Learning all the Wrong Lessons from the Great Streetcar Conspiracy

“I bought the Red Car so that I could dismantle it.” — A work of fiction.

As someone who has studied in the field of transportation planning, I have had more than my fair share of exposure to what is usually called the General Motors streetcar conspiracy. It’s one of the most widely known urban myths of our time, and judging by its spread, probably one of the most compelling too. And it’s not hard to see why: the story is a simple one, with a clear villain, obvious outcomes, and just enough hints of truth scattered throughout to paint a convincing picture. Here in Los Angeles, the General Motors streetcar conspiracy has been elevated to the status of a grim origin story, about how once upon a time we had a utopian realm of electric streetcars before the birth of our horrendous traffic jams and toxic air.

If you haven’t heard the story, let me briefly go over the facts. Beginning in 1938 and continuing through the 1940s, a consortium of automobile and oil companies (most notably General Motors, but also including Firestone Tire, Standard Oil of California, and Phillips Petroleum) formed a bus company called National City Lines (NCL). Along with its subsidiaries, American City Lines and Pacific City Lines, NCL bought up dozens of urban transit companies across the country. Where they bought streetcar systems, they usually replaced those streetcars with buses.

Those are the facts. However, the actual importance of this event has always been in dispute. Those who enthusiastically repeat this story have elevated it to the defining event for American transit in the 20th century, with the implication being that General Motors killed off the streetcar as part of a grand and sinister plot to kill off mass transportation altogether in order to make Americans utterly dependent on their cars. Ascribing a world-shaping event to a small group of shadowy, all-powerful and (somehow) all-knowing actors is a hallmark of all conspiracy theory thinking, but I understand the appeal here: it’s not exactly difficult to believe that a bunch of giant corporations have deliberately made life miserable for you in order to boost their own profits.

But I’m afraid I’m here to burst your bubble. I, the lifelong transit fanatic, would like to inform you that what you’ve heard is (mostly) wrong. Yes, General Motors did tear up some streetcars. No, they did not kill mass transit. The auto industry certainly hasn’t done transit many favors, but as the tired saying goes, it’s more complicated than that.

We’re going to do a little history lesson today. And to start with, let’s talk about what streetcars actually were…

Monopoly

It’s worth pointing out that mass transportation in the first half of the 20th century was fundamentally different from mass transit today. That fundamental difference isn’t that streetcars were the norm instead of buses, or even that a larger portion of the population relied on transit back then. The crucial difference was that mass transit was typically a private endeavor rather than a public enterprise. Transit, whether it came in the form of buses or streetcars, was almost exclusively provided by private companies rather than local governments.

To understand how this relationship came about, you have to start by understanding what transit was built for. Streetcars were usually built first and foremost as a means of developing land. Where before the size of cities was limited by how far one could walk or ride a horse, the invention of the streetcar enabled the expansion of the urban landscape along these new rail lines. Real estate speculators and developers often funded the construction of streetcars, even though they weren’t likely to see profits from the streetcar operation itself. The streetcars were merely a means of giving the masses access to the land, which could be subdivided and sold off for a tidy sum.

This is where I’d like to touch on a side myth, one that often gets presented hand-in-hand with the General Motors streetcar conspiracy: the claim that Los Angeles once had “the best public transit system in the world.” This claim has shown up in a number of places, such as a 1993 Frontline documentary, the 2015 documentary Bikes vs Cars, and even in our esteemed natural history museum, where a placard in the “Becoming Los Angeles” exhibition makes this claim. (Actually, the most notable example of the “best transit system in the world” claim is from the movie Who Framed Roger Rabbit?, but we can at least give that one a pass for being a work of fiction.) Usually this claim is presented to suggest that ours is a city that has lost its way, a paradise lost in a frenzy of automania.

I’m not sure where this claim comes from, but I wouldn’t be surprised if some boisterous streetcar executive in the 1920s stated that the Pacific Electric was the greatest streetcar system in the world—”greatest” here meaning largest. Indeed, the Pacific Electric was the world’s largest interurban streetcar system at its peak, with lines radiating out from Downtown Los Angeles all the way to Riverside, San Bernardino, Santa Ana, Newport Beach, San Fernando, and Santa Monica. But Los Angeles didn’t have this vast streetcar network because it was some super progressive city that loved public transit. It had this vast network because it had a lot of land that could be developed, and some businessmen who were eager to make that happen when building streetcars was the easiest means of doing so. Over time, streetcar magnates consolidated their rail lines until vast transit monopolies were created. In this way, calling the Pacific Electric the “greatest” streetcar system ever built would be like calling American Airlines the “greatest” airline today.

