Chapter 11. Rapid Transit Act and Commission of 1894

THE failure of the Steinway Commission to bring about the construction of new rapid transit lines spurred the people of New York City to further efforts. Led by Mayor Hewitt and the Chamber of Commerce, the citizens appealed to the Legislature of 1894 for some sort of legislation which would bring about the long desired result. The act passed in accordance with the plan of Mayor Hewitt, May 22, 1894, accomplished what previous acts had failed to achieve mainly if not entirely because of the provision for public ownership. This made possible the use of the city's credit in providing the millions needed to bring the great project to fruition.

"The great object aimed at", said Mr. Hewitt in the address before quoted, "was to secure the early completion of the work, its continued ownership by the city and its reversion at the end of fifty years to the city, free and clear of all encumbrances of every kind and nature whatever."

While this feature was new, the statute in form was but an amendment of the act of 1891, which, though it failed of its immediate purpose, nevertheless was the first practicable legislation since the act of 1875. This was recognized by the board created in 1894, and in its first published report it gave credit to the important work done by its predecessor under the act of 1891.

Governor Flower signed the bill of 1894 on the day of its enactment, namely May 22, and it went into effect immediately. By its terms a new board, known as the Board of Rapid Transit Railroad Commissioners, was substituted for that appointed under the act of 1891. The act itself provided that the new board should consist of the Mayor and the Controller of New York City and the president of the New York Chamber of Commerce as ex officio members, and of Messrs. William Steinway, Seth Low, John Claflin, Alexander E. Orr and John H. Starin. These men were all prominent business men of New York and Brooklyn, and commanded the confidence and respect of the community. Seth Low later became Mayor of Greater New York.

Board of Rapid Transit Railroad Commissioners, 1904. (1) Mayor George B. McClellan; (2) John Claflin; (3) Morris K. Jessup; (4) Chairman Alexander E. Orr; (5) John H. Starin; (6) Woodbury Langdon; (7) Charles Stuart Smith; (8) Comptroller Edward M. Grout.

The provisions of the act of 1891 authorizing the board to grant additional franchises to existing railroads (namely the elevated lines) was retained unmodified in the new statute. In brief the new board was authorized to lay out routes for rapid transit lines, to cause such lines to be constructed if the constitutional consents of abutting property owners and of the local authorities were obtained, to adopt the plans made by the old board or to make new ones, and prior to undertaking construction but after adopting plans and getting consents to submit to the qualified electors of the city at the next general election "the question whether such railway or railways shall be constructed by the city and at the public expense." In the event of a negative vote on the referendum, the board was authorized to sell the franchise to build and operate the railway to some private corporation as provided in the act of 1891.

After adopting the routes and plans and getting the necessary consents the board was authorized, in case of an affirmative vote on the referendum, to advertise for proposals and to enter into a contract with some person or corporation to build the road for the city and at its expense. The contractor was to be required to operate the railroad as the lessee of the city for a term not less than thirty-five nor more than fifty years, and at an annual rental sufficient to pay the interest upon the bonds issued by the city for construction and one per cent. in addition as a sinking fund to retire such bonds at maturity.

It was also provided that the contractor should furnish the equipment for the road at his own expense, but that the city should have a lien on such equipment. A bond to guarantee faithful performance of the contract, in an amount to be fixed by the board, was prescribed, and the contractor was to be obliged to deposit with the Controller the amount of $1,000,000, to be returned to the depositor upon the completion and equipment of the road. The board was invested with the duty of supervising the construction and operation of the road.

No time was lost by the new board in setting to work. It met for the first time on June 8, 1894, and organized, electing Alexander E. Orr, as president. No higher encomium could be passed on Mr. Orr than to cite the fact that he remained president until the board had successfully performed its gigantic task and was replaced by the Public Service Commission in 1907. In other words for thirteen years Mr. Orr devoted himself to the service of the public and masterfully piloted the board through innumerable difficulties to triumphant success.

