Margaret Walsh, University of Nottingham
Despite its importance to everyday life, historians have paid surprisingly little attention to modern road transportation. There have been some valuable studies of the automobile, its production and its impact on society and the economy. This article surveys the history of a branch of modern transportation that has been almost completely ignored — the history of motorized buses.
Missing from History
Why has there been such neglect? Part of the explanation lies in the image problem. As the slowest form of motorized transportation and as the cheapest form of public transportation buses have, since the middle of the twentieth century, been perceived as the option of those who cannot afford to travel by car, train or plane. They have thus become associated with the young, the elderly, the poor, minority groups and women. Historians have avoided contact with bus history as they have avoided contact with bus travel. They have preferred to pay attention to trains and rail companies especially those of the nineteenth century. Particularly in the United States where rail service has become geographically very limited an ethos of pathos and romance is still associated with the ‘Iron Horse.’ Indeed there is an inverse relationship between the extent of academic and enthusiast knowledge and the use of modes of transportation. But perhaps of equal importance in encouraging rail and air travel research and writing is the maintenance of business records. These materials have been made available in either public or company depositories and they offer ample evidence to write splendid volumes, whether as corporate histories or as general interest reading. Bus records have not been easily accessible. Neither of the two major American bus carriers, Greyhound and Trailways, has an available corporate archive. Their historical materials deposited elsewhere have been scattered and haphazard. Other company archives are few in numbers and thin in volume. Bus information seems to be as scarce as bus passengers in recent times. Nevertheless enough materials do exist to demonstrate that the long-distance bus industry has offered a useful service and deserves to have its place in the nation’s history recognized.
The statistics on intercity passenger services provide the framework for understanding the growth and position of the motor bus in the United States. In 1910 railroad statistics were the only figures worthy of note. With 240,631 miles of rail track in operation trains provided a network capable of bringing the nation together. In the second decade of the twentieth century, however, the automobile, now being mass-produced, became more readily available and in the 1920s it became popular with one car per 6.6 persons. Then two other motor vehicles, the bus and the truck emerged in their own right and even the plane offered some pioneering passenger trips. As Table 1 documents, by 1929 when figures for the distribution of intercity travel become available, the train had already lost out to the auto, though it retained its dominance as a public carrier. For most of the remainder of the century, except for the gasoline shortages during the Second World War, the private automobile accounted for over eighty percent of domestic intercity travel.
Intercity Travel in the United States by Mode
(Billions of Passenger Miles, 1929-1999)
|PRIVATE CARRIER||PUBLIC CARRIER|
|TOTAL INTERCITY TRAVEL||TOTAL (1)||AUTOMOBILE||AIR||TOTAL (1) (2)||BUS||RAIL||AIR|
Sources: National Association of Motor Bus Operators. Bus Facts. 1966, pp. 6, 8; F. A. Smith, Transportation in America: Historical Compendium, 1939-1985. Washington DC: Eno Foundation for Transportation, 1986, p. 12; F. A. Smith, Transportation in America: A Statistical Analysis of Transportation in the United States. Washington DC: Eno Foundation for Transportation, 1990, p. 7; and Rosalyn A. Wilson, Transportation in America: Statistical Analysis of Transportation in the United States, eighteenth edition, with Historical Compendium, 1939-1999. Washington, DC: Eno Transportation Foundation, 2001, pp. 14-15.
(1) Percentages do not always sum to 100 because of rounding up.
(2) Early figures take count of waterways as well as railroads, buses and airlines.
Although intercity bus travel climbed from nothing to over seven billion passenger miles in 1929, it was always the choice of a relatively small number of people. Following modest growth in the 1930s, ridership soared during World War II, peaking just above 27 billion passenger miles and attaining its highest-ever share of the market. After World War II, as intercity rail ridership plummeted, intercity bus ridership dropped by much less. Measured in billions of passenger miles, bus ridership plateaued in the last half of the twentieth century at a level close to its World War II peak. However, its share of the market continued to fall, decade by decade. From the 1960s the faster and more comfortable jet plane offered better options for the long-distance traveler, but most Americans still chose to travel by land in their own automobiles.
