The New York Rapid Transit Decision of 1900 (Katz)

The New York Rapid Transit Decision of 1900: Economy, Society, Politics

Wallace B. Katz
Survey Number HAER NY-122, pp. 2-144

Historic American Engineering Record
National Park Service
Department of the Interior
Washington, DC. 20240

The records in HAER were created for the U.S. Government and are considered to be in the public domain. It is understood that access to this material rests on the condition that should any of it be used in any form or by any means, the author of such material and the Historic American Engineering Record of the Heritage Conservation and Recreation Service at all times be given proper credit. For information on HAER, visit Built In America: Historic American Buildings Survey and the Historic American Engineering Record, 1933-Present, Library of Congress American Memory Project.

Prologue

Construction of the first subway in New York City, the Interborough Rapid Transit underground railway or IRT, was officially begun on March 24, 1900 and completed, ahead of schedule, in late October, 1904. The assembled dignitaries -- one incumbent and one former mayor, other city officials, the Board of Rapid Transit Commissioners and its Chief Engineer and legal counsels, the subway contractor, and financier behind the IRT company -- who delivered speeches at the ceremony at City Hall marking the opening of the subway on October 27, 1904¹ rarely alluded to the past history of rapid transit of New York. They came to celebrate the fruition of great plans rather than to recall their frustration. Yet all of these men were old enough to remember many earlier subway projects that had failed. And some of them were sufficiently on in years to recall a city which lacked either elevated or underground railways, and in which the only available means of transportation other than foot from one end of a very long island to another was by means of private carriage, stagecoach, omnibus, or horse-car trolley. These same were unlikely to forget that this first subway was a hard won achievement, and that even five years before its opening, it had seemed a plan that might, for want of public funds or private capital, support from politicians, and sustained public interest, remain, as so often in the past, an unrealizable dream. Nor could they fail to remember that there were men seated on the platform beside them who had opposed, delayed, or, at the very least, remained indifferent to the enterprise to which they had devoted so much time, patient effort, skill and, in one notable instance, almost an entire professional career. They perhaps chose not to recall their own failings and mistakes, but years of stalemate and frustration had revealed them nonetheless: indecision, ambivalence about their own proposals, disagreement among themselves about both principles and strategy, the inability, for complex reasons relating to their class prejudices and ideology, to mobilize public support for their cause.

In the end a combination of good luck and great need had assured the triumph of their project. Victory worked to confirm their proud sense of themselves as virtuous men, citizens of large interest and good will who had labored hard and well for the public weal. In the sunny, brisk atmosphere of a late fall afternoon in New York, resplendent in great coats, full-dress morning attire, and top hats, they could thus afford to overlook an unhappy past and speak instead of the greatness of their city and, because of the subway which their vision and energies had helped to effect, its yet greater destiny to come.

[page 4] Belief in the inherent greatness, indeed the imperial stature of their city, was in these men's minds tied to the creation of a comprehensive subway system. For them a rapid transit underground railroad was a panacea providing an easy solution to a variety of political, social, and economic problems that threatened New York's preeminence at home and abroad.

Uppermost in their minds was a political problem. In the nineteenth century New York grew from an oversized seaport town² into a giant industrial and commercial metropolis: the largest city in the United States and the second city in the world.³ In the course of the city's metamorphosis from town to metropolis, the native business elite that had controlled New York's politics since revolutionary times lost ground to new political leaders drawn from the immigrant groups, particularly the Irish, who swelled the city's population in the first half of the century. With Tammany Hall, the historic center of New York's Democracy, as their seat of power, these new leaders gave the city a government that functioned splendidly to serve a broad spectrum of special interests.⁴ Tammany became a byword for bossism, corruption, payroll padding, and favoritism. Perhaps more important, Tammany and a substantial part of the business community were mutually tolerant of each other's foibles. The business leadership acquiesced in and sometimes profited from corruption. Tammany acquiesced in and sometimes profited from a form of laissez-faire capitalism that was indifferent to the larger needs of the public. By the turn of the century, however, New York had become too large and complex a city to afford this state of affairs. The city required efficient and active government and officials whose first concern was not political patronage but rather the provision of urgently needed public works and services. The native business elite attempted to regain control of the city, of a number of great public decisions,⁵ whose management, in the elite's opinion, could not safely be entrusted to Tammany. Of these, the rapid transit subway decision was one of the most important.

The political problem of Tammany corruption related to a social problem. The increase in New York's population, particularly in the period 1860-1900, was largely due to immigration from the poorest, most backward, rural areas of Southern, Central, and Eastern Europe.⁶ The new immigrants customarily settled and tried to remain in the densely populated and overcrowded areas of the lower East Side of Manhattan, where they found work; ghetto camaraderie with both new and older immigrants from their native land; and help of various kinds from Tammany politicians who asked no questions when exchanging favors for votes.⁷ In the view of the patrician elite who led the fight for the subway, the squalid conditions of life in these ghetto slums spawned poverty, crime, and disease; reinforced the newcomers in values, modes of conduct, and traditions that prevented their integration into American life; and, most significant, enabled an inadequate, inefficient, and corrupt system of boss rule to preserve its hold on city politics, thereby precluding the creation of necessary public improvements and services.

[page 5] In lieu of higher wages, which depressed times⁸ and the elite's adamant belief in a high profit incentive for capital rendered inconceivable, and in the absence of a considered policy of zoning, slum clearance, and tenement-house reform,⁹ the patricians envisioned but one solution for both the political problem of bossism and the social problem of immigrant slums. Rapid transit -- mechanized high speed trains running on tracks separate from the street, providing cheap, quick transportation from the Battery to lower Westchester -- would alone foster the dispersion of the immigrant population to the relatively undeveloped northern part of the city. In these more wholesome surroundings the immigrant would undergo a remarkable transformation. Liberated, as it were, from the prison of the ghetto with its bad influences and unhealthy atmosphere, he and his family would slowly become more like other -- that is, native -- New Yorkers; and, more important, would soon realize that the bosses who controlled city politics were not his friends but rather enemies of his own and the public's good.

New York was also beset by serious economic problems in the late nineteenth century, and these, like its political and social problems, demanded resolution, if the city was to sustain its preeminent stature in both the nation and the world. In the early 1800's, because of its natural and splendid Atlantic port, its position as the nation's first major railroad terminus, and its accessibility as a market via inland waterways and then through its first great public "improvement," the Erie Canal,¹⁰ New York had unquestionably reigned supreme as the principal commercial city of the nation. In the last quarter of the century, however, New York was faced with potential rivals for its first-place rank. In the Northeast were Philadelphia, Baltimore, and, to a lesser but still worrisome extent, Boston, all of which, precisely in the effort to equalize their competition vis-a-vis New York, had been favored by federal port and railroad policy.¹¹ And in the Midwest was Chicago, a city which since 1850 had grown with astonishing rapidity.¹² By virtue of its role as a market for the agricultural wealth of its region and as the hub of a newly completed trans-continental railroad system, Chicago posed the greatest threat to New York's commercial supremacy.

But competition with these cities was not in itself the problem that most perturbed prescient New Yorkers of the time. What concerned them was New York's internal economic ills -- overdeveloped for both business and residential purposes in lower Manhattan, and underdevelopment in upper Manhattan, resulting in high taxes, an imbalance in real estate values, downtown traffic congestion that adversely affected retail and wholesale commerce, and a general want of amenity and convenience. Again, there was one simple solution that would deal with such problems. All of them were at least in part the consequence of the lack of adequate rapid transit, and would, accordingly, be substantially if not wholly remedied with the construction of a rapid transit underground railroad.

[page 6] It should come as no surprise, then, that the opening of the first subway in New York represented for its partisans an occasion for self-congratulation and rejoicing. The IRT signified something more than the achievement of a great civic enterprise. Its realization was seen as a victory for good government, social reform, economic stability and growth, and, last but not least, a guarantee of the continued greatness of the Empire City.

Sanguine expectations of the subway such as these were bound to prove illusory, as the report on the impact of the IRT at the end of this study will show. For the urban historian, however, these expectations are no less interesting or important because they were unfounded. Indeed, because the first subway was perceived as an answer to virtually the totality of New York's most insistent needs, its genesis provides a particular case by means of which the historian can understand the totality of the urban life of New York in the late nineteenth century. The IRT, in and of itself, was a considerable achievement -- precisely how considerable, in light of its time and place and from the perspective of the history of technology, subsequent technical studies in this volume will assess. Here, however, in telling the story of the origins of the IRT -- how the demand for a rapid transit underground railway developed and made itself felt, how and why its realization was delayed, opposed, obstructed, and how the subway was finally achieved -- one is concerned with something different in kind from the conventional history of a great "improvement." In charting the origins of the IRT one confronts the history of a metropolis coming to grips both with the manifold problems of its growth in the nineteenth century, and with its political, social, and economic fate in the twentieth century.

Part I, Section I

[page 9] The construction of the IRT was the culmination of a thirty-year struggle for improved mass transportation in New York. The story of its origins is inseparable from the larger context of the history of rapid transit.

The need for rapid transit was sorely felt and strongly expressed in New York as early as 1865. By this date, which marked not only the end of the Civil War but also the completion in London of the first subway in the world,¹ the city had already undergone a transformation that would set the pattern for its development in the next thirty years, and that would also require mass transportation more adequate than ferries, omnibuses, horse-driven railways, and commuter railroads could provide.

Since the beginning of the nineteenth century a great change in number -- the expansion of trade, finance, and industry, and massive immigration from Europe -- had gradually produced in New York an even greater change in form. It was no longer a city in which the homes and businesses of its inhabitants were indiscriminately and compactly huddled around a magnificent natural harbor.² It was a very large if not yet giant city whose character was both enhanced and marred by the effects of rapid and uneven growth. It was a city replete with all the signs and symbols of "advanced" nineteenth-century urban development: a centralized and specialized business district; separate, fashionable, and newly-built residences for the rich and middle classes, rigidly separated according to degree of wealth and social status; prosperous and fast growing suburbs. And it was also a city with problems resulting from and commensurate with its new size and stature: overcrowded and unhealthy slums, adjacent to or stuck within the interstices of the business center, existing in symbiotic relation with its new suburbs to the east and west across the two rivers; mile upon mile of undeveloped or underdeveloped land to the north of Manhattan Island, unpeopled save for the occasional farmer or squatter.

New Yorkers of the time understood that innovations in public transit were responsible for both the virtues and defects of their city's development. Without the existing modes of urban transport, its size in 1865 would have been inconceivable, and its spatial pattern inexplicable. But as most New Yorkers also understood, without considerable improvement in the extant modes of mass transportation -- without, that is, a rapid transit system -- New York after 1865 would suffer from the consequences of its own sudden growth.

In New York, however, the demand for rapid transit did not at first result in subway construction. London's underground railroad, the Metropolitan, stimulated schemes galore for a similar project in New York, none of which were in the least successful. A number of men who made a careful study of the rapid transit question argued repeatedly over the course of thirty years that a subway system would best meet the city's economic and social needs. But subway construction was very expensive. Municipal [page 10] government in the latter half of the nineteenth century was weak and often corrupt, and lacked the power, the will, and the money to build a subway. Moreover, public transit decisions were customarily considered the province of private capital, and since capitalists objected to the cost and doubted the potential profitability of underground railroads, the stopgap solution of elevated railways was the one chosen for New York.

