuria Railway under a company organiza- tion and to obtain the advantages of a company profit-and-loss account, m addition to the general benefits to be derived from consohdatmg the radwaya under one centralized efficient manao-e- ment. - ^ As the available data are entirely for the periods previous to this consohdation, the following discussion will refer only to the Korean Cjiovemment Radways. ETTENT OF 'LINES. The main line runs from Fusan^ to" •Seoul (Koijyo) to Antun^ a total of &85.6 miles, forming what might be caUed the Korean part of the Timns-Siberian route to Japan. In addition, there are the foilowuig important branches: The Konan hue runnino' in a south- westerly direction from Taidcn to Moppo, 161.3 miles;' the Kei^Gen line running northeast from Seoul to Gensan and Bunsen, 138,4 miles- the Hei-Nan branch from Pingyang (Heijyo) to the port of Chin- nampo, 34..3 ....mdes; the Masan branch 'from Sanroshin to the important naval base of Masan, 24.8 miles; and the Kei-Jin branch from Seoul to the important commercial port of Chemulpo (Jinsen) where, because of the fact that the tides rise about 32 feet there is now being constructed a locked basin for the handling of vessels taken into the basm near Iiigli tide. There are a number of otlier unimportant short branches. HISTORICAL SUBTEl. Folowing is a. brief history, largely taken from the historical sketches given in the annual r«>ort for the vear ended March 31 HI16, by the railway bureau of the Governor General of Chosen' The radway hnes had their origin in a concession to build and main- tain a radway between ■Seoul and Chemulpo granted to James R Moree, an American citizen, by the Korean Government in 1896* W hile the construction was. stiM in progress a syndicate headed by Baron 1. Shibusawa bought the concession and the rights con- nected with it in May, 1897. and continued the work. In May 1899, the syndicate was transformed into tlie Seoul-Chemulpo Rail- way Cb. and the line between Chemulpo (Jinsen) and Roryoshin m mdes in length, was opened for traffic in September of that year' The rem,aining part, about 5 miles, w.as completed and opened iii JwJy. l^'OO; this IS now known as the Kei-Jin branch. 1 he construction of the line between Seoul and Fusan was taken up ill August, 1901, by the Seoul-Fusan Railway Co. under the 17S' terras of a treaty signed between Japan and Korea in August, 1894, as weM as a contract entered into between the Korean Government and the above-named company in September, 1898. This line of about 267 miles was finishea and opened for traffic in January, 1905, and the same company purchased the Kei-Jin hnoin October, 1903. The construction of tne hne from Seoul to Shingishu, known as the Kei-Gi section, was taken up by the temporary railway depart- ment of the Japanese Army in February, 1904, but commercial traffic was not handled until April, 1908. When the nationalization of the railways in Japan was decided upon in 1906, the Imperial Government of Japan first purchased all of the Kei-Fu and Kei-Jin lines, totaling 296.6 miles; the railway bureau of the Residency General of Chosen was established at the same time. In September of the same year the Kei-Gi line of 332.9 miles and the Masan branch of 25 miles were transferred to the railway bureau. In December, 1909, the jurisdiction of the Korean railways was taken over by the Imperial Government Railways of Japan, but in October, 1910, they were transferred back to the railway bureau of the Government General of Korea, this arrange- ment being continued untU July 31, 1917, when they were consoli- dated with the South Manchuna Railway. The construction of the railways in Chosen, particularly the sec- tion between Seoul and Shingishu, was carried out very nurriedly, the object at the time being to connect the extreme south of the country and the extreme north as quickly as possible, and to connect a few of the important seaports with the trunk hnes by means of branches. Within a few years of completion, however, the recon- struction of the line^was taken up and fmished in due course of time. With the completion of £he railway bridge over the Yalu River and the reconstruction of the Antung-Mukden branch of the South Manchuria Railway, the Korean railways became a link in the line of communication between Europe and Japan by way of the South Manchuria and Trans-Siberian hnes. The Masan branch was built by the military authorities in 1904 and 1905. Since 1906 the Kei-Gen branch, from Seoul to Gensan and Bunsen, and the Konan and Hei-Nan branches, totaling about 350 miles, have been completed and opened for traffic for the devel- opment of the country. There is one very pertinent fact to be borne in mind, namely, that in the building of railways in Siberia, Manchuria, and Chosen "by the Japanese and Russians strategic and political factors were given first consideration and commercial utihty was considered later. In most cases, in this territory, strategic and commercial utility seem almost to coincide. In addition to their strategic purpose, the investigator perceives that the Korean Railway and the Antung branch of the South Manchuria RaUway possess a function of equal or possibly greater importance in tapping a granary for Japan, to which country these lines provide a direct route through Chosen and across the Fusan Straits to Siiimonoseki. EXTENSION UNDER WAY. The principal extension contemplated (work on some part of which is now actually under way) is the completion of the Kankyo line from Gensan to tne port of Seishin, a distance of about 360 mdes, II 180 MILWAY MATBKIALS, EQUIPMENT, AlfD SUPPLIES. ll!?;f ii?l "Jw?' T" ~rP^^^«^ '^ l^J'5 and, something over 20 mdes m 1916. This hiie will coniiect pear Seishin with the Seishin- Kwainei liiie,/whiiA is plaEned to link 'upwith a line to Kirio, Maiiehma^e p. 208X where connections in turn will be made witll tile Jiinn^^hangchun hne; at Changchun connections wiU be made iwtti, Ae piwenlnortbmi tenninns of the South Manchuria Kailway and the roiiihern end of the Harbin^hangchnn branch of the Chinese .Jti^astem Kailway. CONSTllJCTION' •--CAIWALIZATION-PliroiM^^ STATISTICS. The table Mow shows the perfomance statistics of the Korean lioyerninent Railways Jor the years ended March 31, 1907, 1914. and 1916. The statistics obtainable do not afford sufficient data tirlnita,mll«iie;rijii.. :...: Ml:wltr»in,iMleag®mii..... , To'tal, twill. ,iBllB«i» run • KtimberofpMMnpfai'eiiRled Number of pMMUferB curried. 1 .mile ] C«MliJ.ng'«iiniiiiip farnliip per 'passingir airried. 1 mile '.*.'.'." A.w:r:a«B ride per .pMBwipr Ntimbar of tons (of 2.000 poimds) of eoods curried. .Niim.ber of tons of goods carried 1 mile goods etmiiigs. ...... ■. ; Earnings per ton of goods carried 1 mile.-.. , . . . ATerage haul per ton o.f goods. Average tonnage 'per trafii .Number of looooMitfves NiimtwT of rarrlages Mumber of freight cars, *." g| j||y|mi J||K ....percwat... mi. 8 I,, 307,877 Wmmgt mmm 'tl;Tii4«S' III*. '3 -mm 1913-14 ..miles. l,7«7 )|i'Cllnl ■ISi .miles. §46^11.0 (*) 1. '725,517 %m§,TT2 ■98,882, 574 tl,056.(»4 to. 0100 37.6 438., 116 27, 783, 195 1542,810 10.0106 03.3 970.2 oiL"i' 102,258 18,914,315 13,132,5.^ •781,761 80.0 1*25 t4.28d 13,439 1846 1,014,585 1,955,781 (6) 3,570,366 4,995.441 173,743,488 11,902,903 to. 0100 34.8 138,238,994 •1,263,240 •0.0095 88.9 70.7 165 335 1,602 1915-16 1,006b. 5 1,255.5 1,002.S •80,301,761 •68,854 •4,453,813 •8.567,199 •886.614 m. 1 1.28 S4,4.')3 13.559 •894 1,580,168 8,544,297 5,040,471 186.998,752 •1,974.854 SO. 0095 37.1 201, 538, iW •1,078,066 •0.0087 108.6 102.6 IflO JI9T 1,«M CHOSEK. ORGANIZATION AND OPERATING METHODS. Xol The organization is of the typical branch or bureau type, being very similar to that of the Shantung Railway (see p. 130); but since the Korean railways are now a section of the South Manchuria Rail- way this situation will b© referred to later in connection with the latter system. The method of train operation is the typical station-master work- ing, with very little signaling and interlocking, all of which conforms, in general, to the practice on the Japanese railways. TRAFFIC AND RATES. For the year 1907 the passenser earnings were practically double the freight earnings. During the interval since that time freight earnings have been growing at a faster rate, until in the year 1915 the freight earnings were practically equal to the passenger earnings. It is the general rule, with all railways in this part of the world, for the passenger earnings to exceed the freight business at first but for the freight business to grow faster and fiially exceed the passenger business. This rule, how^ever, does not apply to the South Manchuria Railway, where the freight earnings have always been largely in excess of the passenger earnings. For the year 1907, with 641.5 miles of line, 2,625,772 passengers were carried. This number was not equaled again until the year 1912, when there was an increase to 4,399,022, with 837 miles of hue. On local passenger trains second and third class passengers are handled, and on express trains first-class passengers are handled in addition. The available data do not show the details of the amount of travel or the earnings of these several classes. The average distance traveled per passenger has been a little less than 40 miles since 1906. The average passenger earnings per passenger mile for 1915 were 0.095 cent, which is just slightly less than the average for 1906. In 1907 the earnings increased to 1.22 cents per passenger mile; since then they have gradually fallen and were 0.097 cent m 1914 and as given above in 1915. The goods earnings increased about 210 per cent, with less than 50 per cent increase of mileage, between the years 1907 and 1915, inclusive. The tonnage per train had increased to 102.6, or more than 200 per cent, during this interval, but it still is very low considering the light grades (seldom exceeding 1 per cent) and the heavy motive power and freight equipment on these lines. Coal constitutes the largest item of tonnage, amounting to about 335,000 tons, or approximately 20 per cent of the total freight handled, for the year 1915. A considerable portion of this comes from the South Manchuria Railway. Rice forms the next largest item and has increased from 63,000 tons in 1907 to 296,000 tons in 1915, or about 400 per cent. Lumber amounting to about 107,500 tons in 1915 is the next largest item, showing an increase of more than 150 per cent from 1907. Beans were the fourth largest item in 1907; the tonnage handled was about 31,500 tons, and in 1915 it was about 88,500 tons — an increase of nearly 190 per cent, 50 per cent of which, however, occurred in 1915. The other freight handled IS all of a very miscellaneous character. The mineral traffic, except I 182 B.AILWAY MATERIALS, BQITIPMENT, AND SUPPLIES. tliat in grapliito (8,250 tons), for the year 1915 amountod to only about 4,200 tons. lAMUNGS, llWWilS, ANB PROFITS. Tlie performance table on page 180 shows that the operating ratio has been reduced from 102.2 per cent in 1906 to 80.1 per cent in 1916, which latter year showed a profit of 1.28 per cent on the capital inTested. The change has resnlted from a steady growth of traffic, with close attention to operating efficiency, including iraprovements for increasing the trainload. With the increase of coal mining, the traffic that will result from the iron furnaces, and the general develop- ment of the other resources of Korea, there is little doubt that these lines will become increasingly profitable. lMPLO¥118 AND WAGES. The following table shows the number, nationality, and averat^e compensation of the employees of the Korean railways as of March 31, Bcpnrtment and na- tijoality of em- ptoyee. Direct or (engineer in chief}: JaiMinose (''''Cho- iunin"nuik).... 0'«npral department : Councilors;, Japan- ese ., Other Japanese Koraans O'fficials of *'Sonin"rank. NttBl' ber. Ax-'eRijfe monthly pay. l7!I Employees of "nainin"rank. Num- ber. A em- ptoyees. Average „ ! Average montlily j*l^' monthly pay. j ' pay. Class B em- ployees. Num- ber. Total , Traffic (icpartnaent: Councilow, Japan- ese Other Japttnese .Kore-Ans. 93.13 78.51 Average monthly pay." Total. Avern monthly pay. Nam-' -^^'■'^'ii* ber. I3»).79 Zi 23 139.33 69 1 m.92 S14.73 18.94 »7 9 7d 2 llii lf»5.75 81.99' — Total 10 1... 151 35. lii 8.36 2 LSI 774 19 H.20 ! 975 11.92 I 179 8.89 7.20 193 17.10 2 i l,90>i 498 151 Locomotive depart- ment : Engineer (''Cho- kunin"ranlc).... Other Japanese.... Koreans I { Chinese ! '» L... ;1,454 I ,..2,,40H ; 215.19 133.77 77 3ii. '05 Total 12.30 411 11 14.24 10.25 431 7 11.13 6. 66 9.85 1 1,021 442 [ 7 ' . ., If aintenanoe of way and works de- partment: Japanese. 19 I 108.21 Kore:m,s I ' , Chinese f ■ n 422 9u8 tl,471 i-i.i: 80 41.14 Total.. 19 80 Jbi J* 6 17.91 IJ. oO 1,1(0 1,4« 12.41 1,X?1 «i.82 jl,472 ' 8.17 5 278 .12,631 3,008 11-57 CHOSEK. 183 Peitrjl ment and na- Officials of "Sonin"rank. Employees of "nainin"rank. Class A em- ployees. Class B em- ployees. — , — "": — =a Total- tljimlity of em- ployee. Num- ber. Average monthly pay. Num- ber. Average monthly pay. Num- ber. Average monthly pay. Num- ber. Average monthly pay. Num- ber. A vera:; e monthly pay. " Financial depart- ment: Councilor, Japan- ese 1 3 f 145. 29 108.57 "■"57" "'m.il' 22 ""'ji6.*96" 8.77 1 224 22 Japane.se Koreans 137.22 101 Total 4 57 101 85 247 $22. 67 Construction depart- ment; Engineer ("Cho- kunin"rank)... 1 1 3 233.26 157.03 112.44 1 1 19 1 Councilor. Japan- ese Other Japane^se 9 42.04 4 1 14.40 17.45 3 7.2;i --•--•--•• Koreans ••-•--■••• Total 5 9 5 3 22 54.54 Ryuzan workshops: Japanese 2 127.95 13 37.85 32 20.22 369 620 16. 26 7.85 416 620 Koreans -••••- - -!•• Total 2 13 32 989 1,036 11.83 Taiden construction oflice: Assistant secre- tary, Japanese.. Assistant e n g i - ncers, Japanasc.. 1 157.03 9 8 37.00 37. 64 *** 1 9 8 62 17 Clerks, Japanese. . Other Japanese 18 1 is. 30 44 15.95 16 i 13. 69 6.86 •••---•-•• Koreans Tom 1 17 19 60 97 19.15 SUMMARY. Officials of "Cho- kunin"rank 3 6 6 8 1 33 246. 20 136. tj7 111.46 78.41 S7. 24 3 6 6 8 1 33 187 287 1, 359 J, 328 12 Counci lors , Ja pan ese Secretaries, Japan- ese Assistant secre- taries, Japanese... ..........1 Secretary interpre- ter, Japanese Engineers, Japanese. 125.1,8 I i 1 1 *■"*"! Assistant engineers, Japanese.. Clerks. Japanese Other Japanese em- plDyees Korean employees . . Chinese employees. . 187 287 39.46 36.24 ! 1,755 41 1 15.26 3.604 12.26 3,2S7 12 11.93 |. 7.14 : 8.31 ■•-----••HP Total 57 119.13 ! 474 i 37.51 1,796 li.18 6,903 1 9.79 9,230 12.93 From the above table it will be seen that the average monthly wage for all employees is S12.93 gold, wliich is S3.18 gold higher than the average wage for all employees of the Imperial Government Railways of Japan for the same year. The Ryuzan workshops and the Taiden construction office are given as typical situations. The summary includes the other construction organizations and the other workshops— one of the latter at Soryo (near Fusan) and one at Heijyo (Pingyang), having 377 and 177 employees, respectively. Since the date of the above figures there has been some increase in the percentage of both the Koreans. and the Chinese employed. lAItWAY MATERIALS, EQUIPMENT, AHD SUPPLIES. BOADWAT AND TKACX. ^ The ,Kel-Gi line from, Ryuzan, near Seoul, to Sliiiiffishu wm hur^ tat the Ime has smce been substantially recoiistnic ted with mixi mum grades of 1 per cent and maximum curves of 4° 30'Vnd wiXril structures permanent. Wliile the Kei-Fii Wim^^ orL!!!ii ^, *lf ^ located an/constmcted, i m accordance with the standards just Indicated, aS^^^TS Z^nZZiZt^'^^ ^r*' ^^ this^constmctiont^ iZ ml w l^t!^^^^^^ ^^^ ^''^'' ""^f ^**^«^ ?^^^^^ ^^ P*>int« wJiwe flood m atar dunng the rainy season damaged the roadway. In the oast Sr "" *" ^""^ ^''''^ ""^ '**'™*'«*'' ^*^*^^ delaying^ ^ The oth®r lines have been built largely on the final location but it IS the general practice to put in temporary structures and after the liM IS m service to put m the permanent stractures and to lift the mentTonS '""'^^ overcome the washing^jut tendency just The location of all lines is through fairly roueh countrv for railwfiir construction, and tWs fact, with the stendara'"of cons true titTnfo^ lowed,, has m,ade the hnes^ moderately expensive. A very consider- itirrZf llTf'"'^ *'*? been required, particularly on the main reouirod a great deal of tunneling and heavy rock work. About 235 mi es of track is laid with 65-pound rail, and all the Pemainder is laid with 75.pound rail. The general details of Lck work conform very closely to the practice of the Imperial Govern- ment Railways of Japan. Parts of the line are ballasted with broken ^ne, and the remaining parts with good gravel, some of which has been screened. The ties are an assortment of Japanese hardwoods •lapaaese o^aks, and tnnbers from northwestern Cho,sen. ' i«0€oiifcrri?Es* Of the 165 locomotives constituting the equipment March 31 1916 94 were of the tank and 71 of the tender type; of thrktter 9 were superheatera, .A very large percentage of these locomotives are of Amencan manufacture, although a number of the latest and lare^Psf mrere built at the Shakako works of the South Manchuria Rai W at l>airen. These locomotives are of the 4~6~^ type, and weiffh ^'^S^Plo^f Zl*^ tender, in working condition, about 240,000 pounds with 120,000-pound drivers. The cyMndere are 21 by 26 inches the diameter of the driving wheels is 54 inches, the boiler pressure is 180 l?ITl!' ^ 1 *^® ^""^'"^ ""^ ?^ superheater type. The South MancHuna Kailway now has an order in America for 24 locomotives a number of which are probably for the use of the Korean Railways! .PASSIMCSEE CAIS. The carriage equipment consists of first, second, and third class day coaches, as well as sleepmg, diniiM, mail, and baggage cars, for the handling of both the through and the local busmess. The largest Item of the equipment consists of 134 third-class care, with four- i wneel tracks, which seat 100 passengers per car. The next largest • CHOSEIT. 185 items are 47 second and third class cars, each seating 86 passengere, and 47 baggage and brake composite cars. A very large percentage of this equipment is also of American manufacture, but the tendency in recent years has been to manufacture this class of equipment in the Ryuzan shops or to obtain it from the Shakako works at Dairen. FREIGHT CAKS. The freight equipment is divided between open and covered cars, of which 557 are of the covered or box car type; 378 of these are of t^Ypical American construction with air brakes, 46 are goods vans with air brakes, and 24 are cattle cars with air brakes. Of the re- mainder of the freight equipment only about 10 per cent is equipped with hand brakes. With the exception of four water-tank cars the remainder of the freight equipment consists of open care, of which 78 are coal cars, 608 miscellaneous gondolas, and 342 small four-wheel wagons, which have been mostly used for construction work. There is very little special work equipment. In the past work equipment has been little used, hand labor being depended upon, but with the growth of business it would appear that special work equip- ment, particularly wrecking cranes, will become more necessary in the future. From the above it will be noticed that there were 0.194 locomotn < s and 0.336 passenger cars of all classes and only 1,60 freight cars, nc idl- ing work equipment, per mile of line on the Korean Railways March 31,1916. Tlieref ore the statement seems warranted that the growth of business to be expected in the next few years will inevitably require additional rolling stock. It is not probable that the existing condi- tion will be in any measure relieved by the consolidation of the man- agement with that of the South Manchuria Railway, which has no surplus equipment to take care of its steadily growing business. WORESHOPS. The main shops of the Korean Railways are located at Ryuzan, in close proximity to the general administration buildings, less than 5 miles from Seoul. There are also division workshops at Soryo, about 5 miles from Fusan, employing ordinarily from 375 to 400 men, and at Heijyo (Pingyang), employing from 175 to 200 men. The require- ments at Antung are taken care of in the South Manchuria district shojis at that point. The Ryuzan works are well arranged and fairly well equipped with modern shop machinery^ a large amount of which is from American sources. The number of men employed varies from 1,000 to 1,200, the usual number being about 1,100. In recent vears an increasing number of Koreans have been employed as artfsans and laborers'' When the writer visited the works in July, 1917, slightly more than 70 per cent of the 1,100 employees were Koreans or Chinese— a con- s tlerable increase, it will be noted, over the number shown by the table on page 183 for March 31, 1916. These shops are arranged to take care of all classes of repairs on the roiling stock of the Korean Railways, besides handling a very considerable amount of manufacturing of railway requirements for all departments. In addition, at the Ryuzan works a small number J» :r I i 186 EAILWAY MATERIALS, BQITIPMEXT, AND SUPPLIES. of passenger and freiglit cara are being constructed, the necessary parts benig purchased where they can be obtained to the best advan- OfFICIALS— PURCHASES. The director}^ of the principal officials will be included under the Korean section of the South Manchuria Railway Co. (see p. 272). In the early dnjs of the construction of the Korean Railways a large part of all the requirements was supplied from American sources, and a substantial part is still being so purchased when the articles are thus obtainable; but the operation of the Korean Railways has been very similar to that of the Imperial Government Railways of Japan and, so far as is practicable, equipment and supplies are obtained from Japanese sources, the amount increasing from year to year. More- over, there is a great tendency to secure supplies from America through lar^e Japanese commercial and engineering concerns, such as the Mitsui Bussan Kaisha, Takata & Co., Okura & Co., and similar concerns, all of which have well-staffed branch offices in Seoul. The policy It IS said, is to allow the Stores Branch in Seoul to purchase directlj such materials as can be obtained through the local repre- sentatives, but large general purchases will ordinarily be handled through the general purchasing office of the South Manchuria Railway ni. KOREAN LIGHT RAILWAYS AND TRAMWAYS. INTRODUCTION. The Korean light railways and tramways are of considerable im- portance. The following is a reference made to the subject in the an- nual report of the railwav bureau of the Governor General of Chosen for the year ended Marcn 31, 1916: The light railways and tramways sanctioned and constructed dnring the old Korean administration were transferred to the superintendence of the Government General of Chosen in October, 1910; the lines open to traffic at the time reached only 20 miles, while a length of 15 miles was still unopened. Before that time there w^as no law applying to these lines, so one was then issued concerning light railways in Chosen ana supplementary laws were issued in June, 1913. Since the fiscal year 1914 an annual sul)sidy of 6 per cent has been allowed to companies planning to lay down and work light railways according to the law, so as to assist and encourage the devel- opment of the work. The policy and tendency seem to incline decidedly toward the buil.iing of trunk and important branch lines as part of the govern- ment system of standard-gauge railways and the building of light railways or tramw^ays as a means of developing the country. Tliis latter class includes tramwa3^s in the cities and industrial lines, par- ticularly in the development of the mineral resources of Chosen. All these lines are considered as forming one general class, but they can be subdivided into the lines handling general traflic (including the city passenger tramways) and the lines that do not handle general traffic. These last receive no subsidies and are termed private lines. On March 31, 1916, there were 64.9 miles of general-traffic lines of all classes and 46.9 mUes of industrial lines, making a total of 111.8 miles. On this same date there were under construction 144.4 miles of the former and 21 mOes of the latter, a total of 165.4 miles. In addition, there is projected a very considerable mileage of both classes, which will be built in the course of time. There has been a great deal of difficulty in obtaining the necessary materials for constructing these lines and the rolling stock to operate them, especially since the exhaustion of the supply of 2-foot-6-inch- gauge equipment from the Antung branch of the South Manchuria Kailway, and it is very probable that the construction of the new lines will be materially retarded until prices become more nearly normal. For the year ended March 31, 1916, the revenues from the 64 miles of commercial lines amounted to $222,006 and the expenses totaled $153,696, leaving a profit of $68,310. The paid-up capital of these lines amounted on this same date to about $3,537,000, and in addition there seemed to be about $1,242,500 of other debts, making the out- standing capital obligations nearly $4,800,000. The coiLstruction cost and prnxhasing price of these lines on the same date totaled $4,202,275, which apparently is considered the equivalent of the construction cost. The profits for the year 1914 showed only about 187 188 :iail:wat materials, bquifmeht, and supplies. llL^^^T"* ''^^''™ "^^ *^^*5. ^*^^ ''''^ ^ 1^15 about 1.6 per cent aUowMg for some mcrease of cap tal obligations details of whLbT^ not shown It is not Btated on what lin^ CeZ^^^^^ guaranteed, but, w th the partial inforniatinii «f CnJ #1! « -^ ^n^, which would indicate the payment of a subsidy of 4 to 5 ner cent on such hnes as are guaranteea. This apphes to\oth 1914 w.^ Following are very brief references to some of the hnes on which the ivnter obtained Infonnation. KEIJYO (SEOUL) ELECTRIC CO. in Ch^osfS?™!?r ^"^ •''' I**^ '"f * important concern of its kind i^„-f ; ** operations include the supplying of commercial elec- tncity and gas for the city and suburbs of .Seoul (called KeSrobv ianS .-iiffr^A?!^,,'^ "^"^ purchased and takin over by Japanese capit^ After the company was taken over it was firat Sasliso Jfjf* ^r* ^'^r.- S^* P'^^°* P"d-up capital ^ Slf$T;0(;S;S5o"'^" ''^P"^ "^^^^'^-^ amounting^o Tppioxi- wlSfk '^f l^fLff^ ?f ''*"*^' '"^'^ 2^.6 miles of all track, aU of wmch IS of 3-footr-8-mch gauge. DetaUs of the earnings were not avaJable, but sufficient data were obtained to inXatelhlt whUe nof f^nlfr'™ T'.^^l^'^ "'^y **« P'«fit«We theZuiwayTl^e notcaroring their part of the mterest and dividend charges. mere is one power house for the genera] supply of current wifh one substation ]n addition for the convereioTo? tramX 00^^ LleSfer'Ss'cr^ f/' "ir'^ P-«Beng«r cri^mSS ana t) ta-aiier goods cars, and 2 sprinklers. Tliis rolling stock ifir-lnH unde? c«LZc^„^^i i^""' "^ •^."^y' ^^^^' ,*¥'« ^^^e 6 new cars ?„, Ik" i?i J 1 ° *? *?^ company's own workshops, the equipment (o buSmor'l''.±l'*^. ^r'^ '^"'="'^1 f™"" America^' It wrSd to buiid more cars, but these were held up on account of the difficultv "^ThlT^ ?q»fP?»??t «°d the high prices prevailSL "^*^ rhe tract is all laid with 60-pound T-raU A considerable part of WdSt-r'^ " "' '^'^"'^ manufacture, incluSg^^ll I ^rJ^Th.rHfil).'^ ^. company is at Tokyo, Japan, but Mr. :».., f TifP^*^^^ '^ *=^*^ en-meer, located in Seoul, and has eener J charge of the triunwayB, incluSing the handling of pi^chaseTtlat Ire made locaUy. Many of these are from the stroi^ Japan^e commerd^ s?e'i=ra'ar'" '" '"'"' "^ '^^"-^ *^ ^ eonixr^s ZENHOKU UGOT RAILWAY CO. ZS^^ *^ «nshu, where thi head office is LcateT The m^^^^ SdolS^ir^r^^ B 1146,335, with about 125,000 ofo the? capital oWigations. General commercial traffic is handled. The Hne CHOSEN". 189 has a small amount of equipment, consisting of 2 locomotives, 6 passenger cars, and 12 coveied and 9 open goods wagons. KOREAN GAS & ELECTRIC CO. The Korean Gas Co. now has 12.8 miles of electric tramway, of 2-foot-6-inch gauge, at Fusan, including a line to the Torai'Hot Springs. This same company operates the commercial electric and gas business at Fusan. The company now has $675,000 in capital shares outstanding, with about $200,000 of other capital obligations. KANKO COAL MINING CO. The Kanko Coal Mining Co. operates 8.8 miles of st^am line, of 2-foot 6-inch gauge, handlmg general commercial traffic, though the principal use of the line is the transporting of this company's coal to the nort of Seikoshin. The issued share capital is about $150,000. The nead office is at Kanko. KOREAN LIGHT RAILWAY CO. The Korean Light RaOway Co., with head office at Fusan, has in course of constniction four or five steam lines amoimting to about 115 miles of 2-foot 6-inch gauge. These lines are all in southern Chosen, in the general vicinity of FuSan, and about 25 miles are now practically complete. From the mformation obtainable it appears that this a)mpany has additional mileage projected. It is one of the concerns whose Imes will be built under the 6 per cent subsidy. This same company has another electrified Ime of about 12 miles of 2-foot 6-inch gauge, under construction from the port of Seishin^ in the northern part of Chosen, to Ranan, on the Kyojo-Kwainei mill- tary railway. From all appearances this concern is likely to take a very active part in buildmg subsidized light railways and tramwaya in all parts of Chosen. INDUSTRIAL TRAMWAYS The various minmg concerns have, as a rule, built and operated the industrial tramways for the handling of ores and fuel. The Mitsui Mining Co., of Tokyo, owns and operates the longest lme--18.5 miles of steam railway, of 2-foot 6-inch gauge, between Shmanshu and Kaisen, a short distance north of Fingyang (Heijyo). Mitsubishi & Co., of Tokyo, have under construction two steam lines, one of 10.3 miles and the other of 3.9 miles, both of 2-foot 6-mch gauge, and one electric line of 6.8 miles, of 2-foot 6-inch gauge. These are aU for the transportation of ore. M. Komiya, of Fusan, has 12.2 miles of man-power line, of 2-foot 6-mch gauge, for the transportation of ore between Kokan and Tokusuri, and there are a number of other small Imes. Mining development wiU probably brmg about considerable additions to the number of these small industrial lines. 1 i Part 4.-^MANCHURIA. I. GENERAL INFORMATION. Most of the features of Manchuria involvmg the transportation situation liave been covered in connection with the general features of China. It therefore seems necessary only to list the five railways that now exist and to call very brief attention to the products of Manchuria so far as these involve railway transportation. In con- nection with these railways one feature that will probably be of much importance in the future development of Manchuria, and has in the past been of considerable magnitude, is the shipping on the Amur and its tributaries, of which the Sungari is the most important. The Amur River drains an area of many thousand square miles of rich country suited to both agricultural and pastoral products and prob- al)ly containing considerable mineral resources, of which at the present time gold is the most important product. The five railways in Manchuria are as follows: South Manchuria Railway Co., 692 miles; Kirin-Chanojchun Railway, 80 miles; Ssup- ingkai-Chengchiatun Railway, 52 miles; Chinese Eastern Railway, 1 ,078 miles ; Tsitsihar Light Railway, 1 7 miles ; tot al, 1 ,9 19 miles. The first three lines are all of 4-foot 8i-inch gauge. The Chinese Eastern is of Russian standard 5-foot gauge, and the Tsitsihar of meter gauge. The second and third lines, although nominally Chinese Government railways, are actually feeder lines to the South Manchuria Railway and are largely under the control of the latter. The soya bean is produced in great quantities in aU of southern and central Manchuria. Millet is grown in its several varieties, of which kaoliang is the most important; its grain is used for food, the stalk is stripped for fodder, and the stalk and roots are used for fuel. In central and northern Manchuria the pastoral products are important. Lumber is brought down the Sungari River in considerable quan- tities, particularly to Kirin, from which place it is shipped by rail to pohits on both the South Manchuria and the Chinese Eastern Rail- ways. Much the larger part of the population of Manchuria is located in the southern and central portions. It is estimated that about 75 per cent is located in the general region served by the South Man- churia Railwaj. This territory was and is now served bv the native craft on the Liao River, which lies west of the main line of the railway from a point about 75 miles southwest of Changchun (to which point it flows out of the northeastern part of Mongolia) to the head of the Liaotung Gulf. In the past, during the navigation season a great amomit of traffic was carried by the craft plying this stream. This business was carried to Newchwang, where it was taken up by ocean-gomg ships. One of the handicaps in this system of transporta- m 192 BAIL.WAY MATERIALS, EQUIPMENT, AND SUPPLIES. the tiOE IS that the agricultural products can best be transported to t nver ports dunng the winter, but the river and the port of Newchwang CAii be navigated only durmg the open season of about six months- this means the stormg of large quantities of soya beans and m-ain during the sprmg months. The handling of this traffic by raflwav has made a great improvement m the situation, m that the o-ains can be transported immediately to the ice-free port of Dairen. This has resulted in the loss bv Newchwang of much of its commercial impor- taiice since the completion of the railway and the opening of the port oi x/ari6n« n. MANCHURIAN RAILWAYS. SOUTH MANCHURU RAILWAY CO. INTRODUCTION— EXTENT OF LINES. The vSouth Manchuria Kaiiway Co. is one of the most interesting and instructive developments in this part of the world. The conclusions that can be drawn from the working results are particularly significant as to what can be accomplished by similar methods in other parts of th^Far East, and attention will be called later to some of these points. ^ The mam line extends northwestwardly from the port of Dairen (formerly called Dahiy) to Changchun, a distance of 437.6 miles, of which 238.4 miles at the southern end is double tracked. At Chang- chun connections are made with the Harbin-Changchun branch of the Chinese Eastern and with the Kirin-Changchun line of the Chinese Government railways. At Ssupingkai comiection is made with the fesupingkai-Chengchiatun line extending northwestwardly toward northeastern Mongolia. The Mukden-Antung line leaves the main line about 5 miles south of Mukden and runs in a southeasterly direc- tion to Antung, a distance of 170.8 miles, where connection is made with the Korean railways. In addition, there are important branches, as follows: To the Fushuncoal mines, 30.9 miles; to Newchwang (Ying- kow), 13.9 miles; to Port Arthur, 28.9 miles; to the Yentai coal mines 9.7 miles— a total of 981.8 miles, not including the Liushutun branch of 3.5 miles. At the present writing no extensions of the South Manchuria lines are contemplated, but the proposed extensions of the Kirin-Changchun and the Ssupmgkai-Chengchiatun lines will, for all practical purposes effect extensions that will act as traffic feeders to the South Manchuria system. There has been much discussion concerning the possible acquiring by the South Manchuria Co. of about 75 miles of the south- ern end of the Harbin-Changchun branch of the Chinese Eastern Kail way, which would give access to the Sungari River and, by means of river transportation, to all of the Sungari and Amur River ports This would be a very valuable acquisition, and would probably add a substantial volume of traffic to both outbound and inbound shipments. --^^^^^ South Manchuria Railway Co. is not only an organization for the maintenance and operation of this railway property but is also a very efficient means by which the Japanese Government main- tains and operates an investigation, development, manufacturing, and transportation organization in Manchuria and Chosen, it is probable that additional branch lines will be built for the future development of the country. FINANCIAL STATISTICS—OPERATING RESULTS. The tables following present financial statistics and operating results of the South Manchuria Railway and its outside undertakings- values are expressed in gold. ' 106229*'— 1^ 13 103 lAItWAY MATERIALS, EQIJIPMEKT, AND S'UPPLIES. WORKINQ KESlfLTS FOR YEAR ENDED MAR. 31. 1916. ItfOtSi Main line railway , Mttkden-Antimg railway , . . . , „ , Total railwav Ftf amships and float ine cqnipimtti. .' .' '.'.'.'.'.'. Tmmwaj and ck'ctricaTeqiiipmeflt Mines , , HarlKirs aad wliftrTes fJas plants , , Worksliops iioie IS ».•-.-..••••••.•«.,...,,,*,.,,,, Land Land Improrements. Smidrj' 'bui diuRs For property taten owr from the JapamM O'Overameirt in lp07', . . , Sundry rectlpls and losses. General ijqwnaes and interest «i baiik depoalti- , Capital Invest- :nMnt. 124,750,692 13,234,125 Total Interest on debent ures Wiitliif oi' discount on debentum ismm 36,9S4,K17 2,517,2.Hl ■2,505,321 8,719,6:W. % 910, 745 712,919 3, mSi, 363 1,013,474 5,405,347 5,M5,«2 4i,SS(l,0(10 K^eceipts. 110,919,310 mi,ma le 1 I IP 1 i J,. ili!l|.>di! 031,330 57S,397 6,m5,088. 1,1I2,9» 122,070 756,613 Operat- ing ratio. Expenses and deductions Per cmu^. 31.6 63.6 BxpenMt. 13,446,817 628, 183 34.2 93.2 61.4 S4.1 83.9 •)% 12«l.3 72, 3M 180,805 4,075,000 60K,2:J7 360,770 5,304,475 957,976 67, 198 Profit and loss. 17,472,49.1 36.3,769 141,252 1,242,150 346, 717 1,582,296 7,836,262 2:i,095 217,627 1,000,613 184, 9 tt 54,871 -23,828 -4S,\508 -294,323. -1,372,491 125,934,310 21,827,334 67.3 14,686,071 Total deductions, l?wiitlorf«r... Deduftinnt. 12,774,108 ;»9,027 • per «nt dWdund on, salwcri'bers* .sliansi.... 2 per loent extra diiridwds m sutmcrllMn'' iltmiwi:,. ,.,..., , pt'ridands on JapaiwM' 6oii«ni.iiianit alans. Special resen^es, Meseo'e prescribeil by litw * * ' Bonus to officers Total incnine' dediicttons Balaneo' for' year carried to surplus 3,113,135 777,660 2i9,220 1,246.2.50 l,2Mi,2.-»0 201,407 149,550 7,141,261 4,028,121 3,880,337 147,791 PEEFORMANCE STATISTICS FOE YEAR ENDED MAR. 31, I9I«. I'tonu. M iin Ite. llileftofline open... , , Miles M all trades. ., ,.,..'"' M OBiibir' «f train miles ran. Niiniitar ol loeowiotiTO miles run Nnraaljer of ▼ehide miles nm.. , ' * *' ' N'um,ber of paascngers carried N'limbc* of passengers carried 1 mile I'.'.'.'.'.'.'.'.'.'. CiMching earmngs , Ear I lings p r passi*'nK(«r carried 1 aile * ", Average ride ,per passenger, mllid , Averaips mimlier of pmseogers .carriad per passenger train niiiie Xumtw ol im» of goods carried Number of tons of go«is carried 1 mile. , , (Jwxls earnings , ,, liarriiugs i>er to::i carried 1 mile '..'.'."'.'. A vrragc haul im't ton of goods, miles Ave nigO' nuuilxu' of tons of goods battled per gcwds iraui'mVlo! '. Ye-:irlr working recfipts per mile of open line \ esr y working expenses per :mlle «f open line 1 ftirly opt'raling income per mile of open line , . . . , , I'oarly transportatfoii and tmflc expense per mile Yearly maintenaiwe of equipment expense per aiile. .. Year y maintenance of way expense per mile '....'.'.'. 1 earty general railway expense per mil© , I otal yearly expense .per .mile..., , ' 521.0 '796.8 3,957,774 4,.'i70,iKM» 76,206,841' 8> BOO. 557 ■233, 567, IW' 12.185,481 10.00877 73.0 192 ,l03 1,173, 834, 902 •7.fOf»,»2 10.00673 193.9 371 '•20,959 tl4,34;i M,5»l tl, 163 SI, §26 1213 t6,616 Mukden-An- tung line. 170.8 125.9 747,760 7W,077 %88ai,f04 fli7,f7T 21^,846 1218,453 SO. 00950 38. 2 59 Total for year. 1,1M,734 112,487,947 1696.045 saoimM 80.9 215 S5,8oe wSf Hi o S2, 130 Sl,«74 S0I5 SI, 298 t3,678 1,022.7 4,705,531 «y351,877 85^092,747 3,7(18,165 255,261,946 I2.413,9!)6 So.a(m:t 68. K 167 7,44.3,817 1,286, 322, H49 S8, 604, 437 SO. 0Ofi6.H 172.8 352 S17,232 S.5, mf) 911,3-12 S3, 115 SI, 027 S20I *i,890 MANCHUEIA. 195 RECEIPTS, EXPENSES, AND PEOFITS FOR FOUR YEARS ENDED MAR. SI. Items. 1907-8 1914-15 Total railway revenues Total railway expenses ] I'rolJ ts from railway operations [.. "[['.[ Operating ratio percent. . Total receipts from all sources Total expenses of all kinds Total net profit r?om all sources S6, 249, 765 $2,572,962 13,676,803 4L2 S7, 727, 797 51,053,621 Sll, 573,536 14, 160, 12.5 S7, 413, 411 35.9 1915-16 1916-17 S8, 781, 418 122,268,302 118,509,068 13,759,234 $11,911,262 $4,075,000 $7,836,262 34.2 $21 ,'827, 334 $17,799,206 $4,028,128 $26,272,671 $21,233,984 $5,038,687 ROLLING STOCK. Items. Number of locomotives Number of carriages of all classes , Number of freigfatcars .,.. 1916 267 213 3,186 1917 270 219 3,194 TRAMWAY EQUIPMENT. Items. 1917 Itema. 1917 DAISEN TXAMITATS. Miles ofline open 25.58 50 10 rUSHUK TSAMWAVa Miles ofline open . 48.56 11 3 185 9 Number of passenger cars Number of motored freight cars Numl:>er of electric locomotives' .......... Number of passenger cars (motored) Number of freight cars (for carrying sand). Number of steam shovels. OUTSIDE UNDESTAKINGS. In addition to its railway mileage, the South Manchuria Railway Co., as indicated in the above tables, owns and operates outside undertakinp, with a capital investment of about $40,000,000, not including the value of the concessions and property turned over by Russia at the end of the Russo-Japanese war. The railway company maintains a research department with a central laboratory and a geological laboratory. The central labora- tory has eight divisions, as follows: Analytical and applied chemistry; tussah filature; dyeing and weaving works; ceramic; brewing- hygienic; electrochemistry; and experimental bean mill. The lab- oratory aims at pursuing the study, from both the scientific and the comi|iercial point of view, of the analysis of coal and iron ores in Manchuria, the employment of clay and siUceous stone as materials for glass making, the method of manufacturing salt, the uses of beans, the rnaiuifacture of pulp for paper from kaoliang stalks, the distilling of kaoliang spirit, the reeling of tussah silk, and the potentialities of tho botanical products of Manchuria. The geological laboratory is intended mainly for the investigation 'xnd analysis of the soil, mineral products, etc., in Manchuria and Alongoha, the surveys of which from a geological point of view have been practically concluded. A geological map and a pictorial table of mineral products of Manchuria are in preparation, and careful search is being made for all mineral products, particularly coal and iron. « 196 'RAILWAY MATEMALS, EQUIPMENT, AHB SUPPLIES. By further reference to tlie table on page 194 it will he seen that the mines., tramways and electric pknta, harbore and wharves, and gas plants are showing reasonable profits. The hotels are operated. at a small loss. The End operations show a loss, probably on account of certain entOT>rises that are undertaken for the development of the country. Hie largest item of loss is the one of general expense, which includes the investigations and developments going on m the researeh department and other similar expenses that are not being allocated to the Tsrious entei-prises directly. In addition to those mentioned above, further developments are under way, among the most important of which are the two 250-ton blast furnaces now in course of construction at Anshan, where later it is planned to erect a complete steel plant, particularly for the manufacture of ship plates and similar materials. In this general connection it may be mentioned that the Kawasaki Dockyards Co., of Kobe, has a shipbuilding plant at Dairen, and there are a number of other growing industries at this point, representing entirely Jap- anes^e enterprise and capital, HISTOttlCAL SURVEY— ORGANIZATION. A detailed history of the South Manchurian branch of the Chinese Eastern Railway and the South Manchuria Railway Co. since its acquisition by the Japanese would be entirely too long to be included in such a report as this, but the principal facts will be briefly stated. The ine from Harbin to Port Arthur and Dairen was built by Russia under the terms of the supplemental agreement shown in appendix No. 2. The track was all standard Russian 5-foot gauge. One result of the Russo-Japanese war was the surrender of the line south of KwancheiiFtze, a point about 2 mies north of Changchun, to Japan. The field railway department of the Japanese Army adminis- tered the property until AprO 1, 1907, on which date tfie railway and all the outside undertakings, including the coal mines, w^cre turned over to the company, which had already gone through the following formative process: On June 7, 1906, an imperial ordinance (No. 142) was issued concerning tlie establishment of the South Manchuria Railway Co., and on July 13 of the same year Gen. Viscount G. Kodama was appointed president of the organization committee, «ompo3ed of 80 members. But, in consequence of the death of Viscount Kodama, which occurred on July 24, Viscount Terauchi, Minister of War, assumed the presidency on July 25. On August 1 the Government forw^arded to the committee the conditions pertaining to the establishment of the South Manchuria Railway Co., and after the forination of the company had been pre- pared by the committee on the basis of the imperial ordinance and in a-;x*ordance with the conditions of the Government, the articles of association were approved by tlie Government on August 18. The authorized shai'e capital w^as 200,000,000 yen, par value of shares 200 yen. The right to hold shares was limited to the Imperial Japanese Government and the Imperial Chinese Government, now the Renublic of China, and subjects of these two countries. It is arobable, however, that very few, if any, of the shares were ever leld by Chinese. For the property turned over, the Imperial Japan- ese Government received a total of 500,000 fuBy paid-up shares, or 60 per cent of the total amount authorized, fhe subscribed stock MANCHURIA. 197 { under the provisions of several articles is granted 6 per cent divi- dends, and in June, 1914, a revision of the articles of association per- mitted the payment of an additional 2 per cent if 2 per cent was paid on the Government shares. At least one-twentieth of the net profits are to be set aside as a reserve fund until this has reached one-quarter of the authorized capital, and dividends on the Govern- ment shares are limited to 5 per cent per annum. Instead of paying this amount it appears to be the general policy to retain an amount equal to the dividend paid on Government shares, usually 2i per cent, m the form of a special reserve. In addition, the Imperial Government of Japan guarantees interest on debentures, of which there are now outstanding £12,000,000 ($58,398,000 gold), one-half paying 5 per cent interest and the other half 4i per cent. The arti- cles of association limit the amount of debentures that may be issued to double the authorized outstanding capital shares, including those held bv the Government. The board of directors was originally composed of a president, vice president, and at least four directors, with from three to five auditors, but the recent reorganization, now in effect, provided for a board of directors with a director in chief and four directors at Dairen and one director at Tokyo, as shown by the directory given on page 270. The president and vice president formerly were, and the du-ector in chief now is, appointed by Imperial sanction. Tlie directors are appointed by the Government from among the share- hokiers and the auditors are elected by the shareholders. Baron Y. Goto was appointed president, Mr. Z. Nakamura vice president, and Mr. S. Kunisawa leading director in November, 1906. In July, 1908, when Baron Goto was appointed Minister of Com- munications, Mr. Nakamura was raised to the presidency and Mr. Kunisawa promoted to the vice presidency, both of them remainincr m office untd December, 1913, when they were succeeded by Dr. JVomura as president and Mr. D. I to as vice president. They in turn retained office until July, 1915, when they wwe succeeded by Lieut. Gen. Baron Y. Nakamura as president a«d Dr. Kunisawa as vice president. This arrangement continued untd the reorganiza- tion and consohdation with the Korean railways ; at that time Bai-on Nakamura retu-ed and Dr. Kunisawa is now director in chief. On July 31, 1917, the administration of the Korean railways was consolidated with that of the South Manchuria Railway Co., but since that time the organization has been modified in several ways untd It is now as indicated by the directory (see p. 270) ; it is complete for nandimg not only the railway operations but all the outside un- dertakings ^as well. The administration of the Korean railways is known as the "Korean section." The working of this entire arrangement seems to be very satisfac- tory, and, in view of the growing financial success from year to year It would certainly appear that the organization methods"of the South Maiicliuna Railway Co. can be studied with much benefit in relation to their bearing on other similai- situations in the Far East. While this organization conforms to the departmental system characteristic ol government railways, and there is not a distinct commercial de- partment, there is nevertheless a close and thorough study of the traffic, including the means of meeting developing conditions. This last IS a special feature of the selling of transportation in any part ii lAILWAY MATEBIAL8, ■^BQ:IFIFM«:HT, AH0 SUPPLIES. of the world, bat is the one mmt fp«|iien% lacking in the govem- .mcat operation of railways'. OPBKATIMC METMO'HS. The method of train running' conforms, strictly to tlw 8tation-m,aster system 'already referred to in connertion with '"the Japanese railwa^ys. All signaling is d'Oiig the lines of the British Board of Trade practice and is al very limited, hotli for signals and interlocking. The same remarks conferning modern methwls of signaling and selective tele- phone apparatus for central control apply here as in coimffction with the Imperial Government Railways of tlapaa. .QIVIHllllIllff . ■€»i«T«iic»ioii emm and The tables on page 194 show the general statistics for the main lino and branches as one group and for the Mukden-Antnng' line as. an- other group, with a summary for the whole, for the .year ended M.arch 31,, 1'916. In the .column **Capit.al investmenV' the item of I49,.850v000' rejpresents the T,aluation put on the property taken over fro.m the .Russian Government at the end of the Kusso-Japanes.© W.ar,. and in this la included .all the oth.ex property rights and con- eessiom as well .as the railway., which had been changed from th© Kussian 5-foot gauge to the .Japanese 3-foot 6-inch gauge during tho w,ar. ^ This^ also included the 2-foot 6-inch gauge ■military railway, which h.a8 since been recons. true ted .into the Mukden-Antung line. There .apparently has Wen no effort to aiocat.e to the different under- takings the division of this valuation of the original property. The other items in this colu,nin show the ciipit.al expe.nditures on the various u.ndertakings. The raOway expendit'ures include tlio expenses incurred in changing the main line and branches from 3-foot 64nch to 4-foot 8|-in.ch .gauge' and the reconstruction of the Mukden- Antung line into the present standardiacd, gauge, which involved the practical rebudding of this entire line, mostly on .new location. Without attempting to .allocate the original property the capital investment of the main Miie .avcr^es. .$47,505 per mile of line .and of the .Antu,ng line 171,630,, or |.53,4.S0' jjiar .mil.e of li.ne for the entire system.. Outside of the .Bairen and Port Arthur harbors and towns there w.ffls. not a great deal of actual property other than that of the railway, and whOe the mim..ujg concc!ssio.us were of great value there was very Mttle actual plant when t.he Japanese acquii-ed the property. The mining plant at the .Fuahun coal m.iiies is modern and up-to- date in even- respect and has ■'heen .iitotalled entirely by tlie South .Manchuria Kail way Co. These same remarks applv to the other undertaki.ngs of this most excellently equipped property, especially tile Shakafa i workshops .and the .Dairen trauiw.ays mid electric light and gm plants. TtAf .riC AND BATia.. The South Manchuria Railway is one of the exceptio.ns in this' part of fi f the world to the .rule tliat passenger earnings, at the start exceed pciglit earnings. The freight earnings of tlie South Manchuria Railway have iil.ways largely exceeded the passenger earnings. The ijerformance statistics show passenger earnings per mile .as less than 0'.9 cent and average e.arn.ings per ton mile of freight as less than 0.7 cent, with the very low m^ of 0.625 cent on the Antung MANCHURIA. 199 liiie^this latter condition probably bein^ due largely to the prefer- ential rates for freight via tlie Korean Railway and this line on sliip- ments between Japan and China, in connection with which there s a reduction of one-third of the usual Chinese customs duties when tlie goods enter Mancluiriii at Antiing. Passenger fares, whil(^ called first, second, and third class, wore in reality, first, third, and fourth class, and the rates formeily wcit^ f>, 2.7, and 1.8 sen per mile, but in October, 1917, these were changed to 5, 3.5, and 2.8 sen for first, second, and third class passengers, ami tliere was established what is the equivalent of the coolie fare on some of the Chinese railways. While the freight handled' is very varied, coal constitutes the largest single item, amounting to about 2,500,000 tons from the Fushun and Yentai mines and about 300,000 tons from the Penchihu mines. The next largest and most important item for the country as a whole is the soya bean and its products. One feature that is being worked out with particular care is the warehousing of goods, both imports and exports. This feature was taken in hand under orders from the Japanese Government in October, 1908, and while it was fairly well handled at Dairen it was not well provided for at the other stations along the line. Improve- ments, however, wore made from time to time. In September, 1911, regular warehouses were established at Dairen, and since then 25 or more subordinate warehouses have been established along the line and an arrangement has been instituted for insuring the stored goods. This has had a very beneficial effect on the general commercial business of this enture region. BAKNmGS. EXPENSES. AND PROFrTS. The table on page 195 shows that, with an increase of about one- third in the mileage (almost entirely on account of the opening of the Antnng line), the earnmgs have almost doubled during the nine-year period from 1907 to 1915, inclusive. During this same period the operating ratio was reduced from 41.2 to 34.2 per cent, profits from the railway operation more than doubled, and the results from all sources increased nearly five times; at the same time increased amounts were set aside lor special revenues. The detailed results for 1916 are not available, but for that yeai the amount retained for discount of debentures was double that for the previous year, and an 8 per cent dividend was paid to the shareholdei*s. The special reserve fund on March 31, 1917, was $7,926,150, while the amount actually required by law is only $1,113,727. During the period above mentioned, substantial improvements have been made m the condition of the property. From these performance figures it is quite obvious that, not- withstanding the amounts being expended in developing the outside undertakings, this corporation, as a whole, is becoming very profit- able. The area served is not at all densely populated as conditions go in the Far East, and this part of the country is of only the average productiveness for China. Therefore one seems warranted in calling attention to these results as an example of what can be accomplished by ably operated railways m other parts of China. BAILWAY MATERIALS,, BQ,IJIPirE'NT, AKD SUFPUEa RB9ULTS or O'OTSIDE DNDEtTAKINGa. The outside iiii,der takings of tlw corporation are of great impoi-t- aiice. It is difficult, to dotermiiio tlie order of tlicir i,mj)orta.nc-(\ hut at present. !lic» eoal mining is proliably first (as shown by ihv tiMv on page 194) and is now returning tlie largest profit. The sliipping lines, liaihors, whnrves. tramways, el(H:*tiicity and gas plants, and 'work- shops are all very important, and one of "the importimt. future develop- ments will l>e the iron mining and smelt.ing and the st^eel manufacture for which plants are now in eouree of construction. While the land enterprises show a loss from operation, it is largely through tliis medium that the agiiculture of the country is being improved. Tlie tramways include only those at Daw-en and Fushun, and the only gas plant is at Daircn. Tlie electrical undertakings include the furnishing of com;mercial electricity at Dairen, Mukden, Changchun, Antiing,, and Fushun, with othere contemjjlated. The hotels are those at Daiien, Hoshigaura, Mukden, and Changchun, and the lour Korean Railway hotels at Seoul, Fusan, Shingishu, and Diamond Mountain. The land department includes the management of th© railway area. The company, while assuming the obligation of pro- viding the noojssary arrangements lor education, public works, hygienic welfare, etc., in the railway "area, was, on the otiier hand, empowered by the Government to collect a house rate and other necessary assessments from the residents in the railway area— subject to the Government's sanction— in order to recoup the outla3-s. In 1907, when the company took up the management of the rail- way area, there were settlement councils at various centers along the railway. The company thought it expedient to utilize them to act as Its agents, but discontinued their exiMrimental- utilization in October of the same year. The company established, instead, district agencies at Liaoyang, Mukden, Chaiagchun, and four other places. At present district agencies are maintained at the following 11 railway towns: Dairen, Wafangtien, Tashilikiao, Liaoyang, Mukden, rieHmg, Kaiyuan, Kuiigchuling, Changchun, Pencliihu, and Antung. In addition, there are model industrial towns at the hhakako workshops and the Fushun mines. Eleven other towns •'^ ^™g ^4^1*^^' some of which are now well toward completion. rhis administration includes the operation of markets, slaughter- houses, vegetable farms, various kinds of welfare establishments, hospitftls, sanitation and fire departments, amusement parks, and very complete arrangements for the schooling of all Japanese chil- dren m the railway area. In brief, conditions are made as attractive and as profitable as possible for the Japanese emplovees in the •dnimistration and operation of all the railway company's under- takings. The environment of the Japanese section of toe mining town of Fushun is probably equal, if not superior, to that of any other place in the world where nearly 7,000 tons of coal are mined per day; this condition is particularly noticeable when compared with that at the coal-mining centers in Japan, .■MKOYBIS AND WAG.I8. The writer was not able to obtain information that would make possible sucii an an.alysi8 of wages as m^as given for the Japanese and the Korean railways. On March 31, 1915, there was a total of MANCHUKIA. 201 22,833 officials and railway and general emplovees (this does not iiiclude such enterprises as the Fushun mines). 'Of tliese 4,714 were ofRcials and 18,119 were termed employees. Of the latter, 8,443 were Japanese and 9,676, or more than '53 per cent, were Chinese. In the 1915 number of a small publication put out by the South Manchuria Eailway the following significant statement is made: • Lhinese coolies are being hired in place of Japanese laborers for the dual reason that the former cost less and are more convenient in dealing with Chinese customers." In July, 1917, more than -70 per cent of the employees of the Shakako works were Chinese none of whom were employed in the administrative, technical, or "over- head-expeiise" positions. The writer was informed that the per- centage of Chmese in tlic wage positions had materially increased since March, 1915. It is safe to say, however, that the wage em- ployees are not paid any higher, and are probablv paid lower" wages than similar employees on the Korean railways. One reason for this IS the larger percentage of natives employed on the Manchurian railways. At the Fushun mines before the war, the daily wage of the Chinese miners and laborers averaged 25 gold sen (equal to 12.