At the time of his election as president Mr. Orr was also president of the New York Chamber of Commerce. He therefore resigned the individual appointment conferred on him by the act, and Mr. John H. Inman, one of the members of the Steinway Commission, was elected to fill the vacancy, the statute permitting the board to recruit its membership. At subsequent meetings John H. Starin was elected vice-president, Henry R. Beekman and Albert B. Boardman were chosen counsel and William Barclay Parsons chief engineer.

Staff of Board of Rapid Transit Railroad Commissioners. (1) A. B. Boardman, Counsel; (2) William Barclay Parsons, Chief Engineer; (3) Edward M. Shepard, Counsel; (4) George L. Rives, Counsel.

Early in its deliberations the new board reached the conclusion that the only way of meeting the transit situation was to build underground railroads, and this decision as soon as announced met the approval of a public wearied with the inadequacy of the service supplied by the elevated railroads and of the presence of their unsightly structures in the streets of the city. It also decided that the plans made by the Steinway Commission must be changed in some respects if the cost of the proposed railroad was to be kept within the limit fixed by the statute, $50,000,000, but as the act permitted modifications of such plans the new board contented itself with a tentative approval of the old plans and routes as a basis for submitting to the voters the question whether the new road should be constructed and owned by the city. This course was adopted on advice of counsel.

This action was taken on July 17, and before the election in the ensuing November the board issued an address to the people, in which the intention was declared of considering the question of routes and plans de novo should the electors decide for municipal ownership. At the same time it sent Mr. Parsons, its chief engineer, to foreign lands to study the systems of rapid transit employed in certain cities on the continent of Europe and in Great Britain. Mr. Parsons' report was published later under the title, Report on Rapid Transit in Foreign Cities.

The proposed referendum was held on November 6, 1894 at the general election, and the climax of the Era of Public Ownership was reached in an overwhelming majority in favor of municipal construction. The total vote was 184,035, of which 132,647 were for and 42,916 against municipal construction and ownership of the new roads, there having been cast 399 ballots which were declared defective and not counted.

Having received the mandate of the people, the board proceeded to push the difficult work of selecting the final routes and perfecting the detail plans, which already had received much consideration. At the election a new Mayor, William L. Strong, had been chosen to succeed Thomas F. Gilroy. The Controller, Ashbel P. Fitch, was continued in office, so that the only change in the composition of the board with the coming of the new year, 1895, was the substitution of Mayor Strong for Mayor Gilroy as one of the ex officio members. One of its counsel, however, Henry R. Beekman, had been elected Justice of the Supreme Court; and upon his retirement the board named Parsons, Shepard and Ogden to serve with Tracy, Boardman and Platt as counsel. This brought to the service of the public the brilliant mind of the late Edward M. Shepard, to whose able work much of the later success of the board was due.

There was such great divergence of opinion as to the best route to be adopted that the board decided (December 26, 1894) to submit the recommendations of its own engineer to a special board of experts. As such a board President Orr appointed Abram S. Hewitt, Thomas C. Clarke, Charles Sooysmith, Octave Chanute and Professor William H. Burr, of Columbia University. These men at once began their investigations, and on January 29, 1895, submitted their report.

This report approved the estimates made by Mr. Parsons that an underground road could be built to the northerly city line within the $50,000,000 limit and that the subway for four tracks should be made fifty feet wide instead of forty-four as fixed by the Steinway Commission.

On the question of route the experts suggested a line from the City Hall northward through Elm Street, Lafayette Place and Fourth Avenue to Fourteenth Street, instead of the line up Broadway favored by the Commission. It was estimated that such a change, by avoiding the expensive construction in lower Broadway, would save $3,700,000. The Commission had considered such a change itself, but did not make it at this time. On May 9, 1895, the board adopted a resolution fixing the route for the new line and transmitted it to the Common Council. Briefly sketched, this route was as follows:

From a loop at Battery Park up Broadway to Fifty-ninth street and up the Boulevard (Broadway extended) to about 124th street; thence by viaduct over the Boulevard to about 134th street; thence under the Boulevard and Eleventh Avenue to about 185th street. There was to be a loop at City Hall, connecting with a line from Park Row to a junction with the Broadway line at Fulton street.

