Prestate Information: Automobile Industry


We are accustomed to rapid development of any sort of new technology in the 21st century, and have grown quick to adapt to a wide variety of personal computers, cell phones, televisions, gaming systems and a multitude of related electronic devices.  The pace of life in the United States was much different in 1895.  While the industrial revolution had brought about collossal changes such as electricity, the telephone and mechanized manufacturing of all kinds of new products, nothing burst onto the American scene as quickly as the automobile, nor had such a profound and far-reaching effect on social behavior.  The development of the automobile also took place within a very short time span of just one generation, from commercial introduction in 1896 to complete immersion by 1915.  The automotive industry's formative period was followed and overlapped quite promptly by the first era of motor vehicle registration and license plates, 1898-1918.


The gasoline car was first invented and developed in France and Germany.  Gottlieb Daimler and his assistant, William Maybach, were the first to adapt the stationery internal-combustion engine to a movable power plant in 1885.  Another German engine manufacturer, Carl Benz, built his first gasoline car that same year.  After further experimentation, Benz displayed his third car at the 1887 Paris Exhibition and sold it there.

Steam cars were also first developed in France, mainly through Leon Serpollet's invention of the "flash boiler," an instantaneous steam generator well suited to early automobiles in the 1890s.


STEAM - R.E. Olds manufactured steam vehicles starting in 1887 in Lansing, Michigan, and made the first sale of an American automobile in 1893 to a London firm.

ELECTRIC - An electric car was designed by William Morrison of Des Moines, Iowa, and driven to Chicago in 1892.

GASOLINE - The Duryea brothers completed the first gasoline car in 1893.  Elwood Haynes, with the Apperson brothers, of Kokomo, Indiana, also made a gasoline car in 1894.

The Curved-Dash Olds appeared in 1901 at a moderate retail price of $650, thus becoming the first mass-produced motor vehicle in the world.

Henry Ford joined up with the Detroit Automobile Company in August 1899, and reorganized as the Henry Ford Company in November 1901.  He left that company to form the Ford Motor Company on June 16, 1903.

Buick Motor Company was founded in 1902 by David Buick, a Detroit manufacturer of plumbing supplies who had previously developed a method of affixing porcelain to cast iron, making possible the ubiquitous white porcelain bath tub!  Porcelain was also used for spark plug insulators starting in 1902.

Durant formed General Motors on September 16, 1908, but the company had to be reorganized under bank control in 1910.

The Ford Model T first became available on October 1, 1908, with an engine strength of 20 H.P.  After October 1, 1909, this model was the only car Ford manufactured!  On January 1, 1910, Ford Motor Company's Highland Park plant opened, signifying the end of the formative stage of the American automobile industry.

The geographic center of automobile manufacturing was originally located in New England, then shifted to Detroit later as the emphasis changed from steam and electric vehicles to gasoline cars.  Michigan (and to some extent, Indiana) had been the center of the carriage and wagon trade primarily because of the proximity of excellent hardwood forests, and Detroit had already become known for its production of stationery gasoline engines for farm and marine use.

The electric self-starter debuted on Cadillac's 1912 models and spread widely throughout the industry in 1913.  Hand-crank starters were dangerous, and damage from the crank handle or shaft repeatedly striking the front license plate can be seen on many surviving plates of that era.


The first automobile club formed in the U.S. was the American Motor League, on November 1, 1895, by a group of mostly auto manufacturers such as Haynes and the Duryeas.  The club was too far ahead of its time and quickly disbanded.  After that, local clubs were gradually organized in a few large cities, such as the Chicago Automobile Club in December 1899.  (In a shrewd move, the CAC created five advisory memberships for the Chicago commissioner of public works, who was in charge of city automobile registration, and examiners on the Chicago board of examiners, in charge of issuing drivers licenses!)  The first successful national association was the Automobile Club of America (ACA), formed in New York City on June 7, 1899.  This club, in its effort to become the national leader in automotive affairs, came across as a pretentious country-club set run by New York's self-appointed automobile elite.  As a result, the American Automobile Association (AAA) was formed as a federation of local clubs.

