Renting the street

FRANCHISES IN MOTION—Cable cars pass a horsecar on Market Street while another horsecar has just crossed from Third Street to Kearny, passing Lotta’s Fountain. It’s the 1880s, and transit franchises are hot properties in San Francisco. The stripes you see crossing the streets were granite crosswalks, but many pedestrians ignored them. SFMTA Archive.

Editor’s note: One hundred years ago—April 1, 1921 (no fooling!)—an old name appeared anew on the San Francisco scene: Market Street Railway Company. There had already been four transit companies bearing that name, dating back to 1860. This incarnation of the name came after a financial reorganization of the city’s dominant transit company, United Railroads, which with its predecessor had consolidated numerous private operators of cable cars, horsecars, and electric streetcars in the preceding 30 years. 

Our nonprofit took that famed name, Market Street Railway, for ourselves back in 1977, 33 years after Muni acquired our namesake. To mark the centennial of our namesake, our member magazine Inside Track published this story, illuminating how transit got started in San Francisco and how it brought to us the city we know today. To receive the rest of the series and other exclusive features, please join us as a member! 

Rick Laubscher
Market Street Railway President

For the first half-century of our city’s transit (and really, all of America’s), the driving force was private companies using public streets to try to make a profit, by essentially renting those streets—paying for the exclusive transit use of them. Today, of course, we think of public mass transit as not only serving the public, but owned by the public as well—a function of government, not a for-profit business. Yet public ownership of a big-city transit line didn’t happen until 1912, right here, with Muni. 

Before that, all over the country, mass transit was provided by companies that aimed to make a profit. In the Gold Rush-enriched San Francisco of the 1850s, the first public transit vehicles were horse-drawn omnibuses (yes, that’s where the word ‘bus’ comes from). They were basically urban stagecoaches. But what few streets existed then were rough at best. 

FIRST FRANCHISE—A drawing of Hayes Valley in 1864, probably at Hayes and Gough Streets, showing the steam dummy and trailers of the first transit franchise to operate in San Francisco, the Market Street Railroad Company, awarded to (surprise!) Thomas Hayes. SFMTA Archive.

To provide a smoother ride on larger vehicles, a man named Thomas Hayes won the right from the government in 1857 to lay tracks in a few streets for his exclusive use. It was the first street railway franchise awarded in California.

Hayes named his operation the Market Street Railroad Company, and on July 4, 1860, began operating a steam-powered passenger car on tracks from Third Street out Market and then South on Valencia. He then ran a branch out a street he named for himself to Laguna Street, to help him develop land he owned, land now known as Hayes Valley.

Hayes paid the government for his franchise, basically renting the streets his tracks were laid on. The success of his company immediately attracted competitors. The government took bids for the franchise rights to other streets, with the winners paying fees and a percentage of their fares. 

HORSES RULE ON MARKET—After noisy steam dummies were banned from Market Street in 1868, the first franchisee converted its lines to horse-drawn streetcars like this one. The cobblestone pavement provided sound footing for the horses, but made the wagons and buggies they pulled bounce, attracting many passengers to the smooth ride of horse-drawn rail vehicles. Market & Post Streets, about 1870. SFMTA Archive.

After steam operation on Market Street was banned in 1868, horses took over, pulling little trailers along the tracks on many routes owned by various start-up companies. In 1873, Scotsman Andrew Hallidie won a franchise on Clay Street, not for horse-drawn cars, but for little cars pulled by an underground cable. This high technology innovation was twice as fast as horsecars, and could climb hills that horses couldn’t. But the uncertainty of long-term franchise rights discouraged large-scale investment until 1879, when the state granted San Francisco the right to award long-term street railway franchises, up to 50 years. Existing small-scale franchise holders applied for the new, longer franchises, increasing the value of their companies. This in turn drew bigger financial players to San Francisco transit, since these franchises now had predictable value. 

Stanford on Market Street

In 1882, Leland Stanford, former California governor, a builder of the transcontinental railroad, and soon to become robber-baron-in-charge of the mighty Southern Pacific Railroad (whose tentacles all over the state gained it the nickname of the Octopus), bought up the company Thomas Hayes had started, by this time a horsecar operation calling itself Market Street Railway. 

FIRST CABLE FRANCHISE—Andrew Hallidie’s Clay Street Railroad Company had its eastern terminal at Portsmouth Square, Clay and Kearny Streets. SFMTA Archive.

Stanford’s plans were to replace horsepower with cable power and build more lines radiating off Market. Appropriately, he renamed it the Market Street Cable Railway Company. (Stanford soon got kicked out of his rail interests by Collis P. Huntington, who lived a couple blocks from him atop Nob Hill, but consoled himself with a US Senate seat and a university built on his farm in Palo Alto, which he named for his late son.)

Other San Francisco transit companies, led by the Omnibus Railroad, quickly followed Stanford’s lead in converting the franchises for their horsecar lines to cable power, but after Frank Sprague made the electric streetcar practical in Richmond, Virginia in 1888, companies switched to this latest high-tech transit mode, which was twice as fast as cable cars and cheaper to install and maintain. 

