General Motors streetcar conspiracy
Encyclopedia
The General Motors streetcar conspiracy (also known as the National City Lines conspiracy) refers to allegations and convictions in relation to a program by General Motors
(GM) and a number of other companies to purchase and dismantle streetcar
s (trams/trolleys) and electric train
s in many cities across the United States
and replace them with bus services
; a program which has been blamed by some for the virtual elimination of effective public transport in nearly all American cities by the 1970s. The lack of hard information about what occurred has led to intrigue, uncertainty, inaccuracy and conspiracy theories
. The story has been explored many times in print, film and other media, notably in Who Framed Roger Rabbit
, Taken for a Ride
and The End of Suburbia
.
During the period from 1936 to 1950, National City Lines
and Pacific City Lines
were involved in the conversion of over 100 electric surface-traction systems into bus systems in 45 cities including Baltimore
, Newark
, Los Angeles
(mainly the "Yellow Cars"), New York City
, Oakland
and San Diego. In 1946, Edwin J. Quinby, a retired naval lieutenant commander alerted transportation officials across the country to what he called "a careful, deliberately planned campaign to swindle you out of your most important and valuable public utilities—your Electric Railway System". GM and other companies were subsequently convicted in 1949 of conspiring to monopolize the sale of buses and related products via a complex network of linked holding companies including National City Lines and Pacific City Lines. They were also indicted, but acquitted of conspiring to monopolize the ownership of these companies.
By the time of the 1973 oil crisis
, controversial new testimony was presented to a United States Senate
inquiry into the causes of the decline of transit car systems in the US. This alleged that there was a wider conspiracy—by GM in particular—to destroy effective public transport systems in order to increase sales of automobile
s and that this was implemented with great effect to the detriment of many cities.
Only a few US cities have surviving effective rail-based urban transport systems based on tram, metro, or elevated train; notable survivors include New York City
, Newark, New Jersey
, Philadelphia, San Francisco, Boston
and Chicago
. There is now general agreement that GM and other companies were indeed actively involved in a largely unpublicized program to purchase many streetcar systems and convert them to buses, which they often supplied. There is also acknowledgment that the Great Depression
, the Public Utility Holding Company Act of 1935
, labor unrest
, market forces
, rapidly increasing traffic congestion
, taxation policies that favored private vehicle ownership, urban sprawl
, and general enthusiasm for the automobile played a major or possibly more significant role. One author recently summed the situation up as follows: "Clearly, GM waged a war on electric traction. It was indeed an all out assault, but by no means the single reason for the failure of rapid transit. Also, it is just as clear that actions and inactions by government contributed significantly to the elimination of electric traction."Guy Span (2003b)
The Toronto streetcar system
in Canada
received many of the streetcars that were sold or abandoned during the scandal.
s and later cable railway
or trams powered by electricity
. Electrically powered Trolleybus
es were also common.
At one time, nearly every city in the U.S. with population over 10,000 had at least one streetcar company and nearly all of which were privately owned and were later dismantled. Bradford Snell estimates that in 1920 90% of all trips were by rail using 1,200 separate electric street and interurban railways with 44,000 miles of track, 300,000 employees, 15 billion annual passengers, and $1 billion in income.Snell, Bradford (1995) 90 percent of all trips were by rail, chiefly electric rail; only one in 10 Americans owned an automobile. There were 1,200 separate electric street and interurban railways, a thriving and profitable industry with 44,000 miles of track, 300,000 employees, 15 billion annual passengers, and $1 billion in income. Virtually every city and town in America of more than 2,500 people had its own electric rail system.
established a special unit within the corporation which was charged with the task of replacing America's electric railways with cars, trucks and buses.Snell, Bradford (1995).
The Omnibus Corporation
was formed in 1926 by John D. Hertz
with "plans embracing the extension of motor coach operation to urban and rural communities in every part of the United States" and that "Mr. Hertz said that it was not the purpose of the corporation to enter into competition with street car companies or railroads, but to work with them for the rehabilitation of street car companies or parts of railroads in sections where the service was now inadequate." This company owned the Chicago Motor Coach Company
which Hertz had founded to operate buses in Chicago and the Fifth Avenue Coach Company in New York. The same year, the Fifth Avenue Coach Company acquired a majority of the stock in the struggling New York Railways Corporation
. Hertz was made a board member of GM the next year when GM acquired a controlling share of the Yellow Coach Manufacturing Company, a very successful bus and coach manufacturer which Hertz had founded in 1923.
In 1932, GM formed a new subsidiary—United Cities Motor Transport (UCMT)—and looked around to gobble up transit companies to replace its equipment with GM buses. There were only a few smaller systems for sale so GM did indeed acquire them and substitute buses. With so little on the market, UCMT approached the city of Portland, Oregon, in 1933 to replace its streetcar system with buses. However, the voters in Portland said no and UCMT was censured by the American Transit Association for its obviously self-serving role. UCMT operations soon folded up.
caused great difficulties for the streetcar operators given that it made it illegal for a single business to both provide public transport and supply electricity to other parties. E. Quinby later asked "Who is behind this campaign to separate the obviously economical combination of electric railway and its power plant?". There is no evidence that the motor industry was influential in this regard.Guy Span (2003b). No one sought an answer to Quinby’s most penetrating question (referring to the 1935 Public Utility Holding Company Act), "Who Is Behind This Campaign To Separate The Obviously Economical Combination Of Electric Railway And Its Power Plant?"
When the New York Railways Corporation converted streetcars to buses in 1935 and 1936, the new bus services were operated by the New York City Omnibus Corporation
which shared management with The Omnibus Corporation.
In 1936, National City Lines
, an existing bus operation which had been founded in 1920 by an E. Roy Fitzgerald and his brother was re-organized into a holding company
. In 1938, Pacific City Lines
was formed to purchase streetcar systems in the western United States.
National City Lines raised funds to purchase transportation systems in cities "where street cars were no longer practicable" and to replace them with bus transit systems
. Investors consisted of Firestone Tire, Standard Oil of California (now Chevron Corporation), Phillips Petroleum
(now part of ConocoPhillips
), General Motors, Mack Trucks
(now a subsidiary of Volvo
), and the Federal Engineering Corporation.
In 1941, Pacific City Lines attempted a hostile takeover of the Key System
which operated electric trains and streetcars in Oakland, California
. Information about this only became public in 1955. American City Lines was organized to acquire local transportation systems in the larger metropolitan areas in various parts of the country in 1943 and merged with National City Lines in 1946.
As the 1940s progressed, the companies gained more power. National City Lines acquired the Los Angeles Railway
(a.k.a. the "Yellow Cars") in 1945 and converted many lines to buses. By 1946, the company acquired 64% of the stock in the Key System which operated electric trains and streetcars in Oakland, California
. Many of these conversions to busses resulted in public outcry.
That same year, Edwin J. Quinby, a recently retired naval lieutenant commander
, published a 24-page expose on the owners of National City Lines. It was addressed to "The Mayors; The City Manager; The City Transit Engineer; The members of The Committee on Mass-Transportation and The Tax-Payers and The Riding Citizens of Your Community" and began, "This is an urgent warning to each and every one of you that there is a careful, deliberately planned campaign to swindle you out of your most important and valuable public utilities–your Electric Railway System".Guy Span (2003b) Quinby had previously worked for the North Jersey Rapid Transit which operated in New York and had established up the Electric Rail Users Association in 1934 which lobbied
on behalf of rail users and services. He was later to write a history of North Jersey Rapid Transit.
By 1947, the National City Lines owned or controlled 46 systems in 45 cities in 16 states.
On April 9, 1947, nine corporations and seven individuals (constituting officers and directors of certain of the corporate defendants) were indicted in the Federal District Court of Southern California
on counts of 'conspiring
to acquire control of a number of transit companies, forming a transportation monopoly
" and "Conspiring to monopolize sales of buses and supplies to companies owned by National City Lines" which had been made illegal by the 1890 Sherman Antitrust Act
.
The initial court case was in the Federal District Court of Southern California. In 1948, the venue was changed to the Federal District Court in Northern Illinois
following an appeal to the United States Supreme Court
(in United States v. National City Lines Inc.) who felt that there was evidence of conspiracy to monopolize the supply of buses and supplies.