On February 21, 1902, five local automobile clubs - the ACA (New York) plus those of Chicago, Long Island, Philadelphia and Rhode Island - sent out a circular letter announcing a meeting to be held in Chicago on March 3-4, 1902, to discuss affiliation.  By the time the inaugural convention took place two weeks later, delegates from eight clubs attended, the result being the formation of the AAA.  Two days later, the American Motor League (AML) was revived in Chicago by Charles Duryea and other original organizers, and became a competing force for the AAA.  Although the AML attempted to form regional chapters, it never gained dominance, lacking funds, prestige and solid organizational structure.  Thus, the AAA emerged as the leading movement of automobile owners, but problems loomed ahead.  The New York-based ACA, which had enthusiastically joined the AAA knowing its large size would ensure dominance in terms of voting, slowly experienced a dilution of power as more local clubs sprang up and joined, tilting the balance of votes away from its center.  By 1906, it had become apparent that the AAA had accomplished little of any major importance.  For example, since motor vehicle legislation was still at the local and state level, local clubs felt they could exert adequate influence over such legislation as effectively, or better, than their national counterpart.  Such dissatisfaction led to the gradual withdrawal of several clubs in the 1906-08 era.  Finally, the ACA itself withdrew from the AAA on March 12, 1908, mainly from differences over a legislative proposal for New York state registraton fees ranging from $2 to $11.  The aggressive and wealthy ACA pushed for much higher annual fees from $4 to $40, based on vehicle weight, in hopes of increasing state revenues for better highways, but this was strongly opposed by the other 34 local clubs in New York state, who supported the proposed legislation.  Oliver A. Quayle, president of the New York State Automobile Association, speaking for the vast majority of middle-class automobile owners in New York, stated that no such law taxing cars at $40 would pass on his watch.  After the ACA debacle, the AAA reached an affiliation with the National Association of Automobile Manufacturers (NAAM) and began a quick growth phase in 1908-09.  By the end of 1909, the AAA had a membership of 25,759, made up of 225 clubs comprising 30 state associations, and was here to stay.


Six motor vehicles were shown at the 1893 Columbian Exposition in Chicago.  The first automobile shows, exhibitions devoted solely to motor vehicles, took place in 1900, the most successful being that held at New York City's Madison Square Garden on November 3-10.  Prior to this, automobiles were shown at bicycle, electrical and sportsmen's exhibitions, as well as travelling circuses, as early as 1896.


The Automobile Club of France, formed in 1895, sponsored its first race, the Paris-Bordeaux-Paris long-distance endurance run, on July 11, 1895.  There was such widespread favorable publicity from this contest that the Chicago Times-Herald decided to sponsor the first American automobile race, and this incentive helped launch the publication of the first two automobile trade magazines.  The Chicago race, held on Thanksgiving Day 1895, was won by Duryea for a 55-mile distance.  Duryea Motor Company was formed in the fall of 1895, made the first sale of a gasoline car in February 1896, and produced twelve more vehicles that year, marking the official birth of the U.S. automobile industry.

The first track races were held at Narragansett, Rhode Island, on September 7, 1896.  Because some races, such as the Vanderbilt Challenge Cup in Long Island, New York, had courses made up of public highways closed specifically for the event, racing in general probably aroused as much unfavorable public opinion of the automobile as it gained in advertising value and the promotion of the rapid development of sheer automotive technology.  The first Indianapolis 500 race was not held until 1911.


The first transcontinental crossings took place in the summer of 1903, starting with that made by Dr. H. Nelson Jackson, a Burlington, Vermont, physician, and his chauffeur, Sewall K. Crocker, in a new Winton, from San Francisco to New York City in 63 days.

The first widespread automobile touring vacations occurred in the summer of 1904, led by tours from New York and elsewhere to the St. Louis World's Fair between July 25 and August 10, organized under the auspices of the AAA.  The first Glidden tour, a reliability run for private owners for a trophy, was held July 11-22, 1905, through New England and New York State.


The monthly periodicals "Motorcycle", first published in October 1895, and "Horseless Age", appearing in November 1895, both pre-dated the first commercial sales of motor vehicles and even the formation of the first automobile manufacturing firm.  These magazines, and others that would soon follow, went on to become the leading source of information, then and now, about the progress towards the universal adoption of the automobile, as well as the mounting regulations accompanying such adoption.  Because of their sensationalistic appeal to news consumers, we are also fortunate that, from the outset, motor vehicles were given frequent and extensive coverage in all newspapers and magazines of that era.  In the very early years, when someone bought a new automobile, it made the news!  By 1910, the Sunday paper in larger cities would carry an automobile section alongside the sports pages.


Horse stables and carriage houses were usually built in the back of properties, away from houses, mainly due to smell and sanitation issues.  With the coming of the automobile, these already-existing structures were readily adaptable to garages.  Later, garages were built closer to, or even attached to, homes for added convenience.

Storage and repair facilities were lacking, especially in large cities, slowing the growth of the automobile market.  Most livery stables refused to store automobiles because they were viewed as their competition.  Automobile clubs were formed to help fill this void.  Dealer's repair garages and service departments were slow in developing, as manufacturers had little incentive to service older vehicles.  Luckily, automobiles quickly became more mechanically reliable each year, to the point where an actual used car market began to develop by 1906.


In the immediate wake of the great San Francisco earthquake of April 18, 1906, hundreds of privately owned automobiles were pressed into service for a wide variety of emergency applications, some of which were life-saving.  This encouraged the U.S. War Department, as well as municipal and fire departments across the country, to purchase motor vehicle equipment at an unprecedented level.

