Samuel Insull

Samuel Insull
Samuel Insull
Born	Template:Birth date; London, England
Died	July 16, 1938 (aged 78); Paris, France
Occupation(s)	Industrialist, business executive
Known for	Establishing a unified electrical infrastructure in the United States; founding holding companies consolidating utilities and railroads; construction of the Chicago Civic Opera House

Samuel Insull (November 11, 1859 – July 16, 1938) was a British-American industrialist and pioneer centered in Chicago who played a key role in establishing a unified electrical infrastructure across the United States. He founded holding companies that consolidated utilities and railroads, and was instrumental in the construction of the Chicago Civic Opera House in 1929. His extensive Midwest utility empire collapsed amid the Great Depression, resulting in allegations that he profited by marketing worthless stock to investors. After a seven-week legal proceeding, Insull and 16 associates were found not guilty of all accusations.

Early life

Born in London to Insull Insull, a tradesman and lay preacher involved in the temperance movement, and Emma Short, Samuel Insull was one of five children. His younger brother Martin later became a prominent executive within Samuel’s enterprises. Beginning his career as an apprentice clerk at age 14, he subsequently worked as a stenographer for Vanity Fair. At 19, he became private secretary and accountant to Colonel George Gouraud, Thomas Edison’s representative in London.

In 1881, at 21 years old, Insull emigrated to the United States aiming to serve as Edison’s personal secretary. Over the following decade, he climbed the ranks within Edison’s companies, contributing to the development of electrical power plants nationwide. He took part in Henry Villard’s establishment of Edison General Electric in 1889, which eventually evolved into General Electric. Although offered the position of second vice president at GE in 1892, he was disappointed not to be appointed president and subsequently relocated to Chicago to head the Chicago Edison Company. His move was also influenced by internal conflicts after J.P. Morgan merged Thomson-Houston with Edison General Electric; while Edison remained supportive, others disapproved of Insull’s acceptance of external capital.

Life in Chicago

Founded in Chicago in 1882 as Western Edison Light Co., the company was renamed Chicago Edison Co. in 1887. Insull assumed its presidency in 1892 and reversed its financial losses by implementing a demand-metered billing system inspired by his visit to Brighton, England, in 1894. By 1897, this tiered rate structure reduced many customers’ bills by approximately 32%.

Becoming a US citizen in 1896, Insull established Commonwealth Electric Light & Power Co. in 1897. These entities merged in 1907 to create Commonwealth Edison. By 1920, holding exclusive franchise rights within Chicago, Commonwealth Edison served nearly 500,000 customers, employed about 6,000 workers, and generated close to $40 million annually. Key power plants included Fisk Generating Station and Crawford Station.

Acknowledging alternating current (AC) as the superior technology during the war of currents, Insull transitioned support from Edison's direct current systems to AC. His utility holdings around Chicago expanded to encompass Federal Signal Corporation, Peoples Gas, and Northern Indiana Public Service Company, along with interests in several electric interurban railways such as the Chicago North Shore and Milwaukee Railroad and Chicago Aurora and Elgin Railroad. He upgraded these railroads by electrifying their lines.

Insull was an early proponent of regulated industry frameworks, advocating for electric utilities as natural monopolies subject to regulation that curbed competition while enabling economies of scale. He pursued vertical integration by controlling coal mines, rail transport through the Chicago & Illinois Midland Railway, and barge transfer facilities to efficiently supply fuel to Commonwealth Edison plants. Large steam turbine installations like those at the 1929 State Line Generating Plant reduced electricity costs and broadened market access.

In broadcasting ventures, Insull partnered with Westinghouse to establish Chicago’s first radio station, KYW (AM), launched in 1921 atop the Edison Company building. After Westinghouse acquired Edison’s stake in KYW in 1926, Insull created Great Lakes Broadcasting Company and purchased stations WENR and WBCN for $1 million. These stations were consolidated into WENR—an NBC Blue Network affiliate initially located in the Strauss Building before moving to the Civic Opera House. Beginning in 1929, Great Lakes Broadcasting also operated mechanical television station W9XR featuring Chicago’s first 50,000-watt transmitter.

