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New York Sun, November 29, 1911, page 13:

PUBLIC  NOTICE.
BOARD  OF  ESTIMATE  AND  APPORTIONMENT
CITY  OF  NEW  YORK.
    Public Notice is hereby given that at the meeting of the Board of Estimate and Apportionment held this day the following resolutions were adopted:
    Whereas, The New York Magnaphone and Music Company has under date of June 29, 1911, made application to this Board for the grant of the right, privilege or franchise to lay, construct, maintain and operate electric wires with the necessary branches under and along the streets, avenues and public places of The City of New York for the purpose of distributing music and matters of general interest and amusement electrically by means of a magnaphone; and
    Whereas, Sections 72, 73 and 74 of the Greater New York Charter, as amended by Chapters 629 and 630 of the Laws of 1905, provide for the manner and procedure of making such grants; and
    Whereas, in pursuance of such laws, this Board adopted a resolution on July 8, 1911, fixing the date for a public hearing thereon as September 21, 1911, at which time citizens were entitled to appear and be heard, and publication was had for at least two (2) days in the "Evening Mail" and the "Globe," newspapers designated by the Mayor, and in the "City Record" for ten (10) days immediately prior to the date of hearing, and the public hearing was duly held on such day; and
    Whereas, This Board has made inquiry as to the money value of the franchise or right applied for and proposed to be granted to The New York Magnaphone and Music Company and the adequacy of the amount of compensation to be paid therefor; now, therefore, it is
    Resolved. That the following form of resolution for the grant of the franchise or right applied for by The New York Magnaphone and Music Company, containing the form of proposed contract for the grant of such franchise or right, be hereby introduced and entered in the minutes of this Board, as follows, to wit:
    Resolved. That the Board of Estimate and Apportionment hereby grants to The New York Megaphone and Music Company the franchise or right fully set out and described in the following form of proposed contract for the grant thereof, embodying all the terms and conditions, including the provisions as to rates and charges upon and subject to the terms and conditions in said proposed form of contract contained, and the Mayor of the City of New York be and he hereby is authorized to execute and deliver such contract in the name and on behalf of The City of New York, as follows, to wit:
PROPOSED  FORM  OF  CONTRACT.
    THIS CONTRACT, made this     day of 19--, by and between the City of New York (hereinafter called the City), party of the first part, by the Mayor of said City, acting for and in the name of said City, under and in pursuance of the authority of the Board of Estimate and Apportionment of said City (hereinafter called the Board), and The New York Magnaphone and Music Company (hereinafter called the Company), party of the second part, witnesseth:
    In consideration of mutual covenants and agreements herein contained, the parties hereto do hereby covenant and agree as follows:
    Section 1. The City hereby grants to the Company, subject to the conditions and provisions hereinafter set forth, the right and privilege to lay, construct, maintain and operate suitable wires or other electrical conductors in the conduits under the streets and avenues within the territory comprised in the Borough of Manhattan and that part of the Borough of The Bronx west of the Bronx River: such wires to connect only the premises of subscribers with the central stations of the Company and to be used for the purpose of maintaining a system whereby music and information in relation to matters of general interest may be distributed electrically from the central stations of the Company to two or more subscribers simultaneously and for no other purpose whatsoever.
    Section 2. The grant of this privilege is subject to the following conditions, which shall be complied with by the Company:
    First--The rights and privileges herein granted shall not be construed to in any way give the Company the right or privilege to engage in a business permitting communication between subscribers and this contract is entered into on the mutual and express understanding and agreement by and between the parties hereto that the Company will not in any way engage in a business which will permit communication between its subscribers or claim the right so to do so under this contract and the right and privilege herein and hereby granted and conferred: it being understood that this is not a grant to do a telephone business within the general accepted meaning of the term.
    Second--The said right to lay, construct, maintain and operate wires or other electrical conductors in conduits for the purpose aforesaid shall be held and enjoyed by the Company for the term of twenty-five (25) years from the date upon which this contract is signed by the Mayor, without any privilege of renewal thereof.
    Third--The Company shall pay to the City for privilege hereby granted the following sums of money:
    (a) The sum of five thousand ($5,000) in cash within three (3) months after the date on which this contact is signed by the Mayor, and before anything is done in exercise of the privilege hereby granted.
