Michigan Land Use Institute

MLUI / Articles from 1995 to 2012 / Ripping Up Rail

Ripping Up Rail

Auto industry conspiracy finished off the streetcar

March 1, 2001 | By Keith Schneider
Great Lakes Bulletin News Service

If you're from Detroit, you don't have to be ancient to remember an era before World War II when electric trolley service was so good that passengers on the Jefferson Avenue line waited just minutes between trains. As late as the 1940s, people who lived in Detroit — or for that matter in Grand Rapids, Kalamazoo, or Battle Creek — did not need automobiles. Trolley lines, owned and managed by private companies, provided remarkably efficient, nonpolluting, and low-cost transportation within cities and from city to city.

Cause of Death
Trolleys and commuter trains and buses were mainstream modes of transportation before sprawl put miles of travel between homes and everyday activities, such as grocery shopping and basketball practice. In 1945, according to the Detroit Free Press, the city's transit system carried 492 million riders, most of them on electric trolleys. In contrast, some 70 million riders use Detroit's public transportation system today, and they have only one choice: Buses.

Why did trolleys vanish in Detroit and every other city that had them? The advent of the automobile made traveling long distances easy and convenient. State and federal policies encouraged massive taxpayer investments in new roads and discouraged public support for private urban transit companies. Working families sought larger homes and more space. The result was a flood of people that flowed from city neighborhoods, where they had walked to street corners to catch trolleys, out to far-flung suburbs where empty roads encouraged driving.

Sales Trick
But new technology and government subsidies did not alone kill off the public transit systems that once served Michigan. One more salient factor sealed the streetcar's fate and simultaneously laid the foundation for America's current predicament of near-total reliance on cars. It was a big business conspiracy launched during the Great Depression that finished off the nation's public transit systems and which continues today to have costly and damaging implications.

In 1932, General Motors formed the first of two private companies, United Cities Motor Transit, to buy urban streetcar lines, tear them up, and substitute buses the company manufactured. When the American Transit Association criticized United Cities for attempting to tear up Portland, Oregon's electric transit system, G.M. closed the company temporarily because of fears of a political backlash.

G.M. returned to its sales strategy in 1936 by forming National City Lines, a new private company jointly owned by G.M., Firestone, Standard Oil of California, Mack Truck, and Phillips Petroleum. According to testimony from congressional hearings and a federal court case, between 1936 and 1956 National City Lines bought, dismantled, and replaced 100 electric rail systems in 45 cities with buses. Detroit, Kalamazoo, and Battle Creek were among the places that National City Lines targeted. G.M. also owned Omnibus Corporation, which in 1935 converted New York's extensive streetcar system to buses.

Guilty Verdict
In 1949 the United States found G.M., Standard Oil, Firestone, Mack Truck, and Phillips Petroleum guilty of anticompetitive behavior in violation of the Sherman Antitrust Act. What the court called a "criminal conspiracy" proved ultimately to be a splendid business investment for the perpetrators. G.M., Standard Oil, Firestone, Mack Truck, and Phillips Petroleum have since realized hundreds of billions of dollars in product sales connected with motorized transportation. They were fined only $5,000 each.


Michigan Land Use Institute

148 E. Front Street, Suite 301
Traverse City, MI 49684-5725
p (231) 941-6584 
e comments@mlui.org