Passenger Trains > Origins of the decline in traction in the US

My attention was recently directed to a documentary titled "Taken for a ride," which deals with the demise of streetcar lines in the US.

Here's the Youtube link:

It's a darn good documentary, especially the sections dealing with what happened well before the Interstate highway system came about.

Before posting this, I did search TrainOrders to make sure I wouldn't get flamed for posting something that had recently been posted by others. Winnemucca did mention this documentary in a post over 5 years ago, but that was over 5 years ago, so I think it's OK to mention this documentary once again.

Link Please.
David

Go to YouTube and search for "Taken for a Ride." It's the full-length, approx. 50 min. documentary.

Bandito probably put the link in his post but the site software deleted it.



Edited 2 time(s). Last edit at 01/25/15 21:36 by GenePoon.

Copy and paste: https://www.youtube.com/watch?v=2JQWRAoL0vk

Does it explain how FDR's changes to tax laws and the regulation of utilities and holding companies effectively forced the electric industry to abandon subsidizing their unprofitable streetcar systems, or is it just another "GM killed the streetcar"/Roger Rabbit selective Simpleton rewrite of history?



Edited 1 time(s). Last edit at 01/26/15 01:12 by darkcloud.

darkcloud Wrote:
-------------------------------------------------------
> Does it explain how FDR's changes to tax laws and
> the regulation of utilities and holding companies
> effectively forced the electric industry to
> abandon subsidizing their unprofitable streetcar
> systems, or is it just another "GM killed the
> streetcar"/Roger Rabbit selective Simpleton
> rewrite of history?


That's an extremely important insight.

Here in NJ, the streetcar / utility interests played a large role in developing suburbs. The Morris County Traction Company and Public Service Coordinated Transport (rail+bus+streetcars+ferries) doubled as real estate developers. The building of suburbs and regional amusement parks was a major part of their mandates.

Same thing with much of New York City and the privately owned subway companies. Or Oakland, or Los Angeles, etc. These often debt laden companies were ripe for collapse when the stock markets and credit collapsed.

The Public Utility Holding Company Act made an enormous difference, causing the formal divestiture of many subsidiaries and the assumption of ownership or effective control by cities, etc.

Lackawanna484 Wrote:
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> Morris County Traction Company and Public Service
> Coordinated Transport
> (rail+bus+streetcars+ferries)

MCT and PSCT operated ferries? On the Hudson?

To your point, many streetcar companies around the country were involved in developing the outer fringes of their service areas to create demand for the trolley lines. Move folks out of the city and they'll need a way to get to their jobs or merchants in the cities.

CPR_4000 Wrote:
-------------------------------------------------------
> Lackawanna484 Wrote:
> --------------------------------------------------
> -----
> > Morris County Traction Company and Public
> Service
> > Coordinated Transport
> > (rail+bus+streetcars+ferries)
>
> MCT and PSCT operated ferries? On the Hudson?

Indeed, the PSCT operated ferries.

The coordinated in the PSCT name referred to the multi-modal transportation. PSCT operated ferries from Edgewater NJ to 125th street for many years. There was a loop at the terminal. The ferry was a key element in the Palisades Amusement Park venture, which also had a number of trolley lines converge there.

It's a fascinating part of the PSCT story, largely clobbered by the opening of the George Washington Bridge.


>
> To your point, many streetcar companies around the
> country were involved in developing the outer
> fringes of their service areas to create demand
> for the trolley lines. Move folks out of the city
> and they'll need a way to get to their jobs or
> merchants in the cities.

That's correct, and is why I mentioned several examples by name. I'm sure there are many others. In an era when many families did not own cars, trolley access was a major plus in selling homes with fresh air, lawns, etc away from the perceived ills of the cities.

The development of amusement parks was an additional opportunity to create more business. Olympic Park in Irvington NJ was adjacent to the #25 trolley, Palisades Amusement Park was at a crossing of several lines, etc. There are many other examples.

What killed the trolley and privately owned transit companies across the US was the automobile, cheap gas and better roads. In addition, cities tried to bill the private companies for road improvements so much that many abandoned the streetcar line and converted to buses just to avoid the penalty. It was much more economically than just GM, Firestone and the oil companies. Now we see 'streetcars' making a comeback as light rail lines.

darkcloud Wrote:
-------------------------------------------------------
> Does it explain how FDR's changes to tax laws and
> the regulation of utilities and holding companies
> effectively forced the electric industry to
> abandon subsidizing their unprofitable streetcar
> systems, or is it just another "GM killed the
> streetcar"/Roger Rabbit selective Simpleton
> rewrite of history?