    (b) During the first term of five (5) years an annual sum, which shall in no case be less than two thousand five hundred dollars ($2,500), and which shall be equal to three (3) per cent. of its gross annual receipts if such percentage shall exceed the sum of two thousand five hundred dollars ($2,500).
    During the second term of five (5) years an annual sum which shall in no case be less than three thousand five hundred dollars ($3,500) and which shall be equal to three (3) per cent. of its gross annual receipts, if such percentage shall exceed the sum of three thousand five hundred dollars ($3,500).
    During the third term of five (5) years an annual sum, which shall in no case be less than five thousand ($5,000), and which shall be equal to three (3) per cent. of its gross annual receipts, if such percentage shall exceed the sum of five thousand dollars ($5,000).
    During the fourth term of five (5) years an annual sum, which shall in no case be less than seven thousand five hundred dollars ($7,500), and which shall be equal to four (4) per cent. of its gross annual receipts, if such percentage shall exceed the sum of seven thousand five hundred dollars ($7,500).
    During the remaining term of five (5) years an annual sum, which shall in no case be less than ten thousand dollars ($10,000), and which shall be equal to five (5) per cent. of it gross annual receipts, if such percentage shall exceed the sum of ten thousand dollars ($10,000).
    The gross annual receipts mentioned above shall be the gross receipts of the Company from all sources within the Borough of Manhattan and the portion of the Borough of The Bronx lying westerly of the Bronx River.
    The annual charges shall commence from the date on upon which this contract is signed by the mayor.
    All annual charges, as above, shall be paid into the treasury of the City on November 1st of each year, and shall be for the amount due to September 30 next preceding. Provided, that the first annual payment shall be only for that proportion of the first annual charge as the time between the day upon which the contract is signed by the Mayor and September 30 following shall bear to the whole of the year.
    Whenever the percentage required to be paid shall exceed the minimum amount as above, then the sum over and above such minimum shall be paid on or before November 1 in each year for the year ending September 30 next preceding.
    Any and all payments to be made by the terms of this contract to the City by the Company shall not be considered in any manner in the nature of a tax, such payments shall be made addition to any and all taxes of whatsoever kind of description now or hereafter required to be paid by any ordinance of the City, or resolution of the Board, or any law of the State of New York.
    Fourth--The annual charges or payments shall continue throughout the whole term of the contract, notwithstanding any clause in any statute or in the charter of any other company providing for payment for similar rights or franchises at a different rate, and no assignment, lease or sublease of the rights or privileges hereby granted, or of any part thereof, shall be valid or effectual for any purpose unless the said assignment, lease or sublease shall contain a covenant on the part of the assignee or lessee that the same is subject to all of the conditions of this contract, and that the assignee or lessee assumes and will be bound by all said conditions, and especially said conditions as to payments, anything in any statute or in the charter of such assignee or lessee to the contrary notwithstanding, and that the said assignee or lessee waives any more favorable conditions created by such statute or its charter, and that it will not claim by reason thereof, or otherwise, exemption from liability to perform each and all of the conditions of this contract.
    Fifth--The rights and privileges hereby granted shall not be assigned, either in whole or in part, or leased or sublet in any manner, nor shall the title thereto, or right, interest or property therein, pass to or vest in any other person or corporation whatsoever, either by the act of the Company, or by operation of law, whether under the provisions of the statutes relating to the consolidation or merger of corporations or otherwise, without the consent of the City, acting by the Board evidenced by an instrument under seal, anything herein contained to the contrary thereof in anywise notwithstanding, and the granting, giving or waiving of any one or more of such consents shall not render unnecessary any subsequent consent or consents.
    Sixth--Upon the termination of this original contract, or upon the termination of the rights hereby granted for any cause, or upon the dissolution of the Company before such termination, the wires, electrical conductors and other property of the Company constructed pursuant to this contract within the streets and avenues shall become the property of the City without cost, and the same may be used or disposed of by the City for any reason whatsoever, or the same may be leased to any company or individual.
    If, however, at the termination of this contract as above, the Board shall so order by resolution, the Company shall, upon thirty (30) days notice from the Board, remove any and all of its wires, electrical conductors and other property, or any portion thereof, constructed pursuant to this contract, and the said streets and avenues shall be restored to their original condition at the sole cost and expense of the Company.
    Seventh--Said wires, electrical conductors, and other property shall be constructed, maintained and operated subject to the supervision and control of all the authorities of the City who have jurisdiction in such matters, as provided by the Charter of the City.