The San Diego Electric Railway
was sold to Western Transit Company, which was owned by a J. L. Haugh, Oakland, for an $5.5 million in 1948. Jessie Haugh was also president of Key Systems which later purchased Pacific Electric Railway
. The financial arrangements were not public at the time. In the same year the Baltimore Streetcar system
was purchased by National City Lines and started converting the system to buses.
In 1949, Firestone Tire, Standard oil of California, Phillips Petroleum, General Motors and Mack Trucks were convicted
of conspiring to monopolize the sale of buses and related products to local transit companies controlled by National City Lines and other companies; they were acquitted
of conspiring to monopolize the ownership of these companies. The verdicts were upheld on appeal
in 1951. General Motors was fined $5,000 and H.C. Grossman, who was treasurer of General Motors and played a key role in the motorization campaigns and had also served as a director of Pacific City Lines was fined $1 along with various other individuals.Snell, Bradford C. (1974) p. 103 The court imposed a sanction of $5,000 on GM. In addition, the jury convicted H.C. Grossman, who was then treasurer of GM. Grossman had played a key role in the motorization campaigns and had served as a director of Pacific City Lines when that company undertook the dismantlement of the $100 million Pacific Electric system. The court fined Grossman the magnanimous sum of $1
According to Bradford Snell, GM's own testimony had shown that by the mid-1950s, GM and its agents had canvassed more than 1,000 electric railways and had motorized 90 percent, more than 900 systems.Snell, Bradford (1995) GM admitted in court documents that by the mid-1950s, its agents had canvassed more than 1,000 electric railways and that, of these, they had motorized 90 percent, more than 900 systems. The struggling Pacific Electric Railway
was purchased by Metropolitan Coach Lines in 1953. Jesse Haugh, who ran Metropolitan Coach Lines and was a former executive of Pacific City Lines had previously purchased San Diego Electric Railway though a separate company in 1948. The remaining streetcars converted to buses in the next two years.
The remains of the Pacific Electric Railway and of the Los Angeles Railway
were taken into public ownership in 1958 after which streetcars continued to be replaced with buses. Haugh sold the bus-based San Diego system to the city in 1966.
Study Group Report on Land Use in California, reported that there was a wider conspiracy to dismantle the streetcars. These allegations were first reported publicly in Politics of Land: Ralph Nader's Study Group Report on Land Use in California at pp. 410–12, compiled by Robert C. Fellmeth, Center for Study of Responsive Law, and published in 1973 by Grossman Publishers.
In 1974, U.S. government attorney Bradford Snell gave testimony before a United States Senate
inquiry into the causes of the decline of the transit car systems in the U.S. highlighting the National City Lines acquisitions as the primary cause.Snell, Bradford C. (1974) it demonstrates General Motors to be a sovereign economic state, whose common control of auto, truck, bus and locomotive production was a major factor in the displacement of rail and bus transportation by cars and trucks Joseph Alioto
, mayor of San Francisco, and also an antitrust attorney testified that "General Motors and the automobile industry generally exhibit a kind of monopoly evil", also that GM "has carried on a deliberate concerted action with the oil companies and tire companies...for the purpose of destroying a vital form of competition; namely, electric rapid transit." Tom Bradley
, mayor of Los Angeles testified, saying that GM, through its subsidiaries, had "scrapped" the Pacific Electric and Los Angeles streetcar systems leaving the electric train system "totally destroyed".Slater, Cliff (1997), Mayor Alioto, himself a nationally prominent antitrust attorney, congratulated Snell on the "excellence" of his "very fine monograph." Alioto testified that, "General Motors and the automobile industry generally exhibit a kind of monopoly evil" and that GM "has carried on a deliberate concerted action with the oil companies and tire companies...for the purpose of destroying a vital form of cotric rapid transit. ... Mayor Bradley also testified, in absentia, saying that General Motors, through its American City Lines and Pacific City Lines affiliates, "scrapped" the Pacific Electric and Los Angeles streetcar systems to "motorize" Los Angeles. After GM was through, the "electric train system was totally destroyed."
General Motors published a rebuttal the same year titled 'The Truth About American Ground Transport' The role of General Motors and the motor bus in the decline of mass transit was further explored in the doctoral thesis of David Lipson in 1987.
In the 1988 film, Who Framed Roger Rabbit
, the scandal is masked and set in Los Angeles.Bianco, Martha (1988) Script-writers Jeffrey Price and Peter S. Seaman
explained: "the Red Car plot, suburb
expansion, urban
and political corruption
really did happen," Price stated. "In Los Angeles, during the 1940s, car and tire companies teamed up against the Pacific Electric Railway
system and bought them out of business. Where the freeway runs in Los Angeles is where the Red Car used to be."
In recent decades, many cities have started constructing new streetcar systems, light rail, and other public transport systems. However, most US cities still have high levels of automobile dependency
with limited or non-existent levels of public transport, which are normally bus-based and are of limited frequency and quality and typically only used by those with no other options. Commuter rail has been effectively eliminated in many parts of the USA. Regional rail
is limited and the only national passenger rail service has been operated by the government-subsidized Amtrak
since 1971.
Other significant factors included:
Myths:
Holding companies for transport operators
Personnel
Manufacturing companies
In addition to the six business indicted in 1947:
Finance organisations
Training
Advocacy group
s
Affected transit lines
General Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
(GM) and a number of other companies to purchase and dismantle streetcar
Tram
A tram is a passenger rail vehicle which runs on tracks along public urban streets and also sometimes on separate rights of way. It may also run between cities and/or towns , and/or partially grade separated even in the cities...
s (trams/trolleys) and electric train
Electric locomotive
An electric locomotive is a locomotive powered by electricity from overhead lines, a third rail or an on-board energy storage device...
s in many cities across the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
and replace them with bus services
Public transport bus service
Bus services play a major role in the provision of public transport. These services can take many forms, varying in distance covered and types of vehicle used, and can operate with fixed or flexible routes and schedules...
; a program which has been blamed by some for the virtual elimination of effective public transport in nearly all American cities by the 1970s. The lack of hard information about what occurred has led to intrigue, uncertainty, inaccuracy and conspiracy theories
Conspiracy theory
A conspiracy theory explains an event as being the result of an alleged plot by a covert group or organization or, more broadly, the idea that important political, social or economic events are the products of secret plots that are largely unknown to the general public.-Usage:The term "conspiracy...
. The story has been explored many times in print, film and other media, notably in Who Framed Roger Rabbit
Who Framed Roger Rabbit
Who Framed Roger Rabbit is a 1988 American fantasy-comedy-noir film directed by Robert Zemeckis and released by Touchstone Pictures. The film combines live action and animation, and is based on Gary K. Wolf's novel Who Censored Roger Rabbit?, which depicts a world in which cartoon characters...
, Taken for a Ride
Taken for a Ride (film)
Taken for a Ride is a documentary film by Martha Olson and Jim Klein about the Great American streetcar scandal. The 55-minute film was first broadcast on August 6, 1996 on the PBS television series P.O.V..-External links:* at the P. O. V. website*...
and The End of Suburbia
The End of Suburbia
The End of Suburbia: Oil Depletion and the Collapse of The American Dream is a 2004 documentary film concerning peak oil and its implications for the suburban lifestyle, written and directed by Toronto-based filmmaker Gregory Greene....
.
During the period from 1936 to 1950, National City Lines
National City Lines
National City Lines, Inc. , was a controversial company founded in Minnesota, United States in 1920 as a modest local transport company operating two buses which was reorganized into a holding company in 1936 with equity funding from General Motors, Firestone Tire, Standard Oil of California and...
and Pacific City Lines
Pacific City Lines
Pacific City Lines was a company formed in 1937 as a subsidiary to National City Lines in Oakland, California. Its function was to purchase streetcar systems in the western United States as part of what became known as the Great American streetcar scandal...
were involved in the conversion of over 100 electric surface-traction systems into bus systems in 45 cities including Baltimore
Baltimore
Baltimore is the largest independent city in the United States and the largest city and cultural center of the US state of Maryland. The city is located in central Maryland along the tidal portion of the Patapsco River, an arm of the Chesapeake Bay. Baltimore is sometimes referred to as Baltimore...
, Newark
Newark, New Jersey
Newark is the largest city in the American state of New Jersey, and the seat of Essex County. As of the 2010 United States Census, Newark had a population of 277,140, maintaining its status as the largest municipality in New Jersey. It is the 68th largest city in the U.S...
