John Wasik's The Merchant of Power: Sam Insull, Thomas Edison, and the Creation of the Modern Metropolis (2006), is a classic rags to riches to rags story. Insull is now largely forgotten. During the 1930s, though, after the collapse of his utilities empire, he was as reviled as were Ken Lay and Enron in recent years. The similarities between Insull and Lay, however, don't go much further. Insull, for all his faults, was a remarkable innovator who contributed greatly to the technical and financial development of the electric power system. Although indicted after the collapse of his businesses, he was acquitted of all charges. And, Insull lost his fortune when his businesses failed during the depression.
As a young man, Insull came to the United States from his native England to work for Thomas Edison. Insull quickly grasped the potential of electrification of cities. He understood (unlike Edison) that alternating current, which can be transmitted long distances, and the creation of a power grid were essential to providing efficient electrical service to metropolitan areas.
After leaving Edison's employ, Insull moved to Chicago and built an extensive utility system in the Midwest. In a largely unregulated business environment, Insull created a mind-boggling system of utility holding companies. These holding companies enabled Insull to control a huge financial empire with a relatively small investment. But while this system worked well during the boom years of the 1920s, it was unable to withstand the economic downturn of the 1930s.
Insull was especially reviled because financial disaster overtook him at a time when the fight between public and private utilities was at its height. Franklin Roosevelt, when he was Governor of New York, was very interested in public hydro-electric power generation. As President, Roosevelt continued to pursue public power with the creation of the Tennessee Valley Authority, the Bonneville Power Administration, and the Rural Electrification Administration. The magnates of the private utilities were considered arch enemies by the Roosevelt administration. Insull was a prime target of reforming zeal. The failure of Insull's utilities empire, and Insull's acquittals in his criminal trials, provided impetus for the enactment of securities and utilities laws during the New Deal. Those laws, along with the electrical power grid, are Insull's legacy.