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A Brief History of
The First 100 Years of the Automobile Industry
in the United States

Chapter 3 - How Detroit became the Motor City

by Richard A. Wright

In 1901, an oil well on a farm in Texas erupted in an incredible geyser, a steam valve blew up in New York and an auto factory burned down in Detroit.

These three seemingly unrelated events did much to make Detroit the automotive capital and to shape the still embryonic industry.

When the famous oil gusher called "Spindletop" was brought in on a farm near Beaumont, Texas, the country's petroleum production was doubled overnight. A seemingly inexhaustible supply of cheap fuel for automobiles had been discovered. The availability of low-priced fuel gave added impetus to the internal combustion engine in its competition with steam and electric power and to this day has had a tremendous impact on the U.S. car market, American attitudes toward cars and driving and the shape of the cars themselves. (You may not think it's cheap, but in constant dollars gasoline costs less today than it did 25 years ago when it was 30 cents a gallon.)

In New York, two Detroit investors, Henry B. Joy and his brother-in-law, Truman Newberry, were at the second annual New York Auto Show in 1901. Joy had decided to enter the auto business and was looking for a car company to buy.

The only car maker in Detroit was Oldsmobile and Ransom E. Olds was not interested in selling his company. Joy had been told that the Locomobile, a luxury steam car, was a likely prospect and he and Newberry were examining one when a pressure gauge exploded near Newberry's head, showering both Detroiters with hot water and dousing their interest in steamers.

They began looking for a gasoline car and were impressed with the Packard, built in Warren, Ohio, by James W. Packard. Joy bought the rights to the Packard and moved the company to Detroit. He commissioned a young architect named Albert Kahn to build a plant, which still stands on East Grand Boulevard. Kahn would design many more auto plants around the world, but from this first one would come a half-century of high-quality luxury cars.

But the Packard plant was not the first to be specially built for production of cars. The first was built in 1900 by Ransom E. Olds, a young automotive wizard from Lansing who had actually built cars and ran them several years before the Duryeas did and perhaps as early as Daimler and Benz in Germany. But they were steam-powered and Olds was coming to the view that the relatively new internal-combustion gasoline engine was the way to go.

It appears that Michigan became the center of the auto industry not because of any inexorable historical forces, or because of its geography, but because of the unique people who were there and who came to the state in those formative years.

The first Olds plant was built on East Jefferson, near the Belle Isle Bridge. While the plant was being built, Olds' engineering people designed and built 11 pilot models, including several sizes of cars and a couple of electrics.

Among them was a small, light horseless carriage with a singlecylinder, water-cooled four-cycle engine at the rear. Its most distinctive feature was its curved dashboard. The little Curved Dash Olds was a favorite in the plant, but it was not widely known to the public and was not much of a factor in the company's sales. It was considered a "mascot" or a "toy."

But in March, 1901, fire destroyed most of the Olds Motor Works and the only car that was saved was the Curved Dash Olds. Olds decided to rebuilt immediately and to put all the firm's production resources into the little Curved Dash Olds, the "Merry Oldsmobile" of musical fame.

It was a momentous decision, because it committed Olds to production of a small, relatively inexpensive car, the first "high-volume" model.

Proving the adage that it's an ill wind that blows no good, the fire had a positive effect -- news of the fire made thousands of people aware of the car. Inquiries and orders began arriving, some accompanied by cash payments.

By late summer, Olds had so many orders that he sought an outside source for engines. So he went to see another man who was a potent factor in making Detroit the Motor City -- Henry M. Leland, head of Leland and Faulconer Co., foremost machine shop in the Midwest. Leland agreed to build 2,000 engines for Olds. It was the first large component order by an auto maker to an outside supplier.

Olds then ordered 2,000 transmissions from a smaller machine shop owned by John and Horace Dodge. Olds announced he would produce and sell 4,000 automobiles the following year, which was equal to the total production in the United States the preceding year.

Unlike the approach used in Europe and New England of hand-building one car at a time, Olds planned to mass-produce cars, to put the world on affordable wheels. In a few years, Henry Ford would do just that, working on the foundation laid by Ransom E. Olds.

One of the ways auto makers drew attention to their vehicles in those days was to take trips in them. No one had driven from Detroit to New York, so Olds commissioned a young associate, Roy D. Chapin, to drive a Curved Dash Olds to New York for an appearance at the New York Auto Show.

(Another young associate of Olds in 1901 was John Maxwell, who later built his own car -- made famous by comedian Jack Benny's jokes about his old Maxwell -- and whose firm was the forerunner of Chrysler Corp.)

