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Samuel Insull
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Samuel Insull (November 11, 1859 – July 16, 1938) was an Anglo-American investor based in 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.
el Insull was born in London, and began his career as a clerk for various local businesses.
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Samuel Insull (November 11, 1859 – July 16, 1938) was an Anglo-American investor based in 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 named General Electric.
Life in Chicago
The Western Edison Light Co. was founded in Chicago in 1882, three years after Edison developed a practical light bulb. In 1887, Western Edison became the Chicago Edison Co. Insull left General Electric and moved to Chicago in 1892, where he became president of Chicago Edison that year. In 1897, he incorporated another electric utility, the Commonwealth Electric Light & Power Co. In 1907, Insull's two companies formally merged to create the Commonwealth Edison Co. As more people became connected to the electric grid, Insull's company, which had an exclusive franchise from the city, grew steadily. By 1920, when it used more than two million tons of coal annually, the company's 6,000 employees served about 500,000 customers; annual revenues reached nearly $40 million. During the 1920s, its largest generating stations included one on Fisk Street and West 22nd and one on Crawford Avenue and the Sanitary Canal.
Insull 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 what is now Federal Signal Corporation,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.
Personal life
On May 22, 1899, Samuel Insull married a "tiny, exquisitely beautiful and clever" Broadway ingénue actress whose stage name was (Alis) Gladys Wallis (born 1875 - died September 23, 1953). Her real name was Margaret Anna Bird. Gladys Wallis was popular with New York audiences and appeared in W. H. Crane's company first in the play "For Money" in 1892 and in his subsequent productions. Gladys played the role of Maggie Rolan in "Brother John" (1893); the New York Times reviewer listed her as one of the most popular players, one who "deserved quite all the applause [she] received". Prior to her marriage to Insull, Gladys also appeared on the New York stage in: “On Probation” and “Worth a Million”. At the height of her fame she was interviewed (rather unsuccessfully) by Frank Norris.
At the time of their marriage, Insull was forty-one and Gladys was twenty-four. She had been on the stage from childhood. The Insulls lived outside Libertyville, Illinois, in a Spanish Revival mansion with extensive grounds now known as the Cuneo Museum, in Vernon Hills. The Insulls had one son, Samuel Jr.
Orson Welles' masterpiece Citizen Kane is in part based on the life of Samuel and Gladys Insull. Playwright Herman J. Mankiewicz based Susan Alexander’s catastrophic operatic debut in “Citizen Kane” on Gladys Wallis Insull’s New York role as Lady Teazle in a charity revival of “A School for Scandal.” The review of Susan Alexander's debut in Kane echoes Mankiewicz's actual 1925 review of Gladys Insull. His 1925 review began: "As Lady Teazle, Mrs. Insull is as pretty as she is diminutive; with a clear smile and dainty gestures. There is a charming grace in her bearing that makes for excellent deportment. But Lady Teazle seems much too innocent to lend credit to her part in the play."
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.
Insull controlled an empire of $500 million with only $27 million in equity. (Due to the highly-leveraged structure of Insull's holdings, he is sometimes wrongly credited with the invention of the holding company.) His holding company collapsed during the Great Depression, wiping out the life savings of 600,000 shareholders. 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 Gladys 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.
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. Gladys Insull, her son Samuel Insull, Jr. and his wife and son, Samuel III are buried in Chicago’s Graceland Cemetery.
Books about Samuel Insull
- John F. Wasik: The Merchant of Power: Sam Insull, Thomas Edison, and the Creation of the Modern Metropolis. New York: Palgrave Macmillan. 2006. ISBN 1-4039-6884-5
- Forrest McDonald: Insull: The Rise and Fall of a Billionaire Utility Tycoon. Chicago: University of Chicago Press, 1962. ISBN 1-58798-243-9
- Samuel Insull: Memoirs of Samuel Insull: An Autobiography by Samuel Insull. Larry Plachno (Ed.) New York: Transportation Trails, 1992 (reissue). ISBN 0933449178; ISBN-13: 9780933449176
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