Samuel Insull

Samuel Insull (November 11, 1859 – July 16, 1938) was a British-born American business magnate. He was an innovator and investor based in Chicago who greatly contributed to create an integrated electrical infrastructure in the United States. Insull created holding companies that purchased utilities and railroads. Insull was responsible for the building of the Chicago Civic Opera House in 1929.
Due to the Great Depression, his vast Midwest holding company empire collapsed, and he was accused of profiting personally by selling worthless stock to unsuspecting investors who trusted him because of his position and reputation. Following a seven-week trial, he and 16 co-defendants were acquitted of all charges after two hours of jury deliberation.

Early life

Insull was born on November 11, 1859, in London, the son of Insull Insull, a tradesman and lay preacher who was active in the temperance movement, and Emma Short. He was one of five siblings who survived to adulthood. His younger brother, Martin, became a major executive at Sam's companies. Insull's career began as an apprentice clerk for various local businesses at age 14. He went on to become a stenographer at '' Vanity Fair''. Through a newspaper ad, the 19-year-old became the private secretary and bookkeeper to Colonel George Gouraud, the London representative of Thomas Edison's telephone companies. When he learned of a job with Edison in the United States, Insull indicated he would be glad to have it, provided it was as Thomas Edison's personal secretary.

In 1881, at the age of 21, Insull immigrated to the US, complete with side whiskers to make him appear older than his years. In the decade that followed, Insull took on increasing responsibilities in Edison's business endeavors, building electrical power stations throughout the US. With several other Edison Pioneers, he participated in Henry Villard's January 1889 founding of Edison General Electric, which later became the publicly held company now known as General Electric. In 1892, Insull was offered the post of second-vice-president at General Electric, but was unhappy at not being named its president. When the presidency went to another, Insull moved to Chicago as head of the Chicago Edison Company. Another consideration is that he was caught between opposing factions when J. P. Morgan combined the Thomson-Houston Electric Company and Edison General Electric to form the new company in April 1892. Those loyal to Edison accused Insull of selling out, and in fact he did welcome the infusion of capital, from the Vanderbilts, J. P. Morgan and others, as necessary for the company's future development. Edison forgave him, but others did not, and it seemed a good idea to move on to a new company in a new place.

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. Chicago Edison was losing money until Insull discovered a way to make it profitable during a Christmas visit to Brighton, England in 1894. To his surprise, he saw that the shops were closed, but every light in them was burning, something that never happened in the US. Finding the head of the town's electric company, he asked him how this could happen and was told the secret to it was not a flat rate bill, but use of a demand metered billing system, measuring not only total power consumption, but a set of rates for low-demand and high-demand electric use times. By 1897, Insull had worked out his formulas enough to offer Chicago electric customers two-tiered electric rates. With the new system, many homeowners found their bills lowered by 32% within a year.

In 1896, Insull became a US citizen. 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.

During a Chicago meeting on October 8, 1918, he introduced Professor Thomas Garrigue Masaryk as the president of the future Czechoslovak Republic, de facto.

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 would win over Edison's direct current, Insull switched his support to AC in the war of the currents.

His Chicago area holdings later included 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 lines, including the Chicago North Shore and Milwaukee Railroad, Chicago Rapid Transit Company, Chicago Aurora and Elgin Railroad, Gary Railways, and Chicago South Shore and South Bend Railroad. He helped modernize these railroads and others.

As a result of owning 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, such as the installations in the 1929 State Line Generating Plant in Hammond, Indiana. This made it easier to put electricity into homes. In the late 1920s, he attempted to build a dam on the Cumberland River just above scenic Cumberland Falls, posing a threat to the cataract's flow, but was thwarted by conservation interests and the Kentucky legislature.

Samuel Insull also had interests in broadcasting. Through his long association with Chicago's Civic Opera, he thought the new medium of radio broadcasting would be a way to bring opera performances into people's homes. On hearing of the work of Westinghouse to establish a radio station in Chicago, he contacted the company. Together the two companies arranged for a radio station to be built in Chicago which would be operated jointly by Commonwealth Edison and Westinghouse. KYW's first home was the roof of the Edison Company building at 72 West Adams Street in Chicago, and it went on the air November 11, 1921. It was Chicago's first radio station.

Though the partnership came to an end in 1926, with Westinghouse buying out Edison's interest in KYW, Insull's interest in broadcasting did not stop there. He formed the Great Lakes Broadcasting Company in 1927 and purchased Chicago radio stations WENR and WBCN; the two stations were merged on June 1, 1927, with Insull paying a million dollars for WENR alone. Insull moved the stations first into the Strauss Building, then into Insull's Civic Opera House, where WENR became an affiliate of the NBC Blue Network. Insull's Great Lakes Broadcasting Company also included a mechanical television station, W9XR, which began in 1929 after the company installed the first 50,000 watt radio transmitter in Chicago for its two radio stations.

The Wall Street Crash of 1929 and ensuing Great Depression, caused the collapse of Insull's public utility holding company empire.

When Insull's fortune started to fade, he sold both WENR and WBCN along with W9XR, to the National Broadcasting Company in March 1931. Two years after its purchase of the radio stations and the mechanical television station, NBC shut W9XR just as it had done with W9XAP, which came with its purchase of WMAQ (AM).

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 (1875–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); a ''New York Times'' reviewer listed her as one of the most popular players, one who "deserved quite all the applause