Good point, and it bears remembering that the producers of
this documentary could hardly be considered politically neutral.

Building the London Underground also helped develop that city's suburbs, allowing folks to live somewhere other than in big, (at that time) dirty cities... I'm sure there are parallels elsewhere.

Bill Deaver
Tehachapi, CA

jfrank39 Wrote:
-------------------------------------------------------
> What killed the trolley and privately owned
> transit companies across the US was the
> automobile, cheap gas and better roads. In
> addition, cities tried to bill the private
> companies for road improvements so much that many
> abandoned the streetcar line and converted to
> buses just to avoid the penalty. It was much more
> economically than just GM, Firestone and the oil
> companies. Now we see 'streetcars' making a
> comeback as light rail lines.

Worth keeping in mind is that by 1941, 91% of all US passenger miles of travel were already by private automobile. That was before the Interstates, before the limited access Turnpikes, before two car families, before the development of suburban sprawl, and before the destruction of most streetcar and interurban companies, and before the mass of train-offs.

The streamliner train, the PCC car, and other innovations were attempts by the rail industry to regain the position they held in 1920. Whether streetcars and rail could have maintained a modicum of market share in the face of the automobile without the ill effects of the utility holiding company laws and the legal requirement to maintain streets, and the heavy taxation of property and income that developed during the 1920-1940 period is worth debating, but it seems likely that without significant innovations in the direction of productivity of invested capital and trained labor would have still been for naught, and the tendency of government policy and regulation was to thwart innovations in productivty by the rail industry (i.e. labor saving measures, higher speeds, plant additions and improvements all resulted in negative financial measures due to unionization and regulation).

The financial inability to completely replace the turn of the century Brill car era fleets with new PCC's was the certain death knell of most streetcar systems. The dispersion and inconvenience of rail travel in general due to the connection problem compared to the point to point system of owning your own car was the coupe-de-grace.

Rail can work as a private enterprise in its current niche, but not at current levels of productivity, and not at current levels of construction cost for new fixed plant.

Capital costs?
The maintenance of the track, overhead power system, and (if any) signals had to be funded from operations.
When city streets were re-paved, the trolley company had to pay to raise their tracks a couple of inches, a huge infrastructure cost with no return.
Many trolley systems had invested in their initial infrastructure by issuing bonds, which also had to be retired through earnings. When the original rail, trolley wire poles, and ties were at the end of their natural life cycle there was no cash to repair them.
In contrast, a city bus line could simply pay a motor fuel tax and ignore the rest of this infrastructure burden. (Shops and office buildings being an equal cost exposure.)

The above mentioned Morris County Traction Company was purchased by the Public Service Coordinated Transport in 1928(?), and almost immediately converted to motor bus. Expenses went down, and some MCTC cars were used on other PS lines.

railstiesballast Wrote:
-------------------------------------------------------
> Capital costs?
> The maintenance of the track, overhead power
> system, and (if any) signals had to be funded from
> operations.

This isn't a problem. The problem is the lack of use of the infrastructure to spread out its costs. Roads succeed by having many users pay a little for them. Railroads have resisted this model from the start to try to ensure their ability to extract the highest rates the traffic will economically bear in the absence of competition.

> When city streets were re-paved, the trolley
> company had to pay to raise their tracks a couple
> of inches, a huge infrastructure cost with no
> return.

Actually, usually, the trolley company was responsible to pave the lanes in the streets which its tracks occupied.

> Many trolley systems had invested in their initial
> infrastructure by issuing bonds, which also had to
> be retired through earnings. When the original
> rail, trolley wire poles, and ties were at the end
> of their natural life cycle there was no cash to
> repair them.

This was not always the case. In Pittsburgh for example, the trolley company had sufficient money saved up to renew the system post WWII and pay dividends to shareholders and make payments to bondholders but it was stolen by sharp lawyers for the Guggenheim interests through court proceedings.

jfrank39 Wrote:
-------------------------------------------------------
> What killed the trolley and privately owned
> transit companies across the US was the
> automobile, cheap gas and better roads. In
> addition, cities tried to bill the private
> companies for road improvements so much that many
> abandoned the streetcar line and converted to
> buses just to avoid the penalty. It was much more
> economically than just GM, Firestone and the oil
> companies. Now we see 'streetcars' making a
> comeback as light rail lines.

