Man who set the pattern for bringing power to our cities

THE MERCHANT OF POWER: SAM INSULL, THOMAS EDISON, AND THE CREATION OF THE MODERN METROPOLIS

By John Wasik

Palgrave Macmillan, $35, 271 pages

REVIEWED BY JAMES SRODES

It helps to remember that the legends of America’s industrial golden age were just ordinary men. While greatness came because they mastered something important, the rest of the time they often were indifferent personalities at best. Think of Ford, of Carnegie or of Rockefeller.

Or of Samuel Insull, now largely forgotten, but who once ranked with the greatest of the great and whose triumphs influence the way we live today, the way the automobile, steel or oil have. Like some others his fatal flaw was a giant moral black hole, but unlike them, he was brought very low indeed, a victim of his own obtuseness.

Samuel Insull was born into poverty in 1859 in London’s seedy Lambeth district. He did not stay there long. He picked up the shorthand and the other organizational skills of an office clerk with such alacrity that by the time he was 21 he was in New York and the principal private secretary to the marvel of the age Thomas Edison. Famous already from his improvements of the telegraph, Edison was on the brink of building the first large electricity generating plant to illuminate Wall Street. The year was 1882 and the Golden Age of financial wheeling and dealing began to glow in earnest.

The genius inventor was a mess. Untidy in his person, Edison was an even sloppier businessman and remained always more interested in the technical side of his creations than in their most profitable use. For example, he viewed providing illumination for the area around his power stations as a way to sell his other breakthrough invention — light bulbs — and not as a way to sell electricity itself.

Sam Insull quickly brought order out of the chaos that was Edison’s financial life. While Edison often went without sleep while he experimented, Insull matched him in energetically organizing the financial structure of the shambolic maze of special-purpose corporations the inventor had organized to make and market his cornucopia of inventions.

In so doing he changed the focus of Edison’s electrical empire from specific products to an energy flow that could be — must be — metered as it was sold; this made it possible to charge different rates depending on the user.

From Edison the youngerInsull learned the benefits of single-mindedness and focus on the task at hand. “Just make it go,” Edison would exhort his aide.

Insull also began to learn the dangerous art of financial pyramiding from another instructor as amoral as any financier on Wall Street. Henry Villiard was a German-born adventurer, failed railroad promoter and Edison confidant who dreamed of creating an international electrical giant that would dominate the global marketplace they both were sure would develop.

Villiard was skilled at making each dollar of investment capital do the work of vastly larger sums. He brought the Edison General Electric company into a partnership with the Siemens brothers of Germany and used the synergy of some of their equipment with Edison’s vision to draw ever increasing sums out of selected Wall Street and London investment banks.

To Edison’s delight, Villiard’s house of cards did generate enough hard cash to buy out the inventor’s bushels of various shares and options and make him a secure multimillionaire with no further financial obligations to the corporation that bore his name. From that time on Edison did not give a damn what happened to Edison General Electric.

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