SUPPLEMENTAL REPORT ON COMPREHENSIVE SYSTEM OF PASSENGER SUBWAYS FOR THE CITY OF CHICAGO BY THE HARBOR AND SUBWAY COMMISSION OCTOBER 30, 1912 Digitized by the Internet Archive in 2015 https://archive.org/details/supplementalrepoOOchic . - t h-J3o '’“A . ■ r n / REPLY TO CRITIOISMS OF A COMPREHENSIVE SYSTEM OF PASSENGER SUBWAYS. Chicago, October 30, 1912. To the Honorable, The Committee on Local Transportation, City Council, Chicago. Gentlemen : Since Sepetmber 10 last, on wliicli date tbe Harbor and Subway Commission and a sub-committee of your honorable body jointly recommended tentative routes and plans for a comprehensive system of municipal passenger subways, numer- ous criticisms of such report have been made before your hon- orable body at public hearings. We, the undersigTied members of the Harbor and Subway Commission, at your request, have classified and summarized the objections raised by various critics to a comprehensive and independent system of city-owned passenger subways , and sub- mit herewith certain facts and figures that, in our judgment, furnish complete and irrefutable proof that such objections lad: the results of experience to support them. We take for granted that all the critics of our subway report who have appeared before your ihonorable body are genuinely in favor of such improvements and developments in Chicago’s transportation facilities as are feasible as well as necessary. CLASSIFICATION OF CRITICISMS. In discussing such betterments of local transportation facili- ties, on broad lines, all the objections to a comprehensive system of municipal passenger subways fall into natural groups as follows: (1) That Chicago can obtain genuine rapid transit with- out a comprehensive system of passenger subways by improving and extending the existing means of trans- portation, or, in other words, that Chicago’s present and future traffic can be properly cared for by bringing the surface and elevated roads up to modem standards of routing, equipment and service. 2 (2) That a comprehensive system of passenger subways would mot pay financially, or, in other words, that the present or probable future volumes of passenger traffic would be inadequate to support a comprehen- ^ sive system of subways in addition to existing means of transportation. (3) That an independent system of municipal passenger subways, even with a large carrying capacity supple- mental to existing lines, would increase, rather than diminish, traffic congestion in the down-town or “loop” district. (4) That the effect of a comprehensive system of passen- ger subwaj^s would be to upbuild the business facilities of the down- town, or “loop” district, at the expense of outlying business and residential districts. (5) That genuine rapid transit in Chicago can be obtained by making new contracts with a privately-owned trans- portation monopoly, such contracts to include the ex- clusive use, for operating purposes, of such limited down-town subways as may be built at the City’s expense, to enable the existing companies to get rid of down-town or “loop” district congestion. THE OBVIOUS ANSWERS. We will answer these objections in order, with a brief sum- mary of demonstrated facts. In the first place, we submit to your honorable body that the critics who have attacked the subway report, on the lines enumerated above, have failed to produce any evidence that adequately answers or refutes the main contention in our report, namely: That genuine rapid transit in Chicago is impossible without a comprehensive system of municipally-owned passenger sub- ways radiating to outlying sections of the city. Tliere is no dispute over the fact that passenger traffic over the intramural roads of any city increases in ratio as the city grows in population. Chicago, as a concrete example, in- creased the number of rides per capita on local transportation lines, according to data from available statistics, as follows : Year. Population. Rides Per Capita. 1900 1,700,000 217 1905 1,940,000 261 1910 2,200,000 321 1 3 Thus, at the outset, we find Chicago’s population increas- ing at the normal rate of about 60,000 per year, or to be con- servative, about 500,000 in ten years. According to the table printed above, the number of rides per capita increases, during a ten-year period, about 50 per cent. It is apparent, on the face of such figures, that even were existing lines of transportation increased to their fullest capacity they could not possibly care for the constantl}" increasing de- mand for transportation facilities as the city grows. INCAPACITY OF ENISTINC SYSTEMS. At present the surface and elevated lines in Chicago have an aggregate seating capacity of about 85,000 passengers during the rush hour. The number of passengers they actually handle, with and without seats, during the rush hour, is approximately 160,000. This condition is steadily growing worse. Thus it is evident that were the seating capacity of the surface and elevated roads approximately double during the rush hour, they would not much more than care for the present demands of daily passengers, without overcrowding. Even with double their present capacity they would not be in a position to keep jDace with the ever-increasing demands for transporta- tion facilities, as the population grows. Again, there is no such thing as genuine rapid transit unless it is continuous rapid transit from the embarking point to the point of destination. The actual time saved by the operation of passenger sub- ways, in comparison with the time consumed in the operation of either elevated or surface cars, for a given distance, is one of the strongest practical arguments for the installation of sub- ways. For instance, let us take a south side point, say 63rd Street and Stony Island Avenue, as the embarking point, and Madison Street as the down-town destination. The most careful comparison of the time required for the operation of cars or trains over this distance, by the ditferent methods, shows the following results : Elevated express, about 31 minutes. Surface cars, about 53 minutes. Subway trains, about 25 minutes. The subway would total about 20 par cent less time than the elevated, and 50 per cent less time than the surface ears. 4 This is theoretical. The actual time consumed by elevated or surface cars, especially during the rush hours, depends upon so many conditions that it is impossible to fig-ure on any certain time. For instance, take the elevated. Those who use the south side line, in rush hour periods, feel almost certain of reaching a point between 12th and Congress Streets on time, but from this point to the stations on the loop, it is almost as certain that they will be delayed. As a rule it takes as much time from this point as it has taken on the rest of the