768 RAPID-TRANSTT SUBWAYS IN METROPOLITAN CITIES. 



the central governineiit ) , which are to be opened from time to time as 

 specified in the act, until l)v 1916 every line will be in operation. All 

 are to be operated by the present leasing company and upon the same 

 terms as given above. The thirty-five-year period — the duration of 

 the franchise — is to run from the date of opening each line, and to 

 prevent any inconvenience which might arise from franchises for 

 different sections falling in at different dates, the concession pro- 

 vides that the company may retain possession of all until the termi- 

 nation of the last franchise, and shall pay 4.5.000 francs per kilometer 

 per year ($14,000 per mile) for every line whose lease expires pre- 

 vious to that time. 



CONDITIONS IN BOSTON LEASE. 



Like Paris, Boston owns its subway and has rented it for twenty 

 years to a private company — the West End Elevated Railway Com- 

 pany, which has subleased it to the Boston Elevated Railway Com- 

 pany. The rental will never be less than 4| per cent of the cost of 

 the subway, and if this sum does not amount to 5 cents for each car 

 using the subway, it shall be made nj) to this sum. The income will 

 pay the interest on all outstanding bonds and i)r()\id(' a sinking 

 fund to extinguish them at maturity — forty years hence. All oper- 

 ating expenses are paid by the operating company, and at the ex- 

 piration of the lease the city will pay the fair value of all rails, pipes, 

 wires, etc., which are affixed to the subway. 



COMPENSATION. 



Comparing the various methods of securing compensation, it is 

 evident that in no instance have large profits been secured. Buda- 

 ]iest undoubtedly receives the most, considering the fact that it has 

 invested nothing, for even the expense of rearranging sewers, water 

 mains, conduits, etc, was borne by the sulnvay company. Paris may 

 make the most, for if the ti-affic greatly exceeds 125,000,000 pei'sous 

 annually, the net profit will be more than 5 j^er cent of the gross re- 

 ceipts, as the rate is about ;5;3 per cent of the gross receipts. How- 

 ever, if the traffic should fall considerably below this figure, the 

 municipality will need to make up the deficit from other sources. 

 There seems to be little risk in this direction, and Paris has followed 

 its usual course of exacting large payments from unuiicipal monopo- 

 lies rather than of requiring lower prices and increasingly better serv- 

 ice. London and (ilasgow are at the other extreme, and New York 

 and Boston ai-e iu)t far distant, for the payments are not large, barely 

 exceeding for the present the interest on bonds issued for the construc- 

 tion of the subways and sinking fund charges to wipe out the debt. 



Considerable variety exists also as to the basis for compensation. 

 Budapest uses gross receipts — an easily ascertainable basis and freed 



