By Al Mankoff

Volume 4, Summer 1999

When I was a boy, we used to play "Kick the Can. We'd chalk a baseball diamond in the street and kick a tin can from base to base until somebody caught it. That game reminds me of what E. Jay Quinby did. He was a naval commander during World War II who was still stationed in Key West, Florida, in January 1946 when he "kicked"a 37-page manifesto to home plate in Washington, D.C.

En route, his manifesto detailing a deliberate conspiracy to eliminate electric-powered mass transit in the name of gasoline-powered profits, was kicked to the "bases"of hundreds of mayors, city managers, transit operators, transit engineers, congressmen and newspapers all over America.

"This is an urgent warning to each and every one," Quinby cautioned in the opening paragraph of his document, "that there is a careful, deliberately planned campaign to swindle you out of your most important and valuable public utilities your electric utilities (street car systems)! Who will rebuild them for you?"

There were congressional antitrust hearings and a federal trial, but they weren't taken very seriously. Gasoline was 12 cents a gallon and no one had heard of the ozone layer yet. The corporations were convicted and fined $5,000. The individuals were convicted and fined one dollar each.

Trolleys, Buses and a Simple Marketing Strategy

For a long time, there had been notice of something going on. Just before the outbreak of World War II, William C. Dixon, a former justice of the Minnesota Supreme Court was asked by the federal government to investigate the sale of scores of independent (streetcar and bus) transit systems all over the country. Then the bombing of Pearl Harbor diverted the government's interest.

Beginning during the 1920s, a General Motors Corp. ( GM ) Bus Division subsidiary purchased streetcar lines in Springfield, Ohio, Kalamazoo and Saginaw, Michigan. gm set up a corporation staffed with dedicated functionaries, funneled dollars into it, bought private and municipal transit systems around the country, and then ensured through tightly worded contracts that the transit systems could buy only GM and Mack buses, Firestone tires, and fuels and lubricants from Standard Oil of California.

When it was clear that the marketing strategy worked, gm searched the country for someone to head the enterprise. E. Roy Fitzgerald was an inspired choice. He was president of an obscure Minnesota bus system that began in the 1920s with a couple of rickety tin lizzies. Fitzgerald was so astonished to find himself wooed by GM , he devoted all his energy to its success. GM named Fitzgerald president of National City Lines ( NCL ), a holding company incorporated in 1936 to acquire and operate local transit companies. (See "United States vs. National City Lines,"Federal Reporter, 3rd. Series 186 F.2d 562.)

With Fitzgerald at the helm, ncl formed its own own subsidiaries, American City Lines ( ACL ) and Pacific City Lines ( PCL ). PCL began business in January 1938, acquiring transit companies along the Pacific coast. ACL , organized in 1943, acquired local transit systems in the larger metropolitan areas of the country. ACL merged with NCL in 1946. By that year, NCL owned or controlled 46 transit systems in 45 cities and 16 states, and aided GM in the conversion of more than 100 electric transit systems to bus-only operations.

When an electric-powered transit system was purchased, it was converted quickly into a gasoline-powered bus company and then just as quickly, sold to new operators. Electric-powered streetcars were all replaced with either GM or Mack buses. Since an electric streetcar lasted three times longer than a bus, buses had to be replaced three times more often. Gasoline-powered vehicles meant much higher operating expenses. Many streetcar lines which had been profitable before, lost money for the first time.

In 1946, Mass Transportation magazine named Fitzgerald "Transportation Man of the Year.
" Fitzgerald also made the cover of the July 20, 1946 issue of Business Week . NCL was being listed on the "Big Board"of the New York Stock Exchange. The article says, "Operating no cross-country routes, N.C.L. goes quietly about its relatively prosaic job of hauling city and suburban passengers in 83 cities and 17 states . . . . Experts are guessing that this year [NCL] will exceed $200 million gross. Fitzgerald who [is] N.C.L., [has] become the most spectacular figure in city transit."