line. There were days last winter when elevated patrons could not use this line on account of snow and ice. The entire structure being exposed to the weather, traffic is more or less subject to interruption in many ways. The loop, with its crossings, limits the number of trains that can be operated, the rule being to allow only a certain number of trains of each road on at a time. When each road has its allotment the trains must stop until a vacancy occurs. Fires adjacent to the structure often block the trains. As for the surface lines, there is no possible way in which they can be utilized for genuine rapid transit, especially rapid transit for considerable distances. While the surface lines are as much of a necessity, in their proper sphere, as are passenger subways, their usefulness must necessarily be confined to local traffic in the congested districts, and to their use as feeders for rapid transit lines in the outlying districts, where they will be free from traffic interruptions at crossings, and other obstacles met with in the congested districts. The speed of surface cars will always be limited on account of pedestrians and vehicles at street crossings. It is one of the grave municipal issues of today— the limitation of surface car speed to prevent the dreadful and increasing casualties. CONTINUOUS SPEED BY SUBWAYS. One of the strongest arg;uments for passenger subways — not merely subways in the down-town district, but rapid transit arteries penetrating the outlying sections— is that speed, com- fort and safety can be uniformly maintained during a continuous ride, whether it is a few blocks or a dozen miles. The actual time saved by the daily patrons of passenger subways, in going to and from their business or their homes, will be an enormous economical asset. It will add whole days, and even weeks, to the yearly aggregate of available time for business or recreation, in case of regular subway patrons. 5 We believe, on this point, that jowr honorable body cannot do' better than weigh the matured expression of expert investi- gators on the rapid transit issue in New York City when the original comparison was being made between passenger sub- ways and elevated or surface lines. In 1894, the rapid transit issue in New York had become so absorbing, and vital to the city’s welfare, the Chamber of Com- merce undertook an independent investigation of the whole mat- ter. In summarizing the conclusions, the signers of the Cham- ber of Commerce report in 1905, used the following language; ‘ ‘ It was concluded that to get rapid transit the undergTound system must be adopted; that it was impossible to get real rapid transit with an overhead railway.” Prom the same report, on page 7, the following abstract is taken : “It may be that ten years ago, or even five years ago, many people in New York believed that existing systems were the best that could be devised; that the electric cars on the surface and the elevated trains were entirely satisfactory; and that nothing remained but to extend accommodations as population increased. They had become used to the trouble of climbing to sta- tions well lifted above the streets. They had forgotten about dangers of ‘roads upon stilts.’ They ignored the discomfort to dwellers along the lines. They recognized how unsightly the structures were, but sank regrets in view of their utility. They equally minimized the objections that may be raised against the use of streets by a surface system that is noisy to a degree, that greatly inconveniences ordinary traffic, and that in each and every year maims and kills many victims. It is possible today to predict with safety that the elevated structures will all be taken down. It is at least possible to hope that the enormous cars now propelled rapidly over our streets by electricity will be disused in the more or less distant future, and a system of transportation introduced that will be more convenient and less objectionable. For it would be unreasonable to suppose that the evolution of the past in the matter of transit for cities is to end with the methods now in use. The ultimate goal is a system, or systems, that will be not unsightly, that will be noiseless to a reasonable degree, that will not cause undue inconvenience to any persons or interests, that will be safe for passengers and not dangerous to others, and that will be rapid. This is the goal ; and in view of progress heretofore made, and in view of prog- 6 ress at large, one may say with confidence that it will be reached. ’ ’ President Orr, in his address on the opening of New York’s first subway, said: “And I am also led to believe that subway construction under municipal ownership is only in its first stage of develop- ment. Every city is divided into two great sections, the busi- ness and the residential, and the larger the city the further these sections will be apart, and passenger transportation is an im- portant factor. Surface railroads are serviceable for short dis- tances, and will always have their place, but they are not ap- plicable to long distance street travel. At best they are an ag- gregation of grade crossings, subject to continual interruptions that cannot be obviated, nor can dependence be placed upon reaching a destination at a given time. “It cannot be denied that elevated railroads have proved of inestimable value in hastening the city’s development, and also a great personal convenience as to time; but they are un- sightly in appearance, interfere with light and ventilation in the congested streets, and in many instances injure the value of abutting property, and at times are subject to serious delays through atmospheric changes. I question whether further ele- vated railroad-building will have many advocates in the future, except in sparsely inhabited outlying territory, or for bridge approaches, or that it would have been advocated, in the first instance, if the electric conditions of today had been obtained. In subway passenger service all these objectionable features are eliminated.” We lay special stress upon utterances like these, because they represent the deliberate conclusions of men of large affairs, who made a painstaking investigation intoi the different pro- posed solutions of New York’s transportation problem, and who were admittedly uninfluenced by any other considerations than the public good. It was owing to such weighty testimony as this, from disinterested sources, that New York finally adopted under- ground construction as the only permanent means of getting genuine rapid transit. 