Also a line diverging from the Broadway route at Fourteenth street, running under Union Square to Fourth Avenue and up Fourth and Park Avenues to about 98th street; thence by viaduct over Park Avenue to the Harlem River, across the Harlem by bridge and up Walton Avenue to about 146th street.

In the resolution it was specified that the line should be a four track road from Park Place on the South to 135th street on the North on the West Side, and from Union Square to Forty-second street on the East side; elsewhere there were to be only two tracks. All tracks were to be constructed on one level at standard gauge, with a width of 12 feet and one half for each track. The whole line was to be a subway except for the viaducts on the West Side between 124th and 134th streets and on the East Side north of 98th Street. The tube was to be at least twelve feet in height in the clear, and the roof as near the surface of the street as possible. Along Broadway from Park Place to 34th street all water and sewer pipes and other sub-surface structures were to be placed in pipe galleries built as part of the subway work.

The right to construct pipe galleries was conferred on the board by an amendment to the Rapid Transit Act passed at its solicitation by the Legislature of 1895. This amendment also provided that the City should extinguish all easements of abutting property owners whose property might be affected by the building of the road and authorized the expenditure of $5,000,000 additional for that purpose. Litigation over such rights had been the source of much trouble and expense in the construction of the elevated railroads. The board also was given power to grant franchises for the extension of existing railroads by a vote of six of its members, instead of the unanimous vote previously required, but only on condition that the recipients of such grant should make proper compensation to the City and that this compensation should be subject to adjustment at the end of periods to be fixed by the board, such period not to exceed thirty-five years.

Not being able to obtain the requisite number of consents of property owners along the proposed route, the board in the fall of 1895 made application to the Appellate Division of the Supreme Court for the appointment of commissioners and a determination by the Court in lieu of such consents. The matter came up on the request of the board for the Court to name the newspapers in which such application should be published. To the surprise of all the Court refused to consider the matter at all, and entered an order to that effect on October 7, 1895. The board at once appealed, and the decision was reversed by the Court of Appeals on October 22 following. The Supreme Court then named Frederic R. Coudert, George Sherman and William H. Gelshenen as Commissioners to take testimony and report whether the proposed rapid transit railroad ought to be constructed. After a long contest, with the Rapid Transit board and advocates of subways on one hand and property owners who opposed the project on the other, the commissioners, on March 6, 1896, reported unanimously in favor of the new road. On the argument, the Appellate Division unanimously refused to confirm the report of its commissioners. This decision was rendered on May 22, 1896, and the board gave careful and respectful consideration to the reasons advanced by the Court for its decision.

These reasons in brief were: that the proposed road when constructed would not furnish a complete system of transit from one end of the city to the other; that it was doubtful whether any large part of the road could be built within the limit of the funds then at the city's disposal, and that it was certain that the expenditure of such a large amount for rapid transit would deprive the city of the financial ability to engage in any other public work and possibly might impair its credit for years. The board deduced from this decision that the Court would not consent to any route under Broadway or to an underground road on any other route unless it extended practically from one end of the city to the other and it was conclusively shown that the total cost would be much less than $50,000,000.

The effect of such a decision on the mind of a public clamoring for additional rapid transit facilities may be imagined. Public meetings were held, resolutions adopted, the press urged some action and the board received letters from many prominent citizens advocating a continuance of the work. The board therefore set about devising a scheme which would meet the approval of the court. Routes and plans were reconsidered, and by the end of the year 1896 the board had determined to adopt the Elm Street route in place of the Broadway line south of Forty-second street. The decision was not formally made, however, until the next year.

In the meanwhile the board had been fighting for its very life in another litigation, which attacked the constitutionality of the Rapid Transit Act. This was caused by an action brought by the Sun Printing and Publishing Association and others as taxpayers, seeking to enjoin the city from expending its funds for a rapid transit subway on the ground that the act of 1894 was unconstitutional. On February 20, 1896, Justice Truax in Special Term of the Supreme Court upheld the constitutionality of the act, and his decision later was affirmed by the Appellate Division in July, 1896, and by the Court of Appeals in March, 1897. During this trying year of 1896, when the board was fighting for its life in the Sun case and struggling with the court to get legal authority to build a subway, the rapid transit situation was further complicated by an attempt of the Manhattan Railway company, probably made to head off the threatened subway, to obtain rights for extensions of the elevated railroads. This application was made on June 11 and after conferences with the board was modified on July 15. The company asked for franchises for thirty miles of new routes besides additional facilities upon existing routes. It did not pledge itself, however, to build such extensions within any period of time, made no offer of rental to the city for such privileges and limited its application by a condition that it must receive immunity from claims for damages on account of construction.

