Market Urbanism

Liberalizing cities | From the bottom up

“Market Urbanism” refers to the synthesis of classical liberal economics and ethics (market), with an appreciation of the urban way of life and its benefits to society (urbanism). We advocate for the emergence of bottom up solutions to urban issues, as opposed to ones imposed from the top down.

The Great American Streetcar Myth

By

by Stephen Smith

streetcar

Among liberals in the planning profession today, the story of the Great American Streetcar Conspiracy is widely known. There are more nuanced variants, but it goes something like this: Streetcars were once plentiful and efficient, but then along came a bunch of car and oil companies like General Motors and Standard Oil, and they bought up all the streetcar companies, tore out their tracks and replaced the routes with buses, and ultimately set America on its present path to motorized suburban hell. Although the story dates back to a 1950 court conviction and was retold by academics and government employees throughout the ’60s and ’70s, the theory leapt into the public consciousness in 1988 with both a 60 Minutes piece and a fictionalized account in the movie Who Framed Roger Rabbit?. Even today it resonates with liberals – The Atlantic casually mentions it as the reason America abandoned mass transit, The Nation wrote a whole article about it a few years ago, Fast Food Nation discusses it, and in the last week I’ve seen two references to the theory in the planning blogosphere.

Though the story has embedded itself in the liberal worldview, it has little basis in reality. A cursory look at transportation history shows that motorization was already well underway by the time National City Lines – the holding company backed by GM, Firestone Tire, and Standard Oil, among others – started buying up transit companies in 1938. Other factors, often championed by progressives, had already driven the industry into decline and it was really only a matter of time before buses took over. Although General Motors and other car-centric companies were certainly lobbying the government in their favor, the progressive tendency to vilify private transit companies had already turned the public against streetcars, and local governments were already heavily predisposed towards motorization by the late ’30s. It is perhaps because of this progressive complicity in streetcars’ demise, along with continued loyalty to state ownership and regulatory power, that the modern liberal narrative omits the true reasons for the decline of streetcars in America.

By the time the automobile really hit the scene, the streetcar had been around for about as long as the car’s been around today. First powered by horses in the 1830s, later by steam-powered cable systems, and finally by electricity, it’s fair to say that the streetcar was a deeply entrenched mode of transit by the beginning of the 20th century. But while the streetcar gained in popularity, the industry also attracted a cruft of regulation and corruption that dogged it till its dying day. Bribery was endemic in the awarding of service franchises, and their exclusive monopolies (often granted by the government) didn’t do much to endear them to the public, either. Ironically, though, it was these exclusive contracts that eventually brought streetcars down. Eager to receive guarantees on their large up-front investments, streetcar operators agreed to contract provisions that held fares constant at five cents and mandated that rail line owners maintain the pavement around their tracks. These rules made sense in the 19th century – inflation was a relatively minor phenomenon until World War I, and horses were rather destructive to the cobblestone streets – but as the next century dawned, these provisions grew increasingly anachronistic and would soon lead to the streetcar’s downfall.

The five-cent fare became a birthright to early 20th century voters and was a third-rail to politicians, not unlike toll-free roads today. Even when wartime inflation eroded the value of the nickel to half its prewar value, local governments would not release streetcar operators from their obligations to charge the uniform fare for all trips, no matter the distance. (Some have argued that this absence of zone pricing, which was so common in Europe, was itself sprawl-inducing, as it made living in far-off suburbs no more expensive than living closer to the city center.) The paving requirements, too, turned out to be poisonous to the industry. When automobiles started arriving in cities, their roads were literally being paid for by the competition, despite the fact that horses had long been phased out, and electric streetcars ran on dedicated tracks and didn’t touch the pavement. Organized labor also took its toll on the streetcar, driving up wages in a heavily labor-intensive industry where the competition – jitneys, municipal buses, and automobiles – had much fewer labor restrictions (not to mention lower or nonexistent tax burdens). In San Francisco, unions managed to convince the city government to forbid the operation of streetcars by just one person, ostensibly on safety grounds, but more likely to encourage employment of union members. Companies were also required to continue to provide service on all the routes they owned, and in many cases were actually required to modernize them, regardless of profitability. In addition to draining the corporations of funds, this also explains why they opted for cheaper buses on routes that were no longer profitable, but had to be maintained by law.

As the century wore on, “traction magnates,” as the titans of the streetcar industry were known, became the Wall Street bankers of their day. Progressive Era and New Deal reformers reacted against the Gilded Age elites, and the owners of streetcar networks were some of the wealthiest people around. The Nation was, by 1920, editorializing against density and subways (they “make a slum out of a suburb”), and the progressive New Dealer mayor of New York Fiorello La Guardia deemed trolleys to be “as dead as sailing ships” in 1935. Franklin Delano Roosevelt’s own Works Progress Administration was tearing up streetcar tracks in Manhattan years before National City Lines began doing the same in far less transit-worthy places.