7 THE FIITANGIAL PROBLEM. We now come to tlie second group of objections, which we have put in crystallized form, as follows: (2) That a comprehensive system of passenger subways would not pay financially, or, in other words, that the present and probable future volumes of passenger traffic would be inade- quate to support a comprehensive system of subways in addi- tion to existing means of transportation. In the first place, we wish to call the attention of your hon- orable body, and to lay special emphasis thereon, to that para- graph in our report of September 10 which points out the dis- tinction between a municipally-owned transportation system and one owned and operated by private interests primarily to earn dividends, as follows: “This Commission and your sub-committee have, moreover, endeavored as far as possible to avoid the theory, so universal in laying out privately owned transportation lines, that Chi- cago’s new rapid transit subways should be built only where they will yield an immediate profit from operation. Wliile the possibility of profitable operation has had due weight in each case, we have sought to serve the best interests of all the people of Chicago by mapping out a subway system that will penetrate to all sections of the city at the same time, and will in this way tend toward the symmetrical building up of all sections that will thus obtain the benefits of genuine rapid transit. We have acted on the well-established principle, whenever better trans- portation becomes a municipal undertaking, that it is the prov- ince of transportation improvements to equalize the prosperity of localities, in so far as a comprehensive planning of subway routes can do. It is obvious that a municipally-owned subway system can afford to support, for a time, the less profitable ex- tensions out of the surplus earnings of those routes that extend through richer and more populous territory. ’ ’ Even with this important consideration in mind, let us ad- mit that the enlistment of large capital for a passenger subway undertaking in Chicago rests finally upon the ability to dem- onstrate, beyond any possible doubt, that the subway system so built, either by the municipality direct or by private capital, or by a combination of both, will yield a legitimate profit on such investment from the traffic it will create and receive. Let us therefore take the estimate of capital cost of the in- dependent system of passenger subways, as outlined in our re- port — $131,000,000, which includes equipment. 8 It would require 10 per cent on this capital, or $13,100,000, to pay fixed charges, according’ to the following conservative estimate: Operating expenses, at the rate of 40% on gross earnings from suhway op- eration 4 per cent Interest on capital investment 5 percent Sinking fund for gradual extinction of the capital debt 1 per cent Total 10 percent FIXED CHAKGES OX INVESTMEXT. We will further illustrate this by the following detailed figures : Estimated cost for subway system. . . .$131,000,000 Tlie necessary yearly revenue to meet expenses, 5% interest on capital invested 6,550,000 1% on capital for sinking fund 1,310,000 Operating expenses 40%, equal to 5,240,000 Necessary gross earnings $ 13,100,000 We have fixed the sinking fund allowance at 1 per cent, on the principle of a gradiral amortization of the capital debt that will give the people of Chicago a rnunicipally-ovned subway system, free of all debt, in less than 50 years. The “spread” of the capital liability can be made to cover a shorter or longer period at the city’s pleasure. A 1 per cent sinking fund will pay oirt, according to reliable actuarial figures, the entire capital debt in about 47 years. Meanwhile, ‘the city’s interest charge is gradually reduced during the sinking fund’s operation, and more net i>rofits made available each year. The estimate of 40 per cent of gross revenues for operating expenses is arrived at by first estimating the probable traffic receipts from subway operation, according to well-established rules. It is sufficient to show, as we shall now proceed to do, that the traffic in sight, and available for subways when built, is practically three times greater than the volume necessary to produce enough revenue to meet all fixed charges. TEAFFIC VOLUMES. We have selected the year 1918 as being approximately the end of the subway construction period, if such construction is 9 now undertaken. If, in the year 1918, the subways outlined in our report should be finished and in operation, the estimated volume of available trafiic is shown in the following table : Estimated population in City of Chicago year 1918, based on a decreasing rate of increase 2,585,000 Proportion of above population that will be served by the subway, i. e., living within one-half mile of proposed routes 1,825,000 This estimate is based on the natural increase in population and one per cent per year added on account of subway, which was the case in New York. Estimated rides per capita per annum. . 395 Total rides per annum available for sub- way zone 719,000,000 Total revenue available $35,950,000 We have shown that the amount of revenue required to pay 10 per cent on the capital investment, for operating expenses, interest and sinking fund, is estimated at $13,100,000. To produce this revenue requires 262,000,000 rides. The total available rides in the subway zones will be 719,- 000,000, as already shown. The total revenue that will be avail- able from these aggregate rides is $ 35,950,000 The percentage of the total rides avail- able within the subway zone to meet necessary expenses is, there- fore 36.5 per cent. In other words, only about one-third of the available traffic in the subway zones is required to meet all necessary expenses. All the revenue from traffic in excess of this one-third will be profit. The revenues for the surface and elevated lines in 1911 were $38,000,000. If the increase is the same in the next six years, as in the preceding years, and they had the capacity to care for the traffic, the receipts should be at least $53,000,000. Chicago ’s subways, as planned, taking one-half mile on each side of the same, would reach 1,540,000 people at the end of 1912. With street cars in the outlying districts as feeders, this should be materially increased. 