Metro Manila Transportation 2007

Choose your pick: FX, Jeepney or LRT?

No Signal

Manila Railroad Company Post number 828 at the University of the Philippines Los Banos.

No Home Along Da Riles?

An exception rather than the rule. Philippine National Railways line beside the International Rice Research Institute.

Stop, Look and Listen

Horace Longwood Higgins Railroad Crossing.

Testimony of Horace Longwood Higgins, July 19, 1899

The complete transcript of the Horace Longwood Higgins' response to the questions of the members of the Philippine Commission on July 19, 1899 can be downloaded below.

President William Mckinley appointed the members of the commission on January 20, 1899 to investigate the affairs in the Philippine Islands. The following were the commissioners: Jacob Gould Schurman of New York, Rear Admiral George Dewey of the United States Navy, Charles Denby of Indiana, Dean C. Worcester of Michigan. John R. MacArthur was appointed Secretary and Counsel of the Commission and Rutherford Corbin, assistant secretary.

A nice read for those interested in Philippine railway history.

Please download here and add to your collection.

Is San Fernando (La Union) the northernmost end of the MRC tracks?

No, the northernmost end of the Manila Railroad Company line is Sudipen. The Japanese Imperial Forces extended the MRC line from San Fernando, La Union to Sudipen, La Union during World War II. After the war, the line was dismantled and tracks were used for the repair of the line to Bicol. The Manila-Sudipen line was called Rikuu Kanri Kyuko

Please download San Fernando-Sudipen kml here.

Higgin's Aringay-Baguio Line Found!

The Manila Railroad Company started to construct the Aringay to Baguio Line in 1911. Unprecedented rains caused delays and financial difficulties. World War I caused European suppliers to default deliveries of vital railroad equipment. Only 12 kilometers were built and in December, 1914 work on the line ceased. Please download this kml file to view line. Please note that the Google Earth image of the Aringay-Baguio line is "clouded in mystery". Historians noted that MRR built railroad tunnels along the line. The Aringay-Baguio line was the second attempt to build a railroad track to Baguio.

The first attempt to construct a railroad track to Baguio started in the early 20th century and the San Fabian-Camp One line was opened to public on March, 1908. The line was also abandoned in 1914 but was reconstructed up to Binday in 1937. Download San Fabian-Camp One Line here.

The lines can be best viewed together with the Dagupan-San Fernando (La Union) line. Dagupan-San Fernando (La Union) line can be downloaded here.

Manila Railroad Company 1905-1917 Records

Philippine Railways Historical Society Wishlist:

Manila Railroad Company 1905-1917 Records in microfilm at the US National Archives.

1. 350.3 RECORDS RELATING TO THE PHILIPPINE ISLANDS
1898-1939

Textual Records: Executive orders and proclamations of the Governor General of the Philippine Islands, 1898-1935, and the President of the Commonwealth of the Philippine Islands, 1935-36. Correspondence of the Philippine (Taft) Commission, 1900-6. Acts of the Commission, 1900-7; the Philippine Legislature, 1907-35; and the Philippine National Assembly, 1936-37. House and Senate bills of the Philippine Legislature, 1928-35. Galley proofs of A History of the Philippine Insurrection against the United States, 1899-1903, 1906, with related records of the War Department project to publish the history, 1898-1916. Correspondence and reports relating to Gen. Mariano Noriel and Apolinario Mabini, 1916. Records of the Philippine Exposition Board, 1904-5, and the Manila Railroad Company, 1905-17.

2. Photographic Prints (12,059 images): Philippine Islands, including agricultural and industrial activities, native peoples, public roads and facilities, Emilio Aguinaldo, soldiers, public officials, and general scenes, 1898-1935 (P, BS; 10,200 images). Group portrait of the Philippine Commissioners in Washington, DC, 1904 (C, 1 image). Philippine Islands, some views taken by Lt. C.F. O'Keefe of the U.S. Army Corps of Engineers, 1899-1928 (PC, 436 images). Manila railroad, Philippine Islands, and notables including William H. Taft and Gen. Leonard Wood, 1907-16 (MR, 1,208 images). Public works projects in the Philippine Islands, 1909-12 (PW, 39 images). Portraits of Philippine officials, 1900-35 (O, 94 images). Palm plants, Bureau of Education, in album, ca. 1910 (E, 81 images). SEE ALSO 350.7.

3. Poster (1 image): "Baguio Summer Resort," issued by the Manila Railroad Company, ca. 1930 (PO).

PURCHASE OF THE MANILA RAILROAD COMPANY PART II

Memorandum of agreement between the Manila Railroad Co., a corporation organized under the laws of the State of New Jersey, and duly authorized to do business in the Philippine Islands (herein referred to as the railroad company), the Manila Railroad Co. (1906) (Ltd.), a company incorporated under the English companies' acts as a company limited by shares and also duly authorized to do business within the Philippine Islands (herein referred to as the construction company), and the government of the Philippine Islands (herein referred to as the government); witnesseth that

Whereas under the provisions of Act 1905 of the Philippine Legislature and a contract in accordance therewith-executed between the government and the railroad company the government has guaranteed until maturity the due and punctual payment by the railroad company of interest at the rate of 4 per cent per annum upon first-lien bonds with respect to the lines of railway therein designated as the Southern Lines issued in the amounts and for the purposes specified in paragraph 4 of said contract; and Whereas the government, by reason of said contract of guaranty and under the provisions of law whereby such guaranty is authorized, is compelled, through various agencies created for that purpose, to inspect and supervise the construction and operation of the lines designated in said Act No. 1905 as the Southern Lines of the railroad company in order to protect itself under said contract of guaranty; and

Whereas the railroad company, on the 28th of January, 1910, entered into a contract with the construction company whereby, among other things, it was agreed that the latter company should construct and equip all such portions of the Northern Lines and Southern Lines of the railroad company as said lines are designated in said Act 1905, including telegraph, telephone, and electrical transmission lines thereupon as then remained to be constructed and receive in payment therefor securities of the railroad company as therein specified; and

Whereas under and by virtue of the provisions of Acts 2083 and 2465 of the Philippine Legislature and 2088 of the Philippine Commission the government has loaned to the railroad company from the so-called gold standard fund the sum of 1P5,637,000 in order to assist the railroad company in the construction and equipment of said Southern Lines; and

Whereas the railroad company has re-loaned to the construction company the moneys loaned to it by the Government from the gold standard fund, as herein before recited, in order to assist the construction company to carry out its said contract of the 28th of January, 1910, said loans by the railroad company to the construction company being on the terms and conditions set forth in a contract dated January 14, 1913; and

Whereas the construction company has purchased construction stores and materials and has performed construction work under the said contract of January 28, 1910, in an amount in excess of its indebtedness to the railroad company by reason of said loans and all other loans made by the railroad company to it; and

Whereas the outstanding stock of the railroad company consists of common stock of a par value of $2,130,700 and 7 per cent cumulative preferred stock of a par value of $3,652,800, all of which is owned by the construction company; and

Whereas the funded indebtedness of the railroad company consists of $4,330,000 Northern Lines first mortgage 6 per cent gold bonds, $7,716,000 Northern Lines second mortgage 7 per cent gold bonds, all of which are owned by the construction company, and $10,575,000 Southern Lines first mortgage 4 per cent gold bonds, many of which are also owned by the said construction company; and

Whereas all the outstanding stock of the railroad company, and all its Northern Lines bonds have been pledged by the construction company with the Merchants Trust (Ltd.) of London as security for certain A and B debenture bonds of the construction company; and Whereas by reason of the European war the construction company is unable to proceed further with its contract of January 28, 1910, in the construction and equipment of such portions of the Northern and Southern Lines of the railroad company as remain to be constructed and equipped; and

Whereas it is the desire of all parties hereto that the accounts between the railroad company and the construction company be liquidated, and that the government, through the acquisition of all the outstanding stock of the railroad company, acquire the management and control thereof, and that the payment of the Southern Lines 4 per cent bonds of the railroad company be more fully insured by the establishment and maintenance of a sinking fund sufficient to pay off said bonds at their maturity, all in the manner and upon the terms and conditions outlined in this agreement; and

Whereas it is the desire of the government upon acquiring the stock of the railroad company to make substantial changes in the management and operation thereof in order to effect certain proposed economies therein, and the railroad company and the construction company concede to the government the right so to do; and

Whereas there are no contracts of employment between the railroad company and its officers, general manager, or counsel which can not be canceled forthwith, but there are certain written contracts of employment between the railroad company and certain of its employees in usual and customary forms, a specimen copy of which has been exhibited to all the parties hereto, and others of said employees are now serving or continuing to serve without the formal execution or renewal of such written contracts, to each of which contracts reference is hereby made for the exact terms and conditions therein contained and the rights of the parties thereunder; and

Whereas the negotiations between the parties hereto have resulted in the agreement herein outlined, which his excellency, the Governor General, has accepted subject to the approval of the Legislature of the Philippine Islands, and which Mr. Horace L. Higgins, as president of the railroad company and as attorney in fact of the construction company, has been duly authorized by cables recently transmitted and exhibited to the Governor General, to execute on behalf of the railroad company and the construction company, respectively, but which agreement is to be subject also to the approval and consent of the Merchants Trust (Ltd.), trustees for the holders of said A and B debenture bonds of the construction company, and of the shareholders of the construction company should their consent and approval be necessary or advisable: Now, therefore, in consideration of the premises, and of the mutual promises herein contained, and of the benefits to accrue to each of the parties hereto, and of other valuable considerations the receipt whereof by each is hereby acknowledged, the parties hereto hereby respectively agree:

1.The maturity of the Southern Lines 4 per cent bonds shall be extended for 20 years-that is to say, to May 1, 1959 -as to those holders of said bonds consenting thereto, provided that the consent of Congress to such extension and to the extension for a like term of the guaranty by the government of the interest on said bonds can be secured, in which event the construction company will consent to such extension as to all bonds then held by it.
2.The railroad company will establish a sinking fund from funds available for such purpose, if any, to be deposited with the insular treasurer in annual installments payable on May 1, 1917, and thereafter on May 1 of each succeeding year. Unless and until the parties hereto agree upon a graduated scale of payments, the first three of said annual installments shall be P500,000 each, and thereafter said annual installments shall be sufficient to enable the railroad company to pay off upon their maturity in 1939 all the Southern Lines 4 per cent bonds issued and to be issued, provided that if the consent of Congress to the extension of the maturity of said bonds and of the government's guaranty of interest, as aforesaid, has been or shall at any time be secured then the amount of said annual installments shall be sufficient to pay off upon their maturity in 1959 those Southern Lines 4 per cent bonds the holders of which consent to such extension, and only such consenting bondholders shall thereafter participate in any of the benefits of said sinking fund.
3.All holders of said bonds shall be given an opportunity to signify their consent to such extension and to participate in the benefits of the sinking fund. Such holders as desire to consent to said extension shall surrender their bonds to the railroad company for the endorsement thereon of such extension so as to bind subsequent holders. In case any of such bondholders shall withhold their consent, the railroad company and the government jointly and severally bind themselves to preserve the lien of the mortgage and protect the security of the consenting bondholders, notwithstanding that the bonds of such non-consenting bondholders may become due and payable on the 1st day of May, 1939; and if the railroad company or the government should -fail adequately so to do, any of the consenting bondholders may themselves take such steps as may be necessary to protect their interests. Any expense on the part of the consenting bondholders in so doing shall be a charge on the property of the railroad company of equal priority with said bonds, and said sinking fund shall thereupon be increased by annual payments sufficient to pay off such expense and interest thereon at maturity of said bonds on May 1, 1959.
4.The government, by a continuing annual appropriation or in such other lawful manner as may hereafter be agreed upon, will loan to the railroad company an amount sufficient to maintain the sinking fund at the required figure. All loans so made by the government shall bear interest at the rate of 4 per cent per annum and shall constitute a lien on the property of the railroad company subject only to liens or mortgages existing on said property at the time such loans are made.
5.Such portion of said sinking fund as shall have been deposited by the railroad company shall be invested only in the purchase of said Southern Lines 4 per cent bonds at the market value on the date of purchase, but at a price not above their-par value, provided that funds loaned by the government to the railroad company for the purpose of maintaining said sinking fund may be invested for the benefit of said sinking fund, in the discretion of the Governor General. All bonds purchased by said fund shall be forthwith canceled.
6.Upon the maturity of the 4 per cent bonds for which a sinking fund is created the fund shall be applied in paying off such of the bonds as have not been purchased and canceled. All loans made by the government for the purpose of maintaining said sinking fund and the interest thereon shall thereupon become immediately-due and payable and the lien of the government securing the same shall become immediately enforceable.
7.The government shall purchase all the capital stock of the railroad company now outstanding for the sum of P8,000,000, Philippine currency, in cash payable 51 per cent upon the date of the sale, and the balance within 18 months thereafter with interest thereon at 5 per cent per annum, said balance to be evidenced by paper which can be discounted with banks and shall be issued by such parties as may hereafter be lawfully agreed upon.
8.The construction company will transfer said stock to the government in proper proportion of preferred and common shares as and when the payment therefor is received.
9.The net amount due to the construction company from the railroad company on September 30, 1915, as appears from the books of the two companies, is acknowledged to be approximately 39,730,650, exclusive of moneys advanced and liabilities incurred by the construction company for stores and materials, shipped and unshipped and not yet received, for and on account of the railroad company, which, when properly verified, shall be added thereto, said amount being also subject to the adjustment of exchange, interest, and other items which ordinarily are adjusted at periodic or irregular intervals and which consequently have not yet been entered in the books of the respective companies. It is agreed that all accounts between the railroad company and the construction company shall be adjusted as of the 31st of December, 1915, and entered in the books of the respective companies, that the books of the railroad company shall be closed as of said date, that proper trial balances and balance sheets shall be prepared showing the status of the accounts between the railroad company and the construction company, a certified copy of which shall be furnished to each of the parties hereto, and that the net amount then due to the construction company from the railroad company, including said expenses and liabilities incurred by the construction company for said stores and materials, shall be definitely ascertained. All said accounts and the adjustment thereof and the net amount due to the construction company ascertained therefrom shall be examined, checked, and certified by auditors of the government and of the railroad and construction companies. All disputes regarding these accounts and any addition to be made thereto under this agreement shall be settled by arbitration in the usual manner. The net balance due to the construction company on December 31, 1915, as thus ascertained, shall be accepted by the parties as correct, provided that an inventory shall be made of 10 per cent of those certain construction stores and materials in stock, not issued up to the (late of the sale for construction purposes, which constitute part of said indebtedness of the railroad company to the construction company, to ascertain if said stores and materials are actually on hand on December 31, 1915; if said inventory shows that the stores and materials actually on hand do not vary overage or shortage by more than 10 per cent from the amounts thereof which should be on hand, as shown by the books, then the book figures of such indebtedness shall be accepted, but if such variation indicated by said inventory shall be greater than 10 per cent then a complete inventory shall be taken of all such construction stores and materials, and said net balance shall be increased or diminished as said complete inventory may disclose an overage or shortage in the total amount of said construction stores and materials. Subject to such changes as may occur in the usual course of business between December 31, 1915, and the date of the sale the said net balance due to the construction company, shall without deduction, be paid in the manner hereinafter set forth.
10.The two agreements between the railroad company and the construction company, one dated the 1st day of January, 1907, and the other dated the 28th day of January, 1910, and the further agreement supplementing the same, dated the 14th day of January, 1913, shall be terminated and canceled as of the late of the sale.
11.The railroad company shall refund at par and cancel all its outstanding $4,330,000 first mortgage 6 per cent bonds and $7,716,000 second mortgage 7 per cent bonds and issue in lieu thereof new bonds maturing at the expiration of 40 years from the date of the sale and bearing interest at 5 per cent per annum, which shall be secured by a first mortgage on the Northern lines and by a mortgage on the Southern Lines subject only to said Southern Lines 4 per cent mortgage and the lien of the government for the payment of interest guaranteed thereunder; provided that said 5 per cent bonds may be divided into classes having different priorities or may be divided into two issues secured by first and second mortgages, or may be issued under the existing first and second mortgages, modified accordingly, as the construction company may elect. The construction company shall surrender for cancellation all said first 6s and second 7s, and shall accept in exchange therefor said new 5 per cent bonds of an equal par value. The issue of new 5 per cent bonds shall not exceed in the aggregate the principal amount of $13,236,000.
12.The net balance due to the construction company on the date of the sale, ascertained as above provided, shall be paid by bonds of the railroad company of an equal par value as follows: $1,190,000 by said new 5 per cent bonds and $1,740,000 by Southern Lines 4 per cent bonds, all (including $690,000 of said Southern Lines 4 per cent bonds now held by the government as security for certain loans heretofore made by the government to the railroad company) to be issued and certified and delivered to the construction company upon the date of the sale, the remainder by Southern Lines 4 per cent bonds as and when first issued. The construction company agrees to accept said bonds in lieu of the stock and bonds which it is or would be entitled to receive under said agreements of January 1, 1907, and January 28, 1910. Interest up to the date of the sale due the construction company as holder of the first mortgage 6 per cent bonds and second mortgage 7 per cent bonds of the railroad company, although included in the net balance, shall, however, be paid in cash.
13.Until fully paid the net balance due the construction company shall be evidenced by notes of the railroad company bearing interest at 4 per cent, which, principal and interest, shall be paid off and canceled by the delivery to the construction company of an equal par value of Southern Lines 4 per cent bonds as and when first issued. All of such bonds hereafter issued by the railroad company shall be delivered to the construction company until said balance and notes are paid off, notwithstanding the right of the government under certain existing contracts between it and the railroad company to hold said bonds as additional security for loans to the railroad company.
14.The construction company shall upon the date of the sale be released from all liability to the railroad company or to the government except as herein otherwise provided, and particularly from all claims or liabilities based on or arising out of said agreements and supplementary agreement dated, respectively, January 1, 1907; January 28, 1910; and January 14, 1913.
15.The government agrees to waive any defaults existing on the date of the sale on the part of the railroad company in complying with any of the conditions or requirements of the various concessions granted to it by the government, and the government agrees that thereafter it will take no steps to forfeit any concession or franchise because of any default thereunder on the part of the railroad company. All bonds heretofore executed as a guaranty for the performance of the obligations of the concessions shall be canceled and returned.
16.The government and the railroad company shall be released from all claims on the part of the construction company except those hereby continued or created, and excepting, always, the obligations set forth in the various bonds and mortgages, it being expressly understood and agreed that the construction company does not waive any rights which it may have as holder of any of the bonds of the railroad company.
17.Immediately upon acquiring a majority of the stock of the railroad company, the government, as majority stockholder, shall have the right to change the personnel of the board of directors and to nominate new directors and officers of the railroad company, including its general manager and counsel, and the construction company, as present majority stockholder, agrees to procure the resignation of said officials if requested by the government so to do, and will undertake to hold the railroad company harmless from any such change, provided that so long as the construction company shall continue to hold any of the stock of the railroad company it shall be entitled to have a substantial minority representation on the board of directors and executive committee, if any, of the railroad company. In order more fully to insure to the government the foregoing rights, the railroad company and the construction company jointly and severally represent that there are no existing contracts of employment between the railroad company and its officers, agents, or employees, other than those herein before referred to, which will hinder or prevent the government from effecting such changes in management or operation as it may desire; but nothing herein contained shall affect any of the said contracts of employment between the railroad company and its employees, it being the intention of the parties hereto that the railroad company shall continue to have the same discretionary rights with respect thereto under the new management as it now has. The construction company will consent to the transfer of the principal office of the railroad company to Manila in any lawful manner which the government may elect.
18.The government agrees that the time for completing the construction of the lines of railway of the railroad company shall be extended for such time as may be prudently necessary, and the time for payment of the loans made by the government to the railroad company from the gold-standard fund of the Philippine Islands shall be extended for as long a time as the Governor General may lawfully extend the same, and in case legislative permission can be secured the time for the payment of said loans shall be further extended for such time as may be prudently necessary.
19.The points herein outlined shall be embodied in an agreement of sale the execution of which shall be dependent upon legislative action necessary or proper to enable the government and the railroad company to carry out the agreement, and it is understood that the agreement herein set forth shall be subject to the assent of the trustees of the A and B debenture bonds of the construction company and of its shareholders should their consent be necessary or advisable. In said agreement of sale the parties shall fix a date when the accounts between the railroad company and the construction company shall be finally liquidated, when all payments and transfers provided for shall be made, and which shall be considered as the date of the sale for the purposes of this agreement.
20.The parties will execute such further instruments as may be necessary to carry out this agreement.

