General Motors streetcar conspiracy

The Great American Streetcar Scandal, also known as the General Motors streetcar conspiracy refers to General Motors, Firestone Tire, Standard Oil of California and Phillips Petroleum forming National City Lines (NCL) holding company, which acquired most streetcar systems throughout the United States, dismantled them, and replaced them with buses in the early 20th Century. The scandal alleges that NCL's companies had an ulterior motive to forcibly gain mass use of the automobile among the U.S. population by buying up easy-to-use mass light rail transportation countrywide and dismantling it.

Background

Between 1936 and 1950, National City Lines bought out more than 100 electric surface-traction systems in 45 cities, including Detroit, New York, Oakland, Philadelphia, St. Louis, Salt Lake City, Tulsa, Baltimore, Minneapolis, Seattle and Los Angeles, and replaced them with GM buses. The scandal is rehashed in books like Fast Food Nation; testimony by Government Attorney Bradford Snell to a United States Senate inquiry in 1974 gave the scandal its current prevalence and weight in U.S. popular culture.

Depending on who is telling the story, to one degree or another, the scandal also invokes the Interstate Highway System as an additional culprit, since the system began its initial construction in California after the large-scale dismantling of that state's trolley network. (Some documentation of the California rapid transit interurban systems — some pieces of which survive as local and semi-local transport systems — is provided by historians such as The Electric Railway Historical Association of Southern California.)

Technically, the scandal would rightly be called the National City Lines scandal or the General Motors-Firestone-Standard Oil-National City Lines scandal. However, GM was indeed the most prominent of the companies engaged in this behavior and had engaged in similar behavior before the scandal took place. Alfred P. Sloan, Jr., long-time president of GM in the early 20th century, had developed a business strategy to expand auto sales and maximize profits by eliminating streetcars; according to GM's own files ^{[citation needed]}, Sloan had established a special unit in 1922 within the corporation, charged, among other things, with the task of replacing the United States' electric railways with cars, trucks, and buses.

Elements

There are several qualifiers to this situation. The trolley industry's problems were also deeply financial and structural (ancient equipment, etc.) in their own right, and these issues did largely predate auto's interest in getting rid of that industry, so some transportation historians argue that the conversion to buses would likely have occurred anyway, given that streetcar ridership was steadily declining through this period due to factors which included:

Deterioration of streetcar systems during World War II, during which no new rolling stock and few replacement parts were manufactured;
Politically or socially-motivated opponents of streetcar systems like Robert Moses and New York City Mayor Fiorello LaGuardia (Between 1926 and 1936 GM acquired New York Railways, but left it languishing under continued underinvestment and poor service);
Federal subsidy of competing systems;
Low fare revenues leading to inability to upgrade rolling stock, causing further erosion of ridership;
Legislation that prevented power utilities from owning trolley lines, e.g., Public Utility Holding Company Act of 1935;
Rising real estate prices, leading to transit companies selling off real estate holdings to remain financially viable;
Competition with automobiles for road space, and
Suburbanization.

Los Angeles had two separate trolley systems, known as the Red Cars and the Yellow Cars. National City Lines owned only the Yellow Cars, yet both ended up being dismantled. It is worth noting that the two systems were often used in conjunction by travelers, and cutting service on one line made the other less convenient as compared to automobiles. Regardless, during this period automobile ownership was rising everywhere in the United States, in cities both with and without GM having purchased the local streetcar systems.

The Great American Streetcar Scandal ultimately reached the United States Supreme Court in United States v. National City Lines Inc. 334 U.S. 573, 596 (1948) ("National City I")[1] which reversed lower court rulings on the case. The proceedings were against General Motors, its subsidiary National City Lines, and seven other corporations. They were indicted on two counts under the US Sherman Antitrust Act. The charges, in summary, were conspiracy to acquire control of a number of transit companies, forming a transportation monopoly (all defendants were acquitted on this charge), and conspiring to monopolize sales of buses and supplies to companies owned by National City Lines (General Motors alone was convicted on this charge). The judge presiding thought that the scandal was of little real consequence. GM was fined $5000 and each executive was ordered to pay a fine of $1.

Opposing Argument

Streetcars faded in popular appeal as the rise of the private automobile signaled greater freedom for the individual in choosing where and when to travel. By 1929, over half of the US householders owned a car. People were choosing to drive their own cars instead of riding on public transportation systems. In addition, rail lines must be rebuilt after approximately three decades of service, entailing transit inconvenience and high added costs that require new bond measures to fund.^[1]

External links

^ A Desire Named Streetcar: How Federal Subsidies Encourage Wasteful Local Transit Systems

[1] A Desire Named Streetcar: How Federal Subsidies Encourage Wasteful Local Transit Systems

[1]

General Motors streetcar conspiracy

Background

Elements

Opposing Argument

See also

Further reading

External links