The elevated railways were envisaged as a temporary solution and they provided the city with temporary relief. Within ten years of the completion of the elevated system, these roads were already inadequate to the city's needs, having created more traffic than they could satisfactorily handle. By 1890 the demand for improved rapid transit had become synonymous with agitation for a subway but the large capital investment in both the elevated railways and the newly consolidated surface railway system represented an obstacle that would frustrate and delay subway construction for another decade.

Part I, Section 2

In 1866 the New York State Senate appointed a committee of five members -- Senators Andrews, Low, and Cornell, Mayor Hoffman of New York City, and Alfred Craven, the Engineer of the Croton [Aqueduct] Board -- to meet during the Legislature's recess, and to consider and report back to the Senate on the means and modes by which the City could obtain a transit system to meet its needs.¹

Three points in the resolution establishing this committee are worthy of comment. First, the resolution specified that the committee decide upon "the most advantageous and proper route or routes" which such a transit system should follow. The stipulation that the committee chart possible routes and choose the best one represented a departure from the usual procedure concerning urban transit in New York, where, as in many other American cities,² the choice of routes for mass transportation was customarily left to negotiations between the private interests involved -- the builders of the proposed railway or horsecar line, their competitors, and property owners whose right of way would be affected. Second, in naming the Engineer of the Croton Board, Alfred Craven, to the committee, the Senate not only assured. that it would have benefit of expert advice, but also made implicit reference to an earlier New York tradition of public responsibility for large public projects, such as the Erie Canal on the Croton Aqueduct. Third, the resolution emphasized that the commissioners should consider only proposals "suited to the rapid transportation of passengers from the upper to the lower portion of the city," which was explicitly to recognize that the future growth of New York depended on the creation of a rapid transit system, a system with trains of cars rather than just one, and with tracks that were separated from normal street traffic -- in other words, either an elevated or underground railroad.

[page 11] With Senator George H. Andrews presiding, the Committee met in New York during the last six months of 1866, at first gathering data for its deliberations and advertising for proposals along the lines laid down by the Senate resolution, then hearing testimony from advocates of various elevated and underground railway schemes,³ and then, in two final months, making and preparing its decisions for public reception. On January 31, 1867, it submitted its report to the Legislature.

The Committee's conclusions were in three respects unequivocal. It began by stating its objections to the existing modes of urban transport; it ruled out any extension of railways on the surface of the streets, whether horse-driven or steam-powered, arguing that "if every avenue lengthwise of the island were to be occupied at once by surface rails, the relief afforded thereby would not be adequate to the present requirements, and in three years' time the pressure with all its accompanying annoyances; inconveniences and dangers, would be as great as it is today."⁴ In this, as will be seen, the Committee drew attention to an important point: that every enlargement or improvement of the street railway system, rather than relieving traffic, tended after an initial period of grace to create and in turn be overwhelmed by more of it. The Committee also ruled against a single elevated or underground line through the center of the city, because such a line would serve little purpose if, as it must, it stopped at Central Park.⁵ Most important, however, was its declaration in favor of underground railways as "the only speedy remedy for the present and prospective wants of the city of New York in the matter of safe, rapid, and cheap transportation of persons and property."⁶ The Committee proposed the construction of two underground lines, to run together from the Battery to City Hall Park, and from there branching out separately to the East and to the West Side of the City until the Harlem River.⁷

In other respects the Committee's conclusions were less than clear. Though all five members agreed that underground railways would provide the best solution to the City's transit problems, they were not certain as to the most suitable motive power for New York's subways. London's underground, the Metropolitan Railroad, was steam-powered. But the principal difference between it and what would be required for the proposed subways in New York was that it was a short, open-cut railroad that infrequently ran through tunnels, and the tunnels it did have were far less lengthy than the distance between the Battery and 14th Street, much less the distance from the Battery to the Harlem River. For New York, then, the Committee raised the possibility of a more experimental technology -- pneumatic propulsion -- which an 1864 Select Committee of the House of Lords had expressly vetoed in London.⁸

Again, though the Committee was presented with numerous underground railway proposals, one or two of which it might have chosen to recommend to the Senate, it refrained from doing so. Either the Committee had reservations about the feasibility -- financial or technological -- of all these schemes, which in effect cast doubt on its own recommendations, or, as James Blaine Walker, [page 12] an early historian of rapid transit, has suggested, it chose to let the proponents of rival schemes "fight it out before the legislature,"⁹ which reveals much about the Committee's limited conception of its own powers and responsibilities.

The Committee did nonetheless recommend a specific transit proposal which in the end constituted the one practical consequence of its activity. It suggested to the Senate that Charles Harvey, the investor and promoter of a cable-powered elevated railroad, be permitted to construct a small segment of his road as an experiment. But this recommendation, later implemented by the Senate, was all the more curious, inasmuch as the Committee also concluded that elevated railways "cannot be fully adapted to the transportation of freight, and have never been tested in any practical way so as to warrant an unconditional recommendation of them for transportation of passengers."¹⁰

The best and simplest comment on the work of the Senate Committee of 1866 was made some forty years later, in the "History of State Regulation in New York," prepared by another public body concerned with the question of urban mass transportation -- the Public Service Commission for the First District of New York. Without remarking on either the ambiguity of the 1866 Committee's work or the motives that might have conceivably determined so finally inconclusive a report, the Public Service Commission merely stated what was -- and what for almost thirty years would continue to be-- unfortunately true: "the above report was without practical result."¹¹

Part I, Section 3

Whatever the Committee's reservations about the technical or economic feasibility of an underground railroad, its decision to recommend subway construction was rooted in its understanding of the needs and problems of New York. Its work may have finally been "without practical result, but the "commercial, moral, and hygienic considerations" to which it referred in its conclusions, were invariably mentioned for nearly thirty years thereafter whenever the subject of rapid transit was raised.

New York's needs and problems, like the form of the city itself, did not change qualitatively over the course of the next thirty years. They merely grew larger, developed in a previously established direction; and became more apparent, hence more pressing. Demographic, real estate, and public transit statistics, newspapers and business journals, as well as the arguments set forth by advocates of one or another form of rapid transit, all demonstrate the real and perceived continuity of the city's needs and problems over three decades.

In June, 1894 the Real Estate Record and Builder's Guide, the highly literate organ of New York's real estate and construction interests, celebrated the twenty-fifth anniversary of its publication with one-hundred and forty-three page supplement, entitled "A History of Real Estate, Building, and Architecture in New York City, 1868-1893."¹ As might be expected, [page 13] given the Record and Guide's advocacy of real estate interests, the agreement of this retrospective compendium of facts and figures about New York's development was directed to a single and simple end: to describe how the city had grown and prospered mightily in twenty-five years; and to indicate what would be required so that it would continue along the same lines in the twenty-five years to come.

There were three especially prominent points in this discussion. First, the period immediately following the Civil War marked a turning point in New York's history, for from that time on its destiny was "to be not only the chief city of the North, but the Metropolis of a reunited country. As of old all roads led to Rome, so now in this Western world, all roads lead to New York."² Second, the present city, the Metropolis of 1893, was "in an extraordinarily full sense" the creation of the prior twenty-five years. In a quarter of a century the City had changed a great deal, indeed in terms of its physical appearance had followed a pattern that could first be discerned shortly before or soon after the Civil War, and that had since become progressively more apparent.³ The Record and Guide emphasized a third point, which was that the development of New York "beyond the limits of the Colonial City" had been "strictly controlled by the nature of ... rapid transit facilities," adding, so as to be sure that its readers caught the point, "that the extent of the one has ever marked the boundary of the other."⁴ Of course regular readers of the Record and Guide hardly needed to be reminded of this fact. In twenty five years scarcely a weekly issue passed without some mention of rapid transit, and some dire warning from the editor, C.W. Sweet, of what fate would befall New York without improvement of its rapid transit system. Even as it celebrated its twenty-fifth anniversary, the Record and Guide's message remained the same: the City had grown, changed, and prospered, and would continue to do so; but notwithstanding the advent of elevated railways and the recent introduction of cable-powered streetcars, its rapid transit problem endured forever.

The trouble was that over the course of three decades New York's population had increased and was continuing, to increase absolutely and at a rate far in excess of the City's, capacity to house it adequately. The cause of this lamentable situation was that New York could only develop in one direction -- to the north -- and residential movement in that direction depended unfortunately on improved rapid transit, which was not forthcoming.

The phrase "pressure of population" assumes real meaning, when one considers that by 1875 more than one million New Yorkers were crammed into the southern part of Manhattan Island below 59th Street, and, of that figure, more than half were crowded into the Island's southern tip below 14th Street. And by 1890, with the population up beyond the 1.5 million mark, and increasing at a more rapid rate than in the previous thirty years, the city was still virtually undeveloped to both the East and West above 125th Street.⁵ Even the Upper West Side, both slightly above and below 96th Street, was partially developed.⁶ There were simply too many New Yorkers in too [page 14] small a space, and without rapid transit there was little possibility of a change in this situation. One begins to understand, then, why throughout these three decades New Yorkers looked to rapid transit as the answer to their apparently never-ending problem with sheer number.

The problem of number is of course inexplicable without reference to New York's other great problem, its unique geographical limitations. Some cities, like London,⁷ were unconfined by geographical bounds and could develop in a haphazard fashion, scattered out in all directions. Other cities such as Paris were limited in their development by man-made boundaries -- until the middle of the nineteenth century, by walls⁸ -- but this in itself did not preclude a relatively uniform circular pattern of growth from the_center of the city to the circumference formed by the wall. By contrast, Manhattan Island was a narrow strip of land twelve miles long, and one half to two miles wide, bounded on one side by the East River, on the other side by the Hudson, and with the Atlantic Ocean at its tip. Accordingly, its spatial development and much of its traffic were limited to an obligatory south-north axis.

By 1860 the southern end of the Island, at least as far as 14th Street or Union Square, had been taken over by a specialized central business district, so that residences were pushed. further to the north, a process which continued as the business center grew. Early modes of public transit -- stagecoaches, omnibuses, and horsecars -- had made this pattern possible, but without rapid transit, the northern development of the city had to cease. No one, not even the rich and middle classes who conceivably could afford the pecuniary cost, could or would afford the cost in time and inconvenience involved in traveling long distances at slow speeds in jammed horsecars to and from the business center in the south and residences far to the north.

To some extent before¹⁰ and quite markedly after the Civil War, then, another pattern began to take shape. The very rich spared themselves a long ride by reserving the best areas in Manhattan within reasonably easy reach of the business center. Some of the rich and many of the middle classes -- according to the Record and Guide, all varieties of lower, middle, and upper-middle classes -- availed themselves of the nine ferries across the two rivers and left the city for greener pastures in Brooklyn, Long Island, and the towns of nearby New Jersey. The working poor, cut off from northern movement by the lack of quick cheap transport and by the residential area reserved for the rich, and unable to afford either the price of the ferries or homes in the suburbs, stayed where they already were, in the ever more densely concentrated sections of the lower half of the city, adjacent to or interspersed within the central business district. Meanwhile, vast tracts of land in the northern half of the city above 125th Street,. including the territories of lower Westchester, annexed in 1874, were left, as one writer put it, "to languish and depreciate in value."¹²

[page 15] That the rich had reserved a substantial and choice part of Manhattan, the entire area adjoining Central Park, for their present and future residential development, was a fact perhaps first remarked upon by the Senate Committee of 1866; it not only discerned the new pattern as it was just taking shape, but also recognized the problem which would result from it, offering as well its own unfortunately aborted solution. The Committee perceived that the residential district reserved for the rich, which was virtually all of midtown Manhattan, constituted a barrier to the northern movement of the poor, which could only be overcome by rapid transit in the form of two underground railroad lines.

