January 9 marks the 109th anniversary of the subway system connecting Brooklyn to Manhattan.
The original subway systems were constructed and managed by the private sector with no government operating subsidies. Financial viability was 100 percent dependent on farebox revenues. They supported both development and economic growth of numerous neighborhoods in the boroughs of Manhattan, Brooklyn, Bronx and Queens.
As part of the franchise agreement which owners had to sign, City Hall had direct control over the fare structure. For a period of time, owners actually make a profit with a five cent fare. After two decades passed, rising costs would pressure owners to ask City Hall for permission to raise the fares.
Politicians more interested in the next reelection (and subscribing to the old Roman philosophy of free bread and circuses) refused this request each year for well over a decade.
As a result, owners started curtailing basic maintenance, delayed purchases of new subway cars, postponed salary increases for employees, canceled any plans for system expansion and cut corners to survive.
Does any of this sound familiar?
In 1920, automatic coin-operated turnstiles were first introduced on the Lexington Avenue subway. This began the elimination of ticket collection employees.
In 1932, the city began building and financing construction of the new IND line. This new municipal system subsidized by taxpayers dollars would provide direct competition to both the IRT and BMT.
Municipal government forced them into economic ruin by denying them fare increases that would have provided access to additional badly needed revenues. The owners folded in 1940 and sold out to City Hall.