Below are some excerpts about rail transportation from the Book The Truth About Automobiles which is reviewed elsewhere.
The most impressive electric vehicles of that era were the electric interurbans and electric streetcars. Modern versions of streetcars still exist today. However, most modern systems are not true streetcars in that they do not have their tracks in the streets but rather in corridors devoted solely to the transit trains. There is no modern equivalent of the interurban in the United States.
At its peak around World War I, the electric streetcar system in the United States was massive. There was nearly 45,000 miles of streetcar track in cities from coast to coast. The systems carried more than 11 billion passengers per year. They provided fast, clean, and efficient urban transportation in many cities across the United States.
In addition to the streetcars, the electric interurban systems provided fast transportation for rural areas and small towns -- much faster than anything available today. It was a massive system of track and huge, stately vehicles which brought clean, economical transportation to almost every big city in the country and to hundreds of small towns as well. In this web site are some maps of the interurban system in Ohio and the north-central United States.
The interurbans were much larger than the streetcars used in the city. They were also much faster, some capable of speeds over 100 miles per hour. The first major high speed line was built from Cleveland to Akron, Ohio in 1895. At one time, if just a few more lines had been completed, it would have been possible to travel from St. Louis, Mo. to New York or to points in central Maine all on quiet, and sometimes luxurious electric interurbans.
The states having the greatest concentration of electric interurbans were Ohio, Indiana, Illinois, and Michigan. However, California had a significant electric rail system, too. Electric interurbans could be found in Utah, the Pacific Northwest, the Carolinas, Maine, Pennsylvania, and elsewhere. One line even climbed over a 10,000 foot Rocky mountain pass to get from Victor to Cripple Creek, Colorado. In 1916, when the electric interurbans reached their peak, over 15,500 miles of track were in use.
The demise of the inspiring, creative competition that once existed between the various forms of transportation and the many different companies providing automobiles and transportation services is very sad. The loss of efficiency and versatility is bad. The over-dependence upon cars and trucks is bad. The complete dependence upon oil to power transportation is bad. The worst, however, is that a very important outlet for creative genius within the United States has been taken away from those who have the ideas and energy to create new technology and improve the old.
With a vast network of interurban lines and city trolley lines, the need for automobiles and trucks was limited. A fast interurban was available, sometimes more frequently than once every hour, to take rural people and travelers almost anywhere they wanted to go without the expense and trouble of driving a car. City streetcars offered fast, non-polluting, quiet city transportation. The interurbans and trolleys made automobiles unnecessary for many people. It was inevitable that the interests of the automobile industry and the electric rail systems would clash.
Nonetheless, for many years the automobile manufacturers and electric rail lines were able to coexist. For the first twenty years of the 20th century, the markets for both automobiles and interurbans expanded. During this time, most people were first time buyers of automobiles, and these people bought enough cars to keep the industry growing.
In the early and mid-1920's, however, the automobile market started to become saturated. By that time, most people who wanted a car had bought one; and, despite the glamour of automobiles and declining prices, many people found the trolleys and interurbans completely met their transportation needs and were far less costly and troublesome than owning a car. The automobile industry was under the pressure of declining sales. It had to create more demand for cars and to generate more sales. As technical innovations slackened, financial "innovation" grew.
Selling on credit was one of the greatest innovations ever discovered by the automobile manufacturers. In the early days, automobiles were purchased with cash. By 1923, however, about one half of all new cars sold was sold on credit. Manufacturers and dealers viewed credit selling as a tremendous concept and, perhaps, their savior because it sold many cars that otherwise never would have been sold. Nonetheless, the early 1920's were very difficult years for most automobile manufacturers. Many went out of business during this time, and, without credit sales, many more would have failed. Bankers and economists, on the other hand, feared that it would get out of control and wreck the economy.
Another major problem for General Motors and all of the automobile manufacturers was the
ever growing number of used cars. This was long before the day of the two or three car family.
