The Alameda in San Jose crossing
underneath SP in 1937. The trolley wire supports on the bridge
can be seen to this day. Streetcars provided pollution free,
comfortable transportation without receiving any government
subsidy. Unfortunately for transit patrons, and all who desire
clean air, the competition between transportation competitors
was not a fair one.
The destruction of transit in the East Bay and across the
Bay Bridge was, unfortunately, typical for California's other
large metropolitan areas. The only large city in California
where GM did not destroy the transit system was San Francisco.
This was because it was not able to do a takeover: San Francisco's
transit system was owned by the City. Of course, GM was savvy
enough to not directly buy these transit systems. They used
"front" companies, funneling the money through them,
and when they achieved control, it was the end for the transit
system. All without the public's knowledge.
California transit systems destroyed by GM included those
in the East Bay, San Jose, Fresno, Stockton, Sacramento, San
Diego and the biggest, Los Angeles. There were probably more,
but I can prove these from records.
San Jose
What about the San Jose streetcar system? GM has admitted
to making an "investment ... in Pacific City Lines beginning
in 1938 ..." [in GM's report "The Truth About American
Ground Transport," page 21]. San Jose Railroads became
a subsidiary of Pacific City Lines [Moody's Manuals]. The
streetcar service was discontinued on April 10, 1938.
Hostile takeover attempt of the Key System in 1941
Harre Demoro of the San Francisco Chronicle writes [in his
book The Key Route] : "Pacific City Lines was headquartered
in Oakland and specialized in acquiring smaller transit systems
and converting them from rail to bus. The Key System was among
its largest targets at the time [January, 1941], and [Key
System president] Lundberg moved quickly to avert a takeover."
This 1941 takeover attempt was only made publicly known at
a PUC hearing in 1955, because the request by the Key System
(GM-controlled) attorney to delete it from the public record
was denied. The Key System was not so lucky in 1946.
The Key System takeover in 1946
General Motors has admitted to making "investments"
in National City Lines in 1939 and other years (which they
didn't all list). This "front" company, National
City Lines, acquired 64% of the stock of the Key System (officially
the Railway Equipment and Realty Company) in 1946. The destruction
of this transit system is detailed in previous pages.
Los Angeles metropolitan area
The Los Angeles system consisted of two companies, Los Angeles
Railway, with 1042 yellow streetcars, and Pacific Electric,
with 437 red electric cars. At least one line was quad tracked
for express train service. Pacific Electric had a subway thru
downtown Los Angeles. [Figures from PUC Special Study TR-23,
1944].
General Motors has admitted that "GM made ... investments
in American City Lines in 1943." Soon, American City
Lines was buying stock in Los Angeles Railway. By May 1, 1945,
they owned 59% of the outstanding stock. The same month, the
Los Angeles Railway announced plans to scrap most of the streetcar
lines [Source: Moody's]. Pacific Electric was acquired in
1953. By then, a number of lines had already been acquired
and destroyed via Pacific City Lines [Source: Hearings before
the Senate Subcommittee on Antitrust and Monopoly: American
Ground Transport, 1974]. The Hollywood Blvd. line was destroyed
in 1954 and the Glendale-Burbank line in 1955, both using
the subway under downtown LA.
Kerosene was poured on the streetcars and electric trains
and they were burned, except a few placed in museums. Nothing
was left of the transit system which had comprised 1479 streetcars
and train cars and 771 trolley buses. Even the subway was
made unusable by a future subway line.
San Diego
On March 12, 1949, General Motors was convicted for monopoly
and violating antitrust laws by a federal court. It was fined
merely $5000. The fine was not enough to dissuade GM, because
the destructions continued using more elaborate "fronts."
For example, the selling of the San Diego streetcar system
in 1948 (when GM was under indictment), with 104 streetcars,
was "to J. L. Haugh, Oakland, for an undisclosed amount"
[Moody's Public Utilities Manuals]. Who is this person? The
Key System president installed by GM! Previous to that, he
was an executive at Pacific City Lines. San Diego's streetcars,
which were the new PCC type - still being used to this day
in San Francisco - were scrapped in 1949.
That's not all for J. L. Haugh. In 1953, Jesse L. Haugh "acquired"
the Pacific Electric. The real financiers of the takeover
were again hidden from the public at the time, but became
known later by congressional investigation.
Investors plundered, taxpayers burdened
The last year that dividends were paid on Key System stock
was in 1947. This meant that the owners of the Key System
stock who were not automobile interests, and who owned 36%
of the stock, were, in effect, plundered. Stockholders of
the Los Angeles Railway, 41% of which was not owned by automobile
interests, were also plundered.
It also meant that what was once a private company, making
profit and paying taxes, eventually became both government
owned and government subsidized, after GM destroyed both its
efficiency and its customer base. This process was repeated
in other of GM's transit operations in California. The transit
companies also had owned much of the property under their
tracks, and paid property taxes which roads never paid.
Taxpayers to this day are burdened with subsidizing bus systems.
To a much greater extent, they are burdened with subsidizing
automobiles whose numbers are far greater than if the electric
systems - with streetcars, trains and trolly buses - had remained
intact.
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