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Chapter 08: Commission of 1891

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Rapid Transit in New York City and in the Other Great Cities ยท Chamber of Commerce, 1906

Organization of Commission of 1891. The rapid transit act of 1891 provided for the continuance in office of William Steinway, John H. Starin, Samuel Spencer, John H. Inman and Eugene L. Bushe, who had been appointed commissioners by Mayor Grant in 1890 under the Act of 1875. The commissioners were required, if, after investigation, they deemed the construction of a rapid transit railroad necessary, first, to adopt the routes and general plan of construction for such railroad; second, to obtain the consent to the construction and operation of such railroad by the local authorities and the property holders affected, or, if the consent of the property holders should be withheld, then the consent of the General Term of the Supreme Court; third, to adopt detailed plans for the construction and operation of such road; and, lastly, to sell the right to construct and operate such railroad to a corporation to be formed under the terms of the Act, for such a period of time as they should deem advisable and upon such terms as they should be able to exact.

This Board made a careful examination of the entire question with the assistance of William E. Worthen and William Barclay Parsons, whom it had appointed its engineers. After holding a number of public hearings the unanimous conclusion was reached that not only were additional transit facilities needed, but that such facilities could only be obtained in an adequate manner by the construction of underground roads.

Location of Routes. It was appreciated that any system devised with a view to permanency and the capacity requisite for the future, would be costly; and the route, in order to give relief where most needed and to command the necessary traffic to make the line remunerative, should be along main arteries of travel. Statistics established the fact that the existing north and south lines of transit nearest the center of the city absorbed the greatest travel, and that the relative pressure upon them was in proportion to their proximity to Broadway.

These considerations required the location of the lower part of the route on or near that thoroughfare, the continuation of the line north of Fourteenth street to be made by diverging lines to the east and west. Since an elevated structure on Broadway below Thirty-third street was prohibited by the statute, it became necessary to plan a subway.

Broadway Selected. Two types of tunnel were considered, namely, one for a double-deck tunnel with two tracks upon each deck, and the other for four tracks on a single level. After a thorough discussion of the advantages and disadvantages of both plans, it was decided to build all the tracks on the same level. The route selected extended from the Battery under Broadway to Fifty-ninth street, and thence north, on the west side of the city, to the city line. At Fourteenth street the line turned and passed under Fourth and Madison avenues to the Grand Central; thence under Madison avenue north to the Twenty-third and Twenty-fourth Wards. Loops were to be built at the Battery, City Hall park, and Fourteenth street. From Morris street to Vesey there were to be three tracks, and from Vesey to One-hundred-and-ninetieth street, on the west side, four tracks, and the remainder of the distance two tracks. On the east side, from Fourteenth street to the Harlem River, there were to be four tracks, and thence to the city limits two tracks.

A line under Broadway having been decided upon, the question was narrowed to the character of the structure and its distance below the surface, whether it should be deep or shallow; whether, in providing for four tracks, the entire width of the street, or only a portion, should be used; and whether the surface of the street and existing pipes should be disturbed. Although the impression had prevailed that a rock tunnel could be driven the entire distance, borings made by the Commission showed that a large portion would be in sand.

Tunnel Plans. As finally drawn, the plans called for a tunnel not less than 11.5 feet in clear height and 11 feet in width for each track. The roof of the tunnel was to be as near the surface of the street as the pipes and underground structures would permit. The Government Ship Canal and the Harlem River were to be crossed by double-track draw bridges not less than 50 feet in the clear above mean high water mark, with clear spans of not less than 125 feet between center piers and bulkhead line.

The stations were to be provided with ample elevator service wherever the platforms were 20 feet or more below the curb line. The road was to be operated with electricity or other power not requiring combustion in the tunnel.

The plans were approved by the Board of Aldermen, the Department of Public Parks, and by the Commissioner of Street Improvements of the Twenty-third and Twenty-fourth Wards, as required by the terms of the Act. All the necessary consents were obtained, including a majority of the property owners along Broadway.

But, after all this had been accomplished, it was found that capitalists could not be induced to invest in the enterprise. The undertaking was upon such a vast scale, and the prospective revenue so doubtful, that hopes of carrying the scheme to completion were hardly entertained at all.

