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.

 


May 26, 1936

Conference at the office of Paez, who had just returned from an air trip (his first) to survey transport possibilities in Mindanao. He showed me all plans for his suggested legislation in the coming session. I made an approving report thereon to Quezon. Paez told me was proceeding slowly and unit by unit to buy bus lines competing with the Manila Railroad, instead of announcing a general plan therefor. He said that the road which replaced the Tay-Tay–Antipolo branch of the Manila Railroad (taken out in my time) was now the most profitable section of the bus company–they carried 18,000 people to the shrine at Antipolo the other day–this being a month of pilgrimages. The railroad company will replace Cavite and other unprofitable railroad lines in the same way.


May 18, 1936

Long talk with Unson about the reorganization of the government. Query: how to get funds from the Legislature for research scientific work? We finally decided the only way by which we could avoid alarming the legislature is to strengthen the Bureau of Science, instead of turning over its researchers to the University, or trying to secure a large appropriation for the Council of National Research (Dr. Roxas); Unson says Governor General Murphy considered Dr. Roxas something of a spendthrift. We talked of the American attitude of growing indifference and severity towards the Philippines. He commented that it was American psychology for a father to cut loose entirely from a grown-up son! Unson expressed doubt of the Philippine Army.

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. Quezon cannot stand the racket at Malacañan Palace–when he finally does receive his visitors he gives three times the time necessary for each interview. He is too restless for office work anyway, and while there feels like a bird in a cage. He gives himself so thoroughly to each visitor that this kind of work wears him out. He cannot, however, let his underlings run their offices, so all of them are simply terrified of him, and the administration becomes paralyzed.

I asked Unson why the United States Army officers thrust themselves to the fore continually in the press, giving “full military honors” and exchanging so many visits of ceremony, so that the public must have an engorged idea of militarism in the Philippines. He said this was not so from Taft to me, but dated from General Wood as Governor General.

Unson is anxious to have the Bureau of Printing print all textbooks for Philippine schools; but is opposed by the Bureau of Education. I advised him to include this recommendation in the Survey Board’s report on the Bureau of Printing, thus advocating giving more employment to Filipino printers.

Golf alone at McKinley at 5 p.m.


May 9, 1936

Talk with A. D. Williams who says Quezon now wants a much bigger yacht than that he (Williams) had selected for him; wishes the Southern Cross, now in Cuba, twice the size of the Yolanda; price asked: half a million dollars.

He 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. Williams says a wharf at Baler would be too expensive to build. That wharf at Iligan is O.K. and we should have landed there on our recent trip.

Papers today carry a statement from Pardee, calling on bondholders of the Philippine Railway to deposit their bonds with him for purposes of negotiation with Philippine Government; says the company cannot pay the $8,000,000 principal of bonds due next year, and proposes to sell bonds ($1000) at $350 apiece to the Philippine Government; (price now in New York $300 and the stock sells for $1 a share).


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. (This is the first instance I know since his inauguration where private interests had influenced the President contrary to the public interest.)

“A.D.” also inveighed against the taking of the accounting division out of the Bureau of Public Works and putting it with the others in the new budget office.

He also admitted it was a mistake to have put the Bagagab-Echague road over the mountains–it should have followed the Magat River down stream.

3 to 5 p.m. with the Survey Board quizzing the Directors of the Bureau of Lands and of the Land Registration Office. They sat side by side rather like naughty school boys, each covertly watching the other.

Bridge at the Polo Club, Peters, Satterfield and Ale. Went for a short time to Oleagas “cock-tail supper.”


February 12, 1936

At office, Hartendorp, who has been appointed Adviser to the President on press matters, came in to see me–he has the next room. He suggested that Roxas had tried to drive a sharp bargain with Quezon and had been repulsed.

He told also the story of Quezon’s visit of a few days ago to the Lian Friar estate. The President asked an old man there why the tenants had burned the residence of the manager for the Friars. The old man replied that this had not been done by the tenants, but by the estate managers in order to get up a case against the tenants. Quezon replied “I am not an American Governor General–don’t tell me such nonsense. As a matter of fact, I am a Filipino, and not from Manila–I was born and brought up in a small place just like this.”

Hartendorp also told me of last Friday’s Press Conference: how somebody asked whether Judge Paredes’ petition for a rehearing of his sentence of dismissal would be entertained by the President, and Quezon had replied that since he had read a whole column editorial in the Bulletin commending his act of dismissal, this being the first time in his life he (Quezon) had not been attacked by the Bulletin, he would not forfeit this new found favor by rehearing the sentence. Then Hartendorp later advised Quezon that Robert Aura Smith had been very much flattered, and the other newspapers were jealous. Would it not be well for Quezon to compliment the other editors? (Quezon told me later he had replied: “You ass! I was sarcastically running the knife into Robt. Aura Smith–not flattering him!!!)

