"Oh, don't take your hand off my forehead, father darling!" "No, sonny."

by two down the lane on New Year's morning, lingered uncertainly a long way off, then gathered in a whispering group

was at the window, holding Philly, and beckoned them in.

"Say Happy New Year,' fellers," whispered their leader, "'cause he dunno he's awful sick, don't you see; an' say it loud right through the winder, so he 'll hear good."

The boys crowded forward up the steps, hugging their packages awkwardly, and gazing awestricken at Philly's white face behind the pane. One by one they laid their gifts on the sill, with quavering greeting, in sorrow and great awe. Little Tommy Dan, last and least of all, stood on tiptoe under the window, with bright greeting ready, and only said,

"G-good-by, Philly."

Louise Lyndon Sibley.

THE surface railway facilities in New York (boroughs of Manhattan and the Bronx), and its supply of gas and electricity, are now in the hands of two great corporations, behind which is one group or alliance of men. These corporations represent an actual outlay probably well within $125,000,000, for systems which could be replaced to-day, probably, for less than $100,000,000, while their nominal capitalization, share and loan, excluding securities of consolidated companies held in the treasury of the controlling company, is over $300,000,000, and the market value of their securities is above $400,000,000. The enormous difference between cost and market value represents roughly, if not accu

1 This article is intended to be presented from an external and objective point of view; but, to prevent misapprehension, it should be

rately, the value of the franchises" promoted" out of the people's possession into private pockets, in large part not of those whose foresight, investment, and skill have developed the present facilities, but of those who, with the double leverage of "politics" and "financing," have become possessed in recent years of these franchise privileges. The story of how the street railway franchises in New York have been one by one obtained, and at last welded into a unified monopoly; how the gas companies, by various processes of peace and war, have been brought into final combination; how the leading electric corporation was captured by the gas interests; and how, finally, within the year past, all these enterstated that the writer was the first vice president and active executive of the Edison Company of New York, from 1890 into 1899. — R. R. B.

prises have come under the same control, would easily fill volumes, but the brief statement here presented may throw some light on one of the chief municipal problems of the day.

Most New Yorkers of middle age remember the lumbering ten-cent" stage," seating ten and "strapping" more, such as that which, after emerging from the usual blockade at Fulton Street, over which a footbridge afforded safe passage, rumbled for a weary hour along Broadway as far as 34th Street, whence another started occasionally up Bloomingdale Road to Manhattanville; and the primitive six-cent "street car" on Sixth and Eighth avenues, some of the one-horse "bobtail" order, some with the legend "Negroes allowed in this car," a few with a placard " Heated,” — which, with those of the "Harlem Extension" down Fourth Avenue, used alike for freight cars and street cars, and the other avenue lines, furnished the chief means of transportation in the days “before the war," and for some time thereafter. The present Metropolitan Street Railway, consolidating many separate lines into a single service, with marvelous engineering feats of reconstruction, excellently operated, as rapid as surface conditions permit, with cars well lighted, well heated, and comfortable, though chronically overcrowded, and an almost universal transfer system for a five-cent fare, affords such superior facilities that citizens are ready to forget or condone the steps by which charters have been obtained and consolidations effected, and to overlook the possibilities of still better facilities, lower fares, or reduced taxes, that might have been or might yet be, if the people, as the municipality, recover their rights in the streets, and properly control the operating companies which should lease street privileges. The popular rumor that this company paid $750,000 secretly for illicit privileges which it failed to

get through the Eldridge bill of 1898, vetoed by Governor Black, cannot, of course, be verified, and is perhaps not true in this form; but that it is believed is in itself significant, and it is probably true that large considerations were indirectly paid to keep hands off and eyes shut while the "combine" of capitalists behind the railway company was getting its grip on most of the public utilities of New York. Among these the master spirit is ex-Secretary William C. Whitney, who, like Richard Croker in the municipality, holds no official position and has no stated responsibility in his company, since, as stated in a laudatory article on the company in the New York Times for November 20, 1898, "for reasons of his own, he withdrew from the Board of Directors two or three years ago. But his wishes find expression in every important act of the Board." "With Mr. Whitney as the subtle, often invisible director,” wrote a correspondent of the Philadelphia Press, December 6, 1898, "the corporation grew to majestic proportions. He apparently bore about the same relations to it that he did to Tammany Hall, of which, although not a member, he was, nevertheless, through men who respected his authority, the controlling influence."

