company provided for in Contract No. 4 and the financial arrangement between the City and the company were predicated. Subsequently and in 1916, Section 48 of the Tax Law was amended so as to prohibit the deduction of bridge tolls from the special franchise tax. This resulted in effect in the City reaching into the joint pooled earnings of the railroad and taking out an additional $100,000 over the amounts that it had been receiving in March, 1913. This disturbed the profit-sharing basis of Contract No. 4 and resulted in a diversion of rapid transit moneys that should continue to have gone to meet interest and sinking fund payments on company and City bonds directly to the City for current expenses. It therefore constituted a burden on the joint earnings additional to that contemplated not only by the company's but also by the City's representatives in entering into Contract No. 4 and in estimating the probable financial results of that contract.

The situation in respect of the estimates for the Ashland Place connection is: During the earlier stages of the negotiations an estimate was made by a committee composed of Mr. D. L. Turner, the present Chief Engineer of the Commission, Mr. W. S. Menden, Chief Engineer of New York Municipal Railway Corporation, and Mr. Frederick L. Cranford, of slightly less than $1,600,000 as the cost of the Ashland Place connection. It is this estimate to which reference is made in the quotation from the letter of the President of the Railway Corporation. Increases in the cost of labor and materials, due to war conditions, resulted in increasing the estimate from $1,600,000 to about $2,200,000. It is to this addition that the company objects, not on the ground that it is excessive under present conditions, but because it is in excess of the obligations that it contemplated assuming in connection with the Ashland Place connection.

The adjustment finally worked out between the parties in respect to these matters is embodied in the following provision of the proposed agreement:

(* * * The cost of construction of the Ashland Place connection shall be likewise so determined and allowed and included but subject, however, to these qualifications: No amount shall be charged to cost of construction on account of

the Ashland Place connection (except for additions) in excess of one million six hundred thousand ($1,600,000) dollars and the sum or sums to be paid to the City under the provisions of paragraph 9 of Article XLIX of Contract No. 4 shall, after the date of the declaration by the Commission that the Ashland Place connection is ready for operation, be reduced in each quarter by the amount of tolls or rentals paid by the Lessee to the City during such quarter pursuant to the terms and provisions of any contract covering the operation of rapid transit trains or rapid transit cars over the New York and Brooklyn bridge, and the amount so paid to the City for such tolls in any quarter shall be deemed a payment to the City on account of said charge for interest and sinking fund upon the cost of construction under the provisions of said paragraph 9 of Article XLIX.”

So far as the matter of bridge tolls is concerned the deferring of possible allowances therefor until "after the date of the declaration by the Commission that the Ashland Place connection is ready for operation" leaves it merely of academic interest, for the Ashland Place connection and the Myrtle Avenue transfer connection will render unnecessary further rapid transit service over the Brooklyn bridge. This may occur even before that time through the prompt construction of the Myrtle Avenue transfer connection and the working out of plans the Commission already has in contemplation for a transfer connection at Fulton street and Flatbush avenue extension for transfers from the Fifth Avenue and Fulton Street lines to the DeKalb Avenue station of the Fourth Avenue subway. The tides of travel are being so changed by the new Dual System lines as to render the Brooklyn Bridge service a source of useless expense and from a rapid transit standpoint the joint account under Contract No. 4 should shortly be substantially increased by the saving not only in the bridge tolls but in operating expenses over the bridge.

From the general standpoint of public use and convenience the cessation of rapid transit service over that bridge will have important and beneficial results in that the trolley cars can be placed in the center of the bridge and the roadways left free for vehicular traffic. This will restore the Brooklyn bridge largely to the purposes for which it was contemplated and

relieve the overburden to which it has been subjected for all these years. Furthermore, it will result in further large savings through making unnecessary the expenditure of the millions of dollars contemplated by the plans of the Bridge Department for the reconstruction of the Brooklyn bridge.

So far as the limitation of the cost of the construction of the Ashland Place connection is concerned the Commission has done its utmost to secure a modification of the company's position in this respect and in this has been aided by the active co-operation of the Comptroller of the City. Despite these efforts the company has refused to change its position on the ground that not only is the subway cost account compelled at this time to bear the additional burden of this construction but also that there will be involved an additional expenditure by the company of about two million dollars for additional equipment.

