by Paul R. Spitzzeri
It is an old canard that there was a sinister plot by auto, oil and tire companies to dismantle greater Los Angeles’ vast network of electric streetcars and replace it with gasoline-powered buses that would, apparently, have the residual effect of pushing more cars to impressionable and gullible regional residents.
As World War II came to a close, in fact, a syndicate of General Motors, Firestone tire and two major oil companies did form a bus company to purchase the Los Angeles Railway (LARY), which operated streetcars within Angel City limits, so it was no wonder that conspiracy theorists so readily developed the claim.
While our area became more car-centric with the obvious boom in auto ownership and use, especially by solo drivers, leading to ever-worsening pollution through leaded gasoline, it is understandable that those distressed by our smog problem yearned for a return to mass transit that would be more environmentally friendly.
The problem is that, by 1945, when the consortium gobbled up the LARY, the streetcar system was already in dire straits with the Great Depression and wartime rationing and restrictions on rubber and oil propping its operations up far longer than likely would have happened otherwise.
Moreover, the automobile owner played a major role in the demise of streetcars thanks to lower costs, not to mention the sense of freedom and individuality embodied in having and driving their own vehicle, choosing the time and route of travel and so on. The choice of the average resident, living increasingly in sprawling suburban subdivisions with increasingly longer commutes to work and other destinations, is definitely an important part of the equation.
It should also be noted that developers of streetcar lines—most notable, Henry E. Huntington, who created what became known as the Pacific Electric system throughout greater Los Angeles—did not see these transportation companies as means to great wealth through nominal fares juxtaposed to the operational costs involved. It was that sprawl that was embodied into the development of the transit systems that was the motivational force through the profits derived from suburban land development.
With the Homestead’s interpretive period of 1830 to 1930, the Roaring Twenties is a major era of interest and it was during that decade that the strain on the streetcar system was really becoming clear and perhaps no issue was as reflective of that as the attempt of the LARY to raise its passenger fares from a nickel to seven cents—an initiative that fomented fierce opposition by the City of Los Angeles and others, leading to a nearly two-year battle.
The claim of the company was that is operating costs were just not sustainable and the increase in fares was necessary to address the growing problem. The featured object from the Museum’s collection for this post is the 1 December 1926 edition of Azuride, a pocket-sized newsletter issued by the LARY to its ridership and, while most issues had multiple small sections of various topics, this one had a sole purpose: to convince riders of the necessity of the fare increase.
The content was ascribed to the firm’s Vice-President and General Manager George J. Kuhrts (1869-1932), a native Angeleno with a long history in local transportation. He was the son of Susan Buhn and Jacob Kuhrts, natives of what, a year after George’s birth, became a united Germany. Jake Kuhrts left home at age 12 and took to the sea, sailing through much of the world for a half-decade before traveling from China to California in 1848.
After a brief period working at the Mission Dolores, or Carmel, he headed for the Sierra Nevada Mountains when word was broadcast about the discovery of gold by James Marshall at Sutter’s Mill in Coloma. He was an early miner at Placer County and remained there for eight years before migrating south to Los Angeles in 1857 and working as a teamster between the Angel City and eastern California desert mining operations.
He married Susan in 1865 and, the following year, opened a store on the northwest corner of Spring and First streets in a building he constructed and which he operated for a dozen years. He was best known, however, for his leadership in the first volunteer-operated fire companies in town, starting in 1871, and a foreman, treasurer and president of two such entities, as well as chief of one through 1884, when the professionalized Los Angeles Fire Department was established.
He was president of that organization for two years and then long served on the Fire Commission, as well as stints with the Police Commission and as a member of the City Council, including a year as president. He died in January 1926 at age 93, remembered well for his years of residency in and of service to the Angel City.
George Kuhrts was born at the family home, which was later replaced by the business block his father constructed and received his education in local schools, including Los Angeles High and immediately began his working career with the city’s engineering department. From 1889 to 1892, he was employed by the Southern Pacific Railroad, including a stint for the firm in Arizona before returning to his hometown.
He became the assistant city engineer and held that position for three years before joining the Los Angeles and Pasadena electric railway as an assistant chief engineer and then had a similar position with the Pacific Electric line. Kuhrts then became connected with the powerful Collis P. Huntington of the Southern Pacific and then the rail tycoon’s nephew, Henry E., who came to Los Angeles in 1901 after Collis’ death and a takeover of the Southern Pacific and became the owner of the LARY and developer of the Pacific Electric Railway.
HIs close ties with the Huntingtons led him to assist Henry in his acquisition and consolidation of city streetcar companies into the LARY and he was appointed chief engineer in 1902, working in that role for fourteen years. Elevated to assistant general manager, Kuhrts was not only a LARY director, but was a board member of the Rodeo Land and Water Company, which developed much of Beverly Hills (he was a longtime resident of the city).