The board on August 6, 1896, rejected this application, pointing out in its answer that the board had no power under the law to grant to a private corporation immunity from damage claims, that the statute required a company to pay rental to the city for extensions and that a grant not limited as to time would be tantamount to giving an option for rapid transit extensions which the company could build or not, and if it did not build the very existence of the grant would prevent relief from any other quarter. The board then requested the company to amend its offer to overcome these difficulties, but no further application was received. A year and a half later, however, when it became apparent that the city was actually going to build a rapid transit railroad, the company filed another application, of which notice will be taken further on.

During the year 1896 Seth Low resigned from the board and John H. Inman and William Steinway died. The vacancies were filled by the board, which elected Woodbury Langdon to succeed Low, Geo. L. Rives to succeed Inman and Charles Stewart Smith to succeed Steinway.

With the coming of the year 1897 the board was ready to change the proposed route to meet the views of the Appellate Division, namely that the road should extend from one end of the city to the other and must be built at a cost much less than $50,000,000. Accordingly, after receiving a report from Engineer Parsons, the board on January 14, 1897, adopted a revised route and general plan, under which the proposed road would run up Elm street and Fourth Avenue from City Hall and connect with the Broadway route by a cross-town line through Forty-second street. The modified route began at the intersection of Broadway and Park Row, ran thence under Elm street, Lafayette Place and private property to Fourth Avenue, up Fourth and Park Avenues to Forty-second street, west under Forty-second street to Broadway, and up Broadway and the Boulevard to 124th street, thence by viaduct over the Boulevard to 134th street, thence under the Boulevard and Eleventh Avenue to a point north of 190th street, over private property, Ellwood street and Broadway to Riverside Avenue and over Riverside Avenue to a point near Kingsbridge station of the New York and Putnam railroad.

The route also provided for a loop at City Hall and for an extension from the main line near 103d street under Lenox Avenue to and under the Harlem River and under 149th street to Westchester Avenue and thence over Westchester Avenue by viaduct to Southern Boulevard, over Southern Boulevard to Boston Road and over Boston Road to Bronx Park.

It was provided that the road should have four tracks from City Hall to 103d street and two tracks elsewhere, and that all tracks should be built on one level. The resolution also contained this clause: "The general mode of operation shall be by electricity or some other power not requiring combustion within the tunnels or on the viaducts, and the motors shall be capable of moving trains at a speed of not less than forty miles per hour for long distances, exclusive of stops."

The modified route was later approved by the court and was followed in the construction of the road. This change in the route is responsible for the zig-zag line of the first subway. The Rapid Transit Commission, therefore, cannot be charged with this peculiar alignment. The board originally favored a straight line up Broadway, but the court objected to the expense and the Elm street route was substituted to save a few millions of dollars. In consequence the first subway is an East Side line below and a West Side line above Forty-second street. This initial mistake proved costly to the City in later years when the building of extensions of the subway was undertaken, for the zig-zag line compelled the laying out of a new route on the same plan or the building of north and south wings to the existing road, which of course meant operation by the company which leased the first subway. It is difficult to estimate the time consumed in adjusting the new lines to this situation, but it is safe to say that rapid transit relief was delayed some years in consequence.

At the time, however, the Elm street route was generally approved, for it was felt that it would meet the main objection advanced by the Appellate Division. The people wanted rapid transit, and it mattered very little to them whether the new road ran straight up and c&own the island or zig-zag across town. In a report published after the subway was completed, the Rapid Transit Commission spoke as follows of the Elm street route:

"The scheme thus adopted complied, it was hoped, with the requirements of the Appellate Division. In the first place the road was estimated to cost about $35,000,000, and that this estimate was correct time has conclusively proved. In the second place it ran from the City Hall -- or near the southerly end of Manhattan Island, -- to Kingsbridge as the terminus of one branch and to the Bronx Park as the terminus of the other. At Kingsbridge a physical connection with the New York Central lines to Yonkers and beyond was easy. At the Bronx Park the northerly limits of the city were nearly reached; and if the court had insisted on a further extension here, it would have cost little, comparatively, to extend the road still further by an elevated structure through the Park.

