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Primary Sources: Samuel Insull: No Great Trouble Was Expected
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The man who made electricity a reality in millions of American homes was ruined during the stock market crash of 1929 and the Great Depression that followed. His holding companies and his personal fortune were wiped out in one of the era's biggest financial disasters, triggering losses for thousands of stockholders. Insull quickly became a Depression-era scapegoat, charged with embezzlement, larceny, mail fraud, and violating the Bankruptcy Act.

While awaiting trial in 1934, Insull dictated his memoirs, including this description of his attitude after the crash. Though he would be cleared of all charges, his reputation would never recover.

Financial Happenings 1929-1933

Looking back over the financial happenings from 1929 to 1933, it looks very doubtful to me that anyone familiar with the financial affairs in the United States had, at that time, any real conception of the general drift of business, either in the United States or in the rest of the world.

After the market troubles in 1929, President [Herbert] Hoover called for meetings of various groups of people engaged in different lines of business, and I was present at a White House Conference during which I was asked to present estimates of proposed investment expenditures of the Insull group of public utility properties. The general atmosphere of the White House Conferences was that business should, to a large extent, be carried on as usual. Looking back over this period, it does not seem to me as if, at this time, the President and his advisers thought that the United States was headed for any really serious trouble, and certainly not any such troubles as culminated in the Bank Holiday declared by President [Franklin] Roosevelt as soon as he entered office.

Undoubtedly, in 1929 President Hoover was intent on the policy of encouragement of all classes of industry to go ahead on the assumption that no great trouble was to be expected. This view was not confined to official circles. On October 31, 1929, the Chicago Tribune published a statement made by John D. Rockefeller, Senior... he had very positive views of a favorable character as to the future outlook...

Looking over a statement of my own, issued on October 12, 1930, practically a year later, in which I analyzed the earning figures of the so-called Insull group of properties, the only weak spot that I could see at that time was the suburban and interurban transportation properties, and the troubles with these cases were ascribed as much to the competition of the automobile as to the adverse condition of general business....

I heard of a number of cases of investors who refrained from investing their funds during 1929 and 1930, and who, thinking all the troubles were over by January 1931, bought very largely of securities and suffered very large losses as the result. The fact that I did not foresee the tremendous troubles that followed was in no sense peculiar to myself. The same point of view that I held was held by most men of business affairs. The extremity of the crisis and the depression that followed was, in my judgment, owing very largely to the general belief that the business position of the United States was fundamentally sound and that whatever troubles might beset the rest of the world would be relatively easily weathered by this country...


Excerpt from Plachno, Larry, ed. The Memoirs of Samuel Insull. Polo, Illinois: Transportation Trails, 1992, pp. 226-228.



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