    No construction shall be commenced by the Company until written permits therefor have been obtained from the proper City officials.
    In any permits so issued such officials may also impose such conditions, as a condition of the granting of the same, as are necessary for the purpose of protecting any structures, in the streets and avenues, over which such officials have jurisdiction, and the Company shall comply with such conditions.
    Eighth--All wires or other electrical conductors of the Company laid pursuant to the contract shall be placed in ducts, conduits or subways (referred to in this paragraph as subways). Such subways shall be leased from the company or companies having control thereof under the provisions of law, or from the City should it succeed to the rights of such company or companies. If the City shall construct or acquire subways for electrical conductors in the Borough of Manhattan or the portion of the Borough of The Bronx west of the Bronx River, the Company hereby agrees to lay its wires and electrical conductors in such subways, and the City agrees to lease to the Company during the term of this contract such spaces as may be required for the business herein authorized.
    Ninth--The Company shall, upon request from any individual or corporation occupying or owning premises in the territory in which the Company is operating, not in arrears to it for service already rendered, extend its wires to such premises and furnish its service to such individual or corporation, provided that such premises are not more than one half (½) mile from any other premises in which the Company has its apparatus installed at the time such request is made.
    Tenth--The Company shall file with the Board on the first day of November in each year a map or a plan upon which shall be plainly indicated the number of wires which are used by the Company on the thirtieth day of September next preceding, and the streets and avenues in which the same are located, and also those which were put in during the preceding year:
    Eleventh--The Company shall commence the operation of its system of distribution of music and matters of general interest, as herein authorized, within six (6) months from the date on which this contract is signed by the Mayor, and shall have in operation the apparatus for the delivery of such service at one thousand (1,000) points upon subscriber's premises within five (5) years from the date on which this contract is signed by the Mayor, otherwise this grant shall cease and determine.
    Twelfth--The Board may, by resolution, direct the Company to install its apparatus and necessary appurtenances thereto in any or all of the free wards of Bellevue and Allied Hospitals, and in the assembly halls of any or all of the public schools within the portion of the City for which a franchise is hereby granted. Upon notice by the Board to the Company that any such resolution has been adopted the Company shall install such apparatus and the necessary appurtenances thereto, free of charge, and shall furnish service, as directed, at one-half the regular rates charged by the Company for similar service, provided that the Company shall not be required to extend its wires for the purpose of connecting with such hospitals or schools a distance greater in any case than one-half (½) mile.
    Thirteenth--It is agreed that the Board shall have absolute power to regulate all charges or rates for services rendered by the Company to subscribers pursuant to this contract, provided that such rates shall be reasonable and fair, but the Company shall not at any time within the term of this contact charge more than twenty dollars ($20) per month for an unlimited music service.
    Fourteenth--The Company shall not require nor receive from its subscribers any deposit or advance payment in excess of the cost to it of apparatus leased or furnished to the subscriber on his premises, and of what is reasonably necessary to insure payment of current bills, and on such amounts so paid the Company shall pay interest at the statutory rate whenever such money is held for more than one month. Unpaid bills shall never be charged against property unless due from the owner thereof, and no person not himself in arrears shall be denied service because any previous occupant of the same premises is in arrears to the Company for service.
    Fifteenth--The wires of the Company shall be employed for no other purpose than those explicitly set forth herein, and the Company binds itself not to lay, use, lease or operate wires for illegal purposes.
    Sixteenth--The Company shall assume all liability to persons or property by reason of the construction or operation authorized by this contract, and it is a condition of this contract that the City shall assume no liability whatsoever to either persons or property on account of the same, and the Company hereby agrees to repay to the City any damage which the City shall be compelled to pay by reason of any acts or default of the Company.
    Seventeenth--It is a condition of this contract that the Company shall bear the entire expense of all work undertaken by reason of this grant.
    Eighteenth--If the Company shall fail to give efficient public service at reasonable rates, or at the rates herein fixed, or at the rates which may be hereafter fixed by the Board, or fail to maintain its structures and equipment as herein provided in good condition throughout the whole term of this contract, the Board may give notice to the Company specifying any default on the part of the Company, and requiring the Company to remedy the same within a reasonable time; and upon failure of the Company to remedy such default within a reasonable time, the Company shall for each day thereafter during which the default or defect remains, pay to the City the sum of two hundred and fifty dollars ($250), as fixed or liquidated damages, or the Board. In case such structures or equipment which may effect the surface of the street shall not be put in good condition within a reasonable time after notice by the Board as aforesaid shall have the right to make needed repairs at the expense of the Company, in which case the Company shall pay to the City the amount of the cost of such repairs, with local interest thereon, all of which sums may be deducted from the fund hereinafter provided for.
