II. MANILA RAILROAD CO. (LTD.).

LOCATION AND EXTENSIONS.

The Manila Railroad Co.'s system of railways is located in the central, western, southern, and southeastern portions of the island of Luzon. The main terminal is at Manila. The part lying north of Manila is known as the Northern Lines; the main line runs a little west of north from Manila through Dagupan to San Fernando, a distance of 158.2 miles, and, in addition, there are 148.5 miles of branches, making a total of 306.7 miles of railway in the Northern Lines. The part lying southeast of Manila is known as the Southern Lines; the main line runs from Manila to Calanay, a distance of 117 miles, and there are 149.9 miles of branches, making a total of 266.9 miles of railway in the Southern Lines. The total for the system is 573.6 miles of route, all of 3-foot 6-inch gauge.

The extensions under construction are almost entirely additions to the Southern Lines, which will be extended to the most southerly part of the island of Luzon.

The Manila Railroad Co. (of New Jersey) controls the Manila Navigation & Transportation Co., but no further mention will be made of this concern, since its operations are conducted separately from those of the railway.

PRESENT OWNERSHIP AND CONTROL.

After extended negotiations the control of these lines was taken over by the Philippine government January 1, 1917, by the purchase of all the outstanding common and preferred stock and the guaranty of the outstanding bonds. The status of the corporation was retained, and the operation of the lines was continued, with only a change in the board of directors and the principal executive officers. This arrangement was continued until January 1, 1918, when further changes were made the president of the Philippine Upper House (Senate) also becoming president of the railway and the director of the Bureau of Public Works assuming the duties of general manager of the railway. This, in a way, merges the administration of the railway with the Bureau of Public Works, but the corporation status of the railway is still retained.

HISTORICAL SURVEY.

The Manila Railroad Co. (Ltd.) was registered December 13, 1906, under the English laws as a successor to the original Manila Railway Co., which was incorporated January 25, 1888, to take over a concession from the Spanish Government for a line of 122 miles for a term of 99 years to run from April, 1887. The new company was incorporated as an outcome of the negotiations with the United

States to obtain a settlement of the railway's claims against the Government arising out of the developments in the Philippine Islands from 1897 to 1899. In addition, there was formed the Manila Railroad Co. (of New Jersey), which took over all the properties of the original Manila Railway Co. (English) and was granted a perpetual concession. This company which took the place of the old English company holding the concessions from the Spanish Government was organized in 1906 under the laws of the State of New Jersey and holds, subject to the terms of concessionary grants or contracts, concessions for approximately 350 miles of lines designated as the Northern Lines and approximately 470 miles of line called the Southern Lines. These lines, totaling about 820 miles, were all to be on the island of Luzon and to the north and south (southeast) of Manila. One very specific requirement of the concessions was that the two systems were to be kept separate and distinct and to be constructed, maintained, and operated and their books and acts kept as if the lines were owned by separate and distinct companies. The two systems were to have (and do have) a common terminus in Manila and to enjoy every facility for free exchange of traffic, including a port line in Manila, connecting with the water front wharves and warehouses, which was constructed by the government

The concessions provided that there should be paid annually for a period of 30 years an amount equal to 0.5 per cent and for 50 years thereafter an amount equal to 1.5 per cent of the gross earnings of the company in lieu of all taxes of every name and nature on the franchises, earnings, and all other property owned or operated by the company under its concessions. The concession also had the very important provision that all materials and equipment imported for the company's lines should be admitted free of duty.

CAPITAL OBLIGATIONS.

Of the authorized $3,500,000 common stock and $6,500,000 preferred 7 per cent stock for the Northern Lines, there was outstanding, previous to the purchase by the Philippine government, $2,130,700 of the former and $3,652,800 of the latter a total of $5,783,500. Of the authorized $7,500,000 first mortgage 6 per cent gold bonds and the $12,500,000 second mortgage 7 per cent gold bonds for the Northern Lines, each issue maturing in 1956, there was outstanding, previous to the purchase by the government, $4,330,000 of the former and $7,716,000 of the latter a total of $12,046,000.

For the Southern Lines there was no stock outstanding, and of the authorized $30,000,000 first mortgage 4 per cent gold bonds there was outstanding $10,575,000. The maturity of this issue of bonds. was extended from 1839 to 1859 when the control was taken over by the government. The outstanding bonds for the system totaled $22,621,000, or more than $39,000 per mile of line in service, although this includes some of the expenses already incurred on the less than 100 miles of additional line under construction at that time.

In the balance sheets for December 31, 1915, the Northern Lines of the operating company, the Manila Railroad Co. (of New Jersey), showed a liability of $3,946,441 to the holding company, the Manila Railroad Co. (Ltd.), this being a result of the accrued annual deficits. The Southern Lines showed a liability of $2,838,500 due the Philip

pine government for advances to meet the annual deficits and a liability of $3,284,918 of this character for the Southern Lines, resulting in a total of $7,230,609 for the system, which can be termed accumulated deficit.

INVESTMENT ASSETS.