San Francisco got its first electric streetcar line in 1891, built by two brothers named Joost, from Market and Steuart Streets (just steps from our San Francisco Railway Museum) via a variety of South of Market and Mission District Streets to reach the county line. Again, it was the grant of an exclusive long-term franchise that justified the capital investment.

FIRST ELECTRIC FRANCHISE—The San Francisco & San Mateo Railway Company opened in 1891, running from the site of our San Francisco Railway Museum on Steuart Street just south of Market all the way to Daly City. This early electric car is much like preserved “Dinky” 578, built just five years later. SFMTA Archive.

In 1893, the Southern Pacific interests snapped up a number of smaller companies (and their franchises), naming the new entity Market Street Railway Company. Its intent was to convert routes to electric streetcars (if they weren’t too steep, as cable lines such as Powell were). It was able to convert several cable lines to electric streetcars and built new electric lines too. 

Uniting the railroads

But the Market Street Railway of 1893 lasted less than ten years. In 1902, a group of eastern capitalists bought out the Southern Pacific interests and consolidated its holdings with several other rail transit companies it had already purchased. These included the Sutter Street Railroad, operated by cable power, and the San Francisco & San Mateo Electric Railway (the company the Joosts had founded, which had just opened a new carbarn at Geneva & San Jose Avenues, a site now home to Muni’s vintage streetcar fleet).

The new company, holding dozens of valuable street franchises, as well as the track and vehicles that operated on them, was known as United Railroads (URR). Getting the most value from its most valuable franchise, along Market Street, was a top priority for the new company. That required converting the five Market cable car lines to electric streetcars. But a city ordinance pushed by merchants forbade overhead wires on Market (and on Sutter, the company’s most direct route west to the fast-growing Richmond District). URR didn’t want to pay for the expensive electric conduit operation that city leaders demanded (already installed in New York and Washington DC). So, the cable cars soldiered on along Market Street, already antiquated by national standards.

GO BIG OR GO HOME—As quickly as it could afford, United Railroads upsized the streetcars on its electric lines to gain more revenue from its busiest franchises. Car 1352 was built by the St. Louis Car Company in 1904, part of a class of 125 cars of this type that survived the 1906 earthquake and fire and played a key role in the city’s recovery. SFMTA Archive.

The stalemate continued until April 18, 1906, when the earthquake and fire destroyed most cable machinery in San Francisco. URR, aided by bribes paid to members of the Board of Supervisors, won the right to string “temporary” overhead wires on Market and Sutter Streets and substitute streetcars for the old cable cars. These immediately became, along with Mission and Fillmore streets, some of the company’s busiest routes.

Unequal service

The franchises that United Railroads depended upon were not distributed evenly across the city. For example, in the 1880s and 90s, several competing companies built east-west lines from downtown into the Richmond District, both to take advantage of the residential growth there, and to serve the then-new urban oasis of Golden Gate Park. Transit service on almost every block caused the Richmond to grow even faster. Meantime, on the south side of the park, transit service in the Sunset District was sparse, as was also true in neighborhoods starting to develop in the southern part of the city. 

FAIR COMPETITION—United Railroads was struggling financially in the 1910s, and the rise of the new Municipal Railway didn’t help. The City backed Muni’s expansion with several new lines that directly served the 1915 Panama-Pacific International Exposition in what’s now the Marina District. These United Railroads streetcars on Market near Haight can only offer riders transfers to reach the fair. (This is obviously a posed shot, with the mystery man in-between the 7-Haight and 8-Market & Castro streetcars possibly demonstrating the clearance between the tracks). John Henry Mentz photo; SFMTA Archive.

Attracting private transit companies to invest in substantial new lines to these areas got harder in 1902, the same year URR came into being. A new, progressive, city charter in 1900 had set the goal of eventual public ownership of utilities, including transit. Two years later, in furtherance of that goal, the city government cut the length of new transit franchises to 25 years. By this time, many of the original 50-year franchises were at or nearing the halfway point in their lives. Seeing the writing on the wall, the original backers of United Railroads sold their shares. New shareholders, backed by hard-nosed URR President Patrick Calhoun, took an approach less friendly to the city and downright hostile to organized labor, leading to a bloody carmen’s strike in 1907.

Even with a hostile city government, URR leaders had reason to feel they were in the driver’s seat as they fought the carmen’s strike. The city government had twice asked voters to approve bonds to start a municipal railway, and both times voters had said no. Besides, no other big city had publicly-owned transit lines, and most of URR’s important franchises were good for at least 20 more years. But the ugly 1907 strike, in a union-friendly town, started changing minds about the privately-owned transit company.

Competition

Then, after a third failure at the ballot box, bonds to create a municipal railway were finally approved by voters in 1909, starting with the acquisition and conversion to streetcars of the Geary Street cable line, which had eluded United Railroads’ grasp. (We’ll chronicle the birth pangs of Muni in our next issue.) Now there would be competition, at least in some parts of town. And as the years ticked by, those franchises that were the foundation of URR’s business would lose value unless renewed, which was now contrary to city policy.

