San Pablo Station Circa 1908

Goodbye Rail Ferry Virgin Mary

Photo courtesy of http://www.nzmaritime.co.nz/aratika.htm.

According to David Williams of Philippine Railways SIG, the rail ferry (3 feet 6 inch gauge) Virgin Mary formerly Aratika was sold to an Indian ship breaker for scrap. The rail ferry Aratika was in service in New Zealand from 1974 to 1999 before it was sold to MBRS Lines Philippines and was used to service the Manila-Caticlan route.

RIHS Photos for the Explainer

I have mentioned some interesting facts about Philippine Railways during the show of Manolo Quezon. This was based on the MR 350 collection of the US Archives. Below are some of the pictures I prepared but were not shown because of lack of time:



The Antipolo Station picture above was taken on May 1, 1910. This is a rare photo of the Antipolo station with people waiting for the train carrying the May 1 pilgrims.



The Manila Belt Line Bayanihan Photo. MRR Megamovers Circa 1908. A rare photo of a house being moved using the newly built rails of the Manila Belt Line near Paco Station.



One hundred years ago, the Manila Railroad Company completed the Pandacan Swing Bridge. The MRR trains finally crossed Pasig river in 1908.



William Howard Taft visited the Philippines a year before he became president of the United States. He inspected the MRR line to Baguio. The above picture was taken in Baguio showing Secretary of War William Howard Taft together with Governor General Cameron Forbes. The automobile in the picture was one of two Stanley Steam Automobile exported to the Philippines.



Only in the Philippines courtesy of the American railroad engineers, MRR tracks on top of Bued River. Rush! Willian Howard Taft wants to visit Baguio!



The first attempt to build a railroad to Baguio was the line from San Fabian to Camp 1. From Camp 1 the plan was to build a line to Baguio using Kennon road. A year after the line to Camp 1 was built, the mighty Bued river washed out an entire segment of the line.

The railways in Philippine history

By Augusto V. de Viana, Ph.D
National Historical Institute

Most countries—rich and poor—take pride in their railways system. The train provides a fast, inexpensive and comfortable system of transportation. It helps reduce road traffic and contributes to cleaner air. Developed and developing nations have also found the railways to be a great national unifying force and a solvent for class divisions.

The Philippines is one of the rare countries that has not built a strong, reliable and modern railways system. Blame it on poor government planning, skewed priorities and the automotive-bus lobby. The service has deteriorated through the years, beginning in the sixties and seventies. Yet the first Philippine train service started in the Spanish colonial era, about 115 years ago, when Filipinos could travel from Manila to La Union, and back. Today, one is lucky to reach Malolos, Bulacan, by train.

We asked Dr. Augusto de Viana of the National Historical Institute to write this paean—and lament—to the national railways service to commemorate the launching of the first Luzon railways service on November 24, 1892.

ONE of Spain’s tangible legacies to the Philippines was the introduction of the railroad. Compared to the churches in the country, the first railroads in the Philippines were not initiated by the religious orders or the Spanish government but were funded by private capital.

Manila-Malabon line

The first railway was a short one, the Manila-Malabon railway. It was owned and operated by the Compaña de Tranvias under Jacobo Zobel Zangroniz. Consisting of four German-made locomotives and eight nine-passenger coaches, it was formally inaugurated on October 20, 1888.

The rail line served Malabon, which was already prosperous because of its cigar-making factories, bangus culture and a large sugar mill owned and managed by British businessmen. The end of the line was Tondo, then the country’s commercial capital. Its terminal was a simple two-story wooden structure with the first floor serving as waiting area. The Malabon end was located at the roadside under an acacia tree where the conductor sold tickets. The trains had three classes: first class, for 20 centavos; second class, 10 centavos, and third class, 5 centavos.

The colonial government decided to hop on the railway bandwagon as early as 1875 when Madrid sanctioned a project for the Philippines. A committee headed by Eduardo Lopez Navarro called for the building of three railway lines. The first was the Manila-Dagupan line which crossed the fertile central plain of Luzon through the Bulacan, Pampanga, Tarlac and Pangasinan. This could be extended far north to Laoag, Ilocos Norte.

