drawback to Philippine manufactures, which are of small importance
in the total trade of the Colony.

Philippine railways were first officially projected in 1875,
when a Royal Decree of that year, dated August 6, determined the
legislative basis for works of that nature. The Inspector of Public
Works was instructed to form a general plan of a railway system
in Luzon Island. The projected system included (1) a line running
north from Manila through the Provinces of Bulacan, Pampanga, and
Pangasinan. (2) A line running south from Manila, along the Laguna
de Bay shore and eastwards through Tayabas, Camarines, and Albay
Provinces. (3) A branch from this line on the Laguna de Bay shore to
run almost due south to Batangas. The lines to be constructed were
classed under two heads, viz.:--(1) Those of general public utility
to be laid down either by the State or by subsidized companies, the
concession in this case being given by the Home Government; and (2)
those of private interest, for the construction of which concessions
could be granted by the Gov.-General.

In 1885 the Government solicited tenders for the laying of the
first line of railway from Manila to Dagupan--a port on the Gulf
of Lingayen, and the only practicable outlet for produce from the
Province of Pangasinan and Tarlac District. The distance by sea
is 216 miles--the railway line 196 kilometres (say 120 miles). The
subsidy offered by the Government amounted to about P7,650 per mile,
but on three occasions no tender was forthcoming either from Madrid
or in Manila, where it was simultaneously solicited. Subsequently
a modified offer was made of a guaranteed annual interest of 8 per
cent, on a maximum outlay of P4,964,473.65, and the news was received
in Manila in October, 1886, that the contract had been taken up by
a London firm of contractors. The prospectus of "The Manila Railway
Co., Ltd," was issued in February, 1888. The line was to be completed
within four years from July 21, 1887, and at the end of ninety-nine
years the railway and rolling-stock were to revert to the Spanish
Government without compensation. The rails, locomotives (36 tons and
12 tons each), tenders, coaches, waggons, and ironwork for bridges all
came from England. The first stone of the Central Station in Manila
(Bilibid Road, Tondo) was laid by Gov.-General Emilio Terrero on July
31, 1887. In 1890 the original contractors failed, and only the first
section of 28 miles was opened to t