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This was part of an independent study done by Ms. Jennifer Kutsick, Summer 2010.
Modern day history chronicles the period of time known as the Gilded Age with stories of gross wealth, unbridled competition, the rise of monopolistic business, and the evils of the infamous robber-barons. The United States experienced vast economic growth during this period of time and the development of new technologies and materials resulted in new industries, increased efficiency, increased wealth, and way of life changes for many of the country’s citizens. These changes undoubtedly accompanied many a scandalous story and encouraged wealthy industrialists to engage in scrupulous behavior. That being said, time and the art of oration have a peculiar way of ignoring or forgetting the many benefits this period of time and the robber barons in particular brought the nation and her people. This study focuses on one particular “robber-baron”; his name is Henry Morrison Flagler.
The Early Years
Henry Morrison Flagler was born on January 2, 1830 to parents Isaac and Elizabeth Flagler. Isaac, a Presbyterian minister, and Elizabeth had both been twice before married and widowed prior to meeting and marrying each other. The reverend Isaac Flagler had two elder daughters from his first wife and one young daughter, Ann Caroline from his second wife. Ann Caroline, or Carrie as the family called her, was three years old and still under her father’s care when he and Ms. Elizabeth Caldwell Harkness married. Elizabeth bought to their new family a son, Daniel M. Harkness, from her previous marriage. Daniel Harkness, Henrys older half-brother, and his half-brother’s Harkness relatives, served as great influences on Henry Flagler and would have a profound impact on his future business and personal life.
Henry Flagler dropped out of school after the 8th grade. At the age of 14, eager to join his working brother Dan in Ohio, Henry left his home near Medina, New York. The journey required he walk 9 miles to Medina, access the canal and travel via waterway first to Buffalo, NY, and then to Sandusky, OH. Henry was able to make a deal with one of the ship’s crew members in which he would labor in exchange for fare on the water route from Medina to Buffalo (Martin, 1949). After arriving in Sandusky, Flagler traveled another 30 miles on foot to a town called Republic, OH. The trip was difficult on Flagler and by the time he arrived in Republic, he had only a five-cent piece, four pennies, and a five-franc piece to his name (Akin, 1988). Henry Flagler kept that five-franc piece the rest of his life as a reminder of the “biblical parable of the talents” (Akin, 1988). In 1913, Flagler was interviewed by the Jacksonville Metropolis, his exact quote regarding the franc is as follows, and “The five-franc piece is at home in my desk. I have kept it all these years, imitating the man in the Bible who had but one talent.” (Akin, 1988, p.240)
Dan Harkness immediately got Henry a job at L.G. Harkness and Company, a firm owned by Dan’s uncle and local businessman, Lamon Harkness. Henry’s wage increased just under a year’s time of employment at the company from $5 to $7 dollars a month. Over the course of the next several years, Henry spent his time working and learning; he abstained from indulgences such as liquor and saved a good portion of his wages earned. The firm schooled the young man on enterprise and the art of negotiation. In later years, Henry recalled the company sold brandy to consumers at a price predetermined by their heritage which bore a direct correlation on their economic class and ability to pay; Englishmen paid $4 a gallon, Germans $1.50 a gallon, and American Indians paid whatever he could get them to (Martin, 1949).
At the age of 19, Henry was promoted to a sales position in the Bellevue store of Chapman, Harkness & Company and his salary increased to nearly $400 annually (Gordon, 2008). In 1852, Dan Harkness, Henry’s half-brother, bought out the firm Chapman, Harkness & Company, reorganized it as D.M. Harkness & Company, and made 22 year old Flagler a partner. The following year, the mutual friendship of the Harkness family members and Henry was further strengthened when Henry and Ms. Mary Harkness, Lamon Harkness’s daughter, married.
Henry Flagler, his wife Mary, and her sister. Picture is property of the
Florida Photographic Collection
Both the Harkness family business interests and Flagler’s involvement in the businesses continued to grow throughout the 1850’s. The business interests expanded into grain and liquor trade as well as even banking. Concerning the grain trade, Flagler shipped large quantities of wheat to a Cleveland based commission merchant named John D. Rockefeller. Concerning the liquor trade, Flagler and the Harknesses increased production and Flagler made a small fortune in the trade but evidently sold out after only a few years. According to Akin, Flagler claimed that his morals compelled him to sell his interests in the distillery (1988). Interestingly, Flagler reportedly sold his interests in 1958, the same year his religious father, who strongly objected to liquor and individuals involved in liquor trade, spent time living at Flagler’s Bellevue home (Akin, 1988).