In witness whereof, this memorandum of agreement is executed in triplicate on the 18th day of December, 1915. Witness the hand of Francis Burton Harrison, Governor General, and the great seal of the government of the Philippine Islands, and that of Horace L. Higgins, president of the Manila Railroad Co., with the corporate seal of the latter, and attorney in fact of the Manila Railway Co. (1906) (Ltd.), thereunto duly authorized.


THE GOVERNMENT OF THE PHILIPPINE ISLANDS,
(Sgd.) By FRANCIS BURTON HARRISON,
Governor General of the Philippine Islands.
Attest: (Sgd.) S. FERGUSON,
Acting Executive Secretary.

MANILA RAILROAD COMPANY,
(Sgd.) By HORACE L. HIGGINS,
As its President.
Attest: (Sgd.) P. A. ALEXANDER,
Assistant Secretary.

MANILA RAILWAY COMPANY (1906) (LTD.),
(Sgd.) By HORACE L. HIGGINS, As its Attorney in fact.
Attest: (Sgd.). P. A. ALEXANDER.

PHILIPPINE ISLANDS, City of Manila, ss:

In the city of Manila, Philippine Islands, on this 18th day of December, 1915, personally appeared before me Francis Burton Harrison, Governor General of the Philippine Islands, and Horace L. Higgins, to me known to be the persons who executed the foregoing instrument, and acknowledged that they executed the same in their respective official capacities. The cedula certificates of the parties were exhibited to me, being numbered, respectively, F-1, issued at Manila, dated January 2, 1915, and F-1797660, issued at Caloocan, Rizal, dated February 1, 1915.

(Sgd.) M. DE YRIARTE, Ex Oflcio Notary Public. Reg. 48, page 57.

I, Samuel Ferguson, acting executive secretary for the Philippine Islands, do hereby certify that M. de Yriarte, who took the annexed acknowledgment, was at the time of taking the same a duly qualified notary public in and for the city of Manila, P. I., and authorized to take the same; that the same is executed in accordance with the laws of the Philippine Islands; that I am acquainted with the signature and seal of said notary, and that the signature and seal affixed to the said acknowledgment are his genuine signature and seal.

PURCHASE OF THE MANILA RAILROAD COMPANY PART I

From: Report of the Governor General of the Philippine Islands [1916] pages 49-57

MESSAGE OF THE GOVERNOR GENERAL TO THE THIRD PHILIPPINE LEGISLATURE RELATIVE TO THE PROPOSED PURCHASE OF OUTSTANDING STOCK OF THE MANILA RAILROAD CO. BY THE PHILIPPINE GOVERNMENT.

MANILA, January 10, 1916.

GENTLEMEN OF THE LEGISLATURE: I have the honor to submit herewith for your consideration an agreement entered into on the 18th day of December, 1915, by and between the duly authorized representative of the Manila Railroad Co. and of the Manila Railway Co. (1906) (Ltd.) and myself. This agreement was made by me subject to the approval of the Philippine Legislature, and is of no force and effect unless ratified by you. On behalf of the Manila Railroad Co. and the Manila Railway Co. (1906) (Ltd.) this agreement was signed subject to the assent of the trustees of certain A and B debenture bonds of the Manila Railway Co., which is the owner of the stock of the Manila Railroad Co. I advocate the adoption by you of the terms of the agreement primarily because I believe that the people of the Philippine Islands should own their greatest public utility, the Manila Railroad Co.; this railroad is a public highway, and should be operated for the benefit of those served thereby rather than for the financial benefit of private stockholders. A railroad is, in the very nature of things, a monopoly, and experience throughout the world affords convincing arguments in favor of the ownership and control of such monopoly by the people themselves. Even if it be suggested that the management of a railroad company may perhaps be more profitably conducted by private enterprise, which is by no means certain, considerations of the highest public policy offset this. This railroad discharges a public function, namely, the transportation of persons and of freight from place to place within the Philippine Islands, and the exercise of this function should be subject to the control of the public itself. The conduct and operation of the Manila Railroad Co. enters, in one way or another, into almost every detail of your economic growth, and thus, directly or indirectly, affects and will continue indefinitely to affect the daily lives of the people of these islands. Without entering into a discussion of the general subject of the benefits of government ownership of railroads as opposed to private ownership, I submit this matter to your attention as of especial importance in the economic future and development of the Philippine Islands. The gift to a private company of a perpetual franchise for the operation of a transportation system was imprudent and unwise, and I earnestly advise that the people of the Philippines should take this, the first reasonable opportunity of securing the return of this franchise. It is true that in the United States the railroads generally have been built and maintained by private enterprise, although even there public assistance has been given by way of land grants, and guarantee of interest in many of the States, and the courts have been frequently called upon through reorganization to sustain the operation of many of these systems. However, the United States Government has recently authorized Government construction and ownership of a railroad line for the development of the Territory of Alaska. Moreover, the Government of the United States, through the ownership of the capital stock, operates the Panama Railroad as an incident to the building and operation of the Panama Canal. Outside of the United States the greater portion of the railroad mileage of the world is owned by the several States and Governments. The figures for the year 1913 show that of the railroad mileage outside the United States 197,491 miles were State owned, as compared with 136,327 miles privately owned. Here in the Orient it is especially noticeable that within recent years the Japanese Government has taken over and is maintaining in successful operation more than two-thirds of the railways of the Japanese Empire, and in the Dutch East Indies almost the entire railway mileage is owned by the Government. It is in British India, however, that we have the most striking precedent. There, as in the Philippines, it was found to be almost impossible to induce private capital to engage in the construction of the railways without government guaranty of some sort; that guaranty was finally and somewhat reluctantly given and carried with it such supervision as was necessary for the proper protection of the government under its guaranties. The exercise of this supervision finally resulted in the acquisition by the government of the greater portion of the railroad mileage of the numerous railroad companies of India, where they are now successfully operated by the States or by their lessees. A similar situation has developed in respect to the Manila Railroad Co. In order to induce the development and further construction of mileage, the government in 1910 guaranteed interest on bonds issued for the construction of the so-called Southern Lines in the amounts and under the conditions set forth in Act 1905 of the Philippine Legislature. The annual contingent liability of the government under this guaranty to-day amounts to approximately P863,000, and will increase as new sections of the railroad are completed and new bonds are issued under the provisions of existing law. To protect itself under its guaranty, the Philippine government has maintained agencies of supervision and of audit, but constant controversies have arisen between the government and the management of the railroad company in the acquisition of the land for right of way, in the construction of these lines, regarding the proper distribution of the expense of operation as between the Northern and Southern Lines, and over other matters. During these years the control and management of the railroad company have been in the hands of a board of directors in New York City; the Manila Railroad Co., moreover, is controlled through stock ownership by an English holding company whose directors sit in London. I believe it desirable to transfer the control of the great public function which the Manila Railroad Co. has undertaken under its franchise to perform from these two boards of directors in New York and London to the representative of the people served; in other words; to the government of the Philippine Islands. The control thus located in the Philippine Islands can be more immediately responsive to the needs of traffic and may be exercised not solely for the financial benefits arising from the railroad for the benefit of the stockholders, but primarily to develop the country and to serve the people occupying the territory traversed by the road. The consolidation of the management of the road in the hands of directors in Manila and abolition of the dual supervision over the construction work by the government and the railroad company, as at present exists, will result in considerable net economics to the railroad company itself. In addition, however, to the general reasons in favor of government ownership of this railroad, a special reason exists of great and compelling interest to the Filipino people. For the purpose of expediting the construction of the Southern Lines of the Manila Railroad, the Philippine government has by legislative authority lent to the Manila Railroad Co. from time to time from the resources of the gold standard fund the sum of 15,675,000 and has authorized further loans so that the total will eventually reach the sum of P7,127,000. These sums of money have been re-loaned by the Manila Railroad Co. to the sole stockholder, the Manila Railway Co. (1906) (Ltd.), which is the English construction company, in order to enable the latter to comply with its contract to construct the Manila South Lines. This English company is now unable by reason of the financial condition brought about by the European war to obtain capital for further construction work in the Philippines except as this government may make to it further advances from time to time. The situation is one, therefore, in my opinion, which requires the Philippine government, for the protection of its own investments in the Manila Railroad Co., to assume the ownership of the road. Moreover, it may be stated that the government has practically financed the construction work for the Manila Railroad Co. since January 22, 1912, during which time the final control of that construction and the operation of the line so constructed has been in private hands. The contract which I submit for your consideration provides for the liquidation of all claims by the English construction company against the railroad company for work already performed and the complete withdrawal of the construction company from further responsibility. The present financial condition of the Manila Railroad Co. is as follows: The bonded indebtedness is P45,242,000, and consists of the following issues of bonds: P8,660,000 6 per cent first-mortgage gold bonds, maturing in 1956; P15,432,000 7 per cent second-mortgage gold bonds, maturing also in 1956; and P21,150,000 4 per cent first-mortgage gold bonds, Southern Lines, maturing in 1939. The capital stock amounts to 111,567,000 authorized and outstanding, all owned by the Manila Railway Co. (1906) (Ltd.), with the exception of a few qualifying shares in the hands of the directors of the road. The negotiations for the acquisition of the Manila Railroad Co. have been based upon the purchase by the government of the capital stock of that company. The price finally agreed upon is P8,000,000, or approximately 70 per cent of the face value, which is the full amount required for the acquisition of the Manila Railroad Co. by the Philippine government. For the immediate present the contract calls for the payment of 51 per cent of the P8,000,000, or P4,080,000, which sum may be temporarily provided out of existing capital resources of the government. The balance of 93,920,000 will be payable in 18 months from the date of the execution of the contract. In addition to this, the government, under the terms of the.contract, will undertake to lend to the Manila Railroad Co., if required, such amount as may be necessary to maintain a sinking fund to be established by the railroad company at a rate sufficient to pay off the principal on the outstanding government interest-guaranteed 4 per cent bonds, and the construction company, which is the owner of almost all of the outstanding 4s, has agreed to an extension of the date of maturity of said 4 per cent bonds, provided congressional authority for such extension can be secured. Such loans for the purpose of maintaining this sinking fund are to bear interest at 4 per cent and are secured by a lien on the property of the railroad company subject only to the liens existing on such property at the time such loans are made. In consideration of the price of 98,000,000 agreed upon for the P11,567,000 par value of outstanding capital stock, the construction company, which is the owner of all of the outstanding 6 and 7 per cent first and second mortgage bonds of the Northern Lines, has agreed to a reduction in the rate of interest upon such bonds to 5 per cent, which will result in a net interest saving of P395,240 to the Manila Railroad Co. It is this saving which gives, in my opinion, value to the outstanding stock of the Manila Railroad Co. The railroad has now for the third time since the government entered into its contract of guaranty failed to meet the full interest obligations upon its present indebtedness. In 1910 the government was compelled to advance under its interest guaranty the sum of approximately P19,000 to enable the road to meet its full interest payments. In 1914 the deficit amounted to P51,631.26. In 1915 the estimated deficit October 31, on the Southern Lines, amounted to P82,900. In the years 1914 and 1915 there were partial failures of the rice crops in central Luzon, and these, coming at times when financial conditions throughout the world were already disturbed by reason of the European war, brought about the inability of the Manila Railroad Co. to meet its interest obligations for the current years. In addition to the deficit on the Southern Lines amounting to P982,900, which has been paid by the government under its guaranty as stated above, there is a further sum which may amount to P100,000 on the Northern Lines, which has been financed by a temporary release by this government of a portion of the bonds now held in the bureau of insular affairs to secure existing indebtedness of the railroad company to the government. Moreover, until the completion of the present construction plans of the railroad company, each year imposes greater interest obligations upon the railroad, inasmuch as the road is being built in isolated sections, and these sections c;ln not be expected to pay for themselves until they are connected one with another and through traffic is thus established. As has before been mentioned, the refunding of 6s and 7s under the terms of this agreement with 5 per cent bonds will result in an annual saving of interest to the Manila Railroad Co. of P395,240 per annum, or more than sufficient to provide for any ordinary contingencies such as those herein before detailed. It should not be understood, however, that the purchase of the Manila Railroad Co. will result in immediate financial benefit to the government by way of dividends upon the stock. While it is true that in the year 1912 the sum of P377,733 was paid in dividends upon this stock and in the year 1913 P465,683, it is also true that the company has under the terms of its existing construction contracts assumed liability for interest payments upon sections of the road which will in themselves be unprofitable until finally linked one to the other. For example, the Southern Lines are not finally connected between Laguimanoc and Hondagua on the Pacific coast of Luzon. It is expected that this connection will be made some time in the early part of this year, but there is as yet no connection between Hondagua and the beginning of another section of the line at Iriga, and it is estimated that this connection can not be effected for at least two years to come. Until this connecting link is built the existing line in Ambos Camarines and Albay does not and will not produce sufficient revenue to pay for its operation. An actual deficit in operation of this individual section of approximately P100,000 a year, which must be debited against the entire system, will be almost inevitable until this connection is made. It will only be upon completion of the line between Hondagua and Iriga that its operation through Ambos Camarines and Albay will pay fixed charges upon that section, I am confident, however, that upon the completion of that line the through traffic from the southern Provinces will produce revenue more than sufficient to pay the fixed charges, and that the completed system of railways will prove to be a profitable investment in the' way of dividends upon the stock acquired by this government. The question of profitable operation and stock dividends upon the stock of the Manila Railroad Co. when owned by the government is without doubt a matter of great importance, but of less importance to the people of the Philippine Islands than that the road should be operated in such a way as to develop as quickly as possible and to the utmost the country served and the expansion of commerce in the Philippines. Should the agreement entered into by me and herewith placed before you be ratified by the Philippine Legislature, I recommend that provision be made for a management of the railroad with a reasonably fixed tenure of office and freedom from minor political restrictions which should be accomplished by an extension of the civil-service rules to the personnel. In a larger sense the very acquisition of this railroad system by the government will remove the railroad from politics. Attached to this message are a copy of the agreement entered into. by me and of the balance sheet of the Manila Railroad Co. as of September 30, 1915.

