When the bid was accepted by the city no arrangements had
been made for the capital necessary to carry out the contract. After
its acceptance, Mr. McDonald not only found little encouragement in
his efforts to secure the capital, but discovered that the surety
companies were unwilling to furnish the security required of him,
except on terms impossible for him to fulfill.
The crucial point in the whole problem of rapid transit with which the
citizens of New York had struggled for so many years had been reached,
and failure seemed inevitable. The requirements of the Rapid Transit
Act were rigid and forbade any solution of the problem which committed
the city to share in the risks of the undertaking. Engineers might
make routes and plans, lawyers might draw legislative acts, the city
might prepare contracts, the question was and always had been, Can
anybody build the road who will agree to do it and hold the city safe
from loss?
It was obvious when the surety companies declined the issue that the
whole rapid transit problem was thrown open, or rather that it always
had been open. The final analysis had not been made. After all, the
attitude of the surety companies was only a reflection of the general
feeling of practical business and railroad men towards the whole
venture. To the companies the proposition had come as a concrete
business proffer and they had rejected it.
At this critical point, Mr. McDonald sought the assistance of Mr.
August Belmont.
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