No particular date marks the beginning of the American intercity or long-distance bus industry because so many individuals were attracted to it at a similar time when they perceived that they could make a profit by carrying fare-paying passengers over public highways. Early records suggest bus travel developed from being an adventure into a realistic business proposition in the second decade of the twentieth century when countless entrepreneurs scattered throughout the nation operated local services using automobile sedans, frequently known as ‘jitneys.’ Encouraged by their successes, ambitious pioneers in the 1920s developed longer networks either by connecting their routes with those of like-minded entrepreneurs or by buying out their rivals. They then needed to acquire larger, more comfortable and more reliable vehicles and to meet the requirements of state governments who imposed regulations for safety, competition, financing road construction and accounting procedures. Competition from the railroads threatened the well being of promising bus companies. Some railroads decided to run subsidiary bus operations in the hope of squeezing out motor carriers. Others preferred to attack bus entrepreneurs through a propaganda campaign claiming that buses were competing unfairly because they did not pay sufficient taxes for road use. Bus owners fought back, both verbally and practically. Those who had gained enough experience and expertise to organize their firms systematically took advantage of the flexibility of their vehicles that did not run on fixed tracks and of the lower running costs of coaches to provide a cheaper service. By the late 1920s regional bus lines were visible and the possibility of national lines suggested increased prospects.
The Impact of the Great Depression
The onset of the Great Depression, however, brought painful changes to this adolescent service sector. Many small carriers went out of business when passengers and ticket sales declined as unemployment grew and most Americans could not afford to travel. The larger companies, experiencing both a cash flow and capital shortage had to reorganize their financial and administrative structures and had to ensure system-wide economies in order to survive. The travails of the only burgeoning national enterprise, Greyhound, are instructive of the difficulties faced. Much of the corporation’s rapid expansion in the late 1920s had been financed by short-term loans, which could not be repaid as income fell. Two re-capitalization schemes in 1930 and in 1933 were essential to meet current obligations. These involved loans from banks, negotiations with General Motors and a re-floatation of shares. The corporation then took constructive as well as defensive action. It rationalized its divisional structure to become more competitive and continued to spend heavily on advertising and other media promotions. The strenuous efforts paid off and Greyhound not only survived, but also gained in market strength. Smaller firms with less credibility and credit worthiness struggled to remain solvent and were unable to expand while the disposable incomes of Americans remained low.
Federal Government Legislation
The federal government had expressed concern about the extent and shape of the developing long-distance bus industry before the Great Depression shattered the national economy. Starting in 1925 a series of forty bills calling for the regulation of motor passenger carriers came before Congress. Congressional hearings and two major investigations by the Interstate Commerce Commission (ICC) of the motor transport industry, in 1928 and 1932, made other suggestions for legislation, as did the Federal Coordinator of Transportation. But legislators felt under pressure from varied interest groups and were uncertain how to proceed. Emergency and short-term solutions came in the shape of the bus code of the National Industrial Recovery Act (NIRA) of 1933. But dissatisfaction with the code and the Supreme Court’s judgement about the unconstitutionality of the NIRA (1935) rallied support for specific legislation. The ensuing Motor Carrier Act (MCA) of 1935 entitled existing carriers to receive operating permits on filing applications and granted certificates to other firms only after an investigation or hearing which established that their business was in the public interest. Certificates could be suspended, changed or revoked. All interstate bus operators now had to conform to regulations governing safety, finance, insurance, accounting and records and they were required to consult the government over any rate changes.
