General Motors Conspiracy

[Slick Vik]

Just to add to what I've been talking about for a while on here

 

Mir

Mirroring the techniques of railroad barons of the century before, GM’s lobbying group crafted legislation that made highways federally funded and controlled. Their justification was that highways were a national defense issue-required to move troops around the country in case of an attack. Conveniently, this made the secretary of defense, Charles Wilson, responsible for highway acts. Wilson was a major GM shareholder, and former president of the company.

He was the one who said “I thought that what was good for our country was good for General Motors, and vice versa.” The highway system that was brought into existence destroyed the homes of thousands.

According to Senator Gaylord Nelson, 75 percent of federal transportation spending has gone toward highways, while 1 percent has been spent on mass transit.

 

http://www.jasongooljar.com/2009/06/24/robert-moses-was-a-nasty-man-and-the-evil-car-companies/

 

[livincinco]

In 1956, the year the interstate highway act was signed, Real GDP in the US was $2.58 trillion measured in chained 2005 dollars.  In 2012, Real GDP was $13.67 trillion (same measure) 

 

PPP (purchasing power parity - adjusted for inflation)

1956 - $15,275

2012 - $43,814

 

I don't see the problem.

[livincinco]

Yep, what I'm seeing is that the federal government undertook a massive infrastructure project that has effectively tripled the standard of living of the average American in two generations.  GM benefitted from it...and created huge numbers of good paying manufacturing jobs in the US.  We need more conspiracies like that.

[Slick Vik]

Yep, what I'm seeing is that the federal government undertook a massive infrastructure project that has effectively tripled the standard of living of the average American in two generations. GM benefitted from it...and created huge numbers of good paying manufacturing jobs in the US. We need more conspiracies like that.

Yea Screw the thousands of miles of rails that were ripped out of the ground that made lives of ordinary people day to day.

In 1956, the year the interstate highway act was signed, Real GDP in the US was $2.58 trillion measured in chained 2005 dollars. In 2012, Real GDP was $13.67 trillion (same measure)

PPP (purchasing power parity - adjusted for inflation)

1956 - $15,275

2012 - $43,814

I don't see the problem.

Are you basing the increase simply on interstate highways?

[RedScare]

Could you post some statistics showing that pulling up rails caused hardship? I've never seen it.

[Slick Vik]

I think in Slick Vik's world, automobiles...and the income needed to purchase them...are evil. While championing railed mass transit, he oftentimes veers off into tirades against those with the means to purchase autos. I don't think it has occurred to him that he is in the minority in his disdain for personal wealth and automobiles. Even those of us who appreciate mass transit are also appreciative of autos and the money it takes to purchase them. In that sense, we are willing participants in the GM conspiracy.

I'm not tirading people's means of income and not necessarily tirading against the auto but the reason it became a necessity was collusion between GM and the federal government. At one time most of the cities were like New York only a fool would buy a car for half a years salary when there was excellent public transportation.

[RedScare]

 only a fool would buy a car for half a years salary when there was excellent public transportation.

 

And, now one can buy an automobile for a month or two's salary. What great advancements we've made. Only your ideology prevents you from seeing that.

[livincinco]

I'm not tirading people's means of income and not necessarily tirading against the auto but the reason it became a necessity was collusion between GM and the federal government. At one time most of the cities were like New York only a fool would buy a car for half a years salary when there was excellent public transportation.

 

Actually about 20% of the US population owned a car prior to the Great Depression.  Car ownership stagnated during the depression and World War II and then increased to 32% by 1950.  It was on a significant upward trend before the alleged "conspiracy" occurred.

 

Vehicle ownership in Western Europe is in the 50-70% range even with the extensive transit systems.  Lot of fools out there.

 

There's a pretty strong coorelation between economic growth and car ownership in most countries.

[Slick Vik]

And, now one can buy an automobile for a month or two's salary. What great advancements we've made. Only your ideology prevents you from seeing that.

Not a new automobile

And, now one can buy an automobile for a month or two's salary. What great advancements we've made. Only your ideology prevents you from seeing that.

Not a new automobile

[RedScare]

Not a new automobile

Not a new automobile

 

So?

[samagon]

Could you post some statistics showing that pulling up rails caused hardship? I've never seen it.

 

Did you ever see the movie fried green tomatoes?

 

Yes, there was a kid that died, and another that lost an arm because of the railroad, but when people stopped taking the railroad, that whole community died!

[RedScare]

Did you ever see the movie fried green tomatoes?

 

Yes, there was a kid that died, and another that lost an arm because of the railroad, but when people stopped taking the railroad, that whole community died!

