improvement was the debt margin of the City was insufficient to permit of the carrying out at this time of such a large project. In the earlier report the suggestion was made that this line might be financed in great part by assessment upon property benefited, under existing provisions of the Rapid Transit Act, and this suggestion seemed to meet with general favor at the public hearing. The constitutionality of the assessment provisions of the Rapid Transit Act has however been questioned and it was hoped that the assessment proceeding for the Utica Avenue line might furnish a test case that would settle this question. The failure of the Board of Estimate and Apportionment to act upon the Utica Avenue matter as submitted to it by the Commission in February of this year has prevented progress in this direction. Acquisition of Privately Owned Lines: In the earlier report the committee, foreseeing that the growing dominance of the City's rapid transit lines would eventually force the gradual absorption by the City of the existing company owned lines, reiterated the recommendation of its members expressed in a memorandum to the Chairman under date of December 28, 1915, of "the vesting of title of the existing elevated and transit lines of the B. R. T. (defined as the Existing Railroads' in Contract No. 4) in the City under fair and equitable terms. This is indispensable to the proper carrying out of the Commission's plan for future rapid transit improvement and the proper solution of the problem of elevated railroad elimination. The dealings of the Commission with respect to the existing railroads are complicated by the company's ownership in perpetuity of these lines. The changing or rearrangement of parts of them that will be so necessary in the future is rendered impossible when the company insists, as it does, upon substitute perpetual franchises." It has been impossible so far to make any headway with the company on this proposition. It must, however, be squarely faced at no late date and such an arrangement carried into effect. In view of the growing discussion of the municipalization of public utilities the committee believes that it might be helpful to repeat herein what was stated in the memorandum of December 28, 1915, in outlining a financial plan for the taking over by the City of company owned lines which in its view is both safe and entirely practicable. In that memorandum it was stated: Contract No. 4 provides that the company may deduct from the combined revenue of the City and company lines a liberal allowance covering existing earnings. That contract can readily be amended so as to provide that the company receive an additional one per cent upon a fair valuation of its existing lines to amortize their cost and to provide that the City's right of recaption (which would be extended to cover company lines) would be subject to the payment of the portion of that valuation that under the schedules should then be unamortized. Such an arrangement in principle is fair both to the City and to the company and in practice would be advantageous to both. It would not require any present outlay by the City nor any expenditure by the company, except, perhaps, for certain refinancing costs. "Under such an arrangement the difficulties in the carrying out of future improvements that would be bound to arise between the City and the company would be obviated. The existing railroads would be exempt from taxation which would help to carry the company over the lean years of early operation, and would swell the profits of the company and the City from the railroads in future years. Moreover, in looking into the future, such an arrangement is very largely to the company's interest. When the joint City and company system provided for in Contract No. 4 is all in operation the City lines, especially the Broadway-Fourth Avenue line, will form the more valuable and more important lines of the new system. As time goes on the extensions and additions will be to the City lines so that they will be growing of relatively greater, and the company lines of relatively minor, importance. This dwindling of importance will be reflected in the value of the company's lines. "A further very great practical benefit will be the relief from the existing situation which necessarily brings the company into sharp collision with the public. In this present third-tracking matter the company has indicated in all the discussions before the Commission its desire to be fair and reasonable and to placate and not to antagonize public sentiment. Despite good intentions the practical situation is such that the interests of the public and of the company are at variance and in the future will become more and more widely so. "With the title to the existing railroads in the City the broader plans can readily be carried out from time to time. The City could lay out extensions to company as well as to City lines and rearrange and revamp some of the company's lines so as to correct the mistakes of the past. It will then be a matter of plans and finance and the voluntary co-operation of the citizens of central Brooklyn in offering to stand assessment indicates that by a reasonable use of that method improvements can be secured far earlier than would otherwise be the case. There are no insuperable difficulties to the carrying out of this arrangement. The main one will be in agreeing upon a fair valuation of the existing railroads. That should, however, readily yield to fair dealing on the part of the City and the company." Livingston Street Subway: The lack of available City money for major subway construction has already been referred to in connection with the Crosstown line. If it were available the committee would gladly have pressed the negotiations for the Livingston Street subway. As it is, by far the greater part of the Ashland Place connection construction will form part of the future Livingston Street subway and its adoption will be an important initial step. The documents now presented comprise: 1. Agreement modifying Contract No. 4 so as to provide for 2. 