A good summary. One could also add that the much of public had a preference for new brightly colored stylish (at least in the eyes of consumers) cars and the ability to come and go on their schedule, not on the timetable of a transit provider. The trolleys, along with cities themselves, were viewed as old, dirty and obsolete - the new age was defined by automobiles and suburbs.

In several cities, "streetcars" are making a comeback as...streetcars!

GenePoon Wrote:
-------------------------------------------------------

>
> Good point, and it bears remembering that the
> producers of
> this documentary could hardly be considered
> politically neutral.

Just so I have a reference point, please provide an example of a documentary, book or magazine article which describes the decline of traction in a "politically neutral" way.

abyler Wrote:
-------------------------------------------------------

>
> This was not always the case. In Pittsburgh for
> example, the trolley company had sufficient money
> saved up to renew the system post WWII and pay
> dividends to shareholders and make payments to
> bondholders but it was stolen by sharp lawyers for
> the Guggenheim interests through court
> proceedings.

Can you provide a source to back up your statement? I've made a few presentations on Pittsburgh's transit history, none of my research ever came across this. In the audience at one or two of the presentations were people more knowledgeable than I and they never mentioned this.

My understanding is that the Pittsburgh Railways Company was a financially marginal enterprise for most of its history, entered into two bankruptcies, and lacked the capital for modernization after World War II. Additionally, Pittsburgh Railways' ridership plummeted after 1947. Nowhere, have I read about any other parties diverting funds intended for capital improvements. However, if you provide a source, I will check that out and discuss it with local transit historians.



Edited 1 time(s). Last edit at 01/26/15 20:14 by RuleG.

For those interested, the peak mileage for traction lines was about 1921. Everything started going downhill from then.

For starters, too many traction lines were created in the belief of 'build it, and they will come'. Many times, lines laid down in the early part of the 1900s went from nowhere to some other nowhere, 30 or 40 miles away. While that may have been good for farmers to get their milk to market in the still horse-and-buggy days, once the Model T became king of the road, there just wasn't enough business left to make a profit. The proliferation of paved roads and automobiles in the 20s significantly sped up the decline of the interurbans and streetcars.

Then came the depression. Perhaps 50% or more of the trolley lines in the nation went under. Major drop-offs in passengers spelled doom for some of the best of them. The likes of the Indiana Railroad, Cincinnati and Lake Erie, Lakeshore Electric and the Columbus, Delaware and Marion are perhaps some of the better-known and better run electrics didn't make it to World War II. Movies and photos of those lines shows that by 1935 or so, the rights-of-way were more like grass-of-way and the rails were sometimes hard to see.

Like the railroads, the interurban lines had the wheels run off of them during World War II. By 1945 or so, many of the steel cars built in the late teens and twenties were nearing the end, mostly due to reduced maintenance during the depression and war years. The Chicago North Shore & Milwaukee had 2 Electroliners built just before the war, and managed to 'update' much of their fleet with painted-on stainless steel fluting to mimic the streamliners coming to the railroads. The Illinois Terminal ordered 3 or 4 multi-car semi-permanently coupled trains that someone failed to determine would not fit the southern terminal of the line at St Louis. Those were the last interurbans built in this country.

As the economy picked up after the war and more highways and cars were built, even the railroads saw major declines in passenger traffic and the new streamliners only slowed down the decline. By the 50s, the only interurbans still running were the 3 (former) Insull lines out of Chicago and the great Pacific Electric. Perhaps one of the contributing factors to their survival is they weren't 'built on a shoestring' to begin with. And the giant infusion of cash from the Insull empire allowed expansion and modernization in the 30s that helped those lines. Today, the only interurban electric still running is the Chicago South Shore and South Bend, now subsidized under the Northern Indiana Commuter Transit District (NICTD) banner. Suburban rail lines on the East Coast (diesel and electric) survive only as government operations.

