Three men were essential to the building of Bagnell Dam, which created Lake of the Ozarks: a banker, a lawyer, and the president of a power company. Only one stayed out of federal prison. The head of Union Electric was not that lucky one.
Louis Henry Egan was born in 1881 in Lacrosse, Wisconsin. Egan followed his father’s profession and graduated from Yale with a degree in engineering. The “moose tall” president of Union Electric, as Time magazine described him, was profiled in the January 1925 issue of The American Magazine as a can-do, overly optimistic executive. The subtitle of the puff piece read, “’There isn’t any job you ever heard of that can beat mine,’ says Louis H. Egan one of the leading public utility men in the Middle West – It was this attitude that helped him at the age of thirty-eight, to become president of a big electric light company.” Above all, the article stated, Egan despised complaining slackers who he called “Whimper Whine-ies,” who are always “crying a pond.”
The concrete obstacle in the Osage River that ponded Lake of the Ozarks was one of the last significant privately built dams in the United States. It was a project birthed in the Roaring Twenties when free enterprise had been released from strict government regulation after an era of “trust busters” and reformers like Teddy Roosevelt and Woodrow Wilson. Bagnell Dam, as Project No. 459 came to be called, was completed in 1931 just as big government was about to snatch the reins back from hard-charging businessmen who had created both phenomenal wealth and crippling debt and were being blamed for the ensuing Great Depression. Egan, prototypical of these Twenties boomers, had built the St. Louis utility into a profitable part of The North American Company’s holdings.
When equally expansionist Kansas City banker Walter Cravens diverted his Land Bank assets into his speculative dam scheme, he ran afoul of federal law and was forced to sell his overly ambitious, underfinanced project. When his original backer pulled out, Cravens took his project to Wall Street, looking for investors. Many firms passed on the opportunity, but he finally connected with Dillon, Read & Co., an investment-banking company with connections to Stone & Webster, Inc., a New England engineering services company founded in 1889, which specialized in public utility projects, especially hydropower facilities. Together they bought a one-year option to buy Cravens’ valuable permit to impound the Osage. In July, 1929, the license was retroactively transferred to Union Electric ninety days before the Wall Street crash that signaled the start of the Great Depression. Cravens was paid $300,000. He needed a good bit of it for lawyers.
The two new project owners had approached The North American Company, among whose holdings was the St. Louis utility, Union Electric. North American also owned ten percent of Stone & Webster. The construction company’s chairman was on the board of the giant holding company as well. Several years earlier Louis Egan had turned down Cravens who was looking for a market for the electricity Project 459 would eventually produce. When a similar proposal came to UE from The North American Company, Egan jumped on board. Union Electric had had no use for the electricity when first approached, and still didn’t, having just finished a huge coal-fired power plant at Kahokia, Illinois near St. Louis. In the late 1920s sophisticated companies like all these involved with the Bagnell Dam project were aware that financial storm clouds were gathering. This $36 million project promised to be one of the last big deals possible before the looming Wall Street deluge of plummeting stock prices.
Had the deal not been expeditiously done, Bagnell Dam would not have been built. Even the reputable construction company was damaged by the crash. Ten shares of Stone & Webster common stock valued at $1,133.75 in 1929 were only worth $62.50 in 1933.
Had the private power company not built the big dam on the Osage River, decades later, the U.S. Army Corps of engineers would have undoubtedly used this superior dam site instead of building their big Osage River dam at the decidedly inferior Kaysinger Bluff site at Warsaw, Missouri. The Miller County location permitted a much higher dam to be constructed, but the capitalist builders were afraid of the political uproar of flooding Warsaw, a town of more than a thousand at the time. Flooding five hundred people at Linn Creek was an overcome-able public relations problem. The disaster that Truman Reservoir became might not have happened if the dam on the lower Osage known as Bagnell had become a larger federal project.
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