Electric Railway Journal · Vol. 65, No. 7 · February 14, 1925 · pp 253-256.

Mayor Hylan Held Responsible for New York's Subway Ills. Governor Smith's Special Commission Criticises Board of Estimate, but Exonerates Members of New York Transit Commission Urges Completion of Existing Lines with Shop and Yard Facilities Demand for Larger Borrowing Capacity for City Approved.

The members of the New York Transit Commission are not chargeable with the failure to build the much needed new subway lines or extend the existing subways. The repeated and persistent refusals of the Mayor and other members of the Board of Estimate of New York City to adopt proposals for the validation of new routes and to approve contracts for construction of routes already validated or provided for in the dual contracts of 1913 completely frustrated provision for increased transit facilities. The charges made by the Mayor and the Board of Estimate against the commission are without foundation and no cause exists for the removal of the commissioners from office. These are the principal findings made public on Feb. 9 by Justice John V. McAvoy, appointed by Governor Smith to inquire into the transit situation in New York City. Each of the eleven counts is dismissed with a statement that sufficient evidence was not presented at the public hearings before the justice to sustain the charges. The justice reached his conclusions without qualification or equivocation. His report is a concise statement of fact without flourish or adornment. The justice has dismissed the question of fare as not involved in the controversy. He did say, however, that a statute could be agreed to between the Governor and the Legislature, which would provide that the rate of fare should be 7 cents on the rapid transit lines and that the first cent above 5 cents should be paid into the city treasury monthly and the remaining cent be impounded so that the operating companies would be prevented from receiving any greater return than a fixed amount.

The one point on which Justice McAvoy fails to sustain the views of the Transit Commissioners is in his recommendation for legislation to take away their power to modify contracts with the railroad companies without the consent of the city. The commission has announced that it would not seek to exercise this power except in connection with its proposed readjustment plan for the unification of the transit companies into a single system. Justice McAvoy indicates that he considers this plan impracticable at present and declares that the absence of a provision to give the city final authority as to the lines to be included in such a system constitutes an "insuperable barrier" to its adoption without considering any of the other possible objections that might be raised. As the justice sees it the pressing necessity of the transit situation "called for co-operation between the Transit Commission and the Board of Estimate, and the rejection of contracts without any assigned good reason or because of hostility to the Transit Commission, which under the law was the only body which could propose them, is indefensible. Obviously, it would only prevent the building of new subways which were needed so acutely."

Subway routes which must be rushed to completion and which should have been finished long ago, had there been co-operation instead of antagonism on the part of the Board of Estimate, include the 14th Street line, the Nassau-Broad Street line, extension of the Queensboro line, the Washington Heights line, and making the West Side subway north of 96th Street into a four-track route. More cars can be run in non-rush hours, Justice McAvoy states.

The justice reaches no conclusion as to whether or not the city's proposed independent subway system can be made self-supporting at present construction costs on a 5-cent fare. Saying that the 5-cent fare in the existing subways is unalterably fixed by contracts, and that the fare in the proposed municipal subway is fixed by statute at the same rate for the first 3 years, Justice McAvoy holds that the 5-cent fare issue does not now arise and that no anticipatory conclusion should be reached in advance of an estimate of the probable results of the operation of the proposed new lines by the Board of Transportation.

Justice McAvoy declares that the present municipally supervised system of bus operation is illegal and asserts that the city should compel the present individual bus operators to apply for franchises and certificates, with payment of a percentage of their receipts to the city, until the power of the municipality to operate buses is established by decision of the courts or by new legislation.

He also condemns the proposed Staten Island combined freight and passenger tunnel favored by the Hylan administration, and declares that the plans should be changed at once to a rapid transit tunnel, which can be built at much less cost, and that the present mandatory act for the construction of a combined freight and passenger tunnel should be amended.

One point upon which Justice McAvoy sustains a contention of the city administration is his declaration for a constitutional amendment to exempt sufficient sums from the city's debt limit to provide funds for new subway construction. This, however, is the suggestion made by Comptroller Craig and not that of Mayor Hylan.

These suggestions are incidental. The main purpose of the report was to fix responsibility. The full report would cover 10 pages of space in the Electric Railway Journal. The attempt made here is merely to touch the high spots so far as these suggestions are contained. The justice's review and decision on the 11 allegations have been summarized as follows:

Charge 1. The first charge is substantially to the effect that the commissioners failed and neglected to perform their duty with respect to securing safe and adequate rapid transit services; in particular it is claimed that an accident happened on the elevated railroad in Brooklyn whereby two wooden cars fell to the street; that portions of the structure, in particular the guard rails and wooden ties, were defective and bolts were loose; that a device termed "dead man's button" was not installed upon the trains of that company; that under contract No. 4, wooden cars should not have been allowed to be used in trains operated upon that structure; that on July 30, 1924, a wreck occurred at the Sunnyside yard of the Long Island Railroad through the throwing by hand of a switch under a moving train, causing the derailment of the last three cars of the train; that on August 5, 1924, a wreck occurred at the Ocean Parkway station of the Brighton Beach line of the B.-M. T. system, and that the transit commissioners were guilty of negligence.

