General Motors Streetcar Conspiracy

The General Motors Streetcar Conspiracy is a popular urban legend that General Motors illegally acquired many US streetcar systems and replaced them with buses for the express purpose of promoting the automobile.

By labelling the covert operation a 'conspiracy' and filing it under 'urban legends,' would-be apologists undercut what was actually a consummate business strategy crafted by Alfred P. Sloan, Jr, the MIT-trained genius behind General Motors, to expand auto sales and maximize profits by eliminating streetcars. In 1922, according to GM's own files, Sloan established a special unit within the corporation which was charged, among other things, with the task of replacing America's electric railways with cars, trucks and buses.

An article by Bradford Snell mentions that General Motors was convicted of conspiracy in 1949 (and fined $5000!) in their program to buy up and destroy electric urban trolley systems so that urban transit would be forced to rely on GMC buses and that this is the principal reason that modern-day trolley systems are rare in the United States today.

Bradford C. Snell makes his case against GM.

This belief has been questioned by Sy Adler who points out that, among other things, that General Motors was not convicted of buying up urban trolley systems but rather merely of forcing bus companies owned by General Motors to use General Motors buses and that trolley ridership peaked in the 1920 before GM's actions. The trolley industry's problems largely predated GM's interest.

Evidence in favor of the conspiracy are claims that, for instance, between 1926 and 1936 General Motors (GM) acquired New York Railways. By underinvestment and bad services the public transport system was systematically destroyed. In the mid-1930s GM advertised a trend away from rails, despite there was no such trend. Together with Standard Oil, Phillips Petroleum, Mack Truck and Firestone Tires, GM backed a joint venture called Yellow Coach to take over public transport city by city. Bad service reduced reliability and thus actively created the trend towards private transport that GM advertised. The companies were found guilty by a court of antitrust behavior and restraint of trade and fined a token amount.

Evidence against the conspiracy are that automobile ownership was rising everywhere, with and without GM purchasing the local streetcar systems. Streetcars were being converted to buses almost everywhere, including cities like London, England, without GM involvement, because buses were seen as the new technology at the time and were more flexible than streetcars, as they could route around track blockages for instance, and could use any road, not just roads with tracks, thereby off-loading infrastructure costs to the municipality.

Some documentation of the rapid transit interurban systems is often best provided by the history buffs, such as The Electric Railway Historical Association of Southern California.

Between 1936 and 1950, National City Lines, a holding company sponsored and funded by GM, Firestone, and Standard Oil of California, bought out more than 100 electric surface-traction systems in 45 cities (including New York, Philadelphia, St. Louis, Salt Lake City, Tulsa, and Los Angeles) to be dismantled and replaced with GM buses... In 1949 GM and its partners were convicted in U.S.district court in Chicago of criminal conspiracy in this matter and fined $5,000.

"General Motors' Destruction of California Transit Systems" provides some documentation of GM front companies and hostile takeovers of 'Key System' transit systems in California.

General Motors Streetcar Conspiracy

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Further reading