"The necessity of avoiding Broadway below Thirty-fourth street so as to meet the views of the court compelled the use of Fourth Avenue and Elm street for the main stem, and the introduction of an awkward alignment from Fourth Avenue to the Westward along Forty-second street to Broadway."

In the modified route no provision was made for the extension of the subway south from City Hall, the board being unwilling to plan an extension down Broadway in view of the dicta of the court. When this became known the property owners along Broadway filed with the board a petition for such a route signed by a majority in value of the abutting property. Accordingly on April 1, 1897, the board adopted a resolution providing for a two track extension of the subway down Broadway to Battery Place, with a loop under Battery Park, Whitehall street and State street.

The city authorities promptly gave their consents to the route above City Hall, but the board was unsuccessful in obtaining the consents of the property owners for that part of the line. Therefore it determined to pursue the alternative course and applied to the Appellate Division for the appointment of commissioners to inquire and report whether such a railroad ought to be constructed in the public interest. In July, 1897, the court appointed Arthur D. Williams, John Sabine Smith and George W. Young as such commissioners. Again opposing interests made a fight against the proposition, but the commissioners on November 6, 1897, submitted a unanimous report in its favor. In a short time, namely on December 17, 1897, the Appellate Division confirmed the report of its commissioners, but coupled its approval with the condition that the Rapid Transit Commission should stipulate that upon awarding any contract for construction and operation of the railroad, "the penalty of the bond specified in Section 34 of the Rapid Transit Act will be fixed at not less than $15,000,000." In the language of the court this was done to give "some assurance that the powers of the Rapid Transit Commissioners in respect to security should be exercised so as to protect the interests of the city in a substantial manner."

Such an approval was tantamount to disapproval in the minds of those conversant with the situation, for the requirement of a bond in such an amount as $15,000,000 to run for the whole period of the lease of the road, as required by section 34, was about equivalent to a prohibition of any lease. Nevertheless the board endeavored to comply with the wishes of the court and appointed a committee to inquire whether such a bond could be obtained.

While this committee was at work another serious problem confronted the board, which seemed fated to encounter a new obstacle as soon as an old one had been solved. This was the financial condition of the city after its enlargement to take in Brooklyn, Queens and Richmond boroughs. This consolidation took effect January 1, 1898, when Robert A. Van Wyck became Mayor and Bird S. Coler, Controller. Under the statute these new officers became ex officio members of the Rapid Transit board, taking the places respectively of William L. Strong and Ashbel P. Fitch. As Greater New York had to assume the indebtedness of all the communities it absorbed, it was feared that the added burden would bring the debt of the city so close to the constitutional limit of ten per cent. of the assessed value of its real estate as to prohibit the issue of bonds in amounts large enough to defray the cost of the proposed rapid transit railroad. The danger, however, was more apparent than real. It was found that property in the old city had been assessed much lower than the property in the communities absorbed, and as the law provided for assessment at actual value, the assessment of the old city was soon raised to somewhere near an equality with that in the annexed boroughs, thereby expanding the debt-incurring power of the city as a whole to such an extent that no difficulty was anticipated in financing the new road.

Another effect of the consolidation and one not anticipated was the hostile sentiment developed in Kings, Queens and Richmond boroughs against the proposed rapid transit road. As laid out the road ran entirely within New York county, or in the boroughs of Manhattan and the Bronx. By the consolidation, however, the property in the other boroughs must be taxed to defray a portion of the cost. Objection at once was made against using the general credit of the city to pay for an improvement confined to two boroughs, and for a time the members of the board feared that this sentiment would defeat the project. The press supported the board, as did many broad-minded citizens having property in the other boroughs, and it was pointed out that the road would be used by residents of all boroughs and undoubtedly would be extended to Brooklyn, Queens and Richmond in the course of time. Opposition gradually lessened and the board soon was able to proceed with the project, but during the first part of the year 1898 there is no doubt that its members felt discouraged and apprehensive of the failure of the enterprise.