Beyond local governments’ direct attacks on private transit companies, all levels of government contributed to rail’s demise by offering the vast majority of roads to consumers free of charge. While the status quo’s more libertarian-minded backers will point to the gas tax as a user fee, the highway funds are hardly adequate to cover the true costs. Though state and federal governments do now cover most of the capital and operating costs of the highways, local roads are still paid for almost entirely out of general revenues. And when you consider the forgone taxes and opportunity costs, roads start to look severely under-priced – to say nothing of the last hundred years of subsidized road building (the mainstay of FDR’s WPA), eminent domain, anti-urban federal home tax breaks and lending programs, positive feedback loops, and density-limiting zoning and parking policies. Private streetcar companies didn’t get the benefit of government-financed, tax-free tracks in their day, and in fact they paid the automobile’s subsidies directly in some cases, as with the aforementioned paving requirements, and indirectly in others, through local property taxes.

But if the suburban bug had infected America long before 1938 and failures of government were the real culprit, then why is the narrative of the Great American Streetcar Conspiracy so pervasive? Martha Bianco has pointed to the universal desire for a clear villain/victim dichotomy in her study of the myth, but I think the real reason is that politicians and progressive academics have too much at stake in the status quo explanations. American politicians have hitched their wagons too tightly to suburban homeowners to admit that it was a mistake. Progressive economists, historians, and planners, on the other hand, have invested so much intellectual capital into the idea of state regulation and control that they cannot admit that the urban planning profession in America is rotten to the core, and that the mere granting of these powers to government was the original sin. With car-borne constituents and an economic ideology to defend, modern day liberals have apparently found their own culpability in the rise of the suburbs too tough a pill to swallow, and so they’ve settled on General Motors, Standard Oil, and Firestone Tire as scapegoats. But just because they can’t face their history doesn’t mean that we shouldn’t.

Academic references

  1. Bianco, Martha. “Kennedy, 60 Minutes, and Roger Rabbit: Understanding conspiracy-theory explanations of the decline of urban mass transit.” [source]
  2. Bond, Winstan. “The flawed economics and morality of the American uniform five-cent fare.” [source]
  3. Lurie, Melvin. “The effect of unionization on wages in the transit industry.” [source]
  4. Schrag, Zachary. ” ‘The bus is young and honest’: Transportation politics, technical choice, and the motorization of Manhattan surface transit, 1919-1936.” [source]

Comments

  1. Yes, the streetcars were in general decline even before they were dismantled. But the replacement of streetcars with buses led to a sharp decline in transit ridership independently of the trend for lower ridership. Even today, when buses are in principle much smoother rides than they were in 1950, there’s a measurable rail bias in transit ridership, even keeping everything else equal.

    But the complicity of the oil and auto industries in the decline of transit goes further back than the National City Lines conspiracy. Beginning in the 1920s, those industries engaged in widespread astroturf encouraging road construction; the government supported them, in an early example of regulatory capture. For an example, described in Owen Gutfreund’s 20th Century Sprawl, the federal good roads honcho ran essay contests like “How good roads help the religious life of my community,” sponsored by Firestone. GM’s American Highway Users Alliance joined the fray in the 1930s, once the company displaced Ford as the top automaker; it sponsored pseudo-scholarship arguing that toll roads would never get enough users to pay back their construction costs (in reality, they were wildly successful, much more so than the free roads).

    Turn-of-the-century progressive reformers were instrumental behind the early push for government subsidy of sprawl, but you can’t ignore the role of the sprawl industry in generating income for itself.

  2. Perhaps I sold the sprawl industry short when it comes to lobbying…I knew about the Good Roads movement and their auto-based funding sources, but it always seemed to me like their contributions were relatively minor…more relevant for rural and interstate travel. I don’t know much about it, but as far as I know, the Good Roads movement didn’t extend to urban centers/streetcar suburbs. Do you have any good reading material on the Good Roads movement?

  3. I don’t see what liberalism has to do with this at all. I’d also note that using liberal and progressive as interchangeable terms isn’t all that accurate.

    That said, the reasons you lay out for the decline of streetcars are all solid – however, they do not explain some of the individual cases. In Minneapolis, the guys that liquidated Twin City Rapid Transit were convicted of fraud. Was it some vast conspiracy? No, but it wasn’t just some natural decline in market share.

    Likewise, as Alon notes, the real problem wasn’t that streetcar ridership peaked, but that this massive disinvestment removed a huge amount of infrastructure and crippled the transit ridership base in many cities. You only need to compare some of the cities that managed to keep streetcars in place (San Francisco, Toronto) or those that had other transit infrastructure to fall back on (New York, Chicago) and compare them to places like Los Angeles.

  4. I don’t see what liberalism has to do with this at all. I’d also note that using liberal and progressive as interchangeable terms isn’t all that accurate.

    That said, the reasons you lay out for the decline of streetcars are all solid – however, they do not explain some of the individual cases. In Minneapolis, the guys that liquidated Twin City Rapid Transit were convicted of fraud. Was it some vast conspiracy? No, but it wasn’t just some natural decline in market share.

    Likewise, as Alon notes, the real problem wasn’t that streetcar ridership peaked, but that this massive disinvestment removed a huge amount of infrastructure and crippled the transit ridership base in many cities. You only need to compare some of the cities that managed to keep streetcars in place (San Francisco, Toronto) or those that had other transit infrastructure to fall back on (New York, Chicago) and compare them to places like Los Angeles.