3. (a) the Ashland Place connection (b) the Lawrence Street station on the Willoughby (c) the transfer connection between the Myrtle Modifying certificate extending the time for third- Certificate for Adams Street relocation. The various provisions of these documents are discussed in the form of communication to the Board of Estimate and Apportionment embodied in this report. The committee strongly recommends the adoption by the Commission of the agreement providing for the Ashland Place connection and the other transit improvements and the extension of time certificate. It does not recommend the adoption by the Commission of the Adams Street Certificate and for this reason: The Adams Street Relocation project was initiated in large part by the Board of Estimate and Apportionment through the Transit Committee of that Board of which President McAneny was then the Chairman. The purposes of the project are the clearing of Borough Hall park of the present elevated railroad and the betterment of that park as the site of present and future public buildings. It is absolutely barren of rapid transit advantage. In the studies and negotiations that have followed since this matter was before the Board of Estimate and Apportionment it has developed that the cost will be more than twice that contemplated by President McAneny and his committee and that to safeguard existing franchise rights the company feels compelled to insist upon terms that are exceedingly onerous from a public standpoint. As this is a street, park or public buildings betterment proposition instead of a rapid transit one the committee believes the Commission should withhold any expression of its views and transmit this form of certificate to the Board of Estimate and Apportionment, with a statement of the present estimated cost, as indicating the best terms the Commission has been able to negotiate with the company and to request the Board of Estimate and Apportionment officially to advise it whether under all the conditions it believes the financial and franchise terms as embodied in such form of certificate justify the prosecution of this improvement. On the receipt of such advice the Commission will be in a better position to pass upon this matter. The committee recommends the sending of a communication to the Board of Estimate and Apportionment in the form following: To the Board of Estimate and Apportionment of The Public Service Commission for the First District transmits herewith for the approval of the Board of Estimate and Apportionment: · 1. Proposed agreement between The City of New York, acting by the Commission and New York Municipal Railway Corporation and New York Consolidated Railroad Company modifying the contract of March 19, 1913 between The City of New York and New York Municipal Railway Corporation, known as Contract No. 4, in order to provide for the following rapid transit improvements: (a) The construction of the Ashland Place connection. (b) The construction of an additional station on the Willoughby Street line at or near Lawrence street. (c) The construction of a transfer connection between the Myrtle Avenue Elevated line and the Myrtle Avenue station of the Fourth Avenue subway. (d) The construction of an additional station on the Brooklyn plaza of the Williamsburg bridge. 2. Proposed certificate modifying the certificate granted by the Commission under date of March 19, 1913 to New York Municipal Railway Corporation for additional tracks on the Broadway, Fulton Street and Myrtle Avenue Elevated lines so as to extend the time of the Railway Corporation to begin the third-tracking of the Fulton Street line below the point of junction with the Ashland Place connection until one year after notice. The Commission also transmits to the Board of Estimate and Apportionment for consideration and advice the form of proposed certificate for the relocation in Adams and other streets of the portion of the existing Fulton Street line west of Boerum place. Under date of January 26, 1917, following preliminary negotiations with the railroad company, the Commission sent a communication to the Board of Estimate and Apportionment outlining the necessary changes in the Dual System layout in Brooklyn that are embodied in these documents. Subsequently the Commission transmitted to the Board of Estimate and Apportionment the route and general plan for the Ashland Place connection, which was thereafter consented to by the Board of Estimate and Apportionment and the Mayor. The Commission then canvassed the property owners affected and secured sufficient property owners' consents to legalize this route. As stated above, the agreement modifying Contract No. 4 provides for the construction of the Ashland Place connection, the Lawrence Street station, the Myrtle Avenue transfer connection and the Williamsburg Plaza station. The Board of Estimate and Apportionment has already approved an agreement between the City and the construction contractor providing for the Lawrence Street station and appropriated $275,000 for the portion of that work covered by that agreement. Such appropriation has been taken into consideration in fixing the amount of the requisition transmitted herewith. The Ashland Place Connection: The Commission believes the construction of this connection to be a matter of far-reaching importance and vitally neces |