The first lines of the new Municipal Railway were concentrated in the northeast quadrant of the city, but its biggest spur to the city’s growth came when it opened lines where its private competitors couldn’t get a franchise: underground. The opening of the Twin Peaks Tunnel in 1918 suddenly made the empty lands of the city’s southwest quadrant attractive to homebuilders, replacing the long, indirect surface slogs provided by United Railroads surface service with a quick trip on Muni tracks through the tunnel. The private company lobbied city officials hard to be granted the right to share the tunnel with Muni, but failed. Increased public ill-will toward the company following another bloody strike in 1917 no doubt played a part.

END OF THE LINE—Barely a month before handing the system over to Market Street Railway Company, a final indignity for United Railroads on February 21, 1921: a cave-in of its tracks on Stanyan Street between Frederick and Carl Streets, near the corner of Golden Gate Park, swallowing an auto. Luckily, these tracks were connectors to the Haight carbarn and didn’t carry cars with passengers. The 6-line car will turn east on Carl Street, later sharing trackage there with Muni’s N-Judah line. John Henry Mentz photo, SFMTA Archive.

And yet United Railroads’ problems went far deeper. Physical damage from the 1906 earthquake and fire was followed by plummeting revenue from fewer riders as the city recovered. URR President Calhoun siphoned off money for his own purposes. Competition popped up on busy corridors from unregulated jitneys—private automobiles offering faster rides for the same five-cent fare as the streetcars (a nickel was called a “jit” in the slang of the day). And to top it off, a runaway streetcar in Visitacion Valley, along what’s now Geneva Avenue, killed eight passengers and injured more than 70 in 1918. It was the worst streetcar disaster in California history, resulting in large damage awards to victims.

Taken together, these circumstances caused the financial failure of United Railroads. Since its very formation in 1902, there had been talk that the original investors had paid too much for the properties and franchises they took over, and negotiations had been going on for several years to reorganize the company on firmer financial ground by paying off bondholders in the company at a significant loss. These negotiations accelerated even as a number of civic leaders called for a city takeover. But that wasn’t in the offing, not yet. Instead, a reorganization ended the life of United Railroads, its assets going to a familiar name: Market Street Railway Company.

What did the future hold for this new operator with the old name? What kind of transit service could San Franciscans expect from a company whose franchise rights were ever closer to their end? Would the city government help or hinder Market Street Railway? All questions we’ll address in the near future.


Owning, using, and paying for the streets

Our city’s streets are unquestionably owned by the public (except a handful of private streets in gated communities, a rarity in San Francisco). But owning, paying for, and using are three different things. 

As you can see in our exclusive narrated version of the famous 1906 “Trip Down Market Street” film, horses, buggies, large dray wagons, bicycles, pedestrians, and transit vehicles were all using the city-owned street space. But only the companies operating the cable cars, streetcars, and horsecars were paying for the right to use the street, making money by collecting fares (some of which they shared with the city under their franchise agreements). 

FREELOADING ON THE FRANCHISE—A jitney, at left on Market at Front Street, looks to grab the nickels of riders for a trip in direct competition with United Railroads’ 9-Valencia line. By the time of this 1914 photo, Muni’s Geary streetcars, including the D-line car to the right, were running all the way to the Ferry, providing more competition for URR. John Henry Mentz photo, SFMTA Archive.

In 1914, some private automobile drivers started picking up passengers on the same routes as United Railroads, poaching the five cent fares but not paying “rent” on any kind of franchise. The city eventually regulated these “jitneys” and forced them from Market onto Mission Street instead, a practice that lasted all the way to 2016. Author Don Anderson quotes Uber’s founder, Travis Kalanick, as calling his company the modern equivalent of the jitneys. (See Don’s excellent story on the city’s jitneys here.)

The early jitneys took revenue from United Railroads and the nascent Muni. A century later, the appearance of Uber and Lyft decimated the taxi business and reduced Muni ridership as well. Taxis pay “rent” to use streets by purchasing SFMTA-issued medallions, which cost $250,000. Competition from Uber and Lyft have made the medallions worth only a fraction of that, and taxi owners are suing the city. Uber and Lyft didn’t pay any “rent” to use the streets at the beginning, but many cities now impose some kind of tax or fee on them. In San Francisco, that’s a voter-approved 3.25% tax on most trips. That tax money goes to SFMTA. Additionally, because the city considers Uber and Lyft cars to be private automobiles, SFMTA bans them from Market Street, while taxis are allowed (with conditions). 

BARELY CONTROLLED CHAOS—This still frame from the famous 1906 “Trip Down Market Street” film shows a streetcar, cable cars, buggies, automobiles, a large dray wagon, and lots of pedestrians filling up the intersection of Fourth and Market.

In the past few (pre-pandemic) years, the numbers of bicycles and scooters, both manual and electric, have grown rapidly in the city. Companies that rent them have to get a franchise and pay a fee to the city for the right to operate on the streets. Private owners of bicycles and scooters pay no fees. Automobile owners pay gas taxes and state license fees. They pay to park both at meters in commercial districts and at the curb in many residential districts, though parking permits. Additionally, they pay to park at both SFMTA-owned and private garages, with a hefty parking tax imposed at all garages.