  5. Plenty of progressives know that the myth isn’t exactly true. There is no question that the bus coalition did bring about the end of streetcars, but the fact is that streetcars were declining anyway. Witold Rybczynsky discusses this in the first chapter of _City Life_, which was published in 1995.

    What is undeniable is that the bus coalition didn’t make decisions in their ownership of systems that would favor the streetcar over the conversion to buses.

    But yes, there were many other more important reasons for why the streetcars failed, deconcentration of population and the subsidy of roadbuilding, while privately owned streetcar firms continued to pay taxes on their capital equipment and land, which was comparable to how the trucking industry was subsidized vis-a-vis railroads. Go back and look at AAR ads in national magazines such as Saturday Evening Post from the 1940s and 1950s for the railroad industry’s take on the same subject.

    And as pointed out by economists, regulation of streetcar fares focused on keeping fares low, rather than ensuring the right amount of money for capital investment in further improvements, which ended up causing other problems. Etc.

    Richard Layman
    http://urbanplacesandspaces.blogspot.com

  6. Streetcars never made money. They were constructed and operated by land speculators to provide access to new housing developments. They made a good deal of money on the land, sold the streetcars to separate operating companies which were unable to maintain a quality of service given price regulations. The car became a much quicker and convenient alternative.

  7. There was apparently good money in the 1940s and 1950s strip mining these transit companies. Buy already struggling transit companies. Rip up all the rails and overhead wire – sell for scrap. Replace trolleys with diesel buses – bought by GM, of course, this allows making regular city streets into high speed one way thoroughfares purely for auto traffic – benefiting highway interests. Slash headways to reduce costs (while also slashing ridership but who cares especially when your company owners are highway interests). Sell off any private right-of-way, off-street loops, substations, urban garages/yards/barns. Its all about dis-investment, sell what you can off piecemeal since the sum of the parts are worth more than the whole. When you’ve finished the strip mining process, sell remnants of ‘bustituted’ transit system to local government.

    This 1955 GM “modernization” ad of Denver Transit says it all…

    http://www.trolleybuses.net/den/htm/usa_h_den_misc_ad_gm_trolleyconversion_195509_bt.htm

    Look to see when the last streetcar operated in your town, then look to see when the downtown one way streets went into effect. In many places it was the following day. Cities were anxious to get their one way streets and the streetcars were in their way of their implementation. The cities were pushing for the streetcars to go, the NCL-owned transit companies were happy to help as removing streetcars benefited the city and their bottom line, it was seen as win-win. Plus with the way people worshipped cars in that era, many saw no need for any quality transit anyway.

    A diesel bus is a transit vehicle made for an automotive environment… it functions and operates like an auto, a diesel bus’ whole relationship with the street is subservient to the flow of automobile traffic, it is on equal footing with a single single-occupant automobile, a diesel bus has no infrastructure in the street or overhead that says it even belongs on the street, it gets out of the way of traffic and pulls over to the curb to stop and pick up/drop off passengers. As its loading, auto traffic keeps flowing by on the wide thoroughfare. Meanwhile a streetcar is a transit vehicle designed for a transit and pedestrian environment, it dominates the street, it dictates the flow and speed of traffic… cars wait behind it. Pedestrians walk out into the street and board in the middle of the street. The role of the street is completely different.

    I think much of the desire to get the streetcars out was a desire by many to change the role of streets to that of an arterial thoroughfare solely for motor vehicle traffic.

    Going Places is a great video from this era that argued for better transit, unfortunately no one was listening.

  8. I read that a contributing factor to the “all of a sudden” and in many locations demise of electric streetcars was due to competition with cars on the road.
    Not meaning that people decided that cars were better than the street car, but that the car on the road adversely affected the efficiency of the street car system. As it was never part of the original civil engineer’s design of the urban layout.

    Part of the street car era was that street had sole right of way and would never have anything disrupting its constant flow. Prior to the automobile would have been horse competition, but I don’t imagine that anyone would have been brave enough to cut off the street car in their horse drawn wagon. Perhaps someone wanting to show off their shiny new car might intentionally go slow just to show off their new status symbol to everyone else stuck on the streetcar. Enter a few more cars on the road who are dropping someone off at a curb, turning slowly, distracted, and now the streetcar is no longer a great mode of travel because it can’t get past a broken down car occupying its lane.

    Reference: The facts come from John Stilgoe’s book Train Time, the embellishment is my own.

  9. I should clarify that when I say “progressive reformers,” I mean the turn of the century Progressive Movement, not modern progressivism.

  10. You’re trying to politicize actions from 80 years ago that weren’t political (they were fiscal) and you’re trying to construct a new narrative based on a faulty and poorly researched premise. Streetcar ridership started to decline with the introduction of the Model T. When La Guardia was saying that streetcars were dead it was in the context of massive subway projects. FDR and the WPA? Sorry but building the Blue Ridge or Merrit Parkway wasn’t competing with Brooklyn or LA trolleys. As was already mentioned, transit operations were, in most locations, only marginally profitable while they had limited competition. The capital costs were covered by profits from real estate development. Once the area was built out reinvestment in a line fizzled. The trolley routes that charged market fare and were getting no subsidies were among the first to fold.