While many, many want to blame the somewhat 'under the table' consortium of GM, Firestone, and one or more oil companies for the elimination of countless city trolley lines, that was only one of several concurrent causes, in my opinion. While it made good 'business sense' for the consortium under the guise of <can't remember the name> to buy out private city streetcar lines (this was in the era before ANY municipality-owned streetcar lines other than Detroit, IIRC), the economics of maintaining the tracks and overhead wires and the need to replace very worn-out equipment (mostly built in the teens and twenties) after the war made conversion to busses the only economical, ie, -profitable- way to make money. As mentioned by others in this thread, the streetcar companies were required to maintain the space from the outermost rail to outermost rail, or perhaps an extra foot or so beyond. That including snow removal as well as paving repairs, rail and tie maintenance, and, of course, overhead power maintenance with associated wires, poles, power lines, etc. Busses had NONE of that expense. And, don't forget the mainline railroads such as the B&O, Great Northern, Norfolk and Western, the Milwaukee Road, and even Conrail that gave up on electric freight. The cost of equipment replacement from engines, to overhead wires to substations, was cost prohibitive compared to replacing it all with diesels that can 'go anywhere'.

While it would be nice to ponder 'what if' for the Pacific Electric, or the North Shore had lasted into the 70s or so and then subsidized after that, the biggest problem they both had was the extensive street running they had. That's why the North Shore abandoned the Shore Line in 1955...too much slow running, too many stops too close together.

And in case the readers of this website have forgotten or not yet learned, there is NO, repeat, NO passenger carrying, daily-scheduled railroad in the WORLD that makes money! Somewhere in the late 40s, or early 50s was the end of carrying passengers profitably.



Edited 2 time(s). Last edit at 01/26/15 19:47 by BRAtkinson.

RuleG Wrote:
-------------------------------------------------------
> abyler Wrote:
> --------------------------------------------------
> -----
>
> >
> > This was not always the case. In Pittsburgh
> for
> > example, the trolley company had sufficient
> money
> > saved up to renew the system post WWII and pay
> > dividends to shareholders and make payments to
> > bondholders but it was stolen by sharp lawyers
> for
> > the Guggenheim interests through court
> > proceedings.
>
> Can you provide a source to back up your
> statement? I've made a few presentations on
> Pittsburgh's transit history, none of my research
> ever came across this. In the audience at one or
> two of the presentations were people more
> knowledgeable than I and they never mentioned
> this.
>
> My understanding is that the Pittsburgh Railways
> Company was a financially marginal enterprise for
> most of its history, entered into two
> bankruptcies, and lacked the capital for
> modernization after World War II. Additionally,
> Pittsburgh Railways' ridership plummeted after
> 1947. Nowhere, have I read about any other
> parties diverting funds intended for capital
> improvements. However, if you provide a source, I
> will check that out and discuss it with local
> transit historians.

Sure, it was the typical Wall Street fraud against the public we've seen over and over and over and over and over again for at least the past 80-90 years.

"Transit in the Triangle, Vol. 1" (Bulletin 145 of the CERA)
pp. 127-130

"No interest on bonds or stocks was paid during [the time of reorgnization planning]. Accumulated revenues went for regular operations and to pay the various car trusts. Money, therefore, was still accumulating in the company treasury. By the end of 1946, PRCo had $23,149,315.20 in cash and securities. This was enough to provide free trolley rides to everybody in the city for an entire year.

"Guggenheim interests on Wall Street were cognizant of this build-up, and they began to purchase as much low-valued transit stock as possible, and took their claim to the Third Circuit Corut of Appeals, on the grounds that the District Court had erred in not making the subordination of Philadelphia Company claims a part of the reorganization.

"On January 4, 1949, at the request of the underliers, a 60-day adjournment was granted to enable the parties to explore the possibility of a settlement.

"The trustees had counted on the accumulated money to pay the debts to bond- and stock-holders as well as to make system renewals. The trustees had set aside $14 million of this money for renewal. The remainder was for shareholders.

"Philadelphia Company realized it would be forced to subordinate its claims. The Guggenheim action ultimately meant thst for very little investment, the plaintiffs walked away with a huge amount of cash. Philadelphia Company had been forced to let it got. Pittsburgh Railways was left without money to adjust to changing situations. This condition was devestating to the system: No capital, no private street railways.

"Funds for system improvements had evaporated. In 1947 an order for 100 additional all-electric PCC cars had been placed, and those contracts were safe, but PRCo's quest for additional new streetcars had been crushed."

I'm surprised you wouldn't have this book given your stated interest.