A real story for this era is how General Motors, Ford and Chrysler reshaped American ground transportation to serve their corporate wants instead of social needs.
As a result of their monopolistic structure, the Big Three automakers acted in a way detrimental to public interest. GM had control of auto, truck, bus and locomotive production. We are seeing a collapse of a society based on the automobile. We have consumed too much oil, polluted the atmosphere, and turned our cities into highways and parking lots. We see a government bias in favor of highways, failure to produce transport vehicles consistent with energy/environmental restraints, and a consumer dependence on the auto.
GM had the power and economic incentive to suppress rail and bus transportation: one bus can eliminate 35 automobiles; one rail transit vehicle can supplant 50 passenger cars; one train can displace 1000 cars or a fleet of 150 cargo-laden trucks.
GM had a role in the destruction of more than 100 electric surface rail systems in 45 cities including New York, Philadelphia, Baltimore, St. Louis, Oakland, Salt Lake City and Los Angeles. In southern California, GM and other highway interests acquired local transit companies and replaced them with busses. The noisy, foul-smelling busses turned people away from mass transit and therefore sold millions of automobiles.
General Motors received a criminal conviction for its part in monopolizing street transportation. In spite of this, GM continued to acquire and dieselize electric transit properties into 1955. 40,000 streetcars were in service in 1936 when National City Lines was organized by GM. By 1955, only 5,000 remained. While substituting buses for electric street railways helped GM stockholders, it deprived the riding public of a pollution free and energy efficient mode of transportation.
Substitution of buses for streetcar lines contributed indirectly to the abandonment of electric railway freight service. Merchants used to rely on this service to deliver goods and interchange with railroads. For instance, Pacific Electric was once the third largest freight railroad in California. It just proved uneconomical to maintain city track for freight-only. General Motors even benefited from this demise. They also sold trucks! They even used to have an interest in Associated Transport and Consolidated Freightways.
GM used its leverage as the largest freight shipper to coerce railroads to scrap their equipment, including pollution-free electrics, in favor of less durable, less efficient GM diesels. New Haven Railroad showed a profit during 50 years of electrification but started heavy losses after it dieselized its operations.
General Motors diversification into bus transportation: (1) shifted passengers from rail to bus and eventually into automobiles; and (2) shifted freight from rail to truck. An additional factor was GM’s integration into locomotive production. In 1930, they acquired Winton Engine and Electro-Motive. Unfortunately, GM could make 25 to 30 times more gross revenue selling cars and trucks than it could diesel locomotives.
In 1956 the government sued General Motors for monopolization of the bus industry and requested divestiture of its bus production facilities. The case was a failure for the government because GM had combined bus and truck production within the same facilities. A few years later the Justice Department started and then abandoned an antitrust case against GM Locomotive.
Many of the anti-competitive forces of the automobile industry could be diffused by a remedy suggested several years ago by Bradford C. Snell of the International Conference on Appropriate Transportation. First, deconcentration of the motor vehicle industry would reduce the automakers ability to pass on the cost of their anti-rail lobbying to consumers. Second, reorganization of GM’s bus and rail divisions into independent corporations would enable them to operate free from the conflict of interest they currently have. Finally, the facilitation of entry by a number of new bus and rail enterprises would provide competitive capability to build a modern passenger and freight transport system.
It has been the policy of Congress in the past to maintain competition by prohibiting common control of competing modes of transport. The Air Mail Act of 1934 forced GM to sell its interests in several airlines. GM also had interests in several aircraft manufacturers. At that time, GM chairman Sloan implied to Congress that his company had entered the aviation industry to protect its interests in the promotion of automobiles.
At one time there were more than 150 competing manufacturers of bus and rail vehicles. The technological development of these vehicles stopped in the 1930’s.
In Europe and Japan, where there is a limited amount of common auto/rail/bus ownership, there are much more balanced transportation systems.
GM owned Hertz from 1925 to 1953. Because it was perceived to lessen sales of cars, GM limited its growth. Its success after disposition by GM shows what could happen to bus and rail operations.
General Motors got into bus production in 1925 by acquiring Yellow Coach. In 1926 they assisted in the formation of the Greyhound Corporation. 1932 saw GM going into the business of converting interurban electric railways as well as electric streetcar systems to bus operations. Due to the high cost of operation and slow speed on congested streets, buses ultimately contributed to the collapse of hundreds of transit systems.
Several railroads converted substantial portions of their commuter rail service with buses: Pennsylvania Greyhound Lines (Pennsylvania RR); Central Greyhound Lines (New York Central); Pacific Greyhound Lines (Southern Pacific); New England Greyhound Lines (New York, New Haven & Hartford); Northland Greyhound Lines (Great Northern); and Southwestern Greyhound Lines (St. Louis Southwestern Railroad). The railroads were eventually forced out of ownership by the government. By 1950, Greyhound carried half as many intercity passengers as the railroads. Until 1948, General Motors was the largest stockholder in Greyhound.
General Motors used various devices to convert street car lines to bus. At first, United Cities Motor Transit was directly owned by GM and would buy electric street car companies, convert them to GM motorbus operation, and then resell them. After being censured by the American Transit Association, GM went “undercover” with other organizations, primarily National City Lines, Inc. Other participants in National City Lines were Greyhound, Standard Oil of California and Firestone Tire. By reselling properties after conversion, they were assured that capital was continually reinvested in the motorization of additional systems. The biggest GM “triumph” was California’s Pacific Electric. Within a 75-mile radius of Los Angeles, it carried 80 million people annually. In 1949, GM, Greyhound, Standard Oil and Firestone were found guilty of criminally conspiring to monopolize the sale of buses. General Motors was fined $5,000! The GM treasurer who masterminded the destruction of Pacific Electric was fined $1!
Additional Reading on this subject: great reference is Revisiting the Great American Streetcar Scandal, by Al Mankoffâ€“ Vol. 4, Summer 1999
and The Great American Streetcar Myth
Please read “The Streetcar Conspiracy” by Bradford Snell and “The Conspiracy Revisted Rebutted” by Louis Guilbault. I do not have links and will not tell you about Amazon or Borders and Noble because those people would not even give me the time of day.
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