    If you want to promote the market then do it but don’t try to pretend that the death of the streetcar was part of some “liberal agenda” of the great depression.

  11. I have read a lot about car/tire/oil companies lobbying efforts in those early days, but what about the enormous political clout of streetcar developers? They were much larger corporations, and if money and lobbying alone were enough to influence policy, you’d think they would have won. In the end, I think that lobbyists are given more credit than they deserve, and that the general ideological orientation of the period is the ultimate factor in deciding which way legislation goes.

  12. The streetcar developers did not have the same lobbying clout. They were too unpopular, and were too local to buy federal officials. The railroads did engage in massing lobbying, which is why they can use eminent domain as if they were public but can’t have eminent domain exercised against them except by the Feds. They didn’t care too much about cars until it was too late – they thought good roads would extend their range and be good for the bottom line.

    Money and lobbying alone are definitely not enough to influence policy. But they definitely help.

  13. But weren’t the important decisions being made by local actors? I agree that the national car companies were better at lobbying the federal government than the parochial electricity/streetcar barons, but then why weren’t they able to influence municipalities not to tax them so heavily, not to force them to build roads, not build roads out of general revenues, let them out of their 5-cent fares, etc? By the time the feds really got involved with road construction after the Depression, local governments had already beaten the streetcar companies to within an inch of their lives, no?

    I guess in general I’m just skeptical of explanations that rest on lobbying for monumental shifts in policy. Sure, lobbyists can get (relatively) little things done that a lawmaker doesn’t really care about, but I think that politicians choose to be lobbied to by people they have ideological affinities with, and that this extremely ideologically-charged period has more to say about what happened to streetcars than lobbying efforts do. But I agree with you that streetcars’ unpopularity had a huge role in it all…in some ways they were in the wrong place at the wrong time. But then again, one thing that Progressives/New Dealers liked about roads/suburbs was that they had control over building them, and since they hated density they were never going to allow that, so even municipally-controlled streetcars were never really going to work out.

  14. First of all, the FDR and WPA stuff is specifically regarding tearing out streetcar tracks – specifically, 125 miles of them in Manhattan alone. Building government-subsidized road projects was the largest element of the WPA. Hating on streetcars was far more popular during the Progressive Era – it was definitely part of their “agenda.”

    But secondly, streetcars a century ago were very much political issues. In fact, they were among the most important issues in local politics at the time.

  15. This s by far one of the best write ups and calrifications I have seen about the history of transit, private transit, and specifically the streetcar. I’m impressed that somebody actually looked up the history of what REALLY happened vs. the great conspiracies that people tend to hold as true somehow.

  16. Some of the important decisions were made by local actors, but not all: the Federal Aid Highway Act was passed early on, and so was the planning for the US Highway System. And of those decisions that were local, many were the kind that lobbyists don’t have as much influence over. Lobbyists are at their most powerful when they can influence esoteric regulations that nobody cares about, or propose benefits to themselves whose costs are too spread over to attract equally committed opposition. They’re at their weakest when their proposed policy goes against something that can be the basis of a mass movement. Modern-day lobbyists defeat popular programs by playing with obscure amendments and side issues until the legislation is too expensive. The railroads could obtain massive land grants and subsidies in the Gilded Age and defeat the proposed PTC mandate in the 1920s, but were powerless against fare caps, which affected people directly and thus has populist support.

    It’s true that the Progressive Movement hated urban density, but it didn’t really hate trains until after cars proved to be a better vehicle for suburbanization. Its main ideas about urbanity were home ownership, separation of uses, slum clearance, building codes, and single-family housing; those were supposed to turn immigrants into proper, unhyphenated Americans and defeat machine politics, which used ethnic loyalties to gain popular support. The New Deal was somewhat different. It came from a fusion of whatever was left of Progressivism with left-wing populism, which the original Progressives detested. It wasn’t intentionally anti-urban – in fact, it for the first time made urban roads eligible for federal funding – but was very much into building infrastructure to provide stimulus, leading to unintended anti-urban consequences.

  17. One thing that never gets brought up is that many non-NCL properties (Chicago, Seattle, etc.) lost surface streetcars as well. Also properties such as San Francisco Muni or New Orleans, both of which managed to keep a few streetcar lines, had many more routes that ended up being converted to buses.

    I think what really killed the streetcar in those days was lack of public interest. You have to look at the attitudes of people after WW II. After four years of crowding onto streetcars, gas and food rationing, etc, people were ready to “live it up.” That meant a nice house in the suburbs, a couple of cars, a TV, refrigerator, washer, dryer and various other energy-eating gadgets. People wanted to live this shiny, happy version of the future, and if the road and car people helped to push that along, well that was just good business, in their view.

    In the case of Los Angeles, many streetcar lines went away not because of NCL(LATL) per se, but because the City reconfigured the downtown streets to one-way. Another set of lines (serving the Southwest area of LA) were broken near Downtown because of freeway construction. But at least four lines survived until LATL was bought by the public LAMTA, which ran them until 1963. The decision to drop the last streetcars in LA was that of LAMTA, not LATL.

  18. You know what happened to streetcars, was very much like Buy America, an incomplete government policy.
    The design of the policy was at fault, requriing a better design. More market involvement would not have solved
    anything, that is a non-sequitor. We don’t get many people championing good designs. Instead we get people
    championing the market, a kind of deus ex machina.

