Samuel Insull

Samuel Insull

Samuel Insull (November 11, 1859 – July 16, 1938) was an investor in and from Chicago who was known for purchasing utilities and railroads. He contributed to creating an integrated electrical infrastructure in the United States. He was also responsible for the building of the Chicago Civic Opera House in 1929.

Early life

Samuel Insull was born in London, and began his career as a clerk for various local businesses. At the age of 21 he caught the attention of Thomas Edison while working for Edison's business representative in London. Edison offered Insull a job as his personal secretary, and Insull emigrated to the United States in 1881. In the decade that followed Insull took on increasing responsibilities in Edison's business endeavors, building electrical power stations throughout the United States. With several other Edison Pioneers he founded Edison General Electric, which later became the publicly held company General Electric.


Life in Chicago

In 1892, Insull left General Electric and moved to Chicago to take over the presidency of Chicago Edison (later Commonwealth Edison). He began purchasing portions of the utility infrastructure of the city. When it became clear that Westinghouse's support of alternating current was to win out over Edison's direct current, Insull switched his support to AC.

His Chicago area holdings came to include Commonwealth Edison, Peoples Gas, and the Northern Indiana Public Service Company, and held shares of many more utilities. Insull also owned significant portions of many railroads, mainly electric interurban streetcar lines, including the Chicago North Shore and Milwaukee Railroad, Chicago Rapid Transit Company, Chicago Aurora and Elgin Railroad, and Chicago South Shore and South Bend Railroad. He helped modernize these railroads and others.

As a result of owning all these diverse companies, Insull is credited with being one of the early proponents for regulation of industry. He saw that federal and state regulation would recognize electric utilities as natural monopolies, allowing them to grow with little competition and to sell electricity to broader segments of the market. He used economies of scale to overcome market barriers by cheaply producing electricity with large steam turbines. This made it easier to put electricity into homes.

Insull lived outside Libertyville, Illinois, in a mansion now known as the Cuneo Museum, in Vernon Hills.[1]


Great Depression

In Illinois, Insull had long battled with Harold L. Ickes over concerns that Insull was exploiting his customers. Upon the promotion of Ickes to Interior Secretary in 1933, Insull had a powerful foe in the Roosevelt administration. Due to the highly-leveraged structure of Insull's holdings (he invented the holding company and controlled an empire of $500 million with only $27 million in equity), his holding company collapsed during the Great Depression, leaving 600,000 shareholders ruined. This led to the enactment of the Public Utility Holding Company Act of 1935.

Insull fled the country to Greece, but was later extradited back to the United States by Turkey to face federal prosecution on mail fraud and antitrust charges. He was defended by famous Chicago lawyer Floyd Thompson and found not guilty on all counts.


Death

According to The New York Times, Mr. and Mrs. Insull had arrived in Paris to see the French Bastille Day festivities. He rose at about 7 a.m. so as not to miss the show. Mr. Insull suffered from a heart ailment, and his wife had asked him not to take the Métro because it was bad for his heart. Nevertheless, Mr. Insull had made frequent declarations that he was "now a poor man" and descended a long flight of stairs at the Place de la Concorde station and died of a heart attack just as he stepped toward the ticket taker. [1]

He is reputed to have died penniless, but he did not. The myth started when his corpse was looted by a Parisian for his wallet.

Insull was buried on July 23, 1938 in Putney Vale Cemetery, London, the city of his birth.
While her husband was alive, Mrs. Gladys Insull had vowed never to return to Chicago and the society that had shunned her. She eventually became homesick for her family and returned to stay in Chicago with her son Sam Insull Jr. She died on September 23, 1953.


External links

TIME magazine cover photo of Samuel Insull, November 29, 1926

TIME magazine cover photo of Samuel Insull, November 4, 1929

TIME magazine cover photo of Samuel Insull, May 14, 1934

PBS: Photo of Samuel Insull with Thomas Edison

Encyclopedia Britannica Concise: Photo of Samuel Insull