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TUDENTS of municipal government in America have

usually devoted themselves so exclusively to the forms of city government that they have had little time left in which to consider what purposes those forms are intended to subserve. In like manner the State legislatures, when framing city charters, have been at great pains to construct as the central feature of each municipal government a complex and unwieldy local legislature modeled more or less closely upon their own organization, without making sufficient allowance for the widely different functions to be performed. This is reversing the processes of nature, which always makes the structure to fit its particular functions; and one result of this illogical mode of procedure is that when it comes to the actual work of municipal administration the ready-made city councils are usually found to be misfits. It is therefore encouraging to find a charter in which more attention than usual is paid to municipal functions; and this is the case with the charter of Greater New York, although the points which gave the Charter Commission most trouble, and led to most discussion both by the Commissioners and by the public, were matters relating to structure and the power of removal.

In no respect has the failure of city councils in America been greater or more disastrous than in their relations to companies enjoying or applying for municipal franchises; for not only have these special privileges in the public streets usually been given away with little or no return to the city in any form, but the authorities granting them have either failed to retain or neglected to exercise adequate powers of regulation and control. In short, corporations created supposedly to serve the public have too often become the masters of the public's representatives, either through outright corruption or through the more refined arts of the lobbyist. There is no reason to suppose that New York had been worse than many another city in this respect, and yet the hand of the franchise-grabber has left a dark stain upon its history.

The methods of granting franchises in New York City hitherto have been utterly unsystematized and of very uneven merit, but their very variety makes them suggestive and useful for purposes of study. The ferries have always been kept well in hand by the city authorities, at least ever since the days of Peter Stuyvesant, whose perquisite the ferry rent was; for even at that time the magistrates of New Amsterdam licensed the ferrymen. There was a time, indeed, before the middle of the seventeenth century, when there was little ferry traffic, and when the ferry was a very simple affair which needed no regulation by the authorities. We are told that "Cornelis Dircksen, who had a farm in that vicinity, came at the sound of a horn, which hung against a tree, and ferried the waiting passengers across the river in a skiff, for the moderate charge of three stivers in wampum."1 But the travel across the East River increased rapidly, until there was "daily confusion occurring among the ferrymen on Manhattan Island, so that the inhabitants are waiting whole days before they can obtain a passage, and then not without danger, and at an exorbitant price;"2 and so it became necessary to bring the business under governmental control. In 1654 Governor Stuyvesant and his council enacted that no person should ferry without a license from the city magistrates, required suitable accommodations to be provided, and fixed the tolls. The burgomasters had made application for the ferry rent as a source of municipal revenue, but as long as Peter Stuyvesant remained in power the city authorities were obliged to be content with the power of issuing the licenses. Under English rule the ferry rent was for many years the chief source of municipal income, and together with the revenue from the city wharf paid most of the ordinary municipal expenses. The right of the city to control the ferry monopoly and to make it a source of revenue was confirmed by successive royal charters, and in order to prevent unauthorized competition the Cornbury charter also granted to the city of New York all the unappropriated land between high and low water mark on the Long Island side, with power to 1 Mrs. Lamb, History of the City of New York, i, 86. Stiles, History of the City of Brooklyn, iii, 507.


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establish and maintain one or more ferries. This power to establish additional ferries was employed just before the Revolution to increase the number from one to three. The rent of the Old Ferry had gradually increased in the course of a century from scarcely more than one hundred pounds, in the currency of the colony, to some five or six times that amount; or, to speak more exactly and in modern terms, from $257.50 in 1674 to $1375 in 1771; but when the additional ferries were established no single franchise was quite so valuable. The leases were commonly sold at auction, or “public outcry,even as early as the seventeenth century; and they usually included the use of ferry houses and their appurtenances on both sides of the river. In 1805 the new lessee was required to pay for the boats at a valuation fixed by arbitrators; and this practice has survived to the present day.