 

I'll give you credit. This is more in depth analysis than I have seen from others.

[ToryGattis]

According to Senator Gaylord Nelson, 75 percent of federal transportation spending has gone toward highways, while 1 percent has been spent on mass transit.

 

This is one of my hot buttons.  The federal government is only supposed to be involved in *interstate* commerce, as specified by the Constitution, i.e. things like interstate highways, ports, airports, and long-distance freight rail.  Things that individual states wouldn't necessarily do themselves, because the benefits cross multiple states.  The feds have no purpose getting involved in *local* mass transit - those should be local decisions, locally funded, with local benefits.  Too many boondoggle mass transit projects get built because of the availability of "free" federal money, when localities would never build the same things themselves with their own money, because the benefits simply don't justify the costs.

[samagon]

This is one of my hot buttons.  The federal government is only supposed to be involved in *interstate* commerce, as specified by the Constitution, i.e. things like interstate highways, ports, airports, and long-distance freight rail.  Things that individual states wouldn't necessarily do themselves, because the benefits cross multiple states.  The feds have no purpose getting involved in *local* mass transit - those should be local decisions, locally funded, with local benefits.  Too many boondoggle mass transit projects get built because of the availability of "free" federal money, when localities would never build the same things themselves with their own money, because the benefits simply don't justify the costs.

 

Ah, but for the same reason that I benefit from a super highway out in the middle of Katy, someone in California benefits from a highway out in Arkansas that goes to a paper mill, so it only makes sense that all of those that benefit from the highway pay for it.

 

And that's how some of my money that I pay the IRS with ends up funding a bridge in Alaska.

[Subdude]

This is one of my hot buttons.  The federal government is only supposed to be involved in *interstate* commerce, as specified by the Constitution, i.e. things like interstate highways, ports, airports, and long-distance freight rail.  Things that individual states wouldn't necessarily do themselves, because the benefits cross multiple states.  The feds have no purpose getting involved in *local* mass transit - those should be local decisions, locally funded, with local benefits.  Too many boondoggle mass transit projects get built because of the availability of "free" federal money, when localities would never build the same things themselves with their own money, because the benefits simply don't justify the costs.

 

In the land of theoretical purity that is certainly the case and I agree.  That said, here on earth Congress functions so as to re-distribute federal funding, whether the benefit is interstate or not. 

[august948]

I'm not tirading people's means of income and not necessarily tirading against the auto but the reason it became a necessity was collusion between GM and the federal government. At one time most of the cities were like New York only a fool would buy a car for half a years salary when there was excellent public transportation.

Is there a country of any economic significance that hasn't built up an equivalent to our interstate highway system? Was there a conspiracy between GM and the German government to build the Autobahn in the 30's? Isn't it really required for for a country to be considered "world-class"?

Maybe it was just a d@mn good idea.

[editor]

Is there a country of any economic significance that hasn't built up an equivalent to our interstate highway system? Was there a conspiracy between GM and the German government to build the Autobahn in the 30's? Isn't it really required for for a country to be considered "world-class"?

Maybe it was just a d@mn good idea.

 

The national public highway system (what we now call the U.S. routes) was built as a means of promoting the country's economy.  Just like the National Weather Service.  How to build it was one of the many reasons behind the Civil War.  Northern states believed the national road network should be constructed with taxpayer dollars to help commerce.  Southern states believed a number of private networks of toll roads financed by private companies was the way to go.  

 

As for the interstates -- they weren't built for you.  They were built for the military.  You're trip to grandma's house is just incidental.  

 

Ditto for the national waterway networks.  I live near a busy lock, and when the boats line up, military vessels immediately jump the line and get priority, followed by local emergency services, followed by fright vessels, then commercial passenger vessels, then private boats.  

[livincinco]

As for the interstates -- they weren't built for you.  They were built for the military.  You're trip to grandma's house is just incidental.  

 

They were built for the military, but they were also built to enhance interstate commerce.  Most conversations regarding transit on this site have very little appreciation for the huge amount of freight that is moved in this country. 

[august948]

As for the interstates -- they weren't built for you.  They were built for the military. You're trip to grandma's house is just incidental.  

Ditto for the national waterway networks. I live near a busy lock, and when the boats line up, military vessels immediately jump the line and get priority, followed by local emergency services, followed by fright vessels, then commercial passenger vessels, then private boats.

Interstate Myths

http://www.fhwa.dot.gov/interstate/interstatemyths.htm#question3

President Eisenhower supported the Interstate System because he wanted a way of evacuating cities if the United States was attacked by an atomic bomb.