In principle this adjustment does not differ from the arrangement negotiated with the Railway Corporation by the Board of Estimate and Apportionment for the substitution of a tunnel under 60th street in lieu of the crossing over the Queensboro bridge in that there the agreement was based upon the City charging to cost of construction only the amount it would have been permitted to charge to cost of construction had the crossing been over the bridge as originally contemplated. It must be said that from the company's standpoint, considering the difficulties that it will be under in financing, there is some justice in its insistence on this limitation, especially in view of the fact that several hundred thousand dollars of the cost will be for the Ashland Place connection proper that in the future may be rendered unnecessary by the construction of the Livingston Street railway. Even considering this as a somewhat harsh condition insisted upon by the company as a price for its necessary acquiescence it is the view of the Commission that the great and farreaching benefits flowing from the Ashland Place connection justify this concession to the company.

Adams Street Relocation: This certificate has been prepared under the provisions of Section 24-A of the Rapid Transit Act and provides in substance:

1. The City to relocate the present Fulton Street line west of Boerum place in Adams street including the necessary reconstruction of the present Myrtle Avenue line so as to provide additional tracks and equivalent station facilities and when completed to remove the Fulton Street Elevated structure between Boerum place and York street.

2. The portions of the substitute line in Adams street and York street, between a point about midway between Tillary and Concord streets and York street to be suspended provided that in lieu thereof the company during the period of such suspension is to be confirmed in its existing operation over the New York and Brooklyn bridge and its terminals and approaches. That is upon the basis of providing in Adams street and for the time being in part, on the Brooklyn bridge and its approaches track and storage facilities equivalent to the track and storage facilities removed from Fulton street.

3. The entire cost to be borne by the City. In the earlier negotiations it was the understanding that the Railway Corporation would contribute $100,000 towards this cost, but this concession has been withdrawn by the company on the ground that it was only intended to apply in case the third-tracking work were continued down Fulton street and over the relocated line in Adams street, in which event there would be a saving that might be employed as a contribution to the cost of the relocation. The estimated cost of this construction, including the portion as to which the construction is temporarily to be suspended, is $2,275,000. This figure also includes the acquisition of necessary real estate or interests therein which under the certificate are to be acquired by the City for the railroad company.

The tenure of the company to be the same as over the existing Fulton Street tracks in perpetuity.

The matter of the Adams Street relocation was initiated largely in the Board of Estimate and Apportionment in 1913 and 1914 through the Transit Committee of which President McAneny was then the Chairman. Its purpose was the clearing of Borough Hall park of the existing elevated structure and the betterment of the park and surrounding district as the site for present and future public buildings. It is barren of any rapid transit advantage. At the

time this matter was under consideration in the Board of Estimate and Apportionment the cost was estimated. at around a million dollars and the detail franchise terms had not been worked out. The project, there fore, has never been before the Board of Estimate and Apportionment in the complete form in which it is now presented. The Commission has proceeded with this matter not as one of its rapid transit projects, but in order to carry out so far as it properly could, what it conceived to be the wishes of the Board of Estimate and Apportionment in the matter of a street, park or building sites betterment.

In view of this special situation the Commission has not adopted or passed upon this certificate but transmits it to the Board of Estimate and Apportionment for its information, with the request that the Commission officially be advised by the Board of Estimate and Apportionment as to its desires with respect to this project in view of the definite knowledge now presented as to the cost and franchise terms that necessarily are involved. In this connection it might be stated that in negotiating the terms of this certificate the efforts of those acting for the Commission have greatly been hampered by the necessity of working out terms that not only would meet with the approval of the railroad companies but also would be such as the trustees under the various mortgages could accept as the equivalent of rights and structures released. Subject to these limitations the Commission has had the active co-operation of representatives of the railroad companies in working out the terms of the certificate but because of the mortgage complications there has not been the possibility of obtaining the concessions the representatives of the Commission deemed advisable.

With respect to the Adams Street Certificate, therefore, the Commission does not express any opinion but transmits it for the information of the Board of Estimate and Apportionment as indicating the more complete development of the matter from the initial stages when it was originally before your Board, with the request that the Commission be advised of the views of your Board in the premises. In the light of such expression the Commission will be in a position to act upon this matter with a knowledge of the precise views of the Board of Estimate and Appor