Chapter 21: Present Rapid Transit Laws
Rapid Transit in New York City and in the Other Great Cities · Chamber of Commerce, 1906
The failure of the two earlier Commissions, and the inadequate quality of the legislation under which they had acted, resulted in a study of the legislation needed by this Chamber. A bill was prepared by a committee appointed for the purpose which became a law in 1894. This law was amended in 1895, 1896, 1900, 1901, 1902, 1904 and 1905.
Commission. The first section of the Rapid Transit Law as it now stands provides for the appointment of a Board of Rapid Transit Commissioners in each city having over 1,000,000 inhabitants according to the last preceding national or State census. Such board shall be made up of the Mayor, the Comptroller or other chief financial officer of the city, the president of the Chamber of Commerce of the State of New York, by virtue of his office, and the following named persons: William Steinway, Seth Low, John Claflin, Alexander E. Orr and John H. Starin. Vacancies shall be filled by a majority vote of the remaining members of the Board. Four members of the Board constitute a quorum for the transaction of business. Each of the commissioners, other than the Mayor and Comptroller, shall take an oath faithfully to perform the duties of his office.
Establish Routes and Form Plans; Consent of Property Owners. From time to time the Board is to consider and determine whether it is for the interest of the city to build a rapid transit railway or railways for the conveyance of persons and property. Upon the request of the local authorities the board shall consider and determine such questions forthwith. If the Board considers such a railway necessary, it shall establish the route thereof and the general plan of construction. Such plan shall show the general mode of operation, and contain such details as to the manner of construction as may be necessary to indicate the extent to which any street, avenue or other public place is to be encroached upon and the property abutting thereon affected, and the concurrent votes of at least six members of the Board shall be necessary to determine such route. The route may be located over, under, upon, through, or across any streets, avenues, bridges, viaducts, and lands within the city, and partly through blocks between streets or avenues; provided that the consent of the owners of one-half in value of the property bounded by such streets, and also the consent of the local authorities having control of such streets and avenues have been procured. In case the consent of such property owners cannot be obtained, the General Term of the Supreme Court in the district of the proposed construction shall appoint three commissioners, who shall give due hearing to all parties interested, and determine whether such railway ought to be built. The finding of the commissioners, confirmed by the court, shall be taken in lieu of the consent of the property owners. It is made lawful for the commissioners to locate the route of a railway by tunnel under any public parks, lands, or waters, and across any of the streets or avenues now occupied by an elevated railroad in the city of New York. An elevated railway must not be built on Broadway south of Thirty-third street, nor on Madison avenue.
Plans to be Sent to Board of Estimate and Apportionment. Section 5 provides that after any determination by the Board of any routes and general plan a copy of such conclusions shall be sent to the Board of Estimate and Apportionment. It shall be the duty of that board, upon receiving such plans, to appoint a day not less than one week nor more than ten days after the receipt thereof for their consideration. Such consideration is to be continued from time to time until a final vote shall be taken. Within sixty days of the receipt of the plans a final vote must be taken, the vote to be upon a resolution to approve the plans. Upon the adoption of such a vote by a majority of all the members of the Board of Estimate and Apportionment, and the approval of the Mayor, the plans shall be deemed to be approved by the city authorities. Having obtained the approval of the city authorities, the Rapid Transit Commission shall obtain, if possible, the consents of property owners along the line of the road. The value of the abutting property shall be obtained from the assessment roll of the city. If such consents cannot be obtained, the Board may. in its own name, make application to the Appellate Division of the Supreme Court in the judicial district in which the railroad is to be constructed, for the appointment of three commissioners to determine and report, after due hearing, whether such railroad ought to be constructed and operated. Two weeks' notice of such application shall be made by publication in papers to be designated by the court. The three commissioners shall determine, after public hearing of all parties interested, whether such railroad ought to be constructed and operated, and report the evidence taken to the court, together with their determination. If the decision of the commissioners should be in favor of construction, and this should be confirmed by the court, such decision is to be taken in lieu of the consent of the property owners. Such report shall be made within sixty days after appointment of the commissioners, unless the court shall extend the time.
Having obtained the consents, the Rapid Transit Commission shall at once proceed to prepare the plans and specifications "including all devices and appurtenances deemed by it necessary to secure the greatest efficiency, public convenience and safety, including the number, location and description of stations" and plans for turnouts, switches, sidings, buildings, platforms, stairways, elevators, telegraph and signal devices, and other appliances which the board may approve as "the best and most efficient system of rapid transit in view of the public needs and requirements." The plans may also include subways or tunnels for sewer, gas, or water pipes, electric wires and other conductors proper to be placed underground.
Stations and station approaches may be under or over streets of the route, or cross streets.
Sewers, Water Pipes, Conduits, Etc. The Board may from time to time alter such plans and specifications, but always so that the same shall accord with the general plan of construction; but whenever a contract shall have been made for the construction of the railway, no alteration shall be made without the consent of the contractor and his sureties. When the line disturbs any sewer, water pipe, or other duly authorized subsurface structure, the work of construction at such points shall be conducted in accordance with the reasonable requirements of the Commissioner of Public Works. All expense attached to the work shall be borne by the contracting company. Where galleries or subways shall be constructed for sewer, water pipes, or other underground structures, they shall be in the care of the Board and be maintained by the city. Any revenue derived from them shall be paid to the treasury of the city, except that where bonds shall have been issued to pay for the construction of such railroads, such amounts shall be paid into the sinking fund to be established out of the annual rentals of the road. Any corporation which, at the time of construction of such subways, shall own pipes or conduits in a street traversed by the road, shall be entitled to the use of such galleries and no rent shall be charged for such use except a reasonable charge to defray the actual cost of maintenance; but if the new galleries are of greater capacity than the old ones, the rent shall be charged only for such increased capacity.
