A headline in Bernard Weisberger’s “The Forgotten Four Hundred: Chicago’s First Millionaires” (November 1987) calls Samuel Insull a “bad apple.” But Insull’s utility empire didn’t fall until 1932; it was not “balloon financing” (he used pyramided holding companies); and the fall—which was bound to happen due to the deepening effects of the Great Depression—was caused by the refusal of New York bankers to refinance a large loan, causing one of the key holding companies to default. From there it all fell apart. Common stockholders were wiped out while the bondholders and preferred stockholders came away in good shape. The utility companies were strong and survived in most cases. Samuel Insull lost his fortune and all his many positions and died relatively poor.

What Insull did in building his utility empire was not illegal or less moral than some of what we read about today. There was nothing illegal about utility holding companies or pyramiding them. The misfortune was an economic slump that took more than two years to really have an effect on utilities following the crash of 1929. Although he was tried, Insull was never convicted in any court.