This complex array of charges for various transportation modes is the source of continuing and vigorous policy debate in the city. The city’s overarching goal is to reduce street congestion and vehicle emissions by providing more exclusive street space for Muni vehicles, bicycles and scooters, reducing the space for private automobiles. Increased parking fees are also intended in part to discourage private automobile operation in the city, and the city is now studying a proposed congestion charge on private automobiles that enter the downtown area (similar to what’s in place in London and Singapore). The city has also considered imposing its own license fee on cars registered in the city.

PART OF THE COST—Street railway franchise holders were required to properly pave the tracks and the space in between, even if the city hadn’t paved the rest of the street yet. Here we’re looking east on Clement Street from 30th Avenue on the 2-line in 1914. Note the Belgian block flanking the rails, the San Francisco standard for track installation. John Henry Mentz photo, SFMTA Archive.

Many automobile owners are outraged by what they consider the assault on their long-time primacy on the streets of San Francisco, but the revenue from fees on autos and other modes of transportation is channeled to SFMTA, intended to subsidize Muni service, including of course the historic streetcars and cable cars.  

San Francisco lost 53,000 residents in the first eight months of the pandemic, most of them to neighborhood Bay Area counties. Major downtown employers such as Salesforce, Twitter, Google, and Facebook have said they’ll let employees work from home most of the time for the foreseeable future. As the pandemic wanes, we’re likely to see a far different congestion picture than before. Our nonprofit’s goal is making sure the historic streetcars and cable cars still “own” the place they’ve earned on the streets of San Francisco.

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Rise and Fall of United Railroads

Excerpted from a chapter in the forthcoming book by Emiliano Echeverria and Michael Dolgushkin, chronicling the complete history of San Francisco’s dominant transit operator for the first two decades of the 20th century.

At the turn of the twentieth century, San Francisco’s transit was coming of age.  The Market Street Railway was in transition from being owned by interests in common with the Southern Pacific, to coming under the control of the partnership of Henry Huntington and I. W. Hellman: The Huntington – Hellman Syndicate.  Management continued with Southern Pacific by mutual agreement.    Things were going quite smoothly, indeed.   Then everything changed.

In August 1900, the power behind everything connected with the Southern Pacific, and the Market Street Railway, Collis P. Huntington, died of heart failure.  In the months just prior to his death, Collis P. Huntington had taken out large loans from the Speyer Brothers, which gave the investors of those loans “temporary” effective control of the Southern Pacific.  Following Collis Huntington’s death, the Speyer Brothers had enough control to decide that they did not want “another Huntington” in the presidency of the Southern Pacific.  With enough intrigue for a spy novel, they elected Arthur Hayes to the presidency of the Southern Pacific Company.

Henry Huntington, as a result, sold all his Southern Pacific stock holdings to investors who sold them to Edward H Harriman of the Union Pacific.  Within a year Harriman would come to control the Southern Pacific.  In addition to selling his holdings in the Southern Pacific, Huntington figured that it may be time to sell his interest in the Market Street Railway, as well.  During the spring of 1901, he was noticing that a group of eastern investors were becoming more than casually interested in Bay Area transit systems.   He decided that conversation with them may be opportune.

The amazing Ferry Terminal near the end of the United Railroads era. At the south terminal, 10, 11, 35 and 36 cars are awaiting their respective departure times.  The loop is full of cars while the North terminal has a 16 car and a Muni E car in the distance.  Click on the photo for a large version, then enlarge it and look around. You’ll see some people wearing masks for the 1918 flu pandemic, some great businesses and ads, and of course, streetcars bearing route numbers still used by Muni today. Is it any wonder that this terminal, with its ferryboats and streetcars was the second busiest intermodal passenger terminal in the world after Charing Cross Station in London?  Photo by John Henry Mentz, URR #U07146, Courtesy, Western Neighborhoods Project # wnp100.10021

Eastern Investors, the Brown Brothers, Get Their Foothold

The group of “Eastern Capitalists,” The Brown Brothers, known locally as “The Baltimore Syndicate,” first entered the San Francisco transportation scene with the purchase of the San Francisco & San Mateo Electric Railway on May 12, 1901. This meant that the San Francisco & San Mateo Railway was the founding basis for URR, not the Market Street Railway which was several months later. The following July 1 the Syndicate bought the Sutter Street Railway, which included the two Richmond District lines purchased from the Sutro Railroad in 1899.

On July 11, 1901, the Market Street Railway President Henry Huntington and financier I. W. Hellman met with Baltimore Syndicate representative George R. Webb who began negotiations toward purchase, along with California State Attorney General Tirey L. Ford and San Francisco mining operator R. G. Hanford representing the Syndicate.

The agreements were announced in the press on November 7, 1901, and the Market Street Railway’s operating assets were transferred to the new United Railroads of San Francisco on March 18, 1902.  Market Street Railway was reorganized by I.W. Hellman as a holding corporation handling the financial obligations of both the Market Street Railway and the United Railroads, particularly its bonded indebtedness.

Brown Brothers representative Arthur Holland became president of United Railroads.  George F. Chapman was appointed General Manager on May 22. It soon became obvious that the Baltimore Syndicate had paid far too much for the property, somewhere in the neighborhood of 35 to 40 million dollars. This overvaluation proved an untenable situation for the company and plagued it throughout its existence.

