Henry Morrison Flagler (January 2, 1830 – May 20, 1913) was an American
industrialist
A business magnate, also known as a tycoon, is a person who has achieved immense wealth through the ownership of multiple lines of enterprise. The term characteristically refers to a powerful entrepreneur or investor who controls, through perso ...
and a founder of
Standard Oil
Standard Oil Company, Inc., was an American oil production, transportation, refining, and marketing company that operated from 1870 to 1911. At its height, Standard Oil was the largest petroleum company in the world, and its success made its co-f ...
, which was first based in Ohio. He was also a key figure in the development of the Atlantic coast of
Florida and founder of the
Florida East Coast Railway
The Florida East Coast Railway is a Class II railroad operating in the U.S. state of Florida, currently owned by Grupo México.
Built primarily in the last quarter of the 19th century and the first decade of the 20th century, the FEC was a pr ...
. He is also known as a founder of the cities of
Miami and
Palm Beach, Florida
Palm Beach is an incorporated town in Palm Beach County, Florida. Located on a barrier island in east-central Palm Beach County, the town is separated from several nearby cities including West Palm Beach and Lake Worth Beach by the Intracoas ...
.
Early life and education
Flagler was born in
Hopewell, New York. His father was Isaac Flagler, a
Presbyterian minister
Minister may refer to:
* Minister (Christianity), a Christian cleric
** Minister (Catholic Church)
* Minister (government), a member of government who heads a ministry (government department)
** Minister without portfolio, a member of government w ...
and great-grandson of Zacharra Flegler, whose family had emigrated from the German
Palatinate
Palatinate or county palatine may refer to:
*the territory or jurisdiction of a count palatine
United Kingdom and Ireland
*County palatine in England and Ireland
* Palatinate (award), student sporting award of Durham University
*Palatinate (col ...
region to Holland in 1688. Zacharra worked in England for several years before moving to
Dutchess County, New York, in 1710. His grandson Solomon changed the spelling of the surname to Flagler and passed it on to his 11 children. Flagler's mother was Elizabeth Caldwell Harkness Flagler, Isaac's third wife and a widow who had a stepson,
Stephen V. Harkness, and a son,
Daniel M. Harkness, from her marriage to deceased widower David Harkness of
Milan, Ohio.
Flagler attended local schools through eighth grade. His half-brother
Daniel
Daniel is a masculine given name and a surname of Hebrew origin. It means "God is my judge"Hanks, Hardcastle and Hodges, ''Oxford Dictionary of First Names'', Oxford University Press, 2nd edition, , p. 68. (cf. Gabriel—"God is my strength" ...
had left Hopewell to live and work with his paternal uncle Lamon G. Harkness, who had a store in
Republic, Ohio
Republic is a village in Seneca County, Ohio, United States. The population was 549 at the 2010 census.
History
In 1834, Sidney Smith hired R.M. Shoemaker of Cincinnati to survey a new town at the corners of sections 15, 16, 21, and 22 in Scipi ...
. He recruited Henry Flagler to join him, and the youth went to Ohio at age 14, where he started work in 1844 at a salary of US$5 per month plus
room and board
Room and board is a phrase describing a situation in which, in exchange for money, Manual labour, labor or other considerations, a person is provided with a place to live as well as meals on a comprehensive basis. It commonly occurs as a fee at h ...
. By 1849, Flagler was promoted to the sales staff at a salary of $40 per month. He later joined Daniel in a grain business started with his uncle Lamon in
Bellevue, Ohio.
In 1862, Flagler and his brother-in-law Barney Hamlin York (1833–1884) founded the Flagler and York Salt Company, a
salt mining and production business in
Saginaw, Michigan. He found that salt mining required more technical knowledge than he had and struggled in the industry during the Civil War. The company collapsed when the war undercut commercial demand for salt. Flagler returned to Bellevue having lost his initial $50,000 investment and an additional $50,000 he had borrowed from his father-in-law and Daniel. Flagler believed that he had learned a valuable lesson: invest in a business only after thorough investigation.