The Central Park, bounded on the South and North by 59th and 110th Streets, on the East by the Fifth Avenue and on the West by the Eighth Avenue . . . an area more than half a mile broad by more than two and a half miles long, . . . not only excluded from its boundaries all tenements, but all property within the area on either side of it extending nearly to the rivers and for some distance above and below the Park has advanced so enormously in value within the past six years as practically to exclude the laboring classes from residence in a district more than three miles long and extending nearly the whole width of the city. For a large population, then, this area on either side of the Park, unavailable for its greater portion for domiciles for the working classes, requires in effect to be traversed by some method affording rapid means of transit from extreme upper to the lower portions of the city.¹³

Seven years later in 1873, after little substantial improvement of the rapid transit situation, the new pattern foreseen by the Committee was firmly established, and the New York Times, regretfully accepting its negative consequences, predicted that "New York will become a city of the very rich and poor, of those who can afford to stay and these who cannot leave."¹⁴ Two years later the Record and Guide, still hoping that rapid transit could forestall or definitively avert this pattern by equalizing land values, looked forward to a city in which "moderate prices for land all along the line from Fifty-ninth street to Yonkers" would foster "the introduction of a middle class between our millionaires and paupers."¹⁵

By 1877, however, the Record and Guide projected a different vision. Like the Times it saw no choice but to accept the prevailing pattern; unlike the Times it went a step further by rejoicing in it, deciding to make a silk purse of a sow's ear. It prophesied a future city with but two social classes -- rich and poor -- and three distinct "classes of property": one section in the lower third of Manhattan containing industry and wholesale commerce; one district in the middle of the Island given over to the fashionable retail trade; and one part of the city, the upper third, restricted to the elegant homes of the wealthy.¹⁶ And inasmuch as these three distinct [page 16] "classes of property" would "exhaust the available territory of the island proper," the Record and Guide foresaw no other alternative for the working classes but to seek their tenements -- "the inevitable dwellings of the poor" -- wherever they could best be found, "interwoven with and around these distinctive localities, in spots and gaps unsuited for the use of any of them."¹⁷

The Record and Guide, as one might assume of a journal that spoke for the interests of realtors, builders, and property owners, remained largely unconcerned about two problems that evoked dismay in other New Yorkers: the problem of the slums and the problem of suburban exodus. Throughout the late 1870's and 1880's, when the upper East and West Side above 59th Street were in the process of being built up, and when money for development further north was thus unavailable, the Record and Guide rarely discussed the slum problem in the Lower East Side. And on the few occasions when it did refer to tenement house reform its primary purpose was to berate "philanthropists" who wanted to destroy those structures, or prevent new ones from being built.¹⁸ Only when the area around Central Park and some parts of Harlem had been partially developed, and when real estate brokers started to think about the opportunities open to them through development of northern. Manhattan and lower Westchester, did the Record and Guide change its tune. By 1890 it began to consider the problem of tenements, and the necessary connection between rapid transit and the dispersal of the slum population to "cleaner and fresher air" to the north.¹⁹ The Record and Guide was similarly indifferent to the problem of suburban exodus. It welcomes stimulation of the real estate and construction businesses from whatever quarter it might come, and houses built in Brooklyn, Hoboken, or Jersey City were better than no houses built at all. The Record and Guide's position on these two issues, however, provides curious illustration of the extent to which the defense of special interests can both mislead and enlighten. With respect to one issue -- the problem of the slums -- its attitude was callous and short-sighted; with regard to the other issue -- suburban exodus -- it was both astute. and prophetic.

The problem of suburban exodus was far less grave than many New Yorkers thought, and would in time be definitively solved, as the Record and Guide first predicted,²⁰ by the consolidation of Manhattan with its Brooklyn and Long Island suburbs. Consolidation would not take place, however, until 1898, and in the 1860's and 1870's most New Yorkers failed even to imagine, much less promote it. They could not perceive that New York was fast emerging as the nation's first great metropolitan district²¹ and that nearby cities and towns, if still politically autonomous, had already become socially and economically dependent on New York. Nor could they understand what to any contemporary statistician seems easily explained -- their city's declining ratio of population increase. New York's falling and Brooklyn and northern New Jersey's rising rates of growth were in accordance with statistical law: the larger the aggregate of population, the slower the rate of growth; the smaller the aggregate of population, the faster the rate of growth.²² New York's growth from 1820 to 1850 had, of course, defied this law; a rare occurrence owing to the construction of the Erie Canal and its effect on the city's commerce,²³ and an occurrence not to be repeated.

[page 17] But New Yorkers of the late nineteenth century knew nothing of this law, and could hardly be expected to understand that their city's earlier rate of growth was only the exception that proved the rule. What they saw and, even more, what they feared, was a city losing population and tax revenue to its neighbors, a city whose rate of growth was declining while the size of adjacent areas rapidly increased, and a city whose development, in the absence of rapid transit, had been artificially and abruptly halted.

One writer, arguing in 1870 for rapid transit, observed a great difference between the New York of the first half and the New York of the second half of the century. In 1817 New Yorkers had been willing to take a risk in building the Erie Canal, and because of it they had captured the Western trade and surpassed their nearest rival, Philadelphia. The New Yorkers of the present were too timid to build an underground railway, and thus would soon lose out to Brooklyn, in 1870 the third largest city in the United States.²⁴

The same writer was also worried about the potential development of New Jersey cities, which, as he clearly indicated, were growing at New York's expense because "the time required to travel from Harlem is over two hours, while that from Elizabeth, New Jersey, just twice the distance, is only fifty minutes."²⁵ The Times was similarly perturbed by the growth of Brooklyn and New Jersey. In an editorial of 1874 it pointed to the fact that Brooklyn's population had not only grown more rapidly than New York's; but also, at least during the period 1860-1870, had made an absolute gain slightly in excess of the city's; and Jersey City had nearly trebled and Hoboken more than doubled in population during the same decade.²⁶. "People have found," said the Times, "that a residence within two miles of Fulton Ferry, on the Brooklyn side, and a mile of Williamsburg Ferry is nearer to the lower portions of the City than a residence above Fifty-ninth Street. Jersey City and Hoboken are still nearer, and a traveler can reach any place within 17 miles of Jersey City in the time required to take him to Sixty-second street."²⁷

In a few years, however, the Record and Guide was proven right and the Times proven wrong. The exodus from New York to Brooklyn, Long Island and New Jersey, did not wholly cease, but with the completion in Manhattan²⁸ of the elevated lines by the early 1880's, it did lessen considerably. More people at least than before could and did move north on Manhattan Island. This, together with massive immigration from Europe,²⁹ somewhat augmented the city's rate of growth, though it was never again as great as in the three decades prior to 1850. Other problems subsided or momentarily disappeared as well: the diminution of the middle-class population of the city, and the imbalance of land and real estate values

The "els" were a stop-gap solution to the city's transit needs, but they provided at least temporary relief for some of its problems. No one, not the Record and Guide, nor the Times, nor the other newspapers except [page 18] The Sun, the house organ of the elevated company,³⁰; and least of all the passengers who rode the trains, was completely satisfied with the "els," Everyone complained of the way the elevated structures darkened and obstructed the streets, and, because of the smoke and cinders from their steam-powered engines, the way the trains dirtied the streets. Few were totally pleased by the elevateds' service, its speed, or the routes that the four lines followed. Some, like the Record and Guide, lamented the cheap, flimsy, and impermanent character of the elevated structures themselves.³¹

Yet as early as 1880, the Record and Guide declared itself "not only friendly to the present elevated roads, but to all proposed ones," adding "they are worth not four times, but twenty times their cost to the owners of real estate and the people of this metropolis."³² Hardly any New Yorker would have taken issue with the judgment of the Record and Guide in its Supplement of 1894:

... it was in the years 1879-80 that New York came into full possession of its present rapid transit facilities, and to this fact probably more than to all others put together is due: the activity in real estate and the increase in values that commenced in these years . . . it must also be acknowledged that the utilitarian service which they (the "els") have rendered to the city has been enormous. The marvelous expansion of the metropolis northward within the last fifteen years is directly due to their assistance. In their absence New York as we know it today north of Fifty-ninth Street is inconceivable.³³

The Times, too, in spite of its suspicion of the elevated company's management, joined the bandwagon, and lauded the "els" for the work they were doing in restoring a balanced social composition of the city. An editorial written spoke of a middle-class return to New York, and of new recruits who "bring their neighborhood with them, and fill contiguous dwellings with reputable and congenial occupants."³⁴

Praise for the elevated roads also emanated from another and surprising source: from proponents of underground railway schemes who had hoped and believed that the very success of the "els" would stimulate both the public and, more important, private capital to invest in still better, if more expensive, forms of rapid transit. For this reason subway advocates cited impressive statistics about the "els": how much they had cost; how much profit in relation to original cost they earned; how their passenger traffic had increased and how much more it could be expected to increase; how they had helped augment land and real estate values along their routes; how, by contrast, streets at great distance from their routes had suffered a loss of value; and how, by bringing a greater number of people from greater distances into the center of the city to shop and conduct business they [page 19] had improved the commercial life of New York.³⁵ The main point, of course, was that the "els" had cheated most of the traffic that they handled. This was a true point as well. After an initial loss, passenger traffic on the surface railways had not decreased but increased because of the "els", profiting from the enormous short-distance spillover that the "els" created.³⁶ And if the elevated roads could achieve such success in a short time, then, or so the subway advocates argued, real long-distance and much faster transport -- underground railroads -- could do even better.

However, in one respect, which was never mentioned by those who praised the "els," these roads proved to be a failure. Even in the early 1880's, before bad management and the renaissance of old problems caused widespread public disenchantment with the "els," there was one problem, the slums in the lower East Side, which the elevated trains could neither solve nor alleviate, and for which, presumably, only a subway might provide relief.

Indeed insofar as the "els" generated a larger traffic moving to and from the central business district, which in turn prompted its expansion, their effect on the slums below 14th Street was counter-productive. For as the business center expanded, the area in which the working poor could live in close proximity to their work was further contracted. And with immigration increasing in the 1880's, this meant a slum problem even greater than twenty years before, when the Senate Committee had expressed special concern regarding the "moral considerations" that demanded a quick and adequate solution of the rapid transit problem.

