Transit, Labor, and the Transition to Public Ownership in Oakland

By Jordan Patty

Mass Transit After World War II

In an era when labor expected generous wages and benefits, how could an urban bus company expect to operate at a profit, regularly raise pay, and pay franchise fees to municipalities when fewer people were riding the bus year after year? This was a question faced by companies in cities across the United States throughout the 1950s and 1960s such as the Key System in Oakland, California. The automobile was stealing their customers while radio and television programming provided Americans entertainment without their having to leave the house at night.[1] The abandonment of restrictions on rubber and gasoline in post-World War II America had increased the production of automobiles, which resulted in declining prices. The rise in wages paid to workers across the board made automobiles all the more affordable but also meant transit companies were paying more for labor and seeing less profit. The federal government began to improve highways throughout the United States, many of them in urban areas, making car travel more convenient within cities.[2] At the same time, federal highway projects and home ownership programs – as well as the same prosperity that encouraged automobile purchases – promoted suburbanization, which in many cases extended beyond the reach of city transit systems. The systems would have to expand or cede an even greater portion of their ridership. This drastic change turned out to be a death sentence for urban transit systems across the country; 194 companies ceased operations between 1954 and 1963 with some communities witnessing the complete dissolution of entire transit systems.[3]

Labor costs presented a particular dilemma for transit because increased productivity could offset rising wages to a lesser degree than in manufacturing. Transit could not drop below one operator per vehicle. Between 1940 and 1954, transit fares increased nationwide 114 percent. But fare increases encouraged more auto purchases and carpools, leading to even greater declines in ridership and further drops in revenue. This prevented transit firms from raising wages as much as other unionized sectors. By the mid-1950s, wages consumed 60 cents of every dollar of the transit industry’s revenue, a higher amount than in the manufacturing sector.[4]

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Port of Oakland, Ca., Works Progress Administration, 1939, Prints and Photographs Division, Library of Congress

The disputes between management and labor reflected a trend in the United States in the years following World War II. Cities of varying sizes in different parts of the country experienced transit interruptions due to labor issues, and the problems had increased significantly by the mid-1950s. From the late 1940s through the early 1950s, the strikes occurred mainly in large metropolitan areas such as Atlanta, Oakland, Detroit, New York, Boston, Baltimore, and Miami. By the mid-1950s, however, strikes began to occur more frequently in smaller cities as well as continuing in large ones across the country.[5] City governments across the country were beginning to conclude that transit systems could not function properly as private businesses in the 1950s. The solution to providing uninterrupted transit service could not be solved easily due to transit’s inability to match wages paid in the manufacturing industry.

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Passengers board a new ACT bus at the Transbay Terminal in San Francisco, c. 1961, New Look…New Deal…in the Bay Area, General Motors brochure.

Failure of the Key System and Movement to Public Ownership

In Oakland, California, the private transit company Key System Transit Lines provided commuter bus and train service to San Francisco and local bus service in the East Bay. At the same time that its financial situation restricted the ability to expand and provide reliable service, identical factors also prevented the company from meeting the demands of Amalgamated Transit Union Local 192 for wage and benefits increases. From the perspective of Local 192, the rising cost-of-living justified their demands for increased wages. The rise in prices in the late 1940s and into the 1950s created problems for Local 192 because previous wage agreements during contract negotiations quickly looked insufficient. Both President Fred V. Stambaugh and his predecessor, E. H. Hensen, contacted Key System management to arrange for a meeting to discuss adjusting wages in order to meet the rapidly increasing cost-of-living. Stambaugh noted that other industries had adjusted wages to meet employees’ rising costs, and suggested increased compensation would result in better employee retention since they would not quit for higher pay elsewhere.[6]

