Chinese Government designated for that purpose. This operation and all those relating to the issue of the bonds will be performed by the above-mentioned Commission, in accordance with the instructions which the Powers shall send their delegates.
(d) The proceeds of the revenues assigned to the payment of the bonds shall be paid monthly to the Commission.
(e) The revenues assigned as security for the bonds are the following:
1. The balance of the revenues of the Imperial Maritime Customs, after payment of the interest and amortization of preceding loans secured on these revenues, plus the proceeds of the increase to five per cent effective of the present tariff on maritime imports, including articles hitherto on the free list, with the exception of rice, cereals, and flour of foreign origin, as well as of gold and silver, minted or unminted.
2. The revenues of the native customs, administered in the open ports by the Imperial Maritime Customs.
3. The total revenues of the gabelle [salt tax], exclusive of the fraction previously set aside for other foreign loans.
The raising of the present tariff on imports to five per cent effective is agreed to on the conditions mentioned below.
It will be put in force two months after the signing of the present protocol, and no exceptions shall be made save for merchandise shipped not more than ten days after that date.
1°. All duties on imports levied ad valorem shall be converted as far as possible and as soon as may be into specific duties. This conversion will be made in the following manner: The average value of merchandise at the time of its unloading during the three years 1897, 1898, and 1899, that is to say, the market price less the amount of import duties and incidental expenses, shall be taken as the basis for the valuation of merchandise. Pending the result of the work of conversion, duties shall be levied ad valorem.
2°. The beds of the rivers Peiho and Whangpu will be improved with the financial participation of China.
Article VII
The Chinese Government has agreed that the quarter occupied by the legations shall be considered as one specially reserved for their use and placed under their exclusive control, in which Chinese shall not have the right to reside and which may be made defensible.
The limits of this quarter have been fixed as follows on the annexed plan (Annex No. 14):
On the west, the line 1, 2, 3, 4, 5.
On the north, the line 5, 6, 7, 8, 9, 10.
On the east, Ketteler Street: 10, 11, 12.