, Los Angeles
Los Ángeles
Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...
(mainly the "Yellow Cars"), New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, Oakland
Oakland, California
Oakland is a major West Coast port city on San Francisco Bay in the U.S. state of California. It is the eighth-largest city in the state with a 2010 population of 390,724...
and San Diego. In 1946, Edwin J. Quinby, a retired naval lieutenant commander alerted transportation officials across the country to what he called "a careful, deliberately planned campaign to swindle you out of your most important and valuable public utilities—your Electric Railway System". GM and other companies were subsequently convicted in 1949 of conspiring to monopolize the sale of buses and related products via a complex network of linked holding companies including National City Lines and Pacific City Lines. They were also indicted, but acquitted of conspiring to monopolize the ownership of these companies.
By the time of the 1973 oil crisis
1973 oil crisis
The 1973 oil crisis started in October 1973, when the members of Organization of Arab Petroleum Exporting Countries or the OAPEC proclaimed an oil embargo. This was "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war. It lasted until March 1974. With the...
, controversial new testimony was presented to a United States Senate
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
inquiry into the causes of the decline of transit car systems in the US. This alleged that there was a wider conspiracy—by GM in particular—to destroy effective public transport systems in order to increase sales of automobile
Automobile
An automobile, autocar, motor car or car is a wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor...
s and that this was implemented with great effect to the detriment of many cities.
Only a few US cities have surviving effective rail-based urban transport systems based on tram, metro, or elevated train; notable survivors include New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, Newark, New Jersey
Newark, New Jersey
Newark is the largest city in the American state of New Jersey, and the seat of Essex County. As of the 2010 United States Census, Newark had a population of 277,140, maintaining its status as the largest municipality in New Jersey. It is the 68th largest city in the U.S...
, Philadelphia, San Francisco, Boston
Boston
Boston is the capital of and largest city in Massachusetts, and is one of the oldest cities in the United States. The largest city in New England, Boston is regarded as the unofficial "Capital of New England" for its economic and cultural impact on the entire New England region. The city proper had...
and Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
. There is now general agreement that GM and other companies were indeed actively involved in a largely unpublicized program to purchase many streetcar systems and convert them to buses, which they often supplied. There is also acknowledgment that the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
, the Public Utility Holding Company Act of 1935
Public Utility Holding Company Act of 1935
The Public Utility Holding Company Act of 1935 , , also known as the Wheeler-Rayburn Act, was a law that was passed by the United States Congress to facilitate regulation of electric utilities, by either limiting their operations to a single state, and thus subjecting them to effective state...
, labor unrest
Labor unrest
Labor unrest is a term used by employers or those generally in the business community to describe organizing and strike actions undertaken by labor unions, especially where labor disputes become violent or where industrial actions in which members of a workforce obstruct the normal process of...
, market forces
Market economy
A market economy is an economy in which the prices of goods and services are determined in a free price system. This is often contrasted with a state-directed or planned economy. Market economies can range from hypothetically pure laissez-faire variants to an assortment of real-world mixed...
, rapidly increasing traffic congestion
Traffic congestion
Traffic congestion is a condition on road networks that occurs as use increases, and is characterized by slower speeds, longer trip times, and increased vehicular queueing. The most common example is the physical use of roads by vehicles. When traffic demand is great enough that the interaction...
, taxation policies that favored private vehicle ownership, urban sprawl
Urban sprawl
Urban sprawl, also known as suburban sprawl, is a multifaceted concept, which includes the spreading outwards of a city and its suburbs to its outskirts to low-density and auto-dependent development on rural land, high segregation of uses Urban sprawl, also known as suburban sprawl, is a...
, and general enthusiasm for the automobile played a major or possibly more significant role. One author recently summed the situation up as follows: "Clearly, GM waged a war on electric traction. It was indeed an all out assault, but by no means the single reason for the failure of rapid transit. Also, it is just as clear that actions and inactions by government contributed significantly to the elimination of electric traction."Guy Span (2003b)
The Toronto streetcar system
Toronto streetcar system
The Toronto streetcar system comprises eleven streetcar routes in Toronto, Ontario, Canada, operated by the Toronto Transit Commission , and is the largest such system in the Americas in terms of ridership, number of cars, and track length. The network is concentrated primarily in downtown and in...
in Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
received many of the streetcars that were sold or abandoned during the scandal.
Background
In the 19th century, city transit systems were rail-based, first with HorsecarHorsecar
A horsecar or horse-drawn tram is an animal-powered streetcar or tram.These early forms of public transport developed out of industrial haulage routes that had long been in existence, and from the omnibus routes that first ran on public streets in the 1820s, using the newly improved iron or steel...
s and later cable railway
Cable car (railway)
A cable car or cable railway is a mass transit system using rail cars that are hauled by a continuously moving cable running at a constant speed. Individual cars stop and start by releasing and gripping this cable as required...
or trams powered by electricity
Electricity
Electricity is a general term encompassing a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning, static electricity, and the flow of electrical current in an electrical wire...
. Electrically powered Trolleybus
Trolleybus
A trolleybus is an electric bus that draws its electricity from overhead wires using spring-loaded trolley poles. Two wires and poles are required to complete the electrical circuit...
es were also common.
At one time, nearly every city in the U.S. with population over 10,000 had at least one streetcar company and nearly all of which were privately owned and were later dismantled. Bradford Snell estimates that in 1920 90% of all trips were by rail using 1,200 separate electric street and interurban railways with 44,000 miles of track, 300,000 employees, 15 billion annual passengers, and $1 billion in income.Snell, Bradford (1995) 90 percent of all trips were by rail, chiefly electric rail; only one in 10 Americans owned an automobile. There were 1,200 separate electric street and interurban railways, a thriving and profitable industry with 44,000 miles of track, 300,000 employees, 15 billion annual passengers, and $1 billion in income. Virtually every city and town in America of more than 2,500 people had its own electric rail system.
Early years
In 1922, the head of General Motors (GM), Alfred P. SloanAlfred P. Sloan
Alfred Pritchard Sloan, Jr. was an American business executive in the automotive industry. He was a long-time president, chairman, and CEO of General Motors Corporation...
established a special unit within the corporation which was charged with the task of replacing America's electric railways with cars, trucks and buses.Snell, Bradford (1995).
The Omnibus Corporation
The Omnibus Corporation
The Omnibus Corporation was formed in 1925 and acquired control of Fifth Avenue Coach Company and the Chicago Motor Coach Company with John D. Hertz as chairman. In 1953 it purchased Yellow Drive-It-Yourself from General Motors and sold its interests in public transport...
was formed in 1926 by John D. Hertz
John D. Hertz
John Daniel Hertz, Sr. was an American businessman, thoroughbred racehorse owner, and philanthropist.-Biography:...
with "plans embracing the extension of motor coach operation to urban and rural communities in every part of the United States" and that "Mr. Hertz said that it was not the purpose of the corporation to enter into competition with street car companies or railroads, but to work with them for the rehabilitation of street car companies or parts of railroads in sections where the service was now inadequate." This company owned the Chicago Motor Coach Company
Chicago Motor Coach Company
The Chicago Motor Coach Company was founded in 1917 by John D. Hertz to provide Chicago's first bus transportation services, primarily in places where streetcars were not able to travel. The company grew rapidly and was purchased by the Chicago Transit Authority in 1952.-History:John D. Hertz...
which Hertz had founded to operate buses in Chicago and the Fifth Avenue Coach Company in New York. The same year, the Fifth Avenue Coach Company acquired a majority of the stock in the struggling New York Railways Corporation
New York Railways Corporation
The New York Railways Corporation was a railway company that operated street railways in Manhattan, New York City, United States between 1925 and 1936. During 1935/1936 it converted its remaining lines to bus routes which were operated by the New York City Omnibus Corporation, and now operated by...
. Hertz was made a board member of GM the next year when GM acquired a controlling share of the Yellow Coach Manufacturing Company, a very successful bus and coach manufacturer which Hertz had founded in 1923.