It soon also became apparent that Patrick Calhoun of the United Railways investment Company, URR’s largest individual stockholder, acted as the power behind the scenes. Indeed, Calhoun was sent to San Francisco in 1903 to mediate the company’s dispute with the carmen’s union, a situation which prompted a news reporter to ask President Holland who was actually running the company.  

The Brown Brothers Get Cold Feet: Ladenburg-Thalmann and The Rise of Patrick Calhoun

By April of 1905 the Brown Brothers had realized the futility of making a profit from a transit operation with overly watered stock, franchises of limited duration, and an only partially modernized system; and began negotiations to sell their interests in the United Railways Investment Company including its subsidiary United Railroads to the merchant banking firm of Ladenburg, Thalmann and Company.   

In November Calhoun was back in San Francisco ostensibly for the purpose of attempting to negotiate a solution to the question of overhead trolley wires on Market and Sutter Streets, a matter which had been stewing all year. A few days later, on November 23, Arthur Holland announced his resignation as president of United Railroads, citing the Brown Brothers desire to withdraw from management of the company. Calhoun’s presence in San Francisco at the time Ladenburg, Thalmann & Company was taking over management can hardly be seen as a coincidence and, indeed, he was elected president of United Railroads on December 30, 1905. Among other factors, the new ownership and Calhoun’s ascendancy resulted in a much less friendly attitude toward organized labor.  Calhoun, after a lengthy stay in New York, returned to San Francisco on March 12 to deal with proposed improvements to the United Railroads system and the perennial overhead trolley issue.

Here we see a typical street scene on the 5 McAllister line looking east from Webster in April 1920.  This line was roughly the same as today’s 5-Fulton trolley coach.  McAllister Street’s buildings in this area were 40-50 years old already and passing their prime.  Indeed, by this time McAllister Street was settling into its role as “Second-Hand-Row”, with its proliferation of thrift stores and the like lining the street from Octavia to Fillmore.  This was indeed “The City That Was” too, as everything in this image was destroyed for redevelopment in the late 1960s. Click to enlarge and look at the storefronts.  Photo by John Henry Mentz, URR, Courtesy SFMTA Archives # U06974

Everything Changes

The great earthquake and fire of April 18-21, 1906 stopped United Railroads operations – cold, although cars began running on Fillmore Street the night of the 21st.  Company headquarters moved temporarily to the Turk and Fillmore Car-house. The Royal, New York Underwriters, and Phoenix Insurance Companies were named adjustors of United Railroads losses. As the city rebuilt the company’s route structure and methods of operation changed.   A couple of months later URR set up a more substantial temporary headquarters at the location of the former Oak & Broderick Power House.  Here, company management could function until a new headquarters was found at 58 Sutter, its permanent home.

Then, on March 10, 1907, the receivers of the Westinghouse Electric and Manufacturing Company joined other creditors (including General Electric and the Lorain Steel Company) in an adjustment of their claims against United Railroads, which had a floating indebtedness amounting to $3,500,000 and faced receivership. United Railways Investment Company agreed to issue notes in that amount to be secured by an issue of first preferred stock in United Railroads, to bear a 6 per cent interest, and be payable for the first half in August 1912, and the second half in February 1914. Patrick Calhoun blamed this situation on money lost during the recent strike, and said that the company was “cleaning up its finances.”

On May 5, 1907, the carmen went out on strike, during which United Railroads Vice President and General Manager George F Chapman passed away from pneumonia. After a brief interim tenure by Thornwell Mullaly, he was replaced as General Manager by Charles N. Black on September 11, 1907.

In December 1908, the United Railways Investment Company gained control of the Stanislaus Water Power Company, giving United Railroads not only abundant power for its lines but also a surplus of approximately 40,000 horsepower available for sale, saving the company $300,000 to $500,000.

Holding Companies Take Over Ownership

The Railroads and Power Development Company was formed on June 9, 1909, as a holding company which owned all stock, except directors’ qualifying shares of the United Railroads, San Francisco Electric Railways, Sierra and San Francisco Power Company, and Coast Valleys Gas and Electric Company. It also served the purpose of shielding United Railways Investment Company from United Railroads’ financial obligations.

The California Railway and Power Company was organized under the laws of Delaware on December 18, 1912, to acquire from The Railroads and Power Development Company all of the outstanding stock of the United Railroads of San Francisco, The San Francisco Electric Railway Company. Sierra and San Francisco Power Company, and Coast Valley Gas and Electric Company. All the issued common and preferred stock of California Railway and Power Company was owned by United Railways Investment Company.  Ladenburg, Thalmann still retained some financial stake in United Railroads, but their influence immediately waned.