Business and Standard Oil
After the failure of his salt business in Saginaw, Flagler returned to Bellevue in 1866 and reentered the
grain
A grain is a small, hard, dry fruit (caryopsis) – with or without an attached hull layer – harvested for human or animal consumption. A grain crop is a grain-producing plant. The two main types of commercial grain crops are cereals and legum ...
business as a commission merchant with the Harkness Grain Company. During this time he worked to pay back his stepbrother. Through this business, Flagler became acquainted with
John D. Rockefeller, who worked as a commission agent with Hewitt and Tuttle for the Harkness Grain Company. By the mid-1860s,
Cleveland had become the center of the oil refining industry in America and Rockefeller left the grain business to start his own oil refinery. Rockefeller worked in association with chemist and inventor
Samuel Andrews.
Needing capital for his new venture, Rockefeller approached Flagler in 1867. Flagler's stepbrother
Stephen V. Harkness invested $100,000 (equivalent to $ in ) on the condition that Flagler be made a partner. The
Rockefeller, Andrews & Flagler partnership was formed with Flagler in control of Harkness' interest. The partnership eventually grew into the
Standard Oil
Standard Oil Company, Inc., was an American oil production, transportation, refining, and marketing company that operated from 1870 to 1911. At its height, Standard Oil was the largest petroleum company in the world, and its success made its co-f ...
Corporation. It was Flagler's idea to use the
rebate
Rebate may refer to:
Sales and finance
* Rebate (marketing), a type of sales promotion
** Conditional rebate
* Tax rebate, a reduction in taxation demanded
* UK rebate, a financial mechanism which reduced the United Kingdom's contribution to the ...
system to strengthen the firm's position against competitors and the transporting enterprises alike. Flagler was in a special position to make those deals due to his connections as a
grain merchant
The grain trade refers to the local and international trade in cereals and other food grains such as wheat, barley, maize, and rice. Grain is an important trade item because it is easily stored and transported with limited spoilage, unlike ...
. Equivalent to a 15% discount, they put Standard Oil in position to significantly undercut other oil refineries. By 1872, it led the American oil refining industry, producing . In 1877, Flagler and his family moved to
New York City, which was becoming the center of commerce in the U.S.. In 1885, Standard Oil moved its corporate headquarters to New York City to the iconic
26 Broadway
26 Broadway, also known as the Standard Oil Building or Socony–Vacuum Building, is an office building adjacent to Bowling Green in the Financial District of Lower Manhattan in New York City. The 31-story, structure was designed in the Renais ...
location.
By the end of the
American Civil War, Cleveland was one of the five main refining centers in the U.S. (besides
Pittsburgh, New York City,
Philadelphia, and
the region in northwestern
Pennsylvania where most of the oil originated).
By 1869, there was three times more kerosene refining capacity than needed to supply the market, and the capacity remained in excess for many years.
In June 1870, Flagler and Rockefeller formed Standard Oil of Ohio, which rapidly became the most profitable refiner in Ohio. Standard Oil grew to become one of the largest shippers of oil and kerosene in the country. The railroads were fighting fiercely for traffic and, in an attempt to create a
cartel to control freight rates, formed the
South Improvement Company
The South Improvement Company was a short lived Pennsylvania corporation founded in late 1871 which existed until the state of Pennsylvania suspended its charter on April 2, 1872. It was created by major railroad and oil interests, and was widely ...
in collusion with Standard and other oil men outside the main oil centers. The cartel received preferential treatment as a high-volume shipper, which included not just steep rebates of up to 50% for their product but also rebates for the shipment of competing products. Part of this scheme was the announcement of sharply increased freight charges. This touched off a firestorm of protest from independent oil well owners, including boycotts and vandalism, which eventually led to the discovery of Standard Oil's part in the deal. A major New York refiner,
Charles Pratt and Company, headed by
Charles Pratt and
Henry H. Rogers, led the opposition to this plan, and railroads soon backed off. Pennsylvania revoked the cartel's charter, and non-preferential rates were restored for the time being.