Kuhrts then moved to the positions of general manager and vice-president of the LARY serving directly under Huntington and obviously had a direct role in the proposal to raise the passenger fares. When this raised, the ire of the City Council was raised, with the Los Angeles Express of 17 November beginning its coverage with:
Amid the scenes of wild disorder, with councilmen talking and shouting at once and President Boyle Workman [Workman’s father, William H., was mayor when Kuhrts’s father was on the council in 1886-1887] vainly pounding with his gavel for order, the City Council today by a vote of 14 to 2 passed resolutions instructing the city attorney and the Board of Public Utilities to take steps to prevent the Los Angeles Railway from raising its fare to 7 cents.
The Los Angeles Times of the same date added that “the corporation has found it impossible to continue [any] longer at the existing rate and yield a fair return to its investors.” The LARY, valued at north of $45 million, added that “$6,000,000 must be expended on improvements and extensions, and increased revenue to meet the financial program is imperative.”
Moreover, it was stated, no dividends were issued to shareholders in thirteen years, while operating income for 1925, at not far above $1.5 million, was said to be two million dollars short of a reasonable investor return of 6%. The LARY wanted to raise the fare, but also provide for a metal token system that would be sold at four for a quarter, while higher rates of ten and fifteen cents would be implemented for riders in zones further into the Angel City’s hinterlands.
One part of town within these outer levels was Hollywood and its Citizen of the 18th editorialized that it was understood that, unlike other cities with higher streetcar rates or the Pacific Electric which charged ten cents for rides not longer than those for which the LARY charged half, Angelenos were used to their nickel fare.
The company was also to be credited with extending routes and expanding bus service—this latter, of course, was at the center of the “cabal” purchase of nearly two decades later. The paper, however, called for the consolidation of the PERY and LARY systems because Hollywood was served by the former and the Citizen was insistent that the latter, known for its “yellow car” descriptor (the PERY was the “red car” line) serve its community.
There was also talk of the City of Los Angeles buying the LARY, but, assuming that the price Huntington would ask was no less than $40 million and the bond capacity of the municipality was not even $10 million more than that, this seemed implausible. The Times‘ well-known columnist, Harry Carr, commented that the idea “is not one to cause any leaping enthusiasm in the hearts of tax-payers,” while city-owned enterprises generally were “the dumping ground for job hunters.”
The Los Angeles Record of the 22nd reported that the Board of Public Utilities requested $5,000 from the council to fight the proposal, with these funds used “to prepare data and engineering facts so that the board may represent the people before the state railroad commission,” this latter being today’s Public Utilities Commission.
Beyond the fare fight, the local board wanted the LARY to provide badly needed extensions to areas developed within the last five years, during a huge real estate boom and to provide for “universal transfers” between the LARY and PERY systems. The article concluded that “more engineers and auditors will be needed to study the accounts of the railway company and decide upon a just and equitable fare if the city’s case is to be properly presented.”
Given the stiff resistance by the City, Kuhrts decided that it was time to take his company’s argument directly to riders through Azuride and he began by allowing that “this is an unusual request for a company to make to its customers,” though he added that “we believe that ours is an unusual public utility.”
The official asserted that “all our cards are on the table” and, while it wasn’t possible to provide customers all of the information about the proposal “in this necessarily brief statement,” he assured riders that any questions would be replied to with “prompt and straightforward answers to the best of our availability.” He continued,
Since the [First World] war when prices and costs of everything began to go up and stay up, we have been making every effort and every economy to furnish street car transportation in Los Angeles for a nickel with free transfer thrown in. There is not another city in the United States where a street car service at all comparable to ours is at the present time charging only 5c.
In fact, commented Kuhrts, the average fare among 272 American cities was over seven-and-a-half cents and had been over seven since the start of the decade. He added, “we given you a longer ride for a nickel than on almost any other system” while distances on the LARY were longer than in other metropolises.
Beyond this, he observed, “Los Angeles has doubled its population since 1920 (from less than 600,000 to more than 1,200,000.)” Yet, the company expended above $12.5 million in the system. The plain fact was “we are no longer able to give the street car service we are furnishing for 5c a ride” and, given its druthers, the firm “would much prefer to reduce [fares] if we could.”
Like any worker or housewife, though, the LARY faced rising prices for everything in its operations, including more than $3 million in street paving, despite the fact that the benefit was to all who used these thoroughfares, not just car riders. Moreover, the entity paid just under $400,000 in taxes in 1920, but a half-decade later the amount more than doubled. Kuhrts observed that,
The transportation system is to the city what the circulatory system is to the body. The city cannot have a healthy growth unless a good and up-to-date system of economic mass transportation is provided. There is no substitute for the electric street railway, supplemented as our road is by auxiliary bus lines. No method of transportation exists at once so safe, so comfortable, speedy and economical. But the cost of the service must be provided and we have no source of income other than from fares.
After discussing the increase in bus service since it was introduced in 1922, with 133 vehicles carrying nearly 10.5 million passengers, but operating at a loss of a quarter million dollars yearly with no inkling that it would be profitable, the executive noted, “we should have had a raise in fare as long as two years ago.”
