November 30, 2006
Hitler’s carmaker: How General Motors helped jump-start the Third Reich’s military machine
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The scheme worked this way: The manufacturers purchased NCL-preferred stock to acquire transit lines on condition that when the systems were acquired, the trolleys would be dismantled and replaced with motor buses. That is exactly what happened. All the conspirators gained immensely when non-polluting electric systems were replaced by oil-burners. Phillips and Standard sold oil products. Firestone sold the tires. GM and Mack divvied up the bus manufacturing and sales market according to an agreed-upon formula.Transit systems in 16 states were converted, adversely affecting millions of Americans, who had to pay higher fares for lesser, more unpopular service. Dozens more cities were targeted in the $9.5 million scheme.
In April 1947, indictments alleging two counts of criminal conspiracy were handed down against General Motors, Mack Truck, Phillips Petroleum, Standard Oil of California and Firestone Tires, as well as against numerous key executives of the companies.
The defendants were found guilty on one of the two counts: conspiring to monopolize the bus business by creating a network of petroleum-based transit companies that were forbidden to use transportation or technology products other than those supplied by the defendants themselves. The jury found the defendants not guilty on the count alleging a conspiracy to actually control those transit systems. On April 1, 1949, the judge handed down his sentence: a $5,000 fine to each corporate defendant except Standard, which was fined $1,000. As for NCL, president E. Roy Fitzgerald and his co-conspirators at GM and the other companies, they, too, were fined. Each was ordered to "forfeit and pay to the United States of America a fine in the amount of $1."
The cases were appealed -- even the $1 penalties -- all the way to the United States Supreme Court, which allowed the convictions to stand. The government filed a civil action against the same circle of companies trying to stop their continued conduct. But the government was unsuccessful. Undaunted, NCL and its many subsidiaries continued into the 1950s to acquire, convert and operate urban transit systems using evolved methods. continued....
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