FRANCIS BURTON HARRISON,
Governor General.

The Manila Railroad Company - 1947 Report

By FERNANDO E. V. SISON
General Manager,
Manila Railroad Company

Published in the American Chamber of Commerce Journal February 1947 issue


The Manila Railroad Company is one of our largest domestic corporations, representing an investment of over one hundred million pesos. As is well known, its railway lines are confined to the Island of Luzon, extending from San Fernando, La Union, in the north, to Legaspi, Albay, in the south, with a number of branches serving areas away from the main lines. The more important branches are the Paniqui-San Quintin, Tarlac-San Jose, Bigaa-Cabanatuan, San Fernando-Carmen, Calamba-Batangas, and College-Pagsanjan. The 1941 kilometreage of the main and branch lines in operation was 1,140.5.

During the period from 1917, when the Philippine Government acquired ownership of the property, to 1941, many millions of pesos have been added to the investment in the property. These funds were derived from surplus earnings of the Company and from purchases of additional capital stock by the Government. Probably the most important improvement was the construction of the line connecting the Legaspi Division to the Main Line South, completed in 1938. This construction covered about 110 kilometers of line between Aloneros, Tayabas, and Pamplona, Camarines Sur. Other notable improvements were the acquisition of new rolling stock, locomotives, passenger coaches, and freight cars, replacement of wooden bridges with permanent concrete and steel structures, grade rectification, construction of numerous new station buildings, installation of storage tanks for fuel oil and water, practically complete replacement of wooden poles with concrete and steel poles for carrying communication wires, the acquisition of a large fleet of auxiliary highway transportation units, and other improvements too numerous to mention

The property in 1941 may therefore be considered as having been in first-class condition, well maintained and rendering absolutely indispensable service to the people of this Island. Then came the war. Almost overnight the picture was changed. Railroads are among the first victims of war, affording as they do ready means for the transportation of troops and military supplies. The first development was the taking of the Company under military control by command of General Douglas MacArthur on December 14, 1941. Then came the body-blow, which was almost a knock-out. On December 30, 1941, Mr. Jose Paez, then General Manager of the Company, received a letter from USAFFE Headquarters directing that the military authorities be permitted to disable or destroy such items of rolling stock, shop equipments and right-of-way facilities as was necessary to the execution of military operations pertaining to the defense of the Philippines. The carrying out of this order resulted in very extensive damage and destruction to the railroad property. Bridges were blown up, shop machinery was disabled, and rolling stock collected and burned. The damage resulting from this military policy was later augmented by lack of maintenance during the Japanese regime, by the intensive air raids of American naval and land aviation in 1944 and early in 1945, and by guerrilla activities, looting, and sabotage. A rough estimate of damage and losses sustained aggregates about forty million pesos.

To cite a few facts by way of illustration, out of 159 locomotives on hand in 1941, still only about 17 were in serviceable condition several months after liberation; 66 were missing entirely or in such condition as not worth repairing; and 73 were repairable. Out of 208 passenger coaches, 143 are missing. Sixty-five rail motor cars were in service in 1941 and there is only one in operation today, although 36 may be repaired if new motors are provided. Sixty-one out of 100 rail motor trailers are gone, as well as 70 out of 94 baggage and express cars and cabooses. The rolling stock situation as can be seen is not so good.

Fortunately, however, the United States Army after taking over the operation of the property in January, 1945, brought in 43 oil-burning steam locomotives, 10 diesel-electric switching engines, and about 1,000 gondola, box, and tank cars. This equipment, except eight diesel-electric engines shipped to Japan, together with undamaged and repaired Manila Railroad locomotives and cars, we are now using.

Although the Army operation was for military purposes and not for the benefit of the Company, the Army deserves great credit for the efficient manner in which the lines were put in operating condition. This has been of the utmost importance to the Company in resuming active control of the property.

With the property so adversely affected by the destruction resulting from the war, the first objective was naturally to restore the railroad lines, rolling stock, bridges, buildings, communication systems, highway lines, and other railroad property to its pre-war condition or better, so as to enable the Company to furnish the transportation facilities so essential to the economic well-being of the country.