Undeterred, though vilified for the first time by the press, Flagler and Rockefeller continued with their self-reinforcing cycle of buying competing refiners, improving the efficiency of operations, pressing for discounts on oil shipments, undercutting competition, making secret deals, raising investment pools, and buying rivals out. In less than four months in 1872, in what was later known as "The Cleveland Conquest" or "The Cleveland Massacre", Standard Oil had absorbed 22 of its 26 Cleveland competitors. Eventually, even former antagonists Pratt and Rogers saw the futility of continuing to compete against Standard Oil: in 1874, they made a secret agreement with their old nemesis to be acquired. Pratt and Rogers became Flagler and Rockefeller's partners. Rogers, in particular, became one of Flagler and Rockefeller's key men in the formation of the Standard Oil Trust. Pratt's son,
Charles Millard Pratt, became Secretary of Standard Oil. For many of the competitors, Flagler and Rockefeller had merely to show them the books so they could see what they were up against and make them a decent offer. If they refused the offer, Flagler and Rockefeller told them they would run them into bankruptcy and then cheaply buy up their assets at auction. Flagler and Rockefeller saw themselves as the industry's saviors, "an angel of mercy" absorbing the weak and making the industry as a whole stronger, more efficient, and more competitive. Standard was growing
horizontally and
vertically. It added its own pipelines, tank cars, and home delivery network. It kept oil prices low to stave off competitors, made its products affordable to the average household, and, to increase market penetration, sometimes sold below cost if necessary. It developed over 300 oil-based products from tar to paint to
Vaseline petroleum jelly to chewing gum. By the end of the 1870s, Standard was refining over 90% of the oil in the U.S.
In 1877, Standard clashed with
Thomas A. Scott
Thomas Alexander Scott (December 28, 1823 – May 21, 1881) was an American businessman, railroad executive, and industrialist. In 1861, President Abraham Lincoln appointed him to serve as U.S. Assistant Secretary of War, and during the American ...
the president of the
Pennsylvania Railroad
The Pennsylvania Railroad (reporting mark PRR), legal name The Pennsylvania Railroad Company also known as the "Pennsy", was an American Class I railroad that was established in 1846 and headquartered in Philadelphia, Pennsylvania. It was named ...
, its chief hauler. Flagler and Rockefeller had envisioned the use of pipelines as an alternative transport system for oil and began a campaign to build and acquire them. The railroad, seeing Standard's incursion into the transportation and pipeline fields, struck back and formed a subsidiary to buy and build oil refineries and pipelines.This subsidiary, the
Empire Transportation Company
The Empire Transportation Company was a Multimodal transport, multimodal freight transportation company founded and operated by Joseph D. Potts in 1865. It owned a small fleet of boats on the Great Lakes which collected grain and produce which were ...
, which Joseph D. Potts created in 1865 and also ran, owned other assets including a small fleet of ships on the
Great Lakes. Standard countered and held back its shipments and, with the help of other railroads, started a price war that dramatically reduced freight payments and caused labor unrest as well. Flagler and Rockefeller eventually prevailed and the railroad sold all its oil interests to Standard. But in the aftermath of that battle, in 1879 the Commonwealth of Pennsylvania indicted Flagler and Rockefeller on charges of monopolizing the oil trade, starting an avalanche of similar court proceedings in other states and making a national issue of Standard Oil's business practices. The
New York State Legislature's
Hepburn Committee in 1879 conducted hearings in response to the complaints of local merchants that were not involved in the oil trade in order to investigate railroad rebate practices. The committee ultimately discovered the previously unknown scope of Standard Oil's business interests.
Monopoly
Standard Oil gradually gained almost complete control of oil refining and marketing in the United States through
horizontal integration. In the kerosene industry, Standard Oil replaced the old distribution system with its own vertical system. It supplied kerosene by tank cars that brought the fuel to local markets, and tank wagons then delivered to retail customers, thus bypassing the existing network of wholesale jobbers. Despite improving the quality and availability of kerosene products while greatly reducing their cost to the public (the price of kerosene dropped by nearly 80% over the life of the company), Standard Oil's business practices created intense controversy. Standard's most potent weapons against competitors were underselling, differential pricing, and secret transportation rebates. The firm was attacked by journalists and politicians throughout its existence, in part for these
monopolistic methods, giving momentum to the
antitrust
Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust l ...
movement. By 1880, according to the ''
New York World'', Standard Oil was "the most cruel, impudent, pitiless, and grasping monopoly that ever fastened upon a country." To the critics Flagler and Rockefeller replied, "In a business so large as ours... some things are likely to be done which we cannot approve. We correct them as soon as they come to our knowledge."
