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It is provided that the Company shall have the use of the above tracks to the extent of one-third of their capacity; the City, or any operator holding under it, one-third of their capacity, and the remaining one-third of the capacity of such tracks shall be divided between the City, or any operator holding under the City, and the Company, in accordance with traffic requirements. The Company is given the privilege for the first 10 years of securing its electric motive power from outside sources, pending the construction of the necessary power houses and sub-stations. Title to the equipment vests in the city upon delivery to the railroad and acceptance thereof by the Commission. Provisions are made for securing to the City the necessary control over expenditures by the Company in the construction, equipment, maintenance and operation of the lines. Supervision by the Commission is agreed to, and the Company is required to provide facilities for such inspection as the Commission may wish to make. The Company must keep proper accounts, and permit their examination by the Commission, and submit to the Commission for approval any contract, agreement, mortgage or undertaking having to do with its contribution toward the cost of construction or equipment. Any contract having to do with the maintenance and operation of the road, extending for more than one year or involving the expenditure of more than $50,000, must be approved by the Commission. Differences between the City and the Company are to be settled by a board of arbitration, consisting of three members, one to be appointed by the City, one by the Company and a third by the two so appointed; or, in case of failure to appoint a third member within 30 days, such third member shall be named by the chief judge of the Court of Appeals, or, failing to do so within 15 days, by an associate judge of the Court of Appeals, in the order of seniority. The new rapid transit lines are provided essentially for passenger operation, but the carriage of freight, mail and express matter is permitted, provided it does not interfere with passenger traffic. Advertising is prohibited on any part of the road or stations. The extension of the existing elevated system and the additional tracks on the elevated lines already described are authorized as separate grants under the respective certificates as to the separate lines for which they are granted, and the certificates therefor are terminable as to one or more of them separately at any time after 10 years from the commence ment of operation of the whole or part of them under the certificates.
In case of the termination by the city of the certificates as to either of the extensions (the Jamaica line or the Liberty Avenue line) or the additional tracks on any of the existing elevated lines (Broadway, Fulton Street and Myrtle Avenue lines) before the expiration of the 85 years for which they are granted, the Company is to receive a percentage of the cost of the extensions and additional tracks, as set forth in a schedule beginning with 115 per cent of such cost after 10 years from the commencement of operation, and diminishing one seventy-fifth for every additional year that such extensions or additional tracks shall have been in operation, until the 85th year, at the end of which the City will take such extensions or additional tracks and the equipment supplied for initial operation, free of cost. For additions to the extensions and additional tracks or additional equip ment beyond that supplied for initial operation and which shall have been in operation less than 39 years at the time of the termination of the certificates by the City, the Company is to receive a percentage of the cost of such additions and additional equipment, as set forth in a second schedule in each certificate, beginning with 107.5 per cent, if such additions and additional equipment be turned over to the City, and diminishing pro rata for every year that the same shall have been in operation, until the 39th year, at the end of which such additions and additional equipment shall be turned over to the City free of cost. If the exercise of the rights under the certificates continue to the end of the term, then the Company shall be paid for additions and additional equipment a percentage of the cost as set forth in a third schedule in each certificate, beginning with 100 per cent, if such additions and additional equipment be taken by the City and diminishing pro rata for every year that the same shall have been in operation, until the 39th year, at the end of which such additions and additional equipment shall be taken by the City free of cost. The certificate for additional tracks provides that the third or additional tracks which have already been constructed on the line on which additional tracks are granted under the certificate, shall not be subject to be taken over by the City, unless it shall finally be determined by the court that such additional tracks were constructed and are maintained without authority. The Company is required to begin construction of both the extensions and the additional tracks under the respective certificates six months after obtaining the necessary consents therefor, and to complete the same within two years thereafter. The Commission reserves, however, the right to extend such time. The extensions are to be constructed according to the general design of the Van Cortlandt Park Extension of the existing subway operated by the Interborough Rapid Transit Company; and both the extensions and the additional tracks or the supporting girders are required to leave a clearance above the surface of the street of at least 14 feet. The Company is required to procure all the necessary easements and interests in real estate for the construction of the extensions and the additional tracks. The certificate for the extensions provides that the construction of the third track on either the Jamaica line or the Liberty Avenue line, or any portion thereof, may be deferred during such time as shall be approved by the Commission, but the Company is required to begin the construction of such third track within six months after it shall be directed to do so by the Commission, and to complete the same within two years thereafter.