In 1932, GM formed a new subsidiary—United Cities Motor Transport (UCMT)—and looked around to gobble up transit companies to replace its equipment with GM buses. There were only a few smaller systems for sale so GM did indeed acquire them and substitute buses. With so little on the market, UCMT approached the city of Portland, Oregon, in 1933 to replace its streetcar system with buses. However, the voters in Portland said no and UCMT was censured by the American Transit Association for its obviously self-serving role. UCMT operations soon folded up.
Conversion
The Public Utility Holding Company Act of 1935Public Utility Holding Company Act of 1935
The Public Utility Holding Company Act of 1935 , , also known as the Wheeler-Rayburn Act, was a law that was passed by the United States Congress to facilitate regulation of electric utilities, by either limiting their operations to a single state, and thus subjecting them to effective state...
caused great difficulties for the streetcar operators given that it made it illegal for a single business to both provide public transport and supply electricity to other parties. E. Quinby later asked "Who is behind this campaign to separate the obviously economical combination of electric railway and its power plant?". There is no evidence that the motor industry was influential in this regard.Guy Span (2003b). No one sought an answer to Quinby’s most penetrating question (referring to the 1935 Public Utility Holding Company Act), "Who Is Behind This Campaign To Separate The Obviously Economical Combination Of Electric Railway And Its Power Plant?"
When the New York Railways Corporation converted streetcars to buses in 1935 and 1936, the new bus services were operated by the New York City Omnibus Corporation
New York City Omnibus Corporation
The New York City Omnibus Corporation was formed in 1926. It ran new bus services that replaced the New York Railways Corporation streetcars when they were dismantled in 1935/36. It purchased the Fifth Avenue Coach Company from The Omnibus Corporation in 1954 and renamed itself the 'Fifth Avenue...
which shared management with The Omnibus Corporation.
In 1936, National City Lines
National City Lines
National City Lines, Inc. , was a controversial company founded in Minnesota, United States in 1920 as a modest local transport company operating two buses which was reorganized into a holding company in 1936 with equity funding from General Motors, Firestone Tire, Standard Oil of California and...
, an existing bus operation which had been founded in 1920 by an E. Roy Fitzgerald and his brother was re-organized into a holding company
Holding company
A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow...
. In 1938, Pacific City Lines
Pacific City Lines
Pacific City Lines was a company formed in 1937 as a subsidiary to National City Lines in Oakland, California. Its function was to purchase streetcar systems in the western United States as part of what became known as the Great American streetcar scandal...
was formed to purchase streetcar systems in the western United States.
National City Lines raised funds to purchase transportation systems in cities "where street cars were no longer practicable" and to replace them with bus transit systems
Public transport bus service
Bus services play a major role in the provision of public transport. These services can take many forms, varying in distance covered and types of vehicle used, and can operate with fixed or flexible routes and schedules...
. Investors consisted of Firestone Tire, Standard Oil of California (now Chevron Corporation), Phillips Petroleum
Phillips Petroleum
Phillips Petroleum Company was founded in 1917 by L.E. Phillips and Frank Phillips, of Bartlesville, Oklahoma. Their younger brother Waite Phillips was the benefactor of Philmont Scout Ranch....
(now part of ConocoPhillips
ConocoPhillips
ConocoPhillips Company is an American multinational energy corporation with its headquarters located in the Energy Corridor district of Houston, Texas in the United States...
), General Motors, Mack Trucks
Mack Trucks
Mack Trucks is an American truck-manufacturing company and a former manufacturer of buses and trolley buses. A wholly owned subsidiary of Renault Véhicules Industriels since 1990, Mack Trucks is currently a subsidiary of AB Volvo. The company's headquarters are located in Greensboro, North Carolina...
(now a subsidiary of Volvo
Volvo
AB Volvo is a Swedish builder of commercial vehicles, including trucks, buses and construction equipment. Volvo also supplies marine and industrial drive systems, aerospace components and financial services...
), and the Federal Engineering Corporation.
In 1941, Pacific City Lines attempted a hostile takeover of the Key System
Key System
The Key System was a privately owned company which provided mass transit in the cities of Oakland, Berkeley, Alameda, Emeryville, Piedmont, San Leandro, Richmond, Albany and El Cerrito in the eastern San Francisco Bay Area from 1903 until 1960, when the system was sold to a newly formed public...
which operated electric trains and streetcars in Oakland, California
Oakland, California
Oakland is a major West Coast port city on San Francisco Bay in the U.S. state of California. It is the eighth-largest city in the state with a 2010 population of 390,724...
. Information about this only became public in 1955. American City Lines was organized to acquire local transportation systems in the larger metropolitan areas in various parts of the country in 1943 and merged with National City Lines in 1946.
As the 1940s progressed, the companies gained more power. National City Lines acquired the Los Angeles Railway
Los Angeles Railway
The Los Angeles Railway was a system of streetcars that operated in central Los Angeles, California and the immediate surrounding neighborhoods between from 1901 and 1963. Except for two short funicular railways it operated on tracks...
(a.k.a. the "Yellow Cars") in 1945 and converted many lines to buses. By 1946, the company acquired 64% of the stock in the Key System which operated electric trains and streetcars in Oakland, California
Oakland, California
Oakland is a major West Coast port city on San Francisco Bay in the U.S. state of California. It is the eighth-largest city in the state with a 2010 population of 390,724...
. Many of these conversions to busses resulted in public outcry.
That same year, Edwin J. Quinby, a recently retired naval lieutenant commander
Lieutenant commander (United States)
Lieutenant commander is a mid-ranking officer rank in the United States Navy, the United States Coast Guard, the United States Public Health Service Commissioned Corps, and the National Oceanic and Atmospheric Administration Commissioned Corps, with the pay grade of O-4 and NATO rank code OF-3...
, published a 24-page expose on the owners of National City Lines. It was addressed to "The Mayors; The City Manager; The City Transit Engineer; The members of The Committee on Mass-Transportation and The Tax-Payers and The Riding Citizens of Your Community" and began, "This is an urgent warning to each and every one of you that there is a careful, deliberately planned campaign to swindle you out of your most important and valuable public utilities–your Electric Railway System".Guy Span (2003b) Quinby had previously worked for the North Jersey Rapid Transit which operated in New York and had established up the Electric Rail Users Association in 1934 which lobbied
Lobbying
Lobbying is the act of attempting to influence decisions made by officials in the government, most often legislators or members of regulatory agencies. Lobbying is done by various people or groups, from private-sector individuals or corporations, fellow legislators or government officials, or...
on behalf of rail users and services. He was later to write a history of North Jersey Rapid Transit.
By 1947, the National City Lines owned or controlled 46 systems in 45 cities in 16 states.
On April 9, 1947, nine corporations and seven individuals (constituting officers and directors of certain of the corporate defendants) were indicted in the Federal District Court of Southern California
United States District Court for the Southern District of California
The United States District Court for the Southern District of California is the federal district court whose jurisdiction comprises the following counties in California: Imperial and San Diego. In terms of filed indictments, it is one of the busiest criminal districts in the United States...
on counts of 'conspiring
Conspiracy (civil)
A civil conspiracy or collusion is an agreement between two or more parties to deprive a third party of legal rights or deceive a third party to obtain an illegal objective....
to acquire control of a number of transit companies, forming a transportation monopoly
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
" and "Conspiring to monopolize sales of buses and supplies to companies owned by National City Lines" which had been made illegal by the 1890 Sherman Antitrust Act
Sherman Antitrust Act
The Sherman Antitrust Act requires the United States federal government to investigate and pursue trusts, companies, and organizations suspected of violating the Act. It was the first Federal statute to limit cartels and monopolies, and today still forms the basis for most antitrust litigation by...
.
The initial court case was in the Federal District Court of Southern California. In 1948, the venue was changed to the Federal District Court in Northern Illinois
United States District Court for the Northern District of Illinois
The United States District Court for the Northern District of Illinois is the trial-level court with jurisdiction over the northern counties of Illinois....
following an appeal to the United States Supreme Court
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
(in United States v. National City Lines Inc.) who felt that there was evidence of conspiracy to monopolize the supply of buses and supplies.
The San Diego Electric Railway
San Diego Electric Railway
The San Diego Electric Railway was a mass transit system in Southern California, USA, using streetcars and buses.The SDERy was established by "sugar heir," developer, and entrepreneur John D. Spreckels in 1892...
was sold to Western Transit Company, which was owned by a J. L. Haugh, Oakland, for an $5.5 million in 1948. Jessie Haugh was also president of Key Systems which later purchased Pacific Electric Railway
Pacific Electric Railway
The Pacific Electric Railway , also known as the Red Car system, was a mass transit system in Southern California using streetcars, light rail, and buses...