Expansion of the business center would not of course have mattered, had the "els" managed the task which social reformers expected rapid transit to accomplish, the "dispersal" of a substantial portion of the slum population northward, into less crowded and "healthier" areas of the city.³⁷ But this they could not and did not do. As Adna Ferrin Weber, the celebrated author of The Growth of Cities in the Nineteenth Century, indicated in 1899, the removal of the poor to the northern suburbs could not be achieved by cheap and rapid transit alone. It required as well higher wages; shorter working hours, and some method -- Weber suggested "associations for the ownership of suburban homes by workingmen" -- by means of which the poor could afford to buy homes in the suburbs.³⁸

In the 1880's, the hey-day of the "els," none of these conditions prevailed. The "els" themselves were slow, or at least not fast enough to count as rapid transit for unskilled laborers obliged to work ten to twelve hours daily. One critic noted that the 6th Avenue line took twenty-three minutes to travel from the Battery to 23rd Street, and that the 3rd Avenue elevated road took forty-five minutes to go from South Ferry to 129th Street. None of the lines averaged better than twelve miles an hour after making from two to four stops per mile, which scarcely met the popular demand expressed in the slogan "From the Battery to Harlem in 15 minutes."³⁹ The "els" were also [page 20] too expensive. In 1875 fares had originally been set at ten cents between the Battery and 59th Street, and for the East Side lines fifteen cents and the West Side lines seventeen cents for the trip from the Battery to the Harlem River, with half-price "commission fares" during rush hours.⁴⁰ By 1885, a year in which the roads carried over 115 million passengers,⁴¹ fares were reduced to a standard five cents. But even this fare, given the extra cost of transfers to the street railways, was prohibitively costly for the tenement dweller of the lower East Side, who at best earned $16 or $17 and at worst $8 or $9 weekly, not counting periods of unemployment.⁴² Moreover, even had the immigrants of the lower East Side been able to spend time or money to travel on the elevated roads, they could not have afforded the price of either homes or apartments to the north. The very rise in land and real-estate values that the Record and Guide attributed to the creation of the "els," precluded working class settlement in the northern sections of the city.

All of the needs and problems requiring improved rapid transit were discussed in a remarkable pamphlet, written in 1884 by one underground railway proponent who refrained from praising the "els." His name was John Isaacs Davenport, a newspaperman, lawyer, political and social reformer, and as George Rogers Taylor has said, a subway advocate whose conclusions can be trusted.⁴³

Like almost all reformers of his time and social class, Davenport's concern with the problem of the slums, creditable as it was, belied an even greater anxiety, indeed a fear, about the possible effects on the moral, social, and political character of American life of the "social disease" of the slum. As someone who devoted much of his life to the study and control of political corruption,⁴⁴ Davenport perhaps saw in the immigrant slum dweller a potential voter too precisely suited to the needs and interests of Tammany Hall and the Tweed Ring. As the patrician descendant of a prominent Connecticut family, he was perhaps threatened by the lower-class and the foreign rather than native American moral deportment of the immigrant slum dweller. He was quick to see pathological social conditions -- poverty, crime, disease -- while failing to notice that these same slum dwellers resisted the worst effects of social deracination through strong kinship, religious, and political allegiances.⁴⁵ Again, in common with other reformers of his time, Davenport. was perhaps too ready to find nothing of redeeming value in these slums, to miss whatever strength of character or simple vitality may have existed in this world.

All this helps to explain why he and most other patrician reformers were so eager to remove everyone from these slums, to disperse their population to the northern suburbs -- to Arcadia within easy reach of the city, the rus in urbe. Instead of the "dirt and confinement, the dreariness, ugliness, and vice of. the poorer quarters of a great city," the erstwhile slum dweller would find in the suburbs "sunlight, fresh air, the sight of grass and trees," and his children "the opportunity for healthy moral and physical growth."⁴⁶ And this also explains why, while neglecting to consider the question of the wages or working hours of the poor, men like Davenport put so much store by the improvement of rapid transit. For by the late nineteenth century rapid transit [page 21] had become a panacea for the quick and easy abolition of all social evils. It promised a social reformation without class struggle, without sacrifice on the part of the employers or the propertied classes, and one achieved in such a way that men like Davenport would not have to relinquish or even question their sentimental belief in rural virtue, while nonetheless partaking of all the advantages -- wealth, culture, diversity -- of a city whose very existence represented its antithesis.⁴⁷

And yet, in spite of his ideology, Davenport made a very good argument for a rapid transit underground railroad. In part, this was because he filled his pamphlet with a multitude of facts and figures about slum life that one rarely found in the pages of the Record and Guide. He knew all about the beginnings of the tenement-house slum in the early nineteenth century. He described how old single-family dwellings were converted into "tenant houses" for three or more families, and how, once landlords discovered that these converted houses yielded substantial profit in rent, they began to erect new houses designed especially as tenements -- "buildings upon small lots, frequently two buildings, one in front and one in the rear of the lot, without the slightest attention being paid to the most simple and ordinary sanitary measures."⁴⁸ He also knew why these tenements were so quickly packed with~the working-class and immigrant poor.

... there was nowhere the working portion of the community, and the poor, could go, but to the east side of the city. The utter absence of public means of conveyance, and the necessity of being within easy walking distance of their place of work, compelled the masses to reside in the lower wards while the greater value of property in the northern and western sections of the city forced them to the east side which thus became, each year, more densely settled.⁴⁹

He cited statistics drawn from the Citizen's Association Council of Hygiene Report of 1864 and from other sources such as the Metropolitan Board of Health, which showed that the average density of population per acre in New York below the Harlem River was 110, surpassing even Paris and London.⁵⁰ Density in certain wards of the lower East Side -- the fourth, sixth, seventh, tenth, eleventh, thirteenth, fourteenth, and seventeenth, ranging from 233.6 to 432.3 persons per acre⁵¹ -- availed the working class and poor of "very little more ground space than is appropriated to the dead -- a distribution which is not less fatal than it is impartial."⁵² He cited mortality statistics to demonstrate that overcrowding and squalor were responsible for New York's high death rate, which was greater than any other American city's, and higher even that that of the largest cities in Great Britain and France.⁵³ And referring to Dr. Stephen Smith, another social reformer and the first Commissioner of the Metropolitan Board of Health, Davenport concluded that there was only one solution for all these problems. Smith said it was fruitless to [page 22] remove the filth from the tenements; no amount of tenement-house regulation or reform would ever work.⁵⁴ What the situation required was the removal of the slum-dweller from the slum, and this could only be achieved by means of rapid transit.

All of Davenport's facts and figures were directed to the promotion of a subway. His thesis was both simple and true: that in New York public transit facilities always came too late to do any good. By the time they made their appearance -- he had in mind the horsecars in the 1850's, and the "els" in the 1870's and 1880's -- rising land values, a further expansion of the business center, and a new and even more massive stream of immigration rendered these "improvements" useless with respect to the problem of the slums in the lower East Side. In the year he wrote, 1884, a subway was urgently needed, not only because the elevated trains did not provide true rapid transit, but also because a subway, if not built now but later, would be ineffective. Time counted. If not in 1884, then certainly in a few years, speculators would begin to turn their attention from the upper West side and Harlem and hike up the price of land in the northernmost sections of Manhattan and the Bronx. Yet another wave of immigration would inundate the lower East Side. And the central business district, growing ever more crowded and congested, in part because of the traffic generated by the "els" and more efficiently powered streetcars, would further expand

Davenport's argument is persuasive. Rapid transit was doubtless seen as a panacea. But if the opinions of contemporary reformers like Davenport are to be given any weight, then one must consider why each new form of public transit -- and as will be seen, both forms of rapid transit, the subway as well as the elevated trains -- ultimately failed to achieve the ends that reformers and other interested parties expected of them. Davenport's argument provides an answer to this question. Public transit, rapid transit, came too late, long after it was needed, and long after it could or would do the most good. And if Davenport's thesis has some truth, then in answering one question it poses another: Why did it take so long for New York to build a subway, or, in other words, why was the Senate Committee Report of 1868 "without practical result"?

Part I, Section 4

In the period between 1864 and 1902 sixteen separate companies received charters from the State of New York to construct an underground railroad in Manhattan.¹ One of these, the New York City Rapid Transit Company, was organized in 1872 by Commodore Vanderbilt of the New York Central for the express purpose, not of building a subway, but of preventing anyone else from building one.² Another company, first chartered in 1868 as the Beach Pneumatic Transit Company, began its largely paper life³ as a plan for a pneumatically propelled freight railway. It changed its name in 1874 to the Broadway Underground Railway and became a subway plan for the carrying of passengers, then reappeared in 1885, still as a subway plan, under the [page 23] name of the Arcade Railway. Transfigured yet once more in 1897 as the New York Parcel Dispatch Company, a pneumatic railway, it finally passed into oblivion. Another proposed road, the New York City Central Underground Railway, first chartered in 1868, achieved a short-lived renaissance in 1880 as the New York Underground Railway Company. The Metropolitan Railway Company bears the distinction of putting forth in 1864 the first proposal for a subway in New York City's history. The New York District Railway, chartered at the end of 1885; is worthy of note because it was unsuccessfully promoted by two young men who subsequently made good -- William Barclay Parsons, later Chief Engineer of the Rapid Transit Commission that planned New York's first subway, and August Belmont, the financier whose firm, the Interborough Rapid Transit Company, chartered in 1902, finally did build the subway.

Regarding all of these subway schemes, save the last of course, there is something tragi-comical. They suggest a Victorian melodrama of_the sort with which we are all familiar, that is, stories about charlatan promoters and naive investors, tales of great men, Dickens, U.S. Grant, Mark Twain, who go bankrupt after having sunk their money or their name in some failed speculation; moral fables about men with big plans and high hopes who die penniless, alone, and mentally unsound. One is not surprised to discover that upon being retired by his Party from high office in 1884, Chester Alan Arthur, the twenty-first President of the United States, became the figure-head president of the Arcade Railway Company; or that the officials of the New York Central Underground Railway Company first bribed the legislature to obtain their franchise, then hawked their stock in one European capital after another in a futile attempt to secure investors, and finally wound up using their worthless charter in real estate speculations in Harlem and Westchester.⁴

Such stories as these form part of what might be called the folklore of nineteenth-century capitalist society, the great age of entrepreneurs who made it and many more who did not. Nor are these stories irrelevant. The simple fact is that no subway was built or would ever be built in New York without private capital willing to build it.

There are many reasons why nineteenth-century American capitalists were reluctant to undertake the construction of a subway, but all these reasons can finally be reduced to an essential and obvious one: men with a stock of capital sufficiently large to build an underground railway were not convinced that it was or would ever become a profitable enterprise. The question to consider, then, is what led them to believe that a subway wouldn't pay.