May Sell Franchise. If, after having secured the necessary consents and prepared the plans and specifications, it shall not have been determined by vote of the people "as provided by sections twelve and thirteen of chapter seven-hundred-and-fifty-two of the laws of eighteen-hundred-and-ninety-four," that such railway shall be constructed for and at the expense of the city, as afterward provided, then the Board shall sell at public auction the franchise to build, maintain and operate the road.
Terms of Sale. The terms of sale shall provide for the construction of the railway under the supervision of the Board, and for the approval of an engineer to be appointed by the Board, the salary of the engineer to be paid by the company owning the franchise. The successful bidder must deposit with the chief fiscal officer of the city cash or securities in such amount as may be determined by the Board to constitute a guarantee of full compliance with the terms of sale. The road is to be begun and finished at times specified by the Board. Should the company fail to begin or finish the road in the times named, then the Board shall have power to re-sell the franchise and so much of the road as may have been constructed. The proceeds of such re-sale shall be applied first to the payment of the expenses of the re-sale, and then to the discharge of any liens that may have been created upon the property, and the balance to be paid over to the company. The terms of sale must specify the amount of capital of the corporation, and number of shares of capital stock it shall be authorized to issue, the percentage to be paid in cash by the subscribers, the maximum amount of bonded indebtedness which such corporation may incur, and the rates of fares and freights which such corporation may charge for the carriage of persons and property. But the rate of fare from any point on the road northward or southward within the city of New York shall not exceed five cents. The Board may reject all bids and re-advertise the franchise for sale as often as it may deem necessary in the interest of the city, and shall finally accept that bid, which, under all circumstances, is most advantageous to the public and the city; and no bid shall be accepted without the concurrent vote of six members of the Board. The sale may be adjourned from time to time at the discretion of the Board. All such sales must be made for a definite term of years.
Within one year, and not less than six months, prior to the expiration of the period for which the franchise shall have been sold, the Board shall proceed to re-sell the right to maintain and operate the road. Such sale is to be made in the manner prescribed for the original sale. Any corporation theretofore organized under the provisions of the act may be a purchaser on such re-sale; but if no such corporation be the purchaser, a new corporation shall be formed to maintain and operate the road. Such sale is to be made in the manner prescribed for the original sale.
Powers of Board. The Board may rent such offices and employ such engineers, attorneys and other persons as it may deem necessary to the proper performance of its duties. It may sue in the name and on behalf of the city. It may bring actions to recover damages for any violation of contract. Every action or proceeding brought by the Board shall have preference above all causes not criminal on the calendar of every court, and may be brought on for trial or argument upon notice of eight day's for any day of any term on which the court shall be in session.
Payment of Expenses of Board. The Board of Estimate and Apportionment, or other board on which is imposed the duty and in which is vested the power of making appropriations of public moneys for the purposes of the city government, shall, on requisition duly made by the Board of Rapid Transit Commissioners, appropriate such sum or sums of money as may be requisite to properly enable it to perform its duties. Such appropriation shall be made forthwith upon presentation of a requisition from the Board, which shall state the purposes for which such moneys are required. It shall be the duty of the Auditor and Comptroller, after such appropriations have been made, to audit and pay the proper expenditures and compensation of the commissioners, upon vouchers furnished by the commissioners.
Bonds. For the purpose of providing funds with which to pay these sums, the Comptroller or other chief financial officer of the city is authorized to issue and sell revenue bonds of the city in anticipation of receipt of taxes, and out of the proceeds of such bonds to make the required payments. The amount necessary to pay the principal and interest of the bonds shall be included in the estimate of moneys necessary to be raised by taxation to carry on the business of the city. All expenses of the Rapid Transit Commission, including the compensation of the Commissioners, shall be repaid, with interest, by the successful bidder for the franchise. The compensation to be paid the Commissioners shall be determined by the general term of the Supreme Court in the department in which the city shall be located.
Subscription to Capital Stock of Corporation. The articles of association of the corporation building and operating the road shall be signed by not less than twenty-five persons. The articles must state that they are made and filed for the purpose of taking and exercising the rights purchased. The articles must be approved by a vote of six members of the Board. Immediately after the articles of association shall have been approved and filed, the Board of Rapid Transit Commissioners shall open books of subscription to the capital stock of the corporation, and shall give public notice of such opening. When the full amount of such capital stock shall have been subscribed by not less than fifty persons, and such percentage of the amount subscribed as may have been fixed by the Board in the terms of sale shall have been paid in, in cash, the Board shall call a meeting of the subscribers for the purpose of organizing the corporation. At such meeting of the subscribers thirteen directors shall be elected, each of whom shall be a holder in his own right of at least one hundred shares of stock.
By-Laws. The by-laws to be adopted must provide the term of office of the directors, which shall not exceed one year; the manner of filling vacancies; the time and place of the annual meeting of the directors; manner of calling and holding special meetings; the number of stockholders who shall attend in person or by proxy any stockholders' meeting in order to constitute a quorum; the officers of the corporation, the manner of their election by the directors, and their powers and duties; the manner of amending the by-laws.
If in their judgment the public interest requires it, the Board may, at any time after the full organization of the corporation, by the concurrent vote of six members, alter or add to the detailed plans and specifications, provided these plans do not change the route of the railway and are not inconsistent with the general plan of construction. Such change must be approved by a vote of two-thirds of the directors.