In particular, the Bay Area’s rising housing costs put pressure on Local 192 to continue to push for higher wages during contract negotiations. In October 1951, the Central Labor Council of Alameda County (CLCAC) requested that union members send in information about rent increases and evictions. The removal of rent controls after World War II resulted in much higher rents which stretched the budgets of many union families especially when they did not receive a corresponding increase in wages. The CLCAC hoped that they could make the case to their U.S. Congressmen for the re-classification of the area as a “critical defense housing area” that would bring back rent controls.[7]

As a result of this economic climate, Local 192 demanded more from the Key System in the immediate postwar period. The inability of the company and the union to resolve their disputes, and Key System’s refusal to go into arbitration, led to strikes in 1947 and 1953.[8] The 16-day strike in June 1947 occurred shortly after the Key System’s takeover by National City Lines, who became the majority owner of the transit system, but the 76-day strike in 1953 damaged the company most.[9] In June 1947, Local 192 members voted to strike after the Key System refused to go into arbitration to settle the wage increase demands by both Local 192 and Local 818 (the ATU local that represented mechanical workers).[10] Both of the locals eventually settled on an 11-cent per hour raise, and the contract included a pension plan for all employees.[11]

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San Francisco and San Francisco-Oakland Bay Bridge from Yerba Buena Island, 1947, Prints and Photographs Division, Library of Congress

Stambaugh had some confidence going into the 1953 negotiations that they could again negotiate a favorable contract with company management.[12] The local argued that the Key System could pay for a raise without raising fares, and they dismissed Key System complaints about costs while turning a profit, such as the net income of $638,467 reported by the Key System in 1952.[13] Additionally, they pointed to the generous dividends paid by National City Lines as proof.[14]

After three weeks of failed negotiations in July 1953, the 192 membership voted 1,131 to 72 to go on strike.[15] Realizing the impact that a strike would have on the community, Stambaugh preemptively sent out a letter to all of the East Bay local officials whose constituents would be affected. He noted that Local 192 had had tried to work out an agreement with the Key System for three weeks to no avail.[16]

At the end of August 1953, the Key System proposed a wage increase, partially based on the Public Utilities Commission allowing a fare increase. They also laid out their argument against arbitration which they referred to as “a dangerous practice.” By going to arbitration, “you put your fate in the hands of an outsider who is not familiar with our problems, and is not responsible for any decision he may make.”[17]

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ACT billboard advertisement, c. 1961, New Look…New Deal…in the Bay Area, General Motors brochure.

With the company and Local 192 unable to work out a solution, East Bay officials attempted different strategies to end the strike. One of the steps the Oakland Mayor took was to appoint a Citizens Transit Emergency Committee to assist in ending the strike.[18] East Bay city attorneys considered filing a suit to end the strike, but they didn’t believe they could interfere with a private company and order them to resume service. Fred Dubovsky, a local attorney, opted to take matters into his own hands, and he filed a lawsuit to force the Key System back into operations. Deciding to work with Dubovsky, the Oakland city attorney developed a plan with the support of the union to take over the Key System in receivership, and then reopen the transit system for operations. Once the Key System ownership figured out that the judge would most likely agree to the deal, the Key System met with the union to settle the strike. The fact that the union would agree to the receivership takeover without first settling the strike with the Key System surprised ownership.[19] Following the strike, the Oakland City Manager sent a letter to Stambaugh expressing his relief that the strike ended, thanking Stambaugh for working to end the strike. In the hope that the Key System and 192 would have a better working relationship moving forward, he noted that both he and the mayor also worked to end the strike.[20]

Transit Districts and the California Legislature

Although the 1953 strike did not in and of itself lead to the calls for a publicly-owned transit system, the strike did add to the growing list of reasons why the Key System appeared unable to manage the responsibility of serving the growing population of the East Bay. If another strike happened and if the Key System continued its fast decline, how could the counties legally take over the system? Legally, East Bay officials believed that the plan to assume control of the Key System during the strike would have faced challenges, so they sought another path to a public transit system. This began a process that would culminate in the passage of the Alameda-Contra Costa Transit District Law in 1955.[21]