Bid Received. In the fall of 1892 the Commission advertised for bids for the franchise, and on December 30 met in the City Hall. But one bid was received, that of $1,000 from William N. Amory, who deposited ten per cent. of the amount, or $100 cash, as required by law. If the Board accepted this offer, it became its duty to notify the bidder to make the final deposit of $1,000,000 within five days. This amount was required in order to insure the completion of the road along the lines laid down, the protection of the city and of property holders. The records show that Mr. Amory refused to make any statement to the Board regarding his ability to deposit the million dollars, and at the meeting held January 3, 1893, Mr. Bowers, counsel for the Commission, said: "If you satisfy this Commission, by the production of your securities to-day, or, for that matter, to-morrow, that you are ready to build this road and carry out the scheme, there will be no difficulty about your getting the franchise." No explanation being presented, the Board refused to accept the proposition.

Previous to this important negotiations were held with the Manhattan Railway Company looking to the granting of franchises permitting the company to extend their elevated lines and to build additional ones. Just after the first meeting in January the Manhattan Company withdrew all the proposals they had made.

At a meeting on January 17 it was decided, since a satisfactory bidder could not be obtained, to hold the franchise in abeyance. It was voted also that "the Commission will, at any time, upon information that a proposed purchaser is ready to make a deposit with the Comptroller sufficient to justify the belief that the road will be built in accordance with the plans and specifications therefor, again offer said franchise at public auction, in accordance with the terms of the statute."

Elevated Roads for Temporary Relief. At this meeting the Commission decided, further, that it was its duty to provide elevated roads as a temporary relief, and to provide further relief by "granting additional facilities to the existing elevated railways," which were to be extended on both the east and west sides of town.

Three days later an application was received from the Manhattan Elevated Railway Company for permission to build new lines and extend its old lines, the total length of the extension being about 38 miles. These covered the whole city like a network. The Commission refused some of these and substituted others.

At subsequent meetings questions arose whether other privileges should be given to the Manhattan Company, or whether the new lines at least should be disposed of at public auction. At the meeting on March l1 Mr. Starin said: "My point is: Why are you going to give all these privileges to the Manhattan system? Are you going to give them all these privileges, or put them up at auction? If it is desirable to give everything, there is an end of rapid transit for all time. You cannot think of having two rapid transits in the city of New York."

Offer to Manhattan Company. In April Mr. Starin offered to vote in favor of granting the franchise to the Manhattan Company, provided it be compelled to pay 5 per cent. on the net receipts of its entire system; to maintain a fare of 5 cents from the Battery to the city line; and to pay all expenses of the Commission up to the day of the execution of the contract. A motion to this effect was approved, as was one to grant franchises to the company for the extensions needed. A copy of these resolutions was sent to the officials of the elevated road, who replied that they were willing to pay 5 per cent. on the net income of the new lines other than third track, or 3 per cent. on the income of the entire system.

The Commission stipulated that the net earnings should be ascertained by deducting all operating expenses and taxes from the gross earnings. As generally understood, earnings of this character are usually found by deducting only the operating expenses, and not the taxes, from the gross earnings. This made a material difference in the amount to be paid by the company.

Net Earnings. The following tables show the amount that would have been received by the city under the proposition of the Commission and also under that of the company:

The gross earnings of the Manhattan Company for 1892 were............... $10,835,978 Deductions Operating expenses.. $5,375,349 Taxes............... 479,864 ---------- $5,855,213 Net earnings as determined.......... $4,980,765 Compensation proposed by the Commission, 5 per cent. upon net earnings................... 249,038

The counter-proposition made by the company was to pay 3 per cent. upon the amount found after deducting from the gross earnings, not only all the operating expenses and taxes, but also the interest upon bonds, as follows:

Gross earnings....................... $10,835,978 Deductions Operating expenses.. $5,375,349 Taxes............... 479,864 Interest on bonds.... 1,919,052 ---------- $7,774.265 ----------- $3,061,713

Three per cent. on the above, as proposed by the company, would be $91,851. In 1892 the difference between the two propositions would have made a loss to the city of $157,187.

Cost of Operating Surface and Elevated Roads. The average cost of operating street surface railroads in New York is 72 per cent. of the gross receipts, and yet such roads are required to pay the city 3 per cent. annually of their gross receipts, for the first five years, and 5 per cent. of the gross receipts thereafter. At that time the operating expenses of the Manhattan Company were about 50 per cent. of the gross receipts, so that the compensation proposed by the Commission was equal to but 2.5 per cent. of the gross receipts, or less than one-half the ordinary tax regularly paid by the street railroads.