Building a streetcar network is one thing. Maintaining an adequate transit system is something else altogether. And on this point, the Pacific Electric was widely hated. Service was slow, cars were routinely overcrowded, and conditions only worsened as automobiles became increasingly popular through the 1910s and ’20s—more cars on the road meant more traffic that streetcars were stuck in. Streetcar companies were also no friend of the little guy, developing a reputation as union busters, and the Pacific Electric—overseen by the notoriously anti-union Henry Huntington—was certainly no exception. This didn’t exactly endear them to progressives of the era.

What’s more, there really wasn’t much incentive for the Pacific Electric to improve its service. Following the “Great Merger” of 1911, in which all the various interurban streetcar companies were consolidated under the Pacific Electric banner, the Pacific Electric had a virtual monopoly on transit between the various cities of the Los Angeles region. Expansion of the system virtually stopped after the Great Merger, with a line to San Bernardino (already in the works before the merger) being the only major addition to the network after 1911. This is particularly significant when one considers that the population of Los Angeles County more than quadrupled between 1910 and 1930, putting huge pressure on a system that was inadequate for the needs of the growing metropolis. Necessary improvements to service weren’t made by the Pacific Electric until their nose hairs were pulled; for instance, a downtown tunnel for their Hollywood-bound cars was constructed only because state regulators wouldn’t allow the Pacific Electric to raise fares otherwise.

In fact, so hated was the Pacific Electric that several independent transit systems were created specifically as alternatives to it. In 1927, the Pacific Electric tried to acquire a franchise for all bus service within Long Beach, but were rebuffed by the city council there, who cited the company’s “heavy-handed methods and monopolistic goals.” The franchise was instead awarded to the Lang Transportation Company, an early precursor to today’s Long Beach Transit. That same year, the Pacific Electric put forward a proposal to raise fares for Westside service by seven cents—the equivalent of nearly an entire dollar today—which led to Culver City and Santa Monica forming their own municipal-run bus systems as more affordable options for their citizens. Those systems are still with us today; you may know them as Culver CityBus and Big Blue Bus.

Simply put, streetcar companies were like the cable internet companies of their time: almost no one liked them and almost everyone had to deal with them. When you actually look at what Angelenos at the time had to say about their transit system, the “best transit system in the world” claim rings particularly hollow.

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Decline

We tend to think of auto-oriented suburbs as being an invention of the 1950s, but they actually date back quite a bit further, especially in Los Angeles. As early as as the 1910s, developers were laying out subdivisions with the cars of wealthier homeowners in mind, a pattern which became the norm with the real estate boom of the 1920s. With new urban development no longer tied to the construction of streetcar lines, streetcar companies stopped expanding their service—and this was when things began to fall apart.

The auto craze of the 1920s was bad enough for streetcar companies, who began to salvage their bottom line by replacing less profitable streetcar lines with bus service. In many cities—including Los Angeles—this process was hastened by increasing competition with new bus companies, some of which were bought out by railroad and streetcar companies (the rapid spread of Greyhound in the 1920s came about in large part through collaboration with railroad companies). But it was the Great Depression that dealt the harshest blow to streetcars, as many people who had relied on the streetcar service now found themselves out of work.

As fare revenues plummeted, many streetcar companies slashed service, and the Pacific Electric was no exception. Between 1935 and the outbreak of World War II, passenger rail service on the Pacific Electric went from this (rail lines are in solid red):

1935_pe_railway_motor_transit_company

To this (passenger rail lines are in solid red, added by me for ease of reading):

1942_pacific_electric_railway_and_motor_coach

By the end of the Depression, buses were picking up much of the slack as streetcar service was cut, reducing the Pacific Electric to a skeleton of its former self. The high employment and the gasoline rationing of the war years elevated transit ridership to levels not reached before or since, but this only took a greater toll on the Pacific Electric’s aging equipment, which couldn’t be replaced owing to the scarcity of supplies needed for the war effort.

And mind you, this all happened before General Motors ever entered the picture, as far as Los Angeles transit goes. National City Lines bought out the Los Angeles Railway—the local streetcar system that served the neighborhoods around Downtown Los Angeles, better known as the “Yellow Cars”—in 1945 and began converting many of its streetcar lines into bus lines. But NCL—and by extension, General Motors—never acquired the Pacific Electric. This bears repeating, given how common a misconception this is: the Pacific Electric was never acquired by General Motors. The company that did the most to dismantle the streetcars of the Pacific Electric was… the Pacific Electric.

 

1949busbrochure
A 1949 Pacific Electric pamphlet

Conspiracy

But there was a conspiracy, right? That much has been proven, correct?

Yes, but it’s worth laying out exactly what that conspiracy entailed, because it may not be as grand as you’re expecting.

As I mentioned earlier, mass transit during the 1930s was mostly a private endeavor. Municipal-run transit—that is, public transit—was very rare in the United States at this time, limited to just a few examples. Many streetcar companies had already invested in buses since they were more economical; not only were they cheaper to operate for lightly used lines, but local and state governments were increasingly getting involved in the building of roads, and it was a lot cheaper to run a bus on a public road than to run a streetcar on a privately-owned rail line that you were responsible for maintaining. Plus, buses were seen as new and sleek; many streetcar companies couldn’t afford to replace their aging rail fleets.