THE ANSWER. In support of this charge the Mayor's counsel urges that the transit commissioners, though in office from April 26, 1921, did not commence any public hearings into the service upon the rapid transit lines, until March 15, 1922, and that no order affecting that service was made until May and July of that year. The Transit Commission, however, did undertake the investigation of the service in November, 1921, preliminary to instituting the public hearings mentioned by the Mayor's counsel. It does not appear to me that there was any delay in making the inquiry which can fairly be criticised as amounting to a dereliction of duty.

The powers of the Transit Commission were regulatory in character, but that does not mean that the commissioners are chargeable with knowledge of each and every detail of the structure and equipment of the companies operating in this city. . . I am certain that they were not guilty of misconduct because they did not at an earlier date take the steps now urged by counsel. Upon receipt of the report of the joint board of engineers in January, 1924, as to the condition of the elevated structure in Brooklyn steps were taken to carry out the recommendations of that report.

It is erroneous to say that the structure of any of the elevated railroads in Brooklyn was found by these engineers to be "unsafe." The converse is the fact. It would indeed be surprising if structures which have borne their burden for so many years had been found to be unsafe for use. Moreover, if the city authorities had or have evidence proving that the structure was and is actually unsafe steps could have been and can still be taken by them through application to the courts to require its abatement as a public nuisance.

The accident on the Fifth Avenue line did not occur on a curve and seems to have been caused by the dropping upon the track of some portion of the car equipment, which caused a derailment, and it is difficult to see in what respect the most approved "dead man's button" would have averted that accident.

The accident in the Sunnyside yard resulted from the negligent conduct of an employee in turning a switch while a train was passing in front of him upon the track. The criticism is made that this switch should have been included in the interlocking system. There is no justification for the contention that the transit commissioners were charged with the responsibility of investigating every switch in every railroad yard to see whether it is properly controlled, in the absence of proof, as here, that the defect was one which was readily apparent or had been called to their attention.

The further contention that under contract No. 4 the wooden cars were required to be retired from service at the dates fixed in the schedule mentioned in Article XLVII of that contract, appears from a study of the contract to be fallacious. From the evidence before me it appears that these cars and their equipment were being maintained by the operating company in a serviceable condition by renewals and repairs, so that while for valuation purposes they might as a matter of contract stipulation be agreed to be worthless, when the city should exercise its right of recapture prior to the termination of the contract, nevertheless, if so maintained in good order there appears to be no reason why they should be scrapped unless all wooden car equipment is to be removed from operation. The retirement of these serviceable cars would not have aided in reducing, but would have necessarily tended to increase the congestion, due to the heavy traffic upon those lines.

Charge 2. The second charge condemns the transit commissioners for approving the reorganization of the Brooklyn Rapid Transit Company.

THE ANSWER. It is claimed that the Transit Commission, in the performance of its quasi-judicial function, approved a reorganization which it should have disapproved. The city of New York, although it took part in that proceeding, having been represented by counsel who called witnesses and presented arguments in support of its contention, did not seek to review its decision in the courts. It abided by the result. The organization was achieved. Now it criticises the determination of the Transit Commission upon the ground among others that the Transit Commission permitted an overcapitalization of the Brooklyn-Manhattan Transit Corporation because that company issued 769,911 shares of non-par value common stock.

The charge is made that after the approval by the Transit Commission, the Brooklyn-Manhattan Transit Corporation, which had been organized under the business corporation laws of the state of New York, entered upon its books the sum of $40,000,000 as the valuation of the 769,911 shares of non-par value common stock. It does not appear that the Transit Commission had any jurisdiction over the book entries of the Brooklyn-Manhattan Transit Corporation, after it approved the form of capitalization which had theretofore been approved by the United States District Court.

The prices at which the shares of that company sold in the market were not matters which fell within the scope of the Transit Commission's jurisdiction, nor will the declaration of a dividend by the corporation, organized under the business corporation law, come under the Transit Commission's control.

The courts have ruled that the legislation giving public utility commissioners power to regulate the issuance of stocks and bonds of a public utility corporation was not designed to make the commissioners financial managers of the corporation, nor did it empower them to substitute their judgment for that of the board of directors or stockholders of the corporation as to the wisdom of a transaction.