Manila-Bicol line

The second was the Bicol line which was to pass through the southeastern coast of Laguna de Bay to the abaca and coconut-growing regions of Tayabas (Quezon province), the two Camarines provinces and Albay. The third line was the Manila-Batangas route which ended in the town of Taal. The three lines totaling 1,730 kilometers of track could be built by the Spanish government or by a Spanish-owned private company. Foreign companies could also participate in the projects.

Manila-Dagupan line

Of the three lines, the Manila-Dagupan route received the greatest attention. Invitations for tenders were drawn and advertised and the Spanish government offered a subsidy of $7,650. In 1885 a British consortium headed by George Noble Taylor successfully bid in Madrid. Called the Manila Railway Company, the British capitalists demanded a very high guaranteed interest clause considering the risks. They also demanded fiscal control in the management of the concession.

The Spanish government granted these demands. Under the agreement, the British company was to operate the line for 99 years beginning January 21, 1887. All the risks were to be borne by the Spanish government which would be certainly be passed on to the consumers. If the project turned out to be unprofitable, the British could back out.

Construction of the rail line began in December 1887. Building was done by Filipino laborers. The locomotives, coaches, freight cars and rails were manufactured in England. By March 24, 1891, the first length of track covering 43.8 kilometers was completed followed by the completion of an additional 40 kilometers. On February 19, 1892, a section of track from Bagbag, Bulacan, to Mabalacat, Pam­panga, totaling 186.7 kilome­ters was finished. By June 1892 the tracks reached Tarlac.

Problems dogged the project. There were changes to be made in the structural designs and frequent floods washed away embankments. Numerous compensation claims from the landowners had to be settled. A particularly difficult section was the construction of the Calumpit Bridge. This delayed the project for about 18 months. The turbulent river during the rainy season made crossing almost impossible. According to popular lore, the English engineers had to defer to their Filipino laborers who wanted to perform rites to appease the local spirits and to hasten construction. The bridge with its piers remain standing today.

Corruption in 1892

The worst delays however were caused by the colonial officials who had to be paid off with bribes. Some officials, even those in Madrid, had to be greased with shares in the company. Gov. Eulogio Despujol went to Tarlac and scolded his officials for their dilatory tactics. With the officials whipped into line, the last section of the railway from Tarlac to Dagupan finally opened. The line became operational in November 1892.

The Manila-Dagupan line cost P7,899,000. This was more than double the original estimate of P3 million. It was also the largest single infrastructure project in the country during the Spanish period. It had 29 stations and 16 bridges. A short spur line was built to connect the Tutuban terminal to the quay at Binondo along the Pasig River. This line was used to export goods overseas or to bring in foreign products for the Filipinos.

The rail line reduced travel time from Manila to Central Luzon. Though it took eight hours to travel from Manila to Dagupan, travel to Pangasinan took longer as the province had to reached by boat via the Lingayen Gulf or through the camino real through the Central Plains. Among the early beneficiaries of the Manila-Dagupan railway was Jose Rizal who took the train to see Leonor Rivera in Tarlac.

More goods could be ferried from the provinces to Manila or vice versa. The railway opened new areas for development. Isolated areas in the interiors of Pangasinan and Tarlac were developed. The railway also hired hundreds of laborers, blacksmiths, conductors and engineers. A more far-reaching effect was the increased migration of rural folk to Manila. It broke down regional barriers caused by cultural isolation and natural obstacles.

As a business enterprise, the Manila-Dagupan railway was not very profitable. Inflation during the last decades of Spanish rule and rigidity of tariff regulations stifled its growth. This was also the reason why the other rail projects were not pursued. During the second phase of the Philippine Revolution, regular commercial operations of the trains were threatened. Parts of the railroad were destroyed during the Filipino-American War. The state of the Manila Railroad Company however started to improve with the coming of the Americans.

The American period

In 1917 the American colonial administration took ownership of the railroad from its British owners by nationalizing the entire network. Additional lines were added, including the Manila-Legazpi line. New lines started serving Nueva Ecija, Cavite, Rizal and Batangas. The original Manila-Dagupan line was extended up to San Fernando, La Union, where Baguio-bound passengers could take the bus to the summer capital. Later, this line was extended up to Bacnotan, La Union. There were plans during the American period to build a railway line up to Baguio itself and the terminal would be where the old Benguet Auto Line used to be. Rail lines were also built in Cebu and Panay.

