National City Lines
|Headquarters||Chicago, Illinois, USA|
|Products||holding company for streetcar and bus lines|
National City Lines, Inc. (NCL) is a holding company, now mostly involved in real estate, better known for its earlier involvement in transit. The company grew out of the Fitzgerald brothers' bus operations, founded in Minnesota, United States in 1920 as a modest local transport company operating two buses. It was reorganized into a holding company in 1936, and later expanded about 1938 with equity funding from General Motors, Firestone Tire, Standard Oil of California and Phillips Petroleum for the express purpose of acquiring local transit systems throughout the United States in what became known as the Great American Streetcar Scandal. The company formed a subsidiary, Pacific City Lines in 1937 to purchase streetcar systems in the western United States. National City Lines, and Pacific City Lines were indicted in 1947 on charges of conspiring to acquire control of a number of transit companies, and of forming a transportation monopoly for the purpose of 'Conspiring to monopolize sales of buses and supplies to companies owned by National City Lines'. They were acquitted on the first charge but not the second in 1949.
The company was formed in 1920, operating two buses in Minnesota[n 1] by E. Roy Fitzgerald and his brother transporting miners and schoolchildren. In 1936 the company was organized into a holding company.[n 2] In 1938, National City Lines wished to purchase transportation systems in cities "where street cars were no longer practicable" and replace them with passenger buses. To fund this expansion the company obtained equity funding from companies seeking to increase sales of commercial buses and supplies, including General Motors, Firestone Tire, Standard Oil of California and Phillips Petroleum.[n 3]
In 1936, they bought 13 transit companies in Illinois, Oklahoma and Michigan, then in 1937, they replaced streetcars in Butte, Montana and made purchases in Mississippi and Texas. Sometimes these systems were already run down, but not always. Major investment had recently been made with improvements to the streetcars systems in Butte and Beaumont, Texas.
In 1938 the company entered into exclusive dealing arrangements and obtained equity funding from companies seeking to increase sales of commercial buses and supplies, including General Motors, Firestone Tire, Standard Oil of California and Phillips Petroleum. The company was indicted in 1947 and was later convicted in the United States District Court for the Northern District of Illinois of conspiring to monopolize the sale of buses and related products to the local transit companies that they controlled.
By 1947 the company owned or controlled more than 100 electric streetcar systems in 45 cities including, but not limited to, Baltimore, St. Louis, Salt Lake City, Los Angeles, Oakland, Philadelphia and Tulsa. The company ultimately dismantled these systems and replaced them with bus systems in what became known as the 'Great American streetcar scandal' and formed the inspiration for the film Who Framed Roger Rabbit.
American City Lines, which had been organized to acquire local transportation systems in the larger metropolitan areas in various parts of the country in 1943 merged with NCL in 1946.[n 2] By 1947 the company owned or controlled 46 systems in 45 cities in 16 states.[n 4]
In 1947 National City Lines, with others was indicted in the Federal District Court of Southern California on two counts: 'conspiring to acquire control of a number of transit companies, forming a transportation monopolize' and 'Conspiring to monopolize sales of buses and supplies to companies owned by National City Lines' in what became known as the Great American streetcar scandal (or 'General Motors streetcar conspiracy', 'National City Lines conspiracy').[n 5]
In 1948, the United States Supreme Court (in United States v. National City Lines Inc.) permitted a change in venue to the Federal District Court in Northern Illinois. National City Lines merged with Pacific City Lines the same year.
In 1949, General Motors, Standard Oil of California, Firestone and others were convicted of conspiring to monopolize the sale of buses and related products to local transit companies controlled by NCL and other companies; they were acquitted of conspiring to monopolize the ownership of these companies. The verdicts were upheld on appeal in 1951.[n 6] The corporations involved were fined $5000, their executives $1 apiece.
Operating areas and companies
There is considerable uncertainty and variability amongst sources as to where National City Lines operated.
The 1948 ruling stated that:
"Forty-four cities in sixteen states are included. The states are as widely scattered as California, Florida, Maryland, Michigan, Nebraska, Texas and Washington. The larger local transportation systems include those of Baltimore, St. Louis, Salt Lake City, Los Angeles and Oakland. The largest concentrations of smaller systems are in Illinois, with eleven cities; California with nine (excluding Los Angeles); and Michigan with four. The local operating companies were not named as parties defendant."