The opportunity was seized by the Manhattan Railway company to create another diversion. It made public a statement that it would enlarge its system of elevated railroads just as soon as it could get the rights from the board or from the Legislature. On January 31 it filed with the board an application for the right to make certain extensions of the existing elevated roads, mainly by lengthening the lines to the north, but made no offer of rental to the city. The board referred the matter to a special committee and its chief engineer, who held several conferences with Jay Gould, Russell Sage and others interested in the elevated company. The committee reported on March 17, 1898, to the effect that the northern extensions asked for by the company would not give the additional facilities demanded unless additional tracks were built on the southern portions of the lines, where the two tracks existing were already badly overcrowded. The committee accordingly recommended that seven certificates for new rights should be prepared and offered to the company, which would provide for substantially everything asked for and in addition the extra tracks needed to enlarge the capacity of the whole system.

The lines covered by the proposed seven franchises had been approved by the board's engineer and submitted to the elevated company. The latter, while admitting the practicability of the routes from an engineering standpoint, declined in the absence of accurate figures as to cost to commit itself to their construction, and also asked for further time in which to determine what if any rental it would be able to pay the city for the new rights. To save time, therefore, the committee recommended that the seven certificates be prepared for tender to the company and that during the time taken in their preparation the officers of the latter could deliberate upon and decide the questions as to cost of construction and the amount of rental to be paid to the city.

"Every day is adding to the difficulties of the situation," said the report. " So long as the Manhattan application is pending, the consideration of other plans looking to a solution of the rapid transit problem is necessarily deferred."

The report was adopted, the seven franchises were prepared and formally tendered to the company by the board on April 7, 1898. The company, however, did not accept them, and the board pursued its work to bring about the construction of the proposed subway. Indeed its work in this regard had never been intermitted. While the Manhattan proposal was pending and before it was submitted, the board sought the aid of men of wealth and influence to consider the building and operation of the road. Conferences were held with the leading transportation men of the city, including Cornelius Vanderbilt and Chauncey M. Depew, of the New York Central system; Charles P. Clark, of the New York, New Haven and Hartford company and William C. Whitney and others interested in the Metropolitan Street Railway company. None of them would take any active part in the project. Could any of them have foreseen the enormous profits later made out of the operation of the first subway by the Interborough Rapid Transit company, there would have been a different reception accorded the advances of the board in 1898.

On January 13, 1898, the board received the report of its committee appointed to inquire into the possibility of obtaining a bond of $15,000,000, as required by the court. The committee found that it would be next to impossible to get a contractor who would be able or willing to give such a large bond, and accordingly recommended that the court be requested to limit its requirement to a bond for construction and equipment and to leave to the board the fixing of the amount of the bond to be given to protect the city in regard to the payment of rental and satisfactory operation of the road. The board followed this recommendation and on January 17, 1898, instructed its counsel to apply to the court for a modification of its order.

The application was duly made and the Appellate Division granted it to the extent of modifying its previous order so that, while insisting on a bond of $15,000,000, it consented that the liability of the sureties as to $14,000,000 thereof should terminate on the completion and equipment of the railroad, limiting the permanent bond to $1,000,000. While this was still a severe restriction in the opinion of the board, it was not prohibitive, and the board accordingly entered into the stipulation required by the court.

After all these difficulties had been surmounted the board should have had plain sailing, but its usual adverse luck still prevailed and a formidable but unlooked for obstacle arose. The law required that any contract prepared by the board for the construction and operation of the railroad must be approved as to form by the Corporation Counsel, the legal adviser of the city government. This official was John Whalen, appointed by Van Wyck, the new Mayor. The proposed contract was adopted by the board on March 31, 1898, and submitted to the Corporation Counsel on April 7 following. He was asked to give it his attention and report at once. Instead of acting promptly he held the contract for nearly a year and a half without acting, and in September 1899 returned it to the board with suggestions for several amendments. His reason for holding it so long was that it was the practice of the Law Department never to approve a contract which could not legally be made.