Period of deterioration

Now government-owned, the Manila Railroad Company was renamed the Philippine National Railways in 1964. Though it enjoyed a measure of popularity, from the time of President Ramon Magsaysay to the government of Ferdinand Mar­cos, ridership started to decline. The causes were competition from bus lines, the auto lobby and inefficiency of the company itself. Squatters started building shanties along the railroad tracks. This led to accidents, unsafe train travel and pollution on the rails.

La Union line abandoned

By the mid-1980s the Manila-La Union Line was abandoned. What are left today are the abandoned tracks, bridges and stations which were taken over by the squatters. Access and the right-of-way were taken over by interlopers. Organized professional squatters grabbed large tracts of land. The politicians encouraged squatting for votes. Service to Legazpi was interrupted by the eruption of Mayon Volcano. The rail service has not been restored.

Today the country’s railway service is a sorry shadow of its old self. The railways of Cebu and Panay are long gone. The challenge to the government or the private sector is how to restore the railway service which has always been the workhorse of all modern and developing countries all over the world.

Manila Railroad Company Logos

The Manila Railway Company

Far Eastern Review, September, 1906
pp. 120 – 124

The Manila Railway Company, operating the only steam railway in the Philippines, between Manila and Dagupan, was organized in London in 1888. The concession for this road was secured from the Spanish Government for a term of 99 years dating from April, 1887, and during that period the Government guaranteed the interest, payable from the Philippine Treasury, of 8 per cent, on a capital of $4,964,000, which was subsequently increased to $5,373,700 from the extra cost of works authorized by the Government. The working expenses for the purpose of calculating the guarantee, was based on 50 per cent of the gross earnings. At the expiration of this concession the road was to revert to the State without compensation, and there was no option for the purchase by the Government at any time during the life of the franchise.

The Spanish Government regularly paid the guarantee, every three months up to 1897, but, on the change of sovereignty, the payments were stopped. The company, acting under the best legal advice, took the natural stand that, under international law, the United States assumed the obligations of Spain on the transfer of authority, while the American officials have contested the point.

This is in addition to the claims of the Company for damages to their lines through insurrection, and for revenues while under control of the military amounting to $1,500,000 gold, has been a matter of diplomatic negotiation ever since, and was only settled on the signing of the recent contract for the new lines.

In 1903, the Company secured concessions from the Philippine Commission for the construction of three extensions to the main line aggregating 87 miles, one to Camp Stotsenburg, one to Cabanatuan and the other to Antipolo. The Company as formerly organized had and authorized capital of $1,000,000 gold ordinary and $1,500,000 preference shares, with borrowing powers of $7,575,000. The headquarters are at 43 New Broad St., London, with the following Board of Directors:

C.J. C. Scott, (Chairman), A. von Andre, Admiral Sir C. A. G. Bridge, R. H. Bensen, R. Fleming and J. G. Le Marchant, Secretary, J. Mackenzie.

Two years ago, a controlling interest in the company was secured by Messrs. Speyers and Co., the well-known bankers of New York and London, and through this firm the negotiations with the government were carried out for the construction of the new roads.

The Hon. Cameron Forbes, in an article on the Railroads of the Islands, recently published in the anniversary number of the Daily Bulletin, has the following to say about the negotiations leading up to the new concessions:-
On June 20, 1905, Secretary Taft advertised proposals in Washington asking for bids for the construction of railways, and they were similarly advertised in Manila. The terms, which had been very carefully drawn under good advice, called for very good construction, early completion, and, in general, would have provided the Islands with an admirable system at an early date. There were eleven routes advertised, amounting in all to an aggregate of about 1,200 miles. The probable cost of construction of this number of miles was the extreme limit upon which the Government was authorized to guarantee bonds, as the bill provided that the amount of interest guaranteed could not exceed $1,200,000 a year. At the time these proposals were issued the Government had reason to believe that there would be at least three bids for the whole system.

On December 20, 1905, the bids were opened in Washington in the presence of the Secretary of War and Governor-General Wright. They were three in number, one for the whole island of Luzon, one for three of the Visayan islands, Panay, Negros, and Cebu, and one from a Seattle syndicate for the lines in southern Luzon in the provinces of Albay and Ambos Camarines.

