Library of Congress
August Belmont , Sr .
Eleanor Belmont
Library of Congress
John B . McDonald , a veteran railroad and tunnel builder , won with a $ 35 million bid in January 1900 , but he did not have the $ 7 million in bonds and other assurances the city required . Belmont quickly teamed up with McDonald , mustered the capital , set up a company to oversee construction and , effectively , became McDonald ’ s boss . Belmont ’ s Interborough Rapid Transit Company ( IRT ) got the operating rights and future profits .
The financial structure was akin to the public-private partnerships used today for many infrastructure projects . The city borrowed the $ 35 million at favorable government rates . Belmont raised an additional $ 25 million to pay for cars , a power plant and other equipment . The IRT then paid back the city ’ s loan at a rate slightly higher than what the city paid , and the IRT pocketed the profits over and above that .
Belmont wasn ’ t content with just the subway , however . He already controlled trolley networks in the Bronx and Queens , and in 1903 , a year before the subway opened , the IRT acquired control of all four of
Manhattan ’ s elevated lines . At the time , the els were the only alternative to the streetcars and horse carriages that inched along on the city ’ s traffic-clogged streets . Two years later , after the subway debuted , the IRT bought a streetcar operator that proposed to build a subway line up the Upper East Side of Manhattan from Grand Central . Belmont had designs on that route himself , so he simply eliminated the rival .
“ Well , we couldn ’ t stand that kind of competition , and so we combined with them ,” he candidly told an interviewer years later .
It was a move borrowed from the playbook of the industrialists who were consolidating industries across the nation — men he mingled with .
The two acquisitions gave Belmont 600 miles of rail lines in Manhattan , the Bronx and Queens , and a lock on fast transit in Manhattan and the Bronx , a position he would enjoy for a dozen years . They also sowed the seeds of Belmont ’ s later financial problems , for he overpaid for both the elevated and streetcar lines .
Belmont , the Man
Belmont ’ s growing transit empire created a second problem : bad PR . He had been seen as a civic-minded mogul using his money and skills to better New York . Crowds cheered every mention of his name on the subway ’ s opening day in 1904 . But once he controlled the els and streetcars as well as the subway , he ceased to be viewed as the city ’ s benefactor . He was seen as “ behaving like a tyrant and an oppressor , extorting from the patrons of his roads the very last penny of obtainable tribute , and giving in return the meanest accommodations ,” as The New York Times summed up his image problem . It didn ’ t help that the subway was so successful that passengers routinely found themselves sandwiched in overcrowded trains .
He also made enemies outside New York City . He was a strong advocate of the gold standard in the 1890s and 1900s and vocally opposed William Jennings Bryan , the populist Democratic presidential nominee in 1896 , and others who favored
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