THE ORIGINS OF THE BUS INDUSTRY From Jitney to Giant: The ...gammathetaupsilon.org/the-geographical-bulletin/1980s/volume29-1/article1.pdf · hound Bus Lines (6). By the end of the

From Jitney to Giant: The Spatial Development of Greyhound Bus Lines

Malcolm Fairweather and Thomas Rumney

State University of New York Plattsburgh, New York

THE ORIGINS OF THE BUS INDUSTRY

The early growth of the intercity bus industry is difficult to document because of the limited availability of relevant state or federal statistics prior to 1925. In fact, it was only in 1922 that vehicle manu­facturers began to design chassis and bodies specifically for buses. Most of the early buses, or "jitneys" (1) as they were called, were merely converted automo­biles. As a result, the bus industry was developed by numerous one-vehicle taxi operators, scattered across the country, who decided to extend their intraurban services to link nearby communities (2).

The first automobile-bus with regular routes and schedules (a common carrier in the modern sense of the term) made its appearance on a route between the old and new cities of Hibbings, Minne­sota in 1913 and was the forerunner of Greyhound Bus Lines. At about the same time Pickwick Transportation Lines be­gan a similar type of operation in south­ern California. The successes of these pioneers led to the establishment of hundreds of small " intercity bus opera­tors" throughout the USA by 1915.

During the next 20 years, three im­portant trends occurred that concerned the numbers of bus operators, regula­tion of the industry and the influence of other transportation modes. Improve­ments in highway and vehicular con­struction encouraged increases in num­bers of independent bus operators until about 1930, when a series of events changed that trend to such an extent that by 1935 there were very few small in­tercity bus operators left. The increasing cost of buses, over- competition, the economic depression and actions by state regulatory boards all led to the demise of the small intercity bus company dur­ing the first half of the 1930's.

The turmoil in the intercity bus in­dustry caused by too many operators vying for routes and passengers in the 1920's resulted in all states, except Del­aware, passing laws to regulate intercity passenger carriers by 1929. These laws almost uniformly adopted the concept of certifying only one carrier to each route and were instrumental in causing the

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rapid decline in the total number of op­erators especially during the early 1930's. In fact, Eckert and Hilton contend that the jitney was legislated or regulated out of existence by the states (3). By 1935 the remaining intercity bus companies were successful in getting passed federal leg­islation in the form of The Motor Carrier Act . By this legislation the Interstate Commerce Commission regulated all in­terstate passenger bus operators includ­ing the distribution of operating licenses.

The steam railroads also played an important role in the development of the bus industry. By the mid-1920's major railroads had acquired control of many bus companies. They believed that the buses could act as feeders to their rail operations as well as facilitating their abandonment of passenger service to sparsely populated regions and small towns . Initially, the state regulation agencies approved of the in-roads made by the rail companies because of the fi­nancial stability they brought to an ever changing bus industry. But. by the end of the 1920's, concerns were being raised about a rail monopoly of the intercity passenger industry and many states be­gan to adopt policies to reduce the in­fluence of the railroads in the passenger carrying industry. This concern was short lived, however, because the railroads found their bus operations less profit­able than expected and many sold off their holdings.

Throughout the late 1920's and early 1930's all of the forces noted above were at work. In addition, there were also nu­merous inter-line mergers, which were used by successful companies to ex­pand their route systems. This process of route expansion was fostered by state transportation policies that supported the concept of one carrier per route in the belief that it improved service to the general public. By 1935, therefore, "the consolidation movement had achieved its logical conclusion, a nationwide bus system" (4).

THE GROWTH OF GREYHOUND BUS LINES

Through the entrepreneurship of Carl Wickman, Greyhound Bus Lines had its

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origins in the very early days of the in­dustry. The bus line he formed in Hib­bings, Minnesota, in 1913, soon took on additional partners, expanded its route system and was renamed Mesaba Transportation in 1916. Within two years it had a fleet of 18 "buses" operating throughout northern Minnesota. In 1922 Carl Wickman sold his share of the com­pany and set out for Duluth to develop a new bus company by purchasing sev­eral smaller operations. The new com­pany that he formed was called North­land Transportation (5).

Aware of competition from road transportation, the Great Northern Rail­road bought a majority of the shares in the Northland Transportation Company in 1926. Now the bus company was part of a large corporation and had greatly expanded resources available to it. Meanwhile, Wickman, kept on to run Northland Transportation, was indepen­dently buying numerous small bus com­panies in the same region and with other partners set up a holding company called the Motor Transit Corporation in 1926. One of the bus lines acquired was called "Greyhound"; this became the symbol for the company and began to appear on all of the corporation 's transportation equipment. By 1929 the Motor Transit Corporation had acquired Northland Transportation Company (or Northland Greyhound as it was then called) and formally changed its name to Grey­hound Bus Lines (6).

By the end of the 1920's (see Map I) Greyhound Bus Lines was a highly com­petitive intercity bus company about to enter a period of vast expansion. Its route system still reflected its Midwestern origins but the germ of expansion, by merger or take-over, had been set and some relatively isolated (from the rest of the system) routes had been acquired. This situation was not to last long and within a few years the company would be operating coast to coast.

One impetus for expansion nation­wide came in the summer of 1928 when a bus of the Yellow Pioneer System of California drove into New York from Los Angeles, cutting directly across the Greyhound territory . Greyhound was

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concerned about this level of competi­tion and in a move to expand its system and reduce competition, it purchased the Yellow Pioneer System in 1929 for $6.4 million. Later that year saw the merger with other large California companies (the Pickwick Corporation and Southern Pa­cific Company) thus greatly extending the route network and permitting coast-to­coast service on a single bus line (7) (see Map II).

