The Great Streetcar Conspiracy

If you oppose a streetcar or light-rail line, you will inevitably encounter the myth of the Great General Motors Streetcar Conspiracy. This story has been debunked numerous times, but it simply won’t die, as indicated by the lengthy Wikipedia article on the subject.

According to the myth, General Motors bought streetcar companies in order to dismantle them so that people would be forced to buy General Motors cars and drive instead. The truth is that General Motors merely was selling buses to companies that were transitioning from streetcars to buses.

Between 1888 and 1920, streetcar companies built lines in more than 800 American cities. These lines wore out and needed to be replaced after about 30 years. By that time, buses were available that cost less to operate and maintain than streetcars and could go anywhere there was a street, not just places where there were rails. Since buses shared the cost of infrastructure with cars and trucks, where streetcar owners had to pay 100 percent of the cost of the infrastructure they needed, most transit companies converted to buses as the streetcar lines deteriorated.

General Motors saw this as an opportunity and, in 1937, it along with Firestone Tire and Chevron and Phillips oil companies bought National City Lines, a company that owned about 60 streetcar lines in cities across the country. When the local streetcar companies converted to buses, National City made sure they buy buses from General Motors, tires from Firestone, and fuel from Chevron or Phillips, depending on which part of the country they were in.

Later, GM allowed Mack Truck to invest in National City so it could sell its buses, mainly to avoid claims that GM was trying to create a monopoly on buses. It didn’t work: In 1949, the Justice Department successfully persuaded the courts that GM and the other companies’ ownership of National City violated anti-monopoly laws, and they sold their interest in National City.

During the dozen years that GM and the other companies controlled National City, hundreds of streetcar companies across the country replaced streetcars with buses, but only about two dozen of them were owned by National City. Many companies owned by National City still operated streetcars when GM divested itself of the company in 1949, showing that GM was not pressuring National City to abandon streetcar lines any faster than it would have done anyway.

Adherents of the conspiracy theory often give the example of the Los Angeles’ Pacific Electric system, which was featured in the movie, Who Framed Roger Rabbit, which used the conspiracy story as a part of its plot. In fact, National City never owned any interest in Pacific Electric. It did own an interest in a streetcar company called Los Angeles Transit, but LA Transit was one of the companies that did not convert its streetcars to buses while GM controlled National City. In fact, LA Transit made its final conversion to buses only after it was taken over by the government.

Of the more than 800 cities that had streetcars in the early 1900s, only six still had them in 1966. Of the 800 or so that converted to buses, only about 24 were owned by National City when GM and its “co-conspirators” controlled that company. Transit companies and transit agencies converted streetcars to buses because buses cost less to operate, less to maintain, and less to replace than streetcars yet could go on any street and not just on streets that happened to have rails.

If there is a streetcar conspiracy, it is between railcar manufacturers, engineering firms, rail contractors, and transit agencies seeking to get as many millions of tax dollars as they can to build one of the most inefficient forms of urban travel.