10 Yet the total revenue from traffic required to make Chi- cago’s subways a paying proposition is only about one-third the present revenues of the surface and elevated roads. Wliile on this subject, it is important to show that our esti- mate of 40 per cent of gross receipts for subway operating ex- penses is conservative, and based on actual experience. The fact that operating expenses on surface and elevated roads run from 60 per cent to 70 per cent has no bearing on the demon- strated fact that subways can be operated to the highest point of efficiency for less than 40 per cent on gross receipts. The published statements of the Interborough Company and the New York Rapid Transit Commission show the cost of opera- tion of the subways in New York to be as follows; The increase in the last year was largely due to the extra- ordinary expenditures resulting from changes in subway equip- ment which, if deducted, would leave about 36 per cent for 1911. The argument is made that New York is not a fair compari- son because the travel is coming and going at the same time. This is in direct contradiction to the report of the Public Service Commission. In speaking of the business center the latter body says: “Travel is all toward this district in the morning and all away from it in the evening. ’ ’ As a matter of fact Chicago has a great advantage over New York. In New York, the subway is 16 miles long and ac- cording to the above it has a haul one way, while in Chicago it is about 16 miles from one terminal to the other. To illustrate, take Wilson Avenue to 79th Street and Cottage Grove Avenue. If a train starting from Wilson Avenue in the morning will take a load down-town and coming back from 79th and Cottage Grove will take another load, it will thus earn two fares for the round trip, when in New York they earn but one. In other words, the New York subway is 16 miles with a residence dis- trict at one terminal and a business district at the other, while in Chicago with the 16-mile subway we have a residence district at each terminal with the business district in the center, thus making our average haul much less. As further evidence, let us make a comparison with the street railways in Chicago. LOW OPERATING COSTS. 1909 1910 1911 39.50 35.75 43.18 11 The operating’ expense of the City Railway Company is 62 per cent of gross receipts. The trainmen’s wages are 35 per cent of the operating expense, or 21.4 per cent of the gross receipts. The schedule time of the City Railway from 71st and Cottage Grove Ave. to Wabash and Randolph is 53 minutes. -The subway time would he 26.6 minutes. For 10 cars on the surface lines it would require 10 motormen and 10 conductors, or 20 men at 29 cents per hour— $5.80 per hour; for 53 minutes or a trip down-town — $5.12. For a 10-car snbway train : 1 motorman, 34c per hour $ .34 1 conductor, 25c per hour 25 8 guards, 22i4c per hour 1.80 $2.39 per hour for 26.6 minutes or a trip down-town, $1.06. This one item would reduce the operating expense of the subway to 45 per cent as against 62 per cent for the surface cars. There is also a saving in power and other items, to say nothing of interruption and ob- struction that the surface cars meet with. An estimate of 40 per cent on operating expense for subways is very conservative. CONSTRUCTION FIGURES. Some critics have claimed that we placed the estimates of subway construction cost too low. The estimated cost of construction of passenger subways in Chicago, given in our joint report, is based on an average estimated cost per mile of single track of $730,000, the cost of course being greater in the central and adjacent parts of the city and less in outlying districts. A reasonable way to establish the sufficiency of this estimate is to compare it with the actual cost of subways already built, or under contract. Mr. Willcox, chairman of the Public Service Commission of New York, in a statement issued November 16, 1910, says : “The average cost per mile of track of the municipal rapid transit routes now operated by the Interborough was $784,351. “In 1905 the president of the Interborough, in a letter to the Rapid Transit Commission giving the reasons why his com- pany was not a bidder on the routes then proposed, stated that his engineers had found that the increased cost through labor, material, methods of construction, etc., would increase the aver- age cost per mile of track by 100 per cent. “These portions — that is, the Lexington Avenue, with the two Bronx Extensions, Canal Street, Broadway— Lafayette and the two South Brooklyn extensions, on $85,000,000 bids received and estimated on the remainder, will cost, including station finish, $123,000,000, as compared with $209,000,000, the cost of construction of those portions as given by certain critics. ’ ’ Owing to the geological formation in New York, (requiring a great deal of rock excavation and tunneling) , the cost greatly exceeds what can be expected for the proposed Chicago subways. The Fourth Avenue subway in Brooklyn, extending from Nassau Street to Forty-third Street, 3.9 miles long, cost for the straight portion $538,000 per mile and for the whole length, $855,000 per mile of single track. This latter cost is due to especially difficult construction involving subway crossing under the old one at two places, its average depth being 42 feet below street grade, over twice as deep as the one proposed here and its having from four to eight tracks on different levels. In Toronto, plans and specifications were made for a sub- way three and one-half miles long, and bids were asked for. The price per mile of single track bid was $539,400. It might be stated, in addition, that this Commission’s esti- mate was prepared from figured quantities, and that the unit prices applied unquestionably are higher than the work would be let for if bids were asked. SUBWAY PROFITS CERTAIN. We are assuming, of course, in all this reasoning, that the city must show a financial profit from subway construction and operation before it can enlist the co-operation of capitalists. But it is a demonstrated fact that capital is always eager for profitable investments. If it can be shown that there are suf- ficient returns in sight to justify the expenditure, the financial battle is already won. If the legality of the Mueller certificates is established by a decision of the- Supreme Court, and the city builds its own subways, there cannot be any apprehension as to the sale of such certificates to banking interests, or syndicates of capitalists, strictly on their intrinsic merit as the medium of a profitable investment. In this way subway construction may proceed to completion without saddling one cent of taxation on the people of Chicago. The latter applies also, of course, to the alternative finan- 13 cial proposition, as outlined in our report — namely, the construc- tion of Chicago’s subways by private capital under a form of contract in which the city is absolute owner of title to the sub- ways, and recompenses the builders by an operating lease for a limited term of years. Whichever policy is finally adopted by the city, the same financial rule applies that there is more than sufficient revenue from subway operation in sight to provide for all fixed charges, including oi3erating expenses, interest on the investment, and a sinking fund for gradual extinction of the capital debt. The total carrying charges will be met by the earnings from the properties themselves. As