Antitrust Violations

Quinby's 1946 manifesto reopened the government investigation on the sale of transit companies around the country. William C. Dixon, the original investigator, was named the chief prosecutor during the federal Sherman Anti-Trust Act trial. According to Dixon, one company acquiring another company and converting it to another mode of transit wasn't illegal but acquiring companies and then forcing them to buy only certain products exclusively was illegal.

In August 1946, Railroad Magazine , reported, "Mass Transportation, a magazine which at one time represented the electric railway industry, recently devoted its front cover, plus the first five pages, to an attempt to smear E. J. Quinby . . . . But why this bitter attack . . . . the magazine attempts to belittle him by pointing out the low-cost edition of [his manifesto]; its cheap grade of paper, and how it was printed in a 'furnace basement.' É.the use of the entire cover and the opening five pages to lampoon Comdr. Quinby is quite amazing."

On April 10, 1947, The New York Sun newspaper reported, "Attorney General Clark announced today the indictment of nine corporations and seven individuals on anti-trust charges of conspiracy in the sale of equipment to a 'nationwide combine of city bus lines."

The indicted companies were: National City Lines, Inc., American City Lines, Inc., Pacific City Lines, Inc., the Standard Oil Company of California, the Federal Engineering Corporation, the Phillips Petroleum Company, the General Motors Corporation, the Firestone Tire & Rubber Company and the Mack Manufacturing Corporation.

The individuals indicted were: E. Roy Fitzgerald and Foster G. Beamsley of NCL ; H.C. Grossman, GM ; Henry C. Judd, Standard Oil of California; L.R. Jackson, Firestone Tire & Rubber; Frank B. Stradley, and A.M. Hughes, Phillips Petroleum.

On March 13, 1949, they were all convicted on one count of conspiring to monopolize a part of the trade and commerce of the United States. At the time, NCL owned or controlled 47 local transportation systems in California, Missouri, Washington, Utah, Maryland, Alabama, Florida, Illinois, Oklahoma, Indiana, Iowa, Mississippi, Nebraska, Michigan, Texas and Ohio.

When asked if they were guilty, Dixon said in 1987, "They were guilty, guilty as hell! Somebody should have gone to jail over this!

"Dixon's comments are all the more poignant in the context of more than 700 pages of Federal Bureau of Investigation ( FBI ) documents released under the Freedom of Information Act after a wait of more than four years. Virtually all of the pages are scarred with impervious black censoring ink, but what remains visible is quite startling. (See p.18)

An electric trolley in downtown Newark, New Jersey picks up passengers waiting on the street. Photo below that is an all service vehicle (ASV) that was powered by either fuel or overhead electric cables. The bottom photo is one of the President's Committee Cars (PCC) which the city of Newark purchased used from the Twin Cities Rapid Transit Company when the Minnesota transit operator converted to gasoline-powered buses. The PCCs became part of the Newark City Subway system in 1954 and 18 are still in daily service.

If Only More Paid Attention

The United States still bears untold scars from the American streetcar swindle. The once profitable system of privately-held independent electric-powered urban transit was destroyed, giving cities the choice between government-subsidized transit or no service at all. An economical, efficient, and non-polluting transit system has been replaced with one that is more expensive, less-efficient, and highly polluting. The American taxpayer has paid the price ever since.

Although more than 35 cities in the United States still operate, or have established new light rail systems, many built over long-abandoned train or trolley routes, it will be several more generations before the painfully slow recovery is accomplished. Indeed, Portland, Oregon, Newark, San Diego, Dallas, St. Louis and Baltimore are all planning extensions of their existing systems.

To fill the growing domestic market for light rail vehicles today, streetcars must be imported from foreign manufacturers because the domestic industry that once led the world in streetcar manufacture and technology lies moribund. We can only speculate on what might have been if more people heeded Quinby's warning about this senseless destruction of an important national asset.

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Content: ©2004 Al Mankoff