The Predatory Conspiracy to Wipe Out Street Cars


In the first quarter of the last century, street cars were an integral part of most American cities. By 1920, valuable franchises and infrastructure had been created. There were 1,200 electric street cars and interurban railways. Street cars were 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 with a population of more than 2,500 people had its own electric rail system.

But by the 1920s, street cars were competing with the automobile for the right of way on urban streets and roads. Once cars began driving on streetcar tracks, the trolley was slowed down dramatically.

“Once just 10 percent or so of people were driving, the tracks were so crowded that [the streetcars] weren’t making their schedules,” Peter Norton, a historian at the University of Virginia and author of “Fighting Traffic: The Dawn of the Motor Age in the American City, told Vox.

In some places, like Chicago, streetcars retained dedicated rights of way and survived. Pretty much everywhere else, they were doomed.

“With 160,000 cars cramming onto Los Angeles streets in the 1920s, mass-transit riders complained of massive traffic jams and hour-long delays,” Norton said.

What Could Have Been

Today, trams and streetcars are visible in many European cities. In Prague, for example, one doesn’t even need a car in the city centrum, as public transit dominates and automobiles are a muted inconvenience.

As you can see in the following video clip, Prague trams are quick and get you to your destination in a snap. Notice how cars must plod along while trams fly by. Plus with a car you need to screw around with parking. Somebody has their priorities straight in this city. Wait times at tram stops are short, usually no more than 10 minutes, and drivers keep strict and dependable schedules. In Prague, some streets are dedicated to trams. Block a tram and you’ll get a hefty ticket.

There are large modern trams and, as you see in the video, older-generation models as well. Once in awhile the classic older Skoda “retros” roll by. Notice at minute 00:02:15 and 00:06:00 that there’s single-line private seating. Although graffiti is sometimes visible, they’re kept clean and in good repair. There’s low tolerance for troublemakers and bums in this system, as public safety is paramount. Passengers are incredibly polite and civil.

Since Prague is a very pedestrian-friendly city, any necessary walking is more a joy than a hassle. Notice how active the wide sidewalks are in the clip. Also notice the urban design of buffering the pedestrians from the street with trees. Actually, for someone not used to this system, one needs to be alert to moving trams, more so than cars. For longer trips, there’s an underground metro system and a national rail system with train cars of varied quality and price. There are buses as well but generally speaking trams are the preference.

Prague Trams Extravaganza 2 & 3 October 2018

Back in the USA

In addition to having to share the roads, city contracts required streetcar companies to keep the pavement on the roads surrounding the tracks in good shape. This meant that the companies were effectively subsidizing automobile travel even as it cannibalized their business.

Many electric lines — especially in western states — were tied into other real estate or transportation enterprises. Pacific Electric and Los Angeles Railway companies were in essence loss leaders for property development and long-haul shipping. Accordingly, there was little reinvestment, and they operated as slash-and-burn stripping operations.

At every turn, the urban tram systems were worked over by a monopolistic racketeering business strategy crafted by Alfred P. Sloan, Jr., the MIT-trained genius behind General Motors. In 1921, GM lost $65 million, leading Sloan to conclude that the auto market was saturated, that those who desired cars already owned them and that the only way to increase GM’s sales and restore its profitability was to eliminate its principal rival, the electric lines.

In 1922, according to GM’s own files, Sloan established a special unit within the corporation which was charged by any means necessary, with the task of replacing America’s electric railways with cars, trucks and buses.

When tram companies tried to seek fare increases, the auto lobby was there organizing against it. Many contracts had permanently locked companies into a 5-cent fare, which wasn’t indexed to inflation.

GM, for decades, was the nation’s largest shipper of freight over railroads, which controlled some of America’s most extensive railways. By wielding freight traffic as a club, GM persuaded railroads to abandon their electric rail subsidiaries.

Members of GM’s special unit went to, among others, Southern Pacific, owner of Los Angeles’ Pacific Electric, the world’s largest interurban railway with 1,500 miles of track, reaching 75 miles from the East in San Bernardino to the North to San Fernando and to the South in Santa Ana. Also pressured was New York Central, owner of the New York State Railways, had 600 miles of street railways and interurban lines in upstate New York. New Haven owned 1,500 miles of trolley lines in New York, Connecticut, Rhode Island and Massachusetts.