^ cents United States currency) per day. It is now 30 gold sen, and while this IS an increase in the railway area of Manchuria where Japanese money is the prevailing currency, outside this area it is not actually equivalent to the former wages on account of the increased price of silver m the last two years. The writer made an effort to compare the wages in the Dairen shojps with those m the Tangshan shops of the Chinese Peking- Mukdeii Railway, and his conclusions were that the wages of artisans and laborers were practicallv on a par in the two establishments although m some respects the Tangshan shops probably pay higher wages, ROADWAY AND TEACK. The country traversed by the main line has no particular diffi- culties for railway building, and the line is of low grade, well located and substantially built with permanent structures. The bridges are capable of carrying heavy equipment; the track is laid with heavy rail well tied and ballasted mostly with broken stone. Tlie Mukden- Antung line runs through a much rougher country than the main line, and the location and construction were more difficult and expensive; it is, however, well located and substantially constructed and while some temporary locations were first used these have been largely replaced by reconstructed line, most of which has now been completed. There are 24 tunnels on the line, the longest being about 4,900 feet and the second longest about 3,250 feet. A great deal of bridging was required for the line, there being a total of 205 bridges and 213 culverts. ** 'i here is also a very considerable tendency toward standardized track practice and the manufacture of much of the roadway and track material at the Shakako works where all of the structural and bridge work has been taken care of for some time. Much of the existing track material has come frem American sources, and the track construction, in general, is practically along American lines As on the Japanese and Korean railways, considerable trouble has been experienced in some places with floods damaging the roadway I: I lit 202 EAILWAY MATERIALS, EQUIPMENT, AND SUPPLIES. li. IP' but much of this danger, particularly on the Antung line, has been nlf.^«™^ ^ judicious grading changes in raising the track at such LOooMonvn. Tlic number of locomotives averages 0.4 per mile of line. Of the iLtlZ"!^^^^^' .* '^^^ number arc of American manufacture, borne of the largest and most recent were built in the Sliakako works- most of these were 2-8-0 freight locomotives with 1^3,000 nounds onort^"'''* drivers, weiglit of engine and tender complete about ^>J2.)00 pounds, 180-pound boUer pressure, and superheated At present the South Manchuria Railway has 24 locomotives on order in America, but it is probable that the greater number of these are mtended for the Korean section, which % not so well equipped with motive power as the main lines. There were also in course of w^o W'„„T ^''/^'^ yiter visited the works, 9 locomotives, which were largdy mtended for the Korean lines. In addition, 4 iocomo- tiv^ were m course of erection for the Ssupingkai-acngckiatun line. 1 he present electnc locomotive equipment for the Fushun tram- ways was erected at these works. Several additional electric loco- motives were in course of construction in 1917. Most of the enuip- ment had come from American sources, but three smaU locomotives had equipment that came from Germany before the beginning of the Oii,e rather interestbg feature regarding the 2-foot 6-inch mum mllum stock of the original Mnkden^Antung line, which consist^ of Ml locomotives, 15/ passenger c^are, and 3,727 goo^da. wagons has been their use for the light railways in Chosen and also, to a certain extent, in Japan. Tins supply is now exhausted, however, and additional equipment miU have to he obtained by purchase from other sourcra, *^ ^ Tliese jines have about 0.3 passenger car per mile of line, which eonsidenng the amount of business handled, is below normal This equipment, however, is well adapted for handling the traffic. Most of the equipment is of American manufacture and is aU along tlie Imes of American standard practice. In the last three or four vears liowcyer, a considerable amount bas been built at the Slmkako works' mcludiiig two steel under-frame dining cars, three combination coaches r!^;.fr^-''Tl •'ll.T ^W«' f"sj ^^^ "^^^ tJie writer visited tiie works in July, 1917, additional equipment was in course of con- Mi-uction, .includuig^ 10 passenger cars, and 60 freight cais for the '^JJPingKai-aiengchiat^ hue. pr.nll.^^*?t^"!T' f^^ *'^". "f I^^'^j^^ *^« '«^t substantial eciuipment that has been built m the Far East. The under frame is entirely of steel, robustly coiistructed and designed to take all the draft strain tJiroiigh the center longitudinal girder. Tlie trucks are of six-wlieei Fullman type; tlie couplers are Buhoup automatic three- stem,; qmck-action automatic air brakes with 18 by 12 inch cyhnders are _used ; the cars are electrically lighted and steam heated from the eimoe; the wheels are 36 inclies in diameter and are steel tired with Biild steel plate centers; and the journals are 5 bv 9 inclies. The general dimensions ,are m follows; Lengtli between coupler kuuckle faces, 80 feet 3 Miches; height of coupler center, 2 feet 11 inches; heio-ht MAWCHURIA. 203 0f the floor top from rail, 4 feet 5 finches; extreme height from rail, 15 feet H inciies; extreme width, 10 feet 4h inches; car body, out- side length, 72 feet 7h inches; outside width, 10 feet IJ ioches; truck wheel base, 10 feet 6 inches; total wheel base, G7 feet. The tare weight of these cars is 122,000 pounds. FREIGHT CARS. The freight equipment of all classes averages 4.7 cars per mile of line; this figure, with the amount of business handled, indicates that the equipment is being worked to full capacity. There are 5 refrig- erator cars, 18 oil-carrying tank cars, 119 caboose cars, 215 100,000- pound-capacity coal cars, and the remainder of the equipment con- sists of 60,000-pound-capacity covered and open cars, a considerable inimbor of which are gondola cars for handling coal. All this rolling stock is equipped with automatic couplers and air brakes. The wheels are all :il^ inches, chilled cast iron; they are now being pro- duced at the Shakako works, which are also producing steel cast centers as required. All freight cars are equipped with four-wheel trucks, A very large part of this freight equipment is of American manufacture, but the Shakako works are turning out an increasing amount each year and are reducing the percentage of parts and materials required from the outside. WORKING EQUIPMENT. These lines have a small amount of working equipment, most of which is now in use at the Fushun mine, where there are now in service nine steam shovels and one drag-line dredge, as well as a considerable number of Western side-dump cars. There is very little wrecking and similar equipment on the other parts of the line. The harbor department has a small amount of dredging equipment and barges — ^used entirely in the construction and maintenance of the harbors at Dairen and Port Arthur. WORKSHOPS. special attention has been given to the matter of workshops on these lines. In addition to the Shakako works, near Dairen, which have already been referred to repeatedly, there are additional dis- trict shop fficiiities near the Dairen wharves and at Liaoyang, Kung- chuling, and Antung. There are also equipment-handlmg facilities, or what are teimed '^running sheds," at Changchun, Penchihu, and several other points, in addition to considerable shop equipment at Fushun for taking care of both the coal-carrying railway equipment and the so-called tramway equipment (particularly electric locomo- tives) for the switching work around the mines. All of these shop facilities except the Shakako works are for taking care of the running situation and are arranged only for the making of current repairs. The Shakako works are, however, the most important in the Far East to-day from the standpoint of the manufacture of railway equip- ment. The shops of the South Manchuria Railway were originally located in Dairen, but these quickly became inadequate and the present site, comprising about 400 acres of well-adapted land about Z-'UtI lAILWAY MATEEIALS;, IQUIFMEHT, AHB SUPPLIES. 4 miles from, Dairen, in close p,roxim,ity to the main line, w,as selected and the D'aireii tramways were extencled to the main entrance.. The general arrangement m a model in many respects. Some parts, particularly the locomotive shops, conform dosely to the Phila- delphia & Heading shop at .Reading, Pa.., the plans of which were followed m general The plant consists of a very complete and well- equipped machine .shop, engine-erecting shop with one 100-ton and two 30-t.on overhead cranes,, smith and forge shops, iron, steel, and brass fo'Undries, complete samTiiill and woodworking shops, passenger- car shops,, inclnding a well-designed paint shop, and ,freight-car shops, witli. ,a,ll the necessary facilities in tlie way of electrical shops, general stores., power house and lightning plant, and the shops' own system of watenvorks, inchiding fire protection. In brief, the shops consti- tute a xeTX complete general manufacturing })lant for the production of all kinds of railway equipment and materials, including roadway and track m.ateriab, especi,ally bridge work and fabricated structural materials. During the last three years the works have designed and built three meter-gauge locomotives for the French Indo-China rail- w.ay8. 'They ,li,ave also built some large lathes, more than 50 of which have gone to the Bussian Govem„ment and a number of which ,have been sold to concerns in the Osaka industrial district of Japan.. Tliey have handled ai the lieavy castings and fabricated all the requirements for the new 150-toii blast furnace at Penchihu and are furnishing all the materials for the two 250-ton blast furnaces and steel plant now under construction at Anshan. When the writer visited the works in July, 1917, there was in course of construction a large amount of fabricated and distilhng equipment for a new oil refineiT being built in the northern part of the main island of Japan. In July, 1917, there were about 4,160 employees of all classes, of whom 71 or 72 ner cent were^ Chinese— all employed in the wage occupations. All salaried, administrative, and technical positions ,are_ occupied by Japanwe, .as is also tlie case with all supervising positions, such as those of foremen, gang bosses, and sim,ilar employees who have to do with keeping the .m,en busy and on the move. The writer was particularlj' .impressed with the .fact that the men .in all departments were busily engaged. A. visit to these works affords very convincing proof of the canaeity of the robust northern Chinese to make good workmen in such shops, especially in molding of all kinds, in fabricating and erecting work, and m machine-tool men. One interesting featui-e^ in the engiueerkig o.ffice was the large per- cent.age of Japanese girls, employed in m,ak.ing tracings and dohig some of the less difficult drawing.. General sanitary '0on'di,tion3 in these works are excellent, and, in add,itio.n,, there is near by a model town which was first arranged to take care of Japan^ese employees, but to which additio,ns have been made to take care of a portion of the Climese, particularly those with fa.milit«. There are now nearly 1,000 dwellings in this colony (sm.all but substantial and comfortable); water is supplied from the shops waterwo,rks; gas is furnished from Dairen; and many o.f the better houses are electrically lighted. There has grown up also a co,nsid- erable population imm.ediately outside the Emits oi the model vil- lage; the latter .has been extended to take care of some of this growth, and probably will be extended further in the future. Alto- getlier, this model town is a most unusual feature of this part of ihQ MAKCHUBIA. 205 world; but, like similar towns in other parts of the world, it has obviously proved its value to the company as well as its benefit to the employees. The directory of the principal officials of the South Manchurian Railway, including the Korean section, is shown in order on page 270. PURCHASES. Both the South Manchuria Railway and the Korean Railways, as already stated several times, have purchased much of their equip- ment, materials, and supplies from American sources. A consider- able part of this business has been handled directly through American concerns. Many of the requirements in the future, particularly in the way of special parts and materials, will no doubt be supplied from the United States, but much of the business will probably ba conducted through the strong Japanese commercial and engineering concerns with well-staffed branches at Dairen, such as the Mitsui Bussan Kaisha, Takata & Co., and Okura & Co., all of which have strong American connections. There is no doubt that this practice is steadily growing both in Manchuria and Korea, as well as in Japan proper. There is also, however, a great tendency for these concerns to represent Japanese manufacturers who are in a position to make delivery. The latter will doubtless be given preference in awarding the business, when other things are equal, even though the prices for the Japanese products may be liigher than for those from other Bources. One particular part of the business that will probably be of considerable volume, if followed up, will be the furnishing of the special parts and materials for the equipment to be manufactured and erected at the Shakako works. Purchases are negotiated principally by the stores department at Dairen, although it is stated that the Korean section will continue to make purchases of articles that can be obtained locally along the line and from the concerns with branches in Seoul. In some in- stances purchases are handled through the Tokyo office, but this is only in special cases when the business can be conducted to better advantage with concerns in Tokyo that may not have special repre- sentatives in Daii'en or Seoul. EIRIN-CHANGCHUN RAILWAY. LOCATION AND EXTENT. The Kirin-Changchun Railway, while nominally a Chinese Govern- ment railway, is now actually under the control of Japanese interests, through the management of the South Manchuria Railway Adminis- tration. For this reason it was shown under a subheadfing in the Chinese Government Railways tabulation, was not included in the s(\ oral statistical tables of these railways, and is now shown as one (*f tlie railways in the area of the Japanese "sphere of influence'' in Manchuria. These same remarks apply to tne Ssupingkai-Cheiig- chiatun Railway, immediately following. €*onnection is made with the South Manchufia Railway at Ciiang- chun, where the latter company's central passenger station is used; this station is also used by the Harbin-Changchun branch of the Chinese Eastern Railway. The present line extends in a general easterly direction about 80 miles to Kirin, the capital of the Man- ■Zll"tj lAILWAY MATEBIALSj BQIUPM'EyT, AWD SUPPLIES. clmrian ■extension i,s made wi jinm of Kirin. 'Tiie teniiim» at Kirin includes an tte banks of 'tlie Simgari River, where' freight connection river triific. Altlioujrh linesJiad preyiouslv been suggested to Kirin, particular! v o!u^ oxtension of the Pekmg-Sfukdon Railway, this particular line was first proposed in 1900. Work was not sturted, Lwever, until n\ I .2^^^i .^? ^*"® T®*' ^^^^^y ^P^'»*^ ^^^ gmeml traffic in * *''T.->t)(T, 1912, but this was done with some temporary construction <>i:i' part of winch is not .yet completed. ' ' CONSTKITCTWN COST AN© INVtSTM'ENT ASSOTS. Mr. G. A. 'Kvle in his study of the construction cost of tlie Ohineso ifovenimcnt, Railways, shows the cost of this line as $78,261 Mcx per mile of line. Tins, however, does not represent the final cost. on tccoiint of the expense still to be incurred in building about 4 miles of line on the final location, including a tunnel 3,000 or 4,000 feet in length. 'The consolidated report for 'the Chinese Government Kailwajs for 1915 showed the total cost of road and equinmeiit earned t:o the balance sheet as 16,193,595 Mex., but this has been increased, somewhat since that date on account of the completion' of a small amount of ttie construction and the purchase of nine loco- motives from, America, rmma amd cwwrr'HOL. «i^?i^^^"S!i"*i ^*^%^^"'^^ partly with funds from a 2,150,000 yen (11,071,- io gold) loan from the lokohama Specie Bank (Japanese) and the rem,ainder of the funds^ was furnished by the Chinese Gov- em/ment from other sources. In the latter part of 1917 a further lo,an was negotiated bj the Clunese Government with the Yokohama hpecie Bank, the total amount being 6,500,000 yen ($3,240,250 gold) ; this includes the former loan of 2,150,000 yen. Tliis loan is for a term of 30 years., was issued at 91.5, and the rate of interest is 5 per cent per an,nnm The property and .revenues of this railway a,re security ,for the loan, although it was -never stated that the loan was made for further development of this line. In the announcement of this loan the followirg statements were made: .Diiriiig the term of the loan the South Manchuria Eailwav Co. shull be intniBted r!firl^'r«S!T'**''* t ^^ ^'^"^ ^"^^^ ^^ "^^ "^^"^'^ 2 pm cent ol tlie not The (, twese (,ove,rnment AaD, appoint a director to Biipervifle' all affairs of the railway The SoMh Maiichom PaiUy Co. Aall ,appoint cliiefB for the en^iJeri w trapsportation and accoiiiite de^partmeiitu, one of wLm almll represent, the Japanew baiikere and ,Aall have full pom-er to ,act in accordance with the stipulationfi 1?^ H there is aiiv mportiint affair to lj,e considered, the representative of 'the Jai>ai esa l:aiiker8, mil liave to coiKilt the Chinese director beforihand. J^iu^eso Therefore, although this is nominally a Chinese Government line I'i'cler th,e direction of the Mnistry of Communications with ' a ^ T'*-T ^'^^mm diiector ,in general charge, it will in fact hecome a, ieeder to the bouth Manchuria Railway, being to all intents and purposes under Japanese control. By tliis arrangement the road will no doubt be efficientlj managed and the property improved and developed,. * * •? i MANCHURIA. EXTENSIONS SUGGESTED. 207 Various plans and suggestion^ have been made for extensions of tlie Kirin-Changchun Railway, and without doubt one of the objecte of the loan just mentioned was to prepare the way for the utilization of this line as part of a system of lines, one of which will be the Kirin-Hweining Railway, discussed on page 208. Another line likely to be built may follow the Sungari River for a short distance and tlien turn to the northeast; it will probably be extended to the headwaters of the Hurka River and follow this to Lake Birten or Ninguta, in which neighborhood a turn to the southeast would be made, with the line running to the Tumen River in northeastern Oiosen and then to the port of Seishin or Keiko. From Ninguta a line would probably be built to connect with the Chinese Eastern at Harbin. Tliesc new lines would total several hundred miles of rail- way—much of it througli rather rough terrain and a considerable portion through well-timbered country, the products of which will be much in demand in this part of the world in the next few years. TRAFFIC. The business of this line at present is about 40 per cent passenger and 60 oer cent freight, and, with the development of the country and further extensions, no doubt the freight traffic will increase at a greater rate than the passenger business. Agricultural products constitute about 60 per cent of the present freight traffic, lumber 20 per cent, manufactured products 15 per cent, and mineral products 5 per cent, animal products being negligible. EARNINGS AND EXPENSES. The gross earnings for 1916 were $933,444 Mex. and the operating expenses $756,379 Mex., making an operating ratio of 81 per cent. It is doubtful, however, whether the figure given represents sufficient expenditure to fully maintain both roadway and rolhng stock. INCOME CHARGES AND LOSS. After payment of interest charges on funded debt and all other income charges there was a deficit of about $50,000 Mex. Although it is possible that the results from this property will be improved untler the virtual management of the South Manchuria Railway Administration, it is hardly likely that it will show a profit. ROADWAY AND TRACK, The hue lies through a roiling country w^here railway construction is not particularly difficult, although a good deal of bridging was required. The line is fairly well located and constructed mostly with permanent structures. The track at present is laid with 60-pound rail, which came from the Han-Yeh-Ping Steel Works, but it is stated t hat as soon as prices become normal it is to be laid with 85-pound rail of the same weight and section as much of the South Manchuria line. The line is tied fauiy well and ballasted largdv with broken stone. The track work conforms, in general, to that on the Ciiinese Government Railways (particularly the Peking-Suiyuan), especially the frogs, switches, and similar materials. The brixlges seem some- 208 RAILWAY MATERIAM, IQUIPMINT, AMD SUPPLIES. what light for carmiig heavy motive power. It was stated that these were for loacfing between CoQper' E-~35 and E~-40. Most ' of th«e bndges were fabrieattid at the Shanhaikwari Bridge Works .of the .Fekiiig-Miikden Railway. BOLLING STOCK. o«T¥ ^^¥^^^ ^^^^ 'roiisists of 22 locomotives, 25 passenger cars, and 227 freight cars., with no service cars. ,M of this' equipment, except Slocomotivcs, w:as fn,rni8hed from, the Tangshan sho'ps of the Peking Mukden Kailway. The 9 locomotives were 'furn is hecf from the UnitcMl htates early in 1916. This roMing stock is ai equipped with Janiiey- I mn automatic eourfers. Passenger cars are aU equipped with air brakes, and the freight equipment averages. 46,500 pounds carrying capacity per car. The locomotives, including the 9 new ones.* are somewhat light for handling the traffic economic aJlv^-particuiarlv over the steep grades of the teniporarv line at the point that is to bo reconstructed, whieh- is^near the mddle of t.he liiic and governs, the trainJoad .m both directions.. WOBESMOPS.. ^ 'There are smal,! shops at Changchun. 'These, however a.re not intended for the manufacture of equipment, but. only for the makin^*^ of .miscellaneous and general repairs.. With the new mana.gement it 18 very likely that the furnishing of equipment, and also probably' the handling of heavyjepairs.,, will be taken care of in the shops of the oouth M.anchuria .Kailway. " OrriCIAM— PU1CHA.91M. A dirwtOTv is given in order on page 272, hut this does not include the ckief of the traiic department called for by the new agreement Bince this appointment .had not been made w£en the writer visited ChangcMm. Purchases were formerly largely directed by the Japanese chief engineer t.li.rough the Chinese managing director, but it is probaW© that the arrangement in the future will be for the chief engineer to .liandl,e tiis business Wely tlu-ough " the purchasing department of the houth Manchuria .Radway, including the drawing on the eeiieral storeroom at Dairen and the Shakako workshops. SIGNING OP COOTKACT' FOl KIRIN-HWEINING KAILWAY. Tlie iin >st im.Dortant raiway development in the Far East since llie mei-ger of the Korean Railways with the South Manchuria Rail- way on Au.gu.8t 1, 1917, was the signing, on June 18, 1918, by the (..1,i,i.uese Mi,,irister of ■Cbmm.iniications ami representatives b^rtiiking syndicate, of the prelim.inary contract for the construction M_ the kirin-Hweining' (or iOrin-Kwainei) line. This new railway w.!il t.i'aver8e eastern Manchuria (Province of Kirin) to the.. Korea.n iHiriliT. wdiere it wii connect with the Kwainei-Seishin Railway to tlie bea of Japan, giving t.he South Mancimria Railway a new deep- wiiter outlet .fwid opening a new and rich territory to commercial and .i..iMl.us.tr.ial exploitation. .It w.ill also, through its 'connection at Kirin cit J With the Kirm-Changchun line, which ,in turn coimects at Chang- MANCHUEIA. 209 chun with the Chinese Eastern, provide the Trang-Siberian route with an ice-free terminus at Seishin as an alternative to Vladivostok. The preliminary contract provided for an immediate advance of 10,000,000 yen at 7i per cent by the Japanese syndicate, which is composed of the Bank of Taiwan, the Bank of Clhosen, and the Indus- trial Bank of Japan, in exchange for Chinese treasury notes for six naonths, at the end of which period the formal contract was to be signed. The Japanese banks were pledged, on the signing of the formal agreement, to float for the Chinese Government lo-year 5 per cent bonds for an amount sufficient to refund tlie 10,000,000 yen advance and to complete the construction of the railw^ay. The preliminary contract did not indicate the method of operation of the new line, but it is assumed that it will be on a basis similar to that of the Kirin-Changchun line, which belongs to the Chinese Gov- ernment, but is operated under Japanese supervision, by the terms of a loan of 6,500,000 yen, in a way to make it essentially a part of the South Manchuria Railway. Tlie route of the railway from Kirin to Hweining (Kwainei) will follow the old caravan road from Kirin southeastward over the Haerpha Mountains, through the so-called West Yenki district of Kirin Prov- ince, to Lungchingtsun and thence through Huolikow Pass to the Tumen River, the boundary between Kirin and Chosen (Korea). Over this river, which is a wide, shallow stream, navigable only by rafts and very small boats, an international bridge will be built, the Chinese Grovernment and the ffovernment general of Chosen each pay- ing half the cost. Trains will run from this point over the Kwainei- Seishin Railway (Kwainei being the Japanese name for Hweining) to the sea. Seishin as a port dates only from the Russo-Japanese war. Before that time it was a Korean village of about 200 inhabitants. It was opened to trade in 1908 and a Japanese town sprang up, which increased rapidly in size and importance after the buflding of the hght railway and still more rapidly after the standardization of the radway in 1917. In the decennial report of the Chinese Maritime Customs for the northern ports, 1 902-1 911, this statement is made : " It IS predicted by some that when the Kirin Railway is extended to Kwainei and connected up with Seishin, the latter place will become a great exporting port—in fact, the shipping point for the surplus products of all eastern Manchuria; in other words, it wiU rival Vladi- vostok and take away a large part of its present trade.'' The com- missioner of customs at Lungchingtsun remarks, however, that he thinks that Seishin will never outstrip Vladivostok. The harbor at Seishin is not exceptionally good, though it is one of the best on the northern Korean coast and is usually ice-free. It is wide and deep but too open. Two breakwaters have been built, inclosing an area of 10 acres, which has been sufficient for the needs of the port thus IV r. Undoubtedly the breakwater system will now be extended by the government general of Chosen. The distance over which the Kirin-Hweining (or Kirin-Kwainei) Radway will run is approximately 410 miles— 320 mOes from Kiiin to Lungchingtsun, 20 miles from Lungchingtsun to Huolikow Pass, and 70 miles from the pass to the end of the hne. Though the road 10G229°— 19- 2W EAILWAT MATBIIAI18, .IQITIPMEHT, AMD SUPPLIES. isjo cross three 'rivers and two mountain ranges, the enirineerini^ ditticttlties are said not to be great. ^ '^ hilwir'Zf''*^''**^'*'""'^ f Jif ■? '"P-Hweining Railway 13 from a report siibmiticd Pekii^f C««n«»ioiier A. W... Pemo, whw he wts acting m commerdal attache at SSOTDf GKAlJCmNGCmATUN EAILWAY. ■• .lo€::ation anb iiriNsiOMa This line connects with the South Manchuria Railway at Ssupinffkai and runs ,n a northwesterly direction, toward Inner MongoliS, a distance of about 52 mdcs to the important city and trade center of l!!f !f f T' ^ ^'^•^*''' extension of about 150 mOes to this line liis .already been considered, and as soon as materials can be obtained Ins nocbubt will be made by the same interest that built the present line. Tbi»se extensions will reach the upper ralleys of the Liao River m Inner Mongolia claimed as part of the Japanese ' 'sphere of influ- cnce. riiis country is rich in both agricultural and pastoral prod- nets, mdj,t m also stated that there are valuable fuel anrf other mmcral deposits to be reached by extensions of this line. ' msToticAL aopvEf. The history of this line is very brief and recent. It may be regarded as^one of the important results of the agreement between tiapan^ and Kussia m to the areas of the * '.sphere of influence" thai ,was all,pcated to Japan in Southern Manchuria and Eastern Innw Mongolia, This, no doubt, is also a counteracting line against the €hinrhow~Aig^^ hne projected between Chinchow on t^ Peking- Mukden Railway and Aigun on the Amur River. An effort was macTe ai^one time by American capital to secure the concession for buUdinir tins last. line. ^ The loan agreenient for the financing, construction, and operation of this line IS with the Yokohama Specie Bank (Japanese) and m dated December 29, 1915, as shown by Appendix No. 9 of this report llie first location surveys were made in July, 1916, work was started early in 1917, and the line was opened for traffic in November 1917 rhis however, was^with considerable temporary construction, pari ticularly bridges, which wdl have to be rebuilt, as mentioned later. flTMBS Ann CO'NTHOL. /• J^ni^-!!? ^Tr ¥ «o^*™P*i«n were furnis.hed by the 5,000,000 yen (12,492,000 gold) loan previously mentioned. The term of the loan m 40 years, the rate of interest 5 per cent per annum, amortization to begin the eleventh year and to be effected by semiannual payments- but the loan can be redeemed in part or in whole by payment of 21 per cent premium until the end of the twentieth year and then can be redeemed at par. The issue m-as made at 94.6, and the railway property and revenues are pledged as security for the loan which B also guaranteed b^ the Chinese Government, as to both principal and interest. This is one of the cases in which a railway was built to develop a claimed '^sphere of influence," largely if not wholly to meet the desire of interest* other than Chinese; but, notwithstandiiiff tills, the Chinese Government guarantees, the loan. MANCHURIA. 211 While the agreement calls for a Chinese managing director, it requires both the chief engineer and the chief accountant to be Japa- nese, and, in addition, during construction, most of the administra- tive and technical staff wore Japanese. The Japanese chief engineer and chief accountant, being permanent employees, will no doubt lie in virtual charge of the property, particularly as the operating agreement has been made with the South Manchuria Railway for the hire of rolling stock and the exchange of traffic, including the use of the latter company's station facilities at Ssupingkai. CONSTRUCTION COST AND CAPrTAL LUBILmES. The construction cost was estimated, on account of the high cost of materials, at $120,000 (Mex.) per mOe, and thus a total of'' about $6,000,000 (Mex.) would represent the cost for the present line. It is generafly imderstood that, with the present price of silver, the 5,000,000 gold yen will not be sufficient to complete the construc- tion, and it is also stated that thus far only 3,500,000 yen of the loan has actually been issued, although there is little doubt that the re- mainder will be made available to complete the line as far as possible. The amount of the loan issued constitutes the capital liability to date. ROADWAY AND TRACK. Tlie present line is through a rich agricultural country where rail- way construction is comparatively easy, except for the 'considerable amount of bridging required, which will he expensive for permanent structures on account of the extreme difficulty of foundation. This is particularly true of a bridge of more than 2,100 feet across the Liao River, where a temporary structure has been built; but on account of the floods occurring in this river during the rainy season permanent structures will be built as soon as possible. The investigations of the foundations for this last bridge indicate that the substructure work will be extremely difficult and expensive. All the other bridges are now temporary structures, and it is planned to rebuild them as per- manent structures in the course of time. There is no stone or timber along any part of the present line, and both have had to be shipped m by the South Manchuria Railway; this includes broken stone for ballast. The track is laid with 85-pound rail, which, with the fast- enings, came from the Han-Yeh-Ping Steel Works. The South Manchuria 8- f oot-6-inch standard ties were used, and the track materials and work are very similar to the practices on the latter line; in fact, much of the material was actually received from the South Manchuria stores department. ROLLING STOCK. So far all the rolling stock used has been leased from the South Manchuria Railway. There are on order in the Shakako works 4 locomotives, 10 passenger cars, and 60 freight cars, all along the standard lines of construction of the South Manchuria line, but the delivery of these has been delayed on account of special parts and materials required but not delivered. It is very likely, however, that part of this equipment will have been delivered by the time this report is in prmt. 212 :IIAILWAY MATEBIALS, EQUIPMENT, AND SUPPUIS.. WO'KKSHOPS. RtiJining elieds and small workshops are being provided at Ssu- ingkai. Tliose are apparently intended only for the making of ciirrent and general repairs, and are not intended for the manufacture or equipment. It is more than likely that many of the shop require- meiits of this hue will be taken care of at the Shakako works of the himih Manchuria Railway. TRAFFIC AND EARNINGS. The traffic of the present line will largely consist of agricultural products obtained along the line and both agricultural and pastoral products from Cbengcbialun. It is reported that the earnings of the loie for the hrsl few weeks aToraged about 2,750 yen ($1,370 gold) a week, which is somewhat better than the showing of the Mukden- Antung branch of the South Manchuria Railway when first opened lor traflic. 1< rom all appearances one seems warranted in predicting that this line will do a considerable volume of business, and particu- tail V that it wiU make a valuable traffic feeder to the South Manchuria llauway. OfFIOALS— PO'WCHASIS, Mr. Yu Yu (Chinese), formeriy managing director of the Kirin- UiaiM^ehim Radway, is now the managing director of this line and Mr, J. .I^ujine (Japanese) is chief engineer. Purchases for this line were made largely by the chief enc^ineer (Japanese) subject to approval by the managing director (Chmese) Ihe rail fastenings came from the Han-Yeb-Ping steel plant, and the structural materials will be furnished from the Shakako works as will also be the case with the rolling stock requirements. It is entirely OTobable tiiat in the future requirements will be arranged for larc^elv through the South Manchuria Railway porchasing lepartment at Dairen, drawing on this company's Dairen storeroom and the Shakako workshops. in. RUSSIAN RAILWAYS IN MANCHURIA AND EASTERN SIBERIA. INTRODUCTION. Wliile the heading of this section of the report is ''Manchuria/' It seems desirable to explain the general situation as regards the Russian railways in eastern Siberia. The Chinese Eastern Railway, Southern Ussuri Railway, Amur Railway, Pin-Hei Railway, and Amur River steamer lines are in a way under one general adminis- tration, and the Chinese Eastern and the Southern Ussuri are manacred as one system. ° This is a very interesting situation, about which much could be written, but, until some settlement of the present chaotic conditions is effected, such a discussion would have very httle point in relation to markets for railway equipment and materials. The writer visited Changchun, Harbin, Nikolsk, and Vladivostok in August, 1917, but was unable to obtain information directly from the railway officials on account of the large number of changes that had already occurred and the disturbed conditions prevailing even at that time. There- fore, the following account will refer very briefly to the situation and give an idea of the general arrangement. The lines in which we are interested are the Chinese Eastern Rail- way--the part of the Trans-Siberian line in Manchuria—and the Southern Ussuri Railway— the part of the Trans-Siberian line from the eastern Manchurian border to Vladivostok. The other lines are mentioned for the reason that this can be done much more briefly ^ISP- ^if y ^^^ combined than when they are referred to separately. The Chmese Eastern Railway includes all that part of the Russian Tranfe-Siberian route that Hes in Manchuria. It consists of the main hue running west from Pogranichnaya (Suifenho, Chinese name) on the Ussuri border to Manchuria (ManchouH) on the Trans- Baikal border, a length of about 926 miles, and a branch south from Harbin to Kwanchengtze (a point about 2 miles north of tliangchun), from which place the South Manchuria Railway owns the tracksgiving entrance to the central station used by all railways entering Oiangchun. The Southern Ussuri Railway starts at the port of Vladivostok and runs north a distance of about 68 miles to Nikolsk. Shortly after passing this place, a turn is made and the line runs west to Pogranich- naya, a distance of about 143 miles from Vladivostok. In addition what may be called a section of the Amur route contmues north from Nikolsk, fo lowing the Ussuri River to its junction with tlie Amur Kiver at Khabarovsk, or, as it is frequently called, Habarovsk liiis hne between Vladivostok and Khabarovsk was the first part built of the eastern end of the Trans-Siberian route, work beino- officiaUy started in May, 1891, at Vladivostok. "" It is not generally known that the Amur Railway— running parallel to, and 15 to -60 miles from, the north side of the Amur River from 213 m 214 lAItWAY MATERIALS, BQUIPMENT, AFD SUPPLIES. piiibarovsk, to a pomt Jrat east of Chita, a place about 300 miles farther west than Manchuria station and about 650 miles east of Wkntsk—is connected, and that trains are being mn by this route. While this line is connected,, it is not balias/ted or in serviceable condition for reliably handlingregular traffic. The bridge across the Amur River at Khabarovsk is approximately 7,600 feet in length, was opened in November, 1916, required live years to build, and cost about 18,000,000 rubles, or approxim'ately $9,000,000 gold. The construction of this bridge was contracteii for in Austria, but, as most of the material, was on the ground at the opening of the war, it was ieished by the Russian engineers. There is one branch from the main hne to the important city of Blagovestchensk, on the Amur River nearly opposite Aigun and Tfthieho, the northern terminus of the proposed Cliinchow-Aigun Railway. During the navigation season of about six months the Amur River steamer lines form a very important feature of the trans- portation situation in this part of the world. Tliese steamer lines cover not only the Amur River but its navigable tributaries, of which there is a ven^ considerable number, the Sungari being the most important. Much of this transportation is done by native Chinese craft, but in the last 25 vears there has grown up a fleet of Russian river steamers and trailer barges. The Chinese Eastern Railway 01W1S 13 of these steamers and 30 barges. In the operation of tliis river traflic one steamer at times tows as many as five good-sized barges. In recent years most of these steamers and barges have been operated as a combination, under the direction of Messrs. Oparim and Alexieff, two well-known merchants of Harbin. This combination included the leasing of some of the Chinese Eastern fioatinff equipment above mentioned. It is access to this system of navigable rivers that is desu-ed by the Japanese in acquu-ing the additional 75 miles of the Harbin-Changchun brancli, so as to reach th^ first crossing on the upper part of the Sungari River, where it is still navigable by t,hese river steamers. As ,regards the projected Pin-Hei Railway, it may be noted that a prehminary agreement was made between Russia and Cliina in 1915 and 1916 for building a line from Harbin to Mergen and then on to Aigun and Taheiho on the Amur River, with a hraneli from the Chinese Eastern Railway at ,Angangki through Tsitsihar to Mergen, to connect there with tlie other line. Tliis railway, according to the agreement, was to be buil,t by Russia as a Chinese Government railway and to be guaranteed by the Chinese Government, but it would be entirely for the benefit of Russia, particularly from a strategic standpoint. The line would be tlirough a rather rough country but one rich in both agricultural and pastoral products. Apparently little or nothing is known about the mineral resources along this line. THl mm Of ¥M»I¥08T0E. Vladivostok is a very excellent 'port with deep water in the harbor, and with the ice breakers now used it is actually kept open for nav,igation all the year round. This result is greatly ass,Kted by the favorable winds during the winter, wliich blow in a direction tending MAFCHURIA. 215 to drive the broken ice to sea. Tliere are large warehouses along * !*^^ge part of the water front, all of which are served directly by railway tracks. These facilities are, however, more for the handling of inbound materials and manufactured products than for outbound shipments. During normal times soya beans, bean oil, and bean cake constitute one of the largest items of export. The beans are handled in sacks in a way quite similar to the methods of handling wheat in AustraUa. CONDmONS AT HARBIN. Harbin is the administration headquarters for the Chinese Eastern and the Southern Ussuri Railways. The town is divided into two distinct parts. The railway and civil administration is in a part of the town lying on the high ground, but on account of the port facilities and for other reasons a large part of the civil population lives in what might be called the lower town. Harbin is, without doubt, the most important commercial center in all of central and northern Manchuria, and it is the principal port for the fleet of river steamers above mentioned. The tracks of the Chinese Eastern Railway extend for a considerable distance along the river front, where transfer is made directly from railway cars to the river steamers and barges, and from this point shipments are made to all the places reached by this system of navigable rivers. It would undoubtedly be of great benefit to the development of all this region if the Harbin- Changchun branch of the Chinese Eastern Railway were changed to 4-foot 8i-inch gauge, thus enabling shipment to be made directly from China and Southern Manchuria to these river wharves. Tliis is one of the reasons why the Japanese have made such persistent efforts to secure control of this branch. FINANCES, MANAGEMENT, AND EQUIPMENT OP LINES. So many writers have already fuUy covered this situation that It seems unnecessary to include any historical statement in this report other than what has already been said and what is given in Ap- pendix 2. CONSTRUCTION COST AND CAPITAL LIABH^mES. The Far Eastern Review, in its railway number of November, 1909, shows the cost of the Chinese Eastern Railway as $90,000,000 gold. This has been added to somewhat — chiefly on account of reconstruc- tion, though it is very probable that some of the additional amount was spent on other than strictly railway expenditures. There seems to be a variety of opinion as to the actual construction cost of this line, but if it is not m excess of the above figures it is not so unduly expensive as is usually stated, particularly when all the conditions are considered. No accurate iufoi-mation was obtained concerning the present capital obligations of these lines. ° TRAFFIC. The traflac on the Chinese Eastern Railway totaled about 2,121,500 tons for the year 1915, of which grain was the largest item, constitut- mg about 45 per cent. Coal was next, constituting about 8 per cent, and tea was next, amounting to almost 5 per cent. There im RAILWAY MATEEIALS, EQUIPMENT, AND SUPPLIES. was a large increase of tonnage handled as compared with the previous year, grain and coal each increasing about 50 per cent and tea about 100 per cent. OEGANIZATION AND OPERATING METHODS. The organization is of the typically bureaucratic type in all features. Methods of operation and train running conform to the station- master method in all its purity. There are buffet stations, averag- ing about 25 miles apart, where ample time is allowed for refresh- •r^ent. One memorable feature of Russian tram operation, partic- iilarly m yard switching, is the constant use of a large resonant whistle to sound a code of signals to switchmen who are located on the ground to throw switches for the handling of cars. In the yard at Harbin a surprisingly large number of men are used as ground switchmen. While the writer made inquiry as to the performance figures of these lines, it was impossible to obtain data that would satisfactorily show the facts and represent the normal conditions. KOADWAY AND TRACK. The line passes through a great variety of country; therefore the location and construction are all the way from "easy" to "difficult and expensive." As a whole, the line appears to be reasonably well located and the construction substantial, although the Southern Ussuri line shows to some advantage over the Chinese Eastern particularly in the use of stone ballast on the former as against ledifTereiit gravel ballast on the latter. The structures are all per- manent and some of the bridges are imposing, especially the five- span bridge over the Sungari River at Harbin. The tunnels, of which there is a considerable number, are well constructed, partic- ularly the substantial lining in most of them. All these lines are of the Russian standard 5-foot gauge. There 18 a great variety of materials^some rather unusual— used in the track work, and the writer was impressed* with the fact that those m charge seemed able to use any kind of a track device that they were able to obtam. STOCK. The rolling stock is even more varied than the track devices. The recent equipment received from the United States seems to be used^ without any apparent difficulties, with the other mixed equip- ri^eiit, but most of this new American equipment was loaded at Vladivostok and sent to Russia, and it usually never came back. Iherefore, most of this equipment that the writer saw was in transit on Its way to Russia. Most of the rolling stock in use for local service was of continental types and much of it was manufactured 01 the Russian shops. The locomotives, as a rule, were small, and mmiy of them had an adjustable diamond stack for the burnino' of (■■oal or wood. '^^ WORKSHOPS. Large worfahops are located at Harbin. These are capable of Imndling all classes of repairs to rolling stock, as well as a good deal ol manufactunng, if the latter is desu-ed. Since the beoinnincr of the war, a car erectmg or assembling shop has been used^'at vfadi- MANCHURIA. 217 yostok for handling the cars received from the United States This latter was one of the results of the Stephens Railway Mission to wrS'dSfi ^^ T i^¥- ^""^'^^ received were loaded on cars and nauiea 48b miles to Harbin, where they were assembled. OFFICIALS— PURCHASES. in WnJ^'iml^'i^^^^T'"* t"'* °^ *^^ principal officials in charge ^«V n^n A'fir / ^i^K ^^^^H""" ^P ™''"y '^^^'^nges since that tbrv, ih^J\?j} T- "^-'i" ^^ "i^f^** ^ ^^"..'^ directory of the officials of these Imes. A similar condition prevails with respect to the handlinjr of purchases, although one feature has developed during the period smce the beginnuig of the war. Formerly purchases w^re hand" SL n3w'nf\"'''"*'''^J^* Petrograd, but there wa^ a constantly growing practice of buying directly from concerns in Harbin, if the needed articles could be so secured. A number of American con- cerns have branches m Harbin, and most of the large J^anese concerns, with branches at Dairen, also have branches" in rfS If • MAPfCHUMIAN AH O VLAWVOSTOK TRAMWAYS* '■%Afivii«iyr Aitfffi, MfaBtmir mmAwnMikvo IfAilllSrl AN'U FUWUn IliAlllWAlCf. As already ©xplwE'ed, botli llie Dairon and the Fushun tramway systems are^owned and, operated hj the South Manchuria Railway C\). The m,.ileage and ©cuiipment are shown by the table on page 195. Both th^se eyatems are well constructs, maintained, and o|>ere,t'ed, and the greater part of the 'equipment, particularly elec- trical, is of American manufacture. In addition to the passenger serrice, the Bairen lines have 10 motored freight cara used for distributing freight from and to the steam raflways and wharves for the industries in Dairen — particu- larly sojra beans to the oil mills and oil and bean cake from these mills. This service is performed very expeditiously and satisfactorily and proven ta a great deal of heavy 'tracking over the paved streets. All of the Dairen tramway equipment is 600 volts direct current, and a very simple pantagraph contact is used, which, in turn, greatly simplified the overhead construction. There is a very interesting 83'stem of fares on the Dairen line, based on time limits. First-class fares are 5 sen (2J cents gold) for a half-hour ticket and 6 sen (3 cents gold) for a oU'C-hour ticket. The tramways at Fushun are primarily for the handling of coal, and the passenger service is a secondary consideration. . HI. U lkUCi.Il ntJ.I01!i' I KmIH W il 1 9» The Mukden horse tramway starts at the railway station in the railway area and runs a distance of a little more than 4 miles, to the west gate of the west wall of the inner city. This distance is divided into three zones, the fares for the two outside zones being 3 sen (1 J cents gold) and the fare on the zone in the outer city being 4 sen. The rail on this line is a very Mght section of T rail, and both this rail and the cars were formerly in use on the Tokyo horse tramways; the cars were first used on liorse tramwa3^s in New York City before the days of electric street railways. This" concern is Sino-Japanese —the Japanese interest largely rep- resented by the cars and materials furnished from Tokyo. There is very little real capital invested in the plant, and it is understood tli.it the concern is not unduly prosperous. The service is not well palroiiized, as it is neither expeditious nor attractive. VMMVOSTOK TRAMWAYS. The electric tramirays in Vladivostok at present total about 4 miles of route, and about 3| miles additional are under construction. 1 lie present lines were under private ownership when the writer was ill Vladivostok, but the new lines are being built by the city and the general opinion prevailed that the sjsiem would later be taken over 218 MAN'CHUIITA. 219 by the city. The manager and engineer in August, 1917, was H. C. Schriber, and the principal owners were A. K. Gromadsky and IT. A. Zimmerman. Current is supplied from the city power plant. All the ecjuipment is largely from German and Russian sources. Finan- cially the concern was in very doubtful condition, and much trouble was being experienced with the employees in the operation of the lines. TSITSIHAR (ANGANGKI) LIGHT RAILWAY. The Tsitsihar Light Railway connects the Chinese city of Tsitsihar, capital of Heilungkiang, the most northerly Province of Manchuria, with New Tsitsihar, a new town on the Chinese Eastern Railway, about 18 miles distant in a southerly direction. The Russians, in building the Chinese Eastern Railway, kept the line at this distance with the idea of the advantage that would accrue to them in the building of a new town inside the limits of the railway zone over which they claimed jurisdiction. The line was built entirely with provincial funds and has always been controlled and operated by the provincial authorities. The construction was begun in September, 1907, and surveys were estab- lished two years later. It is stated that the capital expenditures have exceeded 240,000 taels. The track is of meter gauge. This light railway has at times been brought into prominence by the Chinchow-Aigun project, which is one of the concessions that has been negotiated for by American interests in competition with Jap- anese and Russian interests. The last phase was the signing of a preliminary agreement with a Russian concern for the construction of a line from Harbin to Aigiin on the Amur River, and also a line from Tsitsihar that would connect with the above line at Mergur, which point is about half way from Harbin to Aigun. The contract for the construction of this line was given to Telge & Schroeter, of Tientsin, who purchased all the roadway and track materials and rolling stock from Orenstein & Koppel, of Berlin. Mr. W. R. T. Tuckey, formerly of the Peking-Mukden Railway and now engineer-in-chief of the southern (British) section of the Tientsin- Pukow Railway, was engineer in charge of the construction of this Une. Part 5.— PHILIPPINE ISLANDS. L GENERAL INFORMATION. INTRODUCTION. To cover the railway markets of the Philippine Islands so far as the present railways are concerned is a somewhat simple matter. The need of railways for the development of the large possibilities of these islands is a much more difficult and important subject, which, • however, it is not the purpose of this report to consider. An effort will be made under the several headings of ''general in- formation" to state very briefly some of the salient features that affect, more or less, transportation conditions now and in the future. An attempt will also be made to indicate some of the possible devel- opments of the islands, particularly with respect to supplying the United States with tropical products such as hemp, cocoa, rubber, and similar articles of which the American people are very largo users but of which they control a very small part of the world's present supplies. AREA AND POPULATION. The islands, numbering 3,141, are located between 5° and 22*» north latitude and 117° and 127° east longitude. The area of all the islands totals 115,026 square miles. Luzon, lying near the north, and Mindanao, lying near the south of the archipelago approximate about 40,000 and 36,000 square miles, respectively. The nine next largest islands ranffe from 5,000 to 1,000 square miles each, and there are 275 islands with an area of less than IJ square m.iles each. . To give an idea of the extent of these islands, it may be said that if the most northerly island were placed on Sault Ste. Marie, Mich., the most southerly island would be located near Birmingham, Ala., the most easterly part of Mindanao would come near Pinehurst, N. C, and the most southwesterly island would be in southeastern Arkansas. Manila would come near South Bend, Ind., and Zamboanga near Chattanooga, Tenn. Prof. H. O. Beyer, who has the chair of anthropology in the University of the Phihppines, estimated the population at about 9,503,370, from data gathered in 1915 and 1916. Of this population It IS estimated that less than 75,000 are what might be called for- eigners. The remainder are natives, there being more than 25 dif- f{ iViiit tribes, of which there are many subdivisions. Of the foreigners ui)i)ut two-thirds are Cliinese, and nearly one-half of the remainder consists of other Asiatics, mostly Japanese. There are about 5,000 Americans in the Philippines and nearly as many Spaniards and other Europeans of all nationalities. mi m JM AILWAY M ATEEiALS, EQITIrMEwT, AlTD SITPPLTES* AGHCULT'UIAL ANB PASTOEAL PKODUCTS. Agriculture in some fonn is the principal, ooeiipatioe of tlie natives, fcut the methocis are mostly primitive. It is estimated that there are more than r2,000»000 acres of cleared arable land, but that only about 7,000,000 acres are actually under cultivation. The leadin» crops, in the order of their value, are rice, hemp (abaca), sugar can(\ coconuts, corn, and tobacco. Rice is the cliief food of most of the people and, strange as it in ay seem for such a productive conntry, it is one of 'the large items (if imports even when crops are normal; more' than 16,500,000 wortli of rice was inii)()rted in WIS and 1916 and 15,390,000 worth in 1917. The land, m a rule, is very responsive to scientific treatment and its product ivitf could be .greatly multiplied by modern methods, but the native farmers, unless 'persistently led, are slow to take advantage of improved implements and practices. Plantations of rubber are being started, particularly on ^ the island- df Mindanao, and are reported to be jirogressing very satisfactorily. A large part of the entire area (especially on the larger islands) is as productive m any part of the Tropics and under intensive modern methock will give results equal to 'the best obtained in other coun- tries — comparable to those in Java, to which the island of Mindanao is in many respects similar. Pastoral products are of minor importance and, although general conditions are favorable "for stock raising in parts of the islantis, the prevalence of destructive animal diseases has made this hazanious in the paist... Hardy animals like .goats, swine, and sheep are found in considerable numbers, but their quality is inferior, since little or no mt tent ion has been paid to the breeding. The Indian cattle recently .introduced show a 'strong resistance to the native cattle diseases. A considerable .amount of m,eat and dairy products is imported from the 'United States,, Australia, and New Zealand. .Irvlf 'ISS I If I rMMJil U L> I S. The Bureau of Forestry of the PbOippine government estimates that 40 per cent of the entire area of tne islands is covered with cogon grass (Im'pe^mia ewltoto), /which is useless for grazing, is a ^m menace, destroys the productivity of the land, and, woi-at of all, is a breeding place for the destructive locust. This condition has been caused largely by the abandonment of the land after it has been, .used for agricultural purposes, especially by the "Caingin " system. The Bureau of Forestry is working to correct this condition, but not with partic'ularly encouraging results up t(» the present time. Reforestation of some of these areas is being at- tem|>ted in a sm^all, way 'by sowing a tree, ipit-ipil (Lenmsna glaum), which, it has been found, w:ill. kill out cogon grass within two years. This tree has. proved the most succeasful of any used thus far. The 40 per ^ cent mentioned, with the 15 per cent area of cleared arable lands, leaves 45 per cent that can be considered as forest land, of which it is estimated that two-thirds (30 per cent of the whole area) is original forest land and the remaining one-third second- growth timber; most of this last is of doubtful value. The cutting of timber is now done under license from and supervision of the Bureau of Forestry. The remaining forests contain some very good PHILIPPIl^E ISLANDS. 223 timber and are a very valuable asset. If properly handled they will supply the greater part of the requirements of the islands and f urn isii considerable amounts to be exported for an indefinite number of years. The value of timber exported in 1915 was $235,275 and in 1916 $480,644. MINERAL PROBUCTS. ITie total mineral products are of minor importance. There au' known to be considerable deposits of coal and some quantity of iron, but neither of these have been properly proved to determine their quantity or quaUty. A company was organized early in 1917 with a capital of $25,000,000 (the Philippine government owning 51 per cent of all stock issued) to prove and develop the coal resources of the islands. Mr. Vicente Maldriga is general manager and Mr. Hix (American) is assistant general manager and chief engineer. In 1914 the Yidue of the coal imported was $1,749,745; in 1915, $1,432,520; in 1916, $1,303,994; and in 1917, $1,.'