sary to permit of the complete utilization of the new subway system in a way adequately to serve the different sections of Brooklyn. One of the main inducements to the City in entering into Contract No. 4 was that the lack of outlets and terminal facilities of the then existing Brooklyn elevated system prevented the operation of that system to its full capacity and the transportation of Brooklyn passengers to and through other boroughs. At that time the greater parts of the traffic over the Brooklyn elevated lines was throttled into two tracks over the Brooklyn bridge. Furthermore, passengers were carried only to the ends of the bridges and not to the points in Manhattan where most of them desired to go. The addition of the Broadway line in Manhattan with proper connections was planned to relieve this congestion and provide proper outlets. The great mistake, however, was made of only providing access into this line for the Flatbush and South Brooklyn districts. The Eastern District of Brooklyn was provided for by a special line running to 14th street and Sixth avenue, Manhattan, with transfer privileges to the Broadway line.

This left out of consideration the great central · district of Brooklyn lying between the Eastern District and the Flatbush and South Brooklyn districts. This is the old thickly settled part of Brooklyn in which traffic congestion has probably been the most severe. Despite this the only provision made for traffic relief was the third-tracking of certain of the elevated lines, but still mainly keeping them tributary to the bridges with, at the best, the possibility of a very inconvenient method of transfer to the subway system. For example, the Fulton Street line, according to the only plans that had been developed, would continue over the Brooklyn bridge to Park row with the possibility of a transfer arrangement there with the Chambers Street station of the Centre Street loop. Even the plans for this transfer arrangement had not been developed and it could only be arranged for by a long and inconvenient passageway connection from the bridge terminal to the Chambers Street station under the Municipal building. It does not require extended argument to show that such provision was most inadequate and the possible trans

fer connection so inconvenient and burdensome as to tend to discourage, rather than to encourage, increased traffic on this line. The discrimination is the more apparent when consideration is given to the splendidly increased facilities afforded to the residents of Flatbush and South Brooklyn by direct track connection. with Manhattan.

This situation will radically be changed by the construction of the Ashland Place connection. Instead of continuing to be tied up to the Brooklyn bridge, the entire district tributary to the Fulton Street line will be placed on a parity with other sections of Brooklyn and give direct access to the subway system and through it to the districts of Manhattan, Queens and Brooklyn served by the subways and elevated lines operated under Contract No. 4. This means a complete and thorough-going measure of relief for central Brooklyn - a measure of relief which on all grounds it is justly entitled to.

In the opinion of the Commission the advantages of this plan to the City are very great not only in affording really adequate service to this district of Brooklyn, but through the provision of such service, in increasing the financial returns to the City and the company from Contract No. 4. The entire history of rapid transit in this city indicates that as proper and adequate facilities are provided the public is quick to take advantage of them by increased use. Important as the Fulton Street line is of itself its importance and use to the people it serves is many times increased by rendering it possible, through proper connections, for it to transport its passengers over the wide area in the three boroughs served by the new combined rapid transit system. This should result in a far more intensive use of the Fulton Street line and as a corollary in heavily increased receipts. So that in considering the advantage given to the residents of central Brooklyn by this increased service it should also be borne in mind that from a financial standpoint. this improvement, through materially increasing the earning power of the system, will advance the time when the City will be receiving the full interest and sinking fund payments on its investment in the subway lines.

Willoughby Street Station: The importance of the Willoughby Street station in providing access to the

financial and shopping district of Brooklyn between Flatbush avenue and Borough Hall has already been presented to your Board. This station has already been authorized by the Board of Estimate and Apportionment and its construction is already under way.

Transfer Arrangements between Myrtle Avenue Elevated Line and the Fourth Avenue Subway: What has been stated above in regard to the lack of proper connections between some of the elevated lines in Brooklyn and the new subway system applies also to the Myrtle Avenue and Lexington Avenue Elevated lines. They, like the Fulton Street line, were left tributary to the Brooklyn bridge without even adequate transfer arrangements. It is not practical to give these lines a direct track connection with the subway system but it is entirely feasible to arrange for a convenient transfer between those elevated lines and the Fourth Avenue subway at the point of crossing at Myrtle avenue and Flatbush avenue extension. This will involve the relocation of the present Bridge Street station of the Myrtle, Avenue line (which will be done at company expense) and the construction of passageways from the elevated station platform to the Myrtle Avenue station of the Fourth Avenue. subway. The only direct City expense involved will be in the reconstruction of the present entrances to the Myrtle Avenue station, which will be small.

