While there is clearly some dispute as to the importance of a national conspiracy in the shift from streetcars to transit, one should not dismiss the existence of criminals in the streetcar companies of the era (like the rail era before them). A marked example is in the Twin Cities of Minneapolis and St. Paul, Minnesota. The streetcar lines in the Twin Cities were built by Tom Lowry in the nineteenth and early twentieth centuries, and like many cities were aimed at large part in land development. For the period between 1925 and 1948, fares held steady at $0.10, leading to capital shortfalls. The Twin Cities lines were publicly traded and most shareholders were non-local. The conversion from streetcars to buses took place after a series of events helped drain the company of even more resources. In 1949, Charles Green undertook a hostile takeover. He asked for a fare hike, fired 25 percent of the workforce, and canceled capital investment. He was employing a traditional “cash cow” model, wherein new owners milked the system of resources to pay for its own takeover.
A strange turn took place when Isadore Blumenfeld, a.k.a. Kid Cann (rumored to be a gangster and murderer) and Fred Osanna (known to be a lawyer) tried to take the system from Green. The State Railway Commission made an investigation of bribery, embezzlement, kickbacks, and death threats. Osanna and company did successfully takeover the Twin Cities Rapid Transit in 1951, and sold off the streetcars and many of the rails. It is reported that the vehicles are still running in New Jersey and in Mexico City, though while the shells may still operate, whether the mechanics in the vehicles do is unclear. Osanna claimed “the fastest and most massive streetcar-to-bus conversion ever undertaken in any major US city.” However, Osanna wound up in jail for fraud. The system was subsequently sold to Carl Pohlad (later owner of the Minnesota Twins), and was eventually sold to the public Metropolitan Transit Commission in 1970 for $7.9 million.
Though streetcars were clearly on the decline everywhere, this loss is felt deeply in the Twin Cities region.
Losses (of things we want) are always felt more than gains. Having the streetcars did not make Twin Citians as happy as losing the streetcars made them unhappy. This observation connects with Prospect Theory of Kahneman and Tversky, and helps explain why change is so difficult. We are loss averse. Even today, people who were not born here or then are outraged by the inevitable change that took place.
I believe loss aversion can be rational as a signaling mechanism. If you believe I will be “irrationally” upset at losses when you take something from me, you will be less likely to take it. You will also over-compensate me if you do take it so that I will feel that I have been properly compensated.
We in the Twin Cities see this playing out in the Southwest corridor, where supposedly a bike lane, an LRT and a freight line cannot fit in the same corridor at grade, and all sorts of irrational work-arounds are proposed. [Matt Steele argues you only need to single track the LRT, and my belief is they could run the occasional freight and frequent passenger trains on the same track or buy out the freight railroad if they wanted too.]
The loss here is not the loss of the transit system, but the loss of the quiet associated with the lack of a transit system in Kenilworth, vs. the loss of a bike path, vs. the feared loss of safety associated with a re-routed freight line in St. Louis Park. Instead of solving the problem, there are people who seem to enjoy admiring the problem, as if it were a piece in the sculpture garden.
Historical section adapted from Garrison, W and Levinson, D (2014) The Transportation Experience: Second Edition. Oxford University Press.