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By authority of the United States, he it enacted by the Philippine Legislature, that:

SECTION 1. Authority is hereby granted to construct, maintain, and operate a street railway over certain designated streets, thoroughfares, public bridges, and places in the municipality of Cebu, Province of Cebu, Philippine Islands, and the Governor-General is hereby authorized on behalf of the Government of the Philippine Islands to offer for public bidding the franchise set forth in this Act, and to grant said franchise to the best bidder, upon such terms as to percentage of gross earnings paid in lieu of Insular, provincial, and municipal taxes on the franchise and earnings thereof, which shall in no case be less than one and one-half per centum, and upon such terms and conditions as to advertisement and manner of bidding as he shall deem proper.

SEC. 2. The franchise referred to in section one hereof shall be  substantially in the following form:

FRANCHISE.
ARTICLE 1. There is hereby granted to ........................................ for the period of fifty years from and after the passage of this Act, the right and privilege to construct, maintain, and operate a Right of way. street railway in the municipality of Cebu, over the streets, thoroughfares, public bridges, and places hereinafter designated, subject to all the laws and ordinances of said municipality which are not inconsistent with the provisions of this Act.

ART.  2. The grantee hereunder, his assigns  and assignees, is authorized to make all necessary excavations and constructions in and upon any of the streets, thoroughfares, public bridges, and places designated in this Act, for the purpose of placing, removing, and repairing tracks,  sidings,  curves, switches,  and connections, and to erect the necessary poles, wires, and other overhead structures connected therewith.

ART. 3. With the consent of the municipal council of Cebu previously obtained, the said excavations and constructions may be made in and upon the following streets of the said municipality:

(a) Commencing at the intersection of Calle de los Martires and Calle Lopez Jaena, along the latter street to Calle Mabini, thence to Calle Colon, thence to Calle Juan Climaco, thence along Calle Juan Climaco throughout the length of such street to Calle Magazines, thence across the bridge called Puente Concordia to Calle Tupas, thence along Calle Tupas to Calle Tuti on the west side of the San Nicolas Eoman Catholic Church, thence along the said Calle Tuti to Calle Padilla, thence along Calle Padilla and its extension, in a westerly direction, to a point in front of the Eoman Catholic Church of the barrio of El Pardo.
(b) From the Concordia Bridge along Calle Magallanes to Calle Carmelo, thence to Calle Morga (Comercio), thence along the latter street to its intersection with Calle de los Martires, thence along Calle de los Martires throughout its entire length to the first intersecting street north of the Mabolo Eoman Catholic Church.
(c) From the intersection of Calle Magallanes and Calle Carmelo, along Calle Magallanes to Calle Pedro Burgos, thence along Calle Burgos to its intersection with Calle Morga.
(d) From the intersection of Calle Magallanes and Calle Norte America, along the latter street to its junction with Calle Colon.
(e) Reasonable and necessary changes in and extensions of the aforesaid lines and routes may be made by the grantee with the consent of the municipal council, and the approval of the Governor-General.

ART. 4. The grantee may lay double tracks upon each and all of the streets and thoroughfares mentioned in the last preceding article except Calle Lopez Jaena: Calle Mabini from Lopez Jaena to Calle Colon; Calle Padilla, in the barrio of San Nicolas, from Calle Colon to Calle Carlock; and Calle Norte America. Upon these excepted streets double tracks may be laid only after the express consent of the municipal council thereto has been obtained.

ART. 5. The motive power to be used by the grantee hereunder shall be electricity: Provided, That the grantee may at any time adopt other motive power for the good of the service, with the consent of the municipal council and the approval of the Governor-General.

ART. 6. In the construction of the track, standard trails of not less than twenty-four and eight-tenths kilograms in weight per meter shall be used, and where the same pass through or over any street or thoroughfare they shall be laid and maintained true to the finished grade of the street or thoroughfare, and the gauge of all tracks laid or maintained hereunder shall not be less than one meter six and sixty-eight hundredths centimeters.

