The Merchant of Power: Sam Insull, Thomas Edison, and the Creation of the Modern Metropolis [Hardcover]

John F. Wasik (Author)

Book Description

Publication Date: March 2, 2006

A timely rags-to-riches story, The Merchant of Power recounts how Sam Insull--right hand to Thomas Edison--went on to become one of the richest men in the world, pivotal in the birth of General Electric and instrumental in the creation of the modern metropolis with his invention of the power grid, which fuels major cities today. John Wasik, awarded the National Press Club Award for Consumer Journalism, had unprecedented access to Sam Insull's archives, which includes private correspondence with Thomas Edison. The extraordinary fall of a man extraordinary for his time is revealed in this cautionary tale about the excesses of corporate power.

Editorial Reviews

From Publishers Weekly

Sam Insull is the forgotten energy tycoon of the early 20th century. As Wasik, a columnist for Bloomberg News, relates, Insull came to America from England in 1881 with $200 in his pocket to be Thomas Edison's private secretary and died in a Paris metro station in 1938 with 84 cents in his pocket. In between, he helped Edison light up New York and moved to Chicago, where he built a corporate empire that raised his personal worth to over $150 million ($1.7 billion in today's dollars); then he lost everything in the Great Depression. The collapse of his companies made him the bête noire of thousands of his now destitute Chicago shareholders and, according to the author, a model for Orson Welles's Citizen Kane. Wasik notes that Insull was instrumental in two fundamental shifts in American history: first, his innovations in the delivery of electric power made possible the consumer age; second, the failure of his financial empire became a basis for the New Deal laws that now govern much of corporate America. Wasik writes well, and Insull is a complex man whose life and times make worthwhile reading. B&w photos. (Mar. 16)
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Review

"Brilliant . . . brings Insull back to complicated life, and should revive interest in a forgotten giant."--Chicago Sun-Times

 

"[A] focused look at one of the most interesting historical figures you've never heard of . . . a fascinating cautionary tale."--Fortune

 

"Does a fine job of telling the early story of utilities, moguls and scandal."--Chicago Tribune

 

"One of the most magnetic and powerful con artists of the Great Depression was Sam Insull. Patron of the arts, philanthropist and Thomas Edison's right hand, he shafted thousands of investors large and small. . . . I found the work of John Wasik not only personally enthralling but an informal history of that traumatic time."--Studs Terkel

 

"[A] bittersweet biography of one of the titans of American industry, business and finance . . . Highly readable. . . ."--Fort Worth Star-Telegram

 

"Wasik writes well, and Insull is a complex man whose life and times makes worthwhile reading."--Publishers Weekly

"Bloomberg News columnist John Wasik points out in a new biography, Merchant of Power, Insull started as the financial manager for a big man--not Ken Lay, but Thomas Edison. . . ."--The New York Sun

"Wasik [has] taken his cue from current corporate scandals such as Enron and WorldCom in deciding to pluck Insull from semiobscurity, as many of Insull's contemporaries (including FDR) believed him to be guilty (he was acquitted) of orchestrating the first large-scale corporate deception."--Library Journal

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Product Details

• Hardcover: 288 pages
• Publisher: Palgrave Macmillan; 1st ed edition (March 2, 2006)
• Language: English
• ISBN-10: 1403968845
• ISBN-13: 978-1403968845
• Product Dimensions: 9.2 x 6.3 x 1 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 5.0 out of 5 stars  See all reviews (5 customer reviews)
• Amazon Best Sellers Rank: #1,206,876 in Books (See Top 100 in Books)

More About the Author

I am curious about the world. That's why I'm compelled to ask questions about history, politics, the environment, economics and investing. Although I don't write in order to live, I put words down in order to understand life. My two most recent books are "The Cul-de-Sac Syndrome" and "The Audacity of Help." The former book explores the past, present and future of American housing from the colonial era to today. It was an outgrowth of research I was doing into environmental building, which I see as one antidote to climate change, resource depletion and affordable housing. It was also a tangential follow-up to my "Merchant of Power," which was the history of electrical generation as seen through the lens of the life of utilities magnate Samuel Insull. My "Audacity of Help" is an in-depth look at the economic crisis and how President Obama's economic plan will address some deep-seated economic and social problems. I don't write in a vacuum, however. I speak all over the country on the topics I write about, write blogs, a column for Bloomberg News and try to engage intelligent people on the best ways to understand, confront and heal many of the country's economic and social ills. If I do this right, you'll have some pretty decent questions to ask those in power after reading my books. Democracy is knowledge in action and I'm an ecodynamic player.

Customer Reviews

Most Helpful Customer Reviews

9 of 10 people found the following review helpful:

5.0 out of 5 stars He Enabled the Construction of Cities, April 19, 2006

By 

John Matlock "Gunny" (Winnemucca, NV) - See all my reviews
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This review is from: The Merchant of Power: Sam Insull, Thomas Edison, and the Creation of the Modern Metropolis (Hardcover)

This is a rags-to-riches-to-rags story. Sam Insull came to the US with $200, got a job with Thomas Edison. Then he basically designed and set up the electric power grid as we know it today.

Then through a series of misadventures that he couldn't have forseen he was wiped out. He was tried in court because there was at least a hint of fraud. He was found not-guilty on all charges.

Why do we care about such a man -- two reasons:

First, he is the one that made it possible that when we turn on the light switch, the overhead light comes on. This convenience is a major part of the reasons for the advances in the world. Not only light, but medical equipment, tools, motors of all types.

