Samuel Insull faces embezzlement and fraud charges after empire collapses

Electricity magnate Samuel Insull controlled a sprawling industrial empire that stretched across large parts of the United States, yet his personal wealth swung wildly from an estimated $100 million to a staggering $4,000,000,000 during the Gilded Age, blogs.loc.gov reported.

That immense financial reach collapsed entirely when the 1929 stock market crash destroyed his heavily leveraged holding companies and wiped out the savings of hundreds of thousands of investors. Born in England in 1859, Insull immigrated to the United States after working as a stenographer and joined Thomas Edison personally before helping found Edison General Electric.

Power Expansion and Holding Company Control

Insull moved to Chicago in 1892 to become president of the struggling Chicago Edison Co., where he instituted a time-of-use rate structure modeled after a system he observed in Brighton, England. His leadership helped merge Chicago Edison with Commonwealth Electric Light & Power Co. to form Commonwealth Edison Co.

By 1912, Insull formed the Middle West Utilities Company, an electric utility holding company that let him control power generation from Texas to Illinois and outward to Maine and Florida. His dominance in the sector was so pronounced that he appeared on the cover of Time Magazine twice, first on November 29, 1926, and again on November 4, 1929.

Monopoly Regulation and the Great Depression

During the late 19th and early 20th centuries, Insull participated in the War of the Currents, watching utilities shift from Thomas Edison’s direct current to the alternating current championed by Nikola Tesla and George Westinghouse. In his 1915 book collecting his public addresses, Insull argued that the electricity sector was a natural monopoly that required government regulation.

I think it was some twelve years ago that I first tried to voice the idea that our business is a natural monopoly and that we must accept, with that advantage, the obligation which naturally follows, namely, regulation

Samuel Insull

When the 1929 stock market crash ushered in the Great Depression, Insull’s highly leveraged business model could no longer sustain itself. Within a few years, Middle West entered receivership, erasing his fortune alongside public savings.

Extradition and Subsequent Corporate Reform

Insull resigned in 1932 and fled with his wife to France and Greece before authorities arrested him in Türkiye and extradited him back to the United States to face embezzlement and fraud charges that were later abandoned. He died in Paris in 1938 and was buried in London’s Putney Vale Cemetery.

The spectacular failure of Insull’s corporate empire prompted federal lawmakers to overhaul oversight of publicly traded businesses through major legislative actions. In 1934, Congress created the Securities and Exchange Commission, followed closely by the passage of the Public Utility Holding Company Act of 1935.