At that time, many legislatures had made it difficult to incorporate in one state and operate in another. As a result, Flagler and Rockefeller and their associates owned dozens of separate corporations, each of which operated in just one state; the management of the whole enterprise was rather unwieldy. In 1882, Flagler and Rockefeller's lawyers created an innovative form of corporation to centralize their holdings, giving birth to the Standard Oil Trust. The "
trust" was a corporation of corporations, and the entity's size and wealth drew much attention. Nine trustees, including Rockefeller, ran the 41 companies in the trust. The public and the press were immediately suspicious of this new legal entity, and other businesses seized upon the idea and emulated it, further inflaming public sentiment. Standard Oil had gained an aura of invincibility, always prevailing against competitors, critics, and political enemies. It had become the richest, biggest, most feared business in the world, seemingly immune to the boom and bust of the business cycle, consistently racking up profits year after year.
Its vast American empire included 20,000 domestic wells, 4,000 miles of pipeline, 5,000 tank cars, and over 100,000 employees. Its share of world oil refining topped out above 90% but slowly dropped to about 80% for the rest of the century. In spite of the formation of the trust and its perceived immunity from all competition, by the 1880s Standard Oil had passed its peak of power over the world oil market. Flagler and Rockefeller finally gave up their dream of controlling all the world's oil refining. Rockefeller admitted later, "We realized that public sentiment would be against us if we actually refined all the oil." Over time foreign competition and new finds abroad eroded his dominance. In the early 1880s, Flagler and Rockefeller created one of their most important innovations. Rather than try to influence the price of crude oil directly, Standard Oil had been exercising indirect control by altering oil storage charges to suit market conditions. Flagler and Rockefeller then decided to issue certificates against oil stored in Standard Oil's pipelines. These certificates became traded by speculators, thus creating the first oil-futures market which effectively set spot market prices from then on. The
National Petroleum Exchange
The National Petroleum Exchange was a resource exchange in New York City founded in 1882. In 1883 the National Petroleum Exchange and the New York Mining Stock Exchange were consolidated, becoming the New-York Mining Stock and National Petroleum E ...
opened in Manhattan in late 1882 to facilitate the oil futures trading.
Even though 85% of world crude production was still coming from Pennsylvania wells in the 1880s, overseas drilling in Russia and Asia began to reach the world market.
Robert Nobel had established his own refining enterprise in the abundant and cheaper Russian oil fields, including the region's first pipeline and the world's first oil tanker. The Paris Rothschilds jumped into the fray providing financing. Additional fields were discovered in Burma and Java. Even more critical, the invention of the light bulb gradually began to erode the dominance of kerosene for illumination. But Standard Oil adapted, developing its own European presence, expanding into
natural gas production in the U.S., then into gasoline for automobiles, which until then had been considered a waste product.
Standard Oil moved its headquarters to New York City, at 26 Broadway, and Flagler and Rockefeller became central figures in the city's business community.
In 1887, Congress created the
Interstate Commerce Commission
The Interstate Commerce Commission (ICC) was a regulatory agency in the United States created by the Interstate Commerce Act of 1887. The agency's original purpose was to regulate railroads (and later trucking) to ensure fair rates, to eliminat ...
, which was tasked with enforcing equal rates for all railroad freight, but by then Standard depended more on pipeline transport. More threatening to Standard's power was the
Sherman Antitrust Act of 1890, originally used to control unions, but later central to the breakup of the Standard Oil trust. Ohio was especially vigorous in applying its state anti-trust laws, and finally forced a separation of Standard Oil of Ohio from the rest of the company in 1892, the first step in the dissolution of the trust.
Upon his ascent to the presidency, Theodore Roosevelt initiated dozens of suits under the Sherman Antitrust Act and coaxed reforms out of Congress. In 1901,
U.S. Steel
United States Steel Corporation, more commonly known as U.S. Steel, is an American integrated steel producer headquartered in Pittsburgh, Pittsburgh, Pennsylvania, with production operations primarily in the United States of America and in severa ...
, now controlled by
J. Pierpont Morgan
John Pierpont Morgan Sr. (April 17, 1837 – March 31, 1913) was an American financier and investment banker who dominated corporate finance on Wall Street throughout the Gilded Age. As the head of the banking firm that ultimately became known ...
, having bought Andrew Carnegie's steel assets, offered to buy Standard's iron interests as well. A deal brokered by
Henry Clay Frick exchanged Standard's iron interests for U.S. Steel stock and gave Rockefeller and his son membership on the company's board of directors.