The 1850’s were prosperous for Henry Flagler. In 1862 Flagler & Barney York formed the Flagler & York Salt Company. The men moved their families to Saginaw, MI. The Civil War created a strong demand for salt which was used as a preservative to keep food for the army fresh (Gordon, 2008). The Michigan legislature offered tax exemptions for salt companies and Flagler and York saw an opportunity. The firm was moderately successful during the war but once it ended, so did the high demand; overproduction and intense competition drove many out of the industry. The Flagler & York Salt Company closed and Flagler returned to Ohio in 1866. Flagler lost his $50,000 investment and was in debt approximately the same amount (Martin, 1949).
Flagler and his family moved to Cleveland, Ohio in 1866. He borrowed $50,000 from his Harkness family relatives to pay his debts at an agreed upon interest rate of 10% (Martin, 1949). Flagler obtained employment with a former grain commission partner of John D. Rockefellers, Maurice Clark, who offered Flagler a partner position in his firm Clark & Sanford. Flagler was so successful, in approximately a year’s time he had paid off more than $20,000 on his $50,000 loan (Martin, 1949). The Flagler’s moved to Euclid Avenue, at the time considered ‘the most beautiful street in America’. Flagler worked in the Sexton building, and it was at this period of time that his relationship with John D. Rockefeller developed. Both men worked in the same building and lived on the same street. In 1867 Flagler left Clark & Sanford to join Rockefeller and Samuel Andrews in their oil venture. The men changed the company name from Rockefeller and Andrews to Rockefeller, Andrews, and Flagler when a $100,000 investment to secure Flagler’s position was contributed by Mary Flagler’s cousin Stephen Harkness (Akin, 1988).
Throughout the course of his early career, Flagler maintained a strong relationship with his Presbyterian religious roots. He taught Sunday school for several years and was a member of the board of his Saginaw, MI. church. The Flagler’s were active in their community and Henry was a member of the Young Men’s Association. Henry and his wife also had two children during this period, although one of his daughters would later pass at the age of three. His wife’s health was always somewhat weak and he reportedly spent every night, except for two, of Mary’s last 17 years of life at her bedside (Martin, 1949). Henry had experienced success and failure, but the one constant throughout this period of time was his determination. His willingness to leave the grain business after it proved highly profitable for him a second time during this early career displays his speculative side and more importantly his confidence in his own abilities. His ability to recover from the salt business failure demonstrates an astounding commitment to move forward. He later said of his failure in the salt company that he had been a victim, of “unbridled competition” (Akin, 1999, p.19). This lesson undoubtedly was a factor in how he positioned Standard in his next career.
The Standard Years
Flagler joining Rockefeller’s oil company was the beginning of the two men’s life-long friendship which was founded on business, and according to Rockefeller, Flagler used to say was a whole lot better than a business founded on friendship (1909). The two men worked side by side in these early days; they shared an office and routinely walked together to and from their Euclid Avenue homes and the office. These daily walks, Rockefeller wrote, are when two men collaborated on their thinking, talking, and plans (1909).
The only oil field in the world during the early years of Standard and up until the 1880’s existed in Northwest Pennsylvania. The combustible engine had not yet been introduced to the mass markets, and at this time oil was a speculative venture. The product was being marketed for medicinal purposes until it was discovered a derivative of the product, kerosene, could be used to light homes in replace of whale oil. Speculation caused the price and production of oil to fluctuate widely during the early years of the Rockefeller, Andrews, & Flagler partnership; prices reached lows of 10 cents a barrel and as high as $13.25 a barrel while annual production rose from 2,000 barrels in 1859 to 4,250,000 in 1869 (Gordon, 2008). Given the status of this relatively new industry, it should come as no surprise that refining was accordingly very fragmented and most firms were unwilling to invest large amounts of capital into such a speculative venture.
One of Flagler’s major contributions to the ultimate success of what was to become Standard Oil was his insistence on investment in the firm’s refineries. Rockefeller writes in Random Reminisces of Men and Events, that Flagler deserves great credit for his insistence that their refining facilities be the best in order to produce the best(1909). Flagler’s attitude starkly contrasted with that of the era, as most refiners only invested enough to put up what Rockefeller described as “flimsy shacks” in fear of oil drying up (1909). These investments in early state of the art facilities would pay dividends to Standard as the firm grew; the facilities were a factoring element of Standard’s ability to be a low cost provider to the markets (Gordon, 2008). Flagler took a risk with these investments but as Rockefeller notes he followed his convictions, an indication he was confident in his own abilities to succeed and in his intuition of future prospects, he later relies on the same intuition and vision in the development of Florida.