These bids were none of them in accordance with the terms of the proposals, differing in the following respects:

The Speyer syndicate did not ask for a guaranty but made many requests for privileges which were of such a nature that the Government could not possibly be justified in acceding to them as they would have laid it open to the charge of having given away the rights of the people. These included permanent low taxation, permanent high rates without right to regulate, and permanent immunity from competition.

The Seattle syndicate did not deposit any check as guaranty, complying otherwise in every respect with the terms of the proposal.

The second call for bids was issued, to be opened on January 20, 1906. In the second call the following changes were made:

In the first place in regard to bids upon which guaranty was asked the amount of contractor's profit was increased as requested by the Visayan syndicate and the period of time during which surveys and construction could be made lengthened. Other changes of a minor nature were also made.

In regard to unguaranteed lines propositions were requested, no restrictions being placed except that they must comply with the terms of the law.

The Speyers this time offered two propositions, one of them for unguaranteed lines almost entirely as before, but eliminating some of the more objectionable features of their original proposition, and bidding in addition on a guaranteed line from Dagupan to Laoag, making in all some 400 miles of unguaranteed line, much of it short branches from the existing lines, and 160 miles of guaranteed line. Although modified so as to comply with the terms of the law yet the proposition of the Speyers still contained so may features that seemed objectionable that the award was withheld and negotiations entered into with them in the effort to have them so modify their demands as to make a proposition which the Government could be entirely justified in accepting.

After many months of negotiation this has at last been accomplished, Messrs. Speyers & Co. having reached an agreement with the Secretary of War, of the progress of which the Commission were kept cognizant and of which they entirely approve. In the course of these negotiations the plan to construct a guaranteed line from Dagupan to Laoag was abandoned and the result is that all the lines in Luzon are upon one plan, namely, that of unguaranteed construction. On May 25, 1906, the following resolution was passed, formally awarding the concession to the Speyer syndicate and agreeing to pass an Act the terms of which has been agreed upon, word by word, by the parties interested, namely, The Philippine Government, the War Department, and the bankers:

“WHEREAS, the Secretary of War and Vice-Governor Smith have reached an agreement with Messrs Speyer and Company upon the terms of a concession for the construction of 428 miles, more or less, of railroad in the Island of Luzon, the construction and equipment of which they will agree to undertake; and

“WHEREAS, said agreement contained also a provision by which all the railroad lines of the Manila Railway Company, Limited, whether built under the old Spanish grant or under concessions of the Philippine Commission will be transferred to a new company organized under the laws of one of the States of the United States and will be merged with the new system; and

“WHEREAS, said agreement further provides that all claims of the existing railroad against the Insular, provincial, or municipal government of the Philippine Islands and the United States Government will be waived, and the original Spanish grant and concessions by the Philippine Commission for existing railroads will be terminated and merged in the new concession; and

“WHEREAS, it appears to the Commission that it is in the public interest that railroads be constructed in Luzon at the earliest possible date, and that the lines bid for are, on the whole, satisfactory and the terms proposed are such that the public interest will be properly protected if the same be accepted and approved;

“NOW, THEREFORE, BE IT RESOLVED, That the Commission hereby agrees to award to Messrs. Speyer and Company, of New York, a concession, the terms of which are to be the terms contained in the draft of the proposed Act copy of which is hereto attached, which provides for the construction and equipment of 428 miles, more or less, of railway in the Island of Luzon along the routes indicated in the attached draft and upon the terms therein set forth; and

“BE IT RESOLVED FURTHER, That in order that no time may be lost by the said company in making their arrangements to begin their surveys and other plans for early construction the Secretary of War is hereby authorized to give formal notice of such agreement to award; and

“BE IT RESOLVED FURTHER, That the Secretary of War be notified that, upon receipt of the name of the proposed railway company for which the concession is requested, the Commission will pas an Act in accordance with the terms of the accompanying draft, copy of which he now has in Washington.”

