The real story behind the demise of America's once-mighty streetcars (2024)

Back in the 1920s, most American city-dwellers took public transportation to work every day.

There were 17,000 miles of streetcar lines across the country, running through virtually every major American city. That included cities we don’t think of as hubs for mass transit today: Atlanta, Raleigh, and Los Angeles.

Nowadays, by contrast, just 5 percent or so of workers commute via public transit, and they’re disproportionately clustered in a handful of dense cities like New York, Boston, and Chicago. Just a handful of cities still have extensive streetcar systems — and several others are now spending millions trying to build new, smaller ones.

So whatever happened to all those streetcars?

But that’s not actually the full story, he says. “By the time National City Lines was buying up these streetcar companies, they were already in bankruptcy.”

Surprisingly, though, streetcars didn’t solely go bankrupt because people chose cars over rail. The real reasons for the streetcar’s demise are much less nefarious than a GM-driven conspiracy — they include gridlock and city rules that kept fares artificially low — but they’re fascinating in their own right, and if you’re a transit fan, they’re even more frustrating.

During the 1800s, animal-drawn streetcar lines were built in cities across the United States. Starting in the 1880s, they were replaced by electrified streetcars, which quickly became the dominant mode of transportation in many cities.

Running streetcars was a very profitable business. Cities expanded, and people who found themselves living too far from work to walk depended on them. (Some real-estate developers built nearby suburbs around streetcar lines.) Over time, the businessmen who ran the streetcars, called “traction magnates,“ consolidated ownership of multiple lines, establishing powerful, oftentimes corrupt monopolies in many cities.

Eventually, many of them contracted with city governments for the explicit right to operate as a monopoly in that city. In exchange, they agreed to all sorts of conditions. “Eager to receive guarantees on their large up-front investments, streetcar operators agreed to contract provisions that held fares constant at five cents and mandated that rail line owners maintain the pavement around their tracks,” writes Stephen Smith at Market Urbanism.

Until the start of World War I, these conditions weren’t a huge problem. But soon afterward, they became excessively onerous — because even though these companies were making sacrifices to act as monopolies, they were no longer operating as them.

The decline of the streetcar after World War I — when cars began to arrive on city streets — is often cast as a simple choice made by consumers. As a Smithsonian exhibition puts it, “Americans chose another alternative — the automobile. The car became the commuter option of choice for those who could afford it, and more people could do so.”

But the reality is more complicated. “People weren’t choosing to ride or not ride in some perfect universe — they were making it in a messy, real-world environment,” Norton says.

The real problem was that once cars appeared on the road, they could drive on streetcar tracks — and the streetcars could no longer operate efficiently. “Once just 10 percent or so of people were driving, the tracks were so crowded that [the streetcars] weren’t making their schedules,” Norton says.

In some places, like Chicago, streetcars retained dedicated rights of way, and they survived. Pretty much anywhere else, they were doomed. “With 160,000 cars cramming onto Los Angeles streets in the 1920s, mass-transit riders complained of massive traffic jams and hourlong delays,” writes Cecilia Rasmussen at the Los Angeles Times.

What’s more, in many cities the streetcars’ contracts required them to keep the pavement on the roads surrounding the tracks in good shape. This meant that the companies were effectively subsidizing automobile travel even as it cannibalized their business.

And paying for this maintenance got more and more difficult for one key reason: many contracts had permanently locked companies into a 5-cent fare, which wasn’t indexed to inflation.

Especially after World War I, the value of 5 cents plummeted, but streetcars had to get approval from municipal commissions for any fare hikes — and the idea of the 5-cent fare had become ingrained as something of a birthright among many members of the public. “Nobody on these commissions would approve fare increases to cover costs, because that would get them in trouble with their constituents,” Norton says.

Because of these factors, some streetcar companies began going into bankruptcy as early as the 1920s, when they were still their cities’ dominant mode of transportation. Huge costs and the falling value of fares forced them to cut back on service, steadily pushing people to the convenient, increasingly affordable automobile.

As they fought to stay alive during the Great Depression, many companies invested in buses, which were cheaper and more flexible. Initially they operated mainly as feeder systems to bring commuters to the end of lines, but as time went on, they began to replace some lines entirely.

That wasn’t enough to save most of these companies, especially as city, state, and federal governments pumped more and more money into roads. “By the ‘50s, planners put a priority on bringing cars into cities with new urban highways,” Norton says. “That really made streetcars truly impractical to get around on.”

By the 1950s, virtually all streetcar companies were in terrible shape. Some were taken over by new municipal bus companies, while a total of 46 transit networks were bought up by National City Lines — the holding company linked to GM, as well as oil and tire companies, that’s at the center of all the conspiracy theories.

While it’s true that National City continued ripping up lines and replacing them with buses — and that, long-term, GM benefited from the decline of mass transit — it’s very hard to argue that National City killed the streetcar on its own. Streetcar systems went bankrupt and were dismantled in virtually every metro area in the United States, and National City was only involved in about 10 percent of cases.

It’s also not exactly right to say the streetcar died because Americans chose the car. In an alternate world where government subsidized each mode equally, it’s easy to imagine things playing out quite differently.

So what killed the streetcar? The simplest answer is that it couldn’t compete with the car — on an extremely uneven playing field.