Desire to rid the US of streetcars

0 0 October 17, 2025 Edit this post

by Bill Buys

EVER wondered what ever happened to streetcars – or trams, as they’re called in countries other than the US and Canada?

They were everywhere in the US 100 years ago, but these days, you're lucky to find one in a city, and even then it’s usually just a tourist attraction.

Part of the reason is something called the General Motors Streetcar Conspiracy.

The Ranker website says the conspiracy basically refers to a time when General Motors started buying up streetcar companies to create a monopoly on the transportation market.

It involved all kinds of backdoor deals and disposal methods, including the rumour that there's a trove of streetcars somewhere off the Pacific Coast near Los Angeles.

Is it true? Like most other widely believed conspiracy theories, some of it yes, some of it no, but the whole ordeal provides a fascinating look into the history of transportation in the US.

In 1936, GM began funding National City Lines and other holding companies with the purpose of buying up streetcar lines.

Before this, in 1935, GM had bought up some streetcar lines in a more direct fashion, particularly in New York City where they succeeded in changing the streetcar lines to bus lines.

Over time, Standard Oil, Firestone Tires, and Mack Trucks also colluded with National City Lines.

In the course of 12 years, National City Lines bought up many streetcar lines, the major ones being Baltimore, St. Louis, the Los Angeles Railway, and the Key System in Oakland, California.

GM was forced to sell National City Lines in 1949, but the company still continued to operate in some form, even buying up the Philadelphia streetcar lines in 1954.

Legend has it that, in the 1940s, General Motors engaged in a vast capitalist conspiracy to buy up electric trolleys all around the United States and shutter them.

From there, they replaced the trolleys with buses and basically gave consumers no choice but to use automotive transit.

Even the buses were part of the long con, though: the unpleasantness of bus travel would further convince people to buy their own cars.

Thus, the demise of street cars in cities was due to the machinations of a corporation intent on manipulating the market to its gain.

This conspiracy is well travelled, even making up much of the plot of the 1988 movie Who Framed Roger Rabbit . . . but is any of it true?

In many cases, National City Lines decided to shutter the streetcar operations they bought and replace them with buses.

In 1945, for example, the Los Angeles Yellow Car Lines were sold to a subsidiary of National City Lines.

The company began scrapping the electric trolleys and replacing them with products provided by their colluding companies.

The new diesel buses (GM's contribution) required fuel (provided by Standard Oil) and rubber (which is where Firestone came in).

By 1946, the Justice Department had taken notice and filed an anti-trust lawsuit.

In 1948, during the Supreme Court case United States vs National City Lines, the court ruled that GM had colluded with other companies to create a monopoly -- just not in the way the conspiracy theory would have you believe.

These companies conspired not to corner the market on streetcars per se (which were already publicly regulated local monopolies anyway) but to corner the market on transportation, particularly buses and their supplies.

Basically, the court ruled that a company that supplies products such as buses and petroleum couldn't go around buying transportation companies with the understanding that the subsidiary companies would buy exclusively from the supplier.

They were held liable for conspiring to monopolise the sale of GM buses, along with Firestone tires and Phillips and Chevron fuel for those buses.

Perhaps the biggest indication that the decline of the streetcar was not primarily caused by GM's actions is that it was already underway long before National City Lines was created in 1936.

Streetcar ridership peaked in 1920 at 13.8 billion rides per year.

At that point, it started losing a significant market share to buses, with combined bus and streetcar ridership still increasing until 1926, at which point the private car's presence started to be felt.

The rubber and fuel rationing of WWII saw an increase in both bus and streetcar service, but streetcar ridership still didn't re-reach its 1920 peak.

By 1937, more than 50 per cent of cities in the US operated on buses only. Similar trends existed in other countries, such as the UK.

It was only large cities that could maintain the ridership necessary to maintain streetcar lines, and most were augmented by buses, including Los Angeles, when National City Lines entered in 1945.

One of the chief disadvantages that streetcars faced when trying to compete with cars was that the streetcar companies were required to pay for the infrastructure needed to run them.

It included paving streets, a substantial amount of overhead.

1899 illustration by George Luks, *The Menace of the Hour*, depicting the new electric subway system in New York City as an octopus.

On the other hand, buses were able to use the roads being paid for by the public or sometimes even the street car companies themselves.

In return for being granted monopoly status as a regulated utility, most municipalities required streetcar companies to pay for the paving and upkeep of the streets around their lines.

Unlike most other countries, streetcars in the US were generally required to charge a flat rate of five cents for rides, no matter the distance.

This was due to agreements made with local municipalities that granted them monopoly status as public utilities.

As inflation set in, these fixed rates became extremely problematic, and politicians were not inclined to allow fares to be raised.

Bus companies, on the other hand, had no such legal restrictions and were able to institute zone pricing: charging one rate for travel inside city limits and another rate for longer trips.

In 1974, Bradford Snell was a congressional staffer when he introduced his report: "American Ground Transport: A Proposal for Restructuring the Automobile, Truck, Bus and Rail Industries."

The report claimed that GM deliberately masterminded the takeover of economically viable streetcar operations across the country in order to close them down and force people to use cars.

Snell pointed to the record of deliberate actions taken by GM and its subsidiaries in several cities to buy up streetcar lines and systematically dismantle them.

He also pointed to instances of corruption where GM bribed local officials.

However, some have questioned the accuracy of Snell's analysis.

The PBS film Taken For A Ride was a very persuasive piece of pro-mass transit propaganda that further cemented the idea that the modern American roadway system is really the result of a vast conspiracy undertaken by automotive interests.

Certainly, it did raise some valid points.

Yes, GM did engage in a campaign to replace streetcars with buses.

Yes, they created National City Lines in order to buy up streetcar lines.

Yes, the Supreme Court did rule against National City Lines under anti-trust laws and charge the players token fines.

It also points out the influence of highway-lobbying groups created by GM and other automotive interests on American transportation.

But it does not show a causal connection between the creation of interstate highways and the elimination of local streetcar systems.

The film relied largely on anecdotal evidence coupled with the work of Bradford Snell to make its assertions.

Though not directly related to the streetcar, the PBS film did point out the heavy influence of the highway lobby during the 1950s and beyond.

GM itself created the National Highway Users Conference to operate as a lobbying organisation in Washington, DC which was a major impetus behind the creation of today’s Interstate Highway System, which continues to shape the face of transportation.

But sans streetcars.