The New York and Harlem Railroad had been chartered by special act of the legislature in 1831, and the common council granted it permission to lay its tracks southward from the Harlem River, by successive resolutions from 1832 to 1852, in which year it reached the City Hall Park. This was the first street railway in New York, and no compensation was given for the franchise-except, according to rumor, to legislators and common councilmen until in 1872 the legislative grant for the extension exacted 5 per cent of gross receipts on Madison Avenue above 79th Street. It required much pressure from 1854 to 1858 to replace steam

with horses below 42d Street, and the common council complained by resolution that the company had defied it, had refused to obey its ordinances, and was using paid agents at Albany to circumvent it. The Sixth and Eighth Avenue franchises were granted in 1851-52, also without compensation, — though Comptroller Flagg, in a special message, urged that the companies should at least be required to pave and clean the streets they used, but the roads were not to be assigned without consent of the common council, and were to be surrendered to the city on demand at 10 per cent advance on cost. Franchises for Third Avenue, -to a ring of stageowners and politicians, for Second Avenue, and for Ninth Avenue were successively granted, with trivial conditions of protection to the city. In 1853 came a general exposé, on charges initiated by an outraged lobbyist, who thought it was not fair play that the common council should take $20,000 for a charter from one set of people, and then, for $50,000, revoke its action in favor of another. The grand jury obtained direct confessions of payments to bribe aldermen, — Tweed appearing on the scene in this connection, - but the charters remained intact.

Broadway had always been the golden goal of the charter-grabbers, and, also in 1852, Jacob Sharp and others obtained authorization for a Broadway railroad from the aldermen and assistant aldermen, without compensation to the city, notwithstanding various competing offers of $1,000,000, of $100,000 a year for ten years, of $1000 instead of $20 license for each car, of one cent for each passenger carried, or of a threecent fare. This grant was repassed over Mayor Kingsland's veto, in the face of an injunction from Judge Campbell, and was checkmated only by the punishment of the aldermen for contempt of court, after a legal contest finally settled in the Court of Appeals. In 1859 an atNO. 528. 30

VOL. LXXXVIII.

tempt to "parallel Broadway" took the shape of the "Yonkers road," which, by beginning in Westchester County, was to avoid the restriction upon railroads "commencing and ending within the city limits." For this the common council raced a permit through both branches December 7, 1859, before the meeting of the legislature in January should give the Albany lobbyists a chance at the job, and only Mayor Tiemann's veto saved. the city. The ensuing legislature took from the "common scoundrels," as they were called, the right to grant street railway franchises, and the seat of corruption was transferred, for a time, from the City Hall to the state Capitol. Various other attempts on Broadway were defeated, until in 1884 — when the first general surface railway law was passed, with a proviso that 3 per cent, and ultimately 5 per cent, of gross receipts should be paid the city - Jacob Sharp and his associates of the Broadway Surface Railroad Company procured the Broadway franchise from the "boodle board" of aldermen, two of whom were sentenced to the state prison for bribery, while Sharp, also convicted, died pending a retrial ordered on appeal. In 1886 the legislature annulled the charter of the company; but the Court of Appeals, in the O'Brien case, held that the right in the street granted by the city was perpetual and indefeasible, and hence that it survived the corporation, and vested in the directors as trustees for the creditors and shareholders. This decision, counter to the common rule that stolen goods may be recovered by the owner, gave an extraordinary force to the adage that "possession is nine points of the law," and put a premium on the corrupt or brutal overbearing by corporations of public or private rights; and it has yet to be overcome by that application of common sense to new conditions which constitutes the evolution of law.

Up to 1889-90 the many cross-town

lines which had obtained charters, as well as the older lines lengthwise of the city, had been independently operated, exclusively by horse power. At that date the New York situation attracted the attention of the Widener - Elkins Philadelphia syndicate of street railway promoters, whose combination with the Whitney interests has resulted in the unified system of to-day, a system as creditable in its operation as it has been the contrary in other respects. The first step was the incorporation of the Metropolitan Cross-Town Railway, which acquired a cross-town line whose charter permitted it to lease or consolidate with other roads. About the same time the Metropolitan Traction Company was organized in New Jersey; in 1892 this was reincorporated in New York; and in 1893 the Metropolitan Street Railway Company was incorporated in New York, and became the operating company for the Traction Company, which owned its $30,000,000 stock. Meanwhile, by purchase, by lease, by control of securities, consolidations were going on, and in 1897 the Traction Company was dissolved, its shareholders receiving share for share of Street Railway stock and a premium in debenture bonds; and the Metropolitan Cross-Town, the Broadway Surface, and other companies were finally merged in the Metropolitan Street Railway Company, whose only considerable rival was the Third Avenue Railroad, with its subsidiary lines. During this period, changes of motive power from horse to cable, from cable to electricity were going on; but the city secured little pecuniary advantage, the minimum of $150,000 per year offered by the Broadway road as a premium for the change to cable proving to be no more than it would presently have been obliged to pay as the 5 per cent of its gross receipts. To safeguard the city, the Cantor act of 1886 had provided for the sale of new franchises at auction, with a minimum price of 5 per cent of

