American Ground Transport*
Page 4

     “By 1949, General Motors had been involved in the replacement of more than 100 electric transit systems with GM buses in 45 cities including New York, Philadelphia, Baltimore, St. Louis, Oakland, Salt Lake City, and Los Angeles. In April of that year, a Chicago Federal jury convicted GM of having criminally conspired with Standard Oil of California, Firestone Tire and others to replace electric transportation with gas- or diesel-powered buses and to monopolize the sale of buses and related products to local transportation companies throughout the country. The court imposed a sanction of $5,000 on GM. In addition, the jury convicted H.C. Grossman, who was then treasurer of General Motors. Grossman had played a key role in the motorization campaigns and had served as a director of Pacific City Lines when that company undertook the dismantlement of the $100 million Pacific Electric system. The court fined Grossman the magnanimous sum of $1.
     “Despite its criminal conviction, General Motors continued to acquire and dieselize electric transit properties through September of 1955. By then, approximately 88 percent of the nation’s electric streetcar network had been eliminated. In 1936, when GM organized National City Lines, 40,000 streetcars were operating in the United States; at the end of 1965, only 5,000 remained. In December of that year, GM bus chief Roger M. Kyes correctly observed: ‘The motor coach has supplanted the interurban systems and has for all practical purposes eliminated the trolley (street-car)’ . . .
     “Electric street railways and electric trolley buses were eliminated without regard to their relative merit as a mode of transport. Their displacement by oil-powered buses maximized the earnings of GM stockholders; but it deprived the riding public of a competing method of travel,” the report asserts, and quotes urban transit expert George M. Smerk as saying that " ‘Street railways and trolley bus operations, even if better suited to traffic needs and the public interest, were doomed in favor of the vehicles and material produced by the conspirators.’ "
     Progressing from the conversion of rail systems to bus transportation, new market temptations appear on the transportation scene:
     “General Motors’ gross revenues are 10 times greater if it sells cars rather than buses. In theory, therefore, GM has every economic incentive to discourage bus ridership. In fact, its bus dieselization program may have generated that effect. Engineering studies strongly suggest that conversion from electric transit to diesel buses results in higher operating costs, loss of patronage, and eventual bankruptcy. They demonstrate, for example, that diesel buses have 28 percent shorter economic lives, 40 percent higher operating costs, and 9 percent lower productivity than electric buses. They also conclude that the diesel’s foul smoke, ear-splitting noise, and slow acceleration may discourage ridership. In short, by increasing the costs, reducing the revenues, and contributing to the collapse of hundreds of transit systems, GM’s dieselization program may have had the long-term effect of selling GM cars.”
     But the last chapter of mass transit history has not been written and the Snell report views the present and anticipates the future as it looks at “the political restraint of rail transit” by the continuing efforts of auto makers. “[The auto industry] has used [its revenues from auto sales] to finance political activities which, in the absence of effective countervailing activities by competing ground transport industries, induced government bodies to promote their product (automobiles) over other alternatives, particularly rail rapid transit.
     "On June 28, 1932, Alfred P. Sloan, Jr., president of General Motors, organized the National Highway Users Conference [whose] announced objectives were dedication of highway taxes solely to highway purposes, and development of a continuing program of highway construction.

Continued on page 5

Copyright 1974 by Third Rail Press, 1999 by The Composing Stack Inc.
Reprinted by permission. Not responsible for typographical errors.

*Quotations in this article are taken from “AMERICAN GROUND TRANSPORT, A Proposal for Restructuring the Automobile, Truck, Bus, and Rail Industries,” 1973 by Bradford C. Snell. Excerpts used by permission of the author

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