    Nineteenth--If for a period of any three (3) consecutive months after the commencement of the operation of the system proposed by the Company, as herein provided, such system shall not be operated, or if the same shall not be operated for a period of any six (6) months out of any consecutive twelve (12) months after the commencement of operation, the Board may declare the right and franchise and this contract terminated without further proceedings in law or in equity.
    Twentieth--The Company shall submit to the Board a report not later than November 1 of each year for the year ending September 30 next preceding, and at any other time, upon request of the Board, which shall state:
    1. The amount of stock issued, for cash, for property.
    2. The amount paid in as by last report.
    3. The total amount of capital stock paid in.
    4. The funded debt by last report.
    5. The total amount of funded debt.
    6. The floating debt as by last report.
    7. The total amount of floating debt.
    8. The total amount of funded and floating debt.
    9. The average rate per annum of interest on funded debt.
    10. Statement of dividends paid during the year.
    11. The total amount expended for same.
    12. The names of the directors elected at the last meeting of the corporation held for such purpose.
    13. Location, value and amount paid for real estate owned by the Company as by last report.
    14. Location, value and amount paid for real estate now owned by the Company.
    15. Number of subscribers served by the Company.
    16. Total receipts of Company for each class of business.
    17. Amounts paid by the Company for damage to persons or property on account of construction and operation.
    18. Total expenses for operation, including salaries.
--and such other information in regard to the business of the Company as may be required by the Board.
    Twenty-first--The Company shall at all times keep accurate books of account of the gross receipts from all sources within the limits of the City, and shall, on or before November 1 of each year, make a verified report to the Comptroller of the City of the business done by the Company for the year ending September 30 next preceding, in such form as he may prescribe. Such report shall contain a statement of such gross receipts from the operation of the system hereby authorized from all subscribers served by the Company, together with such other information as the Comptroller may require. The Comptroller shall have access to all books of the Company for the purpose of ascertaining the correctness of its report, and may examine its officers under oath.
    Twenty-second--This grant is upon the express condition that the Company, within thirty (30) days after the signing of this contract by the Mayor, and before anything is done in exercise of the rights conferred hereby, shall deposit with the Comptroller of the City the sum of five thousand ($5,000) either in money or security, to be approved by him, which fund shall be security for the performance by the Company of all the terms and conditions of this contract, especially those which relate to the payment of the annual charges for the privilege hereby granted, the rendering of efficient public service at the rates herein fixed or at the rates which may be hereafter fixed by the Board, as herein provided, and in default of the payment of such annual charges the City shall collect the same with interest from said fund after ten (10) days notice to the Company. In case of failure of the Company to comply with the terms of this contract relating to the filing of annual statements, the furnishing of service to applicants as herein provided, or its neglect or refusal to comply with any demand or direction of the Board or other Municipal officer, made pursuant to the terms of this contract or under the authority of any laws or ordinances now or hereafter in force; in such cases and in any of these events, the Company shall, except as herein otherwise provided, pay to the City a penalty of fifty ($50) for each violation, which sum or sums may be deducted from said fund.
    The procedure for the imposition and collection of of the penalties in this contract shall be as follows:
    The Board, on complaint made, shall give notice to the Company, directing its President, or other officer, to appear before the Board on a certain day not less than ten (10) days after the date of such notice, to show cause why the Company should not be penalized in accordance with the foregoing provisions. If the Company fails to make an appearance, or, after a hearing, appears in the judgment of the Board to be in fault, said Board shall forthwith impose the prescribed penalty, or where the amount of the penalty is not prescribed herein, such amount as appears to the Board to be just, and without legal procedure direct the Comptroller to withdraw the amount of such penalty from the security fund deposited with him. In case of any drafts made upon the security fund the Company shall, upon ten (10) days notice, pay to the City a sum sufficient to restore said security fund to the original amount of five thousand dollars ($5,000), and in default thereof the contract shall be canceled and annulled at the option of the Board, acting in behalf of the City. No action or proceeding or right under the provisions of the contract shall affect any other legal rights, remedies or causes of action belonging to the City.