Huntington was lionized because he “has at no time taken any profit out of this road,” while also “consistently followed the policy to put all earnings back into the property in extensions and improvement of the service.” Of course, the owner’s substantial estate was really built on real estate speculation aided by the development of streetcar lines as an incentive to property buyers, which was not mentioned.
In stating that the value of the LARY was the aforementioned $45 million, Kuhrts told readers that “the city and the car riders are much benefited by this conservative capitalization because our fixed charges for interest on bonds and on borrowed money are low.” Yet, he reiterated
“the management of the road cannot any longer make ends meet on the nickel fare.”
Expressing that “we have faith in the continued rapid growth and development of the City of Los Angeles and the street railway system must grow with the city,” the official observed that the $6 million in improvements for the following three years was considered the lowest estimate. In fact, he went on, it was more likely that $10 million was more realistic and, whatever the amount, “this money cannot come from the fares paid by the car riders,” it had to be “from the savings of people who are willing to invest and risk their money in this enterprise.”
With regard to LARY stockholders, they were getting under 3 1/2% of a return and this was “less than the interest rate we have to pay on our bonds and for money borrowed at the bank.” If the fare increase was approved, the funds generated “will produce no more than the actual cost of operation plus somewhat less than 7% on the invested money,” while there were also interest and amortization on bonds, interest on loans and other costs.
Kuhrts remarked that the firm preferred to have a single fare, excepting some of the longer routes, rather than implement a tiered rate system based on zones, adding that “it is proper and fair to make a distinction between the street car rider who uses our service only occasionally and the rider who travels regularly;” hence, the 7-cent fare and the four-for-a-quarter token variation.
This method was used throughout the nation and it was said that 90% of American streetcar riders used lower-fare tokens. Given this, the LARY was, in effect, proposing a fare raise of more like 6 1/4 to 6 1/2 cents. Finally, he informed patrons that,
The city’s best interests are also the interests of the Los Angeles Railway. We do not wish to ask for anything that is not reasonable and fair . . . It is not to the city’s good and not fair, we believe, to fight our application regardless of the facts. We know that the great majority of the people are ready to do the just thing if they have correct and reliable information. That is why we are asking you to support our application before the Commission and not to oppose it.
The City, in fact, continued its relentless opposition all the way to the United States Supreme Court, so that it took nearly two years for the rate increase to take effect. By this time, Huntington died (he passed away in May 1927) and Kuhrts became the LARY president, holding that position until he died at age 63 on 1 April 1932 from a blood clot in his brain while meeting with company officials in his office.
This artifact is a notable one regarding the condition of mass transit in 1920s Los Angeles, when a decided shift away from such use of transportation to single-rider automobile travel was becoming increasingly more common. Notably, in recent decades, vigorous attempts have been made to essentially rebuild much of the streetcar infrastructure and billions continue to be spent in so doing. What the future of mass transit in our region holds will, naturally, be interesting (and instructive) to witness.
While reading this post, I used historical figures and some assumptions to analyze the potential impact of LARY’s proposed two-cent fare increase. Below is a breakdown of my reasoning:
1. Population and Ridership
In 1925, the population of Greater Los Angeles was approximately 1.2 million, with around 50% commuting daily for work. Of these commuters, half relied on railways. Given that LARY (the Yellow Cars) primarily served intracity transit, while PERY (the Red Cars) catered to longer-distance travel, I assumed that more than half, say approximately 60%, of rail commuters relied on LARY. This equates to about 180,000 daily riders. At the time, the standard work schedule remained six days a week.
2. Potential Additional Revenue
Using the above assumptions, 180,000 riders purchasing two tickets per day would generate the following additional yearly revenue from a two-cent fare increase per ticket:
$0.02 x 2 (tickets) × 180,000 (riders) × 6 (days) × 50 (weeks) = $2,160,000
As noted in the post, LARY’s operating income in 1925 was $1.5 million, falling short of $2 million to meet shareholder ROI expectations. This calculated revenue increase aligns closely with the additional income required to bridge the gap.
3. Impact on Riders
For riders, the fare increase would have had a negligible financial impact. With an average monthly salary of about $150 in 1925, the two-cent increase per ticket would amount to an additional $1 per month, representing less than 1% of monthly income.
The above analysis highlights how the fare increase, while critical for LARY’s financial sustainability, was unlikely to cause hardship for riders, raising questions about the true motivations behind the city’s persistent and relentless opposition.
Great article and excellent research. The more I read into the history of America’s lost trolley systems the more sad I am for what could have been. As tempting as it is to blame GM for these failures it’s obvious that city governments were far more responsible. Either through neglect, ignorance, or even with full intent.
Hi Michael, thanks for the comment and kind words, which we very much appreciate. A key factor, as well, is that, with automobiles becoming much more affordable, thanks to Henry Ford’s assembly-line manufacturing and other elements leading the way, greater Los Angeles residents made this region the car capital of the world. Declining ridership was the obvious result and, as noted, the Great Depression and World War II rationing kept streetcars operable longer than otherwise.