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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).