Great Depression
In Illinois, Insull had long battled with Harold L. Ickes over concerns that Insull was exploiting his customers. Upon the promotion of Ickes to Interior Secretary in 1933, Insull had a powerful foe in the Roosevelt administration.
Insull controlled an empire of $500 million with only $27 million in equity. (Due to the highly-leveraged structure of Insull's holdings, he is sometimes wrongly credited with the invention of the holding company.) His holding company collapsed during the Great Depression, wiping out the life savings of 600,000 shareholders. This led to the enactment of the Public Utility Holding Company Act of 1935.
Insull fled the country initially to France. When the United States asked French authorities that he be extradited, Insull moved on to Greece, where there was not yet an extradition treaty with the US. He was later arrested and extradited back to the United States by Turkey in 1934 to face federal prosecution on mail fraud and antitrust charges. He was defended by famous Chicago lawyer Floyd Thompson and found not guilty on all counts.
Read more about this topic: Samuel Insull
Famous quotes containing the word depression:
“The term clinical depression finds its way into too many conversations these days. One has a sense that a catastrophe has occurred in the psychic landscape.”
—Leonard Cohen (b. 1934)
“The chief lesson of the Depression should never be forgotten. Even our liberty-loving American people will sacrifice their freedom and their democratic principles if their security and their very lives are threatened by another breakdown of our free enterprise system. We can no more afford another general depression than we can afford another total war, if democracy is to survive.”
—Agnes E. Meyer (1887–1970)