Road Free From Tax Until Operation. Every corporation organized under this act shall have its principal office and be taxed on its property in the city where the railway is situated. But no taxes of any kind shall be imposed upon any portion of the railway not in actual operation for the transportation of passengers or freight.
The capital stock of the corporation may be increased or reduced upon the approval of the Commissioners, and the approval of two-thirds in amount of all the stockholders.
Powers of Corporation. The corporation shall have the right to acquire such real estate as may be necessary for stations, depots, engine houses, machine shops, etc. In case the corporation cannot agree with the owner of such property upon the terms, it shall have the right to acquire title in the manner prescribed by the condemnation law.
The corporation shall have the right to cross, intersect, join, and
unite its railway with any other railway at any point on its route and upon the grounds of such other railway company, with the necessary turnouts, sidings, switches and other conveniences in furtherance of the objects of its connections. And every corporation whose railway shall be intersected by the new railway, shall unite with the new railway in forming such intersections and connections; if the two corporations cannot agree upon the amount of compensation to be made therefor, the same shall be determined by commissioners to be appointed by the court, in the manner provided in the act in respect to acquiring title to real estate. If the two corporations cannot agree upon the manner of such crossings and connections, then the commissioners shall determine the same.
The corporation shall convey persons and property on its railway by the power or force of steam, or by any motor other than animal power. It may enter upon and under streets and avenues and public places. No road must cross a steam railroad at grade.
Mails to be Carried. The corporation shall, when applied to by the Postmaster-General, convey the mails of the United States on its road; and in case the parties cannot agree as to the rate of transportation therefor, and as to the time, rate of speed, manner and conditions of carrying the same, the Governor of the State shall appoint three commissioners who shall determine the prices, terms and conditions. This price must not be less than the corporation would receive as freight on a like weight of merchandise transported in their merchandise trains, and a fair compensation for the post-office car. If the Postmaster-General shall require the mail to be carried at other hours, or at a higher speed than the passenger trains are run, the corporation shall furnish an extra train for the mail and be allowed an extra compensation for the service.
Franchise to Roads Already Built; Privileges of Existing Roads. The Board may also from time to time grant a franchise, upon application of any railroad corporation owning or actually operating a railroad wholly or in part within the limits of the city, or of any railroad corporation now or hereafter incorporated, for the purpose of constructing and operating a tunnel railroad in the city, to be connected with any railroad or railroads within the State of New York, or within ally adjoining State, and thereby forming a continuous line for the carriage of passengers and property between a point or points within and a point or points without the city. The Board may, by a vote of six of its members, determine the route or routes by which such railroad corporation may connect with other railroads, or the stations thereof, or with ferries, or may establish or extend its lines within the city, and may authorize such corporation to lay additional tracks on, above, under or contiguous to a portion or the whole of the route of its railway within the city, or to acquire terminal or other facilities necessary for the accommodation of the traveling public on any street or place except Battery Park.
Board to Determine Routes and Plans; Rental to be Paid by Corporation. The Board shall fix the location and plans of construction of such railroad or railroads, the times within which they shall be constructed, the compensation to be made to the city, and such other terms and requirements as the Board may consider just and proper. But every such determination, authorization and license shall be made upon the condition that the railroad corporation to which the grant shall be made, shall, from the time of the commencement of the operation of such railway annually pay to the city a sum or rental, and that the amount of such rental, for a period of not more than twenty-five years, shall be prescribed by the Board.
Readjustment of Service. Such authorization shall provide for re-adjustment of the amount of rental at the expiration of the period for which the same shall be prescribed, and for re-adjustment from time to time in the future of the amount of such annual payment at intervals each of not more than twenty-five years.
Property Owners' Consent. But such construction and operation of any such railroad shall only be upon the condition that the consent of the owners of one-half in value of the property bounded on, and the consent also of the local authorities having control of that portion of the street upon, above, or under which it is proposed to construct the road, be first obtained. In case the consent of such property owners cannot be obtained, the Appellate Division of the Supreme Court in the department in which such railroad is to be built, may, upon application, appoint three commissioners who shall determine, after a hearing of all the parties interested, whether the road ought to be constructed or operated, and their determination, confirmed by the court, may be taken in lieu of the consent of the property owners.
Disposition of Sewers, Water Pipes, Etc. Wherever the route selected by the Board intersects, crosses, or coincides with any tracks occupying the surface of any street, or the construction interferes with any pipes, sewers, subways, or underground conduits, any corporation organized under the act, or any contractor constructing any railway under a contract made with the Board, is authorized to remove the tracks or pipes, etc., in such manner as to interfere as little as possible with the operation of the railroad tracks, or the usefulness of the pipes and sewers. All these must be replaced as soon as possible. All such removals and restorations shall be made at the cost of the corporation or contractor building the road. For the purpose of facilitating construction, the contractor may, with the approval of the Board, lay upon or over the surface of any street, temporary tramways to be used only for the removal of excavated material or the transportation of material for use in the construction.
Section 34 is quoted in full, since it is that under which the present subway is being constructed:
People Vote for Road. "In case the people shall determine by vote, as provided in sections twelve and thirteen of chapter seven hundred and fifty-two of the laws of eighteen-hundred-and-ninety-four, that any such railway or railways shall be constructed for and at the expense of the city, then and in that event it shall be the duty of said Board to consider the routes, plans and specifications, if any, previously laid out and adopted by them or their predecessors, and for which the consents have been obtained referred to in section five of this act; and either to proceed with the construction of such railway or railways, and provide for the operation of the same, as hereinafter provided, or to change and modify the said. routes, plans, or specifications in such particulars as to said Board may seem to be desirable; or, from time to time, and with or without reference to former routes or plans, to adopt other or different or additional routes, plans and specifications for such railway or railways, provided always that in all cases in which any such change or modification shall be of such character as to require the consents thereto referred to in section five of this act; and in all cases where other or different routes or general plans may have been so adopted the said Board shall proceed to secure the consents required to be obtained by section five of this act as therein set forth.