It was in London, after all, that capitalism was invented, and it was there, as well, that the first subway in the world, still unfinished, opened for business on 10 January 1863. A little more than a year before this date, the Times of London had noted that many English capitalists, like their American counterparts, had been skeptical about whether such a project [page 24]

... even if it could be accomplished, would pay. A subterranean railway under London was awfully suggestive of dark noisome tunnels, buried many fathoms deep beyond the reach of light or life; passages inhabited by rats, soaked with sewer drippings, and poisoned by the escape of gas mains. It seemed an insult to common sense to suppose that people who could travel as cheaply to the city on the outside of a Paddington bus would ever prefer, as a merely quicker medium, to be driven amid palpable darkness through the foul subsoil of London..."⁵

But despite the difficult task of allaying public anxiety about underground travel and the gloomy predictions of financial failure, a number of English businessmen, several distinguished civil servants,⁶ the Corporation of the City of London,⁷ and a Parliamentary committee had nevertheless decided that to risk chances and a hard-headed business sense were both equal1y important elements of the entrepreneurial ethos. And as things turned out, the gamble paid off at least in the short run. Public fears about underground travel were overcome, and by 1868 the Metropolitan was carrying more than 27.5 million passengers a year, and paying a healthy dividend of from five to seven percent.⁸

In later years, to be sure, the Metropolitan did not do so well. After 1870 its dividend fall off or was only paid at the five percent rate from profits derived from its substantial surplus land holdings.⁹ And its sister road which soon became its rival, the Metropolitan District Railway, was never a profitable venture. This line, which began partial operation in 1868, suffered from having been built through some of the most expensive real estate in the world and was, in consequence, burdened with numerous added and special costs.¹⁰ Both lines, moreover, ran into difficulty by quarreling rather than cooperating with each other. Their rivalry led them to overextend themselves by expanding into areas where local authorities and landowners, anxious to profit from the needs of the companies, made them pay for costly street improvements or imposed special conditions on their construction.

It can be said, then, that London provided a number of positive and negative precedents for the New York capitalist of the late 1860's or early 1870's, who may have been considering investment in a subway. To begin with, the profit ledger of the Metropolitan in its first seven years of operation offered him the encouragement of a sufficiently attractive financial incentive. Second, though, the earnings of the London undergrounds were not in the long run as satisfactory as had first been expected, they did attract a growing number of passengers. Londoners were apparently less bothered by tunnels supposedly filled with "smoke and noxious gases" than American capitalists of a later time liked to think. Passenger traffic did not fall off when dividends did. Though surface horsecar companies, [page 25] because of their small initial capital expense and a reduction in the price of horse feed, showed a better profit than either underground line after 1875, the railways' traffic grew far more rapidly.¹¹ The negative precedent was of course the Metropolitan District, with its high initial cost and low earnings. But the circumstances of its construction and operation were peculiar to it. Its difficulties need not have deterred the New York capitalist, but rather might have served him as an object lesson in what to avoid in launching his own venture.

In the years after New Yorkers had decided against a subway, and when the elevated roads were already built, it was commonly held that London's experience had demonstrated that underground railroads were not attractive to patrons because of their smoky and dank tunnels, and that such roads could not conceivably be financially successful. But this view was a myth propagated by American capitalists. Russell Sage, part owner of the Manhattan Elevated Company, had reasons of his own for believing that "the traveling public would rather ride in the open than in a tunnel thirty feet underground."¹² And men like William Barclay Parsons and August Belmont, who in the 1890's voiced negative opinions on the technical feasibility and financial profitability of a steam-powered underground railway in New York after the Civil War, were doubtless expressing what was by then the conventional capitalist wisdom.¹³

The question, then, gets down to this: was a subway like London's feasible or possible in New York in the late 1860's or early 1870's, before the decision was made to build elevated railroads, and before capital had invested large sums in one form of rapid transit, thereby precluding similar investment in another form. The answer, of course, is that subways were feasible but not possible, a fact that should become apparent once certain features of New York's business and political life are clearly understood.

Too much attention and far too much weight has been accorded the subject of motive power. Since a steam-driven subway was never built in New York, it is not possible to know whether New Yorkers would have adjusted, as Londoners did, to the smoke from locomotives and the smell of the tunnels. A New York subway would presumably have followed London's example in providing an abundance of ventilation shafts, and in using locomotives that burned coke rather than coal, and were equipped with steam-condensing engines, both of which cut down on the amount of smoke or exhaust gas discharged into the tunnel. New York needed a "truck line" underneath a principal street running through the center of town, as opposed to London's circular belt route with many open cuts and short tunnels, and this would have required at least one very long and possibly one or two nearly as long tunnels, which signified a ventilation problem much greater than London's. At the same time, with a well-worked out system of ventilation shafts, and four tracks with express service, the very speed of the express trains might have generated sufficient movement of the air to keep tunnels reasonably comfortable, or so at least several subway advocates claimed.¹⁴

[page 26] The point here is not to argue that steam was an ideal motive power, but only to suggest that it did not, in and of itself, rule out the possibility of an underground railroad in New York in the late 1860's or early 1870's. It is an axiom of the history of capitalist society that technical innovation usually follows closely upon capitalist need or demand,¹⁵ which is enough to suggest that if capital had been willing, the necessary technology would have been forthcoming. And had there been nothing else to dissuade capital from such a venture, the matter of motive power would not have made much difference.

When compared to elevated railways, the cost of subways was an important but not decisive consideration arguing against underground railway construction. The American Society of Civil Engineers Report of 1875, which, as will be seen, had good reason to cite a low estimated figure for the construction of elevated roads, concluded that double-tracked elevated lines would cost between $700,000 and $1,125,000 per mile.¹⁶ This was close to their actual cost, at least as indicated in a report prepared in 1880 by Elnathan Sweet; an engineer for the Railroad Committee of New York State Assembly, in which the capital outlay of the New York Elevated Company road, by that time virtually complete, was said be $8.7 million, and that of the Metropolitan Elevated line $9.6 million. In testimony before the same Committee, Jose Navarro, one of the promoters of the Gilbert road, which later became the Metropolitan, claimed that his elevated road had cost a approximately $700,000 to $800,000 per mile of doublet tracked structure. These figures may be a little high, because W.F. Reeves, the most recent historian of the elevated roads in New York, cites the sum of $2,525,240 for the Metropolitan Elevated Company's double-tracked road from Morris Street to 83rd Street, a distance of 6.12 miles, or a little more than $400,000 per mile.¹⁹

Estimates for a subway ran considerably higher than any of the above figures for the elevated roads. In an 1865 brochure prepared as a promotion for the underground Metropolitan Railway, A. P. Robinson, the engineer of the proposed subway, estimated that the entire cost -- including equipment and cars, not counted in the above figures for the "els" -- of the railroad's approximately five-mile route from the Battery to 59th Street, would be $8,487,006, or almost $1.7 million a mile.²⁰ In 1875 the ASCE report concluded that a subway would cost $2 million a mile to build.²¹ And in 1877, Alan Campbell, Commissioner of Public Works in Mayor Ely's administration, sent the Mayor a report recommending the construction of a subway, in which he cited figures from the proposed but never-constructed Vanderbilt plan for an underground line. The estimated cost for a five mile route -- again, with all equipment and rolling stock included - -was $9.1 million, or roughly $1.8 million a mile.²² Campbell also asserted that such a road could be profitable, that it might earn upwards of $600,000 per year, and pay a yearly dividend of from six to seven percent.²³

[page 27] Given the greater cost of an underground railway compared with that of an elevated road, it can be said that two conditions had to be met before a subway could be constructed. The first condition was substantial and reputable financial backing. A subway was beyond the means and the capacities of the small entrepreneur or even a group of small entrepreneurs. It was a risky project for all but the biggest capitalists, a man or a group of men who could afford the large initial expense of construction and equipment, and who could manage the road despite the likelihood of small returns in the first few years of operation.

Such men existed in New York and elsewhere in the United States after 1865 but the particular character of American economic development at this time worked against investment in subways or, for that matter, in intraurban transit of any kind. Money could and was being made in urban public transit, but it is significant that until the late 1870's and early 1880's, there was very little of what may be described as "big money" invested in urban mass transportation. The streetcar companies were small, numerous, and disorganized. Surface railway consolidation in Boston, Philadelphia, and New York had not yet begun. "Big money" interested in railroads invested in inter-urban rather than intra-urban transportation. The era following the Civil War was the great age of inter-urban railroad construction in the United States, and this took precedence over urban transit development.²⁴

In other words, the view that a subway "wouldn't pay" was in reality a relative rather than an absolute judgment. Given its cost and the risk involved, capitalists in position to build a subway could find much better ways to employ their money. The problem was that in the absence of positive governmental action and public funds for rapid transit construction, mass transportation in New York and elsewhere depended on capitalist initiative. And capitalists, at least in the period of inter-urban railroad development directly after the Civil War, regarded urban public transit as a distinctly second-class investment.

In the early 1870's, for example, Cornelius Vanderbilt was apparently interested in rapid transit, but only insofar as it related to the inter-urban railroad empire of the New York Central. With $3.2 million or half the construction costs supplied by city funds, he did in fact build what Mayor Wickham described as a rapid transit road²⁵ -- his Hudson River "improvement" for the New York Central, which was a mostly open-cut or viaduct railway with short tunnels, running from 4th Avenue above 42nd Street to the Harlem River. In 1872 Vanderbilt also obtained a charter for a subway, the New York City Rapid Transit Railway, which was to run from City Hall Park to "a point between 48th Street and 59th Street." But there is good reason to believe that his purpose in securing this charter had very little to do with any desire to construct a subway. The route of his proposed underground line paralleled the one approved for the New York City Central Underground Railway. Vanderbilt's only aim in applying for this charter was to prevent the construction of the Central Underground, which if built would have served as an inner-city connection for inter-urban railroads that were rivals of the New York Central.²⁶

[page 28] The second condition necessary for subway construction was that the road be located on a route which would insure a high return. In other words, a route that would exploit heavy downtown traffic in order to balance anticipated losses in the relatively undeveloped uptown parts of the city, until such time, of course, that the subway generate uptown settlement and created its own traffic. In 1865 Henry Varnum Poor, the railroad developer,²⁷ and his associates, John Jacob Astor and Abiel Low, were willing and able to build an underground railway, but their decision depended on the possibility of securing a proper route. In the 1890's, when the Rapid Transit Commission was planning New York's first subway, there were two such routes in lower Manhattan: Broadway, and the newly improved Elm Street (now Lafayette Street). In the 1860's, however, only Broadway would have sufficed, and the problem was that Broadway, both then and later, was simply unavailable.

