The CTA is
A New Era Begins (1947)
By the mid-1940s, it became apparent that privately owned public transit in Chicago could not survive due to its unprofitability, plus a number of other difficulties. By this time, the transit situation in Chicago was quite complicated and problematic indeed. To wit...
The street railways system was being managed by the Chicago Surface Lines, but was still actually comprised of five separate companies: the Chicago Railways Company, the Chicago City Railway Company (the only of the original three Chicago operators left), the Calumet and South Chicago Railway Company, the Chicago and Western Railway Company, and the Southern Street Railway Company. All were being managed by trustees or receivers appointed by the District Court of the United States due to bankruptcy.
The rapid transit was consolidated under the Chicago Rapid Transit Company (and the Union Consolidated Elevated Railway Company, which still owned less than a few miles of track and operated no rolling stock). Both were also in receivership.
The last of the city ordinances allowing the CSL to operate had expired July 15, 1938 and the last of the similar ordinances for the CRT were set to expire in 1945. The physical plant of both systems was reaching critical stages of decay. The CSL was operating cars as old as 1905-vintage and the majority of their cars were the 883 "Big Pullmans", "Small Pullmans" and "Stove-Bolts" from 1908-1910 and 471 Brill cars from 1905-1908. The newest "L" cars were already over 20 years old: the 4000-series steel cars were produced from 1913 to 1924. But a number of old wooden cars dating from the beginning of "L" service in the 19th century were still in regular revenue operation. And what simple age hadn't claimed, wartime overloading had. Unable to pump new capital into the system during the Great Depression, wartime rationing had still prevented reinvestment while at the same time adding hundreds of thousands of new passengers to the system each day.
Though the idea of municipal ownership was not novel (Charles T. Yerkes and Samuel Insull had both proposed the idea years earlier), the time was right. Besides the above factors, the dismal situation facing Chicago transit was also caused by:
By Act of the General Assembly of the State of Illinois, the Chicago Transit Authority (CTA) was created April 12, 1945 as a political subdivision to acquire, own, and operate the transportation system in the Chicago metropolitan area of Cook County. The act granted the CTA no taxing powers, but did exempt it from sales taxes and awarded the power of eminent domain. It also required that at least 50% of its operating budget be made from the farebox, a stipulation that would come back to haunt the system in later years. The Act (and the Ordinance of the City Council of Chicago that granted the CTA the exclusive right of own and operate a unified local transit system in Chicago) was adopted by a six-to-one majority of the electors of Chicago in a referendum on June 4, 1945.
The governing body of the CTA is the Chicago Transit Board consisting of seven members, of which four are appointed by the mayor of Chicago and three by the governor of Illinois. Each's appointment must be approved by the other. Each board member serves a seven year term, staggered to minimize abrupt changes in policy. The board chooses a General Manager (changed to "Executive Director" in 1976 and now called "President" since March 1992) to oversee day-to-day operations. The first board took their oath of office September 1, 1945, with the first Executive Director, Walter J. McCarter, taking office in 1947.
The CTA's next task was to acquire the street railway and rapid transit systems. The state and city provided no initial grant to do so, so the CTA was instead authorized to issue revenue bonds secured by their own earnings. $105 million worth of bonds were issued in the initial offering and, after buyers were found, the CTA was able to purchase the Chicago Rapid Transit and Chicago Surface Lines systems lock, stock, and barrel.
On October 1, 1947, the Chicago Transit Authority took over all "L" and streetcar operations in the City of Chicago. But they had a daunting task ahead of them. Both systems needed extensive restructuring and modernization.