In 1955, California State Legislature passed legislation that permitted the creation of the Alameda-Contra Costa Transit District (ACTD).[22] Though the legislature allowed the creation of ACTD, the voters in the two counties actually had to vote to approve the creation of the district, and they did so in a special election in 1956. Unlike a transit authority, the transit district board possessed a wide array of powers. The board had authority to hire the general manager, make financial decisions about revenue and expenditures, and, perhaps most importantly, the district could decide on property tax rates to fund the transit system, a unique legal authority found in few, if any, legal compacts of other transit systems nationwide.[23]

Stambaugh and the ACTD Legislation

With regards to the membership of Local 192, the legislation was amended as the bill moved forward. Initially, there was discussion about bringing the workers into a civil service system. Instead, the legislation provided for the union workforce to move into the same positions in the new transit district and preserve the collective bargaining system that Local 192 had with the Key System. Officials believed that by preserving collective bargaining rights, the union would be more inclined to negotiate in good faith with the transit district, and, by April 1955, legislators completed amending SB 987 to include collective bargaining.[24] Perhaps a blueprint for what would happen elsewhere in the country in the 1960s and beyond with transit in other states, the legislation specifically required the recognition of the union by a public California agency, a groundbreaking move for the state that would not have taken place without the intervention of Stambaugh.[25]

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ACT bus jumping the “final hurdle” of buying the Key System property and equipment in order to begin operations, June 1960, Transit Times, ACT Newsletter.

Local 192 had been politically active in the East Bay, lobbying state legislators to vote against a right-to-work law and against a law to prevent strikes against public utilities, but the passage of the legislation to allow for the creation of the ACTD and then two votes that followed in 1959, one to create the ACTD in 1956 and the other to fund a public transit system, would require much more work on the part of Stambaugh.[26] This work included many trips to Sacramento, the California State Capital, and constant communication with both Local 192 and ATU. In fact, this process required so much of Stambaugh’s time that he strongly suggested that ATU develop a nationwide strategy that could be employed in other states considering similar legislation.[27]

In the end, the Transit District Law of 1955 included labor provisions for collective bargaining instead of shifting all of the unionized workers into civil service positions. This was not ideal for more conservative Republicans involved in the process, but others on the project convinced them that allowing collective bargaining would aid in preventing future strikes. Few examples of unionized transit public employees existed in mid-size metropolitan areas like the East Bay, so those working on the Transit District Law had to seek out examples, such as in San Francisco.[28] There was a general consensus that in order to move the legislation through the state legislature, pass the bond, and successfully negotiate with the union, that the collective bargaining provision would be an important feature for the public system to maintain good labor-management relations and avoid strikes.[29] Stambaugh aided in the inclusion of favorable labor policies as he sought to put Local 192 in a better position with the Key System.

ACTD Creation

Although the California Legislature approved the creation of the Alameda-Contra Costa Transit District, another five years would pass before Alameda-Contra Costa Transit (ACT) formally began operating a public transit system. Following the sale of the Key System to ACT, ACT finally began operations on October 1, 1960.[30] To pay for it, the board members would have to submit a bond proposal to the voters and pass it with two-thirds of the vote.[31]

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Happy commuters riding ACT rather than sitting in congested traffic, c 1959, East Bay Transit on the Move, ACTD brochure.

As with the legislation at the state level, Stambaugh played a key role in the East Bay during the campaigns for both the 1956 ACTD vote and the bond vote, which required a second vote in 1959 after the first one failed in 1958. The fact that, in general, the East Bay residents in 1956 supported Proposition A to create the ACTD made Stambaugh’s job somewhat easier. The Alameda County Central Labor Council aided in the public relations campaign by arguing that the ACTD would lessen the likelihood of strikes by having a public body that could operate the transit system. An editorial in the Oakland Tribune largely echoed that sentiment – that the real desired outcome would be the creation of a public agency to run the mass transit system, and, without such an action, then the East Bay would be unable to handle the continued growth.[32]

