The nickel fare was part of the agreement the city had with the companies that operated the subway, the Interborough Rapid Transit and Brooklyn Rapid Transit Companies, both of which came to be widely reviled by New Yorkers for their poor service. The IRT sought to set aside the contract and raise the fare. The city challenged the move in a case that reached the Supreme Court. The case was sent back to state courts, where the company ultimately lost.

When the two privately-run lines were unified with the city-run line in 1940, the fare remained a nickel.

The push to raise the fare gained steam after World War II. Ridership was soaring — on weekdays in 1946 average ridership was more than 6.4 million — and the city was emerging from years of wartime spending cuts. The subway had become crowded and unsafe and significant investment was needed to upgrade and expand the system.

A resolution put before the City Council declared that the subway was “in such a deplorable state of neglect and disrepair as to be a disgrace to The City of New York and a menace to public safety, heath and decency.”

The city was operating the subway at a loss forcing it to spend less on other services like hospitals, schools, prisons, parks and libraries and other critical functions. (The Metropolitan Transportation Authority, a state agency controlled by the governor that now operates the subway, was not created until the 1960s.)

The nickel fare was also seen as preventing pay raises for city employees, including transit workers, and critics argued that the city was essentially providing a free service to riders.