Railways in Mindanao: Then and Now

Department of Transportation and Communications, 2010

 

News is that the National Economic Development Authority (NEDA) has approved a Feasibility Study to proceed for the proposed Mindanao Railway Project. The map above gives an indication of the scope of the proposed railway system.It’s been a long time coming. An overview of railways in the past can be found in The Colonial Iron Horse: Railroads and Regional Development in the Philippines, 1875-1935 by Arturo G. Corpuz. The British, of course, were railway pioneers in the Philippines, and as this report on a US Congressional Hearing in 1904 shows, the Americans were wary of British commercial interests in this regard. See also a 1907 journal article by Frank McIntyre, Railroads in the Philippine Islands.

The Philippine Diary Project gives a glimpse into the first glimmerings of a railway scheme for Mindanao. These glimpses are through the diary of Francis Burton Harrison, former Governor-General, and who served as an adviser to the Commonwealth of the Philippines from 1935-36 and again from 1942-44 (and after independence, on foreign affairs). Aside from having been a chief executive, Harrison was a longtime resident of the United Kingdom and was thus attuned both to British psychology and their reliance on railways, in contrast to the American preference for highways. See Planes, trains, and automobiles from July 16, 2008 for some background:

Courtesy of Augusto de Viana is The railways in Philippine history which, however, so compresses the most interesting years, the 20s to the 50s, as to render that section meaningless. Oh well. Viviana overlooks the ambivalence and even hostility American officials felt towards railways, since it would affect the Philippine market for automobiles… When autonomy was achieved, railroad development accelerated. And the policy debate on highways versus railways also began, along with still-unrealized plans such as a railroad for Mindanao (the development of Maria Cristina Fall’s hydroelectric power was originally envisioned as primarily powering the Mindanao railways: there are interesting snippets on these debates in F.B. Harrison’s diary: as an Anglophile, he was pro-railways, pointing with envy to Britain’s not altogether altruistic promotion of its own steam engine industry in its colonies…

Harrison’s interest in railways can be seen in his entry for October 25-29, 1935, Harrison records an extended conversation with Alejandro Roces, the leading newspaper publisher at the time:

Roces, Sr. advocates a National Transportation Corporation to take over all the motor bus lines –capital required now is about three million pesos but they would take shares or installment payments; they can be run as feeders for the Railroad. Paez agrees with him. Roces advocates moving Bilibid prison out of town and making the site a central market and the hub of motor buses –thus cutting out the middleman. This has been tried in Spain –and is a success.

His interest is also shown by railways-related details he notices. Two days before the inauguration of the Commonwealth (November 13, 1935), Harrison visits Pasay and noticed,

Called at Pasay. Quezon was closeted with General MacIntyre, General Creed Cox (Chief of the Bureau of Insular Affairs), Osmeña, Roxas, Paez and Carmona –I believe they were discussing the subject of the bonds of the Manila Railroad.

Harrison quite early on (the idea was first broached in broad strokes on November 2, 1935, thirteen days before the inauguration of the Commonwealth) was engaged as an adviser on communications, and his first task was advising the Philippine government on how to handle the British owners of the Manila Railway Company. See his diary entry for November 26, 1935:

We then discussed my appointment as Adviser on Communications and he asked me also to help him in the reorganization of the government. He is to put me in touch with Quirino and Paez on the purchase of the Manila RR. bonds from the English.

Harrison seems to have immediately set about getting himself up to speed on the railway situation. See his diary entry for November 27, 1935:

Talk with [James J.] Rafferty and McCreery, who is auditor and acting manager of the Philippine Railway. He said that the Iloilo line, is practically self-sustaining. Cebu is not suited to a railway.

Two days later, he was actively taking up the task assigned him with the railways manager. See his diary entry for November 29, 1935:

Conference 9-10 a.m. with [Jose] Paez over the proposed purchase of the Manila RR. Southern 4’s from the Southern Syndicate. He is much in favor of accepting the British offer, and says that if the plan is carried thru’ the RR. can meet its indebtedness for interest even in bad times.

About a week later, he was being consulted by representatives of investors on what to do, see his entry for December 6, 1935:

[John H.] Pardee wants to know whether the Philippine Railway Co., should pay its Dutch bond holders on a gold basis, or whether the Manila RR. had decided that under American law they could pay only 4%. If so, the Philippine Railway Co., would pay only 4%, because the gold clause was not in their bonds and upon “instructions” from the Secretary of War in the time of Taft this had not been followed by a vote of their board. No written word of this exists in the War Department today.

Three days later, the government position was formally communicated to the new National Assembly. See Message of President Quezon to the First National Assembly on Railroad Bonds Redemption, December 9, 1935.

