The Merchant of Power: Sam Insull, Thomas Edison, and the Creation of the Modern Metropolis

by John F. Wasik

A timely rags-to-riches story, The Merchant of Power recounts how Sam Insull--right hand to Thomas Edison--went on to become one of the richest men in the world, pivotal in the birth of General Electric and instrumental in the creation of the modern metropolis with his invention of the power grid, which fuels major cities today. John Wasik, awarded the National Press Club Award for Consumer Journalism, had unprecedented access to Sam Insull's archives, which includes private correspondence with Thomas Edison. The extraordinary fall of a man extraordinary for his time is revealed in this cautionary tale about the excesses of corporate power.

Genres: Business, Nonfiction, Science, History

288 pages, Hardcover

First published March 7, 2006

About the author

I'm the author of 19 books to date. They've spanned the gamut from personal finance and environmental topics to infrastructure, technology and creativity. I like telling stories that answer a question: How did we get electricity in our homes? How can we best save for retirement? What do we need to know about workplace automation? I have a hybrid set of interests that cross the boundaries of history, geography, science, economics and ecology. I've spoken across North America on these subjects and am thrilled to present my ideas and books to live audiences. I'm also a working journalist, contributing to The New York Times, Forbes and Real Clear Investigations. As a former columnist for Reuters and Bloomberg, my columns were published in five continents. I'm also a musician, poet and county commissioner and forest preserve vice president.

Reviews

[Todd · Rating 4 out of 5]

I approached this book conversely to the way many others did; I already knew a bit about Insull, but not much about Edison aside from the bubblegummy movie stuff. A great deal was learned about both regardless. This book examines two completely different personalities -- one, of an inventor (Thomas Edison) and second an innovator (Sam Insul). And makes it clear that inventions are not innovations. In a subtle manner it also draws a point that certain kind of innovations only leads towards disaster, hence, not all innovations are equal (or good).

[Judy Aulik · Rating 4 out of 5]

The community where I grew up was badly affected by the collapse of the Insull empire. One of my historical interests is his electric railroad system: just think about how efficient transportation would be in Chicagoland if not for greed and the Great Depression!
But I digress. This biography is well worth the effort to obtain and to read. It patches together the history of many of the quirky north suburbs while being a fascinating narrative.

[Connor Usry · Rating 4 out of 5]

Fascinating story of Samuel Insull - the man who essentially drove the development of the structure of the modern electrical grid. Follows his successes and eventual fall from grace when his holding companies were exposed to public as the shells that they were.

The story covers...
* His work under Thomas Edison in NY/NJ
* His development of his empire in Chicago
* The collapse of the market during the Great Depression
* His time in Greece/Turkey while the US tried to extradite him.
* His trial (and eventual acquittal) in the US, supported by FDR and the public opinion
(Last two chapters were great summaries)
--------
Quotes:
“ It should be born in mind that she powers as essential to the former residence to the manufacturer. The same policy has brought cheap power within the reach of manufacturing institutions, be there ever so small, established in county districts, and opened up the possibility of the establishment of large manufacturing businesses in role communities which give employment to the families of the farmers adjacent to those communities.” Pg 90

“How ironic that and saw the “natural monopoly “power Baron was espousing the views of a progressive Democrat a generation before World education would become a well-funded national program.” pg 90

“He would consistently argue that private concerns like his were always more efficient than municipal corporation’s in an out to rake up whenever political sentiment seem to be favoring me to support ownership. By 1906 he had already cut rate by 20%, and would invoke a rake up whenever he thought it would get in the company political leverage and good public relations. Read cutting was also good for business since it brought in new customers. New accounts translated into greater “load factor” for his power plants. They could run longer and more efficiently if there were more power customers.” pg 91

“In 1903 Chicago Edison‘s (Insull’s company) promotional Guru John Gilchrist started “Electric City”, a magazine that promoted the lifestyle and workplace advantages of electric power. He got his start through his plan of installing 6 free outlets in any home that signed a contract for a year‘s worth of electricity. Homeowners who felt they got a deal often ended up wiring their entire homes and buying appliances from Chicago Edison. Gilchrist would then follow up by sending trucks and salesman to the “wired “neighborhoods to either give away or sell fans and appliances. Once households had useful appliance, they craved more. The nascent consumer culture became electrified “. Pg 91

“Louis Brandeis (future Supreme Court justice) discovered another secret of how the trust controlled a mountain of properties. Interlocking directorates, “the root of many evils“ that intimately linked to the bankers to the trusts, were “the most potent instrument of the money trusts.“ In his 1914 classic other peoples money, Brandow showed the connections between the Morgan bank and several railroads, GE, Western Union, American telephone and telegraph, and US Steel. He gave the world the phrase “sunlight is the greatest disinfectant,” (referring to the corporate disclosure’s), Brandeis not only pushed for greater corporate regulation, he wanted the public to know how much the largest corporations were steered by just a few industrial admirals.” - pg 104