To the surprise of Stambaugh, the Central Labor Council of Contra Costa County (CLCCC) had been working to undermine the payment of property taxes by Contra Costa county residents to fund the new transit system. He wrote to Hugh Caudel, the Secretary-Treasurer, to complain that he thought the CLCCC misled Local 192 about their involvement in working against the taxing of a portion of Contra Costa County to pay for ACT. Stambaugh made two arguments in favor of the ACTD: that it made more sense for taxpayers to fund ACTD rather than the Key System because the ACTD would offer lower fares, and the taxes paid would not be too outrageous especially since the improved service by ACT would boost ridership and bring in much more revenue than the Key System.[33]

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The initial operating area of ACT (outlined in red) approved by voters in 1959, May 1959, Transit Times, ACT Newsletter.

The ACTD directors brought a bond issue to the voters in November 1958. While 60 percent of the voters in Alameda County voted for the bond, nearly the same amount voted against it in Contra Costa County. Since the state transit district legislation required that two-thirds of the voters approve of the bond issue, the ACTD directors approved a plan to change the law during the 1959 state legislative session. Specifically, they wanted to make the path to withdrawing from the district easier and to decrease the requirement for approving the bond issue from two-thirds to a simple majority.[34]

In an effort to counter those opposed to the bond, Stambaugh sent out letters to labor groups in Alameda County to encourage them to vote for the Proposition A transit bond issue on October 20, 1959, that stated that no additional property taxes would be necessary because ACT would be self-supporting. He also noted the endorsement of the bond issue by the Alameda County Central Labor Council.[35] Stambaugh continued his activities in Sacramento. He kept other union officials abreast of legislation, particularly bills AB 570 and AB 602 in that would allow unions to collectively bargain with public utilities and provide public employees with the same rights to bargain collectively as private employees.[36]

The chances of the second bond issue passing gained steam when the legislature passed the Transit District Act in 1959 with amendments.[37] In May 1959, after some additional legislative changes went into effect, the bond issue passed in October 1959 without a large part of Contra Costa County.[38] This provided the ACTD with the ability to raise funds to purchase the Key System and ACT began operations in 1960.

The ATU praised the work of Stambaugh because of his work to put in labor provisions into a bill that initially just seized the Key System with no collective bargaining language.  An article in The Motorman, Conductor and Motor Coach Operator pointed out the increase in wages, better fringe benefits, and the improvement in working conditions which 192 members voted 771 to 42 to accept in 1960.  The new contract with the new ACT had benefits for office workers and dispatchers in addition to drivers and mechanics.[39]

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Graphic illustrating the accountability of the ACTD Board of Directors to the public, c. 1959, East Bay Transit on the Move, ACTD brochure.

The Key System emerged from War World II in terrible shape. After management deferred repairs for years prior to the war, heavy use of the system during the war made the situation much worse. The poor state of the infrastructure and the automobile’s increased popularity led to a consensus on replacing local streetcar tracks with buses. The Key System, in the eyes of the pubic, saw its profit as the most important concern rather than serving the public. This change in view towards the Key System contributed to the acceleration of serious planning efforts to create a more accountable public transit option. Local 192, with Stambaugh leading the way, saw an opportunity to influence the development of this new public system which benefitted workers by providing a financially secure employer that could meet their demands for higher wages and maintain labor peace.

photoJordanPattyJordan Patty is currently pursuing a PhD in history at George Mason University and writing a dissertation on mass transit and labor unions. He earned an MLS from the University of Maryland and an MA in history from the University of Arkansas. His writing on archives and history topics has appeared in both academic and non-academic journals and books. He works in the archives and records management profession.


Featured image: Photographs promoting the benefits of new buses to be purchased by ACT once they purchase the Key System, Tranist Times Newsletter, June 1960

[1] Clifford E. Clark, Jr., “Ranch-House Suburbia: Ideals and Realities” in Recasting America: Culture and Politics in the Age of the Cold War, ed. Lary May (Chicago: The University of Chicago Press, 1989), 172.

