Understanding business activity historically is key to understanding the development of American cities. Albion provides a unique opportunity to study this phenomenon due to its small size and relative isolation from other settlements.
Albion first served as a center for processing agricultural products. This was surpassed by industrial activity following the Civil War. This activity continued with few setbacks for 100 years until the 1960’s when factory closure, loss of jobs, and population flight transformed Albion again.
Water from the Kalamazoo River was diverted through several man made races, where water rushed through narrow channels providing power for mills that lined them. Farmers from the surrounding area brought their products to these mills where wheat and corn were ground, processed, and prepared to be consumed locally, and any surplus shipped by railroad throughout the country.
In addition to several mills along the river, unique features of the built environment during this time were a concentration of retail stores in Albion’s historic downtown along Superior Street and near the Kalamazoo River and railroad.
Industrial production built upon the design of agricultural production. Earliest factories were also started along Superior Street. A building on the northwest corner of Superior and Cass served as home for the Gale Manufacturing Company and later for the Albion Malleable company as well.
Movement of these factories established a trend followed by retailing and residences that moved from the center to the outer edges of the settlement as well. This movement was aided by introduction of automobiles at a price most workers could afford. The automobile gave people the mobility they needed to live far away from their place of work if they so chose.
This history of banking in Albion closely mirrors changes in business and industry in the city, and in recent decades for the nation of local control. What began as several small locally owned banks, started near the founding of Albion settlement, centralized into a few large local banks with close connections to business and industry in the city. The Great Depression had a leveling effect, and in the decades after that a more active federal government and its corollary in large multinational banks, have severed altogether local control over capital resources.
The First Local Banks
Peabody Exchange and Deposit Bank, 1876 – April 5, 1886
From the period 1853 to 1876 three separate banks were formed in the Albion area. Of these three, through various reorganization, being placed into receivership, and voluntary liquidation, none lasted any form any later than 1931. 1) The first chain began with the Hannahs’ Exchange and Banking Office opened in 1853, reorganized in 1858, and finally organized as the Albion State Bank, which continued to operate until December 22, 1931. 2) The second chain began with the Mayhew & Irwin Exchange Office in 1859, organized by federal charter in 1866, reorganized by federal charter in 1885, and reorganized by federal charter again in 1905 as the Albion National Bank, which was closed on January 2, 1912 after an elaborate forgery scheme was revealed. 3) The final bank from this early period was the Peabody Exchange and Deposit Bank, founded by John Murray Peabody, to compete with the bank of his brother-in-law, James W. Sheldon. Unlike the others, Peabody’s bank never reorganized or received state or federal charters, instead nearly 10 years after opening in 1876, Peabody’s bank failed on April 5, 1886, and he was forced to leave town with his wife and family in disgrace.
After the closing of the Albion State Bank in December 1931, Albion was left with only one bank.
Two Attempts at Local Ownership
The Commercial and Savings Bank was organized by prominent Albion citizens and opened on September 30, 1893. This bank would continue to be locally owned and operated, and be Albion’s only bank from 1931 to 1956. On March 1, 1955 the Commercial and Savings Bank merged with the Jackson City Bank & Trust Company, and local control of the bank was lost.
Banks up to this time helped to provide the capital that is necessary for the business of creating new work. With capital now in the control of outsiders, this left Albion businessmen and industrialists without a local source of capital under their control.
Loss of Local Control
Troubled by seeing the only locally owned bank controlled by outsiders, and loss of local control of capital, prominent local citizens organized again and opened The Bank of Albion on January 27, 1956, to provide competition with the Commercial and Savings Bank, now owned by outsiders, and to give Albion residents a second choice of place to do business with.
Despite their good intentions, the Bank of Albion was short-lived. In 1974 a majority of shares were purchased by Charles A. Gerstacker, chairman of the Dow Chemical Bank. Now, again, local control of capital had been lost, and that important connection between banks and owners of business and industry has been severed.
This condition persists to present day. The businesses and people of Albion are now subject to the oftentimes unsympathetic and arbitrary authority of outsiders.
Retailing in Albion
Earliest retailers located downtown along Superior Street.
The main thoroughfare between Detroit and Chicago passed north of Downtown along Michigan and Austin Avenue. Entrepreneurs moved here to take advantage of the heavy traffic. Showcase buildings lined Michigan Avenue including the Parker Inn, Washington Gardner High School and Wesley Hall. Austin Avenue had a more working class character with worker housing and neighborhood markets especially in the area north of Albion Malleable.
The final shift of retailing from city center to outlying locations occurred when Interstate 94 arrived in 1960 one mile north of the downtown. Businesses concentrated near the expressway entrance and exit ramps on North Eaton Street.
Power is essential to perform work. Where Albion has gotten its power from, has strongly influenced economic change in the city. Animal and human motive force were the principal forms of power for centuries. With tools both animals and humans could be made more efficient.
