NEW YORK.

Public Service Commission-First District.

IN THE MATTER OF THE COMPLAINT OF WILLIAM B. RAFFERTY AGAINST THE UNITED STATES EXPRESS COMPANY, Defendant.

IN THE MATTER OF THE HEARING UPON THE MOTION OF THE COMMISSION CONCERNING THE REGULATIONS, PRACTICES, SERVICE, RATES AND CHARGES OF THE UNITED STATES EXPRESS COMPANY WITH RESPECT TO THE HANDLING AND TRANSPORTATION OF BAGGAGE CHECKS WITHIN THE FIRST DISTRICT.

Case No. 1589.

Decided February 6, 1913.

Jurisdiction (Territorial) of Commissions-State vs. Interstate Jurisdiction-Traffic Between Points in New York State Over Waters of New York Bay-Consol. L., Ch. 59, §7, Construed.—In a proceeding as to express rates and service between Staten Island and the Borough of Manhattan, each within the City and State of New York, it was contended by the defendant express company that the express business in question was conducted by means of the municipal ferry-boats, and that these boats, in passing through the waters of New York Bay, crossed the boundary line between the States of New York and New Jersey, and proceeded for a short distance on the New Jersey side of the line, after which they returned to the New York side of the line. The carrier contended that by reason of this slight "swing" of the boats through what were called New Jersey waters, any shipment between Staten Island and Manhattan was an interstate shipment, over which the New York Public Service Commission would have no jurisdiction. HELD, that while the Commission is inclined to the opinion that, were the facts as contended by the defendant carrier, it nevertheless should properly be regarded that the boats touched New Jersey waters so incidentally that state regulation of such transportation would not be an interference with commerce between the states, this question need not be here decided, inasmuch as Consol. L., Ch. 59, §7, comprising an agreement entered into between the State of New York and the State of New Jersey in 1833, approved by Act of Congress in 1834, the State of New York was vested with "exclusive jurisdiction" over all the waters of New York Bay.

Rates and Charges-Express Companies-Practice of Charging for "Transportation" of "Baggage Check" to Point from Which Baggage is to be Delivered Disapproved.-The defendant carrier, when tendered a railroad baggage check at its local office in St. George, Staten Island, by the complainant, who desired that the carrier transport the trunk represented by the check from the Grand Central Terminal to the complainant's home on Staten Island, exacted a charge of twenty-five cents for the "carrying" of the check to Grand Central Terminal, in addition to the usual charge for carrying the trunk from Grand Central Terminal to Staten Island. HELD,-that it is clear that the carrying of the baggage check is not at all a separate and distinct transaction from the carrying of the baggage, but is simply incidental thereto, and the carrier will be required to cease and desist from exacting the charge complained of or any charge whatever for the carrying of baggage checks within the First District.*

IN THE MATTER OF THE APPLICATION OF THE INTERBOROUGH RAPID TRANSIT COMPANY FOR AUTHORITY TO EXECUTE ITS PROPOSED FIRST REFUNDING MORTGAGE, SECURING ITS GOLD BONDS, AND FOR THE CONSENT OF THE COMMISSION TO THE ISSUANCE OF CERTAIN BONDS THEREUNDER.

Case No. 1614.

IN THE MATTER OF THE APPLICATION OF THE NEW YORK MUNICIPAL RAILWAY CORPORATION TO EXECUTE ITS PROPOSED FIRST MORTGAGE AND DEED OF TRUST SECURING ITS FIRST MORTGAGE FIVE PER CENT. SINKING FUND GOLD BONDS, AND FOR THE CONSENT OF THE COMMISSION TO THE ISSUANCE OF BONDS THEREUNDER.

Case No. 1615.

Decided March 20, 1913.

Issuance of Stocks and Bonds-First Refunding Mortgage to Secure Certain Bonds-Consent of the Commission to Execution and Issuance of Mortgage. Under all of the circumstances, the Commission should consent to the execution and issuance by the I. R. T. Co. of a first and refunding mortgage securing $300,000,000, face value, of five per cent. gold bonds, upon the terms and conditions specified in the Order entered in Case No. 1614.

*Syllabus prepared by the Commission.-Ed.

Issuance of Stocks and Bonds-First Mortgage and Deed of Trust to Secure Certain Bonds-Consent of Commission to Execution and Issuance of Mortgage.-Under all of the circumstances, the Commission should consent to the execution and issuance by the N. Y. Mun. Ry. Corp. of a first mortgage and deed of trust to secure an issue of $100,000,000, face value, of five per cent. bonds, upon the terms and conditions specified in the Order entered in Case No. 1615.

Issuance of Stocks and Bonds-Amount of Securities Issuable—Approval of Issue-To Pay for New Subway Construction and Equipment of New Subway Lines.-Under all of the circumstances, the Commission should authorize the I. R. T. Co. to issue $160,957,000, face value, of bonds, dated January 1, 1913, maturing January 1, 1966, bearing interest at five per cent. per annum, to be sold so as to net not less than 93% per cent. of their face value with accrued interest, redeemable on any interest day at 110 per cent. of the face value thereof with the accrued interest, and otherwise upon the terms and conditions, and for the purposes, specified in the Order entered in Case No. 1614.

