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INNOVATION PUT BUFFALO ON THE MAP

Buffalo marched into the 20th century shod in workmen's boots and walked out wearing loafers.

Mostly, the city ascended in business and industrial prominence during the first half of the century, and descended in the second half. Its steel plants and aircraft factories disappeared, replaced by banks and call centers.

Along the way, some famous names , painfully, were lost: Sattler's, AM&A's, Courier-Express, Larkin, Pratt & Lambert, Birge and scores of others. But new names like Ingram, Reciprocal, Azerty, Adelphia and many others appeared to usher in the 21st century.

Electricity comes of age
All the technological progress of the 20th century can be traced in the flow of electrons across wires and through circuits, transformers and resistors -- and Buffalo felt the impact first.

Buffalo was the first city to light its streets and propel its streetcars with electricity, thanks to visionary entrepreneurs like Jacob F. Schoellkopf, whose Niagara Falls power venture eventually merged with others to become Niagara Mohawk Power Corp.

As the years passed and the electrons flowed, Buffalo grew into an industrial giant, taking a premier position in steelmaking, automobile and aircraft manufacturing, flour milling and railroading.

Of course, the rest of the world soon harnessed those electrons, too, and Buffalo eventually lost its early advantage. Electricity powered air conditioners, which made it possible to move factories and offices to the sticky climate of the South, and computer and telecommunications networks, which make it possible to conduct business from almost anywhere in the world.

Thomas-Flyer wins race
In 1908, Buffalo's E.R. Thomas Motor Car Co. accomplished a feat that The Buffalo Evening News called "a Homeric adventure outdoing all the wanderings of Ulysses and Aeneas and the Argonauts combined."

One of its Thomas-Flyer motorcars won a 13,300-mile race from New York, across the continent to Alaska, over the Bering Strait to Siberia and across Europe to Paris in 168 days. Basking in fame, the company's production hit a record high of 1,036 cars in 1909, but in 1912 it was out of business.

More than 30 different makes of automobiles came and went in Buffalo during the first half of the 20th century. The most famous, Pierce-Arrow Motor Car Co., was started by carriage maker George N. Pierce in 1901. At its height, the company employed 10,000 here making hand-crafted cars with optional features such as writing desks and toilets. The Great Depression and the mass-production methods of Ford and General Motors put it out of business in 1937.

In 1916, John R. Oishei was driving on Delaware Avenue in a rainstorm and knocked over a bicyclist. The next year, he founded Tri-Continental Corp. -- Trico -- the first windshield-wiper manufacturer. It employed 2,700 in 1986, when it moved most operations to the Texas-Mexico border.

The automobile sector remains the area's largest private employer today.

Rise and fall of steel
Buffalo became a steel town because of its geography. The Great Lakes made it easy to ship iron ore in; extensive rail links took coal in and steel out.

The precursors of Bethlehem Steel Corp. and Republic Steel Corp. moved here in 1905 and 1906.

In the 1960s, the Bethlehem plant -- an industrial city unto itself -- employed 20,000. But not for long. It went through a series of cutbacks as newer plants elsewhere got a productivity edge on it and as foreign steel took a foothold in the American market. Recession and high inflation in the 1970s took their toll. The end came with a bang on Dec. 27, 1982, with the announcement the plant would close.

Crash of aircraft industry
Buffalo was the aeronautical capital of the nation between the world wars.

Glenn Hammond Curtiss opened Curtiss Aeroplane Co. in 1915. Leslie Irvin invented the parachute and opened Irving Air Chute Co. in 1919. Lawrence Dale "Larry" Bell founded Bell Aircraft Co. here in 1935.

Bell is legendary for its aeronautical feats: America's first jet, the first vertical takeoff and landing aircraft, the first helicopter, the first jet to break the sound barrier, the rocket belt.

During World War II, Bell employed 30,000 here making P-39 Airacobras, and Curtiss-Wright employed 20,000 making P-40 pursuit planes. But after the war, government contracts dwindled, and the companies failed to capitalize on the growing commercial aircraft market. Curtiss-Wright failed in 1946. Textron bought Bell in 1960, four years after Larry Bell's death, and kept downsizing until closing area operations entirely in 1994.

WGR signs on
In 1922, Buffalo's first permanent radio station, WGR, signed on, opening the era of wireless communications that continues to develop today. Radio brought presidential fireside chats and live accounts of the Blitz to Buffalo's living rooms and brought downtown nightclub entertainment into the lives of shut-ins.

In 1948, the city's first television station, WBEN-TV, took to the airways. Over the years, some of broadcasting's major personalities did stints in Buffalo, among them Jack Paar, Foster Brooks and Buffalo Bob Smith.

The Crash of 1929
Buffalo boomed until the Crash. Central Terminal opened in 1929 far out on Broadway because city planners thought downtown would expand eastward to surround it. The Buffalo Stock Exchange opened in May of that inauspicious year and faded out in 1936.

The city never really recouped its boundless energy after the afflictions of the Great Depression. The economic boom of World War II revived a lot of companies, but for many it was merely temporary life support.