As discussed in an aforementioned paragraph, production and costs in the oil industry were volatile. Gordon explains that even as demand of crude oil was steadily rising, supply was sporadic because large expenses are needed for drilling and exploration, therefore, they occur only when prices are high, and then if they are successful, the price for crude drops significantly (2008). Flagler realized he could not control the commodity markets; he could however advance his firms position if he had an advantage in transportation costs. Flagler was so successful at ‘evening’ transportation costs amongst the railroads, that transportation became the primary means for Standard’s early horizontal integration (Akin, 1988). Flagler used the company’s ability to ship large volumes as a means to secure rebates from the railroads. Flagler’s effectiveness at negotiating rebates with the railroads was a major factor of the company’s early success and an indication of the man’s competitiveness. Trunk lines had been overbuilt and the competition was fierce. The rails means of survival was to negotiate unfavorable prices on their end from volume shippers to pay off fixed debt, and then charge small shippers much higher rates for any profits they hoped to make (Akin, 1988). General J.H. vice president and general manager of the Lake Shore accepted a rebate and rate proposal by Flagler explaining that the proposition “offered to the railroad company a larger measure of profit than would or could ensue from any business to be carried under the old arrangements” (Epstein, 2008). Additionally, Flagler & Rockefeller’s were buying up all smaller refineries they could. This further cemented their advantage as a volume shipper.
Critics of Standard’s, have said Flagler’s aggressiveness when attempting to buy competitors often caught sellers off guard and allowed the company to acquire competitors at bargain prices (Akin, 1988). This is one basis for the angry public sentiment the firm eventually grew accustomed to. Opponents have also often vilified Standard for its collaboration with the rails in rebate initiatives, claiming monopolistic, unfair, and anticompetitive practices. However as explained above the rebates were usually mutually beneficial and Standards efficiency afforded them the volume needed to make the rebate program attractive to the rails; smaller refiners were told that if they could ship the amount guaranteed by Rockefeller, Andrews, & Flagler, they would be given the same rebates (Martin, 1949). Flagler may have been shrewd, but he also demonstrated generosity. Rockefeller tells of a time when Flagler ran into a German baker he knew from his grain merchant days. The baker had sold his business and built a small refinery. The news had bothered Flagler so he later consulted with Rockefeller the prospect of purchasing the bakers refinery. Henry told Rockefeller “That little baker man knows more about baking than oil refining, but I’d feel better if we invited him to join us – I’ve got him on my conscience” (Rockefeller, 1908). Rockefeller agreed and Henry propositioned the baker who was happy to sell at a fair appraised price. The baker was satisfied with the appraised value but insisted Flagler advice him on whether to take cash or Standard Oil certificates. Henry wasn’t comfortable giving the baker advice, but the baker insisted. Ultimately, he suggested taking half in cash and half in certificates. Later, Henry said he was pleased to be able to ask the baker for his original $2,500 in stock and instead issue $50,000 in the new company and later pay a $10,000 dividend (Martin, 1949). Of course there were opponents, but Flagler and Rockefeller were focused businessmen whose intentions were to advance their companies interest, not to please the rivals. Rails were notorious for engaging in unfair business practices in regards to rates during that time, in fact Flagler claimed it was actually Thomas Scott of The Pennsylvania and Empire who initiated the rebate programs of the era (Martin, 1949).
In 1870, Rockefeller, Andrews and Flagler incorporated into The Standard Oil Company. Later when Rockefeller was asked if it had been his idea to incorporate, he replied, “No, Sir, I wish I’d had the brains to think of that. It was Henry M. Flagler.” (Martin, 1949). Forty year old Henry Flagler was named secretary and treasury of the newly incorporated company and allotted 1,333 shares of stock at $100 par value. Flagler’s responsibilities in the company continued to entail transportation arrangements and contractual agreements. Flagler was no lawyer and never had any formal legal education, but Rockefeller praised his ability to understand and draw up contracts, even implying many of the companies lawyers could have learned from him (1909). The incorporation was successful and within just a few months, Standard had absorbed 20 of the 25 area refineries. In 1871, Standard declared a dividend of $40 a share when many other refiners were going bankrupt (Akin, 1988).
Standard’s rapid growth continued throughout the 1870’s. However oil refining capacity exponentially increased, even while rates were falling. In 1872 Flagler and Rockefeller involved themselves in the infamous Southern Improvement Company. Neither man admittedly created the company but Standard owned a considerable amount of its stock and many historians felt the scheme reminiscent of Flagler. Others attribute its origin to Thomas Scott, but no man has claimed credit for the scheme (Martin, 1949). Sothern’s plan was to create a double pooling arrangement between the refiners and the shippers in order to control railroad rates throughout the shipping regions of Ohio, Pennsylvania, and New York. The arrangement was conceived in secret; non-member refiners were to be charged full rates, while members would equitably distribute their shipments on multiple rails and granted very favorable rates as their incentive to “even” out their disbursements of crude shipments amongst the competing rails. Refiners also felt the pooling arrangement would allow them to control prices of crude shipped to them from producers (Martin, 1949). When the movement came to light, it was disastrous. The producers countered the arrangement by forming the Petroleum Producers Union and banned all shipments of crude out of the oil regions. Standard was forced to lay off thousands of employees during the quasi-strike but was able to survive as many of their newly acquired refineries were not members of the Southern Improvement Company nor was their affiliation with Standard publicly known (Akin, 1988). Flagler and Rockefeller learned from the Southern Improvement failure and while they failed at several other attempts to form a pooling agreement, such as The Pittsburgh Plan, they continued to secretly acquire and align their interests with refiners, producers, rails, and pipelines (Akin, 1988). Their new alliances and acquisitions became The Standard Alliance. Members of the alliance were issued Standard stock therefore aligning their interests with that of Standards. Alliance members were acquiring firms without their knowledge of the Standard affiliation (Akin, 1988). Akin accredits October 17, 1877, after Standard acquired the Empire and the Columbia Conduit Company, as the day the company achieved complete domination of the oil industry (1988). Flagler and Standard were not apprehensive in their quest for market control; Flagler was at one point willing to pay for political favors assuring his lobbyist Smith Weed $60,000 to fight free pipeline legislation being debated in the state legislature (Akin, 1988).