Probably the most important accomplishment of the Company since liberation has been the restoration of the Main Line South so that through train service could be furnished from Manila to the Bicol region. The United States Army during its operation from January 16, 1945, to January 31, 1946, made repairs, mostly temporary, to 448.11 kilometers of line out of 1,140.5 kilometers, or about 40%. The Army operations were for the most part on the Northern Lines, the only section of the Main Line South that was restored by the Army being from Manila to College Junction, a distance of 67 kilometers. The restoration of the Main Line South was regarded as of great importance in supplying railroad transportation to the copra- and lumber-producing districts of Luzon, not to mention the fact that the southern provinces are a source of firewood and other forest products, hemp, fruit, vegetables, fish, etc. Many bridges had been damaged and destroyed, particularly on the section between Masaya, Laguna, and Lucena, Quezon, as well as several important bridges farther to the south. The Palikpik bridge, spanning a very deep ravine a few kilometers south of Masaya, presented an especially difficult problem as the entire bridge was destroyed and the erection of very extensive trestle work was necessary. Several steel spans at other locations had fallen into rivers and were otherwise damaged. However by the dismantling of bridge-spans and other materials on certain branch lines and the San Fernando- Sudipen extension installed by the Japanese, the work of restoring the bridges on the entire Main Line South from College to Ligao, Albay, was finally accomplished and through train service was inaugurated on February 20, 1947.

The destructive effects of the war on the railroad tracks were from three causes: direct destruction by bombs, shell-fire, and explosives; physical deterioration due to neglect by the Japanese of maintenance and replacement; and looting of materials, especially ties. When the Railroad was turned over to the Commonwealth Government by the United States Army, even the lines in operation were badly in need of ballast, ties, spikes, fishplates, and bolts, despite the fact that the Army had accomplished a considerable amount of repair and maintenance work. Track conditions were especially bad on portions of the Main Line South between Lucena and Legaspi. The tracks at various places lay almost entirely hidden beneath a heavy growth of weeds, grass, and shrubs. The rails at many locations were out of alignment and not up to grade, and low joints were found on long stretches of track. Many ties had been stolen and others were rotting away.

To meet the need for ballast materials, two ballast pits were reopened-the Plaridel ballast pit for the Northern Lines and the Pugod ballast pit for the section between Aloneros and Sipocot on the Main Line South. Considerable quantities of ballast have been distributed where most urgently needed, especially at low bridge approaches. In regard to rails, ties, spikes, fishplates, and track bolts required for the repair of the track structure, new supplies were practically unobtainable and recourse was had to the salvaging of old materials obtained from the dismantling of the San Fernando-Sudipen section and various military spurs which had been installed by the Japanese. In addition, old materials were picked up here and there along the lines, including certain items left by the United States Army, and a considerable number of ties were removed from the Cabanatuan Branch, which might otherwise have been stolen. By such means, the condition of the track has been greatly improved, permitting increased train speeds on both the Main Line North and the Main Line South.

As mentioned previously, the United States Army operated 448.11 kilometers of railway line, or about 40% of the pre-war trackage, whereas at present the Company is operating 867.26 kilometers of line, or about 76.4% of the pre-war trackage. The most important line not yet reopened is the Cabanatuan Branch from Plaridel to Cabanatuan, which suffered so badly from war-damage and looting that it has been impracticable to place it in operating condition. The Batangas Branch, Malvar-San Pablo, Santa Mesa-Taytay, and several smaller branches also have not been restored.

A large number of station buildings and other buildings both north and south of Manila were destroyed or damaged during the war. Due to lack of funds and materials, it was not possible to make speedy and complete repairs to these buildings. Accordingly, only such repairs as were essential for operating purposes were made on important structures. Permanent reconstruction will have to await the providing of additional funds from war damage claims or other sources.

The former communication systems of the Company, -telegraph, telephone and radio, were among the more essential services that were heavily hit by the war, not only because of actual destruction by military action, but also from the effects of wholesale looting. Communication facilities had to be restored on lines where trains were not yet operated and also changes and additions had to be made to the telegraph and telephone systems installed by the United States Army in order to meet the Company's requirements. On the Southern Lines particularly, where many sections had suffered from looting of wires, new copper wires were installed. By the end of June, 1946, an efficient communication system had been established all the way from San Fernando, Union, in the north, to Ligao, Albay, in the south.

The United States Army brought in 45 locomotives and about 1,000 freight cars, which were turned over to the Company when the Army relinquished control of the property on February 1, 1946. This equipment, together with old Manila Railroad rolling stock and such units as the Company was able to recondition subsequently, are now being used in train service. Unfortunately the Army brought in no passenger coaches and a large proportion of the former coaches had been destroyed. To meet this difficulty, a number of the open gondola cars brought by the Army were converted for passenger use by extending the sides upward, putting on roofs, and installing benches for seats. This was necessarily a rather crude resort, but was taken as an emergency measure in order to provide as much passenger accommodation as possible under the prevailing conditions. The acquisition of new modern locomotives, coaches, and cars is obviously one of the principal projects that must be undertaken by the Company as soon as adequate funds are provided.

Before the war the Company conducted extensive highway operations through the Benguet Auto Line in the Baguio district and adjacent lowlands, the Luzon Bus Line in the Central Luzon Area, and the Mindanao Motor Line with headquarters at Cotabato. All units belonging to these three lines (390 in number) were commandeered by the USAFFE and were either lost or destroyed. After the liberation a number of surplus United States Army highway vehicles were obtained through the Government Procurement Commission and converted for commercial use. Subsequently, most of these have been replaced with the latest type of streamlined buses. The Company is therefore now able to supplement its rail service with modern highway transportation units, even if to a much more limited extent than prior to the war.

The most pressing problem confronting the management of the Company has been and continues to be the financial one. When the property was turned back to the Government, the Company was practically without funds and there was urgent need for working capital. Accordingly, in December, 1945, the Philippine Congress, on the recommendation of the President, enacted Commonwealth Act 707 appropriating P20,000,000 for the rehabilitation of the Manila Railroad Company, subject to funds becoming available. Of this amount, P10,000,000 has since been released, which has enabled the Company to meet its most pressing obligations and devote certain amounts to absolutely essential rehabilitation work. However, until the balance of the authorized fund of P20,000,000 and compensation for war damage is received, the Company will necessarily be handicapped in rebuilding the property so that it may efficiently and adequately perform the transportation service which is so vital to the general program of rehabilitation in the Philippines. The plans for future improvements are therefore contingent upon the necessary financial requirements being provided. If these funds are forthcoming, there can be no doubt that, the Manila Railroad Company will be able within a reasonable time to restore and modernize its transportation system and serve the people as fully and efficiently as in the past, and with the aim of making even greater progress in the future. All the efforts of the Company are being concentrated on the attainment of that objective.

Reconstruction of the Manila Railway Company Limited

From The Far Eastern Review January 1907

The directors of the Manila Railway Company have announced from their London office that negotiations for the reconstruction of the company necessary to carry out the terms of settlement with the United States Government, set forth in the circular of August 3rd last, sent to the shareholders, are concluded, and are contained in a plan of reconstruction issued to the shareholders with the report for the year ended December 31st, 1905. The plan has received the careful attention of the directors, and has been adopted by the shareholders.

Claim Against United States

The directors recall that after the Spanish-American War the company presented a claim for the amount due under the guarantee given with the Spanish concession; but
liability was denied by the Washington Government. After the return of the railway to the company there were presented to the United States Government claims for use and for damages. In June, 1905, the Philippine Government invited tenders from United States or Philippine Corporations or citizens for the construction of various lines on the Island of Luzon, as well as on other Philippine islands. Two members of the Board of Directors proceeded at once to Washington to take up again with the British Ambassador the negotiations for damages. After much consultation Messrs. Speyer & Co., of New York, with a view to cooperating with the company, and at the same time, as far as possible, to protect the shareholders' interests, presented a bid for the construction of various lines on the Island of Luzon, which were considered to be profitable commercial enterprises if worked in connection with the railroads owned by the company. None of the bids presented were accepted; but, as the result of subsequent negotiations, an award was made to Messrs. Speyer & Co. of a concession for these lines, which have now been assigned to a New Jersey Company organized by them, known as the Manila Railroad Company. The concession which has been granted to the American company is a perpetual concession, qualified only by the not unusual condition that it is subject to amendment, alteration or repeal by the Congress of the United States. It authorizes and requires the construction of 450 miles of railroad in the Island of Luzon, which are reported by Mr. Horace L. Higgins, general manager of the Manila Railway Company, Ltd., to be likely to be remunerative, and provides that the favorable rates of taxation prescribed in respect to the new lines shall apply to the existing lines when owned or operated by the American company, and that the concession or franchise shall appertain to the English company's lines when it shall have fully discharged all claims against the United States and the Philippine Government. Mr. Higgins, who has been closely associated with the Manila Railway since its formation, has agreed to take the office of President and General Manager of the American company.

A Satisfactory Position

In the opinion of the directors the position thus brought about is thoroughly satisfactory. They have, therefore, with the assistance of Messrs. Speyer & Co., in New York, and Messrs. Speyer Brothers, in London, very carefully considered how to effect the transfer of the property to the American company and the construction of the new lines, at the same time ensuring that practically the entire net revenue of both the present system and the new lines shall be retained. A new English company will be formed called the Manila Railway Company (1906), Limited, referred to herein as "the new company," which will act as a holding or securities company. As part of the plan, the following agreements will be made:-

(1)An agreement with the American company under which the English company will sell its undertakings in consideration of an agreed amount of the American company's securities;
(2) an agreement with the new company under which the old company will nominate the new company to receive such securities in consideration of the new company's issuing to the old company an agreed amount thereof;
(3) an agreement between the new company and American company for purchase by the new company of bonds and shares of the American company to be issued to obtain money for construction of new lines and other corporate purposes. Under the provisions of the Act of Congress applying to corporations doing business in the Philippine Islands, bonds and shares of the American company cannot be issued except in exchange for actual cash or for property at a fair valuation equal to the par value of the bonds or shares so issued.

