actual construction of the rapid transit road. The letter of
invitation to contractors required that every proposal should be
accompanied by a certified check upon a National or State Bank,
payable to the order of the Comptroller, for $150,000, and that within
ten days after acceptance, or within such further period as might be
prescribed by the Board, the contract should be duly executed and
delivered. The amount to be paid by the city for the construction was
$35,000,000 and an additional sum not to exceed $2,750,000 for
terminals, station sites, and other purposes. The construction was to
be completed in four years and a half, and the term of the lease from
the city to the contractor was fixed at fifty years, with a renewal,
at the option of the contractor, for twenty-five years at a rental to
be agreed upon by the city, not less than the average rental for the
then preceding ten years. The rental for the fifty-year term was fixed
at an amount equal to the annual interest upon the bonds issued by the
city for construction and 1 per cent. additional, such 1 per cent.
during the first ten years to be contingent in part upon the earnings
of the road. To secure the performance of the contract by Mr. McDonald
the city required him to deposit $1,000,000 in cash as security for
construction, to furnish a bond with surety for $5,000,000 as security
for construction and equipment, and to furnish another bond of
$1,000,000 as continuing security for the performance of the contract.
The city in addition to this security had, under the provisions of the
Rapid Transit Act, a first lien on the equipment, and it should be
mentioned that at the expiration of the lease and renewals (if any)
the equipment is to be turned over to the city, pending an agreement
or arbitration upon the question of the price to be paid for it by the
city. The contract (which covered about 200 printed pages) was minute
in detail as to the work to be done, and sweeping powers of
supervision were given the city through the Chief Engineer of the