Political cartoon showing a Standard Oil tank as an octopus with many tentacles wrapped around the steel, copper, and shipping industries, as well as a state house, the U.S. Capitol, and one tentacle reaching for the White House. Published in Puck, v. 56, no. 1436 (1904 Sept. 7).
In 1882 Henry Flagler and C.T. Dodd drafted the Standard Oil Trust agreement. It set up separate corporations in each state but stock remained in the hands of trustees who issued ‘certificates of interest’ to shareholders. Standard Company of New Jersey became Standard’s principal corporation after the Ohio Supreme Court ordered the trust dissolved. Flagler was voted by the shareholders to the board of trustees and elected President of the Standard Oil Company of New Jersey. In 1882 Flagler was called to testify in front of a United States Senate Committee. During the preceding years, Standard and Flagler had battled multiple criminal and civil lawsuits, and investigations. Flagler’s and grasp of legal matters increased as a result of his preparedness for these investigations. In front of the senate committee, he was purposefully uncooperative and evasive (Akin, 1988). Flagler’s involvement with Standard lessened after 1882 and continued to diminish for the remainder of his years (Martin, 1949). Flagler and Standard were amazingly prosperous and both would continue to achieve. Flagler remained Vice President of Standard until 1908 and was a member of the board of directors until 1911. In seven years time Standard paid 11 million in dividends; capital increased from 1 million in 1870 to more than 100 million by 1892 (Martin, 1949). One of the final contributions Flagler made to Standard was in 1892 when he aggressively campaigned for marketing gasoline as a use for automobile fuel (Gordon, 2008). In 1911, the year he gave up his seat on the board, courts were finally successful at dissolving the company and Standard was divided into 35 individual units.
Spreadsheet of Standard oil dividend data
Puck cartoon, The Infant Hercules/Roosevelt and the Standard Oil serpents/Rockefeller & Flagler, May 23, 1906 issue; Retrieved from Wikipedia
Henry Flagler, over the course of his career at Standard, was shrewd and ambitious. However, his actions always retained a sort of sensibility and more specifically an unwavering focus on his business of the time, Standard Oil. His great sense is demonstrated in his ability to disengage emotionally from business concerns. He was cordial and respectful even when his was deliberately lobbying against a particular action or firm. Flagler relied on his reasoning to guide him in contractual and business matters. One clear example of this reasoning is demonstrated in a matter concerning the Atlantic Rail. When the rail fell into receivership and attempted to collect a $2,000 debt owed by Standard, Flagler knowing The Atlantic owed Standard a much higher sum stated, “It seems to me, that if this old Atlantic organization is too far gone to pay, it is also too far gone to receive any moneys. It is a poor rule that won’t work both ways.”(Akin, 1988, p.66). Nevertheless as Standard solidified its position, Henry’s interest began to wane. The 1870’s were a decade of change for the Flagler family as well as his business interests. His wife gave birth to their first and only son in 1870. In 1879, the Flagler family took a trip to Jacksonville, Florida on doctors recommendations the warm climate might improve Mrs. Flagler’s health. Finally, the most devastating change occurred in 1881 when Mary Flagler passed. Flagler’s disposition after her death has been described as sad and lonely (Martin, 1949). Flagler, at 51 years of age, was a widower with a young son and he resolved to change his priorities and more accommodate his family obligations (Martin, 1949). He rented a large estate at Mamaroneck, New York which he later purchased where his sister came to live and his daughter visited frequently.
Photo of Henry Flagler obtained from the Florida Keys Public Libraries
The Florida Years
Rockefeller wrote of such a man that at a time when most would retire to enjoy their success, he would go onto fulfill his destiny (1908). Rockefeller of course, was describing Henry Morrison Flagler. In 1883, 53 year old Flagler wed for the second time, 35 year old Ida Alice Shourds. At the time of their marriage, Flagler’s net worth was 20 million, approximately 442 million by today’s standards, and his day to day activities at Standard had steadily declined.