One of the most effective attacks on Flagler and Rockefeller and their firm was the 1905 publication of ''
The History of the Standard Oil Company,'' by
Ida Tarbell, a leading
muckraker
The muckrakers were reform-minded journalists, writers, and photographers in the Progressive Era in the United States (1890s–1920s) who claimed to expose corruption and wrongdoing in established institutions, often through sensationalist publ ...
. She documented the company's espionage, price wars, heavy-handed marketing tactics, and courtroom evasions. Although her work prompted a huge backlash against the company, Tarbell claims to have been surprised at its magnitude. "I never had an animus against their size and wealth, never objected to their corporate form. I was willing that they should combine and grow as big and wealthy as they could, but only by legitimate means. But they had never played fair, and that ruined their greatness for me." Tarbell's father had been driven out of the oil business during the
South Improvement Company
The South Improvement Company was a short lived Pennsylvania corporation founded in late 1871 which existed until the state of Pennsylvania suspended its charter on April 2, 1872. It was created by major railroad and oil interests, and was widely ...
affair.
Flagler and Rockefeller began a publicity campaign to put the company and themselves in a better light. Though Flagler and Rockefeller had long maintained a policy of active silence with the press, they decided to make themselves more accessible and responded with conciliatory comments such as "capital and labor are both wild forces which require intelligent legislation to hold them in restriction."
Flagler and Rockefeller continued to consolidate their oil interests as best they could until New Jersey, in 1909, changed its incorporation laws to effectively allow a re-creation of the trust in the form of a single
holding company. Rockefeller retained his nominal title as president until 1911 and he kept his stock. At last in 1911, the
Supreme Court of the United States
The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point o ...
found
Standard Oil Company of New Jersey
ExxonMobil, an American multinational oil and gas corporation presently based out of Texas, has had one of the longest histories of any company in its industry. A direct descendant of John D. Rockefeller's Standard Oil, the company traces its roo ...
in violation of the
Sherman Antitrust Act. By then the trust still had a 70% market share of the refined oil market but only 14% of the U.S. crude oil supply. The court ruled that the trust originated in illegal monopoly practices and ordered it to be broken up into 34 new companies. These included, among many others, Continental Oil, which became
Conoco
Conoco Inc. ( ) was an American oil and gas company that operated from 1875 until 2002, when it merged with Phillips Petroleum to form ConocoPhillips. Founded by Isaac Elder Blake in 1875 as the "Continental Oil and Transportation Company". Curr ...
, now part of
ConocoPhillips
ConocoPhillips Company is an American multinational corporation engaged in hydrocarbon exploration and production. It is based in the Energy Corridor district of Houston, Texas.
The company has operations in 15 countries and has production in ...
; Standard of Indiana, which became
Amoco, now part of
BP; Standard of California, which became
Chevron; Standard of New Jersey, which became
Esso
Esso () is a trading name for ExxonMobil. Originally, the name was primarily used by its predecessor Standard Oil of New Jersey after the breakup of the original Standard Oil company in 1911. The company adopted the name "Esso" (the phonetic p ...
(and later,
Exxon
ExxonMobil Corporation (commonly shortened to Exxon) is an American multinational oil and gas corporation headquartered in Irving, Texas. It is the largest direct descendant of John D. Rockefeller's Standard Oil, and was formed on November 30, ...
), now part of
ExxonMobil
ExxonMobil Corporation (commonly shortened to Exxon) is an American multinational oil and gas corporation headquartered in Irving, Texas. It is the largest direct descendant of John D. Rockefeller's Standard Oil, and was formed on November 30, ...
; Standard of New York, which became
Mobil
Mobil is a petroleum brand owned and operated by American oil and gas corporation ExxonMobil. The brand was formerly owned and operated by an oil and gas corporation of the same name, which itself merged with Exxon to form ExxonMobil in 1999.
...
, now part of ExxonMobil; and Standard of Ohio, which became
Sohio, now part of BP.
Pennzoil and Chevron have remained separate companies.
Flagler's contributions
When Flagler envisioned successes in the oil industry, he and Rockefeller started building their fortune in refining oil in Cleveland, Ohio. Cleveland became very well known for oil refining, as, "More and more crude oil was shipped from the oil regions to Cleveland for the refining process because of transportation facilities and the aggressiveness of the refiners there. It was due largely to the efforts of Henry M. Flagler and John D. Rockefeller." Flagler and Rockefeller worked hard for their company to achieve such prominence. Henry explained: "We worked night and day, making good oil as cheaply as possible and selling it for all we could get."
