Samuel Insull
Samuel Insull was an influential figure in the development of the electrical industry in the United States, born on November 11, 1859, in London, England. He began his career working as a clerk before becoming the private secretary to Thomas Edison, which propelled him into the world of electrical power generation and distribution. After immigrating to the U.S. in 1881, Insull took charge of the struggling Edison General Electric Company and successfully transformed its fortunes, leading to significant growth in employment and productivity.
In 1892, he became president of the Chicago Edison Electric Company, where he initiated major advancements in electric power supply, culminating in the merger of his company with Commonwealth Electric Company in 1907 to form Commonwealth Edison. Insull played a pivotal role in promoting electrical consumption, introducing initiatives such as "give something electrical for Christmas" to encourage the adoption of electrical appliances. By 1929, he controlled a substantial portion of the U.S. electricity market.
However, the stock market crash of 1929 severely impacted his financial empire, leading to public vilification and legal troubles. Despite being acquitted of serious charges, Insull's reputation suffered irreparable damage, and he spent his later years in Europe before dying in Paris on July 16, 1938. Today, Insull's legacy is complex, remembered as both a pioneering innovator in electricity and a symbol of failure during a tumultuous economic period.
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Samuel Insull
Investor
- Born: November 11, 1859
- Birthplace: London, England
- Died: July 19, 1938
- Place of death: Paris, France
Summary: Samuel Insull was secretary to Thomas Alva Edison, vice president of Edison Electric, president of Chicago Edison, electricity utility magnate, and innovator.
Samuel Insull was born November 11, 1859, in London, England. His father was a nonconformist minister and his mother operated the Insull’s Temperance Hotel near Reading, England. Despite the family’s modest means, his parents were able to send him to a good school where he worked hard. At the age of 14, Insull became a junior clerk in an auction house. At age 18, he answered Colonel George E. Gourard’s advertisement for a secretary. Gourard was the London representative for Thomas Alva Edison. His enthusiasm for new electrical devices had turned his London home into a minor replica of Edison’s Menlo Park. Pleased with Insull’s work and his interest in electrical devices, he sent him to Edison when he expressed the desire for a private secretary.
Immigrating to the United States in 1881 at the age of 21, Insull found that his work as the private secretary to Thomas Alva Edison opened the door to a career in the generating and marketing of electricity. To deal with his failing Edison General Electric Company in Schenectady, New York, Edison put Insull in charge. At the time, there were 200 employees and the company was in the red. Insull quickly put the company into the black, and when he left about nine years later, there were 6,000 employees. Insull, now 33, was restive as an Edison employee, so he moved to Chicago to take charge of the Chicago Edison Electric Company. It was a small company with no connection to Edison, despite its name. Insull, hired as president at only a third of his salary under Edison, set about to turn it into a major power company.
In 1893, Chicago held the Chicago World Columbian Exposition. It was an ideal place to exhibit the marvels of electrification. Supplying the power was the small Commonwealth Electric Company and Insull’s Chicago Edison Electric Company. Soon afterward, he persuaded Commonwealth Electric to hire him as its president too. He ran both companies until 1907, when he merged them into Commonwealth Edison. That year, he was also able to secure a 40-year franchise from the Chicago city government to supply the city with electricity.
The monopoly enabled steady growth in electricity sales from about 6 terawatt-hours in 1902 to 118 terawatt-hours in 1929. The use of meters with high and low usage rates aided his success. The compound steam turbine came to Insull’s attention soon after its invention by Sir Charles Algernon Parsons. He persuaded his reluctant board to invest in turbines. In 1903, at Chicago’s Fisk Street Generating Station, a coal-fired steam-turbine went into operation, producing 5,000 kilowatts of electricity.
Insull was a salesman for electrical usage. He wanted to electrify America. Chicago’s Commonwealth Edison kept open a display, the “Electric Shop,” where shoppers could see the latest in electrical appliances. An all-electric model home was built in the River Forest suburb for consumers to visit. So enamored was Insull with selling electrical usage that one Christmas season he had Commonwealth Edison push the promotional slogan, “give something electrical for Christmas.” His electrical consumption promotion has been described as part of the “gospel of consumption.” Insull expanded his electrical empire by buying small electrical utilities in the region beyond Chicago. Those in northern Illinois he combined into the Public Service Company of Northern Illinois. He also took control of failing companies such as Chicago Peoples Gas, the Light & Coke Company, and Chicago’s street car and elevated train franchises. Insull’s great expansion aimed to wire America for electricity. By 1929, he controlled an eighth of the electricity consumed in the United States. One million investors and 41 million consumers were involved in his operations.
Insull had financed his corporate expansions with stock sales. However, these sales were for stock in highly leveraged holding companies. Stockholders had often purchased on the basis of Insull’s reputation as a successful businessman. Using the funds, he purchased numerous utilities conducting operations in 31 states. However, the market crash in 1929 began a decline that resulted in hundreds of millions of dollars in losses. By 1932, he had nearly bankrupted himself trying to save his companies. As the pain of the Great Depression deepened, the public turned against Insull. Before the crash of 1929, he was hailed as an American business genius. Now, he was vilified in the newspapers and in the court of public opinion as a criminal. In the presidential election of 1932, Franklin D. Roosevelt demagogically denounced Insull in a campaign speech.
When long-time foe Harold L. Ickes was appointed interior secretary in 1933, Insull, frightened that he could not get a fair trial, fled to Europe. The flight inflamed the page-one newspaper stories on him. In 1934, Insull was extradited from Turkey on charges of embezzlement, larceny, and mail fraud in federal and state courts. He was tried in court three times and was acquitted all three times. The juries saw him as just a failed businessman. A free man, he moved to France. He died in Paris on July 16, 1938, on the platform of a subway station of an apparent heart attack. When Insull died, his reputation was so tarnished that most Americans saw him as just a thief, instead of one of the great innovators and organizers of electricity.
Bibliography
Insull, Samuel, and Larry Plachno. The Memoirs of Samuel Insull. Polo, IL: Transportation Trails, 1992.
McDonald, Forrest. Insull: The Rise and Fall of a Billionaire Utility Tycoon. Chicago: University of Chicago Press, 1962.
Plachno, Larry. Memoirs of Samuel Insull: An Autobiography. Polo, IL: Transportation Trails Books, 1992.
Platt, Harold L. The Electric City: Energy and the Growth of the Chicago Area, 1880–1930. Chicago: Chicago University Press, 1991.
Wasik, John F. Merchant of Power: Sam Insull, Thomas Edison, and the Creation of the Modern Metropolis. New York: Palgrave Macmillan, 2008.