New-York tribune., 1913-07-26
CALLS PROPOSED TUNNEL
CONTRACT BAD EXAMPLE
Ten Per Cent to lnterborough
Sets a Precedent, Says CON-
missioner MaItbie.
FEARS OTHER CHANGES
New Agreement, He Says,
Would Relieve Constructors
of Steinway Section of
a Vital Obligation.

Commissioner Maltbie, of the Public
Service Commission. pointed out yester-
day that II the agreement for the recon-
struction and equipment OF the Stcinway
tunnel. as approved by the other mem
bers Of the commission on Thursday, is
permitted To 60 through by the Board Of
Estimate. II will open the door for other
notifications of the contracts for the dual
subway system. He regards il as setting
a most dangerous precedent.
This proposed agreement relieves the
Interborough Rapid Transit Company
from one Of the most vital provisions Of
the contract in this particular case. II
this provision is to be waived at this
time what is TO prevent further waivers
until the contracts are riddled? Commits
sioner Maltbie asks.
The agreement provides that the work
of reconstruction shall be done by the
Rapid Transit Construction Company, a
subsidiary OF the Interborough Rapid
Transit Company, and that the company
shall receive 10 per cent over and above
the actual cost Of the work and materials
in payment for the engineering. super
visory and legal expenses connected there
with.
Contract No of the dual system states
that the cost Of construction shall be linn
tied TO the actual cost in money, and that
If any increase or profit shall accrue di-
rectly or indirectly 70 the lessees or on
its behalf in any manner in connection
with the construction, then the amount
OF any such increase or profit shall be
no nf
The only exception TO this is where the
contract has been obtained through COM
petitive bidding.
The proposed contract FOR the recon
struction OF the Steinway tunnel states
that the Interborough shall receive rs
compensation. therefore. the actual cost
Of construction plus 10 per cent TO cover
the cost of administration. supervision,
engineering and legal expenses. Then the
agreement goes on to state:
If any portion of such 10 per cent shall
not be necessary to pay such expenses
the lessees shall nevertheless, De entitled
TO receive and retain such excess as com
pensation for its services and such excess
shall not he deemed 10 be income, increase
or profit resulting from construction under
the terms OF the operating contract IT
being the spirit and intent OF this agree
ment that the lessee is TO be compensated
for an extra burden and obligation not
imposed by the operating contract"
Chairman Mccall Of the Public Service
Commission. who argued in favor OF the
proposed agreement, defended his course
by saying that II was necessary 20 get
the Steinway tunnel in operation at the
earliest possible moment. as 1t had been
lying idle for many years. lie intmated
he might not favor the proposed contract
by which John f. Stevens would get 10
per cent over and above the actual cost
for the extensions Of the elevated rail-
roads SO far as the third-tracking OF the
lines is concerned he said. the commits
sion had nothing 10 do with IT, that the
1nterborough could get the work done in
any manner II might sec ht.
Some time ago Commissioner Eustis
asked General Manager Hedley, Of the In
tcrborough. why the 10 per cent was de-
msnded. Mr. Hedlcy is said TO have re
piled that it was pay for the special SER
vices Of high officials devoted 10 that par
ticular work.
II was predicted last night that II the
Stenway agreement were allowed 10
stand It would be likely to reopen the old
controversy over the contracts every time
contract for construction was 10 be let.