The New York Subway, Its Construction and Equipment. Interborough Rapid Transit Company
and sweeping powers of supervision were given the city through the Chief Engineer of the Board, who by the contract was made arbiter of all questions that might arise as to the interpretation of the plans and specifications. The city had been fortunate in securing for the preparation of plans the services of Mr. William Barclay Parsons, one of the foremost engineers of the country. For years as Chief Engineer of the Board he had studied and developed the various plans and it was he who was to superintend on behalf of the city the completion of the work.
During the thirty-two years of rapid transit discussion between 1868, when the New York City Central Underground Company was incorporated, up to 1900, when the invitations for bids were issued by the city, every scheme for rapid transit had failed because responsible capitalists could not be found willing to undertake the task of building a road. Each year had increased the difficulties attending such an enterprise and the scheme finally evolved had put all of the risk upon the capitalists who might attempt to finance the work, and left none upon the city. Without detracting from the credit due the public-spirited citizens who had evolved the plan of municipal ownership, it may be safely asserted that the success of the undertaking depended almost entirely upon the financial backing of the contractor. When the bid was accepted by the city no arrangements had been made for the capital necessary to carry out the contract. After its acceptance, Mr. McDonald not only found little encouragement in his efforts to secure the capital, but discovered that the surety companies were unwilling to furnish the security required of him, except on terms impossible for him to fulfill.
The crucial point in the whole problem of rapid transit with which the citizens of New York had struggled for so many years had been reached, and failure seemed inevitable. The requirements of the Rapid Transit Act were rigid and forbade any solution of the problem which committed the city to share in the risks of the undertaking. Engineers might make routes and plans, lawyers might draw legislative acts, the city might prepare contracts, the question was and always had been, Can anybody build the road who will agree to do it and hold the city safe from loss?
It was obvious when the surety companies declined the issue that the whole rapid transit problem was thrown open, or rather that it always had been open. The final analysis had not been made. After all, the attitude of the surety companies was only a reflection of the general feeling of practical business and railroad men towards the whole venture. To the companies the proposition had come as a concrete business proffer and they had rejected it.
At this critical point, Mr. McDonald sought the assistance of Mr. August Belmont. It was left to Mr. Belmont to make the final analysis, and avert the failure which impended. There was no time for indecision or delay. Whatever was to be done must be done immediately. The necessary capital must be procured, the required security must be given, and an organization for building and operating the road must be anticipated. Mr. Belmont looking through and beyond the intricacies of the Rapid Transit Act, and the complications of the contract, saw that he who undertook to surmount the difficulties presented by the attitude of the surety companies must solve the whole problem. It was not the ordinary question of financing a railroad contract. He saw that the responsibility for the entire rapid transit undertaking must be centered, and that a compact and effective organization must be planned which could deal with every phase of the situation.
Mr. Belmont without delay took the matter up directly with the Board of Rapid Transit Railroad Commissioners, and presented a plan for the incorporation of a company to procure the security required for the performance of the contract, to furnish the capital necessary to carry on the work, and to assume supervision over the whole undertaking. Application was to be made to the Supreme Court to modify the requirements with respect to the sureties by striking out a provision requiring the justification of the sureties in double the amount of liabilities assumed by each and reducing the minimum amount permitted to be taken by each surety from $500,000 to $250,000. The new corporation was to execute as surety a bond for $4,000,000, the additional amount of $1,000,000 to be furnished by other sureties. A beneficial interest in the bonds required from the sub-contractors was to be assigned to the city and, finally, the additional amount of $1,000,000, in cash or securities, was to be deposited with the city as further security for the performance of the contract. The plan was approved by the Board of Rapid Transit Railroad Commissioners, and pursuant to the plan, the Rapid Transit Subway Construction Company was organized. The Supreme Court granted the application to modify the requirements as to the justification of sureties and the contract was executed February 21, 1900.
As president and active executive head of the Rapid Transit Subway Construction Company, Mr. Belmont perfected its organization, collected the staff of engineers under whose direction the work of building the road was to be done, supervised the letting of sub-contracts, and completed the financial arrangements for carrying on the work.
The equipment of the road included, under the terms of the contract, the rolling stock, all machinery and mechanisms for generating electricity for motive power, lighting, and signaling, and also the power house, sub-stations, and the real estate upon which they were to be erected. The magnitude of the task of providing the equipment was not generally appreciated until Mr. Belmont took the rapid transit problem in hand. He foresaw from the beginning the importance of that branch of the work, and early in 1900, immediately after the signing of the contract, turned his attention to selecting the best engineers and operating experts, and planned the organization of an operating company. As early as May, 1900, he secured the services of Mr. E. P. Bryan, who came to New York from St. Louis, resigning as vice-president and general manager of the Terminal Railroad Association, and began a study of the construction work and plans for equipment, to the end that the problems of operation might be anticipated as the building and equipment of the road progressed. Upon the incorporation of the operating company, Mr. Bryan became vice-president.
In the spring of 1902, the Interborough Rapid Transit Company, the operating railroad corporation was formed by the interests represented by Mr. Belmont, he becoming president and active executive head of this company also, and soon thereafter Mr. McDonald assigned to it the lease or operating part of his contract with the city, that company thereby becoming directly responsible to the city for the equipment and operation of the road, Mr. McDonald remaining as contractor for its construction. In the summer of the same year, the Board of Rapid Transit Railroad Commissioners having adopted a route and plans for an extension of the subway under the East River to the Borough of Brooklyn, the Rapid Transit Subway Construction Company entered into a contract with the city, similar in form to Mr. McDonald's contract, to build, equip, and operate the extension. Mr. McDonald, as contractor of the Rapid Transit Subway Construction Company, assumed the general supervision of the work of constructing the Brooklyn extension; and the construction work of both the original subway and the extension has been carried on under his direction. The work of construction has been greatly facilitated by the broad minded and liberal policy of the Rapid Transit Board and its Chief Engineer and Counsel, and by the coöperation of all the other departments of the City Government, and also by the generous attitude of the Metropolitan Street Railway Company and its lessee, the New York City Railroad Company, in extending privileges which have been of great assistance in the prosecution of the work. In January, 1903, the Interborough Rapid Transit Company acquired the elevated railway system by lease for 999 years from the Manhattan Railway Company, thus assuring harmonious operation of the elevated roads and the subway system, including the Brooklyn extension.
The incorporators of the Interborough Rapid Transit Company were William H. Baldwin, Jr., Charles T. Barney, August Belmont, E. P. Bryan, Andrew Freedman, James Jourdan, Gardiner M. Lane, John B. McDonald, DeLancey Nicoll, Walter G. Oakman, John Peirce, Wm. A. Read, Cornelius Vanderbilt, George W. Wickersham, and George W. Young.
The incorporators of the Rapid Transit Subway Construction Company were Charles T. Barney, August Belmont, John B. McDonald, Walter G. Oakman, and William A. Read.
CHAPTER I