. The financial arrangements were not public at the time. In the same year the Baltimore Streetcar system
History of MTA Maryland
The Maryland Transit Administration was originally known as the Baltimore Metropolitan Transit Authority, then the Maryland Mass Transit Administration before it changed to its current name...
was purchased by National City Lines and started converting the system to buses.
In 1949, Firestone Tire, Standard oil of California, Phillips Petroleum, General Motors and Mack Trucks were convicted
Conviction
In law, a conviction is the verdict that results when a court of law finds a defendant guilty of a crime.The opposite of a conviction is an acquittal . In Scotland and in the Netherlands, there can also be a verdict of "not proven", which counts as an acquittal...
of conspiring to monopolize the sale of buses and related products to local transit companies controlled by National City Lines and other companies; they were acquitted
Acquittal
In the common law tradition, an acquittal formally certifies the accused is free from the charge of an offense, as far as the criminal law is concerned. This is so even where the prosecution is abandoned nolle prosequi...
of conspiring to monopolize the ownership of these companies. The verdicts were upheld on appeal
Appeal
An appeal is a petition for review of a case that has been decided by a court of law. The petition is made to a higher court for the purpose of overturning the lower court's decision....
in 1951. General Motors was fined $5,000 and H.C. Grossman, who was treasurer of General Motors and played a key role in the motorization campaigns and had also served as a director of Pacific City Lines was fined $1 along with various other individuals.Snell, Bradford C. (1974) p. 103 The court imposed a sanction of $5,000 on GM. In addition, the jury convicted H.C. Grossman, who was then treasurer of GM. Grossman had played a key role in the motorization campaigns and had served as a director of Pacific City Lines when that company undertook the dismantlement of the $100 million Pacific Electric system. The court fined Grossman the magnanimous sum of $1
According to Bradford Snell, GM's own testimony had shown that by the mid-1950s, GM and its agents had canvassed more than 1,000 electric railways and had motorized 90 percent, more than 900 systems.Snell, Bradford (1995) GM admitted in court documents that by the mid-1950s, its agents had canvassed more than 1,000 electric railways and that, of these, they had motorized 90 percent, more than 900 systems. The struggling Pacific Electric Railway
Pacific Electric Railway
The Pacific Electric Railway , also known as the Red Car system, was a mass transit system in Southern California using streetcars, light rail, and buses...
was purchased by Metropolitan Coach Lines in 1953. Jesse Haugh, who ran Metropolitan Coach Lines and was a former executive of Pacific City Lines had previously purchased San Diego Electric Railway though a separate company in 1948. The remaining streetcars converted to buses in the next two years.
The remains of the Pacific Electric Railway and of the Los Angeles Railway
Los Angeles Railway
The Los Angeles Railway was a system of streetcars that operated in central Los Angeles, California and the immediate surrounding neighborhoods between from 1901 and 1963. Except for two short funicular railways it operated on tracks...
were taken into public ownership in 1958 after which streetcars continued to be replaced with buses. Haugh sold the bus-based San Diego system to the city in 1966.
1970s to present
In 1970, Robert Eldridge Hicks, a Harvard Law student working on the Ralph NaderRalph Nader
Ralph Nader is an American political activist, as well as an author, lecturer, and attorney. Areas of particular concern to Nader include consumer protection, humanitarianism, environmentalism, and democratic government....
Study Group Report on Land Use in California, reported that there was a wider conspiracy to dismantle the streetcars. These allegations were first reported publicly in Politics of Land: Ralph Nader's Study Group Report on Land Use in California at pp. 410–12, compiled by Robert C. Fellmeth, Center for Study of Responsive Law, and published in 1973 by Grossman Publishers.
In 1974, U.S. government attorney Bradford Snell gave testimony before a United States Senate
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
inquiry into the causes of the decline of the transit car systems in the U.S. highlighting the National City Lines acquisitions as the primary cause.Snell, Bradford C. (1974) it demonstrates General Motors to be a sovereign economic state, whose common control of auto, truck, bus and locomotive production was a major factor in the displacement of rail and bus transportation by cars and trucks Joseph Alioto
Joseph Alioto
Joseph Lawrence Alioto was the 36th mayor of San Francisco, California, from 1968 to 1976.-Biography:...
, mayor of San Francisco, and also an antitrust attorney testified that "General Motors and the automobile industry generally exhibit a kind of monopoly evil", also that GM "has carried on a deliberate concerted action with the oil companies and tire companies...for the purpose of destroying a vital form of competition; namely, electric rapid transit." Tom Bradley
Tom Bradley (politician)
Thomas J. "Tom" Bradley was the 38th Mayor of Los Angeles, California, serving in that office from 1973 to 1993. He was the first and to date only African American mayor of Los Angeles...
, mayor of Los Angeles testified, saying that GM, through its subsidiaries, had "scrapped" the Pacific Electric and Los Angeles streetcar systems leaving the electric train system "totally destroyed".Slater, Cliff (1997), Mayor Alioto, himself a nationally prominent antitrust attorney, congratulated Snell on the "excellence" of his "very fine monograph." Alioto testified that, "General Motors and the automobile industry generally exhibit a kind of monopoly evil" and that GM "has carried on a deliberate concerted action with the oil companies and tire companies...for the purpose of destroying a vital form of cotric rapid transit. ... Mayor Bradley also testified, in absentia, saying that General Motors, through its American City Lines and Pacific City Lines affiliates, "scrapped" the Pacific Electric and Los Angeles streetcar systems to "motorize" Los Angeles. After GM was through, the "electric train system was totally destroyed."
General Motors published a rebuttal the same year titled 'The Truth About American Ground Transport' The role of General Motors and the motor bus in the decline of mass transit was further explored in the doctoral thesis of David Lipson in 1987.
In the 1988 film, Who Framed Roger Rabbit
Who Framed Roger Rabbit
Who Framed Roger Rabbit is a 1988 American fantasy-comedy-noir film directed by Robert Zemeckis and released by Touchstone Pictures. The film combines live action and animation, and is based on Gary K. Wolf's novel Who Censored Roger Rabbit?, which depicts a world in which cartoon characters...
, the scandal is masked and set in Los Angeles.Bianco, Martha (1988) Script-writers Jeffrey Price and Peter S. Seaman
Jeffrey Price and Peter S. Seaman
Jeffrey Price and Peter S. Seaman are American screenwriters who have worked together on several projects, but are best known for Disney/Amblin's film Who Framed Roger Rabbit.-Filmography:*Trenchcoat *Who Framed Roger Rabbit...
explained: "the Red Car plot, suburb
Suburb
The word suburb mostly refers to a residential area, either existing as part of a city or as a separate residential community within commuting distance of a city . Some suburbs have a degree of administrative autonomy, and most have lower population density than inner city neighborhoods...
expansion, urban
Urban culture
Urban culture is the culture of towns and cities. In the United States, Urban culture may also sometimes be used as a euphemistic reference to contemporary African American culture.- African American culture :...
and political corruption
Political corruption
Political corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by...
really did happen," Price stated. "In Los Angeles, during the 1940s, car and tire companies teamed up against the Pacific Electric Railway
Pacific Electric Railway
The Pacific Electric Railway , also known as the Red Car system, was a mass transit system in Southern California using streetcars, light rail, and buses...
system and bought them out of business. Where the freeway runs in Los Angeles is where the Red Car used to be."
In recent decades, many cities have started constructing new streetcar systems, light rail, and other public transport systems. However, most US cities still have high levels of automobile dependency
Automobile dependency
Automobile dependency is a term coined by Professors Peter Newman and Jeff Kenworthy to capture the predicament of most cities in the United States, Canada, Australia and New Zealand, and to a lesser extent, large cities in Europe....
with limited or non-existent levels of public transport, which are normally bus-based and are of limited frequency and quality and typically only used by those with no other options. Commuter rail has been effectively eliminated in many parts of the USA. Regional rail
Regional rail
Commuter rail, also called suburban rail, is a passenger rail transport service that primarily operates between a city center, and the middle to outer suburbs beyond 15km and commuter towns or other locations that draw large numbers of commuters—people who travel on a daily basis...
is limited and the only national passenger rail service has been operated by the government-subsidized Amtrak
Amtrak
The National Railroad Passenger Corporation, doing business as Amtrak , is a government-owned corporation that was organized on May 1, 1971, to provide intercity passenger train service in the United States. "Amtrak" is a portmanteau of the words "America" and "track". It is headquartered at Union...
since 1971.
