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.

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.

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

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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