Second, the collapse of his company attracted the attention of the Federal Government. Because of the way his company collapsed the Government passed all kinds of laws forming the Securities and Exchance Commission, requiring quarterly reports of the financial condition of the company and so on.

It's also interesting that this book came out now in the aftermath of all the recent corporate scandals. I guess that there is little that changes in the world.

3 of 3 people found the following review helpful:

5.0 out of 5 stars Edison Invented, and Insull (Who?) Delivered., September 20, 2006

By 

R. Hardy "Rob Hardy" (Columbus, Mississippi USA) - See all my reviews
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This review is from: The Merchant of Power: Sam Insull, Thomas Edison, and the Creation of the Modern Metropolis (Hardcover)

Everyone knows the inspired inventor Thomas Edison. Edison was a classic rumpled genius, driven in his eagerness to invent but sloppy in his other habits. He was devoted to the technical aspects of his gadgets, but he had little head for business or making those gadgets pay. The business of his endeavors was as unkempt as his clothing, but lucky for him, he had a young ally to help get his books in order. Samuel Insull, in contrast to Edison, is barely remembered today, but he had a huge role in making the modern world through the electrical inventions that Edison churned out. He was driven to make electricity pay, and he did so in millions of dollars, using all the dubious financial levers through the 1920's until it all went wrong. In _The Merchant of Power: Sam Insull, Thomas Edison, and the Creation of the Modern Metropolis_ (Palgrave), John F. Wasik, a journalist in business and finance, has told Insull's story, one full of ambition and financial spectacle, and leading to the sort of ruin contemporary readers will recognize in, say, the Enron scandal.

Insull was born in London in 1859. He scrambled to improve himself as ever any Horatio Alger hero did, and won his way to New York as Edison's private secretary. His ability to work right through the night and get by on catnaps ingratiated himself to his new boss. As Insull took a firmer grasp of Edison's technological advances, he centered on one in particular, the distribution of electricity that could power the lights and other inventions that Edison had produced. He went on literally to electrify Chicago, using huge generators never imagined before. He initiated the metering of power and other financial innovations, not all of them strictly on the up and up. He actually fled America when the bust of the Depression came, tooling around Europe to avoid extradition. Eventually, he could not avoid coming back and facing trial for fraud. A brilliant defense expounded on his rags-to-riches life story and made credible the idea that although he had brought down thousands of investors, no one had fallen as low as he had himself, and that his financial machinations had been for the purpose of preserving his stockholders' fortunes, failing merely because everything was failing. He was acquitted, but he remained a useful enemy for Franklin Delano Roosevelt's campaign against "big power".

Insull may be forgotten, but the foresight of his role in the electrification of America deserves recognition. He was a major influence in the arts, too, but not in the way he would have wanted in promoting the Grand Opera that was fashionable for patronage in his day. Insull did promote the dramatic career of his wife, well beyond her years or capacity. Herman Mankiewicz had started a venomous review of one of her performances in New York, got drunk, passed out on his typewriter, and couldn't finish the review. When it came time to write the script of _Citizen Kane_, Mankiewicz included the incident as part of Kane's sad advocacy for his wife's opera career. Insull served physically as well, as one of the models for Kane; Orson Welles handed his makeup man a picture of Insull, with his brush mustache, and wanted to look as much like him as possible. It's quite the legacy, but Wasik's book presents a memorable picture of the original, as well as the technological and social life of Chicago in his times.

2 of 2 people found the following review helpful:

5.0 out of 5 stars History repeats itself, January 5, 2009

By 

Pradyot Rai "Prady" (Fairfax, VA United States) - See all my reviews
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This review is from: The Merchant of Power: Sam Insull, Thomas Edison, and the Creation of the Modern Metropolis (Paperback)

One of the most striking aspects of this book is the rare coincidence it draws with the current market turmoil with that of the great depression and the exuberance which led it all.

The background of this book is set on a character, Sam Insull, who unfortunately got completely buried in the history. His ordinary demeanor, shroud business acumen and stunning entrepreneurship was so remarkable that it made the DOW to melt (to 56 points) in 1929 and forced Fed to institute SEC in 1934. This SEC is the same foundation on which modern financial structure is based and is subject of so much debate. After reading this book, you can almost relate what Obama means when he says, "...this 19th century financial system needs to change to reflect 21st century needs... (Not verbatim)".

From the completely other side, this book makes few great points. This book examines two completely different personalities -- one, of an inventor (Thomas Edison) and second an innovator (Sam Insul). And makes it clear that inventions are not innovations. In a subtle manner it also draws a point that certain kind of innovations only leads towards disaster, hence, not all innovations are equal (or good). It tells us innovations can cause "market value" to completely evaporate - in other terms - creative destruction.

If you happen to wonder -- what is the structure of our corporate financing and what value it adds to the system, OR how we got into the situations where we are today (with our credit crisis), OR if you really wonder the ingenuity and geniuses of this country (in other words, "land of opportunity") this is surely a book for you (without any pun intended).

Based on your gut feel, after you have read this book, you may end up forming opinion about what (and how much) to regulate about the current system. But it will surely give you hope that we will definitely come out of the current crisis, with macho smart and much more confident. You will know that this is not the end of the world and that show-must-surely-go-on. Because, nothing-lasts-forever and history-repeats-itself ;-)

Amen!
Pradyot Rai
The Merchant of Power: Sam Insull, Thomas Edison, and the Creation of the Modern Metropolis