The New York Subway | Page 5

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 the city, through the Board, over the operation of the road under the lease.
One of the most attractive--and, in fact, indispensable features of the scheme--was that the work of construction, instead of being subject to the conflicting control of various departments of the City Government, with their frequent changes in personnel, was under the exclusive supervision and control of the Rapid Transit Board, a conservative and continuous body composed of the two principal officers of the City Government, and five merchants of the very highest standing in the community.
Provided capitalists could be found to undertake such an extensive work under the exacting provisions, the scheme was