rails-api broken

gistfile1.txt

$ ruby -v
ruby 2.1.1p76 (2014-02-24 revision 45161) [x86_64-darwin13.0]

$ rails -v
Rails 4.1.0.rc1

$ rails-api new contacts-server --skip-sprockets --database=postgresql
      create  
      create  README.rdoc
      create  Rakefile
      create  config.ru
      create  .gitignore
      create  Gemfile
      create  app
      create  app/controllers/application_controller.rb
      create  app/assets/images/.keep
      create  app/mailers/.keep
      create  app/models/.keep
      create  app/controllers/concerns/.keep
      create  app/models/concerns/.keep
      create  bin
      create  bin/bundle
      create  bin/rails
      create  bin/rake
      create  config
      create  config/routes.rb
      create  config/application.rb
      create  config/environment.rb
      create  config/secrets.yml
      create  config/environments
      create  config/environments/development.rb
      create  config/environments/production.rb
      create  config/environments/test.rb
      create  config/initializers
      create  config/initializers/secret_token.rb
      create  config/initializers/wrap_parameters.rb
      create  config/locales
      create  config/locales/en.yml
      create  config/boot.rb
      create  config/database.yml
      create  db
      create  db/seeds.rb
      create  lib
      create  lib/tasks
      create  lib/tasks/.keep
      create  lib/assets
      create  lib/assets/.keep
      create  log
      create  log/.keep
      create  public
      create  public/404.html
      create  public/422.html
      create  public/500.html
      create  public/favicon.ico
      create  public/robots.txt
      create  test/fixtures
      create  test/fixtures/.keep
      create  test/controllers
      create  test/controllers/.keep
      create  test/mailers
      create  test/mailers/.keep
      create  test/models
      create  test/models/.keep
      create  test/helpers
      create  test/helpers/.keep
      create  test/integration
      create  test/integration/.keep
      create  test/test_helper.rb
         run  bundle install
Gemfile syntax error on line 4: syntax error, unexpected tSTRING_BEG, expecting
keyword_do or '{' or '('
gem 'rails-api'
     ^
         run  bundle exec spring binstub --all
Gemfile syntax error on line 4: syntax error, unexpected tSTRING_BEG, expecting
keyword_do or '{' or '('
gem 'rails-api'
     ^