The cost of road and equipment and the general expenses on December 31, 1915, are shown by the following table for the Northern and Southern Lines and for the system as a whole; these figures substantially represent the property at the time it was taken over by the government:

This represents a cost of $55,685 per mile for the Northern Lines and $43,825 for the Southern Lines, or an average of almost exactly $50,000 a mile for the system. When one considers the 3-foot 6-inch gauge and the small amount of rolling stock this seems to represent a rather high investment.

TRAFFIC.

For the year ended December 31, 1915, the last year for which figures were available when the writer was in Manila in April and May, 1917, the earnings for the Northern Lines were 64 per cent from passenger and 36 per cent from freight business. On the Southern Lines the division was 66 and 34, making practically 65 and 35 for the system as a whole.

Passengers are carried first, second, and third class on all the lines. On the Northern Lines, in 1915, 1 per cent of the passengers rode first class, 1.1 per cent second class, and 97.9 per cent third class. The earnings were about 5 per cent from first class, 4 per cent from second class, and 91 per cent from third class. The average ride for all passengers was 19.24 miles, and the average earnings from all passengers were 1.65 cents per mile. A total of 2,357,341 passengers were carried during the year. On the Southern Lines, of the 2,031,651 passengers carried, 0.7 per cent were first class, 0.9 per cent second class, and 98.4 per cent third class. The average ride was 16.72 miles, and the average earnings per passenger mile were 1.62 cents. The earnings for the Southern Lines were not shown by classes.

The first-class fares average about 3 cents a mile, the third-class fares a little more than 50 per cent of the first-class fares, and the second-class over 75 per cent of the first class. One hundred and ten

pounds, 88 pounds, and 66 pounds of baggage are carried free for the respective classes. The larger number of first and second class passengers, the longer ride, and the higher average of earnings per passenger mile on the Northern Lines are almost entirely the result of the special travel to Baguio.

On the Northern Lines, during the year 1915, 438,369 tons (of 2,000 pounds) of freight were moved, from which the total revenue was $465,323. The average haul was 56.1 miles, and the average earnings per ton-mile were 1.114 cents. Agricultural products constituted 58 per cent, manufactured products 9.5 per cent, and forest products 5 per cent. Materials for the government amounted to 18.4 per cent. The Southern Lines handled 305,801 short tons. The average haul was 39.9 miles, and the average earnings were 1.536 cents per tonmile. Agricultural products constituted 64.3 per cent, forestry products more than 14 per cent, and manufactured products 12.5 per cent. Animal products form about 4 per cent on all lines.

WORKING RESULTS AND LOSS.

The following table shows the financial results for the year 1915, the most recent figures available when the writer was in Manila:

For the year 1917, the first year under government operation, the press reports state that the loss was converted into a profit of about $400,000. During that year a considerably increased volume was also reported.

OPERATING METHODS.

Train-running methods conform strictly to the British "stationmaster" system, referred to at length in the Chinese and Japanese sections of this report. The small amount of signaling is along the lines of the British Board of Trade practice and as simple as it is possible to make this system of signaling. With the class of employees available, consisting almost entirely of natives in the train and station service, there is little doubt that this is the best method of operation, and government operation will be an added reason for continuing this arrangement.

EMPLOYEES AND WAGES.

The following table shows the number of general officers and all other employees, the number of days worked, the total yearly com

pensation, the average daily compensation, and the average yearly compensation; the figures are for the year 1915:

The average daily wages of the employees classified as "all other" and the yearly wages for this class on the Northern Lines give the best idea of the wage situation. It will be noticed that the employees on the Northern Lines worked nearly 350 days during the year, while on the Southern Lines they worked less than 207 days. It will also be noticed that the wages on this system are considerably higher than the average on the railways in China, Japan, Chosen, and Manchuria, as shown by the other sections of this report.

ROADWAY AND TRACK.

On account of the large number of openings required to take care of the excessive rain that fails at times, and the difficulty of getting across marshy ground (which occurs frequently), location and construction are rather troublesome and expensive.

On December 31, 1915, on the Northern Lines there were 902 bridges, averaging 42.5 feet in length, of which 517 were wooden or combination structures; many of these were approaching the time when they would need to be renewed and when it would be desirable to replace them with permanent structures. On the Southern Lines there were 428 bridges, averaging 58 feet, of which 244 were wooden structures. On the Northern Lines the permissible maximum axle load is 29,120 pounds and on the Southern Lines 31,600 pounds. In addition, there are 582 culverts on the Northern Lines and 1,374 on the Southern Lines, showing the great number of openings required. Most of the rail in all tracks is 60-pound, and the fastenings, frogs, switches, and other track appliances are all along the lines of British practice in China. Most of the crossties are now of native timbers. These cost $0.955 in 1915 on both the Northern and Southern Lines. Bridge ties cost $1.82 on the Southern Lines, where there are a number of lumbering operations, and $2.93 on the Northern Lines, part of whose ties came from the northwestern United States or western Canada.

The track is fairly well ballasted with various materials, from engine cinders to gravel, with some broken rock.