Station on Williamsburg Bridge Plaza: Just east of the Williamsburg Bridge plaza is the junction between the City's Centre Street Loop line and the company's Broadway Elevated line. The Essex Street station of the Centre Street loop is already one of the most congested stations in the entire subway system. The district tributary to the Broadway Elevated line now producing a heavy traffic will largely be increased after the additional tracks and connections of that line are completed. Under the Dual System plans there is no provision for an express station on the Williamsburg bridge which is necessary to permit of the proper transfer and interchange of passengers at this important center. This omission is remedied by a provision for an adequate express station at this point.

Suspension of Third-tracking of the Fulton Street Elevated Line: The Ashland Place connection in

addition to providing such a large measure of increased service for the central district of Brooklyn will also meet in part the objections of many to the further third-tracking of elevated lines, since the construction of the connection will render unnecessary for the present at least the third-tracking of the Fulton Street Elevated line below the point of junction. The third-tracking will have to be continued between Nostrand avenue to which it is at present completed, and such point of junction. The modifying certifificate, therefore, provides for the suspension of the portion of the third-tracking below the point of junction until one year after notice, from the Commission to the company or from the company to the Commission, which must be based upon a certificate that traffic necessities require such construction.

In order to provide for the use of the improved type of subway cars on the Fulton Street line below the point of junction with the Ashland Place connection, it will be necessary to strengthen the existing structure and to rearrange and enlarge the present station facilities on that part of the line. The agree ment modifying Contract No. 4, therefore, provides that it is without prejudice to the company's right and obligation to carry out such reconstruction. This of itself, with the attendant use of improved rolling stock, will greatly better the local service furnished by the Fulton Street line into and through the shopping and financial district of Brooklyn.

Terms: There has been little difficulty in arranging the terms covering the construction of the Lawrence Street station, the Myrtle Avenue transfer connection and the Williamsburg Bridge Plaza station. The entire cost of construction of these improvements. will be charged to cost under Contract No. 4 and they will be treated in all respects as though originally incorporated in the Dual System plans.

The greatest difficulty has been in negotiating the financial terms covering the construction of the Ashland Place connection. These difficulties turned on the limitation of cost of construction of the Ashland Place connection and the matter of bridge tolls. In his letter of January 5th, 1917, addressed to the Chairman of the Commission, the President of New York Municipal Railway Corporation stated the company's reasons for these concessions as follows:

Primarily it is because you have asked us to assume an additional burden represented by the interest fund on not less than $2,000,000 of additional construction, the greater part of which will not add any revenue to the joint enterprise, and this burden will postpone so much longer the division of profits. We offered in my letter to Mr. Harkness to assume this burden both in the case of the proposed changes required at Gold street and Myrtle avenue, and we offered to assume the burden as to $1,600,000 of the expense (more than your estimated cost) of the Ashland Place connection, on the supposition that the elimination of the bridge rental capitalized would just about equal the amount of this new burden. In addition this obligation would probably involve an expenditure by us of not less than $2,000,000 for steel car equipment. You probably do not know, because you were not one of the parties to the negotiations leading up to the March 19, 1913, contracts, that our controlling reason for entering into these contracts was the hope of eventual divisible profits between the City and the company. The City's representatives and ourselves estimated that it was reasonable to expect such divisible profits within a comparatively few years after full operation. Except for that expectation we would not have been justified in entering into the contractual arrangement, for otherwise the operating company would be surrendering all hope of growth for the payment of interest and sinking fund on the City's investment. It is of great importance to us, therefore, that the City's cost as well as our own for new construction should not be unnecessarily increased, and I think the financial officers of the City, having its future credit in mind and the release of rapid transit investments for other corporate purposes, are equally insistent with us that every reasonable effort should be made to expedite the time of divisible profits. In consenting therefore to assume such an additional burden as is represented by the interest and sinking fund of $1,600,000, we have, we think, a right to ask that the equivalent amount represented in minimum bridge rental should be abolished, and in this arrangement the City will profit as well as ourselves, for it will bring the time so much nearer when the City will receive full return on its investment."

The situation in respect of bridge tolls is: At the time Contract No. 4 was entered into in March, 1913, the company was permitted, under the then tax law to deduct from its franchise taxes the amount of tolls paid for operating over the New York and Brooklyn bridge. By reason of this deduction the net result was practically equivalent to the remission of tolls. It was upon that basis that the preferentials to the