This delay by the city administration, which if it reflected the sentiment of the people would have cordially supported the Rapid Transit board, brought matters to a standstill, and the year 1899 opened with the Commissioners marking time and longingly awaiting the action of the Corporation Counsel. The situation was intolerable, and the board determined to appeal to the new Legislature just convened. A memorial to that body was prepared by the board and sent to Albany, and its publication and discussion eventually cleared the atmosphere. In this memorial the board set forth the whole rapid transit situation, called attention to the debt limit restriction and the doubts of, the city authorities that a sufficient margin existed to, justify undertaking city construction of the rapid transit railroad; suggested a possible way out by authorizing New York county instead of the city to issue bonds for its construction; and in view of the possibility of not getting enough public funds to construct the line suggested that the board be empowered to resort to private capital and given the broadest powers to make the franchise attractive and arouse competition.

Hardly had this memorial been transmitted when certain men interested in the Metropolitan Street Railway company, who a year before had refused to consider building and operating the rapid transit road for the city, informed the board that if a new company to be formed by them were granted a perpetual franchise they would construct a road according to the plans of the board, complete the west side branch to Fort George within three years and the remainder of the road within two years after the corporation should earn five per cent. on the cost of building the first section. They offered to pay the city five per cent. of the gross receipts annually, provided the company first took out of earnings five per cent. net upon the cost of construction.

This offer was seriously considered by the board, which, while favoring public ownership, believed that rapid transit by aid of private capital was better than no rapid transit at all. Accordingly it unanimously approved a resolution offered by Mayor Van Wyck on March 29, 1899, declaring "that it is in the public interest that, in addition to the powers already possessed by the board, the Legislature should grant to the board the power to contract for the construction and operation of the rapid transit railroad by private capital."

Something might have been achieved along these lines if the friends of the Metropolitan Street Railway had not overplayed their hand. A bill was introduced in the Legislature to confer on the board the power to grant a perpetual franchise to a private corporation. The press and the public instantly took alarm. The bill was taken as an attempt on the part of the Metropolitan to "grab" a valuable franchise for the underground railroad and was bitterly denounced. Agitation continued and attained such proportions that the bill failed, and the Metropolitan coterie who had approached the board withdrew its offer, stating that the opposition which had developed had created such a situation that "success in the enterprise would be impossible."

The Legislature, however, passed the bill amending the rapid transit act, which had been submitted by the board, but amended it so materially that it would seriously hamper any negotiations which the board might undertake to enlist the aid of private capital in the construction of the railroad. Mayor Van Wyck refused to accept it for the city, and so the legislative session ended without any rapid transit relief. The board, therefore, began prodding the city authorities for action, as public construction was now the only course open.

Meanwhile a new member had entered the board in the person of Morris K. Jessup, who was elected president of the Chamber of Commerce in May, 1899, and thereby became a member of the board, succeeding Alexander E. Orr, the president. But John Claflin resigned at the first meeting thereafter, and the board elected Mr. Orr to succeed him, so that there was no break in Mr. Orr's service. Another election was held, and Mr. Orr was reelected as president on May 29, 1899, Mr. Starin, the vice-president, having acted as president during the interim, namely from May 11 to May 29. About the same time Lewis L. Delafield, the secretary of the board, resigned and Bion L. Burrows was elected to succeed him.

The first gun in the board's assault on the city authorities was in the form of a letter to Mayor Van Wyck, dated May 19, 1899. It opened with the inquiry as to the extent "to which the municipal authorities will feel able to promote construction by the city of the proposed rapid transit railroad." It then set forth briefly the various steps taken to date by the board, including the submission of the draft contract to the Corporation Counsel for his approval on April 7, 1898, adding significantly "but no communication has as yet been received from him, whether of approval or disapproval."

Municipal construction under the law as it stood was declared by the board to be entirely feasible, "provided the municipal authorities will co-operate with the board." Further progress, however, was impossible until the Corporation Counsel should give his approval to the form of the contract as required by law.

