Gruhl, Edwin (1886-1933)

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Dr. James Gruhl MIT

Edwin Gruhl's thesis at the University of Wisconsin was "Depreciation," 1908.   He saw Income Tax coming (1913 it was enacted) and conceived of the new idea of Depreciation.  He also wrote a paper of "Discrimination," 1932 about the government's right to compell electric utilities to charge lower rates for certain kinds of customers.  He was also trained as a concert pianist, a student of world renowned pianist Hans Bruhning (?) and had a very large collection of musical manuscripts which were donated to the University of wisconsin.  As an economics student he discovered Gruhl's Law, that the approximate doubling time for an investment can be estimated by dividing the interest rate into 70.  For example, at 5% compound interest, the investment would double in 70/5=14 years.  It is now commonly called The Rule of 70.

North American COmpany was the largest company in the world in the late 1920s and early 1930s, being a horizonal and vertical monopoly of electric utilities, coal companies, railroads and other companies.  There motto is 'We don;t write checks to anyone,' they even bought Muzak which provided music for their offices, 60 Broad Street, NYC.  Edwin lived at 125 Park Avenue, and he had built a tudor mansion at Noisy Brook, Flemington NJ which had many of his inventions for an all electric farm, stables and residence.  

Edwin was constantly in bidding wars with Thomas A. Edison's companies and Henry M. Byllesby companies, and he bought more than 200 companies, mostly small, individual city, electric utilities, to build up North American Company.  Byllesby was Edison's expert on electromagnetic forces, later worked for George Westinghouse, before starting his own group of utilities.  Byllesby collaborated with Nikola Tesla on a number of inventions.  Edwin was on good terms with Edison, Tesla, Byllesby, Henry Ford and many others.  Supposedly, when FDR was elected U.S. President at the November 1932 election, he announced that now he was the most powerful person in the world.  One of his aides said, that person might actually be the President of the largest corporation in the world, Edwin Gruhl.  FDR said he would take care of that.  Just after taking office March 4, 1933 FDR angered the business leaders by taking the U.S. off the gold stanadard, to 'fiat paper currency,' so he could triple the size of government, as a way out of the Depression (which failed).  Business leaders (DuPont, J.P Morgan and other tried a coup in 1934, called The Business Plot.  Edwin had died in January 1933 and was not part of the plot.  FDR kept his word and in 1935 pushed through the Public Utility Holding Company Act of 1935 which broke the North American company into 30 companies.

Edwin Frederick Gruhl was the oldest son of Frederick James Gruhl, born in Cedarburg, Wisconsin, who was the son of Daniel Frederick Gruhl, an immigrant from the Baltic Sea area of Pomerania.  Edwin had a brother Clarence James Gruhl who was an architect who did work for Conrad Hilton, and a brother Alfred Gruhl who was Chairman of Wisconsin Energy, and developed the first interconnected electric power pool, MAIN, Mid American Interpool Network, then helped start U.S. utlity interconnections with NERC, National Electric Reliability Council, and was in charge of, among many other projects, Point Beach Nuclear Power Station, which was the most reliable nuclear facility ever built.

Edwin's papers and North American Company papers are available from James Gruhl.

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