Carriage and wagon manufacturers struggled to stay in business as the automobile gained popularity.  Some, like Studebaker, entered the automobile business as a hedge against anticipated future market conditions.  Owners of the more progressive city livery stables also expanded by opening automobile garages or introducing automobile rental services.  Riding clubs around the nation started losing membership and closed their clubhouses, as horse boarding fell out of fashion.  In 1908, an estimated 198,000 motor vehicles were registered nationwide, a mere 1% of the total modes of private transportation, as compared to 19,992,000 farm horses in use.  This was to change dramatically starting in 1909 with the introduction of the Ford Model T and the onset of the middle class automobile market.  Up to 1908, the most noticeable displacement of animal power was the system of horse-drawn streetcars by electric urban trolley service.

Saturation of the upper-class market occurred by 1907.  The development of a middle-class market would have occurred sooner than 1908 if a greater quantity of reliable cars could have been produced, especially in the lower price range.  Cars were generally not sold on credit or installment plans back then because too many cash customers were waiting.  Big-city urban markets were developed first, then sales spread to the smaller regional centers nationwide.

The even diffusion of the automobile was not determined by climate or terrain, although one would expect the motor vehicle market to have been dominated by the South due to the ability to drive year-round unhindered by snow and ice, whereas driving in the North was strictly a seasonal venture in the early years when cars had open tops.  Instead, income distribution was the main factor in the growth rate of automobile ownership in different regions of the U.S.  The South, the poorest section of the country, was still in slow recovery from the Civil War and Reconstruction, including the economic changes wrought by emancipation, so automobile sales developed more gradually.

Foreign imports remained a relatively insignificant factor in the U.S. automobile market, accounting for less than 2% of total registrations in each year from 1901 to 1912.  Additionally, private ownership of automobiles rapidly became far more widespread in America than it ever had in Europe, which was ravaged by World War I in 1914-18.

The cost of ownership of a horse-drawn rig was never within reach of every citizen, especially in cities, where parking, storage and sanitation made costs prohibitive.  Therefore, mass ownership of automobiles starting in late 1908 was a completely new phenomenon.

The development of motor vehicles within rapid-transit systems was comparatively slow.  Most cities had invested so heavily in the infrastructure of trolley lines (surveying and building special road beds, laying tracks, building poles, wires and electrical equipment in dedicated buildings) that they were reluctant to extend trolley lines further out or add bus lines.  Most of that investment had occurred just in the decade prior to the development of automobile technology, so it was still relatively new.  Regular motor bus service was inaugurated in New York City and Philadelphia in 1907.  This lack of financial commitment to mass transit in the form of new automotive equipment, and the American streak of independence in general, brought about the high level of mass ownership of private automobiles in the U.S., in stark contrast to most areas of the world.

Trucks and commercially-used vehicles were also slower to develop industry-wide, not due to being uneconomical, but because any appreciable economies of scale could not be achieved until a motorized delivery system was adopted en masse.  The delay can be attributed mainly due to a lack of a widespread service support structure in the form of qualified mechanics and drivers.  This was to follow starting in about 1910.

Automobiles were very economical, even early on.  Despite their higher initial cost, they accomplished more work in less time, making them cheaper to operate, even taking into account repairs, maintenance and registration costs.  Other advantages included:  Safer to drive due to being quicker and easier to brake; takes up half the space for parking and storage than a team and carriage or wagon; greater endurance; ability to accomplish heavier work; cleaner streets, maintaining value with less depreciation than horses, and cheaper cost of gasoline over oats.  While the daily cost of operation was higher, the per-ton-mile cost was significantly lower.

The lack of tariff barriers among the U.S. states was another major factor in developing a large domestic market for automobiles to an extent not possible in Europe.

Physicians were the most innovative single group of owners to adopt the automobile early on, as they recognized the value in reaching patients quickly.  Surprisingly, farmers embraced automobiles too, converting Model Ts into truck bodies, since they experienced a period of increasing prosperity in the 1900-1910 decade.

For the January 1909 Inauguration of President Taft, automobiles displaced the White House horses for the first time.  It's just too bad that the idea of issuing special license plates to commemorate this event didn't happen until 1933!

The U.S. Post Office Department was slow to convert mail delivery to horseless conveyances, even though experimentation occurred as early as the fall of 1896 in New York City.  Due to the Post Office's typical practice of negotiating four-year contracts with private carriers, requiring the posting of discouragingly high bonds, plus the full responsibility of vehicle operation and maintenance, all for relatively low payment, not many automobiles were enticed into postal service.  In 1906, a series of pilot cities began testing motor vehicle mail delivery, and Baltimore was chosen as the first test site due to its many steep grades and large sections of heavy cobblestone pavement designed to keep horses' hooves from slipping.  Not until July 1, 1909, did the Post Office Department authorize the purchase of electric mail vehicles to replace horses in New York City.  The development of automobile use for rural free delivery (RFD) service was even later since rural carriers had to purchase their own vehicles, rarely possible on the miniscule salaries they received.