Politics being what it is, by December 15, 1935 Harrison was noticing political intrigue concerning his assignment on railways:

[A.D. Williams] reported that it is now rumoured that I came out here this time to advance the interests of the English in the Manila RR. bond redemption. (Exactly contrary to facts –as usual). Says Paez insisted on resigning if the bonds are not redeemed. I feel certain we could have made a better bargain with the English; that I could have done it; and that it is legally possible to avoid paying them receipts from the “gold clause” in the bonds, and that the English know it. (N.B. Quezon asked me to prepare “advise” on this subject and then never asked for my opinion.)

Five days after that, Harrison records his discussions with the president, and then with the British consul on December 20, 1935 (along the way it’s an interesting glimpse into the contending interests that come into play whenever any commercial interest is affected by government policies –press, politicians, governments local and foreign, get into the act):

Then I asked him [Quezon] what was the matter with the Manila RR. bond purchase? He said it has been held up to enquire of the United States Government as to whether they considered that the Philippine Government was resposible for the principal of these bonds; they had replied thru the High Commissioner in the affirmative –so Quezon said the bill would go through because this meant that the United States would act on the maturity of the bonds and seize the Customs House. He said that if the American Government had decided this Government was not responsible for the principal, he was going to say to the English that he had been in favour of purchase but the Legislature demands better terms. I told him that this Government was not responsible for principal of these bonds –that just as we had bought the railroad we could sell it. Then he said Confesor (Assemblyman) had told him of F. Theo Roger’s (of Free Press) story that I had come out here to get what I could for the English! He said that he had authorized Confesor to state the true facts in the Legislature –that this impugned his honor as well as my own– that he would put Rogers in prison if he printed such a gross libel. He asked me to bring him the memorandum on these bonds which I had prepared for him on December 6, which I did…

…I then went to home of A.P. Blunt, British Consul General –he did not get there until 8 o’clock, having been at work in his office, getting off in the mail all his reports on governmental development here… As I left, Blunt asked me in a casual voice what had happened about the purchase of the Manila RR. bonds –I said there had been “a hitch.” He eagerly enquired “what hitch?” I said it had been caused by Vicente Villamin’s speech –“ah!” he said “they fear the wily English bankers, whereas our fellows would rather get this agreement now than perhaps lose everything later.” I replied that there was much to be said on each side, but I really thought the deal would go through –(it passed the Legislature just about that time).

The story resumes some weeks later, on January 16, 1936:

I asked him [Quezon] whether he wanted me to talk public business at luncheon, and he replied that he enjoyed it with people he liked. Told him I had just been with Paez and had written for him (Quezon) an opinion on the Manila RR. I advised him to instruct the public utilities commission to stop for the present issuing any more “certificates” or licenses for the bus lines. Said he would do so. Told him it was fortunate he could put the railroad and the busses under one control –other countries could not now do so but he was catching the situation nearly as it began.

I also expressed the hope that he would be able to get the Legislature to agree to permit the Manila Railroad to abandon those branches which were (dead) unprofitable.

(a few days later, on January 20, 1936, Harrison would note that he submitted a memorandum on Manila Railroad plans “for the next few years”). A few months later, the situation seems to have been resolved, as recorded in his diary entry for March 19, 1936:

Quirino said to me that my silver purchase suggestion was “gaining ground.” He also remarked that I had helped in the purchase of the Manila Railroad bonds, because I knew the “psychological background” of the English bondholders.

But this entry is about the proposed Mindanao Railway. And here, Harrison gives insights into the thinking behind the Mindanao Railway –and the opposition to it.

The entries related to a Mindanao Railways plan start on February 18, 1936, when A.D. Williams, the American adviser of the government on public works, makes an inquiry with Harrison:

A. D. Williams came in to enquire whether there was any basis for Quezon’s newspaper statement that it was being considered whether to build main roads in Mindanao, or railroads, which would cost ten times as much and probably be a heavy loss. We agreed that roads were the modern solution, and that a railroad was only justified if leading to a mine or other heavy industry.

A month later, Harrison, on March 17, 1936 notes that Teofisto Guingona, Sr. (who would be Commissioner of Mindanao and Sulu) had a different point of view:

Guingona is in favour of constructing roads rather than railroads in Mindanao.

The clash between these points of views is discussed in his entry for March 25, 1936:

Busy morning at office. Miguel Unson has seen Quezon…

We talked over the issue of railway vs. roads in Mindanao: he says the plan is to take down there that useless railroad outfit in Cebu, and perhaps in Iloilo as well, and to build roads as feeders. I also saw Osmeña for a moment before the Cabinet meeting and he talked on the same subject: says the time has come to decide either for railroad or roads, and not to make the same mistake as in Luzon, where they run parallel.