  19. The Toronto case is well worth considering. The system had been in public hands since 1919 and kept to a strict model of self-financing. As a result there was very little “streetcar suburbs” activity — running subsidized lines into low-density suburbs — as seen in many American cities. Some historical geographers credit the reluctance to service emerging suburbs in the 1920s and 1930s with creating a denser and more contiguous urban form than is found in American cities of the same period. Housing was built more compactly because the car was not yet an available alternative for most people. The Toronto Transit Commission was so successful that it came out of World War II with enough capital to self-finance a subway line. In the late 1950s, Toronto was the smallest city in the world to have built a subway. Only in the 1950s did subsidies enter the scene, as the TTC’s service area was expanded into rapidly growing suburbs. Even today, it is one of the least subsidized transit systems in the western world, with a ridership second only to New York’s in North America. The Toronto case suggests that a well-managed, publicly run rail transit system was able to fend off the rise of the car and the private bus lobby in the 1940s and 1950s. I should say that I don’t think there’s anything uniquely Canadian about this what happened in Toronto — a similar scenario could have played out in the U.S., and the common U.S. scenario might well have played out in Toronto.

  20. The author’s analysis suffers from the same “desire for a clear villain/victim dichotomy” that dooms the flawed Streetcar Conspiracy. He simply substitutes ‘liberals and progressives’ for ‘oil and car companies,’ without changing the overall story plot.

  21. Here’s a couple of books worth reading. They don’t cover all the points raised, but they seem to be pretty well researched. I’m surprised they were not in the authors references.

    Black, E. 2006, Internal Combustion: How Corporations and Governments Addicted the World to Oil and Derailed the Alternatives, St.Martins Press, NY. ISBN 978-0-312-35908-9
    Carson, I. & Vaitheeswaran, V. V., 2008, Zoom: The Global Race to Fuel the Car of the Future, Penguin, ISBN 978-0141-03672-4

    Both books are readily available from FetchBook at: http://www.fetchbook.info/compare.do?search=9780141036724&startFrom=1

    I found both books disturbing because of the insight it offers into corporate influence and government compliance with self-interest groups. An inescapable conclusion is that the US got hijacked in the mid 1800’s and the system established is now part of America’s DNA. This is not good, but it is relevant to any discussion concerning public interest.

  22. I am glad to see this old canard being debunked. National City Lines was purchased by the “conspirators” in about 1938, and they divested it in 1949. During that time, about two dozen of the local transit systems owned by National City converted from streetcars to buses, while many more did not. The San Francisco Key System, Los Angeles yellow car, and St. Louis transit are among the systems owned by National City that did not convert from streetcars to buses.

    Meanwhile, literally hundreds of companies NOT owned by National City did convert from streetcars to buses. General Motors did try to use its ownership of transit agencies to sell its buses (along with Chevron oil in the West and Phillips in the East and Firestone Tires–the other conspirators) to agencies that were buying buses, for which it was fined $5,000. But that is the extent of the conspiracy.

  23. There’s another piece to this story.

    By the advent of WWII, those streetcar based transit systems still remaining were run to the max during the war, as gasoline rationing was in effect. They were just run into the ground. Most of these systems were about 30-40 years old at that point, many of the small ones never really have been upgraded in 20 or more years. The infrastructure (rail, overhead, and power generation) was worn out, and in need of refurbishment. With the expansion of population outside the core city, expansion was needed, but laying rail was very expensive. See Zack’s comment below.

    In that condition, barring public ownership (not many of the transit systems were public owned at the time), the operators were living hand to mouth out of the farebox, and unable to meet their obligations. The GM man’s offer to sell you a TDH 5105 for pennies (he was going to reap his profit with spare parts), and to haul away all that unsightly copper hanging in the air, was simply irresistible.

    Mayor LaGuardia’s sentiments were those the folks had in those days. Streetcars were so 1900s. Not nearly modern enough for the jet age. Now there were other twists and turns to why streetcars went away in various cities. Chicago, for example, had a moderately large system even until the early 50s. PCC 7078 had a fatal encounter with a gas truck; the Chicago politicians used this (and others) as reasons to junk the cars.

    Also, streetcars did make money … when there wasn’t much auto competition — many companies were profitable thru the mid-20s. The interurbans (usually bigger electric cars that traveled between cities) made money thru the 1910s, and some even into the 20s. However, the Model T was relentless, and it prevailed.

    Traffic was different in the 1940s. Check this out

    http://www.youtube.com/user/danhaneckow#p/u/8/_dHmuFTigzI

    Where the people were standing was a “safety island”. Many safety islands didn’t have the benefit of walls for protection. Just lines in the street right in the middle of traffic like that.

  24. There’s another piece to this story.

    By the advent of WWII, those streetcar based transit systems still remaining were run to the max during the war, as gasoline rationing was in effect. They were just run into the ground. Most of these systems were about 30-40 years old at that point, many of the small ones never really have been upgraded in 20 or more years. The infrastructure (rail, overhead, and power generation) was worn out, and in need of refurbishment. With the expansion of population outside the core city, expansion was needed, but laying rail was very expensive. See Zack’s comment below.