Most people who bought a car were buying their first car. Every used car sold was one less new
car sold. Although older cars did create a market for parts, it was trivial compared to the loss of
new car sales.
Electric Rail Transportationin the United States
The electric trolley and electric interurban, on the other hand, didn't create a market for anything made by GM. As a matter of fact, they severely limited the growth of GM's markets. Anyone who had their transportation needs met by an interurban or streetcar represented one less automobile sold, and, during the early and mid-20's, the industry was desperate for sales. If, somehow, people could be dissuaded from using trolleys and interurbans, and shifted into something manufactured by GM, the profits and power of General Motors would continue to increase.
From the automobile manufacturer's point of view, something had to be done about electric rail transportation. It was siphoning off too many sales. General Motors had the wealth and the means to do something about it. The means was the bus. In the typical Sloan-General Motors fashion, General Motors expanded into the production of buses, not by creation of its own bus manufacturing operations, but by purchasing Yellow Coach in 1925. At the time of the purchase, Yellow Coach was the nation's largest manufacturer of city and intercity buses. After this strategic purchase, only two more things were necessary to secure the eventual domination of the automobile over the faster and more efficient rail transportation systems -- a market for the buses and a way of getting rid of the interurbans. These were not significant problems for a corporation the size of General Motors. One year later, in order to help create a market for its buses, GM assisted in the formation of the Greyhound Corporation.
"In 1926, interests allied with GM organized and then combined with the Greyhound Corp. for the purpose of replacing rail passenger service with a GM-equipped and Greyhound-operated nationwide system of intercity bus transportation." "Beginning in 1932, it undertook the direct operation and conversion of interurban electric railways and local electric streetcar and trolleybus systems to city bus operations." In this manner, GM created its own market for the buses it produced.
Next, General Motors moved on to a tougher market, city streetcars. "At first, its procedure consisted of directly acquiring and scrapping local electric transit systems in favor of GM buses." "As GM General Counsel Henry Hogan would observe later, the corporation decided that the only way this new market for (city) buses would be created was for it to finance the conversion from streetcars to buses in some small cities." To achieve this goal, GM's bus division formed United Cities Motor Transit. The sole function of UCMT was to purchase electric streetcar companies, sell off the streetcars, rip up the tracks and substitute GM diesel buses. The system would then be sold to a local operator. "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."
Undaunted by the censure and, no doubt, encouraged by the success of the United Cities campaign, General Motors continued its attack on electric rail systems. In 1936, GM, through its officers and employees and several Greyhound executives, formed National City Lines. "During the following 14 years GM, 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." National Cities used the same technique which United Cities had used: purchase, conversion, and resale. This assured GM and its allied companies that their money was continually at work.
In 1938, General Motors organized a west coast affiliate of National Cities called Pacific Cities to do for the west coast what it had done to the east and midwest. By 1939, GM, through Pacific Cities, had acquired the electric rail systems of Fresno, San Jose, and Stockton. It then scrapped the rail systems and substituted diesel buses. "By 1949, GM 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."
The effort was a synergistic, diabolical, stroke of genius. The efforts paid off so handsomely for General Motors in so many different ways. It sold buses for GM. It got rid of the interurbans which, in turn, created a need for more cars. It created a greater demand for better roads for the buses and cars which benefitted the sale of cars. It generated more sales of gasoline and diesel fuel for GM's oil industry allies which generated more fuel taxes for more highways. It removed from public view an electrically powered vehicle (there were still some electric car manufacturers then). It was very clever.
For the American public, however, it was less beneficial. This sort of predatory action distorts markets. It is the sort of event that can drastically alter history. The interurbans and trolleys had so many advantages over automobiles and buses. They were faster, cheaper to maintain, more reliable, quieter, more powerful, less affected by bad weather, more comfortable, and did not have to be personally owned, operated, insured, or maintained. Nonetheless, they disappeared and were replaced by slow and sluggish buses which were offensive to the ears and nose, if not the eyes.