    Twenty-third--In case of any violation or breach, or failure to comply with any of the provisions herein contained, or with any orders of the Board acting under the powers herein reserved, the franchise or consent herein granted may be forfeited by a suit brought by the Corporation Counsel, on notice of ten (10) days to the Company, or at the option of the Board by resolution of said Board, which said resolution may contain a provision to the effect that the wires and electrical conductors constructed and in use by virtue of this contract shall thereupon become the property of the City without proceedings at law or in equity. Provided, however, that such action by the Board shall not be taken until the Board shall give notice to the Company to appear before it on a certain day not less than ten (10) days after the date of such notice, to show cause why such resolution declaring the contract forfeited should not be adopted. In case the Company fails to appear, action may be taken by the Board forthwith.
    Twenty-fourth--The words "notice" or "direction," wherever used in this contract, shall be deemed to mean a written notice or direction. Every such notice or direction to be served upon the Company shall be delivered at such office in the City as shall have been designated by the Company, or if no such office shall have been designated, or if such designation shall have for any reason become inoperative, shall be mailed in the City, postage prepaid, addressed to the Company at the City. Delivery or mailing of such notice or direction as and when above provided shall be equivalent to direct personal notice or direction, and shall be deemed to have been given at the time of delivery or mailing.
    Twenty-fifth--If at any time the powers of the Board or any other of the other authorities herein mentioned or intended to be mentioned, shall be transferred by law to any other board, authority, officer or officers, then in such case such other board, authority, officer or officers, shall have all the powers, rights and duties herein reserved to or prescribed for the Board or other authorities, officer or officers.
    Section 3. Nothing in this contract shall be construed as in any way limiting the present or future jurisdiction of the Public Service Commission under the Laws of the State of New York.
    Section 4. The company promises, covenants and agrees on its part and behalf to conform to and abide by and perform all the terms, conditions and requirements in this contract fixed and contained.
    IN WITNESS WHEREOF, the party of the first part by its Mayor, thereunto duly authorized by the Board of Estimate and Apportionment of said City, has caused the corporate name of said City to be hereunto signed and the corporate seal of said City to be hereunto affixed; and the party of the second part, by its officers, thereunto duly authorized, has caused its corporate name to be hereunto signed, and its corporate seal to be hereunto affixed, the day and year first above written.
THE  CITY  OF  NEW  YORK.
By -------- --------- Mayor.        
[Corporate Seal.]
    Attest:
------- ------- City Clerk.
THE  NEW  YORK  MAGNAPHONE  AND  MUSIC  COMPANY.
By -------- --------- President.        
[Seal.]
    Attest:
------- ------- Secretary.
(Here add acknowledgments.)

    Resolved. That the results of the inquiry made by this Board as to the money value of the franchise or right proposed to be granted and the adequacy of the compensation proposed to be paid therefor and of the terms and conditions, including the provisions as to the rates and charges, are as hereinbefore specified, and fully set forth in and by the foregoing form of proposed contract for the grant of such franchise or right.
    Resolved. That these preambles and resolutions for the grant of a franchise or right applied for by The New York Magnaphone and Music Company and the said form of proposed contract for the grant of such franchise or right containing said results of such inquiry after the same shall be entered in the minutes of this Board, shall be published for at least twenty (20) days immediately prior to Thursday, December 7, 1911, in the "City Record" and at least twice during the ten (10) days immediately prior to Thursday, December 7, 1911 in two daily newspapers to be designated by the Mayor therefor and published in the City of New York at the expense of The New York Magnaphone and Music Company, together with the following notice, to wit:
    NOTICE IS HEREBY GIVEN that the Board of Estimate and Apportionment, before authorizing any contract for the grant of a franchise or right applied for by The New York Magnaphone and Music Company and fully set forth and described in the foregoing form of proposed contract for the grant of such franchise or right, and before adopting any resolution authorizing any such contract will, at a meeting of said Board, to be held in the old Council Chamber, City Hall, Borough of Manhattan, City of New York, on Thursday, December 7, 1911, at 10:30 o'clock A. M., hold a public hearing thereon, at which citizens shall be entitled to appear and be heard.
    (The Sun and the New York Press designated.)
                                  JOSEPH  HAAG, Secretary.
    Dated New York, October 29, 1911.