    In that condition, barring public ownership (not many of the transit systems were public owned at the time), the operators were living hand to mouth out of the farebox, and unable to meet their obligations. The GM man’s offer to sell you a TDH 5105 for pennies (he was going to reap his profit with spare parts), and to haul away all that unsightly copper hanging in the air, was simply irresistible.

    Mayor LaGuardia’s sentiments were those the folks had in those days. Streetcars were so 1900s. Not nearly modern enough for the jet age. Now there were other twists and turns to why streetcars went away in various cities. Chicago, for example, had a moderately large system even until the early 50s. PCC 7078 had a fatal encounter with a gas truck; the Chicago politicians used this (and others) as reasons to junk the cars.

    Also, streetcars did make money … when there wasn’t much auto competition — many companies were profitable thru the mid-20s. The interurbans (usually bigger electric cars that traveled between cities) made money thru the 1910s, and some even into the 20s. However, the Model T was relentless, and it prevailed.

    Traffic was different in the 1940s. Check this out

    http://www.youtube.com/user/danhaneckow#p/u/8/_dHmuFTigzI

    Where the people were standing was a “safety island”. Many safety islands didn’t have the benefit of walls for protection. Just lines in the street right in the middle of traffic like that.

  25. Hi Randal, good to see you reading the blog!

    I do have a question, though. While I was doing research for this article I read your CATO paper that references the GM conspiracy myth, and you explain the demise of the streetcar as “mainly prompted by the inefficiencies of streetcars, which were apparent to both public officials and private transit operators.” While I agree that the operating conditions of the streetcars were inefficient in the sense that they were unprofitable, I would argue that they were only so unprofitable because of the onerous government regulations against them and the funding of their competition (i.e., the roads). You seem to be implying (although I could be incorrect in this interpretation) that this was not true, however, and that the triumph of buses was indeed due to market forces and not government intervention.

    You wrote the paper a long time ago and the GM incident wasn’t the focus of your paper, but I’d be interested to get your opinion on whether private mass transit might have prevailed had the competition been fairer (i.e., streetcars were relieved of paving and five-cent fare obligations, and local roads were 100% funded via user fees).

  26. You know, another way to look at what happened with the streetcars is to ask the question — “what prompted Boston, Newark, Philadelphia, Pittsburgh, Cleveland, and San Francisco to keep some of their streetcar lines?” Answer: tunnels or grade separations to get the cars to downtown.

    New Orleans is a special case — lots of ridership on St Charles. Toronto has already been cited as a special case.

    I’ll say it, and maybe I ought to wear a flame suit… I believe streetcars (light rail) and transit thrive where traffic is terrible and/or parking costs for the day are outrageous. Imposing transit on Flyover Country (admittedly gross generalization of the area from the Appalachians to the west end of the Rockies), without the adverse traffic and parking factor is usually economic folly. People may like their transit line, but none in North America cover their costs out of the farebox.

    http://en.wikipedia.org/wiki/Farebox_recovery_ratio

  27. The story actually seems to vary with city and by region. In California one of the largest street railway operators/owners was the Southern Pacific Co.which, by the 1930s, wanted out of that particular business. So they sold their franchises in cities such as Fresno and Stockton, and after WWII they sold their systems in Southern Carlifornia to an off-shoot of NCL (remember Pacific Electric?).

    NCL bought mostly small bus companies in small cities until they got into larger cities such as Oakland and Los Angeles, both in 1944. But they were already in a whole host of small California cities by then.

    Salta Lake City was another city that NCL got into, as well as St. Louis. It’s also interesting that in Los Angeles some of the streetcar lines remained until after NCL went out of business, so they must have been fairly profitable!

  28. Outstanding article on the way it was and is. Thank you for the time and energy you spent exposing this myth. I will take the time to read and research on the other issues that you brought up and will comment further at a later date. Thanks again.

  29. Are you aware that the History Channel has a segment on the LA transit system and blame GM on the fact that it was shut down? That is were people are getting some of this junk.

  30. I’m old enough to remember riding on the Los Angeles streetcar system. I don’t know if the car was much of an improvement, but the streetcar system was no picnic, slow, you waited in the rain (rare in Los Angeles, but it did happen), and my mother had to keep two children (3 and 7) from slipping of the traffic island and into traffic flowing by on two sides.

  31. Be very careful of ANYTHING put out by the entertainment industry (Hollywood, History Channel, etc.). I started my career as an engineer working with a consulting firm that handled traffic flow. For whatever it’s worth, you will find my name on the Los Angeles Rapid Transit Study (LARTS) circa 1972.

    Lots of things seem to make sense, but when examined in detail fall apart. Ex: An RT system can move people faster and cheaper. That’s true: STATION TO STATION!. Once you get the whole trip in there DOOR TO DOOR, everything changes. and the automobile comes in pretty darn good. Again, on the LARTS study, about half of the people in the greater Los Angeles area, would have had to drive 15 miles to get to the station for the high speed bus that would take them to the high speed rail.

    My apologies to all the people I met in Berkeley, but the engineers are not complete idiots.