The process of making tools, however, required other tools and new sources of energy to be used in the manufacturing process.
River power, from Mill Race
Arrival of the railroad in 1845 allowed wood to be replaced by coal. Widely distributed among businesses and residences, coal provided longer lasting and a more concentrated form of energy. A disadvantage of coal was the thick and heavy smoke it created, covering the city.
First Electric Utility Company, Albion
In 1888 a sign of changes came to downtown Albion. A Jackson company installed a single art light on Superior Street obtaining power from a dynamo attached to the water wheel of the Stone Mill. While installed for demonstration purposes only, this may be considered the earliest power plant in the city, a utility exclusively intended to produce electric power for residences and businesses of the town.
Just a few years later in 1896, the Albion Gas and Coke Company started by Simeon L. and Fred W. Freese was granted a 25 year charter from the city. They immediately built their power generating plant and laid mains in the streets. Sold to A.J. Gale in 1898, he made further improvements and extensions to the plant and distribution system.
As a sign of rapid consolidation in the electric utility industry, Gale sold the plant to the Kelsey Brewer Company of Grand Rapids in 1902, who operated it until 1924 when the Middle West Utilities company of Chicago purchased, and immediately expanded the plant.
Rapid expansion of power generating capacity occurred in Albion between 1926 and 1929. By 1926 Albion’s plant had reached capacity so plans were made that fall to build an entirely new plant. This began operating March 1927 and began providing service to industry in March 1928. By 1929 demand for industrial demand was so great that it was decided to again enlarge the plant, with a new building housing a modern carbureted water gas plant.
Second Electric Utility Company, Albion
- Albion Electric Light Company, founded ?
- Sold to Commonwealth Power in 1905
- Sold to Consumers Power in 1910
A second electric utility company was created near the same time as the Albion Gas and Coke Company. The Albion Electric Light Company, also granted a city charter, existed solely to provide power for lighting. The only businesses using the facility were Bullen’s Big Busy Store, C.S. Tucker’s Dry Good Store, and George Mitchell’s confectionery. Showing signs of consolidation and outside control, power was sold to the Albion Electric Light Company by Kalamazoo Valley Electric Company.
Further consolidation occurred in 1905 when Commonwealth Power purchased the Albion Electric Light Company and in 1910 when bought by Consumers Power Company. A fire destroyed the original plant on East Erie Street in 1913 and construction of a new plant began. Albion’s new plant produced 200 horsepower with a generator powered by the Kalamazoo River. By 1932 there were 2,500 electrical customers in Albion.
Power has been exclusively controlled by outsiders for most of Albion’s history. Increasing demands for power has generated great wealth for outsiders, with money pouring out of Albion as energy pours in.
Some argue the need for renewable energies, and if history provides any example, these could be the source of wide ranging social and economic change. More conservative analysts suggest the best policy is energy conservation. Renewables require an incredible amount of space, and the processes used to create the technology is by its nature not renewable.
Communication from its inception has promoted an intensified connection with the outside world. Change in transportation, banking, and utilities, closely followed. Communication has allowed the spread of different ways of thinking, knowing, and working, while at the same time undermining the uniquely local and relational culture that existed in Albion closer to the time of its founding.
First Wave of Innovation, from 1842-1864
- Western Union Telegraph Company, 1842-?
- 1845, U.S. government refuses to purchase Morse’s telegraph line, formation of independent companies began.
- Western Union created from telegraph company mergers
- Albion Press, 1849-?
- Herald, 1850s-1867
- Albion Mirror, October 11, 1855-1909
- Albion Weekly Recorder, May 1868-July 1904
Western Union Telegraph Company came to Albion with the railroad. The first office of Western Union was in the Michigan Central Passenger Depot for the next seventy years, until 1912 when it moved to the Bell Telephone Building on Superior Street. The telegraph was replaced by a simplex system in the 1930s.
The first newspapers were established shortly after this connection to the outside world was made. The first two the Albion Press and the Herald were short lived, but the Albion Mirror run by 3 generations of the Cole family was able to survive as late as 1909, near the time Western Union made its move.
The last newspaper to be introduced during this period, the Albion Weekly Recorder in May 1868 would also be the one to survive the longest, through various management and reorganization.
Second Wave of Innovation, from 1881-1884
Postal Telegraph Company, established in 1881
1883, first toll line built between Battle Creek and Albion
Albion Telephone Exchange, opened in 1884
Invention of the harmonic telegraph system by Elisha Gray in 1874 allowed a second wave of innovation in communication to commence. Telegrams could be sent with this new telegraph system, then delivered by mail after their receipt, thus founding of the Postal Telegraph Company in 1881.
By 1886 Postal Telegraph had acquired independent lines between New York and Chicago, New York and Washington, Buffalo and Pittsburgh. After acquiring lines of the Pacific Mutual Telegraph Company and making an agreement with the Canadian Pacific Railroad Company on July 21, 1886, Postal Telegraph was the first to have trans-continental connection between the Atlantic and Pacific. Building on this position they developed international connections with Europe, Latin America, and the Far East.
