Monday, April 10, 2017

How Standard Oil and GM Stymied Los Angeles Public Transportation

Editorial note from Robert Paulsen:  This post is a synthesis of two earlier posts, Los Angeles and the Great Interstate Highway Conspiracy and Los Angeles and the Great Interstate Highway Conspiracy Part Two, for the purposes of creating a vlog pertaining to the subject.  Below is a link to the video and the transcript.

This is the Seattle Center Monorail, built for the Seattle World's Fair in 1962 and still operating today.  I've always wondered why this form of mass transit never caught on in Los Angeles where I'm from.  The truth is the Alweg Monorail Company, responsible for the Seattle and Disneyland's Monorail offered to build this sort of thing for Los Angeles in 1963.  What happened?

In the aftermath of gaining international recognition for their monorail at the 1962 Seattle Century 21 Exposition, the Alweg Monorail Company wanted to establish a major presence in the world of urban rail transit.  On June 4, 1963, the President of the Alweg Rapid Transit Systems, Sixten Holmquist wrote a letter to the Metropolitan Transit Authority (MTA) of Los Angeles with an official proposal.  It stated, "We are pleased to submit this day a proposal to finance and construct an Alweg Monorail rapid transit system 43 miles in length, serving the San Fernando Valley, the Wilshire corridor, the San Bernardino corridor and downtown Los Angeles."  In specifying the financial details, in which the complete system amounted to $105,275,000, the proposal, which was also presented to the L.A. County Board of Supervisors, stated, "this is a turn-key proposal in which a group will share risk, finance the construction, and turn over to MTA a completed and operating system to be repaid from MTA revenues."

So why didn't the L.A. County Board of Supervisors approve this proposal?  It was opposed by Standard Oil.  According to Kim Pedersen, a former Alweg engineer explained that there was initially a lot of excitement for the proposal.  But then political pressure from Standard Oil dampened their enthusiasm.  According to page 170 of American Society of Civil Engineers - Los Angeles Section, political pressure may also have come from General Motors against the project.  Famed author Ray Bradbury rallied against this pressure by stating, "A single transit line will not answer our problems; we must lay plans for a series of transportation systems that would allow us to move freely, once more, within our city.  The answer to all this is the monorail."  For all his objections, Bradbury was thrown out of the Board of Supervisors meeting.  Walt Disney also supported the monorail, but unfortunately their influence was unable to match Standard Oil and GM.
Standard Oil "Octopus"  Image courtesy of Wikimedia Commons

But this wasn't the first time that Standard Oil and GM stymied public transportation in Los Angeles.  Their most infamous collusion is known as the Great American Streetcar Scandal.  Between 1938 and 1950, the transit systems in more than 25 cities were bought out by National City Lines (NCL) and replaced by GM buses.  Who controlled National City Lines?  Well, their list of investors included Firestone Tires, Phillips Petroleum, Mack Truck Company, Standard Oil and, at least since 1946 when American City Lines merged with NCL, General Motors.  Despite public opinion polls that, in Los Angeles for example, showed 88 percent of the public favoring expansion of the rail lines after World War II, NCL systematically shut down its streetcar systems until, by 1955, only a few remained.  L.A. had two popular trolley systems; the Pacific Electric "Red Cars" and the Los Angeles Railway "Yellow Cars."  While National City Lines owned only the Yellow Cars, because both systems were often used in conjunction by travelers and cutting service on one line made the other less convenient than automobiles, both systems failed and were dismantled.  While General Motors, Standard Oil and Firestone Tires may not have bought the Red Car just to destroy it, like the Judge Doom character played by Christopher Lloyd did in the final act of the 1988 movie Who Framed Roger Rabbit?, the result was identical.

They didn't go down without a fight, however.  On April 9, 1947, nine corporations and seven individuals (comprising officers and directors of certain of the corporate defendants) were indicted in the United States District Court for the Southern District of California on two counts under the U.S. Sherman Antitrust Act. The charges were conspiracy to acquire control of a number of transit companies to form a transportation monopoly, and conspiring to monopolize sales of buses and supplies to companies owned by the City Lines.  In 1948, the Supreme Court of the United States reversed lower court rulings and allowed the venue to be changed from Southern California to Northern Illinois.  In 1949, the defendants were acquitted on the first count of conspiring to monopolize transportation services, but they were found guilty on the second count of conspiring to monopolize the provision of parts and supplies to their subsidiary companies.  What was their penalty for this criminal conspiracy?  The companies were each fined $5,000, and the directors were each fined one dollar!  Amazingly, they had the audacity to appeal this slap on the wrist, but the verdicts were upheld in 1951. Pacific Electric "Red Cars" lined up for destruction  Image courtesy of Wikimedia Commons

Destroying the trolley system and replacing it with buses was only the first step. In order for private cars to become the dominant American transportation, they needed new roads to drive on.  GM helped create the  National Highway Users Conference, which became a powerful DC lobby group for interstate highways.  When GM President Charles Wilson became Secretary of Defense in 1953, he used his position to claim that a new road system was vital to U.S. security needs.  Backing him up in this regard was Federal Highway Administrator Francis DuPont, whose family was then the largest GM shareholder.  In 1956, Congress approved a bill introduced by Senator Albert Gore, Sr., the $25 billion Federal-Aid Highway Act.  Secretary of Commerce Sinclair Weeks called it, "the greatest public works program in the history of the world."  That may or may not be true, but in Los Angeles, we call it "gridlock."

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