Who Killed Public Transportation in Los Angeles?

Why did the streetcars disappear, there many reasons and this news item may shed a little light from 50 to 60 years ago.

Who Killed Public Transportation in Los Angeles?

Posted on 03 May 2014
by
Craig Fitzgerald

With Elon Muskai??i??s Hyperloop making news in Israel, the story of how Los Angelesai??i??s trolley system disintegrated is once again rising in discussions. The demise of the Red Car trolleys in Los Angeles is the stuff of legend. Itai??i??s such a great narrative that it made its way into the plot of the movie Who Framed Roger Rabbit?, the Chinatown-esque movie that spearheaded the resurgence in American animated films. But, like the story of Preston Tuckerai??i??s quest to outdo the American automotive industry at its own game, thereai??i??s a lot more to the story of the demise of Pacific Electric ai??i?? also known as the Red Car System ai??i?? than meets the eye.

The Conspiracy

Thereai??i??s no doubt that General Motors and many other automotive-centric companies bought up trolley services all over America. According to United States Court of Appeals for the Seventh Circuit in 1951, ai???Pacific City Lines was organized for the purpose of acquiring local transit companies on the Pacific Coast and commenced doing business in January 1938,ai??? with the backing of investors like Firestone, Standard Oil of California, Phillips Petroleum, General Motors, Mack Trucks and the Federal Engineering Corporation.

National City Lines ai??i?? the parent company of Pacific City Lines ai??i?? bought the Yellow Cars of the Los Angeles Railway, converting most of those lines to bus routes. National City Lines, Pacific City Lines and American City Lines made similar purchases and conversions in over 100 American cities like Oakland, Baltimore and San Diego, and eliminated streetcar service en masse.

In 1949, Firestone Tire, Standard Oil of California, Phillips Petroleum, GM and Mack Trucks were convicted of conspiring to monopolize the sale of buses and related products to local transit companies controlled by NCL and other companies. However, they were acquitted of conspiring to monopolize the ownership of these companies. The verdicts were upheld on appeal in 1951.

The Whistleblowers

In 1946, Edwin J. Quinby had recently retired from the US Navy as a Lieutenant Commander. As a result of the conversion of the Key System trolleys in Oakland, California, Quinby penned a 24-page expose on the owners and investors of the National City Lines. ai???This is an urgent warning to each and every one of you that there is a careful, deliberately planned campaign to swindle you out of your most important and valuable public utilitiesai??i??your Electric Railway System,ai??? Quinby wrote.

Quinby had previously worked for the North Jersey Rapid Transit, which operated in New York and had established the Electric Railroadersai??i?? Association in 1934, which had lobbied on behalf of rail users and the services they used.

Thirty years later, Bradford Snell, a the Senate antitrust attorney, former scholar with the Brookings Institution and attorney with Pillsbury, Madison and Sutro testified before the United States Senate, and provided what would become the document of record that conspiracy theorists would refer back to time and time again when discussing the ai???Great American Streetcar Scandal.ai???

Snell testified: ai???My findings, contained in a study entitled American Ground Transport, are briefly this: the Big Three car companies used their vast economic power to restructure America into a land of big ca=rs and diesel trucksai??i??General Motorsai??i?? destruction of electric transit systems across the county left millions of urban residents without an attractive alternative to automotive travel.ai???

Snell took particular issue with the leniency of the fines levied in the conspiracy cases: ai???The court imposed a sanction of $5,000 on GM. In addition, the jury convicted H.C. Grossman, who was then treasurer of GM. Grossman had played a key role in the motorization campaigns and had served as a director of Pacific City Lines when that company undertook the dismantlement of the $100 million Pacific Electric system. The court fined Grossman the magnanimous sum of $1.ai???

The Mitigating Factors

Whether or not GM, Firestone and Standard Oil were buying up trolley companies and converting them to buses, the fact was that many of those lines were in dire financial shape when they were purchased, due in part to the trust-busting that followed the stock market crash of 1929.

The Public Utility Holding Company Act of 1935 ai??i?? also known as the Wheeler-Rayburn Act ai??i?? put the kibosh on trolley company profitability. Prior to the Act, streetcar companies like Pacific Electric could provide a public transportation service, as well as producing electricity for sale to other parties. By 1932, eight utility holding companies controlled 73 percent of the private electric industry. Complex legal structures made it very hard for individual states to regulate.

Companies like Pacific Electric were private companies, not public services. They were owned by electric utility holding companies. The electric utility company could sell electricity to the streetcar affiliate company and artificially mark up the price, allowing the utility company to effectively subsidize the streetcars, and then jack up electric rates for other customers.

The Wheeler-Rayburn Act resulted in the divestiture of utility-owned electric streetcar companies, and seriously impinged their ability to run profitably.

The DebunkerAi??

In 1997, in an issue of Transportation Quarterly, Cliff Slater essentially exploded the myth that the demise of trolley cars in America was due solely to the fact that GM and its cohorts were buying them. Slater essentially said that the trolley car systems around the country were able to be purchased because they were going broke.Ai?? As far back as 1920, ridership on streetcars was on the decline. By the time of the stock market crash, 20 percent of cities across the country were already relying solely upon bus service.

In 1915, streetcars were cheaper than buses to operate, according to Slater, but just a few short years later, as soldiers returned home from World War I, that wasnai??i??t necessarily the case. The capital cost of maintaining railways exploded, versus the road maintenance for buses, which was essentially subsidized by road construction specifically for automobiles that were becoming vastly more popular in the 1920s.

Streetcar ridership increased heavily during World War II, which made it a lot easier for conspiracy theorists to point to increased ridership as a suggestion that all was well with the trolley systems. But it was a time of great austerity and gas rationing, artificially inflating ridership during the war years. Immediately following the war, ridership plummeted and never recovered.

ai???GM simply took advantage of an economic trend that was already well along in the process ai??i?? one that was going to continue with or without GMai??i??s help,ai??? concluded Slater.