The salient points in the Speyer's concession are as follows:

1.They agree to build 428 miles, more or less of railroad throughout the Island of Luzon, including roughly 100 miles in Albay and Ambos Camarines, the line from Manila to Batangas and Lucena with branches, and several branches from the existing line of the Manila and Dagupan Railway, branching to the east and to the west, but principally to the east and including a line from Dagupan to San Fernando de la Union and a branch to the foot of the mountains within a few miles to Baguio.
2.No guaranty is asked on any of this construction.
3.While the rates are to be based on those now enjoyed by the Manila and Dagupan Railway the Government has the power to regulate them at any time.
4.The existing Manila and Dagupan Railway and all its branches give up their franchises, withdraw any claims which they may have against the municipal, provincial, or insular governments or the Government of the United States, and come in under the new charter on exactly the same basis at which the new lines go in.
5.The concession is a perpetual one.
6.There is nothing said in regard to competing lines, the Government being free to grant franchises for such lines at any time.
7.Taxation is one-half of one per cent of the gross earnings for thirty years; 1 ½ per cent for the ensuing fifty years, and thereafter to be fixed by the Government.
8.The company is give twelve months to complete its surveys and thereafter two years in which to complete the first 150 miles and agree to complete 75 miles each year thereafter. This does not compel particularly rapid action.
9.Right of entry of the material for the construction free of duty.
10.Privileges of using right of way 100 feet wide of the public domain, excepting always such part as is laid aside for public uses like parks, streets, etc., and such improved lands as the so-called Friars' Lands, etc., for which payment must be made.
11.Gauge to be three fee six inches and the quality of construction material to be up to first-rate modern standards with due regard to local conditions.
It will be seen that the public are to be amply protected by the above concession. Although the concession is a perpetual one the power of the Government to regulate rates and to grant franchises for competing lines assures the people of the Philippine Islands that industry cannot be choked either by exorbitant rates or by one railroad occupying the fields and preventing any others from coming in. Others can be built whenever it seems advisable to so arrange.

In this enterprise the syndicate has a great advantage in the experience gained by the officers now in in charge of the Manila Railway Company, Limited. Mr. Higgins is manager of this company and deserves a great deal of credit for the condition to which he has brought the property. In spite of light rails, the inexperience of native labor in railroad matters, the recent destruction during the insurrection, and the resultant depression in industrial conditions throughout the Islands he has succeeded in bringing his road-bed up to a very creditable condition and so maintains it. While the railroad is run on what seems to those used to American methods as a slow and cautious plan yet it is to be said to his credit that using wholly native engineers and conductors collissions are almost unknown, and the railroad is run as a profitable enterprise, continually building itself up which is the best criterion of good management. Mr. Higgins' wide experience, thorough training, and known ability are such as to be a guaranty that the work of construction about to be begun will be well and economically done.

Philippine Commission Act No. 1507 – June 29, 1906

By authority of the United States, be it enacted by the Philippine Commission, that:

SECTION I. There is hereby created as of December ninth, nineteen hundred and five, in the Department of Commerce and Police, the position of Supervising Railway Expert at a salary of twenty-four thousand pesos per annum The Supervising Rail way Expert shall be appointed by the Governor-General, with
the advice and consent of the Philippine Commission.

SEC. 2. The Supervising Railway Expert shall be supplied with an office by the Director of Public Works, who shall assign to him from the force authorized by his appropriation such stenographers, clerks, assistant engineers, draftsmen, and other employees as he may require and as may from time to time be
authorized for that purpose by the Philippine Commission.

The salary of the Supervising Railway Expert shall be mid from the Insular salary and expense and/or from any appropriation specifically providing therefor. His proper contingent expenses and those of the employees assigned to him shall be paid from the appropriations of the Bureau of Public Works.

SEC. 3. The Supervising Railway Expert shall keep an account of the nature and cost of the service which he and the employees assigned to him perform in order that the Government may be in position to make a charge against any railroad constructed under guaranty, as in the instance of the Philippine Railway Company in article nine of section one of Act Numbered Fourteen hundred and ninety-seven.

SEC. 4. It shall be the duty of the Supervising Railway Expert-

(a) To advise the Secretary of Commerce and Police in regard to any concession or extension of concession if they be asked for by companies, firms, or individuals proposing to construct railroads in the Philippine Islands, whether the traction is by steam, electricity, or other motive power.