One of United Railroads’ worst defeats came in 1918 when Muni finally was able to have its rails reach from Castro to the Ferry, creating the famous four-track “Roar of the Four” on Market Street.   True city competition had arrived on Market, ending the transportation monopoly that URR and its predecessors had enjoyed on San Francisco’s main street for over a half a century.  Already crippled, URR would soon find its collapse, under the tragic circumstance of a horrible wreck in Visitacion Valley that year.  In this 1918 photo, only the J and K lines were in Muni service on Market Street, leaving those outside tracks looking pretty empty, a far cry from the conga line of continuous URR cars on the inside tracks. Click to enlarge and look around this intersection of Fourth Street, Market, Stockton, and Eddy, all of them served by streetcars then.  Courtesy Emiliano Echeverria / Randolph Brant Collection, Western Neighborhoods Project # wnp30.0143

Patrick Calhoun Out, Jesse Lilienthal Ascends to the Presidency

On August 28, 1913, Patrick Calhoun resigned, and after a very brief tenure by Mason B. Starring, Jesse W. Lilienthal assumed the presidency of United Railroads.

Calhoun quit the United Railways Investment Company Board in April, 1914. The following month it was revealed that Calhoun had gotten permission by the United Railroads Board to purchase outside stock with company money, which he used instead to invest in the failed Solano Land Company to the tune of what was reported in the newspapers as $1,096,000 but was actually closer to $3,000,000. This sparked an investigation by the State Railroad Commission as to whether the money had been returned to United Railroads, and what the company intended to do if it hadn’t. Tirey L. Ford stated that he voted for the resolution but never heard the land company’s name mentioned. Lilienthal called the matter “ancient history,” and said he was not positive where the money was placed. He was supposedly unaware of the company’s financial state when he accepted the presidency, and said he would not have accepted it had he known. He also came under fire for his handling of his predecessor’s actions.

In 1916, during the midst of much corporate chaos, William Von Phul was appointed to succeed Charles N. Black as general manager of United Railroads on June 1, 1916. Not long afterwards a reorganization plan for the company was announced, which would involve a blanket mortgage for the entire property. The $1,000,000 United Railroads notes and the $1,925,000 California and Power notes would be taken care of by stock in the reorganized company. The outstanding $7,053,000 Market Street Railway 5s would receive par or 90. Bankers immediately began to express doubt over this arrangement, particularly if 4 per cent bonds could be placed at 50.                  

Not long after, the company’s bondholders invited Frank B. Anderson, William H. Crocker, Herbert Fleishhacker, I. W. Hellman, Jr., and J. D. McKee to form a new reorganization committee. About two weeks later the committee asked the four percent bondholders to deposit their securities with the Union Trust Company, hinting that the next coupons could not be paid unless the proposed organization could be consummated. Late in September the committee announced a plan in which the 4% bonds would get 25% in Market Street 5s and 46% in first preferred, wiping out $44,330,100 in URR’s liabilities.

Shortly thereafter, bankers revealed plans to pay URR bondholders 71 cents on the dollar, the company announced default on its October interest, and doubts were raised about whether the committee’s plan would do what was intended. In November, the Railroad Commission requested an inventory and appraisal of URR property, and the Baltimore Trust Company opposed the reorganization plan, asking for a better deal for its bondholders. By the end of the year a suit was brought by the Oakland Bank of Savings and D. A. Bulmore, along with the Anglo and London Paris National Bank, to foreclose the trust mortgage securing the outstanding $1,800,000 in outstanding Market Street Cable Railway bonds.

The United Railroads reorganization scheme, and opposition to it, dragged through the beginning of 1917, as clamor for purchase by the city increased. By the end of April the reorganization plans appeared to have been completed, with the bondholders to receive 66 2/3% of their holdings in new 6% bonds, 1% to 3% in new 6% first preferred stock, and 33% in new common stock. This seemed to satisfy everyone for the time being, but the issue was pushed to the back burner for the rest of the year by the United States entry into World War I, and the carmen’s strike (resulting in further agitation for municipal purchase). During this lull in negotiations, in October 1918, the California Railway and Power Company reported on its poor financial state, and blamed it primarily on the previous year’s strike. 

The Reorganization Gets Back on Track

Early in 1919, the previously dormant reorganization plan was once again active, with Lilienthal explaining that the restructuring would be done in a way that would give a large margin between the expected earnings and the fixed charges, which would be accomplished by the holders of the United Railroads 4 per cent bonds taking junior securities in exchange, and that Ladenburg, Thalmann would accept junior securities of the reorganized company in exchange for the $5,000,000 obligation of the present one. The holders of the Market Street Cable 6s, the Ferries & Cliff House 6s, The Omnibus Cable Company 6s, and the Sutter Street Railway 5s, totaling $5,200,000, would receive par. Progress on this matter continued to be made into the next month, and its sinking fund 4 per cent bond certificates increased in value. However, Thornwell Mullally stepped down as assistant to the president of URR on February 25, 1919.

 Although no one knew at the time, Jesse Lilienthal’s appointment as President of URR, like for George Chapman before him, would be the death of him.  United Railroads President Jesse W. Lilienthal died of a stroke on June 3, 1919, as he was giving a speech at the Colonial Ballroom at the Hotel St. Francis, his last words being “In times like these we know no creeds. For the American of today there should be only this thought-one country, one flag, one God.” Lilienthal passed without having seen his desire for city purchase of the company come to fruition. William Von Phul took his place while also retaining the general manager position of United Railroads.