Under the new regulations of the MCA competition between long-distance operators was limited. Existing companies who had filed for permits protested against applications from new competitors on their routes. If it was established that services were adequate and traffic was light, new applications were often turned down. The general thrust of the new policy supported larger companies, which more easily met federal government standards. The Greyhound Corporation, with its structure reorganized and already providing a national service, held a virtual monopoly of long-distance service in parts of the country. The administrative agency, the Motor Carrier Bureau (MCB) was well aware of both the potential abuse of monopoly power and the economies of scale achievable by larger operations. It thus encouraged an amalgamation of independent carriers to form a new nationwide system, National Trailways. Ironically this form of competition, which was officially encouraged in the bus industry, created a duopoly in many markets because most other operators were small companies that conducted much of their business in short-haul suburban and intra-regional transport. Influenced by historic concerns about regulating the railroads, the government had created a new public policy that insisted on competition within an industry even though that competition favored a small number of large firms. And even more ironically by the mid 1930s competition among different modes of transportation meant that there was little constructive thought given to a new national transportation policy that might coordinate these modes efficiently and effectively to use their natural advantages to best public effect.
For Better or Worse in the Second World War
War brought expansion to the bus industry, but under stressful conditions and with consequences that would have long-term implications. The need to carry both civilians and troops, combined with gasoline, rubber and parts shortages, forced Americans to move from their automobiles and onto public transportation. New records were set for passenger transportation. Seats were filled to capacity, with standing room only. Long-distance bus passenger miles doubled from 13.6 billion in 1941 to 26.9 billion in 1945. This business was not achieved in a free market. A wartime administrative bureau, the Office of Defense Transportation (ODT) created in December 1941 managed traffic flows throughout the war. It used relatively simple devices such as the rationing of parts, rubber allocation, speed limits, fuel control and the restriction of non-essential services to distribute scarce resources among transportation systems. Assisted by trade associations like the National Association of Motor Bus Operators (NAMBO), the ODT issued directives encouraging full capacity use and rational use of passenger operations.
Though bus companies abandoned competition with each other and with their long-standing rival, the railroads, they were unable to gain long-term benefits from their patriotic efforts to help win the war. Earnings rose, but it was impossible to invest part or all of these into the industry because of government curtailment of vehicle production and building construction activity. Hence buses were kept in service beyond their normal life expectancy and terminals were neither improved nor renovated. Speed limits of thirty-five miles per hour, imposed in 1942, created longer man-hours for drivers and lengthened journeys for passengers, already frustrated and tired by waiting in crowded terminals. Despite the industry’s wartime propaganda exhorting Americans either not to travel or to do so at off-peak times and to be patient for the good of the country, the unfavorable impressions of inconvenience and discomfort of traveling by bus remained with many patrons.
Emerging from the wartime conditions, bus managers considered that they could build on their increased business provided that they could both invest in new vehicles and buildings and could persuade Americans that buses offered many advantages over automobiles for long-distance travel. They were essentially optimistic about the future of their business. But they had not reckoned on either post-war inflation or on a lengthy federal government inquiry into the conduct of the industry. Funds accumulated during the war had been earmarked for investment in a variety of terminals and garages and for replacing and increasing rolling stock. New vehicles were ordered as soon as wartime restrictions were lifted, but not only were there delays in delivery due to shortages of materials and strikes in production plants, but these cost more than had been anticipated. The abandonment of effective wartime controls in 1946 brought rapid increases in prices and rents as consumers with huge pent-up savings chased scarce goods and housing. Older buses, which would typically have been retired, were retained. The double burden of depreciation charges of both new buses and restyled buses delayed the acquisition of more modern cruiser-type vehicles until the early 1950s. The normal investment in buildings was also held in check.