It seems that the issue continued to remain unresolved –or that those opposed to railways were still lobbying to change the policy. See Harrison’s entry for April 28, 1936:

At Malacañan. A. D. Williams had just come from a conference with Quezon, Paez and Ramon Fernandez; says the President is set on building railways in Mindanao, and “A.D.” and Fernandez tried to convince him they would not pay. “A.D.” said he thought he had offended Quezon still more by replying to his (Quezon’s) complaints that the roads offered too unfair competition to the Manila Railroad, that the competition from trucks was unfair and when they had finally managed by January 1, 1936 to get the tax on trucks raised from one peso to two pesos per 100 kilos, the rate had at once been reduced again. This was Quezon’s own doing on the advice of Geo. Vargas, and they both looked pretty glum.

But the policy remained. See May 8, 1936:

This morning, Quezon gave a press interview to both “foreign” and “local” reporters. Evidently, he had important things to give out. The newspapers published:

(a)  A statement that Davao land “leases” would go to the courts.

(b)  The President contemplates the construction of a 150 kilometer (300!) electric railway between Davao and Cagayan de Misamis, and also would complete the Aloneros-Pasacao gap in the southern lines of the Manila Railroad. The Maria Cristina Falls in Lanao are to be used for part of the power for the first project.

(c)  That the Philippines would sooner ask for immediate independence than wait for the end of the ten years period if there are no prospects of improving the provisions of the economic clauses of the Tydings-McDuffie law.

Still, the opponents of the railways scheme hadn’t given up, as recorded in this entry for May 9, 1936:

[A.D. Williams] told me again of a talk with Quezon concerning transportation. It arose out of a project to build a wharf for the Cebu Portland Cement Co. Williams pointed out that this would reduce the revenues of the Cebu Railway. Quezon replied: “our guarantee of interest on the bonds expires next year. We will have to buy the road and move it.” Williams agreed and suggested moving it to Negros. Quezon remained silent. What he wants is to move it to Mindanao which Williams opposes since he believes that a railroad would be so much more expensive to maintain and operate than roads.

The policy, however, still remained. As the entry for May 18, 1936, the railways head was dispatched to Mindanao to conduct an inspection:

Quezon returned from Hong Kong and after a day at Malacañan left for Baguio. His office work is greatly in arrears and is in confusion. Vargas handed me a memorandum prepared by Quezon dated April 14 in Iloilo, addressed to me, (and unsigned) asking me to prepare papers to carry out the recommendations of the annual report of the Manila Railroad Co. This I received May 18!! Vargas says he found it “on the boat” (Arayat?). I hardly think it was meant for me, anyway, but probably for Paez who is away inspecting the line for the proposed railroad in Mindanao.

A month later, the lobbying of the National Assembly included a pitch for the Mindanao railways scheme, see June 6, 1936:

Before making wharf at Iligan, Quezon addressed the Assemblymen, asking for funds for the development of Mindanao. He used maps, and said that an electric railway was to be built from Misamis, via Bukidnon to Davao, the water power for this project coming from the falls in Lanao. Only four or five of the Assemblymen had ever been in Mindanao before. The gathering seemed to be willing to vote the money, but wanted to know how they were to get the colonists? Quezon replied “Open roads, and they will come of themselves.”

These behind-the-scenes stories in Harrison’s diaries, help provide context to the official declaration of policy in the Second State of the Nation Address, June 16, 1936 in which the railroad bonds, and future plans, including the expansion of the railways system, were discussed:

Manila Railroad Company –A very important measure approved by the National Assembly is Commonwealth Act No. 4 providing funds to be loaned to the Manila Railroad Company for the purchase, before maturity, of certain outstanding bonds of the said Company. In accordance with the provisions of this Act, I directed the Insular Treasurer to loan to the Manila Railroad Company P9,900,000, and authorized the Philippine National Bank to use P3,360,000 of its funds in the purchase of said bonds.

On January 29, 1936, upon payment to the Manila Railway Company (1906) Ltd., through the Chase National Bank, New York City, of the sum of $6,698,631.41 covering the principal, interest and exchange premium, all of the Souther Lines 4 per cent gold bonds maturing May 1, 1939, held by the English Company, with par value of P16,340,000, were delivered to the order of the Bureau of Insular Affairs, Washington, D.C., acting as representative of the Commonwealth Government and the Manila Railroad Company.

