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The notion of a General Motors streetcar conspiracy emerged after General Motors (GM) and other companies were convicted of monopolizing the sale of buses and supplies to National City Lines (NCL) 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 (through a subsidiary), Federal Engineering, Phillips Petroleum, and Mack Trucks—gained control of additional transit systems in about 25 cities.[3] 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. Most of the companies involved were convicted in 1949 of conspiracy to monopolize interstate commerce in the sale of buses, fuel, and supplies to NCL subsidiaries, but were acquitted of conspiring to monopolize the transit industry.

The story as an urban legend has been written about by Martha Bianco, Scott Bottles, Sy Adler, Jonathan Richmond,[4] and Robert Post. It has been explored several times in print, film, and other media, notably in Who Framed Roger Rabbit, Taken for a Ride, Internal Combustion, and The End of Suburbia.

Only a handful of U.S. cities, including San Francisco, New Orleans, Newark, Cleveland, Philadelphia, Pittsburgh, and Boston, have surviving legacy rail urban transport systems based on streetcars, although their systems are significantly smaller than they once were. Other cities are re-introducing streetcars. In some cases, the streetcars do not actually ride on the street. Boston had all of its downtown lines elevated or buried by the mid-1920s, and most of the surviving lines at grade operate on their own right of way. However, San Francisco's and Philadelphia's lines do have large portions of the route that ride on the street as well as using tunnels.

Other factorsOther factors have been cited as reasons for the decline of streetcars and public transport generally in the United States. Robert Post notes that the ultimate reach of GM's alleged conspiracy extended to only about 10% of American transit systems.[69] Guy Span says that actions and inaction by government was one of many contributing factors in the elimination of electric traction.[67] Cliff Slater suggested that the regulatory framework in the US actually protected the electric streetcars for longer than would have been the case if there was less regulation.[70]

Some regulations and regulatory changes have been linked directly to the decline of the streetcars:

  • Difficult labor relations, and tight regulation of fares, routes, and schedules took their toll on city streetcar systems.Some regulations and regulatory changes have been linked directly to the decline of the streetcars:

    Different funding models have also been highlighted:

    • Streetcar lines were built using funds from private investors and were required to pay numerous taxes and dividends. By contrast, new roads were constructed and maintained by the government from tax income.[77][78]
    • By 1916, street railroads nationwide were wearing out their equipment faster than they were replacing it. While operating expenses were generally recovered, money for long-term investment was generally diverted elsewhere.[citation needed]
    • The U.S. government responded to the Great Depression with massive subsidies for road construction.[77]
    • Later construction of the Interstate Highway System was authorized by the Federal Aid Highway Act of 1956 which approved the expenditure of $25 billion of public money for the creation of a new 41,000 miles (66,000 km) interstate road network.[78] Streetcar operators were occasionally required to pay for the reinstatement of their lines following the construction of the freeways.[79][failed verification]
    • Federal fuel taxes, introduced in 1956, were paid into a new Highway Trust Fund which could only fund highway construction (until 1983 when some 10% was diverted into a new Mass Transit Account).Suburbanization and urban sprawl, exacerbated in the US by white flight,[48] created low-density land use patterns which are not easily served by streetcars, or indeed by any public transport, to this day.[80][81]
    • Increased traffic congestion often reduced service speeds and thereby increased their operational costs and made the services less attractive to the remaining users.[82][83][84]
    • More recently it has been suggested that the provision of free parking facilities at destinations and in the center of cities loads all users with the cost of facilities enjoyed only by motorists, creating additional traffic congestion and significantly affects the viability of other transport modes.[85]

    Counterarguments

    Some of the specific allegations which have been argued over the years include:

    • According to Snell's testimony, the New York, New Haven & Hartford Railroad (NH) in New York and Connecticut was profitable until it was acquired and converted to diesel trains.[86] Little of NH was converted to diesel, and remains in electric operation under Metro-North Railroad and Amtrak. In reality, the line was in financial difficulty for years and filed for bankruptcy in 1935.New York, New Haven & Hartford Railroad (NH) in New York and Connecticut was profitable until it was acquired and converted to diesel trains.[86] Little of NH was converted to diesel, and remains in electric operation under Metro-North Railroad and Amtrak. In reality, the line was in financial difficulty for years and filed for bankruptcy in 1935.[87]
    • "GM killed the New York street cars".[86] In reality, the New York Railways Company entered receivership in 1919,[88] six years before it was bought by the New York Railways Corporation.[89]
    • "GM Killed the Red cars in Los Angeles".[86] Pacific Electric Railway (which operated the 'red cars') was hemorrhaging routes as traffic congestion worsened with growing car ownership levels after the