The first steam ferry boats, launched in 1811 and the following year, navigated the North River; but in 1814 Robert Fulton and William Cutting obtained a franchise for twentyfive years for a steam ferry to Brooklyn, agreeing to pay $4,000 a year for the first eighteen years and $4,500 thereafter. This Fulton Ferry franchise turned out to be so valuable that only three years before it expired it was sold, together with boats and equipment of no great value, for $100,000. The Fulton and South Ferries were afterward consolidated under the management of the New York and Brooklyn Ferry Company, which in time acquired several other ferries and developed into the Union Ferry Company of to-day. The tolls for foot passengers were reduced during the forties and early fifties from four cents to three, two, and even one cent, but rose again to two cents, or about one cent and a half when tickets were bought. In 1871, by renewing the franchise at a nominal rental, the city secured the concession of one-cent fares during certain hours in the morning and evening; but much to the company's surprise, it was found that this reduction increased the receipts instead of diminishing them. Yet notwithstanding this object lesson, the reduction of tolls on other ferries required the intervention of the legislature.

The ferry franchises were not always sold at auction in former times, but in 1853 the legislature made that formality imperative, and limited the duration of the franchises to ten years. The result has been a fairly large and constantly increasing revenue from the ferries, and in some cases remarkably good terms have been made. The largest sums are still received from the Union Ferry Company, which pays seven and three-fourths per cent. of its gross receipts; of some $330,000 received from the ferries in 1896, exclusive of wharf rent and taxes, this company paid $64,427.

The street railway companies have always been treated much more leniently than the ferries; their franchises are without any time limit, and in some instances they have been given away without compensation. A wrong beginning was made when the first street railway franchise was granted in 1831; for no provision was made for payments to the city in case the experiment should prove successful. Some twenty years later, when the era of street railway building began in earnest, the license fee required of stages was made applicable to street cars; and this fee was afterwards increased from twenty dollars to fifty, with a half rate for one-horse cars. From 1860 to 1874 the franchises were granted by the State legislature, instead of the city council, and during the latter part of this period the plan of reserving to the city three per cent. of the gross receipts was adopted in several cases, and one franchise was sold at auction. A constitutional amendment adopted at the election of 1874 changed all that; it prohibited special legislation granting the right to lay railway tracks or any exclusive franchise, and required as conditions precedent to the construction of any street railway the consent of the local authorities, and also the consent of the owners of one-half the value of the abutting property, or in default of the latter an order of the General Term of the Supreme Court based upon the report of three special commissioners that the road ought to be built. This amendment was supplemented in 1884 by a statute requiring companies thereafter constructing street railways in cities of 250,000 or more inhabitants to pay into the municipal sinking fund at least three per cent. of the gross

receipts for the first five years and five per cent. thereafter. But the granting of franchises by the common council turned out worse then than the old plan of special legislation, as the people realized when the Broadway franchise, for which one company had offered the city one million dollars, was given to another company in return for just one-half that amount paid to the aldermen for their individual benefit. No sooner was the proof of this wholesale bribery made public than the State legislature passed a law requiring all street railway franchises to be sold at public auction to the bidder offering the highest percentage of the gross receipts; the minimum percentages remaining the same as before.

This statute, known as the Cantor Act in honor of its author, was afterward incorporated in the General Railroad Law, and its application restricted to New York City. It has resulted in the sale of franchises for higher percentages than ever before—much higher in some instances—but as yet the receipts of the city treasury show the effects of its operation only in part.

Although all the surface railway lines in the borough of Manhattan have been brought under the control of two giant corporations, their financial obligations to the city remain the same as before; and thus it happens that from some the city receives only the license fees which survive from the period of stages, while others pay a stated amount yearly or a percentage of their receipts. The Third Avenue Railroad Company refuses to pay anything whatever on account of its main line, on the ground that the old license fees do not apply to cable cars; and the highly favored “Huckleberry" road to the Bronx, whose franchise was granted by special act of the legislature, also pays nothing at all. The total receipts from street railways in 1896, exclusive of taxes, were only $302,111, or much less than the corresponding revenue from the ferries; nor is this an exceptional case. Yet it is evident enough that the street railway franchises are much more valuable than the ferry franchises, especially as the city of New York as heretofore constituted has had jurisdiction and control over only one end of most of the ferry routes. The most that can be said of the 1 Laws of 1892, chap. 340.

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