In a statement before the Commission, made by John H. Starin, we find the following:

"The tax upon street surface roads amounts to one-quarter of a cent for each passenger carried. The Commissioners' proposition would tax the Manhattan Company only one-ninth of a cent for each passenger carried."

Manhattan Proposition Analyzed. "The Manhattan Company's proposition contemplates but one-twenty-fourth of a cent for each passenger carried. Yet it costs nearly 50 per cent. more to transport a passenger on the surface roads than it does on the elevated."

"Is that company harshly dealt with when it is asked to pay less than one-half as much as street railroads pay? Or should the Commissioners accede to the demands of the company that the city accept one-sixth of the tax heretofore, in other cases, found just and equitable, for the most valuable passenger traffic franchise in the world?"

Earnings of Manhattan Co. "In proof of the contention that the payment of the tax proposed by the Commissioners would result in no hardship to the Manhattan Company, it may be stated that the company, had it paid such tax in 1892, besides every other expense incurred by it, would have earned a clear profit of more than $2,800,000, equal to 9.37 per cent., upon the company's capital stock of $30,000,000."

"The bonded indebtedness of the company is $40,000,000. The total of stock and bonds is, therefore, $70,000,000. It is certain that were the elevated roads bonded or stocked for an amount equal only to their exact cost, they could have carried last year the 214,000,000 passengers actually carried for a fare of 3 cents each, and after payment of all expenses would have earned nearly 6 per cent. dividends upon the actual cost of the roads."

The president of the Manhattan Railway Company, in a letter dated May 25, 1803, refused the proposition of the Commission and withdrew the proposal made by his own company. It is impossible to conceive the reasons that prompted the directors of the Manhattan Company to decline a franchise that would have placed in their control, for an indefinite period, the rapid transit facilities of the city.

In order to understand the condition of affairs at that time, it is necessary to explain that the law creating the Board of Rapid Transit Commissioners provided that a franchise could not be granted without the unanimous consent of the members. New York city at that time was in sore need of increased rapid transit facilities, and there were thousands of citizens who would have welcomed any addition to the transportation methods, no matter at what cost to the city. The temptation to yield to this pressure on the part of the people was very great.

Commission Resigns. A resolution introduced in June, 1893, proposed to give the franchises to the Manhattan Company on a 4 per cent. basis. This motion had the support of four of the members of the Commission, Mr. Starin alone voting against it, and it was lost because of the unanimous clause in the statute. After the meeting Messrs. Steinway, Bushe, Spencer and Inman resigned, but, with the exception of Mr. Spencer, were immediately reappointed by Mayor Gilroy. D. F. Porter was appointed in place of Mr. Spencer. The proposed franchises were of the most extended and far-reaching character, covering many of the principal streets and avenues of the then city of New York. It seems not too much to say that, but for the vote of Mr. Starin, and the determined stand he took all through the discussions with the elevated railroad officers, the construction of subways in New York would have been indefinitely postponed.

Services of Mr. Starin. Another service to the city, the value of which it is difficult to estimate, was rendered by Mr. Starin when the elevated railway company made application for authority to build an elevated line on the Boulevard, now upper Broadway. Such a structure would have ruined what is now recognized as one of the finest thoroughfares in the world. Against this proposal Mr. Starin interposed opposition, and was again successful.

On August 15, 1893, Geo. J. Gould, president of the Manhattan Company, wrote to the Commission that, "owing to the present disturbed financial condition of the country, it is not considered wise to assume large contracts." The Commission thereupon abandoned all negotiations with the elevated road, and concluded to lay out independent elevated lines and offer them for sale. The Commission was engaged upon that work when the present Commission, created by the Act of 1894, came into existence. On May 24, 1894, the Commission voted to pass its records, property, etc., over to its successor.

Not all of the achievements of the Commission of 1891 were of a negative kind. The studies made by the engineering staff under the direction of William Barclay Parsons were of the greatest value to the next Board. The examinations made by him furnished accurate data with regard to the nature of the material through which a subway would have to pass, both on the east and west sides of the city. The study of the physical conditions peculiar to New York, and of the work that had been done along similar lines abroad, had a marked influence upon the decision taken by the present Commission.

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