these earnings increase, from year to year, with the growth of population and traffic, it follows that the subways will not only pay for themselves but yield a substantial profit to the city in future years. Chicago is indebted to New York for demonstrating that sub- ways can be built and operated at a handsome profit. Not only has New York demonstrated this, but having spent $83,000,000 in subways, although it took nine years to get the first one under contract, it is now showing, in conjunction with the operating companies, its confidence in the necessity of subways by spending jointly a sum that will make the total cost of the new rapid transit system $347,000,000. And this has been done without an additional tax of one cent on private property owners. The actual profits of New York’s subways, since they were opened, have been from 9 per cent to 20 per cent. At the present moment, while waiting for more subways to be built. New York’s subways are literally choked and gorged with traffic. They are carrying over 200 people in a. car that has a seating capacity of 50. People crowd the subways, and hang on straps rather than take the surface or elevated cars where they can get seats. That is why the subway operating company is now earning 20 per cent. The people demand real rapid transit. The contract for the first New York subways provided that the operating company should pay as rental the interest on the bonds issued by the city, plus 1 per cent per annum for a sink- ing fund. The rental for the year ending June 30, 1912, was $2,312,943. The company’s profits from the operation of the road are more than double this amount. The contract for opera- tion of the new subways provides first, operating expenses; second, interest on the investment; third, 4 per cent for sinking 14 fund— after which the city and the companies share and share alike in the profits. Under this contract the city expects to have a good revenue after a few years. SUBWAYS BENEFIT EXISTING LINES. The argument that the building up of passenger traffic on Chicago’s subway system would be at the expense. of existing transportation lines is amply disproved by New York’s experi- ence, where subways have not only created traffic for themselves but increased the traffic for both surface and elevated lines. Chairman Willcox, of New York’s Public Service Commis- sion, in his statement of November 16, 1910, says: “The actual traffic that would offer itself after construction is completed can only be judged by experience. Engineers of the Rapid Transit Commission figured in advance that the ex- treme capacity of the present subway would he around 800,000 passengers per day. Engineers and financiers in considering the matter of bidding on the original contract did not expect that traffic would develop beyond 400,000 passengers a day. The actual traffic has exceeded the estimate of extreme capacity. In 1899 when the present or Interhorough subway was contracted for, the surface lines in New York County carried 360,000,000 passengers and the elevated 174,000,000. Fears may then have been felt that the subway would not develop its own traffic, yet in the year ending June 30, 1910, in New York County, the surface line carried 430,000,000, the elevated 293,000,000 and the Inter- borough subway 269,000,000. With these in mind, the argument that the Tri-Borough would afford unnecessary capacity inas- much as it would take most of those who now ride on the ele- vated and subway falls to the ground. It might just as well have been stated in 1899 that to build a subway to carry 260,- 000,000 would take away all of the traffic from the elevated and a part of the traction traffic, while the facts show that it has de- veloped not only its own traffic of 269,000,000 and is crowded beyond the point of decency, hut the surface and elevated lines have increased 33 per cent.” When the sub-committee of your honorable body was in New York recently, its members were told by officials of the Public Service Commission that 80 per cent of the people of New York had said that the subways could not be built, and that if built they could not pay. The parallel between the same class of objectors in Chicago and tho’se who were proven wrong in New 15 York may be illustrated by quoting again from tbe 1905 report of New York’s Ckamber of Commerce: ‘‘The foregoing fails to convey even a faint conception of tbe discouraging delays that continually beset all efforts of tbe Eupid Transit Commission to accomplish tbe object for wbicb it was created. No sooner was one obstacle surmounted than anotber, perhaps more formidable, was presented. This con- stant changing of the aspect of tbe question made necessary repeated revisions and alterations of tbe plans, all of wbicb took time. Although there was an imperative demand for rapid transit by tbe people, who bad by a large majority of their votes sanctioned municipal ownership, tbe city authorities and tbe courts were indisposed to promote tbe purpose. Neither tbe Manhattan nor tbe Metropolitan Company seemed at all anxious to provide increased facilities, unless such facilities could be given upon its own terms. It would seem as if tbe former com- pany bad become convinced that no scheme of rapid transit could be carried to successful completion without its assistance, and that if tbe plans of the Commission could be delayed long enough to thoroughly dishearten tbe Commission and tbe people, it would have the opportunity of providing rapid transit according to its own plans and desires.” A further comparison might be drawn between tbe probable available traffic from subway population zones in Chicago and New York at periods just prior to the beginning of subway con- struction. For instance: From the report of tbe Public Service Commission of New York City for 1910 tbe cost of tbe initial subway system of New York was $83,309,689.47. The population of New York, within the subway zone, i. e., territory one-half mile on either side of the subway routes in 1900, when tbe contract for the first subway system was let, was 985,000. Tbe population within a similar zone adjacent to tbe pro- posed subways for Chicago at end of 1912 is 1,540,000. If New York, with its 985,000 people located within tbe sub- way zone, could afford to expend $83,309,689.47, Chicago, under similar conditions, can therefore afford to expend $130,000,0.00. Tbe rides per capita in New York in 1900 were 246, while the rides per capita in Chicago in 1900 were 217. Tbe rides per capita in New York in 1910 were 321, and in Chicago the rides per capita in 1910 were also 321. The population of New York in the last decade increased 16 1,340,000 and the rides per capita increased 75, while the popula- tion of Chicago increased only 486,000 and the