ART. 7. The construction, operation, and maintenance of so much of the construction herein provided for as may be upon any public road, street, highway, or place shall be subject to the following terms, conditions, and limitations:

(a) The grantee shall in all cases lay and maintain his tracks so as to conform to the grades of the streets, thoroughfares, bridges, and public places along or across which said tracks may be constructed, and whenever such grades shall hereafter be established or altered by the municipal authorities of the municipality of Cebu the grantee shall lay and maintain his tracks to such established grades at his own expense: Provided, That if the grade at which any such track is laid be altered by the municipal authorities of the municipality of Cebu within seven years from the date hereof, the said municipality shall at its expense furnish the material to enable the grantee to conform the bed of his track to the altered grade, and the material necessary to reconstruct the cement substructure of the track of the grantee at the new grade: And provided further, That whenever the grade at which any such track is laid is altered by the said municipal authorities after more than seven years from the date hereof, the municipality of Cebu shall furnish the material to enable the grantee to conform the bed of his tracks to the altered grade, but not the cement for the substructure of the track.
(b) The said tracks shall be so constructed and maintained as not to interfere with the ordinary use by the general public of said streets or highways as regulated by the municipal ordinances, and to that end the same shall be so laid as to leave sufficient space on one or both sides thereof for vehicles to pass without danger of collision with the cars being operated on said tracks.
(c) The maximum rate of speed at which the grantee may operate his cars shall be fixed by the municipal authorities wherever the same shall be operated over or across a street, highway, or public place.
(d) Members of the police and fire departments of the municipality of Cebu wearing official badges shall be entitled to ride free upon the cars of the grantee, subject to such reasonable and proper restrictions as may be imposed.
(e)  The grantee shall hold the municipality of Cebu harmless from all claims, accounts, demands, or actions arising out of accidents or injuries, whether to property or persons, caused by the construction or operation of the road.

ART. 8. The grantee shall at all times keep the tracks, rolling stock, and other construction in good repair.   Provision shall be made  for  carrying  first  and  second class  passengers: Provided, That except when demanded by special parties, all cars carrying first-class passengers shall be divided into first and second class compartments.   The grantee shall at all times furnish and operate sufficient cars to satisfy the public demand, and to carry comfortably all the members of the public desiring to ride therein.

ART. 9. In consideration of the franchise hereby granted, the per centum of the gross earnings of the enterprise agreed upon at the time of the award of this franchise shall be paid quarterly into the Insular Treasury in lieu of all Insular, provincial, and municipal taxes on the franchise and the privileges granted hereunder, except taxes on real estate.   The amount of gross earnings thus paid shall be distributed between the Insular  Government,  the Province of Cebu, and the municipality of Cebu, as may be provided by general law.

ART. 10. The grantee shall keep a record of all fares collected and tickets sold, and receipts from the transportation of freight, baggage, and express, which shall be subject to the inspection of the Insular Auditor, whose duty it shall be to audit and approve the accounts of the grantee at the end of each quarter, before the payment of the percentage tax.    The accounts when thus audited    Audit. and approved shall, in the absence of fraud or mistake, be final and conclusive evidence of the liability of the grantee under the provisions of article nine of this franchise.

ART. 11. Whenever any franchise or right of way is granted to other franchises. any other person or corporation now or hereafter in existence, over portions of the lines and. tracks of the grantee herein, the terms on which said other person or corporation shall use said right of way, and the compensation to be paid the grantee herein by such other person or corporation for said use, shall be determined by the members of the Supreme Court of the Philippine Islands, sitting as a board of arbitrators. The decision of a majority of said board shall be final.

ART. 12. The franchise herein granted is subject to amendment, alteration, or repeal by the Congress of the United States, and upon the termination of this franchise by forfeiture, repeal, or expiration of time, the right to use the streets and other public lands herein granted shall revert to the municipality, province, or Insular Government, as the case may be.

ART. 13. The grantee herein may sell, lease, give, grant, convey, or assign this franchise, and all property and rights acquired hereunder, to any person, company, or corporation competent to conduct the business authorized hereby, but no title to this franchise, or to the property or rights acquired hereunder, shall pass by sale, lease, gift, grant, conveyance, or assignment to the vendee, lessee, donee, transferee, or assignee, or be enjoyed by him until he shall have filed in the office of the Secretary of Commerce and Police an agreement in writing to comply with all the terms and conditions imposed on the grantee by the franchise, and accepting the said franchise subject to all its existing terms and conditions: Provided, however, That no transfer of this franchise shall become effective under the provisions of this article until it has been previously approved in writing by the Secretary of Commerce and Police.

