History of the Brooklyn-Manhattan Transit Corporation

What came to be known as the BMT began in the late 1800's as a series of separate and independent steam railroads, surface, and elevated lines in Brooklyn. The following is a list of some of the companies with their opening dates:

Steam Railroads:

  • Brooklyn, Canarsie, and Rockaway Beach (1865)
  • Brooklyn, Bath, and Coney Island (1864) - renamed Brooklyn, Bath and West End (1885)
  • Prospect Park and Coney Island RailRoad (1875) (aka Culver Line)
  • Brooklyn, Flatbush and Coney Island (1878)
  • New York and Sea Beach Railroad (1879)

Elevated Railroads:

  • Brooklyn Elevated Railroad Co (1885)
  • Union Elvated Railroad Company (1886)
  • Kings County Elevated Railroad Co (1888)

The Brooklyn Rapid Transit Company was incorporated in 1896 and by 1900 as a result of mergers and aquisitions it had aquired control of all of these companies (and more). The BRT was a holding company — it began to consolidate the elevated lines under a subsidiary called the Brooklyn Union Elevated Railroad Co. Another subsidiary, the Transit Development Company, was formed to own the shops and rolling stock. In 1912 The New York Consolidated Railroad was formed to operate the BRT's rapid transit lines. With the signing of the Dual Contracts and the BRT's entry as a subway operator, the New York Municipal Railway Corporation (NYM) was formed to enter into contract with the City. The NYM was then leased back to the New York Consolidated RR. The 1922 issue of Moody's Manual of Investments described the arrangement as follows:

"Prior to the execution of the contracts with the city, and pursuant to the predetermined arrangement, the companies owning the existing railroads which are to form part of the new rapid transit system, namely the Brooklyn Union Elevated RR Co., the Canarsie RR Co, and the Sea Beach Ry Co. were duly consolidated into the New York Consolidated RR Co., and subsequently the latter company took from the New York Municipal Ry Corp. an assignment of the operating provisions of the City contracts assumed by that corporation, so that the New York Consolidated RR Co will be the operator of the new system."

Make sense now???

The DUAL CONTRACTS — B.R.T. gets a subway

On March 19, 1913 the City entered into contract with the Interborough Rapid Transit Company and the New York Municipal Railway Co. (BRT) to expand and improve existing rapid transit facilities and construct new subway lines to be operated by these companies. Simply stated the city agreed to put up $171 million towards construction of the "Dual System", while the IRT was to contribute $105 million and the NYM (BRT) $61 million. In exchange the city retained ownership and the right to re-capture while it leased the lines to the companies for operation (term of lease 49 years with the city having the right to re-capture lines after 10 years). The companies agreed to equip and operate their lines at a single five cent fare (SORRY — NO free transfers between companies though). The Contract between the NYM (BRT) and the City is also referred to as Contract No. 4.

There were two basic problems with the contracts:
1) The fare was set at five cents for 49 years — this was OK for 1913 but it did not take into consideration the inflation that followed World War I and eventually led to bankruptcy for the IRT and a realization on the part of the BMT that they had to sell. With City politicians using the five cent fare as an issue to advance their political careers, the companies never had a chance for relief. Meanwhile operating costs kept rising...and rising...

2)The city wasn't happy with the formula for sharing profits with the companies. After paying operating expanses, profits were to be shared according to the following formula in this order:

a) Companies were to retain a "preferential" based on profits they were earning on their rapid transit operations prior to entering into the contracts with the city.
b) Companies retained the amount necessary to service their debt.
c) City retained the amount necessary to service its debt.
d) Any remainder would be divided equally.

Needless to say, because of the constraints of the five cent fare, profits never reached the level necessary for the city to receive its share. The City eventually began to think that by taking over the entire system it would in turn get to keep all the profits.

The "STANDARDS" of the B.R.T.