Partnership with Bell Telephone system allowed telephones to be used to send Postal telegrams throughout the world.
By 1932 Postal Telegraph served 70,000 location, and was part of the International Telephone and Telegraph system since 1928. At the end of 1930 all international cable and radio terminals were consolidated into one operating unit in New York with 19 telegraph cables to foreign points and 24 international radio circuits to foreign companies and ships at sea.
Partnership was made with Western Union so that every business office had a telegraph printer, and communication between equipment of the different companies could occur.
The first toll line was built from Battle Creek to Marshall and on to Albion in 1883 with no exchange and one public telephone. Albion’s first telephone exchange opened in 1884 at 204 S. Superior St. A ten line board with split plug, the first telephone operator in Albion was Miss Lucy Sayles. The facility moved again to 103 West Porter Street in July 1883 and 300 South Superior Street July 1886, into a building jointly owned with the U.S. Express Company.
When moved to 110 1/2 South Superior Street on January 1, 1900 the exchange had 211 stations. The system was rebuilt in 1920 and 60 additional numbers were added in 1922. Western Electric Company expanded the board in 1925 from 800 to 1000 stations. Stations grew from 992 on January 1, 1920 to 1752 on January 1, 1931.
Third Wave of Innovation, from 1890s-1910
Transcript, early 1890s-1899
Albion Leader, 1898-1918
Recorder Press Comapny, July 1904-present
Mirror-Gazette, 1909-January 22, 1910
Consolidation in the Albion newspaper industry was occurring at a time of rapid economic expansion, and prefigured reform of the city charter in 1916, expansion of electric utilities, and expansion of factories with waves of immigrants and migrants coming to work in them.
The Transcript, which was started in the early 1890s consolidated with the Albion Leader in 1899. William B. Gildart operated this paper from May 1, 1905 until his death October 1918. The Mirror, established in 1855 and run by three generations of the Cole family, changed from a weekly to a daily paper with support from people outside of Albion. The Mirror-Gazette stopped publishing on January 22, 1910 after only six months of publications.
This left the Albion Weekly Recorder as the oldest surviving paper in Albion. Founded in 1868, when Walter S. Kennedy and Rex B. Kennedy came to Albion from Chicago in 1904 they organized the Recorder Press Company. It moved from being a weekly to a daily paper on January 15, 1905. The Recorder survived brief competition from the Mirror Gazette, and with suspension of the Leader upon William Gildart’s death in 1918, became the only surviving paper in Albion.
Richard T. Baldwin and Joseph A. Baldwin became editor and business manager in 1920, while Walter S. Kennedy continued as principal owner and managing editor. They moved to their current plant on West Center Street in 1925. In August 1928 Joseph A. Baldwin went to Washington D.C., and Jack C. Bedient became business manager and partner.
Contemporary changes in communication have built on earlier change, with communication become more ubiquitous and transparent. The cell phone made people no longer dependent on land lines or required them to be in a particular location to communicate with other people. Miniaturization of the cell phone made it possible for it to be easily carried from one place to another.
The Internet changed the way people exchanged information. Originally designed for educational and research purposes in the 1960s and 1970s, later versions made it possible for ordinary people (with access to computers) to freely exchange and disseminate information. Introduction of the Windows 95 operating system allowed record numbers of new users to use personal computers for word processing, data analysis, and communication.
Commercialization of the Internet during the 1990s shifted the focus from academic and research uses. Web sites like Amazon.com, Priceline, and EBay, allowed people to buy and sell goods with other people who lived anywhere in the country and other places in the world. In this respect, innovation in communication further broke down the need for traditional social bonds and for brick and mortar locations were for sale of goods and provision of services. Loss of local control seems to have only been amplified with each successive technological change.
The nature of business is adverse to writing history. Business processes undergo constant adaptation and change. Only when business activity has been completed is it possible to pick up the fragments and to assemble the story of what has occurred. This exercise is very similar to the process of studying Albion and making sense of what has occurred there, for Albion is a city founded almost exclusively for business.
During times of prosperity all boats rose, with construction of new churches, provision of new services and new government buildings, construction of new buildings at the college, and new public schools. Banks had the income needed to operate, and a wide variety of social groups provided structured opportunities for leisure outside of the mundane and daily practices of work.
During times of economic distress, impact was felt throughout the city as well, often with a slow-down in new construction, abandonment and closure of surplus schools, flight of population, and failure of locally owned banks.
These patterns of prosperity and distress have been obscured in recent times by loss of local control, making it difficult to see the connections between downtown, factories, public schools and the college. With outsiders making decisions about banking, transportation, communication, and utilities that ultimately impact Albion, residents today do not have the same ability to see the economic connection between all these functions, or realize their ability to change certain conditions in a way to bring desirable outcomes or to mitigate problems.
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