As the largest depositor in the nation’s leading banks, GM also enjoyed financial leverage over the electric railways, which relied heavily on these banks to supply their capital needs. According to U.S. Department of Justice documents, officials (aka crooks) from GM visited banks used by railways in Philadelphia, Dallas, Kansas City and other locations and, by offering them millions in additional deposits, persuaded their rail clients to convert to motor vehicles.

By 1930, most streetcar systems were aging and losing money. Service to the public was suffering. Once stock prices were knocked in the bear market of the Great Depression, GM would use mobsters as fronts to buy city tram companies on the cheap. They would then scrap street cars and replace them with unreliable, slow-moving, gas-guzzling, smog-producing buses.

The New York Railways Corporation began converting to buses in 1935. National City Lines acquired the Los Angeles Railway (aka the “Yellow Cars”) in 1945, which signaled the end for electric trams in that region.

The Public Utility Holding Company Act of 1935 made it illegal for a single privately owned businesses to provide both public transport and supply electricity to other parties, which caused great difficulties for the streetcar operators that were frequently also generators of electricity.

A total of 46 transit networks were bought up by National City Lines, the holding company linked to GM allied with Standard Oil of California (Chevron), Phillips Petroleum and Firestone.

‘Red Car’ electric streetcars stacked in Los Angeles and awaiting demolition in 1956.

The railways of Boston, Detroit, San Francisco, Seattle and even Canada were publicly operated and unavailable for purchase, but this didn’t preclude GM from using bribes and other inducements to persuade officials to motorize.

San Francisco and Seattle arranged for one of its former regional bus managers, the ex-president of its United Cities subsidiary, to become manager and transit czar. Because of influence peddling, it wasn’t until 1946 that the Justice Department finally looked into it. It filed an antitrust suit against National City Lines for conspiracy to monopolize the transit industry. But before the suit came to trial in Chicago, the consortium of big companies bailed out, selling their holdings in National City Lines. That essentially left it as an empty corporation.

Court documents reveal that GM admitted that by the mid 1950s, its agents had canvassed more than 1,000 electric railways and that, among these, they had motorized 90 percent (more than 900 systems).

In later criminal conspiracy cases conducted after the tram system had been thoroughly wrecked, the assistant U.S. attorney declared, “The ‘result’ of GM’s plans has been the elimination of electrically propelled vehicles and the substitution of motor buses in a number of cities.”

On April 9, 1947, nine corporations and seven individuals (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.” Some penalties were rendered, but by then the auto industry had already won the war.

In an alternate world, one which the government subsidizes each mode of transport equally, it’s easy to imagine things playing out quite differently.

The final coup de grace against an electric tram revival in the 1950s came from city, state and federal governments, which pumped more and more money into roadways and freeways for motorcars. City planners put a priority on bringing cars to urban areas via new highways.

The plan’s key contributors included members of the auto industry (including General Motors CEO Charles Erwin Wilson) and highway engineers. Curiously, urban planners were absent — the profession barely existed at the time.

“Highway engineers dominated the decision-making,” Joseph DiMento, a law professor who co-wrote “Changing Lanes: Visions and Histories of Urban Freeways,” said in a Vox story. “They were trained to design without much consideration for how a highway might impact urban fabric — they were worried about the most efficient way of moving people from A to B.”

As a result, the official plans dictated that highways cut directly through the core of virtually every major city in order to bring commuters in and out of newly growing suburbs. While they were at it, highways also gutted many cities. Entire neighborhoods were torn down or isolated by huge interchanges and wide ribbons of asphalt. Places that we’d now see as interesting ethnic areas were viewed as blight. Highways were a tool for justifying the destruction of many of these areas.

Read “Ghost Town Poletown, Detroit: Slash-and-Burn Kleptocracy on Full Display”

For example whole sections east of downtown Minneapolis were cut out with spaghetti-like interchanges, and neighborhoods were separated and cut off from one another. In theory, these residential neighborhoods could have been preserved, even if gentrified, and would have made excellent short tram routes into downtown. The before and after can be viewed in the next link.

The University of Oklahoma has before and after aerials of the impact of freeway construction throughout Cincinnati, Detroit, St. Louis, Kansas City, Minneapolis, Milwaukee, Indianapolis, Cleveland and Columbus. Other regions are also shown.

The following video shows the old street cars of Detroit.