By 1930 Greyhound Bus Lines was a large and complex corporation con­trolled by financial interests in New York City. Corporate connections with the railroads continued and the expansion of routes into the eastern USA had brought in the Pennsylvania Railroad; which had acquired stock in the Grey­hound parent company after establish­ing Pennsylvania Greyhound Lines to satisfy its own transport needs (8). By the end of 1930 Greyhound was the first truly national bus system and had estab­lished what was to be its basic route system, with about 13 percent of the to­tal national bus route mileage or 41,000 miles of routes. Similarly, the whole bus industry had matured significantly and an article in the New York Times of 1930 stated : " Not many years ago buses, like movies, were included among the fads. In the past few years they have risen to a position of national importance" (9).

Despite severe financial problems brought about by the mergers of the late 1920's and early 1930's, Greyhound con­tinued to expand and by the end of the decade it had routes in every state of the Union (with the exception of New Hampshire).

By 1940 Greyhound was operating over 55,000 route miles of highway, (a 25% increase in just a decade). running 202,000 million bus miles and carrying some 52 million passengers annually (10). The growth of the system and its chang­ing structure, especially the infilling of routes east of the Mississippi, can be seen when Maps II and III are compared. Prior to World War II , therefore, Grey­hound was already a major force in American transportation.

The 1940's was the decade of great­est route expansion for Greyhound, with

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an additional 33 percent of route miles being added to the system (see Map IV). The late 1950's and 1960's, however, were a period of consolidation, and re­alignment of the route network to follow the rapidly expanding Interstate High­way System. Since the mid-1950's, Greyhound has been operating about 100,000 miles of route network, and it has sustained this level of spatial coverage, although organizing its system to link major urban areas with connections to smaller communities along the routes. While the spatial structure of the net­work has remained stable during the past two decades (compare Maps V and VI) vast changes have gone on within the Greyhound Corporation. Since the 1960's, diversification has occurred and the company has expanded its operations to include bus manufacturing (Greyhound is the largest manufacturer of intercity buses in North America). financial ser­vices, consumer products and food pro­cessing (11).

Today, Greyhound Lines Inc., the bus operating part of the corporation, is a billion dollar a year business in which over 70 percent of the revenues come from the carriage of passengers with an increasing portion being derived from package express services (about 15 per­cent). The group now owns over 5,000 buses, operates over 100,000 route miles and is recognized as the major ground transportation carrier in the USA (12).

CONCLUSION

The intercity bus industry plays an extremely important role in the USA. It services some 15,000 communities, 14,000 of which have no other form of scheduled passenger service. Although a distant second to the airline industry in terms of passenger miles operated, the bus industry carries more passengers than either rail or air carriers. Further­more, it services small communities, sparsely populated areas and low in­come travellers, and receives very lim­ited government subsidies. This is in contrast to its competitors.

In recent years the bus industry has undergone the deregulation process that

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has affected the other modes of trans­portation. The Bus Regulatory Reform Act of 1982 substantially deregulated the in­dustry at a time when it was suffering from increasing operating costs and growing competition, especially from air and automobile transportation (13). Still, the intercity bus industry continues to grow in terms of the number of passen­gers carried each year. Also, it contains one element not found in any other sec­tor of the transportation industry, a sin­gle company that annually carries over one half of all passengers using that particular mode of transportation. Such is the dominance of the intercity bus in­dustry by Greyhound Bus Lines.

ACKNOWLEDGEMENTS

The authors wish to thank two of our undergraduate cartographers, Mary-Jane Schatzel and David C. O'Rourke, for the

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time and effort involved in drafting the finished maps for this paper.

FOOTNOTES

1. The term "Jitney" was used to describe the modified 5 to 12 passenger automobiles that were operated in the early days of bus travel. These vehicles charged a flat fare of 5 cents and were named after the slang expres­sion for a nickle-a jitney.

2. Crandall, Burton B. " The Growth of the Intercity Bus In­dustry." Unpublished M.A. thesis. Syracuse University, Syracuse, N.Y. 1954. p. 6.

3. Eckert, Ross D. and Hilton, George W. "The Jitney," Journal of Law and Economics, Vol. XV, No.2, 1972. pp. 293- 325.

4. Crandall, Burton B. p. 151 . 5. "Jitney into Giant," Fortune, August 1934, pp. 44 and 110. 6. New York Times, August 7, 1929. p. 36:4. 7. Georgano, G. N. (ed.), Transportarion Through rhe Ages.

New York: McGraw Hill Book Co., 1972, p. 55. 8. Taft, Charles A., Commercial Moror Transporrarion,

Homewood, Illinois: Richard D. Irwin Co., 1955, p. 593. 9. The New York Times, January 5, 1930, X, 28 :1.

10. Crandall, Burton B., p. 288. 11 . The Greyhound Corporation, An Era of Excellence, Phoe­

nix, Arizona (undated publication) p. 17. 12 . The Greyhound Corporation, 1985 Annual Reporr,

pp. 2-3. 13. Farris, Martin T. and Daniel, Norman E. "The Bus Reg­

ulatory Reform Act of 1982" Transportarion Journal, Vol. 23, No. 1, 1983. pp. 4-15.