Shortly after the marriage, Henry and the new Mrs. Flagler honeymooned in Jacksonville. While in Jacksonville, they made the trip down the St. Johns River, the chief means of transportation in Northeast Florida at the time, to visit St. Augustine, a nearby town of 2,000 residents (Martin, 1949). The Flagler’s were ‘delighted’ by the magnificent orange groves that inhabited St. Augustine and quickly made plans to return to the area (Martin, 1949). At this time, Flagler’s interest in the area must have peaked and some consideration into development must have crossed his mind as during the next several years he would wholeheartedly engage in development projects throughout the area.
In 1885, the Flagler’s returned to Jacksonville on Henry’s private rail car and traveled to St. Augustine on the newly constructed Jacksonville, St. Augustine, & Halifax Railway.
Henry Flagler's private railway car at Whitehall in 1993. Photo by Tom Hambright. Photo property of the Florida-Keys Public Library
In St. Augustine, the couple stayed at the newly constructed San Marco Hotel. Flagler was impressed with the recent transportation and accommodation improvements in the area (Akin, 1988). He was also fascinated by the construction of Franklin W. Smith’s residence, Villa Zorayda (Martin, 1949). Smith was involved in architecting a Spanish theme for the area and began construction on the Casa Monica Hotel the very next year. During the Flagler’s stay, residents of the area engaged in their annual Ponce de Leon celebration; the celebration intrigued Flagler.
What exactly inspired the events that followed, no one can say for sure. Friends of Henry’s later said the man had always wanted to own a hotel and was fascinated by the duties of a hotel manager (Martin, 1949). When asked during an interview in 1887 with the
Jacksonville News Herald
, why a man with a major interest in Standard would desire to go into the hotel business, Flagler responded, “For the last fourteen or fifteen years I have devoted my time exclusively to business, and now I am pleasing myself.” (Standiford, 2002, p.47). The venture that followed truly seems to be one initiated by a desire of self-fulfillment and continued based on a love Flagler developed for the regions, people, and state of Florida, as no precise indication existed indicating he would see worthwhile returns on his Florida investments.
When Flagler met and befriended Dr. Andrew Anderson, plans to develop a hotel in the area were finalized. Dr. Anderson was born in St. Augustine, attended college at Princeton and then returned to the area to practice medicine. Dr. Anderson’s influence and enthusiasm for the project encouraged Flagler to proceed with development and Flagler purchased acreage from the Dr. and promised to return to the area shortly (Martin, 1949). When he returned to St. Augustine with a business associate and architect Thomas Hastings, structural planning of The Ponce de Leon hotel began. The public’s reaction to the announcement of Flagler’s building the Ponce de Leon set off the first great, of Florida’s many, real estate speculation frenzies (Standiford, 2002).
During this period of planning, Flagler traveled to and from St. Augustine and New York; Dr. Anderson acted as an agent on his behalf when he was away (Martin, 1949). During this planning phase Flagler donated land to the city of St. Augustine for a new train depot, and in 1885 purchased the Jacksonville, St. Augustine & Halifax River Rail. Flagler immediately improved the rail and replaced 30 pound rails with 60 (Martin, 1949). On December 1, 1885 excavation began on the Ponce de Leon. Construction on the hotel took several years, when it was nearly complete and the furnishings arrived, Flagler’s excitement led him to join the workers and help transport the furniture to the hotel (Martin, 1949). During the construction process Henry realized demand existed for affordable lodging accommodations and construction on the Alcazar, located across the street, began. Flagler had the same developers, McGuire and McDonald, as well as many of the same laborers working on both projects simultaneously. The Ponce de Leon officially opened January 10, 1888 at a cost of $2.5 million dollars (Martin, 1949). The hotels were immediately successful and travelers’ reviews proclaimed the hotel superior to that of Chicago’s Palmer House (Standiford, 2002). The size of the hotel was remarkable; it was the largest concrete structure in the world(Akin, 1988).The building channeled old Spanish charm, had elaborate ceiling art, electric lighting, antique oak and terracotta columns, courtyards and gardens. The hotel was attended by many famous guests including Mrs. Benjamin Harrison as well as the Vice President and his wife. The Alcazar, Arabic for “royal castle” officially opened in 1889. It was also a beautiful structure with indoor salt water pools as well as a large casino, often preferred to the Ponce de Leon by European travelers (Martin, 1949).