 During the summer and fall of 1919, the United Railroads reorganization plans continued and were further amended. In August it was announced that 100 per cent of par would be offered, but with a reduced proportion of Market Street Railway bonds, and the balance made up in stock of all three issues. The following month came the news that the reorganization plans had been perfected. The United Railroads would cease to exist and the Market Street Railway Company, with a new $32,150,000 capitalization, would reacquire all the properties. A few days later the United Railroads bondholders were asked to deposit their securities with E. H. Rollins & Sons in return for five year 6 per cent notes. As of late November 1920, the plan had met with approval among the bondholders, but had not yet gone before the Railroad Commission for approval.

We’re looking north on Fillmore in 1920. That’s Sutter Street crossing just ahead. This was one of the busiest transfer points in the whole URR system.  Here, Line # 3 Sutter – Jackson cars turned off Sutter onto Fillmore and turned to Jackson Street where the line served residents of Pacific Heights.  Within a few Months URR was no more: Market Street Railway arose from the ashes of URR.  (And those decorative arches are no more either, of course, torn down in a World War II scrap metal drive.) Click to enlarge, and check out the Uber-predecessor jitney looking to steal streetcar riders at left, parked behind an electric delivery truck, both proving that old ideas can become new again. Photo by John Henry Mentz, URR, Courtesy SFMTA Archives # U06961

1920-21 – The Death of URR and the Rebirth of MSR

The petition for the United Railroads reorganization was not presented to the Railroad Commission until June 18, 1920, as clamor for city purchase persisted. The plan was formally submitted on September 10, with a reduction in the company’s capitalization from $81,945,600 to $47,516,000. The Railroad Commission approved the plan, and on January 29, 1921, the Union Trust Company began foreclosure proceedings against United Railroads, with the reorganization expected to take effect in 60 days. Those proceedings were temporarily halted on February 5, but were soon allowed to continue. The receiver’s sale took place on March 21, signaling the corporate end of United Railroads, and brought $7,000,000. Several steps remained to be taken, but on April 1, 1921 the Market Street Railway Company regained operation of most of San Francisco’s privately-owned street railway lines.

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Double your year-end donation!

Your year-end tax-deductible donation will be DOUBLED thanks to a matching challenge from our board members. Please read on!

Hard to believe that 2020 marks 25 years since the permanent F-line opened on Market Street, and 20 years since it was extended to Fisherman’s Wharf, where one of the famed Blackpool “Boat Trams” is pictured (both of the Boat Trams, we should mention, Market Street Railway acquired for Muni and paid to ship here).

Muni is, of course, America’s first publicly-owned big city transit system, celebrating its 107th anniversary of operation on December 28. Someone recently described our nonprofit as “like the starter dough that makes sourdough bread possible. Without that starter, always on hand to be a catalyst, no sourdough.” We’re certainly not as famous as San Francisco sourdough, but we’re flattered by the analogy.  As we’ve said before, it takes patience and persistence to accomplish good things in San Francisco. Important projects don’t get done as quickly as we would like, that’s true, but we’ve seen so many examples of other advocacy groups who constantly act confrontative instead of collaborative, and they usually end up with no results at all.   

We made some good progress in 2019, notably getting the Boats back into summertime waterfront service, to the delight of the public, thanks to SFMTA Director of Transit Julie Kirschbaum. Having been at this advocacy for almost 40 years (since the planning of the first Trolley Festival in the early 1980s), we’ve seen both supportive and obstructive officials at Muni. But our patient building of relationships at City Hall and with leading businesses and neighborhood groups has enabled steady growth and improvement in the historic streetcar operation, and contributed to rejuvenation of the cable car system, overcoming the periodic internal indifference that now appears past. 

With new leadership in place at Muni and its parent, SFMTA, we believe 2020 can be a breakthrough year, with your help. There are already early indications that the beloved Boats will be cruising the waterfront more often in 2020. We believe contracts will finally go out to completely restore five more historic streetcars from the 1920s. They include New Orleans 913 (1923), Market Street Railway 798 (1924), Johnstown 351 (1926), Osaka 151 (1927) and Porto, Portugal 189(1929), restore them with their original trucks, not replicas, thanks to our advocacy, to give the traditional ride of these great vintage vehicles.

Additionally, original 1914 Muni 162 should reenter service, its 105-year old trucks completely rebuilt in-house, by Muni’s great crafts workers. Following that, its sister 1914 Car 130 is slated for a complete in-house rebuilding. Muni leadership’s decision to do this work in-house (pending identification of space and budgeting) is to us a clear demonstration of their strong commitment to the true permanent operation of not only the F-line, but also the E-Embarcadero line, where the double-end vintage streetcars will primarily be assigned. And again, thanks to our advocacy, we are closer to getting the E-line extended westward to Aquatic Park to serve Fort Mason, with a grant of nearly $1 million to get to the design phase approved by the San Francisco County Transportation Authority.