The debt limit situation was discussed in the letter, and it was stated that the board believed the provisions concerning it in the contract were sufficient, but that if the Corporation Counsel deemed them insufficient he should advise the board to that effect so that the contract might be amended. In conclusion the letter said:

"The board begs to repeat that its power to carry out the purpose for which it was created now depends practically, first upon the permission of the Corporation Counsel to make any contract, and, second, upon the assent of the Board of Estimate to a postponement of the making of other contracts involving large municipal debt until a rapid transit contract actually made shall assure the carrying out of that great public measure. The board, therefore, respectfully asks your Honor, and through you the other municipal authorities, whether in these two respects it may be aided to secure prompt and actual construction of the rapid transit road by the city."

This letter placed the responsibility for further delay squarely on the city administration and focused public attention on Mayor Van Wyck. There was no other difficulty in the way. A new assessment had been made in July raising the valuation of the real estate of the city more than $420,000,000, and thus adding $42,000,000 to the borrowing capacity under the debt limit. In addition a constitutional amendment was to come before the people for adoption in the ensuing election exempting from charging against the Greater City an indebtedness of about $30,000,000 carried by the separate counties when taken into the consolidation. This amendment, which was approved by the people, still further added to the city's borrowing capacity.

Through the spring and into the summer the City Hall remained silent. The board waited respectfully for a reply until July 13, when it addressed another letter, this time to the Board of Estimate, again reviewing the situation. Attention was called to the fact that the margin below the debt limit was fully $40,000,000, that no contract could be made till the Corporation Counsel acted, that a rapid transit debt could not be created till after the contract was executed and that meanwhile other debts might be incurred which would so lessen the borrowing capacity of the city as to prevent any rapid transit construction and thus defeat the will of the people as registered in the vote on the referendum in 1894. The board, therefore, expressly asked that no further debt be authorized in an amount sufficient to reduce the borrowing margin below the estimated cost of the proposed road until there should have been reasonable opportunity for the letting of the contract.

This evoked a response on September 20, when the Corporation Counsel transmitted to the board his views on the draft contract, as before mentioned. In this letter he stated that the city was now in a position to undertake the work and he had already conferred with the counsel for the board with a view "to expediting the business." The Corporation Counsel made eight points against the contract, to which the board replied. His first point was that the Law Department of the city should have charge of all proceedings for the condemnation of land. The board tersely responded that the law itself expressly provided that the Corporation Counsel should have charge of such proceedings.

His second point was that the contract ought to provide for the transportation of light parcels and packages. Again the board countered by quoting another provision of the act which authorized the use of the railroad for that purpose.

It is unnecessary to refer to most of the other points. The best suggestion made was that the contract be amended by making special reference to the Labor law, although it already contained a provision requiring compliance with all laws. The board agreed to this suggestion and subsequently incorporated a special provision on the Labor law.

The board then revised its form of contract and again transmitted it for approval to the Corporation Counsel on October 6, 1899. The most important amendment was a provision to limit the initial work to that part of the road extending from Brooklyn Bridge to 59th street and giving the city the option to require the contractor to complete the rest of the line within certain specified periods. By thus limiting the initial expenditure it was thought that all question as to obtaining the funds necessary would be avoided. Conferences followed with the Corporation Counsel, and the amended form of contract was approved by him on October 11, 1899, about a year and six months after it had been submitted to him.

Once having decided to co-operate with the board in providing new rapid transit facilities, it must be said that the city authorities gave generous assistance. The Corporation Counsel joined counsel for the board in making application to the Appellate Division for a modification of the stipulation previously entered into by the board on the matter of the bond to be required of the contractor. This, it will be remembered, was for a $1,000,000 continuing bond and for a bond of $14,000,000 during the progress of the work. The joint application was made on October 20, 1899, and was argued on October 30. It proved successful, for the court on November 10 gave a decision ordering a modification of the stipulation so as to reduce the amount of the bond to $5,000,000. Thus the year 1899 ended with all the legal difficulties cleared away, all other obstacles surmounted and the path open for the advertisement and award of the great contract.

Chapter 11. Rapid Transit Act and Commission of 1894

Chapter XI