The effect of the arrangement will be that there will be vested in the new company, as a holding company, practically all the bonds and shares issued by the American company. These will be vested by the new company in trustees, and against them will be issued the shares and securities of the new company, the prescribed portion of which will be offered to the shareholders in exchange for their existing holdings. The securities of the new company will thus have a charge on the entire net revenue, not only of the 208 miles of the present system, but of the further 420 miles to be built under the new concessions.

New Company

The Manila Railway Company (1906), Limited, will have an authorized capital of £4,000,000, divided into £200,000 5 per cent non-cumulative preference shares of £10 each and 200,000 ordinary shares of L10 each. There will be a present issue in 4 per cent "A" debenture bonds of £1,600,000 and in 4 per cent "B" debenture bonds of £1,730,000. Power will be reserved in the trust deed that further amounts of each class of debenture bonds may be created and issued for the acquisition of securities issued by the American company for the construction or acquisition of new mileage or other capital purposes, provided that the total amount of bonds to be issued for the construction or acquisition of new mileage shall not exceed the rate of £5,000 of each class per mile, and that for other capital purposes the amount to be issued shall not exceed £50,000 per annum of each class. It is proposed to deal with the securities and shares of the new company as follows: —Four per cent "A" debenture bonds: In exchange for the securities of the present company, £1,257,200; issued to provide funds for the requirements of the plan, £342,800; reserved for future construction and equipment, £1,400,000; total £3,000,000. Four per cent "B" debenture bonds: In partial exchange for the securities of the present company, £730,000; issued to provide funds for the requirements of the plan, £1,000,000; reserved for future construction and equipment £1,270,000; total, £3,000,000. Preference shares: In exchange for the shares and securities of the present company, £1,180,000; issued to provide funds for the requirements of the plan, £820,000; total, £2,000,000. Ordinary shares: In exchange for the shares of the present company, £399,270; reserve for new company, £1,600,730; total, £2,000,000. The interest charges on the £1,600,000 "A" debenture bonds and £730,000 "B" debenture bonds will amount to £93,200, thus reducing the annual interest charges by about £15,000. Mr. Higgins estimates that the net income of the present system of 208 miles, having regard to the increased traffic, which should be brought as each connecting branch of the new system is opened, will be £116,000 for 1906, and will by 1912 have increased to £153,000. It is estimated that the construction of the 420 miles of new railroad will cost approximately £3,100,000 for which the issue of the securities reserved for this should fully provide, and that construction should be completed in 1911. Mr. Higgins estimates that the yearly net earnings of the sections, beginning with 1907, should be as follows: £1,200, £29,300, £66,900, £112,200, £135,800, £155,000. The total estimated net revenue of the 628 miles when completed and in operation will be £308,100.

Terms of Exchange

The securities to be received in exchange for each principal sum of £100 existing securities are as follows: For 5 per cent first mortgage stock, £112 new 4 per cent "A" debenture bonds and i6s.8d. for accrued interest to December 31st, 1906; for 6 per cent prior lien bonds, Series "A," £120 new 4 per cent "A" debenture bonds and £3 accrued interest; for 6 per cent prior lien bonds Series "B" £115 new 4 per cent "A" debenture bonds and 3 accrued interest; for 6 per cent secured notes, £112 new 4 per cent "A" debenture bonds, with 3 os. 4d. accrued interest; for 6 per cent debentures £100 new 4 percent "B" debenture bonds, £100 new preference shares, and £6 cash; for 7 per cent cumulative preference shares,. £150 new preference shares; for ordinary shares, £300 new ordinary shares; for deferred shares, £300 new ordinary shares.

Annual Report

The report of the Manila Railway Company, ltd., for the year ended December 31st, 1905, states that the traffic receipts amounted to $1,694,820 and the expenses in Manila to $723,040 leaving $971,779, which, at 2s. exchange, is equal to £97,178. The profit on working the quay line amounted to £1,429, and the profit in exchange to £242, while the charges in London were £3,790, leaving as net revenue £95,059, out of which interest has been paid on first mortgage registered stock (£7,500) and on prior lien bonds, "A" and "B" (£35,100). The value of the Philippine currency has remained steady throughout the year at slightly over 2s. per dollar. The claims against the governments of the United States and of the Philippine Islands have been settled, subject to the consent of the shareholders and security holders, on the terms stated in the chairman's circular of August 3, 1906. The company's claims on the Spanish Government are being prosecuted, but the directors regret that they are still unable to report any recoveries. The construction of the extensions has made good progress. The receipts from extensions to December 31st, 1905, are £13,305. The amount paid for interest on secured notes during 1905 was £20,250, so that a debit balance of £6,944 is carried forward to 1906.


View sample of the Manila Railway Company(1906) Limited Stock Certificate here.

Railways Ad ca 1928: Bicol Express

The above ad circa 1928 promotes Mayon Volcano while actively erupting. The ad was published a year after the Manila Railroad company promoted "Bicol Express". The Manila Railroad Company started using "Express" after they used oil-fired locomotives. The trip starts with a train ride from Paco to Aloneros, Guinayangan. A night boat to Pasacao, Camarines Sur along the Ragay Gulf, then motor drive to Pamplona, Camarines Sur. The last leg of the travel is a train ride from Pamplona to Legaspi City or Tabaco, Albay.

Antipolo Extension: 100 Years After (Part II)

Highway 54 (now called EDSA, an acronym for Epifanio de los Santos Avenue) was built during the Commonwealth period. The EDSA Guadalupe Bridge was built on top of the Antipolo Extension Railways. The line from Guadalupe to Montalban and Antipolo was abandoned before World War II and was never rebuilt. The line from Sta Mesa to EDSA Guadalupe bridge was used up to the late 1970s while the line after the bridge was converted into industrial plants, housing, roads and the rest occupied by informal settlers. In the late 1990s, a new MRT was constructed on top of the Antipolo Extension as seen in the picture above. MRT construction started in 1997. The initial section from North Avenue to Buendia opened on December 16, 1999 while the Buendia to Taft Avenue, on July 20, 2000.



Train service once again crossed the unpredictable Marikina River after more than 60 years. Construction of the LRT 2 started in 1998 and the Santolan, Pasig to Cubao segment was opened on April 5, 2003. Cubao to Legarda segment on April 5, 2004 and Legarda to Recto segment, October 29, 2004. There are plans to extend this line to Antipolo (Masinag).



Train service to Marikina stopped before World War II. Marikina residents yearn for the return of the Iron Horse. The City government bought a Baldwin steam locomotive (from Pampanga Sugar Dev. Co.) and was exhibited at the Marikina Riverside complex to serve as a reminder of the Manila Railroad Company line that ran across the entire Marikina town.

To be continued...

Rare Manila Railroad Company Ads ca 1907

Manila Railroad Company Ads published in the February and March, 1907 issues of Far Eastern Review. The ad below was released only two months after the opening of the Antipolo Extension. This ad is probably the oldest ad that mentioned the Antipolo extension of the Manila Railroad Company.



How do tourists travel from Camp One to Baguio? Please visit this website. Baguio Specials train schedule below. Click on image for bigger view.

Philippine Railways Stereographs

Hires image here.

Royal Decree of May 11, 1888

ARTICLE 1. The railway lines of general service of the Island of Luzon, which constitute the plan of the Government, for the purposes mentioned in the royal decree of August 6, 1875, are the following:

Lines of the north:
From Manila to Dagupan by way of Tarlac.
From Dagupan to Laoag by way of the coast.
From San Fernando to Iba by way of Subic.
From Biga to Tuguegarao by way of Balinang and Cabanatuan.

Lines of the south:
From Manila to Taal by way of Calamba, to Albay by way of Santa Cruz and Nueva Caceres.

ART. 2. The definite studies of these lines shall fix the intermediate points of their course, which shall be adjusted with the object of harmonizing the conditions which the direction of a line of general interest demands with the object of serving the greatest possible number of towns.

ART. 3. A study shall be made of the line from Manila to Taal through the valley of the River Pasig, without prejudice to making an investigation also of the branch to Cavite as soon as its necessity and advisability for the interests of the State is proven.

ART. 4. For the purpose of the cited royal decree, the lines from Manila to Dagupan, Biga to Cabanatuan and Batangas, and from Calamba to Santa Cruz shall be considered preferred lines.

ART. 5. New lines shall not be considered in this plan unless their general direction and conditions are first made the subject of the investigation prescribed in article 13 of the royal decree of August 6, 1875.

ART. 6. The study, construction, and operation of these lines shall be subject to the prescriptions of the royal decree of August 6, 1875, and to those of the royal orders of June 7 and August 9, 1876.

Gaceta de Manila, August 19.

Royal Order of August 9, 1876

HONORABLE SIR: In view of the letter of Your Excellency, No. 446, of March 15, last, with which you forwarded a copy of the report on the technical conditions of the railways of the Island of Luzon, His Majesty the King (whom God preserve) in accordance with the full and unanimous resolution of the consulting board of roads, canals, and ports, has deemed proper to approve the following technical conditions for the railways that may be constructed in said Islands:

1.The road gauge shall be the same for all railways, and shall measure 1 meter 7 centimeters (31- English feet) between the inside edges of the rails.

2.The width of the space between the lines shall, as a general rule, be 1 meter 70 centimeters between the inside borders of the central rails, and 2 meters 30 centimeters at least, in the stations.

3.The minimum radius of the curves shall be 200 meters, which can not be reduced except in exceptional cases, presenting comparative studies, and demonstrating the necessity of adopting a smaller radius for the curves.

4.The maximum gradient shall be 20 "mildsimas," which can not be increased except in exceptional cases presenting comparative studies and demonstrating the necessity of adopting greater gradients.