The entire problem of Broadway, and the source of the problem, the rights of Broadway property owners, can only be properly understood in relation to a larger context, which is that of the laws and legal procedures affecting urban railroads in the nineteenth century. In both England and America, the rights of private property owners were of course greatly respected, not only because property in itself was considered essential to the definition of human personality, but also because the defense of property rights served a public function. Those seeking to build a railroad in a nineteenth-century city such as New York or London, represented private interests asking for a considerable public privilege. They asked for the right to construct and operate their railroad through, on, under, or over private property on the public way, and the right in certain cases, to demand, condemn, or buy property that stood in the way of their "improvement." For this reason, government everywhere regulated railroads, required them to be licensed or chartered, and, not unjustly, demanded that they prove that the communal need for their "improvement" was equal in value to the direct and indirect "social costs" it might incur. Another way of acquiring this "proof," and one that was particularly appropriate to the Anglo-Saxon legal system, was to pit private interests against private interests, so as to oblige the prospective railway builder to prove in a court of law that his railroad was undeniably a public necessity, worth the sacrifice of individual convenience or property. Only thus could the rights of one private interest be considered superior to those of another, and only thus could the public interest be clearly established.²⁸

In New York this whole question was even more complex, because all matters pertaining to the chartering and regulation of railroads were not, throughout most of the latter half of the nineteenth century, decided upon in New York City by New Yorkers, but in the state legislature at Albany by representatives from largely rural districts. New York City lacked real autonomy or self-government, "home rule", and more than once in its history rural state legislators, usually Republican when New York was usually Democratic, and usually unconcerned with the city's real needs or desires, had given franchises to street railway operators whose credentials or the routes of whose railroads greatly displeased the citizens of [page 29] the city. By opposing the proposed construction of state-chartered railroads, and by bringing the matter before the courts, then, property owners such as those on Broadway were perceived not only as defending their own rights, but also as striking a blow for home rule.²⁹

In principle this concern shown by Broadway property owners for the public interest was of course commendable; in practice it was often abused. Throughout most of the nineteenth century, and certainly in the late 1860's and early 1870's, Broadway was the principal thoroughfare of New York City. It was the street with the most expensive real estate, both commercial property on lower Broadway below 14th Street, and, at least until the 1880's, residential property on upper Broadway above Union Square. Its landowners and merchants, among whom could be counted some of the richest and most powerful men in the city -- Astors, Goelets, the department-store mogul, A. T. Stewart -- ceaselessly stood watch over the rights and value attached to what was theirs. In effect, as was common in the nineteenth century, they exploited the general reverence for the rights of property and used. their economic and political clout to preclude any "public improvement" on lower Broadway. Broadway property owners preferred to keep their street a high-class thoroughfare for carriages, omnibuses, and stagecoaches. They regarded any less swank form of transit as likely to downgrade the fashionable retail trade of their street, and railway construction of any kind as likely to cause inconvenience and damage, interfere with business, and possibly decrease the value of their property. It was only in the 1880's that they allowed a street railway to invade lower Broadway, and then only because, as the Record and Guide and numerous subway promoters noted,³⁰ real estate values below Union Square were declining, the fashionable retail trade was moving uptown, and the entire area was badly in need of the economic stimulation offered by public transit.

In the late 1860's and early 1870's, when the likelihood of a profitable route might have tipped the balance in favor of a subway, the opposition of property holders on lower Broadway constituted an insuperable obstacle to its construction. By the 1880's, however, when a new scheme for a Broadway subway -- the Arcade Railway -- attracted considerable notice and some reputable backing,³¹ there was little possibility of a subway under Broadway or anywhere else. For by this time the "els" were already built, and their construction represented an investment in rapid transit of sufficient magnitude to deter further capitalist initiative for nearly two decades.

Part I, Section 5

[page 30] In the decade following the Civil War, New York required some form of rapid transit, and if subways were ruled out, then elevated trains were the next best and indeed the only alternative. But private capital's decisions not to build a subway did not imply a corresponding will on its part to construct an elevated railway system. Capital's reluctance to invest in public transit once again impeded and then determined the character of the rapid transit decision of the mid 1870's. Municipal government was mindful of the needs of the city and its citizens, but was limited in its vision and its actions by the need to stimulate capitalist initiative. Public construction of a rapid transit system was at the time considered neither desirable nor possible, and private construction depended on the guarantee of a low cost initial investment and immediate and substantial profit. Accordingly, city officials did their best to smooth the way for the realization of these last conditions, which resulted in an elevated railway system adequate to the needs of capital, but one which, within a very few years after its completion, was inadequate to meet the needs of the urban public it was supposed to serve.

The Senate Committee of 1866, it will be remembered, had recommended to the Legislature that Charles Harvey be allowed to construct a small section of his cable-powered elevated railway as an experiment. The Legislature approved this suggestion; the experimental half-mile segment was built on Greenwich Street from the Battery to Cortlandt Street; a subsequent Committee appointed by the Legislature approved further construction; and by 1870 Harvey's road was a single track cable-powered line running from the Battery to 30th Street. The cable-powered road, however, was never popular, there were some accidents, and in 1871 the original company, the Westside and Yonkers Patent Railway; went bankrupt and was dissolved. The new company which was formed, the New York Elevated Railroad, requested the right to convert the road to steam power.¹ The progress of this company, in turn, was stalled by the panic of 1873. The same fate also befell a second elevated road, Rufus Gilbert's Elevated Company, chartered in 1872, which was to run along 6th Avenue to 59th Street on compressed air power.²

The ostensible failure of these two lines, the depression, the opposition of property owners, the incessant lobbying in Albany of streetcar companies who feared competition from rapid transit, and New York's great and immediate need for some kind of rapid transit, spurred several prominent New Yorkers and interested groups like real estate brokers to consider another alternative to private capital -- municipal construction. To men like iron-master Abram Hewitt, social reformer Simeon Church; and former Mayor Opdyke, all of whom spoke before a meeting of the newly formed Rapid Transit Association in February, 1873, it seemed as if the City would have to step in and lend a hand or face the fact that New York would never have rapid transit. Accordingly, they prepared a bill for the Legislature, sponsored by Mayor Opdyke, which called for the creation of a rapid transit commission with authority to select routes and devise plans for a four track rapid transit road.³

[page 31] These men were aware that there was ample precedent for such positive governmental action. In New York itself and in America generally, there was the experience of building the Erie Canal and the canals in other states inspired by its example.⁴ In London there was the Metropolitan Railway, which owed its existence to an Act of Parliament and to the Corporation of the City of London, which had subscribed for half of its shares. In Paris in the 1850's and 1860's the Prefect of Police and the General Counsel of the Seine had organized all the omnibus lines into one company, the General Omnibus Company, had asserted their authority to lay down routes and timetables, even when these caused the Company to lose money, and had also created a consolidated street railway network for both Paris and its suburbs.⁵ Again, in New York itself there was an even more recent precedent than the Erie Canal: the agreement between Commodore Vanderbilt and City by which each would pay half the cost of his New York Central "improvement."

Despite these precedents, however, municipal construction of rapid transit or the pledge of city funds or credit to a private firm for the same purpose, was not in the cards for New York in the 1870's. The city gift of $3.2 million dollars to Cornelius Vanderbilt was a special matter, the exception that proved the rule. He owned the property and was also a man who could be trusted to improve it to everyone's satisfaction.⁶ The European precedents would someday exert an influence, but it was too soon as yet for New Yorkers to accept the European principle of "municipal socialism."⁷ The Erie Canal was a precedent too far off in the past; New York had changed a great deal since 1817. In the early 1870's the remembrance of the notorious Tweed gang, which had only been thrown out of office a few years before, and the possibility that Tammany might soon recapture City Hall, was sufficient to convince many citizens that the notion of municipal construction was, if not laughable, at least naive. Nor were Republican rural legislators in Albany likely to look with favor on the plunder that might potentially fall into the hands of their Democratic on Tammany rivals, should the City own and operate rapid transit lines.

In addition, there was considerable ambivalence, even among those most eager for rapid transit, to the principle of municipal construction. In 1871 Simeon Church managed to convince a meeting of the West Side Association, a group of realtors and property owners who looked to rapid transit for the development of their section of the city, to vote for a resolution in favor of municipal construction. But the same group rescinded this resolution at their next week's meeting.⁸ At another meeting of property owners in 1873, a resolution was passed which called for public construction, but in terms which make clear that this alternative represented a bitter pill, and one to which most New York businessmen, themselves understandably partial to private enterprise, resorted only out of desperation.

[page 32] Resolved: That having heard explained several schemes for rapid transit in New York as private enterprises, this meeting expresses the hope that the Legislature will pass all the bills having that object in view which promise any success; but having no confidence whatever in the success of any private scheme, and no hope that rapid transit will ever be secured by private means, we earnestly urge upon the Legislature to pass the bill for the construction of a road as a City work as the only safe, sure, and economical measure of relief.⁹

With such feeble support behind it, with many who desired rapid transit nevertheless unwilling to make use of public funds, and with powerful interests opposed to it, the Opdyke bill, as might be expected, failed in the Legislature. Its failure, however, was not without significance for the future: later proposals for public support of rapid transit would take great care to separate the issue of municipal ownership from that of construction and operation.¹⁰

Once the use of municipal funds had been ruled out, subsequent developments appear to have followed a prepared script. It was decided not to initiate new rapid transit enterprises, but rather to encourage and smooth the way for those that already existed. This shut the door definitively on subway construction, and also signified that the city and its citizens would accept whatever the existing elevated lines -- the New York and Gilbert companies -- were willing to provide. In effect, it was no decision at all, but an acquiescence in a decision that had already been made by private capital, and which government, spurred on by now unified public support, real estate interests,¹¹ prominent businessmen, and, most important of all, the principal stockholders in the two elevated companies,¹² now hurried to confirm and further.

The first step in this process was the 1874-5 Report of the American Society of Civil Engineers, whose expert conclusions cannot be understood apart from the above context. The aim of this blue-ribbon panel of engineers¹³ was to unite public support behind the established private agencies of rapid transit construction. Their report stated that the major problem of the past had been that "lawmakers have been unwilling to grant charters until they knew on what plans the roads were to be built, and capital has refused to make in advance the necessary surveys and investigations, upon which alone adequate plans could be based."¹⁴ This was a problem effortlessly obviated, of course, by the existence of two already franchised elevated companies, one partially built along 9th Avenue, and the other with full-scale plans for a road on 6th Avenue. The ASCE report also suggested, rather redundantly, that franchises be given to companies "who now control the existing lines of transportation in the territory,"¹⁵ and that further and more strenuous effort be made to secure rapid transit by private means before recourse to public construction was attempted. After having considered [page 33] seventy-five projects for different types of rapid transit construction, they arrived at several expert judgments on the relative merits of elevated as opposed to underground rapid transit, all of which come as no surprise. They concluded that elevated railroads would be less expensive to build than subways, that the latter would take longer time in construction than the former, and that underground roads, besides resulting in unhealthy and smoke-ridden tunnels, would also disturb sewerage, water, and gas pipes, as well as business and street traffic.¹⁶

The way thus paved by scientific expertise, Mayor Wickham took the next step. In a special message to the Board of Aldermen on 28 January 1875, he called for the establishment of a committee from among the aldermen to consider the rapid transit situation, noting that "it may ... be now safely assumed that the discussions of the subject have produced a concurrence of opinions on these cardinal points," one of which was "that the work should be constructed, if practicable, by private capital, and not by the city," and "that capitalists should be encouraged to undertake the enterprise by permission to select routes along which business is likely to be profitable."¹⁷ In accordance with the Mayor's recommendations, a special committee of the Aldermen met to draft a bill to be sent to Albany. The majority of the committee first decided for construction by private capital, but with resort to public ownership within six months if this proved impractical. A few weeks later, however, "after more maturely considering the subject," they reversed themselves and took the view "that private enterprise should be granted a longer time in which to decided whether to undertake the enterprise, and that the proposed bill be so amended as to omit all provisions providing for an alternative public construction and operation."¹⁸ Nine of the aldermen resolutely held fast to the notion of municipal construction, but they were voted down by twelve others, and the bill went to Albany without a trace of this principle intact.

This bill, known as the Husted Act, was signed by Governor Tilden on June 19, 1875. It authorized the Mayor to appoint a five-man Rapid Transit Commission (RTC) with the power to lay down rules and conceive plans for rapid transit construction and operation. The Commission was accorded the power to create, if it so desired, new private corporations and to supervise both their organization and their subsequent construction of rapid transit roads. Provision was also made for the RTC to recognize the existence and supervise extension of the lines of the established elevated companies. If it selected routes which were identical to those held by existing lines, it could incorporate these lines anew as companies specially formed under the Husted Act. Both of these last two provisions, as will be seen, had a remarkable affect on the fortunes of the two established elevated roads.