Issuance of Stocks and Bonds-Amount of Securities Issuable-Approval of Issue to Pay for New Subway Construction and Equipment of New Subway Lines.-Under all the circumstances, the Commission should authorize the N. Y. Mun. Ry. Corp. to issue $40,000,000, face value. of bonds, dated July 1, 1912, maturing January 1, 1966, bearing interest at five per cent. per annum, to be sold so as to net not less than 97 per cent. of their face value with accrued interest, redeemable on any interest day at 1071⁄2 per cent. of the face value thereof with accrued interest, and otherwise upon the terms and conditions, and for the purposes, specified in the Order entered in Case No. 1615.

Hearings closed March 19, 1913. Orders entered March 20, 1913.

As a consequence of the contractual arrangements entered into by the City of New York, acting by the Public Service Commission for the First District and the Board of Estimate and Apportionment, and the Interborough Rapid Transit Company and the New York Municipal Railway Corporation, respecting the construction, equipment, maintenance and operation of certain rapid transit railroads, the two corporations named made application to the Commission for consent to the issuance and execution of certain mortgages and the issuance thereunder of certain bonds.

The details of the respective applications are summarized in the Orders entered by the Commission, in Cases Nos. 1614 and 1615, respectively, granting the same, as hereinafter set out.

The contracts entered into by the City and the two corporations, as above referred to, were made in pursuance of the Rapid Transit Act (L. 1891, Ch. 4, as amended), and the

powers, duties and functions of the Commission in respect to such contracts were only those arising out of the provisions of the Rapid Transit Act (L. 1891, Ch. 4, as amended), the Commission being the successor of the former Board of Rapid Transit Railroad Commissioners.

The applications for the consent of the Commission to the execution and issuance of the corporate mortgages and the issuance thereunder of bonds were a part of the general contractual understanding entered into between the City and the two companies named, for the so-called "dual system" of rapid transit in the City of New York.

As stated in the "Editorial Note" to this Volume, reports or communications prepared by the Commission or members thereof upon matters arising by virtue of its functions under the Rapid Transit Act (L. 1891, Ch. 4, as amended) are not included in this series of Reports. Records in relation to the Commission's contractual and recommendatory powers under the Rapid Transit Act are published in the Annual Reports of the Commission and in the Minutes of its Proceedings. Information in relation to the rapid transit contracts in question will therefore be found in those publications, rather than in connection with the action taken in Cases Nos. 1614 and 1615. A summary of the provisions of the "operating contract" entered into with the Interborough Rapid Transit Company is, however, as follows:

"This contract puts into effect the Dual System agreement in so far as the subway lines to be operated by the Interborough Rapid Transit Company are concerned. It provides that the City shall construct the new lines allotted to the Interborough company, and that the company shall contribute not less than $58,000,000 (or one-half the total) toward the cost of construction, and not less than $22,000,000 toward the cost of equipment. The company is to get a lease of all lines for operation, including the present subway and the new lines, for a term of forty-nine years from January 1, 1917, the date set for the beginning of operation, and the lease is to expire at midnight on December 31, 1965. Provision is made for temporary operation of parts of the system as soon as completed. The City reserves the right to take over any or all of the lines at any time after ten years and terminate the contract. The company is to supply all the equipment, and, in the event of recaption, the City is to pay for the equipment.

"The lines which are to be built under this contract are described as the Seventh Avenue-Lexington Avenue line, the Eastern

Parkway line, the Steinway Tunnel line and the White Plains Road line. The Seventh Avenue-Lexington Avenue line consists of those parts of the subway extensions necessary to complete the "H" of the present subway with two Bronx extensions and the tunnel connection with Brooklyn; the Eastern Parkway line is the extension of the present subway in Brooklyn through Eastern Parkway and Livonia avenue; the Steinway Tunnel line is the existing Steinway Tunnel and its extension west under 42d street to Broadway and its extensions from the Queens end to the Queensboro Bridge plaza; the White Plains Road line is the extension of the existing subway from about 179th street to and through White Plains road to 241st street. The Lexington Avenue subway will be connected with the existing subway at a point in Park avenue just south of 42d street.

"The Public Service Commission is to prepare the construction contracts and specifications which will be generally similar to the Lexington avenue contracts. After the form of contract, specifications and contract drawings have been adopted, the Commission, before advertising for bids, ‘shall transmit a copy of the same to the lessee and within ten days after such receipt, or such further time as the Commission may allow, the lessee shall return the same to the Commission with its criticisms or suggestions. The Commission shall thereupon consider any such criticisms and suggestions and its decision shall be final and binding upon the lessee. Proposals for making such contracts shall then be invited by the Commission in the form and manner required by Section 36 of the Rapid Transit Act.'

"How the Company's Money is to be Applied

"The Commission is to award the contracts, but is not to be limited to the selection of the lowest bidder, and it may reject all bids, and readvertise. After a contract is awarded, approved by the Board of Estimate and Apportionment and executed by the contractor, the Commission transmits it in triplicate to the company which becomes a party to the contract for the purpose of disbursing part of its contribution toward destruction. The company has ten days in which to sign and return the contract to the Commission, which then executes it on behalf of the city. The Commission then undertakes the sole supervision and direction of the work. Periodically, but not oftener than once a month, the Chief Engineer shall estimate the value of the work done and the amount which shall be paid the contractor. The Commission will then prepare a voucher for the company's proportion of the amounts due the contractor, and send the same to the company for payment. Within thirty days thereafter the company shall pay this amount directly to the contractor.

"Of the total contribution by the company for construction, $3,000,000 is to be allowed for the Steinway Tunnel, the title to which the company is to procure and transfer to the City of New York. Upon the vesting of title in the City, the company shall be