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The Great American streetcar scandal (also known as the General Motors streetcar conspiracy and the National City Lines conspiracy) is a conspiracy in which streetcar systems throughout the United States were dismantled and replaced with buses in the mid-20th century as a result of illegal actions by a number of prominent companies, acting through National City Lines (NCL), Pacific City Lines (on the West Coast, starting in 1938), and American City Lines (in large cities, starting in 1943).
National, which had been in operation since 1920, was organized into a holding company, and General Motors, Firestone Tire, Standard Oil of California, Phillips Petroleum, Mack, and the Federal Engineering Corporation made investments in the City Lines companies in return for exclusive supply contracts. Between 1936 and 1950, National City Lines bought out more than 100 electric surface-traction systems in 45 cities, including Detroit, New York City, Oakland, Philadelphia, Phoenix, St. Louis, Salt Lake City, Tulsa, Baltimore, Minneapolis, and Los Angeles, and replaced them with GM buses. American City Lines merged with National in 1946
Indeed, in the 1920s automaker General Motors (GM) began a covert campaign to undermine the popular rail-based public transit systems that were ubiquitous in and around the country’s bustling urban areas. At the time, only one in 10 Americans owned cars and most people traveled by trolley and streetcar.
Within three decades, GM, with help from Standard Oil, Firestone Tire, Mack Truck and Phillips Petroleum, succeeded in decimating the nation’s trolley systems, while seeing to the creation of the federal highway system and the ensuing dominance of the automobile as America’s preferred mode of transport.
GM began by funding a company called National City Lines (NCL), which by 1946 controlled streetcar operations in 80 American cities.
“Despite public opinion polls that showed 88 percent of the public favoring expansion of the rail lines after World War II, NCL systematically closed its streetcars down until, by 1955, only a few remained,” writes author Jim Motavalli in his 2001 book, Forward Drive.
The idea was simple. Starting in 1936, National City (in the East and South) and its subsidiaries American City Lines (Midwest) and Pacific City Lines (West) bought controlling interests in 146 trolley systems in the U.S. and Canada, using money laundered through several finance companies that were in on the scheme. The new managers were directed to abandon streetcar service and replace the trolleys with GM buses. Contracts were then signed ensuring the exclusive use of Firestone tires and rubber products, and Standard Oil fuels and lubricants. Vendors who had held contracts for decades were frozen out. GM, Firestone and Standard Oil sales zoomed, and profits went through the roof.
Many of those trolley systems were already in poor financial shape, some of them about to collapse, in the wake of 1935 federal anti-trust legislation (which, ironically, had mortally wounded many trolley companies by severing their connections to power companies – and their access to cheap electricity). But others, particularly in the bigger cities, were healthy – and getting healthier with the delivery of brand-new, ultramodern trolleys called "PCC cars" (small fleets of which are still operating in some American cities, providing comfortable, fast, safe service to thousands of commuters every day.)
GM first replaced trolleys with free-roaming buses, eliminating the need for tracks embedded in the street and clearing the way for cars. As dramatized in a 1996 PBS docudrama, Taken for a Ride, Alfred P. Sloan, GM’s president at the time, said, “We’ve got 90 percent of the market out there that we can…turn into automobile users. If we can eliminate the rail alternatives, we will create a new market for our cars.” And they did just that, with the help of GM subsidiaries Yellow Coach and Greyhound Bus. Sloan predicted that the jolting rides of buses would soon lead people to not want them and to buy GM’s cars instead.
Quinby, a longtime trolley advocate from New Jersey, had shocked his wealthy parents by taking a blue-collar job operating a huge, interurban trolley between Paterson, N.J., and Ridgewood, N.Y., as his first job after college. When World War II came, he enlisted in the Navy and was stationed in Key West, Fla. He was still there when, in 1945, the conspirators resumed their temporarily delayed program.
Among the first to recognize the devastation that was taking place, Quinby prepared a detailed manifesto, which he sent to every mayor, city manager and member of Congress – to everyone and anyone, in short, who had anything to do with governance, regulation, politics or transportation.
"National City Lines, organized in 1936, as a holding company to acquire and operate local transit companies, had brought, up to the time when the contracts were executed, its necessary equipment and fuel products from different suppliers, with no long-term contract with any of them. Pacific City Lines was organized for the purpose of acquiring local transit companies on the Pacific Coast and commenced doing business in January 1938. American was organized to acquire local transportation systems in the larger metropolitan areas in various parts of the country in 1943. It merged with National in 1946."