Mayor Wickham's choice of commissioners was indicative of the close rapport existing between government and business in the late nineteenth century. He chose five prominent businessmen¹⁹ for the RTC, all of whom were involved in either the financial on manufacturing end of the iron and [page 34] railroad industries, and who thus had more than a passing knowledge as well as more than a passing interest in elevated railroad construction. They promptly set to work in order to accomplish the task for which they had been selected. Though presented with more than forty plans for various types of railroads, they quickly chose elevated steam roads as the "most practicable" form of rapid transit: "...considering the circumstances of the present situation,²⁰ and advised by engineers, and by capitalists as well, ... [we] reached the conclusion that elevated steam railways to be actually constructed in this city, but are the best for the purpose in view."²¹ The purpose in view also determined the routes they picked, which corresponded to the routes on 6th and 9th Avenues previously accorded the New York and Gilbert Elevated Companies. The old charters of these firms were thereby reconfirmed by the RTC²², which also gave them permission to construct and expand their lines on the West Side, and to build new lines on the East Side along 2nd and 3rd Avenues, all of which were to extend to the Harlem River.²³ In the event that these two companies failed to build or did not build their roads according to schedule, the RTC, availing itself of the provisions of the Husted Act, also formed a new corporation, the Manhattan Elevated Company, organized with an initial capital stock of $2 million, which, by happy coincidence, was quickly subscribed for in equal parts by the major shareholders of the two railroads with prior franchises.²⁴

There can be no doubt that the Rapid Transit Commission of 1875 splendidly executed its mandate, which was in reality to foster and confirm the routes and plans already decided upon by private enterprise. That there was never any question of it doing anything else, is demonstrated first by the fare structure -- ten cents below, fifteen or more cents above 59th Street -- that it set up, and which, while doubtless helpful to capital, precluded working class travel on the elevated roads; and second, by the fact that the new corporation it established, the Manhattan Company, was formed wholly as a paper company, and had no property, built no roads, and was intended merely as a company for the existing lines constructed by the two other companies.²⁴

One would hardly describe the activity of the RTC of 1875, then, as having promoted a positive role for government in urban mass transportation; indeed, it did exactly the reverse, confirming, at least until 1894, the customary dependence upon private enterprise for public transit. At the same time; the Commission did exactly what it set out to do, which was to select the cheapest, most easily built, most available, least bothersome, and most technologically feasible form of rapid transit, and by governmental action to stimulate private capital to provide such a system for the citizens of New York.

And stimulate private capital it surely did. In the early days of elevated roads, before the Commission met, investors were few and capital insufficient. After 1875 the elevated roads attracted a whole new breed of capitalist: men like Jose Navarro, who actually built the Gilbert road through the medium of his New York Loan and Improvement Company; Cyrus Field, [page 35] the man responsible for the Atlantic cable, who took over the New York Elevated road in 1877; and, finally, two of the very greatest of the "robber barons," Jay Gould and Russell Sage, whose manipulations of the stock and fortunes of the Manhattan Company comprise too lengthy and complicated a story to tell here,²⁵ but who, by 1884,^26> had established monopolistic control over the only form of rapid transit existing in the world's second largest city.

Part I, Section 6

One need not search long or hard to discover what aroused Jay Gould and Russell Sage's interest in the elevated roads in the early 1880's. Nor is there any mystery surrounding the entrance in the mid 1880's into the street railway business of such men as William C. Whitney and Thomas Fortune Ryan. From a city with a population of a little more than a million persons in 1875, New York, not counting its suburbs in Brooklyn and Long Island, had grown by 1890 into a city of nearly a million and a half. A city of such size, with so dynamic an economy, made ample use of the public transit that it had, or, in the near future, was likely to get.

In 1876, one year after the RTC's decisions, the total passenger traffic of all surface and elevated railways in New York was 167 million, and would grow even larger -- to 408 million -- by 1890. In 1876 the "els," only partially completed, had served but two million passengers; in 1886, with four roads complete to the Harlem River, they served 115 million passengers. And the street railways, profiting from the short-distance traffic of the "els", were in similarly healthy shape: in 1886 they carried 210.5 million passengers.¹

Public transit, in other words, could rely on ever-increasing market for its services, and, properly managed, could be made to "pay," and handsomely at that. Even so eminent a figure in the financial world as J. P. Morgan did not hesitate, in 1891, to join the board of Gould and Sage's Manhattan Elevated Company, which as Morgan noted, had gained respectability in the business world by virtue of its achieving a six percent annual dividend, then considered mandatory for a "paying" concern. But the very reason -- money -- which had led men like Gould, Sage, Whitney, and Ryan to seek and eventually obtain control of the mass transportation facilities of New York, also determined their resistance to any improvement in that system, and represented, therefore, a major obstacle to the construction of another and more innovative mode of public transportation that New York badly needed: a rapid transit underground railroad.

There were several reasons why the existing modes of public transit and the men who controlled them stood in the way of the building of a subway. To begin with, the management of the elevated roads and the surface railways feared competition from a subway, which, if it were correctly routed and had both local and express tracks, might detract both from the long haul traffic of the "els" and the short distance traffic of the streetcars. The elevated roads, moreover, did not want competition because they neither desired nor, as will be seen, could afford to meet this threat by expansion or improvement of their lines. They preferred to stand still, to make a large profit on their existing roads by running them badly and at minimal expense.

[page 36] The surface railway monopoly cannot be accused of the same tactics. Indeed Whitney, Ryan and their Philadelphia mentors -- Peter A.B. Widener, William Kemble, and William Elkins -- who provided financial support and surface traction know-how, had invested vast sums in transforming a hodge-podge of competing horsecar lines into a consolidated system of cable-powered and, by the late 1890's, electrified street trolleys. Having devoted so much time, energy, and money to this effort, they were ready, at approximately the same time as New Yorkers began seriously to consider the construction of a subway, to cease the expansion of their own business, and to sit back contentedly and enjoy the fruits of their labor. The manner in which their own business had developed should have and perhaps did suggest to them that they be the ones to build a subway; along with their neatly organized system of consolidated lines and free transfers, a subway would have been all they needed to create a unified system with virtually monopolistic power over New York's public transit. But this, aside from the fact that they both wanted and needed time to accumulate profit before risking further expansion, would have brought them into overt competition with the management of the elevated roads, which, from the very beginning of their business enterprise they had quite self-consciously chosen to avoid.³ And they had another reason, as well, for hesitating to undertake a subway venture. Their company, like the elevated company, could not afford it.

From its inception, even before Jay Gould and Russell Sage took control of it, the Manhattan Elevated Company was an enterprise built on "watered" stock -- that is, capitalization on the basis of anticipated earnings rather than actual assets. Its initial capitalization of $2 million in 1875 was all water, since the company at that time existed only on paper, owned no property, and was not engaged in building any elevated roads; the $2 million represented what it might become in the event that the two other roads -- the New York and Metropolitan companies -- failed to build. By 1879, when the Manhattan, because of quarrels over routing,⁴ leased the other two roads, its capitalization had increased to $l3 million, again all water, but useful for several purposes: first, to pay the lessors a dividend of ten percent on their similarly watered stock; second, to pay the interest on the lessors' construction bonds; third, to provide for operating expenses unrelated to earning power; and fourth, and most important, divide a profit, how much is not known, among all those concerned. Including the capital stock of the two leased roads and their construction bonds, the Manhattan's capitalization in 1880, as stated in Elnathan Sweet's report to the Railroad Committee of the State Assembly was $43 million, of which about $25 million was water.⁵ This large sum did not preclude the Manhattan from failing to meet its obligations to both its shareholders and the lessor roads in its early years of operation. Earnings in the early 1880's increased slowly, and Gould and Sage, in attempting to gain control of the elevated roads, used the technique of stock manipulation to realize their objective.⁶ By 1888 the Manhattan's [page 37] capitalization was $51 million, $26 million stock and $25 million bonds, by 1894, $66 million, or $30 million stock and almost $36 million in bonds, and by 1899, $88 million, or $48 million stock. and $40 million bonds, with a market value of approximately $100 million.⁷

Given the considerable earning power of the company by the early 1890's -- it carried 221.5 million passengers in 1893⁸ -- a capitalization of such proportions should presumably have allowed the company sufficient reserve to pay a good dividend, meet all its obligations with respect to construction bonds, taxes, etc., while still improving and extending its lines. However, this presumption would fail to take into account the fact that the Manhattan was paying dividends on watered stock that had risen in value several times over what it was bought for, and that it was also obliged to dispense some $13 million in property abutment and damage payments,⁹ with four hundred such suits still pending as late as 1898. The RTC of 1875 had smoothed the way for private capital in every respect but this one, and it cost the Manhattan dearly. The only way the company could maintain its customary dividend of six percent was to reduce operating costs to a minimum and refrain from any but the most necessary improvements or extensions of its lines.

This Jay Gould and his son George, who took over the company's management after his father's death in 1892, resolutely strove to do. But his policy had to backfire; minimal operating expense meant bad service, and bad service resulted in decreased passenger traffic. As the Times, no friend of the Gould's, was quick to note, "a great transportation company in a city where the growth of passenger transportation is at the rate of 20,000,000 per year, shows a dwindling business, which it is making no effort to increase."¹⁰ By 1896 the road was losing passenger trips at an average rate of 12 million a year, was only able to manage a four percent dividend, and was thus obliged to reduce service further yet: a vicious cycle. These figures help to explain why the Manhattan hesitated to change the motive power of its trains from steam to electricity, beginning this transformation only in 1899 and completing it in 1903, at least six years after the new technology had thoroughly proven its feasibility and economy. They also explain why it was preposterous for anyone, least of all the Rapid Transit Commissions of 1891 and 1894, to assume that the Manhattan would agree to costly expansions of its lines or build additional tracks on all its lines for express trains. Such improvements would have required a nearly total reconstruction of the road -- new elevated structures, new trains, perhaps a whole new series of abutment suits as well, and this the Manhattan simply could not afford.

Though the surface railway monopoly, the Metropolitan, was a vary different kind of business enterprise than the Manhattan, it had financial problems of its own, most of which stemmed from its success in contrast to the Manhattan, which did nothing to improve its system after it absorbed the Bronx elevated lines of the Suburban Rapid Transit Company in 1891,¹² the Metropolitan was an expanding, active business. In endeavoring to consolidate nearly seventy-five percent of the city's surface railways between 1886 and 1895, Whitney, Ryan, and their Philadelphia allies bought or leased a variety of companies. All of these had watered stock, so when bought they fetched high prices, and [page 38] when leased they demanded and received extravagant rentals in perpetuity, and large dividend payments for their shareholders. These companies were also bought or leased in a wholly unimproved and sometimes defunct condition, and all of them were horsecar lines, which obliged the syndicate to replace worn-out equipment, and, especially for the more important lines on principal thoroughfares, to switch from horse power to newer technologies -- first to cable power and then to electricity.