Cities Formed by Consolidation. "If any city has been or shall have been formed by the union of or consolidation of one or more cities and other territory, and if in or for one of such cities so consolidated or united there shall have been a Board of Rapid Transit Railroad Commissioners as provided in this act, the board of rapid transit railroad commissioners for the said city formed by such union or consolidation shall have for and within such city so formed all the powers, and be subject to all the duties and responsibilities, which at the time of such union or consolidation belonged to the Board of Rapid Transit Railroad Commissioners of the former city so as aforesaid possessing such board for or in or with respect to such former If in such former city the vote of the qualified electors thereof shall have been for municipal construction of rapid transit road as prescribed in sections twelve and thirteen of chapter seven-hundred-and-fifty-two of the laws of eighteen-hundred-and-ninety-four, then the system of municipal construction of rapid transit railways provided for in this act and all the provisions with respect thereto in this act contained shall be applicable to, and in full force within, all the districts or boroughs and throughout the entire area of the said city formed by such union or consolidation.
New Routes and General Plans. "The Board of Rapid Transit Railroad Commissioners for any city shall, prior to the time of the final grant of any franchise:under the provisions of this act, or the making of a contract for construction and operation of any railroad under the provisions of this act, have power to rescind and revoke any resolution or resolutions of such board adopting any routes or general plan for a rapid transit railroad adopted by such Board, and, in the discretion of such Board and in lieu thereof, to adopt new routes and general plan. Every such rescindment or revocation which shall have been heretofore made shall be deemed to have been lawful and authorized by this act as the same was prior to the present amendment hereof."
Contract for Building Road; Work Divided. "As soon as such consents, where necessary, shall have been obtained for any rapid transit railroad or railroads, and the detailed plans and specifications have been prepared as provided in section six of this act, the said Board, for and in behalf of the said city, shall enter into a contract with any person,. firm, or corporation, which in the opinion of said Board shall be best qualified to fulfill and carry out said contract, for the construction of such road or roads, including such galleries, ways, subways, and tunnels for sub-surface structures as said Board may include in the plans for such road or roads under the authority of section six of this act, such road or roads, galleries, ways, subways or tunnels to, be constructed upon the routes and in accordance with the plans and specifications so adopted, for such sum or sums of money, to be raised and paid out of the treasury of said city, as hereinafter provided, and on such terms and conditions, not inconsistent with the aforesaid plans and' specifications, as said Board shall determine to be best for the public interests. The sum or sums of money to, be paid for the construction of such road or roads shall be separately stated in the contract from the sum or sums to be paid for any galleries, ways, subways, or tunnels for sub-surface structures, the construction of which is provided for in such contract. And said Board may in any case contract for the construction of the whole road, or all the roads provided for by the aforesaid plans in a single contract, or may by separate contracts, executed from time to time, provide for the construction of parts of said road or roads, or for the construction at first of two or more tracks over a part or parts of such road or roads and afterwards of one or more additional tracks over a part or parts of such road or roads as the necessities of said city and the increase of its population may in the judgment of said Board require."
Amount to be Paid for Future Construction. "The Board may also, in a contract for a part of any such rapid transit railroad, insert a provision that, at a future time, upon the requirement of the Board, the contractor shall construct the remainder or any part of the remainder of said road, as the growth of population or the interests of the city may, in the judgment of the Board, require, and may, in such contract, insert a provision of a method for fixing and ascertaining at such future time the amount to be paid to the contractor for such additional construction, and to the end of such ascertainment, may provide for arbitration or for the determination by a court of the amount of such compensation, or of any other details of construction which shall not be prescribed in the contract, but which shall be deemed necessary or convenient by the Board."
Work May be Suspended. "Any such contract may provide, if the public interest shall, in the opinion of the Board, justify the provision, that the construction of any section or portion of the railroad included in such contract may, with the consent of the Board, be suspended during the term of operation of the railroad as hereinafter mentioned, or any part of such term; provided, that during such term or part of term the lessee or contractor shall use, in lieu of such portion of the road, a railroad owned or leased by the lessee or contractor or a portion or section thereof, which shall, with the railroad or portion of railroad constructed by it under its contract with the Board, form a continuous and convenient route."
All Leases to Expire at Same Time. "Every such contract shall also provide that the persons, firm, or corporation so contracting to construct said road, or roads, shall, at his, or its own cost and expense, equip, maintain and operate said road or roads for a term of years to be specified in said contract, not more than fifty years, and upon such terms and conditions as to the rates or fare to be charged and the character of service to be furnished and otherwise, as said Board shall deem to be best suited to the public interests, and subject to such public supervision and to such conditions, regulations and requirements as may be determined upon by said Board; provided, that the right to use or operate any galleries, ways, subways or tunnels for sub-surface structures, which are required to be constructed under said contract, shall not pass under the operating provisions of said contract; and further provided that in case the contract shall provide for construction at different times or at intervals of time of different parts of a road, or if the contract shall provide for the use by the contractor of an existing railroad as part of continuous route as aforesaid, then and in any such case the Board of Rapid Transit Railroad Commissioners may, in its discretion, prescribe periods for the operation of the different parts of said road so that at one period of time in the future the Board may be enabled to make a single operating contract or lease of the entire road."