The Ponce de Leon, St. Augustine, Florida. Photochrom postcard by the Detroit Photographic Co., copyrighted 1902. Library of Congress Prints and Photographs Division Washington, D.C. 20540 USA
The Alcazar, St. Augustine, Florida. Library of Congress Prints and Photographs Division Washington, D.C. 20540
Flagler’s hotel development career was in its infant stages when he simultaneously engaged himself in railroad acquisition and development. He had already acquired one short rail, and in 1888 purchased both the St. Augustine & Palatka Rail and St. Johns Rail from Tocoi to St. Augustine. Later that same year he purchased a logging road which traveled south to Daytona. He made improvements to all the lines and within a short period of time established adequate rail from South Jacksonville to Daytona. In addition to the southward expansion he moved inward and bridged Palatka over the St. Johns in 1888 and South Jacksonville and the St. Johns the following year. The Jacksonville, St. Augustine & Halifax required sinking piers in 90 ft. of water which had never been done before. Flagler’s engineers questioned him about the task and he responded by asking if it could not be done, his engineers conferred shortly and replied it could (Standiford). Flagler’s response, “Then build it”. (Standiford, 2002, p. 54).
Henry Flagler built the first Union Station, a Mission Style Depot with train shed in the same location as our Jacksonville Terminal. It opened in 1897 and served the Seaboard, Atlantic Coast Line, Florida East Coast, Southern and Georgia, Southern & Florida Railroads and their predecessor’s. In 1919 the Jacksonville Terminal was constructed with 1/5th ownership between the 5 railroads. The building closed in 1974 and is now the Prime Osborne Convention Center.
Flagler’s St. Augustine building program continued. In 1889 he purchased the Casa Monica and renamed it the Cordova. He purchased land in Hastings, a town nearby and accessible by his rail for potato farming. He purchased acreage in San Mateo for citrus farming. In 1889, he built a hospital for the city of St. Augustine. He then engaged in a program of public works spending as though he was the city’s single benefactor; he contributed to the building of city hall, street paving, water works, electric lighting, sewage systems, housing for employees, car shops, African American schools, and encouraged the development of a woman’s organization to maintain the hospital (Martin, 1949).
During this same period, Flagler faced another personal tragedy when his daughter Jean Louise passed shortly after giving birth. In her honor, he built The First Presbyterian Church. He buried her and her daughter in the Memorial Presbyterian Church, the name given to the Presbyterian Church he built, along with his first wife whose body he had transported there. The church was beautifully designed in Victorian Renaissance style, and located a short distance behind the Ponce de Leon. He also had a falling out with his son whom had moved to the area to work for him. The falling out strained their relationship for the rest of the men’s lives. Flagler’s attraction to Florida grew stronger and in 1893 he and Ida Alice moved into their newly constructed home, Kirkside. Meanwhile, his development of Florida continued. It seems one project spurred the need for the next. Once his rail was operable to Daytona, Flagler purchased a small hotel near the area in Ormond. Flagler constructed an 18-hole golf course on the hotel and constructed a terminal point for his rail.
In 1899, the Florida legislature passed an Act which set aside 10 million acres of land for individuals interested in building new rail lines. Flagler had yet to actually build rail, he simply purchased and improved pre-existing lines. When he involved himself in the Ormond and Daytona area, people urged him to extend the rail southward into the Indian River area (Martin, 1949). Landowners offered him the right of way as they were eager for transportation and economic development. In 1892, Flagler obtained a charter from the state of Florida authorizing through rail construction down to Miami. On March 22, 1894 construction on the tracks to the Lake Worth terminal was complete (Martin, 1949). On the land to the east of Lake Worth now known as Palm Beach, Flagler exclaimed, “I have found a veritable Paradise” (Standiford, 2002, p.59). He told his managers to acquire land necessary for the “largest hotel in the world” (Standiford, 2002, p.59). The announcement of Flagler’s decision to build the hotel set off a second frenzy of Florida land speculation and property prices skyrocketed. The new hotel was given the name The Royal Poinciana, and construction started almost immediately. Laborers on the hotel lived on the West side of the lake where the terminal and materials were easily accessible. In order to reach the worksite they had to row across to the East side of Lake Worth. Flagler purchased several hundred acres of land on the west side in order to house the laborers and planned on establishing a commercial town (Martin, 1949). One of the first services in the town was a fire department in order to keep workers protected for their hastily constructed, highly flammable shacks. The firefighters were called “Flagler Alerts” and would ring a bell to notify the area of fire and rush to the scene of the fire on their bicycles (Martin, 1949, p.115). The commercial town on the west side of the lake, incorporated as West Palm Beach on November 10, 1894. On the east side of the lake, known as Palm Beach, the Royal Poinciana opened on February 11, 1894. Standiford, discusses the striking differences of the two towns today even though they are located only a few hundred yards apart (2002). West Palm is home to many low income residents while the median income of the33480 zip code in Palm Beach today is $101,217 and the median house value $3,690,000 (AOL Real Estate, 2010). However, it doesn’t appear to have been Flagler’s intention to attribute to the divide. He financed many civic projects in the town of West Palm, replaced the temporary shacks with homes, built a church, and even purchased a plot of land for his burial although he later changed his mind (Martin, 1949).