>38,235. About $125,000 worth of this came from the Ignited States in 1914 and 1915, but none in 1916 or 1917. MANUFACTURING. Such manufacturing as is done might be called native and special. There is very little manufacturing, aside from some special fines, that can be considered modern, particularly as regards heavy industries. Both the native and the special industries generally recjuire the maximum of hand work and uFually little machinery except some of the simpler kinds. Hat and basket making are typical ot the native industries, which are largely household occupations and require almost no machinery. Lace making and tobacco manufacturing are the two best exam))les of the special industries, although there are special crafts, such as slipper and shoe making, most of which is done in small shops. COMMERCE. The trade of the Philippines consists largely in exporting the agri- cultural products above mentioned, mostly in a raw or semiraw form, and the importation ol manufactured goods, for which the islands are very largely dependent on the outside world. The main volume of the trade of the islands is carried on through a relatively small number of large commercial houses, which constitute the agencies through which the handling of exports and imports is carried on. It is said that 90 per cent of the commercial activities of the Philippines are in the bands of the foreigners, numbering less than 75,000, as already stated. A network of small traders constitute the distribut- ing and collecting medium for the various parts of the islands. The Chinese play a very large part in tne business of the islands, particularly in the sale to the natives of manufactured products, such as dry (soft) goods. It is also an interesting fact that the Chinese own much of the best property in the business section of the city of Manila. The following data, taken from the annual reports of the Bureau of Customs of the Philippine government, show that the volume of 224 BAItWAY MATERIALS, BQUIPMENT, AND SUPPLI,ES. fowign trtda is renJly very large, especially when the small tradin capacity of the average native is considered: Of Cblatdw yuan. ■ 111 J VCF ■ <» ifi It. M % || »». ., we 191(1 IM2 ,. IJ'lti. ...... WH. ....... ■»15 il'HX I I. . w • * . , xjiiiJi, tPiiir iiniS* Erports. I1%1W„»» 24, (W, 779 »,'«i0,550 6l,,»7,901 53,312,7«:1 4|i,588,6Sa 4i,«2,lM 45,«8,;a8 «,7«i,IW tl4,!M,5S2 22, M, 373 .3Ji,454',774 54,923,300 47,772,TO:i I8,IW9,634 a,8U,0(M W,«7,183 !K,»4,307 Total trade. '134,039,568 47, 854, 152 63,305,324 90,347,824 liti,59l,2()l 101,(W.S.742 97,278,287 103,123,188 lis, 41:3,, S21 101,451,133 In favor of islands. Acaiiist islands. S3, 404, 224 100,981 4,.5O0,S20 24,440,845 29,857,481 f 4, 34 J, 4)1 ti,74l,!.!r^«!F^ *^ ^^^! mcksive, the balance of trade averaged about W,000,000 a year against the islands, but from 1905 to 1909, inclusive It averaged newly $4,000,000 a year in favor of the islands. The period '^7^^1899 to 1915 gave an aggregate balance against the islands of 118,810,591, but the years 1916 and 1917 have changed this t€> a balance in favor of the islands amounting to $35,487,735. At this point it seems proper to correct the verj^ general misunder- staQding^coKermng the financial situation between the United States and the Phihppme Islands. The only expenses that have been borne by the United States are those of the military and naval estabhsh- nients; the civil government expenses and all the insular improve- ments have been paid for from the revenues of the Pliilippine govern- men i* From the above table it will be seen that more than 50 per cent of the imports came from the United States for the four years shown Imports from ai other countries are charged considerable duties while those from the United States enter Iree. This is a very im- portant^ act vantage. At present, with the scarcity of shipping and the high freight rates, Japan is enjoying an opportunity of which it IS takmg advantage, as is shown by its constantly increasing share of tlie business. One reason for Japan's advance in this trade is to be found in the adaptability of many of its products to the requkements of the islands. Rice, largely from French Indo-€hina, and u-on and steel products, mcludmg machine£y, are the next largest items of imDortation after cotton goods. The iron and steel products are of wide variety, and the proportion from the United States has averaged nearly 75 per cent for a period of years past. The value of the u-on steel, and machinery imports for five recent years has been as follows • PfilLIPPINB ISLAT7D8. 225 1913, $8,613,904; 1914, $6,983,444; 1915, $4,430,071; 1916, $3,763,239; and 1917, $5,927,563. Other imports, in the order of their value, are: Chemicals, drugs and medicines, coal, food products, leather goods, oils, and silks. Hemp is much the most important export. About 50 per cent of this goes to the United States and the next largest amount to the United Kingdom, with Japan third. The value of the exports for five recent years has been as follows: 1913, $21,686,785: 1914 $19- 765,602; 1915, $21,644,847; 1916, $27,224,955; and 1917, $47,787,860. hugar IS the article next in importance. More than 50 per cent of the exports usually go to the United States. The value of the sugar exports for five recent years has been as follows: 1913, $7,032 889- l?i1{il^4P'^^^^ ^^^^' $11,310,215; 1916, $18,587,593; and 1917! $12,277,679, Copra and coconut products are third in value, and again about 50 per cent of the exports go to the United States. Tobacco products are fourth in value, and here again the United btates takes about 50 per cent. Other exports, in the order of then* value, are maguey, embroideries and hats, lumber, and cordage. PORTS AND TRADE CE^ITERS. ManOa is the seat of the Philippine government and in every way IS the most important port and trade and manufacturing center. It is^located in the southern part of the island of Luzon, somewhat north of the center of the archipelago, being accessible from all parts of the islands. In an an- line, it is about 500 miles from Hongkong, 1 200 miles from Shanghai, 1,600 mUes from Kobe, 1,800 miles from Yoko- hama, and a htfcle more than 6,000 miles from San Francisco. Via the Panama Canal it is about 11,500 miles from New York and about 14,000 miles from Liverpool. , While Manila is not the only port of entry, it is much the most important, particularly for imports. The mier harbor is protected by a breakwater, mside which vessels handle cargo by lighters- this is done with much of the cargo gomg to the Pasig River and its con- necting cunals. There are also five modern piers at which the largest vessels plymg the Pacific can dock. There are several large modern warehouses near these docks. In fact, the port of Manila is excellent in every respect and capable of handhng an immense volume of business. The most important of the other ports are Iloilfe, Cebu, and Zam- boanga, m the order named. All are south of Manila. Much has been said in regard to makmg Manila a ''free port," and there is much to commend this plan. COASTAL SHIPPING. While some over-sea staple cargo is shipped from the ports of Hoilo, tjebu,' and Zamboanga, the great bulk of all over-sea shipments goes through the port of Manila. Coastwise shippmg is the interisland transportation problem of greatest importance. The very long coast line of the islands and their natural conformation make it practicable 10622»''~19 15 226 RAILWAY MATEraALS, EQUIPMENT, AlTD STTPPLIE3. to have the great number of harbors, mostly smaU, that now exist and the numfo of which wUl increase as the business grows. How- ever there wiU have to be connected with this coastwise shinpin.- (par icularly as the development of the islands proceeds) a system o? ?ramw«*v^ '^f^T^'^' '^^l^^ Y^t^ shp'Jd be similar to the -so-called F™^. *" ^ * ^'"^^"y^ «^ J^Pan. (Chosen, and There are a number of different concerns engaged in this coastal shipping Some of the rurus start at Hongkong making Manila the main port of caU, while there are other linSs that make the run fro ni Manda. The amount of this shipping will have to be substantiallv mcreasod as the development of tlie iSands proceeds. ™'**'"""'"-^ GENERAL RARWAY SITUATION. At presentthe railway facilities of the islands are limited, to say the least. The Manda Railroad Co. (Ltd.), now controlled «nd onerate*! l.v t.hA Phili,...;^-. ^„„ . VlJ'Jl?^ controued and loiai 01 /id., J miles, ail of 3 -foot 6-inm craiiiyA #»nTnnria«a oil fi^y* «^^ merel^rmlw^s nw m service ioTh'S^ tJiaii 100 miles under eonsfcnictioo. The Manila Eleetril Railway^ LiglUmg Corporatiofl has a total of 45.1 miles of street railwa%^ and iiiterurbaii lines in and ■around the city of Manila. This is the onlv sjTstem of electnc railwa^^s of any kind in the islands. ' The' only ^!!^^i tmMl^rtatipn concern of any ma-nitude whatever is thi Benguet Automobile Lme, running a line of large motor buses from jf^tf !f:t*"^^^ RailroJ ^1 *;^c^ ai^nt^Jf S good roads has been built m several parts of the islands While these are very valuiible, it is doubtful whether thev will provide the tninsportatiim needed to develop to best advantage the heavy aeri! ^'"t'll^r^ especially liemp, sugar, and coc^ut products.^ the de?&Zmenf of%h^^^^^^ to be Considered in r^;.!K^« • ^ 4 r ^M^PB"® Islands is the adoption of a com- prehensive system of mam railways for the larger islands. suDDle- mented^by Wht railways. It woiSd admittedly^be much bettor to Have this development carried out under a well considered and I^!!*r^^^^^^^^^^ progimm, instead of l>y the haphazard, piecemeal con- struction that will otherm^ise result. n. MANILA RAILROAD CO. (LTD.). LOCATION AND EXTENSIONS, The Manila Railroad Co.'s system of railways is located in the central, western, southern, and southeastern portions of the island of Luzon. The main terminal is at Manila. The part lying north of Manila is known as the Northern Lines; the mam line runs a little west of north from Manila through Dagupan to San Fernando, a dis- tance of 158.2 miles, and, in addition, there are 148.5 miles of branches, making a total of 306.7 miles of railway in the Northern Lines. The part lying southeast of Manila is known as the Southern Lines; the mam line runs from Manila to Calanay, a distance of 117 miles, and there are 149.9 miles of branches, making a total of 266.9 miles of railway in the Southern Lines. The total for the system is 573.6 miles of route, all of 3-foot 6-inch gauge. The extensions under construction are almost entirely additions to the Southern Lines, which will be extended to the most southerly part of the island of Luzon. The Manila Railroad Co. (of New Jersey) controls the Manila Navi- gation & Transportation Co., but no further mention will be made of this concern, since its operations are conducted separately from those Of the railway. PRESENT OWNERSHIP AND CONTROL. After extended negotiations the control of those lines was taken over by the Philippine government January 1, 1917, by the purchase of all the outstandmg common and preferred stock andi the guaranty of the outstanding bonds. The status of the corporation was re- tained, and the operation of the lines was continued, with only a change m the board of directors and the principal executive officers. This arrangement was continued until January 1, 1918, when further changes were made— the president of the Phihppine Upper House (Senate) also becoming president of the railway and the director of the Bureau of Pubhc Works assuming the duties of general manager of the railway. This, in a way, merges the administration of the railway with the Bureau of Public Works, but the corporation status of the railway is still retained. HISTORICAL SURVEY. The Manila Railroad Co. (Ltd.) was registered December 13, 1906, uiuler the English laws as a successor to the original Manila Railway »-o., which was incorporated January 25, 1888, to take over a con- cession from the Spanish Government for a line of 122 miles for a term of 99 years to run from April, 1887. The new company was incorporated as an outcome of the negotiations with the United 227 H )! J 20Q' lAILWAY MATElIAIiS, IQIflPMEKT, AMD SUPPUIS. StE'tes to obtain a setflenient of the miway's claims against the Gov- ernment anamg out of the developments in the Philippine Islands from 1897 to 1899. In-addition, there was formed the Manila Rail- road Co. (of New Jersey), which took over all the properties of the original Manila Railway Co. (English) and was granted a perpetual concession . This company which took the place of the old English compan)-^ holding the concessions from the Spanish Government was organized m 1906 under the laws of the State of New Jersey and holds subject to the terms of concessionary grants or contracts, concessions for approx,imately 350 miles of lines^ designated as the Northern Lines and approximately 470 miles of line called the Southern Lines. riiese lines, totahng about 820 miles, were all to he on the island of Luzon and to the north and south (southeast) of Manila. One very specihc requirement of the concessions was that. the two systems were to be kept separate and distinct and to be constructed,*^ main- tained, and opemted and their books and acta kept as, if the lines were owned by separate and distinct companies, flie two systems were to have (and do have) a common terminus in Manila and to mjov ©very facility for free exchange of traffic, including a port line in Manila, connecting with the water front wharves and warehouses, which was. constructed by the government The concessions provided that there should be paid annually for a period of m years an amount equal to 0.5 per c^nt and for 50 years thereafter an amount equal to 1.5 per cent of the gross earnings of the company m lieu of all Uxm of every name and nature on the fran- chises, earnings, and all other property owned or operated by the company under its con^ceseions. The concession also had the very important provision that all materials and equipment imported for tlie company's lines should be admitted free of duty. CAPITAL OBLIGATIONS. Of the authorized $3,500,000 common stock and 16,500,000 pre- ferred 7 per cent stock for the Northern Lines, there was outstanding previous to the nurehase by the Philippine government, f2,130,7(§) of the former and 13,652,800 of the latter—a total of $5,783,500. Of the authorized $7,500,000 first mortgage 6 per cent gold bonds and the $12,500,000 second mortgage 7 per cent gold bonds for the North- ern Lines, each issue matunng in 1956, there was outstanding, pre- vious to the purchase by the government, $4,330,000 of the former and $7,716,000 of the latter— a total of $12,046,000. For the Southern Lines there was no stock outstanding, and of the authorized $30,000,000 first mortgage 4 per cent gold bonds there was outstanding $10,575,000. The maturity of thra issue of bonds was extended from 1839 to 1859 when the control was taken over by tlie government. The outstanding bonds for the system totaled $22,621,000, or more than $39,000 per mile of line in service, although this includes some of the expenses already incurred on the less than 100 miles of additional line under construction at that time. In the balance sheets for December 31, 1915, tlie Northern Lines of the operating company, the Manila Kaikoad Co. (of New Jersey) showed a liabilitv of $3,946,441 to the holding company, the Manila ICailroad Co. (Ltd.), this being a result of the accrued annual deficits. The Southern Lines showed a liability of $2,838,500 due the Philip- PHILIPPINB ISLANDS. "Z"Z«F nine government for advances to meet the annual deficits and a lia- bility of $3,284,918 of this character for the Southern Lines, resulting in a total of $7,230,609 for the system, which can be termed accu- mulated deficit, INVESTMENT ASSETS. Tlie cost of road and equipment and the general expenses on December 31, 1915, are shown bv the following table for the Northern and Southern Lines and for the system as a whole; these figures substantially represent the property at the time it was taken over by the government: Items. Cost of road Cost of equipment. General expenses . . Tot2.1 investment assets Northern Lines. SI 4, 698, 634 1,389,818 1,010,197 17,098,649 Southern Lines. f7, 416, 302 2,078,988 2,183,928 11,679,218 Total. $22,114,938 3,4t»S,S(Jfi 3,194,125 28,777,867 This represents a cost of, $55,685 per mile for the Northern Lines and $43,825 for the Southern Lines, or an average of almost exactly 150,000 a mile for the system. When one considers the 3-foot 64nch gauge and the small amount of rolling stock this seems to represent a rather high investment. TRAFFIC. For the year ended December 31, 1915, the last year for which figures were available when the writer was in Manila in April and May 1917, the earnings for the Northern Lines were 64 per cent from pas- senger and 36 per cent from freight business. On the Southern Lines the division was 66 and 34, making practically 65 and 35 for the sys- tem as a whole. Passengers are carried first, second, and third class on all the lines. On the Northern Lines, in 1915, 1 per cent of the passengers rode first class, 1 . 1 per cent second class, and 97.9 per cent third class. The earnings were about 5 per cent from first class, 4 per cent from second class, and 91 per cent from third class. The average ride for all pas- sengers was 19.24 miles, and the average earnings from all passengers were 1 .65 cents per mile. A total of 2,357,341 passengers were carried during the year. On the Southern Lines, of the 2,031,651 passengers carried, 0.7 per cent were first class, 0.9 per cent second class, and 98.4 per cent third class. The average ride was 16.72 miles, and the average earnings per passenger mile were 1.62 cents. The earnings for the Southern Lmes were not shov^ii by classes. The first-class fares average about 3 cents a mile, the third-class fares a little more than 50 per cent of the firet-class fares, and the second-class over 75 per cent of the first class. One hundred and ten pounds, 88 pounds, and 66 pounds of baggage are carried free for the respective classes. The larger number of first and second class pas- sengers, the longer ride, and the higher average of earnings per pas- senger mile on the Northern Lines are almost entirely the result oith© special travel to Baguio. RAILWAY MATERIAM, EQITIPMEKT,, AKD SUPPL:IES. '^i*J''^"f T^'*^®™ ^^^^' during the jeM 1915, 438,369 tons (of 2,000 pounds) of freight were movei, from which the total revenue was $465,323. The average haul was. 56.1 milw, and the average earnings per ton-inile were 1.114 cents. Agricultural products constituted 58 per cent, mLanufactured products 9.5 per cent, and forest products 5 per cent. Materials for tlie government amounted to 18.4 per cent. 1 he houthcrn Lmes handled 305,801 short tons. Tlie avcrao-e hjiul was 39.9 miles, and the average earnings were 1.536 cents per toii- mile. Agricultural products constituted 64.3 per cent, forestry prod- ucts more than 14 per cent, and manufactured products 12.5 per cent. Animal products form about 4 per cent on all lines. WOIKIMG RESULTS AND LOSS. The following tahle shows the financial results for the year 1915 the most recent figures available when the writer w^as in Manila : ' Items. Nortlient Lines. Southern Lines. Total. Cross odrporate revenw 11,400,225 It, cm, 689 •2,463,914 ■Opfntinfiiitw-. , per^crait.. m.2 7L7 65.0 O'pumtlinf 8XWSIMW Taios, •* • ■ ■• mo.im 1864,781 6,425 11, 455, 484 15,702 Total 7M,M0 671,206 1,471,188 Cross corporate Inooinffl., «00, 245 392,483 ' — — Interesi cluyrges... . ., Other mwmeehar|*os...,..,,..II"IIII*l*I*^'*^]^^**"*''^';]; To^tal , Lous....... ,..„ 992, 728 M1,M7 5,600 'Mt,8K 37,298 1,351,522 42,988 817,357 587,153 1,404,510 217, 112 194, «0 ill, 781 For the year 1917, the first year under government operation, the press reports state that the loss was converted into a profit of about §400,000. During that year a coiisiderablv increased volume waa also reported. " • • ^ OPEKATING METHODa Train-ruiiuing methods conform strictlv to the British "station- Bi„astor ' svstem, referred to at lengt-h in '"the Ohintee and Japanese sections, of tks ronort. The small amount of signaling is along the lines of the Britisli Board of Trade practice .and as simple as it' is pwsible to make this system of signaling. With the class of emplo vees available, consisting almost entirelr of natives in the tram and station service, there is little doubt that this is the best method of operation, and government operation will be an added reason for continuing' this arrangement. :VifHOf EES AND WAGE&. Th,e folowiiig t.able shoirs the number of general officers and all other employees, the number of days worked, the total yearly com- PHILIPPINE ISLANDS. 231 ppnsation, the average daily compensation, and the average yearly compensation; the figures are for the year 1915: Classes of employees. Number. Total days worked. Total yearly compen- sation. Average daily compen- sation. Average yearly compen- sation. NORTHERN LfflES. General officers A 1 1 others 6 2,768 2,122 963,93^1 $40,500 512,082 $19. 086 .531 $(i, 750. Of) 1H.=>. (' ) SOUTHERN LINES. ( ! eneral officers 9 2,583 2,845 533.483 8,587 254,018 3.018 .476 954 11 All others 98 34 Total of "all others" 5,351 t 4m 41Q 766 100 1 -'^11 142 38 _, — . , --_ The average daily wages of the employees classified as ''all other" and the yearly wages for this class on the Northern Lines give the best idea of the wage situation. It will be noticed that the employees on the Northern lines worked nearly 350 days during the year, while on the Southern Lines they worked less* than 207 days*. Iti will also be noticed that the wages on this system are considerably higher than the average on the railways in China, Japan, Chosen, and Manchuria, as shown by the other sections of this report. ROADWAY AND TRACK. On account of the large number of openings required to take care of the excessive rain that fails at times, and the difficulty of getting across marshy ground (which occurs frequently), location and con- struction are rather troublesome and expensive^ On December 31, 1915, on the Northern Lines there were 902 bridges, averaging 42.5 feet in length, of which 517 were wooden or combination structures; many of these were approaching the time when they would need to be renewed and when it would be desirable to replace them with permanent structures. On the Southern Lines there were 428 bridges, averaging 58 feet, of which 244 were wooden stnictures. On the Northern Lmes the permissible maximum axle load is 29,120 pounds and on the Southern Lines 31,600 pounds. In addition, there are 582 culverts on the Northern Lines and 1,374 on the Southern Lines, showing the great number of openings required. Most of the rail in all tracks is 60-pound, and the fastenings, frogs, switches, and other track appliances are all along the lines of British practice in China. Most of the crossties are now of native timbers. These cost 10.955 in 1915 on both the Northern and Southern Lines. Bridge ties cost $1.82 on the Southern Lines, where there are a number of lumbering operations, and $2.93 on the Northern Lines, part of whose ties came from the northwestern United States or western Canada. The track is fairly well ballasted with various materiab, from engine cinders to gravel, with dome broken rock. BAILWAY MATERIALS, EQUIPMENT, AND SUPPLIES. LOCOMOTIVES. There are 69 locomotives on the Northern Lines, ranging in weight (exclusive of tender) from 31,400 pounds to 130,000 pounds and from type 00 to oOOoo and oOOO-OOOo— the latter intended for use on the Baguio line. On the Southern Lines there are 39 locomo- tives, ranging in weight (exclusive of tender) from 43,700 pounds to 130,000 pounds and from type 000 to oOOOoo. The 00-type locomotives have now been m service about 30 years, and not only these but all other locomotives ever purchased are still in service. This condition is in accordance with the general practice of the Far East to get a very long life out of all rolling stock. Considerable numbers of the locomotives are superheated; on those the Wakefield superheater lubricator is used. The Detroit lubricatoF is generally used for saturated steam. The Dreadnaught vacuum injector is used on all locomotives, as all power brakes are of vacuum, type. All locomotives are of British construction, except a relatively smai number that were furnished from the United States but were built largely to conform to British specifications and practice. It has been the practice to use noncorrosive materials for fire-box con- struction, but a change was being made to iron when the writer was ill Manila. There is a good deal of corrosive water on the lines, and some use had been made of boiler compounds, but it was stated that results had not been satisfactory, particularly in the superheated locomotives, where deterioration of the noncorrosive materials had occurred. During 1915 the fuel for locomotive use cost $5.78 per short ton. This cost was substantially increased in 1916 and again increased in 1917, but the detailed figures were not available when the writer was m Jji.aniia. Figure 39 shows the locomotive drawing the Baguio Special the weight of which (exclusive of tender) is 93,200 pounds, with a tractive effOTt of 15,600 pounds. This picture shows the type of coupler, buffer, and vacuum hose connection and also something unusual in British Dractice — a bell on the locomotive. The following table shows the amount and classification of the rolling stock of the Manila Railroad Co. : Special Agents Series No. 180. Rolling stoclc. .iOCOMOTIVES. Class Al, 00 ClassAS, OOO. ClaasAI, 0000 Clisa Bl, OOOOo Claai C3, OOOoo '. Cites D3,oO00 Class M, oOOo ■■ Class F2, oOOoo. '..*. Class F3, oOOOo Mif er special, oOOO-OOOo '..'.'.I'.'.'. '. I .' .' * Total.... , ,.., Northern Lines. Southern Lines. Total. 69 i 7 7 3 5 S 8 » 11 18 fi 6 S 5 14 3 i a 40 15 6 6 3 FIG. 39.— LOCOMOTIVE DRAWING BAGUIO SPECIAL. PHILIPPINE ISLANDS. 106 FIG. 40.— BAGUIO SPECIAL LEAVING STATION. INTENTIONAL SECOND EXPOSURE 232 RAILWAY MATERIALS, EQUIPMENT, AND SUPPLIES. LOCOMOTIVES. There are 69 locomotives on the Northern Lines, ranging in weight (exclusive of tender) from 3 1,400 pounds to 130,000 pounds and from type 00 to oOOoo and oOOO-OOOo— the latter intended for use on the Baguio line. On the Southern Lines there are 39 locomo- tives, ranging in weight (exclusive of tender) from 43,700 pounds to 130,000 pounds and from type 000 to oOOOoo. The 00- type locomotives have now been in service about 30 years, and not only these but all other locomotives ever purchased are still in service. This condition is in accordance with the general practice of the Far East to get a very long life out of all rolling stock. Considerable numbers of the locomotives are superheated; on these the Wakefield superheater lubricator is used. The Detroit lubricator is generally used for saturated steam. The Dreadnaught vacuum injector is used on all locomotives, as all power brakes are of vacuum type. All locomotives are of British construction, except a relatively small number that were furnished from the United States but were built largely to conform to British specifications and practice. It has been the practice to use noncorrosive materials for fire-box con- struction, but a change was being made to iron when the writer was in Manila. There is a good deal of corrosive water on the lines, and some use had been made of boiler compounds, but it was stated that results had not been satisfactory, particularly in the superheated locomotives, where deterioration of the noncorrosive materials had occurred. During 1915 the fuel for locomotive use cost $5.78 per short ton. This cost was substantially increased in 1916 and again increased in 1917, but the detailed figures were not available when the writer was in Manila. Figure 39 shows the locomotive drawing the Baguio Special, the weight of which (exclusive of tender) is 93,200 pounds, with a tractive effort of 15,600 pounds. This picture shows the type of coupler, buffer, and vacuum hose connection and also something unusual in British practice— a bell on the locomotive. The following table shows the amount and classification of the rolling stock of the Manila Railroad Co. : Rolling stock. Northern Lines. LOCOMOTIVES. Class A2, OO , Class AS, 000 Class A4, OOOO [ Class B4, OOOOo Classes, OOOoo.... l,l["V Class D3, oOOO Class E2, oOOo Class F2, oOOoo l'"' Class F3, OOOOo .". ".' Meyer special, oOOO-OOOo Total Southern Lines. 5 7 5 29 15 5 3 Total. 7 3 5 8 11 S 39 5 14 3 5 13 40 15 5 fi 3 F Special Agents Series No. 180. r FIG. 39.— LOCOMOTIVE DRAWING BAGUIO SPECIAL. PHILIPPINE ISLANDS. r4 |Uftftl PASSENGER AND FREIGHT CARS. The above table shows the amount of passenger and freight car equipment on the Northern and Southern Lines. The passenger eouipment ranges all the way from old and very light four-wheel side-entrance carriages, as shown in figure 41, to some modern and robust regular and special equipment, as shown by figure 40. All the passenger stock on the Northern Lines is equipped With vacuum train Drakes, and on the Southern Lines all vehicles are so equipped except the five express, baggage, and mail cars. Figure 41 shows the type of coupling, buffer, and vacuum brake hose used on all rolling stock. The vacuum brake hose must be strongly spiraled insicle to prevent collapsing. The freight cars are very largely of the goods-wagon type, espe- cially the box, stock, and refrigerator classes. The average capacity of the freight cars on the Northern Lines is 11.2 short tons and on the Southern Lines 18.4 short tons; 14.2 short tons is the average for all freight cars. PracticaUy all of the rolling stock is of British manufacture and built in accordance with typical British standards and practice, especially the tired wheels on all classes of cars. On the Northern Lines only 84 of the total of 916 freight cars are equipped with vacuum train brakes. On the Southern Lines 345 of the 680 are so equipped, including 250 of the 420 box cars. WORKSHOPS. Workshops for the entire system are located at Caloocan, on the Northern Lines, about 5 miles from the main station at Manila. This is also where the company residences are located for the con- tract staff. These shops are reasonably well arranged and equipped for the handling of all kinds of repairs to all classes of rolling stock, but are not suitable for the manufacture of equipment except the assembling of heavy rolling stock and possibly the building of some of the lighter classes of goods wagons. About 500 men are employed, and it is interesting to note that the Chinese are the most useful all- INTENTIONAL SECOND EXPOSURE PHILIPPINE ISLANDS. 233 i Special Agents Series No. 180. (I i FIG. 41.-OLDEST TYPE OF PHILIPPINE THIRD-CLASS PASSENGER GAR (SIDE ENTRANCE). FIG. 42.— TYPICAL PHILIPPINE FOUR-WHEEL GOODS WAGON. ; '1* ' , - Rolling stock. Northern Lines. Soutnern Lines. Total. PASSENGER CARS. First-class coaches 41 m 1 1 1 35 2 Ifi 64 CI 5 •W S<^cond-class couches 144 JHv, ing cars 1 I'arlor cars 1 Sleeping cars 1 Baggage, express, and mall 40 Special c-ars 2 Total 101 H5 2H) FREIGHT CARS. Box 591 132 33 59 9 77 15 420 204 24 17 2 13 1,011 Flat 330 Stock 57 Coal 7(t Refrigerator 11 Other cars in freight service 77 In company service 28 Total 910 680 1,596 PASSENGER AND FREIGHT CARS. The above table shows the amount of passenger and freight car equipment on the Northern and Southern Lines. The passenger equipment ranges all the way from old and very light four-wlieel side-entrance carriages, as shown in figure 41, to some modern and robust regular and special equipment, as shown by figure 40. All the passenger stock on the Northern Lines is etjuipped with vacuum train Drakes, and on the Southern Lines all vehicles are so equipped except the five express, baggage, and mail cars. Figure 41 shows the type of coupling, buffer, and vacuum brake hose used on all rolling stock. The vacuum brake hose must be strongly spiraled inside to prevent collapsing. The freight cars are very largely of the goods-wagon type, espe- cially the box, stock, and refrigerator classes. The average capacity of the freight cars on the Northern Lines is 11.2 short tons and on the Southern Lines 18.4 short tons; 14.2 short tons is the average for all freight cars. Practically all of the rolling stock is of British manufacture and built in accordance with typical British standards and practice, es})ecially the tired wheels on all classes of cars. On the Northern Lines only 84 of the total of 916 freight cars are equipped with vacuum train brakes. On the Southern Lines 345 of the 680 are so equipped, including 250 of the 420 box cai-s. WORKSHOPS. Workshops for the entire system are located at Caloocan, on the Northern Lines, about 5 miles from the main station at Manila. This is also where the company residences are located for the con- tract staff. These shops are reasonably well arranged and equipped for the handling of all kinds of repairs to all classes of rolling stock, but are not suitable for the manufacture of equipment except the assembling of heavy rolling stock and possibly the building ot some of the lighter classes of goods wagons. About 500 men are employed, and it is interesting to note that the Chinese are the most useful all- 284 RAILWAY MATERIALS, EQUIPMENT, ANB SUPPLIES. round workmee, particularly in the foundry. The general store- room of the system is in close proximity to these shops, and many of the rolling-stock stores are carried in the shops storerooms. OKC5ANIZATION. The operating organiisation is the typical departmental or branch organization that usually goes with the "station-master" system of railway operation. Attention has ahready been called to the fact that operations have been, in a way, merged with the Bureau of Public Works of the Philippine government. A directory of the board of directors and the principS officials is given on page 272. PURCHASES. It is the policy, so far as practicable, to make all purchases in the islands—largely at Manila. This is done through a superintendent of stores, under the supervision of the general manager. The super- intendent of stores is located at the main storeroom at Caloocan. Needed articles that can not be obtained in Manila are handled through the purchasing department of the Philippine government i.nd are usuaiy bought by Mr. H. 'L. Hershey, purchasing agent for the Phdipnine eovemment, located in the WhitehaJl Builing 17 Battery Place, New York City. Mr. Hershey also has the tifle of purchasing agent for the Manila Railway Co. (Ltd.). Purchases of new rolling stock, as well as other large purchases will be handled principally by the Nifw York office. On account of the special requirements in the case of much of this equipment par- ticularly the vacuum train brakes, biddera should be specific in then- tenders, and when not furnished with the requisite data should insist oa very definite inf ormatioa m to wbat is wanted. m. PHILIPPINE RAILWAY CO. LOCATION OP LINES-SOURCE OF CAPITAL. One section of the Philippine Railway Co.'s lines is located on the island of Panay and extends from Iloilo, the port of second import- ance in the Philippines, to Capiz, on the north end of the island, a distance 'of 59.4 miles. The other section is on the island of Cebu and extends from Argao, on the east coast of the south end of the island, through Cebu, the port of third importance, to Dango, on the east coast of the north end of the island, a distance of 72.3 miles. The present mileage thus totals 131.7, all of 3-foot 6-inch gauge. The financing and construction of these lines was carried out by J. G. White & Co., of New York City, and they have since been oper- ated as one of this company's activities. The capital was largely, if not entirely, from American or local Philippine sources. fflSTORICAL SURVEY— CAPITAL OBLIGATIONS. This company was chartered in perpetuity March 5, 1906, in Connecticut to construct (under a concession granted July 13, 1906, by the Philippine government in accordance with acts of Congress of the United States and approved by the Secretary of .War) lines of railway in the Philippine Islands, as follows: Island of Panay, 100 miles; island of Negros, 100 miles; island of Cebu, 95 miles. The concession fixes the company's tax rate at 0.5 per cent of the gross earnings for a period of 30 years and at 1.5 per cent for 50 years thereafter, these payments to be made in lieu of all other taxes. Under the terms of the concession the Philippine government guarantees interest on bonds issued to the extent of 95 per cent of the cost of construction of the lines. Of the authorized $15,000,000 of 4 per cent 30-year gold bonds, $8,551,000 was issued in 1907 under the above terms. These are to matiu-e July 1, 1937, or they may be drawn by lot and redeemed at 110 and interest if they can not be purchased below this figure. A sinking fund for redeeming this l>ond issue was to be provided, as follows: 0.5 per cent on the amount of outstanding bonds from July 1, 1911, to July 1, 1920, inclusive, and 1 per cent from July 1, 1921, to date of maturity, said sinking contributions to be made before any dividends can be paid on any issues of capital stock. The balance sheet does not disclose that anv such sinking fund has been established thus far. Five million dollars of common stock has been authorized and issued for the con- tractual rights, and this amount of stock is now outstanding. INVESTMENT ASSETS. The investment assets standing on the balance sheet December 31, 1915, were as follows: Cost of road, $6,052,530; cost of equipment, $510,996; general expenditures, $2,586,267; total investment assets, 235 t 236 :BAILWAY MATBMALS, IQUIPMENT, AND SUPPLIES. !!lit?:. t!;A ^*^ ^^^'^i *H^?«^ «^ w>»<* ^nci equipment as almost exactly $50,000 per mile of line and the general expenditures as 'f yfn oPr™"®'.?*^'?? ^¥ mvestment .assets total the high amount of 169,325 per mile of line for a railway of 3.foot 64nch gauge. No details are available of the general expenditures,, particularly what ^h^ ™ "l Tr""^ \charged to the sale of the 4 per cent bonds, llie general balanc® sheets for December 31, 1915, show the con- ff»^:^"»l "g^¥ *» ^fmed at 12,999,000 in the assets, and in the habilrt^^ an item of 12,024,487 is carried as the amount due the rMlippme govemment under the guaranty to meet the bond interest. tlAFWC f^lS'lt^ revenues from transDortation were derived about friTo-thirds f rom^ passenger business and one-third from freight traffic. ff io^iAir '%^^^ passengers were carried, producing a revenue 01 izisi,015; of these 0.2 per cent were firat class and contributed 1 per cent of the revenue, 14 per cent were second class and contrib- uted 20 per cent of the revenue, and 85.8 per cent were third olass iin,d^ contnbuted 79 per cent of the revenue. The average distance traveled was 14J miles, and the average rTrFao^Z^Pr**?!^"''^^^^^^^ ^^^^^ ^-^S cents. The freight traffic totaled 92,207 short tons, of which 52.6 per cent consisted of affri- culturil products, 26.4 per cent of mineral products, and 13.3 per 1« 41 lo'^o *''^T^'^ ^T^' ^^ ^^*'^ ^^^^"® ^^«^^ ^^%ht trafec was fll9,712, maMng the average earnings per ton carried 11.298. mcluding switchmg charges. The ton-mile statistics were not availaole* WORKING MESULTa The following table shows the working results for the year ended December 31, 1915: '^ Items. Operating re vimies — , Operating e xpensas (Oparatiaf ratio: «7a per ctmt.) " " Met operating re venue Net revenue from outside operationsl '.'.'.'. Otlier iii'iome Amount. 1362,407 243,035 .1 OCSl •••.••••••.«.,.,.,,.,.,,,,,,,,,, 119,373 9,020 3,356 Twes. < Jross corporate income Interest charges , Otli«r iaoom« dodinctions. '.I'.','.'. .Net corporate loss , 131,648 2,995 128,653 342,040 1.265 314,652 EMPLOYEiS AND WAGEa The followinjp table shows the number of employees, the davs worked, and tie compensation for the year 1915. This shows a lugher rate of wages than lor any other railway covered by this PHILIPPINE ISLANDS. 237 report, but it will be noted that the number of employees is only 5 per mile of line, which is lower than for any other line: Employees. Number. Days worked. Compen- sation for year. Daily average. Yearly average. General officers 5 660 1,895 207,997 f 19, 562 135,958 110.32 .65 $3,910.47 206.00 AUothers ROADWAY AND TRACK. These lines are well located and constructed and, with the exception of a piece of 1^ per cent grade, the maximum grade is 1 per cent. Out of a total of 330 openings, totaling 17,725 feet in length, 314, totaling 16,525 feet in length, are permanent structures, and 16, totaling 1,200 feet, are wooden trestles. The track is laid with 70 and 60 pound rails, and the ties are now mostly Philippine hard- woods, which cost 86.5 cents per tie in 1915. All rail fastenings, frogs, switches, and track appliances are along the Hnes of American standards and practice. LOCOMOTIVES. The lines have a total of 15 locomotives. Twelve of these are type OOOo, weighing (exclusive of tender) 86,500 pounds each; they are used for general road service in hauling freight, passenger, and mixed trams, the greater part of the road mileage being made by mixed trams. The other three are type 000 switching engines, weighing (exclusive of tender) 64,400 pounds each. These locomotives are all of American manufacture and built along the lines of American standards and practice. Fuel on these lines, delivered to the engine cost $4.56 per short ton during the year 1915, but the cost was greatlv mcreased during the years 1916 and 1917. PASSENGER AND FREIGHT CARS. The passenger and freight car equipment is as follows: Passenger cars—Parlor and first class combined, 1 ; first and second class com- bined, 7; second class, 12; third class, 21; second class and baggage combined, 6; other cars in passenger service, 2; total, 49 Freight cars—Box, 82; flat, 43; stock, 6; coal, 4; Rodgers ballast, 57; derrick. 2; caboose, 1; other road cars, 4; total, 199. The average capacity of all freight cars is 58,300 pounds, of the box cars 45,000 pounds, of the flat cars 76,200 pounds, and of the coal cars 56,000 pounds. Forty-seven of the 49 passenger cars are equipped with air brakes and automatic couplers, and all but 4 of the box cars of the freight equipment are provided with ak brakes and automatic couplers. This equipment is all of American manufacture and is along the usual Imes of practice, includmg chilled cast-u-on wheels. WORKSHOPS. The shops of these lines are located at Iloilo, and during the year 1915, in addition to the railway company's own work, did commercial 238 BATLWAY MATERIALS, EQXTIPM'ENT, AND SUPPLIES. shop work to the extent of 147,880, from which an income of $9,020 wt\s earned. ' The organization of tliese lines more nearly approaches the Ameri- can divisional arrangement than docs that of any of the other rail- ways carried by this report. A directory of the principal officials is given on. page 272. PURCHASES. The local storekeepers are authorized to make purchases of small artK'les needed immt^diately. Other materials and supplies that can be obtained m the Phihppines are handled by the purciiasing ao-ent supiTviscd by the general manager; purchases of importance are'^isu- aliy given personal attention by the latter. Purchases of equip- ?^r^^ wf ■ *'*!^ il^^ ^^ obtained in the Philippines are handled by tJ. ii. White & Co., of New Ybrk City, in connection with a large number of other properties, under the" supervision of the manager of purchfises, Mr. K N. Chilson, of the J. G. White Engineering Corpoj tioii, of 43 Exchange Plaoa ^ . ^ ora- IV. MANILA ELECTRIC RAILROAD FLIGHTING CORPORATION- MANILA SUBURBAN RAILWAYS CO. LOCATION AND EXTENT. The Manila Electric Railroad & Lighting Corporation owns or controls all the street and suburban railways in and around Manila. It owns and operates 33.1 miles of street railways, as well as the elec- tric light and power plant supplying the entu-e city of Manila, and also controls and operates as a subsidiary the iJanila Suburban Railways Co., with 12 miles of route running from Manila past Fort McKinley to Pasig. SOURCE OF CAPITAL AND PRESENT CONTROL. The financing, construction, and reconstruction of these properties was carried out by J. G. White & Co., of New York, and they have since been, and are now, operated as one of the large number 6i properties managed hj this organization. The capital for the reorganization, reconstruction, and new construction of tlie present plant was largely, if not entirely, from American and local Philippine sources. HISTORICAL SURVEY— CAPITAL OBLIGATIONS. The present company was chartered June 26, 1903, under the laws of the State of Connecticut, and acquired all the stocks and bonds of the Manila Electric Railroad & Light Co., practically all the stocks of the Union Trunk Co., and the Compania de los Trans vias de Filipinas, and more than 98 per cent of the stock of La Electricesta ; it also owns all the stock of the Manila Suburban Railways Co., incorporated in July, 1906, under the laws of Connecticut, to build electric railways and operate electric light and power systems along such railways in the suburbs of Manila. This last conapany's fran- chise expires in 1953. The funded obligations of the Manila Electric Railroad & Lighting Corporation include $3,000,000 first mortgage 6 per cent 50-year gold bonds authorized (all issued and now outstanding) and $1,000,000 6 per cent 50-year notes authorized (all issued and now outstanding). There is an authorized amount of $3,000,000 common stock, of which $1,685,000 has been issued and is now outstanding. This makes the outstanding capital obligations total $5,685,000, of which the balance sheet shows $71,042 funded debt owned and held as in- vestment assets. Of an authorized total of $2,500,000, the Manila Suburban Rail- ways Co. has issued and now outstanding $650,000 first mortgage 5 per cent gold bonds, with 40-year sinking fund. Of an authorized total of $1,000,000 common stock, there is now outstanding $530,000, all owned by the Manila Electric Railroad & Lighting Corporation. This makes the outstanding capital obligations of the Manila Sub- 239 11' 240* RAILWAY MATEWALS, EQUIPMENT, AND SUPPLIES. urban Railways Co. total $1,180,000. The balance sheet shows $19,000 of the bonds deposited with trustee of sinking fund and held .as^ investment assets.. INVESTMENT ASSETa The balance sheet for December 31, 1915, shows the cost of the plant of all the property of the Manila Electric Kailroad & Lighting Corporation as totaling $6,030,045. In addition, there are shown $20,000 of stock owned in other enterprises and the above-mentioned $71 ,042 of funded debt owned. The balance sheet for the same date for the Manila Suburban Railwavs Co. shows the cost of the plant as $1,204,690, and, in addition, there is held by the trustee of the sinking fund the $19,000 above mentioned. TlAfllC AND OTHER BUSINESS. The system of fares on the Manila Electric Railroad & Lighting Corporation lines involves the carrying of first-class passengers at a uniform rate of 12 centavos (6 cents) and second-class passengers for 10 centavos (5 cents) for all ri(>es, including very liberal transfer privileges. The management has given serious consideration to the adoption of a zone system of fares similar to that in use in Shanghai (see p. 138). From the writer's observation in Australia, it would Seem that this might be done with much advantage to the convenience of the public as a whole and the earnings of the company; some of the rides are entirely too long for the fares charged, while, on the other hand, riding for short distances is discouraged by the uniform fare, 5 cents being a very high charge for a second-class fare in the Far East. One point that has considerable weight in this connection is the competition of the ''calesa," a horse-drawn, two-wheeled vehicle, as sliown in figures 44 and 45. It is stated that there are about 6,000 of these in Manila, with a seating capacity amounting to double that of the entire equipment of the street railwavs. While these vehicles are supposed to have a regularly established rate of fares, the rates are in reality very variable when subject to bargaining in the presence of competition. This form of conveyance takes the place of the man-drawn jinrikisha that one finds in China and Japan and other parts of the Far East and is a very serious competitor of the electric street car. The transportation earnings of the Manila city lines for the year ended December 31, 1915, were $523,017, of which 20 per cent was from first-class travel, 79 per cent from second-class, and 1 per cent from freight and miscellaneous items. The transportation earnings ( oiistituted about 40 per cent of the total earnings of the corporation. The transportation earnings of the Manila Suburban Railways totaled $135,274, representing 80 per cent of the total earnings. i' ii-st-class travel accounted for 18 per cent and second-class for Uie cmainder; the other transportation earnings are only a fraction of 1 per cent of tho whole. WORKING RESULTS. The last annual report available when the writer was in Manila in May, 1917, was for the jear ended December 31, 1915. The significant figures are shown m the following table: Special Agents Series No. 180. s i _ < Vi •» rv FIG. 43.— SHELTERED WAITING STATION. MANILA STREET RAILWAYS. FIG. 44.— TRACK RECONSTRUCTION, MANILA STREET RAILWAYS. INTENTIONAL SECOND EXPOSURE 240" RAILWAY MATERIALS, EQUIPMENT, AND SUPPLIES. l\ urban Railways Co. total $1,180,000. The balance sheet shows $19,000 of the bonds deposited with trustee of sinking fund and held as investment assets. INVESTMENT ASSETS. The balance sheet for December 31, 1915, shows the cost of the plant of all the property of the Manila Electric Kaih^oad & Lighting Corporation as totaling $6,030,045. In addition, there are shown $20,000 of stock o'WTied in other enterprises and the above-mentioned $71,042 of funded debt owned. The balance sheet for the same date for the Manila Suburban Railways Co. shows the cost of the plant as $1,204,690, and, in addition, there is held by the trustee of the sinking fund the $19,000 above mentioned. TRAFFIC AND OTHER BUSINESS. The s^-stem of fares on the ManOa Electric Railroad & Lighting Corporation lines involves the carrying of first-class passengers at a uniform rate of 12 centavos (6 cents) and second-class passengers for 10 centavos (5 cents) for all rides, including very liberal transfer privileges. The management has given serious consideration to the adoption of a zone system of fares similar to that in use in Shanghai (see p. 138). From* the writer's observation in Australia, it would seem that this might be done with much advantage to the convenience of the public as a whole and the earnings of the company; some of the rides are entirely too long for the fares charged, whde, on the otlier hand, riding for short distances is discouraged by the uniform fare, 5 cents being a very high charge for a second-class fare in the Far East. One point that has considerable weight in this connection is the competition of the *'calesa," a horse-drawn, two-wheeled vehicle, as snown in figures 44 and 45. It is stated that there are about 6,000 of these in Manila, with a Beating capacity amounting to double that of the entire equipment of the street railways. While these vehicles are supposed to have a regularly established rate of fares, the rates are in reality very varialde wJien subject to bargaining in the presence of competition. This form of conveyance takes the place of the man-drawn jinrikisha that one finds in China and Japan and other parts of the Far East and is a very serious competitor of the electric street car. The transi)ortation earnings of the Manila city lines for the year ended December 31, 1915, were $523,017, of which 20 per cent was from first-class travel, 79 per cent from second-class, and 1 per cent from freight and miscellaneous items. The transportation earnings ( oiistituted about 40 per cent of the total earnings of the corporation. The transportation earnings of the Manila Suburban Railways iotaled $135,274, representing 80 per cent of the total earnings. I irst-class travel accounted for 18 per cent and second-class for the Minainder; the other transportation earnings are only a fraction of i pel- cent of the whole. WORKING RESULTS. The last annual report available when the writer was in Manila in May, 1917, was for the year ended December 31, 1915. The significant figures are shown in the following table: Special Agents Series No. 180. FIG. 43.— SHELTERED WAITING STATION. MANILA STREET RAILWAYS. FIG. 44.— TRACK RECONSTRUCTION. MANILA STREET RAILWAYS. PHILIPPINE ISLANDS. 241 special Agents Series No. 180. FIG. 45.— CENTER-ENTRANCE CAR. MANILA STREET RAILWAYS. FIG. 46.— END-ENTRANCE CAR, MANILA STREET RAILWAYS. MANILA ELECTRIC RAILROAD & LIGHTING CORPORATION. Items. Amount. Items. Amount, ( ] erating revenues $1,317,932 674,341 Net Income --.- $360,517 i 1 crating expenses Reserves, replacements, and renewals. . . Dividends on $1,685,000 common stock. . . Total income deductions (')I>erating ratio: 51.2 percent.) Ni t operating income 73,600 275,000 643,591 6,540 M 1 icellaneous income 348,600 < r (sscarporate income 650,131 Surnlus for vear 11,917 Taxes on real and permanent property. . Coal tax : :.......... 4,887 7,052 37,533 142 240,000 Taxes on earnings Miscellaneous income charges Interest on funded debt Total taxes and fixed charges 289,614 MANILA SUBURBAN RAILWAYS CO. Items. Amount. Itrms. J : — — — ^ Amount. Operating revenues • $170,717 76,140 Net Income ,,,.. $57,311 Operating expenses Reserves for retf/acement (Operating ratio: 44.6 per cent.) 6,400 53,000 Net operating income 94,577 380 Dividends on $430,000 common stock Total ineome deductions Deficit for vear Miscellaneous income G ross corporate income 94,957 59,400 2,080 Taxes on earnings 5,146 32,500 Interest on funded debt : Total taxes and fixed charges 37,646 i ROADWAY AND POWER PLANT. Some of the streets of Manila are narrow and crooked, making the building of street railways rather difficult as regards both the track and the overhead construction. In a number of instances the lines fo in one direction on one street and return by an adjoining street, 'he tracks in busy, narrow streets are laid with 92-pound girder rail, some of which is now being replaced with a still heavier girder rail. In other districts the track is laid with 70-pound T rail. The track materials are from American sources and along American lines of standards and practice, including a considerable amount of special work. The same remarks apply to the overhead contact construc- tion, some of which is rather complicated on account of the narrow and crooked streets. There is one central power house, located on the Pasig River, which furnishes power for all the above railwaj^s and also all the commercial current for lighting and power in Manila and its suburbs. Fuel is handled in lighters directly to this central power house. Figure 44 shows track reconstruction work in progress on the approaches to one of the bridges on the Pasig River. ROLLING STOCK. The car equipment for the city lines consists of 72 closed and 48 open passenger cars, 1 exprress car, 3 work cars, 1 wreck car, 1 town car, and 1 pole car, all of which are electrically equipped except 1 106229"— 19 16 INTENTIONAL SECOND EXPOSURE Special Agents Series No. 180. FIG. 45.— CENTER-ENTRANCE CAR, MANILA STREET RAILWAYS. FIG. 46.— END-ENTRANCE CAR, MANILA STREET RAILWAYS. PHILIPPINE ISLANDS. MANILA ELECTRIC RAILROAD & LIGHTING CORPORATION. 241 Items. Amount. Items. Amount. < pcratiiifi revenues $1,317,932 674,341 1 Net Income I3f)0,517 f |)craling expenses j Reserves, replacements, and renewals. . . i Dividends on 81,685,000 common stoclc... peruling ratio: 51.2 percent.) N«?t operating income 643,591 6,540 73,oOO 275,000 \I iscellaneous income 348,600 ' rosscarporate income 650,131 Surnlus for vcar 11.917 Taxes on re^l and permanent property. . Coal tax 4,887 I 7,a52 37,533 142 240,000 Taxes on earnings Miscellaneous i ncorae charges 1 terest on funded debt Total taxes and fixed charges 289,614 ; j MANILA SUBURBAN RAILWAYS CO. Items. Amount. Operating revenues ( )perating expenses (( )pcrating ratio: 44.6 per cent.) Net operating income Miscellaneous income ross corporate income. Taxes on earnings Interest on funded debt. Total taxes and fixed charges. -• 8170,717 76, 140 =s.v Itrms. Amount. 94, 577 380 94,957 5, 146 32,500 37,646 i Net income. Reserves for reiZ/acement Dividends on $fl^,000 common stock. . . Total income deductions. Deficit for year 1.57,311 6,400 53,000 59,400 2,089 ROADWAY AND POWER PLANT. Some of the streets of Manila are narrow and crooked, making the building of street railways rather difficult as regards both the track and the overhead construction. In a number of instances the lines go in one direction on one street and return by an adjoining street. The tracks in busy, narrow streets are laid with 92-pound girder rail, some of which is now being replaced with a still heavier girder rail. In other districts the track is laid with 70-pound T rail. The track materials are from American sources and along American lines of standards and practice, including a considerable amount of special work. The same remarks apply to the overhead contact construc- tion, some of which is rather complicated on account of the narrow and crooked streets. There is one central power house, located on the Pasig River, which furnishes power for all the above railways and also all the comniercial current for lighting and power in Manila and its sul)urbs. Fuel is handled in lighters directly to this central power house. Figure 44 shows track reconstruction work in progress on the approaches to one of the bridges on the Pasig River. ROLLING STOCK. The car equipment for the city lines consists of 72 closed and 48 open passenger cars, 1 exitress car, 3 work cars, 1 wreck car, 1 town car, and 1 pole car, all of which are electrically equipped except 1 106229°— 19 16 I SdxM RAILWAY MATEKIALS, EQUIPMENT, AKD SITPPLIES. IIIM of the open passenger care and the pole car. The suhurban hnp egmpment consists of 6 closed passenger cars and 7 freight cars i\] of wtich are electncally equipped except 3 of the freight cars Whi Trt ofln"' f R T;P""'rVV?^"' American source^s, a considerai ^ mi British and Belgian manufacture Vil,Z f,«'™P*»y°'g illustrations show several types of these car. Figure 45 shows one of the latest center-entrance cars ;„„ M"^ "^"^ 1 *^ypej^«'-e fabricated in the United States accor,'- bEn K?^^ """^ "".^'T '^P?^ ^""'^^ 'l"^ t» Manila, where they mnv's o^/sb'^n?*' Tr*"'^^ assembled and comnleted'in the com^ E^ TLl P f ^t^ arrangement is of special advantage in tho saving of ocean freight charges. Particular attention is called to the roof airangement of this equipment, which is so desig^ed^onl "r to keep out tKe veiy heavy rains durikg typhoon seasSlls. WORKSHOPS-ORGANIZATION. Li connection with the general offices-and central car bams the f^^L^fZ ^7,f: ^^?<^^h well arranged and equipped Zp for msnection and the making of all classes of repairs to the equipment mcludmg the assembling and completing of cars, as above expEd The general storerooms are locateJat this same place, and here t" ere gre^t distance from sources of supply. ^ 8imilaVt'?Th«?*i^"f^°'^.T*^ the operations of these properties is suniiai to that m the other activities of J. G. White & Co as i« mdicated by the directory of the principal officials given Tn page 273 PDRCHASES. praeticaM^ to obtaiB supBliesiritl^^^^ ^^s^^h 'a^ti le^ as can not be obtained there are ordered from the mwYortlmtl of the J. G. White & Co. mterests and PurXses arf ilde^i^^^^ the malinger of piirehases of the J. G. WBite EnEineerin^Zmn^^^ at U Exchange Place, New York City,. ^'W^®'^™ig Corpoiation Part 6.— CONCLUSIONS AND SUGGESTIONS. INTRODUCTION. In this chapter an effort will be made to summarize the conclusions of the writer's investigation and to formulate such suggestions as seem warranted. All the situations covered in this report will be referred to in general. Remarks concerning China are to be under- stood as applying to both China proper and Manchuria, and, unless otherwise stated, the same will be true of Japan and Chosen. The original purpose of this report was to cover the markets for railway materials, equipment, and supplies, and it is fully realized by tho writer that this hitention has oeen departed from to a certain ex- tent, in that a considerable part of the data may be considered aa referring to investments rather than markets. Circumstances, how- ever, have seemed to justify this treatment. PAST PROGRESS. It is felt that the data included in this report show conclusively that Chma has made real progress toward a solution of its railway problems, particularly when one considers the ''original conditions." One of the convincing evidences that China has made substantial progress in its railway development is to be found in the working results of the present railways, not only in cases where profits might reasonably have been expected, but alijo in others where they could hardly have been anticipated. ^ Probably the best arrangement for the railways in China would be Government ownership and operation under a strong central organ- ization, such organization to be assisted for the present by broad- minded foreign railway experts who will work for the railway develop- ment of Chma as a whole instead of the limiting * 'sphere-of-inliuence" policy of the past. Regarding Japan, it seems only necessary to say that it has passed through all the stages of its railway development until at present, from the standpoint of railway markets, it seems a question rather of competition from Japanese sources than of retauiing the general trade hi the Empire that the United States has enjoyed in the past. While there will continue to be markets for many materials of Amer- ican manufacture, the Japanese will, of their own accord, investigate and decide as to their requirements. In short, Japan has reached the pomt where it is capable of carrying on its own individual railway development. This has been the object of the Japanese railway policy for a considerable number of years. FUTURE PROSPECTS. Japan's present ability to supply and control most of its railway requn-ements in normal times will no doubt be fui'ther developed, 243 244: BAILWAY MATERIALS, BQUIPMEMT, AND SUPPLIES. Lion in the Chinese )m0nts that Japan Shantung. possibility of similar developments in Railway progrws, in China mil midonbtedly be substantial, and if the rastrictions of the " spheres of influence'^ and the railway loan a|?reejnente are ehmmateil (as in fairness to China they should be) this development may be phenomenal—especially if China ' in turn' corrects some of the retarding internal conditions, such as 'the likin taxes and '^smieeze," and eliminates the political influences and local miUtaiT mterferences. When the volume of business handled is con- sKtered m connection with the rather small ainoimt of rollm? stock It becomes apparent that the administration of these Imes is being handltti with considerable efficiency, particularlv when allowances are made for all the handicapping conditions. Improvement in working results would be brought about if some of the obvious restriction! could be broadly corrected. CONSOLIDATION OF CHINESE GOVEKNMENT RAILWAYa It is debatable whether consohdation or unification is the correct nL^ci^^*^;rif ivta^vT*^ '"'^^ ^"•'"^ *« '« ^^^^''^''' , The ^Ministry of Communications" has made considerable nroffress m what may be termed regulatory requirements, such as those makine ^enl^J^l^T^ accounts, the operating oi^ankation, and, to I certaiii extent, the oneratmg methods of the several raOways con- stitutmg the group of hues known as the Chmese Government Rail- ways, lliere has been some progress toward through handlinc^ of traffic and interchange of equipment, but very Httle actual progress has been made m consolidating these hues under one central admin- istration so that they can be developed and operated as a whole to t^e best advantage --m which arrangement there would be a number of very real pssibdities of obtaining improvement in the efficiency of both facdities and mmagement. ' "^ In. suggesting the possibSities along these lines the witer has gen- eraUy been met by the question: -that about the attitude of the omi^rs of Ae W^^^^^ loans with which these Imes were built I ^in the past the has been the prmcipal factor in preventing the consoklation of th«e lines, and this, together with the claims of the several -spheres of influence," contmues to block (or at least materiaUy to hmder) the proper development of the Chmese Gov- ©niment Railways m a whole. It is obvious, of course, that there niust be some advantage accruing to the owners of these bonds to incllic© them to agree to a new arrangement. To those now m con- trol of tbe present concessions or loans, what are the advantaffes to be gained by assenting to such consolidation I In the writer's opmion by proper consohdation of these lines the value of these bonds will be enhaiiced rather than endangered, particidarly by reason of the sti f^tZfLT"^^^ "^ mimuMded by spreadmg it over an exten- sive system, the eammgs of which wiU not be materiaUy affected bv !!fw ''''f'^T^' ^ .a^l^jtion, such action would ssskt m further railway development m China, which, in turn, would again enhance the security of the present loans. ^ «iiiianc© COFCLUSIOFS AND SUGGESTIONS. 