Story Behind Building the Bridge
Toll Rates and General Bridge Rules 1937
Voters in the six newly-formed Golden
Gate Bridge and Highway District counties went to the polls on Nov 4, 1930
to approve a major bond issue during the depths of the Depression to fund
construction of the Golden Gate Bridge. Promises made during the campaign
were amusing. This 1930 campaign brochure promised that tolls on the proposed
bridge would drop to 25 cents a car by 1960, and transit across the span
would be free by 1970. The yes vote was 145,697, and 47,005
voted no. The bridge also replaced the profitable Sausalito ferry, but the District, later, raised tolls to support an expensive, and unprofitable, bus and ferry system.
The total bond
issue to be voted upon at the election November 4 for the Golden Gate Bridge,
will be $35,000,000. Total earnings in 40 years will be $110,942,800. Bonded
indebtedness in any one of the six counties included in the Golden Gate
Bridge and Highway District will not be increased by the approval of the
will pay for itself out of tolls. These tolls will redeem the bond issue,
pay all interest, pay for maintenance of the bridge and accumulate a vast
profit--not less than $17,242,800, within the 40 year period.
It is the consensus
of opinion of all who have studied the subject that the construction of
this span will increase property values not only in the territory tributary
to the bridge, but throughout the entire metropolitan bay area.
Gate Bridge will eliminate dependence on a ferry system which has reached
its saturation point.
The Hyde Street-Sausalito
ferry can maintain a headway of about one boat every three minutes, but
this requires that additional floating equipment be diverted from other
bay ferry lines. The average capacity of the boats is 73.6 vehicles, closely
packed. The congestion at the Marin shore due to inadequate transportation
across the bay has caused thousands of motorists great delay and inconvenience
on Sundays and holidays. The ferry schedules cannot be increased without
immense cost and even then the inadequacy of ferries as compared with a
Golden Gate bridge is apparent to all.
Gate Bridge with its six traffic lanes will have the capacity to pass without
congestion all traffic that its north and south approaches will deliver.
the Golden Gate Bridge and Highway District are on record in a signed pledge
to the voters of the District that if after the bridge bond issue of $35,000,000
has been approved at the polls by the necessary two-thirds majority vote,
it is found that bids upon the span exceed the present estimates of the
engineers, 35 million, the bonds will NOT be sold but the whole proposition
will be re-submitted to the voters.
This will act
as an effectual safeguard against any possible overrun in the estimated
cost of the bridge, silencing the objection that after the bonds once have
been voted, the cost of the bridge will run many millions of dollars above
the engineers' estimates.
plan employed by the Golden Gate Bridge and Highway District is the issuance
of forty year 5% bonds covering the cost of building the bridge and placing
it in operation and redeemed from the earnings of the bridge at five year
intervals. The cost above referred to includes the carrying charges during
This plan of
financing has been established as the safest and the best. It not only
protects the District, but the bondholder is protected as well, because
the District guarantees the payment of interest and redemption of the bond.
This makes the bond salable at the highest premium and at the lowest possible
interest rate. This method is the only method approved by financiers and
the only method in use for toll bridges.
redemption possible during the twenty-first year of operation, but for
better salability the bonds will run forty years. At the end of forty years,
the bridge becomes a free bridge and reverts for operation to the State,
at the option of the State.
plan of financing, the taxpayers carry no burden. The toll pays for the
bridge and also refund the preliminary expense tax. The plan presents a
thoroughly tested method of bridge financing, established as standard practice
by leading cities and States. It substitutes a users tax for a direct
tax, and thus not only eliminates bridge taxation but produces revenues
applicable for the lessening of general taxation.
Gate Bridge District as finally formed includes the counties of San Francisco,
Marin, Sonoma, Del Norte and parts of Mendocino and Napa.
As the result
of a careful investigation the Board of Directors fixed the total amount
of bonds to be authorized at $35,000,000. Of this amount $32,000,000 may
be issued and $3,000,000 retained as a reserve. The estimated cost of completing
the structure is $32,815,000. Thirty-two million dollars face value of
bonds with a coupon rate of five per cent will with the expected premium
produce an amount in excess of the construction cost sufficient
to provide a further contingency item.
of the directors will be to award contracts in open competition to the
lowest qualified and responsible bidders. The successful contractors will
be bonded to insure faithful performance. Under this procedures, unless
bids come within the estimates of the engineers, no contracts will be awarded,
hence the completion of the bridge within its estimated cost is automatically
and the reserve of approximately $3,000,000 in bonds safeguards the enterprise
against the possibility is often suggested that the bridge may be started
and not finished for lack of money, and that additional financing might
was the procedure followed in the building of the Hudson River bridge in
New York, the engineers of which are also the engineers for the Golden
Gate Bridge, the contract awards in the case of the Hudson River bridge
under-ran the engineers' estimates.
The power to
fix tolls rests with the Board of Directors, but the rate of toll is governed
by economic considerations as the charges of any public or private service
are governed. The toll schedule proposed in the beginning will produce
a revenue of 84.3 cents per average vehicle, which is approximately the
average toll in effect at the Carquinez bridge and lower by approximately
fifteen percent than the present average San Francisco-Sausalito ferry
be progressively decreased as earnings warrant to a minimum of 25 cents
during the last ten years.
Under the system
of financing adopted, the bridge district lends its credit only, and reliance
is placed on the demonstrated ability of the toll bridge to redeem the
bonds issued to cover their cost. The schedule of redemption set up assumes
that retirements will not begin until the tenth year, and then at the rate
of only 200 bonds per year, but that this rate is to be gradually increased
at five-year intervals until the last five-year period of the term, the
rate of redemption will be 2800 bonds annually. At the fortieth year, the
bridge having retired its bonds, and accumulated a substantial surplus
of seventeen million odd dollars besides, can become free.
Gate Bridge is based on the most rational of all methods of taxation, namely,
the users tax. This tax falls only on those who use the bridge. The toll
system of payment for the building of the Golden Gate Bridge is not only
logical but the most favorable plan of financing from the standpoint of
tax immunity and tax relief that it is possible to devise.
and like public improvements are liabilitiespublic charges. A public
toll bridge, on the other hand, is an asset, an income-bearing property,
a profit-sharing public corporation, in which each taxpayer in the district
is a stockholder and receives annual dividends.
Bridging the Famed Golden Gate 
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