5.The width of the grade for a road, without counting the side ditches, shall be as follows: In cuts, 3 meters 67 centimeters; on fills, 4 meters; in cuts and fills, 3 meters 835 millimeters. In the structural works the width shall be 4 meters and 20 centimeters between the side railings. In overhead ways the width shall also be 4 meters 20 centimeters, with a free height over the surface of the rails of 4 meters 50 centimeters, when the structure is straight, and of 5 meters 20 centimeters from the center of each way when it is arched. In the viaducts over cart roads the width between the side walls shall correspond to the road itself, with a free height of 4 meters 30 centimeters over the road if the bridge is of straight timbers, and of 5 meters in the center if it is arched. In the bridges over roads the width between the abutments shall be 3 meters, with a free height of 3 meters more if constructed of straight timbers, and with a height of 3 meters 50 centimeters in the center if it is arched. In the tunnels the width shall be 4 meters 40 centimeters, and the free height in the center of each way over the surface of the rails of 5 meters 50 centimeters.

Royal Order of August 6, 1875

In view of the reasons submitted to me by the colonial minister, and having heard the opinion of the full council of state in full on the propriety of issuing the general bases for the legislation for railways in the Philippines, I hereby decree the following:

CHAPTER I.
CLASSIFICATION OF RAILWAYS.

ARTICLE 1. The railways of the Philippine Islands shall be classified as lines of general service and lines of private interest.

ART. 2. Until there shall be formed and approved a plan of the railway lines of general interest for said Islands, the Government shall decide the class to which each line whose concession may be requested shall belong, in view of its importance and the public and private interests which its construction may affect.

ART. 3. All the railway lines of general service are hereby declared to be works of public utility for the application of the privileges which the provisions in force grant to those which have this character. Lines of private interest must first be declared of public utility in order to enjoy said privileges.

CHAPTER II.
THE CONCESSION OR AUTHORIZATION TO CONSTRUCT AND OPERATE RAILWAYS.

ART. 4. The construction and operation of railway lines of general service may be performed by the Government, and in its default by private persons or companies. Lines of private interest shall always be constructed and operated by their owners or concessioners with the intervention of the agents of the Government specified in the regulations.

ART. 5. The construction of a line can not be commenced, whether built with the funds of the State or with a subvention of State or local funds, without its plan being approved and without first securing royal permission or concession, until by means of a public auction. Lines for which no subsidy whatsoever is requested shall be granted by the Government after the proper proceedings for the declaration of public utility, if it should be asked for, and also permission to cross other lines and channels or lands of public ownership crossed by the said lines. The lines for the building of which such declaration or permission is not requested shall be granted by the governor general, reporting the same to the Government.

ART. 6. The construction of lines of general interest may be aided by the State or with local funds:

1.By giving to the concessioner part of the works already constructed.
2. By paying at fixed periods a part of the capital invested, recognizing as the limit thereof the approved estimate.
3. By granting him the ownership of lands of the State adjoining or nearest to the line which may be disposed of, and
4. By granting the privileges and exemptions prescribed in Chapter IV. After the plans of each line or section have been approved, in view of proceedings instituted in the Philippines, and after hearing the council of state, the Government shall determine the maximum amount of the subsidy or subsidies with. which its construction should be aided, and the periods of the payments thereof.

ART. 7. The concessions for lines subsidized by the State or with local funds shall be granted for the maximum period of ninetynine years. Lines not subsidized shall be granted in perpetuity or temporarily, as may be considered equitable in each case.

ART. 8. After the subvention of a line or section has been determined, the concession thereof shall be offered at public auction, giving at least three months' notice; the object of the bidding being the capital to be paid to the concessioner, and if he should renounce it the object of the bidding shall be the lands to be granted to him, and if he should also renounce these lands the object of the bidding shall be the time of the duration of the concession and the usufruct of the road by the concessioner. The sale shall be awarded by the Government to the highest bidder, who shall be obliged to pay the cost of the approved plans to those who may have prepared them, the price of which shall be determined before the sale.

ART. 9. In order to take part in the public sale it is necessary to prove that there has been deposited at the place mentioned in the notice of sale, as a guaranty of the proposals which may be presented, 2 per cent in coin of the total value of the railway, according to the approved estimate.

ART. 10. The concessions which it is proper for the Government to grant shall be granted by a royal order or by a royal decree, according to their importance.- No concession shall be granted until it is first proven that there has been deposited in the place designated 5 per cent in coin of the estimated value of the works, or its equivalent at the quoted rate in bonds of the State debt, if the work should be subsidized, and only 2 per cent should it not be. Should the concessioner allow four months to elapse without making this deposit, the granting of the concession shall be declared null with the loss of' the bond given, and a new sale shall take place if, the lines were of those granted at a public auction.

ART. 11. The deposit referred to in the foregoing article may be withdrawn by the concessioners as they prove by the certificates of the inspecting engineer' that they have performed sufficient work, estimated according to the prices of the approved estimate, in order to pay their cost, the works of the railway remaining specially mortgaged in place of that part of the guaranty that may have been returned.

ART. 12. Upon the expiration of the term of the concession the State shall take possession of the line, with all its rolling stock and all its dependencies, entering into full ownership and the complete enjoyment of the right of its operation.

CHAPTER III.
FORMALITIES TO BE OBSERVED IN REQUESTING AUTHORIZATION OR CONCESSION.

ART. 13. When it is considered proper to build a railway line with public funds, the Government shall order a study thereof made, and the governor general shall forward the complete plan of the same, prepared in accordance with the forms in force in the Peninsula, with a report in which shall be heard the council of the administration, the Economic Society of Friends of the Country, the authorities, and the boards of agriculture, industry, and commerce of the Provinces that the line crosses, the general inspection and the consulting board of public' works, the officers of the treasuries with whose funds the works must be paid, and the other corporations, official bodies, and individuals which in the judgment of the governor general can advise the Government with reference to the utility of the project and the direction of its line. This investigation shall not be necessary with regard to the lines which are declared to be of general service in the plan mentioned in Articles 2 and 40, but shall be made for all of them at one time after said plan has been formed.

ART. 14. Individuals or companies who desire the concession of a line shall address their petitions to the governor general, accompanied with a preliminary plan thereof, prepared according to approved forms'; but the investigation mentioned in the foregoing article must be made by said authority should they request that the line be classified as of general service or desire a subsidy or exemption of duties or privilege of any kind whatsoever, or the declaration of public utility, and when the construction should in any way affect the public domain. The public sale of subsidized lines shall be made with the purpose of constructing the works according to the final or preliminary plans approved by the Government.

ART. 15. The definite plans of the lines whose concession appertains to the Government shall be presented by the concessioners to the governor general (which may be done in sections), who shall forward it for superior approval, with the reports of the general inspection and the consulting board of public works before proceeding with their construction; but the governor general may authorize the beginning of said sections if from said reports it appears that neither the line nor the technical conditions of the preliminary plan and of the works have not been materially departed from, subject always to the definite approval of the Government.

CHAPTER IV.
PRIVILEGES AND GENERAL EXEMPTIONS GRANTED TO CONCESSIONERS.

ART. 16. Foreign capital employed in the construction of railways and loans for this purpose remain under the safeguard of the State and are exempt from reprisals and confiscations or embargoes by reason of war.

ART. 17. The following shall be granted to the concessioners of lines of general service:

1.The public lands which the line and its dependencies may have to occupy.
2.The rights which the inhabitants of the districts through which the line passes have to cut timber, to pasturage, and other rights, shall be enjoyed by the employees and laborers of the companies, and shall be used for the care of the draft animals employed on the works.
3.The right to open quarries, gather loose stone, construct lime, chalk, and brick kilns, to deposit material and establish workshops on lands adjoining the lines. If these be public lands the right shall be enjoyed, after giving due notice to the local authority; but if they should be private property it can not be used without first having advised the owner or his representative through said authority, and having formally bound themselves to indemnify the losses and damages that may be caused.
4.The exclusive right to receive, during the term of the concession and according to the schedule of rates approved, the passage and transportation charges, without prejudice to those which may belong to other companies.
5.The remission, during construction and for ten years afterwatds, of the duties fixed in the customs tariff, the lighthouse dues, bar duties, bridge tolls and ferriage, which prime material, manufactured effects, instruments, utensils, machinery, cars, timber, coke, and everything which constitutes the stationary and rolling stock which may be imported, and which is applied exclusively to the construction and operation of the railway for which concession has been granted. The Government shall determine, in a special provision, the manner in which the concessioners shall enjoy these franchises during the construction, and the manner of utilizing them during the first ten years, taking into account that this right may have begun at different times for each section of the line belonging to the same concessioner or company.
6.The exemption from the mortgage charges due on account of the transfers of property made by virtue of the law of eminent domain.
7.The power of utilizing for the construction of railways the labor of the "polistas" when they are not needed for communal and provincial works, paying into the local funds the price of their labors at the current prices in each jurisdiction.
8.The advantages granted to the agricultural industry by royal order of February 16, 1851, relating to the introduction of Chinese colonists, and the analogous privilege granted to the mining industry by the royal decree of May 14, 1867, which concession can be utilized both for the construction and operation of railway lines of which they are the concessioners, as also for the cultivation and colonization of the lands which form part of the subsidy of said lines. The Government may grant all or part of these privileges and exemptions to the lines of private interest which in view of their importance deserve the same.

CHAPTER V.
FORFEITURE OF CONCESSIONS.

ART. 18. Railway concessions shall be forfeited if the works are not commenced, or if the road or sections into which it is divided are not finished within the period prescribed in the concessions, except in cases of force majeure. When such case should occur, and it is duly proven, the terms fixed may be extended for the time absolutely necessary by the authority which may have granted the concession; but when this time has elapsed, the concession shall be forfeited if the work stipulated has not been performed.

