Samuel Insull (1859–1938) utilities executive

Born in London, Insull served as secretary for the London agent of Thomas A. EDISON until 1881. He was hired as Edison’s private secretary in that year and began a long career in the American power industry that helped develop his reputation, and later his vilification, after the Crash of 1929.

Insull became Edison’s general manager when the manufacturing operations of Edison’s electrical company were moved to Schenectady, New York. In the five years that the operation was under Insull’s control, it expanded substantially. In 1892, Edison Electric merged with another electrical equipment manufacturer, the Thompson- Houston Co., to form the GENERAL ELECTRIC CO., a J. P. Morgan creation. Insull realized that his future with the company was limited since Edison was no longer in effective control of the company. He resigned his position with GE and moved west to become president of the Chicago Edison Co.

Like many other industrialists of his era, Insull proved to be a master consolidator, and within 15 years the entire electrical business in Chicago was controlled by Insull through the Commonwealth Edison Co. Throughout the war years and the 1920s, he continued to expand operations, and by 1930, the company provided 10 percent of the nation’s electricity in 32 states. He was a generous benefactor of Chicago and many of its local institutions. His company also was highly leveraged, resembling a pyramid, in which a handful of executives effectively controlled the HOLDING COMPANY and all of its subsidiaries. In order to accomplish this, Insull borrowed heavily from banks. When the stock market crash occurred in 1929, the stock fell dramatically, and many of his midwestern bankers were unable to support the company and called in New York banks as well. After negotiating with the bankers for months, many of his companies were declared bankrupt in 1932, and millions were lost, including many small investors’ funds. The focus of increasing public hostility, Insull left the country for Paris and then fled France for Greece to avoid extradition.

Insull finally returned to the United States to face the charges against him, including mail fraud, embezzlement, and violation of federal bankruptcy laws. He finally was acquitted on all counts and returned to Paris, where he died of a heart attack in 1938. He is best remembered for bringing the consolidation trend to the production of electricity in the 1920s and creating one of the several large electrical utility combines, dubbed the “power trust,” that produced more than half of the country’s power and led to the passing of the Public Utility Holding Co. Act in 1935.

Samuel Insull (1859–1938) utilities executive

Index A-Z