(b) To supervise the construction and operation of all railroads being constructed or operated in the Philippine Islands with a view to seeing that they comply with the terms of the concession from which they receive their privileges and with the laws of Congress and of the Philippine Islands governing such
enterprises.

(c) To supervise in particular the construction of railroads upon which interest of bonds is guaranteed under authority granted by the terms of the Act of Congress approved February sixth, nineteen hundred and five. It shall be his duty to determine the nature and quality of all expenditures and to see that they comply with the terms of their respective concessions in all respects, and no bonds shall be issued or certified as provided in section four of the Act of Congress
approved February sixth, nineteen hundred and five, until written certification is made to the Governor-General through the Secretary of Commerce and Police by the Supervising Railway Expert that he or his duly authorized representative has examined the line upon which such bonds are to be issued and the
books and accounts of the company and that the construction has complied in every way with the terms of the concession: Provided, however, That if the Supervising Railway Expert and the officers of the railway company in question differ as to the proper allowance to be made it1 regard to any piece of construction, the Governor-General may, after due hearing of both sides, determine the proper amount of bonds which may be authorized, and in that instance he may certify to such bonds without previous certification by the Supervising Railway Expert.

(d) He shall examine the operation of all railroads operating under guaranty of interest authorized by the Act of Congress approved February sixth, nineteen hundred and five, with a view to determining the real cost of operation, and in the event that any company makes a claim for payment of guaranty of
interest under representation that it has failed to earn the amount necessary to pay interest on the bonds, after proper examination of the operating accounts he shall send a report of the same to the Secretary of Commerce and Police and to the Insular Auditor with a certificate that he has so examined the accounts and found the representations of the company to be correct and the money to be paid under the guaranty to be properly due; or if he does not find the representations of the company to be correct he shall report the difference, showing what, in his judgment, is the proper deficit, if any, and the amount which he has found to be due by the Government toward the interest of these bonds.

(e) He shall examine annually or oftener the operations of all other railroad companies in the Philippine Islands in such detail as may be required by the Secretary of Commerce and Police, and shall render to the said Secretary a report of their earnings and operations for the purpose of an exhibit to the annual report of the Philippine Commission, and shall furnish such other reports and exhibits and make such other examinations as may from time to time be required
by the Secretary of Commerce and Police.

(f) He shall advise the Governor-General upon all points which require determination by the Governor-General under the terms of any Act or concessionary grant or franchise to construct or operate railroads in the Philippine Islands.

SEC. 5. The Supervising Railway Expert shall be the agent of the Governor-General and of the Secretary of Commerce and Police to make all investigations required of them by the terms of any Act or concessionary grant to a railroad, except as hereinafter provided. He shall have power to look into and examine
any books and accounts, vouchers, records, or other information to which under the terms of the law the Philippine Government has access: Provided, That nothing in this Act shall be construed to exclude the Auditor for the Philippine Islands from examining from time to time, in his discretion or when requested to do so by the Governor-General, the books, records, accounts, and vouchers of any railroad company or corporation organized or operating in the Philippine Islands. And provided further, That the Governor-General or the Secretary of Commerce and Police may at any time designated in writing any other official to be his agent to make any examination or perform other duties in connection with the supervision of railroads.

SEC. 6. The Supervising Railway Expert shall be entitled to such leave of absence or commutation thereof as may he determined by resolution of the Philippine Commission.

SEC 7. The public good requiring the speedy enactment of this bill, the passage of the same is hereby expedited in accordance with section two of "An Act prescribing the order of procedure by the Commission in the enactment of laws," passed September twenty-sixth, nineteen hundred.

SEC. 8. This Act shall take effect on its passage.

Enacted, June 29, 1906.

Supervising Railway Expert

An office created by Act No. 1507, of the Philippine Commission, enacted June 29, 1906, under the Department of Commerce and Police, and placed in the Bureau of Public Works from which it was separated during the fiscal year 1906-1907. Abolished as a separate office, its duties were transferred to the Board of Public Utility Commissioners by Act No. 2320 of the Third Philippine Legislature, second session, enacted January 31, 1914.

Source: Checklist of publications of the government of the Philippine islands September 1, 1900, to December 31, 1917 Page 240

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.

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.