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A Vigorous# Red-Blooded Life: Samuel Insull# 1859-1938 by Stephanie Anne Hauflaire Thesis for the Degree of Bachelor of Arts in History College of Liberal Arts and Sciences University of Illinois Urbana, Illinois 1992 Contents Introduction.. * 1 1* The Early Years........ ........... 3 2. The Beginning...................... 13 3. Expanding Production and Distribution of Electricity........ 26 4. A Monopoly of Service; Electricity, Gas, Traction, the War.,.......... ,32 5. Big Business in the 20's ...........47 6. The Decline and Fall of Samuel Insull........................... , 57 Conclusion..................... 68 Endnotes............ ............ 71 Bibliography. .............. 82 I h»y« often been in downtown Chica?© et n ,j «. c* - = eiegye the-;be«nt^,of eil tfte ilfhta «g«|net the iisi ■ ■a |i«€lc"’Sl|, & *t**tfo ttfcfir* • atu&mr *«fr tosrl^iin history for most of my life, I never knew who was responsible for this beautiful spectacle until my grandfather suggested that I do my honors thesis on a man named Samuel Insull. "Who* s he, Gramp?** I asked. MHe1 s someone who made a lot of folks mad at him; although if it wasn't for him, Chicago might have still been living by candlelight.” I am not the only student of American history who had never heard of Samuel Insull. Almost everyone who has asked me what I have been writing about has asked, "Samuel Insull? Who's he?" The more I read, the more I came to realise what a shame it is that so few people know who Insull was or what he did for our country. It is disappointing that he is mentioned in so few history books, and that when he is mentioned, he is usually referred to as a "robber baron,” instead of as the man who was the commercial pioneer of electric power. In this thesis I will highlight some of Insull's greatest business achievements, including innovations in the rate- making of t til it ies, the centralization of power supply through central station service, and the electrification of small towns and farms in thirty-two states in the Union. I will also discuss Insull's extraordinary and original public s • ca w p llfm ■ and his exemplary employee p olicies , filisiiy# I mill show that although he me falsely aednsed of ^ # C i h # a mcmbpoly of the power supply of chioafo to shtlify; his lost for power and money, Insull was genuinely concerned with the welfare of his community and with the success of his country. This can be seen through a look at his fair rate making and superior service to the public, his many charitable works in Chicago, and his valuable, patriotic service during World War I. After reading Forrest McDonald's book, many books on Chicago history, and countless speeches and comments by Samuel Insull, I conclude that Samuel Insull was a genuine, honest, hard-working genius who took the lead in the electricity business for forty years, and though he contributed so much to our society, has been repeatedly and unfairly vilified by the press and by many historians. The following pages will trace the footsteps of this important figure in the history of America. 2 thiemly mm s “ ~l»oWd©n~ " Samuel Insull wee born in London in 1859* He bed seven siblings, three of whom died before age ten. Insults Presbyterian parents, Emma and Samuel Insull were crusaders for the temperance movement. According to Emmett Dedmon, there is some evidence that Insull was partly of Jewish origin. Some critics later attributed Insull*s great success to this heritage. Insull Is quoted as saying, "If I have some Jewish blood, I should not be ashamed. Some of England’s greatest men were Jews.1,1 Insull's mother Emma ran a temperance shelter, and while in London Samuel senior operated a small dairy.2 Because of financial difficulties the family moved to Reading, England in 1866, at which time Samuel senior acquired a paid position as a temperance seeretary in the Oxfordshire district.3 this job, which lasted until 1874, enabled the Insulls to send young Samuel and his older brother Joe "to a good private school which, as McDonald says, "opened the world to young Sam." 4 While in school Insull learned many Victorian principles such as, "Idle hands are the devil's workshop/ Time is money; One reveres one's family; and One places highest valuation upon a man's word and good name."5 Even as a young boy, Insull was teaching himself that honesty# prudence, and hard work would , eventually bring ‘him -respect -and- success. ■ ;; ! .