High gas prices and our “addiction” to foreign oil, as President Bush has called it, have roots in a nearly forgotten criminal conspiracy. It was this conspiracy that ordained our extreme dependence on cars and trucks and the inevitable and all-but-irreversible results, including filthy air, congestion, long commutes and accelerated global warming.
In 1949, three of our largest corporations–General Motors, Standard Oil of California (SoCal, now Chevron) and Firestone Tire and Rubber (now Japan’s Bridgestone)–were convicted of having conspired for more than a decade to replace highly efficient urban electric transit systems with bus lines. The bus lines’ operators contracted never to buy new equipment “using any fuel or means of propulsion other than” petroleum. GM, SoCal and Firestone were fined $5,000 each, the maximum the antitrust laws then allowed. GM’s treasurer, also convicted, was fined $1.
GM’s $5,001 punishment somehow failed to deter it from continuing for six years to acquire electric-powered rail and bus properties and convert them to gasoline and diesel. The conspiracy-to-monopolize convictions, upheld on appeal, never received attention commensurate with their impact. In 1974, however, they did become a subject of Senate Antitrust and Monopoly Subcommittee hearings on the broad topic of auto industry reform.
Strikingly, the subcommittee chairman, Philip Hart, was the senior senator from Michigan, where the auto industry was dominant and where GM was the dominant corporation. An assistant subcommittee counsel, Bradford Snell, had researched the conspiracy for American Ground Transport, a study financed by the Stern Fund. GM, he testified, had led the destruction of more than 100 electric-rail transit systems in forty-five cities, including New York, Los Angeles, Philadelphia, Baltimore and St. Louis.
The instruments of destruction were principally National City Lines (NCL) and other holding companies formed by GM, a manufacturer of gas and diesel buses; SoCal and Phillips Petroleum, providers of gasoline and diesel fuels; and Firestone, provider of bus tires. To finance the conversion of electric transit systems in sixteen states to gas or diesel buses, GM, SoCal, Firestone and Phillips (also convicted) gave NCL $9 million by 1950, Snell told the hearing. The conversion was virtually complete by the mid-1950s. In Los Angeles, Snell testified, GM and SoCal created NCL affiliates that bought up and scrapped rail lines, including those used by Pacific Electric, the world’s largest electric railway operation. Its 3,000 trains had carried 80 million passengers through fifty-six Southern California incorporated communities annually. “Motorization drastically altered the way of life in Southern California,” Snell wrote in a section of the study later endorsed by Los Angeles Mayor Tom Bradley. “Today,” he continued,