The Conspiracy to Destroy Pubic Transit in America

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The Conspiracy to Destroy Pubic Transit in America

  • Most of us have heard the story of how America once had trolley cars, a system of electric street railways that provided cheap and efficient transportation to almost any place a person would want to go.  That system, according to the story, was destroyed by a group of businessmen in order to increase their own profits by requiring the American people to buy cars.  Up to now I have regarded this as an urban legend. However Stephen B. Goddard in a well researched and footnoted book, Getting There, has shown that it is all too true.  

    Chapter 7, Derailing the Trolleys, is where Goddard explains it.  In the late 19th century most electric street railways were built by companies that produced electricity and needed a place to sell it.  As time went on home uses of electricity made their industry more successful.  In the 1920's government regulation increasingly encumbered their trolley operations while vehicles with gasoline engines were unregulated and paid minimal taxes.  Streetcar systems began to loose money but they continued to operate, subsidized by the lucrative home electricity market and unable to cut back on their routes or increase their fares because of government regulators.  

    In Minnesota a man who owned a family operated bus company, Roy Fitzgerald, saw an opportunity.  He began to use his unregulated buses to compete with streetcars offering lower fares.  His success came to the attention of General Motors.  GM had expanded it automobile manufacturing operations and was also building buses.  GM, Firestone, Standard Oil of California, Mack and Phillips Petroleum organized to loan money to new bus lines such as National City Lines, American City Lines and others all organized by Fitzgerald.   Of course the new bus companies had to purchase buses and supplies from the companies that provided the cash to buy out the trolley lines.  The money was not to be made in operating public transit; it was to be made in selling buses, tires and the petroleum products needed to operate the system.  However, their success was limited because many electric companies were reluctant to sell their streetcar operations.  Then, in 1935, the Rayburn-Wheeler Act was passed which forced the electric companies to divest themselves of electric street railways.  Fitzgerald, with the backing of the above companies, was able a great many trolley lines.  The trolley cars were scrapped and replaced with buses.  All of this was in violation of the Sherman Antitrust Act for for whatever reason the government ignored that until the late 1940's when it filed and won a law suit against the companies that had destroyed the trolley lines.  They were convicted of "concocting and implementing a criminal conspiracy" but got off with very light fines.  

    Meanwhile the bus companies, when they began losing money, were sold to the municipalities they served.  And the public got to pay for buses which last at most 20 years while streetcars last for much longer periods of time.  For example, New Orleans still uses Perly Thomas cars which were build in the middle 1920's and have been operated continuously since they were purchased.  And the streetcars cost less to operate.  

    Here in the US we like to think the success of the automobile is based solely on its popularity with the public.  However, while the automobile is popular, it was also pushed on us by a large automobile manufactures and its co-conspirators.  And we are all poorer because of it.

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  • To us older guys this is not news...we've read of the trials of the late 40's and 50's where GM, AMACO, and the tire companies were in court defending their monopolistic actions.  But the result of their actions were too imbued on the populace to turn around and go back.  

    But today, I think there is a rethinking of the problem and the process as more and more new light rail and commuter lines emerge.  Environmental problems, land availability and use, the preciousness of fuel sources and its rising costs, traffic jams, and people getting tired of driving and stopping and driving and driving more and more because home is often removed so much from their place of work: these are all reasons why I feel that public transportation is facing not so much a rebirth as a reconstruction and renaissance. 

    RIDEWITHMEHENRY will plan and escort railfan rides in and around the NY Metropolitan and Philadephia areas: no mode of transportation is untouched. Guaranteed railfan fun!

  • What goes around, comes around - the more things change the more they stay the same.

    Read history and you will find that everything that is taking place today, has taken place in the past - only the names and the technologies have changed.

    Never too old to have a happy childhood!

  • I sure hope you are right, Henry, and we are seeing a rebirth of public transit.  I am lucky enough to live in a state with a relatively good transit system and I have been using it for many years.  New Jersey Transit has done some very good things, especially with our rail transit.  However, our bus system is treated like a step child, ignoring new development which simply goes without any transit at all.  For example, Mercer Hospital (which used to be in Trenton) was served by a bus every half hour from 5 am to midnight.  Recently it was moved to a suburban location in Hopewell Township.  Now it has no transit at all.  So I remain somewhat skeptical.  

    PS.  I live between Newark and Paterson so what I see is not typical.  I think you live in or near Binghamton.  What kind of transit is out your way?

  • Actually, Balt, I do read history more than I read anything else.  Most of my reading about trains is history as well as biography.  Recently I read Maury Klein's The Life and Legend of E. H. Harriman.  I agree with you that human nature has not changed but technology has changed.  A lot.  

    PS.  When, in the Bible, Esau sold his birth right he at least got a "mess of pottage" (bowl of red lentil stew) in return.  The men who stole our streetcar systems didn't even give us that.

  • Like Henry6 I am old enough to remember the elaborate street car and inter-urban system in the Detroit area that lasted till  about 1950.