Stock and bonds. January 31, 1913, the Public Service Commission for the First District authorized the Company to issue capital stock for $100,000, and to sell the same at not less than par. On the same day the Commission authorized the New York Consolidated Railroad Company to purchase the stock of the Company as such stock should be issued from time to time. August 1, 1913, the Commission authorized a further issue of the Company's capital stock for $400,000, at not less than par. July 1, 1912, the Company executed a mortgage to the Central Trust Company of New York, as trustee, to guarantee the payment of five per cent bonds for $100,000,000. The bonds are made payable January 1, 1966, but may be redeemed on any interest date at 107.5 per cent of the face value, together with the accrued interest thereon. The mortgage covers all the property and
rights of the Company. The bonds under the above mortgage were guaranteed by a mortgage of the New York Consolidated Railroad Company, the owner of the stock of the Company and the future operator of the Company's lines as lessee, to the Central Trust Company of New York, as trustee.
The above mortgage of the Company was approved by the Commission on March 20, 1913, and the Company was authorized to issue bonds for $40,000,000, and to sell such bonds so as to net the Company not less than 97 per cent of the face value. The bonds were to be issued for the following purposes: 1. Toward the discharge of its immediate obligation to con
tribute toward the cost of construction of the rapid transit
railroads for initial operation under Contract no. 4...... $11,042,480 2. Toward the cost of equipment of such road for initial operation
15,520,000 3. Toward the cost of reconstruction of the existing elevated railroads
5,969,380 4. Toward the actual cost of plant and structure, and of equip
ment of third or additional tracks on the lines of the exist-
3,880,000 5. Toward the actual cost of plant and structure, and of equip
ment of extensions to the elevated lines to be constructed
2,388,140 6. For expenses of the sale of the bonds at not less than 97 per cent of par.
Intercorporate relations. (See also chart IV, no. 36.) October 1, 1912, the Brooklyn Rapid Transit Company agreed to purchase the bonds of the Company when they should be issued, and to provide money for the purchase of such bonds it authorized the issue of six year five per cent gold notes for $60,000,000, and executed a trust agreement, dated July 1, 1912, to the Central Trust Company of New York, as trustee, to secure the payment of the notes. The Brooklyn Rapid Transit Company is the owner of more than 95 per cent of the capital stock of the New York Consolidated Railroad Company, which is in turn the owner of the capital stock of the Company. January 31, 1913, the Company entered into an operating agreement with the New York Consolidated Railroad Company, acquiring the right to operate the elevated railroads of the latter Company so as to enable the Company to take certificates for extensions and additional tracks to the elevated lines which are to be operated in connection with the new subways allotted to the Company under Contract no. 4, as its portion of the so-called Dual System of Rapid Transit. The agreement was approved by the Commission on February 4, 1913. March 25, 1913, the Company assigned and leased all its rights under Contract no. 4 and under the certificates for extensions and additional tracks, to the New York Consolidated Railroad Company. The lease was approved by the Commission on the date of its execution; its provisions are given in the history of the New York Consolidated Railroad Company (no. 482).
February 3, 1913, the Company entered into an agreement with The Brooklyn Heights Railrad Company and The Brooklyn City Rail Road Company, lessor of the Brooklyn Heights Company, for operation on the Lutheran Cemetery extension, and for the construction of a connection between the elevated road of the Lutheran Cemetery line, owned by the New York Consolidated Railroad Company, and the surface line owned by The Brooklyn City Rail Road Company. The Company agreed to construct the connection at its own expense, in accordance with plans and specifications approved by the Brooklyn Heights Company, “which shall include two tracks to be laid on an elevated structure, on the same grade as and uniting with the two tracks of said elevated railroad at or near said intersection of Wyckoff avenue and Palmetto street; and which elevated structure and two tracks shall continue thence northeasterly and easterly over and upon the lands constituting part of said right of way of the Brooklyn City Company, and over the said surface railroad tracks, to and across Fresh Pond road, at an elevation throughout of at least 14 feet above said surface railroad tracks, and to construct an incline and two tracks thereon connecting with and descending from the two tracks on such elevated structure at or near the easterly side of Fresh Pond road, so that the two tracks constructed on such incline shall, at the foot of such incline, about 1,000 feet easterly of the easterly side of Fresh Pond road, connect with the two tracks of said surface railroad on the grade of said surface railroad tracks." The connection is to be so constructed as not to interfere with the operation of the