"Additional facts, while not largely in dispute, are partially controverted, at least in so far as inferences are concerned; however, we think the evidence adequately justified the jury in finding affirmatively that they existed. In 1938, National conceived the idea of purchasing transportation systems in cities where street cars were no longer practicable and supplanting the latter with passenger busses. Its capital was limited and its earlier experience in public financing convinced it that it could not successfully finance the purchase of an increasing number of operating companies in various parts of the United States by such means. Accordingly it devised the plan of procuring funds from manufacturing companies whose products its operating companies were using constantly in their business. National approached General Motors, which manufactures busses and delivers them to the various sections of the United States. It approached Firestone, whose business of manufacturing and supplying tires extends likewise throughout the nation. In the middle west, where a large part of its operating subsidiaries were to be located, it solicited investment of funds from Phillips, which operates throughout that section but not on the east or west coast. Pacific undertook the procurement of funds from General Motors and Firestone and also from Standard Oil of California, which operates on the Pacific coast. Mack Truck Company was also solicited. Eventually each of the suppliers entered into a contract with City Lines defendants of the character we have described whereby City Lines companies agreed that they would buy their exclusive requirements from the contracting supplier and from no one else. We think the evidence is clear that when any one of these suppliers was approached, its attitude was that it would be interested in helping finance City Lines, provided it should receive a contract for the exclusive use of its products in all of the operating companies of the City Lines, so far as busses and tires were concerned, and, as to the oil companies, in the territory served by the respective petroleum companies. It may be of little importance, but it seems to be the fact, at least we think the jury was justified in inferring it to be the fact, that the proposal for financing came from City Lines but that proposal of exclusive contracts came from the suppliers. At any rate, it is clear that eventually each supplier entered into a written contract of long duration whereby City Lines, in consideration of suppliers' help in financing City Lines, agreed that all of their operating subsidiaries should use only the suppliers' products. These were not joint contracts; each supplier entered into a separate agreement. Whether the action of the suppliers in this connection was so concerted as to justify the jury in finding that defendants conspired to monopolize that segment of interstate commerce reflected by the purchase and shipment in commerce of busses, tires and petroleum products to the operating companies, we shall discuss more fully later. The facts related present only a sketchy outline of the setup as it was presented to the jury.
"Although defendants insist that each supplier merely obtained business from the City Lines defendants through separate negotiations, the documentary evidence referred to above and other circumstances in evidence seem to us clearly sufficient to justify the jury in finding that the contrary was true. It is clear that representatives of two or more supplier defendants were in attendance in Chicago and New York at meetings and conferences, out of which grew the investment and requirements contracts. And the fact that copies of a memorandum of discussions held between one of the supplier defendants and one of the City Lines defendants, as well as copies of many of the letters which passed between the contracting parties prior to the execution of the contracts, were sent to representatives of other supplier defendants, coupled with the fact that the latter corresponded with one another relative to the provisions of the contracts, is hardly reconcilable with defendants' contention that their several contracts were negotiated independently of one another but is, rather, convincing that each of the contracts was regarded by the parties as but a part of a 'larger deal' or 'proposition', to use the words of certain of the defendants, in which all of the supplier defendants were involved."
GM was later instrumental in the creation of the National Highway Users Conference, which became the most powerful lobby in Washington. Highway lobbyists worked directly with lawmakers to craft highway-friendly legislation, and GM’s promotional films were showcasing America’s burgeoning interstate highway system as the realization of the so-called “American dream of freedom on wheels.”
When GM President Charles Wilson became Secretary of Defense in 1953, he worked with Congress to craft the $25 billion Federal-Aid Highway Act of 1956. Referred to at the time as the “greatest public works project in the history of the world,” the federally funded race to build roads from coast-to-coast was on.
But the controversy persists to this day. GM apologists insist that there was no deliberate attempt to sabotage the electric-railway industry, or to dismantle U.S. trolley systems, yet that was the undeniable result.
And, though some maintain that the trolley systems would have died, anyway, extensive FBI files recently obtained by this writer under the Freedom of Information Act prove that the conspiracy was even more widespread than is generally known.
The wife of the U.S. postmaster general was investigated in St. Louis, as co-owner of a finance company that laundered money passing from GM to National City Lines. Commissioners in a Florida city each received a brand-new Cadillac – and, the very next week, voted to scrap their trolley system, replacing the abandoned cars with GM buses. There is even suspicion of jury tampering, but none of this evidence was made public, either during or after the trial.
Decades before Southern California was known for its freeways, it had the largest trolley system in the world -- the Pacific Electric Railway. "The Big Red Cars," as the locals called the trolleys, spanned 1,100 miles throughout Southern California and was the primary means of transportation in the pre-freeway age. Back then, Downtown Los Angeles was a highly active, bustling city center, and a typical street would be indistinguishable from those in New York or Chicago at the time. Downtown was also the hub of the Pacific Electric.
Who knows how deep this particular tunnel of the rabbit hole goes. It seems to me that this was a terrible way to force us into using the car as our main mode of transportation. We were never really given a choice IMHO. I wonder if less gasoline and oil might have been used over the years, making our skies cleaner and our air more breathable
Originally posted by Toromos
I live just outside Chicago and work in the city. I don't know a single person who actually enjoys driving their car into downtown for work or pleasure. It is an unmitigated headache and often ridiculously expensive. And yet, the CTA seems to be falling to pieces.