This table attempts to bring together the many sources detailing cities which were at one time or another owned or controlled by National City Lines. A star (*) indicates that NCL is understood to have had significant control but not ownership:
- Alabama: Mobile, Montgomery
- California: Burbank, Eureka, Fresno, Glendale, Los Angeles*, Oakland*, Sacramento, Inglewood, Long Beach, San Jose, Pasadena, Stockton
- Florida: Tampa, Jacksonville*
- Illinois: Aurora/Elgin, Bloomington, Champaign, Danville, East St. Louis, Decatur, Galesburg, Joliet, Kewanee, LaSalle/Peru, Peoria, Quincy, Rock Island
- Indiana: South Bend, Terre Haute
- Iowa: Burlington, Davenport, Cedar Rapids, Ottumwa, Sioux City
- Maryland: Baltimore*
- Michigan: Jackson, Lansing, Kalamazoo, Saginaw, Pontiac
- Mississippi: Jackson
- Missouri: St. Louis*
- Montana: Butte, Great Falls
- Nebraska: Lincoln
- New York: New York
- Ohio: Canton, Portsmouth
- Oklahoma: Tulsa
- Pennsylvania: Philadelphia*
- Texas: Beaumont, El Paso, Houston, Port Arthur, Wichita Falls
- Utah: Salt Lake City
- Washington: Bellingham, Everett, Spokane
- Wisconsin: Oshkosh
National City Lines and the Montgomery Bus Boycott
Rosa Parks was arrested for refusing to move to the back of the bus operated by Montgomery Bus Lines, bus #2857, a subsidiary of a National City Lines on 1 December 1955 which led to the Montgomery Bus Boycott. Martin Luther King, Jr. and the Montgomery Improvement Association wired a letter to National City Lines on 8 December 1955 and the company's vice president. Kenneth E. Totten traveled to Montgomery the following week. The boycott lasted for just over a year and ended only after a successful ruling by the Supreme Court that allowed black bus passengers to sit anywhere they wanted.
- See reference section below for source documents relating to these notes and for further references
- United States Court of Appeals for the Seventh Circuit (1951), para 6 "It is undisputed that on April 1, 1939, defendant National City Lines, Inc., had grown from an humble beginning in 1920, consisting of the ownership and operation of two second-hand buses in Minnesota, to ownership or control of 29 local operating transportation companies located in 27 different cities in 10 states."
- United States Court of Appeals for the Seventh Circuit (1951), para 8 "National City Lines, organized in 1936, as a holding company to acquire and operate local transit companies, had brought, up to the time when the contracts were executed, its necessary equipment and fuel products from different suppliers, with no long-term contract with any of them. Pacific City Lines was organized for the purpose of acquiring local transit companies on the Pacific Coast and commenced doing business in January 1938. American was organized to acquire local transportation systems in the larger metropolitan areas in various parts of the country in 1943. It merged with National in 1946."
- United States Court of Appeals for the Seventh Circuit (1951), para 9 "In 1938, National conceived the idea of purchasing transportation systems in cities where street cars were no longer practicable and supplanting the latter with passenger buses. Its capital was limited and its earlier experience in public financing convinced it that it could not successfully finance the purchase of an increasing number of operating companies in various parts of the United States by such means. Accordingly it devised the plan of procuring funds from manufacturing companies whose products its operating companies were using constantly in their business. National approached General Motors, which manufactures buses and delivers them to the various sections of the United States. It approached Firestone, whose business of manufacturing and supplying tires extends likewise throughout the nation. In the middle west, where a large part of its operating subsidiaries were to be located, it solicited investment of funds from Phillips, which operates throughout that section but not on the east or west coast. Pacific undertook the procurement of funds from General Motors and Firestone and also from Standard Oil of California, which operates on the Pacific coast. Mack Truck Company was also solicited. Eventually each of the suppliers entered into a contract with City Lines defendants of the character we have described whereby City Lines companies agreed that they would buy their exclusive requirements from the contracting supplier and from no one else."
- United States Court of Appeals for the Seventh Circuit (1951), para 6 "At the time the indictment was returned, the City Lines defendants had expanded their ownership or control to 46 transportation systems located in 45 cities in 16 states.."