Protection by City."Every such contract shall further provide by proper stipulations and covenants on the part of the said city, that the said city shall secure and assure to the contractor, so long as the contractor shall perform the stipulations of the contract, the right to construct and to operate the road as prescribed in the contract, free of all right, claim or other interference, whether by injunction, suit for damages or otherwise, on the part of the owner, abutting owner, or other person."
Payment Required of Corporation. "Every such contract shall further provide that the person, firm or corporation so contracting to construct, maintain and operate said road shall annually pay into the treasury of said city, as rental for the use of said road, a sum which shall not, except as hereinafter provided, be less than the annual interest upon the bonds to be issued by said city for the construction of said road as hereinafter provided for, and in addition to said interest, a further sum which shall be equal to a percentage of not less than one per centum upon the whole amount of said bonds; provided, that in estimating such annual interest and additional percentage there shall be deducted from the amount of said bonds the amount thereof issued to pay for rights, terms, easements, privileges or property other than lands acquired in fee, and also the amount thereof issued to pay for the construction of galleries, ways, subways and tunnels for sub-surface structures."
Times of Payment. "And provided, further, that the said contract may, in the discretion of the said Board, provide that the payment of the said further sum; of not less than one per centum upon the amount of said bonds as aforesaid, shall begin at a date not more than five years after the date at which the payment of rental shall begin, and that the said annual rate, instead of one per centum, may be a rate not less than one-half per centum for a further period not exceeding five years; but in case the contractor shall, during any year in which the said payment of one per centum shall be suspended or reduced as aforesaid, earn a greater profit upon his, its, or their net capital invested in the enterprise than five per centum, then the surplus of his, its, or their earnings for such year up to the extent of at least one per centum shall be paid as rental as aforesaid."
"Such rental and the term for the operation of the railroad included in any such contract shall begin, as to said road, or any section thereof, when the same shall be declared by the Board of Rapid Transit Railroad Commissioners to be completed and ready for operation."
Method of Estimating Payment; Rental to Pay Interest on Bonds and Sinking Funds. "For the purpose of estimating such one per centum per annum upon the ascertainment of the amount of such rental, there shall be included such portion of the said bonds as shall have been issued to pay interest on bonds theretofore issued under the provisions of this act, except bonds issued to pay for rights, terms, easements, privileges, or property other than lands acquired in fee. The aforesaid annual rental shall be paid at such times during each year as said Board shall require, and shall be applied first to the payment of the interest on said bonds, as the same shall accrue and fall due, and the remainder of said rental not required for the payment of said interest shall be paid into the sinking fund, for the payment of the city debt, if there shall be such sinking fund in said city, or, if there be none such, then said balance of said rental shall be securely invested, and, with the annual accretions of interest thereon, shall constitute a sinking fund for the payment and redemption at maturity of the bonds issued, as hereinafter provided."
Renewal of Lease. "Any such contract may also provide for a renewal or renewals of the lease of said road upon the expiration of the original term and of any renewals of the same, upon such terms and conditions as to said Board may seem just and proper, and may also contain provisions for the valuation of the whole or a part of the property of said contracting person, firm or corporation, employed in and about the equipment, maintenance and operation of said road, and for the purchase of the same by the city, at such valuation, or a percentage of the same, should said lease not be renewed at any time."
"Any such contract may provide for the construction of said road in sections, and, except as herein otherwise provided, every such contract shall specify when the construction of the railroad included therein or of the several sections of the same shall be commenced, and, in each case, the date of completion. It shall also state the date on which the operation of the road, or any section thereof, shall commence."
Bond of Corporation. "The person, firm or corporation so contracting for the construction, equipment, maintenance and operation of the railroad or railroads included in any such contract shall give a bond to the city, in such amount as said Board of Rapid Transit Railroad Commissioners shall require, and with sureties to be approved by said Board, who shall justify each in double the amount of his liability upon said bond. Said bond shall be a continuing security, and shall provide for the prompt payment by said contracting person, firm or corporation, of the amount of annual rental specified in the aforesaid contract, and also for the faithful performance by said contracting person or corporation of all the conditions, covenants and requirements specified and provided for in said contract. In lieu of said continuing bond such contracting person, firm or corporation may, upon the approval of the said Board, deposit with the comptroller or other chief financial officer of such city cash equal in amount to the entire amount of the said bond or securities which are lawful for the investment of the funds of savings banks within this state and are worth not less than the entire amount of such bond. If such bond shall have been given after the deposit of cash and securities in lieu thereof as aforesaid, and the approval thereof by the said Board, the said bond shall be surrendered by the said city to the said contracting person, firm or corporation duly canceled by the Comptroller or other chief financial officer of the said city. In the event of the deposit of cash or securities as aforesaid, the contract may provide for the payment to the contractor of the income of such securities or of interest upon such moneys at a rate not higher than the highest rate received by the city upon the deposit of its funds with banks, and may also provide for withdrawal of securities so deposited upon deposit of cash or securities of the same value, provided that all such securities shall be such as are lawful for the investment of the funds of savings banks."
