Demolition of Sixth Avenue Elevated and Construction
of New Sixth Avenue Subway

The discontinuance of operation of the Sixth Avenue elevated railway became effective on December
4, 1938, and somewhat increased the patronage on the Broadway and Columbus Avenue route and on
the Sixth Avenue route of this Company.

During the period of the demolition of the elevated railway on Sixth Avenue and the process of con¬
struction of the new subway, operating conditions of the Sixth Avenue route necessarily have been
greatly hampered as compared with what will be the case when the elevated has been entirely removed and
the new subway under Sixth Avenue has been built.

The improved operating conditions when Sixth Avenue is cleared of its present obstructions will tend
to speed up service and to attract additional patronage because of the greater facility of movement of the
buses and better opportunity for them to draw up to the curb to receive and discharge passengers. The
accident hazard of operating under the elevated structure will be eliminated.

Purchase of New Coaches

The growth of business and the probable demands which will be made upon the facilities of this Com¬
pany and its subsidiary companies during the period of the World's Fair rendered it desirable that 50 new
buses should be ordered. These 50 buses will be equipped with Diesel engines and will be delivered
during the early part of 1939.   The cost of this new equipment is approximately $630,000.

Surveys which have been made of motor coach equipment available on a rental basis indicate that no
difficulty will be experienced in renting whatever additional equipment may be needed to meet increased
demands for transportation accommodations during the World's Fair, thus avoiding the necessity of further
capital investment for additional equipment.

Reconstruction of Property at 146th Street and Lenox Avenue

It was found desirable from the standpoint of efficiency and economy to reconstruct in part and to
demolish in part the carhouse and office structures at 146th Street and Lenox Avenue. This work was
commenced on July 11, 1938. There will be a small portion of the building remaining for use as a Division
Office. On the site of the remainder of the property there will be constructed a one-story garage which will
house equipment more economically and to greater advantage than heretofore. As a result of this
modification of the property at 146th Street and Lenox Avenue, the offices of the New York City Omnibus
Corporation, Madison Avenue Coach Company, Inc., and Eighth Avenue Coach Corporation have been
consolidated with those of the Fifth Avenue Coach Company at 605 West 132nd Street which consolidation
of executive and clerical forces will result in some further savings.

Litigation As To One-Way Operation On
Eighth and Ninth Avenues

Under date of March 16, 1938, in an attempt to convert Eighth and Ninth Avenues into one-way
streets, the Police Commissioner advised Eighth Avenue Coach Corporation that effective April 4, 1938,
no vehicles would be permitted to proceed northbound on Eighth Avenue between Hudson Street and 57th
Street, or southbound on Ninth and Columbus Avenues between 64th Street and Hudson Street. This
proposed curtailment of the present two-way operation would deprive Eighth Avenue Coach Corporation
of a substantial part of its franchise rights and would have a disastrous effect upon its revenues. Accordingly
suit was instituted in the New York State Supreme Court asking that the regulation be enjoined.

The lower court denied an application for a temporary injunction, but the Appellate Division reversed
the lower court and restrained the enforcement of the police regulation pending the trial of the litigation.

The trial was commenced on June 15th, and after the summer recess the presentation of evidence was
completed, and briefs were submitted on November 9th. On February 28, 1939, an opinion was handed
down by the Trial Court holding that Eighth Avenue Coach Corporation was entitled to an injunction
restraining the enforcement of the police order. It is understood that the Corporation Counsel of the
City of New York will appeal this decision.

[4]