ART. 19. The concession shall also be forfeited if the public service be wholly or partially interrupted through any fault of the concessioner in the case prescribed in article 36.

ART. 20. From the decisions declaring the forfeiture of railway concessions the concessioners may appeal by administrative litigation within the periods prescribed in the law, counted from the day on which they are notified. If they should not appeal within these periods, it shall be taken for granted that they consent to the forfeiture and they shall have no further remedy.

ART. 21. When the decisions declaring the forfeiture of concessions become final, the amount of the guaranty, which has been demanded of the concessioner, shall revert to the State, if the road should not be concluded and in operation; and if it should be concluded, this guaranty shall not become forfeited.

ART. 22. In the case mentioned in the foregoing article, the annulled concession shall be offered at public auction on the same conditions under which it was originally granted.

ART. 23. The basis for this auction shall be its value, according to the appraisement made by the agents of the Government, with the intervention of the former concessioner, the plans made, the lands acquired, the works performed, the construction and operating material acquired, and the tools, utensils, and apparatus for the existing work, with a deduction of that which was paid to said concessioners on account of the aid or subsidy in coin, bonds, works, lands, and other things.

ART. 24. If, on holding the sale, no bidder should present himself within the period fixed, new sales shall be held on successive bases of two-thirds, the half and the third part of the basis mentioned in the foregoing article. ART. 25. If neither in this last sale bidders should appear, the Government can finish and operate the line of the forfeited concession or grant it to a new concessioner under the conditions deemed proper. ART. 26. If the new award of a line has taken place in any of the sales mentioned in articles 23 and 24, the amount of the guaranty or the part thereof which the concessioner may have withdrawn, according to article 11, if proper, according to article 21, as well as the expenses of the appraisement and sale, shall be deducted from the proceeds of the latter, delivering the balance to the bankrupt concessioner or to his legal representatives or heirs. The guaranty which the new concessioner must present shall be only 5 per cent of the value of that which is lacking for the complete conclusion of the road, according to the plan approved.


CHAPTER VI.
TECHNICAL CONDITIONS TO BE OBSERVED IN THE PLANS AND CONSTRUCTION OF THE LINES.

ART. 27. The railways of general service in the Philippines shall be constructed subject to the following conditions:

1.The gauge of the line, or the distance between the inside borders of the rails, shall be the same for all railways, and the Government shall fix said gauge on approving the first railway project, or before; in view of proceedings which the governor general of said islands shall be instructed to prepare immediately, taking into consideration the probable traffic and other requirements of the country, as well as the necessary economy with which the works should be constructed.
2.In the same document the distance between parallel tracks shall be determined, the minimum radius of the curves, the maximum gradients, the width of the roadbed, in cuts and fills for one and two tracks, and of the structural works both above and below the line or lines.
3.The railways may be constructed with one or with two tracks, or with a combination of both systems, without taking into account the greater number -demanded by the service in the stations. In the railways of private interest the technical conditions may be different and shall be fixed in each case as may be proper.

CHAPTER VII.
THE OPERATION OF RAILWAYS.

ART. 28. All railways shall have two distinct sources of revenue, that of passage and that of freight. The first shall consist of the payment to be made for the use of the railway, and the second of the charges to be paid for carrying persons, animals, and goods on the line.

ART. 29. The rates of both shall conform to those of the maximum tariffs which may be approved for each line on or before granting its concession.

ART. 30. In the regulations and instructions which may be drafted for the execution of this decree, and in the sheet of general conditions or the particular conditions of each concession, shall be expressed the gratuitous services or the reduced prices which the lines must offer, and the special rates for public service, considering among the first the transportation of the ordinary mails at the times fixed by the governor general of the islands, and among the second military and similar transportation.

ART. 31. No one can be forbidden to establish transportation companies over the lines of a concessioner if the latter is paid the schedule rates, and observing the police regulations for this kind of lines.
ART. 32. After the first five years of the operation of a railway have elapsed, and every five years thereafter, the Government may revise the maximum or legal schedules. If the Government believes that said rates may be reduced without prejudice to the interests of the concessioner, and the latter should not agree to the reduction, it may nevertheless reduce the same 10 per cent, after hearing the council of state, and guaranteeing to said concessioner the gross proceeds of the last year and the increase which had been obtained on an average during the past five years.

ART. 33. The concessioners may at any time reduce the rates of the legal schedules as they may consider proper, advising the governor general of the islands thereof. They may also, within the rates which result from the application of the basis of the legal rates in force, fix the schedules to be applied, and establish the combined, reduced, special, and differential rates that they desire, forwarding the same for the examination of the governor general, with the anticipation mentioned in the regulations. In every case the schedules shall be announced to the public in due time, and the changes which may be made in the same shall be posted in all the stations in full view, and shall be applied without any privilege or favor.

ART. 34. In all railways there shall be established a telegraph line for the exclusive service of the same. Upon the poles of this telegraph line the concessioners shall place the number of wires fixed in each concession for the telegraph service of the State, their construction and preservation being at the expense of the concessioners, and the service of the official and private correspondence at the expense of the State. Nevertheless, the Government and the concessioners may arrange that the officials of the State take charge of the telegraph service of the railway lines, or vice versa. The concessioners shall provide the Government with the places necessary for its telegraph stations, in the railway stations, wherever it may consider it convenient to have them, the establishment of said stations, as well as their maintenance, being for the account of the State. The Government may also make use of the apparatus of the railways in cases of recognized urgency or for the public interest.

ART. 35. Every concessioner is obliged to maintain the operation of his lines, or secure it by private contracts, and to combine its operations with those lines with which they join or with their own extensions.

ART. 36. When by fault of the concessioner the public service of the railway is wholly or partially interrupted, the governor general shall immediately take the necessary steps in order to temporarily provide for said service at the expense of the concessioner, making a report to the Government. Within a period of six months the concessioner must prove that he has sufficient means to continue its operation, having the right to grant the latter to another person or company after special authorization of the Government. If even by this means the service is not continued, the concession shall be forfeited, the provisions of article 19 and following of Chapter V of this decree being consequently observed.

ART. 37. The operation of the railways of the State shall be performed by the same, or by companies which contract for this service at public auction, as may be considered most convenient for the public interests.

ART. 38. In the general regulations issued or in each concession shall be determined the manner in which the Government shall exercise the intervention necessary in order to maintain the service of the railways in proper condition and that which corresponds to the commercial part of the company.

ART. 39. The regulations issued for the police of railways shall determine all that is necessary with regard to the preservation and security of said roads, of their works, material, and accessories, meanwhile observing the similar provisions in force in the Peninsula in so far as applicable to the Philippines.

CHAPTER VIII.
THE STUDY OF RAILWAY LINES.

ART. 40. The governor general of the Philippines shall order that the general inspection of public works form at once a general plan of the railway lines of general service of the Island of Luzon, including only such lines, the construction of which is considered most urgent, and taking into consideration that of the cart roads that is being prepared. Said plan, reported upon according to the provisions of article 13 of this decree, shall be forwarded for royal approval, and it shall be enlarged as may be convenient. Similar plans shall be prepared successively for the Island of Mindanao and other islands of the archipelago in proportion as the necessities of the case indicate the advisability of constructing therein this kind of lines. The Government, in view of said plan, shall order that a commission of engineers study the preliminary and definite plans of the lines of greater interest, following the order of their importance, so that according to the plans and estimates which may be approved, their construction may be commenced.

ART. 41. Provision shall be made in subsequent general estimates for the expenses -occasioned by these labors.

ART. 42. The Government and the governor general of the Philippines may authorize individuals or companies who request it, that they make studies of railways, as mentioned in article 14, without this permission bestowing any right, nor limiting in any manner the power which the Government possesses to grant similar authority to all who request it, reserving alone the right to be repaid the cost of the study, if they are approved when the line is granted in accordance with article 8.

CHAPTER IX.
COMPANIES FOR THE CONSTRUCTION AND OPERATION OF RAILWAYS.

ART. 43. The formation of associations, corporations, or companies with the object of building or operating railways shall be subject to the provisions of the Code of Commerce and other commercial laws of the Philippines for the different kinds of commercial associations which said code permits. In stock companies the capital may consist in mortgage obligations in the proportion which said law may prescribe, or which may be fixed by special provision. All associations or companies can also contract loans for the fulfillment of their corporate obligations, subject to the provisions of the aforementioned legislation or to that which may be enacted in the future. Both the obligations as well as the loans may be guaranteed with the proceeds of the operation of the line during the period of the concession, and must be redeemed within said period, unless the line has been granted in perpetuity, in which case it can also be mortgaged and the time for the repayment of the same may be indefinite.

ART. 44. The definite organization of the associations or companies can not take place until the concession of the line or lines which they propose to build and operate has been granted. The domicile of the companies must be at Madrid or Manila; but in the latter case they shall have a representative in Madrid near the Government.

ART. 45. The companies or associations constituted for the purpose of building or operating one or more lines can increase their sphere of action and extend it to other lines by competent authority, either by petitioning for their concession or acquiring them by purchase, fusion, or in any manner permitted by law, from those to whom they have already been granted.

ART. 46. They are also authorized to work directly or by contract with a third party the lands which they may have received as part of the subsidy which they enjoy.

ADDITIONAL ARTICLES.

1.Until the regulations and instructions are issued for the execution of this decree, and for the operation and police of the Philippine railway lines, there shall be observed the similar provisions in force in the Peninsula in so far as compatible and which are not opposed to the special legislation for those Islands.
2.The general provisions issued with reference to the Philippine railways are binding on all concessioners.

Given at the palace on August 6, 1875.
ALFONSO.

ADELARDO LOPEZ DE AYALA,
Colonial Secretary.
Boletin del Ministerio.