discussion between 1868,
when the New York City Central Underground Company was incorporated,
up to 1900, when the invitations for bids were issued by the city,
every scheme for rapid transit had failed because responsible
capitalists could not be found willing to undertake the task of
building a road. Each year had increased the difficulties attending
such an enterprise and the scheme finally evolved had put all of the
risk upon the capitalists who might attempt to finance the work, and
left none upon the city. Without detracting from the credit due the
public-spirited citizens who had evolved the plan of municipal
ownership, it may be safely asserted that the success of the
undertaking depended almost entirely upon the financial backing of the
contractor. 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. It was left to Mr. Belmont to make the final analysis,
and avert the failure which impended. There was no time for indecision
or delay. Whatever was to be done must be done immediately. The
necessary capital must be