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The classic Schwinn headbadge Founding of Schwinn [ ] Ignaz Schwinn was born in,, Germany, in 1860 and worked on two-wheeled ancestors of the modern bicycle that appeared in 19th century Europe. Schwinn emigrated to the United States in 1891. In 1895, with the financial backing of fellow Adolph Frederick William Arnold (a ), he founded Arnold, Schwinn & Company.

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Schwinn's new company coincided with a sudden bicycle craze in America. Chicago became the center of the American bicycle industry, with thirty factories turning out thousands of bikes every day. Bicycle output in the United States grew to over a million units per year by the turn of the 20th century. The boom in bicycle sales was short lived, saturating the market years before motor vehicles were common on American streets. By 1905, bicycle annual sales had fallen to only 25% of that reached in 1900.

Many smaller companies were absorbed by larger firms or went bankrupt; in Chicago, only twelve bicycle makers remained in business. Competition became intense, both for parts suppliers and for contracts from the major department stores, which retailed the majority of bicycles produced in those days. Realizing he needed to grow the company, Ignaz Schwinn purchased several smaller bicycle firms, building a modern factory on Chicago's west side to mass-produce bicycles at lower cost. He finalized a purchase of in 1912, and in 1917 added the to form. In an atmosphere of general decline elsewhere in the industry, Schwinn's new motorcycle division thrived, and by 1928 was in third place behind.

Depression years [ ]. Schwinn AeroCycle in At the close of the 1920s, the stock market crash decimated the American motorcycle industry, taking Excelsior-Henderson with it. Arnold, Schwinn, & Co. (as it remained until 1967) was on the verge of. With no buyers, Excelsior-Henderson motorcycles were discontinued in 1931. Ignaz's son, Frank W. Schwinn, took over day-to-day operations at Schwinn.

Putting all company efforts towards bicycles, he succeeded in developing a low-cost model that brought Schwinn recognition as an innovative company, as well as a product that would continue to sell during the inevitable downturns in business cycles. After traveling to Europe to get ideas, F. Schwinn returned to Chicago and in 1933 introduced the Schwinn B-10E Motorbike, actually a youth's bicycle designed to imitate a motorcycle. The company revised the model the next year and renamed it the Aerocycle. For the Aerocycle, F. Schwinn persuaded American Rubber Co. To make 2.125-inch-wide (54.0 mm), while adding streamlined, an imitation 'gas tank', a streamlined, chrome-plated headlight, and a push-button.

The bicycle would eventually come to be known as a paperboy bike. Schwinn was soon sponsoring a bicycle racing team headed by Emil Wastyn, who designed the team bikes, and the company competed in across the United States with riders such as Jerry Rodman. In 1938, Frank W. Schwinn officially introduced the series. Developed from experiences gained in racing, Schwinn established Paramount as their answer to high-end, professional competition bicycles. The Paramount used high-strength steel alloy tubing and expensive brass lug-brazed construction. During the next twenty years, most of the Paramount bikes would be built in limited numbers at a small frame shop headed by Wastyn, in spite of Schwinn's continued efforts to bring all frame production into the factory.