245 The first table on page 53 shows that the investment assets of the Chinese Government Ilailwavs total $406,741,411 Mex., not includ- ing the Kirin-Changchun Railway, which is a detached line now under Japanese control, and the Canton-Hankow line, which is not yet com- pleted. Interest charges on the funded debt of these lines for 1916 totaled $12,258,896 Mex., leaving a balance to net income, except deduction for permanent Chinese Government investment, of $20,- 801,268 Mex., or a margin of almost 170 per cent to meet interest charges on funded debt. On lines north of the Yangtze River and the two Shanghai lines, which can be considered as a connected sys- tem, even a better showing is made. This is indicated by the first subtotal on page 53. The three Imes shown last are aU disconnected but will become part of the connected system when the Canton-Han- kow line is completed. When one comes to examine the investment assets and the capital liabilities, it is seen that the Chinese Government has a very substan- tial equity in this group of railways. The second table on page 53 is a summary of the balance sheets for the six most important lines for the year 1916 (except the Peking-Suiyuan, which is for 1915). The following is a further summarizing of the balance sheets of the above lines, as of December 31, 1916, with the 1916 report of the Peking-Suiyuan line, which has just been received, but which makes very little change in the totals. This table shows in the columns of assets the cost of the three classes of permanent investment assets, and in the column of liabilities it shows present outstanding capital liabilities and liabilities permanently disposed of through surplus earnings: Investment assets. Amount. Capital liabilities. Amount. Cost of road and equipment: reking-Mukden Mex. dollars. 59,942,844 25,981,205 99,803,208 97,807,19fi 30,484,417 21,307,376 Bonds and shares outstanding: Peking-Mukden Mex. dollars, 19,750,617 Peking-Suivuan Pekmg-Suiyuan Tientsin- Pukow Peking-Hankow Tiontsin-Pukow Peking- Hankow 95,249,974 58,4.50,.'>83 29, ti28, 185 lS,4a'>,015 Bhanghai-Nanking Shanghai-Hangehow-Ningpo Shanghai- Nanking Shanghai-Hangehow-Ningpo Total Total 335,326,246 221,490,374 Permanent Government investments: Pekine-Mukdcn Cost of other physical property: Peking- Mukden 467.731 23,903,393 Peking-Suiyuan Tientsin- Pukow Peking-Hankow Shanghai-Nanking Shanghai-Hangehow-Ningpo Total Cost of non physical assets: Peking-Mukden Peking-Suiyuan Pftkinp-HftiikAw , , ... 57,003 119,177 2,491,795 22, Wi2, 737 3,r«9,350 40,309,381 3.072,671 4,980,706 Total 2, 667, 975 99,178,238 Additions to property through surplus: Peking-Mukden." Total investment assets I otal bonds and shares outstanding. . . 338,461,952 221,490,374 11, l«i.3 7 23*^ 678 Pckini'-Siiiv'iiAn 1 Ixcess of investment assets over out- 116,971,578 Peking-Hankow !>tanding bonds and shares Total.. Funded debt retired through surplus: Peking-Mukden 20, S2S, 39S 9, 7s4, «7 1,519.801 35:i!i24 Peking-Suiyuan Shanghai-^ianking Total ll,(j58,392 Total capital liabilities and addi- tions through surplus 353,155,402 246 BAIL WAY MATERIALS., EQUiPAIIiXT, AXD SUPPLIES. CONCLUSIONS AND SUGGESTIONS. 247 The conclusion to be drawn from this table is that in these six lines the Chinese Govemment has investment assets of $116,971,578 Mex., not counting the working assents and the assets in the other lines, both of which Will add a good deal in real value. This equity .is being added to each year in the amortizing of the wveral loans. The data presented seem to warrant the suggestion that, to protect the prestmt bondholders in consolidating these lines, a consolidation mortgage is one of the practicable arranffcmonts; and through tliis isame means the capital could be furnishecl to take care of the exten- sions, betterments, and additional equipment, which will make these railways, still better paying properties. It^ has been the writers intention not to include the Canton- Hankow Railway (or, to give it the correct name, the Hukuang Eailways) in the above suggestions, for tlie reason that the resources pledged for the pre^sent Hukuang Lines seem adequate. It appears practicable, however, to utilize the above-mentioned equity in obtaining the additional funds that will be neceasarv to comi)leto this line^^-undoubtedly the most needed additional line in China— and in doing so to effect the consohdation of all the Chmese Govern- ment Railways into one organic system. The following table shows the status of the Hukuang RaUways on December 31, 1916: loTestmwrt mmts. Lialiilitlcs, Cofistrtiftlon (^xpTidit ores 'Ftaanrial e.x'p<'ndituri:s. , . . Working aaaets.. JDefcrred debit ilcois Jftx. im». 27,119,3SH 19,175,97-1 H,0:i8,24C» 10,fi»,»9 TV! or (.KflRP Itonds t >l h<>r seciirod indebted tiess Defrf red credit items Total obligations , . . . Mex. dom. ♦".7,32(1,000 (:62.9oi Total i»«ts ..,....,,.,.. 67,I«2,,WI 67, 982, 901 The writer, in presenting the above suggestions, appreciates the many difficulties that would have to be overcome in making the proposed consoMdation. It is felt, however, that this is the treatment which will result in the greatt^st t;nd best railway development in China, when the situation is considered as a whole, and that the Chinese Government's equity, with the existing progress, renders this the best solution of a difficult situation. One of the very sub- Btantial advantages in consolidation • would be 'the rearranging and combining of the present management and the introduction of more efficient administrative methods. There are also economies tliat could be effected by the joint use of existing equipment—all of which are prevented by the present restrictions. The administration of the present Chinese Govemment Railways, so far as the joint use of tracks and equipment is concerned, is just as strictly accounted for as though the lines were privately o^med and operated. PIOGRAM OF CONSTRUCTION. As already explained, Japan has worked out a very complete and comprehensive program of railway construction as regards both the additions to the Government railways and the private light rail- ways to be built under the 5 per cent subsidy law. With the present restrictions resulting from the "spheres of influence" and the railway loan agreements, it is practically impos- sible for the Ministry of Communications to plan and adfopt any comprehensive program of railway constmction for China as a wh.)l(% though there is no doubt as to the desirability of such action. Therefore one feature of the suggested consolidation of the Chinese Government Railways should be the elimination of those restrictions and the working out and adoption of such a program. It is particulariy fortunate that so much of the present mileage has been built with the standard ffauge (4 feet 8| inches), and it is also fortunate that thus far there nas been very little duplication of facilities or building of parallel lines, though tne two elaborate sta- tions at Tsinanfu and the three terminals at Peking show what may occur if the present conditions continue. It is obvious tiiat it would be entirely beyond the scope of the present report to attempt to outline such a program. Although some construction programs have been suggested, such as that by Dr. Sun Yat Sen's Chinese National Railway Corporation, none of them, in the writer's opinion, have been based on such an exhaustive study as the correct solution of the problem warrants and demands. Tliere is every reason why a carefully worked out construction program should be adopted and followed in the building of future railways in China and in the extensions and additions to the present lines. In deciding upon such a program consideration should bo given to the construction of lines to develop the resources of the country, particularly fuel and iron, and the avoidance of parallel lines and lines paralleling the water transportation routes. The latter condition forms the explanation for the lack of success of certain of the present railways, since some of the water transporta- tion lines, especially some of the native Chinese craft, carry a limited amount of ireight for very low charges. A preliminary study of the situation seems to w^arrant the statement tnat in most instances lines could be located to develop the country fully, to avoid very largely the paralleling of water routes, and still to provide through rail connections between the large centers of population. It has been generally agreed that the completion of a comprehensive system of railways in China would do much to stabihze the country, pai*- ticularly in connection with the suggested currency reforms. iVfter the completion of the text of this report, the writer's atten- tion was called to the study of the development of the Chhiese railways made by Mr. A. J. H. Charignon, a French civil engineer, who, at the time his book was published, w^as employed as technical adviser to the Ministry of Communications. While this study is entitled a "Program of development" of the Chinese railways, it impresses the WTiter rather as a very excellent reference w^ork cover- ing the many railway projects in China as they stood at the time this study was made (1912 to 1914). There is a large amount of useful and apparently very accurate data, particularly as to the length of the hues, 'rhe Chinese names (French vemoii) are given mth much care and consistency in the rendering. There are 21 maps showing the various projects and also a large map of China, The text is in French, and so far as is known no translation has been lAILWAY MATEttlALS, BQITIPM.B:HT, Alf'D SUPPLIES. made iii,to English. For anyone making a study of the Chinos© railway situation, this publication affords much va,luaHe di\in. The complete title is as follows: 'Les Chemins de For Chinois, un pro- gramme pour leur d'^veloppemeut, par A. J. H. Charignon, ing^niour ■ciTil, coiiseiiler techniciue au Ministiire des Communications; H. Dunod & K Pioiife, Witcurs, 47 et 49 Quai des Grands-Augu,stin8, Pans, 19! 4. mAEACTEK OF LINES. To the writer the characteristics of the Chinese lines to he built 8«m to be a matter of much importance. As stated several times, most of the present lines are now at. a disadvantage in handling tlieir growing business on account of their inability to use as heavy motive power as would seem likely to be most efficient, considering that m;uch of the freight tratlic can be move(i most economicaily on the comm,od,ity basis (which means by heavy tonnage trains at com- paratively slow speeds). One excepti,on is the Feking-Sui^-uan line, witli its heavy motive powr and freight einiipment witli power brakes, whose working .results compare TnvoraDly mih those of the O'ther lines, not'withstan:ding the much steeper grades resulting 'from the rougher country through which it passes. It is therefore felt that, expenditures for bridges earning much heavier loads than the present ones and for lines with reasonably low grades would be en ti. rely wi:rranted in the building of future railways. Japan has given careful study to the characteristics of the lines to be built. No doubt its action will be entirely controlled by the funds available, but it can be taken for granted that such action will conform to the methods and princii>les that the Japanese con- sider most advantageous for themst>ly(;'s; it will in no way be affected by the results of the conflicting advice of foreign railway experts, as has occurred 'in, China. ROADWAY AMD BQ'IJIPMBBIT STANDARDS. Japan has the matter of standards thoroughly in hand, and any American manufacturer in doubt as to what is re:,uired can obtain full explanation _from, the inspecting engineer's office, in New York, of tlie lm,|ierial GoTernment Kail ways of Japan. The^ Chinese Government Railways, however, are very far from attaining this fortunate position. Each of the several railways Clin be considered .as having in many ways the standards of the nationality of its particular loan, and in many respects these are Guite different—for example, the frogs and switches used on the difFereiit lines. The system of uniform accounts is an excellent illu8trati<»n of what might be accoinplislied in stand ai'diziiig ail the practicas of the ChincM^ Government liailways as to roadway ,and track, motive power, and rolling stock of all classes. Certain essen- tials could be fixed — and aiternativi^s allowed in other respects — that would enable these^ lines to secure broadly the benefit of inter- national markets, particularly as regards the price competition that would thus ensue. No doubt direct benefit would result to the Chinese railways if, in the adoption of .such standards, special con- sideration were' given to the devices that can now or may in the future be m,jiiiufactiired in China at such places m the Tangshan shops. CONCLUSIOFS AND SUGGESTIONS. 249 As an example, one may mention 33-inch chilled cast-iron car wheels similar to those now 'being manufactured at the Shakako shops and used as standard on the freight equipment of the South Man- churia Railway, where the conditions and traffic are probably fully representative of the future developments on the Chinese Govern- ment Railways as a whole. If wheels of this diameter and material are satisfactory for the service of the South Manchuria Railway (as they apparently are), it would appear that this should be permissible practice to meet the requirements of the Chinese Government Rail- ways, in view of the fact that this is the type of wheels that could be manufactured to best advantage in China at such points as the Tongshan shops on account of the Chinese workman's adaptability for handling this class of work. FINANCING EXTENSIONS AND BETTERMENTS. It is felt that the foregoing data warrant a repetition of the state- ment that one of the big problems in Chinese railway development is the providing of funds for extensions, betterments, and additional terminal faciEties and equipment as the business of the roads grows. These remarks apply even to the profitable lines, especially where a considerable part of the original construction funds is amortized in the first 25 or 30 years. FuU provision for these requirements of the Chinese Government Railways appears to the writer to be one of the problems of the consolidation suggested. There seems to be little occasion to comment on this situation in connection with Japanese railways. The Japanese Government can doubtless secure such funds, to a reasonable amount, as it elects t^ expend on the Government lines, and the funds for the construction of the subsidized private Hght railways and tramways will be forth- coming from private investors or the interested municipalities. BUYING ADDITIONAL EQUIPMENT. In view of the small amount of rolling stock that the Chinese Gov- ernment Railways now have for the handling of their traffic and the immediate need of additional equipment to take care of their growing business, it appears to the writer that there exists an excellent opportunity for American interests to furnish a considerable quantity of roUing stock, to be financed through the medium of equipment trust certificates, along the same general lines that have been fol- lowed in connection with the American railways for many years. The writer discussed the possibilities of such an arrangement with representatives of the Ministry of Communications and the officials of some of the Hues that need additional equipment, and in each instance they were very receptive to the suggestion. The need of such additional equipment is shown by the table on page 76. KIND AND AMOUNT OF EQUIPMENT NEEDED. At the risk of repetition, it is felt that the situation warrants the statement that additional freight equipment in general should be of large hauling and carrying capacity, that it should be provided with power brakes, and that there should be a continuance of the use of automatic couplers constructed with robust draft rigging for the RAILWAY IIATIBIALS, BQUIPMEHT, .ASB SUPPLIES. handling of heavy tonnage trains over moderately long distances. It IS not probable that the hauls in China will equal those in America, hut m all Drobahihtj the average future haul in China will considera- Wy exceed the average in most other countries and much of the busin«s. 'Will be done on a co:mmwiity basis. It is quite impossible to state the amount of equipment that will be needed, but, with the car efficiency now obtained, it seems reason- able to aasume that the Chmeee .railwa>is w,ill not need m. amount of eqiiipment equal to that nettled in the United States. However as *^"' haul ^ '--"^ -- ' *' ■■ ■• ■ becomes longer (as it has been steadily doing) and as the business grows it is hanlly likely that the present car efficiency will be maintained .^^ /Therefore, it is probable that a very considerable amount of additional rolling stock -^especially freight'care and loco- motives—will be required, but that this will not be equal to that on American railwaj-s handling an equal amount of business. One ele- ment that has helped the Chinese lines and probably w,ill continue to so is the supply of labor available in all parts of China which makes it cheaper to unload ears and store the materials than' to pav the present high car-demurrage rates. The actual carrying capacity of the freight cars on the six Chinese Ciovernment Radwa}^ shomi by the table on page 76 is 79 tons (of 2.00,0 pounds) per mile of line, While the average earning capacitv on the .American railwa^-s. is 404 t.ons per mile of line^- that is the ,Am,e:rican railways have m,ore than five times as much freiffht-carrr- mg^ equipment as the Chinese Government 'Railways. Mo comments are made in this connection regaixiing the Japanese railways, since they are steadiv addmg to the equipment of all their lines, inchiding the South Manchuria and Korean railways. In Manchuria and Chosen, however, this equipment is along tie lines above suggested for the Chinese Government Railways. In Japan proper it can be generaMy described as the goods-wagon tvpe of eouin- ment, m iMustra'ted in figure 38. » ^ i u i WORK EQUIPM'ENT KEEDE©. The term ''work equipment'^ is used as applving to construction plant and maintenance and wrecking equipment. The lines in both Japan and Chiiia have very little of this class of equipment, as one sees It m America. Hie principal reason has been the large supply of cheap labor alwajns avadable for handling work. It has been con- sidered cheaper to do all work by hand than to employ expeditinjj and labor-saving machmery; and. in addition, the time element hiw not heretofore been considered sufficiently vital to offset the cost of the expediting plant. During the past, iii the Far East, time, after clieaj) labor, has been the most abundant commodity; therefore a few^days, weeks, months, or yeara more in the constmction of tlu^ lii'oject^ was not of the same moment as the direct cost. Modern iiiethods, liowever, are being given greater consideration, and expe- clitnig machinery, winch is also labor saving, is beginning to come into use m many wajrs. There mill be a growing use of this class of equipment on the railways m both Japan and China, The recent expansion of all kinds of industry in Japan has produced a sliortage of labor m many connections, particularlv on the railways, where lower wages are paid than .in almost any othei* mdustry. . co:n"clusions and suggestions. A typical example of the employment of construction plant equip- ment is the use of 10 or 15 large steam-road rollers on the street- improvement work in the city of Peking. Their use was due not so much to the low unit price of the worn as to the expedition and quality resulting. They were used in spite of the large amount of clieap labor in this section of China. The growing interest charges on some of the large undertakings will no doubt have much to do with tlie use of construction machinery. An excellent illustration of this is a large reinforced concrete^ olTice building being con- structed in Tokyo by hand methods; it is taking three times as long to erect this structure as would have been the case with a well-arranged construction plant. This means that the construction interest- carrying charges were probably more than doubled and that the income was lost for this period — ^more than offsetting any possible saving by reason of the cheap labor. This point is being recognized by the Japanese engineers, and it is also well known to the foreign and Chinese engineers in China. WHARF AND HARBOR EQUIPMENT. Tlie foregoing remarks apply to the handling of cargo. At present it is surprising how expeditiously the work is done at some points, particularly the taking of bunker coal at Nagasaki and the handling of cargo coal at Dairen and Chinwangtao. Recently, however, the labor shortage has been serious at times at Nagasaki. In the course of time witli increased shipments the consideration of quantity handled, rather than of cheapness, will probably be of primary importance in such situations as those at Dairen and Chinwangtao and in connection with the handling of iron ore at Ilwangchow and of fuel and ores at the Han-Yeh-Ping iron and steel plant. At the last- mentioned place there is already in course of construction an unload- ing outfit for the handling of ore and fuel from the barges in which they are transported from the mines. SHOP MACHINERY AND TOOLS. The Japanese railways have given this subject careful study, and their shops, as a rule, are equipped with well-selected machines and tools, a large percentage of which are from American sources, although much equipment is also of British and German manufacture and a growing percentage is of Japanese manufacture. The Japanese are very alert and are increasingly appreciative of the benefit of the best equipment along these lines, lliey will doubtless keep close watch on American developments, and, in all probability, this will continue to be one of our best fields in the Japanese railway markets, particu- larly on account of the special adaptability of many American prod- ucts. American machinery and tool manufacturers are, as a rule, well represented in Japan either by American concerns or by the strong Japanese comniercial and engineering companies already referred to several times. The writer had noticed the extensive use of certain tools in Japan, and, in a conversation with a representative of one of the American manufacturers, the latter expressed wonder a-s to what the Japanese did with all the tools they were buying, in view of the large supply of cheap labor that he understood to be available. Upon an explana lion of the factors of expedition and quan- 252 KAILWAT KATEKIMiS, EQOTFMEFT, AKD S'OTPLIES, tity of podoct re'qii,ired, he stated that he had not appreciated those points., ^^ Outside of the South Manchuria Railway shops at Shakako and to a^oertain, extent the Taafshan and Harhin workshops, the railways m Uuna are rather inacleqiiatelT equipped with expediting and labor-saving machinery and tools.' Much of the present equipment IS of Amencaii, nianufacture, even on the lines huilt with British, Freiwh, and Befaan loans, but in the German-built shops nothing but German machinery has been used.' ' ' With the limited equipment and the preasure of growing business the present slow hand methods of doing much of the work have proTed unsatisfactory— not from the standpomt of cheapness but because they keep Muipment out of service when it is badfy needed. A typical case of this is the boOer repairs to the large locomotives in use on the Peking-Suij^an Railway, which are held out of service almost twice as long by reason of the hand work as they would be if the rcpan-s were eiected 'with a full complement of compressed-air working tools. Therefore, notwithstanding the cheap and capable labor, tTiere should be, and nrobably will be, a growing demand for shop took m the Chines© Government •Railway workshops. ILBCf MFIEB UGHT RAILWAYS" AND SHOirr-LINE TRAMWAYS. Tlie data shown regarding the electric tramways in Japan and the profits resulting from the Hongkong, Shanghai, and Tientsin electric tramwavs seem to the wnter to warrant the statement that electrified light rai ways (or what are called interurban railways in America) *^! >^ l"gWy profitable in China if operated and managed with abiity In^many instances tliere wouM be a combmation of city iiid interurban lines. The writer also beheves that if such Hues ^ the Sunning Railway, the Canton-Samshui line, the Swatow^Chao- chow MailwaY, the Changchow-Amoy line, and the Kiangsi Rail- way, instead of bemg operated as steam raHways, were ^ectrified and would do an interurban business, they would show much better working results. This is particularly true of the last three, which are now fhoAing losses instead of profits; but, in view of their small amount ot freight business, it is also very probable that the fii-st two lines womd show better results. Railway construction in the congested districts of China will be expensive^ in any event, but the light electrified hues would be considerably easier to locate, and this wo'uld, in a measure, offset the increased cost of electrification. A plan according to which tha trunk lines and branches handling freight would be built as steam railways and the short-travel passenger railways and the hght rail- ways as electric lines has much to conunend it as one of the arrange- ments to be adopted in a program of railwav construction for Chma as a whole ospeciafly in view of the avaifable data showing that dectrihed hght railway wo'uld probably be more profitable than steam-operated light railways. lllGANKATIOlf AMD .METHODS OF OPERATION, While the distinctly deipartmental organization and the strictly Btation-maator method of operation may impress representative CONCLUSIONS AND SUGGESTIONS. 253 of American concerns doing business with the Chinese and Japanese railways as not being the best arrangement, it is the writer's opinion that the conditions are such that both these situations must be accepted. Business slioidd be done with these railways along these lines, particularly when it is a question of specifications or equip- ment (though this will seldom be the case outside of such mattei-s us those involving signaling and train dispatching). It may l)e true that by these methods the Far Eastern fines do not move traffic with the same speed as the American roads, but to do so they would be obliged to take a greater amount of risk on account of the class of men with which they have to operate these railways. FOREIGN EXPERTS IN CHINESE RAILWAY SERVICE. Tf the scheme of consolidation previously suggested were to be effected, there is no doubt that this should be done under experienced foreign direction, possibly similar to the present administration of the Salt Gabelle or the Chinese Maritime Customs. Such a necessity would probably be recognized by the most advanced of the Chinese railway men. As illustrating tliis, the view of Dr. C. C. Wang, the present head of the Peking-Hankow Railway, as expressed in the Chinese Social and Political Review and reprinted in the December, 1917, issue of the Far Eastern Review, is quoted as follows: Experience has shown evetywhere that railways mnet be managed by experts. The problems of railway administration are so numerous, the effects so far-reacning, the organization and working so complex, that it is only experts that may be al)le to develop the railways properly. It may be generally said that one of the greatest needs of the railways in China is expert service. A few facts may help to show the needs. We all know that in dealing wdth foreigners we have lost in many cases in the matter of railwa}'s. This perhaps was not dne so mnch to the aggression of our foreign friends as it was to the fact that they were experts while we were not. They knew what they talked about, but we sometimes did not. When our layman representatives, who had no intimate knowledge', met the foreign experts who knew every conier of the ques- tion, it might have been expected that our men lost out. It is due to the same lack of experts in China that we have to employ many foreigners in our railway service at a great cost. The fact that we have had considenil de trouble in dealing with some of our foreign employees may lie traced to the same cause. To ameliorate the situation we must first of all train up our own experts, IMherwiee, any attempt to relieve our foreign assistants will be suicidal. In fact, we need more real foreign experts selected by ourselves for special M'^ork, who should he willing to work disinterestedly for the country and reatly to afford our young men every opportunity to learn. By this process in a few years we shall have our own t'xperta. But the fundamental requirement for training up our own experts under our fi'teign employees or under any other system is that there must first of all be adopted an impartial and effective system for selecting the young men to begin with, a fair piotection against the influence of the politicians and cliques, and a stable and well- defined service that will permit the men to work long enough to learn the busineau. Substantially this same view is expressed by some of the other most progressive Chinese railway officials. For the present foreign experts in the capacity outlined by Dr. Wang are necessary in the further development oi the Chinese railways. At present there are no foreign experts in the employ of the Japanese railways. The Japanese will probably continue their present l)ractice of mating such investigation and study of other railway methods and equipment as they think necessary, and then applying their conclusions m their own way. 254 :ilAttWAY MATERIALS, BQUIPMEMT, AMD SUPPLIES. ICMiIiDf G-Sf IICK, SPECIFICATIONS. TIio matter ^ of rolling-stock specifications is considered at some length, beginniiM? on page 77. In this place it is only necessary to say thiit, with the conditions now prevailing and nntil such time as the Monstry of Communications adopts definite specifications, it is cpiite proper (and, m fact, advisable) for American manufacturers to put foi-ward propositions conforming in general to American speci- liciitions for equipment to bo funiislio'd to'" the Chinese Government KiilwaTO; advantage should be taken of such points as tyiie of engine frame, but such nonessentials as tTOo of boiler and fire-box ma.terials can be conceded. This suggestion is made for the reason that in th,e writer's opinion, the beat interests of the Chinese Government Rail- ways Will, be served by the use of rolling stock along the lines of American practice. In„quiries from Japan will no doubt give very dehnite and detailed specifirations as to what is wanted. 00NT:EACT,ING AND CONSTieCTION PLA,NT. General con^t^acting so far, in the construction of Chinese railways. Has been largt^hr an arrangement ta^keii care of by the railway loan agreements. The construction corporation of the loan syndicate as a rule, has bought the necessart materials and equipment and iii general handled the construction work— usuailv with a small amount of instruction plant. In m.any instances the work has been sublet to Chinese contractora (generally local parties) and the work divided into small amounts; also, it is usually separated as between gradino- foundation and culvert work, and station builcUngs. It is probable that much of the work in the futui-e will be so constructed^ There axe certain hnos project.oii howov(>r, some parts of which will pass throurfi somewhat sparsely settled, rough country, and the reduc- tion of the time element would appear to warrant the statement t lat certain expediting construction plant probably will be used in the future. If the gauge of the Imperial Government Eailways of Japan is wideMd to 4 feet SJ inches along tlie lines of a general reconstruc- tion, there wil,i be need of very much more constraction plant tlian has previously been used, and the execution of the work in the reduced time now estimated would require some intensive construc- tion plant along the .lines of American practice. CONCLUSIONS AND SUGGESTIONS. 255 IIHIGE AND BUILBING MATEEIA,LS. f riflge materials for the Chinese Government Railwaj-s thus far have f'leen largely furnished by the loan interests or from the Shan- haikwan bridge works of the Pekiog-Mnkden K^aOway. In general the specifications have confoi'ined to the practice of the nation responsible for the loan. For recent construction and replacement however, a good many bridges liave been o!>tained fi'om Amencan sources. 'rh,is is particulariy tlie case with the new work on the CiMi ton-Hankow Ime and the replacement on the Pekin<^-Hankow Ime of bridges lost in 1917. "^ Chinese and Japanese materials have ordinarily been used for substmctures and station building in both countries There are numbers of cement plants in both China and Japan. Brick and tile are made in considerable quantities in many localities. The result ia that little material is required from the outside, except where rein- forced concrete is used; this is being employed to an increasing extent, but up to the present time the worK lias usually been done by hand, except for tne mixing machines, which are considerably used. COAL AND WATER STATIONS. The storage of both coal and water is along the very simplest lines in both China and Japan. Very httle labor-saving or expediting equipment is used. In locomotive coaling and taking water the locomotives are always uncoupled from the tragi's. Very little water treatment apparatus has been installed thus far, but as a rule the water is "fair to good" for locomotive use in both comi tries. In China and Manchuria a good deal of the water carries considerable material in suspension, wliich can be removed by filtration. COMMODITY HANDLING PLANTS. Coal and all other similar commodities being so largely handled by hfind, there is very little plant for handling or storing by mechanical methods. This also applies to the handling of agricultural products, most of which are handled in boxes or packages made from matting. Rice is generaOy handled in what may be termed matting packages. Tlie Japanese authorities have given a good deal of study to the handling of soya beans in Manchuria by elevators, but so far no installations have been made, though, with the advantages of drying and cleaning, it appears that tins could be done with consideralrle benefit. The same remarks apply to the handling of both beans and wheat at Vladivostok and Harbin, KAIL AND FASTENINGS. Normally the Japanese railways are supposed to obtain their supply of rail and fastenings from the Iniperial Japanese Steel Works and the IMnese railways from the Efan-Yeh-Ping Steel Works, but, bc^cause of tl\p demand for the products of these plants, considerable (luantities of rail and fastenings have been obtained from other sources. Japanese railways recently obtained a considerable quan- tity of rail from the steel mills in Colorado. The Chinese standard S.">-pound rail section and details of fastenings are shown on page 75. Tlicr© is a decided opportunity for the use of rad anchors (anti- cieepers) on many of the Chinese railways. All rad anchors used thus far in both countries have been largely from American sources, although in Japan the practice is quite extensive of using second- IkuuI ties set on end to anchor the track. CKOSSTIES AND TIMBER. One of the great problems of railway construction and maintenance in China will be the supply of suitable cross ties. The table on page T.'-i shows the life of most timbers to be comparatively short and the <*nst high. In the writer's opinion, a special steel or other similar type of cross tie will provide the solution of this difficult v. One of the conditions that wOl assist in the success of special tract cons true tion 256 lAttWAT MATERIALS, EQ,mPMENT, ANB SUPPLIES, ill Chiim is the large supplv of tlie cheap and capable labor required t^'C^S"^ ""^ mainteoa.ce, particulady when Lavy Thfi supply of tiniber in Oiina is smal and the price very hiffh «id the present growing practice of using reinforced concrete lor 8ta on curbing Hiforaation signs, fence posts, and many similar requirements wdl no doubt be further extended on all the lines FENCING MATERIALS. feS'^c/'rl*'^!7 ^T^^^n^ particularly in the agricultural aree^, fen^g M an mpracticabie luxury m China, but in urban district^ considerable stractures, rather than fences, are at time^ built along the milways, and the practice is rather to thus inclose the railwai m the cities and towns than to fence them tlirough the country In som^e ciLses Aniencan fencing materials hare been used, and thei*r use could be extended to much advantage, especially materials for very robust feric€ posts and also special spiral wire for the country fencing, a little of this latter having been used heretofore. PMOGs AND swrrcHEa While the frogs^ and switches have conformed in the mam to the pract«;e of the builders, the tendency for new work and maintenance l^JZ '?**rf^ *Jrg ^^"^ genenilline of practice that is becoming common in both Chma and Japan, representing what might be termed a compromise between British and American practice Thus far only a few special hardened parts have been used; but the grow- Z «xT«f«i™ ,^*^^^\^'^^^ Japanese railways will w^rant the extensive use of such material, for which their track work is well adapted. A very miscellaneous assortment of deraOs is used in both coun- tries; most of these are homemade devices or manufactured in the railway s own workshops. A good example is sliown in figure 21 Ji'lf;^^™* A ^^^1 ""^ ^^^?^ r^^ ^ ^««^ i^ b«^h countries to advantage. A good many derails are used, and there seems to be a growmg tendency to provide additional protection in this connection. BOADWA¥ AND THACK TOOLa A study of the roadway and track tools in use on the railways in China would constituto something of an education on this-suftect Nearly everything that the writer ever heard of was to be fouK use m one place or another. With the similarity of conditions on a larffe percentage of the lines and with the stone ballast America^ tools are in general, well adapted for construction and maintenance rtnl^^'A^^^'T ""^T- '^^y ''^ «^^^ '^'^ to the railways L.1 T L*L ^^''^f •°**1I American roadway and track tools are used m both countries tUugh there is a decided tendency for Zl Japan«e now to manufacture their own tools. ' "^ SIGNALS AND TBLEPHONEa .J!'3 *^® ^"^f amount of really modem signals and central train- control apparatus now installed, there is every reason why ^e CONCLUSIONS AND SUGGESTIONS. 257 simpler three-speed American method of signaling and selective tele- phones to direct present train working should be adopted in both Japan and China. This could be done with benefit, particularly to take care of the growing traffic, which will necessitate increasing the traffic capacity of these railways from time to time. OILS AND STORAGE. Burning oils and lubricants in China are largely from American sources. In Japan much of the higher-grade lubricating material is of American manufacture, but a considerable amount of the lubri- cants, esnecially the cheaper materials, are from Japanese sources. This condition also obtains in South Manchuria and Chosen. There is a variety of arrangements for storing and distributing the oils, but in only a few cases are the best modern methods employed. As all oils are expensive in China, improved apparatus could be adopted in many instances so as to show a good return on the invest- ment. BUSINESS METHODS. Much might be said regarding the best ways of conducting business in China and Japan, particularly regarding the much-discussed Chinese "comprador" method. The conclusion was reached, how- ever, that this method has little, if any, effect on the business of handling railway equipment. The writer is strongly of the opinion that experienced application and commercial engineers are necessary for the most successful handling of railway business in China and Japan, as is the case in handling these markets in all parts of the world. There have been and wilTbe special conditions to be met and problems to be solved in both of these countries, and, without question, the obtaining of busi- ness can best be followed up by experienced engineers on the ground who will be able to make the best application of available apparatus. REPRESENTATION. The question of representation is admittedly one of much impor- tance. In Japan, at present, there are a number of well-organized American concerns representing American manufacturers; most of these have Japanese employees who are technically famifiar with the products handled. The several strong Japanese commercial and engineering companies usually represent a number of American manufacturers for the sale of railway materials, and as a rule these concerns have a well-organized technical staff. In addition there are a number of large American manufacturers who have established branch plants in Japan. Much has been said concerning the advan- tages of these different arrangements, and, on the other hand, there has been considerable criticism of each of the last two methods as not being, in the long run, to the best American interest. The writer inclines to the opinion that it is quite desirable, in any event, for American interests to retain control of the business in some form, and the first of the above arrangements has much to commend it, espe- cially in view of the fact that there are at present a number of well equipped American concerns for handling the business. 106229"— 19 ^17 258 BAmWAT MATBEIALS, EQUIPMENT, AND SUPPLIES. In CliiB,.a, a-side !mm the Han-Yoli-PiFig Co. and the railways' own worksliops., there are very few strictly Chinese concerns handling railway Wsiness. There is, liowever, a considerable variety of com- mercitd concerns in China representing American manufacturers of railwiiy materials. Some of tiiese are of strictly American interests, hut few are fully staffed with Americiu,is, although several are approximfttely so, especially as regards the technical staff. Sooie of the other concerns are mixed aa to interest, nat.ionality of concerns represented, and nationalitv of staffs (particularly the technical fltoffs). It i,s felt by the writer that American interests and also the eust.omer's interests would he best served through the rejjresentation of Am,erican manufacturer by American or American-CWnese con- cerns. Such interests will give the best consideration to the perma- nent maintenance of the business, while the houses of other nation- ality will be chiefly interested in the immediate business and the profit therefrom an*d will desire to secure later business for their own nationalities. 'This statement is especially pertinent in connection witli the recent war conditions. The question has. been asked whether there are sufficient American concerns of this character to handle the present and futuie business. The writer believes, that there are ; in fact, he .is strongly of the opinion that some of the present conoem--i should make a work in » ar- rangement under the provisions of the Webb-Pomerene law (making it possible for American int(M"osts to combine in handling foicign business), ■especially to eliminate some of the unwarranted compe- tition betW'Cen American intwests and to represent fullv the best American produclB. Another desirable result that such^a consoli- dation would tend to insure is the utilization of the m^ost experienced men, particulai ly those who 'have been in China and have become acquainted with 'conditions. Probably moie than in other countries, experience is an asset in handling businws m Ch.ina. Application engineers should be engaged fo^ long periods — at least 6 years and preferably lO' years. As a matter of tact, th,is is the rule with the engineers of other nationalities. Also, to handle these market-^ to the best advantage, it m werj necessary that such engineers should return to America for periodical visits to keep fully up to date witii developments. Anotlicr advantage of such an arrangement wo'uld be tlje utilization of high-grade men to handle extensive linas of radwaj materials, equipment, and 8uppli.es. This will be particularly de- airab'le when competition is encountered, as it will be after the war. In the writer's opi.nion, the railway markets of Cliina aie going to develop along such lines — in fact, conditions are such now — that one fxperiencedj energetic repiebentative can handle a veiy corujiderable number of sunilar lines; and he can do this at the various commercial centera if aided by the 8t.affs of the several local offices. Thii is ospocialy truC' where these local offices have well-qua lilied engineeis (as they frequentlv have). Th&ie remarks wph particularly to the concerns that nave their principal or heaci office in one of the larce trading centers^-usually Shanghai but sometimes Tientsin- ana blanches in the other centers, such as Peking, Hankow, and Canton oi Hongkong, these centers being the most miportant from the standpomt of railway markets. An additional reason for American manufacturers to combine for handling the sale of railway equipment and mateiiala to the Chinese CONCLUSIONS AND SUGGESTIONS. 259 Government Railways is the growing tendency for the Ministry of Communications to supervise large purchases. Manufacturere in the United States do not yet appreciate as they will later the differ- ence between s.^Uing railway equipment and material to a central- ized buying organization and the competitive buying of a large number of private railways. This is also a strong argument for hav- ing seasoned application engineers available to handle this bus- iness, particulai ly in view of the weight that such men's opinion carries with the Chinese officials. It goes without saying that an acquaintance with the personalities of the officials and a knowledge of the formalities of procedure are valuable assets in this connection; and they both take time to acquire. The most advantageous point at which such representatives may be located is rather difficult to state, particularly as most American con- cerns have their principal or head offices in Shanghai. Peking is likely to become, in the course of time, the most important place, because of its bein^ the headquarters of the Ministry of Communications and of the Pekmg-Hankow and Peking-Suiyuan lines, as well as the point from which one can best keep in close touch with the Cheng-Tai, Tao-Ching, and Pienlo lines, whose operating headquarters are at points on the Peking-Hankow line. Tientsin, the headquarters of the Peking-Mukden and Tientsin-Pukow lines and also of the Kailan Mining Administration, Is only 87 miles by rail from Peking. Many of the American manufacturers have fully equipped branches in Tientsin, some of which handle the Peking business. The round trip between Peking and Tientsin can be made in a day, the traveler having from 10 a. m. to 4.45 p. m. at either end. Hankow is headquarters for the Hukuang Railways and, on account of the construction of these lines, will be an important point to be kept in mind. Canton (or Hongkong as an alternative location), on account of the existing Hues and Imes that probably wiU be con- structed, will be a point of some considerable importance for the handling of Chinese railway markets in southern China; from this point the French Indo-China railways can be reached. Shanghai, while the most important commercial center in China, is the headquarters only for the Shanghai-Nanking and Shanghai- Hangchow-Xingpo lines, both under British foreign staffs. It is probable, however, if sufficient traveling is done, that Shanghai is the location from which the situation can best be handled as a whole — at least for the present. From whatever point it is undertaken to handle the business, a very considerable amount of traveling will bo required to obtain all the business possible. CHINESE STUDENTS IN UNITED STATES. Many persons probably do not appreciate the number of Chinese students that are being given technical education in America through the working of the American refund of the Boxer indemnity. Nimi- hers of these students are remaming and taking a limited apprentice- ship course in various railway ecmipment plants. Some of the present Chniese Government Railway officials, particularly in the mechanical department, have followed this course. Without doubt it has been of much benefit to these men, but, in the writer's opinion, the maxhnum results were not obtained for the reason that the men were 260 lAILWAY MATERIALS', EQ,UIPMEFT, AND SUPPLIES, tramed mostly in designing and manofacturinff methods of the Tery large eon........ .\.-', X. . juLiOuii y^anion. K. C. Johnson (Chinese), Canton, .T. H. Low, Canton. - T. S. Yuen, Canton. KWANGTUNG (YUEH-HAN) RAILWAY CO. (LTD.). CANTON-SHINCHOW SECmON. Head office: Canton. Director... Au Keng Hsing, Canton. Advisory engineer D. S. Williams, Canton. Chief engineer. Yung Men Hon, Canton. Traffic superintendent .M. T. Cheng, Canton. Mechanical superintendent Liang Woo, Canton . Inspecting engineers in England: C. P. Sandberg, 9 Bridge Street, Westminster, S. W. Inapecting engineen in United States : R. W. Hunt 4 €&. , New York. CHINESE PKOTINCIAL RAILWAYa TSCmilAlt (ANGAMGEH' MGHT RAILWAY. Head office: Tiitailiiir, Hdlimgkiang, Manchuria. Management under the pro- vincial viceroy of the Provinc© of Heilungkiang. ■lAifGsi. mmsmm' lAiLWAy. Head office; Kiukiamg . Liat of officials of this lino not obtained. Head office: Nanking. Managing director Traffic manager NAUKINCS CITY RAUiWAY. '^mm Kien Shou, Nanking. TM Ilia Min, Nanking. APPENDIXES. 267 CANTON-KOWLOON (CHUI-KUANG) RAILWAY. CHINESE SECTION. Head office: Tai-Sha-Tau, Canton. Cable address: Kuangchui. M .M laging director — Weu Feh Chang, Canton. A-N-istant managing director. Liang Shi Hsu,' Canton. Smbard Street, London, I-' ' '. 'I'lie British & Chinese Corporation representative in Peking: S. F. Mayer, managing director. BRITISH SECTION. Head office: Kowloon. Cable address: Railway, Hongkong. Manager H. P. Winslow, Kowloon. Engineer way and works R. Baker, Kowloon. Traffic assistant W. G. Clark, Kowloon. Traffic inspector F. Aslett, Kowloon. Locomotive superintendent C. D. Lambert, Kowloon. Assistant locomotive superintendent Ingham Sutcliff , Kowloon. Chief accountant J. Morris, Kowloon. Chief storekeeper G. A. Walker, Kowloon. Agents in England: Crown Agents for the Colonies, 4 Milbank, Westminster, London, S. W. Consulting engineers: Sir J. Wolf Barry, Lyster & Partners, 2 Queen Anne's Gate, Westminster, S. W. CHINESE PRIVATE RAttWAYS. SUNNING (HSINNING) RAILWAY. Head offices: Sunning and Hongkong. President and manager: Chin Gee Hee, Sunning and Hongkong. Hongkong office: No. 151 Connaught Road. SWATOW-CHAOCHOW (CHAO-SHAN) RAILWAY. Chaochowc^ Swatow Railway Co. (Ltd.). Head office: Swatow. Cable address: Railway. Managing director general Chong Hong Nam, Swatow. Acting director general Chong Chee Hain, Swatow. Director Chong Chrong Hong, Swatow. Secretary W. T. Ching, Swatow. €HANGCHOW.AMOY (CHANG-HSU) RAILWAY (FUKIEN RAILWAY). Head office: Amoy. Managing director: Wang Ching Hsien, Amoy. I t I 268 RAILWAY MATERIALS, EQUIPMENT, AND SUFPLIES. IE IHDIISTItlAL RAILWAYa For the rmmn thaX in all cusei these railwaye are numfiged by the industries served there are no particular officiata for these short lines. It was therefore found imprac- ti«We to prepare a directory. fOlEIQIf RAILWAYS W CHINA. 'fllHNAN (TfEN-YIlBI) RAILWAY (INBO.CIIINA KAtLWAYS^^ Head office: Hanoi, TongMng. Chief department of public works Luis Oonstantine, Hanoi Assistant engineer in chief Antoine Meyer, Hanoi. YUNNAN SECTION. Manager of workii|5 and engineer in chief G. J. Chemin-Dupontes, Hanoi General chief of stores Pierre Foursand, Hanoi. SHANTUNG (3A.NTO) .BA.II.WAY. Head office: Tsingtau (Seitou). Cable address: Santetsu, Diirector of th® railway department 8. Salcafuchi, Tsingtau. Bureau of general affaus. K. Sugata, Tsingtau. Traffic bureau K. Chrnki, Tsingtau. Operation bureau Y. Funada, Tsingtau. Financial bureau.. ...T. Sato, Tsingtau. Whaff office .K. Chiato, Tsingtau. Wprlcshops .K. Wada, Tsingtau. Mining bureau — S. Handa, Tsingtau. Bales bureau M. Matsumoto, Tsingtau. TllAMWAYS IN CHINA. TiENTSDI TBAMWAYS. These tramways are operated by the Compagnie de Tramways et d'^clairage de TientfliiL Sod6t6 Anonyme, with headquarters m Brussels, Belgium. Head omce in China: Tientsin. Cable address: Tsintram. All the lollowing officials are located in Tientsin.: General manager , 0. Gaillard Chief engineer , ,G. Rouflart. Traffic and roiad manager... F. Lahaye. Mechanical engineer , . , N. Vrancken. Chief accountant A. Paternoster. SHANGHAI TRAMWAYS. These tramways are operated by the Shanghai Electric Construction Co. (Ltd.). Head office: No. 2 North Soochow Road, Shanghai. All the lollowing officials are located in Shanghai: General manager.. Donald McCall. Deputy manager- J. G. Smeaton. Tiniffic manager .E. Carroll. Rolling stock superintendent J. L. Gordon. Aseistant rolling stock superintendent H. G. Sadler. Line engineer... ,. , .H. J. Blatchford. Assistant line engineer T. H. Brownlie. St irekeeper J. L. Stuart. Secretary in London: L. W, Hawkins, Basilden House, Mooregate, London, E. C. HONGKONG TRAMWAYS CO. aTD.). Head office: Russell Street, Hongkong. Cable address: Snakefish. All the follow- in? officials are located in Hongkong: Chairm,an , . .Hon. C. E. Anton. General manager and cliief engineer J. J. 8. Kennedy. Aaaistant chief engineer ' R. J. Wilton. APPENDIXES. 269 ,.....W. E. Roberta. A. Course. A. K. Henderson. , A. D. Macdonald. Secretary Traffic superintendent Workshop superintendent. Power engineer PEAK TRAMWAYS CO. aTD.). Head office: Alexander Building, Hongkong. Cable address: Fencibles. The officials are located in Hongkong: General managers John D. Humphreys & Son. Superintending engineer C. B. Buyers. IMPERUL GOVERNMENT RAILWAYS OF JAPAN. Head office: Gufukubaehi, Marunouchi, Tokyo. Cable address: Kobusbo, President Baron S . Goto, Tokyo. Vice president K. Nakamura, Tokyo. GENERAL STAFF. Secretariat: Director, section of . documents and archives S. Nakanishi, Tokyo. Director, section of personal affairs T. Inoki, Tokyo. Secretary, section of relief insurance T. Nagai, Tokyo. Engineer in chief, inspection section K. Hasigawa, Tokyo. Engineer, raUway investigation office T. Tariaka, Tokyo. Coordinating secretary Y. Tsurumi, Tokyo, General Administration Bureau: Director E. Osonok (secretary), Tokyo. Chief, general affairs Y. Osaki (secretary), Tokyo. Chief, technical affairs T. 0. Ito (engineer), Tokyo. Traffic Bureau: Director Y. Kmoshita, Tokyo. Chief, general affairs D. Shono (engineer), Tokyo. Passenger traffic manager S. Mikama (secretary), Tokyo. Freight traffic manager J. Murai (secretary), Tokyo. Transportation superintendent ...... .T. Furkawa (engineer), Tokyo. Financial Bureau : Director K. Morimoto, Tokyo. Chief accountant ^ U. Beppa (secretary), Tokyp. Chief auditor T. Nagura (engineer), Tokyo. Chief of stores S. Aoki (secretary), Tokyo. Engineering Bureau: Director S. Sugiusa, Tokyo. Chief of design section M. Nawa (engineer), Tokyo, Chief of extension section S. Omura (engineer), Tokyo. Chief of maintenance of way and works section N. Okano (engineer), Tokyo. Machinery and Rolling-Stock Bureau: Director Y. Shima, Tokyo. Chief of mechanical engineering section. . K. Sakuma (engineer), Tokyo. Chief of electrical engineering section I. Inouye (engineer), Tokyo. DIVISION STAFFS: EASTERN DIVISION. Director Dr. T. Okado (engineer), Ueno, Tokyo, Chief, general affairs G. More^ (secretary), Ueno, Tokyo. Chief, traffic section R. Asahma (en^neer), Ueno, Tokyo. Chief, maintenance section C. Soyama (en^neer), Ueno, Tokyo. Chief, mechanical and electrical section S. Takasu (engineer), Ueno, Tokyo. Chief, accounts section R. Yatabe (secretary), Ueno, Tokyo. Omeya works manager -S. Takasu (engineer). Touchizaka works manager — Y. Kaminasa (engineer). Nagano works manager T. Okabe (engineer) . Moroka works manager S. Mayanagi (engineer). CI 'T A Sill HAILWAY MATERIALS, EQUIPMENT, AKD SUPPLIES.. "SAL D'PrisiON. Birector. ,, . , Chief, general affairs Chief, traffic section. Chief, nmintenance sectioii Cliief, mechanical and electrici Chief, accoiiiito.i»ct»ii !.. 0-i works man.ager Hamamatsii worka ■nianiger Yokkarchi works manager Eauazawm 'iforks 'nmnager Birector. ...... , Chief, general affairs. „ . ., , Cliief, traffic section Chief, maintenance section , , , Chief, mechanical and electrical section. Chief, accounta sectioii Takatori works manager , Kobe works mamger , Shimonoeeki works 'mMtager. , . . Yonago works maomsur. , , . . . ctor , Chief, general affairs . Chief, traffic section.. Chief, maintenance section Chief, mechanical and elecMcal Chief, acconnte aection Kokura works mamiger Yakahnshi works muia^r Wak,amat8u works ma.nager H. Magao, Shimbaahi, Tokyo. S. Nakagawa (secretary), Shimbashi, Tokyo. . R . N omura (engi iieer) , Shimbashi, Tokyo. section H. Inagaki (engineer), Shimbashi, Tokyo. -N. Fukushima (engine©!), Shimbashi, Tokyo.. S, Akiyama (engineer). M. Skida (engineer). K. Kishyanca (engineer). ■ - S. Watanalm (engineer). »N DIVISIOM. Y. Nomura, Kobe. M. Fiikutomi (secretary), Kobe. Y. Kodaira (engineer), Kobe. T. Eudo (engineer). Kobe. S. Taguchi (engineer), Kobe. J- ShMBniji, teecretary), Kobe. S. Tabucm (en^eer), .8. Nakaiia (engineer). - -T. Kisu (engineer). - - Y. Murao (engineer). KYQSHU DWISiOM. — R. Daido, Moji. • - ■ -H. .HiralB (sc'cretary), Moji. - K. Yosbikawa (junior eecretary), Moji. - - - T. Pimikawa (engineer), Moji. sec'tion. K. Yamtfuchi (engineer), Moji. - • - S. Hirayama (junior secretary), Moji. -K. Yamaguchi (engineer). • K. Fyeda (entgiaeef). - - 0. Tsukma (engineer). ^^ HDKKAIIMI DflTlSIOlf . Birector ... S. Suzuki. Sapporo. Cbiet, general affairs S. Koyano (secretarj'), Sapporo. Chief, traffic section , K . Tamaka (secretary), Sapporo. Chief, maintenance section T. Omura (engineer) . Sapporo Chief, mechanical .and electrical section 1. TamaiaAi (engineer) , Sapporo. Chief, accounts section T. Yomiara (secretary). ' Sapporo. Sapporo works manager , Asahigawa works manager. K. Twa.moto (engineer). Hakoaati works manager Y. Oyamalla (engineer). Lnspectiott 'bwfean in United States (.Metropolitan life Building New York CitvV Engineer in chaige, S. .Kobaaii.; T. Tiyama., K. Sakai. . ^^' SOUTH MANCHURIA RAttWAf CO. H«ad.oiice: Dai..ren. 'Gable address: Maiitetsu. Board of direction : Director in cliief ,Br. S. Kimisawa, Bairen. .Director T. Kawakami,, Darren. Do ,, 8. Kal>a:yaiiia,_ Dairen. ^ K. Kaino, Daifen. U'**- - ■ - R. Kawamura, Dairen. jDo R. Tatsui, Dairen. APPENDIXES. 