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Ira Artman (http://www.linkedin.com/in/iraartman) has held quantitative analytical and whole loan trading positions in Mortgage and Structured Finance at JP Morgan Chase, Chase Manhattan, Security Pacific, and City Federal Savings. A graduate of Brown University and MIT’s Sloan School, Mr.... More
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  • Ira Artman's Agent Orange - Henry Flagler And The Creation Of Florida 0 comments
    Jun 3, 2009 9:59 PM

     

    Both capitalism and Florida real estate (see my California and Florida Housing Outlook) are out of favor. It’s time for a … fond tribute to both. 

    Before Anita Bryant cooed for all to “Come to the Florida Sunshine Tree,” before Walt Disney World gleamed in Mickey’s eyes, there was Henry Morrison Flagler. 

    He arrived in Florida from Cleveland, in 1876, tubercular wife in tow.  Up north, Flagler had dabbled in the lubricant business.  There’s not much to say about that Ohio firm, other than what was said by his Standard Oil partner.  According to John D. Rockefeller, Flagler was the “brains” of the business. 

    When the Flaglers arrived, Florida was the poorest state in the country,  “a swampy wasteland of alligators, mangroves and mosquitoes.” Just getting to Jacksonville from New York City took 4 days by rail – non-standard railroad tracks required frequent transfers. Hotel consultant Stanley Turkel relates an 1870 account of the journey’s final leg: 

    • There are two ways of getting to Jacksonville (from Savannah, Georgia) and whichever you choose you will be sorry to have not taken the other. There is the night train by railroad, which brings you to Jacksonville in about 16 hours; and there is the steamboat line, which goes inland nearly all the way, and which may land you in a day, or you may run aground and remain on board for a week. 

    Stanley Turkel, Henry Morrison Flagler in Great Hoteliers: Pioneers of the Hotel Industry, 2006. 

    Before Flagler began to develop Florida, less than 270,00 people lived in the state.  Two decades later, the population had almost tripled to 750,000. 

    Flagler is the one man largely responsible for this growth.  He would spot a promising location – St. Augustine, Daytona, West Palm Beach, Fort Lauderdale, the “muddy hamlet” of Fort Dallas (called “Miami” by the Seminoles, Flagler would not let the town change its name to “Flagler”) – and the transformation would begin.  Flagler would: 

    1. Acquire land in a promising location;
    2. Build a huge, exquisite hotel;
    3. Extend his East Coast Railway southward to serve the hotel; and
    4. Receive 8000 acres of land from the state government for each mile of railway track. 

    Cities would grow up around each hotel and resort. 

    By the time Flagler was done, he had: 

    • Pushed his railroad line all the way to Key West across more than 150 miles of open ocean;
    • Acquired more than 2 million acres of land; and
    • Dominated the east coast of Florida. 

    Flagler’s resort hotels demonstrated, according to travel writer Colette Bancroft, a genius for business along with a close attention to the tiniest detail.   

    He engaged the country’s leading architects (e.g. McKim, Mead, and White) as he invented the concept of a destination resort featuring dependable and consistent elegance.  His resorts featured familiar hotel designs (“huge landlocked versions of today’s fantasy cruise ships”) that he color-coordinated with his railroad, with “interchangeable linens and dishes.”  Flagler created a network: 

    • Offering guests the luxury and fantasy of the resort along with the sense of security of knowing what to expect from a Flagler hotel. 

    Colette Bancroft, St. Petersburg Times, The Founders of Florida Fantasy, 8 Dec 2002.

    Flagler died at the age of 82 in 1913, one year after completing the Key West rail link.   

    While some of his hotels still function as resorts, others have been converted to county offices, a college, a museum, and a retirement home. His Key West railroad, destroyed by a depression-era hurricane, was eventually re-engineered into the Key West Highway.   

    At last count, the population of Florida was more than 18 million. 

    Like the best businessmen of his age – or the political and social architects of our own era – Flagler despised competition, viewing it as wasteful.   

    Flagler preferred monopoly enterprises.  He used the term cooperation, not unlike the planners meeting along Pennsylvania Avenue today, some 1200 miles north of Key West. 

    Throughout his business career, Henry Morrison Flagler’s desk featured a quotation from a 19th century bestseller that remains in vogue:

    • Do unto others before they do it to you.
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