Our board of directors, chaired by Carmen Clark, joins me in thanking all our members and donors for their support that made these and other accomplishments possible. And this year, several members of our board members have stepped up to personally match the first $7,500 in year-end donations we receive. These will be used to help us strengthen our day-to-day advocacy to get the projects I mentioned across the finish line. They’ll also seed an ambitious project we’ll be telling you more about in the next Inside Track, our member magazine. Our San Francisco Railway Museum begins its 15th year of operation in a few months. It’s time to freshen it, both inside and outside, with more moving images and interactivity to appeal to new generations of transit fans, to build enduring support for the historic streetcars and cable cars. Your year-end gifts will be the “starter” for this important project, and our board match will double your donation’s impact

We hope to have made major progress on the museum by 2020’s Muni Heritage Weekend, August 22-23.  Of course, the oh-so-popular Blackpool Boat Trams will be there, along with both Melbourne trams, Muni’s 1912 flagship Car 1, 1896 “Dinky” 578, and much more. 

For all these reasons, and especially our board members’ matching offer, please consider a tax-deductible year-end donation to Market Street Railway. You can make a one-time gift of as little as $10, or a recurring monthly donation. Please click here to donate and help us keep the past present in the future. And please consider sharing this email with friends who might want to join Market Street Railway or make a donationThanks for your ongoing support.

Warm wishes for a very happy holiday season.

Looking forward,

Rick Laubscher, President, Market Street Railway

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What Would You Have Saved From the Old Boneyard?

“Bone Yard” at Funston and Lincoln Way, 1944, SFMTA Archive.

The new issue of our member newsletter, Inside Track, should reach your mailboxes any day now. It contains a story about our efforts to save the best PCC streetcars at Muni’s current “boneyard”, on Marin Street near Islais Creek, as Muni moves to convert the space into a bus testing yard.

(No, we’re not going to post that story here, at least not yet; our members feel getting first knowledge of important developments regarding the historic streetcar fleet is a perk of their membership. But you can get the new Inside Track instantly, by email if you join right now.)

This post is about the original “boneyard,” the streetcar storage area created by our namesake, the old Market Street Railway Company, in the city block bounded by Lincoln Way, Funston Avenue, 14th Avenue, and Irving Street. (Thanks to the SFMTA Archive for the photo, dated March 1944.)

Our namesake stored over 100 streetcars here at a time, with a large infusion entering the boneyard in the late 1930s, after the courts squashed the company’s operation of some streetcars with just a single crew member. Rather than convert those cars back into two-person operation, they just stored them. Even the increased ridership of World War II didn’t pry them out. These included advanced-looking (but underpowered) “rail sedans” purchased second-hand from East St. Louis, conventional arch roof cars from that railway and from Williamsport, PA, and a variety of deck-roof and arch roof cars originally purchased by predecessor United Railroads, plus, over time, most of the streetcars Market Street Railway built with San Francisco labor in its own Elkton Shops near Balboa Park (now the site of Muni’s Curtis E. Green Light Rail Division).

After Market Street Railway was merged with Muni in 1944, the railway stored streetcars here for a time as they were taken out of service in favor of trolley buses. Briefly, these included at least some of the single-truck E-Union line “dinkys”.

We only know of one single streetcar that escaped the boneyard and is still intact today: 1924 home-built car 798, about which we hope to share some very good news soon. For now, let’s play a game for those with some knowledge of the boneyard.

If you could have waved a magic wand and saved up to three streetcars from scrapping, so that they could be running on the E- and F-lines today, which three would they be (meaning which type, not which specific car numbers)?  Answer in the comments section.  Wishing won’t make it so, but what the heck.

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First Videos of “White Front” Powell Cable Car 12

Right on schedule, Powell Cable Car 12 returned to service at 11 a.m. on Thursday, June 15, 2016. For the first time in 72 years (back when it was numbered 512), it was wearing the “White Front” livery of our namesake, Market Street Railway Company, which merged with Muni in 1944. The video above shows the 12 leaving the Washington-Mason car barn for the first time in revenue service since its restoration. The photograph below, taken just few blocks away at… — Read More

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“White Front” Cable Car Returns

Powell Street cable car 12 returns to service today after an extensive rebuilding process that lasted more than two years. Its return marks the completion of a project that Market Street Railway has supported Muni on for more than 20 years. Powell 12 now proudly wears the famous “White Front” livery of our namesake, Market Street Railway Company, that all Powell cars wore from the mid-1930s until 1944, when Muni took over its private competitor, acquiring the Powell cable lines… — Read More

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Join Us at San Francisco History Days

This weekend, March 5-6, the historic Old Mint at Fifth and Mission comes alive again with city history. Dozens of city history groups will assemble to celebrate San Francisco’s history. Market Street Railway will again be among them, as we have been in the past.  (That’s us above at an earlier version of the event. The Old Mint is a great venue for this.) SFGate.com has all the details here. This year, the Mayor’s Office is running the event and… — Read More

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When We Actually Built Our Own Transportation

An article on BART’s new cars stirred up a hornet’s nest of comments lamenting that we don’t build anything here any more — specifically transit vehicles. We’re not going to wade into that discussion (but feel free to clink the link and comment there). Coincidentally, though, that news story appeared the same day a reader in Idaho, Noel Anthony Cimino, submitted this photograph to us for publication. Here’s what he wrote: > “This is a photo of my dad, Joseph… — Read More

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