1936: The first supermarket
The Benatovich brothers -- Hyman, Louis and Sam -- opened the Park Edge Market at 942 McKinley Parkway in South Buffalo in 1936. It was small by today's standards -- about the size of a B-Kwik -- but it heralded an era of increasing consumer choice in foods that culminates today in huge Tops and Wegmans stores that would have boggled the minds of the Benatoviches.

1939: The first shopping plaza
There was something odd about University Plaza, which opened at Main Street and Kenmore Avenue in 1936: The stores were set back, and a parking lot was in front.

Some 60 years later, every suburban thoroughfare would have that look. Nobody is more responsible than Nathan Benderson, founder of Benderson Development Co. and one of the nation's largest commercial landlords. See a strip plaza on Transit Road? A "big box" megastore on Niagara Falls Boulevard? A chain restaurant on Orchard Park Road? Chances are they're paying rent to Benderson.

1942: Larkin closes
John D. Larkin founded his soap company in 1875 and soon conceived the idea of cutting out distributors and retailers and selling directly to consumers. Each box of soap contained a coupon that could be redeemed for premiums. By 1900, he offered more than 900 premiums and soon had a mail-order business that rivaled Sears and Montgomery Ward. Buffalo Pottery was started to manufacture some of the items.

Frank Lloyd Wright designed the Larkin Administration Building. Young women on roller skates zoomed along an underground tunnel from it to a warehouse across the street to fill orders.

It all came to ashes and dust. Larkin died in 1926. His company liquidated in 1942. Wright's building came down in 1950. And the main warehouse was gutted in a general-alarm fire in 1954.

1958: The Seaway opens
The opening of the Erie Canal in 1825 made the Port of Buffalo America's great east-west transfer point. The opening of the St. Lawrence Seaway in 1958 made the port a backwater.

The Seaway opened a direct water route from the Midwest to the world. Shipments didn't need to be offloaded here for transshipment by barge or rail. Buffalo's grain and flour milling industry had built up during the 1920s and 1930s to make the city the milling capital of the world. Almost immediately, the Seaway cut grain tonnage in half.

1990: The end of savings banks
The savings banking was to banking as kite flying is to aeronautics: A child could do it.

Founded in the 1840s and 1850s almost as philanthropic organizations, Buffalo Savings Bank, Erie County Savings Bank and Western Savings Bank aimed to help teach the virtue of thrift to common folk.

They took deposits at 3 to 5 percent and made mortgages and education loans a couple of percentage points higher. The difference -- the profits -- went into accumulated reserves for the safety of depositors. There were no stockholders.

But in the high-inflation era of the 1970s and 1980s, the banks had to pay up to 10 percent for deposits. Meanwhile, they still had portfolios full of old mortgages earning 6 or 7 percent. The reserves began to dwindle.

To earn more, they brought in new aggressive managers who pushed into credit cards, commercial loans -- even some aspects of investment banking. They took on arrogant new names: Empire of America and Goldome. They took over other ailing thrifts in economic hot spots such as Florida and Texas. They sold stock to raise capital. They were out of their league.

Then federal regulators blindsided them. They had let the banks push bad loans off their books into an accounting limbo. But in 1990 and 1991, they wanted those loans fully recognized. That made the banks insolvent, and the feds closed them and sold their assets off to commercial bank competitors.

CENTURY'S TOP 10 BUSINESS PERSONALITIES:

Robert E. Rich, inventor of soy-based dairy substitutes, founder of Rich Products Corp.

"Some day you may have to go to the zoo to see a cow."

William C. Moog, inventor of the servo-controller, founder of Moog Inc.

"Work, in an atmosphere of mutual trust and confidence, can be a more rewarding and satisfying experience for everyone."

John R. Oishei, inventor of the windshield wiper, founder of Trico Products Corp.

"Buffalo is where we operate and Buffalo is where we stay," 18 years before his son broke ground for new Trico plants in Texas and Mexico.

John D. Larkin, pioneer of direct marketing, founder of Larkin Co.

"Save all cost that adds no value."

Lou Jacobs, concessionaire, founder of what is now Delaware North Cos.

"Wherever a crowd gathers, a lot of people will get hungry."

Seymour H. Knox Jr., built Marine Midland Bank, conceived idea of the bank holding company.

"Keep going."

Ellsworth Statler, hotelier who built Buffalo's grandest hotel, endowed Statler Foundation.

"If it's boiled potatoes, say so," eschewing French on hotel restaurant menus.

Lawrence Dale "Larry" Bell, aeronautical pioneer, founded Bell Aircraft Co.

"I'm one of the world's worst pilots."

Robert Wilmers, banker and civic leader who built M&T Bank into a statewide powerhouse.

"A corporation that's as dependent on the community as we are will do better if the community is doing well."

Nathan Benderson, one of the nation's largest commercial landlords, transformer of suburban streetscapes, founder of Benderson Development Co.

"The bigger we get, the more efficiency and the better service we can give our tenants."

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