Did General Motors Plot To Undermine Public Transit So People Would Buy Cars?

Have you ever wondered what ever happened to street cars? Seriously, they were like everywhere 100 years ago. These days, you're lucky to find one in a city, and even then it is usually just a tourist attraction. Well, part of the reason for this is something called the General Motors Streetcar Conspiracy.

What is the General Motors Streetcar Conspiracy? It basically refers to a time when General Motors started buying up streetcar companies to create a monopoly on the transportation market. And it involves all kinds of dastardly backdoor deals and disposal methods, including the rumor that there's a trove of streetcars somewhere off the Pacific Coast near Los Angeles, CA. Is it true? Like most other widely believed conspiracy theories, some of it yes, some of it no, but the whole ordeal provides a fascinating look into the history of transportation in the US.


  • GM's National City Lines Bought All Up The Streetcars

    In 1936, GM began funding National City Lines and other holding companies with the purpose of buying up streetcar lines. Before this, in 1935, GM had bought up some streetcar lines in a more direct fashion, particularly in New York City where they succeeded in changing the streetcar lines to bus lines. Over time, Standard Oil, Firestone Tires, and Mack Trucks would also collude with National City Lines.

    In the course of 12 years, National City Lines bought up many streetcar lines, the major ones being Baltimore, St. Louis, the Los Angeles Railway, and the Key System in Oakland, California. GM was forced to sell National City Lines in 1949, but the company still continued to operate in some form, even buying up the Philadelphia streetcar lines in 1954.

  • The Long Con Began With Trolleys Getting Replaced By Buses
    Photo: Touchstone Pictures

    The Long Con Began With Trolleys Getting Replaced By Buses

    Legend has it that, in the 1940s, General Motors engaged in a vast capitalist conspiracy to buy up electric trolleys all around the United States and shutter them. From there, they replaced the trolleys with buses and basically gave consumers no choice but to use automotive transit. Even the buses were part of the long con, though; the unpleasantness of bus travel would further convince people to buy their own cars.

    Thus, the demise of street cars in cities from New York to Los Angeles was due to the machinations of a corporation intent on manipulating the market to their gain. This conspiracy is well traveled, even making up much of the plot of the 1988 movie Who Framed Roger Rabbit... but is any of it true?

  • There Were Massive Closures Of Streetcar Routes

    In many (but not all) cases, National City Lines decided to shutter the streetcar operations they purchased and replace them with buses. In 1945, for example, the Los Angeles Yellow Car Lines were sold to a subsidiary of National City Lines. The company began scrapping the electric trolleys and replacing them with products provided by their colluding companies. For example, the new diesel buses (GM's contribution) required fuel (provided by Standard Oil) and rubber (which is where Firestone came in). By 1946, the Justice Department had taken notice and filed an antitrust lawsuit.

  • GM Was Convicted Of Violating The Sherman Antitrust Act
    Photo: PBS / Youtube / Fair Use

    GM Was Convicted Of Violating The Sherman Antitrust Act

    In 1948, during the Supreme Court case United States v. National City Lines, the court ruled that GM had colluded with other companies to create a monopoly... just not in the way the conspiracy theory would have you believe. These companies conspired not to corner the market on streetcars per se (which were already publicly regulated local monopolies anyway) but to corner the market on transportation, particularly buses and their supplies.

    Basically, the Court ruled that a company that supplies products (e.g. buses, petroleum, etc.) couldn't go around buying transportation companies with the understanding that the subsidiary companies would buy exclusively from the supplier. They were held liable for conspiring to  monopolize the sale of GM buses, along with Firestone tires and Phillips and Chevron fuel for those buses. Put another way, a steel company going around buying car manufacturers so that they would only buy supplies from said steel company would be a similar violator of antitrust law.

    From the Court's opinion, "[the] basic charge is that the appellees conspired to acquire control of local transportation companies in numerous cities located in widely different parts of the United States, and to restrain and monopolize interstate commerce in motor busses, petroleum supplies, tires and tubes sold to those companies, contrary to the Act's prohibitions."