Royal Order of February 11, 1868.

The Queen (whom God preserve) has deigned to issue the following royal decree: In view of the law of July 16, 1864, for the concession of railways employing animal power, in view of the letter of the superior civil governor of the Philippine Islands and the report which accompanies the same, made by the consulting board of public works, requesting the application in that archipelago of the said law. Upon the recommendation of the colonial minister, in harmony with the report of the full council of state, I hereby decree the following:

ARTICLE 1. The objects of the present decree are the railways employing animal power and the others in which locomotives are not employed in the Philippine Islands.

ART. 2. Those on which suitable cars can run to traverse the ordinary public roads shall be considered as perfected roads, and as such subject to the legislation in force for wagon roads, providing that they are supported by public funds of the State, of the province, or of the towns. The construction of railways, to which reference is made in this article, in wagon roads already built or in course of construction, shall be considered as an improvement of the said wagon roads.

ART. 3. The railways mentioned in article 1 may be constructed by the administration, by contract, and by concessions to companies or individuals.

ART. 4. For the construction of a railway by the administration or by contract, in whose, operation there must be employed special materials which can not be carried over the ordinary roads, the superior civil governor shall require the authorization of the Government.

ART. 5. Individuals or companies can not construct any railway of those which are the object of this decree without having obtained the proper concession.

ART. 6. This concession shall be granted by the superior civil governor after being authorized by the Government for the purpose, giving -due information to the full council of administration before forwarding the proceedings to the colonial minister.

ART. 7. The term of concessions can not exceed sixty years.

ART. 8. Upon the expiration of the term of the concession, the Government shall be substituted in the rights of the company in the railway and its dependencies, entering immediately in the enjoyment of its proceeds.

ART. 9. The Government may at any time revoke the concession of a railway, after indemnifying the company holding the same.

ART. 10. In order to petition for a concession the company must deposit 1 per cent of the total estimated cost of the railway as a guaranty of the propositions which it may make or admits in the course of the proceedings, which deposit shall be increased to 3 per cent fifteen days after the concession has been granted, in order to answer for the obligations of the contract.

ART. 11. The concession must relate to a plan approved by the Government, prepared according to the forms and regulations in force, and after the proper investigation as to its public utility.

ART. 12. Every railway line, whose project may have been approved in the manner prescribed in the preceding article, shall be considered by this fact as having been declared of public utility for the purposes of eminent domain.

ART. 13. The plan being accepted by the superior civil governor, and the conditions and schedules of the concession having been mutually accepted, it shall be forwarded to the Government for the proper decision, after hearing the full council of administration.

ART. 14. There shall at once be granted to the individuals or railway companies the following:

1. The public lands required by the road and its dependencies.
2. The rights which the inhabitants of the districts through which the line passes have to cut wood, to pasture, and other rights, shall be enjoyed by the employees and laborers of the companies, and 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 shops to work the same on lands adjoining the line. If these lands Should be public the company shall enjoy that privilege gratuitously, first giving notice to the local authority; but if it should be private property it can not be used without first advising the owners thereof or their representatives through said local authority, and formally binding themselves to indemnify the owner for losses and damages caused thereby.
4. The exclusive right to collect, while the concession lasts and according to the schedule of rates approved, the rates charged for passengers and freight, without prejudice to those which may belong to other companies.
5. The exemption from the duties fixed in the customs tariff and those of ports and lighthouses which materials of prime necessity should pay, as well as manufactured articles, instruments, utensils, cars, lumber, and everything which constitutes the stationary and rolling stock which must be imported from abroad, and is exclusively applied to the construction and first establishment of the line. The equivalent of such duties shall be fixed when the concession is granted.
6. The exemption from mortgage charges for the transfer of ownership made in virtue of the law of eminent domain.

ART. 15. The technical conditions shall be fixed in each particular case after hearing the report of the consulting board of public works of those islands.

ART. 16. The Government shall establish the schedule of maximum rates for passengers and freight for each concession in view of the estimate of the proceeds of the railway.

ART. 17. The company holding a concession shall collect these charges when transportation is effected with its means and at its expense, but it can not prevent the establishment of other transportation companies when these pay the passage indicated in the schedule.

ART. 18. The companies may at any time reduce the schedule rates as they may desire, advising the superior civil governor, and at the same time informing the inspecting engineer of railways. The reduction shall be made proportionately on passage and freight. Without prejudice to this, the companies may apply to those who accept the same, special rates subject to the provisions of the royal orders of December 6, 1866, and of September 22, 1867, issued for the Peninsula. If any persons do not accept these rates they have the right to demand that no other than the general rates be exacted, with all the conditions established in the same.

ART. 19. Every company holding a concession shall be obliged to maintain constantly the service of transportation or secure it by means of private contracts.

ART. 20. When by fault of the company this service is partially or entirely interrupted, the superior civil government shall take the necessary steps to secure the same provisionally at the expense of the company, according to the provisions contained in the document of private conditions.

ART. 21. The operation of the railways constructed at the expense of the State shall be effected by the administration or by the lessee who contracts for this service at public auction.

ART. 22. If a company should not conclude the works of the railway within the periods fixed, or should fail to comply with the obligations of the concession, the same shall be forfeited, excepting unforeseen causes of force majeure, and the concession may again be sold at public auction, the legal price serving as a basis for the sale, according to appraisement of the work performed and material employed. After the award, the new concessioner shall pay to the original one the value in the public sale of such works and material.

ART. 23. The superior civil governor may authorize the establishment of the railways comprised in this decree in the public roads, streets of towns, and cart roads of all kinds, with the necessary precautions, in order that the public service of the same be not interrupted nor the transit of ordinary vehicles.

ART. 24. The tramways which are the subject-matter of this decree, when destined to the working of mines, quarries, and forests, for the communication of industrial establishments, or of any other kind, or for the use of buildings, estates, or private properties, and pass over lands that are not the private property of the constructor the road, shall be considered as lines of private service, and, as such, are subject to what is prescribed in the regulations in force, or which may be issued hereafter, relating to lines of this character.
ART. 25. The superior civil governor shall prescribe, when necessary, the instructions which he may consider proper for the enforcement of this decree. Given at the palace, on February 11, 1868.

Rubricated by the royal hand.

CARLOS MARFORI,
Colonial Minister.

Which I communicate to Your Excellency, by royal order, for your information and the proper purposes. God guard Your Excellency many years.

MARFORI.

MADRID, February 11, 1868.
Gaceta de Manila, April 19, 1868.