  32. Another consideration is that local elites, being wealthier and more likely to own cars, were heavily pro-auto. Case in point: in 1923, 42,000 Cincinnatians petitioned for a ballot measure that would have required mechanical speed governors in cars, to ensure safety for other modes. All of the daily newspapers opposed the initiative, particularly in their automotive classified sections; after exhaustive Automobile Club lobbying, the measure garnered only 14,000 votes. Streetcar companies were deeply unpopular even when they did stand up for street regulations that would have benefitted their working-class patrons.

  33. “the idea of state regulation and control that they cannot admit that the urban planning profession in America is rotten to the core, and that the mere granting of these powers to government was the original sin”

    Right so you prefer the unregulated world were industrial factories are intertwined with residential neighborhood. Incredible ignorance, Zoning or the “original sin” protects the health., safety and integrity of neighborhoods. You should do some research on it, Euclid vs Amber Reality would be a great place to start.

  34. The biggest detriment to streetcars was whenthe Supreme Court ruled that power companies could not own traction companies. Many cities were given ownership of traction companies whose electrical systems were nearly a half century old and needed upgrading that municipalities could not afford in the Depression era. It was much cheaper for most medium sized snd smaller municipalities to convert to self contained buses-no wire, tracks, electrical systems or private rights of way to maintain. It’s sad a huge city like NY, Chicago or DC couldnt maintain their trolley lines.

  35. The biggest detriment to streetcars was whenthe Supreme Court ruled that power companies could not own traction companies. Many cities were given ownership of traction companies whose electrical systems were nearly a half century old and needed upgrading that municipalities could not afford in the Depression era. It was much cheaper for most medium sized snd smaller municipalities to convert to self contained buses-no wire, tracks, electrical systems or private rights of way to maintain. It’s sad a huge city like NY, Chicago or DC couldnt maintain their trolley lines.

  36. Such nonsense. There was a conspiracy by the corporate industrialists and they are always conspiring to pump up their profits even more.

  39. Zoning started well before Euclid v. Amber (NYC’s code was passed two decades earlier), and was mostly concerned with preserving the “character” and land values of neighborhoods, not health and safety. There were elements of that to it, especially the segregation of industrial/noxious uses, but it was much, much bigger than that. Click on the zoning category on the right to learn more…

  40. “had already drove” ?? Driven.. Fiorello La Guardia — Fiorella would be female! New Dealer? He was a Republican.

  41. @jsallen thanks for the corrections. We will make the edits.
    However, although LaGuardia was a republican, he was a New Dealer, and a Progressive. Progressivism has roots in both parties. Teddy Roosevelt and Herbert Hoover were progressive Republicans, whereas FDR was considered a liberal.

  42. Yeah, a BS apologetic piece.

    It doesn’t matter if it would have happened anyway, the conspiracy (or anti-trust behavior) was there.

    As you write “A cursory look at transportation history shows that motorization was already well underway by the time National City Lines – the holding company backed by GM, Firestone Tire, and Standard Oil, among others – started buying up transit companies in 1938. “.

    What business did they have in getting a holding company and buying (and then killing) those transit companies?

  43. You’re right to split out the highways from local roads. Highways in most states are indeed more than cover’d by the gas taxes; funds are often siphon’d off the highway fund to fund transit.

    Local roads/streets are funded by local taxes … property and/or sales taxes. This is not a true subsidy … roads are NEEDFUL! Even before they began to be pav’d, the streets, roads, asf were there. A town or any neighborhood must hav a street or road to go about on, bring goods in, asf. I don’t think of paying for lawmen or firemen as a “subsidy” any more than I think of paying for the town to pave the streets so as not hav a town full of muddy or dusty roads.

    Further, roads can be noted by anyone from walkers, to bikers, I’v even seen motoriz’d wheelchairs going down my street. Even those without cars or bikes get deliveries either straight to their house or to the local stores where they shop. We townsfolk ban together to pay for these roads to be pav’d; thus, they are not “subsidiz’d” rather streets and street care are among the bedrock reasons that we ban together in towns and do things together.

  44. And what was the root of the “massiv disinvestment”? The simple truth is that when it came time to repave the street (the streetcar companies had to pay for that), upgrade the rails, the catenaries, the streetcars themselves the rail companies (and later the metro transit authorities) could not justify the cost when liken’d to buses.

    Buses are cheaper all about. Any light rail that runs in the street can be caught up in traffic. I know. More than once I’v had to get off the Trolley and walk the last few blocks to where I was going owing to the Trolley was jamm’d up as well.

    Rail on truly makes sense if it runs either under or over the streets and is not hinder’d by traffic. Subways are a deep, deep spend. The best choice then becomes a monorail. The monorails themselves are no more expensiv to build, often less so, than ground level rail but the true savings come in that they cost much less to run (can be automated) and are much quieter.

  45. “The streetcar developers did not have the same lobbying clout.” … Let’s swap to “streetcar companies” to be clear.

    Streetcars companies had a LOT of clout. They kill’d off the erly jitney bus competition thru lobbying for more regulation.

    The feds wern’t wrappt up in transit in those days like it is now. It was ALL state and town … and even then mostly town regulations. The towns were the ones that gave out franchises (often monopolies) and regulated transit. They regulated it to the point of it often being unprofitable so towns took over running the transit systems. As is often the case, the gov’t central planning has led to worse transit system.

