Act No. 1497

Legal Principle: The Philippine Railway Company is authorized to construct, maintain, and operate railways in Panay, Negros, and Cebu under this Act.
Key Definitions:
- Grantee: Refers to the Philippine Railway Company and its successors.
- Governor-General: The representative of the Philippine Government in this context.
Requirements:
- The grantee must submit detailed plans, surveys, and specifications for railway construction to the Governor-General within six months of a written demand.
Timeframes:
- Surveys must begin within 60 days of demand from the Governor-General.

Legal Principle: The Act outlines specific railway lines to be constructed, including:
- In Panay: From Iloilo to Capiz and Bataan (approx. 100 miles).
- In Negros: From Escalante to Himamailan (approx. 100 miles).
- In Cebu: From Cebu City to Danao and Argao (approx. 95 miles).
Requirements:
- The grantee may construct branch lines with the Governor-General's consent.
Important Details:
- All tracks must have a gauge of 3 feet 6 inches.

Legal Principle: The grantee is granted rights of way through public lands for railway construction.
Key Definitions:
- Right of Way: A path or track for the railway through public lands.
Requirements:
- The grantee may occupy necessary public lands and may open quarries or gravel pits with the Governor-General's approval.
Timeframes:
- Land rights revert to the respective government upon termination of the franchise.

Legal Principle: The grantee must adhere to high construction and operational standards.
Requirements:
- All materials must be of first-class quality and conform to American practices.
- The grantee must construct at least 100 miles of main track annually after final plans are approved.
Penalties:
- Failure to meet construction obligations may lead to government intervention to ensure compliance, which becomes a debt of the grantee.

Legal Principle: The Philippine Government guarantees interest payments on first-lien bonds issued by the grantee.
Key Definitions:
- First-lien Bonds: Secured bonds for which the government guarantees interest.
Requirements:
- The government guarantees interest for 30 years at a rate of 4% per annum on up to 95% of the total construction cost.
Important Details:
- The grantee is responsible for timely payment of interest and compliance with mortgage covenants.

Legal Principle: The grantee's gross earnings must be allocated according to specified priorities.
Requirements:
- Earnings must first cover operating expenses, repairs, and then bond interest.
Penalties:
- Non-compliance with financial obligations may lead to state intervention.

Legal Principle: The Philippine Government retains the right to inspect and regulate the grantee’s operations.
Requirements:
- Monthly inspections of financial and operational records will be conducted.
Consequences:
- The government may impose penalties for non-compliance with contractual obligations.

Legal Principle: The Act is subject to amendment or repeal by the U.S. Congress.
Requirements:
- The grantee must execute and deliver the contract and bond within 60 days for the grant to become operative.

The Act grants significant authority to the Philippine Railway Company to develop essential railway infrastructure across key islands.
It includes provisions for government oversight, financial guarantees, and strict adherence to construction and operational standards.
The Philippine Government retains rights to regulate operations, ensuring compliance with contractual obligations and protecting public interests.
The concession is contingent on timely execution of required contracts and bonds, with consequences for failure to meet obligations.