One must conclude that out of sight truly is out of mind. Sloan correctly reasoned or guessed that GM could actively aid in the dismantlement of the electric interurban and trolley systems without drawing significant attention from those charged with enforcing the antitrust laws. Perhaps automobiles were so exciting that no one worried about the interurbans and trolleys, or perhaps they were like the passenger pigeon and no one took seriously the thought that they might become extinct. Whatever the situation was, the elimination of electric rail lines and General Motors' domination of the automobile industry seems to have eliminated the threat of electric vehicles. Ignorance on the part of the American transportation consumer is, truly, GM bliss; and ignorance would protect General Motors' vast empire built upon the internal combustion engine.
There are real problems, however, when a giant corporation which provides one means of satisfying a need, eliminates by purchase or predatory action other firms which provide different and competing means of satisfying the same need. Competition, the foundation and most basic tenet of our economic system, is eliminated. It is not eliminated because of some inherent flaw or inadequacy of the competitors, but because of the greed and power of an immense corporation which has the wherewithal to destroy its competitors. General Motors became wealthy by producing one type of vehicle and used its wealth to buy the existing facilities of other competing forms of transportation and replaced them with the one it manufactured. It did so not with money it earned from the production of buses, certainly not with money earned from the production of interurbans, but with money generated from the sale of automobiles; and the sale of more automobiles was the reason it did it. It was the economic equivalent of murder.
Not only had there been a system of fast electric interurbans in the United States, there also was a substantial and growing system of electric railroads carrying both passenger and heavy freight, at least until General Motors got into the locomotive business. GM entered the railroad locomotive market with diesel-electric locomotives at a time when electric locomotives powered by overhead lines were beginning to flourish. When General Motors began its dieselization program in 1935, two of the country's major railroads had electrified their lines; and several more were considering the same. The New York, New Haven & Hartford railroad had constructed the world's first 11,000-volt, 25 cycle, alternating current electric railroad on 500 miles of track in New England. The Pennsylvania Railroad had established electric passenger and freight service between New York and Washington.
That was the high point for American electric railroads. GM must have concluded that electric locomotives were a mortal threat to the internal combustion engine. Despite the facts that a diesel-engine locomotive had a life span one-half that of an electric locomotive, did only one-third as much work, and was three times more expensive, they started replacing the electric locomotives. By 1973, 99 percent of the U. S. locomotive fleet was dieselized. GM had only one competitor, General Electric, with less than 17 percent of total production; and much of that was for small switchers.
Even though the diesel locomotives were noisy, less efficient, less powerful, less reliable, and more expensive than electric locomotives, they eventually replaced all of the electric feight locomotives in the United States. One might wonder why. There was at least one reason. "As the Nation's largest shipper of freight, GM was able to exert considerable influence over the locomotive purchasing policies of the Nations railroads." If a railroad didn't purchase GM locomotives, it lost the immense GM shipping account to another railroad company or to a trucking company which happened to be in a position to buy GM trucks. For example, in November of 1935, "GM ordered its traffic division to begin routing freight over railroads which agreed reciprocally to scrap their electric and steam equipment for GM diesels. For the next 35 years it used its formidable leverage as the largest commercial shipper to exclude locomotive competition and to force the railroads to convert to all-diesel operation."
The contrast with Europe, where General Motors' influence is less forceful, is quite dramatic. The recent unrest in eastern Europe offered an opportunity to see for oneself the contrast. As turmoil spread from one country to the next, the major news networks had reporters in many of the major eastern European cities. In broadcast after broadcast, a reporter would be standing in a city street describing the events of the day in that particular city; and, in almost every case, before he had finished his report, an electric streetcar would pass behind him.
Electric railroads are also very important in Europe and Asia. A very high percentage of their
railway trackage is electrified. For example, Sweden has 62 percent of its railroad track
electrified; Norway has 57%; Italy has 59%; West Germany has 33%; and Japan has 45%.
Today, the United States has much less than 1%.