Quezon came back and asked me to go for a ride with him–the usual ceremonies took place which he has established for leaving Malacañan–motorcycle cops etc. Quezon went to see the High Commissioner, who was very cordial to me. Do not know the purport of their half hour talk. I chatted with Franks, Ely, Teahan, the a.d.c.’s and others of the High Commissioner’s office until Quezon and I started back to Malacañan for lunch-alone together, and about as pleasant a time as I have ever had with him; we had at least twenty hearty laughs.

He explained the whole Roxas business: he had arranged with Don Manuel to accept the post of Secretary of Finance and on February 8 wrote him a former offer of this plus power to vote Quezon’s powers of control in the Manila Railroad and the National Development Co. To his intense surprise, on his return from taking his children out for a drive at 5 p.m. (which drive he didn’t want to take) he received an answer from Roxas, which he read to me, in which Roxas thanked him but stated that in as much as he had been elected, in accordance with his own wish, a member of the Assembly from Capiz, he could not leave his constituency unless called on to do so by “unavoidable duty of the Government.” This was a shock and surprise to Quezon who at once sent him a letter saying that he (Quezon) had believed that Roxas could be more useful as Secretary of Finance than as a member of the National Assembly; that Roxas was entitled to his own opinion on the matter, and since he (Roxas) had decided against it, Quezon would accept his decision not to be a member of the Cabinet, but with regret. Thereupon Roxas hurried around and tried to chip in–said he would withdraw his letter and would serve as Secretary of Finance, but Quezon replied it was “too late” as he had already appointed de las Alas. Then Osmeña came to see Quezon and Quezon says that if he (Osmeña) had then offered to resign as Secretary of Public Instruction, he (Quezon) would have interrupted the opening of his first sentence with “I accept”; but Osmeña had no idea of resigning. Quezon says Osmeña is an “old snake, but a non-poisonous snake.” He said “I licked those fellows only a year and a half ago, but they won’t stay licked.” I told him he had enough loyal men around him to run any government, and it was unwise to count upon loyalty from his opponents. He said that the night after he got rid of Roxas he was so happy he could not sleep–he wanted to call up an old friend (me) to come and talk to him; that after staying awake until 3 a.m. he got up and worked at his desk until 6.

Next I asked him about his acceptance of “Mike” Elizalde’s resignation of the presidency of the National Development Co. He replied that “Mike” had been the largest contributor to Quezon’s campaign fund in the election for the Presidency; that “like the Republicans in the United States, he had expected in return to run my administration, and so I dropped him.”

Next Quezon described his recent interview with Hausserman, Marsman and Andres Soriano, the three leaders in gold mining here. He told them he was in favour of developing the natural resources of the Islands; that he was also in favour of a fair return to investors. That all three of them had contributed to his campaign fund but if they believed that gave them a right to do as they pleased under his administration they were in for a rude awakening. That if they found existing laws unfair or unworkable, they should come to him and they would find a “sympathetic” listener when they were proposing amendments, but that if they or their clever lawyers tried to evade the law, they would go to jail. He said from the aftereffects of this conversation, they seemed to be very well pleased with the outlook.

Next, I took up with him the question of his attitude to the newspapers–a point on which he and I seem to be entirely congenial. He said he had agreed to the Friday interviews, and enjoyed them. That when he had been questioned and had answered, and another question was put he had “refused to be cross-examined” which produced a sympathetic laugh. I urged him to bend a little to avoid the nibbling of squirrels which might impair the confidence he was gradually inspiring in his own people. But he continues to scorn the press. I said I was just like him and had never crooked the knee to the newspapers.

Then we reverted to Hartendorp, and Quezon said he had received news from him a day or two ago that Scandal was going to publish an article about him and Miss. “That sweet girl” Quezon added. He told Hartendorp to let it be published, and I recalled the Duke of Wellington’s answer: “Publish and be damned.” Quezon replied that he never objected to this sort of scandal “because they always get the wrong woman or the wrong place.”

Then Quezon told me that the law permitting him to reorganize the Government had been drafted by Roxas who was to have undertaken the job. That he regretted he had allowed this to happen, because Singson told him it had taken six months of the hardest work of his life to reorganize only the Department of Agriculture and Natural Resources–and even then his doorstep was always crowded with weeping wives and children. So, Quezon asks me to draft a “superficial reorganization,” so as to have something to show to the Assembly when it convenes in June; he will give me the appropriation and personnel. “We” he added, “will really reorganize the government two or three years hence.”