In 1895 Flagler started construction on a second Palm Beach area hotel. The Palm Beach Inn, loacted a quarter mile away from the Royal Poinciana, opened for business in January of 1896. The name was eventually changed to The Breakers because guests frequently requested rooms “over the breakers” (The Breakers, 2010).
The Royal Poinciana Hotel and grounds, Palm Beach, FL; from a c. 1920 postcard published by C. T. American Art for J. F. Kirkton, Palm Beach, Florida.
The Palm Beach Inn. Property of the Florida Photographic Collection
While construction was moving forward in Palm Beach, Florida endured the coldest season in over 100 years. The 1894-95 winter devastated the crops of farmers and families throughout most of Florida. In 1894 Flagler sent J. Ingraham on a relief mission with 100 thousand dollars and instructions to distribute it, and more if needed, rather than let anyone starve (Standiford, 2002). Flagler told a minister after the freeze to “find any and every case of real need where a chance to start again will be appreciated and see that they have that chance. The only condition I impose is that they do not know the gift comes from Henry M. Flagler” (Gordon, 2008, p.76). Personally, Henry was startled by the destruction of the freeze but it returned his mind to previous attempts made by a Mrs. Julia Tuttle of the Biscayne Bay area to get Flagler to continue building his rail southward. Mrs. Tuttle had written Henry numerous letters and sent undamaged oranges after a freeze to demonstrate the areas warm climate. The latest freeze ignited Henry’s interest in the region and he finally succumbed to Mrs. Tuttle’s request to survey the area for himself. Mrs. Tuttle offered Flagler 100 acres of her land for a rail terminal and a hotel site (Martin, 1949). Flagler accepted Mrs. Tuttle’s proposal and additionally agreed to build a water works system and lay out the streets of the town (Martin, 1949).
The Royal Palm Hotel at Biscayne Bay.
On April 15, 1986, construction on Flagler’s rail to Miami was complete. Along the route, the towns of Delray, Deerfield, and Fort Lauderdale developed. In 1897 Flagler built a rail station in Ft. Lauderdale. On September 7, 1985 Flagler’s system of rails officially changed its name to The East Coast Railway. On January 16, 1897 Flagler opened his Miami hotel, The Royal Palm. Flagler again involved himself in a quasi public works program for the new city. He paved streets, made sidewalks, developed a sewage and water system, and built an electric plant (Martin, 1949). Additionally, he donated land and money for the development of schools, churches, and homes for his employees.
In 1902 Flagler opened the Hotel Continental in Atlantic beach, Florida. It was the only one of his Florida hotels to operate during the summer’s season. In 1900 he merged his shipping company with West Coast developer Henry Plant’s. The new company was the Peninsular & Occidental Steamship Company. Flagler even left Florida for a short period to acquire the Royal Victoria Hotel in the Bahamas which he invested $50,000 in, and renamed the Colonial Hotel which opened in 1899.
During these expansive years of southern Florida’s development, Flagler’s home life was falling apart. His wife had succumbed to mental delusions and was institutionalized. The situation was hard on Flagler but his marriage had been strained for some time as Ida Alice was never accepted by Henry’s associates and her behavior always arguably erratic. At some point during one of her bouts of insanity, Flagler had developed some sort of relationship with Mary Lily Kenan. The extent of their relationship during his marriage is not known, however they were friendly. Flagler continued however to maintain hope that Ida Alice would recover. The couple stayed together in their New York home after she was released from a mental hospital and reportedly Flagler was hopeful Ida Alice’s recovery would be permanent and delighted at the news of her release (Martin, 1949). However, her delusions returned and she was again institutionalized. In 1899, Flagler changed his residency to Florida. People speculated the move was to escape taxes or to run for a position in political office. In 1901 a bill was introduced in the Florida legislature which called for insanity as grounds for divorce. The law passed in June of 1901 and71 year old Flagler filed for divorce. Seven days after his divorce was granted, Flagler announced his engagement to Mary Lily Kenan. Newspapers scolded him, the incident was socially frowned upon and cloaked in scandal as recent contributions to politicians and institutions made by Flagler appeared to be bribes. It is evident from Henry’s Standard days that he was not opposed to compensating in order to get what he wanted.
Henry gave the new Mrs. Flagler everything and anything she wanted. One of the most extravagant gifts to his new wife was a 55 room marble mansion in Palm Beach she called Whitehall. His wedding bliss however was not enough for him to retire further development plans in the state of Florida. In 1895, Flagler’s paper, the
officially announced the 75 year old was moving forward with plans to build the overseas rail extension to Key West (Standiford, 2002). The exact reasoning for Flagler’s decision to build the extension is unknown but there are many theories. Flagler was convinced Key West could become a great port city with its close location to Cuba. Flagler was also influenced by the United States decision to build the Panama Canal and felt the extension would link the Unites States with Central and South America (Standiford, 2002). These thoughts undoubtedly influenced Flagler as he once told a reporter when asked about his success “The man who bets on the growth of the United States and keeps his debts paid will win financial success” (University of South Florida, 2009). The prospect of a return on his investment could not have factored into his decision to build the highway as multiple financial analysts warned him against proceeding with the project (Standiford, 2002). Whatever his exact motivation was, it no doubt was accompanied by intense personal reasons as most thought it was an impossible task.