[Sammons, Sandra Wallus. ''Henry Flagler, Builder of Florida.'' Sarasota, Florida: Pineapple Press Inc, 2010, p. 4.] Not only did Flagler and Rockefeller's Standard Oil company become well known in
Ohio, they expanded to other states, as well as gained additional capital in purchasing smaller oil refining companies across the nation.
According to Allan Nevins, in ''John D. Rockefeller'' (p 292), "Standard Oil was born as a big enterprise, it had cut its teeth as a partnership and was now ready to plunge forward into a period of greater expansion and development. It soon was doing one tenth of all the petroleum business in the United States. Besides its two refineries and a barrel plant in Cleveland, it possessed a fleet of tank cars and warehouses in the oil regions as well as warehouses and tanks in New York."
By 1892, Standard Oil had a monopoly over all oil refineries in the United States. In an overall calculation of America's oil refineries' assets and capital, Standard Oil surpassed all. Standard Oil's combined assets equalled approximately $42,882,650 (equivalent to $ in ) in Indiana, Kentucky, New Jersey, New York and Ohio. Standard Oil also had the highest capitalization, totaling $26,000,000 (equivalent to $ in ). The history of American oil refining begins with Flagler and Rockefeller, as they built the biggest, most prosperous and monopolizing oil empire of their time:
Standard Oil
Standard Oil Company, Inc., was an American oil production, transportation, refining, and marketing company that operated from 1870 to 1911. At its height, Standard Oil was the largest petroleum company in the world, and its success made its co-f ...
.
Although Standard Oil was a partnership, Flagler was credited as the brain behind the booming oil refining business. "When
John D. Rockefeller was asked if the
Standard Oil
Standard Oil Company, Inc., was an American oil production, transportation, refining, and marketing company that operated from 1870 to 1911. At its height, Standard Oil was the largest petroleum company in the world, and its success made its co-f ...
company was the result of his thinking, he answered, 'No, sir. I wish I had the brains to think of it. It was Henry M. Flagler.'" Flagler served as an active part of Standard Oil until 1882, when he stepped back to take a secondary role at Standard Oil. He served as a vice president through 1908 and was part of ownership until 1911.
Florida: resort hotels and railroads
When Flagler's first wife Mary (née Harkness) fell sick, his physician recommended they travel to
Jacksonville for the winter to escape the brutal conditions of the North. For the first time, Flagler was able to experience the warm, sunny atmosphere of Florida. Two years after his first wife died in 1881, he married again. Ida Alice (née Shourds) Flagler had been a
caregiver for Mary. After their wedding, the couple traveled to
Saint Augustine. Flagler found the city charming, but the hotel facilities and transportation systems inadequate.
Franklin W. Smith had just finished building
Villa Zorayda and Flagler offered to buy it for his honeymoon. Smith would not sell, but he planted the seed of St. Augustine's and Florida's future in Flagler's mind.
Although Flagler remained on the board of directors of Standard Oil, he gave up his day-to-day involvement in the corporation to pursue his interests in Florida. He returned to St. Augustine in 1885 and made Smith an offer. If Smith could raise $50,000, Flagler would invest $150,000 and they would build a hotel together. Perhaps fortunately for Smith, he couldn't come up with the funds, so Flagler began construction of the 540-room
Ponce de Leon Hotel by himself, but spent several times his original estimate. Smith helped train the masons on the mixing and pouring techniques he used on Zorayda.
Realizing the need for a sound transportation system to support his hotel ventures, Flagler purchased short line railroads in what would later become known as the
Florida East Coast Railway
The Florida East Coast Railway is a Class II railroad operating in the U.S. state of Florida, currently owned by Grupo México.
Built primarily in the last quarter of the 19th century and the first decade of the 20th century, the FEC was a pr ...
. He used
convict leasing — "a method undertaken by the Southern States to replace the economic setup of slavery"
— to modernize the existing railroads, allowing them to accommodate heavier loads and more traffic.
His next project was the Ponce de Leon Hotel, now part of
Flagler College. He invested with the guidance of Dr. Andrew Anderson, a native of St. Augustine. After many years of work, it opened on January 10, 1888, and was an instant success.
