JohnS:
The 25Hz systems in use in the US were never used in Europe though. So I don't see how European 50Hz had anything to do with the Niagra Falls system etc? So I doubt it was economy issue.
During the early days of Electricity in Europe the German company, AEG, was the European equivilant of Westinghouse or Edison. It came up with many of the very early DC tram systems. However, there is evidence of AEG 50Hz 3-phase systems very early on. They made a lot of sense for industrial drives etc. By 1920 220/380V 50hz was adopted in Ireland for example and it had been around for a good few years before that.
AEG and Siemens in paticular seem to have developed a huge proportion of the features of the commercial electrical systems used in Europe today.