    There is no doubt in my mind that the automobile and other self propelled transportation killed them off. When cars became common and affordable and roads began to develop people wanted to move out of the crowded cities into what then was "the woods" and is now suburbia.There was not enough population in those areas to support public transportation so streetcar companies did not follow them.

    Some of the major American cities are seeing a resurgence in light rail; and rightly so. It can alleviate those eternal and boring drives home from work. Good public transit may again become a reality in the future.

    Norm

    What do we want?
    A time machine!

    When do we want it?
    Irrelevant....

  • The problem is "good" public transportation. An awful lot of the transportation planners and transit operators are a joke (no concept of what they are doing. Bus people in charge of light rail creates some massive FAILs.

    Mudchicken Nothing is worth taking the risk of losing a life over. Come home tonight in the same condition that you left home this morning in. Safety begins with ME.... cinscocom-west
  • Perhaps the biggest problem with streetcar systems was their physical inflexibility.

    While a bus line can easily alter a route to accomodate a new apartment complex or other such facility, a trolley is married to its tracks.

    Another problem was the growth of the suburbs into centers of commerce all of their own.  A spoke-and-hub streetcar system handled folks travelling from the 'burbs into the central city just fine.  But when it came to travelling to the town next door, or several 'burbs over, they were that much less practical, requiring a trip downtown and a transfer to another line out of the city.  Driving direct was much easier.

    Still, it's interesting to consider what might have been had PE and all the other systems continued to exist.

    LarryWhistling
    Resident Microferroequinologist (at least at my house) 
    Everyone goes home; Safety begins with you
    My Opinion. Standard Disclaimers Apply. No Expiration Date
    Come ride the rails with me!
    There's one thing about humility - the moment you think you've got it, you've lost it...

  • Norm,

    Certainly there is no doubt as as automobiles became more popular the demand for public transit waned. But I must disagree that public demand for cars led to the demise of street cars.  

    After all, while public transit did decline it never went away entirely and it still operates.  When it became unprofitable government entities took it over.  But without GM and the rest of the conspirators government might have taken over trolley systems with usable and long lived cars that cost must less to operate than buses.  Instead it had to take over bus systems where buses are replaced every 12 years, cost more to operate and cause pollution as they travel along.  

    I'm not personally familiar with transit in Detroit.  I do know that some cities did choose to keep their street cars.  For example, Washington DC had street cars until the subway was built.  Philadelphia still has them.  Yet both of those cities have a lot of cars too.

    John

  • Chicken,  

    The problem that I see in my state is that, while we have an over all good system, many areas--especially new ones--have no transit at all of any kind.  

    John

  • tree68

    Perhaps the biggest problem with streetcar systems was their physical inflexibility.

    While a bus line can easily alter a route to accomodate a new apartment complex or other such facility, a trolley is married to its tracks.

    Another problem was the growth of the suburbs into centers of commerce all of their own.  A spoke-and-hub streetcar system handled folks travelling from the 'burbs into the central city just fine.  But when it came to travelling to the town next door, or several 'burbs over, they were that much less practical, requiring a trip downtown and a transfer to another line out of the city.  Driving direct was much easier.

    Still, it's interesting to consider what might have been had PE and all the other systems continued to exist.

    tree68

    Perhaps the biggest problem with streetcar systems was their physical inflexibility.

    While a bus line can easily alter a route to accomodate a new apartment complex or other such facility, a trolley is married to its tracks.

    Another problem was the growth of the suburbs into centers of commerce all of their own.  A spoke-and-hub streetcar system handled folks travelling from the 'burbs into the central city just fine.  But when it came to travelling to the town next door, or several 'burbs over, they were that much less practical, requiring a trip downtown and a transfer to another line out of the city.  Driving direct was much easier.

    Still, it's interesting to consider what might have been had PE and all the other systems continued to exist.

    We are a very manipulative and manipulated society.  A straight line inflexible streetcar line could have been designed, marketed and sold to the public.  Look what all we have accepted by the marketers: Jello, Vanna White, the NFL, Rock and Roll, Pat Boone, Madonna, a two party political system, Big Macs,  bigger anything is better except for wireless communication's hardware, the freedom you have owning and driving your own cars(s), the internet, wrestling as a sport, 1000 channel tv reception.  So if we've accepted any or all of those things, and the many other things we use and buy everyday, then a logical, safe, reliable,  environmentally friendly, inexpensive transportation system is within the range of our believing and buying.

    RIDEWITHMEHENRY will plan and escort railfan rides in and around the NY Metropolitan and Philadephia areas: no mode of transportation is untouched. Guaranteed railfan fun!

  • Trees,  

    You make two interesting points.  It is true that streetcar tracks are inflexible and cannot easily be changed.  However, this also has certain advantages.  If the apartment complex builders, for example, consider where the street car runs when they build their complex they can be reasonable sure that the route will not suddenly be changed and leave them in the cold as can happen with bus routes.  That actually happened to me.  I had a condition that required me to see my doctor every month.  A bus route ran right by her office; it was great.  But after a few months and with only 10 days notice and no opportunity for public input the route was suddenly changed.  Now I had to take a different bus and had to walk more than a half hour after I got off of it.  Other people also used the stop by by doctor's office; I don't know what happened to them.  

