The rise of the automobile signaled theend of the nation’s streetcar systems. By 1929more than half of all American householdsowned an automobile. State and local gov-ernments began to apply gasoline taxes andother user fees to the paving of streets andhighways throughout urban areas. When thetime came to replace rails, trolley wires, andother capital equipment, transit companiesrealized it made more sense to run buses onpaved streets whose cost was shared withautos than to maintain exclusive rail rights-of-way and infrastructure for streetcars.Buses were also more flexible and faster thanstreetcars. Transit riders annoyed with dilap-idated streetcars welcomed the newer andmore comfortable buses.Some supporters of mass transit have per-petuated the story that General Motors con-spired to destroy the nation’s transit systemsby replacing “efficient” streetcars with “dirty”buses, but that is little more than an urban leg-end that has been debunked by numerousbooks and articles.
General Motors did pur-chase an interest in various transit companies,but its only goal was to sell its brand of busesto companies that were already convertingfrom streetcars to buses. The simplest evidenceof this is that General Motors never controlledmore than a small fraction of the nation’s tran-sit lines, and it controlled none after 1949. Yettransit companies in many cities not con-trolled by General Motors, including Dallas,Denver, Indianapolis, Minneapolis, Portland,and Seattle, all converted from streetcars tobuses, mostly during the 1950s.The shift to buses was mainly prompted by the inefficiencies of streetcars, which were appar-ent to both public officials and private transitoperators. In 1955, for example, Congressordered the company operating streetcars inWashington, D.C., to convert its system to buseswithin eight years.
The last Los Angeles “red car”lines, which were featured as victims of a con-spiracy in the movie
Who Framed Roger Rabbit?
had never been owned by General Motors andwere actually converted to buses by a publicagency, the Los Angeles Metropolitan Transit Authority, in 1961.
In 1966 St. Louis converted its last streetcarline to buses. That left streetcar systems in only six American cities—Boston, Philadelphia, SanFrancisco, Pittsburgh, New Orleans, and Cleve-land—plus other forms of rail transit in New York and Chicago. Private transit companiesand public transit agencies in most other citiesconsidered rail transit economically inviable.Rail systems simply worked better in high-den-sity urban centers than in less populated cities.Whether by rail or by bus, World War IIboosted transit ridership to a high of nearly 23.5 billion trips in 1946, or about 267 tripsper urban resident. The end of wartime fuelrationing led ridership to decline after thatyear by an average of 7 to 8 percent per yearthrough most of the 1950s and by about 3 per-cent per year in the early 1960s. By 1964 annu-al ridership had fallen to 8.3 million trips, orabout 62 trips per urban resident.
Althoughtaxpayers supported city-owned transit agen-cies in New York, San Francisco, and severalother large cities, 95 percent of the transitindustry remained privately owned.
Federal Intervention inLocal Transit Systems
In 1964 Congress passed the Urban MassTransportation Act, which promised federalcapital grants to state and local public transitagencies. The law offered capital grants for upto 50 percent of the cost of transit improve-ments. The law did not provide funds for pub-lic purchase of private transit companies, butas transportation historian George Smerkobserves, most transit companies, recognizingthe declining nature of their business, “wereanxious to sell out to the public sector.”
Socities without government-run transit systemsbought the companies to make themselves eli-gible for the federal grants.Congress has justified many other federaltransportation programs using a liberalinterpretation of the Interstate CommerceClause of the Constitution. But most transitsystems do not cross state lines, so federalsupport for transit is based instead on the
Althoughtaxpayerssupported city-owned transitagencies inNew York, SanFrancisco, andseveral otherlarge cities, 95percent of thetransit industry remainedprivately ownedin 1964.