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The Motorization of American Cities

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An excellent treatise on the demise of privately owned transit companies is The Motorization of American Cities by David St. Clair, a professor of economics. Mr. St. Clair details how government was largely responsible for the streetcars demise: large taxes (percent of revenue and others); requirements for street paving (6% of revenue in LA) that only benefited the competition; snow removal from street (where applicable); hostility of public staff to private companies; regulation that required uniform fares (could not lower it for heavily used lines), often forced streetcars to subsidize buses, proscribed routes and service, and sometimes even specified inefficient 2-man operation (one man to collect tickets) for streetcars (but not for buses); government subsidized freeways that severed many streetcar lines without compensation for rerouting; the pro-automobile bias of government in street usage (e.g., one-way streets that discourage bicycle and transit usage, including buses); the terms of a renewed franchise (many expired in 1930s) often specified cancellation by government on short (sometimes 90 day) notice (and made risky further investment in streetcar tracks); the Public Holding Company Act (became effective in 1938) forced the sale of many transit companies (for example, the Sacramento transit company which was then bought by Pacific City Lines, a GM "front", in 1938); and finally, the franchise itself prevented another transit company from competing and enabled National City Lines and other GM "front" companies to liquidate streetcar technology (by substituting inferior buses) and prevented competition by much more efficient electric technology that then (after the takeovers) was not allowed to compete. The highest price offered for this legal right to exclusively provide transit (the franchise) was by the one that would profit the most: GM.

The author also details and documents how the interstate highway system (that has primarily an urban purpose in terms of usage), and laws involving government with the highway business, were primarily planned by and lobbied for by the automobile manufacturers, who faced a saturating car market (most car sales were replacements in the 1930s), and wanted to expand into the urban market (where most families did not own cars). The author laments the amount of leverage that business groups can exert on government.

The book is extensively documented by footnotes.