rides per capita increased 104. Thus it is seen that Cliicago conditions are not vastly dif- ferent from New York conditions, as has been stated here, but are just as favorable as they were in New York, when the subway construction was undertaken. OTHEK OBJEGTIONS ANALYZED. With regard to the remaining groups of objections to a comprehensive and independent system of municipal subways for Chicago, we do not deem any elaborate arguments necessary to show that they disprove themselves when analyzed in the light of demonstrated facts. These latter objections, which are inter-related, and may therefore be answered together, are outlined above as follows : (3) That an independent system of municipal passenger subways, even with a large carrying capacity supplemental to existing lines, would increase, rather than diminish, traffic congestion in the down-town or ‘‘loop” district. (4) That the' effect of a comprehensive system of passen- ger subways would be to upbuild the business facilities of the down-town, or “loop” district, at the expense of outlying busi- ness and residential districts. (5) Tliat genuine rapid transit in Chicago can be obtained by making new contracts with a privately-owned transportation monopoly, such contracts to include the exclusive use, for oper- ating purposes, of such limited down-town subways as may be built, at the city’s expense, to enable the existing companies to get rid of down-town or “loop” district congestion. THEOUGH-BOUTE SUBWAYS. The first of these objections falls completely to the ground when, as we have shown, the central, or “loop” district of Chi- cago is destined to be not the terminal but a midway point in the operation of through-route rapid transit subv/ays. Eapid transit subways, being operated from one end of the city to the other, will not need the ‘ ‘ loop ’ ’ district as a terminal switching yard, as the surface and elevated lines find it profitable to do, for double fare purposes. An independent system of municipal subways in Chicago 17 would have a capacity of about 180,000 seats per hour, which, of course, would be in addition to the capacity of existing trac- tion systems. Such a substantial increase, with added speed, obtainable by a free movement of trains through the congested district, would considerably relieve the traffic on surface lines. Fewer surface cars would be required to reach the down-town distiict, thus relieving traffic congestion there. Also, through route subways in the central district will enable surface car companies to considerably reduce their op- erating expenses, which are hig'hest in the congested district, thus enabling them to build up a more profitable traffic in the outlying districts where their cars will become feeders for tne rapid transit lines. Not only will through route subways relieve “loop” dis- rict traffic congestion; they will inevitably tend toward the expansion of the down-town business district beyond the present “loop” barriers. Under present conditions a great portion of those doing business in the “loop” district are located there because their employes can reside in any division of the city and reach their place of business by one car line, one fare and a reasonable length of time. If they could accomplish the same result at a point out- side of, or adjoining, the present “loop” district where the rent and other expenses would be much less, where their employes could reach their place of business by one fare, and rapid transit from any of the outlying districts, in less time than they do at present, is it not reasonable to suppose that they would do so? If, instead of the “loop” district, the business district was extended on the North, "West and South sides, would this not relieve congestion ? Before the first subways were opened in New York City, the business district of that metropolis was practically confined to the area south of Fourteenth Street. Since the opening of subways, the business district has expanded until now it occupies practically all the territory south of Fifty-Ninth Street. COMPAEISONS WITH NEW YOBN. Much stress has been laid by opponents to subways on the alleged dissimilarity between New York and Chicago, both as regards geographical and transportation conditions. It has been stated that in New York “the traffic is going and comfing at the same time, and that therefore New York can get 18 nearly double the returns proportionately than can be expected in Chicago.” The New York Public Service Commission, in its report of September, 1912, says: “Owing to the location of New York City and the peculiar conformation of its five boroughs, the rapid transit require- ments are exceedingly difficult to satisfy. The business center of the Greater City, which is the goal of all transportation lines, is not the center of the city at all, but its extreme southwestern corner. This corner is composed of that part of Manhattan Island lying south of 59th Street. This is now commonly desig- nated as the business section. Generally speaking, the northern part of this district is the locale of hotels, theatres and retail stores, while the southern part of it is the home of financial institutions, wholesale merchants, municipal offices, courts, rail- road freight terminals and general office buildings. Travel on local transportation lines is, therefore, all toward this district in the morning and all away from it in the evening. It comes in two great tides, one from the north, conveying hundreds of thou- sands from upper Manhattan, The Bronx, and the New York and Connecticut suburbs, and one from the east, bringing other hundreds of thousands from Brooklyn and Queens and points further out on Long Island. Similar streams flow in from New Jersey on the west and Staten Island on the south, but neither of these approaches in magnitude the inflow from the north or the east.” CHICAGO’S SPECIAL ADVANTAGES. The marked advantage that Chicago will have over New York, in traffic conditions, is easily understood when we remem- ber that the same tide of morning and evening travel ebbs and flows to and from a central business district in both cases. In Chicago’s case, the heavy morning tide of subway pas- sengers will be unloaded when the through route subway train has only half completed its journey to its destination on the opposite side of the city from its starting point. On its return journey it will again absorb a heavy tide of subway traffic, and discharge it mid-way between its starting point and its desti- nation. Again, as the average subway haul to and from Chicago’s business district, from the outlying districts, will be very much less than New York’s subway haul for the average ride to or from the business district, it naturally follows that the 19 Chicago subway traffic should