gross receipts; but the politicians who organized the Union Railway Company, called the "huckleberry road" because of the sparsely settled suburbs it traversed, evaded this law by obtaining special acts, and a $2,000,000 franchise, of which the Third Avenue Railroad became possessed, yielded the city nothing. A franchise for Lenox Avenue, separated from Sixth Avenue by the two and a half miles of Central Park, was granted to the Metropolitan Company without compensation, under the guise of a “requirement that it should extend its Sixth Avenue line. For other extensions in the northern part of the city there was fierce rivalry between the Metropolitan and Third Avenue companies, resulting in charges and countercharges of corruption, and in the laying of four tracks on Amsterdam Avenue, to the intense indignation of its residents. When, under the law, a small extension privilege was offered at auction, a third bidder, the People's Traction Company, offered the entire gross receipts, and afterward several times these, - a mystery which has never been altogether solved.

The Metropolitan Company was understood to be "in with" Tammany, and the Third Avenue with Republican politicians; but when the Third Avenue line was retransformed from cable to electric traction, Tammany's power was sufficient to require this company to cancel a contract for reconstruction which it had made, and give a new contract, at an increased price, to a politician contractor who was chairman of one of the Tammany committees. The Third Avenue Company, reeking with jobbery, came rapidly to its decline and fall: the Metropolitan Company expressed unwillingness to assume its burdens; efforts to finance it met with many difficulties; at last came a crash, in which its shares, which in 1899 had ranged from 242 to 1173, fell, on March 2, 1900, to 454. Ex-Mayor Hugh J. Grant, formerly

a Tammany magnate, was appointed receiver; and when the stock recovered it was found that the Metropolitan Railway interests held a majority of the shares. About $9,000,000 of the stock is now held in the Metropolitan treasury, assuring control, and $50,000,000 bonds on the Third Avenue property, virtually guaranteed by the Metropolitan Company, are in process of issue. This has been the final coup by which the Metropolitan Street Railway Company has obtained the monopoly of surface railways in the boroughs of Manhattan and the Bronx. It has now a capitalization of $45,000,000 stock, ruling at about 170, aside from about $18,000,000 stock in controlled lines (including Third Avenue) not in its treasury, and above $90,000,000 bonds (including $40,000,000 of the guaranteed Third Avenue bonds); representing, roughly, a market value of at least $200,000,000. The ablest administrative ability has been enlisted in this service; economies and improvements have been everywhere effected; the results accomplished have been marvelous indeed; and if the end justifies the means, the promoters have reason to be pleased with their work.

The Manhattan Elevated Railroad Company, into which were merged, in 1879, both the New York and the Metropolitan elevated railroads, initiated in 1875, has reached, with the usual processes of stock manipulation and multiplication, a capitalization of $48,000,000 stock and $40,000,000 bonds, having a market value, approximately, of $100,000,000; but it has not yet been brought into the general fold, and the alliance prophesied by a traffic agreement with the Third Avenue surface road, made in 1899, for transfers from one system to the other for a supplementary threecent fare, has come to little. The company enjoyed many facilities through a good understanding with "the powers that be," until its president, George J.

Gould, declined to concede to Richard Croker for his Auto-Truck Company the privilege of laying pneumatic tubes along the elevated structure. A picturesque account of an interview between Mr. Gould and Mr. Croker was made public, and a simultaneous and concentrated cross-fire from the city authorities upon the company began. The Park Commissioners notified the company to remove its structure from Battery Park; the Health Department discovered that the supports were in unsafe and dangerous condition; and ordinances proposed in the municipal assembly required the company to inclose its stations in glass and place drip pans under its structure, to operate trains on fiveminute headway throughout the twentyfour hours, under $100 penalty for each omission, and to give up its revenues from newspaper stands and advertising. A renewal of friendly relations averted the threatened dangers; but effective notice was given to other companies of the treatment to be expected in case they failed to conform with the desires of the ruling powers.

When gas began to supplant oil for lighting, the New York Gas Company, organized in 1823, with a capital of $1,000,000, was given exclusive rights for thirty years in the built-up part of the city, and supplied gas at $10 the thousand cubic feet. A dozen gas companies have since been formed, some confined by charter or by agreement to specified parts of the city, others organized for purposes of competition, — whose history has been a confused tangle of asserted corruption, rivalry, "gas wars," pooling, consolidation, overcapitalization, protests from consumers, movements for a municipal plant, improvements in manufacture, appeals to the legislature, and reductions of price, mostly in obedience to legislative requirement. In 1884, the New York, Manhattan, Mutual, Harlem, Metropolitan,