President Eisenhower’s support was based largely on civilian needs—support for economic development, improved highway safety, and congestion relief, as well as reduction of motor vehicle-related lawsuits. He understood the military value of the Interstate System, as well as its use in evacuations, but they were only part of the reason for his support.

Defense was the primary reason for the Interstate System.

The primary justifications for the Interstate System were civilian in nature. In the midst of the Cold War, the Department of Defense supported the Interstate System and Congress added the words “and Defense” to its official name in 1956 (“National System of Interstate and Defense Highways”). However, the program was so popular for its civilian benefits that the legislation would have passed even if defense had not been a factor.

The Interstate System was launched by the Interstate Defense Highway Act of 1956.

No such legislation passed in 1956 or any other year. Nevertheless, this title appears widely throughout the media instead of the correct title: the Federal-Aid Highway Act of 1956.

[Slick Vik]

That same year, Edwin J. Quinby, a recently retired naval lieutenant commander, published a 24-page expose on the owners of NCL. It was addressed to "The Mayors; The City Manager; The City Transit Engineer; The members of The Committee on Mass-Transportation and The Tax-Payers and The Riding Citizens of Your Community" and began, "This is an urgent warning to each and every one of you that there is a careful, deliberately planned campaign to swindle you out of your most important and valuable public utilities–your Electric Railway System".^{[n 6]} Quinby had previously worked for the North Jersey Rapid Transit, which operated in New York and had established up the Electric Rail Users Association in 1934, which lobbied on behalf of rail users and services.^[7] He was later to write a history of North Jersey Rapid Transit.^[8] By 1947, NCL owned or controlled 46 systems in 45 cities in 16 states.^{[n 7]}

 

On April 9, 1947, nine corporations and seven individuals (constituting officers and directors of certain of the corporate defendants) were indicted in the Federal District Court of Southern California on counts of "conspiring to acquire control of a number of transit companies, forming a transportation monopoly" and "conspiring to monopolize sales of buses and supplies to companies owned by National City Lines"^{[n 8]} which had been made illegal by the 1890 Sherman Antitrust Act.

In 1948, the venue was changed from the Federal District Court of Southern California to the Federal District Court in Northern Illinois following an appeal to the United States Supreme Court (in United States v. National City Lines Inc.)^[9] which felt that there was evidence of conspiracy to monopolize the supply of buses and supplies.^{[n 9]}

The San Diego Electric Railway was sold to Western Transit Company, which was owned by a J. L. Haugh, Oakland, for $5.5 million in 1948.^[10] Jessie Haugh was also president of Key Systems which later purchased Pacific Electric Railway. The financial arrangements were not public at the time.^[11] In the same year the Baltimore Streetcar system was purchased by NCL and started converting the system to buses.^[12]

 

In 1949, Firestone Tire, Standard Oil of California, Phillips Petroleum, GM and Mack Trucks were convicted of conspiring to monopolize the sale of buses and related products to local transit companies controlled by NCL and other companies; they wereacquitted of conspiring to monopolize the ownership of these companies. The verdicts were upheld on appeal in 1951.^{[n 9]} Bradford Snell summed up the controversial verdict, as the punishment so poorly matched the crime:

"The court imposed a sanction of $5,000 on GM. In addition, the jury convicted H.C. Grossman, who was then treasurer of GM. Grossman had played a key role in the motorization campaigns and had served as a director of Pacific City Lines when that company undertook the dismantlement of the $100 million Pacific Electric system. The court fined Grossman the magnanimous sum of $1."

[n 10]

According to Snell, GM's own testimony had shown that by the mid-1950s, "its agents had canvassed more than 1,000 electric railways and that, of these, they had motorized 90%—more than 900 systems."^{[n 11]} The struggling Pacific Electric Railway was purchased by Metropolitan Coach Lines in 1953.

Jesse Haugh, who operated Metropolitan Coach Lines and was a former executive of PCL, had previously purchased San Diego Electric Railway though a separate company in 1948. The remaining streetcars were converted to buses by 1950. The remains of the Pacific Electric Railway and of the Los Angeles Railway were taken into public ownership in 1958; all routes were converted to bus routes. Though federal anti-trust action was taken against NCL, the damage was already done: Los Angeles was dominated by automobiles.^[13] Haugh sold the bus-based San Diego system to the city in 1966.^[14]

 

http://en.wikipedia.org/wiki/General_Motors_streetcar_conspiracy#Edwin_J._Quinby

[HTX]

Impressive post until I saw it was a Wiki based response.

Ike saw the benefit of the Autobahn to the German Army. It made sense to him that it would be beneficial to the US military and endorsed building something similar in the US. I cannot say for sure that he saw the economic benefit but is was clearly there in hindsight.

HTX