Nothing has appeared to indicate that the Transit Commission did not bring to the matter the exercise of its discretion in good faith under the law.

Charge 3. The third charge embodies a claim that the Transit Commission was negligent in failing to require the operation of sufficient railroad cars and adequate train crews and their equipment by the companies operating under contracts Nos. 3 and 4, and that as a result the traveling public, especially during the rush hours, received inadequate and insufficient accommodation and were crowded into the cars beyond their capacity.

THE ANSWER. That there is and has been an intolerable overcrowding of passengers, both upon the stations and upon the cars of the operating companies, is of course admitted by everyone. That the companies appear to be operating substantially all of the trains which could with safety be accommodated on existing lines during the so-called rush hours was conceded by the Mayor in the written memorandum which he submitted upon the hearing. There are points of congestion upon the trunk lines through which no more trains can be safely operated during the rush hours, and naturally the outlying districts through which these rush-hour trains are distributed suffer from an inadequate number of trains. Obviously this situation could have been alleviated by the employment of more cars, provided the inspection and shop facilities had been adequate for the proper maintenance of a greater number of cars than were in service. With the completion of all the required shop and inspection facilities additional cars ought to be required. There is no evidence tending to show that the transit commissioners have been neglectful of their duty in this respect.

Charges 4 and 5. Charges 4 and 5 may be grouped, inasmuch as both relate to the alleged failure of the commission to enforce the provisions of the dual contracts with respect to depreciation.

THE ANSWER. Contract No. 3 provides that from the pooled revenue there shall annually be deducted 12 per centum thereof to provide for maintenance, exclusive of depreciation. It is then further provided that for the first year of operation under the lease 5 per centum of the revenue shall be placed in a depreciation fund, and that annually, within 30 days after the 30th day of June, the commission and the lessee shall determine the amount to be paid to such fund and the classification thereof.

The precise meaning of the language of these provisions in the contract is in dispute. The city, through the Transit Commission, contends that in addition to the 12 per cent provided in paragraph 4 and such further sums as may be necessary to maintain the equipment, which sums have been denominated "excess maintenance," there is an obligation upon the company to take further sums from the annual revenue and place them in a depreciation fund. The company, on the other hand, contends that it has fully maintained the equipment and that there has been in fact no depreciation and therefore no necessity for payments due to any depreciation fund.

The Transit Commission has steadfastly adhered to the city's view of the proper construction of these provision of contract No. 3, but has under the advice of its counsel deemed it inexpedient to press the matter to a determination at this time. The commission has not waived the city's rights, but has apparently fairly exercised its judgment and discretion, and there is nothing in its conduct which would justify the charge of malfeasance.

Charge 6. The sixth charge is to the effect that the commissioners have not compelled the operating companies, under contracts Nos. 3 and 4, to put into the pool all the revenues derived, directly or indirectly, from the operation of the properties.

THE ANSWER. The items, specifically referred to, are sums received as rentals from cars leased to other corporations, share of joint revenues with other companies and the amounts received from interest on bank balances. It appears that the first of these items has been adjusted, and the company has acceded to the city's contention as maintained by the Transit Commission. The other two items are in course of adjustment, and the Transit Commission has steadfastly maintained the city's contention with respect thereto.

Charge 7. The seventh charge relates to the inclusion of the receivership expenses in cost of operation, under the provisions of contract No. 4, and further asserts that the transit commissioners have failed to provide adequate examination of the operating accounts of the lessees, and have failed to exclude from the cost of operation items of expense said to be improperly charged against operation under contracts Nos. 3 and 4.

THE ANSWER. The evidence shows that a fraction of the total amount of these expenses, consisting mainly of the compensation of the receiver and his counsel, were permitted to be charged against the cost of operation, being a sum about equal to what would have been the salaries of the officials of the companies, had there been no receiver. The accounting department of the Transit Commission is well organized and has performed its duties in connection with the examination of accounts.

Charge 8. The eighth charge relates to the action of the Transit Commission with respect to items in the 12th and 19th quarterly determination of costs by the engineers under contract No. 4, and the claim likewise that the Transit Commission has failed to urge objections made by its predecessor and to cause the removal of unwarranted items charged thereunder.

THE ANSWER. When the Transit Commission came into office, the disposition of these matters was 5 years in arrears, and within 9 months they were brought up to date. Subsequent determinations have been made from time to time, as appears from the volumes relating thereto, which have been introduced in evidence before me. There is no ground for believing that the Transit Commission has been derelict in its duty in this respect.

Charge 9. The ninth charge consists of the claim that the transit commissioners have violated their duties by creating and maintaining useless appointees in office, who were unfit for the work imposed upon them.