  47. I hav not read Stilgoe’s book but there is somthing amiss here. Do not muddl “right of way” with the streets were only for streetcars or even that the lane the streetcars run in are only for streetcars (unless they’re in a wide median). Often streetcars hav “ROW” now but that doesn’t mean that a car must clear the lane for the streetcar (the streetcar goes slower than the cars so if a car is in the way, then there is a traffic jam and the streetcar isn’t going anyway) … only that a car can’t park or stop over the tracks for a short while to wait on someone or a delivery is made. Truly tho, that is only enforcable by cops. If a delivery truck does stop on the tracks, the streetcar MUST stop. He can call a cop to come giv the guy a ticket (if the cop can get there in time), but he must stop.

    “As it was never part of the original civil engineer’s design of the urban layout.”

    The streets were there before the streetcar (thus, the name STREETcar). Streetcars themselves were first pull’d by horses! Streetcars came along well AFTER any “urban layout” and no competent designer would hav ever laid out a STREET only for streetcar or trolley. It’s doubtful that even a lane would hav been nam’d only for streetcars and unless that was grade separated, any such limitation would hav overlookt by the other users anyway.

  48. I’m not Randall, but I’m a bit baffl’d on the question. Are you asking about private transit (inholding buses) or private rail transit?

    First I want to point as I did in another comment, that local roads are NOT a true subsidy. Roads and streets are NEEDFUL. The users … the citizens … do pay for them thru property and sales taxes. Road/street repair (paving) is one of the bedrock reasons for a town to even be. We townsfolk note the road either straightforwardly … with our own car, bicycle, walking, or even with a wheelchair (yes, I’v often seen a man ride riding his motoriz’d wheelchair down our street) or we note them thru delivery of goods by others. So you see, the roads MUST be there and need to be in good shape for a town to thrive … not so for a rail. Therefore, you shouldn’t brand local roads as “subsidiz’d”. However, having said that and given the tight budgets of many towns, I would not be froward to small local gas tax dedicated to the town streets or even a bit of my property tax earmarkt for streets (as it is done for the schools). Now, we all know that doing that is truly nothing more than shuffling the numbers about but it would at least drive a stake thru this silly thought that local roads are “subsidiz’d”.

    Next, even if the streetcar companies wern’t responsible for paving their lanes, they wouldn’t hav made it any more than LRT systems today. Today’s LRT most often needs a subsidy to cover it’s working costs (even with zone fees) so covering the building costs is not going to happen. The only aside to this is the Las Vegas Monorail which does cover its working costs. It has run into trouble meeting the debt payments for building it tho. That is likely owing to the poor routing but that is another soapbox.

  50. The streetcar system in the District of Columbia (and some nearby parts of Maryland) was ordered shut-down and replaced by buses by congressional mandate (in those days, D.C. had no elected government of any kind) after a long and nasty transit workers strike in 1956.

    The pre-strike holder of the transit franchise in D.C., Louis Wolfson’s Capital Transit Company (CTCo) was replaced by O. Roy Chalk’s D.C. Transit System, Inc. (as a condition of taking over the transit franchise, D.C. Transit was contractually required to cease all electric street railway operations by 1962, and the last streetcars (until recently) rolled on D.C. streets in January 1962). Chalk actually wanted to keep streetcars (the system and rolling stock were generally in good condition), but Congress refused to reconsider. Fares were set by the D.C. Public Service Commission and its Maryland counterpart for service crossing into Montgomery County and Prince George’s County.

    General Motors,Chevron and the rest of the “conspiracy” had nothing to do with it.

  52. If the streetcar demise was inevitable, then why did GM, Firestone, Standard Oil (among others) create a holding company to purchase streetcar operators and tear up their tracks?

    Perhaps liberal planning professionals need a simple scapegoat in corporate America, and some writers need a simple scapegoat in “liberal planning professionals.”

  54. …So the owners wealthy beyond belief but the price freeze and road tax were a crippling squeeze…What?

  56. GM killed their EV1 and crushed them all like they did to electric street transport earlier in the piece, Chene street which starts in a GM factory carpark in Detroit is a complete mess, look on Google Earth. GM have no corporate responsibility, they should have been allowed to fail whereas Lehman brothers should have been kept afloat and given new management.

Trackbacks

  4. […] Read it. Among liberals in the planning profession today, the story of the Great American Streetcar Conspiracy is widely known. There are more nuanced variants, but it goes something like this: Streetcars were once plentiful and efficient, but then along came a bunch of car and oil companies like General Motors and Standard Oil, and they bought up all the streetcar companies, tore out their tracks and replaced the routes with buses, and ultimately set America on its present path to motorized suburban hell. Although the story dates back to a 1950 court conviction and was retold by academics and government employees throughout the ’60s and ’70s, the theory leapt into the public consciousness in 1988 with both a 60 Minutes piece and a fictionalized account in the movie Who Framed Roger Rabbit?. Even today it resonates with liberals – The Atlantic casually mentions it as the reason America abandoned mass transit, The Nation wrote a whole article about it a few years ago, Fast Food Nation discusses it, and in the last week I’ve seen two references to the theory in the planning blogosphere. […]

Meta