The successful culmination of this exceedingly important transaction resulted in great financial advantages to the direct benefit of the Manila Railroad Company and indirectly of the Commonwealth Government, which is the sole owner of the property. The following estimates indicate in round figures the savings that will be effected between now and the maturity of the bonds:

Total face value of the bonds held by the Manila Railway Company (1906), Ltd. …………….. P16,340,000.00
Cost at 80 per cent of face value …………….. 13,072,000.00
Savings in principal …………….. 3,268,000.00
Less –premium …………….. 165,500.00
Net saving in principal …………….. 3,102,500.00
Normal 4 per cent annual interest on English Company holdings P653,600.00
Normal interest for 1936, 1937, 1938 and half of 1939 2,287,600.00
Premium for 3-1/2 years at P441,180 each year 1,544,130.00—————— 3,831,730.00—————————–
Total …………….. P6,934,230.00
Less-
2% on P13,350,000 for 3-1/2 years 934,500.00—————————–
Total savings in principal and interest …………….. P5,999,730.00================

The above savings on the English Company holdings are based on the principal of the bonds being redeemed at maturity at their face value. However, both the principal and interest are subject, at the holders’ option, to payment in certain European currencies at the former gold equivalent, and if this option should be exercised covering the principal at the time of maturity, the amount necessary to redeem the bonds being held by the English Company would, on the present basis of exchange, represent a total sum of approximately P27,287,800. The purchase of these new bonds at this time for the sum of P13,072,000, therefore, means a saving in interest and principal of about P14,200,000 besides a savings in interest and premium amounting to about P2,900,000 after allowing for the two per cent interest on the loan from the Government, or a total saving of about P17,100,000.

The investment of the Government in the Manila Railroad Company including bonded indebtedness of the Company all told amounts to approximately P28,000,000. This is a respectable sum for any Government and doubly so for a Government whose yearly revenue at present is around P78,000,000 and at its highest peak only reached the total of P92,783,173.70.

Bus and truck transportation due to improved roads in the northern and central provinces of Luzon have caused a large decline in the income of the Manila Railroad Company. We cannot afford to allow this situation to continue and permit the Government to suffer tremendous losses in railroad operation, for the time might come when the Government would either be compelled to suspend the operation of the Railway or carry a yearly financial burden that sooner or later would bankrupt the National Treasury.

The Manila Railroad was acquired by the Insular Government in 1917 in order partly to withdraw from foreign hands the control of our most important means of transportation at that time. Soon after the Government assumed the administration of this property, the railroad began paying interest on the bonds from its revenue, and even extended some of its lines with its own resources. Only during the last two or three years has the income of the railroad begun to decline due, as already stated, to bus and truck competition. If it should be found advisable, I am prepared to authorize the Manila Railroad Company to purchase some of these competing bus transportation companies or else to have the Government establish and operate its own bus and truck services. The Constitution expressly authorizes the Government to establish and operate means of transportation and communication, and, upon payment of just compensation, transfer to public ownership utilities held by private individuals to be operated by the Government.

Another step that must be taken at once is the completion of the railroad line to the Bicol provinces. This, I am informed, will make the southern lines a paying enterprise. In pursuance of the authority vested in me by law, I have directed the Secretary of Finance to purchase P3,000,000 worth of stocks of the Manila Railroad to finance the completion of the Aloneros-Ragay line. It is my understanding that to complete the road the Government will have to invest only P700,000 more in addition to the P3,000,000 referred to above.

But this amount will have to be greatly increased if the Manila Railroad Company is not given permission to abandon the Legaspi-Tabaco, Las Pinas-Naic, Rosario-Montalban and Batangas-Bauan lines which are absolutely unnecessary from the point of view of public convenience and which, consequently, are causing an annual loss of about P100,000 to the Railroad Company. Once these lines are abandoned their materials and equipment will be used in the construction of the Aloneros-Ragay line.

I, therefore, earnestly recommend that a law be enacted authorizing the Manila Railroad Company to abandon the lines above mentioned.

After this, there isn’t any discussion on the Mindanao railways scheme, as Harrison resigned as adviser in 1936. As a postscript, the last mention of railroad planning in Harrison’s Diary is on December 23, 1938 when, during a visit, he mentions the recently-completed Bicol Express:

Staying with the President alone at the Guest House across the Pasig River from Malacañan Palace.

At luncheon we had Don Alejandro Roces, proprietor of the T.V.T. newspapers and Paez, manager of the Manila Railroad Company. Paez told of the success of the new branch of the railroad in the Bicol Provinces –at last, they have through connection with Manila and it is no longer necessary to cross Ragay Gulf by steamer. Quezon mentioned that he had refused the request of residents of those provinces for a highway parallel with the railroad.