Post-war financial adjustments alone were not responsible for the slow progress towards modernization. The federal government inadvertently delayed infrastructure developments. The ICC was worried about the honest, efficient and cost-effective management of the intercity bus industry, its profit margins during and after the war and the lack of uniform bus fares. In July 1946 the agency instigated a comprehensive investigation of bus fares and charges in order to establish a fair national rate structure. The hearings concluded that the industry had conducted its affairs justly and that variations in fares were a result of local and regional conditions. In the future profit margins were to be established through a standard operating ratio, taken as the ratio of operating expenses to operating revenues. Bus operators were thus given a clean bill of health and a rate structure that suggested success in a competitive inter-modal marketplace. But the hearings were very lengthy, lasting until December 1949. During these years bus operators hesitated to take major decisions about future expansion. State governments also contributed to this climate of uncertainty. Multiple state registration fees and fuel taxes for vehicles crossing state boundaries increased both running and administrative costs for companies. Furthermore the lack of uniform size and weight limitations on vehicles between states had a negative influence on the selection of larger and more economical coaches and delayed the process of modernizing bus fleets. Entrepreneurs faced unusual problems in the post-war years, at a time when they needed to be forceful and dynamic.
These structural problems dominated bus company discussions at the expense of developing improved customer relations. Certainly time, effort and money were put into a vigorous advertising campaign telling the public that buses were available for both regular service and leisure time activities. The latter offered great potential as people had money in their pockets and desired recreation and entertainment. Advertisements emphasized the reliability, safety, flexibility and comfort of bus journeys while bus company employees were exhorted to develop a reputation for courtesy. But more proactive efforts were needed if new and old clients were to get on and stay on buses. The 25.8 million car registrations of 1945 had become 40.5 million by 1950 and then increased again to 52.1million in 1955. The United States had achieved mass ownership and automobility. The federal government encouraged this personal mobility by promoting the construction of interstate highways in the Federal-Aid Highway Act (Interstate Highways Act) of 1956. Certainly buses also benefited from new high-speed roads, but increasingly the private automobile won the contest for short-distance travel under four hundred miles. Americans preferred to drive themselves whether or not the total cost of personal travel was higher than that of public transport. They valued the convenience of their own vehicles and as more became suburban dwellers they were unwilling to go to bus terminals, often located in downtown city centers.
What could bus operators do to either conserve their position as passenger carriers or to advance this position? Efforts to improve management and internal company restructuring offered some possibilities while new publicity campaigns suggested other avenues for progress. The Greyhound Corporation, as the industry’s largest operator took the lead in adopting a modern professional appearance. In the mid 1950s it sought to raise efficiency by reducing divisional groupings from thirteen to seven, thereby making more effective use of equipment, procedures and personnel. Managers and mechanics now had to undergo systematic training, whether at business schools or in engineering technologies. Theoretical learning was a necessary complement to practical experience. But these administrative changes were insufficient by themselves. Increased trade was sought in transport-related outlets, for example, in carrying small freight and mail, in developing van lines and car rentals and in making connections with airlines to offer surface travel. The closure of many railroad routes offered opportunities to seize their business while road improvements and expansion created the possibility of new business. Yet more openings were envisaged as Greyhound and its major rival, Trailways, participated in the conglomerate movement. Greyhound, for example, not only ventured into bus and auxiliary transport services, but also moved into financial, food, consumer, pharmaceutical, equipment leasing and general activities. Trailways diversified into real estate, accident insurance, restaurants, car parking and ocean cargo shipping operations. The aim was to realize substantial benefits through exchange of clients and economies of scale.