Detroit streetcars

12 Comments on The Predatory Conspiracy to Wipe Out Street Cars

  1. Yes, the joys of European city life. What USA people don’t really experience anymore, is an area that has all 3 aspects of being walkable, safe, and blue-collar-affordable … USA offers 2 of the 3 in many spots, but almost never all of these

    Tho in popular Prague now, capital of Europe’s most booming economy with the lowest European unemployment rate, you are starting to get less affordability as property and rent prices spike up … Czechia long benefiting as a lower-cost centre and supplier for German industry

    A big factor too in Prague’s boom, is how many people and businesses are exiting the more multi-cultural cities of Western Europe with their spiking crime, and choosing more ethnically homogenous Eastern cities, Prague being a particular favourite

    When the shortly upcoming parasite-guild-induced economic crisis hits, Prague may remain a rather golden spot, less hard hit than others, and its boom-like overheating cooling down to more stability

  2. Quite interesting that the San Francisco bay , which has four rail systems (tourist cable cars, MUNI local trams, BART (Bay Area Rapid Transit, which serves the greater eastern and southern bay area), and Caltrains which connect to Amtrak) remains a boom city and arguably a major backbone of the US economy via technology innovation.

  3. The US is so utterly vast beyond most people’s comprehension. As noted elsewhere, the Navajo boast that New England would fit in side their borders. And Navajo is only a tiny speck of the ‘wild west.’ Conquest of which happened precisely because of the railroads This once vast public trust – included alternating checkerboard square miles flanking track lines full of resources such as timber and minerals – have been since devoured by private holders through sleeve corporation scams. Mergers in other words. By companies with illegal overlapping boards of directors. This is not only a huge loss in terms of public wealth and transportation. It will some day cause starvation. The US people are perhaps most anomalous in terms of just how far away their produce/goods/water sources lie. Now primarily moved by trucks. In the event of some great national cataclysm – say, geoengineering Yellowstone for a so-called pressure release eruption as NASA now is doing (one may wonder what the fog a space agency is doing underground…) – trucking can easily be brought to a halt. A trucker once quipped about 9/11: that’s not how to bring down the country. Blow out a couple of major bridges with truckers as casualties and every trucker will cease travel. Trains would give the country a better chance. But dependency on trucking to bring food literally thousands of miles is a death sentence waiting to happen. The heist of streetcars is related. Anything to get every American financing, maintaining, insuring and fueling a vehicle on their own instead of relying on public transportation.

    • “Conservatives” on the car radio (irony!) rant about “socialists cry global warming because they want to get you out of your car and deny you freedom of travel…(read: “make you ride a filthy bus with a bunch of smelly darkies”). The emotional appeal is obvious but think about your car (your ‘freedom’) yeah- you can bounce to the hate-mart and get a can of Monster energy drink any old time but there’s always some damn thing going wrong; your income is now a revenue stream for GM, BMW, Honda, take your choice. I get people needing a truck of a van for a business but how fun/free is it really to HAVE to sit in traffic for an hour plus to get home from your work?

    • Public transportation is too easily controlled by governments and money so I’m not so sad to see it disappear. Our more recent ancestors had horses which are slow but, if well taken care of can last many years and do not require a huge financial investment like modern automobiles. Now days I would be happy with reliable cars and trucks that don’t require constant expensive maintenance because of all the technology crammed into them. Why can’t you buy a car that lasts 20-30 years or more and doesn’t cost $50k or require annual maintenance fees? Obama had the right idea when he said that a reliable mode of transportation could be the difference maker between success and poverty. How many poor people’s lives/situations could be immediately improved if they had a reliable means of transportation? One without the government’s regulatory hand on the steering wheel?

  4. Alfred P. Sloan also was a big promoter of the degree in Business Administration of which he gave lots of money to found such programs in American universities. Because of this, he can be directly or indirectly credited with the scourge of MBA’s that have destroyed most of the traditional American companies that were part of the backbone of what was the United States in the 20th century!

  5. The auto makers were sued in the Bay Area for destroying the transit system and lost the case. They were then fined something like 1 dollar.

  6. Yes, this thread is an important one, as it shows the true ethics of the American corporatacracy and it is not pretty.

    Lest we also forget that both Ford and GM sued the U.S. government for the destruction of their subsidiary factories, located in Germany, as a result of Allied bombing. As many of you know, they also won those lawsuits handily and were never / ever / ever prosecuted for “trading with the enemy”.

    No matter how we feel about WWII or the various depth of our combined knowledge here at WW, what we are simply speaking to is corporate ethics in the United States of America, which has been broken for over a century. It was not capitalism or its tenets that has broken the U.S., it is the ethics that was adopted under the umbrella of capitalism and then fostered that has wreaked havoc on this nation (just my humble opinion).

    All my best,

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