[2] David W. Jones, Jr., Urban Transit Policy: An Economic and Political History (Englewood Cliffs, NJ: Prentice-Hall, 1985), 65, 75; A well-known conspiracy theory advocated by Bradford Snell blames General Motors and others for the decline of the streetcar systems in the United States and the rise of the automobile. For an exchange on this issue, see Van Wilkins, “The Conspiracy Revisited,” The New Electric Railway Journal, 7 (Summer 1995): 19-22, and Bradford Snell, “The Conspiracy Explained,” The New Electric Railway Journal, 8 (Autumn 1995): 26-9.

[3] For background on postwar growth, see Mark I. Gefland, A Nation of Cities: The Federal Government and Urban America, 1933-1965 (New York: Oxford University Press, 1975), 276-277; Clark, “Ranch-House Suburbia,” 171-172; Kenneth T. Jackson, Crabgrass Frontier: The Suburbanization of the United States (New York: Oxford University Press, 1985), 203-204, 206-207, 241; Charles A. Lave, ed., Urban Transit: The Private Challenge to Public Transportation (Cambridge, MA: Ballinger Publishing Co., 1985), 3, 44-7.

[4] Business Week, (July 23, 1955), 120; Historical Statistics of the United States, Colonial Times to 1970, pt. II (Washington, D.C.: Government Printing Office, 1975), 666.

[5] In 1954 strikes disrupted service in Harrisburg and Washington, PA, Indianapolis and Terre Haute, IN. Strikes had halted transit operations in nine cities by July 1955 including Los Angeles, Buffalo, Scranton, PA, and Washington, D.C. Business Week, (July 23, 1955), 120, (July 2, 1955), 90.

[6] F. V. Stambaugh, President to Mr. G. L. Stanley, January 18, 1951, Box 3 Folder 23, Amalgamated Transit Union, Local 192 Records, larc.ms.0327, Labor Archives and Research Center, San Francisco State University (hereafter ATU 192 Records); E. H. Henson, President to Mr. F. W. Teasdel, President, October 11, 1950, Box 23 Folder 23, ATU 192 Records.

[7] The letter does not specifically mention the Korean War, but this attempt to re-classify the area for defense housing likely had to do with the war. Robert S. Ash to All Affiliated Unions, October 9, 1951, Box 3 Folder 25, ATU 192 Records.

[8] Seymour Mark Adler, “The Political Economy of Transit in the San Francisco Bay Area, 1945-1963” (Ph. D., Berkeley, Calif., University of California, 1980), 146.

[9] “Transit Strike Ends at Bay Cities,” Los Angeles Times, June 28, 1947.

[10] “Arbiter Banned by Key; Strike Starts,” East Bay Labor Journal, June 13, 1947; “Key System Union Votes to Strike,” East Bay Labor Journal, June 6, 1947.

[11] “Key System Union Back with Higher Pay after 16 Days,” East Bay Labor Journal, July 4, 1947; Bay Area Wage Schedule, September 1, 1953, Box 16 Folder 1, ATU 192 Records.

[12] Sam B. Berrong to F. V. Stambaugh, February 12, 1952, Box 3 Folder 1, ATU 192 Records; “1500 Carmen Get Split Pay Raise,” East Bay Labor Journal, February 22, 1952.

[13] “Key System Reports Net Profit,” Oakland Tribune, March 29, 1952.

[14] W. M. Sherlock to Mr. F. V. Stambaugh, August 26, 1953, Box 16 Folder 1, ATU 192 Records.

[15] F. V. Stambaugh, President to Alameda Central Labor Council, July 3, 1953, Box 16 Folder 1, ATU 192 Records; Strike Vote of Carmen’s Union, Division 192, June 26, 1953, Box 16 Folder 1, ATU 192 Records; F. V. Stambaugh to Key System Transit Lines, July 20, 1953, Box 3 Folder 23, ATU 192 Records.