The bus industry also adopted a fresh approach to consumer relations in the late 1950s and the 1960s. Again the Greyhound Corporation led the way. Its new advertising agency, Grey Advertising, developed a novel and long-lasting campaign using a real dog, ‘Lady Greyhound,’ rather than the traditional silhouette in bus publicity. The corporation was able to portray ‘Lady Greyhound’ as a caring and sharing personality as she gave press and radio ‘interviews,’ opened bus stations, civic events and charity functions and replied to the members of her fan club. The implications were that Greyhound and the bus industry were equally concerned ‘people.’ Greyhound also became the official bus line in the annual contest to find Mrs. America, a contest that emphasized homemaking skills. This promotion was clearly an effort to appeal to women who comprised the majority of the bus industry’s passengers. More dramatic was the contemporary 1960s campaign to attract the young, foreign visitors, those who did not drive and the poorer groups in society. ‘Go Greyhound and Leave the Driving to Us’ and the offer of up to ninety-nine days bus travel for $99.00 were attractive proposals. By now the bus industry was differentiating among its clients. There was a market for regular route travel among those who did not have access to an automobile or who preferred not to drive. This market could be increased as a result of specific offers if these were well publicized. There was also a potential market for specialized travel in the leisure sector. While middle-class Americans might not want to experience the inconvenience of scheduled journeys, they could be persuaded to charter a bus for special trips, for example, outings by the church choir and the youth club or to sports events and art galleries. They could also be persuaded to join a tour group, as the price of the vacation would ensure like-minded and similarly well-off company. Indeed charter and special services’ income rose during the 1960s.
Not all passengers chose the national bus lines. Indeed there was considerable variety among American bus companies. In some ways smaller companies felt at a disadvantage, but in other ways they clearly won out. Regional operatives, like Jefferson Lines in the Midwest or Peter Pan in New England and New York State remained primarily in transportation services. They operated regular routes on an interstate basis, with charter and special services providing important financial returns. Their durability in business was related to their local reputation for service and their standing, which they were able to exploit. Local companies like Badger Coaches in Madison and Milwaukee, Wisconsin or Wolf’s Bus Line of York Spring, Pennsylvania frequently relied on charter and special work, often within a two hundred mile radius. When they ran regular services, these were on intrastate routes. They frequently filled the gaps left by their larger counterparts. The bus industry was diversified.
The bus industry in the United States had always offered its services to a minority of the traveling public, but by the 1960s it had settled on catering to a smaller proportion of the nation’s travelers. For the rest of the century it would struggle to retain these customers. More people took the bus than took the train because the bus, as a flexible and relatively low cost vehicle, was able to serve more urban and rural communities and to serve them economically. But in an era which was punctuated by economic crises and rising energy prices, the federal government first intervened to protect a special interest group and then stepped out of managing transportation policy in the public interest concerns of communal values and social infrastructure. Though never acting consistently, it became more susceptible to the economic concerns of free market competition and the personal concerns of Americans as individuals. The bus industry thus faced serious problems in its efforts to provide a well-run and effective service in a nation dominated by automobile owners and air travelers.
By the 1970s the economic difficulties faced by buses and more urgently by trains resulted in public investigations. The crisis in public ground transportation emerged first on the railroads because freight had been cross subsidizing passengers for years and the companies had withdrawn from unprofitable passenger services whenever possible. Pressured by an active rail lobby and concerned to ensure a minimum route network, Congress intervened with a subsidy in 1970 and created the National Rail Passenger Corporation, better known as Amtrak, to run passenger operations. Though train services improved continuing federal subsidies were required. Intercity bus operators were outraged both by the creation of Amtrak and the ensuing cheaper rail fares and complained about unfair competition throughout the decade. Their efforts to remain competitive with their long-standing rival, especially in the busy northeastern corridor of the United States, proved to be very tough and revenue from the large bus operators dropped. Losses, however, were not solely due to railroad activities. Airlines continued to enlarge their share of long-distance travel, stimulated by greater use of wide-bodied jet aircraft that increased speed and fostered a relative decline in the price gap between plane and bus fares. At the same time automobile ownership and use continued to grow with over a third of American households possessing two or more vehicles. Competition from both public and private modes of transport became very intense.