Security Required of Corporation; City to Have First Lien Upon Property. "The said contracting person, firm or corporation shall also simultaneously with the execution and delivery of every such contract, deposit with the Comptroller or other chief financial officer of such city the sum of one million dollars in cash or in securities of a value not less than one million dollars, which securities shall be of the character of those in which the savings banks of this state are authorized by law to invest moneys, and shall be approved by the Board of Rapid Transit Railroad Commissioners, which cash or securities shall, under such terms and conditions as shall be provided in the said contract, be further security for the faithful performance by such contracting person, firm or corporation of all the covenants, conditions and requirements specified and provided for in said contract relating to the construction and equipment of said road. If in any case the cost of construction embraced in a contract is estimated by the said Board of Rapid Transit Railroad Commissioners at the sum of ten million dollars or less, the contract may in the discretion of the said Board fix the amount of such deposit at such a sum less than one million dollars as the said board may determine, but in no case shall such deposit be less than ten per cent. of the contract price of such construction. The city in and for which said road shall be constructed shall also have a first lien upon the rolling stock and other property of said contracting person, firm or corporation, constituting the equipment of said road and used or intended for use in the maintenance and operation of the same, as further security for the faithful performance by such contracting person, firm or corporation of the covenant, conditions and agreements of said contract, on his, their or its part to be fulfilled and performed, and in case of the breach of any such covenant, condition and agreement said lien shall be subject to foreclosure by action, at the suit of such city, in the same manner, as far as may be, as is then provided by law in the case of foreclosure by action of mortgages on real estate. The said Board of Rapid Transit Railroad Commissioners may, however, from time to time, by a concurrent vote of six of the members of said Board, relieve from such lien, any property to which the same may attach, upon receiving additional security, which may be deemed by said board so voting to be the equivalent of that which it is proposed to release and otherwise upon such terms as to such Board so voting shall seem just. The said Board may in or by any such contract and in its discretion, require, and this act, as the same was prior to the present amendment thereof, shall be deemed to have authorized the said Board to have heretofore required any other security upon any such contract."
Deposit To Be Returned Upon Completion of Road. "Upon the completion of the construction and equipment of the railroad or railroads provided in any such contract to the satisfaction of the said Board, and when the operation of the same shall have commenced pursuant to said contract, it shall be the duty of the Comptroller or other chief financial officer to pay to the said contracting person, firm or corporation said sum in cash or the said securities so to be deposited as above provided as security for construction and equipment, and the said contracting person, firm or corporation shall also be then entitled to be credited upon the rental which he, they or it shall have contracted to pay to said city for the use of said road a sum which shall be equal, as the case may be, either to the interest on the sum so to be deposited for the time of such deposit at the rate of interest provided for in the bonds which shall have been issued and sold by the city to provide for the construction of said road, or the interest, dividends or other income which said city shall have received from the said securities."
In Case of Default Board May Take Possession and Operate Road. "The said contract shall further provide that in case of default in paying the annual sum or rental therein provided for, or in case of failure or neglect on the part of said contracting person, firm or corporation, faithfully to observe, keep and fulfill the conditions, obligations and requirements of said contract, the said city, by its Board of Rapid Transit Railroad Commissioners, may take possession of said road and the equipment thereof, and as the agent of said contracting person, firm or corporation, either maintain and operate said road, or enter into a contract with some other person, firm or corporation for the maintenance and operation thereof, retaining out of the proceeds of such operation, after the payment of the necessary expenses of operation and maintenance, the annual rental hereinbefore referred to, and paying over the balance, if any, to the person, firm or corporation with whom the first contract above mentioned was made, and if such proceeds of the operation of said road, after the payment of the necessary expenses of maintenance and operation, including the keeping in repairs of the rolling stock and other equipment, shall in any year be less than the annual rental hereinbefore referred to and provided in the first contract, then, and in that case, the said contracting person, firm or corporation, and his or its bondsmen, shall be and continue (but in the case of any bond hereafter executed each bondsman only to the extent of the liability expressly assumed by him upon the bond) jointly and severally liable to the aforesaid city for the amount of such deficiency, until the end of the full term for which the said first contract was originally made."
Board May Assign Privilege; Provisions of Lease. "No contract entered into under authority of this act shall be assigned without the written consent of the said Board of Rapid Transit Railroad Commissioners, concurred in by six members of said Board. The said contracting person, firm or corporation, with such written consent and upon such terms and conditions as the said Board shall prescribe, may either assign the whole of such contract or separately the right or obligation to maintain and operate the said road or roads for the remainder of the term of years specified in such contract and all rights with respect to such maintenance and operation, or included in the leasing provisions of such contract, but subject to all the terms and conditions therein stated; provided, however, that the assignee or assignees shall, in and by such assignment, assume all of the obligations of the original contractor, under or with respect to such leasing provisions and all obligations which relate in any way to such operation and maintenance, and provided, further, said Board before giving its consent shall be satisfied that the pecuniary responsibility of the assignee or assignees shall be no less than that of such original contractor; and provided, further, that all of the security or securities which the city shall have received for the performance by the original contractor of such leasing provisions and of all provisions of the contract with respect to such operation and maintenance shall continue in full force as provided in such contract, or any modification thereof, as security for the performance by such assignee of all obligations of the contractor under or with respect to such leasing provisions and such maintenance or operation."
Successors of Board. "It shall be deemed to be part of every such contract that, in case the Board of Rapid Transit Railroad Commissioners shall cease to exist, the legislature may provide what public officer or officers of the city shall exercise the powers and duties belonging to the Board of Rapid Transit Railroad Commissioners under or by virtue of any such contract, and that in default of such provision, such powers and duties shall be deemed to be vested in the Mayor of the city."
