Pacific Electric


The Pacific Electric Railway Company, nicknamed the Red Cars, was a privately owned mass transit system in Southern California consisting of electrically powered streetcars, interurban cars, and buses and was the largest electric railway system in the world in the 1920s. Organized around the city centers of Los Angeles and San Bernardino, it connected cities in Los Angeles County, Orange County, San Bernardino County and Riverside County.
The system shared dual gauge track with the narrow-gauge Los Angeles Railway, "Yellow Car," or "LARy" system on Main Street in downtown Los Angeles, on 4th Street, and along Hawthorne Boulevard south of downtown Los Angeles toward the cities of Hawthorne, Gardena, and Torrance.

Districts

The system had four districts:

Origins

Electric streetcars first appeared in Los Angeles in 1887. In 1895 the Pasadena & Pacific Railway was created from a merger of the Pasadena and Los Angeles Railway and the Los Angeles Pacific Railway. The Pasadena & Pacific Railway boosted Southern California tourism, living up to its motto "from the mountains to the sea."
File:Old PE car at San Gabriel Mission circa 1905.jpg|thumb|Old Mission Trolley streetcar of the Pacific Electric makes a stop at Mission San Gabriel Arcángel, 1905.
The Pacific Electric Railway was created in 1901 by railroad executive Henry E. Huntington and banker Isaias W. Hellman. As a Vice President of the Southern Pacific Railroad, operated by his uncle, Collis P. Huntington, Huntington had a background in electric streetcar lines in San Francisco where he oversaw SP's effort to consolidate many smaller street railroads into one organized network. Hellman, the President of the Nevada Bank, San Francisco's largest, became one of the largest bond holders for these lines and he and the younger Huntington developed a close business relationship. The success of their San Francisco trolley adventure and Hellman's experience in financing some early Los Angeles trolley lines led them to invest in the purchase of some existing downtown Los Angeles lines which they began to standardize and organize into one network called the Los Angeles Railway. When his uncle Collis died, Henry lost a boardroom battle for control of the Southern Pacific to Union Pacific President E. H. Harriman. Huntington then decided to focus his energies on Southern California.
In May 1901, Hellman, who had been Southern California's leading banker for almost three decades, wrote Huntington that "the time is at hand when we should commence building suburban railroads out of the city." Hellman added that he had already tasked engineer Epes Randolph to survey and lay out the company's first line which would be to Long Beach. In that same year, Huntington and Hellman incorporated a new entity, the Pacific Electric Railway of California, formed to construct new electric rail lines to connect Los Angeles with surrounding cities. Hellman and his group of investors owned the controlling majority of stock and the newspapers of the time referred to it as the Huntington-Hellman syndicate. Using surrogates, the syndicate began purchasing property and rights-of-way. The company's first main project, the line to Long Beach, opened July 4, 1902.
Huntington experienced periods of opposition from organized labor with the construction of the new railways. Tensions between union leaders and like-minded Los Angeles businessmen were high from the early 1900s up through the 1920s. Strikes and boycotts troubled the Pacific Electric throughout those years until they reached the height of violence in the 1919 Streetcar Strike of Los Angeles. The efforts of organized labor simmered with the onset of World War I.
Railroads were one part of the enterprise. Revenue from passenger traffic rarely generated a profit, unlike freight. The real money for the investors was in supplying electric power to new communities and in developing and selling real estate. To get the railways and electricity to their towns, local groups offered the Huntington interest opportunities in local land. Soon Huntington and his partners had significant holdings in the land companies developing Naples, Bay City, Huntington Beach, Newport Beach and Redondo Beach.
Harriman, who controlled the powerful Southern Pacific Railroad, was concerned with the competition that these new electric lines gave his steam railroad traffic, and had been prodding Huntington for joint ownership of the lines but Huntington refused to negotiate. In early 1903, Harriman proposed a franchise plan with three-cent fare plan to the Los Angeles City Council, a plan which, if accepted, would have handicapped the other railways severely. Huntington countered with a ticket book which gave the rider of travel for $6.25, which undercut the Harriman strategy. The Council vetoed the franchise idea, unable to believe adequate service could be provided for such a low fare. Then, on April 14, 1903, Harriman bought Hook's Los Angeles Traction Company, which ran lines within the downtown area and, through its California Pacific subsidiary, was constructing a line from Los Angeles to San Pedro.
The final confrontation came over a bidding war for the 6th Street franchise, in which the franchise, finally went to the top bidder for $110,000, with Harriman the secret winner. In May 1903, Huntington made an overnight trip to San Francisco and worked out an arrangement with Harriman. The Pacific Electric would get the Los Angeles Traction Lines, SP's San Gabriel Valley Rapid Transit Railway line, the 6th Street franchise, and some downtown trackage. In return, Harriman got 40.3% of PE stock, an amount equal to Huntington's, with Hellman, Borel and De Guigne owning the remaining 20%. Huntington could expand the PE as he saw fit, but he was not to compete with existing SP lines. A byproduct of this sale was that Harriman sold the banking unit of his Wells Fargo Company to Hellman who merged it with his Nevada Bank operations and established the Pacific Coast's largest, most powerful bank.

