page_title: General Motors streetcar conspiracy
section_title: Early years
hierarchical_section_title: General Motors streetcar conspiracy / History / Early years
caption_attribution_description: English: Cartoon, "The Menace of the Hour." The menace illustrated is the "Traction Monster" (i.e., the new electric subway system in New York City), depicted as an octopus.
context_page_description: The notion of a General Motors streetcar conspiracy emerged after General Motors and other companies were convicted of monopolizing the sale of buses and supplies to National City Lines and its subsidiaries. In the same case, the defendants were accused of conspiring to own or control transit systems, in violation of Section 1 of the Sherman Antitrust act. The suit created lingering suspicions that the defendants had in fact plotted to dismantle streetcar systems in many cities in the United States as an attempt to monopolize surface transportation.
  Between 1938 and 1950, National City Lines and its subsidiaries, American City Lines and Pacific City Lines—with investment from GM, Firestone Tire, Standard Oil of California, Federal Engineering, Phillips Petroleum, and Mack Trucks—gained control of additional transit systems in about 25 cities. Systems included St. Louis, Baltimore, Los Angeles, and Oakland. NCL often converted streetcars to bus operations in that period, although electric traction was preserved or expanded in some locations. Other systems, such as San Diego's, were converted by outgrowths of the City Lines.
context_section_description: John D. Hertz, better remembered for his car rental business, was also an early motorbus manufacturer and operator. In 1917 he founded the Chicago Motor Coach Company, which operated buses in Chicago, and in 1923, he founded the Yellow Coach Manufacturing Company, a manufacturer of buses. He then formed The Omnibus Corporation in 1926 with "plans embracing the extension of motor coach operation to urban and rural communities in every part of the United States" that then purchased the Fifth Avenue Coach Company in New York. The same year, the Fifth Avenue Coach Company acquired a majority of the stock in the struggling New York Railways Corporation (which had been bankrupted and reorganized at least twice). In 1927, General Motors acquired a controlling share of the Yellow Coach Manufacturing Company and appointed Hertz as a main board director. Hertz's bus lines, however, were not in direct competition with any streetcars, and his core business was the higher-priced "motor coach".
  By 1930, most streetcar systems were aging and losing money. Service to the public was suffering; the Great Depression compounded this. Yellow Coach tried to persuade transit companies to replace streetcars with buses, but could not persuade the power companies that owned the streetcar operations to motorize. GM decided to form a new subsidiary—United Cities Motor Transport (UCMT)—to finance the conversion of streetcar systems to buses in small cities. The new subsidiary made investments in small transit systems in Kalamazoo and Saginaw, Michigan, and in Springfield, Ohio, where they were successful in conversion to buses. UCMT then approached the Portland, Oregon, system with a similar proposal. It was censured by the American Transit Association and dissolved in 1935.
  The New York Railways Corporation began conversion to buses in 1935, with the new bus services being operated by the New York City Omnibus Corporation, which shared management with The Omnibus Corporation. During this period GM worked with Public Service Transportation in New Jersey to develop the "All-Service Vehicle", a bus also capable of working as a trackless trolley, allowing off-wire passenger collection in areas too lightly populated to pay for wire infrastructure.
  Opposition to traction interests and their influence on politicians was growing. For example, in 1922, New York Supreme Court Justice John Ford came out in favor of William Randolph Hearst, a newspaper magnate, for mayor of New York, complaining that Al Smith was too close to the 'traction interests'. In 1925, Hearst complained about Smith in a similar way. In the 1941 film Citizen Kane, the lead character, who was loosely based on Hearst and Samuel Insull, complains about the influence of the 'traction interests'.
  The Public Utility Holding Company Act of 1935, which made it illegal for a single private business to both provide public transport and supply electricity to other parties, caused great difficulties for the streetcar operators which were frequently also generators of electricity.
caption: "The Menace of the Hour": the Populist view of transit (1899).
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