The Mammoth Book of Conspiracies (26 page)

Further Reading

Scott Bottles,
Los Angeles and the Automobile
, 1987

DOCUMENT: BRADFORD C. SNELL, “AMERICAN GROUND TRANSPORT”, WASHINGTON: US GOVERNMENT PRINT OFFICE. A REPORT PRESENTED TO THE COMMITTEE OF THE JUDICIARY, SUBCOMMITTEE ON ANTITRUST AND MONOPOLY, UNITED STATES SENATE, 26 FEBRUARY 1974 [EXTRACT]

N.B. Snell is erroneous in claiming that GM were convicted “of having criminally conspired with Standard Oil of California, Firestone Tire and others to replace electric transportation with gas- or diesel-powered buses”, as explained above.

After its successful experience with intercity buses, General Motors diversified into city bus and rail operations. At first, its procedure consisted of directly acquiring and scrapping local electric transit systems in favor of GM buses. In this fashion, it created a market for its city buses. As GM General Counsel Henry Hogan would observe later, the corporation “decided that the only way this new market for (city) buses could be created was for it to finance the conversion from streetcars to buses in some small cities.” On June 29, 1932, the GM-bus executive committee formally resolved that “to develop motorized transportation, our company should initiate a program of this nature and authorize the incorporation of a holding company with a capital of $300,000.” Thus was formed United Cities Motor Transit (UCMT) as a subsidiary of GM’s bus division. Its sole function was to acquire electric streetcar companies, convert them to GM motorbus operation, and then resell the properties to local concerns which agreed to purchase GM bus replacements. The electric streetcar lines of Kalamazoo and Saginaw, Mich., and Springfield, Ohio, were UCMT’s first targets. “In such case,” Hogan stated, GM “successfully motorized the city, turned the management over to other interests and liquidated its investment.” The program ceased, however, in 1935 when GM was censured by the American Transit Association (ATA) for its self-serving role, as a bus manufacturer, in apparently attempting to motorize Portland’s electric streetcar system.

As a result of the ATA censure, GM dissolved UCMT and embarked upon a nationwide plan to accomplish the same result indirectly. In 1936 it combined with the Omnibus Corp. in engineering the tremendous conversion of New York City’s electric streetcar system to GM buses. At that time, as a result of stock and management interlocks, GM was able to exert substantial influence over Omnibus. John A. Ritchie, for example, served simultaneously as chairman of GM’s bus division and president of Omnibus from 1926 until well after the motorization was completed. The massive conversion within a period of only 18 months of the New York system, then the world’s largest streetcar network, has been recognized subsequently as the turning point in the electric railway industry.

Meanwhile, General Motors had organized another holding company to convert the remainder of the Nation’s electric transportation systems to GM’s buses. In 1936, it caused its officers and employees, I. B. Babcock, E. J. Stone, E. P. Crenshaw, and several Greyhound executives to form National City Lines, Inc. (NCL). During the following 14 years General Motors, together with Standard Oil of California, Firestone Tire, and two other suppliers of bus-related products, contributed more than $9 million to this holding company for the purpose of converting electric transit systems in 16 States to GM bus operations. The method of operation was basically the same as that which GM employed successfully in its United Cities Motor Transit program: acquisition, motorization, resale. By having NCL resell the properties after conversion was completed, GM and its allied companies were assured that their capital was continually reinvested in the motorization of additional systems. There was, moreover, little possibility of reconversion. To preclude the return of electric vehicles to the dozens of cities it motorized, GM extracted from the local transit companies contracts which prohibited their purchase of “any new equipment using any fuel or means of propulsion other than gas.”

The National City Lines campaign had a devastating impact on the quality of urban transportation and urban living in America. Nowhere was the ruin more apparent than in the Greater Los Angeles metropolitan area. Thirty-five years ago it was a beautiful region of lush palm trees, fragrant orange groves, and clean, ocean-enriched air. It was served then by the world’s largest interurban electric railway system. The Pacific Electric system branched out from Los Angeles for a radius of more than 75 miles reaching north to San Fernando, east to San Bernardino, and south to Santa Ana. Its 3,000 quiet, pollution-free, electric trains annually transported 80 million people throughout the sprawling region’s 56 separately incorporated cities. Contrary to popular belief, the Pacific Electric, not the automobile, was responsible for the area’s geographical development. First constructed in 1911, it established traditions of suburban living long before the automobile had arrived.