The subway car the B.R.T. developed for its new subway lines (referred to as the BRT Standard) represented a completely new concept in transit car design. It was as different from the type of equipment used by its competitor, the I.R.T., as Microsoft Windows98 is from DOS 2.1. One of the men responsible for designing the car was the Chief Engineer of the B.R.T., William S. Menden. It was 67 feet long and 10 feet wide, 16 feet longer and one foot wider than the I.R.T. cars. It had many state of the art features, such as a new coupler that incorporated all of the electrical connections required between cars, making it easier and safer to couple them together. In addition, the tail marker lights and headlights were automated. The proper lights would go on at the appropriate end of the train depending on which direction the motorman set his reversing handle, and lights between cars were automatically turned off. For the riding public, the cars had a very spacious interior with a large seating capacity and as a result they were very popular . The B.R.T. car and its operation were more in the style of a suburban, or interurban line, than a rapid transit line.


November 1, 1918 — the B.R.T. was hit with a wildcat strike. Managers and other non-union personnel were put to work operating trains regardless of how little operating experience they had. It was a disaster waiting to happen! One such "replacement" motorman was behind schedule as he was speeding a Brighton Beach bound train down what is today the Franklin Avenue shuttle. The train derailed on a curve and hit a tunnel wall on the approach to the Prospect Park Station. In what is still the greatest tragedy in NYC Transit history 102* people lost their lives. The repercussions of this disaster combined with other factors related to cost overruns and delays in the completion of Contract 4 to push the B.R.T. into receivership.

  • There is some dispute on this figure — the new book "The Malbone Street Wreck" by Brian Cudahy states the death toll was 93, but acknowledges that other sources have given a figure as high as 103.

Like the PHOENIX — The B.M.T. Rises from the Ruins

The BRT was reorganized in 1923 as the Brooklyn Manhattan Transit Corporation (B.M.T.). Its new chairman, Gerhard Melvin Dahl, had considerable experience in both the public and private sectors. He was an attorney, who served as City Attorney and later was elected district attorney in Portage County, Wisconsin. In 1910 Dahl was appointed Street Railroad Commissioner in Cleveland, Ohio, and in 1912 went to work in the private sector as vice president of a utility company and later Chase Bank . Mr. Dahl became involved with the B.M.T., originally as a member of its reorganization committee and ultimately was elected chairman. William S. Menden (remember the Chief Engineer of the BRT) became president. Their goal was to re-vitalize the BMT, improve service, improve its public image, and enhance shareholder value.
As Arthur Somers, president of the Brooklyn Chamber of Commerce, said: "as the B. M. T., newspaper says, let us 'Look Ahead.' Our prosperity, our happiness, our success, our comforts depend upon the New York of tomorrow, the New York of bigger, better, cleaner transit facilities, because I believe the public is willing to cooperate with the Company and that the Company and the public are willing to cooperate with the City in solving our transit problems.
"So, I commend to you, to the people of Brooklyn, Queens and Manhattan, that we make this policy our policy because it is one upon which we can all unite. There is nothing the directors and management of the B. M. T. system seek, there is nothing the public desires, there is nothing the city administration can ask for, which can exceed the possibilities of the policy which the letters B. M. T. should stand for, namely,"Better Metropolitan Transit."
(Source: Transit Truths by Gerhard M. Dahl, 1924)

