Exposition provided a perfect showcase for the wonders and possibilities of electricity. Chicago Edison and the small Commonwealth Electric Company provided the power. Instill soon convinced the latter company that he should be its president too. He ran both companies until he merged them into Commonwealth Edison in 1907. That year also, he secured a forty-year exclusive franchise from the city of Chicago “to distribute electric power within the present or future limits of the municipality.” To put it another way, Insull now had a monopoly in America’s second-largest city to supply a commodity for which the demand was growing exponentially. In 1902, we used just 6 billion kilowatt-hours; in 1929,118 billion.

Insull, however, was already expanding beyond Chicago itself, buying up small utilities in the surrounding counties and combining them into the Public Service Company of Northern Illinois. And he was always highly innovative. He introduced metering, and when Sir Charles Algernon Parsons developed the compound steam turbine, Insull immediately recognized its potential to produce electricity that could be transmitted over long distances in unprecedented amounts. When his board of directors was reluctant to take the gamble, Insull personally guaranteed the cost. The turbine quickly became so fundamental to the power industry that only 25 years later a plaque to mark its historical importance was placed on the Fisk Street power station where Insull had had the first one installed.

As Insul's reputation as a financial and managerial wizard spread, so did his involvement in numerous other enterprises. He turned around the sinking Peoples Gas, Light & Coke Company and Chicago’s streetcar and elevated-railway franchises. He also began selling stocks and bonds in his myriad companies to his employees and customers. Partly this was to help finance his unending expansion, and partly it was to guard against a spreading movement for the public ownership of utilities. By the 1920s, Insull’s empire served 1.8 million households and businesses.

But, while Samuel Insull had pioneered the utility industry, it was not long before others recognized the potential of companies that were natural monopolies and were often regulated by pliable politicians who allowed those companies to charge on a cost-plus basis, assuring steady profits. Insull feared losing control of his many properties, and he increasingly turned to the device of the holding company to make sure that he didn’t.

A holding company is simply a corporation that exists to hold the securities of other corporations. When corporations’ stocks were pyramided one on top of another, the holding company allowed someone with little actual investment to control vast economic assets. To oversimplify somewhat, a person holding 51 percent of the stock of a holding company would control all the companies that the holding company held 51 percent or more of the stock in, and all the companies that those companies in turn held 51 percent or more of the stock in, and so on.

The downside, of course, was that holding companies were top-heavy. Producing no wealth of their own, they depended

on the income from the companies at the bottom of the pyramid to finance the costs of their investments, and most of them were highly leveraged, financed almost totally with borrowed money.

As long as Wall Street was booming, however, all was well, and Instill could finance his house-of-cards financial structure by selling more and more bonds and stocks. In the first eight months of 1929, the stock of Insull Utility Investments—one of dozens of Insull-controlleed companies—rose from $30 a share to $147. But the first eight months of 1929 were easy on Wall Street; it was the ninth and tenth months of that year that separated the men from the boys.

When the bears took over, the Insull empire, financed by ever more issues of securities, began to unravel, despite the fact that Insull himself tried his best to stem the disaster. He borrowed five million dollars personally from a New York bank and turned it over to the companies. He sold his four-thousand-acre estate, turned in his half-million-dollar life insurance policy, and finally gave all his personal property to his companies’ creditors. But it was no use. In April 1932, the Insull empire, or what was left of it, went into receivership. “I wish my time on earth had already come,” he said wearily.

It appeared that the losses would total nearly $800 million, a titanic sum by the standards of the day, and an army of examiners began poring over the bewilderingly complicated transactions among Insull’s many companies. Meanwhile, ambitious district attorneys piled on, hoping to exploit the public fury that was causing Insull to receive in the mail an average of twenty death threats a day. Two months after his companies had gone into receivership, Insull fled abroad, fearing he could not get a fair trial. Hc was soon indicted by both state and federal grand juries for embezzlement, mail fraud, and conspiracy to evade the national bankruptcy act. After months of seeking refuge in countries that lacked extradition treaties with the United States, he was taken into custody and returned for trial. A famous picture appeared in hundreds of newspapers, showing Insull entering the Cook County Jail, a look of utter defeat on his face.

The government tried to make its case using Insull’s own books as evidence. A former sheriff who sat on the first jury noted that the only crooks he knew about kept no books, falsified them, or destroyed them. After seven weeks of testimony, the jury took exactly five minutes to find Insull not guilty and then for the sake of propriety waited two hours before announcing their verdict. Twice more he was tried; twice more the juries acquitted him. Samuel Insull was guilty of nothing more than having failed in business.

A few years later, he died of a heart attack in the Paris subway, at the age of seventy-nine. With no papers on him his body lay unidentified for several hours, and police found only eight francs in his

pockets. Newspapers reported that a man once among the richest in the world had died a beggar’s death. It was the ultimate indignity for this dignified and honest, if perhaps foolish, man. The truth, of course, was that when he collapsed, someone had robbed his corpse of his wallet.