The result of all this activity was an almost entirely new, improved, well-managed,¹³ and highly functional surface railway system for the City of New York. The lines were rearranged so as to complement rather than to compete with each other; new equipment, larger cars, cable and electric traction, provided better service, more comfortable travel, and, as far as it was possible for surface railways, much faster transportation. Consolidation and, after the initial expense, the reduced costs of the new technologies, meant decreased operating expenses, a gain which was in turn passed on to the consumer in the form of lower fares and the institution of a transfer system. Passenger traffic increased steadily, attaining a total of 185 million in 1896.¹⁴ The Metropolitan was a huge success, what Whitney's reverent biographer describes as an "empire on wheels."¹⁵

An empire perhaps, but one that was very expensive to build and maintain. Widener, Elkins, and Kemble had a great deal of money from their older and already successful Philadelphia traction enterprise, but not enough to manage the financing of this sort of operation. The syndicate therefore paid for a substantial part of its purchases, leases, new equipment, and technological improvements with watered stock of its own. Writing in 1902, after the Metropolitan had absorbed its last competitor, the Third Avenue Railway, Milo Maltbie,¹⁶ of the reform journal Municipal Affairs, judged that the combined real property value of the now complete monopoly was $60 million, but that the market value of its stock was $221 million and its par value $165 million -- in other words, $105 million in water on the best estimate.¹⁷ In addition to the obvious problem of dividends paid out on heavily watered stock, there was also the burden of costs for leases, and the overestimation of assets without accounting for depreciation, a problem especially grievous for a firm that had inherited so much out-of-date equipment. Nor was this all: the system of free transfers, as useful as it was in attracting passengers, failed to work; with a five cents fare reduced two and one-half cents because of the transfers, the company lost money.¹⁸ The empire, as even the same reverent biographer was forced to acknowledge, was "top heavy and leaned upon too many weak reeds and poor earners to acquire added value simply because of being purchased or leased."¹⁹

As early as 1899, then, the year that the Metropolitan made a surprising offer to the Rapid Transit Commission to construct a subway, the syndicate was already in trouble. Whether the offer was genuine, or whether the Metropolitan merely made it to delay the Commission's work and forestall competition, is a question that will be discussed at length in the following [page 39] chapter. Here all that need be said is that the terms of the offer reflected a gross error of judgment with respect to public opinion, and this was a curious misperception for someone usually so astute as William C. Whitney.²⁰ And the fact of the matter was that even had these terms been accepted, the Metropolitan was too busy -- in 1899 it was battling to take over the Third Avenue Railway -- and too entangled in a financial web of its own devising, to undertake such a large and innovative venture as subway construction

But if the Metropolitan could not or would not build a subway, and if the Manhattan were similarly unwilling or incapable of substantially improving the one existing mode of rapid transit, who then would or could? Here an earlier point may profitably be underscored. One key to understanding the entire story of the subway, from the early schemes of the 1860's to the beginning of actual construction in 1900, is to see that the man who might conceivably take on such an enterprise would have to be highly reputable and capable of drawing upon vast resources of capital. Given the public transit situation as it existed in the 1890's, such a man required another quality as well: he would have to be a railroad or traction magnate, someone with experience and expertise acquired in running, organizing, and fighting the financial wars involved in the creation of a large railroad or traction network. For even with the pledge of public funds for construction, the job was a big one and the subway, when built, had to be coordinated with other modes of public transit so as to be successfully and profitably run for fifty or seventy-five years under private management.

And here the two extant transit monopolies, by the very fact of their existence, were sufficient to discourage all but the most hardy -- or, as the case may be, foolhardy -- entrepreneur. These two heavily watered companies represented a very large capital investment in public transportation. Conservative businessmen doubtless recognized that if a subway were built by someone outside the sphere of the two existing transit monopolies, competition of a counter-productive sort might result. Despite the belief of later Progressive reformers in the benefits of competition, a competitive battle between three companies providing similar services was not regarded by most capitalists as likely to further the goal of an efficient and comprehensive system of public and rapid transit. Perhaps even more important; the financial stability of the public transit industry might suffer and large investments be endangered, should competition materially affect the market status of the two existing transit monopolies. This meant that any willing to build a subway would not only have to possess the skill and experience to deal with competition and opposition from the Manhattan and Metropolitan, but would also have to create a new monopoly, larger and more powerful than the first two, and capable of incorporating them within a newly organized and consolidated system of urban mass transportation.

Until New York's first subway was a fait accompli, this appeared to be and was in fact a formidable enterprise, one for which only a very few capitalists were eligible. By the early 1890's the inadequacy of the "els" and the surface [page 40] railways argued convincingly for a subway as the one remaining answer to New York's rapid transit problem. But the implementation of the rapid transit subway decision depended, as before, on capitalist initiative, which, because of the two existing transit monopolies, would remain a surprisingly scarce commodity in the largest and wealthiest city in the United States.

Part II, Section 1

[page 54] By the late 1880's and the early 1890's a subway for New York was an idea whose time had come. The surface and elevated railways had created more traffic than they could handle, and neither existing mode of mass transportation was able to provide rapid transit service to promote development of upper Manhattan and the Bronx. Real estate interests and many businessmen,, some politicians, civic associations, labor unions, and a large majority of ordinary citizens were agreed that a subway was the only satisfactory means to meet the city's rapid transit needs. There was only one remaining question, the very large one of how to finance the projected underground road.

An answer to this question was supplied by a new force at work in European and American politics in the last decade of the nineteenth century; the movement for municipal reform. The reform movement was synonymous with an enlarged role for government. Thoughtful men were beginning to understand that great modern cities such as New York required complex and costly public works and services, which capital neither would nor could supply, and which only honest, efficient, and active government could be trusted to provide. Many American reformers hoped to emulate the example of European cities, where government, now run by able and enlightened businessmen and professional experts,¹ had raised the quality and increased the quantity of public "improvements." Writers like Richard Ely and Albert Shaw² propagated the ideas and practices of European municipal reform movements, hoping to influence American businessmen to move in a similar direction. One such idea which directly affected New York's rapid transit decision was English economist Alfred Marshall's³ method of financing public works by having the municipality pay for and own them, while the actual task of construction and operation was entrusted by lease to a private firm.

Marshall's idea had been successfully tried in Great Britain,⁴ and some New Yorkers were quick to see its advantages for financing a subway. In 1888 Mayor Abram Hewitt proposed a rapid transit plan in accordance with Marshall's method, but both business and political leaders opposed it. And beginning in the late 1880's and continuing into the early 1890's, C W Sweet, the erudite editor of the Record and Guide, emphasized this idea in his constant endeavor to cajole New York's businessmen and politicians to build a subway that would help develop the northern reaches of Manhattan and the Bronx. Sweet sometimes expressed his views by means of slogans such as "WHY NOT TRY THE GOVERNMENT?" and "OBJECT-LESSONS IN MUNICIPAL SOCIALISM," but this goal had nothing whatsoever to do with the doctrines of Karl Marx. What he wanted was a subway, and he saw that the best and indeed the only way to get it was through public funding. "Municipal ownership" was not a theory, but an expedient method of providing the modern metropolis with a rapid transit system commensurate with its needs.

[page 55] The only 'principle' that one can safely apply to determine what a municipality should or should not do is expediency. It is that that governs the Record and Guide in advocating any improvements... Socialistic, anarchistic, and political ideas on the matter can all be subjected to the test of expediency, and accepted or rejected, as the case may be, according to how successfully they emerge from that test.⁵

Many of New York's business leaders were eager for a subway as Sweet, but they were reluctant to have the city government involved in its construction. Reformers like Sweet believed that enlarged and more important municipal responsibilities such as rapid transit construction would work against "ignorant, incompetent, and unscrupulous politicians."⁶ But most businessmen, looking to the past and Boss Tweed rather than a future transformed by reformist initiative, feared that if city officials controlled the rapid transit decision, the corrupt politicians of Tammany Hall, New York's "regular" Democratic party machine, would exploit subway construction for their own purposes. Businessmen were also hesitant to accept ideas and practices that at least to them smacked of socialism; They wanted to preserve the dominance of private enterprise in American life and its customary role in providing public transit in American cities such as New York.

In the early 1890's, then, yet another attempt was made to stimulate private capital's interest in subway construction. But as in the past, no substantial capitalist could be found to undertake the project! The opposition of the two transit monopolies, and the large capital investment they represented, deterred many substantial railroad men and financiers who might have shown an interest in the venture. Moreover, many capitalists still believed that a subway "wouldn't pay," and that, given the costs involved, it was not worth the risk. Subway construction in New York was thus repeatedly impeded and delayed because of a lack of capitalistic initiative.

By 1894 business leaders were obliged to acknowledge the validity of C. W. Sweet's "test of expediency." With great reluctance they accepted the principle of "municipal ownership," and the Chamber of Commerce of the State of New York, the most respected and powerful business organization in the city, took direction of the rapid transit decision. It sponsored a bill by means of which the city would support subway construction with its own low-interest bonds, with a private firm responsible for construction and operation of the new subway.

The Chamber of Commerce bill of 1894 represented neither a radical departure from past practice nor a victory for the principle of governmental control over public works. The bill was geared to private enterprise, and perhaps far more than C.W. Sweet or other reformers would have liked, it was an expedient measure specifically designed to overcome the opposition of capital and to attract to the subway project the kind of substantial capitalist who had not been forthcoming without a government subsidy. The Chamber of Commerce plan, as Progressive critics would later argue,⁷ promised "municipal ownership" in name only.

[page 56] Nor did the Chamber of Commerce bill represent a victory for reform. The businessmen who initiated and implemented the rapid transit decision may only be described as reformers in a very special sense. Their principal desire was to reform City Rail, to eject corrupt Tammany politicians from city government, and replace the "regular" machine with men "they could trust" -- in other words, with themselves or men of similar views and social position. But they cannot and should not be confounded with another group of urban reformers, known in American historiography as the Progressives, even though the two groups were occasionally on the same side.⁸

The men in charge of the rapid transit subway decision were for the most part honest, practical, wealthy, patrician businessmen who saw that it was both necessary and expedient for them to be concerned with great municipal issues. They were not "do-gooders"; they had little sympathy for the poor, the immigrant, or the working classes occupying a social station far beneath them. And the motives behind their entry into politics were neither disinterested nor untainted by personal ambition.⁹ Unlike the Progressives, they were not critics of the unregulated and often corrupt capitalism of the late nineteenth century. Their own experience as capitalists was large and they never questioned the wisdom of this system or the truth of its invariable "laws." Their conduct of the rapid transit decision was consistent in almost every respect with conservative and honest business practice of the nineteenth century, and "business as usual" was one of the charges that would later be made against them. Above all, they were little moved and less interested in public opinion, except insofar as it could or did affect the success of their public enterprises. They believed that substantial economic interest, social status, education, intelligence, and broad experience of practical affairs justified their claim to rule, and made popular participation both unnecessary and unwise. These attitudes and beliefs would be reflected in their activity on behalf of a rapid transit subway, and the difficult process by which that decision was implemented, as well as its final product -- the IRT -- would reveal both the virtues and defects of their point of view.

Part II, Section 2

At the top of the stairs leading to the Great Hall of the Chamber of Commerce of the State of New York, there is a life-size white marble statue of Abram S. Hewitt. This statue, commissioned posthumously, and a gold medal presented to the former Congressman and Mayor near the en