271 Secretariat: Director Dr. S. Kunisawa, Dairen. Acting superintendent, section of per- sonnel K. Kawamura, Dairen. Assistant superintendent, section of per- son nel T. Yamanishi , Dairen. Superintendent, inspection section T. Tanabe, Dairen. Department of general affaire: Director T, Kawakami, Dairen, Director, ronstruction bureau S. Hori, Dairen. - (ieneral superintendent, railway section.. N. Tani, Dairen, Superintendent and secretary, railway operation section and secretariat K. Kaise, Dairen. Superintendent, railway traffic section T. Oka, Dairen. Superintendent, maintenance of way sec- tion T. Matsuda, Dairen. Superintendent, public works section Y. Kato, Dairen. Superintendent, architectural section K. Onogi, Dairen. Superintendent, section of correspondence. J. Yamada, Dairen. Superintendent, auditing and statistical section I. Tadane, Dairen. Superintendent, communications section ..T. Mimoto, Dairen. Superintendent, Shakako workshops H. Mori, Dairen. Superintendent, wharf offices T. Narasaki, Dairen. Superintendent, Shakako harbor worka. . .K. Yamaji, Dairen. In charge of Mukden office Col . Sato, Mukden. In charge of Harbin office S. Shoji, Harbin. In charge of Cheng Chiatino office M. Hayakawa, Cheng Chiatino. Mining; department: Director S. Kabayama, Dairen. Chief engineer and superintendent, Fushun collieries .Dr. S. Yonekura, Fushun. Superintendent coal sales section S. Shirosaki, Dairen, Chairman Anshan Steel Works, preparation committee Y. Hatta, Dairen. Superintendent, geological section C. Kido, Dairen. I and department: Director K. Kaino, Dairen. Central laboratory — Acting superintendent K. Kaino, Dairen. Chief, applied chemistry division Y. Suzuki, Dairen. Chief, analytical division K. Higuchi, Dairen. Chief, filature and weaving division . .M. Matsuda, Dairen. Chief, electrical chemistry I. Namari, Dairen. Superintendent, land section K. Musai, Dairen. Superintendent, hygienic section Dr. K. Kasai, Dairen. Superintendent, agricultural experimental station J. Tochinai, Kungchuling. Director, South Manchuria Medical Col- lege Dr. Yamada, Dairen. Principal, South Manchuria Technical School K. Kori, Dairen. Librarian, railway library. F. Shimamura, Dairen, Superintendent, reference miiseum F. Shimamura, Dairen. \f counting department: Director. R. Kawamura, Dairen. Accounting secretary S. Mukaibo, Dairen. Superintendent, stores section K. Akiyama, Dairen. Superintendent, electrical plants H. Amemij'a, Dairen. Superintendent, gas works S. Tomitsugu, Dairen. TOKYO BRANCH OFFICE. Director R. Tatsui, Tokyo. Secretary M. Yamagaki, Tokyo. V hief accountant • - M. Ohwada, Tokyo. 272 .RAILWAY MATEBIALS, EQUIPMEKT, AKD SUPPLIES. Director........ Secretary Traffic manager. Superintendent,, Siiperintenclent, Superintendent, Superintendent, Superintendent, KOEBAN 1AILWAY8 SECTION. ..-....•.•.,...«,.,.,..,.. .»i. JSfc.ubo. Seoul. -•■ •- K. Washio, Seoul. • -M. Audo, Seoul, workshop section .M. Kurosawa, Seoul. accounting section (stores). . .M. Kata, Seoul. construction section. H. Kawayi, Seoul. Seishin construction office... Y. Hisakado, Seishin. Wonaan construction office... S. I to, Wonsan. EIMN-CHANGCHUN RAILWAY. Head office: Changchun. Cable address: Kichang Railway. Managing difector.. Kon To, Changchun. Eni^meer in chief J. Magario, Changchun. Chief of traffic Changchun. Chief accountant J. Uchigaki, Changchun. SSUPINGKAI-CHENGCHIATUN RAILWAY. Head office: Ssupingkai. ManMring.director Yu Yu, Ssupingkai. Chief engineer J. Fujine, Ssupingkai diief accountant , . Ssupingkai. llAlflLA RAILROAD CO. (LTD.). He»d office: Manila, Philippine Islands. Krector Manuel Quezon, Manila. 1^0 Francisco Ortigas, Manila. 1^ J.J. Rafferty, Manila. ^ - A. P. Fitzsimmons, Manila. ^- • - Milton E. Springer, Manila. ^ Felipe Cabailero, Manila. ^ J. F. Fernandez, Manila. Do. Alesandro Ruiz, Manila. Do. . . E.J. Westerhouse, Manila. ssident Manuel Quezon, Manila. president Francesco Ortigas, Manila. Secretary.. P. A. Alexander, Manila. Treasurer J. H. Allen, Manila. Comptroller W. E. Brown, Manila. General manager E. J. Westerhouse, Manila. Traffic manager. M. D. Roger, Manila. Superintendent of transportation T. McD. Rice, Manila. Superintendent, Northern Lines. A. Casteller, Manila. Superintendent, Southern Lines C. U. Russell, Manila. Superintendent, Alhaylim Line .T. C. Macgregor, Manila. Mechanical supenntendent. F. H. Dodd, Caloocan, Manila. Master car builder J. Smedley, Caloocan, Manila. Foreman of workshops F. Kingsland, Caloocan, Manila. Electrician. F. IL Haden, Caloocan, Manila. Chief ennneer E. S. Von Hontkowski, Manila. Principal aimatiint engineer H. W. Corp, Manila. Signal engineer. H. Fielding, Manila. Superintendent of stores. W. Wallace, Caloocan, Manila. PHILIPPINE RAILWAY CO. New York office: 43-49 Exchange Place. Head office in Philippine Islands, Iloilo. Ckble address: Philrayco, New York and Iloilo. Chairman of board William Salomon, Middlebury, Vt. JreflWent Charles M. Swift, New York City. Vice president Clarence Lewis, New York City. Do J. H. Pardee, New York City. APPENDIXES. 273 Secretary-treasurer J. W. Moffat, New York City. Purchasing agent . . .- E.N. Chilson, New York City. Vice president and general manager R. R. Hancock, Iloilo, P. I. Auditor E. G. Carrera, Iloilo, P. I. Traffic agent George P. Linden, Iloilo, P. I. Purchasing agent C. B. Sawyer, Iloilo, P. 1. General attorneys Lawrence & Ross, Manila, P. I. PANAY DIVISION. Trainmaster C. B. Sawyer, Iloilo,P. I. Master mechanic I. T. Brand, Iloilo, P. I. Storekeeper H. H. Sherrard, Iloilo, P.I, CEBU DIVISION. Superintendent C. Jones. Cebu, P. I. Master mechanic M. E. Cleland, Cebu, P. I. Storekeeper J. H. Renner, Cebu, P. I. MANILA ELECTRIC RAILROAD & LIGHTING CORPORATION. New York office: 43-49 Exchange Place. Head office in Philippine Islands: Manila. President Charles M. Swift, Middlebury, Vt. Vice president J. H. Pardee, New York City. Secretary J. W. Moffat, New York City. Treasurer R. B. Marchant, New York City. Vice president and general manager C. N. Duffy, Manila, P. I. Assistant general manager L. S. Cairns, Manila, P. I. Manager railway department W. R. McGeachin, Manila, P. I. Manager lighting department J. C. Rockwill, Manila, P. I. Superintendent tracks C. E. Haygood, Manila, P. I. Superintendent shops F. J. Ten, Manila, P. I. Chief engineer power plant B. H. Blaisdell, Manila, P. I. General attorneys Lawrence & Ross, Manila, P. I, 106229'— 19 IB \m APPENDIXES. 275 f Apppflii 2.^CHINESE EASTERN RAEWAY. CHMISI mrnmBM MMMMAX AWHITST 27/SlPTOfB,lB 8, 1S96. [Traiislation from Preacli.J ofKlk^^ZtZ^ Kmg-rhen, minister plempotentiary 01 ills Alajesty llie Emperor of China, at St. Petereburg, acang by virtueof an impmii edict, dated Knaiig Hbu, 22d war. 7th month, 20th day (Auguet 16/28 1896^ of tfeme ^ TK ^?l •■*'*'' R"8»-.Chine6e Bank, of the otherpart, it ha8"been ngr'eed a« follows:' The 1 hmese Government mil pay the sum of 5,000,000 kuping Wis to the Russo- Chmcse Bank, and will participate in proportion to this payment in the profits and lowes of^ the bank, on condition* set forth in a special contraJT ^ rjie Chinese Government having decided npon the construction of a railway line estai:>liijing direct communication between the city of Chita- and the Ruseian Soutli Vmun Railway, entrmts the wnstruction and opemtion of tMa railwmy to the Ruseo- Chmwe Bank upon the followinir conditions: ^ 1 . The Ru8K»-C%in«e Bunk will eetabltsh for the construction and operation of thia 'laiiway a compwiy under the name of the Chinese Eastern Railway CoT The F«l wMrh this company mil employ will be given to it by th© Chinese Govern- fnent. 1 he atjjtutes of this company will be in conformity with the Riia«ian umasm Mu3f rrlT'^TK ^t"" ^^f^Jo^P^^y can be acquired only by Chin^o Mussian subjecte. The preiident of tliia company will be named by the Chinese Government but paid by the company. He may We his residence in Peking. «f f tr^ii !!.l''** duty of Ae pre«d«it-_to eee particttlarly to the scrupulous fulfiiimeni of the oM^gations of the bank and of tlie railway company toward the Chinee© Govern- ment, lie will furtheniiore be reeponsible for the relatione of the bank and of the raU- way company mth Ae Chinwe Govermiient and the central and local authorities. The president of the Cbinese Eastern Railway Co.. will likewise be responsible for examining all accountB of the Chinese Government with the Russo-Chinese Bank To facilitate m local negotiations, the Russo-Chinese Bank will maintain an a<^ent St X eKing. ° hv^ihe^Ti W rl.^^^^ ^y tlie deputies of the president (named ortbe mllTB^?ZST^.T±f ^^f company, in nnitual,agreement with the engineers Of the toinpany and the local authontiee. In laying out this line, cemeteries and toml„)s, as also towns and villages,, should, so far as poSble, be avoided and passed by. i. Ihe c-ompany must commence the work within a period of 12 months from the day on wMch this contract sliall be sanctioned by imperial decree, and must so carry It on that the whole line will be finished within a penod of six years from the day on which the route of the line^is definitely established and the lands necessary therefor are placM at the disposal of the company. The gauge of the line should be the same as that^of the Russian railways (5 Russian feet, a'bout 4 feet 2| inches Chinese). 4. The Cliinese Government will gi,ve orders to the local authorities to assist the corn- pan) to the extent of their ability tt obtaining, at current pricea, the materials neces- sary for the constructipn of the railway, as also latorers, means of transport by water " ™J*^rJf ?^* ^'*i? P'^^^ons necessary for the feeding of men and anim,al8 etc The Lhinese Government should, as^ needed, 'take measures to facilitate such trans- ■portation. 5. The Chinese Government will take measuree to aaeure the safety of the railway and of the persona in Its service against any attack. The company will have the right to employ, at will, as many foreigners or natives .118 It may find neceseary for the purpose of administration, etc. Criminal cases, lawsuits, etc., upon the territory of the railway, must be settled by the IcK-al authorities m accordance with the stipulations of the treaties. 6. The lands actually necessary for the construction, operation, and protection of tHe line, m also the lands m the vicinity of the line necea.sary ft>r procurring sand stone lime, etc., will be turned over to the company freely, if these lands are the property of the State; if they belong to individuals, they will l>e turned over to the company either upon a single payment or upon an annual rental to the proprietors, at current prices. The lands belonging to the company will be exempt from all land taxes ("impot foncier"). The company will have the absolute and exclusive right of administration of these lands. ("La societe aura le droit absolu et exclusif de I'administration de sea terrains.") The company will have the right to construct on these lands buildings of all sorts, and likewise to construct and operat>e the telegraph necessary for the needs of the line. The income of the company, all its receipts, and the charges for the transportation of passengers and merchandise, telegraphs, etc., will likewise be exempt from any tax or duty. Exception is made, however, as to mines, for which there will be a special arrangement. 7. All goods and materials for the construction, operation, and repair of the line will be exempt from any tax or customs duty and from any internal tax or duty. 8. The company is responsible that the Ruseian troops and war material, dispatched in transit over the line, will be carried through directly from one Russian station to another, without for any pretext stopping on the way longer than is strictly necesBary. 9. Passengers who are not Chinese subjects, if they wish to leave the territory of tho railway, should be supplied with Chinese passports. The company is responsible that passengers who are not Chinese subjects should not leave the territory of the railway if they do not have Chinese passports. 10. Passengers' baggage, as well as merchandise dispatched in transit from one Russian station to another, will not be subject to custom duties; they will likewise l)e exempt from any internal tax or duty. The company is Ixtund to dispatch such mer- chandise, except passengers' baggage, in special cars, which, on arrival at the Chinese frontier, will \ye sealed by the office of the Chinese customs, and can not leave Chinese territory until after the office of the customs shall have satisfied itself that the seals are intact; should it be established that these cars have been opened on the way without authorization, the merchandise would be confiscated. Merchandise imported from Russia into China by the railway, and likewise mer- chandise exported from China into Russia by the same route, will respectively pay the import and export duty of the Chinese Maritime Customs, less one-third. If merchandise is transported into the interior it will pay in addition the transit duty — equivalent to a hsdf of the import duty collected— which frees it from any further charge. Merchandise not pajdng the transit tax will be subject to all the barrier and likin duties imposed in tne interior. The Chinese Government must install customs offices at the two frontier points on the line. 11. The charges for the transportation of passengers and of merchandise, as well as ft)r the loading and unloading o! merchandise, are to be fixed by the company, but it i-' obliged to transport free of charge the Chinese official letter post, and, at half price, 1 Idnese land or sea forces and also Chinese war materials. 12. The Chinese Government transfers to the company the complete and exclusive ri At to operate the line on its own account and risk, so that the Chinese Government v>ii\ in no case be responsible for any deficit whatsoever of the companv, during the time alloted for the work and thereafter for a further 80 years from the day on which the line is finished and traffic in operation. Thia period having elapsed, the line, with all its appurtenances, will pass free of charge to tne Chinese Government. At the expiration of 36 years from the day on which the entire line is finished and traffic in operation, the Chinese Government will have the right to buy back this line upon repaying in full a,ll the capital involved, as well as all the debts contracted for this line, plus accrued interest. [f — in case the profit realized exceeds the dividends allowed to the shareholders— a l»art of such capital is repaid, that part will be deducted from the price of repurchase. In no erne may the Chinese Government enter into possession of this line before the company will make JCuang Hsu, 22nd year, 8th month, 2nd day. Berlin, August 27/September 8, 1896. Russo-Chinese Bank. ROTHSTEIM. PKINCK OCJKIiTOHSKT. lAILWAY MATERIALS, EQUIPMENT, AWD SUPPLIES. APPENDIXES. 277 ACIIIBSliDKlfl! COHCaiWllfO SOUTHSHH MAMCHWEIAlf' CHIllXai BASTEEH E^AILWAT CO'. ITmnslilioE from Chinea©.] BBAWOH OF Phbambli.,— Hei (Cli:ing-chT#M) tmliaffladoT (?) of the Imperial Chinese Govem- ment, and Yang' (-ju), mwiister of the Imperial Cliinese Governmeiit to Rueaia, have recei'ved an imperial decree of the 7th of 'the Fifth Moon, XXlV vear of Kuang Hbh, that is the 13th of June, 1898, Rnssian calendar '(June 25, 1898,, new etyle). authorizing theoi to dmw up a contra<:'t with the Chinese Esietem Railway Co in accordance with the provisions of the treat^fhetween China and Ru»ia, enteral into at Peking'on the 6th of Ihe Third Moon, XXIV year of Kuang Hmi, i. e. March 15, 1898, Russian cal- endar (March 27, 1898, N. S.) and those of the apecial supplementary articles to the «nie, agreed, upon .»t St. Petcrshurg on the 17th of the Intercalary Third Moon- April 25, 1898— (May 7, 1898, N. S.) to the effect 'that, from the date of the ,8igning of T**4-^!?^' "^y the Chineee Government, in accordance with the permission given in 'the aXII year of Kuang Hsu (1896) tO' the Chinese Eastern 'Railway Co. to construct 'Certain rai,lway8, a branch line might he built and opemted. which should begin at a iBtation, t»' be selected on the m,ain line of the Chineae' E,aati5ni 'Railway, and extend to the aeaports, Dalny 'and Port. ,Arthnr in the Liaotung 'Peninsula: the 'said branch Iiiie to he dealt with in careful com'pliance with th,e terms of the 'Contract of the 2d of the Eighth Moon, XXII Year of Ku,ang Han, August 27, 1896, Russian calendar (bept. 8, 1896, N. S.) between t.he 'Chinese Govefn,ment and the Russo-Chinese Bank In accord,:ance 'W,i,th the foregoing 'provisions the following ,articles relating to the conetnictioE ,and ©peration of a railway through Manchuria are now agreed upon. to-wit: '^ AimcLE I. This, branch of the Chine» Eastern Railway, extending to the seaports of Port Arthur ,and, Dalny, shall be known ,a3 the Southern Manchurian Branch of the Chinese Eastern, Railway, A.BT,, IL In aC'Cord,ance' with article IV of the contract of the 2d of the Eightli Moon, , AXII yearof Kuang Hsu, A'upist 27, 1896 (Sept. 8, 1896, N. 8.), ^hich pro^dei that the Chinese Government sh,all take steps as occasion may require to facilitate the bringing m of the ,material8 need^ed, for the constniction of the line, whether transported by water or by land, it is now :agreed that the company may employ steamers or other iresuelii, and such vessels flying the company''s iag' shall be permitted to proceed up the LifM> River or ,any of its branches, and to enter Yingkow (the port of Newchwang) or any port in the neutral territory which may prove advantageoua to the work of constructing thia Ime, and m,ay there diacharge cargo. Abt. III. In order to facilitate the bringing in by the Chinese Baut^pi Eailway Co. of the materials and provisions ,n,eeded in the construction of the Southern: Ilimdiurian ,Branch, it w permitted the company to' build temporary branch lines" from' this road to Yingkow mnd to mB^mM in the neitial lone, but when the work of building the liAe is completed and the 'road 'is open lor traffic the company m'uat at the notice of the thmeee Government re,move theaO' branch milwaye; that m to nay, within eig'ht years from tlie date of the survev and determination of the line and the appropriatwn of the land for ite conatruction the* tempomry branch lines must be removed. Amt IV. In ,accoid,ttnce with the permiaaion granted to the company in the XXIII year of Kuang H,8U (1897) to cut timber ,and mine coal for tlie use of the raUway, It la now agreed to allow the company to ,fell timber at its pleasure in the forests on foyernment lands, each tree to be paid for at a price to be fixed by the engineer in chief or his deputy in coMultotion with the local authorities, but not higher than the local naarket rate. But no foreata on property in the pro\Tnce of Shengking belonging to the imnerial ,fam,il,'y, or on sites that affect tlie *' feng-sliui, " being under the dSect control of the Peking 'Government may be injured or disturbed. The comp,any sliall ,alaO' be ,al„lowed in the regions traversed by this branch line to ,m.nie roch coal m may be need'ed for the con,st,rnct,ion or operation of the railway the price of which coal ,shall 'be fixed by the engineer in, chief or his deputy in consulta- tion with tlie ,l,oc;,al authorities but ,8nall not exceed the ro'yalty paid by other parties m the same locality. ^ ^ i j i Abt. 'V. 'Widiin the 'leased terri,tory on the Liaotung Peninsula Russia may fix the cuitome taiiff t» suit itaelf, and China m,ay levy and collect duties at the boundaries on til goods, going from the leaaed territory to the interior or from the interior to the leaied terntory. In dealing with thi,s matter China may a,rrange with Russia for the lattjr Government to establwh the customs at Dalny and from the date of the opening of the said port to mtemational trade to appinnt the Ch,iiie8e Eastern Railway Go to •ct tt the agent O'f the Chinese Im'perial Board of Revenue to open and manage the cwtoms and ,u ita behal,f to^ levy and collect duties. Th© ,eaid customs shall be under the sole control of the Poking Government, to which the said agent shall from time to time report its management. In addition there shall he appointed a Chinese civil official to be stationed as deputy at the customs. All baggage of paasengers and all ^oods brought from railway stations within the Russian boundaries by the said line into the territory leased to Russia in the liaotung Peninsula, or shipped from the said leased territory into the Russian Empire shall be entirely free of all customs duties as well as of all inland transit and likin dues. Goods shipped by rail from the interior of China to the leased territory or from the leased territory to the interior must pay export or import duties respectively according to the Imperial Maritime Customs tariff with- out increase or reduction. Art. VI. The company may at its pleasure assume the reeponaibility of establishing a line of seagoing vessels flying the company's flag, to he operated under the regula- tions for foreign mercantile shipphig. Should these vessels or the management of the business in connection therewith occasion any financial loss, the Chinese Govern- ment shall not be held responsil>le. Passenger fares and freight rates shall be estab- lished by the company to suit itself, and shall in no\\rifie concern the railway. The period of the management of the said enterprise being of course unlimited, the pro- visions of Article Xll of the Contract between the Chinese Government and the Rusao- Chinese Bank of the XXII year of Kuang Hsu (1896) fixing a price for the purchase of tlie railway, and a date for its reversion to Chma without payment, shall not apply to this unoertaking. Art. VII. As to the location of the Southern Manchurian Railway Line, and the determination of the places through which it shall pass, it will be necessary to wait imtil the engineer in chief shall have surveyed the route through Manchuria and made report of the conditions to the head office of the company, when the company or ita agent in Peking shall consult with the director general of the railway and decide the matter. Appended is the text of the above agreement, as telegraphed by the Chinese Eastern Raifway Co. to the Tsung Li Yamen. Preamble of Agreement. — In accordance with treaty of Peking of 6th of Third Moon and special articles of Intercalary Moon, extension of Chinese Eastern Railway Co., to build and operate a branch line from station to be selected on main line to seaports Port Arthur and Dalny in Liaotung. Careful compliance with provisions of Russo-Chinese Bank's contract. Supplementary articles proposed as follows: 1. This branch line, extending to Port Arthur and Dalny, shall be known as the Southern Manchurian Branch of Chinese Eastern Railway. 2. Original agreement, article IV, (provides) Chinese Government to take steps to facilitate transport by land or water of materials for construction of railway. (Com- pany permitted to employ steamships or other vessels flying company's flag which may enter Liao River and branches and proceed to Yingkow and all seaports in neu- tral zone and there unload materials. 3. In order to facilitate shipment of materials and provisions, company permitted to construct temporary branch lines from Southern Manchurian line tolmigkow and seaports in neutral zone, but when the work of building railway is completed and whole line open to traffic, all these temporary branch lines to be removed at pleasure of Chinese Government. 4. The Chinese Government in First Moon last year granted permission to obtain coal and wood. Company now allowed to fell timber in forests on government lands, price of each tree to be fixed by local authorities in conference with engineer in chief, but not to be made higher than local market rate. But, forests in province of •^hengking, property of imperial family, affecting "feng-shui," under control of Peking Government, not allowed to be touched. Company also permitted in localities through which this branch line pajsses to ndne coal, payment for same also to be determined by conference but not to be more than paid by others. 5. Within the leased territory Russia to determine for itself the customs tariff. China must collect duties on goods at the boundar>' of leased territory. With respect to this matter arrangements may be made permitting Russia on opening of Dalny to international trade to establish the customs at that port and appoint the company to act as a^ent of Chinese Imperial Board of Revenues, levying and collecting duties, under direct control of Peking Government, and reporting its management to same from time to time. Goods coming from railway stations %vithin the Russian boundaries into the leased territory or from the latter into Russia to be free of all customs duty and likin charges; those going by railway from leased territory into the interior of China or from interior to leased territory to pay duty according to tariff of Imperial Mari- time Customs without increase or reduction. 6. Company allowed to establish line of merchant steamships flying company's iag. If any financial loss, China not responsible; this businees not to involve mo M ^ 278 aAILWAT MATERIALS^, IQUIPMBHT, AWB SUPPLIES. wilway and i»t to ba dealt ■with iincier proviaiom of ortgi,iial contmct fixim? priea lor^piircluw;* (of railway) md date for reveraiom (witlioiit pa>-meiit). ' ' i. Ixcatioii of line of Southern Maiichurian Rftilway and deti^iroination of nlwcm thjmugh which it wiirpaa to awail iurveyB in M'aiic!i.iiria by enmnoer in chief when companjf Of ita .agent in Peking' will conialt with director general and decide. The above is tmnslated by Cheng Jii-chiang from,, the complete text of letter received day of Fourth Moon, kuaiw Bill, X,XIV Year (May 22, 1898). XoTi — The ,8:ul»tonce ofthe agreement waa t, by tlie Imperial wnment wi,th, tiie ,E«iio-Chin€ee Bank, a company is fomi,ed under the ■name of the t hmeee EMtem, Biiil:wfty Co.,, for the construction and wnrking of a mi,l- way within the _con&i«! of China,, from one of the points on the ■wcatem boidere of the Prwince of lleilungkmng to one of the points on the eafltcrn bordera of the Province of kirin, and lor 'the connection of this railway with thoee hranchea which the Imperial Kitiwan Government will construct to the Chincae :frontier 'from Thina-Baikalm and the .Southern, UflBwi , lines. The company m empowered; eubject to the anction of the Chinese Government. to exploit, in connection with the railway, or independently of it. coal minefl. as also to' .e»loit m China otb,er entcjrprinfi^nnning, incfuatrial, and commejcial. For the working of these' enterpnees, which m,ay be., independent of the railway, the company 'liiall, kec'P ,accounts 8epani,te frcm, tlio«3 o,f 'the railway. Tlie lbrmaJ..iou of th.e company shall be undertaken' bv the Ru880-Ch.ineee Bank ^ W''ith th,e fornMrtiOB, of the oorajptny all rights and obligations .are transferred to' it m rc-g«nl, to th,e construction and working of the line ceded 'in virtue of the'above- :i»med .agreement o.f August 27, 1896. The company shall bf- recMiijied as form,ed, on the presentation to the Minister of Finance of a warrant ol the Slate B,ank, certif>4ng' the .payment of the firet instalment on the shares. In any case, sncli pa,yment must he tmM not later than two months from the day of con,firm,ation of th,e present stetutee. The eu,cc€«dii» ,iiiiitalnf!ii,te on the shares shall be paid in such order of gnid,ation that the sliarf s Bliall be Mlir paid up at their nominal value not later than one year from the dav of formation of the company. Oioiers of AawB of the company^ may .only be .Kuawin and ai.ineiie subjects. 2.^^ In virtue of the agreement with the Ainese Ciovemment the company shall retain .possession of the Chinese Eastern Raii.w»y during the conrae of 80 Wre from the day of the opening of tiallic along the whole 'line. 3. In rea«nition that the enterprise of the Chinese Eastern Railway will be realized •nly owing to the guaranty mven by the Russian Government in regard to the revenue of the line for covering working expenses .aa. well as for e.ff.ecting the ohlimtorv pay- ments on the Ijonda (sections 11 .and W) :th.e company on its part binds^elf to the .Russian Government, d'urmg the whole term of tiie concession, under the followiuF .ooliga.tio.ii8: ^ (.xV) The Caiinese ^Eastern Railway, with .all its. ..appurtenances and rolling stock.. must be B}mm maffltained in full order for satlslpng all the .requirement of the ,iervice ol the line in rt^gard to the .safety, comfort, and uninterrupted conveyance of .passengers .an.dmMjd8. *^ i-j*"!,!.. ui (B) The toffic on the Chinese ,Eastei-n line must be niJiin,'tain,ed conformably wiUi the degree of tm,ffic on 'the Russian railway lines adjoining the Chinese line. ' (i,),lli,e t,rains of ,all descnptions rnnning between the ,Iluisian, Tra.ns-Baikal and J^aeiiri lines ihall be received by the Chinese Eastern. 'Railway and d.ifipatchcd to their destmation,, in full compleni,e.n.t., without delay. (.D) A.H thro^ugh trains, both paeaenger and Koods, shall be dispatched by the Chinpae ,Eiistern ftulway at rates of speed not lower &m those which £dl be ,adopted on the 8i,berian ,Kailway. "^ (E) The Ch,inese Eastern Railway is l»und to establish and maintain a telegraph .^ongj the whole extent of the line, .and to^ connect it with the telegraph wire of the Russian adioimng railways, and to receive and dispatch without delay through tele- :giam:i sent from one frontier station of the line to another, as also telegrams sent from R.u.iiia to China, and conversely. (F')_ Should, wi.:th th^ development of traffic on the Cliineae Eastern Railway its tochnical. oiiaaiia.tion .prove insufficient lor satiafyiug' the. requirements of a .rqjutor APPENDIXES. 279 and uninterrupted paawiiger and goods traffic, the Chinese Eastern Railway shall immediately, on receipt of a notification on the part of the Russian Railways to aug- ment its capacity to a corresponding degree, adopt the necessary measures for further developing its technical organization and traffic on it. In the event of a difference of opinion arising between the above-meutioned railways, the Chinese E»i8tern Rail- way sliall submit to the decision of the Russian Minister of Finance. If the means at the command of the Chinese Eastern Railway prove insufficient for carrying out the necessary work of its development, the boari of management (,f the railwa/may at all times apply to the Russian Minister of Finance for pecuniary assistance on the part of the Russian Government. (0) For all transit conveyance of passengers and goods, as also for the transmisaiitn of telegrams, there will be established by agreement of the company with the Russian Government, lor the whole term of dumtion of the concessum, maximum tariffs, which can not be raised without the consent of the Russian Government during the whole term above referred to. Within these limits the tariffs of direct communica- tion, lx)th for railway carriage and telegrams, will be fixed by the board of management of the company, on the strength of a mutual agreement with the Russian Minister of Finance. (H) The Russian letter and parcels post, as also the official accompanying them, shall be carried by the Chinese Eastern Railway free of charge. For this purpose the company shall set apart in each ordinary passenger train a carriage compartment of three fathoms in length. The Russian postal authorities may, moreover, if they deem it necessary, place on the line postal carriages, ayn- stnicted by them at their own cost; and the repair, maintenance (interior fitting excepted), as well as the running of such carriages with the trains, shall be free of charge and at the cost of the railway. The above-mentioned engagements, by which, as already stated, the grant of a guaranty by the Russian Government is conditioned, and the consequent reali/^tiou of the enterprise of the Chinese Eastern Railway, shall be binding on. the railway until the same, after the expiration of the 80 years' term of the concession, shall, without payment, become the property of the Chinese Government (section 29). The redemption of the line from the company before the above-mentioned term, in accordance with section 30 of the present statutes, shall not in any way diminish the effect of the above-specified engagements, and these latter, together with the rail- way, shall be transferred to its new proprietor. 4 the same manner, during the course of the whole 80 yearn' term of tlie con- cession (section 2) the following privileges granted to the railway by the Imperial Chinese Government shall remain in force: (o) Passengers' luggage, as also goods, carried in transit from one Russian station, shall not be liable to any Chinese customs duties, and shall be exempt from all internal Chinese dues and taxee. (b) The rates for the carriage of passengem and goods, for telegrams, ete., shall be free fk>m all Chinese taxes and dues. (c) Goods imported from Russia into China by rail, and exported from China to Russia in the same manner, shall pay respectively an import or export Chinese duty to the extent of one-third less as compared with the duty imposed at Chinese seaport customhouses. (d) If goods imported by the railway are destined for conveyance inland, they shall in such case be subject to payment of transit duty to tlie extent of one-half of tlie import duty levied on them, and they shall then be exempted from any addi- tional imposts. Goods which shall not have paid transit duty shall be liable to pay- ment of all established internal carrier and likin dues. 4. In regard to the place of acq|uisitit>n of material for the requirements of the railway, the company snail not be liable to any limitations. If materials be obtained beyond the confines of Russia, they shall on importation through Russian territory be freed from pajTnent of Russian customs duties. 5. The breadth of the railway track must be the same as timt of the Russian lines (5 feet). The company must commence the work not later than August 16, 1897, and conduct it in such a manner that the whole line shall be completed not later than six years from the time when the direction of the line shall be finally determined and tlie neces- sary land assigned to the company. When tracing the line of the railway, cemeteries and graves, as atho towns and villages, must, so far as possible, be left aside of the railway. \^iien effecting the connection, in accordance with section 1 of these statutes^ of the Chinese Eastern Railway with the Russian Trans-Baikal and South Ussun lines, the company shall have the right, with a view of reduction of expenditure, of abstaining nom building its own frontier stations, and of utilizing the frontier 280' BMLWAY MATEMALS, EQOTFMKNT, AWD SUPPLIES. APPENDIXES. 281 I Btotions of the tbove-named Ruasiaa, liaa. The conditions on which they ihall be so iitilizecl shall be deteiinin€ for BupplementMy carnage latee, sliall be detarmiiecl by 'th© company itaell within the hmita indicated in section 3'. "7.''Cri:inef. litigation, etc., m the terri't*>ry of the Chinese Eastern Railway^ shall be dealt 'with by the local aiithoritieis, Chineee and Russian, on the bams of existrng ''f"'l*l|'|'*'^ f''l Jpiifl in .regard to the carriage of passengere and goods, the 'reiiponflibility for such con- veyance, the lapse of time for claimj, the order of recovering monev from the railway when adjudged, and the relations of the railway to the public shall be defined m rales drawn up by the company and establiahed before the opening of the railway tinlic; and these rales shall be fram^ed in accordance with 'those existing on the Btiasian railways. , , # • *i. 8. The Chinese Government has undertalcen to adopt measures for securing the ■afety of the railway and of all employed on it afiinai .iiny extraneous attacks. The preservation of order and decoram on the lands aasigned Uy the railway and it«: appurtenances shall be conided to TOlice atenH^ appointed by the company. The company shall for this purptwe draw up and establish police r^ulations. ». The whole amount of the capital of the company shall be determined according to 'the cost of co'nstruction, calculated on the basis of wtimates framed when the survey of the line waa carried out. The foundation capital shall be charged with (a) the payment of interest and amortiisation of the foundation capital during the 'Construction of 'the railway; (b) the purchase from the Ruasian Government of the rcsulta of the surveys of the direction of the railway to Manchuria which were made by RiMsian engineers; the sum payable trf these surveys will be determined by igreement of the Russian Minister of Finance with the company. The capital of the fcompany shall be formed, by the 'issue of shares .:and boadi* 10. The capital of the company ahall be fixed at 5.000,000 nominal erodit loublee, .and divided into 1,000 shares^ at 5,000 'nominal credit roubles. The sharei are to be 'issued at their nominal value. The piaranty of the Ruaaian Government does not extend to them. 11. The remaining portion of the capital of the company will be formed by the imie of bonds. The bonds will be iiwied in meaaure of requirement, and each time with the special sanctitm of the Minister of Finance. The nominal amount and value of each iseparate' iMiie of bonds, the 'time and amdition of the issue, m mm the form of theae bonds, shall be subject to the sanction of th« Minister of Finance. The Il:uii!ian. Government 'will, giianin,tee the :inHii««l on and amortisation of the lionds. - _ ¥m 'the reaEsation of these bonds the com'pany 'm,iiit have recourse to the Russo- CMnese Bank, but 'the Riisaim,. 'Goveminent reserves to itaelf the nght of appropri- ating' the bond loan at a price which shall 'be^ determined between the 'Company and ■the bank, and fa> 'pay 'to 'the company the agreed amo'unt in ready money. 12. As payments, at© recei'ved for bonds gu,ai»nteed by the Russian Government, the company shall be bound to keep such sums, or interest bearing securities pur- chased with 'the same by pemiJ.ssion of 'the Russian ,Minifl.ter of finance, under the ipecial sij'per\'i8ion of the Russian Ministry of Finance. , • n • Out of the above re<;eipt8 the company shall have the right to make the following payments: •• * j (a) According to actual fulfilment of the work in progreas and execution of orders, and at the time when various expenditure shall become neceesary, such payments to be made on the scale and on the conditions specified in the working estimates. (5) During the construction of the line, of interest, as it becomes due on the bonds .issued by the companv, subject 'to the conditions of their issue, and tlie company shall pay the sums necessary for the above purp'Oee within the limits of the amount realiaed by it in 'the emission of its bonds. , , ^ ,_ „ 13. On the pavment of the first allotment on the shares the founder shall receive temporary certifica'tes, on 'which subsequently, when the board of management of the company shall have been formed, the receipt of the further installments on the shares will 'lie inscribed,. . , ^ ^, When 'the shares, shall be fully 'paid up, the temporary certificates issued to the 'founders shaH be replaced by shares.. , , , The shares of the company are issued to bearer, under the signature of not fewer than three members of the board of mafiagmii&t. To the shares wUlbe^ attached a coupon sheet for the receipt once yearly under them of any dividend that may be Sayable. On the coupon sheete iMJCommg exhausted new sheets will be issued. A ividend on the shares out of the net profiti of any year, supposing such accrue, shall be payable on the adoption by the general meeting of shareholders of the annual report for that year, and the dividend shall be payable at the offices of the company, or at such places as it may indicate. The company shall notify for general information in the Official Gazette and in the Fiimnce Messenger, as also in one of the Chinese newspapers, the extent and place of payment of the dividend. 14. The reserve capital is destined; (ii) For the capital repair of the railway, its buildings, and appurtenances. (6) For defraying extraordinary expenditure of the company in repairing the railway and its appurtenar ?e8. The reserve capital of the company is formed out of annual sums put aside from the net profits of the working of the railway (section 17). The reserve capital must be kept in Russian State interest-bearing seciuities, or in railway bonds guaranteed by the Russian Government. At the expiration of the term of possession of the railway by the company the reserve capital shall be first of all employed in the payment of the debts of the com- pany, including among them sums due to the Russian Government, if such exist; and after the del>t8 of the companv shall have been paid the remainder of the reserve capital shall be divided among the shareholders. In the event of the redemption of the railway by the Chinese Government, the reserve capital becomes the property of the shareholders. 15. The net revenue of the company shall be the remainder of the gross receipts after deduction of working expenses. Under these expenses are classed — (a) General outlays, including assignments toward pension and relief funds if such be established on the line. (h) Maintenance of the staff of the board of management, and of all the services, as also the maintenance of employees and laborers not on the permanent list. (c) Outlays for material and articles used for the railway, as also expenditure in the shape of remuneration for using buildings, rolling stock, and other various requi- sites for the purposes of the railway. (df) Outlays for the maintenance, repair, and renewal of the permanent way, works of construction, buildings, rolling stocic, and other appurtenances of the railway. (f) Expenditures connected with the adoption of the measures and instractions of the board of management for insuring the safety and regularity of the railway service. (/) Expenditure for the improvement and development of the railway, as also for creating and developing its resources, 16. Should the gross receipts of the railway prove insufficient for defraying the working expenses and for meeting the vearly pajTnents due on the bonds, the com- pany will receive the deficient sum from the 'Russian Government, through the Minister of Finance of Russia. The payments referred to wOl be made to the com- pany as advances, at a rate of interest of 6 per cent per annum. Sums paid in excess to tile company, in consequence of its demands and on account of the guaranty, will be deducted from succeeding money payments. On the presentation to the general meeting of shareholders of the annual report of the working of the railway for a given year, the company shall at the same time submit to the general meeting, for confirmation, a detailed statement of the sums owing by the company to the Russian Government, with the interest that has accrued thereon. On the confirmation of this statement by the general meeting the boafd of management shall deliver to the Russian Government an acknowledg- ment of the company's debt, to the full determined amount of the same, and this acknowledgment, until its substitution by another, shall -bear annually interest at the rate of 6 per cent. The acknowledgment above mentioned, given by the board of management to the Russian Government, shall not be subject to bill or deed stamp tax. Subjects of minor importance are dealt with in the following sections: 17. Distribution of net profits of the railway. 18. Functions of the board of management, the seals of which will be at Peking and St. Petersbiu^. 19. Constitution of the board, which is to consist of nine members, elected by the shareholders. The chairman is to be appointed by the Chinese Government. The vice chairman is to be chosen by the members of the board from among them- selves. 20. Order of transaction of the business of the board. 21. General meetings of the shareholders, and the subjects that shall come under their notice. 22. Order of convening general meetings. 'mOM BAILWAY MATEBIAtS, IQUIPMENT, AITD SUPPLIES* 23. Coiidilwiis uncferwkicli geiieral nn»tii:igi eiiall be rocognked m legally held. 24. PartmpfttJOEolaliareholdereiiiproceedl^^^ 25. liOcal maiagemeiit of railway when in working o,rder. 28. Ijocal manageaient of works of coimlruction. 27. Qiiestipiui to be sMbmitted for confimiatioE by tbe RuMiaii Minister of Finftnco. 28. Committee of audit. 29. hi accordaiice with the agreement concluded with the Chinese Government, the latter, after the expiration of 80 years of pofseaeioa of the railway by the com- l»inr, enters into pospciaon of it and it» appurtenances. The reserve and other fmids belonging to the company shall be employed in paying the money due to the Roseian Government under tJie guaranty (section 16) and m satBlaction of other debte of the company, and the remainder shall be dis- 'tribiited ftmong the shareholden. Any money that may remain owing by the company to the Russian Government at the wcpiration of mjmm m respect of the giianuity niiali be written off. The liuflBO-Chineie Bank wiH incur no responsibilitv in respect of the same 30. In accordance with the agreement concluded with the Chinese "Government, ©n the expiration of % yeare from the time of completion of the whole line and its OTOning for traffic, the Chinese Government has the right of acquiring the line, on refunding to the company in fuU all the outlays made on it, and on payment for eyeTythmg done for the requiremeiitfi of the railway, such paymenta to be made with accrued interest. It follows as a matter of course that the portion ol the share capital which has been amortized by drawing, and the part of the debt owing to the Russian Government under the guarantee, and repaid out of the net profits (section 17), will not constituto part of the pnichise .money. In no case can the CMiwdo GovenimeMt enter into posseesion of the railway before It has. lodged 'the necemarjr wwchaiie. money in the Russian Stato Bank. The pnrchaae money lo^ed by the ChineB© Government shall be employed in paring the debt of the company under its bonds, and all sums, with interest owin to tiie Russian Govenunent, the remainder ol the money bein£ then at the diai of the aharehoMeii. ^ ^ t Appendix 3.-PEKING.HANK0W RAILWAY. LOAN FOB THE RAILWAY FROM LUKOWEIAO TO HANKOW. (Provisional) contract between the Chinese Railway Co. and the Soci6t4 Financi^re et Industrielle Beige en Chine, the following has been agreed upon: AitTicLE 1. The Chinese Government has granted a concession for the railway line from Lukowkiao, near the city of Peking, to Hankow, to the Chinese Railway Co., which has already a capital of 13,000,000 taels. The said company is authorized by the Imperial Government to negotiate a loan of £4,500,000 to be applied solely to the building and working of the line from Lukowkiao to Hankow; the provisions hereafter set forth must be observed by the Chinese Rail- way Co. as well as by the Soci^t^ Financi^re et Industrielle Beige en Chine. Art. 2. Said loan of a nominal value of £4,500,000, with 10 per cent discount, or a real value of £4,050,000, is agreed to by the Soci^te Financi^re et Indus- trielle Beige en Chine. It will be paid in four installments of £1,012,500, representing the real value and at the following dates: First payment: January 3, 1898. Second payment: July 3, 1898. Third payment: January 3, 1899. Fourth payment: July 3, 1899. These payments will be made into a Belgian bank of Brussels, chosen by the Chinese Railway Co., which is at liberty to transfer this sum as it sees fit. Art. 3. The loan agreed to by the Society Financi^re et Industrielle Beige en Chine shall bear annual interest of 4 per cent. Said interest shall be paid in January and July of each year. Art. 4. The Chinese Railway Co. agrees to reimburse the loan provided for in the present convention, after the first 10 years, in 20 annuities of £2,225,000, payable yearly after January 3, 1909. The payment of interest and annuities will be made in China, into a bank designated by the Soci^t6 Financi^re et Industrielle Beige- en Chine, and in conformity with the table of amortization annexed to the present convention. Art. 5. With the authorization of the Imperial Chinese Government, the payment of interest and the refunding of the loan will be guaranteed by the railway line from Lukowkiao to Hankow as also by all the property and material connected therewith. It is understood that the guaranties given for the loan provided for in the present convention are reserved for the subscribers to the present loan and that the guaranties given for subsequent loans can nowise prejudice that now granted the Societe Finan- ci^re et Industrielle Beige en Chine. Art. 6. Except in case of force major, the work of building must be finished and the railway from Lukowkiao to Hankow put in operation before the expiration of five years, that is to say, of 1903. Art. 7. The contracting parties may not invoke a state of war existing in any part of the world not to keap their engagements. If said state of war should exist in China, the Belgian staff ehall remain in the employ of the Chinese Railway Co., unless its assistance is asked for by the Imperial Chinese Government. Art. 8. The Society Financi^re et Industrielle Beige en Chine shall choose an experienced, reliable, and honest engineer to represent it, who shall be charged with controlling the technical work; he shall, furthermore, be charged with drawing up plans and carrying them out under the exclusive authority of the general director of the Chinese Railway Co., under whose direct orders he shall be. This controlling engineer will be under the absolute direction of the general director of the Chinese Railway Co. The Chinese Railway Co. reserves all rights of management of the railway. It will be responsible until the expiring of the present contract for the salary of this controlling engineer as fixed upon in agreement with the Society Finan- ci5re et Industrielle Beige en Chine. Art. 9. The foreign staff needed by the Chinese Railway Co. for building and oper- ating the line during the life of the present contract shall be chosen and presented by the technical controlling engineer representing the Society et Financi^re Industrielle 28a lAILWAY MATEBIALS,. EQUIPMENT, AH'D SUPPLIES. APPENDIXES. 285 Beige en ChiBe; it will be appointed by decision of the director general of tbe Chinese Railway CO'. The CMnene Railway C'ito«X'p49iieee of orfipaniisation, miaaion abroad, and 'imning (the loan), inclueiv© of all diflbur8em«nt8 whataoe¥er relating thereto, and finally ita general ex|>eMteB daring the whole time of the loan, the Be%ian company almll receive an increa^s^, of iorty-huiidredtki .per oailifcwr pm (houiaiid) on the rate of interest |>rovided March 1. of each year. Tlie first coupon is payable in gold at francs. Art. 3. The loan shall be extinguished in 20 years, from the year 1909, by yearly dimwings by lot (tiimgee cti aort), wweh will take place at Brussels, in the offices of the Soci^t^ G^irorale pour Favwiaer 1' Industrie Nationale, in conformity with the table annexed to the present. The dmaliiifB shall take place the second Tuesday of January each j'ear; th« irat dimwiiig ahull take place on that date in 1909. The numbers of the lyonds drawn shall be published in fornr newapapeis at the expense of the Societe d' Etude des Chemins de fer en Chine. \wt. 4. The bonds dmwn shall be refunded in gold at their par value on the data on which falls due tlie next coupon. The bonds presented for reimbursement must haiw attached to them all tlie coupons remaining unpaid, and the amount of missing coupons will be deducted from the lanitel to be refunded. Interest on bonds ceases to accrue from the date set for reimbursement. Ajv. 5. The Imperial Chinese Goyemment den^ itself the right before Septom> her 1, 1907, to increase the amortization, to pay off the whole loan, or to makse a con- fvcmon of it.* After that dat» it shall be at liberty to pay off the loan at any time Wore tlie terans of payment, and once the refunding made, the contract slkll be declared annulltd. Ak*. 6. The coupons and the bonds ("tttrea") redeemed ("amortis*') shall be payable in francs, in Europe in the office or offices deaigiiated by the Socieie d'Eliido and entrasled by it with the management of the loan. Akt. 7. Payment of interest and refunding of bonds of the present loan are guar> anteed by the gross revenues of the Imperial Chinese Government. Furthermore, in virtue of an authorization already granted by the Chinese Gov- ernment, and in agreement with it, the Chinese Railway Co. declares that it specially aangns, preferentially for the payment of interest and capital of the present loan, and consequently cedes and delegates in favor of said bonds all the net revenue of the line from Lukowkiao (Peking) to Hankow, after the regular payment of all ex|x»n8es of administration and operation, tlie whole, as is furthermore set forth in a treaty for operating (the liae) concluded between th^ Chinese Railway Co. and the Society d'Etude de Chemins de fer en Chine, treaty hereto annexed and forming an intcojal part of this contract. This assignment (*' affectation") is made exclusively and irrevocably until complete refunding of the bonds of the present loan. Aet. 8. The Chinese Railwav Co. directs the Soci^t<5 d'Etude to deposit the funds frcffli the net revenue of the traflic with the Soci^Ste Gencrale i>our Favoriser 1" Industrie Nationale, established at Brussels, or with the company designated by it. This latter shall convert into gold, and to the best intaiest of the Imperial Cliinese Croveniment and the Chinese Railway Cb., and up to the full amount of the sum 1 9ee., lio«r«'%'.(r, Imn 'Oovcramoiiit took ml or Oct. 8, 190S, and imp«fia1 edicts of Ofjt. S awi 8, IW». Tlie (Mama nftlit Pekiiig-iiarakowr Eatlway Iram Jsa. 1« llil. n f> lAILWAY MATERliiLS, EQ,ITIPMB¥T, AMD SUPPLIES. nec?e«»:ry to insure !!i,e sendee of the lopn at the following semian final |»yM,ent, tlio 'iepoiite made 'with, it by the SocWt^ d 'Etude empowered by the Chinefle Railway Co. #A 'WiAlrA 'f'li.Atin Th^cie' depodlB by the Socift^^ d*6tiide 'with Hie Soci^t^ G^?n«^mle Belf©' or the rom'pany^ dcaignated by it shall TOntinue to be^ made until the sum neceestry for the full iemce of the lotii at. the date "of th.e next semiannual piiymeiit has been com- leted in gold, and in such m.an,ner that said semce i«im!«„red three months at least Defore said semiiinniial payment falls due. The depjodlories. shall utilize them sums in the manner the most advantageous for the Chinese company. The account on which thme fiums are home ishall be chaiired 20 days, before date of semiannual pajTiient with the sum necesaary for the senrioe of the loan, interest, amortization, expenses, and commissions. Art. 9. The bank having' received in deposit the funds shall have the right to take, without new aiithorifation, from such funds on depoeit, the amount of the couiwns to be paid during the i»riod of ■constniction. Art. 10'. 'So as to insure the gnanmty fuit menttoO'ed for the bonds of the present contract, the Chinese Railway Go. recognizes for these bonds a prior special lien on the railway from LukowUiio (Peking) to Hankow: line, stationary and rolling stock, and receipts, Thi» special assi^gnment is accepted in the name of the bondholdeni by the Soci^t4 d*B tilde. In case of nonlxeciition of the obligations assumed, by the Chinese Rail- way Cto. in the 'present contract, the Socit'te d'fetude or the Belgian company deaig- Bated: by it, .8h,all have full po'W»r to^ enjoy as to wid property all the rights and" powers insulting from said special aa8igii.ment. .Aw, ll. 'The preceding pre^iiions do not relieve the Imperial Chineae Govern- ment from ijerso'nal re-iponsibility relative 'to the present loan, aa this re!?po'nsibility 'is specified in a.rt..icle 7, ■Conseauently., the I.'m,peri.al Chinese Government amm to make up the necessary amount for the .service, m .gold, of the loan, in cane' tne suina .accruing from the net proceeds of the line from I,.ukowkiao (Peking) to Hankow, and paid by the Soci^td 4'ttMde, entrusted with, thk »er\'ice"by the Chinese Railwmy Co., to the Soci6t4 GftiAmle Beige, or to^ the com,pa.ny which it may designate, should not have reached, alter their conversion in gold, and .at least three' months before the following semi- .B&niiai payment, the .am:Ount Buffl.cient to cover isaid service. In this case, and U'pon the reques't 'iwuie it, the Imperial Chinwe Government must hold at the disnoaal of the Soci€t# 'G^U'^rale Beige or of the compwiy desigBAted by it 60 days before the next semiannual payment, :gold or ■secuo.ties ^^mmi enffident to .foaliBe the amount .in .gold, irhich the company shall have uotiiai. iSkm Gmmm- ..men.! :is necessary to complete' tJie myment, .Ait:. 12. Out of the sums^ coming from the payments made by the-fied^ d'fltadt or the pa.yment8 made by the Im.pe.rial Chinese' Government, 'the Soci^t^ G^^ittle Beige or the company designa.tecl by it, shall in due time place at the disposal of the irma entrusted with the service of the loan, the necessky amounts, according tO' the .needs, as .asce^rtained du.rin^_ the preceding .hmlf year. Amt, 13. 'The Im,perial CMneae Government will pay to^ the firma entrusted with the »rvi« of the loan, a commiasion of J per cent on the amount of paid coupons and a oomminion of f per cent on the amount of the bonds drawn or ^dmned by anticipated, .reimbunement. 'The .amount of 'this allowance ahali be deducted every six. months from, the surplus of the available exploitation receipts, a.nd, in case of inautficiency, it .shall be i.m,mediately paid by the Imperial Chinese Government. .AiT. 14. The Imperial Chinese' Government binds i'tself by the present conven- tions to O'bsenre and cause to be observed the privilege stipulated in favor of the bonds in article 9, .and to maintain, free and exem.pt from all tax whatsoever, the bonds and 'Coupons, as well assail transactio'na of whatsoever nature connected with the service of the loan. A'RT. 15. Coupons whi'ch shall not have been presented fqr^ cashing within five years following their falling due, shall revert to the Imperial Chinese Govemm'ent; 30 years ehall be the li.mit for redeemed bonds. On the dea.th of anj bondholder of the present loan, the bonds shall be transferred .and ahatl belong to hia heirs, according to the inheritance laws in force, in the couu'try of whiij:i the d^eceased tonclholder was citiaen. Paym.ent« of 'Coupons 'and the redemption of bonds shall be m,ade in time of war., as in time of peace, to the bearers whether they be subjects of friendly or hiMiil* States.. In case of loss, of „ theft, or de8tructi.on of bonds 'Of 'the present loan, the Chimese Government shall replace them, after having been furnished satisfactory proof of their loss or of the destruction of the title deeds and of the rights of the claimants. APPEN'DI'XBS. 289 Art. 16. The Imperial Chinese Government through its representatives in Europe ehall immediately take the necessary steps and furnish the necessary documents for the official listing of the present loan in the bourses of Brussels and Paris. Art. 17. Out of the total amount of the preset loan, representing as nominal capital a sum of 112,500,000 francs, the Soci^t^ d'Etude de Chemins de fer en Chine purchases outright ("acheteferme") 39,000,000 francs of nominal capital, or 78,000 bonds of 600 francs, at 90 per cent for the total sum of 35,100,000 francs, delivery to date from the pa^^nent,to the banks designated in the following article: Art. 18. The iSoci'^t^ d'Etude de Chemins de fer en Chine shall deposit the amount of this purchase, as follows: 8,600,000 francs in the Russo-Chinese Bank at Shanghai, and the remainder in a bank designated hy common accord by the director general of the Chinese Railway Co. and the Soci6f^ d'Etude and against receipt by the Russo-Chinese Bank in Paris of definite bonds for 78,000 bonds bought outright C'achet^s ferme") and deposit in the same bank of the definitive bonds for 147,000 bonds forming the surplus of the loan. The Russo-Chinese Bank and the bank designated by common accord by the Chinese Railway Co. and the Soci^t^ d'Etude ehall credit the Chinese Railway Co. with the sums deposited with them, it being understood that these depository establishments shall not be obliged to deliver these sums, except under the con- ditions and under the reservations indicated in undermentioned article 20. The depository banks shall use these sums to the best advantage of the Chinese Railway Co. Art. 19. The Chinese Railway Co. declares that it has resourced amounting to 13,000,000 taels. The construction of the railroad from Lukowkiao (Peking) to Hankow being limited provisionally to the section from Lukowkiao (Peking) to Paoting (145 kilometers) and to the Hankow-Sinyang section (247 kilometers) which must be constructed first; it is understood that the 13,000,000 taels above mentioned shall in the first plare be applied to the construction and to putting in complete working order of the Lukow- kiao-Paoting section. The construction of the entire line (not including the Peking-Paoting section) shall be done under the direction of the Soci^t6 d'Etude de Chemins de Fer en Chine or its representatives, but for the account of the Chinese Railway Co. The Soci^t^ d'Etude shall make the studies, plans, 8urv^e>^, estimates for the whole line, direct the execution of all the work and order the materials. machiner>% and fur- niture necessary to insure the regular operation of the line. However, the director general of the Chinese Railway Co. reserves to himself the right to approA^e the building plans and contracts for supplies. Except for supplies of materials and expenses of all kinds paid in Europe, the Chinese Railway Co. must place at the disposal of the Soci6t6 dTEtude the necessary sums for settling all payments without exception necessitated in the canning out of the work, as well as the payment of the staff under the orders of the Society d'Etude and, in general, all expenses whatsoever. Consequently, the Soci^t6 (d'Etude) shall not be obliged to pay any expenses from its own funds. It shall endeavor to complete the constmction of the line within three years. Art. 20. On the Hankow-Sinvang section and eventually on the other sections between Paoting and Sinyang, tne Russo-Chinese Bank in tiie first place and after- wards the bank designated by common accord by the Chinese Railway Co. and the Soci^t^ d'Etude, shall deposit each month with the Chinese Railway Co., out of the available funds in their hands, the amounts necessary to settle the payments for the ensuing month, according to the estimates prepared by the Societe d'Etude or its delegates. A first transfer equivalent to the estimated value of the work already executed on the Hankow-Sinyang section shall be made as a first credit. The price paid for the above-mentioned bonds being exclusively affected to the construction of the line from Hankow to Paoting, the Russo-Chinese Bank and the bank referred to in the first paragraph of the present article, would have the right not to i>ay the funds in case one of their payments were diverted from the purpose stipu- lated* as well as in ease the representatives of the Soci^t^ d'Etude were not empowered by the Chinese Railway Co. to continue the management of the construction works with which this company is exclusively entrusted. The balance, if there be one, shall be held subject to the order of the Chinese Rail- wav Co Art. 21. The Chinese Government cedes to the Soci6t6 d'Etude an option till Becember 31, 1901, to purchase the surplus of the loan, to wit: 73,500,000 francs m 90 per cent nominal, plus the accrued fraction due on the coupon. 