HP: The 1920s in America is sort of characterized as a business culture. It was the successful businessmen, like Henry Ford and Sam Insull, that were the great heroes of the age. And so when the Great Depression hit, of course they became the targets for blame for causing so much misery and depression around America. Insull, I think, not only as a political figure, becomes the object of attack as a scapegoat for the Depression, with Franklin Roosevelt picking him out in particular as a public enemy. But also because he had sold his stocks so widely to ordinary people that normally could not afford to invest in stocks, certainly could not afford to lose their savings in stocks. Suddenly they were left with lots of paper that was worthless. And so his reputation changed dramatically in the days following the Depression and the collapse of his house of cards, his holdings companies, and given the political tenure, he becomes a great public enemy of many Americans.

Sam Insull went to trial, and I think in a very convincing way convinced the jury that he was not a crook. I think that is a fair assessment. The jury made the right decision. He made major errors in creating this pyramid of power holding companies that collapsed financial institutions. But, on the other hand, he believed in what he was doing. He was not trying to cheat people. And the fact that he threw so much of his own personal fortune into the into a black hole, basically, to try to shore up Commonwealth Edison, is fairly substantial proof that he was not trying to defraud people--that he really believed in his own vision.

And I think the jury accepted that notion that here was at this point a fairly elderly man, a man that was fairly broken in spirit, because his dream had been shattered, but clearly he was not out to cheat people or to defraud them. And I think that's why he is acquitted in a fairly short time period.

His longer legacy that comes down to us today is mixed. On the one hand, I think he was a visionary in trying to create a kind of almost a democratic vision of public utility services. He did want to extend the service to everyone and felt that the quality of life would be enhanced with modern technology. I think that was a great legacy, and the legacy, in a positive way also of being able to build these kind of regional grids of power that were able to serve all these customers at a fairly reasonable rate. The negative legacy probably is in this financial area of creating these holding companies that were irresponsible.

This would lead to the creation under the New Deal of the Securities and Exchange Commission to regulate stocks in general and a special act in 1935 called the Public Utilities Holding Company Act, which was supposed to provide a death sentence on these conglomerates of utility companies. Now this never really happens. Companies do get around this, and today there are still very large utility corporations that control lots of individual operating companies, but under federal and state regulation now, so that it's much tighter. And that's probably his main legacy.

HP: By the late 1920s, Sam Insull had pretty much fulfilled his dream for providing power to every customer in the city and the suburbs. Sort of the last challenge was really to go back to his original experiments from [earlier in the century] that had remained experimental to actually provide electricity out to the countryside, to the farmers and hopefully improve their quality of life and bring them into the modern technology, modern world. By the late twenties, he begins to do this by figuring out ways to finance, which was the problem of financing building the wires out in these remote areas where you have long stretches between each customer, and it was quite expensive.

So, by the late twenties, he was trying to figure out ways to somehow share the cost and maybe provide the wires to a farm and then have them pay back little by little in each monthly bill some of the cost it took to get the wire out to that individual farm. Of course, the Depression intervenes; private companies like Commonwealth Edison, despite being big companies, had no money to do this kind of financing, and it evolves then into the Tennessee Valley Authority as an alternative regional power grid, and Rural Electrification Administration to provide public financing to provide electricity out to the farms.

HP: One of the major political responses to Insull's fall was sort of going back to an old American idea about monopoly and power and irresponsible power in private hands. With the collapse of Insull's empire these thoughts revived, that too much power was held by one man in the form of Sam Insull. And I think this does lead to notions of more support within the government to set up some kind of yardstick, some kind of public power alternative to private power. If not to literally supply the power to the public, then at least to act as a check and balance on private monopolies that were providing electric and other essential utility services.

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