Other contributing factors
A number of analyses have suggested that the eventual replacement of electric-powered street cars with buses was inevitable and indeed occurred within the same time-frame in many other places where National City Lines did not have an involvement.Slater, Cliff (1997), The issue is whether or not the buses that replaced the electric streetcars were economically superior. Without GM's interference would the United States today have a viable streetcar system? This article makes the case that, GM or not, under a less onerous regulatory environment, buses would have replaced streetcars even earlier than they actually did. It has been estimated that nationwide, the ultimate reach of the alleged conspirators extended to only about 10 percent of all transit systems—sixty-odd out of some six hundred—and yet nearly every other US city also got rid of street cars (as happened with many of the tramcar systems in the British Isles and France)."Other significant factors included:
- Difficult labor relationsLabor relationsIndustrial relations is a multidisciplinary field that studies the employment relationship. Industrial relations is increasingly being called employment relations because of the importance of non-industrial employment relationships. Many outsiders also equate industrial relations to labour relations...
, and tight regulation of fares, routes, and schedules took their toll on city streetcar systems in the first third of the 20th century. By 1916, street railroads nationwide were wearing out their equipment faster than they were replacing it. While operating expenses were generally recovered, money for long-term investment was generally diverted elsewhere. - The Dual Contracts signed by operators in New York greatly restricted their ability to increase fares at a time of high inflation, however these contracts also allowed the city to "recapture" the lines and operate them.
- The Public Utility Holding Company Act of 1935Public Utility Holding Company Act of 1935The Public Utility Holding Company Act of 1935 , , also known as the Wheeler-Rayburn Act, was a law that was passed by the United States Congress to facilitate regulation of electric utilities, by either limiting their operations to a single state, and thus subjecting them to effective state...
, an antitrust law, prohibited regulated electric utilities from operating unregulated businesses, which included most streetcar lines. The act also placed restrictions on services operating across state lines. Many holding companies operated both streetcars and electric utilities across several states; those that owned both types of businesses were forced to sell one. Declining streetcar business was often far less valuable than the growing consumer electric business, and many streetcar systems were put up for sale. The newly independent lines, no longer associated with an electric utility holding company, had to purchase electricity at full price from their former parents, further shaving their already thin margins. - The Great DepressionGreat DepressionThe Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
left many streetcar systems short of funds for maintenance and capital improvements. - The US Government responded to the Great Depression with huge public investmentInvestmentInvestment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
in (or subsidySubsidyA subsidy is an assistance paid to a business or economic sector. Most subsidies are made by the government to producers or distributors in an industry to prevent the decline of that industry or an increase in the prices of its products or simply to encourage it to hire more labor A subsidy (also...
of, depending on your viewpoint) the Interstate Highway SystemInterstate Highway SystemThe Dwight D. Eisenhower National System of Interstate and Defense Highways, , is a network of limited-access roads including freeways, highways, and expressways forming part of the National Highway System of the United States of America...
(See: Federal Aid Road Act of 1916Federal Aid Road Act of 1916The Federal Aid Road Act of 1916, 39 Stat. 355, was enacted on July 11, 1916, and was the first federal highway funding legislation in the United States. It was introduced by Rep. Dorsey W. Shackleford of Missouri, then amended by Sen. John H. Bankhead of Alabama to conform with model legislation...
, Federal Aid Highway Act of 1921Federal Aid Highway Act of 1921 (Phipps Act)The Federal Aid Highway Act of 1921, November 9, 1921, ,sponsored by Sen. Lawrence C. Phipps of Colorado, defined the Federal Aid Road program to develop an immense national highway system. The plan was crafted by the head of the National Highway Commission, Thomas MacDonald and was the first...
, Federal Aid Highway Act of 1956Federal Aid Highway Act of 1956The Federal-Aid Highway Act of 1956, popularly known as the National Interstate and Defense Highways Act , was enacted on June 29, 1956, when Dwight D. Eisenhower signed the bill into law...
and Highway Trust Fund). The American Highway Users AllianceAmerican Highway Users AllianceThe American Highway Users Alliance , is USA a non-profit advocacy group representing many businesses in the automotive and road construction sector...
, formed in 1932 by General MotorsGeneral MotorsGeneral Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
has supported and encouraged this policy ever since. - Streetcar lines were built using funds from private investors and were required to pay numerous taxes as well as dividends. By contrast, the new motorists were able to use roads which were constructed and maintained by the government from tax income. In addition parking facilities were generally available without charge at most retail, leisure and employment destinations with the costs being paid by all users including non-motorists.
- Federal Fuel taxes, which were introduced in 1956, were paid into a new Highway Trust Fund which could only fund highway construction until 1983 when some 10% was diverted into a new 'Mass Transit Account'.
- Streetcar operators were sometimes required to fund reinstatement of lines following the construction of the freeways system (see Transportation in metropolitan DetroitTransportation in metropolitan DetroitTransportation in metropolitan Detroit is provided by a comprehensive system of transit services, airports, and an advanced network of freeways which interconnect the city and region. The Michigan Department of Transportation administers the region's network of major roads and freeways...
). - Urban sprawlUrban sprawlUrban sprawl, also known as suburban sprawl, is a multifaceted concept, which includes the spreading outwards of a city and its suburbs to its outskirts to low-density and auto-dependent development on rural land, high segregation of uses Urban sprawl, also known as suburban sprawl, is a...
, white flightWhite flightWhite flight has been a term that originated in the United States, starting in the mid-20th century, and applied to the large-scale migration of whites of various European ancestries from racially mixed urban regions to more racially homogeneous suburban or exurban regions. It was first seen as...
and suburbanizationSuburbanizationSuburbanization a term used to describe the growth of areas on the fringes of major cities. It is one of the many causes of the increase in urban sprawl. Many residents of metropolitan regions work within the central urban area, choosing instead to live in satellite communities called suburbs...
created land-use patterns which could not be easily served by streetcars, or indeed by any public transport. - Every first time purchaser of an automobileAutomobileAn automobile, autocar, motor car or car is a wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor...
deprived the streetcars operator of income whilst simultaneously created additional traffic congestion which often reduced service speeds and thereby increased their operational costs and making the services less attractive to the remaining users. - The streetcar systems were either privately held companiesPrivately held companyA privately held company or close corporation is a business company owned either by non-governmental organizations or by a relatively small number of shareholders or company members which does not offer or trade its company stock to the general public on the stock market exchanges, but rather the...
or public companiesPublic companyThis is not the same as a Government-owned corporation.A public company or publicly traded company is a limited liability company that offers its securities for sale to the general public, typically through a stock exchange, or through market makers operating in over the counter markets...
and were often available for purchase particularly at a time of economic difficulty when the thriving automobile sector had money to invest with obvious benefits to their shareholders. - Randal O'TooleRandal O'TooleRandal O'Toole is an American public policy analyst. Although O'Toole studied economics at the University of Oregon, he did not receive a degree in economics...
of the Cato InstituteCato InstituteThe Cato Institute is a libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Edward H. Crane, who remains president and CEO, and Charles Koch, chairman of the board and chief executive officer of the conglomerate Koch Industries, Inc., the largest privately held...
, a libertarian think tankThink tankA think tank is an organization that conducts research and engages in advocacy in areas such as social policy, political strategy, economics, military, and technology issues. Most think tanks are non-profit organizations, which some countries such as the United States and Canada provide with tax...
funded by the oil industry, has suggested that streetcars were naturally replaced by the private automobile and the bus following the development of reliable internal combustion engineInternal combustion engineThe internal combustion engine is an engine in which the combustion of a fuel occurs with an oxidizer in a combustion chamber. In an internal combustion engine, the expansion of the high-temperature and high -pressure gases produced by combustion apply direct force to some component of the engine...
s.