Duties of Board in Case of Default. "Every such contract shall provide that if the contracting person, firm or corporation shall fail to construct or operate the railway according to the terms of the contract, and shall, after due notice of its default, omit for more than a reasonable time to comply with the provisions of such contract, the Board of Rapid Transit Railroad Commissioners may bring an action in the name and in behalf of the city to forfeit and vacate all the rights of such contracting person, firm or corporation under such contract, and for damages and otherwise as may be necessary for the sufficient and just protection of the rights of the city; or may, upon such terms as to the Board of Rapid Transit Railroad Commissioners seem just, and with such person or corporation as to the said board may seem proper, make another operating contract and lease of the said road for the residue of the term of the contractor in default; and may bring action in the name and on behalf of the city to recover from the contractor the amount due from the contractor, less the amount which shall have been received by the city, under or by virtue of such new contract, and for all other damages sustained by the city by reason of such default."
"The said Board may by any such contract determine when and how the work of construction of the rapid transit railroad or railroads included therein shall proceed."
Privilege of Roads Wholly or Partly Within City Limits. "Any existing railway corporation owning or actually operating a railway wholly or in part within the limits of the city in and for which said Board has power to act, and approved by the said Board of Rapid Transit Railroad Commissioners, shall be competent and is hereby authorized to enter into any contract for the construction and operation of any railway pursuant to the provisions of this chapter; or, after such a contract shall have been made, shall be competent and is hereby authorized, with the approval of said Board, to contract with the original contractor or his assignee or assignees for the maintenance and operation (including the equipment thereof) of any railway constructed or in process of construction pursuant to the provisions of this chapter, and shall have all the powers necessary to the due performance of such contract."
Rights of Corporation Organized Under Railroad Law. "A corporation may be organized under the railroad law of this state, for the purpose of undertaking the construction and operation of a railway pursuant to the provisions of this act, or for the purpose of maintaining and operating a railway (including the equipment thereof) already constructed or in process of construction pursuant to the provisions of this chapter, or for both such purposes; and any corporation so organized, upon the approval in writing of the said Board of Rapid Transit Railroad Commissioners, shall, in addition to the powers conferred by the general act under which such company is organized, be empowered, and is hereby authorized to enter into any contract permitted by law for the construction and operation, or for the maintenance and operation when constructed (including the equipment thereof if desired), as the case may be, of any such railway constructed or to be constructed at the expense of the city as in this act provided. The certificate of such approval shall be filed in the office of the Secretary of State and a copy thereof certified to be a true copy by the Secretary of State or his deputy shall be evidence of the fact therein stated."
"A corporation so organized shall not be required to procure the consent of the Board of Railroad Commissioners of the State as provided for in section fifty-nine of the railroad law. Where in this section the consents referred to in section five of this act are mentioned, they shall be construed to include any consent given by the commissioners appointed by the General Term or Appellate Division of the Supreme Court, and confirmed by the said General Term or Appellate Division in lieu of the consent of property owners as hereinbefore provided."
The equipment to be supplied by the corporation shall include all rolling stock, boilers, engines, wires, conduits, machinery, tools, and appliances of every nature used for the generation or transmission of power, and including all powerhouses, and all apparatus for signaling and ventilation.
Before awarding any contract the Board shall advertise for proposals for three successive weeks, and shall publicly open all proposals.
Bonds to Be Issued by the City. For the purpose of providing the necessary means for such construction, at the public expense, "and of meeting the interest on the bonds, in this section hereinafter provided for, accruing thereon prior to the completion and readiness for operation of the portion of such road or roads for the construction of which such bonds shall have been respectively issued, the Board of Estimate and Apportionment, or other local authority in said city, in which such road or roads are to be constructed, having power to make appropriations of moneys to be raised by taxation therein, from time to time, and as the same shall be necessary, and upon the requisition of said Board of Rapid Transit Railroad Commissioners, shall direct the Comptroller, or other chief financial officer of said city, and it shall become his duty to issue the bonds of said city at such a rate of interest, not exceeding three and one-half per centum per annum, as said Board of Estimate and Apportionment, or other local authority directing the issue of such bonds, may prescribe."
"Said bonds shall provide for the payment of the principal and interest in gold coin of the United States of America. They shall not be sold for less than the par value thereof; and the proceeds of the same shall be paid out and expended for the purpose for which the same are issued, upon vouchers certified by said Board of Rapid Transit Railroad Commissioners."
Bonds. "Said bonds shall be free from all taxation for city and county purposes, and shall be payable at maturity out of the sinking fund for the payment of the city debt, if there be such a sinking fund of said city; but if there be no such sinking fund, then out of a sinking fund to be established and created out of the annual rentals of said road as hereinbefore provided. But this provision that the said bonds shall be payable out of such a sinking fund shall not diminish or affect the obligation of said city as a debtor upon said bonds, or any other right or remedy of any holder or owner of any such bonds, to collect the principal or interest thereof. The amount of bonds authorized to be issued and sold by this section shall not exceed the limit of amount which shall be prescribed by the Board of Estimate and Apportionment or such other local authority having power to make appropriations of moneys to be raised by taxation; and no contract for the construction of such road or roads shall be made unless and until such Board of Estimate and Apportionment or such other local authority shall have consented thereto and prescribed a limit to the amount of bonds available for the purposes of this section which shall be sufficient to meet the requirements of such contract in addition to all obligations theretofore incurred and to be satisfied from such bonds."
Changes may be made in the contract, or the plans, with the consent of six members of the Board; but in no case shall the annual rental to be paid to the city be reduced below the minimum rate provided.