This competition, however, could not fully explain the plight of the American bus industry. The troubled economic conditions of the 1970s required organizational readjustments. In a period marked by high unemployment and high inflation rates the bus industry found that its receipts did not match its higher production costs. Higher labor costs, significant increases in fuel costs and mounting charges for new vehicles meant that bus companies were unable to finance their operations from their profits. Outside investment funds were needed. But these were slow to materialize because the bus industry was perceived to be in difficulties. Both the trade association, the American Bus Association (ABA) and the major carriers discussed possible solutions including cutting labor costs, finding methods of increasing productivity, promoting marketing drives — both for regular route and special services — and taking on more small freight business. But these efforts were of no avail if the industry as a whole lacked federal government backing. Any improvements made by carriers needed to fit into a national transportation infrastructure that recognized the value of bus services as the only source of public transport in some communities. Individual travel and transportation decisions might be considered to be private decisions but they had public value and consequences. Two main policies were possible in the 1970s, supporting the bus industry financially within the existing transportation structure or altering the framework to stimulate more bus competition and thus hope to create greater efficiency.
The bus industry initially favored government financial assistance as the way forward. In congressional hearings in 1977 bus delegates proposed a revitalization strategy that included capital grants, operating subsidies, tax concessions and regulatory reform aimed in particular at rate flexibility. The Surface Transportation Assistance Act (1978) authorized limited funds in the hope of some industry recovery. But this assistance had only a temporary impact in the late 1970s because by then many government representatives, their advisors, economists and business managers, were more interested in altering public policy to non-government intervention, whether in terms of management, grants or planning. In an era of conservative politics the mood of the country moved in favor of free market enterprise. Within a few years much of the nation’s transport was partially deregulated. In 1978 the Airline Deregulation Act gave airlines considerable freedom in pricing policies and in entry to and exit from routes. In 1980 both trucks and railroads were substantially deregulated. In 1982 it was the turn of the buses. The Bus Regulatory Reform Act of that year did not completely deregulate industry, but it did noticeably lessen governmental authority. Entry into business was liberalized, state regulations about exit from unprofitable routes were eased and price flexibility was granted on fares.
The long-distance bus industry now faced a highly competitive transportation environment. Not only did companies engage in price warfare over potentially profitable bus routes while abandoning marginal routes, but they also had to contest for passengers with the new low-cost deregulated airlines and for package freight with trucks. Companies made considerable efforts to adjust to the new conditions by lowering prices, improving facilities, especially terminals, investing in new coaches, making rural connections with independent feeder lines and in establishing computer systems to assist with ticketing and routing. Their most contentious adjustment came in the area of industrial relations. Here the larger operations ran into difficulties. Facing competition from smaller companies who had hired cheaper labor, they needed to negotiate wage reductions and new conditions with their unionized work force. In 1982 Trailways Lines agreed to a settlement with the American Transit Union (ATU) that froze wages at a level already considerably lower than that of Greyhound who then sought similar wage reductions. Resistance led to a seven-week strike in 1983. But the resulting settlement was relatively short-lived. Negotiations for a new driver’s contact broke down and ended in more strike action in 1990. Violence followed as the company hired replacement drivers and continued to operate its buses. The ensuing costs of countering the violence together with reduced income from services instigated a financial crisis. Greyhound filed for bankruptcy under Chapter 11 in June 1990 to re-order its affairs. The restructured corporation emerged as a smaller operation able to compete in the deregulated world of transportation.
In the 1990s the long-distance bus industry reshaped itself to cater to a variety of markets. Composed of hundreds of operators, ranging from large to small, but primarily small, it remained an essential, albeit minor, part of the United States’ transportation network. Motor coaches provided regular route services to some 4000 communities and had the capacity to serve all groups of people with their leisure, charter, small package, airport and commuter services. They were a vital ingredient to rural life and offered important intermodal links. Indeed for the country as a whole buses carried more commercial passengers than any of their transportation rivals. As a flexible and reasonably priced means of travel they found a niche catering to specific groups in society for scheduled routes and another niche for leisure activities. Though perceived to offer a secondary form of transportation, the bus industry in fact has provided and continues to provide crucial services for many Americans.
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Citation: Walsh, Margaret. “The Bus Industry in the United States”. EH.Net Encyclopedia, edited by Robert Whaples. January 27, 2003. URL http://eh.net/encyclopedia/the-bus-industry-in-the-united-states/