The financial devastation caused by the Wall Street Crash of 1929 and ensuing Great Depression led to the disintegration of Insull’s utility holding empire. As his wealth diminished, he sold WENR, WBCN, and W9XR to the National Broadcasting Company in March 1931. NBC subsequently discontinued W9XR along with other experimental television stations it acquired later.

Personal life

On May 22, 1899, Samuel Insull wed Gladys Wallis (1875–1953), a well-known Broadway actress who performed under the name Alis Gladys Wallis. Prior to their union, she earned recognition for her roles in prominent New York stage productions such as For Money (1892) and Brother John (1893). At the time of their marriage, Insull was 41 years old while Wallis was 24.

The couple's primary residence was a Mediterranean-style estate with expansive grounds located in Vernon Hills, Illinois, which later became the Cuneo Museum. In addition, they owned an apartment on North Lake Shore Drive in the city and a suite at the Civic Opera House. They had one child, a son named Samuel Jr.

Both were enthusiastic supporters of the arts; Insull notably contributed to the creation of Chicago’s Civic Opera House, inaugurated in 1929 with a performance of Aida, for which he personally selected the opera and cast. He was also deeply involved in charitable activities, providing substantial donations to local hospitals and African-American organizations in Chicago. During World War I, Insull led the Illinois Defense Council under President Woodrow Wilson and played a significant role in raising over one million dollars through War Bond sales.

Great Depression

Insull managed an extensive business empire valued at $500 million but supported by only $27 million in equity. Due to this heavily leveraged financial structure, he is sometimes inaccurately credited with pioneering the holding company concept. His empire ultimately collapsed amid the Great Depression, resulting in losses that wiped out the life savings of approximately 600,000 shareholders. This downfall, combined with an investigation by the Federal Trade Commission into the electric industry conducted by the National Electric Light Association, contributed to the passage of the Public Utility Holding Company Act of 1935.

To evade extradition efforts by U.S. authorities, Insull initially fled to France and subsequently to Greece. He was eventually apprehended in Turkey and extradited back to the United States in 1934 to face federal charges including mail fraud and antitrust violations. Represented by Chicago attorney Floyd Thompson, Insull was acquitted on all counts.

Death

In July 1938, while attending Bastille Day celebrations in Paris, Insull suffered a fatal heart attack at the Place de la Concorde Métro station despite his wife’s warnings due to his known heart condition. At the time of his passing, he carried only 30 francs and was identified through a hotel laundry receipt. He was receiving an annual pension totaling $21,000 from three former companies. Insull was interred at Putney Vale Cemetery in London, where he was born. His will revealed an estate worth approximately $1,000 against debts amounting to $14 million.

Legacy

Insull’s enduring impact lies in his development of electrical grid systems and his role in establishing the regulated monopoly, a uniquely American framework for utility enterprises. Through a combination of strategic business insight and political leverage, he eliminated inefficient competition among power providers that often doubled production expenses. While consolidating competing firms into monopolies, Insull preserved affordable pricing and actively advocated for regulatory measures designed to protect consumers.

In media

Samuel Insull served as partial inspiration for Orson Welles’ film Citizen Kane, frequently regarded as a fictionalized portrayal of William Randolph Hearst. Welles acknowledged incorporating aspects of Insull’s life story, such as his commissioning of an opera house for his preferred soprano. The makeup artist Maurice Seiderman used a photograph of Insull as a reference for designing the aged appearance of Charles Foster Kane.

Although Welles denied that Susan Alexander’s character was modeled after Gladys Wallis, co-writer Herman J. Mankiewicz drew upon related experiences when crafting the screenplay. Wallis returned to performing on stage in 1925 after a lengthy hiatus during a charity revival that attracted sharp criticism from Mankiewicz. This episode influenced the film’s depiction of Kane’s second wife’s opera debut and the harsh review delivered by a drama critic.

In 2019, Tom Holland portrayed Samuel Insull in the historical drama The Current War.

External links

Samuel Insull Papers, 1799–1970 (Bulk 1932–1935), Loyola University Chicago Archives
Photograph of Samuel Insull with Thomas Edison, PBS
Genealogy forum information at Genealogy.com
Historic Figures: Samuel Insull (1859–1938), Chicago-L.org