• M l $ H Samuel Senior lost his temperance job#: m & the; family moved hack to London. It was at this time that Samuel Senior decided that his fourteen year old son should become a minister* Sam Junior had decidedly different ideas. He rebelled against his father and announced to the family that he was not going to be a minister; he was going out to find a job. A heated argument followed his decision, but eventually he won. Individual, resolute initiative in the face of strong opposition was to become characteristic of this unusually energetic young man. For example, when he announced, early in his career in Chicago, to all the other electricity men in town, that their way of running things was inefficient, he was certainly going against the tide. Insull’s first job, at age fourteen, earned him $1,25 a week as an office boy in an auctioneering firm. An enterprising young clerk at the firm spotted Insull’s talent, and quickly taught him shorthand. This new knowledge eventually enabled Insull, now aged sixteen, to take a night job as a stenographer for Thomas G, Bowles, the editor of Vanity Fair magazine. Insull worked tirelessly for Bowles for two years, sometimes working until midnight and rising at four o ’clock the next morning to copy his notes from the night before.6 He still held his job at the auctioneering firm, and consequently had little time for leisure activities* Even in bis teenage years Samuel Install had a passion for precise* Sard work* and an insatiable hunger for learning. He taught himself'things such as bookkeeping* political economy* history* and literature. Because he did all this in his spare time* he learned to absorb material quickly and efficiently* a talent that would later serve him quite well.7 The way in which Insuil's life came to be closely entangled with Thomas Edison’s sounds like a great story line for a book. As secretary of the literary society of which he was a member* Insuil was asked to give a talk on the subject of self-help, in his speech, he discussed an article in Ssrifenexia,.. Monthly * that was written about a young inventor named Thomas Alva Edison. This article made Insuil wonder what else there was to know about this tinkering genius. Insuil was soon reading everything he could find about Edison. The more he read* the more impressed he became.8 At this point in Insull’s life* I am quite sure he had no idea he would eventually become Edison’s private secretary and good friend. In 1879, by no fault of his own, Insuil was fired from his job at the auctioneering firm. This seemingly unfortunate Incident opened the first door to the success Insuil would later achieve as an industrialist. Insuil applied for a secretarial job he saw advertised in the newspaper, and he got 5 SflSi® *&*i '' >/* "«? ^ M i p p l i l PRlili ''i^ i^ ^ m m 7 f ; J f M 7 7 ] 7 t rimed. < w t b l . 1 $ m # m n trnpmmH%%tm* this was «\*4 n d ^ i & for a youhf, enterprising individual like Samiiei " Insull• Gouraud proceeded to teach Insull about corporate finance, and encouraged him to learn everything he could about Edison’s affair? in Europe. Insull took Gouraud*s advice to the extreme. Above and beyond his regular duties Insull spent time with the engineers, learning the technical aspects cf the business; he read all of the literature on Edisoi and his experiments;10 and he even became the first telephone operator on the eastern side of the Atlantic.11 When Insull spotted an opportunity for advancement, he jumped at the chance to offer his secretarial services ( free ' ill of charge) to Edison1s head engineer, Edward Johnson. Johnson soon recognized Insull*s special organizational abilities, and recommended him to Edison as an employee with potential. Finally, in January 1881 Edison’s private secretary resigned *< . ^fi suddenly, and Johnson sent for Insull to come to Now York. .>f e ifeSi'IB Insull*s family thought it was a foolish idea, but as was ifil characteristic of him, Samuel Insull was determined to have il§ U * his wish. After promising his mother he would not drink, 7-7 ■'•'7 ': ” -V 7 , Insull took off to meet his destiny. Little did he know he &'fc£7 ■ was on his way to becoming the most powerful, innovative force in the shaping of the burgeoning electricity business, and in the management of public utilities as a whole. 6 •New York- When Insull arrived in New York, he only thought he was going to be personal secretary to Thomas Edison. Before his first night in America was through, he was well on his way to being Edison*s financial advisor!12 Insull's job description was a bit vague, so he simply began assuming increasingly important responsibilities. Almost from the beginning, Edison gave him power of attorney.13 Insull was also in charge of keeping the office running well, organizing and taking charge of Edison's correspondence, and even buying Edison's clothes!14 Insull's starting salary was one hundred dollars a month.

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