RAPID TRANSIT LINES

The City has now nearly completed the 14th Street-Eastern
Line, the construction of shops and storage tracks near Coney
Island, and the lengthening of certain station platforms to
accommodate eight car trains. In anticipation of requirements
for additional equipment your rapid transit operating subsidiary.
New York Rapid Transit Corporation, purchased 213 cars, com¬
prising 71 units of triplex articulated cars, which were equipped
in the Coney Island shops and are now largely in use.

The City has not yet started work on the construction of
the Nassau-Broad Line. This line, with the added facilities
mentioned above, would materially increase the capacity and
efficiency of the rapid transit lines under Contract No. 4.
 

Results of Operation under Contract with City

The first annual report stated briefly the provisions of
Contract No. 4 as to the disposition of revenue arising from
operations under the Contract. New York Rapid Transit Cor¬
poration is entitled to its operating and preferential deductions,
including cumulative deficiencies thereof, ahead of any pay¬
ments to the City. The condensed comparative summary
below, for the fiscal year ended June 30, 1927, and for the four¬
teen-year period from the commencement of operation under
the Contract, namely, August 4, 1913, to June 30, 1927, shows
the order in which such deductions are made from revenues
and the application of revenues thereto, together with the
cumulative deficiencies.

It will be observed that the earnings for 1927 showed an
excess over the year's deductions, applicable to the cumulative
deficiency. With a continuation of favorable operating condi¬
tions and particularly with the additional facilities that the City
is obligated to provide, it is hoped that the net revenue will
continue to increase so that the cumulative deficiency of full
deductions may be gradually made good.