Hylan vs. Dahl

Don't you ever wish you could get back at your boss by becoming a powerful government official and ruining his company? Well, Mayor John Hylan did just that! As the story goes he was a motorman who was fired by the BRT for reading his law books while driving a train. He didn't just get mad — he got EVEN! After becoming mayor he did everything within his power to delay implementation of Contract 4 with the BRT (Coney Island Shops, 14th Street - Canarsie line, and Nassau loop were not completed). Needless to say, the BRT itself gave him plenty of ammunition with its poor public image, and finally the Malbone Street disaster. But Hylan's obsession and bitterness did not end with the demise of the BRT. He continued his campaign of hatred against Chairman Dahl and the new B.M.T.... But here Hylan met his match. Mr. Dahl fought back in the arena of public opinion. Exclaiming that "Truth is Mightier than Abuse" in 1924 Gerhard Dahl published a book entitled Transit Truths, in which he explained that
"Almost from the very beginning, however, the B. M. T. Has met with the bitter, personal and unfair opposition of Mayor Hylan with the result that there is no other alternative for the Company than that of continuing its dual program of giving the best service possible with existing facilities subject to political manipulation and at the same time giving full information to the public. The people themselves will settle the transit problem when they understand the facts".
In a letter addressed to Mayor Hylan, Gerhard Dahl wrote:
"The only arguments you make in the transit situation are those of personal abuse. I am aware that anyone who opposes or differs with you on any matter whatsoever incurs your personal resentment and that you adopt prompt methods no matter how unscrupulous in an attempt to silence them and, at the same time, to impress upon others the danger of disagreeing with you. After all, however, we are still living in an age of free speech and I believe that my duty and responsibility as Chairman of the B. M. T. compels me to acquaint the public with the facts even though I thereby run the risk of being persecuted personally by you."
Eventually editorial opinion began to sway in the B.M.T.'s favor and anyway by 1925 Mr. Hylan was out of office.

The Road to Better Metropolitan Transit

Employee Stock Ownership

In an effort to gain the loyalty of its employees, the B.M.T. instituted an employee stock ownership plan. Under the plan employees were allowed to purchase shares of its preferred stock for $65.00 per share, a discount from the $69.00 it was trading for at the time. All employees could buy the stock in monthly installments of $5.00 until a sufficient amount was accumulated to purchase a share. In addition those who held on to their shares for two years were given rebates, effectively reducing their cost to $60.00. The shares paid a dividend of $6.00 per share, resulting in a return of 10% . The plan was very popular and the shares were oversubscribed within two weeks. Approximately ten thousand employees joined the plan and became shareholders .

Triplexes to Multis - The BMT goes Articulated

Improving on the concepts developed by the BRT and its Standard, in 1925 the B.M.T. introduced a three-car articulated unit named the D-Type or Triplex.The articulated design meant that passengers could walk from one car to another in the unit through an enclosed passageway. The photo at left shows the connection between cars in the unit as viewed from the interior. The middle car in the unit shared trucks with the end cars, thereby reducing overall weight and maintenance costs. Another advantage was that four D-Type units were the equivalent of eight "Standards". These cars also contained front destination signs that displayed route numbers. The B.M.T. had introduced a number scheme to identify its routes using the numbers 1 through 16. (Click here to see the routes from the 1924 BMT Map) To the right of the route number was another rollsign indicating the destination of the train. These were also the first cars in the New York City trasit system to use illuminated side destination signs.

In 1934, the company experimented with two lightweight cars, which could operate on both subway and elevated lines. The first of these, a three-car unit, constructed almost entirely of aluminum, was called the "Green Hornet". I guess the fact that it was painted green had something to do with that. The interior was very pleasant, with red leather upholstered seats and indirect lighting. It even had bells that sounded every time the doors opened and closed. The other car, called the "Little Zephyr", made of stainless steel, was almost identical in appearance to the stainless steel cars that the New York City Transit Authority began using in the 1970's . It took the city almost 35 years to re-discover stainless steel cars and 45 years to re-discover the chimes. Unfortunately in the midst of the Depression, the BMT couldn't afford to purchase more of these cars with all their "bells and whistles" so they settled for a more conventional design. This was the five-car articulated unit called the Multi or MS-Type that nevertheless still had some state-of-the-art features such as full-width cabs, and remote-controlled destination signs. The most notable feature of these units, however, was their rapid acceleration.