THE ANSWER. The Transit Commission continued to employ those who had been performing similar duties under its predecessors. Nearly all of these positions were in the classified Civil Service. The only person mentioned by the Mayor as being unfit was called before me and I found him to be a competent man who was performing his duties. A comparison of the amount expended by the Transit Commission, with that now being incurred by the two bodies, covering the entire field, with which the Transit Commission was invested under the law, prior to July 1, 1924, shows that the expenditures of the Transit Commission were less than that of the two bodies now doing the same work.

Charge 10. The tenth charge accuses the transit commissioners of failing to restore the unified service which existed prior to the receivership of the railroad companies in New York and Brooklyn, and refers in particular to the fact that the Brooklyn City Railroad is being operated independently of the B.-M. T. system of which it was formerly a part.

THE ANSWER. That railroad company became a separate unit during the B. R. T. receivership by virtue of a court order, and manifestly the Transit Commission could not as a matter of law fail to regard the determination of the United States District Court in that respect. There is no reason to believe that the transit commissioners did not act in entire good faith in connection with its consideration of this matter and there is no warrant for any finding of neglect or malfeasance.

Charge 11. The eleventh charge relates to the alleged failure to retire the wooden cars in accordance with the provisions of contract No. 4.

THE ANSWER. This charge is substantially included in the first charge and is disposed of by the views expressed by me with respect thereto.

Commentary.

From the New York World.

The findings are a detailed and unqualified condemnation of the Mayor's whole transit record. Unless Governor Smith rejects them the Democracy of New York cannot consider any longer the renomination of John F. Hylan.

To renominate Mayor Hylan would be to indorse him. To indorse him would be to make the whole Democratic party responsible for the indefensible record of the Hylan-Hearst faction. There is no escape from this conclusion. It is the very heart of the McAvoy report. With this report in existence, the Democratic party of New York must either dissociate itself entirely from the Hylan record or surrender body and soul to Hylan and Hearst and go down with them. There can be no compromise on a record that is indefensible.

The independent citizens of New York realize that a Democratic Governor would never have risked the dangers to his party contained in this inquiry if the evidence were not overwhelming and beyond dispute. This is no Republican report about a Democrat. This is no "reformer's" report about a "politician." This is the report of a Tammany judge to a Tammany Governor about a Mayor of their own party.

From the New York Herald-Tribune.

This report is not the work of the political enemies of the Mayor. It was written after a searching examination into the cold facts by a man belonging to Mr. Hylan's own political organization, who happens to possess the honesty and the intelligence to subordinate party interests to public service. It is a pitiless and an unanswerable indictment of the Mayor's colossal failure to do the job which he promised to do in two campaigns and which the voters elected him to do. The report is calm and dispassionate. It displays a thorough familiarity with every detail of the vast mass of testimony and exhibits submitted at the investigation, supplemented by a first-hand investigation of subway conditions.

Mr. Hylan's utter unfitness for the job which he has held for 7 years and which he hopeis to hold for 4 years more stands revealed. A Governor of his own party accorded him the hearing of his charges against the Transit Commission that he so loudly demanded. A distinguished justice of his own party conducted the investigation, acquitted the Transit Commission, and fixed the responsibility for keeping the people out of subways on Mr. Hylan himself. Judge McAvoy's report ought to bring the Mayor's political career to an end.

From the New York Times.

The sweeping condemnation of the Mayor's course is the thing which to most eyes will stand out in Judge McAvoy's report as of chief importance. Judge McAvoy asks nobody to take his word for this. He recites and analyzes the evidence. He traces the Mayor's vacillation and obstruction step by step; showing what contracts were violated, what promises were repudiated, what official undertakings were concealed, even what orders of the court were defied. The result is a terrible arraignment, all the more death-dealing for being couched in judicial and restrained language. The whole report is, in fact, a model. It is clear without being wordy, condensed without being obscure, and marches from premises to conclusion with an irresistible sweep of logic. The report is not an indiscriminate defense of everything that has been done by the operating companies or even by the Transit Commission. The judge thinks that the Transit Commission should have insisted upon better sanitary conditions in the subway and elevated stations. He objects to permitting the companies to cut down too sharply the force of guards on the trains. There are other minor improvements which should have been required. But all these things are only trifles compared with the way in which Mayor Hylan has thrown himself athwart rapid transit progress.

Judge McAvoy embodies in his report a constructive subway program. Its details, most of them admirable, must be left for future discussion. The great thing is that we have at last a judicial determination in regard to scandalous acts of the city administration which have too long afflicted us. The report certainly ought to be the beginning of better days for rapid transit relief. It ought also to be, if there is left in New York anything like a reasoning public, the end of Mayor Hylan politically.

Sources

Electric Railway Journal, McGraw Hill Company, Digitized by Microsoft, Americana Collection, archive.org.