Bridges. The board of directors of any company incorporated for the purpose of building a bridge, or bridges, connecting a city of more than one million inhabitants with any other city in the State, and to construct an approach thereto extending generally in an easterly and westerly direction, may in lieu of constructing such approach, build and operate an elevated railway, the route of which shall be coincident with the approach or approaches. "The entire route of any elevated railway, constructed under the provisions of this section, shall not exceed three miles in length, nor shall any part of said railway, except at the termini thereof, be less than sixteen feet above any street, avenue or public place, or less than fourteen feet above any existing elevated railway which may be crossed, intervened, or intersected thereby."
The Board may acquire any necessary real estate by condemnation or other legal proceedings.
When the contractor shall require any property for the construction and operation of the road, such property shall be deemed to be required for a public purpose; and, with the approval of the Board, may be acquired by the contractor in all respects as such property may be acquired by the Board. Such property acquired by the Board, when no longer necessary for rapid transit purposes, shall be sold, with the approval of the Commissioners of the Sinking Fund.
Sections 40 to 62, both inclusive, contain provisions for the acquisition of real estate.
Road Part of Streets and Highways. In case it shall be determined by vote of the people to construct the road at the city's expense, then the road shall be the absolute property of the city, and shall be deemed to be part of the public streets and highways, to be used and enjoyed by the public upon the payment of such fares and tolls, and subject to such reasonable rules and regulations, as may be imposed and provided by the Board of Rapid Transit Railroad Commissioners.
No Road to be Upon a Street Surface. The act prohibits the construction or operation of any railroad upon the surface of any street, avenue, or highway in the city of New York; but this prohibition does not extend to bridges, or viaducts, or approaches connecting bridges with the surface; nor does it prevent the construction, or operation upon the surface, of any street, or avenue, or bridge-approach in the city of New York, for such a distance as may be reasonably necessary in order to connect underground lines with bridges, viaducts, or surface lines.
NOTE. The following sections of the Act of 1894, Chapter 752, do not, in terms, amend any portion of the Rapid Transit Act of 1891, although the whole Act of 1894 is, in fact, an amendment of the earlier statute. These sections are accordingly numbered with respect to their position in the Act of 1894, and without reference to the numbering of the sections in the original act.
"Section 11. The Commissioners of Rapid Transit heretofore appointed under the act hereby amended, or who became such commissioners by its terms, upon the organization of the Board which shall succeed them pursuant to said act as hereby amended, shall cease to be such commissioners and shall transfer and deliver to the Board of Rapid Transit Railroad Commissioners, provided for by the act hereby amended, as so amended, all furniture, books, maps, records, plans, and other papers and property of what kind soever appertaining or belonging to or in the custody of the Board of which they were commissioners, or in their possession, or under their control as such commissioners, or held by them, or for which they are responsible in their official capacity. The expenses incurred by said commissioners for which an appropriation or appropriations shall have been made pursuant to section ten of the act hereby amended, shall be paid upon vouchers to be furnished by said Commissioners and otherwise, as provided in said section. Said Commissioners shall also be entitled to receive a reasonable compensation for the services which have been rendered by them, which may have been, or which shall be, determined on their application in the manner provided for in said section. The Comptroller, or other chief financial officer of said city, is hereby authorized and directed to issue and sell revenue bonds of such city in anticipation of the receipt of taxes and out of the proceeds of such bonds to pay said compensation so ascertained and determined, and the amount necessary to pay the principal and interest of said bonds shall be included in the tax levy of said city for the year next following the issue and sale of the same."
Method of Voting. "Section 12. The said Board of Rapid Transit Railway Commissioners shall cause the question, whether such railway or railways shall be constructed by the city and at the public expense, to be submitted to the qualified electors of the city within which such railway or railways is or are to be constructed, and to that end it shall be the duty of said Board, after completion of the detailed plans and specifications, as required by the act hereby amended, at least thirty days prior to the next general election, to file with the public officer or officers within the county in which such city is located, who may be charged with the duty of printing the ballots to be used at such election, a request that separate ballots be printed and supplied to such electors, one-half in number of which shall read, 'For municipal construction of rapid transit road,' and the other half in number of said ballots shall read, 'Against municipal construction of rapid transit road.' Upon such request being so filed, such ballots shall be printed and supplied to such electors at such general election, and separate ballot boxes shall be provided for the reception of the same in each election district within such city, and the provisions of chapter six-hundred-and-eighty of the laws of eighteen-hundred-and-ninety-two, entitled 'An act in relation to the elections constituting chapter six of the general laws,' and any act or acts amendatory thereof, or supplemental thereto, shall apply thereto as far as the nature of the case may allow. No ballot which may be provided under this section shall be deemed invalid by reason of any error in dimensions, style of printing, or other formal defect, or through having been deposited in the wrong ballot box, but all such ballots shall be canvassed and returned as if such formal defect had not existed, or as if they had been deposited in the box provided for the purpose. Upon the canvass of such votes by the Board of County Canvassers of the county in which such city is located, it shall be the duty of said Board to file with the county clerk of said county a statement which shall declare the total number of votes cast in said city 'for municipal construction of rapid transit road,' and the total number so cast therein 'against municipal construction of rapid transit road.' And the said railway or railways shall be constructed by the said city and at the public expense, if it shall be found from such statements so filed that there is a majority of the votes so cast in favor of such municipal construction."
"Section 13. In case the majority of votes cast at such election shall be in favor of such municipal construction of said railway or railways, it shall be the duty of said Board of Rapid Transit Railway Commissioners, within thirty days after the official declaration of the said vote, to proceed to construct the said railway or railways, and to make and let all contracts required for the performance of the work necessary to be done and performed in and about the construction thereof. All such contracts must, before execution, be approved as to form by the counsel to the corporation, or chief legal adviser for said city."