be the more profitable, and that there should be less “dead mileage.” EEASOhTS FOE EECOM]\IENDINO DEFINITE SUBWAY EOUTES. The subway routes as recommended in our report of Sep- tember 10 are laid out on lines of established travel, thus serv- ing the greatest number of people, namely, those doing business in the central district, and at the same time connecting the dif- ferent divisions of the city. Official records show the revenue traffic in Chicago for the year 1911 to be as follows: Surface lines 560,969,655 Elevated lines 162,973,594 Total 723,943,249 Observations made show that the traffic to or from the dis- trict bounded by Chicago Avenue, 12th Street, Halsted Street and Lake Michigan is: 38.8 per cent of the total surface traffic 217,656,000 88.3 per cent of the total elevated traffic. . . .143,906,000 Total 361,562,000 In other words, the traffic to and from the central district of the city is 50 per cent of the total surface and elevated traffic in the entire city. In addition to this traffic the subways will ac- commodate all the local traffic on the different lines outside of the down-town district. In addition to the subway projected through the loop dis- trict, the proposed Halsted Street subway will provide means of reaching the North, West and South Sides, without going through the loop district. When conditions require, additional subways should be con- structed in Ashland, Western, or other thoroughfares, but as the traffic in Ashland Avenue is only 2-1/10 per cent, Eobey Street 1-4/10 per cent and in Western Avenue 2-8/10 per cent of the total surface line traffic in the city, it does not appear that the time is yet ripe for the construction of subways in these thor- oughfares. SUBWAYS AID OUTLYING DISTEICTS. As to the objection that Chicago’s subways, on a compre- hensive plan, would build up the business prosperity in the “loop” district at the expense of outlying districts, we will 20 simply quote from au independent investigation made by the City Club of New York as to the general effect of subways on business and real estate values. The City Club, after a thorough investigation of the increase in real estate values, before and after the building of subways, reported in 1908 that in the borough of Manhattan “the aggre- gate rise in land from 135th Street to Spuyten Duyvil was about $69,300,000. If an estimated normal rise of $21,100,000, based upon the rise of the previous seven years, be subtracted from this, it leaves a rise of about $49,200,000, apparently due to the building of subways.” As regards the effect on land values in the Borough of Bronx, the same report says; “The aggregate increase in land values (of a district extending about a half mile either side of the subway) due to the building of the subway and in excess of a normal rise of $13,500,000, was about $31,300,000.” The report continues: “The property benefited in the dis- tricts above noted could have paid the entire cost of subways and yet have had a net profit due solely to their construction and operation of over $37,500,000. Had it paid only for the portion running through its own territory, there would have remained a profit of over $67,425,000.” We merelj^ quote the above as striking instances of the direct benefit upon outlying real estate values — and consequently upon all business and residence property — of transportation improve- ments. We do not have to go to New York but can find similar in- stances all over Chicago’s outlying districts. Even the crudest forms of transportation betterments stimulate suburban growth. Every time a surface car line, or an elevated line, is extended into new territory it creates new “neighborhood” business sec- tions, and increases the value of nearly all real estate holdings. If we want another concrete instance of this inevitable “cause and effect” from New York it will be found in the re- markable increase in surface car traffic in the Borough of Bronx, amounting to 138 per cent in five years. This increase in surface car traffic was directly due to the opening of subways, and to the beneficial effect the latter had on the growth of outlying districts. PER' ATE MONOPOLY VS. PUBLIC MONOPOLY. Dealing with the claim by opponents of a comprehensive system of municipal subwa^^s in Chicago that the times only call for a limited down-town subway system, to be exclusively used 21 by a privately-owned transportation monopoly, we must neces- sarily admit that such an attempted solution of Chicago ’s trans- portation problem would mean, as a preliminary, the merger of existing traction systems into a single monopoly. We must also admit, at the outset, that the City of Chicago’s consent to such a merger of private transportation interests would be accompanied by a contract, giving not only exclusive transportation privileges to a private concern but so hedging the contractual relations between the city and company that the former would guarantee all risks, in the nature of fixed charges. In other words, the city would bear the real financial burden of subway construction and operation, while giving to a privately- owned transportation corporation the privilege of determining the quality of service, besides giving to the private corporation a fixed share of surplus profits after all guaranteed fixed charges had been met. We do not feel called upon to go into an elaborate argument as to the dangers attending this method of attempting to get genuine rapid transit in Chicago from a private transportation monopoly. Each member of your honorable body is fully informed, in the light of experience, as to these dangers. We will merely take up one or two points relative to the conditions of a probable merger of existing transportation lines, prior to the occupancy of a limited down-town subway system under a new contract with the city. HOW MERGER PLANS AFFECT CITY. A great deal has been said in a general way as to the merger of the elevated and surface lines. While there has been no definite plan or basis outlined, the general proposition from the traction side has been to follow the 1907 ordinances. It would be impossible to have two distinct financial schemes, one for the surface lines and one for the elevated lines. If this plan were followed, the results would be an agreed valuation of the eleva- ted roads. To this valuation should be added the following : 1st — The cost of making each of the roads a four-track structure. 