106229°— 19 19 I I i *i IV . 290' lAILWAY MATERIATJB, EQFIPMEWT, AFB SUPPLIES. APPENDIXES. 291 tioM niMle. but mcIi iiotic# nuBt h% for a gum not lees iliau 25,000 000' fimcii net Boiiiicatoott to the: muigcimnt. of tiie Ctttun .Baflway C«. Th* price of tliii» Imdi slmll be eyer It may wm fit, and to dispense with, the .services of the engineer in 'chief Art. 2ti.. I..n case ol^controveisles or differences 'between 'the Soci^t§d' Etude or its r- pri'.8:-nta.tive8 and tliej.mperial Cbinae Government or the Chinese Railway €o «*"f '^'™« « differences sii.al.l 'be submitted to the judgment of a member of the Ts'uiiE Li. Yamto and. the .Belgian Minister in China. ' ^ in case of diMeeinent "between, these 'latter, the Tsung Li Yam.§n and the Bekian .MiiiiBler ahall designate an arbitrator who shall decide fi.nal.ly. ' ' Art. 27. .As. guaranty for the financial e'Eecutioii' of the presi^nt contract, the Soci^t6 d' Etud.:;. has already deposited m the Ruaso-Chinese .Bank X.:20,000 as security it stiail 'take fil.l ;po«i'8iitti, of this sum. as .soon as it shall .have fulliliod the provisions stipulated m the iiat two fMiapaphi id article: IS here akmm. Frovis.ions Tt 18 underefood that the payment of 8,600,000 franca to the Russo-Chinese Bank at Shanghai must be made within the month following the date of the signing of the present contract. Art. 28. The Tsung Li Yam§n shall be bound in case the Belgian Minister at Peking request it to give cognizance of the title to the minister of the foreign country, indicated by him, as subscriber to the issue of stock .<» Art. 29. The present contract is made in triplicate, one copy for the Chinese Gov- ernment, one for the Chinese Railway Co., and the third for the Soci^t^ d 'Etude de Chemins de Per en Chine. In cane of doubt or disagreement, the French text alone shall be used to interpret the contract. The present contract must be submitted through the proper channel for imperial sanction, and when said sanction has been obtained, the Taung Li Yam^n must ad\'ifle thg Belgian representative at Peking by official dispatch and eventually the repre- sentative in Peking of the foreign countrj' to whom it may give cognizance of the title (*' le reprc sentant h Pekin du pAjB Stranger auquel le titre sera notifi^"). These for- malities shall be complied with within the month following the signing of the contract. The provisions of the contract signed at Wuchang May 27, 1897, and of the protocol signed July 21, 1897, which do not conflict with the present contract, especially those of article 14 of the Wuchang: contract and article 2 of the Shanghai protocol, are and remain in force. The Societ^^ G^n^rale of Brussels and the Russo-Chinese Bank are parties to the present contract, and they, after having examined the preceding con- tract, declare that they, as far as necessary, accept the duties imposed. According to article 14 of the above-mentioned Wuchang contract, the Chinese Railway Co. will only recognize the Soci^t^ Beige as contracting party. Done at Shanghai, the twenty-sixth day of the month of June, one thousand eight hundred ninety-eight. The Engineer represeniing IA« ^oci'^ d'Ettide de Ckemim defer en Chine, The JMreOor General of the Chmeu Railuay Company. The Representatives of the Imperial Chinese Government: The Viceroy of Hupeh, The Ticeroy of Oiihli. OPEEATING COHTEACT. Between the undersigned: 1. The Imperial Chinese Government, represented by Their Excellencies, the Vice- roys of Chihh and of Hupeh; 2. The Chinese Railway Co., represented by His Excellency Sheng Hsiian-huai, Its director general, office of the company at Shanghai; And the Soci^t^ d' Etude de Chemina de Fer en Chine, whose office is at Brussels, Has been agreed as follows: Awr. 1. The Chinese Railway Co., in accord with the Imperial Chinese Government entrusts the Soci^t^ d' Etude de Chemins de Fer en Chine, which shall appoint re pre- sentatives for that purpose, with the direction, adminiatration, and operating of the ^m^ from Hankow to Lukowkiao (Peking), for which it holds a concession, under the ^^^^»^ of an edict of His Majesty the Emperor of China dated October 20, 1890, and of which a copy is annexed to the present contract. Art. 2. Tlie Societe d'Etude shall take over the working of the line as soon as each section is completed, following final acceptance by the Imperial Administration of Chinpsp Railwavs. Each section must be completely and previously equipped and provided with all the material necessary for its working, as well as with the supplies of tools, furniture, and a fund for running expenses. The Societe d'Etude or the repre- sentatives it shall appoint under the provisions of article 1, shall organize the various services, shall have the right to hire the personnel, which it ahall have absolute right to dismiss, or disband, and to fix its salaries according to a fixed schedule previously communicated to the director general of the Chinese Railway Co. It shall make all purchasf 8 necessary for operating, maintaining, or repairing the road; it shall fix the si;hedule of rates in the terms of concession contracts, collect revenues of all kinds, and pay the operating and management expenses of the company. The foregoing measures, taken for the purpose of operating the line, shall be submitted, for consul- tative purposes, to the director general of Chinese Railways. The Chinese Railway Co., which will appoint delegates for that purpose, shall have absolute right of control over the receipts and expenses. The purchase of all new material or works for the improvement or extension of the rrjjular road, or of stations, which may be found necessary after the opening of each "81 lo Mlnistro de Belgique h P&in en fttisait k demande an Tsung Li Yamen, TOlui-ci, seralt l^u de d^ ilr ^*''"^ *" Ministre da pays stranger qu'il lui d&igncrait, comme prenant part k la souscription A\ 292 lAILWAY MATERIALS, EQUIPMENT, ANB SUPPLIES. iection of the line to traffic, shall be at the aole expanse of the Chinese Railway Co, Ab far as poaBible the wppliw nec^eiaarv for the maint-enance and repairing of the rotcl ehall be ordered from the worte and m,iiiei under the control of the director gen- eral ol the (lilnes-e Railway Co. APPENDIXES. and it shall be carried according to the instrtictioM of the director general of th? Chin?Be Railway Co. The traMportation of anything of a nature to injure the Imp -rial Chliipss Government ihaft, moreover, be forbidden. Art, 4. Out of the receiptB from o^peration aiwilaWe, .after payment of all expensei, the Soci^t^i d' Etude nhEll retain the neceneary team to iiwure the payment, every rfi months, and at least three months before its date of payment, of the 8er\dce of the loan of I12,HX),0CI0^ irancs contracted by the Imperial Chinese Government. 'Thk Teue'ri^e ehail he made m long as^ said, loan is not entirely paid off. The amount of this reserve ehall be depeeited monthly with the Soci^t^ G^n^rale Beige pour favoriser Flndustrie Nationale, or with the company designated by it. The latter shall convert into gold on the best terms procurable the sums paid to it for the wrvice ol the loan. 'When, 'by means of the sums thus 'paid in, the service in .gold of the loan shMl have been insured, the Soci^^t^ d'Etude shall deduct 10 per cent of the surplus, which shall he applied to tliu creation of a reserve fimd for rebuilding or making extraordinary WMurs neoeneary to^ insure the worWug of the lines. It shall then 'piiy the 'balance remaining avaMable out of the operating revenues to the Chinese Railway Co. A'RT. 5. The duration of the present operati.ng contract m fixed at 30 years dating from the signing of the contract-. However, thM period would be fully entiaed to extension in case the loan of 112,500,000 francs, should 'not at that time he wholly paid .off; this extenaion would con- tinue m long as the complete am.orti«ition 'had not oeen made. 'But M the refunding of the loan should be made before the dates on which they fall due, the present work- ing contract will be annulled from the date of the total refunding of the loan. Art. 6, D'uring the entire period of the^ worWug' of the 'line 'by the Soci^t6 Beige, the Chinese Railway Co. grants it 20 per cent of the net profits of the raihxjad from Peking to Hankow, as- agreed upon by mutual consent, after the closing of each fi,scal term ('"exercice "'), 'tuMng into ■accoimt, natoimiy, the sums necessary lor the service of the interest and the amortiHition of the loans. Abt. 7- In 'Case of contentions or disagreement between the Soci^t^ d*Etude and the management of the Chinese Railway or the Imperial Chinese Government, said coutentiow .and dinagieeinents shall 'he settled as specified in article 26 of the loan contiBct.. Am, $, If the revenues from o^perating the 'lines aie^ not sufficient to cover the ex- ■penses, the Chinese 'Railway Co. must supply the Soci6t6 d'''Etude with the necessary means, to ins'ure the ope»ting of the lines under normal conditions. AiT. i. All materials and 8ui>pliefl needed by the Boci6t6 d'Etude for the working ol the line, as well .as lor thC' 'maintenance and repair ol 'the' 'line, 'Shall, when imported liom abroad, be exempt from all customs or likin d'ues. Abt. 10. The present contract is made in triplicate; one copy for the Imperial Cliin:eae' Government., one for the Chinese Railway Co,, and the. third for the Soci^td d' Etude de Chemins de Fer en Chine. In case of doubt or disagreement the French text sliall alone be accepted for the inter- pretation of the contract. 'The present contract must- he submitted through the proper channel for imperial sanction, and, when said sanction shall 'have bee.n obtainea, the Tsung 'Li Yamdn must advise, by official disptch, the Belgian representative at Peking and eventually the repreisentative at Peking of the^ foreign government to which the title may be officially notified {*'(iuqmi k titre »era not^'^j. Done in Shanghai, the twenty^sixtliof the month of June, eighteen hundred ninety- eight. fke JJiifinccr rtpretefding the Soditi d'Etwde de Ckemins defer en Chine. Hubert. TM Director-Qenrnd of ike CUneMe Railway Co, Shino-Hsuan-Hujj. S^en for authentication: Witnesses: Meigmn Conmd, 'Tie Repreflsntatives ol the I'mperial CMnese Cbvemment: Tkfi "Fwrof (/'AfjEwl, Hu. Kg. The Viceroy of ChiML CONTBACT FOB THE SWPPUBMEllTAmY LOAN FOB THB FI7BPOSX OF COMPLETING THE LINE FBOM PEKING TO HANKOW, AUGUST IS, IDOf . [Translation from French text as printed in Wang's ''Railway Loan Agreements,** p« 'ti.j Between the undersigned: First. The Imperial Chinese Railway Co. represented by His Excellency Sheng Hsuan-huai Kung Pao, director general, duly authorized by the Chineee Government, Second. The Soci<'^t6 d'Etude de Chemins de Fer en Chine, represented by M. Jean Jadot, engineer in chief, director of the line from Peking to Hankow, holding full It has been agreed as follows: Article I . To assure the completion in good time of the line from Peking to Hankow and of its branches, and also to assure the payment of interest on the loan, until the whole line has been put into operation, the two contracting parties have decided t^o issue a supplementary 5 per cent gold loan, at the issue price of 90 per cent, to the nominal amount of 12,500,000 francs, represented by 25,000 bonds of 500 francs each. Art. II . This loan is subject to all the clauses and conditions of the principal 5 per cent loan contract, under date of June 26, 1898, and of the operating contract annexed thereto, especially as regards the rate of interest, period, amortization, etc. Art. III. This loan, like the principal loan, has the guaranty of the CMnese Gov- ernment; and it has, furthermore, as a special guaranty, the net revenue from the ( peration of the Peking-Hankow line, including the extension from Lukowkiao to Peking, and the branches forming part of the same system, after deduction of the sums necessary to assure the services ol the principal loan of 1898. Art. IV. The purpose of the present supplementary loan being to assure the com- pletion of the whole line , every effort will be made to avoid exceeding it . If, however, after the completion of the line toward the close of 1905, besides the ordinar>' expenses of upkeep and current repairs, and besides the service of the loan and the'deduction of 10 per cent for rebuilding or extraordinary repairs (according to article IV of the operating contract)— expenses which will be covered by the operating revenues — there are expenses to be incurred for the final work or orders for new material, or any extension works whatsoever — expenses which (according to article II of the operating contract, and according to the rules generally adopted in railway business) should be charged to the capital account — these expenses will be covered by that share of the net profits which should accrue to the Imperial Chinese Railway Co.; if that share hhould not suffice to cover these expenses, the Imperial Chinese Railway Co. should, of course, in conformity with the operating contract, fimiish the fimds to cover them. These expenses can only be incurred after a previous agreement with the director general or his delegate. Art. V. After the completion of the whole line the operating service ^lill become more and more important. The Imperial Chinese Railway Co. has named a delegate who (in conformity with article II of the operating contract) should examine in ad- \ance, with the delegate of the Soci6t6 d';6tude de Chemins de Fer en Chine, all measures for the purpose of assuring the perfect organization of the various services dud see to the proper execution of those measures, the Society d'Etude de Chemins de Fer en Chine being charged by the Chinese Govermueut with the operation of the line, by virtue of the operating contract. Art. VI. If, in the future, the construction of new branches is decided upon, the Imperial Chinese Railway Co. must furnish the necessary funds, either by means of its share of the net profits, or otherwise. The Imperial Chinese Railway Co. will be free to choose such means as it sees fit. Art, VII. The present contract is drawn up in four copies, one of them for the JH^ese Government, one for the Imperial Chinese Railway Co., one for the legation ^Belgium in Peking, and one for the 8oci6t^ d'Etude de Chemins de Fer en Chine. ~n case of doubt or difference, the French text alone will be authoritative for the interpretation of the contract. Art. VIII. When the contract shall have received imperial sanction, the Ministry of Foreign Affairs (W'aiwupu) will give instructions by telegraph to His Excellency the Minister of China, in Brussels, for the signature of the 25,000 bonds for the loan, in the name of the Chinese Government. Notice of the imperial sanction and of the instructions given to the Chinese minister at Brussels will be given by the Waiwupu to the minister of Belgium in Peking. If the minister of Belgium requests it of the Waiwupu, the latter will adyise the minister of such foreign country as may be designated to him as taking a part in the subscription for the bonds. Done at Peking, August thirteenth, nineteen hundred and five. J. Jadot. &HBKQ. Il APPENDIXES. ^«7<) Appenii 1— PEKING-NEWCHWANG RAILWAY, msMmirAST AOBniaifT BKrvmr tsb hohgkong a shanghai BAmmfG coBFOEAnoii Ajm MMMmm gihibai. hu. BBspicTnre TUB WHlfQ-llBWCHWAlfG BA1I.WAT I.O,Alf . Tliia IS ft preHmmtry .ngreement made between His Excollencv Hu, Governor of Pekiiig and adiiiuiMtimtor psneiml of the ImpetM Rftilwiys of ^orth China within and without the Great Wall, hereinafter called the administrator general, of the one part, and the HoiigtoiK & Bhaigliai Banking Corporation, representing a British eyndirate, hereinafter' €ai:«d the ■■jadieate, of the other part. 1. The Byndicate is hereby authoriied by the administrator general to make acrangements to ioat and i«ue, on behalf of the Railway Administration, on the best terma obtainable on the market, a sterling loan for the equivalent of about 16,000,000 taels, for the constniction of a railway line from. Chnnghoiifloti to. Hainmingtien, and a branch line to Yin^tzu, and for the rodeni.ption of 'eiSiting loans to the Tientsin- 8han.hal..kwan and 'Tientsin-Lnkowkiao lines, 2. The imcurity for the loan shall be the permanent wav, rolling stock, and entire property, together with the fw^igjit and earnlngB of the existing lines between Peking, Tientain, 'Tangku, and Oiniigh'Otisou. aiid.,Al.9o of the proposed, new lines, when con- •tnicted. in addition to the lighlB of m,ining coal and iron, which will be retained by the Railway Adminurtimtion on each side of the proposed new lines, for a distance to be detunnined. In the event of default or arreara in payment of interest or pay- menta of principal, the said lailwsy lines and mines shall be handed over to repre- ■en.ta.tivea. deputed by th.e ;Byniicat«, to m.an.age them on their behalf, until principal and mtereat of 'the loaii' m redeemetl in full, when the management will revert to It will,, however, b« "provided that if .such arrean are for a .smi^l sum, and it appeare dflsiimbfo to^ the syndicate to exten.d the due 'date of 'their pa3rmen.t for a term not exceeding three months, it shall be open to the indicate to clo so. In th.e event of any nMcJal cifcimstaiices. :ari8ing, n'ec«BiilBting' the introduction of 'iBific^rfeattt changes by tte .BMoagemeiit :afoi«8aid, these changes shall be effected in 'Onisnitetbn 'wi;th the .adiii]Blstni.tor general., .and in the beet mterests of the railway. .In. the case of war- or famine, troops and grain will be t.ran8port,ed over the line on terms to be arranged hereafter. No further .loan, charge, or nortpif^ shall be chai^ged on th.e security named above itn.til. this, loan 'is redeemed.. 3. During the currency of the loan the principal members of the railway staff shall be canable and experienced Europeans, i)rho shall be, as at present, appointed by the aoministsator general of the miiway, and may be, in the event of their misconduct or incompetency, dismiased, after consultation with the chief engineer. If there are Chinese with sufficient engin.ee.ring or traffic experience, they .may be appointed as well as Europeans. Should it be necessary to appoint a new chief engineer, such .apnointment .sh.all be made in, consultation with the .syndicate. In. addition to above, a capable ani experienced European railway accountant Bh.all be appointed to inspect all the accounts of the railways. All receipts and earnings of the lines herein specified shall be paid in to the credit of 'the .Bail.vay Admiaistation with the .Hongkong' & Shaoghiii Banking Cor{>orati^ Tientsin, together with 50,000' taela annually payable under the Board of .Revei^Hi amnge»en.t, approved by the Th.rone, by each of the Provinces of .Shansi, SheHf Honan, and Anu'wei, for the railway purposes for 10 vears. All ex.pe'nfi« of repairin|jr and maintaining lines wHl be paid from, this account, the rem:ainder of which shall then be chareed 'with. 'the sendee of this loan. 4. The .rate of interest, price, term ol years, and other particukrs shall be left to the syndicate to a.rra..nge, on the beat terma possible, on the market, when the moment appears favorable lor floating the loan. Instalhnents of proceeds will be arranged as far as possible to suit the progress of construction and the reouirementa of the administrator general, interest being' calculated from the date of such payments. The loan w;il.l be redeemahle hy the annual 'drawings to he scheduled in the inal. .agreement.. .B-esidea the dm:wingS' m scheduled the administrator general may from 2'fU time to time, on giving due notification to the syndicate, call for extra drawings to be held, bonds so drawn being redeemed by the Railway Administration at 20 per cent premium on their par value. 5. If it shall be found that the loan can not be floated without the introduction of some special attraction, the administrator general shall memorialize the Throne, recommending that a concession of mining righte be granted to the syndicate at a pint or points on the lines, and on terms to be arranged with the syndicate on the basis of the mining regulatbns newly established by the Tsung Li Yamen. The re- cjucsta of the syndicate will be confined to mines within a distance of 5 li of the railway. 6. The date of issue of this loan shall be left to the discretion of the syndicate, to be fixed in accordance with the state of the market, but should it be found impossible to issue it before the 1st day of October next, the sj'ndicate will arrange to advance to the administrator general, on or about that date, an installment of about 2,000,000 taels on account of and repayable out of the proceeds of the loan when floated. The terms of this advance shall be left to the arrangement of the syndicate on the best terms obtainable, interest not to exceed the rate of 5J per cent per annum, and the syndicate shall be authorized to issue temporary' bonds for the amount if required. 7. For the satisfaclion of the investing public who are unacouainted with China a satisfactory report will be required from the district engineer, Mr. J. Ginnell, as to the condition and earning power of the old lines, and as to the route, prospects, and mineral wealth of the new lines to be constructed, and Mr. Ginnell shall be instructed bj' the administrator general to proceed to London as soon as possible after the signing of thispreliminary agreement, to confer with the syndicate on these matters. 8. The terms of this preliminary agreement will, immediately after signature, be submitted by the administrator general to the Throne for sanction by the imperial edict, which shall be officially communicated by the Tsung Li Yamen to the British minister in Peking. 9. Three months from the date of signature of this preliminary agreement shall be allowed to the syndicate to accept or decline its terms. Upon their confirmation by the s^'ndicate, this preliminary agreement shall be replaced by a definite agreement, pro^nding for all details. Signed at Peking, this 7th day of June, 1898, being the 19th day of the 4th moon of the 24th year of the Emperor Kuang Hsu. (Seal of Administrator General of Railwaya within and without the Shanhaikwan boundary.) For the Hongkong & Shanghai Banking Corjjoration. (Signed.) E. G. Hillier, Agent DIFINITX AQBKEMEIffT BETWEEN THE BBIXISH A CHimSSE COBPOBA- TIOM (LTD.) AHB DIXECTOB 6ENEBAI. HV, BSSPSCTIirG THE PEKma- mWCHWAlTG BAIXiWAY LOAH. This agreement is made between His Excellency Hu, Governor of Peking, as administrator general of the railways of Nortli China within and without Shanhaikwan, acting under the authority of the Imperial Chinese Government, hereinafter callS the administrator general, of the one part, and the Hongkong & Shanghai Banking Corporation, for themselves and on behalf of the British firm of Jardine, Matheson & Co., representing as joint agents the British & Chinese Corporation (Ltd.), hereinafter called the corporation, of the other part: Whereas, on the 7th day of June, 1898, being the 19tli day of the 4th month of the 24th year of the Emperor Kuang Hsu, a preliminary agreement was signed at Peking between the administrator general and tne Hongkong & Shanghai Banking Corpora- tion, representing a British syndicate, for a sterling loan for the equivalent of about 16,000,000 taels for the construction of a railway from Cliunghousou to Hsinmingting and a branch line to Yingtzu, and for the redemption of existing loans made to the Ticntsin-Shanhaikwan and the Tientsin-Lukowkiao Railway lines; and Whereas, the Hongkong & Shanghai Banking Corporation, before the expiration of the period named, duly notified the administrator general that it is prepared, with ( crtain modifications', to arrange the issue of the loan upon the conditions named in 1 h o I >rel imi nary agreements : I . The corporation agrees to issue on behalf of the administrator general a sterling kii.n for the amount of X2, 300,000, the proceeds of which are to be applied in the order following: ( a ) To the redemption forthwith or at maturity of the loans and advances specified in the statement attached to this agreement which have been made by foreign banks to the Tientsin-Shanhaikwan and the Tientsin-Lukowkiao Railway lines. The administrator general hereby certifies that the total amount of the liabilities due by the lines named does not exceed the sum of 3,000,000 taels. \ m 1> i ¥¥ 'llf A "V 'TUT A WVHt A T Q 11! ATTtlB'TlfWTOr'P k TOTTl CTTTJiyr TT7Q ItAlij W ii. I JH.ii..l fjA liLLiSi Mi^ U IJrM.l?j Vi J. | A.^ .LI o U Jr Jrlji JiitJm TO' the canyiiig oiit^ within a period of three ycare from the date, of this agree- mem't,, of certain improYemento .and additions to rollinK stock of the existing Tines between Peking twi Shanhaikwan, recommended by the European chief engineer, and estimated by him to cost' al)out 1,500,000 taels. (c) To the coiwtriiction of a railway line from Chnnghoimoii to Hsinmingting, and one from a point on that line nMr Shihsanchan to Yingtzu, and of a branch line from Mnerhho to 'the collieries of Ntnpiao. The administrator general engages that the construction of the new lines here speci- fied shall be completed 'within a period of 'three years from the date of this apeement, 2. In the event of the proceeds of "this loan 'being insufficient for the completion of the new lines here specified, the adrainbtnitor pneral will provide or will smrange with the Imperial Government of China' to' provide funds from other sources sufficient to complete 'their construction. 3. Tnis loan shall he a first charge u|>on the security of the permanent way, rolling stock,, and entire 'nroprty, with the freight and eamingS' of the existing lines between Peking and ShaniiaiKwan, and on the frelgh'ts and earnings of the new lines when constructed. The .administrator general shall, during the continuance of th,is loan, maintain 'the railway buildinp, 'works, rolling 'Stock, and dependencies in good order and co'ndition, and shall inrreitie. 'the rolline ^itock 'from 'time to time to such extont as: shall be necessary for the 're<|ulremente of ttmffic. Should it be decided, h'ereafter to construct branch lines or extensions connecting with the lines herein named, their construction shall be undertaken by the Railway Administntion, and should the funds of the Railway Administration be insufficient for' that 'purpose,, it .shall apply to the corporatio'n for 'the same. 4. The pnncipal and int'Crest of th'is loan are guaranteed by the Imperial Govern- ment of Oiina, and in the event of default in payment of interest or repayment of principal at due date, the corpomtian shall immediately notify the Imperml Govern- ment of China thereof, and the Imperial Government of China will thereupon provide the funds necessary to meet such payments in sterling in London. In tne event of the Imperial Government of China l>eing unable to T)ro\4de the funds necessary to ■meeting a payment of interest. 'Or^ 'p.rincipal when callea upon by the corporation to do ■o, 'in terms of this clause, the said railway lines and entire |>roperty shall thereupon he handed over to renrteentatives deputed by the corpomlion to manage, on their behalf, until principal and interest of the loan have been redeemed in fnll, when the management will revert to the Railway Adminifitration. It is ];>rovided tnat should arrears of interesl or principal be for a small sum, and it appear desirable to the corpora- tion to extend the dFue date' of their payment for a term not exceed,ing three months, it shall be open to the corporation to do so. Thin arrangement, which differs from other contracts in that the administrator nmsml. retains 'control of the rail.way lines so long .as. the principal and interest of this loan are' ;regtthirl,y' '|>aid,, has 'been a|!;reed to in conseiiuenre of the friendly relations which, have long 'existed lietween the eont.racting parties.. 5. No further loan shall be charged upon the security named above, except through the corporatioii, until, the loan is redeemed; and the Tsung Li Yamen will hand to the 'B'ritish. 'minister in Peking a 'written 'undertaking on, behalf of the Imperial Government of China, that the railway lines named in this agreement shall never be alienated or parted with. 6. During the cunrencv of this loan the chief engineer of the railways shall be a Britlah subject. The pi^ncipal members of the railway staff shall be capable and experienced Europeans, who shall be, as at present, appointed by the administrator Seneral of the railways, and may be, in the event of their misconduct or incompetency, lismiased, after con0iil.tation with the chief engineer. If there are Chiu'Cse with .sufficient engineering or traffic experience they may 'he appointed as well an Europeans. Should it be necessary to appoint a new chief engineer such an appointment shaU be made in consultation, with, 'tne corporation. In addition to the above, a capable and efficient European raHway accountant shall be appointed, with full powers to organize and direct the keeping of the railway accounts, and to act with the administrator general and the chief engineer of the rail- way 'in the supervision of ref!eipta and expenditures. 7. The railway lines named in the agreement being Imperial Government lines, in the event of war or famine Chinese Government troops and grain may be transported over me ones tree. 8. All receipts and earnings of the lines herein speciied shall be paid into the credit of the Railway Adminintrstion with the Songkong A Shanghai Banking Corporation, Tientsin, together with 50,000 taels annually payable, under the Board of Revenue's arrangement approved by the Throne, by each of the Provinces of Shansi, Shensi, Honan, and Annwei, for railway purposes for 10 years. APPEHDIXBS. 297 \ All expenses of working and maintaining the lines will be paid from their receipt, and earnings, the remainder of which, together with the provincial funds above nameds shall then be charced with the service of this loan. Payments of interest and repay- ments of principal shall be made in equal monthly installments, and in accordance with the amounts and dates of ayeariy schedule which will be furnished to the admin- istrator general by the bank. These payments shall be made bv the administrator general to the Hongkon? & Shanirhai Banking Corporation, Tientsin, in Hongpinff sycee sufficient to provide the sterling amount due to the bondholders m terms of the prospectus of the loan, the rate of exchange for these payments being fixed by that bank as each such payment becomes due. In. reimbursement of expenses incurred in connection with the distribution of the service to bondholders of the principal and interest of the loan, the Hongkong & Shanghai Banking Corporation, Tientsin; shall receivefrom the Railway Administration a commission of i per cent on the annual loan service which will be mcluded m the yearly schedule for the same. 9. The term of the loan shall be 45 years, and subject to the modification men- tioned hereinafter, repayment of the principal shall be made, so far as re«^rds the bondholders, in 40 equal annual installments commencing with the sixth j^ear 10. Interest on the loan shall be charged at the rate of 5 per cent per annum on the nominal principal and shall be calculated on the balance of such principal at any time outstanding, pa>Tnents of interest being made by the administrator general in accordance with the amounts and dates specified in the yearly schedule to be provided 11. The loan will be redeemed by annual drawings in London, as provided for in the prospectus. Besides the drawings as provided for, the admistrator general mav on giving three months' notice to the corporation, call for extra drawings to be held for any amount. Bonds so drawn to be redeemed by the Railway Administration at 20 per cent premium on their par value. Any such extra drawings must take place on the date of the ordinary drawing provided by the prospectus. In the event of such extra drawings taking place, subsequent payments of interest will be adjusted m the yearly schedule to be provided, but the repayments of prin- cipal shall contmue unaltered in t rms of clause 9 of this agreement until the loan is redeemed. The Imperial Government of China hereby engages that this loan shall not be redeemed or converted otherwise than as herein provided. 12. The price agreed upon for this loan is 90 per cent net of the nominal principal hut should an unfavorable state of the market prevail at the time of issuing the pW pectus the corporation is herby authorized to reduce the price of the loan, at its own discretion, to not less than 88 per cent net to the Railway Administration 13. The corporation is hereby authorized to issue to subscribers to the loan bonds for the total amount of the loan in pounds sterling, in such form and for such amounts as shall appear desu^ble to the corporation, and the Minister for China in London will seal all such bonds with his official seal, as evidence that the Imperial Govern- ment of China is bound thereby. Each such bond shall bear the following clause- *'The Imperial Government of China, pursuant to an imperial edict dated ••;•. unconditionally guarantees and declares itself responsible for the pay- ment of the principal moneys and interest hereby secured, and in faith thereof it has specially authorized the Chmese Minister in London to seal this bond with his official seal." 14. All bonds and coupons and payments made and received in connection with this loan shall be exempt from Chinese taxes and imposts forever. 15 All details necessary for the prospectus and connected with the service to the bondholders on the interest and repayment of principal of this loan, not herein explicitly provided for, shall be left to the arrangement of the corporation, who are hereby authonzed to issue a prospectus of the loan as soon as possible after the siim- ing of this agreement. ^ The Tsung Li Yamen will instruct the Chinese Minister in London to cooperate with the corporation m any matters requiring conjoint action. 16. The loan shall be issued to the public as soon as possible after the signing of this agreement, and shall date from the first of the month of its issue. Payment of the entire proceeds will be made in London to the order of the administrator general not kter than March 31, 1899; of the above proceeds the corporation will advance to tlie order of the administrator general in London, on or before October 31 next, the sum of £250,000; this advance will bear interest at the rate of 5 J per cent per annum until such time as the first installment of the loan proceeds shall be available when it shall be deducted from those proceeds by the corporation. ' 17. In the event of an unfavorable state of the market rendering the issue of this loan, and the payment of its proceeds to the Railway Administration, impossible on the terms named without loss to the corporation, the corporation shall be granted f M&O' RAILWAY MATEBIAIiS, .BQUIPME'FT, AH'D SUPPLIES. iucli extension of time fm the performaiice of its contimct with the administrator gen- eral, as the circumst&ncee demiuid, mny advances or installments of proceeds alr^idy made tO' the Railway Adniinistration oeing in that case treated as regards payment of interest, repayment of principal, aecnrity, and Im,p€rial Chinese Government guaranty in terms of this present agreement and as forminR jmrt of the principal amount of this loan. Similar ©xtenacin of time for the issue of this loan and payment of its proceeda :iihali also l>«i granted in the event of the Deutsch-Asiatische Bank, Berlin, objecting to its issue Mfore the month of April next, in accordance with the terms of clause 9, of the .agreement lor the Chinese Imperial Government 4| per cent sterling loan of 1898. 18. Immediately alter the signature of this agreement, and before the issue of the froepectus of the loan to the public, the administiator general will memorialize the 'hrone and obtain an Imperia! edict (Xiafirminp and fmctioning the provisions of this agreement, the imperial edict so received bein^' then communicaied officially and without delay by the Tsung Li Yamen to the British Minister in Peking. 19. The corporation may, subject to aU ita obligations, transfer or delegate all or any of its rij^hts and discretionH to any British company, directors, or agents, in con- sultation with the adminiatmtor general, with or without power of further transfer and subdelegation. 20. This agreement is executed in quadruplicate in Englisli and Chinese, one copy to be retained b}^ the administrator general, one by the Tsung Li Yamen, one by tne British Minister in Peking, and one by the corporation. Should any doubt arise aa to the interpretation of the contnct, the En^Usn text shall be accepted as standard. Signed at Peking by the contracting p«irties this 25th day of the eighth month of the twenty-fourth year of the Emperor Kuang Hau, being the 10th day of October, " \ Western Calendar. Ill Appendix 5.— CANTON-KOWLOON RAILWAY. 2n^^i?l^^^^^ ^^PnSL*^^*^^ ^^ ^=^ BRITISH & CHINESE COR- l^^^^rStl^lI^^ ^^^ ^SSUE AND REGULATION OF A LOAN FOB JHE CONSTRUCTION OF A RAILWAY FROM THE CITY OF CANTON TO J?£,®^™^^Y ^^ THE KOWLOON LEASED TERRITORY UNDER BRITISH CONTROL (HEREINAFTER CALLED THE RAILWAyT fK.vI'wr" f ™®"* H T"^"" at Peking on the twenty-third day of the first month of the I«H fhi nnlL'^T- '^^^ ^'''' corresponding to the seventh day of March, 1907, and the contracting parties are: •' » » ,lJ^®h^ RWfJS^'/'^ri?-^ "'''^o *^^ a^uthority of an imperial decree, of the one part. ?f^ the othef art Corporation (Ltd.) (hereinafter called the corporation) Fv^pltS. 5i,P'^"n^''^7 agreement was made on March 28, 1899, between Hia £Tw?nI;^h«^o.?if''-^'" 9T'?i ^^ the Iniperial Chinese Railway Administration fir^ ?f T^^Ll M^*^''*^?^^^^ T'^'T ^' T*"^^"' «^ ^^« one part, and the British l^rm of Jardine, Matheson & Co., for themselves and on behalf of the Hongkong & nf h?/^fi o'"'!! -^^ Corporation, representing as joint agenta the corporation, of the 01 her part and it wa^ part of the objects thereof that the terms of another preliminary !S^lT!?''^^^i?'^-^^^ ^^""^ contracting parties on May 13, 1898, should be thereby adopted as a prafimmary agreement for the construction and working of a railway fr<.m the city of Canton to the boundary of the Kowloon leased territory under British control subject however as far as might be practicable, to the terms and conditions • *iied amfStffi^ ^" contract for the Shanghai-Nanking Railway when Now it is hereby agreed by and between the parties hereto as follows- Article 1. The corporation agrees to issue, on behalf of the Imperial Chinese 5r^^SS" ' ^fiJ^^l^^S ^^^^ (hereinafter referred to as "the loan") for the amount of Cn^^Ju 1 ^"""f i^""^ conditions hereinafter contained. Imperial Chinese ^w^S xii r o^f ^^ "^"^^ ^? the entire amount, similar to the bonds of the ?Wn ;Lim'''^ Railway, with the raUway m firet mortgage security therefor. The loan shall be m one issue, and the price agreed upon is 94 per cent of the nominal value, subject to the other provisions of this article as hereinafter stated. The interest on the bonds shall be at the rate of 5 per cent per annum on their nominal value, myable half-yearly on the first day of June and the firat day of December, and shall be calculated from the date of their sale to the public K„T^f iTl ' Yl ^^,^^ed ^0 the public as soon as possible after signing this agreement but if at the date of signature thereof, owuig to an unfavourable state of thi market rendering the issue of the loan and the payment of its proceeds to the Viceroy of Canton impossible on the terms above named, then in such case the corporation shaU there- after, at such tune as the Chinese Government may decide within a period not exceed- ing eight months, issue the loan and pay the proceeds thereof to the Viceroy, deducting and retaining six pointa from the rate at which the loan is actually issued to the public v(hatever that rate may be (that is, if the issue price be 101 the Viceroy will deceive 95, and so on). -^ Subject to the provisions of article 16, the duration of the loan is fixed at 30 yeara commencing from the date of the signature of this agreement, but no interest shall be paid on any bonds which may be redeemed or cancelled under the terms herein- after mentioned after the redemption or cancellation thereof. On the face of each of these bonds shall be expressed the value thereof in the sum of £100, or in such different amounts as the Chinese Minister in London in consultation with the corporation may sanction. It is understood that the Chinese Government may hereafter, in its discretion, appoint a director general of the railway upon whom, in such case, will devolve all the powers, functions, and responsibiUty herein attributed to the Viceroy of Canton vnereinafter called the Viceroy). Art. 2 The proceeds of the loan are to be used in the construction and equipment Of the railway, and in paying interest on the loan during the course of construction. 2m 300' BAILWAY MATERIALS, EQUIPMENT, AHD SUPPUES, Tfce railway, being' the first mortgage iecurity for !,he loan, shall be built anil 'isqiiippecl imder the direction,, of the Vireroy, in, acrordance ivith the provieionfl of •jtide 6 hereinafter, and shall be built as economically ae^ poaiible in accordance with tie beit modem syBtem.,. It is iindentood that th^ Viceroy wi,ll secure all the necessary land for the railway, and will gim the nece8sa,ry inetructions to expedi,te and facilitate the work of con- ,Btriicti,on. The railway nifl be built in the (iret ins'tance m a single line, but provision wi„ll be made, with the approTal of the Viceroy, and wherever necessary 'to meet traffic rec|uiremen,t8, for the eventual conBtruction of a double line. ,If,, dunng the time of construction, the proceeds of the loan, togeth« with the accrued interest thereon,, 'payable by the corponitioii, should, after the deduction of the sums neceesary 'for the 'payments of intereit m the loan, be insufficient to complete the ■confltruction, of 'the railway, the amount of the defici,ency shall either be 'provideii from, 'the Chineie' Govern'ment's own resourcefl or by a iupplementary hmii, to be hereafter ismed by the corporation, the interest and other conditions of which fiupplementar}' loan shall be arranged when 'the time arrives, having due regard 'to 'the cottd'itions of the money market. ITien the railway ie complete, if there is a surplus from the sale of bonds, the said «rplus shall be at the disposal of the Chinese Government^ either to redeem the bonds m accordance mth the t«niiB of this •oeement m^ ,hereinafter stated, or to be placwl on deposit with the Hongkong & Shanghai Bttikiiig Corporation for the purpose of paying interest on the loan, or for other 'purposes beneficial to the railway, in regard to which the \lceroy 'will com,m,unicate in d'ue course with the corporation. ,in all matters relating to'llie construction of 'the fmlwm it is expressly agreed that 'particular heed, shall be paid to the opinions and habite of the Chinese people; and that 'When 'practicable, Chinese ,»h,all he employed 'in po8i,tionfi of tru.^t and responsibility 111,^ connec'tion with the railway. In 'regard to ^earthwork, or such other work as Chinese are com'petent -'to perform ■contracts shall be entered into for such 'Work wi,th Chinese, under file sanction of the head office, and the 'Work itself shall be carri,ed out in accordance with plans, and speci- ications of 'the engineer in chief and under his su'pef¥Mon, .Detailed plans' 'and es'timates of cost, whether of 'tie respective sections of the rail- way,, or of auv alterations, of the same, are to lie submitted for the approval of the Viceroy,, by 'the engineer in chief through the managing director. ^ Art. 3. The loan shall 'be secured, by mortgage declared to be now entered into m equjiy l»y virtue of this agreemeat, and shall, as soon m possiWe hereafter, be secured by a Bi3eci„fic .and legal first 'mortijage in iiviinr' of 'the corporation upon all lands ,iaat«rial8,, rolling stwk, buildings, property, and premises of every description pur- chased or to be ptifchaaed for the railway, and on the railwav itself, as and when .constructed, and on 'the revenue of ali'ieucri'ptio'ns derivable 'tlierefrom. The provisions, of thia^ art.icle in respect of the mor%age are to be construed and 'treated 'i« _e<|;ui'valen,t in pur|>ort and effect 'to a mortfage customarilv executed and delivered m Eng,land to a 'trustee ,for the purpose of securing loans and 'bond issues ■upon railway properties in foreign cO'Untries. ,A'8'T. 4. It 18 ,hereby agrc^ed 'that in six ,moEths .after this agreement is signed, the corporation sha,ll provide 'the .amount n:e€e8i«ry 'to proceed with the deta^iled survey #f 'the railway,, .and for prelimi,nary construction work if necessary, whether thw amount .comes from the mle or h,ypothecation of the Iwnds, or from advances made, prci'vidwl that kmde for the requ,ired a,mo'unt shall have been executwl and delivered tO' the .corporation. If, aft«r expiration of eight months from the date of the ratilica- 'tion hereof, the work of coMtruction shall not have been liegun on the railway, this .agreement ,18 to liecome null and void, but if failure to' commence construction be due to any cause of force m,ajeure, a 'reasonable exten8io.n of tMs time limit shall be .arra,nged bet'ween the Viceroy and the corporation. Of the 'proceeds realized from the sale of 'the 'bonds,, after deducting' ,bo much of them .as may be required, to 'he kept in England for the p'urchase of materials and the pawnentfl. of contracts 'there, or for repayment of ad'vance, such amount.^ as may he eBtima.ted and certi,fi,ed to by the engineer in chief 'to 'the Viceroy through the man- aging d,n».c'tor, as being act'uali v ,re<:iu,ired ,for the co,nstruction of any particular section ■of the railway, m,ay b© ordered by the Viceroy, after consideration, to be transferred to Hongkong to be kept in the Hongkong 4 Shanghai Bank, and pkced to the credit of tie instruction account of the railway for the exclusive purpose of constructing the railway m the manner herein provided for under the supervision of the head o&ce and the Viceroy. On each occ.afli,on of a remittance being made to China.,, 'the amount realized in ■ycee will be re^ported 'to the Viceroy, and mj portion whi,ch :ttiay not be required shill be placed at interest. Similarly, the balance in Encland sliall be placed at Mi'tereat, to^ be allowed at 'the usual. ,iata. APPENBIXBa 801 tfllSi^r^'^X^^ ^^AuTZ «I^^*/'o^.t™e to time in England, and of the money ti^B^hLu^^^^ ^or use in China, a.^ tion of tho Wiiwnm, ./^ f ""«"«?" omce for report to the Viceroy for the infonna- lCry the Viceroy or by Mture of Tus ^mlt w if \ *e forporation, as soon as possible after the sig- uuiun, 01 ims agreement, but if, hereafter, the monev markets in Ivindnn nr nfhSr countries require any modiBcation of the form of the Wd ex?eit in anvthfL W affecte the amount of the loan and the liability of theChi'n^ ^Jver^^en^^S ^.b^ m™^ '*"'^¥'*. "i^K'^''^ »^ht modifications may be^TtoSSt?he views in * nZ '^ ""•"*" ^^ ^^ corporation in consultation with the Ch?^ MiS the a^p^i'^oTtirWdwup!;' "P"'*^'' "* ""^ ^y **« ^^'^^o" ^ *« Viceroy for The bonds are to be engraved entirely in the English langnace and shall I>Pi.r tbo facsimJe of the s^nature of the Vicem^ and of hisleal of offi^ in "" diswSl with the necesfflty of signing them all in person, but the Chines^ MiSr in iXC rf hL Su^ata Sla^.h'"'''''' P"' tis'seal upon each lbon"h a fSle a„daTu^nX^CMne^'Gi™"enr' "^^ "' "^ "^"^ '^ <"^^ ""^''"^^ are^to'b^~rv'"e^v!S'^nllr,r'"*'^^y'- <^^!'^J^y bo-^s as may be needed Zl „»i frP^u*^ ?,??^^™ "Oder the supervision of the corporation, and after thev Zn^i'^ b^''tfi"^^rS'*' '" ^"•^"' •" •'^-'"'"^ P«.vided'."rt:*'^ by^he^'l^mtion.'''* engraving, safe deposit, and sale of the bonds are to be borne a he^' offiS'arCand^'tSn^f ""." '^I ^ ^'^^' ^^ ^''^">y ^ ^»^^ ^rn'l7*T?r Briti^ erf""' "i^'S'^'' -'^4'^^^'- -d^Bjul^cWel accountant, inese Bntish employees shall be proposed and certified as comm.tenf for t-heu' posts by the corporation, and. shall hi approved by the Vic^oy Tthe^ HiSd'^thXfr^r^^^^ ^ '^^- n^-^'he shall r^est t^ c^^p^'^'ti^^^ TO aispensewitn their ser^-ices and to nominate their successors, and in the event of ^th "tff V J^Z^T^ '^ Tr' fr K^"^"^ ^'^"«^' it shall'dol' in coLu S^^^on with the Viceroy. It is understood that the Hi]fi*.fl r.oi^«^^^ k,, +i,^.„ ^_i . !l^l^!.JA^^5!»>J_.l^ i« ^^deratood^that the dut^e^perfoi^i^erbylh:^^^^ interests of the Chinese Government and' the are intended to promote the mutual xxiu.n.«i« «i me ^.ninese Uovernment and tho bondholders respectively, and it is therefore agreed that all ^ses^ISSce a^ n^ therefrom shall be referred for amicable adj^tment l^etween the vSv and^thf representative of the corporation. The salaries and other terms of a^mlm of Se engineer in c^ef and the chief accountant shall be proposed by the wSion for approval by the Viceroy; and the amount of their salar Wtc f s^U Kfd o^^ the general accounts of the railway. ' ' ^® P^^^ °"^ *" For all important technical appointments on the railway staff Euroneans nf p^ penence and ability shall be engaged, and wherever competLt Chinli^re avaiJahl^^ they shall also be employed. . Alf such appointments sl^l be ma^ Ind tS W^ LTshill ^eib^ tedTr'tt^^^^^^^ ^^^ '"T ^.'^^T^' '^ Stie^ircoStioi" 1^ ♦^^ ill ? T^ ^^ ^**® Viceroy's approval; similar procedure shaU be followed e W of Xli^'nS^f employed in tL chief accountant's department In^he SLy be d ™S^^^ ^^^"P^^^ employees, their s^nd^s iTnh^f a^ ^^}. I ^"^ nianagma; du^ctor, after consultation with the engineer m chief, and subject to the sanction of the Viceroy. The form of LreemLte msS with European employees shall conform to the usuil practice ^'^'^^''^ ''^^ The accounts of the receipts and the disbursements of the railway's constnirfinT, «n^ operation, shall be kept in Chinese and English in the Deo^tmenf nf tho^f o . ant whose duty it shall be to.organize aSI suZ'^tir^^^^ for the information of the Viceroy through the mana^n^ Hir*w/i ^^^f /iT ^T^?^ All receipts, and paymen^ Xll be e^S b^^^^ and authonzed by the mana^ng direct;)r. ^ accountant For the general technical staff of the railway the necessary arranffemAT,t« alkali k« ^i^^£^,^^p!LZ'ti x^rr^i i%fnS'?u*pe^irrrS} u 302 KAILWAY MATERIAIiS, KQUIPMENT, AND SUPPLIBS* m through the numaging cliructor, ■md ihall always comply therewith,, haying at the iHime time due regaid tii""tlie efficient conatniction and maintenance of the railwav. A whool for 'the education of Chineee in railway mattara' ehall be cetablifihea by the .managing' director, mibject to 'the aoproYal of tne Viceroy." Airr. 7. ¥nder the proTiwoiii of 'article 8 of thii agreement 'the properties covered by the 'fi:rst mortgage securitjr hereby creatc»d include the railway, its property and eqiiipm-ent, and 'the mortgage ia to be'executed by a deed in the form contemplated by the said article. ^^ But iiibfect to^ the guaranty and mort|?ige thus pfivon by the Chineae 'Govemmeiit, it 'is hiireby dedarwi 'that 'this railway is 'in fact a Chinese property. All land that may be required along the whole course of the railway within survey limits, and lor 'the necessary^ sidings, stations, repairing shops and car sheds, to be Erovided for in acoofiian,ce wi'th the detailed plans now made, or hereafter to be made y 'the engineer in chief, and approved 'bv the Viceroy, shall be acquired by tlie Viceroy at"" the actual cost of the land, a'ni3 shall be paid for out of the proceeds of (he loan. The 'title deeds of the land for the railway and all other lands shall be free from all encumbmnces and entanglements and shall, from time to time, as soon as secured, be' 'ws^tenrf in the name of the railway. Notices of all purchases of lands for the railway within the survey limit (together 'wi.th corresponding title deedi) ape"to 'be tranamittied by the railway head offico under 'the direc'tioii of th* Vicerov to the local aeent of the corporation for record and pro«^or- 'vation in its oMce in Hongk'ong, and for the purpose of eitablishing the first mortgage leecurity nn'til the time when the same are to be returned to the viceroy, as herein- ■after in this article mrovidcxl,. Ail lands, the title deeds of m-hich are lodged with the corporation as part of tho first mortgage security of 'the loan, shall not be dispoeed of in any way by nire, lease, or .sale, 'to any party, for any purpose whatsoever, 'without the written consent of the Viceroy, except only in 'the event of the Imperial Chinese Government failing to 'pay the 'interest or principal of the bonds, and then, in .accord^ance with the powers m the d«fld of' mortgage. The lands thus Iwught shall be free from all encumbrances, liabilities, and entangle- ments, and shall be conveyed by full and sufficient deeds of assignment according to Chinese law, all of which "are to be kept and recorded in the Hongkong office of the 'CorpoiEtion, :aad are to be' held by it as a itst 'Inortgiige .■ecurity for the bonds under the proviaiixis of this agreement, until such time as principal and interest of the iMmas, together with aU indebtedness, shall have been paid off, when the same shall then be retumed to the Viceroy, except only in the case of the Imperial Chineae Goveiament's faili»e to pay the interest or principal of the bonds and consequent nalizalia& uid'Cr the powers of the mortgage security. For the proper protection of the first mortgage security the Chinese Government QBclertiikes that until the bonds shall have been redeemed, no part of the lands com- prised in the mortgage security or the railwa]f with its appiui^enances shall be trans- ferred 'Or given to another party, or shall 'be. injured, and that the rights of the first mortgage uiall not be in any way impaired, unless with the consent in writing of the corporation, which shall only be given if in the opinion of the corporation the interests of the 'bondholders will not be afilec^ted.. And further, that until the interest and principal of the loan and all the indebted- ness shall have been paid off, or unless with the express consent in writing of the corporation, the Chinese Government or the Viceroy shall not again mortgage the abo'Ve properties to another party whether Chinese or foreign. During the period of this agreement no special taxes shall be levied by the Chinese Govemnttent on the railway, its appurtenances, or earnings; but all taxes at present payable, such as land tax, as well as any taxes which the Chinese Government may ^nereafter institute, such as ilamp duty, etC'., and which may be applicable generally 'to all co'mmereial transactions' in 'China, shall also apply in the case of the railway :ind its. operations. Art. 8. It is agreed that if the half-yearly interest on the bonds is not paid on any due date thereof, or if the principal of the loan be not paid in accordance with the tinortiiation schedule hereto at Jhed, the whole railway with all its appurtenances horein mortgaged to the corporation for the bondholders, shall be handed over to the corporation to be dealt with bv it according to law in such manner as will insure the proper protection of the interests of the bondholders, provided, however, that if the failure to make payment at any one date be due to causes beyond the con- trol of the Chinese Govemm'ent, and if the ViC'eroy re^quest the corporation to i>ost- pone the taking over of the railway for a reasonable period of grace, the question shall be amicably discussed and decided between 'the Viceroy and the representa- live of the corporation. When the whole loan and the interest due thereon and all ^ APPENDIXES. tj^Jo the indebtcdnpfls shall have been paid off, the railway with all its appurtenances in good working condition shall revert to the possession and management of the Chines? Government according to the provisions of this agreement. Art. 9. As remimemtifxi for all services rendered by the corporation during con- slroction of the railway, the corporation shall receive the sum of £35,000, half of which shall be paid when the construction work is half completed, but not later than 18 nonths after commencement of construction, and the other half upon com- lietion of the line. This amount shall be regarded as a commutation of all cora- missions to which the corporation and its agents would properly be entitled, and of payments of all services rendered in the constmction equipment of the railway, in respect of th« present loan; but in the event of any branch lines being derided upon by the Chinese Government for construction in connection with this railway, and if the Chinese Government decide to build the same by issue of a foreign loan and not from its own resources, then the corporation shall have the first option of tendering for such loan, and a further payment, proportionate to the amount of such supple- mentary loan, and calculated at the same rate as the commutation hereinabove men- tioned, siiall be made to the corporation as commutation of its commission for all wrvicee in respect of construction. in return for this conmauted commission, the Viceroy is entitled to require the ror- poiation to superintend the purchase of all materials required for the construction and equipment of the railway, which shall be purchased in the open market at the lowest rate obtainable, it being understood that all such materials shall be of good and satisfactory quality. At equal rates and qualities, goods of British manufacture shall be given preference over other goods oi foreign origin. Invoices and in8pector*3 cer- tificates are to be submitted to the Viceroy. With a view to encouraging Chinese industries, Chinese Government and other materials are to be prelefred, provided price and quaUty are suitable. No commission shall be allowed to the corporation on the purchase of materials except as above provided. All trade discounts or rebates if any, are, during con- struction, to go to the construction account, and after completion, to the credit of the railway. Art. 10. In the construction ol the line, in the working of the railway, and in the perfwmance of the difcrent kinds of business connected with the railway^ no inter- ference or obstruction by Chinese or foreigners will be permitted. The Chinese Gov- ernment will provide protecticm lor the railway while under construction or when in operation, and all the properties of the railway, as well as Chinese and foreigners employed thereoa, are to enjoy the utmost protectic«i from the local officials. The railway may maiiLtain a force of Chinese police with Chinese officers, their wages and maintenance to be wholly defrayed as part of the cost of the construction and maintenance of the railway. In the event of the railway requiring fiu-ther protec- tion by the military ftwrces of the Imperial or provincial Governments, the same will be duly applied for by the head office and promptly afforded, it being understood that such military forces shall be maintained at the expense of the Government or the province. Akt. 11. All receipts and earnings of the railway shall be regularly paid into the railway's account with the Hongkong & Shanghai Banking Corporation, and on such funds, whether on daily balance or on fixed deposit, the bank's usual rate of interest shall be allowed. All expenses of working and maintaining the line shall be paid from the receipts and earnings, and any remainder thereof shall be charged with the service of the loan. If, after payment of these expenses, and making due provision for pajTuent of interest at 5 per cent per annum on the bonds, and for repayments of principal due in accordance with the amcHtization schedule hereto attached, there remain surplus funds unappro- priated and properly available for other purposes, such funds shall be at the disposal of the Chinese Government to be used in such manner as the Viceroy may decide, provided always that after completion and opening of the line to traffic the amount sufficient for regular payments of interest and repayments of principal shall be de- ducted from such siuplua funds, if any, and ehall be deposited with the Hongkong & Shanghai Banking CarpcHution six months before the aate at which such payments faU due. In the event of there being no surplus funds available as aforesaid from the earnings of the railway, the amount required for payments of interest and repayments of prin- cipal sliall be provided in accoixiance with the conditions of article 14 hereinafter. Art. 12. The corporation are hereby appointed trustees for the bondholders, and in any future negotiations respecting these loans^ or matters arising in connection 304 .RAII-WAY MATEBIAM, EQtTIPMEFT, ABB SUPFUW. tlierewitli, wtieh, may take place between the Vireroy and the corporation, the eor- poratioii shall be taken ai' repreneDting the bondholdem, and m such, enajMWwed to act on their behalf. In view of the fact that the corpomtion'e iwponfflbility to the bondholdere contimieB after c onetruction, whereas, m eiated in article 9, its commuted commiaiion for acmces rendered, ii limited to the period of conrtniction, and the cor- poration is not therennder entitled U any hirthcr remuneration dunng the penod of the loan, the corporation shall recetife aa^ wmuieration for its eervices and respon- sibility in acting M. trustees for the hondhcilders, the sum of £1,000 per awium, such r*?m.iineration to commence from the date of iwue of this loan and to terminate upon. its complete redemption. Ab.t, U. All materials of any kind that arfe reijuired for the coiM*rii.ction and work- ing of the railway, whether imjwrted ftom abroad, or from the prownces^ to the scene of the work, shall he exempted ftom likin so long as. fli.ich exemption remaiM in force in, respect of other Chinese' rai,lway8. The bonds of this loan, twther with their coupons and the income of the railway, shall be free from imposts of any kind by the Ctovemment of China, Abt. 1.4.. It is agredl. that during the time of the construction of the railway, the intoiest on the 'bonds and on any advances made by the corporation is to he paid from the proceeds of the loan. The accruing iiftereet from any proceeds of the loan not used 'during the period of constractiai, :and 'the eaminp. deeved by the thineae Gov- ernment from the working of any •ections of the i»ilway ai they are built, are to bo ised to make up the amount required for the payment of the said interest, and If any deficiency remains it is to he met from the proceeds of the loan. When liie construction of the railway is wholly completed, the interest on the bonds is to be paid, from the income or earniop of the railway receued by the Chinese Government, every half year on the first day of June and the first day of December. It is hereby agreed that the amount rwiuiifed for the payment of interest and the repayment of principal, toigether with a som of one-quarter of 1 per cent on such amounts, to cover commission to the Hongkong A Shanghai Banking Corporation, who are hereby appointed, agents for the entire service of repayi.ng the loan, shall be paid to them 14 days before the due dates in Hongkong or i^ Canton (at the option of the Vicerov when settling exchange) in local currency sufficient to meet such pay- ments in sterling in London, exchange for which shall be settled with the Hongkong & Shanghai Banking Corpofation, the Viceroy having the option of seMing exchange at any date or dates within six months previous to any due date for the repayment oi interest, and pri.ncipaL. , , , . ^ The Chinese Govenunent unconditionally undertakes, and hereby promises, to pay the principal of the loan and the interest on the loan on the^due dates fixed there- for. If, ' at any time, the earnings of the .railway, together with funds available from the proceeds of the loan, are not suflicient to m«t the interest on the bonds and the repayment of capital, in accoidance with the .amurtliatioa schedule hereto attac-hed, the 'Viceroy shal.! devi,se means for supplying the^ deficiency, and should his inability to do so appear probable, he shall memoriali«e the Govenment to take measures to make up the deficiency from other sources, and thus be tmdf to pay off the indebted- ness,, so that the required, amount may be placed in each, cam at 1^^14 days previous to. the due dates of such payments, in the hands of the' Hongkong & Shanghai Ban.ki,ng Corponition.. , j • ■* AiT. 15. The corporation may, subiect to all ita obligations, tranrfer or delegate .all or any of it.e rights, powers, and discretions to its, wcceasors or assigns, but the corporation, which is a corporation formed under Bngiih kw, shall not transfer ita rights under this agreement to any other nation, or people of any other nationahty, except British or Chinese. Similarly, the Chinese Government's nghts imd authonty under this agreement shall not be transferred to persons of other nationality. It is further understood that the Chinese Government will not build another h.n0 competing with thi.s railway to its detriment. , „ , „^ t> Aet. 1*5. The term of the loan, as stated in article 1, shall be 30 years. Kepaynient of principal shall commence alter the expiry of 12* years from the date of the 1^ and ahalfbe completed in 17i years by yearly paymente to the Hongkong & Shanghai Banking Corporation as agente for the service of the loan, acting for the corporation under the terms of this agreement, in accordance with the amortization schedule If, at any time after the expiry of 121 years from the date of the loan, the Imperial Chinese Government ahould wiih to redeem the outstanding amount of the loan, or any portion of it, not yet due under the provisions of the amortization schedule hereto attaclied, not less than six months' notice shall be given in writing by the Viceroy « AiMrtitaltaD. scliedulc u omittod hem. APPENDIXES. 