The BMT's Finest — The Bluebird

No-one can say enough about this car!! Mohair upholstered seats, rubber springs and rubber sandwiched wheels for a quiet ride, mirrors, and indirect lighting are just a few of the features that were introduced with this car in 1939. In a February 8, 1939 editorial entitled It's Done With Mirrors, The New York Times stated that the Bluebird "will make each trip to work a delightful adventure, each evening's homeward journey a period of happy relaxation" . If the B.M.T. had come this far by the late 1930's just imagine how much more they could have done if they had remained in business. Although 50 units were ordered, the city opted to cancel the remainder of the order immediately upon taking over the system on June 1, 1940. Progress, innovation, and experimentation gave way to standardization. The city's attitude could be summarized by the TA's chief car designer who "stated that he believed a subway car was a people moving box that needed no aesthetics ... to work". (Source: Cunningham, Joseph and DeHart, Leonard. A History of the New York City Transit System. 1993). This attitude continues to this day. On May 23rd 2006 MTA board member Barry Feinstein told the New York Daily News: "The cutesy stuff - the beautiful stuff - I have no interest in that ... I don't care about a pretty building. I just don't care."

The Fall of the BMT

Why did the BMT go? The answers lie in ONE WORD — POLITICS!!! By the 1930's it was clear that the five cent fare was inadequate to provide the companies a fair return on investment. The IRT filed for bankruptcy and the BMT's profits began a steady decline after having peaked in the mid 30's. Further complicating matters was competition from the new city-owned subway — the IND. For one thing, it was designed to compete directly with the two private companies. For example, its Fulton Street subway siphoned customers directly away from the BMT Fulton street el. Secondly, the losses the IND was running, as well as the lack of any return on the city's investment in the private lines were draining the city. Unifying the system under city ownership became the city's goal — it actually believed that the system would remain profitable and that those profits would belong only to the city! After all why should a private company profit from providing a public service (except for telephone, electric, and gas utilities)?

From the companies' perspective there was no fare relief in sight. The five cent fare was set in stone — no politician in his right mind would even suggest raising it. The "Dual Contracts" didn't allow a fare increase and the companies were held to this provision even if it meant their destruction. And the company's destruction was what the city really wanted for taking over the system was its true goal anyway. The IRT tried to litigate the fare only to lose. Then as if that were not bad enough, the city passed a gross receipts tax, and prohibited the company from passing it on to its customers. This had the effect of reducing the fare from a nickel, since the company was taxed on that nickel, not on its profit. The company sued and the case went all the way to the Supreme Court, but the company lost. So the company knew it had no hope for relief. Then the city used its right to recapture as its ultimate weapon — it threatened the BMT with dismemberment if it didn't sell. In 1940 the BMT finally surrendered to these forces and sold — title transferred officially on June 1, 1940.

Ironically, the city had failed to learn from its previous attempt at municipal operation. On December 1, 1923 the city took over operation of the Williamsburg Bridge shuttle, a trolley line that charged five cents for three rides when it was operated by the B.M.T. Within a year the city succeeded in turning a $60,000 annual profit into a loss of $40,000. The New York Herald Tribune stated: "if Mr. Hylan loses a hundred thousand dollars a year on a single shuttle line, how many millions a year would he lose were he to run the entire transit business of the city?" Then, without any advanced notice, the city increased the fare on the line to two cents per ride, something that no private operator could legally do without hearings. A member of the Transit Commission and the New York Evening Post both exclaimed, "So this is municipal operation".
In 1993 an editorial appeared in Barron's about the city takeover of the subway system. Barron's wrote: "The fundamental problem of New York, as reflected in its subway system, is the pattern of using public funds to lure private investment in fixed structures, which are then regulated into insolvency and taken over for the public to ruin. This is a long and tedious process — the public is still using ... facilities first opened in 1904 that haven't been operated on a sound financial footing since 1918, that haven't shown a profit since 1932 and that have been out of private hands since 1940. A good investment endures long after the people who make it, and long after the people who steal it." (Source: Barron's 12/13/93, page 10)

Today as we ride the overcrowded subways, awaiting endlessly for additional lines (such as completion of the much needed Second Avenue line), or improvements in service, reflect on what Gerhard Dahl wrote over 90 years ago: "Shall transit be treated as a business problem? Shall subways be built? Shall the people have service? Or — shall cheap politics continue to block subway construction and force added discomforts and congestion?" .