For the official record on this, see the Fifth State of the Nation Address, January 24, 1939:

The Manila Railroad Company has at long last completed its southern line. The gap which existed for many years between Tayabas and Camarines Sur was connected at a cost of about P2,000,000. This was one of my dreams that have come true. The significance of this achievement will be readily seen when we consider the fact that a daily, comfortable, fast and inexpensive communication service has been established between Manila and the Bicol provinces. At the same time the completion of this southern line means increased earnings for the railroad.

Some photos (click to enlarge):

 

The Hondagua reception committee consisted of the crew of a Manila railroad boat.
Railroad officials inspecting the construction of the Sinuknipan Bridge along the new railway line
Government officials and assemblyman welcomed Commissioner McNutt and President Quezon
Coming down
A big crowd cheered the gayly-decorated special trains bearing guests of the Manila Railroad Company as it reached Del Gallego
High Commissioner Paul V. McNutt, President Manuel L. Quezon and Speaker Gil Montilla at the historical stone marker
The historical stone marker unveiled by Commissioner McNutt
Another partial view of the unveiling of the stone marker at Del Gallego, Commissioner McNutt (left) and President Quezon are shown standing before the marker in the background
Manila-Legaspi Line Inauguration
Line to the South

We can catch glimpses of the continuing story, also in the official record for the next two years:

Sixth State of the Nation Address, January 22, 1940:

In addition to this public debt, however, the Manila Railroad Company has an outstanding obligation in the amount of P26,472,000 for which no sinking funds are being provided. In order to protect the credit of one of our most im­portant enterprises, the Government will have to as­sume the payment of this debt maturing in 1956. I recommend that the National Assembly consider a plan establishing a sinking fund for these obliga­tions from the proceeds of the excise tax in the event the Manila Railroad Company is unable to provide therefore.

Seventh State of the Nation Address, January 31, 1941:

With the completion of the Tayabas-Legaspi section of its main Southern Line, the Manila Railroad Company has been enabled to maintain through train operation between Manila and Albay…

The Manila Railroad Company has also outstanding bonds amounting to P28,718,000.00. We have taken steps to enable this company to redeem its outstanding bonds upon maturity. For this purpose the National Assembly last year appropriated P7,000,000 from the Coconut Oil Excise Tax Fund. The present program of the Government contemplates further yearly appropriations from this same Fund until the total bonded debt of the Manila Railroad Company is fully covered.

World War II would put an end to railway schemes. In the years that followed, the story would be destruction and trying to rehabilitate the railways system.

See the two-part series by in the Cebu Daily News: “What happened to the Philippine Railway Company?” on June 12, 2014 and June 19, 2014.

See Statement of the Presidential Spokesperson on the restoration of rail service between Manila and Bicol on June 29, 2011:

The Bicol Express commenced in 1938 when, half a kilometer from del Gallego town proper in Camarines Sur, a golden nail was driven into a railroad tie, marking the meeting point of the south and north railroad lines and so officially linking Manila and Legaspi City by rail. The devastating weather of the early 1970s devastated the South Railway, and only token efforts were made to restore rail services. The railway was only rehabilitated in 1985, but deteriorated again soon after that. Then rail service between Manila and Bicol ceased in 2006 due to typhoon damage.

See also The Railways and Industrial Heritage Society of the Philippines website.

 


February 20, 1970 Thursday

20Feb1970_1-(1215am) 20Feb1970 (10pm)

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Office of the President

of the Philippines

Malacañang

 

 

February 20, 1970

Thursday

 

 

12:15 AM

 

I have asked Gens Yan and Ileto to advance and accelerate preparations in the event that the Maoists accelerate their schedule. Another violent demonstration like last night and according to our intelligence the next targets for sabotage are the public utilities and the big establishments, and I may have to suspend the privilege of the writ of habeas corpus.

Ambassador Byroade filed a strong protest for the vandalism, arson and destruction in the U.S. Embassy last night. I have asked Mayor Villegas to explain his inaction.

Gen. Ordoñez of the Metrocom suffered head wounds last night.

I asked Ernesto Rufino, Vicente Rufino and Carlos Palanca to withdraw advertisements from the Manila Times which was openly supporting revolution and the communist cause. They agreed to do so.

I have convinced Maceda to stay in PACD and he still acted like a spoiled brat. I had to tell him that his employees were talking of his bringing women to the Executive Secretary’s office at night and that he was getting too arrogant.

Gen. Rancudo has put up a SSB for direct communications between my office and the 5th Fighter Wing.

