The Niagara Falls Power Houses , circa 1900 .
Library of Congress acres of land near the falls for an industrial park , promising any interested industrialists access to cheap electrical power .
The Cataract Company was building a potentially better mousetrap , or at least a bigger mousetrap , and the world indeed “ beat a path to their door .” The embryonic industry of producing aluminum from bauxite required large amounts of electrical power — aluminum is sometimes described as “ congealed electricity ”— and the ambitious people in Pittsburgh running what would become the Alcoa Corp . contacted Adams with a plan to place a factory right in Niagara and the request for all the electrical power Adams and his Cataract Company could provide . The manufacture of “ carborundum ” ( silicon carbide )— a mineral used for cutting tools , abrasives and gem polishing — required electrical furnaces capable of producing 4,000 degree ( F ) temperatures , and the Carborundum Company of Monongahela , Pennsylvania was eager to move operations to Niagara to access this abundant electrical power source .
The fortuitous nature of these parallel developments was not lost on Adams . “ How often it happens ,” he wrote years later , “ that two movements , unknown to each other and widely separated … plod
along slowly … until they seemingly just happen to meet at the exact moment when each needs the aid of the other !”
Paying customers willing to set up operations near the falls and for whom the electric power was well worth the price reduced some of the project ’ s dependence on the technical uncertainty of long-distance power transmission to Buffalo . When the first of the turbines was set spinning in mid-summer 1895 , it was Alcoa and the Carborundum Company that began receiving power .
The way in which the profits gushing from new technologies can grease the financial gears to hasten broader societal change is a recurring theme in financial history . For instance , the lucrative spice trade stimulated a good deal of ship building in Elizabethan England , later permitting a group of religious separatists without much money to charter a couple of older merchant vessels , the Mayflower and the Speedwell , for a pilgrimage to the New World . ( The British East India Company passed on using the Mayflower years earlier .) Similarly , the discovery of gold in 1849 a few dozen miles from Sacramento led a few years later to the lavish capitalizing of a railroad , the Sacramento Valley Railroad , whose sole purpose was to ship gold and supplies between the mines in the foothills of the Sierra Nevada range and Sacramento . Fifteen years later , that line served as the western terminus of the Transcontinental Railroad .
The turbines were spinning and aluminum and carborundum production was proceeding , while the city of Buffalo wrestled with how to organize and regulate the proposed electrical utility . Buffalo ’ s Common Council , later its Board of Public Works , could not agree on issues like the right to revoke terms and rates and whether they should have the power to mandate the burying of the wires underground . These questions , while important , weighed on the financials of the project , where the timing of the cash flow is most important .
The project ’ s capitalization was significant : additional offerings brought the total to roughly $ 6 million when the more than 25 miles of transmission lines sending alternating current to Buffalo were completed and transformers were in place . Power was first sent to Buffalo in the early minutes of November 16 , 1896 , and immediately began powering the city ’ s streetcars — ironically , only after being transformed to direct current .
Eight weeks later , Buffalo ’ s burghers decided to celebrate . They packed the top
38 FINANCIAL HISTORY | Winter 2024 | www . MoAF . org