Construction

On June 6, 1903, Huntington created the Los Angeles Inter-Urban Railway, capitalized at $10 million, with plans to extend lines to Santa Ana, Newport Beach, the San Fernando Valley, La Habra, Redlands and Riverside, with branches to Colton and San Bernardino. He simultaneously created the Los Angeles Land Company. Huntington owned almost all the stock in the companies, with token amounts allotted to company directors. Although the company allowed Huntington to proceed with construction plans unencumbered by outside interference, the poor state of the bond market meant that he had to turn to stockholders to finance expansion. In 1904 he acquired and finished the Los Angeles and Glendale Railway. In June, LAIU assumed control of the Riverside and Arlington Railway and the Santa Ana and Orange Motor Railway, and soon after, PE and LAIU finished their extension to Huntington Beach and began building a line to Covina.
Huntington continued to expand and not declare profits. On December 7, 1904, the Hellman group sold the rest of their shares and bonds in PE and LAIU to Huntington and Harriman for $1.2 million. Huntington and Harriman were now equal partners in ownership of the Pacific Electric. The Hellman syndicate retained their 45% interest in the Los Angeles Railway, which they thought would eventually declare dividends.
By 1905, the Newport and Santa Ana lines were completed. In 1906, the Newport line was extended to Balboa, and in late 1906, lines to Sierra Madre and Oak Knoll in Pasadena were finished. The two firms controlled of track, with the Pacific Electric at and the LAIU,. Huntington purchased the Los Angeles and Redondo Railway in July 1905, along with the Redondo Land Company, which owned 90% of the land in the beach community. This announcement precipitated a land boom in the area which resulted in a quick return of Huntington's entire investment in the area and in the railway.
On March 19, 1906, an agreement was reached to sell control of the Los Angeles Pacific Railroad lines, owned by Moses Sherman and Eli P. Clark, for a reported $6 million to Harriman; this turned over all the lines in downtown Los Angeles to Santa Monica and down the coast to Redondo Beach to the Southern Pacific. In January 1907, the Hellman syndicate, after seeing that Huntington ran the Los Angeles Railway similarly to PE, continually expanding and not declaring dividends, sold their 45% stake in the Los Angeles Railway to Harriman and the Southern Pacific.
The Covina line was completed in 1907, as well as a line from Monrovia to Glendora. The system reached La Habra in 1908. By 1910 PE operated nearly of track. Routes had been built into or passed through areas just beginning to grow.
1905 was the Pacific Electric's most profitable year, when the road made $90,711. Profits from the Huntington Land and Improvement Company made up for the poor earnings of the interurban system, with profits of $151,000 in 1905 rising to $402,000 in 1907. However, in 1909, earnings were only $75,000.
Huntington had begun long negotiations with Harriman about consolidating the Los Angeles electric railways beginning in 1907. There had always been a difference between the two men as to the purpose of the railway, with Huntington seeing the PE as a means to facilitate his real estate efforts, and Harriman seeing it as part of the Southern Pacific's overall transportation system in Southern California. Harriman left Huntington alone until 1910, when the former refused to allow the latter to run a line to San Diego that would have interfered with a competitive arrangement Harriman had worked out with the Santa Fe Railway.
In July 1908, Huntington leased all the lines of the Los Angeles Inter-Urban Railway to Harriman. In 1909 he sold the systems in Fresno and Santa Clara County to the Southern Pacific. Talks paused after the death of Harriman on September 9, 1909, but resumed in early 1910. On September 27, 1910, Huntington and Southern Pacific management came to a final agreement. In a complicated stock and bond transaction, Huntington conveyed his 50% of Pacific Electric to the Southern Pacific, while he acquired SP's 45% interest in the Los Angeles Railway. In addition, Huntington conveyed the Los Angeles and Redondo Railway to the Southern Pacific. Huntington retained control of the Los Angeles Railway, the narrow-gauge street car system known locally as "Yellow Cars," until a controlling interest in this company was sold off by Huntington's estate in 1944.