Alfred Lee Loomis was accomplished in many areas, including science, philanthropy, law and investment banking. His laboratory in Tuxedo Park, New York was responsible for the development of enormously prolific scientific contributions, especially to the U.S. defense in World War II. He is not to be understated as a scientist; however, this discussion is not focused on Loomis the scientist, but on Loomis the investor. Originally, he was an attorney. Later he became an investment banker who made a lot of money in the 1920s in utilities. He and his partner, Landon K. Thorne, took over a nearly bankrupt investment bank known as Bonbright. Between 1924 and 1929 Bonbright underwrote 15% of not merely utility securities, a field in which Loomis specialized, but of all the securities issued in the U.S.
An interesting point about Alfred Lee Loomis is that he, more than anyone else, is probably responsible for the evolution of the American utility industry as it existed in 1929. Books written about the industry at that time give credit to a gentleman known as Samuel Insull, a utility entrepreneur. Insull is said to be the pioneer of the holding company structure, also known as the pyramid structure. An example of how that structure works is when Company A buys shares with leverage of utility B, which in turn buys shares with leverage of utility C, which then buys shares with leverage of utility D and so on in a vast chain.
That structure proved to be very dangerous. Since that time, Insull has been recognized as the person responsible for creating the holding company structure for utilities. I went to the library and found that Insull made the cover of Time Magazine three times during that era of leveraged utilities—remember this is the cover of Time Magazine. That was before the evolution of the Public Utility Holding Company Act of 1935, which made the holding company structure illegal for utilities. The first time that Insull made the cover of Time Magazine was on November 29, 1926.
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