National City Lines: Meaning (information, definition, explanation, facts)

Between 1936 and 1950, National City Lines (NCL), a holding company sponsored and funded by General Motors, Firestone Tire, Standard Oil of California and Phillips Petroleum, bought out more than 100 electric surface-traction (streetcar) systems in 45 cities (including New York, Philadelphia, St. Louis, Salt Lake City, Tulsa, and Los Angeles) to be dismantled and replaced with GM buses. In 1949 GM and its partners in NCL were convicted in US District Court in Chicago of criminal conspiracy in this matter and fined $5,000 each for anti-trust violations (contracts in restraint of trade, i.e forcing subsidiaries to buy products from their owners (GM buses, Firestone tires, Standard and Phillips oil)).

National City Lines was formed in 1936 as a holding company, for the express purpose of acquiring local transit systems throughout the country, mostly in medium-size cities. Many of those transit systems had already converted from streetcars to buses. But the controversy involves those transit systems which were still running streetcars when acquired by NCL.

The formation of National City Lines had actually been preceded by other more overt actions by GM. The company began investing in streetcar lines in the late 1920s the shortlived United Cities Motor Transit (UCMT), a direct subsidiary of GM which lasted from 1932 until 1935 when the American Transit Association (ATA) censured the company for converting streetcar systems to bus lines.

A company run by E. Roy Fitzgerald, an unknown from northern Minnesota, was recruited in the new version of this program. Fitzgerald and his family had run a small bus operation in the small town of Eveleth carrying miners and schoolchildren. This small-town entrepreneurial image was sometimes used as a public relations gimmick when communicating with journalists.

Transportation historians note that the conversion to buses would likely have occurred anyway, and the streetcar ridership peaked in 1920 before the existence of NCL and was steadily declining.

Additional factors enabled NCL to acquire streetcar systems in the first place. Because streetcars were the earliest heavy users of electricity, it was practical and economical for many streetcar systems to be owned by the electric utility companies themselves. As part of the New Deal, federal legislation was passed ordering the electric utility companies to sell off their businesses not actually providing electricity. Under the Public Utilities Holding Company Act of 1935, these streetcar systems suddenly became more readily available for takeover by NCL.