The headline in the Bulletin has caused consternation among some senators as the secret orders if anything untoward happens to me has alarmed them of the military taking over. But this only if all the civilian government leaders are liquidated which is far-fetched.


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Office of the President

of the Philippines

Malacañang

 

 

February 20, 1970

Friday

 

 

10:00 PM

 

The report of the IMF and the solution acceptable to them has come in with Gov. Licaros. It is a multiple rate – a floating rate for all imports; all earnings of principal exports of copra, logs, sugar and copper concentrate to be surrendered to the Central Bank at the legal rate of ₱3.90 to the dollar except for 20% which will be allowed to be retained by the exporter and sold at the floating or free rate. Imports of luxuries and travel should be restricted. This will be an industrial development scheme. All the lesser exports will benefit and will be encouraged.

It should be approved by our Monetary Board by now, effective tomorrow, Saturday, morning at 6:00 AM to coincide with the approval of the IMF Executive Board in Washington. We must watch prices.

Met with Byroade and Jim Rafferty to offer my personal apologies. Those crazy Americans for a time thought that I had deflected the rallies from Malacañang to the U.S. Embassy to get them involved. Ridiculous!

But Romulo is getting senile. That note of his in answer to the stiff protest of the Americans was off the beam. It speaks of there being valid ground for the attacks against the Americans and the Americans to ponder on the solution of the problems between the two countries. I have to replace Romulo soon. This is not the way to treat a wounded ally.

More and more people are demanding sterner measures against the demonstrators. The Chamber of Filipino Retailers and small merchants demand protection for life and property.

Met with the Moslem student leaders with their demands – specially Zamboanga and Basilan.

 


February 11, 1970, Wednesday

11Feb1970_1 11Feb1970_2

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Office of the President

of the Philippines

Malacañang

February 11, 1970

Wednesday

1:00 AM

Comparative quiet. The radicals have called off their rally in Plaza Miranda and will probably hold rallies in the campuses. Met with the UP moderates headed by Gordon and Ortega. They are planning to put up their newspaper.

Commander Sumulong sent word through Danding Cojuangco that the rioting in Malacañang was brought about by the CIA. Jim Rafferty had said that he had made inquiries about the squatters and they had refused to join the rally. This, he said was different from Indonesia, where they had.

Commander Sumulong is going after Commander Dante in Tarlac. He says Dante was wounded in a previous skirmish and may be moving around in a hammock. Danding suspects that Ninoy Aquino is hiding him in either Antipolo, Puringay or in the Joe Rojas ranch in Bataan. Sumulong promises to get him.

Col. Tomas Diaz is now Zone-2 and needs ₱80,000 for six civilian jeeps, one jeep each for the six teams and six more vehicles plus ₱10,000 monthly. We will start going after those Ma-Maos in a big way.

Have asked Bobby Benedicto to join Licaros in the U.S.. He has sought a leave of absence preparatory

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Office of the President

of the Philippines

Malacañang

to retirement. Executive Vice Pres Villatuya is Acting President of PNB.

Am still looking for replacements in the BIR, Customs and the financing institutions as well as Undersecretaries of Defense, Justice and Commerce.

Have asked Dir. _______ of Forestry to locate 1,000 hectares near Manila and 1,000 hectares in Bataan near the Free Trade Zone for my resettlement projects.

Have appointed Gen. Tobias as Gen. Man. of the National Housing Corporation. I hope to build 1,000 low-cost houses a month.


August 13-17, 1936

August 15 at Rafferty’s dinner (Grawfus). I sat between Alfonso Sy Cip and Romulo, head of the Herald. Romulo told me of his dramatic defiance of General Wood, when the latter called him on the carpet for the attitude of his paper–(all of which was published in the Herald at the time); of the magnificent impromptu speech by Quezon in defense of my administration at a banker’s dinner in San Francisco. Romulo also said Manuel Roxas is “laying low”; that Quezon was mentioning my name to be first for inscription on the gold plate to be put up at Malacañan (on the first anniversary of the Commonwealth) to commemorate those Americans &c &c–Romulo also remarked: “it would be terrible if the Republicans won the election in the United States.”

Reception at Malacañan this night. As we had dined first at Colonel Garfinkel’s at Fort McKinley, we arrived after the reception line had dissolved and after the Rigodon had been danced. Quezon was in very good form and was pleased to show various improvements he had made in the Palace, which is now lighted by the great chandeliers from the old Ayuntamiento and was cheerfully bright for the first time since the Cimmerian darkness of the Murphy regime. The cabaret downstairs was dreadfully overcrowded. No whiskey was served at the bar. Dancers were streaming with sweat. Traffic, however, was better managed than I have ever seen it, for three different parking places were provided with a telephone to each. The refusal of Quezon to have whiskey and soda served surprised me more than anything I have ever known him to do. It can hardly have been the monastic influence of his predecessor! Anyway it made most of the guests leave early to dash for the Manila Hotel. However, Quezon himself, went to bed at 10:30 so he can’t have cared how early the guests left. Mrs. Quezon appeared, and was very agreeable.