    As far as new centers of growth, certainly buses have their place in any transit system.  What I believe in and advocate for is transportation diversity.  Transportation is not a one size fits all situation.  I agree with you that there are places where private vehicles do make sense and are the only thing that makes sense.  But I think it is fair to point our that large parts of our suburbs have been built for cars only with no consideration given to public transit.  Today we are living longer and most of us want to stay in our homes.  So what happens when we are quite able to keep up with our homes but can no longer drive and there is no public transit.  Do we go to a nursing home just because we cannot drive our cars?

    John

  • henry6

    Look what all we have accepted by the marketers: Jello, Vanna White, the NFL, Rock and Roll, Pat Boone, Madonna, a two party political system, Big Macs,  bigger anything is better except for wireless communication's hardware, the freedom you have owning and driving your own cars(s), the internet, wrestling as a sport, 1000 channel tv reception.

    What's wrong with Vanna White? I think she looks darn nice, especially if you factor in her age; plus she is rather active in various charities.

  • For a contrary view, see this article:

    "Did a conspiracy really kill the streetcar? - It wasn't National City Lines that did it"
    by Diers, John
    from Trains, January 2006,  p. 56

     It might also be informative to review the articles by Prof. of Economics George W. Hilton. 

    Also, it's pretty well settled that many streetcar lines were built by land developers to facilitate access to - and hence to increase the value and selling price of - their new neighborhoods, suburbs, towns, and even amusement parks, etc. further out.  In economic terms, that is called "exploitation of the land", and is not a negative connotation.  As such, though, the streetcar lines were intended to be mere transportation tools to achieve a greater end, not as a 'profit-making center' of their own.

    For example, see this recent (Nov. 23, 2012) feature - "Prospering Public Transportation" - from "Living on Earth", a Public Radio International program styled as an environmental newsmagazine:

     http://www.loe.org/shows/segments.html?programID=12-P13-00047&segmentID=3 

    A pertinent excerpt from "Christopher Leinberger, a George Washington University transportation researcher" (emphasis added - PDN): 

    "LEINBERGER: Transportation, whether it be roads or rail transit, or bike lanes, have always been subsidized. . . .

    And I’m suggesting, and Locus is suggesting, and a lot of developers are suggesting that we need to learn from how we used to build our transit systems 100 years ago. This country 100 years ago had the finest rail transit system on the planet. And the vast majority of it was paid for by real estate developers, and it’s not as if the economics were different then than now – those rail transit systems, those trollies, those subways in New York, lost money. So why did developers build them?

    They built them to get their customers out to their land, so land profits subsidized the transit, and that’s what we’re proposing with value capture as well. Value capture is capturing the value that’s created by transportation improvements. And it’s not as if you can just assume that developers are just going to pay for it all, that’s not going to happen."

    - Paul North. 

    "This Fascinating Railroad Business" (title of 1943 book by Robert Selph Henry of the AAR)
  • Paul_D_North_Jr

    It might also be informative to review the articles by Prof. of Economics George W. Hilton. 

    Also, it's pretty well settled that many streetcar lines were built by land developers to facilitate access to - and hence to increase the value and selling price of - their new neighborhoods, suburbs, towns, and even amusement parks, etc. further out.  In economic terms, that is called "exploitation of the land", and is not a negative connotation.  As such, though, the streetcar lines were intended to be mere transportation tools to achieve a greater end, not as a 'profit-making center' of their own.

     

    "LEINBERGER: Transportation, whether it be roads or rail transit, or bike lanes, have always been subsidized. . . .

    And I’m suggesting, and Locus is suggesting, and a lot of developers are suggesting that we need to learn from how we used to build our transit systems 100 years ago. This country 100 years ago had the finest rail transit system on the planet. And the vast majority of it was paid for by real estate developers, and it’s not as if the economics were different then than now – those rail transit systems, those trollies, those subways in New York, lost money. So why did developers build them?

    They built them to get their customers out to their land, so land profits subsidized the transit, and that’s what we’re proposing with value capture as well. Value capture is capturing the value that’s created by transportation improvements. And it’s not as if you can just assume that developers are just going to pay for it all, that’s not going to happen."

    - Paul North. 

    I think that economics were much different then from what they are now.   Now, transit is truly subsidized as public sector entity.  It seems like George Hilton and Christopher Leinberger are dancing on the head of a pin to reach a torturous conclusion that the trollies and interubans of a 100 years ago lost money and were subsidized because they were not a profit making center of their own, but rather, were a necessary component of a profit making venture. 

    If they were a necessary component of a profit making venture, then they too were a profit making part of that venture.  It is really a stretch to conclude that the profit of the profit center subsidized the non-profit nature of the transit system that was essential to make the profit making center work.

    To say that land profits subsidized the transit may be true in a sense of accounting for a particular business venture, but it is not analogous to the public sector subsidizing transit.