805 to the representative of the corporation, declaring the number of additional bonds so required to l)e redeemed, whereupon the representative of the corporation shall immediately proceed to make such arrangements as may be necessary and usual for the redemption of the number of bonds specified, which, when duly redeemed after payment by the Imperial Chinese Government of the proper amount due thereon, shall be canceled and delivered to the Viceroy. All bonds thus redeemed, in excess of the amount specified in the amortization schedule hereto attached, before the expiry of 25 years from the date of the loan, shall be paid for with a premium of 2| per cent over their face value (that is, £102.10 will be required to pay for £100), but after 25 years bonds may be redeemed over and above the amounts specilied in the schedule without premium upon notice being given in the manner above specified. As soon as the loan has been completely redeemed, this agreement shall become null and void and the mortgage shall be canceled. Art. 17. If, during construction, any proceeds of the sale of the bonds are lying unused and bearing interest on their deposit whilst the construction of the railway is going on, such interest is to be credited to the general account of the railway in order that the railway may enjoy the full advantJ^e thereof. It is also agreed that, if the corp<;)ration shall think it expedient before the sale of any of the bonds to advance any money for the work, such advances, together with the interest thereon not exceeding a charge of 6 per cent per annum, shall be deducted from the proceeds of the sale of the bonds. Art. 18. The junction of the sections of the railway from Canton to the boundary of the Kowloon leased territory under British control, and from the said boundary to the port of Kowloon respectively, and the subseouent joint working of the two sections, shall be arranged by agreement between the Viceroy of Canton and the Governor of Hongkong. Art. 19. This agreement is signed under the authority of an imperial edict dated the seventh day of February, 1907, which has been officially communicated to the British Minister in Peking by the Waiwupu. Art. 20. This agreement is executed in quintupUcate in English and Chinese, one copy to be retained by the Viceroy, one by the Waiwupu, one bv the Board of Communications, one by the British Minister, and one by the corporation, and should any doubt arise as to the interpretation of the agreement the English text shall be accepted as the standard. Signed at Peking by the contracting parties this twenty-third dav of the first month of the thirty-third year of the Emperor Kuang Hsu, being the seventh day of March, nineteen hundred and seven. (Seal and signature of His Excellency Tang Shao-yi, representing the Waiwupu.) Witnessed by — For the llritish <& Chinese Corporation (Ltd.): Witnessed by— Jahdine Mathesom & Co. The Hongkong & Shanghai Banking Corporation: Joint Agents: The British & Chinesb Gobtoration (Lxd.)- 10622©"— la 20 J. 0. P. Bland. fi. Gardner, Ading AgenL VA ApfiiMb 1— IIENTSIN-PIIKOW KAEWAY. This igRMiiiiiit n imii» si 'PbUng on fli« 'lOtli. dtaF' --iitiiiatfli'' at 'iMr 'years fmni. thte> actual beginning of the worka, the conmenceineBt of the worke. "not to 'be dekjred iMyond six monthS' after this^ aipieiiieiit" hat- 'lieeii sipMi, wilUiD- 'Ufaich peftfid^ the syndicate' shall notify the difeeloff' 9tiifliiBl''"tii«t^ 'the sun. of X9it|.M0" has' 'been placed 'at his.. diiixMii, to be held in Europe or remitted to €h..ina m he may direct, as a firsi iwitnUniemt on atoount of the 'proceedS'" of the lean. 13iis..«iioiint of 1500^000, or niaitoirer poffttBH 'thereof is actually advanced., 'ti»etber 'wi:th .interest thereon not exceeding a chaige of 6 per cent per anu'um., shall l>e deducted, from the proceeds of the 'first sale of the bonds. Abt. 'IY. 'The rate of .interest for tht' ^luaii' itoil he & pec' cest^ 'per annum ^on. the nonniiial. ptiaeipal. and ^shall be paid to the bondholders half-yearly. The said in.'terest shall be calculated from the date' on which the loan 'is issued to 'the pithlic and shall be' paid by the Imperial Oiiiiese Qovemment during- the time of Gonstruc'tioii. eitlier from the proceeds of the loan, or frost other ■HBOHi aad-altaniaiids,. in- the Sist plac!e, 'O'ut 'Ol 'iM' .ft!f:eiiae..'af the railway, and then, from nich other revenues as^ 'the Chin is i CiO'¥ the amounts specifi.ed in the schedule attached to this .agreement,, and '14 da} 8 before' th'cir' d'ue da'tes, Watem 'GaloKlar, aa ealeulatod. hal£-yeaiiy .imni... the dftte on 'which, the loan is issued to the public. Akt. V. 'The term of the loan shall 'be 90' years'. Repaym.ent of prin.cipai aha'! I 'Commence after the expiry of 10 years .from the date of the loan and except as provided in article VI hereina.fter, shall 'be 'made by /early amortization to the Deutsch-Asia- tise'he .Bank .and 'the Hongkoiig & Shanghai Banking Corporation in half-vearly in- stallments out of the revenues^ of the line or such other revenue as the Chinese Go'V- ernment may thi,nk fit to' 'use for the p'urpose, according' to the amount specified in the schedule attached, to th,i8 agrc'ement, out 14 dap bc'lore their due date, Western Calendar, as calculated half-yearly, from the date on which the loan is issued to the public. Art. YI. If at any time after the lapse of 10 years from the date of the loan the Imperial Chinese Government should desire to reoeem the whole outstanding amount 'Of 'the .loan, or an.y ;part of it, not yet due :for repayment in accordance with 'the schedule of pepayments 'hereto attachedj it may do so until,, the twentieth year, by payment of a premium of 2| per cent on the lace value of the bonds (that ia to say, by payment 807 of £102 lOi. for each £100 bond) and after the twentieth yeaf wiJ|ioiil premium; but in each and every case of such extra redemption, the Imperial (Jimese Government shall five six months' notice in writing to the syndicate and such redemption shall b« effected by additional drawings of bonds, to take place on the date of an ordinary drawing, as provide for in the prospectus of the loan. Abt. VII. The Deutsch-Afiiatische Bank and the Hongkong & Shanghai Banking Corporation having been M)pointed by the German and Britiwi parties of the syndi- cate, respectively, agents for the service of the loan, the half-vearly pajTnents due for amortization and interest, r^erred to in articles IV and V, shall be made, in accordance with the amounts of the schedule attached to this agreement, ana 14 days before their due dates as fixed by articles IV and V, to tnese banks by the director feneral of the railway, who shall habd to said banks in Shano^hai or Tientsin 14 days ef<»e the said due dates in shares to be arranged by the banks, funds in Shanghai or Tientsin sycee suflEicient to meet such payments m gold in Europe, exchange for which shall be settled with the said baiiJcs on the same day, the Railway Adminis- tration having, however, the option of settling exchange with the two banks at any date or dates within six months previous to any due date for the repajTnent of interest and principal. These payments may, however, be made in gold, if the Imperial Chinese Government should happen to have gold funds bona fide at their disposal in Europe not remitted from China for the purpose and desire so to use them. In reimburs^nent of expenses connected with the payment of interest and the repayment of principal of the loan, the Hongkong & Shanghai Banking Corporation and the Deutsch-Asiatische Bank will receive a commission of one-quarter of 1 per cent on the annual loan service. Aet. VIII. The Imperial Gevemment of China hereby engages that the interest and principal of this loan shall duly be paid in full, and should the revenue of the railway or the process of the loan not be sufficient to provide for the due and full payment of interest and repayment of principal, the director general shall memorialize tke Throne and the Imperial Government of China will thereupon make arrangements to ensure that the amount of the deficiency shall be met from other sources and handed ovct to the banks on the date u|>on which funds are required to complete full payment of interest and repayment of principal. Aet. IX. The loan is hereby secured: 1 . By likin and internal revenues of the province of ChihM to the amount of 1,200,000 Haikwan taels a year. 2. By likin and internal revenues of the province of Shantung to the amount of 1,600,000 Haikwan taek a year, and 3. By revenue of the Nanking likin coUectorate (to the amount of 900,000 Haikwan taels a year) and of the Hnai-«n native customs (to the amount of 100,000 Haikwan taels a year) in the Province Kiangsu. The principal revenues as above stated are hereby declared to be free from all other loans, charges, or mortgages. So long as principal and interest of the loan are r^^larly paid, there shall be no interference with these provincial revenues; but if t^e principal or interest of the loan be in default at due date, then, after a reasonable period of grace, likin and suitable internal revenues of the three Provinces sufficient to provide the amounts above stated shall forthwith be traneierred to and admlnibtered by the Imperial Maritime Customs, in the interest of the bondholders. And so long as this loan or any ^«urt thereof shaO remain unredeemed, it shall have priority as regards both principal and interest over ail future loans, chaises, and mortgages charged on the above^nentioned revenues of the three Provinces. No loan, charge, or mortgage sliall be raised or created which shall take precedence of, or be on equality with this loan, or which shall in any manner lessen or impair its security over the revenues of the three Provinces as above stated; and any future loan, charge, or mortgage charged On the said revenues ms of the country concerned, and should such bonds not be recovered afteralapee of time to be fixed by the iyndicmte the director general or the Chinese Minister in London or Berlin, as the case may be, shall seal and execute duplicate bonds for a like amount and hand them to the syndicate, by whom all expensea. in eon,n«ction therewith shall be defrayed. Aet. XI. All bondi and coupons and payments made and received in connection with the service of this loan shall be exempt from all Chinese taxes and imposts during the currency of this loan. Akt. XII. All details neceanary for the prospectus and connected with the payment of the int«feet and repayment of the principal of this loan, not herein explicitly pro- vided for, shall be left to the arrangement of the syndicate in consultation with the Chineee Ministere in liOndon and Berlin. The syndicate is hereby authorized to iiifie the prospectus of the loan an soon as possible after the siting of this agreement; and the Impenal Government will instruct the Chinese Ministers in London and Berlin to coopenite with the isy&dicate in ^any matlen ;iequiring' conjoint action and to sign the prospectus of the loan. Art. XIII. The loan shall be issued to the public in two or more series of bonds, the first issue to be made to the amount of £3,000,600 as soon as possible after the ■tipiature of this agreement and not later than 12 months from the date thereof. The price to the Imperial Cbineise Government of the first series of bonds shall be 93 per cent of their nominal value. The second and any subsequent series shall be issued in time to permit of iinintenrupted continuance of the work of construction, in amounts to be determined by the director general, and tlie price payable to the Chinese Gov- ernment in respect of these series shall be the actual rate of their issue to the public, le» fiotation charges of ^ points retainable by the syndicate (that is to say, a charge of JBS 10s; Od. for every XlOO bond issued). Subscriptions will be invited by the ayndicate in Europe and in China from both Chinese and Europeans on equal condi- tions, preference being given to the application of the Chineee Government, provided such application be made before the issue of the prospectus to the public. Art. XIV. The proceeds of the loan shall be p«id to the credit of the Tientsin- Pukow Government Railway account with the Hongkong <& Shanghai Banking Corpo- ration and the Deutsch-AeiiaiiBche Bank in China, London, or Berlin, as the case may be. Paymenta of loan proceeds into the credit of this account shall be made in instahnents and on dat»3 conforming to the conditions allowed to the subscribers to the loan. Interest at the rate of 4 per cent per annum shall be granted on the credit balance of the portion of this account kept in London and Berlin, and intereit on the credit batance of the portion kept in China will be allowed at the banks' rates for current account or fixed deptosits, as the case may be, to be hereafter arranged. After deduction of the funds required for the service of interest and for commission on this service during the time of construction, the banks will bold the net proceeds with accrued interest to the order of the director general, who, in ordering payment of any sums exceeding £20,000 shall give notice to the banks 10 days before the day on which they are required. Requiaitionffl on the loan funds will be drawn in amounts to suit the progress of construction of the railway by ordere on the Hongkong & Slianghai Banking Corporation and the Deutsch-Aaialiacbe Bank, respectively, signed by the naniging director of the railway, or in his absence, by his duly authorized representa- tive, and accompanied by his cerlificales elating the nature and cost of the work to be iwidfor. Such amounts as may be required for expenditure in China may be transferred by the managing director, at his discretion, to Shanghai, the transjfers being effected through the Hongkong A Shanghai Banking Corporation and the Deutsch-Asiatische Banks, respectively, and the transferred funds shall remain on deposit with those banks until required for railway purposes. The accounts of the railway will be kept in Chinese and English in accordance Witb accepted modem methods, and will be supported by all necessary vouchers. During the period of construction the said accounts and vouchers will be open at any time to the inspection of an auditor, appointed and paid by the syndicate, whose duties will be confined to certifying to the syndicate to the due expenditure of the loan funds in accordance with the pro^^6ion8 of article 3 of this agreement, and to certify- ing to a monthly statement of the foreign matcriab? purchased by the railway adminis- tration under the provisions of article 18 hereinafter. He will arrange with the Railway Administration that his inspections shall take place on such dates and at such intervals as will enable him to efficiently carry out his duties as herein provided. The railway administration will publish annually upon the close of its financial year, a report, in the Chinese and English languages, showing the working accounta and traffic receipts of the railway, which report shall be prociu^ble by the public on application. Art. XV. If during the time of construction the net proceeds of the present loan with accrued interest should, after deduction of the sums necessary for the service of interest on the loan, not be sufficient to complete the construction and equipment of the railway line, the amount of deficiency shall be provided, in the first place, from such Chinese funds as may be available so as to permit of the uninterrupted continuance of the work of construction, any balance then uncovered being supple- mented by a further foreign loan for the amount required to be issued by the ejTidi- cate. The interest and other conditions of such supplementary loan wiU be the same as in the present agreement, and the price will be determined as in the case of the second and subsequent issues of the present loan. If after the completion of the line there should be a balance at credit of the railway account, such unused balance will be transferred to the credit of the interest reserve fimd hereinafter mentioned in article 21 as a provision for pavments for which the Imperial Chinese Government is responsible under this agreement. Art. XVI. If, before the publication of the prospectus for the issue of the loan, any political or financial crisis should take place by which the market and the prices of existing Chinese Government stocks are so affected as to render, in the opinion of the syndicate, the successful issue of the loan impossible on the terms herein named, the syndicate shall be granted further extension of time, but not beyond 18 months from the date of this agreement, for the performance of their contract. If within this time limit the first series of the loan shall not have been issued, then this contract shall become null and void, and any advances made by the syndicate under the provision of article 3 shall be repaid by the Chinese Government with accrued interest, but without any other compensation or remuneration whatsoever. Art. XVII. The construction and control of the railway will be entirely vested in the Imperial Chinese Government. For the work of construction of the fiorthern and Southern sections, respectively, the Imperial Chinese Government will select and appoint fully qualified German and British chief engineers acceptable to the syndi- cat«. In the event of the syndicate objecting to any proposed appointment, the cause of such objection shall be definitely stated. These two chief engineers shall be under the orders of the managing director, or, in his absence, liis duly authorized repre- sentative, and will carry out all tlie wishes of the railway administration with regard to the plan and construction of the line. In their general conduct they shall pay all due respect to the director general and the managing director. The terms of their respective. agreements will be arranged by the director general on his sole authority. Whenever appointments are to be made or functions are to be defined of the tech- nical employees on the railway staff, as well as in the case of their dismissal, the managing director, or, in his absence, his duly appointed representative, will act in consultation with the chief engineer of the section concerned and, in the case of disagreement, the matter will be referred to the director general, whose decision shall be final. After completion of construction the Imperial Chinese Government will administer both sections as one undivided Government Railway and will appoint an engineer in chief— who during the period of the loan shall be a European — without reference to the syndicate. Art. XVIII. For the Northern and Southern sections of the railway, respectively, the Deutach-Asiatische Bank and the Cliinese Central Kailways (Ltd.) will act as il (4 :ilAILWA¥ MAT1EIAL% IQUIPMBFT, AND SFPPLUa APPENDIXES. 811 iMMite of tiM .nimy :ti!iiBiirti||tiiii: inline, sidi coMtruction for the. purcliMe of :aQjiMterii]a. plant,, «^^ iMjobiii to U uajport'ed from OmmA. For all im- airwtor; and m IJie^ctae of ill teiiJmi. faienta Mii onleiB fcr 111© Importiition o1 ,go«l8' md mawiiale: Irom iDroad, tae «id ageiiti s&all purcliifle the matorlak r©q uired ^QD. 'Qui' taone .mint' fMl'imtageous to the railway, and wall dbarge the oriidnal net oo^nt «l: 'IImi ■Mae nlni a cemminsioa, of 5 per cent. It is ■undewtood that no ^ord,er8 for materials ahall he executed, or any expenditure incurred without due authoriatfttion hy the nnMii |iag' diieetor. ^^^mm^ia In ieit«iiTcir nayment of commMimi as ahove uliited, Urn Beutach-Ailatiiche Bank ,aad^th«^ ChmMe Centrnl Bailwayt (Ltd.) m ag^nti within their^ remective njctioniy ahall he wepared to Bupectntesd the purchaae of aO foreign matond^ tl quired, .fc the conatraction and equipmoit of the mOway, which ahdl he puichas^ in. the open, .market at the loweit. rate ohtainahle, it being understood thM all such ' S!ii^i imdjrtiAtoy guaJity and that^the raUwiiy administra- tioi Aall have the nght to rej^ect at .aitiral m China materlala which do not come iin to apecificatioiii. At eoual rates and qualiUes goods of German mm! BritUi manufac- tp© ahill he «ven, .preference over other goods of foreign, origin for the Northern and Southern ^ieeions, respectively ,. The railway adminl8fra3on reserves 'the ridbt whde paying the above stinnlated commlasion to the said agents, in respect of all piiidiaaee of fcffeiyn n^teriahL to avail itself of the services of other .agents in China. or almad Miinild it see fit to do so. Original invoices and inspector's certificates are to be «bmitted to the .man,a|ing director; all return co.nimi88iona and robates of everv ■ ■««cri|>t}on shall be credited to the railway: and all purchases made by the aemi > on behalf of the railway shall be supported by riianuflicturers' original tovoicos and uifMctors' cettiflcates:. ^ ' Ko commmon ahali. be paid to the agents..excM»t m ,above ■provided, but it is und^r- ■tood. :that the raflway adSniitialionahall pro^de out Jms^yhm^f^SB remuneration of consulting engineen when,ever their servicus .are engaged lith a v\m to the ew»uiagement,of CWnese industries, preference will be iriven at 'equal prices, and q'ualitiei, over British, German, or other .foreign goods, to Chines^ materials ,and goods maaofsctuied in China... No commission mil l>e mM on nm chases: of such materials and goods. *^ ^ It is understood and agreed that after the construction of the line is completed the Deutich-Ajiatiache Bank, .and the Ch.inese Central RaHways (Ltd.)/wiiriS thei^ respective sections, wffl' be gi:ven the prefere.n,ce for auch ,agency burineM duiiiS the currency of the loan for the supply of foreign materials m the rail wayadmSi^ tration may require, on terms to be hereafter mutually agreed upon. ^^ Aier. XIX. Branch Unes in connection with the railway line mentioned in thi« agreementjhat may appear profitable or necessary later on shall be built bv the Imperial Chinese Government with funds at Ihefr diupoeal irom Chin» aouitZ M J M fweign capital is required preference wiU be given to the syndjdita ' cif M^r^L' JL'?i1*2^^ !»r"*S* «»t«^ if P«™l e*"^ction ,a participat-ion •of ,20 .per cent of the net prafita of the railway ,had been promised to the syndicate Sirr!l?!f!flil^' ^T ^T^ responsibility and wnrices. In ct,mmutetSn o^ this participation in net profits the syndicate is granted the right to retain £200 (MM) out of the &at Issue of ti^ia loan, in installments «d on dateetased on^d in^^ porfaon to, the terms of the labicription to the loan as atated in the pro^pectiT No further payment in respect of commutation of profits will he aUowed on anv auble- quent series of ttie loan, or on any supplementary loan. A,»T., ,jlKI. Alter payment of interest an,d repayment of princiDal of the Itmn far wy cwrent yeig,. the aiilww adnffl«^ wifi deposit wiftt'thelBrutscrAiSSd^ Bank an.d, 'th,e Bfoigkong 4 Shanghai BanMng Cotpwation in Shanghai or^ntein any surplus of the net revenue ol the railway line for that year up to the amount required to pay tlie following year's iuntaUiifints of interest on the loan, the rate of inter«it on, the deposit being' arraiued with the ban,kfl from time' to time With durre- gird to the conditions of the market. ^^ Abt. XXII. The Deiitaa^ Bank and the Chinese Central Bailwava (Ltd.) may subject to all their iibligations under this agreement, transfer or dZM.te all or any of their ughto, poweis, and directions thereimder to any German ot BnSsh co,inpan,y, directan, or ageate with 'power 'Of further' transfer, and suhdeleKatior l^'Ui^^^''^^^' drf^gibon, or subdelegation to be subject to lUtoapprovai i^f mil?^S^ S?^'Srr~l?.^«'^^ Mittiority of an imperial e'di,ct dated the mik day ^ tht 12ii Moos of the SM year ol Kuang Hsu, coowponding to the 13th day of January, 1908, Western Calendar, which has been officially communicated to the ministers of Great Britain and Germany in Peking by the Waiwupu. AiiT. XXIV. Five sets of this agreement are executed in English and Chinese, three sets to be retained by the Imperial Chinese Government and two by the syndi- cate. In the event of any doubt arising regarding the interpretation of the contract the English text shall mle. higned at Peking by the contracting parties the 10th day of the 12th Moon of tJie 33rfl year of Kuang Hsu, corresponding to the 13th day of January, 1908, Wester.! Calendar. [Stamp of the official seal of ike Waiwupu.] LxANo Tun Yen. pjeutsch-Asiatische Bank.] H. COEDBS. [Chinese Central Railways (Ltd.)] J. 0. P. Bland, EepreseTUalive, i 'I 1 ippendii 7. — PAULING & CO. LOAN. AQBumifi' :pmo¥iBnfQ fob thx mfiwcnf and consteuction of A B AILWAY lEOM A PODf T ON TMl YANGTZE BIVIB OPPOSITE SHASI, flA 'CRAmmB, "^lUANCHOW, AN'D 'XWEXTANQ, TO SHIN6YI. IN THE TBH' HfOTPW OlRANOtiE'HA 'This aareemeiit is made at Fci-ing on the 25tli day of tlie seventh month of the third year of the Republic of China, being the 25th day of July, 1914, and the cont rafting parties are the Chiao Tung Pti» duly authorized by the Government of the Republic of China (hereinafter iometmes. refenred to as "the Chinese Government" and mme- tim'CB m "the Government'*), on the one part,, and Mcmto. Pauling & Co. (Ltd.), of 26 Victoria Street, London, S. W. (hereinafter term^ed the contractors), of the other part. Now it is hereby agreed by and between the partiee thereto as follows: Article I. The fontractore or their assigna agree to issue on behalf of the Govern- ment of the Republic of China a sterling loae bearing interest at the rate^ of 5 per cent per annum (hereinafter referred to as. the loan) for the amount of £10,000,000 eterling. The loan shall be of the date on which the first series of bonds are iisuctl and shall be called *'*the Chinese Government Railways 5 |jer cent Gold IxMin of 1914" [for the .imilwaya from a point on the Yangtze River oppoiite Shasi to Shing\'i in the Province 'Of Kweichow and a bmnch line from Changten to Oumpba]. In the event of the net proceeds of the loan beingSiifficiait to defray the entire cost ol the constniction and equipment of the undermentioned railways (including interest on and commission for the service of the loan during construction ae herein- after provided) the total amount of the loan may be increased by a further amount not exceeding ,£2,000,000' aterliiig wnking |Muri passu with the present loan. Art. II. The proceeds ol the loan are designed for the construction and eouipment of the railways from a point on the Yangtze opposite Shasi to Shingyi in the Province of Kweichow. ti^ether with a bimnch line fwwi Owngt^h to Changsha (hereinafter called the railway), and lor all necessary expenditure appertaining thereto and for the paymente of the amounto agreed upon as compensation to the contractors for the cancellation of previous agreements as set forth in the Bupplementar>' a^ement made this day between the Government and the contractors and asaet forth in letters exchanged tkm day between the Government and the contractors. Akt. III. The payment of the interest and the redemption of the capital of tlie loan are guaranteed by the Government of the Republic of CMna and by a special lien u'pon the railway,. 'ThM sp«:ial lien constitutes a fi,r8t mortgage^ in favor of the contractors or their anelgtts acting on behalf of the bondlioldere (hereinafter called the trustees) upon the railway itself as and when constructed and on the revenue of all descriptions derivable thereinm, and upon .all materials, rolling stock, and buildings of every description puFchased or to m purchased for the railway. Should there he default in payments on the elates fixed of all or pmt of the hall- yearly interest or amortization payments, the trustees shall have the right to exerc ise on behalf of the bondholders all the righta of Motion which may ace rue to them from the 8^:ial mortgage. This special moitgage is to be executed by a deed in accordance with this article. But subject to the guaranty and mortsa|;e thus given by the Chinese Government it is hereby declared that this raEway is m fact a Chinese property. The title deeds of the land for the use of the railways shall be free from all encumbrances and entangle- menta and shall from time to time m soon as eeeured be registered in the name of the railway. Notices ol all purchases of land for the railway within the survey limit, together with the corresponding title deeds, are to be transmitted by the railway hod office to the representative of the trustees for record and for the purpose of eatab- liahtng' the first-mortgage flecurity. Until the time when the same are to be returned lo tfie Government as hereinafter in this article provided, all lands the title deeds of which are lodged with the trusteee as part of the first- mortgage security lor the loan wMJm APPENDIXES. oXtl shall not be disposed of in any way by hire, lease, or sale to any party for any purpose whatsoever without the written consent of the Chinese Government, except only in the event of the Chinese Government failing to pay the interest or principal of the bonda and then in accordance mth the powers in the deed of mortgage. The lands thus bought shall be free from all encumbrances, lialtilities, and entanglements, and shall be con- veyed by lull and suflScient deeds of assignment according to Chinese law, all of which are to be kept and recorded by the repreeentative of the trustees, and are to be held by them as a first-mortgage security for the bonds under the provisions of this agree- ment untD such time as the principal and interest of the bonds, together with all indebtedness, shall have been paid off, when the same .«?hall then be returned to the Chinese Government, except only in the case of the Chinese Government's failure to pay the interest or principal of the bonds and consequent action of the trustees under the powers of the mortgage security. For the further protection of the first-mortgage security the Chinese Government undertakes that until the bonds shall have been redeemed no part of the lands com- f>rised in the mortgage security or the railway with its appurtenances shall be trans- erred or given to another party or shall be mjured, and that the rights of the first mortgage shall not be in any way impaired unless with the consent in writing of the trustees, which shall only be given if in the opinion of the trustees the interests of the bondholders will not be affected. And further, that until the interest and principal of tiie loan and all the indebted- ness shall have been paid off or unless with the express consent in writing of the trustees the Chinese (lovemment shall not again mortgage the above projwrtiee to another party, whether Chinese or foreign. Art. IV. It is agreed that if the half-yearly interest on the bonds is not paid on any due date thereof, or if the principal of the loan be not paid in accordance with the amortization schedule hereto attached, the whole railway, with all its appurtenances herein mortgaged to the trustees for the bondholders, shall be handea over to the trustees, to be dealt with by them according to law in such manner as will insure the fjroper protection of the interests of the bondholders, provided, however, that if the ailure to make payment at any one date be due to causes beyond the control of the CMnese Government, and if the Chinese Government request the trustees to postpone the taking over ol the railway for a reasonable period of grace, which shall not exceed six months, the question shall be amicably discussed and decided between the Chinese Government ana the representative of the trustees. When the whole loan and the interest due thereon ana all the indebtedness shall have been paid off, the railway, with all its appurtenances in good working condition, shall revert to the possession and management ol the Chinese Government according to the provisions of this agreement. Art. V. The interest on the bonds is to be paid every half year on the first day of June and the first day of December, and it is hereby agreed that the amount re- uuired for the payment of interest and the repayment of principal, together with tne sum of a quarter of 1 per cent on such amounts to cover commission to the con- tractors or their assigns who are hereby appointed the t^nts for the entire service of paying the loan, shall be paid to the contractors or their assigns 14 days before the due dates. During the time of construction the amounts necessary for the pay- ment of the interest on the loan, together with the commieeion of a quarter of 1 per cent above referred to, are to be paid over to the agents for the entire service of re- paying the loan out of the proceeds of the loan on deposit with the issuing bank 14 days before the due dates and on the requisition of the contractors or their assigns. The accruing interest from any proceeds of the loan not used during the period of construction and the earnings derived by the Government from the working of any sections of the railway as they are built are to be used to make up the amount required for the payment of the said interest and if any deficiency remains it is to be met from the proceeds of the loan. When the construction of the railway is wholly completed the interest on the bonds, together with the commission for the service of the loan, is t-o be paid from the income or earnings of the railway received by the Government to the contractors or their assigns 14 days before the due dates in sterling in London. The Chinese Government unconditionally undertakes and hereby promises to pay the principal of the loan and the interest on the loan on the due dates fixed therefor. If at any time the earnings of the railway, together with the funds available from the proceeds of the loan, are not sufficient to meet the interest on the bonds and the repayment of capital in accordance with the amortization schedule hereto attached, the Government shall take measures to make up the deficiency from other sources and then be ready to pay off the indebtedness so that the required amount may be placed in each case at least 14 days previous to the due dates of such payment in the hands of the contractors or their assigna. 814 :»AIIiWA¥ MATERIALS, 'IQU'IPMBHT, AM) STJPPUES. 'A«»- yj- 'Tlif boacli riiall }m hmiB of tk© 'Gwennneiit of tbe Reiwiblic of China. Amt .^ VII. The iunitioii of tii« Iomi Ii fixed at 40 yean, commeacing from th© dato of tile tame of th© loan, but no intorwt ahall b© paid on any bond wfich may b© ro- d«©iB©d, Of canciiled mnirn Hie tenia bordnaftor mentioned after the redemption or cao©iIlrtfaii flMMf. Oii.^«iM^ ;iKiii. ol each of tbeee bonds ehall bo exprewed tb© ■ytim 'tbmnf 'in 'ii©' iiun. of gm m any mck different amounts m th© (Mnem Ifiniatet m London, in comnltation ■wifli 'Ibe 'Contractors or their mdgm, may eanction. itopaynwnt of pondpal liiall. com^iMiic©' after the expiry ^ 12^ years from the date of tie loan tiid.'iliall b© co»pl;©ted .in .27| yean, by yoaily paymente to the contractors Of 'liiot aongni^ M aMnti: ior''"tke ■©rvice of 'the loan nnder th© tens of this agreement in accofdmce with the amortiaation schedule hereto attached. If at any toe after the expiry of 1|| years from the date ol the loan th© China© Oovemment should wish to redeem the oiilitanding amount of the loan or any portion '8tem and standards, provided that the adoption of such system and/or standards does not conflict with the interests of the bondholders. Art. XVIII. The contractors are hereby appointed the agents of the Government of the Republic of China for the construction and equipment of railway and works, and as such agents the contractors shall in a good and workmanlike manner and with good materials and to the reasonable satisfaction of the managang director and the engineer in chief during constniction, construct and complete the railway and works accordin*' to the specifications and plans. The contractors shall locate the railwav in accordance with the instructions of the Government conveyed through the managing director and to the satisfaction of the engineer in chief during constniction. The contractors are hereby appointed as agents for the Railway Administration during construction for the piu*ciiase of all material, plant, and goods required to be imported from abroad. For all imj^ortant purchases of euch materials tenders may be called for by the managing director, and the decision with regard to the acceptance* or refusal of such tenders shall rest with the managing director subject to the approval of the engineer in chief during construction. In the case of all tenders, indents, and orders for the importation of goods and materials from abroad, the said agents shall purchase the materials required on the terms most advantageous to the railwav and shall chai^ the original net cost of same together with the remuneration specified in Article XXI of this agreement. It is understood that no orders for materials shall be executed or any expenditure incurred without the approval of the managing director and the engineer in chief during construction. The contractors shall arrange for inspection before shipment of all materials pur- chased abroad and shall charge the actual cost of such inspection. The managing director and engineer in chief during construction shall arrange fc»- the inspection of all important materials purchased in China, and no materials shall be accepted without their joint approval. Art. XIX. The contractors shall appoint a competent and duly authorized agent who shall be reasonably satisfactory to the Government, to reside on or near the works to represent them (the contractors) and have on their behalf charge of the railway and works during construction, and also as many competent and responsible engineers inspectors, foremen, superintendents, subagents, overseers, and laborers as they ma\' deem to be from time to time necessary. The contractors shall also provide all the necessary medicines and medical attendance for all persons employed on the railwav and works. ' The contractors imdertake on their part that then- foreign staff shall observe the usages of courtesy, together with due respect to the eetabiifihed institutiona of the I MAY ■MATUMAUI,. WHJIPliiarr, AND SUPPLI18, rj. fnrtT^S^J22S£'Sfe ^ *i>n. « nafice b^ brought to the contractors, ^hmuJ^v^SSS ff* w* •«*«*h* to the circnm.t«icee of the case. - hould Mtv rnwq pl g j rt be made at any time by the numaging director aeainst, anv o ^'iSlf^S'JS'lSSS ^J*^-" foreign: about hisTS.eir impropT^ti"^ ^J^SSS^J^l j ' ^"'2 L^'?*^-''"°> ;i ""=« inveetigated m tlat justice '^™ f »^^{SSj2i2^S?y aAnJ-iata^i Should the complaint or chixc be iwoven fto obieetianMe penoB «r pemna ifcdil beTOmoved ra the'root' technical aaMuiti enployed in the coaatmctjon ahall^e deDiii1teiirt% M^ the^«of^6iifiiig'''''ilatt tliafl U »itnict«i to Wp them aa far m poe- ffllile byaffordmg all mformatioii relating to the OMiiteiictlMi.. * Bf™S;*??LJ^iSr^i^l^ ^ % wa:way and for all the piirpofl«i of con- Btriictwn, tod:iiiiiii| Wlirt. nd hmmw inH), whether permanent or tempomn\ with all nghtH^-iwyJadlilMi, and .aeeen U m^ iiia% diali G placed at the service of the !!!2SS2L!^ ■"^*****^ witinmt diilaj ^or hmd:nmw, and when lequimtioned by the ^ ^L^Ia '^**®- P^**' **> '*» P«? ^y **» Oovernmeiit tn^ "the cimtractOTS for the con- Blmftion and equipment and maintenance during coiitrtcfiwi of the raihrav ehall M m aaoimt equal to the actual ont-of-pockel cost thereof to the contractors tocethef r?JlJ5S^!SS*?'^*? ^ ?!!'7?i«^ the^original net cort of all materialsTplant, and 9Wkdfi nquiMid. to Im iiii}MiitiMi. fwmi abroad. 'The actual cent shall include ali ^l ^^.'^'■■^''"jWffl**^ and labor, and all expenses, l!! J'Z^l!^J^!L^!Jf*!^^^ mcnrred by the coritracton, providing panagcs out ani ?i!S!k2L^ '"^^ trtiwwi, «d ^nther troitiim ^■ptcially sent iSr^Eiirope or ^^i '■"* ??^ «5tPM» tc'tii;all,y kmumd "by the ttitf for HaveUng specially and rZ^lS^wi.^* Tl^ *"■ contract and the actual cost of all j^anrmaterials. ataws, imcl^tfwla pnrchased, according to the cost price of same delivered at the works Jll!!ri!?l!l"f2Jf!i!f ^"^"^ °^ P**P* «^ «ii«iise8 •actnally incurred by the con! **^!!!!JSr'Tl^?Ti^*ii^ *?X««"*«n»^ nmmgementa which may be made for the supply of food, ,aiid^«tfa«'tliiiiga :iir the con'vwiien:ce of the stafi employed by the coiitfacton on the: 'wiirki, including the medical staff, m^edictnee, and the nec^saxy efiupmiini for :anii«. ^ Provided, that iio 'Coaifeiot, pbenntract, engagement of ■workmen,, or other obliffa- SSil?!!*^ ^l ^^^ Tt «»^)f .pocket expemm UEUit be in any way affected ■iiau te 'HBtared 'into or made by the ccmtncton, 'without^' previous oonient of the n»na|5m|difecte ,and cmifluliiiig^ciigiiiMn, and 'if any ouVof-pocfcet expenses' shall be mcimwi, bj the 'Coniiactois iiiiil«r'^,niy conliact, subcontract, ananjremOTt or obli- gation «*iit«Mi into^ or" ,niade: without «ch previous consent of the manaeinff director wd the CMiliiing eiiMifiers, eiich out-of-pocket expen,8efl shall, 5the managinff dif ectof and the 'Consulting enginoets, think fit, be wholly or^ to such extmtas the ™'***^' ^r^!*?* «l^=^*''^'^8f wigiiieerB thiak fit disallowed in the contractor's •cwuntii, biit thii^ .shall not awply lo the^ mM .employed by the^ contractors and the ■tfiiMr:^ to them, which ahal,! be at the^iiowtion of the 'Contractofs. Provided that ,ti«, ''Stones and ,allOTvaace6 ol the European engineers and European cleriad stmff^ otter liMB, the contimc'tore' .agent tmd the prin^pal, 'engineer under him :Bhall be^:«ilar' to^ such as, aie^ paid to EuiopwiB in .other works .of the same nature in ■China.- The term "equipment" shall be %id to include in its meaning all requirements necttaary for the ooeration of the railway, and shall therefore include rdlinir stock and Itwmotiv- ao4aen:t,.iif '..openitiiin. ft is, cleKly undemtood -that the term ■*Pequip- nSri.cn;«Vl^fSSlJ^^ compatJy coiwtmctM and maipiped and, hnded oyer ready for operation. It is further clearlv undewtood that the cost of hind pufchaned for the railway and salaries of the managini director chief accoimtante, consulting enginefiii, and the cost of their offices amCtaff •hmll Mtwmduded in 'thf. neameg of tie^ .■■term •* constniction ■and equipment. » ' Abt. XXII. The Gofpiniiiit ihall at all times keep the contractors in funds to meet ejroeiiditure on this contract. For the purpose of ascertaining the amounts to be^pMd by the GovenuMiit ti> lfa« omtiMlare from time to time the contractore shall lotliss tfamaevra days ImIqdi IIm «id of Mch month, furnish to the engineer in chief during cairtnirtian an aceoint ■hewinf tie estimated amount to be expended on the worki dmmg Af then ensuing nMnii, and the Government shall on the first day of ^i^A •»*«!? mjmmt to a bank to be nominated by the contractors to the owttt oTlhi contiactiiii^ the aniOQiit..>of Mch, .ertimftie togeliier with any balance then d« to lte:.«i^^ ■»• tkBmiomj be, after dedwtoig any biiknce then m the hands of the cmtiactofs and APPEimiXES. B19 Art. XXIII. The contractom shall have the full and free use of all the railway and works under construction and the equipment as well as all the land, inchidin.^ borrow pits, quarries, ballast pits, brick field, etc., required for the purpose of the railway sidings, stations, buildings, workshops, water supplies, etc., during the period of construction and shall hand over the same on completion of the railwav. The managing director and engineer in chief d^i^ing construction and their deputies shall at all times have access to the works for purpoees of inspection, and they shall l}e afforded full information r^arding the construction and works, and they shall also at all times have access and the r^ht to make copies of the records, accounts, subcontracts, and vouchers kept in t^ various departments established by tlie contractore. Art. XXIV. After the completion of the survey the Government may arrange with the contractors, if the Government so thinks fit, for the payment to the contractors of a bonus or bonuses conditional on the construction and equipment of any section or sections of the railway being completed within a fixed sum and time to be deter- mined by the Government, but this arrangement shall not entail any obligation on the contractOTs to complete such section or sections within a fixed sum or time or any penalty on the contractors should they fail to complete such section or sections within a fixed sum or time. Art. XXV. The Government shall prevent anv interference with or hindrance or molestation to the contractors and shall take such precautions as may be necessary for the safety of the cootiaetora' men and property; Art. XXVI. The property of the contractors' staff and all miatters and peraons in connection with the works shall be protected by the Government, which shall see that the place is at peace without any organized hindrance. In case of any diflaculty as to labor affecting the works, the Government shall use its best endeavor, in coop- eration with the contractors, in equitably adjusting the same and shall do all in ixs power to assist the contractors in getting labor when required. Art. XXVII. The managing director, the engineer in chief during construction, and *he contractors' agent shaU, from time to time, meet and confer upon any neces- sary matter in connection with the execution of the work and, acting harmoniously together in the interest of their respective principals, shaU determine a mode of operation and line of action to their mutual satisfaction, but in case of and as often as any difference or dispute concerning or relating to the railway or the equipment or to an}i;hing appertaining to the carrying out of the construction (except where otherwise provided for herein) shall arise the subject of such difference or dispute shall be at once referred to the Government by the complaining party and the Gov- ernment shall promptly and equitably adjudicate upon the same. But should either party feel aggrieved or be not satisfied by the adjudication, then the matter in question shall be at once referred to two independent arbitrators appointed by the parties, who shall act in accordance with the arbitration laws in force in England and who shall investigate and decide the matter or matters equitably. Should they fail to arrive at a unanimous decision they shall then refer the matter or matters in question at once to the decision of an umpire to be chosen and appointed by the above-mentioned arbitrators, whose decision shall be final and binding upon both parties hereto. Art. XXVIII. The contractors shall make available the temporary track while under construction for public traflic as far as possible consistent with the require- ments of construction, and traffic carried over the same shall be in accordance with a schedule of rates and terms to be settled by the managing director. After all expenses whatsoever which the chief accountant may allocate in connection with this traffic have been paid out of the receipts therefor the contractors shall receive one-third of the remainder. Art. XXIX. The contractors shall hand over to the Government each section of the railway when it is, in the opinion of the managing director and engineer in chief during constniction, completed for operation subject to the provisions of this agree- ment appertaining thereto. On completion of the survey the sections shall be defined,^ Art. XXX. The raHwiy may maintain a force of Chinese police and Chinese officws under the orders of the managing director, their wt^es and maintenance to be wholly defrayed as part of the cost df the construction and maintenance of the railway. In the event of the railway requiring fmther protection by the military forces of the Government, the same snail be duly applied for by the head ofiice and promptly afforded, it being understood that such military forces shall be maintained at the expense of the Government 320 m 1 1 'RAILWAY MATERIALS, 'EQUIPMIHT, AHD SUFPLIBS. AiT. XXXI. All nmterialB of any kind Ihat are required for th© constniction and working of tlie inilway, whether imparted from abn»d. or from 'the Provinces to the scene of work, shall be exempt from likin or other duties m long as such exempiion remmnj m force m respect of other Ghiniii© jmiiwl .and future railways The bonds c-t tlie loan, together mith their coupons and the income of the railway, shaU be free from, imposts of any kind by the Goverument of the Republic of China '^f • j^XXII. WitJi a liew t» encouragi.ng Chinese •ind.ustriee, mils manufacti.rci at tlie Hauyang Steel A Iron W'orka, native cement, wd other' 'goods manufacture i aud produced in China are to have a preference at eq'ual price and quality 'At e-inl rat©B and qualities, goods of British manufacture shall be given preference over other foods of foreign oiigin. Aiw. XXXIIL The contractoM may, with the approval of the Government and mhject to all theur obligations, tmmim. or delegate all or any of their righta, powers and discretions to their successors or tisigns, provided they are of British nationality! Art. aXXIV. On the signing of this agreement the Government of the RepubUc <»^ Jiinashall oiicMlly notify the British Minister at Peking of the fact. Art. XXXV. This agreement is exe€iited in quadruplicate in EngliBh and Chinese two copies to be retained by the Government, one to be forwarded to the British Minister at Peking, and one to be retained by the contractors. Should any doubt anse as t» the interpretation of the agreement, the English text shall be accepted as tie standard... ^ Signed: at Peking by the contracting jparties: on tliis 25th day of the seventh month of the tiiird year of the Republic of China, being the 25th day of July, nineteen .hundred and .fourteen.. mrmnmoBmrnY Aemnmrf pep¥ii>ing fob canceixatioh. Supplementarv agreement providing for the cancelktlon of an agreement made oil the I8th day of December, 1913, between the Chiao tung Pu, duly authorized by the Ctowrnment of the Republic of China, on the one jpart, and Mesars. Pauling i Co. (Ltd.), of 26 Victoria Street, London, S. W., of the other part, and for due comnensa- tion therefor to .MeanB.. PaulingA Co, (Ltd.).. This, igfeementji. made at Peking on the 26th day of the eeventh month of the tlintl^ year of the Renublic of China, being the 25th day of July, 1914, and the con- ttacting parties are the Chiao Tung Pu, duly authorized by the Government of the Republic of China (hereinafter referred to as the Government^ of the one part, and Measw. PHuling A Co. (Ltil.), of 26 Victoria Street, London, S. W. (hereinalt« termed tlie contractofB), of the other part. ITierciw m agreement was made on the I8th December, 1913, between the Govern- ment and the contiactors (hereinafter termed the preliminary agreement) for the financing .and cons^tniction of a .railway .from a point on the Yangtze River oppoeito Sham, ■ma Changteh, Yiianchow., and .Kweiyang' to Shinwi. .in the 'Province of ICwei- chow, with a branch line connecting Changteh with Ciangaha (hereinafter called the railway). .And whereaa. m .agreement .has^ 'been entered into this day between the Government and the contuctew (hereiniifter tisrmed the detailed agreement) providing for the fi.n.ancing and confltructien of the railway. Now it is hereby agreed by and between the parties thereto as follows: A.BT. I. The :prelimin»ry ^amement M.„.hefeby cancelled, and the contractors shall f eceive as compensation for the cancellation thereof a sum (hereinafter termed the compenaation) equal to 7 per cent on the actual cost of the oonstruction and equip- ment and maintenance during construction of the imilway less the 5 per cent com- miMon on miitenala pufcfaaaed: abroad provided for in article XXI of the detaii^ed agreement. Such, actual coat: shall include ail plant, 'tools, wages for superintondence staff, management, and labor and all expensea, if any, which may be actually incurred by the contractors providing passaoea out and home for staff skiUed artisans and other workmen specially aent from Europe or elsewhere and any expenses actually inciirred by the staff for traveling specially and exclusively on the work arranged for m the detailed agreement and the actual cost of «i plant, materials, stores, and tools puichased, according to the cost price of the same delivered at the works, and also all moneya mid for hire of phint and expenses actually incurred by the contractore in connection with ajiy commissariat afiangementa which may be made for the supply of food and other things for the convenience of the staff employed by the contractors on the works, including the medical staff, medicines, and the necessary equipment loraame. The term "equipment" shall be held to include in its meaning all reqmrements ^neceaiary .for the opeution of the railw.ay and shall therefore include rolli.of stock APPENDIXES. 821 and locomotive! sufKaent for operation. It is clearly understood that the term equipment does not include any purchases made for railway after it has been completely constnicted and equipped and handed over ready for operation. It is further clearly understood that the cost of land purchased for the railway, the salaries *1 • o^ector general chief accountants, and consulting engineers, and the cost of theu- oflices and staff shall not be included in the meaning of the term "construction and equipment. Art II. Piye-sevenths of the compensation of the 7 per cent pro^dded for and detined m Article I of this agreement shall be paid to the contractors by the Gov- ernment immediately on the presentation of each certificate of expenditure simed by the managing du-ector, the engineer in chief during construction, and the chief accountant, and the balance (equal to two-sevenths of the said sum) on completion and handing over of each section of the railway to which the certificate may apply. Art. III. The Government hereby unconditionally undertakes to pay the con- tractors the compensation as defined in Article I of this agreement and in the manner defined in Article II of this agreement. Ar-^ IV. If both parties to this agreement agree that the section of the railway ftom Kweiyang to Shmgyifu is impracticable, the Government of the Republic of ( hina undertakes to substitute an equal mileage elsewhere on the same terms and conditions as those set forth in the detailed agreement and in this agreement ^^^^\ Y; 9,° *^® signing of this agreement the Government shall officially notify the Bntish Minister at Peking of the fact. ' Art. yi. This agreement is executed in quadrupHcate in English and Chinese two copies to be retained by the Government, one to be forwarded to the British Minister at Peking, and one to be retained by the contractors. Should any doubt anse as to the interpretation of this agreement, the English text ehaU be accepted as the standard. Signed at Peking by the contracting parties on this 25th day of the seventh month of the thn-d year of the Republic of China, being the 25th day of July, nineteen hun- dred and fourteen. ^ ^ > 106228*'— 1&- 21 AppiiMii 8.-HUKUANG RAILWAYS. tniAi. AammoEirr. TJis Mreemeiit la made at PeMBg on the twenty-second day of the fourth month of the thiid year of the Emperor Smian Timg, corresponding to the twentieth day of May, one thonnand nine hundred and ele¥en. Western Calendar, and the con- tmrting parties are: Excellency the Kung-Pao Shenff Hsuan-Huai, Minister of Posts and Communi- ^*.