[16] F. V. Stambaugh, President to [Bay Area Mayors and City Managers], July 8, 1953, Box 3 Folder 1, ATU 192 Records.

[17] G. L. Stanley to Dear Friends, August 25, 1953, Box 16 Folder 1, ATU 192 Records.

[18] J. L. Childers and Norman Ogilvie to Vern Stambaugh, August 27, 1953, Box 3 Folder 1, ATU 192 Records.

[19] Robert E. Nisbet and Laura McCreery, From Private to Publicly Owned Transit in the Bay Area: Reflections of the Attorney, Lobbyist, and General Manager of the Alameda-Contra Costa Transit District, 1950s to 1980s (Regional Oral History Office, The Bancroft Library, University of California, Berkeley, 2003), 28–30.

[20] J. F. Hassler to F. V. Stambaugh, October 15, 1953, Box 3 Folder 1, ATU 192 Records.

[21] Nisbet and McCreery, From Private to Publicly Owned Transit in the Bay Area, 31–32.

[22] Norman Kennedy, The Alameda-Contra Costa Transit District: A Review of Ten Years of Public Ownership and Operation (University of California, Berkeley: Institute of Transportation and Traffic Engineering, 1971), 2.

[23] Kennedy, 3.

[24] Adler, “The Political Economy of Transit in the San Francisco Bay Area, 1945-1963,” 152.

[25] Adler, 153; Nisbet and McCreery, From Private to Publicly Owned Transit in the Bay Area, 34–35.

[26] F. V. Stambaugh, President to Industrial Relations Committee, May 8, 1953, Box 3 Folder 26, ATU 192 Records; F. V. Stambaugh, President to Transportation Committee, February 26, 1954, Box 3 Folder 26, ATU 192 Records.

[27] F. V. Stambaugh, President, to Mr. J. M. Elliott, Int. President, August 9, 1961, Box 4 Folder 4, ATU 192 Records.

[28] Nisbet and McCreery, From Private to Publicly Owned Transit in the Bay Area, 33.

[29] Nisbet and McCreery, 38.

[30] Kennedy, The Alameda-Contra Costa Transit District, 1.

[31] Adler, “The Political Economy of Transit in the San Francisco Bay Area, 1945-1963,” 151–52.

[32] “Transit Prop. ‘A’ Backed by Labor,” Clipping, [1956], Box 18 Folder 14, ATU 192 Records; “Proposition ‘A’ Offers First Step In Adequete Public Transportation,” Oakland Tribune Clipping, [1956], Box 18 Folder 14, ATU 192 Records; “Two-County Transit Plan Victorious,” Oakland Tribune Clipping, November 7, 1956, Box 18 Folder 14, ATU 192 Records.

[33] F. V. Stambaugh, President to Mr. Hugh Caudel, Sec’y-Trea., February 21, 1958, Box 4 Folder 5, ATU 192 Records; Hugh Caudel, Sec’y-Treas. to All Local Unions, February 7, 1958, Box 4 Folder 5, ATU 192 Records.

[34] Adler, “The Political Economy of Transit in the San Francisco Bay Area, 1945-1963,” 271.

[35] F. V. Stambaugh, President to All Members of Organized Labor in Alameda County, October 6, 1959, Box 3 Folder 29, ATU 192 Records.

[36] F. V. Stambaugh to multiple recipients, April 10, 1959, Box 3 Folder 1, ATU 192 Records.

[37] Additional amendments passed in 1961 as AB 1872. F. V. Stambaugh to Mr. A. Antonio, October 17, 1961, Box 3 Folder 1, ATU 192 Records.

[38] Adler, “The Political Economy of Transit in the San Francisco Bay Area, 1945-1963,” 271.

[39] “Oakland Agreement Brings Solid Gains,” The Motorman, Conductor and Motor Coach Operator, December 1960.

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