Philippine railways were first officially projected in 1875, when a Royal Decree of that year, dated August 6, determined the legislative basis for works of that nature. The Inspector of Public Works was instructed to form a general plan of a railway system in Luzon Island. The projected system included (1) a line running north from Manila through the Provinces of Bulacan, Pampanga, and Pangasinán. (2) A line running south from Manila, along the Laguna de Bay shore and eastwards through Tayabas, Camarines, and Albay Provinces. (3) A branch from this line on the Laguna de Bay shore to run almost due south to Batangas. The lines to be constructed were classed under two heads, viz.:—(1) Those of general public utility to be laid down either by the State or by subsidized companies, the concession in this case being given by the Home Government; and (2) those of private interest, for the construction of which concessions could be granted by the Gov.-General.
In 1885 the Government solicited tenders for the laying of the first line of railway from Manila to Dagúpan—a port on the Gulf of Lingayen, and the only practicable outlet for produce from the Province of Pangasinán and Tárlac District. The distance by sea is 216 miles—the railway line 196 kilometres (say 120 miles). The subsidy offered by the Government amounted to about ₱7,650 per mile, but on three occasions no tender was forthcoming either from Madrid or in Manila, where it was simultaneously solicited. Subsequently a modified offer was made of a guaranteed annual interest of 8 per cent, on a maximum outlay of ₱4,964,473.65, and the news was received in Manila in October, 1886, that the contract had been taken up by a London firm of contractors. The prospectus of “The Manila Railway Co., Ltd,” was issued in February, 1888. The line was to be completed within four years from July 21, 1887, and at the end of ninety-nine years the railway and rolling-stock were to revert to the Spanish Government without compensation. The rails, locomotives (36 tons and 12 tons each), tenders, coaches, waggons, and ironwork for bridges all came from England. The first stone of the Central Station in Manila (Bilibid Road, Tondo) was laid by Gov.-General Emilio Terrero on July 31, 1887. In 1890 the original contractors failed, and only the first section of 28 miles was opened to traffic on March 24, 1891.
Many other circumstances, however, contributed to delay the opening of the whole line. Compensation claims were very slowly agreed to; the Government engineers slightly altered the plans; the companyʼs engineers could not find a hard strata in the bed of the Calumpit River[19] (a branch of the Rio Grande de Pampanga) on which to build the piers of the bridge; and lastly the Spanish authorities, who had direct intervention in the work, found all sorts of excuses for postponing the opening of the line. When the Civil Director was applied to, he calmly replied that he was going to the baths, and would think about it. Finally, on appeal to the highest authority, Gov.-General Despujols himself went up to Tárlac, and in an energetic speech, reflecting on the dilatoriness of his subordinates, he declared the first Philippine railway open to traffic on November 23, 1892. For about a year and a half passengers and goods were ferried across the Calumpit River in pontoons. Large caissons had to be sunk in the river in which to build the piers for the iron bridge, which cost an enormous sum of money in excess of the estimate. Later on heavy rains caused a partial inundation of the line, the embankment of which yielded to the accumulated mass of water, and traffic to Dagúpan was temporarily suspended. The total outlay on the line far exceeded the companyʼs original calculation, and to avert a financial collapse fresh capital had to be raised by the issue of 6 per cent. Prior Lien Mortgage Bonds, ranking before the debenture stock. The following official quotations on the London Stock Exchange will show the public appreciation of the Manila Railway Companyʼs shares and bonds:—
Official Quotations.
| December. | 7% Cum. Pref. £10 Shares. | 6% Deb. £100 Stock. | 6% Prior Lien Mort. Bonds, Series A., £100. | 6% Prior Lien Mort. Bonds, Series B., £100. |
| £ | £ | £ | £ | |
| 1893 | 2 | 49 | 98 | 87 |
| 1894 | 1 | 32 | 104 | 91 |
| 1895 | ½ | 29 | 107 | 85 |
| 1896 | ¼ | 22 | 96 | 64 |
| 1897 | ¼ | 19 | 101 | 75 |
| 1898 | 1¾ | 45 | 110 | 98 |
| 1899 | 1¾ | 33½ | 101½ | 87½ |
| 1900 | 1½ | 42 | 103½ | 97 |
| 1901 | 2 | 55 | 108 | 102 |
| 1902 | 1½ | 52 | 109 | 102 |
| 1903 | 1½ | 58 | 108 | 104 |
| 1904 | 3½ | 83 | 110 | 107 |
| 1905 | 4¾ | 117 | 110 | 106 |
Up to July 1, 1905, the interest has been regularly paid on the Prior Lien Bonds. No interest has been paid on the debentures (up to December, 1905) since July 1, 1891, nor on the 7 per cent. Cumulative Preference Shares since July 1, 1890. On January 26, 1895, these shares were officially quoted, for sellers, 0.
Including the termini in Manila (Tondo) and Dagúpan, there are 29 stations and 16 bridges along the main line, over which the journey occupies eight hours. There are two branch lines, viz.:—from Bigaá to Cabanatúan (Nueva Ecija), and from Angeles (Pampanga) to Camp Stotsenberg. From the Manila terminus there is a short line (about a mile) running down to the quay in Binondo for goods traffic only. The country through which this line passes is flat, and has large natural resources, the development of which—without a railway—had not been feasible owing to the ranges of mountains—chiefly the Cordillera of Zambales—which run parallel to the coast.
The railway is ably managed, but when I travelled on it in 1904 much of the rolling-stock needed renewal.
In 1890, under Royal Order No. 508, dated June 11 of that year, a 99 yearsʼ concession was granted to a British commercial firm in Manila to lay a 21-mile line of railway, without subsidy, from Manila to Antipolo, to be called the “Centre of Luzon Railway.” The work was to be commenced within one year and finished within two years. The basis of the anticipated traffic was the conveyance of pilgrims to the Shrine of Our Lady of Good Voyage and Peace (vide p. 184); but, moreover, the proposed line connected the parishes of Dilao (then 4,380 pop.), Santa Ana (then 2,115 pop.), Mariquina (then 10,000 pop.), Cainta (then 2,300 pop.), and Taytay (then 6,500 pop.)—branching to Pasig and Angono—with Antipolo (then 3,800; now 2,800 pop.). The estimated outlay was about ₱1,000,000, but the concession was abandoned. The project has since been revived under American auspices.