Revisiting The American Streetcar Scandal

Desertdweller wrote:Just a few observations by one about to leave the railroad industry.

A conspiracy theory has to involve a conspiracy. What we are alluding to in this thread as a conspiracy is also known as a "business plan". A business plan can be a criminal conspiracy if it involves more than one individual (remember, in this country corporations are individuals in a legal sense) plotting to do something illegal. Well, what was the alleged illegal act?
To establish a monopoly? To force competitors out of business? Hardly illegal. To engage in restraint of trade? Yes, that is illegal if it can be proven.

The criminal conspiracy here WAS a form of restraint of trade. As has been pointed out by others, the conspiracy ( ie the illegal "enterprise") was NOT the wholesale "bustitution" of streetcar systems that. but for NCL would not have been bustituted when they were bustituted. The conspiracy involved the requirement imposed by NCL on the new bus systems that they purchase GM buses, Firestone Tires, and Standard Oil products. This is what GM and the other defendants were convicted of, and the court found this to be so egregious that the defendants were fined a whoppng one dollar. So much for the conspiracy.

And in hindsight, I suspect that though, these actions of NCL probably hastened the demise of the streetcar, primarily by creating the situation in which there were so many surplus serviceable streetcars from the bustituted systems that those systems that retained streetcar found no need to continue to order more expensive new equipment when there was plenty of good used equipment available at bargain prices, thus driving the car builders and parts suppliers out of business, continuation of the streetcar as the primary mode of urban public transportation was doomed because of social and economic circumstances of the day, as much as the actions, or intentions of NCL and its backers. Petrolium based fuels were cheap, the country was not concerned with air pollution from motor vehicles, and the bus was considered to be more flexible than the fixed rail streetcar. By the time the problems surrounding the use of fossil fueled vehicles as the primary mode of transport became evident, the streetcar, except for a few notable exceptions was long gone. NCL hastened, but did not cause, this circumstance.

Walt,

I agree with you completely. The restraint of trade was there, but the economic impact on the public was negligable. NCL probably should have partnered with Firestone and Standard Oil to provide a "startup package" without attempting to tie clients into exclusive contracts with only themselves. There was a good chance that the client cities would have chosen those firms as suppliers anyway.

60 years of hindsight tells us that many of the electric transit systems should have been saved. Even those would have required major redesign to address the problems of sharing right of ways with motor traffic.

What if NCL's competitors would have come up with a similar, competing package? Ford Motor Company used to build transit busses. What if they partnered with Goodyear and Shell to compete with GM and NCL?

Les

Desertdweller wrote: There was a good chance that the client cities would have chosen those firms as suppliers anyway.. . . . .


What if NCL's competitors would have come up with a similar, competing package? Ford Motor Company used to build transit busses. What if they partnered with Goodyear and Shell to compete with GM and NCL?

Les

That first observation is borne out by the experience of the Red Arrow Lines in suburban Philadelphia. This company was never owned by or influenced by NCL, being owned by the Taylor family though out the period of private ownership, yet after the late 1940's until SEPTA took it over in 1970, it purchased GM buses exclusively, and the feeling among passengers of that era was that the GM Coach was a vastly superior bus to anything else then in service.

With regard to NCL ( or GM's competitors)-- it would be interesting ( and definately off topic in a rail forum) to explore the question of whether the true victims of the "conspiracy" were, in fact, Mack, Twin Coach, Ford, ACF-Brill, and The White Manufacturing Company all of whom were either out of business or out of the bus manufacturing business by the late 1950's.

walt wrote:With regard to NCL ( or GM's competitors)-- it would be interesting ( and definately off topic in a rail forum) to explore the question of whether the true victims of the "conspiracy" were, in fact, Mack, Twin Coach, Ford, ACF-Brill, and The White Manufacturing Company all of whom were either out of business or out of the bus manufacturing business by the late 1950's.

That's a very interesting and thought-provoking question, walt - one that I have never heard expressed before in this debate. I'll just say (as I know I'm on thin ice here) that it would be interesting to check the rosters of major cities with NCL ownership compared to ones that were not. In my own non-NCL city, Boston, there was pretty much a representation of all the companies that you mentioned with a preponderance of GMC, Mack, and Pullman-Standard (trackless trolleys & streetcars). Anti-trust is documented. I suppose the question may become, "at what point must a corporation not use it's own products to outfit it's own demand for vehicles ?", and "does a natural process of obsolescence which may occur as a result constitute a monopoly ?"

Paul,

I can think of at least a couple examples from the transportation industry. Pullman-Standard was divested of their Pullman service operation because it used their cars exclusively. United Air Lines once had an exclusive deal with Douglas Aircraft that was broken up by Federal action.

But what about Checker Cab? Didn't they produced their own taxis for their own use? Some were sold to other cab operations and the general public.

Les

Desertdweller wrote:But what about Checker Cab? Didn't they produced their own taxis for their own use? Some were sold to other cab operations and the general public.

Good point, Les, and that opens up a whole other perspective. Checkers were "tanks" designed specifically for a huge market. They were practically indestructible. If the "Big 3" didn't do them in a la Tucker or via "anti-trust", what happened ? Is this whole "sinister conspiracy" thing, way over-blown ?

The circumstance that provoked that question was this-- Circa 1955, NCL took control of the Philadelphia Transportation Company(PTC) as was its usual practice it proceeded to bustitute 2/3 of the very extensive Philadelphia streetcar system ( this system was so streetcar dominated that even after the NCL bustitution--- and up into and through the 1960's) Philadelphia continued to run more streetcars than any other U.S. City, and was second only to Toronto in North America in the number of streetcars that it operated. When NCL took over, the PTC had a relatively small fleet of buses with no GM units---the Philly fleet was comprised of Mack, Twin Coach and older ACL-Brill units. PTC was looking at updating the fleet in any event, but when NCL took over and converted the lines it coverted, acquiring new buses became a requirement. Mack and GM submitted proposals for the new fleet with the GM units costing twice as much as the Mack units. Since the PTC was a private company, it was under no requirement to take the low bid, and opted for the GM units. This so infuriated the city government that it refused to allow the PTC to use its credit ( which it had done before) and PTC had to finance the purchase on its own. All subsequent bus purchases, and a very large fleet was acquired over the next 10 years, were GM products. The demise of Mack, Twin Coach, and ACF-Brill, during this period is what prompted my query.