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Be it enacted by the National Assembly of the Philippines:

SECTION 1. Section two of Commonwealth Act Numbered One hundred and eighty-two is amended by inserting a new paragraph between the second and third paragraphs thereof, which paragraph shall read as follows:

"Subscriptions of the Government of the Commonwealth of the Philippines to the capital stock of the corporation shall be made by the President of the Philippines and those of the provincial, municipal, and city governments shall be made by the chief executive officer of such respective gov­ernments upon authority expressed in a resolution of the provincial board, municipal council, or municipal board, as the case may be."

SEC. 2. Section three of Commonwealth Act Numbered One hundred eighty-two is amended so as to read as fol­lows:

"SEC. 3. The said corporation shall be subject to the pro­visions of the Corporation Law in so far as they are not inconsistent with the provisions of this Act, or the pur­poses for which the corporation is formed, and shall nave the general powers mentioned in said law, and such other powers as may be necessary to enable it to promote and maintain a sufficient general production by an efficient co­ordination of the productive forces of the country, or other­wise, and to secure a stable market for Philippine products. Without restricting in any manner any of the aims and purposes of this corporation as set forth in this section, it is expressly declared and provided that the National Development Company may engage in commercial, indus­trial, mining, agricultural, and other enterprises which may be necessary or contributory to the economic development of the country, or important in the public interest, and for this purpose, it may hold public agricultural lands and mineral lands in excess of the areas permitted to private corporations, associations, and persons by the Constitution and by the laws of the Philippines, for a period not ex­ceeding twenty-five years, renewable by the President of the Philippines for another period not exceeding twenty-five years; to acquire, hold, mortgage, and alienate personal and real property in the Philippines or elsewhere; to make contracts and enter into such arrangements as it may consider convenient and advantageous to its interests, for the development, exploitation, and operation of any of its land or mineral holdings, as well as of its industrial en­terprises ; to contract loans, to issue bonds and other obliga­tions as security therefor, and for property purchased or acquired by it, or for any other object in or about its business; to mortgage or pledge any share, stock, bond or other obligation, or any property which may be acquired by it; to secure any bond or other obligation by it issued or incurred; to make contracts of any kind and description; to purchase, hold, alienate, mortgage, pledge, or otherwise dispose of the shares of the capital stock of, or any bond, security, or other evidence of indebtedness created by any other corporation or corporations, co-partnership or co-part­nerships of this or any other country, and while the owner of said stock, to exercise all the rights of ownership, in­cluding the right to vote thereon; and for carrying on its business, or for the purpose of attaining or furthering any of its objects, or authorized in this Act, to perform any and all acts which a co-partnership or natural person is authorized to perform under the laws now existing or which may be enacted hereafter.

"The National Development Company is authorized to guarantee both as to principal and interest, or either, bonds' issued by duly incorporated companies for the erection of, and addition or additions to industrial plants or factories principally used for the manufacture and preparation of the products of the Philippines, or for the establishment, maintenance, and operation of any transportation, commu­nications, or other public service necessary or incidental to the promotion of the domestic or foreign trade of the Philippines: Provided, however, That such guarantee shall-only be lawful when approved by resolution adopted by unanimous vote of all the members of the Board of Directors and confirmed by the President of the Philippines.

"Subject to the same approval, the National Development Company is authorized to purchase bonds issued by i any duly incorporated company engaged in the manufacture or preparation of products in the Philippines or en­gaged in the establishment, maintenance, and operation of transportation,   communications or other  public service necessary or incidental to the promotion of the domestic or foreign trade of the Philippines.    Such bonds shall be secured by a first mortgage or deed of trust on the prop­erty of the company issuing the bonds. The face value of the bonds issued and secured by such mortgage or deed of trust shall not exceed sixty per centum of the fair value of the property securing the bonds. The property serving as security for the bond shall consist of land, buildings, ma­chinery, and equipment of such company in the Philippines.

"The National Development Company as constituted in this Act may organize subsidiary companies to undertake any of the activities mentioned in section three hereof. The capital stock of such subsidiary companies shall be subscribed in whole or in part by the National Development Company, but in every case the National Development Company shall have a controlling interest in any subsidiary company so organized.

"The National Development Company or any of its sub­sidiaries may, for the construction, extension or operation of a railroad system, electric light plant or any other kind of public utility or service, exercise the power of eminent domain in the manner provided by existing laws applicable to railroad corporations."

SEC. 3. The first and second paragraphs of section four of Commonwealth Act Numbered One hundred eighty-two are amended so as to read as follows:

"SEC. 4. The management of the corporation shall be vested in a Board of Directors, consisting of the Secretary of Agriculture and Commerce and the Secretary of Finance, as ex-officio directors and five other persons, as appointive directors to be appointed by the President of the Philip­pines, with the consent of the Commission on Appointments of the National Assembly. The President of the Philippines shall designate and appoint the Chairman of the Board.

"Of the three first appointive directors the President shall designate one to serve for one year, one to serve for two years, and one to serve for three years. Of the two additional appointive directors, the President shall designate one to serve for one year and the other for two years. Thereafter, the successors of all the appointive directors shall serve for three years. Whenever a vacancy shall occur among appointive directors, the person appointed to fill any such vacancy shall hold office for the unexpired term of the member whose place he is selected to fill. Any appointive director shall be subject to removal by the President of the Philippines. Five members of the Board of Directorial! constitute a quorum for the transaction of business."

SEC. 4. Section five of Commonwealth Act Numbered One hundred eighty-two is amended so as to read as fol­lows:

"SEC. 5. The National Development Company, created un­der Act Numbered Twenty-eight hundred and forty-nine, is dissolved. The properties, assets, rights, choses of action, obligations, liabilities, and contracts, of the said Com­pany are hereby transferred to, and are vested in, and as­sumed by, the public corporation herein created, and the business and affairs of such former National Development Company are liquidated as of the date of the approval of this Act, and are automatically assumed and continued by the corporation herein created.

"The net book value of the properties and assets of the present National Development Company on the effective date of the approval of this Act, shall be received by the Corporation herein created in payment for? an equal value of shares of the capital stock of the corporation herein created.

"There are appropriated out of any funds in the National Treasury not otherwise appropriated, such sums as may be necessary to pay for the shares of stock of the National Development Company subscribed by the Government of the Commonwealth of the Philippines; Provided, however, That no sum shall be set up on the books of the Auditor General until it shall be necessary to make the payment or pay­ments authorized by this Act."

SEC. 5. This Act shall take effect upon its approval.

Approved, June 9, 1938.