ART. 14. Should the grantee of this franchise sell, transfer, or assign the franchise as herein authorized to a corporation to be formed and organized in and under the laws of the  Philippine Islands, the said corporation shall offer and place on sale in the Philippine Islands, to citizens of the Philippine Islands, at a price not exceeding par, twenty-five per centum of the stock of said corporation.   The offer to sell said stock on said terms shall be duly advertised in the municipality of Cebu, and shall remain open for six months after the date of such advertisement.   After the expiration of that period, any unsold part of said stock may be sold free from such restrictions.

ART. 15. All the terms, conditions, and restrictions required and imposed by section seventy-lour of the Act of Congress of July first, nineteen hundred and two, arc hereby by reference incorporated in and made a part of this franchise, and the grantee and his successors and assigns take and hold said franchise at all times subject thereto.

ART. 16. No stocks or bonds shall be issued by any corporation owning or operating under this grant, except in exchange for actual cash, or for property at a fair valuation, equal to the par value of the stock or bonds so issued; nor shall such corporation declare any stock or bond dividend; nor shall any person, company, or corporation receiving this franchise from the Government of the Philippine Islands, or from its grantee, use, employ, or contract for the labor of persons claimed or alleged to be held in involuntary servitude, and any person, company, or corporation violating this provision shall forfeit all charters, grants, franchises, and concessions for doing business in the Philippine Islands, and in addition be deemed guilty of an offense, and punished therefor as provided by law.

ART. 17.  The books and accounts of said corporation shall at all times be subject to inspection and examination by the Auditor of the Philippine Islands, or his duly authorized representative.

ART. 18. The fare which may be charged by the grantee shall not exceed the sum of twelve centavos on a first-class car, or ten centavos on a second-class car for one continuous ride from one point to another on the railway herein authorized to be constructed. The fares charged for children under seven years of age shall not exceed the ordinary rate of half fare. Children in arms shall ride free: Provided, That where a change of cars is necessary there shall be established by the grantee a method of transfer not unreasonably burdensome in its restrictions to the transferred passengers; and in case of a failure to comply with the foregoing requirement as to transfers it may be enforced upon application of the municipal council to the proper Court of First Instance or the Supreme Court: And provided further, That the rates to be charged shall at all times be subject to revision and regulation by the Board of Rate Regulation created by Act Numbered Seventeen hundred and seventy-nine, or any legally created successor of said Board.

ART. 19. The grantee shall begin the construction of the street railway herein provided for within one year from the date of the granting of the franchise, and the same shall be completed and in operation within eighteen months after the expiration of said period of one year unless prevented by the act of God, or the public enemy, usurped or military power, martial law, riot, civil commotion, or inevitable cause; otherwise the franchise herein granted shall become liable to forfeiture.

ART. 20. The grantee shall have the right to acquire from corporations or private parties, by purchase, contract, lease, and grant realty or donation, such real estate as may be necessary for the construction, maintenance, and operation of the railway.

ART. 21. The grantee shall have the right to transport freight express packages over his tracks and make reasonable charges Pr for the same, with the approval of the municipal council.

ART. 22. Within ten days after the granting of this franchise, in pursuance of the public bidding required by this Act, the grantee shall file a formal written acceptance of the grant in the office of the Secretary of  Commerce and Police,  and within thirty days after  such  acceptance  the  grantee  shall  deposit in  the  Insular Treasury in cash or negotiable bonds of the United States, or other securities to be  approved by the  Governor-General, the  sum  of three thousand pesos, and within six months thereafter the further sum of seven thousand pesos, as security for the performance of the obligations of the franchise: Provided, That the  said sums shall be repaid by the Insular Treasurer to the grantee whenever. within the period heretofore fixed, the Director of Public Works shall certify that three-fourths of the mileage of the road covered by this franchise has been constructed according to the terms and conditions herein imposed on the grantee.    If, however, the grantee shall, within the time required, fail to perform the obligations of his contract, then the Insular Treasurer may, by appropriate action, recover the sum so deposited as liquidated damages for the breach.

ART. 23. At any time after twenty-five years, the municipality of Cebu may purchase, and the grantee shall sell to the municipality of Cebu, all of its lines, tracks, cars, real estate, buildings, plant, rights under this franchise, and other property used by it in the operation of a street railway in the municipality of Cebu, at a valuation based upon the net earnings of the grantee, the valuation to be determined, after hearing evidence, by the Supreme Court of the Islands, sitting as a board of arbitrators, whose decision, by a majority of the members thereof, shall be final.

Enacted, February 3, 1911.