John F. Wasik - The Merchant of Power: Sam Insull, Thomas Edison, and the Creation of the Modern Metropolis

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Contents

To my parents,

Virginia Frances Wasik

and Arthur Stanley Wasik

Sto lat

A bike ride on my favorite trail always ends in the same place. Once I emerge from the path of the Liberty Prairie, a reserve about 40 miles north of Chicago, I end up under a forest of high-tension towers, which carry 345,000 volts of power across the country. The lines hum and pulse intensely above me like rhythmic rain falling on a metal roof, creating pockets of ozone and delivering electrons to points unknown. Like watching freight trains as a kid, I wonder where the power came from and where it is going. Charting this journey led me to one man.

The widespread availability of electricity occurred because men like Samuel Insull made it happen. While the names of Edison and Westinghouse are better known, it was Insullthe Bill Gates, Warren Buffett, and P.T. Barnum of his timewho brought electricity into nearly every home, office, commercial building, and factory. Unfortunately, Insull is not a person treated kindly by history since most of his empire collapsed in 1932 and his legacy was largely blackened by the largest business failure of that time.

Out of the ashes of Insulls debacle, though, rose a great many social benefits, foremost among them were efficiently distributed electricity throughout the world and a stronger government hand in policing Wall Street chicanery.

Insull wrangled with and frequently outwitted the most corrupt politicians of Illinois. A rare combination of brilliant financier, CEO, visionary, huckster, arts patron, philanthropist, tyrant, and scoundrel, Insull lived a remarkable life that started in the steam age of the robber barons and lasted into Roosevelts radio-obsessed, progressive New Deal era. Even more notable was what happened in tandem with Insulls rise and fall. Emerging during his lifetime were modern corporations, skyscrapers, and our electron-crazy way of life. These foundations of modern civilization were being invented in the dynamo of the Chicago metropolis, an epic story of unbridled energy and folly that shaped human history far beyond its borders. Insull lived in a Chicago in which few public figures rivaled him for supreme notoriety, power, and infamy. Along the way, Insulls role as the merchant of power also influenced other geniuses ranging from Franklin Delano Roosevelt and Frank Lloyd Wright to John Dos Passos and Orson Welles.

Ironically, Insulls superpower creation anchors one of the greatest electrical and information networks ever createdan infrastructure that makes everything from cellphones to the Internet possible. While few truly understand the accomplishments of some of Insulls contemporaries such as Freud, Tesla, Einstein, and Fermi, anyone with electrical outlets and appliances can grasp the infinite importance of easily accessed power. Yet the acquisition of this Promethean energy was not without a cost. With it came unsustainable appetites for electrical and political power, a polluted environment, and perhaps the largest downside of all, global warming.

Insulls career also begs some compelling questions about the troubled soul of capitalism that resound with us today: How much wealth and control should executives have? Should employees be buying their employers stock? How much of the corporate governance process should be made transparent so as to prevent malfeasance and bankruptcy? As we contemplate the meaning of corporate power in the context of even bigger contemporary failures (Enron, WorldCom and many dot.com blowups come to mind), consider what Insull helped foster. This is nothing less than the modern global metropolisan expanding network of energy, and information that is not limited by geography and certainly not by imagination.

John F. Wasik, 2006

1. Samuel Insull in his 20s, when he was a secretary to Thomas Edison. Photo Credit: Loyola University of Chicago Archives: Samuel Insull Papers.

2. Gladys (Margaret Bird) Wallis in a publicity photo during her acting days in the 1890s. Photo Credit: Loyola University of Chicago Archives: Samuel Insull Papers.

3. Three generations of Samuel Insulls, taken in the early 1900s. Photo Credit: Loyola University of Chicago Archives: Samuel Insull Papers.

4. A photograph of Samuel Insull at the height of his powers in the mid-1920s. Photo Credit: Loyola University of Chicago: Samuel Insull papers.

Paris, July 16, 1938

The stout, 78-year-old businessman with the creamy white moustache turned around to gaze upon the city of light one last time. In front of him, a huge metal fence with gold filials offered mock protection to one of Paris loveliest parks, the Jardin de Tuileries, from the angry, vengeful mobs of the past. He reflected upon the violent history of the place. Louis XVI and Marie-Antoinette were arrested and confined to a palace that once graced the grounds after they had been caught in Varennes fleeing the revolution. The day the bells rang in Paris on August 10, 1792, the rabble stormed the last refuge of the Bourbons, leaving 1,000 corpses in Les Tuileries. The exquisite garden, designed by Notre, once strolled in by Catherine de Medici in the late sixteenth century, now, as then, featured generous flowerbeds and lined paths where sculptures longed to dance into the ponds. Lovers, children, and lonely pensioners sat on the green metal chairs.

The old man reflected on what the palace must have looked like as he returned from his shopping trip along the Champs Elyse. The mansion had burned down in 1871 after a confrontation with the Communard government. He empathized with the horror of facing the unwashed masses and a government ardently desiring to see his head in a guillotine. His enemies had compared him to a Bourbon monarch and worse. He chuckled with a sense of stinging irony when it occurred to him that he had once owned a corporate empire spanning the size of France, and a 4,000-acre estate that far eclipsed this mere city park. He knew what it was like to lose nearly everything and to have the angry government and people of a powerful country transform one into a beast that deserved to be hunted and slain.

His sigh was cut short as he felt his breath constricted. Turning around, he had hoped to get one last glimpse down the Place de La Concorde and the 3,300-year-old obelisk that had marked the entrance to the Luxor palace of Ramses III. He tried to imagine the scaffolds where the nearly 3,000 condemned in the Reign of Terror were guillotined in the Place de la Revolution. He felt a dreadful heaviness on his chest, perhaps associated with his imagined horror of the counterrevolution. More likely it was a descent into his own abyss only six years earlier.