Films like Who Framed Roger Rabbit? and documentaries like Who Killed the Electric Car? have continued to utilize Snellai??i??s testimony and his writing as the basis for the theory that GM was at fault for cities in the United States not having adequate public transportation. But in an article entitled The Transformation of the Pacific Electric Railway: Bradford Snell, Roger Rabbit, and the Politics of Transportation in Los Angeles,Ai??scholar Sy Adler flatly states that everything Snell suggested about transit in Los Angeles ai???was wrong.ai???

Like the story of Preston Tucker, when you start to look at the actual facts of what happened, it turns out he was just a guy who wasnai??i??t particularly good at paying his bills.

Comments

2 Responses to “Who Killed Public Transportation in Los Angeles?”
  1. American expert says:

    THERE ARE TWO BAD ERRORS IN THAT REPORT BELOW BY
    CLIFF SLATER:

    One is that Pacific Electric Railway was not associated with the
    electric power business. It was a wholly owned subsidiary of South-
    ern Pacific. Southern Pacific was under high pressure from General
    Motors to get rid of Pacific Electric. Being such a large company,
    General Motors went to Southern Pacific and threatened them with
    loss of much GM freight business if they did not dump Pacific Electric.

    When Pacific Electric sought to bustitute the tunnel lines without using the
    traffic free tunnel the P.U.C. objected and allowed only a partial con-
    version. The public did not like it at all so the P.U.C. cited the service
    deterioration and ordered a fleet of PCC cars to be bought for the
    tunnel to replace the partial bus service.

    That was done.

    It was true that many SMALL city Street Car lines were converted
    to bus after the Public Utility Holding Company Act removed the
    Street Car lines’ source of capital, but ATA (now APTA) Annual FACT
    BOOKS showed that in larger cities with full street cars they were less costly to
    run than buses. Baltimore was a exception as its many Street Car
    lines were longer than many of their less important bus lines.
    Honest management knew that, so they bought many new PCC cars
    offending National City Lines, which bough Baltimore Transit stock,
    fired the good management, and put Douglas Pratt from Pacific City
    Lines in charge. I got to know Douglas Pratt when they moved him
    to Philadelphia to remove Street Cars there. They did not buy P.T.C.
    but took control of its Board of Directors by buying 10 % or so of the
    stock.
    With a straight face, Pratt insisted that a 51 seat GM bus was
    larger than a 50-seat PCC car. In fact, the PCC car was capable of
    62 bus style seats but in many cities put a wide aisle in the front half
    of the PCC ccars making them in fact two and one forward facing seat-
    ing to get more standees. One city had a law that limited standees to
    40 % of seating capacity so a San Diego PCC car would have been
    allowed 87 passengers maximum (too many) but a GM bus only
    71. also too many. Pittsburgh limited PCC cars to 75 passengers
    untll the 1950′s when city opposition to fare increases caused Pitts-
    burgh to raise the PCC cars to 80 peak passengers. In Youngstown
    we limited peak hour bus loads to 66.

  2. E. T. says:

    ANOTHER GROSSLY DISHONEST REPORT ON BUS RAPID TRANSIT
    Gordon J. Thompson made the initial studies for Light Rail, not Bus
    Rapid Transit, on the “Health” line to vastly improve access to the Health
    and University Center. When the plans were pretty well finalized, invest-
    ment in the Health and University center “took off”. As already reported
    previously, Cleveland’s Health Bus Rapid Transit Line was substituted
    for Light Rail as it had a lower initial investment, but NOT the $ 50 mill-
    ion. Euclid Avenue needed much rebuilding for BRT, but they only
    charged BRT with the actual bus facilities. The used highway funds to
    prepare Euclid Avenue. The TOTAL project cost was $ 200 million which
    is $ 10 million per year, given the shorter life of buses and pavement.
    Light Rail was to need $ 300 million to build but only $ 9.5 million per
    year as Light Rail lasts longer. National Transit Data Base for 2012 says
    Cleveland buses cost 99 cents per passenger-mile to operate plus $ 10
    million to amortize BRT. BRT attracts only 15,000 weekday passen-
    gers so the full cost is $ 1.48 per passenger-mile. Light Rail in Cleve-
    land costs 73 cents per passenger-mile plus 29 cents per passenger-
    mile to amortize the investment, a total 45 % more than Light Rail.
    As for Pittsburgh, I had to sign over the state funds for the South Bus-
    way. Tat experience caused me to reject funds for the East BusWay
    which promised 80,000 weekday passengers. The now carry about
    27,500, The used a Light Rail model to estimate BusWay riders. They
    missed their estimate by 191 % or the did not get 66 % of the passen-
    gers they promised. As for the property values, East Liberty did gain as
    it went through an urban redevelopment program, but they also claim-
    ed development values downtown where it was Light Rail had most of
    them, Pittsburgh’s bus costs are up around $ 1.50 per passenger mile plus
    amortization of the bus investment which is 63 cents per passenger-mile,
    very low because it was built in 1982. It got built because my boss retired
    and the new guy was a highway engineer. A previous study had recom-
    mended LRT . That brings up another lie in the report that BRT is newer
    than Light Rail. NOT SO AT ALL, The Shirley Highway BusWay came
    on line in 1969,.
    The first Light Rail was 1981. The South BusWay in Pittsburgh was 1978
    The first U.S. Light Rail Line was 1981. The South BusWay was used by
    buses that carried 18,750 weekday passengers on local highways. They
    promised us that the speed of the BusWay would increase that to 32,000
    but it peaked at 20,750 during the Second Energy crisis. It is now 10,000,
    47 % below before it was built.