designated by the Licensor showing the number of furnaces owned by the Licensee at the beginning of the month which the report is intended to cover and the number of days which such furnaces have been operating consistent with the provisions of the foregoing Section of this License.

PREFERENTIAL 5. This agreement is entered into with the DISCOUNTS. understanding that the Licensee has the priv

ilege of quoting to jobbers only the following additional discounts from the regular selling prices to the Jobbers as established by the Licensor. These additional discounts when given shall appear on the invoices rendered to the Jobber.

PRICES.

6. The Licensor agrees that he will employ a commission of six (6) persons, of which he is to be one and to act as Chairman thereof, five of whom shall be designated by a majority of the parties holding Licenses similar to this License, which Commission shall have supervision of all the relations and transactions between the parties hereto under this agreement, but it is understood that where a member of said Commission, or his Company, shall be directly interested in any question of a violation of the License to be decided by the said Commission, said member shall be disqualified and a temporary member shall be appointed in his place by the remaining members of the Commission.

All terms and conditions relative to prices and discounts now established by the Licensor and set forth in the annexed schedules and made a part hereof, shall remain in force and effect until other terms, conditions and preferential discounts are substituted therefor by the Licensor, which substitution can only be made by him with the approval of a majority of

ROYALTY
REBATES.

the members of the Commission, hereinbefore prescribed. Notice of such changes and substitutions shall be given from time to time in writing by the Licensor to the Licensees. The Licensee covenants to adhere to and maintain such terms, conditions, regulations and preferential discounts as may be established by the Licensor from time to time, and the Licensee further agrees to sell no "Seconds" or "Bs" covered by Schedules 4, 4-12, 5 and 6.

7. If at the end of the fourth month of the first year (said year beginning June 1st, 1910) it shall appear that the Licensee has during the first month complied with all the terms of this agreement, the Licensor shall return the Licensee the following rebate from the royalties paid for said License for said first month's royalties, to wit: 80% of the amount originally paid by the Licensee.

8. At the termination of each succeeding month of the said License if it shall appear that the Licensee has fully complied with the terms of this agreement during the second preceding month, the Licensor shall make a similar rebate. in respect to the royalties paid by the Licensee during the second preceding month.

9. In case of failure on the part of the Licensee to comply in any particular with the terms of this agreement during any month, the Licensor may withhold any and all unpaid rebates and declare the same forfeited as penalty for such violation and shall at once notify the Licensee to that effect.

LABELS.

13. No goods manufactured under this License shall be sold unless they bear a registered label (except where otherwise specified) owned by the Licensee and in addition thereto a License tag or label approved by the Licensor,

which License tag or label shall be placed in a visible position on all goods made hereunder and sold by the Licensee.

14. This agreement is binding upon the parties hereto, and the successor and assigns of each of them, and shall continue in force for a period of two years from the date hereof, unless previously terminated as herein provided.

15. This agreement, however, may be cancelled by the Licensor by written notice upon repeated breaches by the Licensee of any of the covenants herein contained.

IN WITNESS WHEREOF, the parties hereto have executed these presents the day and year above written.

MEMORANDUM OF AGREEMENT (CALLED THE EASTWARD AGREEMENT)

REGARDING THE TRADE BETWEEN THE ATLANTIC PORTS OF THE U. S. A. AND EASTERN ASIATIC PORTS 1

EASTWARD AGREEMENT

United States of America to the Straits, Manila, China, and Japan.

For the better regulation of the trade between the Atlantic Ports of the United States of America and Eastern Asiatic Ports, it is hereby agreed as follows:

1. That on the basis of forty-one sailings per annum the total shall be divided as follows:

Peti

1 United States of America v. American-Asiatic Steamship Company. tion, In equity in the District Court of the United States for the Southern District of New York, Exhibit 1, pp. 27–30.

No other sailings can be admitted without the consent of twothirds of the signatories based on their respective number of sailings. The sailings allotted to each of the signatories shall be distributed as nearly as possible at regular intervals throughout the twelve months, and the order of taking the berth shall be mutually arranged by the agents in New York.

2. That the fundamental condition of this agreement is to be close co-operation, and in order to secure this result the rates of freight from America to the East shall be controlled and mutually determined by the agents in New York, who before naming or altering a rate on any commodity shall first confer and agree amongst themselves as to the rate to be named and/or 1 the reduction to be made.

All engagements shall be reported to one another by the Agents in Conference the first business day of each week, and copies of freight lists are to be exchanged not less than three weeks after the departure of the steamer.

3. That all contracts shall be taken for joint account, and where such contracts cannot be divided such shortages shall be made good to the parties in arrear out of the other contracts previously or subsequently secured, it being the purpose to equitably divide all bookings. Each line shall, however, be entitled to book cargo specifically for their next steamer to be despatched, provided ready to load within 30 days. No line to book cargo specifically for a steamer until allowed to do so by a two-thirds majority vote of the New York agents, based on their principals' respective number of allotted sailings.

4. That engagements of Petroleum in cases, Phosphate Rock and Coal are not necessarily joint operations, but competition for such articles is to be avoided and the closest possible co-operation is to be aimed at. Bookings of Petroleum in cases, Phosphate Rock and Coal are to be reported as soon as fixed.

5. That shipments of the Quartermaster's Department, the Navy (excluding Coal), and the Insular Department, and/or any other Government Department, shall be taken for joint account and

1 Thus in original.-Ed.

pooled on a basis to be agreed between the respective Agents in such a way that all may obtain their proper proportion of the benefits arising from such contracts. Shipments of Specie and Explosives shall be dealt with in like manner.

6. That no return of any description be given to Shippers, Contractors, etc., and where Freight Brokerages are paid the amount shall not exceed one and one-quarter per cent., unless where mutually agreed by all Agents to the contrary.

7. That in order to avoid unnecessary expense and possible delay, the respective parties shall nominate one of the firms of Agents in New York to act for the time being as the mouthpiece of the Associated Agents; and also shall appoint one of their own number to act in a similar capacity on this side. All cabled enquiries regarding matters of policy, important contracts, etc., shall be communicated to the respective parties through this channel, and their replies forwarded in the same way; but it is understood that this arrangement in no way interferes with the right of each signatory to communicate with his own Agents whenever and however he thinks fit.

8. That in all matters of detail not herein decided the settlement shall be left in the hands of the Agents in New York, who shall as far as possible be given a free hand in the conduct of their business.

9. That where it is considered advisable to book cargo for account of the Associated Lines, which through lack of accommodation on the regular steamers might otherwise fall into the hands of competitors, such cargo shall be taken care of by chartering additional tonnage, the result to be divided in proper proportion between the various interests, and the loading commission credited to the Agents pro rata to the share in the trade which each of the signatories hold, based on their respective number of sailings.

All questions connected with the bookings of such additional cargo and the chartering of tonnage shall be governed by a twothirds majority vote of the New York Agents, based on their principals' respective number of allotted sailings. Each service to charter and load such extra tonnage in turn.

10. That the whole purpose of this Agreement is an equitable and fair division of the traffic between the services, to work openly and fairly with one another, and to avoid any and all steps by which even the appearance of undue advantage is given. Should therefore conditions and questions arise which are not herein provided for, the purport and not the strict wording of this Agreement is to be considered.