The interurban lines were privately financed efforts. The money to pay for the construction of the rail lines and upkeep of all their track and equipment was private money. Beyond this, some cities took advantage of the interurban and trolley lines serving their cities by requiring the company to repave the entire street for the privilege of laying their track.
The automobile companies never had this problem. Unlike the railroad system and the interurban system, where the ownership of the vehicles and the right-of-way of a system were in the hands of one entity, the ownership of the automotive transportation system is widely dispersed amongst the users, who are generally the owners of the vehicles, and various government entities, which are the owners of the system of roads and highways. The right-of-way for automobiles has never been the responsibility of the automobile manufacturers. Therefore, much of the automobile transportation system lies outside of the marketplace. Unlike the purchase of an automobile by an individual, the most important parts of the automotive transportation system lie beyond the control of the free market. The infrastructure of highways and streets, without which automobiles are virtually useless, requires centralized planning and government directed construction and government enforced confiscation of land upon which they are built. All this activity emanates from political decisions and the political process, not the market. It is not the free market that has produced the modern American highway system.
Today, the federal government spends $66 billion per year on highways. Only three domestic companies make automobiles which can be used on these roads. Some roads, such as interstate highways, are built for motor vehicles only. If you attempt to ride a horse or bicycle on one, the gendarmes can remove you. If you do not consider foreign firms and some antiques, these super-expensive superhighways are made for the exclusive use of automobiles made by the Only Three. What might happen if the Only Three and their foreign "competitors" had to provide funds for the construction and upkeep of highways as the railroads must provide for their own right-of-way and the interurbans had to provide for theirs? Perhaps there would be many more miles of rails and many fewer roads.
Think of it, $66 billion per year for highways. Automobiles and associated accoutrements involve lots of money and lots of people. That means there are a whole lot of people who like things just the way they are. The number of organizations whose members' income depend solely or substantially upon automobiles and their necessaries is truly astounding. Here are a few. You might be able to think of a many more: The American Trucking Association, The American Road Builders Association, The National Parking Association, The Automotive Safety Foundation, The National Association of Motor Bus Operators, The American Petroleum Institute, The Truck-Trailer Manufacturers Association, The Associated General Contractors of America, The American Automobile Association, The National Joint Heavy and Highway Construction Committee, The Private Truck Council of America, American Public Works Association, The National Automobile Dealers Association, The Rubber Manufacturers Association, The National Crushed Stone Association, The Owners - Operators Independent Drivers Association, The National Limestone Institute, The National Asphalt Pavement Association, The American Association of State Highway Officials (polite company assiduously avoids referring to this group acronymically), The National Ready Mixed Concrete Association, The American Concrete Paving Association, The Asphalt Institute, and The American Trucking Association. Then, you can add in other groups which depend upon the automobile industry such as the tourist industry, highway engineers, the motel and hotel operators, travel agents, teamster unions, the oil industry, and others. That is a whole lot of people who like cars and roads no matter how bad they are or how good alternatives might be. Furthermore, that is an awesome force aligned against anything better or even just different which might take away business.
This is a good point to mention something about the electric car, a subject dealt with in
greater depth elsewhere in this book. Since 1980 General Motors has been promising an electric
car which is just around the corner, so they say and have said for many years. They have not
been loath to proudly trumpet token amounts given to electric car experimenters. However, it is
extremely unlikely that one will see an electric car mass produced by any of the Only Three for
many, many years. One reason why the Only Three will not mass produce electric cars, amongst
many reasons, is the tax on gasoline which finances our immense system of highways. In
addition to mini-cars yielding mini-profits, they also yield mini-gas taxes. It is just one more
reason why the Only Three want to sell big cars but never electric cars. Big cars mean big gas
consumption which means more highway taxes, which means more roads, which means more
cars, which means . . . . Electric cars run by batteries produce zero gasoline taxes. The same
could be true of electric cars powered by a non-fuel-discriminate engine such as a diesel, steam,
Stirling cycle engine, or a fuel cell which could be powered by locally or home produced alcohol.