In 1883, Frank Osgood and Judge Thomas Burke, along with pioneer entrepreneurs David Denny and George Kinnear, formed a plan to build Seattle’s first streetcar line and, arguably, Seattle’s first attempt at public transportation. The first streetcars of the Seattle Street Railway ran between Occidental Avenue and Pike Street in downtown Seattle starting in September 1884. This new form of transportation was an instant success and other competing streetcar companies formed. The first electric railway line (also the first on the West Coast) was added in 1889. By 1892, Seattle had 48 miles of streetcar tracks and 22 miles of cable railways. The Panic of 1893 put many of the street railways into financial difficulty, however. Consolidation of the various lines began in 1899, and over the next few years at least nine of the independent lines were consolidated under the Seattle Electric Railway Co., owned by Stone and Webster.

The period between 1902 and 1912 was considered a golden age for the streetcar system. Routes covered most of the worthwhile destinations in the city, and rides cost five cents. By 1905, Stone and Webster owned over 20 previously independent streetcar and cable lines totaling over 103 miles of track. With the consolidation of the independent lines, there was also expansion of lines into suburban neighborhoods, including Fremont, Ballard, Wallingford, and areas of West Seattle. Unfortunately, after 1907 the company did not invest resources towards upgrading and replacing worn tracks and equipment. This led to slow, erratic, and unreliable service in the coming years. At the end of 1912, Stone and Webster transferred the holdings of the Seattle Electric Co. to the Puget Sound Traction, Light and Power Company (later known as Puget Power and then Puget Sound Energy). By 1915, the system grew to include 203 miles of track, covering 111.2 miles of street.

Beginning in September 1912, the city of Seattle took the plunge into municipal ownership and management of a bond-funded streetcar system. Four miles of track for Division A of the Seattle Municipal Railway (SMR) was completed on May 23, 1914. The line ran from the intersection of 3rd Avenue and Pine Street downtown north to the edge of Ballard at 14th Avenue NW. In October 1913, the owners of the Highland Park and Lake Burien Railway donated their 14 miles of electric railway track. The SMR took over operation of the system in May 1914 and renamed the line Division C. In 1918, the Loyal Railway Co., which serviced the Ballard area and Loyal Heights, was incorporated into the Division A line.

By 1918, Seattle had serious transportation problems. World War I was underway and the city had to contend with an influx of war workers, many of whom were shipyard employees. Negotiations began between the city and Stone & Webster. Seattle Mayor Ole Hanson offered $15 million to purchase the streetcar system – this sum was determined later to be three times the actual value of the system. The agreement included the purchase of approximately 195 miles of electric railway tracks and nine miles of cable tracks, 477 passenger cars, various other freight and work cars, seven car barns and yards, three cable stations, and a large car repair shop in Georgetown. A 20-year utility bond was issued to cover the purchase price. On March 31, 1919, the entire street railway system, renamed the Seattle Municipal Street Railway, was turned over to the city of Seattle.

Monetary problems continued to plague the railway system into the 1920s. By the terms of the sale, the bond obligations to Stone & Webster had the first claim on the earnings of the system. This meant that the annual bond payment of $833,000 was the highest priority regardless of how desperately the money was needed for maintenance, repairs, and equipment. Furthermore, in December 1920, the city had a nine-month operating deficit of over $500,000. The city transferred $83,000 from the General Fund to the Street Railway Fund. Fourteen taxpayers brought a lawsuit against the city, arguing that the General Fund was being used for unauthorized purposes. On April 29, 1922, the State Supreme Court decided that the city could not encroach upon the General Fund for the purposes of maintaining the street railway. This decision doomed the system to eventual bankruptcy. Other cities had commonly permitted using the General Fund for maintenance and improvements.

Competition from the automobile also had a negative impact on ridership. Not only were former railway passengers driving more cars, but these cars also clogged the shared thoroughfares and slowed down railway service. By 1930, 90,000 private automobiles and 400 taxis were competing with the streetcars of the Seattle Municipal Street Railway. In the early 1930s, buses replaced streetcars on some routes. The Aurora Bridge opened on February 22, 1932, with streetcar tracks conspicuously absent from the road. In the early 1930s, several commissions were formed to avert a financial crisis and reorganize railway management. In 1934, it became clear that without the help of an outside financial source the street railway system was doomed to complete bankruptcy.

By 1936, the streetcar system had 224 miles of track, 8.3 miles of cable line, 83.7 miles of bus route, 410 electric cars, 60 buses, 66 utility and freight cars, and five motor utility cars. There were 28 streetcar lines and 16 feeder bus lines. A number of the streetcar lines operated at a loss, as did the cable lines and bus lines. The system had a $4 million deficit and still owed half of the principal on the 1918 bonds.

Later in 1936, the city retained the John C. Beeler Organization, a New York engineering consultant firm that specialized in the operation, management, and financing of city transportation systems. The city rejected Beeler’s first plan to use federal funds to revamp the streetcar lines, eliminate the cable railways, and substitute buses and trackless trolleys on some routes. In August 1936, Beeler submitted his second rehabilitation plan. It proposed eliminating the entire streetcar system and replacing it with 240 trackless trolleys (electric buses) and 135 gasoline buses, along with $11.6 million in bonds to pay off the balance of the debt to Puget Sound Power & Light and finance re-equipping the system. The proposal, Proposition A, was defeated by voters in March 1937. Voters, in the midst of the Great Depression, were not inclined to allow their tax dollars to be used to finance a controversial and untested plan. There was also uncertainty about the superiority of rubber-tired transportation over the proven rail system. No city of Seattle’s size had yet to replace its entire streetcar system with a system of buses and trackless trolleys.

In early 1938, the Seattle Municipal Street Railway went bankrupt. In April, new Seattle mayor Arthur Langlie turned to the Reconstruction Finance Corporation (RFC) for a loan. After months of negotiations, a loan of $10 million was granted. Puget Sound Power & Light accepted a cash payment of $3.25 million. One condition of the RFC loan was the creation of a three-person transportation commission appointed by the mayor and the city council. In late 1939, a resolution was adopted to change the name of the Seattle Municipal Street Railway to the Seattle Transit System. The Beeler Organization was hired to develop a rehabilitation plan, which was substantially similar to its second proposed plan from 1936. The approval of this plan laid the groundwork for the end of the railway and cable lines in Seattle.

In January 1940, the first of the 102 newly ordered gasoline-powered buses began regularly scheduled operation. In April, the first of the 235 Westinghouse trackless trolleys began service. The streetcar lines ceased operation one by one as the buses and trackless trolleys came into service. A number of the streetcar lines in and around downtown were eliminated in the first six months of 1940. Next, the north-south lines from West Seattle and the University District stopped. The cable lines were also eliminated during this time. By the spring of 1941, only the Phinney (Route 21) and 6th Avenue NW (Route 19) streetcar lines remained. The Phinney line stopped running on April 5, 1941. Car No. 706 of Route 19, the last streetcar of the Seattle Municipal Street Railway, made its final run on April 13, 1941.