In 1938, General Motors and Standard Oil of California organized Pacific City Lines (PCL) as an affiliate of NCL to motorize west coast electric railways. The following year PCL acquired, scrapped, and substituted bus lines for three northern California electric rail systems in Fresno, San Jose, and Stockton. In 1940 GM, Standard Oil, and Firestone “assumed the active management of Pacific (City Lines)” in order to supervise its California operations more directly. That year, PCL began to acquire and scrap portions of the $100 million Pacific Electric system, including rail lines from Los Angeles to Glendale, Burbank, Pasadena, and San Bernardino. Subsequently, in December 1944, another NCL affiliate (American City Lines) was financed by GM and Standard Oil to motorize downtown Los Angeles. At the time, the Pacific Electric shared downtown Los Angeles trackage with a local electric streetcar company, the Los Angeles Railway. American City Lines purchased the local system, scrapped its electric transit cars, tore down its power transmission lines, ripped up the tracks, and placed GM diesel buses fueled by Standard Oil on Los Angeles’ crowded streets. In sum, GM and its auto-industrial allies severed Los Angeles’ regional rail links and then motorized its downtown heart.

Motorization drastically altered the quality of life in southern California. Today, Los Angeles is an ecological wasteland: The palm trees are dying from petrochemical smog; the orange groves have been paved over by 300 miles of freeways; the air is a septic tank into which 4 million cars, half of them built by General Motors, pump 13,000 tons of pollutants daily. With the destruction of the efficient Pacific Electric rail system, Los Angeles may have lost its best hope for rapid rail transit and a smog-free metropolitan area. “The Pacific Electric,” wrote UCLA Professor Hilton, “could have comprised the nucleus of a highly efficient rapid transit system, which would have contributed greatly to lessening the tremendous traffic and smog problems that developed from population growth.” The substitution of GM diesel buses, which were forced to compete with automobiles for space on congested freeways, apparently benefited GM, Standard Oil, and Firestone, considerably more than the riding public. Hilton added: “The (Pacific Electric) system, with its extensive private right of way, was far superior to a system consisting solely of buses on the crowded streets.” As early as 1963, the city already was seeking ways of raising $500 million to rebuild a rail system “to supercede its present inadequate network of bus lines.” A decade later, the estimated cost of constructing a 116-mile rail system, less than one-sixth the size of the earlier Pacific Electric, had escalated to more than $6.6 billion.

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 PCL 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 1955, 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 (streetcar).”

The effect of General Motors’ diversification into city transportation systems was substantially to curtail yet another alternative to motor vehicle transportation. 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. Moreover, there is some evidence that in terms of air pollution and energy consumption these electric systems were superior to diesel buses. In any event, GM and its oil and tire co-conspirators used National City Lines as a device to force the sale of their products regardless of the public interest. As Professor Smerk, an authority on urban transportation, has written, “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.”

General Motors’ substitution of buses for city streetcar lines may also have contributed in an indirect manner to the abandonment of electric railway freight service. During the 1930’s merchants relied extensively on interurban electric railways to deliver local goods and to interchange distant freight shipments with mainline railroads. The Pacific Electric, for example, was once the third largest freight railroad in California; it interchanged freight with the Southern Pacific, the Union Pacific and the Santa Fe. In urban areas, these railways often ran on local streetcar trackage. The conversion of city streetcars to buses, therefore, deprived them of city trackage and hastened their replacement by motor trucks, many of which, incidentally, were produced by GM.

General Motors also stood to profit from its interests in highway freight transport. Until the early 1950s, it maintained sizable stock interests in two of the Nation’s largest trucking firms, Associated Transport and Consolidated Freightways, which enjoyed the freight traffic diverted from the electric railways. By 1951, these two companies had established more than 100 freight terminals in 29 States coast-to-coast and, more than likely, had invested in a substantial number of GM diesel-powered trucks.

GM’s diversification into bus and rail operations would appear not only to have had the effect of foreclosing transport alternatives regardless of their comparative advantages, but also to have contributed at least in part to urban air pollution problems. There were in fact some early warnings that GM’s replacement of electric-driven vehicles with diesel-powered buses and trucks was increasing air pollution. On January 26, 1954, for instance, E. P. Crenshaw, GM bus general sales manager, sent the following memorandum to F. J. Limback, another GM executive:

There has developed in a number of cities “smog” conditions which has resulted in Anti-Air Pollution committees, who immediately take issue with bus and truck operations, and especially Diesel engine exhaust. In many cases, efforts are being made to stop further substitution of Diesel buses for electric-driven vehicles …

Three months later, in April 1954, the American Conference of Governmental Industrial Hygienists adopted a limit of 5 parts per million for human exposure to nitrogen oxides. Diesel buses, according to another report by two GM engineers, emitted “oxides of nitrogen concentrations over 200 times the recommended” exposure limit. Nevertheless, the dieselization program continued.

GLOBAL WARMING

Is a hoax, according to an array of climate change doubters who maintain that there is no scientific evidence that the Earth is getting substantially hotter. And even if the world
is
warming up the cause is not the emission of greenhouse gases from fossil fuels – the belief of the global warming orthodox – but a natural fluctuation in temperature caused by solar activity.