2nd — The cost of additional terminals, new rolling stock, additional electrical power and equipment. Taking the value of these roads as represented by theElevated Company, $93,000,000, the necessary additions as quoted above would be at least $40,000,000, making a total of $133,000,000. The purchase price of the surface lines February 1, 1912, was $127,500,000. This would make a total of $260,000,000 to start with, on which the companies would he allowed 5 per cent or $13,000,000. The operating expense for 1911 surface lines was $19,- 473,571; elevated, 1910, $5,810,128; total, $25,283,699.; making a total for interest and operating expense of $38,283,699. To this should he added interest on cost of down-town sub- way, 5 per cent on $10,000,000 equals $500,000. The total receipts were about $37,900,000, or over $300,000, less than the amount required on the purchase price. In other words, the cost to the city would be the 55 per cent it is now receiving, equal to $1,870,000, in 1912. It would be simply turning the 55 per cent “traction fund’' over to the elevated roads to pay interest on a ficticious valuation. There would be no objection to the city’s share of traction profits being wiped out if the nickel-payers were getting the benefit. But why should the city turn this $1,870,000 to the stock* holders of the elevated roads'? However, this is not the most objectionable feature of the merger. Section 23 of the 1907 ordinance reads as follows : “In the event that the said street railways are not purchased by the said City or its licensee as hereinabove authorized, prior to February first, A. D. 1927 (and nothing in this ordinance con- tained shall be construed as being in any event a grant to the Company extending beyond February first, 1927), the said City shall have the right to designate any person, firm or corporation having lawful authority to acquire, own and operate street rail- ways in said City as its licensee, to purchase the said street railways, property and rights of the Company at or after Feb- ruary first, 1927, upon the same terms that the City could then purchase, and in case such reserved right of purchase be not exercised by the said City or its licensee and the City shall grant a right to another company to operate a street railway in the streets and parts of streets constituting the said street railway system of the Company such new company shall he required to and shall purchase and take over the said street railways, prop- erty and rights of the Company at or after February first, 1927, upon tl;e same terms upon which the said City might then pur- chase and take them over.” If a similar section is in the merger ordinance it means that 23 the city, before it can regain control of its streets or its sub- way, must pay the purchase price as it is of that date. ’^Miat that will be can be imagined. If it would amount to $260,000,000, when the subways are constructed, what would it be at the end of the franchise? It is safe to say $300,000,000 at least. It must be borne in mind that there is no depreciation allowed, and no sinking fund provided for. The city would receive for its money a depreciated, obsolete plant probably worth 25 to 50 per cent of the then purchase price. Yet if the city or its agent does not pay this purchase price it cannot regain possession of its streets or its subways. In other words, the franchise is perpetual, so far as the occu- pancy of the streets and subways is concerned, but the obligation to pay the city any 55 per cent or other share of profits would have ceased. In other words, the company will dictate the terms of any future ordinance. Are the people of Chicago ready now to turn over to the transportation companies the only method by which they can get rapid transit, namely, the place for subways? Compare this kind of financiering with the plan suggested, in our report, as one of the alternative propositions — namely, to build Chicago’s subway by the enlistment of private capital under the city’s direction. The city can take over the subways and equipment after a certain number of years upon payment to the operating com- pany of : The amount of money expended plus an agreed per cent for profit. Less the depreciation. Less the amount accrued in the sinking fund, created for amortization of the capital debt. Less any deferred maintenance charges. If the contract continues to the end, then the entire property shall be turned over to the city without further payment, a sink-, ing fund having been created for extinction of the entire capital debt out of earnings. SUEFACE CAE SUBWAYS. There have been some suggestions that if a down-town sub- way system only were built, the surface car companies should be allowed to use such subways to relieve congestion. An allowance of 20 seconds headway between surface cars 24 would give 180 cars per hour. Forty seats to the car would give 7,200 seats per hour. Subway or elevated in subway with trains 1'30" headway and 10-car trains would give 40 10-car trains, or 400 cars per hour. With 50 seats to a car this equals 20,000 seats per hour. The cost of the subways would be the same— unless entrance toi surface car subways would be put at each street corner when the surface car subways would cost more. If the cost is the same, then the surface car subway will cost nearly 300 per cent more for each passenger than the rapid transit subway will cost per passenger. In the operation of the surface car subway, it is a question if the cars can be operated at 20" headway; for instance, take a subway for the North and South sides; there are about 15 different surface routes on the North, nearly as many on the South; unless a certain percentage of cars from each of these routes is taken through the subway there will be complaints of discrimination from the section whose routes do not go into the subway ; on the other hand, if a percentage of each route is taken through the subway it means a concentration and confusion of traffic at the station which it would be impossible to avoid. It must be remembered that the rapid transit cars have four en- trances to the cars, while the surface cars have but one. The entrance to rapid transit cars is on a level with the platform, while the surface cars have steps. It is the loading and unloading that will govern the headway. If rapid transit subways are built, surface car subways will not be necessary because the greater percentage of surface cars coming into the down-town district from the outlying dis- tricts can be discontinued and be used for local or short haul, thus relieving the surface lines of the long haul which they claim is unprofitable. Capacity of present elevated roads during rush hours is 45,000 seats ; capacity as estimated by subway plan 160,000 seats, j A surface car subway would take 180 cars off the streets. A i rapid transit subway would take 500 cars off the streets, at the ] same cost. i (Signed) Eespectfully submitted, (Signed) John Ekicson, (Signed) (Signed) William J. Shanks, James J. Eeynolds, E. C. Shankland, Commissioners. Secretary. 1 RU8H HOURTKArrlC JOHN P. NIOOtNe PfllffTER