The Federal and state governments at first gave little formal recognition to the automobile.  As of 1902, only four states (Connecticut, Massachusetts, New York and Rhode Island) had passed any legislation regarding motor vehicles.  Rhode Island's law didn't even have a clause for speed limits.  Everywhere else, speeds were left up to local ordinances, but even these could not legally apply to roads beyond city limits, where high speeds were most possible.  As of 1902, city ordinances had been introduced, but not yet passed, in Iowa (Davenport) and Oregon (Portland).  There were no city ordinances in 1902 in Florida, Kentucky, Maryland, Montana, New Mexico, North Dakota, South Carolina, Tennessee, Utah, Virginia or Wyoming.

Automobile clubs were often able to prevent the passage of ordinances or laws by promising that their members would exercise restraint and by policing their own.  Later, clubs were able to influence the content of new legislation to a great extent.  New York's 1901 registration law, the first in the U.S., was drafted by the Automobile Club of America (ACA).

Speed limits were a relatively new concept, only recently introduced in the context of bicycle ordinances in the 1890s.  Previously, they were completely unnecessary for horse-drawn conveyances, which had top speeds ranging from 8 to 15 MPH.  Any legal language regulating such vehicles typically included the terms "reasonable and proper" which was sufficient for that context.

The typical cycle of government response to early automobile concerns was as follows, applicable equally to cities and states:  Automobile accidents peaked during the summer months, complaints were received by legislators by the time state legislative sessions opened in the fall, and by the time a new bill containing more restrictions or regulations came up for a vote in the late winter or early spring (the lowest point of automobile activity of the year), the urgency had faded.  The result was that the final law was often more diluted than the original bill, and the process would often repeat during the next legislative session.

In 1907, the automobile industry adopted a standard formula for the determination of a motor vehicle's horsepower, a rating that soon became the basis for automobile registration fees in most states.

Automobiles have been depicted as noisy intrusions into a docile horse-drawn world, thanks to occasional reports of hissing steam boilers and open-throttle accelerations of gasoline cars, but the reality was different in the early years.  The din of horse-shoed hooves clattering on cobblestones was not missed, compared to the rolling of pneumatic tires on smooth-surfaced roads.  The early models of cars were not very powerful vehicles and weren't as loud as our average modern traffic today.  Warning horns were loud but were not sounded as frequently as neighing horses.

The only comprehensive source of state motor vehicle registration totals by year and state is "Highway Statistics, Summary to 1955", published by the United States Department of Commerce.  According to this book, the data was "compiled from state authorities, but it was necessary to draw on other sources and to make numerous estimates in order to present a reasonably complete series."  The fact that this volume lists registration figures for the year 1900 when no state enacted any registration laws until 1901, coupled with the curious observation that, up to 1913, all figures for passenger cars and trucks are rounded off to the tenth place, casts sufficient doubt on the reliability of this source.  Therefore, we felt it was imperative to consult as many authentic and more detailed sources directly from as many states as available.


Contrary to modern assumption, popular prejudice towards the automobile was relatively limited, compared to the introduction of previous innovations such as the bicycle and the self-propelled trolley car.  The American public had already been through these changes to the transportation system, so the automobile, while new, was not as radical and revolutionary a change as it may seem today looking back to the horse-drawn age.

By 1903, most popular and editorial opinion agreed that the automobile was not only here to stay, but would entirely displace the horse within ten years, at least within the major cities.

Registration laws were widely disregarded in the early years.  Even in the city of Boston, where formal state-issued license plates were in full effect, during a road-block check on July 20, 1904, police found that only 126 of 234 motorists had complied with the Massachusetts license and registration law, a 54% compliance rate.  No wonder those first-issue Massachusetts plates are scarce!

In Chicago, in 1904, speeders carried fictitious license numbers which they changed frequently to throw off suspicion.  Which gives rise to the question:  How many of the pre-state plates existing today were out-and-out fakes to begin with?

Contrary to popular belief, most press coverage relating to automobiles at the time was remarkably favorable.  The automobile was not resisted as a dangerous play-toy of the rich nearly as much as has been portrayed in the century since its introduction.  There were certainly incidents of reckless speeding including those resulting in death, and the odd scattering of sharp objects on farm roads by resentful residents, but by and large, the public embraced this new invention more universally than any technological innovation that had come before.  The automobile appealed to the American values of freedom, geographic mobility and immigration, independence and display of status.  Cartoons and jokes deriding the automobile were numerous, yet only contributed further to its popularity!