«.gtM»* ju,i»uauig vwijorauon, me uanque ae I'lndo-Utone, and Messrs. J. P. M««n «! Co Meem. Knhn Loeb & Co., tte First National Bank, and the National aty Bank, all of New^ York, conetituting the American Group, hereinafter called the "banks, of the other part, witoesseth as follows: Article I The Imperial Government of China authorizes the banks to issue a 5 Am. II. This loan is deeigned to provide capital, first— For the redemption at a premium of 2| per cent, with accrued interest, of certain Mnredeemed gold bonda of the total par value of two million two hundred akd twentv- tjro thOTsaijifdolitn fJnlted States currency (G $2,222,000) issued by the American Chma Development Co. on behalf of the Imperial Chines© Government, and secondly— For the conatraction of a Government railway main line from Wuchang, the capital of the Hupeh P^o\^nce, through Yochow and Changaha, the capital of the Hunan rrownce^, to a point in the district of Yichanghsien in the prefecture of Chenchow on the southern boundary of Hunan, connecting with the Kwangtung section of the Canton-Hankow Railway line, the total leogth of this line, hereinafter known as The Hupeh-Hunan Section of the Canton-Hankow Railway line." being an esU- mated dMtanoe of 1,800^ Chineae li, or 900 kilometera, and of A Government railway main line from a point at or near Kwangahui in the Province of Hupeh, oonnecting with the Peking-Hankow Railway line and pa«ing throuKh Hfflangronfc and Chingmenchow to Ichang, an estimated distance of L 200 Chinese li, or 600 falometeiB, and from Ichang to Kweichowf u in the Pro\ince of 8zechwan. an eetimated distance of 600 Chinese M, or 300 kilometers— this latter section of the mwn line having^ been added in substitution for the branch line from Chingmenchow to Hanyangoriginally MTeed upon-the total length of this main line, fiereinafter TTJ^^ ^f^^^^ Section of the Szechwan-Hankow Railway line," being about 1,800 Chinese li, or 900 kilometers. The 8ur\'ey lines shall be open to revision by the Ministry of Poeta and Communica- The Chinese Imperial Government undertakes to call in, after hsLvim received from the banks apnlication in writing to do so, the aforesaid gold bonds, and the banks will apply the amount necessary for the said redemption out of the proceeds of the loan, and will dehver the redeemed bonds to the Chinese Government after having made the bonds valueless. The Chinese Imperial Government will aftxjr receipt of^the redeemed bonds, cancel the inscription of the pledge of the Canton- Hankow Railway line in their archives, and will ad\ise the banks in writing after having done this. ° It is understood that any surplus of the nominal amount of £500,000 steriing hereby aUotted for the redemption of the gold bonds issued by the American China I)eveloi>. ment Co. .^aforesaid, which may remain after complete redemption of those bontfe, shall be; allotted to the above-named railway lines.. Art. III. After deducrion of the amount reciuired for the redemption of the gold bonds referred to m Article II of thia agreement, the balance of the loan proceeds shall be solely devoted to the conatruction of the aforesaid railway lines, ipcludinff the purchase of land, rolling stock, and other equipment, and to the working of the lines, and to payment of interest on the lofu during the period of construction, S22 1 APPENDIXES. 823 which li eBtimated at three years from the actual beginning of tfie works, a longer period, however, being allowed for the completion of the section from Ichang to Kweichowfu in consideration of the engineering difficulties to be encountered. Work shall be commenced simultaneously at Wuchang, Changaha, Kwangshui, and Ichang within SIX months after this agreement has been signed, within which period the banks shall notify the Ministry of Posts and Communications that the sum of £600,000 steriing has been placed at its disposal, in case funds should, be required for survey or construction purooses, or for ordering of materials, and for ihe reeiunption by the Imperial Chinese Government of the portion of these lines already constructed by the Provinces concerned, the said sum to be held in Europe and/or in the United States of America or remitted to China as the Ministry may direct as a firat instalment on account of the proceeds of the loan. This amount of £600,000, or whatever portion thereof is actually advanced, together with interest thereon at the rate of 6 per cent per annum, shall be deducted from the first proceeds of the sale of the bonds. It is understood that the lines of railway dready constructed by the two Provinces of Hupei and Hunan prior to the signature of this agreement with capital provided bjj those Provinces themselves, together with the property of those two pro\dncial railways, shall henceforward be taken over by and incorporated in the Canton-Hankow and the Szechwan-Hankow Government Railways Administrarion, and further that any supplementary funds which may be furnished in the future by the Ministry of Posts and Communications on account of a deficiency in the amount required for the construction of the Canton-Hankow and Szechwan-Hankow main lines within the boundaries of the two Provinces of Hupeh and Hunan, as provided for in Article XV of the present agreement, shall also rank as capital of the Canton-Hankow and Szechwan-Hankow Railway main lines within the boundaries of the two Provinces aforesaid. But the retimia due upon such capital shall not in any manner impair the arrangements for paj-ment of interest and repayment of principal of the present loan. ' Art. IV. The rate of interest for the loan shall be 5 per cent per annum on the nominal principal, and shall be paid to the bondholders half-yearly. The said interest shall be calculated from the date on which the loan is issued to the public, and shall be paid by the Imperial Chinese Government during the time of construction either from the proceeds of the loan or from other sources, and afterwards, in the first place out of the revenues of the railways, and then from such other revenues as the Chinese Government may think fit to use for the purpose, in half-yeariy instahnents according to the amounts specified in the schedule attached to this agieement, and 12 days before their due dates. Western Calendar, as calculated half-yearly from the date on which the loan is issued to the public. Art. V. The term of the loan shall be 40 years. Repayment of principal shall commence after the expiry of 10 years from the date of the loan and except aa provided m article VI hereinafter, shall be made by yeariy amortization to the banks in half- yearly mstalments out of the revenues of the hnes, or such other revenues aa the Chinese Government may think fit to use for the purpose, according to the amounts specified in the schedule attached to this agreement, but 12 days before their due dates, Western Calendar, as calculated half-yearly from the date on which the loan IS issued to the public. Art. VI. If at any time after the lapse of 10 years from the date of the loan the Impenal Chinese Government should desire to redeem the whole outstanding amount of the loan or any part of it not yet due for repayment in accordance with the schedule of repayment hereto attached, it may do so up to the end of the seventeenth year by myment of a premimn of 2^ per cent on the face value of the bonds, that is to sav by the pa>Tnent of £102 lOs. for each £100 bond, and after the lapse of 17 years wiOiout premium: but in each and every case of such extra redemption the Imperial Chinese Government will give six months previous notice in writing to the banks and such redemption shall be effected by additional drawings of bonds to take place on the er cent on, the anmial loan service. AiT.^ VIII. The Imperial Government of Ch„ina hereby engages 'that the interest and pnncipa of this loan shall duly be paid in full and shoulf the revenues of the railwayi and/or the proceeds of the loan not be mifficient to provide for the due and full ,pyiii«nt of interest and repayment of prin,c|pal, the Ministry of Posts and Com- miimcalions Aall m^emonaliie the Throne and the Imperial Government of China will thereupon make arrangements to ensure that the amount of deficiency shall he met from other wurces and handed over to the banks on the date upon which funds «» '""wi'^jwa to .«iiiplete full payment of interest and repayment of principal. Aht IX. The pmmt loan of iS6,0W,000 sterling, together with the second series thereof, nrovinon for the issue of which is made under the terms of article XV herein- after, IS hereby secured, in respect to both principal and interest, as a first chanre upon — ** 1. gupei genem] likin amoiinting to 2,000.000' Haikwan taels a year. 2. Hupeh additional .salt tax for river defence' .amonntiiig' to 400,000 Haikwan taels' • year, ^^ 3 . Hupeh new additional two-cash salt tax of September, 190g, amounting to 300.000 Haikwan 'taels a year. 4. HfPfh collection of Hukuang interprovincial tax on imported rice, to the •mount of 250,000 Haikwan ^'taels a year. 5. Hunan, geaeral.. likin. amountiiig to 2,000,000 Haikwan taels a year. 6 .Hiinan. salt cfniiinsiiioner''B treasmy 'regular salt fiMn. to the amount of 250.000 Hai.kwatt. taels • year. The above nrovinckl revenues, amounting to a total of 5,200,000 Haikwan taels a ywr, are hereby declared to he free from all other loans, chaiges, or mortgages. ^ So long' Mi pnncijial. and .interest of this, loan are regularly .paid, there sSll be no Miterference 'With these provincial, revenues; but if principal' or interest of the loan be m default at due date, then, after a reasonable period of grace, likin and other suitable internal revenues of the Provinces of Hupeh and Hunan sufficient to provide the amounts above stated shall forthwith be ttansfened to and administered by the Imperial Maritime Customs in the interests of the bondholders. And so long as this loan or any part thereof shall remain unredeemed, it shall have priority, both as regards pnncipal and interest, over all future loans, chaiges, and morteages charged on the^ aforesaid, provincial revenues. No .loan, chaise, or morteage ahiOl be rawed or created whiA ahai take precedence of or be on an equality wito this loan or shall m any manner lessen or impair its security over the aforesaid provincial revenues and an/ furture loan, charge, or mortgage charged on the said provincial revenues ether thm the second series of the present loan provided for in article XV aforemen- tioned shall be made subject to this loan, and it shall he so expressed in every agree- nient for every such future loan, charge, or mortgage. . Afteriredemption of the existing gold bonds referred to in article II of this agreement It M understood and agreed that, so long as this loan is unredeemed, the railways shall, under no cireumstances, be mortgaged nor then- receipts given as security to any otn.er party. In the event of the Chinese Government, during the currency of this loan, entering upon definite arrangements for the revision of the Customs tariff, accompanied 1^ Btipalations for the decresae or abolition of likin, it is herehv agreed, on the one hand. that such reyMMin shall not he barred by the fact that this loan is secured by likin and provincial revenues, and, on the other hand, that whatever likin is required to provide the security of this loan shall neither be decreased nor abolished except by previous arrangement with the banks and then only in so far as an equivalent ilsub- stituted lor it in the shape of a int chaise upon the increase of customs revenue consequent upon such revision. APPENDIXES. 325 Akt. X. The banks are hereby authorized to issue to the 8ubscriT)ers to the loan bonds for the total amount of the loan in gold, for such amounts as may appear advisable to the banks. The form and language of the bonds shall be settled by the banks in consultation with the Mmistry of Posts and Communications or the Chinese Minister *^ Ju ml"' If ndon. Pans, or Washington: they shall bear the facsimile of the signature of the Minister of Posts and Communications and of his seal of office, in order to dispense with the necessity of signing them all in person, and the Chinese Minister in Berlin and/or London and/or Paris and/or Washington, at the option of the banks shall, previous to the issue of the bonds, put his seal upon each bond, with a facsimile of his signature, as a proof that the issue and sale of the bonds are duly authorized by and binding upon the Imperial Chinese Government. The representatives of the S?"^^ ^ J Berlin, London, Paris, or New York, as the case may be, shall countersign the bonds as agents for the issue of the loan. In the event of any bond or bonds issued for this loan being lost, stolen, or destroyed, the group and/or bank or banks concerned shall immediately notify the Ministry of Posts and Communications and the Chinese Minister in Berlin, London, Paris or Washington, as the case may be, who shall authorize the group and/or bank or banks concerned to insert an advertisement in the public newspapers notifying that pajrment of such bond or bonds has been stopped, and to take such other steps as may appear advisable or necessary according to the laws and customs of the country concerned and should any bond or bonds be destroyed or should such lost or stolen bond or bonds not he recovered after a lapse of time to be fixed by the group and/or bank or banks concerned the Chinese Minister in Berlin, London, Paris, or Washington, as the case ""^/i?^®' J ^*'^ ^^^ ^^^ execute a duplicate bond or duplicate bonds for a like amount and hand the same to the group and/or bank or banks representing the owner or owners of such lost, stolen, or destroyed bond or bonds which group and/or bank or banks shall pay all expenses in connection with such delivery and execution of such bond or bonds for the account of the owner or owners of such bond or bonds. Art XL All bonds and coupons and payments made and received in connection with the service of this loan shall be exempt from all Chinese taxes and imposts during the currency of this loan. Art. XII. All details necessary for the prospectus and connected with the payment *^-l 51^^^,?®^ ^^^ repayment of the principal of this loan, not herein explicitly pro- vided for, shall be left to the arrangement of the banks in consultation with the Chinese Mm isters in Berlin, London, Paris, and Washington. The banks are hereby authorized to issue the prospectus of the loan as soon as possible after the signing of tliis agreement* and the Imperial Government will instruct the Chinese Ministers in Berlin, London Pans, and Washington to cooperate with the banks in any matters requiring conjoint action, and to sign the prospectus of the loan. Art. XIII. This loan of £6,000,000 steriing shall be issued to the public in one amount as soon as possible after the signature of this agreement, and not later than 12 months from the date thereof. The price of the bonds to the Imperial Chinese Govern- ment shall be 95 per cent of their nominal value. Subscriptions will be invited bv the banks in Europe, in the United States of America, and in China from Chinese Euro- ^fT^'n^- ^™«''^^*ii8 on equal conditions, preference being given to the application of the Chinese Government, provided such application be made not less than four days before the issue of the prospectus to the public. Seven days ' notice of the issue of the proepecUis Will be given by the banks to the Imperial Chinese Government. Art. XIV. The proceeds of the loan shall be placed to the credit of a ''Hukuang Government Railways Account" with the Deutsch-Asiatische Bank, the Hongkong & Shanghai Banking Corporation, and the Banque de I'lndo-Chine in China BerUn London, or Paris, as the case may bCj and with the American Group in New York or such banks in China as from time to time shall be designated by the American Group the International Banking Corporation being now so designated. Payments of the loan proceeds into the credit of this account shall be made in installments and on dates conforming to the conditions allowed to the subscribers to the loan. Interest at the rate of 3 per cent per annum shall be granted on the credit balance of the portion of this account kept in Berlin, London, Paris, or New York, and interest on the credit portion kept m China by the above banks will be allowed at the banks' rate for current accounts to be arranged. Subject to the pa>Tnents and deductions to be made from the loan proceeds in terms of articles II and III of this agreement the banks will hold the net balance with accrued interest to the order of the Ministry of Posts and Communications. Tranters of the loan funds to China in amounts not exceeding £200,000 sterling trans- ferred in any one week, will be made by the Ministry of Posts and Communications at Its discretion, the transfers being effected through the Deutsch-Asiatische Bank the Hongkong & Shanghai Banking Corporation, the Banque de I'lndo-Chine and/or tho I 326 ItAILV/AT MATERIAIS, E:1ITTPJ,IIvXT, Am) SVVVlArS, Imnlc or 'teaks to be des.igiiatad by Htm Americun. GfDup, tlw Inteimaiiiiiial Banking Coroocation, 'being' now so deiipiatod,, Tmnifeta. of tie loan funds to Ohioji from the banks in Europe and America, and transfers from the 'banks in Gbina. to the Cblneee banks wMcb aro lierelnaf ter desifnated almll be made m neailj as^ pnasiblein ec|ual amouoto from each of the banks, tne rate of excliange for each transfer from 'Europe and Am^erica being settled simultaneously with the transferrinf banfa either on the day on which such transfer is to be made, or at the option, of the Mmwtry of Post* and CommunicatiO'ius, on any date, or dates within six months preYious to the day on which Hm tensfer is to be^ niade. In the event of eqmkl transfers being found to 'be impracticable, a mutually satiafactory Brocedure tor making the tensfers above referred to shall be arranged, between 'the :Min.iitiry of Po^ts and CommunicatlonB and the banks. The transferred, .funds, to the extent of one-half of the net balance of the loan proceeds above referred to, may., at the discretion of the 'l.Iiniatry of Posts, and Communication's^ banks for . ,. , ._ , _ ^ , . reaponsiblo for all the funds of thus loan deposited with the .said C'hi..Eese 'banks. The Ministry of Posts and Com.mun.i.t!a.tions slmll from time to time make transfers from the loan funds held in China by the banks and by the designated 0.hine8e banks, to the credit of a construction account for the I'Iui»eh .section of the Szech wan-Hankow Hallway Line with the D'eiitsch-.iaiatische llank and. of a confl.tnict»n account for ike Hupei-H'unan section of the Canton-Hankow Railway Line with the Hongkong and .Shanghai BanM,ng Corporation, in amounts sufficient to cover one month's con- ■struction eslimatos in advance, so as to i,nsuro the uninterrupted continuance of construction. The Min'lstry of Posts and Communications shall Iiaiid to the banks., for ibe information of the auditors ('h.ereinaft4sr referred to), c^^uarterly statements ot the loan, funds held, on depoait by the .aforesaid designated Chinese banks, and these funds shall not he withdrawn from the :8aid banks except for the puipoae of transfer to the construction accounts above nam^ed. Funds shall he .dra.wn from these con- .itruction accounts, in sycee 'by the managing' director .as hereinafter pro\ided, and it will reit-with the ■managi.:ng director under the instructions of theMinistiy of .Posts and 'Communiaitlotf. to., nuike. all neceasary arrangements for the distiibution el sueh .funds throiigli. Chinea© banjks or othern^iae to the points where they are required. Boquisitions upon these construction accounts will be drawn in .amounts, to suit the progfOSB' of construction of the railway lines by orders upon the D.eutach-.Asiati8che Bank or the Hongkong A .Shanghai Banking Corporation signed by the managing director of the lines concerned or, in his absence; by liia d.u,iy authorized representa- tive, who .shall moreover, two days prev.iou.s to the presenta.t.ion of such order, iaeue in dupH'Cate a certificate stating cliarly the o'bject for which the fund* are to lie dra.wn.„ .ha.nding one copy to the auditor conremed ('hereinafter referred to) and on© copy to 'the bank, concerned. If the auditor should find timt there ue irregukrities. in til© payments to be made, 'he m,ay in the first place ask the managing d.irector for specific explanations, and if the maEagi.iig director is unable to furnish definite ex|>lanation!^, the auditor may refer the matter to the Ministry of Posts and. Communi- .cations .for its instructions. The accounts of the. ra.ilway8 shall be kept in Chines© and English in accordance with accepted modern methods, and will he supported by all necessary vouchers, Buring the period of construction the .said accounts and vouchera will be open at any time to the inspection of two auditors for the Hupeh-H'unan aection of the (Sinton- .Hankow Rai.Iway Line, and the H'upeh .section of the Szochwan-Hankow 'Railway Line, reapectively, appointed and paid by the bante, whose, duty it will be to 8a.tL>j.iy the banks as to the due expenditure of the loan funds in accordance with the pro- visions: of article III of this agroement. .and to^ certify to^ monthly state.ments of tlie foreign materials purchased by tlie Rai.lway Ad.ministm.tion under the provis.ion8 of art.icle XVLII hereinafter. The Railway Ad.min.i8tra.tion will publish annuallv upon the close ^of Its fi.naECial year a report in the Chinese and English languages, sfiowing' th.e working accounts and traffic receipts of 'tlie railways, which report shall be pro- curable by the public on .application.. Abt:. XV. If after the d'eduction of the amount required for the redemption of the gold Iwnds referred to in article II of this agreement, and of the sums necessary for the service of interest on the loan during the time of conatruction, the balance of the loan proceeda, with accrued interest, should not b© suflicient to complete the con- struction and equipment of the r%ilway lines named in article II of this agreement, the amount of deficiency shall b® provided, in the first phice, from such Chinese funds m may be available so as to permit of the uninterrupted continuance of the work of conMnictlon, and any balance then uncovered shall be supplemented by the issue APPENDIXES. S27 by the banks under the terms of the present agreement, of a second series of the ^ifT u* "*^^^' ^5^ an amount not exceeding £4,000.000 eterling. This second series shall be secured pan passu as an equal charge in every respect on the internal reve- nues specified m article IX of this agreement, and the time of its issue shall be left to the di«;retion of the banks. Should foreign capital still be required for the com- pletion of the railway lines aforesaid it shall be provided by a further loan to be issued by tlie baidcs on terms to be arranged. If after the completion of the lines tHere should be a balance at the credit of the railways account, such unused balance wiJl he toansf erred to the credit of the interest reeerve fund, hereinafter mentioned in article aX as a pro^Tsion for payments for which the Imperial Chinese Government 18 responsible under this agreement, or will be devoted, if necessary, to the improve- ment of these railways or otherwise to their advantage. Art. XVI. If before the publication of the prospectus for the issue of the loan any political or financial crisis should take place by which the markets and the prices of existing Chinese Government stocks are so affected as to render, in the opinion of the Jjanka, the successful issue of this loan impossible on the terms herein named, the banks shall be granted a reasonable extension of time for the pCTfonnance of their contract. If within this time limit, to be arranged, the loan shall not have been issued, then this contract shall become null and void, and any advances made by the banks under the provisions of article III of this agreement, shall be repaid by the Chinese Government with accrued interest, but without any other compensation or remuneration whatsoever. Art. XVII. The construction and control of the railway lines shall be entirely and exclusively vested in the Imperial Chinese Government- For the work of con- Btruction the Imperial Chinese Government will select for appointment a fully quali- fied British engineer m chief for the Hupeh-Hunan section of the Canton-Hankow railway line from Wuchang to Yichanghsien, and a fully qualified German enl enpneering experts to be selectud by the Minifltry of Posts and Cora- miinications for the inspection of such matedWi. file fees of these inspectors shall be borne in equal shares by th© Ministry of Posts md Communications and the pur- chasing agents. At equal rates and qnalitifis eoods of British, French, German, and American mannfacture shall 'be given impartial preleronce over other goods of foreign O'rigin. The Kailway Administration of the Ministry of Posts and Communications reeerv» the right, wnile pnying the above stipnlated commission to the said agents in respect of all purchases' of foreign materiab, to avail itself of the services of other :agente in China, or abroad,, ihoold it see fit to do so. The most favowble shinping and insurance rates are to be 'Secured and statements thereof together with original invoices and inspectors' certificates are to be submitted to the director general, and the manairing' director concerned; all return commissions and rebates of every description Bhall he cfed.ited, to the railwavs, and all purchases made by the agents on behalf of the ■railwiyi shall be supported by manufacturers^ original invoices and Insp^ectors* certificatw. No commission shall be paid to the agents except as above provided; but it is und:enit«»d that the Railway Administra- tion shall provide out of milway hinds for the femunefation of consu,lting engineers whenever their services are engaged. With a mew U the encouragement of Chinese industries,, preference will be given, ■t equal pric« and qualities, over British. French. German, American, or other for- mm goods to (Mnesc :ina;teriiil8 and goods manufactured in China,, such cases being left to the decision,, in conssltation 'with the ''eunneerS' in, chief, of an inspector ap- pointed by the Minintrv of Posts and Communications. No commission wfflbe paid on purchaaee of such Chinese^ materials' and goods. It is understood and apeed that, aftof the construction of the lines is completed, the British & Chinese Oorponition (Ltd.) and the Bentech-Asiatische Bank will be given the prefeience for agency business lor the respective lines, during the currency of the loan, for the supply of foreign msteiials which the Railway Administration ,iaay recpire, on terms to be hereafter ,niitiitiy :apeed upon. ,A«T. X,I„X. Should the Imperial Chines© 'Gmwiiiiient' itself hereafter consider it desirable to construct extensions in connection with the railway lines named in article II of this HipMiiient in order that the interests of the country may be bettor served, such, eX:ten8ionfl: shall he built by the Imperial, Chinese Government with funds al its disposal from ChiU'Cae' sources, but if foieini, capital is required, and the torms oiered by the banks are as favorable as those oiered by others preference will he given to the banks. Abt. XX. After payment of interest and repayment of principal of this loan for any current year, the Raflway ,Adnilnistration will deposit with the banks in Shanghai, or Hankow .any surplus of th,e net ,revenue of the'wiway lines ,for that year up to the amount required to pay the following year's installments of interest on the loan, the ratoi of interest on the deposit being arranged with the banks from time to tine wi,th, due ;reprd to the conditions of the market. Abt. XXL All expenses in connection with the flotation and issue of this loan, such as underwriting, commission and brokerage, tel^raph chaises, advertising, postage, engrmving and printing of prospectus and bonds, stamp and legal fees, shul be borne by the banks, ,AiiT. XXIL The Deutsch-Aiiatische Bank, the Hongkong & Shanghai Banking Corporation, the Banque de I'Indo-Chine, and the American Group &dl take the loan in ' equ al .shares and without, responsibilitv for each other. Abt. XXiii. 'The Deiit8ch-A.sia.tische Bank, the Hongkong & Shanghai B.an,king Corporation, the Banque de .I'Indo-Chine, .and the American Group may, subject to all their obligations under this agreement, transfer or delegate all or any of their rights, powers, and discretions .hereunoer to any German, Britiah, French, or American com- pany, directors, or agents, with power of liurther tiioiiler and subdelegation; such transfer, subtraiisfer, delegation, m mhdelegttion to 'he subject to, the approval of the Ministry of ,PoBts ,and 'Communicationsi. . 1 1 Art. XXiV. Thia^ agreement is signed under the authori,ty of an imperial ed,ict dated the twenty-second day of the lonrth ,month of the third yeai of the Emperor Bman Tung,, conesponding to the twentieth, 'day of May, 1,911, Western Calendar, APPENDIXES. 829 which will be officially communicated to the Ministers of Great Britain, France, Ger- many, and the United States of America in Peking by the Waiwupu. Art. XXV. Eight sets of this agreement are executed in English and Chinese, four sets to be retained by the Imperial Chinese Government and lour sets by the banks. In the event of any doubt arising regarding the interpretation of the contract tho Eli^lish text shall rule. Signetl at Peking by the contracting parties this twenty-second day of the fourth month of the third year of the Emperor Hsiian Tung, corresponding to the twentieth day of May, one thousand nine hundred and eleven, Western Calendar. The Minister of Posts and Communications, Bheno Hsuan-Huai. For the Deutach-Asiatische Bank, H. CORDBS, For the Hongkong & Shanghai Banking Corporation, Banque de I'Indo-Chine, For J. P. Morgan & Co., Kuhn, Loeb & Co., The First National Bar.k, The National City Bank, of New York, constituting "The American Group," E. G. Hn.LiER, Agent* R. Saint Pierre Casenayb* Willaub Straight, Representaitm, DISPATCH TBOM THE MHHSTEB OF COMMIOTICATIOHS. Peking, Mardi 1, 191S* To the Representatives of The Deutsch-Asiatische Bank, The Hongkong & Shanghai Banking Corporation, The Banque de I'Indo-Chine, and The American Group. Gentlemen: I duly received the letter of the representatives, dated the 11th of July last, in which were submitted four points for discussion. I beg to state that fre- quent discussions have already taken place and that nearly half a year has elapsed smce our joint discussion of the 28th of September. A solution has not yet been arrived at. Construction work is in abeyance for lack of funds. Both parties agree that no further delay should occur. We have mutually agreed that this Ministry shall address a dispatoh to you setting forth a method of procedure and I would request that you will assent thereto and favor us with a reply so that funds to meet requirements may be speedily made available. The method of procedure decided upon, under four headings, is as follows: 1. It has already been arranged that the Szechwan Commercial Railway sliaU be taken over and operated by the Government. The Commercial RaUway line of the Canton-Hankow Railway in Hunan has already been taken over by Director General Huang in Hunan. The surv'ey of the Canton-Hankow Railway in Hupeh is nearing completion and arrangements nave been made for commencing work at the Wuchang end. The German engineer in chief and the American engineer in chief have already been appointed and before many days will proceed to make the survey of their respec- tive sections. The above may all be considered as a simultaneous commencement of work on the four railway lines. 2. According to the terms of article 14 of the loan agreement one-half of the proceeds of the loan funds transferred to China shall be deposited with the Chiao-Tung Bank or with Ta-Ching Bank. It is now agreed that the funds transferred to China sliall b*e temporarily deposited with the Deutsch-Asiatische Bank, the Hongkong & Shanghai Banking Corporation, the Banque de Plndo-Chine, and the International Banking Corporation, designated by the American Group, in readiness to be drawn upon from time to time as required for the work until such time as either the Chiao-Tung Bank or the Ta-Ching Bank has been leoiganized as the State Bank of China and has estab- ■RAILWAY MATERIAM, ,„BQ,FIPMENT, AFD SUPPLIES. lialirf, ite credit, and b'uaiaeas nlslmii, mtli fo»%ii bsnka have been mutually resumed. ^Wheii guch time comei tli*- CkivwameEt may conailt witk the gronm aa; to a reyeraion to the metliod of procedure lsicl.4iowii in .article 14 el tlie loiit affreement ' fel n ^ ?^ depoflte of the procecdi of the loan fundi dmU be shared with the CMao- TtiogJJank or the htate .B:aiiit of China m lagenta. 3 For the piimoM' of new remoYing tie 'bondholdew* apprehenrioiMi thai the amount of the likin apecihed in, the agreement as aecurity may have been, detimaaod, the prep- eTty and matenaia of the milway are hereby specially given as a proviiieiial Buarantv that the likm m uninipftiMd. facepting this, all other conditiona ahould be carried out in accordance with the loan agreement. In the future whenever the Chines© ifOvefnm«nt m ab e to demonstrate that the likin is not only unimpaired, but assign- able by the central Government, or to find some other suitable aecurity, then the said gimiinty of the aecurity shall he immediately canceled and annulled and it shall be unneceaaary to aubrtitute thia with any other guamnty. In the event of the Chineae Government dmwingun new regulations consequent upon the abolition of likin ■Ihe same shall tm mmed out in accordance with article 9 of the loan agreement \ By article 14 of the loan .agreement auditors are to be engaged by the banks for theinapection of the accounts.,, Theirduty, a8.ama.tterof coume, willbe toin\'eat.igafo. to coiwil.t, and make enqitinea. They should therefore be in constant attendance at toe Kailway Accounta Office, so that they may be closely connected and acquainted with the affwra relative to their office, and they shall continue to function durinff the T\l tLT!iT*'T Ti^/?5 aft^e»TJ«^ M the mertgwce of the railway, referred to in heading No. .3 of this, letter, shall rem.ain in for«». In case of doubt as to the employment of loan funds or of any milway revenues, 'then tiie auditors arc empowered to suspend myment of remiisitions until satisfactory explanations are received' by tJiem from the managing director and/or the director pneral. It has already been decided that nulway tccounta shall be kept in ChineSetnd English in accordance with njodern methods. China, actuated by the desire to have accounts kept so that they shall he clear for auditing, will hereelf forthwith engage experienced foreicn accountants whose exectiti.ve 'power and appointment to the various milwav sections shall be entirely and exclusively controlled by the director general. The director general shall have the sole power of engaging or d.iBmisainff the .accountants.. Theae ai^pointments are made by the Chineae Government and lave no concern whatever w.ith the loan agreement. With regard to the control of the railway material dming ilie time of construction It 18 necesaary to make proper armngementa. The managing director and the engineer m cHiel ahould aelect a foreign engineer to be stationed at the store yards to control Bupervise, and .keep records and in the event of dm/mm 'lim, or misuse the managing d.m^tor and the engineer ,in chief ahal.i be reaponfiiWe! ^ ^ The above points having been mnlimlly determined upon verbally. I have to ri!rl!!!f* ^*'"T^® repr«ent»tivea™will prwnpay replv and proceed to carry out the .agreement and ih.us avoid further .Ions upon the part of the railwaya With .compliments, etc, Chu t!Hi-CiniiM, Mvmkr of Cowmmnimi&m, XDU m TSI BABSS. To Ihe Honomble Ifr. Chu Cm-CmiM, .F.«kimo, MmA S, ms. Miniskr of Communimiiom, Sim: Wehave the honwr to jicfawwledge receipt of your letter of the 1st instant .setting forth, under four headingp 'tie 'procedure which haa been agreed unon tor carrying out the pmmam of the Hukuang Railwaya loan agreement [the four hSdincs outlining the method, of niocedure are here repeated], ' In reply we have the honor to state that we are now prepared to armnge for the tiansfer of loan funds to China for purpoeea of survey and/or c^truction in amounts .as may be^ neceMi.ta.ted by the progreaa of the work. Arwngemente are now_ being mjide for the engagement of auditors in terms of the loan agreeaient, Md pwiiiK their appointment we are prejpared to designate membere of our banfa' etais in Hanfiiw to act proviaionally as aucfitore for theBupeh-Hunan section of the Canton-Hankow Ime and the Hupeh section of the HankowSzechwan line .respectively. ^^*^v«w»i* APPENDIXES. OijJL We shall be glad to learn from you as eoou as possible the names of the foreign accoitntanti whom it is the intention of the Chinese Government to engage in accord- imce with the proviaiona of heading No. 4 above. We have the honor to be, Sir, Your obedient servants. For the Hongkong & Shanghai Bank, E. G. HiLLIER. For the Deutsch-Asiatische Bank, H. CORDES. For the Banque de I'lndo-Chine, R. Saint Pierre Casenavb. For The American Group, F. H. McKnigitt. MEMOBAHBA OF SEPTEBCBEB 12, 1913. DIEECTOR-GENEBAL FENO TO BEPRESENTATIVES OF THE FOUR GROUPS. Peking, lith September, 191.3, Gentlemen: I have the honor to acknowledge the receipt of your letter of September 4 with reference to the omissions to be made in the draft memorandum of September 3, Article IV, paragraph (e), and in the annex, Article II. It haa now been agreed to omit the whole of the two clauses above mentioned. I intend upon my return to Hankow immediately to embody the terms of the two aaid clauses in the departmental regulations. The two clauses in question read as follows: MEMORANDUM I, ARTICLE IV, PARAGRAPH (e) (dRAPT OF 3D SEPTEMBER). "The mode of transmitting all funds required by the engineer in chief for his district engineers for survey or construction expenditure shall be settled by the managing director, in consultation with the foreign accountant concerned, with due regard to their safe, economical, and speedy transmission, full consideration being given to the recommendations of the engineer in chief. **The district engineers shall receive, take charge of, and account for all funda sent to their districts." memorandum n, article 2 (draft OP 3D SEPTEMBER). "District en^^neers will have charge of all stores and materials in their districts, and will be authorized to call for tenders where necessary for construction work and to submit the same with their recommendations to the engineer in chief for selection. The engineer in chief will submit hia selection to the managing director for approval and aanction, which decision will be given with all possible dispatch in order to avoid delay in construction." I have the honor to be, gentlemen, Your obedient servant, Feng Yuan Tino. Peking, 12th September, 191$, To the Hongkong and Shanghai Banking Corporation, The Deutsch-Asiatische Bank, The Banque de I'lndo-Chine, and The American Group. Sirs: With reference to the memorandum of procedure for transfer and expenditure of funds and auditing of accountain five articles with the annex regarding construction and purchase of material in two articles, for the Hukuang Railways, as agreed to in our meetings, I beg to enclose you herewith copies of theae memoranda for your infor- mation and acceptance, and ahall be glad to be favored with your reply confirmino^ the same. ** I am, sirs, your obedient servant, Feng Yuan Ting. „, „ , , „ „ Peking, 12th September, 191S, The Honorable Mr. Feng Yuan Tino, Director General Hankow- Canton and HankmjihSzechwan Railways. Sm: We have the honor to acknowledge receipt of your letter of to-d^y's date, inclosing for our information and acceptance copy of the memorandum of procedure ' ■ 332 lAILWAT MATEBIAM, IQITIPMENT, AND SUPPLIES, Jt *ZS'rSl2^ i ^''^'/''^ "^^ Of accoEBte, in five articles, with toe annex remrding coMlractmn and pureliafie of materiala in two articles' tat thS Hiikiian£ Railwiys, as aweed to in our meetings. In reply, we have the honor to confirm, our acceptance of the same We have the honor to he, sir, uii. tmuw, Yonr obedient servants, For the Hongkoi^g and Shanghai, BanMpg Corporation. B. G. HlLLIER,, For the Dei1ach-ABi,atische Bank, ^^^' For the Bamjne de I'lndo-Chine, ^ ^' ^°''^^'^«* ,^- R St Pierre For the International Banking Corporation, _, D. A.MENOCAt, Manager on behalf of the American Group. imiomniiniif OF raociDumi fob the raAirsFti ,and ,ixpiiiBrrTOi OF FUHBS. loJ? ^^, ^ ^ into operation the terms of the letters of agreement of March 1 and 3 1913, the following rules of procedure for the transfer and expenditure of funds in five clanaes and the annex thereto regarding coEstmction and purchase of material in two ctases' have been ,agreed upon. ^ maienais in 1. In the second half of each month estimates of construction and administrativ© the sections concerned, ba»d upon the forecasts (vide also memorandum reeardiM constrnctjonj etc) supplied to tfom by the managing director and engineerTdiiS 2ri?!f i''^''^^-!T^^ ""^ T'^f ^ ^'^''^ *~ to l^'atlditd thereto) . ffi^timate TOuc^XXo^^ * Btatement prepared and signed by the foreign accounlS (a) Available baLice at the credit of the construction account concerned on date of leport. (6) Actual cash balmnce of al,l imprest accounts. Si ^PF?^™ate expenditure until the end of the current month. Aim^a ^^^"^ **^ *^ Hukuang Government Railways accounts in Europe and/or 2. Funds can not be expended for any purposes other than those for which thev were requisitioned in the estimate. Should It be found that additional funds Z required for unforeawn continMncies during any month, such funds miwt b^ requisitioned for under a supplementary estimjite, to be dealt with in accordance with the ordiiiJiry procedure for monthly requiaitioiis. "ccoroanc© 3. The Dionthly estimates and statements above mentioned shall be submitted for »nc ion before^the 20th every month to the director general of Te^lwi^ ^ Hankow, who^has been duly^ emijowered by the Ministry of Communications to act as itB representative, and copies will be forwarded in due course to the bank and audi- tors concem«l. " *""■* • th^Ta™ toiL''^,^"l?i^n ?r* estimates and statements and after lllJ^lu^^ "^TT^ r*. *'! ^*** ) Wherever practicable, paymenti must be eHeisted by checks; where pavnient by check m not practicable sudi payment wMl be made in cash by the cashier from mo imprest account to bo fumiahJ U him by the foreign accountJt APPENDIXES. OuO (f) The cashier will keep a cash book for recording all payments made by him. At the close of each day ho will hand to the foreign accountant a copy of his cash account for the day, accompanied by all vouchers for entrv in the cash book kept by the foreign accountant together with a statement of his balance, and will, if desired, produce his cash for inspection by the auditor. (rf) All ciiecks shall be prepared by the foreign accountant and shall be certified as correct by his signature. He will then present them, toEjether with the relative documents, to the managing director for his approval and signature. After the managing director has signed the checks they will remain in the chaige of the foreign accountant who will be responsible for the safe delivery of the checks or their proceeds to the payee& («) Funds required for land purchase as shown in the engineer-in-chief's monthly' forecast shall be paid by check to the Land Office in amounts to meet immediate requirements, and the relative land transfer certificates must be sent by the managing director without delay to the foreign accountant for comparison and entry. 5. The expenditure of the director-general's establishment will be a fixed monthly suna of $15,000 to be paid against the receipt of the director-general. The salaries and allowances of the managing director's establishment, not including the foreign accountant's department, shall also be a fixed monthly sum to be arranged from time to time with the auditor concerned, and to be approved by the director general. This amount will be paid against the receipt of the managing director. MEMORANDUM REOARDINO CONSTRUCTION AND PURCHASE OP MATERIALS. 1. In order to secure efficiency of construction of the railways, which at present forin the sole security for the loan, all executive work comprised under the ten main heads of t:he form of monthly forecast approved by the director general and attached hereto, will be earned out bv the engineer in chief, and all orders for the purchase of matenals shall be prepared by him, subject always to the authority and approval of the managmg director. 2 In the case of all orders for the purchase of materials (except Chinese materiala and poods manufactured in China on which no commission is chaigeable) copies of requisitions relatmg thereto shall be handed to the purchasing agents mthout delay m order to enable them to make the necessary arrangements for calling for tendera or placmg the orders on the open market, undei- the terms of article 18 of the loan agreement. Pbkino, 12th September, WIS. AMWiJii ».-SSUPINGKAI.CHENGCHIATUN RAEWAY. Aomnmrr fob. comstbuctioh.' ITfimalatioa ol the CMneae text.l TMi Mreemont m mado »t Peking on the »th daj of Dwember IQIR Mfh vi»r «r Mm4»?o*? Kn2?™^'^h„*ir^"f ''*','^"*' the Government), rep««l.ted by the rf-Ii~»E!L;'^^ . (ne'^'M'tOT called the Banki, of tho other part iave oon- S2?2i£'!r^ tnem^lves tte present agreement on the ba»la of the^mi™t^f„ ^^''.;"^,'?,7?' """P? ^f!^"^ tSe Chines and Japanaee GovCT^enta on rfit^;^" TJllPff^"' "^ ? '"' *.'"' ''"''''*"S «•' » '»i'*«y from Seupingkai to Ohen^ cbuUiit. After the completion of a survey, the route will be fixed bvAnri;^^ C^provat* "^ ""^ *^'' "^""^ "^ '^'^ to Ae Ifth^ofc^u^J'^^^ ««W for Sl%3d^"^f'tS*e'l^"\„MtJ^ f^'"'' mentioned ia eet .p«t exclu- «i»i,,8« for&e opemtioEof the road and for ArpayZSriTinT^on •t Iwo dtimi; the period of conatniction of the saTi road ^^^ ^^^ llio work must he etarted not later than, six months alter 'the mmuas of thi« mrr^ mm,© tfefore' the «Q:d of six months the bank will p ace at the disooaitinn n1 iZ director general of the.road a aiim not to exceed 200,o5o^ ven as an a^^S un^^^^ \ll loan which^money will be deposited in .lapan or remitted ^HSihia in acTdaica with tiie mstriictions of the director g«n«iL The sum so advaiS to<^her ^"th !t!2'Tll^'''*''>';if ,*;\"'*^*?^^^ -■econnt at a rl'lTo^e V'^^'c^^ annum unll be ji.|thhe d by the bank from the proceeds of the first bSncieR^uS The advance will be paid in Shanghai taols. * ^^ ****'"*^^' ''^''*'^- eetf^t'J^nJ'y.T '*"'' %«\P'«"<^ Joan fi« 'l^e calculated at the mte of 5 per rent per anniim on the nominal value of the bonds from the day of issurof the lo?n and the payment oi interest to the bondholders will be made semLTufllv D.S Ae jieriod of th« buildinc| of the road, the Governmenr^ll W tC?n Jit*,t eS from the prmapal of the loan or from other sourcei, at its diicwtion ^nd^Ln tl^ biuldiBg M finidiod the interest will be paid first fim the3Zt^ AAhL!^!i 5 which as^above stoted will be computed Crom the day the loan wm ^liirl ^^i kl payable 14 days in advance of tho expiration of eaciL f-y«2 temTrLrfanco with the amortization table annexed to the agreement ^^ ^™ ^ atcordance Arr. 5 The term of the loan ahall be « years. 'The amorti/ation of th<^ nrir„.fr.«i ^A thramarH«ri Lm ^"^ ^^^ ^ advance/in accordance wim tne amortization table (except in the caae anticioated in the sixtK artiT« ^* the agreement), and will be piid from earnings of tto 3 or frli ot^^^^ revenues, at the discretion of the Government! Government AiiT. 6 Tbe Government reserves to itsctll the rkht upon noticr to the hnnlr f« me loan, to pay off, if it desires, before maturity, all or part of the DriiicioalwhiVh has, not been amortfeed, upon cond ition that the toldors of thrbonde a^^L pi^^ « Wmm ■Qm Wm Emtmm Etr tow for MnyaWT^^ APPENDIXES. J IS&'on^Vv:^^^^^ -I- of the bonds that is upon after the day of iisue ofthe l?aii ihl IZ^^^\ ^^ *^-® ^^ ""^ ^® twentieth year araortizatioii i>avmAnf« iSti, I ' • Government may mcrease the amounts of the S rnv^^^^^ P^f;T * P^?«^i^m over and above the par value Sn^Tt^inds urnT.''?*^ T" ^^' "^T^ *^"^ ^y "^^^"« 0^ * supplementary dm^ls ^ "" ^^ ^y^ ^""^^ "^ ^^ prospectus of the loan fSr tJie usuil prkidpaLmis^k)^^^ '^\ir T^" ^^^ payments of the interest and LTZuk the di?ecS^^^^ ' ^f'^^f '^' agreement, to the 14 dav« in nriTmtr^^ ^ general accordiug to the attached amortization table but artivirR ^i.!?P °^®- ^**f payments to be made before maturity in accoKlance m'Si Wments in l^W ^f thCT^ve «,,^f,S2^T'T°' '^''" ^^'^ *« "^^^ ^ """^e such IL gold fun^s ahill'^^t We^^nt&'r^e aX\??h^1^^^ ^^'^ F^iaS'i^°i^tr™"' 'V°^^ 4*^rbT.tleVd^n."id"a^« v\RT. 8 1 he Government guarantees the rcular navmenf h^n, ^ ti,„ ;_» » j of the pnnciDal In ra«o tho ->mn„^t „r *i. T paymeni ootn of the mterest and not be suSt fo7thnboiLZ,^i"ii*! '"'^ ?' *t T«""« ^^"^ <*« ">«! d^" necessary m^rS ^''i^^^Z^^t^^Z'^' ^L?°^^"'''''K'^]i ^"P^^e befo^gin'g ^tle"SJ°o^w1.i^"4 bKo ^tTt ^l/'^T^"' "'^P^-i^ revenues of the road In caao a m.n^o™i!f..i^i • , '"'"f®. and also upon the of article 15 o? IhU agree^t Z^^ ^Sr^H^'"/"'"''"'**'* Tf^^^^ to clause 1 tions or with the Chinese Mnistpr at Tn£^ >ru i. j ^^inister ol Communica- Chinese and JapaneseT^^^'d iJS^^^ be printed in tha Ministry of CommmiioaHonTflLn kI^ signature of the Minister and the seal of the thebon\thSrrerd"LtS„''Ahe'Stfe^at^«C^^^ of thp hnn /""Y< »r„ i'^ I "y,- ' °* """nds will also be signed bv the reorewntaf i™ OI mo bank. If bonds are lost, damaeed orsl^Ipn tho k.„i7^ii^ i" , . ® the .Minister of Communication, o7thrrv,;„o!„i?P'r • r ^^ immediately notify it to advertise in th"preL th^rnvme^^r^^h"'"*' "" ^?^' ''*'° «^" authorize to take the necessai^SiSi rSrmitvUh.lJff."^' ??.^ ^^ T''^' ■"«> ^"^ rrj^^troriv'srSlS^ld^^^^^^^ op^Iions eoXte5li;hte'ZmeL''of\'h ir ' *'"' J'""?? '*'* ""'P"-- ""d "l* »» from Chinese taxation '^^''^"'^^"""P*'*"'* "'te'est.wiU be exempted .hf ^ayL'enf ifX^prtl^n'd" l^'t^r^^r^^t^^l ^Ll^^rr^'"^ »' *« 'T, -" ?r;ii^^eSisrar3iSH-S^^^^^ and also to cooperate ^th"b^ bank in air,,»,t^ 't" ^- *« P^^^P^c'"* of the loan Art. 13. The'^bank ^1 have^he rSrht to 12,1 ^L*""^^ °" *^\^^ "' ^« '»««•• in several series, depeS.uDan the^^^t nf^ the entire loan either at one time or M.VI also upon the cStiSn of Ae mon?v Si^ket ThoT' "" ^"^f^ctory execution, the bonds the i^ue price lerid^.rcSoTti'^'-r ce?t'o?rhehZ^,lttiir'"^'°K' will be rctamed by the bank as indemnifieaSu for the exp^^ of Z^th^ iol^'"'' liJLWAY MATBEIAIiS, BQOTPMENT, AMD SUPPMBS. AWT. 14. The proceecls of the loian ahall he depori'ted to the credit of the railway in the Yokohamft hirnich of the bank tt the times mdicatwi in the prospectus of the loan lor the stibecribefB to the eame. The Yokehaint bnuich of the bank will pay upon the credit balance of these funds interest at the mte of S 'per cent 'per annum, and on sums transferred to China, the locaa branches will my the^ interest that is cwstomary on roch accounts. The bank will retain, at the disposal of the director general, all sums realized from the sale of the bonds, with the interest thereon, deducting, however, the sums necessary for the payment of intereil upon this loan and commissions upon such payments during the period of construction of the road . In the case of payments exceeding 200,000 yen , the director general must advise t-he bank 10 days before effecting the payment. The entire loan is to be expended for the buildinc of tne railway in proportion to the progress of the work and as need may arise, for whicn written requisitions must be presented to the bank, signed by the director eeneni! and the chief accountant, with a statement att»chee the duty of the chief engineer, under the supervision of the director general and th? managing director of the road, to make surveys, prepare plans, drawings, estimates, etr., to direct the technical part of the work, to purchase needed materials, rolHng etock, etc. The chief engineer will submit for the consideration of the director ^nenil a list of the necessary Chines^ and Japanese technical staff for the construction work, exactly designating their number and their functiom!. The director general, up3n approving this list, will appoint those technicians and place them at the disposition of the chief en^eer for the performance of their duties under his direction. Appintments to the mmor posi- tions, and also dismissals, will be made bv the chief engineer with the consent of the director general and managing director of the road. As the construction of the sepa- rate sections of the road is completed, they will be turned over^ by the chief en^neer, to the director general, who will open them for operation if this is considered advmble. The traffic manager sliall be a Japanese subject, and he shall discharge his duties in compliance with the instructions of the difector general and the managing director of the road. The duties of the chief engineer will cease upon the completion of the building t)f the road. The director general shall then appoint a Japanese engineer whose duty it will be to supervise the engineering department under the orders of the / / .APPElfDIXBS. tftJ I If director general and the managing director of the road. The Japanese engineer and traffic mana^r will be appointed, under contract, by the director general, upon agreement with the bank. Art. 17. For the purpose of guarding the railway line, there shall be maintained a Chinese guard detachment under the command of Chmeee officers. All expenses connected with the maintenance of the detachment shall be paid from the amount destined for the building and maintenance of the road. The nummcal strength of the detachment shall be determined by the director general upon agreement with the bank. If the detachment proves to be insufficient, tlie management of the road shall request the Government to said as guards a detachment of troops of either the central or provincial Government, and the expense for their maintenance shall be borne by the corresponding authorities. Art. 18. The income of the railway shall be deposited in the bank on either short or long term deposits, and the bank shall pay interest at rates arranged by mutual agreement between it and the Government. The expenses of operation and upkeep of the road will be paid from the revenue of the road; the net balance of the revenue will first be applied toward the pajTnent of the principal and interest on the loan, in accordance with the annexed amortization table, and the surplus remaining after the above-mentioned payments shall be held at the free disposal of the director general. After the completion of the building of the line and its opening to traffic, the amounts desknated for the payment of principal and interest on the loan shall be handed over to the bank six months in advance of the dates specified in the amortization table. In case the revenue of the road is insufficient to cover the expenses for the payment of interest on the loan and the liquidation of the principal, these payments shall be secured by the means indicated in article 8 of the present agreement. Art. 19. During the period of the building of the road, a person designated by the bank shall act as the agent of the road for the purchase abroad of all necessary build- ing materials, rolling stock and other articles. The more important of these pur- cha^s will be made by the director general by means of tenders. It will be the duty of the agent, who will act as middleman, to furnish the required materials on the terms most advantageous to the road, and as compensation for this service he shall retain for himself 5 per cent of the net cost of materials jMrocured in this way from abroad. All supply contracts shall be made through the chief engineer with the approval of the director general. It shall be the duty of the agent, who will be respon- fflble for the stnctest inspection of the materials obtained, to select materials of the best quality; the management of the road has the right to refuse to accept materials If they are not m accordance with the specification previously adopted. Buildin«» materials, rolling stock, and other articles of Japanese origin will be given preference before merchandise of other origin if the Japanese merchandise is of 3ie same quality •nd the same price; after Japanese matenals, preference shall be given to foreign merchandise recommended by the agent. Original bills for purchases of materials and customs certificates, must be presented to the director general; in cam discounts tie allowed from the established prices, these amounts must be credited to the account of the railway; the agent is required to present all vouchers, certificates of manu- facturers, etc., required by the management of the road. A^de from the above-mentioned commission the bank shall not retain for its own profit any other «ums. In case the management invitee, for consultation, additional •xperts and engmeers, all expenses in this connection will be charged to the account of the road. To encourage Chinese industry, materials and merchandise of native origin if the qualiUee and pnces are the same as similar goods of foreign origin, shall be given the preference; for the purchase of such merchandise, of Oiineee origin, the bank snaU not receive a commission. Upon the completion of the building of the road tne person designated by the bank shall continue as agent of the road, for supplyinff nec^sary materials, dunng the whole period while this agreement is in effect; undw conditions which shall be aftanged later. ^^^^A ^' \^ ^S future, the Government deems it advantageous or desirable to extend tiie r^way Ime or to build a branch, this work can be done with money ob^ tomed from Chinese sources; if, however, foreign capital is wanted for that object, the Gpvermnent is obliged to give the preference to the bank. The length of these additional lines shall be determined by the Government. Art. 21 The bank, being the agent of the bondholders, shall deal with the manage- Sf %i°ld ^ ^ ^ matters concerning the railway, as the representative of Sie Art. 22. Should any events of a political or economic character in the country durmg the penod between the signing of the present agreement and the issuing of the prospectus of the loan, which would have an injurious effect on the money market ana cause a decline m Chinese securities, and in consequence cause the bank diffi- 100229*'— 19 n I i L 338 MAILWAT MATEBIALS, EQUIPMENT, AND SUPPLIES, ^^f ^AT^^^^^'f? ^*» *« P«»«t !««». the Government bv mntmd i«mw». iiieiit witli thelimk shall gmat to the latter an ext«nSnT. AffSl ?L?? ^^^^^ out the condWoM of the a^eS II atX «ph^^ T^l^ loan has not been ii!iiii«l7the owiifinf aTirmJn* ® designated time the 1%m ««*.*.mL«ir:«^rT* Pf^n* agreement shall be consideied as c¬^Uii xne wjvemmeiit m that case: «riii mhiav tn tii^i Konir *■!,-. ""°»«™'0" »o utuceiea. Aw. 24. In order to secure a wide distribution of the biwida tli« Kattir 1.^11 1.-. • ntfu iondB win be tSSlon, Paris anTNeJYoA mhS ff„v ti^ ^ ^t ''u'''*^ of OA..^^f ^KT?*,;?*?*"*'.'?*^ '«» ann^es, wa« ratified by the Preddent SSrT?^!^" w.?Lde by ^ife^Xt^l^kSltSI t^4S — iT:.!*** 'T"* l?"*!;?* tipneonient Is drawn m in four cxipies in the Chinese lammftim **«ie« aqfiH, the J^mmw text wUlTe given^prdei«SJ ** ""* December 27, 4tfa year of the Republic. AKHSX t. ciiatun. With the object of acconmlSiinir ihT^JiJTZ^M °®^P™g™ to Cheng- wmTSS if£i!!J%'^**^ **^ *^*J^* ^**' "* consequence of the European war Z?^rfSlii*Zll!l'^^^ r"?3r iiMrkel :nici^: lifiiiiiityrit is acknowledgS thS ITS SliSStX^Sffi^^ '* PITSt ^« ®«^«™»««t» having it in^iewto stoS Airr. 2. Tiii biiik iiiMfim to Itoelf th« right to return to itself the ammmf »A^^,.^ wth accrued intumt, in locordance withSe first mrt of SSx^lflsTZ^^^l^ famn the ,n»nit nceiiFeii from the sale of bonds ^The Gwe^^nt mnH^T^'t mwt Jecide by mutual agreement the quesd^ni the f^lSr^d Sl^^^ ■•Hi' 'fif iMiing 'the boniiir h«'»«^" «• «*« leaaioMity ana advantageous- rkm w««ii^ W«X«T-« A^ •««»-*, «wiuir™g every Kind of material and other Ihe wSl!^ ^' "^ ^ ^^ J^^y^ent of Interest whfle building and for opm^ irii" J*th?dSS^to*?i!i®r*'*^ on thi« advance will be effected 14 days in ad- ^Z^ !5 A a' "?" *^® amount of the advance, during the period of con- !^^« rf a! ^\^AF^ .completion of the const^ction^fi^st oHTtemX ZSSiTlStr^ ^ *"• " ^ they lOiould be insufficient, from othToov! ZIi^-ii^*l J5**?*^T^^®' II this advanee and also the revenue of the the f«v«;i«r^??il!?^^ lasue of the bonds of the Ssuplnglcai-Chengchiatun Rail way the revenuea of the railway, and also aU property of the roSd, movajBte and immovrWe; APPENDIXES. 339 &le"C:^"^^ Z^^^Clt!^.^J ^ ^'^ ^*-'«' **" '>« <^-<^ered as the bLk fl^acZS? o?'tht ESfetnih^^^^^ ^^ ^^^^^^^^^ »>«^--h of pay the usual interest on tL S^t If thp^d^ ^'i?* ^« ^^^^ ^i» Kyt'in^'XLTe^ ^^^' ^ ^ ^=-^^^^4^^^ f/fe sJrv'^/sS^t ttT^I^^^ P-i-tion to the reouirements the bank, upon the presentetion to it^f a wfi ten ord^^^^^ T?^^ ?"" ^^ P^^ ^^^ and the chief accountant, supplemented bvdo^^im^ kind and coat of the work wMcris being Idertok^^^^^ ^^^^ designating the December 27, 4th year of the Republic. Minister of Finance. Minister of Communications. December 27, 4th year of the reign of Taisho RepreeentaUve of the Yokohama Specie Bank. O sj COLUMBIA UNIVERSITY LIBRARIES TUi book is due on the date Indicated below, or at the txpiMtioii of a definite period after the date of borrowing, as provided by the library rules or by special arrangement with the librarian In charge. DATS MMmOWCO' OATK OUC / OATS aoiifiowco DATE DUK BAR 9 1 351 3 ^^ r t : i ! t Cas(l14») lOOM I 4 COLUMBIA UNIVERSITY LIBRARIES |fl3 ff 1 2_%*1 ^»*—t ' i^il 1 1 HMUi FEB 2 7 19 '^f-^ JUN -' .'J^t. OF TITLE