“The crash of the insole empire has given excellent point to the truth of what I have been arguing for four long years. That great ”Insull monstrosity” made it a part of a group of holding and invest in companies so long, and exercising control over hundreds of thousands of operating companies, and distributed securities among hundreds of thousands of investors, and had taken the money to an amount running over one.5 billion, not millions, but billions! That “Insull monstrosity in “room during the years of prosperity Until it reached a position where it was an important factor in the lives of millions of our people. The name was magic. The investing public did not realize then, as it does now today, but the methods used in building up of these holding companies holy contrary to every sound public policy..” - FDR in a speech about Insull -pg 205

“By 10th of October 1930, Insull was heeding His lawyer’s advice and stay put in Illinois knew he was there. The Hearst Herald & Examiner broke the revelation: “Finds Insull in Athens hotel — Fugitive slips from Extradition Net; Dodges US Arrest; Ex-magnet seems well supplied with Cash: Chicago officer may go abroad for capture. the symbol of corporate evil, a fugitive, and fallen utilities emperor was not merely in exile, however. He would become, in the words of the Washington Post, “the bane of nations,” as FDR did everything in his power to bring Insull back to Chicago to justice. “ - pg 206

[Stephen Rynkiewicz]

Samuel Insull is a Horatio Alger hero in John Wasik's sympathetic telling, except the story arc is rags to riches to rags. This keeps the Bloomberg News reporter from being too critical of Insull's frothy churn of the Jazz Age stock bubble. But it does energize his description of the transformative change carried by Insull's Midwest power lines.

[Stephen · Rating 4 out of 5]

4 stars for a good, detailed history that doesn't get too dense or boring...might deserve another but I couldn't shake the sense that the author was somewhat predisposed to be more lenient with Mr. Insull and his actions.

[Ken Madsen · Rating 5 out of 5]

A fascinating book on a man whose unbelievable rise to success few people have ever heard of and the invention of the modern power grid. It is also a look into the history of Chicago at the turn of the 20th century. Sam Insull's arrival to Chicago to turnaround a"a puny also-ran" Chicago Edison was the beginning of his vision to make electricity available on a large scale through central power generation stations. Chicago provides the backdrop for his endeavors complete with corrupt politicians, financial titans and an unforgiving public. We are taken to the 1893 World's Columbian Exposition where Edison and Westinghouse battled for the public's admiration and desire for all things electrical.

Many people have heard of Rockerfeller, Carnegie, Edison and J.P. Morgan. Sam Insull was a contemporary and his vision of providing electricity to the masses made Insull one of the richest men in the world in the 1920's. At one point, he controlled 30% of all electrical power generation in United States. Why is this man not known? Perhaps because he is also the reason the government enacted many of the securities laws in place to protect investors. Nevertheless, many of the power generation companies Insull started are still around like Exelon and Commonwealth Edison.

Sam Insull deserves a more prominent legacy in history, primarily as the father of the modern power gird. It's an incredible "rags to riches" story. In many ways, it's also a sad story of a driven individual who gave millions to charity and improved the lives of millions through the availability of electricity into their homes. Despite these great achievements, he was still reviled by a public who blamed him for their stock losses after the 1929 market crash.

[Preston · Rating 3 out of 5]

Story of a man little known to the general public, but who played a significant role in bringing electrical power to the general population of the United States. He was a close associate of Thomas Edison and his early achievements is developing pioneer electrical power plants. However, Insull's later career as a creator of powerful corporations lead to the construction of the the mammoth power grids that brought inexpensive electrical power to most of the country. Unfortunately, his business ethics lead to his being disgraced in the eyes of the nation, and his legacy is forever clouded.

[Ryan · Rating 3 out of 5]

Wasik does a good job of portraying Insull and presenting an objective history. However, there are many tangents throughout the book which serve as unnesseary plot devices, and only distract the reader from the main storyline.
Also, there are several errors that were overlooked by Wasik and the editor. For instance, Nikola Tesla is described as being 6 foot 6 in. (he was 6 foot 2 in.) The 1929 financial collapse known as Black Thursday was noted to have occurred on October 13th (it occurred on the 24th, the 13th was a Sunday).
Overall the book did not meet its full potential.

[Garret Seinen · Rating 4 out of 5]

Sam Insul, vindicated

A very fair treatment of a much maligned genius. Sam Insul was possibly the most farsighted individual involved in electrical power generation, taking the field from tiny regionally limited energy to our modern electrical grid.

In all, a good read with two caveats … he praises FDR, a man for whom I hold no admiration and he has drunk the green cool aid. That he is irrational on nuclear electrical power is also regrettable.

[Elise · Rating 5 out of 5]

The story of how electricity came to dominate our lives is usually told through the lives of its inventors. By focusing on the business genius who brought us centralized power, John Wasik fills an important gap in our understanding of how our lives became in separable from the electrical grid.

[Debbie]

Recommended by Sharyn S.