The Interurban Electric Railway (IER) was formed in November, 1934 as a wholly-owned subsidiary of the Southern Pacific Co. (SP). It was set up solely as a passenger carrier to operate the existing Oakland, Alameda, and Berkeley Lines. The IER later entered into an agreement with the State Toll Bridge Authority in which the IER agreed that SP would continue to operate its ferry fleet, and that at the ownership of certain cars were to be deeded to the to the Toll Bridge Authority. (See Ford, p. 239 and 241 for further details of the agreement). Because of increased competition from automobiles after the completion of the Bay Bridgein 1937 (after which it shared tracks on the Bridge with the Key System), the inauguration of Bridge service in early 1939, and the closing of the World's Fair on Treasure Island, patronage declined, and beginning in 1941, the Key System began taking over various IER lines, including replacing some of the lines with motor coaches. (See Demorro, p. 102-108).