Florida East Coast Railway, Key West Extension. Train at Long Key. Gift of Ramon Davis. Retrieved from the Florida Keys Public Library
Florida East Coast Railway, Key West Extension. Seven Mile Bridge. Gift of Ramon Davis. Retrieved from the Florida Keys Public Library.
Flagler solicited bids for construction on the Key West extension in newspapers across the nation; only one contractor replied. The contractor demanded a cost-plus contract which Flagler refused. Instead, Flagler decided his team would undertake the construction themselves. The head construction engineer on the project was Joseph C. Meredith. Meredith died in 1909, before the project was complete but his contributions to the project were unmatched (Martin, 1949). When Meredith passed William Krome took over as chief engineer, his goal like Meredith’s, was to finish the extension before Henry passed. Throughout the entirety of the project there was an average of 3,000 laborers working full time. Flagler had doctors on staff, medical facilities, and housing for the laborers. Trains and ships had to constantly ferry tanks of fresh water to the worker camps. The workers and engineers countered continual surprises, the most damaging of which were hurricanes. In October 1906, a hurricane threw 70 men to sea whom where never seen again. The entire construction was as remarkable as it was expensive. Critics coined the extension “Flagler’s Folly”. On January 22, 1912, when the first train arrived in Key West with Flagler on board, cheering crowds lined the streets to greet him. William Krome said that moment was the happiest of his life (Martin, 1949, p.168).
Henry & Mrs. Flagler arriving in Key West.
Florida East Coast Railway, Key West Extension. 1st Train Celebration, January 22, 1912. Henry M. Flagler, and Dr. Jos. N. Fogarty (Mayor). Gift of Mrs. W. R. Warren. Property of the Florida Keys Public Library.
On May 20, 1913, Henry Morrison Flagler passed. At the time of his death, Florida East Coast Railway had extended 765 miles of track. Flagler’s land company, Model Land Company, owned more than 2 million acres of land. Flagler owned three Florida newspapers, two utility companies, and eight hotels. He also had other land holdings, farms, homes, and Standard stock. Flagler was buried in St. Augustine with his daughter and first wife. He left an estate worth $100 million dollars.
Marines marching on Duval Street in parade for Key West rail. Florida Keys Public Library. Retrieved from
Edwin Lefevre, had the opportunity to spend several weeks observing and interviewing Flagler. Lefevre was a reporter working on a story for
magazine. He went into the assignment with the intention to tell the tale of a robber baron; here is an excerpt of his story based on his time with Flagler,
“You realize that you are before a man who has suffered and has never wept; who has undergone intense pain and has never sobbed; who has never bent under stress and has never hurrahed!...Your great man is apt to be one with certain faculties over-developed, and classifies easily. But Flagler is not like anyone else and withal is not eccentric.
He is without redeeming vices, without amiable inconsistencies, without obsessions. He simply does not “classify.” You can not accurately adjectivize him. He does not defy analysis; he baffles it…Whether his veins run red blood you cannot tell; but you are certain it is not ice water. What color is it, then? That is the mystery of the soul of Henry M. Flagler” (Standiford, 2002, p.97).
Henry Flagler was a so called robber-baron, he engaged in cut throat business practices during an era of fierce competition and loose regulation. He benefited from the “sweat” of his work, as he liked to say and it was this “sweat” which allowed his to achieve so much (Akin, 1988). He was full of energy and as Rockefeller wrote, on the active side of every question and always an inspiration (1909). He was also a determined man, never afraid to work but also capable of compassion. Flagler once told a clergyman friend when asked about Florida, “I feel that these people are wards of mine and have a special claim upon me (Standiford, 2002,p.96). It has been said that he did more for the state of Florida than any man who ever lived (Kennedy, 1900). Flagler silenced critics who thought he was wasting his time in Florida, but often joked “I would have been a rich man had it not been for Florida” (Standiford, 2002, p.70).
Florida East Coast Railway, Key West Extension. Train on Seven Mile Bridge heading to Key West. Photo from the Monroe County Library Collection.
Florida East Coast Railway, Key West Extension. The Florida East Coast Railway Company first train to Key West with Henry Flagler on January 22, 1912 crossing the Seven Mile Bridge. Photo taken for the Knights Key Dock. Monroe County Library Collection.
Florida East Coast Railway, Key West Extension. Train on the Seven Mile Bridge. Gift of Ramon Davis. Florida Keys Public Library.
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Flagler: Rockefeller partner and Florida baron
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