- United States Court of Appeals for the Seventh Circuit (1951), para 1, "On April 9, 1947, nine corporations and seven individuals, constituting officers and directors of certain of the corporate defendants, were indicted on two counts, the second of which charged them with conspiring to monopolize certain portions of interstate commerce, in violation of Section 2 of the Anti-trust Act, 15 U.S.C.A. § 2."
- United States Court of Appeals for the Seventh Circuit (1951), para 33, "We have considered carefully all the evidence offered and excluded. We think that the court's rulings were fair, and that, having permitted great latitude in admitting testimony as to intent, purpose and reasons for the making of the contracts, the court, in its discretion, was entirely justified in excluding the additional testimony offered."
- Documents referenced from 'Notes' section
Walter C. Lindley (January 3, 1951). "UNITED STATES v. NATIONAL CITY LINES, Inc., et al.". United States Court of Appeals for the Seventh Circuit. Archived from the original on 2008-06-08. Retrieved 2009-04-05.
- Rev. M. L. King; Rev. U. J. Fields. "8 December 1955 To the National City Lines, Inc. Montgomery, Ala.". Martin Luther King, Jr. and the Global Freedom Struggle. Stanford University. Retrieved 6 July 2010.
- "Paving the Way for Buses – The Great GM Streetcar Conspiracy Part II - The Plot Clots".
In any event, the Utility Act now put a large number of transit companies on the market. In 1936, GM formed National City Lines and aggressively began to buy transit companies and substitute diesel buses for streetcars.
- "Before delving into the creation of National City Lines in 1936" (PDF).
NCL executives decided to push streetcar replacement efforts west. To do this a new subsidiary, Pacific City Lines was formed. If anyone would know how to come up with financial backing, it would be PCL executive Glenn Traer, who had been a successful Minneapolis investment banker. He and another financial expert, Matthew Robinson, prevented creditors from pulling the plug on the overextended Greyhound in the first full Depression year of 1930.
- "The Conspiracy Revisited Rebutted".
- "Taken for a Ride". CultureChange.
- Dennis McDougal (2002). Privileged son: Otis Chandler and the rise and fall of the L.A. Times dynasty. Da Capo Press. pp. 164–5.
- "GM and the Red Cars".
General Motors and its subsidiary, National City Lines, along with seven other corporations were indicted on two counts under the Sherman Antitrust Act. They were charged with: Conspiring to acquire control of a number of transit companies, forming a transportation monpoly [sic]; Conspiring to monopolize sales of buses and supplies to companies owned by National City Lines. The defendents [sic] were aquitted [sic] on the first count. General Motors was convicted on the second count
- "UNITED STATES V. NATIONAL CITY LINES , 334 U.S. 573 (1948)". FindLaw. 1948.
- "Paving the Way for Buses – The Great GM Streetcar Conspiracy Part II - The Plot Clots".
National City Lines and Pacific City Lines merged in 1948 and continued their practice of "bustitution."
- Snell, Bradford C. (1974). American ground transport: a proposal for restructuring the automobile, truck, bus, and rail industries. Washington: U.S. Govt. Print. Off. p. 103.
The court imposed a sanction of $5,000 on GM. In addition, the jury convicted H.C. Grossman, who was then treasurer of General Motors. Grossman had played a key role in the motorization campaigns and had served as a director of PCL when that company undertook the dismantlement of the $100 million Pacific Electric system. The court fined Grossman the magnanimous sum of $1
- "Cities Served by National City Lines". Retrieved August 23, 2012.
- Snell, Bradford. "The StreetCar Conspiracy: How General Motors Deliberately Destroyed Public Transit". Lovearth Network. Retrieved 6 July 2010.
- "When Trains Ruled the East Bay". Oakland Magazine.
- "The Third Chance was charm".
- "History of the Streetcar". Brooklyn Historic Railway Association.
- "Philadelphia Trolley Routes: By The Numbers". phillytrolley.
- Black, Edwin (2007). "Chapter Ten: 'The GM Conspiracy'". Internal Combustion: How Corporations and Governments Addicted the World to Oil and Derailed the Alternatives. Macmillan. pp. 193–260.