The New York Subway | Page 5

the public's expense, and be operated
under lease from the city, or should be constructed by a private
corporation under a franchise to be sold in the manner attempted
unsuccessfully, under the Act of 1891, as originally passed. At the fall
election of 1894, the electors of the city, by a very large vote, declared
against the sale of a franchise to a private corporation and in favor of
ownership by the city. Several other amendments, the necessity for
which developed as plans for the railway were worked out, were made
up to and including the session of the Legislature of 1900, but the
general scheme for rapid transit may be said to have become fixed
when the electors declared in favor of municipal ownership. The main
provisions of the legislation which stood upon the statute books as the
Rapid Transit Act, when the contract was finally executed, February 21,
1900, may be briefly summarized as follows:
(a) The Act was general in terms, applying to all cities in the State
having a population of over one million; it was special in effect because
New York was the only city having such a population. It did not limit

the Rapid Transit Commissioners to the building of a single road, but
authorized the laying out of successive roads or extensions.
(b) A Board was created consisting of the Mayor, 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 five
members named in the Act: William Steinway, Seth Low, John Claflin,
Alexander E. Orr, and John H. Starin, men distinguished for their
business experience, high integrity, and civic pride. Vacancies in the
Board were to be filled by the Board itself, a guaranty of a continued
uniform policy.
(c) The Board was to prepare general routes and plans and submit the
question of municipal ownership to the electors of the city.
(d) The city was authorized, in the event that the electors decided for
city ownership, to issue bonds not to exceed $50,000,000 for the
construction of the road or roads and $5,000,000 additional, if
necessary, for acquiring property rights for the route. The interest on
the bonds was not to exceed 3-1/2 per cent.
(e) The Commissioners were given the broad power to enter into a
contract (in the case of more than one road, successive contracts) on
behalf of the city for the construction of the road with the person, firm,
or corporation which in the opinion of the Board should be best
qualified to carry out the contract, and to determine the amount of the
bond to be given by the contractor to secure its performance. The
essential features of the contract were, however, prescribed by the Act.
The contractor in and by the contract for building the road was to agree
to fully equip it at his own expense, and the equipment was to include
all power houses. He was also to operate the road, as lessee of the city,
for a term not to exceed fifty years, upon terms to be included in the
contract for construction, which might include provision for renewals
of the lease upon such terms as the Board should from time to time
determine. The rental was to be at least equal to the amount of interest
on the bonds which the city might issue for construction and one per
cent. additional. The one per cent. additional might, in the discretion of
the Board, be made contingent in part for the first ten years of the lease

upon the earnings of the road. The rental was to be applied by the city
to the interest on the bonds and the balance was to be paid into the
city's general sinking fund for payment of the city's debt or into a
sinking fund for the redemption at maturity of the bonds issued for the
construction of the rapid transit road, or roads. In addition to the
security which might be required by the Board of the contractor for
construction and operation, the Act provided that the city should have a
first lien upon the equipment of the road to be furnished by the
contractor, and at the termination of the lease the city had the privilege
of purchasing such equipment from the contractor.
(f) The city was to furnish the right of way to the contractor free from
all claims of abutting property owners. The road was to be the absolute
property of the city and to be deemed a part of the public streets and
highways. The equipment of the road was to be exempt from taxation.
(g) The Board was authorized to include in the contract for construction
provisions in detail for the supervision of