The original plans and specifications contemplated that all tunnels between the First Avenue shafts in Manhattan and East Avenue in Long Island City would be shield-driven, and that work would proceed simultaneously eastward from the First Avenue shafts and both eastward and westward from the Long Island City shafts located west of Front Street at the river, requiring twelve shields.  When making their proposal, S. Pearson and Son, Limited, suggested that shields might be started from the east end of the work and arrive at the Front Street shafts as soon as these shafts could be completed, and proposed sinking a temporary shaft transversely across all four lines near the east end of the work just west of East Avenue, from which, within a short time, to drive toward Front Street by the use of shields.  The railroad company accepted the suggestion for the additional shaft, although the greater part of the tunnels east of Front Street was built without shields.  After several months of negotiation, a contract was entered into on July 7th, 1904, with S. Pearson and Son, Incorporated, a corporation of the State of New York organized by the English firm for the purpose of entering into and carrying out this contract.  The main features had been agreed upon, and work had begun about two months before.  The contract embraced the permanent shafts in Manhattan and Long Island City, the tunnels between these shafts, and their extension eastward in Long Island City to East Avenue, including in all about 23,600 ft. of single-track tunnels.  The contract had novel features, and seemed to be peculiarly suitable for the unknown risks and the unusual magnitude of the work.  A fixed amount was named as contractor’s profit.  If the actual cost of the work when completed, including this sum named as contractor’s profit, should be less than a certain estimated amount named in the contract, the contractor should have one-half of the saving.  If, on the other hand, the actual cost of the completed work, including the fixed sum for contractor’s profit, should exceed the estimated cost named in the contract, the contractor should pay one-half the excess and the railroad company the other half; the contractor’s liability was limited, however, to the amount named for profit plus $1,000,000; or, in other words, his maximum money loss would be $1,000,000.  Any further excess of cost was to be borne wholly by the railroad company.  The management of the work, with some unimportant restrictions, was placed with the contractor; the relations of the engineer, as to plans, inspection, etc., were the same as in ordinary work, and the interest of the contractor to reduce cost was the same in kind as in ordinary work.

[Illustration:  PLATE XIII.—­Plan and Profile.  East River Tunnels]