Streetcar service under the Boston Harbor began December 30, 1904. This photo purportedly dates from 1905. An extra penny surcharge on the fare acted as a toll in order to help pay for the tunnel. The tunnel was temporarily closed in 1921 for conversion to rapid transit and reopened April 24, 1924 with Maverick Square station being completely underground. On January 19, 1954 the Blue Line as it is referred to today, was extended all the way to Revere Beach. There was also a nearby ferry service that served as an alternate route to downtown. It was discontinued in January 1940 with connecting rail service to Lynn.

One interesting bit of trivia is that the tunnel as shown here was constructed to a narrow envelope, just barely large enough for the turn-of-the-century streetcars. That restriction has prevented the use of larger rapid transit cars which are the state-of-the-art in the 21st Century.

I also am wondering who or what the gent on the right is tipping his hat to, or was it blowing off of his head?

"The original Blue Line, or East Boston Tunnel, opened on December 30, 1904." See this.

The tunnel was opened on 12/30 1904. There is a plaque commemorating it on the Boston side at State St. Station

This angle should pretty much be the duplicate of the original because one building still exists. It's the one in the very left side of the frame so it made a decent reference point:

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To get to downtown Boston from the Maverick station one would have to travel under Boston harbor. I wonder when that tunnel was completed.