Chapin left Detroit on Tuesday, Oct. 29, 1901. The New York show opened the following Saturday, Nov. 2. He went through Ontario to Niagara Falls, covering 278 miles on Wednesday, an amazing performance.

He crossed into the United States on Thursday, then on Friday he encountered heavy rains between Syracuse and Albany. Wagon drivers warned him that the muddy roads were impassable.

Chapin pondered his situation. He reasoned that barges, pulled by mules, moved along the Erie Canal in any kind of weather. The towpath used by the mules was level and finished well.

On inquiring about using the towpath, he was told it was federal property and that he would be jailed if he used it. Fifteen minutes later, he pulled the little Olds onto the all-weather road that stretched along the canal to the horizon.

By evening, he was within 200 miles of his goal, the Waldorf-Astoria in New York City. Saturday he stopped to replace a bent axle, but still covered 120 miles. He planned to reach the hotel on Sunday.

But after 50 uneventful miles, his transmission developed trouble and had to be rebuilt, which took all day Monday. He started out early Tuesday and on Fifth Avenue, only blocks from the Waldorf-Astoria, he swerved to avoid hitting a man who stepped in front of the Olds. The car hit the curb and deformed a wheel. Chapin bent it back as best he could and drove on.

Roy Chapin, who would later head the Hudson Motor Car Co. and whose son, Roy Jr., would head American Motors Corp., had completed the longest automobile trip that had been made in this country up until that time. Ransom Olds was waiting in the lobby of the hotel to greet him, but Chapin -- covered with grease and dust -- was ordered by the doorman to use the service entrance at the rear of the hotel.

Of all the automotive giants of that era, undoubtedly the most underestimated has been Henry Leland. It is virtually impossible to overstate his contributions to the auto industry. Yet his hame never appeared on a car's nameplate and the only remembrances of him in the Motor City he did so much to create are names on a street and a former hotel.

This man built engines for Olds, the first mass-produced car in the world and the first to be produced in Detroit. He improved the Olds engine by redesigning valve ports and raising its compression and offered it to Olds, who turned him down.

So in 1902, Leland took the engine to a meeting of directors of the Henry Ford Co., who had gathered to close the business. The company had been formed by four investors to exploit the work of Ford, but there had been a misunderstanding and Ford had quit the company, so it had nothing to build or sell.

(Disagreements between the strong-willed inventors who designed and built cars and the hard-headed businessmen who backed them financially were not unusual. Olds also disagreed with his financial backers and left the company, which kept the name Oldsmobile. He went back to Lansing whence he came and built a car bearing his initials, the Reo. The original Oldsmobile company, which became a division of General Motors, also moved to Lansing.) Leland's engine was so compact that he could carry it into the room. The directors were impressed and after Leland's presentation, decided to build a car using this advanced motor.

But the car was not called the Leland. At Leland's suggestion, it was named after the French explorer who founded Detroit, Antoine de la Mothe Cadillac. With its small, efficient single-cylinder engine, the "one-lunger" Cadillac was an immediate success.

As the master machinist, Leland achieved a degree of interchangeability of parts that had been sought but not quite reached by Olds. After rigorous testing by the Royal Automobile Club in Great Britain, the Cadillac was the first American car to win the club's Dewar Trophy for distinguished automotive achievement.

Leland would later sell his Cadillac company to General Motors and serve as an executive running that division, then leave the corporation after disagreements over just how high the quality of the car should be and a heated dispute over the corporation's role in World War 1.

He started another company to build aircraft engines for the war effort, later shifted to automobile production. He named his new car after a longtime hero of his and the Lincoln became a competitor to Cadillac and Packard in the luxury-car market. (Leland later sold Lincoln to Ford Motor Co.)

Leland's influence was also personal. On one occasion, Leland lectured the head of a leading supplier of roller bearings on the importance of precision machining. Leland had measured some bearings with a micrometer and said to him:

"Your Mr. Steenstrup told me these bearings would be accurate to one 1,000th of an inch. But look here (pointing out variations). Even though you make thousands, the first and last should be precisely alike."

On the receiving end of the lecture was Alfred P. Sloan Jr., head of Hyatt Roller Bearing Co., later to become the legendary head of General Motors and architect of modern American management theory.

Of his encounter with Leland, Sloan said many years later: "A genuine conception of what mass production should mean really grew in me with that conversation."

Copyright 1996, Richard A. Wright
Published by Wayne State University's Department of Communications