July 9, 1936

One hour with Miguel Unson at the Survey Board, where we went over the ground of my recent conversation with the President concerning the policy of having appointive governors in the Provinces.

Unson next asked my advice as to how he should go about reporting to the President three resolutions of the Survey Board on matters in which Quezon has already acted or formed an intention of doing so, over the heads of Unson and of his other colleagues on the Board, and against Unson’s deepest convictions:

(a)  Salaries in the Bureau of Justice recently fixed by Quezon (a “hot one” just put over by Secretary of Justice Yulo), which deranges the other scales of salaries under the standardization plan;

(b)  Quezon’s reported plan to put the Bureau of Prisons under the Philippine Army (another “hot one”–this time by General Paulino Santos);

(c)  Creation of new machinery for the Moro Province. This is Guingona’s influence, and when Unson had him before the Survey Board, Guingona refused to answer our questions, alleging that he had already taken up the matter with the President and considered it confidential! Unson had then read to Guingona the law requiring all government officials to answer questions of the board, but the latter still refused to reply and stuck to his guns!

Inasmuch as both Quezon and Unson, separately, have previously expressed to me the same ideas as to how to deal with the Moros, viz.: to stop “babying” them and to block their drive for “separation” from the rest of the population of the Philippines, it appears to me that this breach is only one of form, or procedure and not of principle. However, the way of the reformer (Unson) is no path of roses, especially when an equally determined “reformer” (Quezon) is his superior officer, and has already decided things!

Rafferty came in to my office and said he had recently talked with Osmeña, who commented on how much my past and present services were appreciated here, and how well the Assemblymen thought of me. Celestino Rodriguez, (who has never been very pro-American) told Rafferty the same story. These comments came as rather an anti-climax to my scene with Quezon yesterday over the Landlord and Tenant bill.

Rafael Palma next came to see me, happy over an interview held just previously with Quezon, concerning an attempt to introduce religious instruction in the government schools. To Palma’s great delight, the President had told him that, as a leading Mason, he should keep in the background, and must leave to him, Quezon, the duty of putting a stop to the Church’s attempted intrusion into the schools. Palma looks younger, more serene and happier than he has appeared since my return here last Autumn. This man is through and through an ardent patriot and always an upright public servant. He has entirely recovered his former serenity now that he is doing really useful public service, as head of the National Council of Education.

I commented to Palma that I could barely understand the English spoken by the young Filipinos of today. He admitted that their accent is getting worse and worse, and hopes that this may be corrected by the use of gramophones in the schools. He added that it was superhumanly difficult to get a new idea through what he called “The Junta.”

My last caller was “Deacon” Prautch, who wished to talk “Credit Unions.” He has a peculiarity I have never observed in another man:–he not only evades an answer to any direct question, but doesn’t even trouble to reply.


February 28, 1936

Visit to office of the usual series of men wanting me to get them jobs. Great relief when Rafferty arrived–he has forced his partners in the Manganese Mine, to “do him right.” Told me Sy Cip’s brother took a Chinese “dumb head” to the United States to campaign against our attempt to make the Chinese keep their books in English, Spanish or Tagalog so that the Government could collect taxes. The Chinese won.

We discussed the “customary law” of the Philippines which underlies the laws imposed by the Spanish and by ourselves. This explains many apparently incomprehensible events here. I told of the magnificent lands in the Cavite foot hills which were unoccupied because of the bandidos. He said he was the first of the Americans in Cebu to move out to a section on the outskirts of the City–no Filipinos would then live there because of the Pulijanes. Said Osmeña told him apropos of the recent surrender of Encallado, that this was the customary method of putting an end to brigandage: inviting the leader to one’s house and treating with him. “I was afraid” said Osmeña “when the criticism was running so high here over the princely way Encallado was treated by Quezon, that the papers would recall that this was the method I used myself when Provincial Governor to put an end to the Pulijan movement in Cebu.”

