National City Lines
National City Lines, Inc. (NCL), was a front company — organized by GM's Alfred P. Sloan, Jr. in 1922, reorganized in 1936 into a holding company — for the express purpose of acquiring local transit systems throughout the United States. "Once [NCL] purchased a transit company, electric trolley service was immediately discontinued, the tracks quickly pulled up, the wires dismantled ...", and GM buses replaced the trolleys.
Indeed, in the 1920s automaker General Motors (GM) began a covert campaign to undermine the popular rail-based public transit systems that were ubiquitous in and around the country’s bustling urban areas. At the time, only one in 10 Americans owned cars and most people traveled by trolley and streetcar.
GM Bought and Dismantled Streetcar Lines Nationwide
“Despite public opinion polls that showed 88 percent of the public favoring expansion of the rail lines after World War II, NCL systematically closed its streetcars down until, by 1955, only a few remained,” writes author Jim Motavalli in his 2001 book, Forward Drive.
Those systems were ultimately dismantled and replaced with bus systems in what became known as the Great American streetcar scandal.
Buses Were First Step to Ending Streetcar System
In 1949, General Motors, Standard Oil of California, Firestone Tire and others were convicted in the United States District Court for the Northern District of Illinois of conspiring to monopolize the sale of buses and related products to local transit companies controlled by NCL and other companies; they were acquitted of conspiring to monopolize the ownership of these companies. The verdicts were upheld on appeal. The corporations involved were fined $5000, their executives $1 apiece.
When GM President Charles Wilson became Secretary of Defense in 1953, he worked with Congress to craft the $25 billion Federal-Aid Highway Act of 1956. Referred to at the time as the “greatest public works project in the history of the world,” the federally funded race to build roads from coast-to-coast was on.
GM was later instrumental in the creation of the National Highway Users Conference, which became the most powerful lobby in Washington. Highway lobbyists worked directly with lawmakers to craft highway-friendly legislation, and GM’s promotional films were showcasing America’s burgeoning interstate highway system as the realization of the so-called “American dream of freedom on wheels.”