His mind is set on our vacation trip in April to Moroland when he “will be through establishing his Government firmly and can relax.”

Golf at McKinley later with Doria and call on Felicia Howell.


December 20, 1935

7 p.m. in Malacañan with the President who was in good health and spirits. I complemented him on his message on economic planning –he enquired whether it has been well received in the foreign community. I gave him Colin Hoskins’ plan on organization for the economic council &c. Then I asked him 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. We then talked a lot about England and the English –I told him to consult me if he had any questions up with the English, since I understood them better than most Americans who were misled by their bland manner and assumed innocence. That what they understood and respected was force and power. Quezon admires the English character. He asked me if I thought the Empire was essential to the continued existence of England as a great power and I said yes!

We then discussed colonization and land problems in the Philippines. He advocates spending money on roads to open up new sections of Mindanao, so that settlers will move in of their own accord. He does not advise spending money on settling people in a wild country; said he would provide transportation for volunteer settlers.

The President also said that instead of continuing the former cusrom of purchase of the Friar Lands in the provinces around Manila, he wanted to get fair treatment for the tenants; that previous purchases of these lands had not helped because outside speculators had intervened, and had secured the lands; he asked me to acquire a copy of Gladstone’s “F.F.F.” law for Ireland of about sixty years ago, when he settled the Irish agrarian problem. (Fixed Tenure, Fixed Rent and Freedom of Transfer). Told him I would go to ask Blunt, the English Consul General. He also asked me to get Blunt’s reaction to the interview he had given the London Times representative who came with Blunt a few days ago –not for publication– he told the Times man he would have to deny the interview if published.

We also talked over plans for the reorganization of the government. We agreed that this time time it must be a real reorganization and radical. He said he had only been in charge for a month and was already sure the present government was most inefficiently organized. He announced that he wanted me to sit with his three commissioners. He asked me which of two alternatives he should choose — (1) to have investigation & report by his three commissioners or (2) to just call in Department Secretaries and tell them they could only have so much appropriation, and must reorganize their Departments. I told him (1) was more scientific, and advised him to proceed with (1) and afterwards apply (2). I asked him how radical the reorganization was to be? –did he, for example, approve of the plan of reducing the number of provinces to 28? He said “no” –that the saving of a couple of millions would not compensate for the dimunition of energy and progress which would result. I then asked him whether he would approve of abolishing the elective city council of Manila and substituting a Board of appointed managers with the Alcalde as its chairman –latter to be elected? He said “yes.”

As I was leaving, he asked me if I would keep notes and write up an account of these months afterwards. I replied that I was already doing so. I also told that if at any time my presence became embarrassing to him on account of the attacks on me by the old imperialists, just to send me on a mission abroad and I would not come back. He replied that he and I would continue to work here together until we had accomplished something substantial.

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. Promised to write the Foreign Office for “F.F.F.” on Irish lands. When asked what his reactions were to the President’s interview with the London Times, Blunt said Quezon was very broad minded, and amazingly frank. I denied that I knew what Quezon had said in the interview –Blunt said he had been embarrassed by the President’s raising the question of Roy Howard’s statement that if the United States abandoned the Philippines, the Filipinos would get under England’s wing. He said Quezon had stated he could run a better government here than anybody else had done –I agreed. 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).

While I was at Malacañan, Quezon talked at length about his letting out the American Justices of the Philippine Supreme Court –under the Constitution he had the power not to accept their resignations until July 1st next, and he was considering assenting to Chief Justice Avanceña’s request to retain them that long, when the Bulletin published an editorial attacking him for thinking of letting the Justices out. Thereupon he sent to Avanceña to enquire whether the six month’s retention of those Justices was essential to the Court –Chief Justice Avanceña replied he could not really say so– thus the resignations are to be accepted as of January 1st. He wrote a letter for the press explaining that he is thus conforming to the spirit of the Constitution. He says Malcolm is behind the drive –he dislikes him as unreliable. Quezon then spoke of the unparalleled generosity of the retirement gratuities given by the Filipinos to those Justices –Malcolm was to receive 60,000 pesos!

Wrote an address for the banquet tonight of the Political Science Club of the University of the Philippines. Got home to find Doria greatly upset over a scurrilous attack on me in a letter pretended to be from a Filipino to the Bulletin. I hope this campaign does not discourage both Doria & Quezon! I have never answered (nor read, if possible to avoid) any newspaper attacks!

Reception this p.m. at James Ross’. Dinner of Political Science Club of U.P. at the Cosmos Club –sat between Bocobo, President of the University and ex-Judge de Joya –speech.