Long talk with Rafferty about Pershing and the “Moro question”; he was collector of customs in Cebu and Zamboanga at the time General Pershing was military governor there. Rafferty believes there was no Moro question there; only a “question” created by the United States Army! Said the reason why Pershing did not oppose my plan to remove the Army from Moroland and install Civil Government under Carpenter was that Pershing wished the credit, for having made this possible. (As a matter of fact we would never have had peace down there unless we had withdrawn the United States Army!) Rafferty says Pershing was utterly selfish and extremely unpopular in Zamboanga. His “illness” when he left for home as the last military governor of Mindanao was only an excuse.

Golf in p.m. at McKinley with Doria.

Memo: Beyer said yesterday that Governor General Murphy had been so afraid of provoking “labor” hostility in the United States that he had declined to take action against two or three labour leaders here when they deserved it. (That seems to have seen his fault as an administrator: every question to be decided here was considered with one eye on his political future at home.)

Quezon is making speeches in the Cagayan valley denouncing people who will not pay their (cedula) taxes, and those governments in the provinces which fail to collect it. (Perhaps the land tax is involved.) It seems probable that the situation is due both to “hard times” and to a general relaxation of government in recent years.

Quezon has announced that the June drawing in the Charity Sweepstakes will be the last; no doubt the affair has given rise to some scandal but I think it wiser for an aministration to regularize and make use of gambling rather than vainly trying to eliminate it.


February 26, 1936

Talk with Rafferty who is being done in by his partners in the manganese mine. Rafferty told me of repeated lies and evasions which are characteristically the world’s 11th wonder!

Talk with Simmie about the arrastre plant and the Government’s attitude toward same. Simmie says he, Gaches and Hausserman would become Philippine citizens in a moment if they could get out of the United States income tax by so doing. Said he was selling out his California property as quickly as he could.

Jollye told me last night that he once crossed the Atlantic on the same ship with ex-Governor General Stimson and ex-Governor General Davis–they spoke to one another but were not friendly.

Sinclair mentioned that the Tabacalera had spent several hundred thousand pesos here trying to raise Sumatra tobacco wrappers–it would not grow–either due to the soil or the climate. At the Carnival, he and I had inspected his (Smith-Bell’s) hemp stripping machine–noisy, slow and almost as much physical exercise as if done by hand!


November 27, 1935

Talk with Rafferty and McCreery, who is auditor and acting manager of the Philippine Railway. He said that the Iloilo line, is practically self-sustaining. Cebu is not suited to a railway. Is pessimistic over the situation in the sugar mills.

Bridge in p.m. with Mrs. Lussier, Mrs. Howell & Doria.

Dinner dance at the Manila Hotel. 25th anniversary of the marriage of Mr. & Mrs. Benito Razon –about 300 guests there. Well done and very pleasant.


November 26, 1935

Long talk with Rafferty in the morning re industrialization in the Philippines.

Golf at Wack-Wack with Jim Rockwell in the afternoon.

Appointment at 7 o’clock at Malacañan with Quezon. He has a sala (or office) next to his bedroom over the front door (where my bedroom used to be, but now reconstructed). He was cheerful and in good form; very friendly. He said he was off tomorrow for a couple of days in Laguna to look into this Encallado banditry. I told him it sounded like the days of Rizal’s books; he said the Constabulary had slipped back in the last few years –thought it a defect in Governor General Murphy’s administration. (Later Osmeña and I expressed to one another a wish that Quezon might not be known to take the matter too seriously.)

Quezon again voiced his irritation with Major General Parker. I said I was sorry to see General MacIntyre leave; he said that he, too, was sorry, but that MacIntyre was determined to leave and retire as Trade Commissioner. He had been quite knocked out by the recent death of his wife. Quezon plans to manage so that MacIntyre remains in the service.

We then discussed my appointment as Adviser on Communications and he asked me also to help him in the reorganization of the government. He is to put me in touch with Quirino and Paez on the purchase of the Manila RR. bonds from the English.

9:30 pm ball at Malacañan—about fifty extremely nice people—the only Americans there besides ourselves were Roy Howard, his wife and son and the High Commissioner and family. The dance was given for Judge Murphy who returns home tomorrow.

Had many interesting conversations —with General Valdes, Miguel Unson and Colonel Paulino Santos. The latter is opposed to the appointment of Moros to govern Moros; said it is better to give positions to bright Moros such as fiscal etc., to serve up here in Manila.

Teahan was amusing about the boredom of Baguio. Osmeña danced every dance; Quezon only one tango. Drinks were served on the balcony; Garfinkel, a.d.c., says that no drinks were offered at big parties following the custom initiated by Governor General Wood. I arranged, at wish of Quezon, to have Nick Kaminsky stay on as superintendent at Malacañan. Ah King whom I brought from Shanghai as my servant was installed again at the Palace as number one “boy”.