"Article II. China cedes to Japan in perpetuity and full sovereignty the following territories, together with all fortifications, arsenals, and public property thereon: (a.) The southern portion of the Province of Fêng-tien, within the following boundaries—The line of demarcation begins at the mouth of the River Yalu, and ascends that stream to the mouth of the River An-Ping: from thence the line runs to Fêng Huang; from thence to Haicheng; from thence to Ying Kow, forming a line which describes the southern portion of the territory. The places above named are included in the ceded territory. When the line reaches the River Liao at Ying Kow it follows the course of that stream to its mouth, where it terminates. The mid-channel of the River Liao shall be taken as the line of demarcation. This cession also includes all islands appertaining or belonging to the Province of Fêng-tien situated in the eastern portion of the Bay of Liao Tung, and in the northern part of the Yellow Sea. (b.) The Island of Formosa, together with all islands appertaining or belonging to the said Island of Formosa. ( (c.) The Pescadores Group, that is to say, all islands lying between the 119th and 120th degrees of longitude east of Greenwich and the 23rd and 24th degrees of north latitude. … [Image: China East Coast.] {77} "Article IV. China agrees to pay to Japan as a war indemnity the sum of 200,000,000 Kuping taels. The said sum to be paid in eight instalments. The first instalment of 50,000,000 taels to be paid within six months, and the second instalment of 50,000,000 taels to be paid within twelve months after the exchange of the ratifications of this Act. The remaining sum to be paid in six equal annual instalments as follows: the first of such equal annual instalments to be paid within two years, the second within three years, the third within four years, the fourth within five years, the fifth within six years, and the sixth within seven years after the exchange of the ratifications of this Act. Interest at the rate of 5 per cent. per annum shall begin to run on all unpaid portions of the said indemnity from the date the first instalment falls due. China shall, however, have the right to pay by anticipation at any time any or all of said instalments. In case the whole amount of the said indemnity is paid within three years after the exchange of the ratifications of the present Act, all interest shall be waived, and the interest for two years and a half, or for any less period if then already paid, shall be included as a part of the principal amount of the indemnity.