Myths and mysteries
The facts around what actually happened have only come out slowly. Businesses were registered in different states; some, such as National City Lines were incorporated in Delaware, which does not require disclosure of any public information about directors or shareholders. It is clear that the parties involved did not want to be traced. It is inevitable that myths have built up and that there are still mysteries.Myths:
- According to Snell's testimony the New York, New Haven and Hartford RailroadNew York, New Haven and Hartford RailroadThe New York, New Haven and Hartford Railroad , was a railroad that operated in the northeast United States from 1872 to 1968 which served the states of Connecticut, New York, Rhode Island, and Massachusetts...
line in New York was profitable until it was acquired and converted to diesel trains.Snell, Bradford (1995) Members of GM's special unit went to, among others, the Southern Pacific, owner of Los Angeles' Pacific Electric, the world's largest interurban, with 1,500 miles of track, reaching 75 miles from San Bernardino, north to San Fernando, and south to Santa Ana; the New York Central, owner of the New York State Railways, 600 miles of street railways and interurban lines in upstate New York; and the New Haven, owner of 1,500 miles of trolley lines in New York, Connecticut, Rhode Island and Massachusetts. In each case, by threatening to divert lucrative automobile freight to rival carriers, they persuaded the railroad (according to GM's own files) to convert its electric street cars to motor buses -- slow, cramped, foul-smelling vehicles whose inferior performance invariable led riders to purchase automobiles. In reality the line had been in financial difficulty for years and had filed for bankruptcy in 1935. The company had also been indicted for "conspiracy to monopolize interstate commerce by acquiring the control of practically all the transportation facilities of New England" in 1914. - "GM killed the New York street cars". In reality the New York Railways Company had entered receivership in 1919, 6 years before it was bought by the New York Railways CorporationNew York Railways CorporationThe New York Railways Corporation was a railway company that operated street railways in Manhattan, New York City, United States between 1925 and 1936. During 1935/1936 it converted its remaining lines to bus routes which were operated by the New York City Omnibus Corporation, and now operated by...
with funding from GM and others. - "GM Killed the Red cars in Los Angeles". In reality Pacific Electric RailwayPacific Electric RailwayThe Pacific Electric Railway , also known as the Red Car system, was a mass transit system in Southern California using streetcars, light rail, and buses...
(who operated the 'red cars') had been hemorrhaging routes as traffic congestion got much worse with growing prosperity and car ownership levels after the end of WW2 long before GM got involved in 1953Guy Span (2003a) Snell’s report can also be misleading (apparently intentionally so). Snell says, "In 1940, GM, Standard Oil and Firestone assumed an active control in Pacific (City Lines)… That year, PCL began to acquire and scrap portions of the $100 million Pacific Electric System (of Roger Rabbit fame)." This statement implies that PCL was getting control of Pacific Electric, when in reality, all they did was acquire the local streetcar systems of Pacific Electric in Glendale and Pasadena and then convert them to buses. Many superficial readers jump on this statement as proof that GM moved in the Red Cars of the Pacific Electric. The ugly little fact is that PCL never acquired Pacific Electric (it was owned by Southern Pacific Railroad until 1953). (There is however a more compelling case in relation to the Los Angeles RailwayLos Angeles RailwayThe Los Angeles Railway was a system of streetcars that operated in central Los Angeles, California and the immediate surrounding neighborhoods between from 1901 and 1963. Except for two short funicular railways it operated on tracks...
'Yellow Cars'.) - The Salt Lake city system is mentioned in the 1949 court papers. However, according to one source the city's system was only purchased by National City Lines' in 1944 at a time where all by one route had already been withdrawn and the withdrawal of this last that line had been approved three years earlier. (See Utah Transit AuthorityUtah Transit AuthorityThe Utah Transit Authority operates a public transportation system throughout the Wasatch Front of Utah, United States. It operates fixed route buses, express buses, ski buses, three light rail lines , and a commuter rail line from Salt Lake City to Pleasant View, north of Ogden. UTA is based in...
)
Relevant actors
The businesses and people in this section have all been referenced by one other external sources in relation to the 'streetcar scandal'.Holding companies for transport operators
- National City LinesNational City LinesNational City Lines, Inc. , was a controversial company founded in Minnesota, United States in 1920 as a modest local transport company operating two buses which was reorganized into a holding company in 1936 with equity funding from General Motors, Firestone Tire, Standard Oil of California and...
(1920-?) Main holding company for public transport operators - The Omnibus CorporationThe Omnibus CorporationThe Omnibus Corporation was formed in 1925 and acquired control of Fifth Avenue Coach Company and the Chicago Motor Coach Company with John D. Hertz as chairman. In 1953 it purchased Yellow Drive-It-Yourself from General Motors and sold its interests in public transport...
(1925–1954) Started by John D. Hertz, who was a director of GM Also known as the 'Omnibus Corporation of America' - New York City Omnibus CorporationNew York City Omnibus CorporationThe New York City Omnibus Corporation was formed in 1926. It ran new bus services that replaced the New York Railways Corporation streetcars when they were dismantled in 1935/36. It purchased the Fifth Avenue Coach Company from The Omnibus Corporation in 1954 and renamed itself the 'Fifth Avenue...
(1926–1962) Shared management with The Omnibus CorporationGuy Span (2003a) Later known as 'Fifth Avenue Coach Lines' - United Cities Motor Transport (1932?-1934?) Was 'censored by the American Transit Association for its obviously self-serving role'.Guy Span (2003b), GM (significantly) formed a new subsidiary, United Cities Motor Transport (UCMT) and looked around to gobble up transit companies to replace its equipment with GM buses.
- Pacific City LinesPacific City LinesPacific City Lines was a company formed in 1937 as a subsidiary to National City Lines in Oakland, California. Its function was to purchase streetcar systems in the western United States as part of what became known as the Great American streetcar scandal...
(1937–1948) Merged into National City Lines in 1948 - American City Lines (1943–1946) Merged with National City Lines 1946.
Personnel
- William Randolph HearstWilliam Randolph HearstWilliam Randolph Hearst was an American business magnate and leading newspaper publisher. Hearst entered the publishing business in 1887, after taking control of The San Francisco Examiner from his father...
American newspaper magnate and leading newspaper publisher who, according to Guy Span "had been supporting a populist campaign against the so-called "Traction Trusts" for years"Guy Span (2003a) The real villain of this piece was a Tammany Hall hack mayor, John F. Hylan, supported by the Hearst Papers. William Randolph Hearst had been supporting a populist campaign against the so-called "Traction Trusts" for years and his crony was probably just following orders. - John D. HertzJohn D. HertzJohn Daniel Hertz, Sr. was an American businessman, thoroughbred racehorse owner, and philanthropist.-Biography:...
President of many relevant businesses and main board member of General Motors - John Francis Hylan Mayor of New York from 1918 to 1925 who complained about the power of the "bankers and Rockefeller-Standard Oil interests"
- Alfred P. SloanAlfred P. SloanAlfred Pritchard Sloan, Jr. was an American business executive in the automotive industry. He was a long-time president, chairman, and CEO of General Motors Corporation...
Head of General Motors - Charles Erwin WilsonCharles Erwin WilsonCharles Erwin Wilson , American businessman and politician, was United States Secretary of Defense from 1953 to 1957 under President Eisenhower. Known as "Engine Charlie", he previously worked as CEO for General Motors. In the wake of the Korean War, he cut the defense budget significantly.-Early...
Former head of General Motors, later Defense SecretaryUnited States Secretary of DefenseThe Secretary of Defense is the head and chief executive officer of the Department of Defense of the United States of America. This position corresponds to what is generally known as a Defense Minister in other countries...
Guy Span (2003b) So let’s not forget the words of Charlie Wilson when asked if there were a conflict with his former employer (GM) on his possible appointment to Secretary of Defense in 1953. He replied, "I cannot conceive of one because for years, I thought what was good for our country was good for General Motors, and vice versa.
Manufacturing companies
In addition to the six business indicted in 1947:
- Yellow Cab Manufacturing CompanyYellow Cab Manufacturing CompanyThe Yellow Cab Manufacturing Company was established in 1920 by John D. Hertz and was associated with the Yellow Cab Company which Hertz also owned.-History:The Yellow Cab Manufacturing Company was established in 1920 by John D...
