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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
In 1938, NCL entered into exclusive dealing arrangements and obtained equity funding from companies seeking to increase sales of commercial buses and supplies, including General Motors, Firestone Tire, Standard Oil of California and Phillips Petroleum, which enabled NCL to buy out more than 100 electric streetcar systems in 45 cities including, but not limited to, Cleveland, Detroit, the Pacific Electric Railway in the Los Angeles area , New York, Oakland, Philadelphia, St. Louis, Salt Lake City, and Tulsa.  By 1946, NCL controlled streetcar operations in 80 American cities.

“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.


Pacific Electric Railway streetcars stacked at a junkyard, 1956
“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,” .... -- Larry West, About.com


GM Bought and Dismantled Streetcar Lines Nationwide

photo from Hennepin County Library - Minnesota

Buses Were First Step to Ending Streetcar System
GM first replaced trolleys with free-roaming buses, eliminating the need for tracks embedded in the street and clearing the way for cars. As dramatized in a 1996 PBS docudrama, Taken for a Ride, Alfred P. Sloan, GM’s president at the time, said, “We’ve got 90 percent of the market out there that we can…turn into automobile users. If we can eliminate the rail alternatives, we will create a new market for our cars.” And they did just that, with the help of GM subsidiaries Yellow Coach and Greyhound Bus. Sloan predicted that the jolting rides of buses would soon lead people to not want them and to buy GM’s cars instead.

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.”

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