The Subway Contracts - What They Are and Who Put Them Over - How the City Is Affected by Them and the Remedy

Sep 21, 2026

A question-and-answer analysis explaining the dual subway contracts between the Public Service Commission (for the City) and two railroad entities, detailing their purpose, timing, financing, and the city and company contributions. It describes how bond proceeds were used, what security was provided, and how amounts and interest arrangements were handled over a multi-decade operating period. The text also addresses tunnel-related allowances, named officials’ roles and compensation, and the legal basis for regulatory decisions, emphasizing taxpayer impact as the ultimate cost.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages18

Reading Time45 min

AccessFree to download

The subway contracts

What they are and who put them over

How the city is affected by them

The remedy

97-84065-15Sheehan,Cornelius M. # The subway contracts [Brooklyn] ## COLUMBIA UNIVERSITY LIBRARIESPRESERVATION DIVISION BIBLIOGRAPHIC MICROFORM TARGET OBIGINAL MATERIAL AS FILMED-EXISTING BIBLIOGRAPHIC RECORD | 508
sheehan.Corneliug M
Z
The subway contracts:what they are and who put
Box 186 them over,how the city is affected by them and the
remedy,by Cornelius M,sheehan, Brooklyn,coll1
son,1925?
24 p. 23 cm,
383017
oNLy
0 | | --- | Roprouctons may not be mado wihout pomison rom Columba Unversty brarios ### RESTRICTIONS ON USE: TECHNICAL MICROFORM DATA FILM SIZE: mmREDUCTION RATIO: 11:1 IB IIB IMAGE PLACEMENT:IA DATE FILMED: 4-7-97 INITIALS: 23332 ### TRACKING\#: FILMED BY PRESERVATION RESOURCES,BETHLEHEM,PA. ## THESUBWAY CONTRACTS WHAT THEY ARE ANDWHO PUT THEM OVER ### HOW THE CITY ISAFFECTED BY THEM AND ### THE REMEDY BY CORNELIUS M.SHEEHANPRESIDENT CITY GOVERNMENT LEAGUELEO KENNETH MEYER,Director8 ADBLPHI PLACEBaoOKLrn,N.Y. THE SUBWAY CONTRACTSWHAT THEY ARE ANDWHO PUT THEM OVERHOW THE CITY ISAFFECTED BY THEMANDTHE REMEDYBYCORNELIUS M.SHEEHAN 吗519276ec 292 Qwestion.What are the Dual Subway Contracts? Answer.Contracts entered into between the Public ServiceCommission,representing the City,and the Interboro RailroadCompany,and the New York and Municipal Railway Company,a subsidiary of the Brooklyn Rapid Transit Company,now knownas the B.M.T. Q.What was the purpose of these contracts? A.Construction of new subways,extension of the elevatedlines and third tracking of all the Manhattan and Bronx elevatedlines,and operation of same. Q.When were these contracts entered into? A.March 19th,1913. Q.Who was to finance the new subways? A.Both the City and the railroad corporations Q.What did the City provide under these contracts? A.First,the use of the public streets without which norailroad could be run.Second,$242,000,000 wholly in cashThird,a contract to operate the roads. Q.What did the companies provide? A.$237,000,000,which included certain property and otherallowances. Q.How was this money obtained? A.It was obtained by bond issue. Q.Was any of the property owned by the companies beforethe issue of said bonds given as security for the payment of theprincipal and interest of the bonds? A.No. Q.What,then,did the companies give as security for thepayment of this loan? A.The use of the subways and the legal right to operatethem during the next succeeding 49 years. Q.Did the companies sell their bonds at par? A.No. A.No,Morgan retained the money and allowed the Inter-borough Company 2y%interest. QWhat did thecompanies receive for their bonds? A.93 cents on the dollar. Q.What interest did the Interborough Company pay? Q.By what other means did the companies provide theirshare? A.536%. A.The Interborough was allowed by the contract $3,00,00Cfor the Steinway tunnel. Q.What did the City allow the Interborough on this money? A.6%. Q.What legal right had the Interborough to this tunnel? Q.Who was the interest charged to? A.None. A.To the Interborough and was later allowed as part of thecontribution of the Interboro towards the subways. Q.Why had not the Interboro any legal claim to this tunnel? A.In the first place,it was built in a location for which thecompany did not have a franchise.In the second place,the fran-chise provided that if it was not completed within the time pro-vided in the franchise it was to revert,without charge,to theCity of New York. Q.Who actually paid this interest? 1 A.The taxpayers. Q.What did Shonts get? A.Two bonuses—one of $125,000 and the other $25,000,or a total of $150,000. Q.Was it completed within the franchise time? Q.Who was Shonts? 4.No. A.Theodore Shonts was President of the Interboro: Q.What right,then,had

FAQs

What are the dual subway contracts, according to the document?

They are contracts entered into between the Public Service Commission (representing the City) and the Interboro Railroad Company, and the New York and Municipal Railway Company.

What was the purpose of these contracts?

They covered construction of new subways, extension of elevated lines, third tracking, and operation of the resulting transportation facilities.

How were the needed funds obtained, and who effectively paid for the arrangements discussed?

The money was obtained by a bond issue; the document indicates that the taxpayers ultimately paid, including through the interest and allowances tied to tunnel matters.

Sep 21, 2026

Uploaded by Seraphina