By this point, General Motors had been making buses for a while. Transit was an obvious business for them to get into, given the increasing popularity of buses. But while selling buses to transit companies was all well and good, what would really sweeten the pot would be if they could guarantee that transit companies would buy their buses. And the easiest way to accomplish that would be to own them outright. Enter National City Lines.

Incidentally, the acquisition of streetcar companies was made easier by the passage of the Public Utility Holding Company Act a few years earlier, a trust-busting bit of New Deal-era legislation aimed at electric utility companies. Many streetcar companies across the country had been owned by electric companies, a handy loophole which basically allowed utility companies to sell electricity back to themselves and post more profits on their books. When the electric companies were forced to divest from any activities unrelated to the production of energy, the streetcar companies had to be sold off.

General Motors basically adopted the same model as the electric companies, only for buses. And this was the true conspiracy: by helping form a holding company to buy up a bunch of transit companies, GM set up a situation where they could be both the producer and consumer of their own product and monopolize the bus market. This was what General Motors, Firestone Tires, Standard Oil, and the other companies involved were found guilty of.

People who bring up the GM streetcar conspiracy often like to point out that the companies involved were indicted in federal court (with the infamous detail that one of the executives involved was only fined $1), but this is always brought up with the implication that they were convicted of destroying streetcars. In truth, no one at the trial cared about the streetcars. The auto and oil companies involved were found guilty of “conspiring to monopolize sales of buses and supplies to companies owned by National City Lines,” which was a blatant violation of antitrust law. But that was it. There was nothing illegal about tearing out streetcars and replacing them with buses; hell, the streetcar companies themselves had been doing that for years.

https://upload.wikimedia.org/wikipedia/commons/1/10/Pacific-Electric-Red-Cars-Awaiting-Destruction.jpg
Pacific Electric cars awaiting destruction, 1956 (again, not at the hands of General Motors)

Lessons

Okay, but so what? Why does this all matter? The streetcars are gone regardless, so why exactly should we care who or what’s to blame?

The problem I have with the General Motors conspiracy theory isn’t just that it’s lazy history. The problem is that people take all the wrong lessons from it. From what I’ve seen, people generally take one of two morals from this story, the first being that auto and gas companies are evil. While I’m not exactly going to defend auto companies, there are far more nefarious things that the auto and oil industries have done than dismantle a few railroads. And besides, laying all the blame for the death of streetcars at General Motors’ feet ignores all the other actors involved, not least of which were streetcar companies themselves.

The other lesson that people seem to take from this is that buses are inherently bad. Even if this isn’t always explicitly stated, there is definitely an underlying disdain for buses at play here. When you build this conspiracy up as the defining event in mass transit, as the thing that made transit suck, what you’re implicitly saying is that the problem is with the vehicle, not with the entity operating it. And believing that the problem was switching from streetcars to buses often leads to people believing that the solution is just to bring back the streetcars, which is… usually not a great idea.

Truthfully, I think there are some valuable lessons to take away from this whole affair. I think it’s messed up that a private corporation could come into your city and, without any input from the public whatsoever, tear out and replace an existing transit network just for their own profit. But I also think it’s messed up that transit was ever a private endeavor to begin with. What General Motors did to transit was no more than what streetcar companies did: they monopolized transit for their own gain and operated their systems not on the basis of public need but on the basis of making as much money as possible. They kept a necessary public service out of the hands of the people who relied on it. They kept transit undemocratic.

When you get down to it, it’s absurd how long it took to get transit into public control. But it did eventually happen. From the 1940s on, there was a growing recognition that mass transit was no longer tenable as a private operation. Cars were simply too popular with the people, and state and federal governments were investing heavily in new freeways and the development of suburbs, unfriendly to mass transit. Yet you couldn’t get rid of transit altogether, because there were still many people who relied on it. So municipalization of transit became the norm. In Los Angeles, transit finally went public in 1958. Public subsidies for transit from the State of California and the federal government were established in the 1960s.

If you ask me, this is the most important event in mass transit in the 20th century. Not the switch from streetcars to buses, but the switch from private company to public agency, because this is what changed our relationship with our transit. We might not exactly see our public transit agencies as responsive to our needs, but they still operate in a much more democratic and transparent fashion than the private corporations of yesteryear. And they lend themselves to far more stability; we can be reasonably assured that no one is going to buy the Expo Line tomorrow and replace it with a Hyperloop test track.

Our transit systems need a whole lot of improvement, it’s true, but they should also be cherished and protected as the necessary public utilities that they are. And so, I leave you with a warning: there are those who wish to privatize our public services, to take what is rightfully ours and exploit it for their own gain. Don’t shed any tears for the streetcar, but remember what happens when you leave transit in the wrong hands.

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