Manufacturer of Taxicabs and parent company of 'Yellow Coach Manufacturing Company'. - Yellow Coach Manufacturing Company Major manufacturer of Buses Coaches, acquired by General Motors
Finance organisations
- General Motors Acceptance CorporationGeneral Motors Acceptance CorporationAlly Financial Inc. is a bank holding company headquartered in Detroit, Michigan, United States at Tower 200 of the Renaissance Center. The bank slogan has more than 15 million customers worldwide and provides a range of financial services including auto financing, insurance, mortgage services, and...
There were allegations that the organization encouraged conversion to buses by offering the operator's banks deposits in return for conversion to buses.Guy Span (2003b) According to Freedom of Information Act (F.O.I.A.) documents, the transit system’s bank would get a visit from GM promising deposits if the bank would lean on the transit company to not buy more streetcars. Converting to bus was easy, with the local banks assistance and, of course, easy financing from GMAC (General Motors Acceptance Corporation).
Training
- General Motors Institute Training city planners with alleged bias towards buses.Guy Span (2003b) City planning was a relatively new field in the 1930s and few accredited institutions taught the subject. However, one such accredited institution did and it was GMI (General Motors Institution which took over the Flint Institute of Technology in 1926). And you can imagine what the fledgling city planners learned: traffic engineering (buses are good; railways are bad).
Advocacy group
Advocacy group
Advocacy groups use various forms of advocacy to influence public opinion and/or policy; they have played and continue to play an important part in the development of political and social systems...
s
- American Highway Users AllianceAmerican Highway Users AllianceThe American Highway Users Alliance , is USA a non-profit advocacy group representing many businesses in the automotive and road construction sector...
. Founded in 1932 by Alfred P. Sloan, president of General Motors
Affected transit lines
- Chicago North Shore LineChicago North Shore and Milwaukee RailroadThe Chicago North Shore and Milwaukee Railroad, often called the North Shore Line, was an interurban railroad line that operated between Chicago, Illinois, and Milwaukee, Wisconsin, until its abandonment in 1963.- Early history :...
Guy Span (2003b) Outstanding systems like the Chicago North Shore Line (which operated from the northern suburbs into Chicago on the elevated loop until 1962) were allowed to go bankrupt and be scrapped - Cleveland Railway (Ohio)Snell, Bradford (1995) Indeed, in San Francisco and Seattle, it arranged for one of its former regional bus managers, the ex-president of its United Cities subsidiary, to become manager and transit czar. In northern New Jersey, Atlanta, Kansas City, Denver, Dallas, and Houston, it relied on banking connections to facilitate abandonment; in Chicago and Milwaukee, it relied on Greyhound, Omnibus, City Coach, and National; in Portland, on United Cities, Pacific Cities and Manning Transportation; in Miami, Cleveland, Cincinnati, Louisville, Memphis, and Pittsburgh, on freelance agents and former GM and National officials; in New Orleans and Indianapolis, on gifts to high-placed executives; in Minneapolis, on unprincipled gangsters. Details are in short supply.
- Key SystemKey SystemThe Key System was a privately owned company which provided mass transit in the cities of Oakland, Berkeley, Alameda, Emeryville, Piedmont, San Leandro, Richmond, Albany and El Cerrito in the eastern San Francisco Bay Area from 1903 until 1960, when the system was sold to a newly formed public...
- Los Angeles RailwayLos Angeles RailwayThe Los Angeles Railway was a system of streetcars that operated in central Los Angeles, California and the immediate surrounding neighborhoods between from 1901 and 1963. Except for two short funicular railways it operated on tracks...
"Yellow Cars" - History of MTA MarylandHistory of MTA MarylandThe Maryland Transit Administration was originally known as the Baltimore Metropolitan Transit Authority, then the Maryland Mass Transit Administration before it changed to its current name...
- New York and Harlem RailroadNew York and Harlem RailroadThe New York and Harlem Railroad was one of the first railroads in the United States, and possibly also the world's first street railway. Designed by John Stephenson, it was opened in stages between 1832 and 1852 between Lower Manhattan to and beyond Harlem...
- Pacific Electric RailwayPacific Electric RailwayThe Pacific Electric Railway , also known as the Red Car system, was a mass transit system in Southern California using streetcars, light rail, and buses...
"Red Cars" using 'Metropolitan Coach Lines' - San Diego Electric RailwaySan Diego Electric RailwayThe San Diego Electric Railway was a mass transit system in Southern California, USA, using streetcars and buses.The SDERy was established by "sugar heir," developer, and entrepreneur John D. Spreckels in 1892...
- Philadelphia trolleys
- Streetcars in St. LouisStreetcars in St. LouisStreetcars in St. Louis, Missouri operated as part of the transportation network of St. Louis from the middle of the 19th century through the early 1960s. During the first forty years of the streetcar in the city, a variety of private companies operated several dozen lines; from the turn of the...
. Mentioned in the 1949 court papers.
See also
- Brooklyn–Manhattan Transit Corporation (A corporation that was "recaptured" by the city using the Dual Contracts provisions)
- Chicago Motor Coach CompanyChicago Motor Coach CompanyThe Chicago Motor Coach Company was founded in 1917 by John D. Hertz to provide Chicago's first bus transportation services, primarily in places where streetcars were not able to travel. The company grew rapidly and was purchased by the Chicago Transit Authority in 1952.-History:John D. Hertz...
A bus transit company established by John Hertz in Chicago in 1917 - Dual Contracts Contracts between New York City and subway operators which restricted fares, enforced share profits and allowed the city to 'recapture' and operate lines
- Transportation in metropolitan DetroitTransportation in metropolitan DetroitTransportation in metropolitan Detroit is provided by a comprehensive system of transit services, airports, and an advanced network of freeways which interconnect the city and region. The Michigan Department of Transportation administers the region's network of major roads and freeways...
(Details of a system that was already in public ownership) - Toronto streetcar systemToronto streetcar systemThe Toronto streetcar system comprises eleven streetcar routes in Toronto, Ontario, Canada, operated by the Toronto Transit Commission , and is the largest such system in the Americas in terms of ridership, number of cars, and track length. The network is concentrated primarily in downtown and in...
, which received much of the rolling stockToronto streetcar system rolling stockThe rolling stock of the Toronto streetcar system includes hundreds of cars were acquired from the TTCs predecessor companies, the Toronto Railway, and Toronto Civic Railways, among others...
from affected systems - List of streetcar systems in the United States
- List of trolleybus systems in the United States
Further reading
- Adler, Sy "The Transformation of the Pacific Electric Railway: Bradford Snell, Roger Rabbit, and the Politics of Transportation in Los Angeles." Urban Affairs Quarterly, Volume 27, Number 1, 1991.
- Bottles, Scott L. Los Angeles and the Automobile, University of California Press, 1987. ISBN 0-520-05795-3.
- Black, Edwin "Internal Combustion: How Corporations and Governments Addicted the World to Oil and Derailed the Alternatives," especially Chapter 10, St. Martins Press 2006
- Fellmeth, Robert C., Project Director, "Politics of Land: Ralph Nader's Study Group Report on Land Use in California," pp. 410–14, Grossman Publishers, NY 1973
- Fischel, W.A. (2004). "An Economic History of Zoning and a Cure for its Exclusionary Effects," Urban Studies 41(2), 317-40.
- Goddard, Stephen B. Getting There: The Epic Struggle between Road and Rail in the American Century, Basic Books, 1994
- Kwitny, Jonathan, "The Great Transportation Conspiracy: a juggernaut named desire," Harper's, February 1981, pp. 14–15, 18, 20, 21
- Norton, Peter D. Fighting Traffic: The Dawn of the Motor Age in the American City, MIT Press, 2008. ISBN 0-262-14100-0
External links
- "The Great GM Conspiracy Legend: GM and the Red Cars", Stan Schwarz
- "Conflict of Transportation Competitors", Akos Szoboszlay
- "Did General Motors destroy the LA mass transit system?", The Straight Dope, 10-Jan-1986
- "Taken for a Ride", Jim Klein and Martha Olson - a 55-minute film first shown on PBS in August 1996
- "Taken for a Ride", Jim Klein and Martha Olson - Free on YouTube
- States v. National City Lines, Inc., 186 F.2d 562 (1951)
- Yellow Coach - 1923-1943- GMC Truck & Coach Division, General Motors Corp. - 1943-present - Detroit, Michigan