This project sparked Flagler's interest in creating a new "American Riviera." Two years later, he expanded his Florida holdings. He built a railroad bridge across the
St. Johns River to gain access to the southern half of the state and purchased the Hotel Ormond, just north of
Daytona. He also built the Alcazar Hotel as an overflow hotel for the Ponce de Leon Hotel. The Alcazar is today the
Lightner Museum, next to the
Casa Monica Hotel in St. Augustine that Flagler bought from
Franklin W. Smith. His personal dedication to the state of Florida was demonstrated when he began construction on his private residence, Kirkside, in St. Augustine.
An immense engineering effort was required to cut through the wilderness and marsh from St. Augustine to Palm Beach. The state provided incentive in the form of for every mile () of track constructed.
Flagler completed the 1,100-room
Royal Poinciana Hotel on the shores of
Lake Worth in
Palm Beach and extended his railroad to its service town,
West Palm Beach, by 1894, founding Palm Beach and West Palm Beach.
The Royal Poinciana Hotel was at the time the largest wooden structure in the world. Two years later, Flagler built the Palm Beach Inn (renamed
The Breakers in 1901), overlooking the Atlantic Ocean in Palm Beach.
Flagler originally intended West Palm Beach to be the terminus of his railroad system, but in 1894 and 1895, severe freezes hit the area, causing Flagler to reconsider. south, the area today known as Miami was reportedly unharmed by the freeze. To further convince Flagler to continue the railroad to Miami, he was offered land in exchange for laying rail tracks from private landowners, the Florida East Coast Canal and Transportation Company, and the Boston and Florida Atlantic Coast Land Company. The land owners were
Julia Tuttle, whom he had met in
Cleveland, Ohio
Cleveland ( ), officially the City of Cleveland, is a city in the U.S. state of Ohio and the county seat of Cuyahoga County. Located in the northeastern part of the state, it is situated along the southern shore of Lake Erie, across the U.S. ...
, and
William Brickell, who ran a trading post on the
Miami River.
Such incentive led to the development of Miami, which was an unincorporated area at the time. Flagler encouraged fruit farming and settlement along his railway line and made many gifts to build hospitals, churches and schools in Florida.
By 1896, Flagler's railroad, the
Florida East Coast Railway
The Florida East Coast Railway is a Class II railroad operating in the U.S. state of Florida, currently owned by Grupo México.
Built primarily in the last quarter of the 19th century and the first decade of the 20th century, the FEC was a pr ...
, reached
Biscayne Bay. Flagler dredged a channel, built streets, instituted the first water and power systems, and financed the city's first newspaper, ''The Metropolis''. When the city was incorporated in 1896, its citizens wanted to honor the man responsible for its growth by naming it "Flagler". He declined the honor, persuading them to use an old Indian name, "
Mayaimi". Instead, an artificial island was constructed in Biscayne Bay called
Flagler Monument Island. In 1897, Flagler opened the exclusive
Royal Palm Hotel on the north bank of the Miami River where it overlooked Biscayne Bay. He became known as the
Father of Miami, Florida.
Flagler's second wife, the former Ida Alice Shourds, was declared insane by Flagler's friend Dr. Anderson in 1896 and was institutionalized on and off starting that year. At the same time, he began to have an affair with
Mary Lily Kenan
Mary Lily Kenan Flagler Bingham (1867–1917) was an American philanthropist and heiress who became notorious when she married one of the richest men of the Gilded Age. Mary Lily outlived her first husband, Henry Flagler, inherited his huge fortun ...
; by 1899, newspapers began to openly question whether the two were having an affair. That year he reportedly gave her more than $1 million in jewelry. In 1901, Flagler bribed the
Florida Legislature
The Florida Legislature is the legislature of the U.S. State of Florida. It is organized as a bicameral body composed of an upper chamber, the Senate, and a lower chamber, the House of Representatives. Article III, Section 1 of the Florida Cons ...
and Governor to pass a law that made incurable insanity grounds for divorce, opening the way for Flagler to remarry. Flagler was the only person to be divorced under the law before it was repealed in 1905. A spouse's mental incapacity was later restored by the legislature as a grounds for dissolution of marriage, and remains the law of Florida today.
On August 24, 1901, 10 days after his divorce, Flagler married Mary Lily at her family's plantation,
Liberty Hall, and the couple soon moved into their new Palm Beach estate, Whitehall, a 55-room
beaux arts home designed by the New York-based firm of
Carrère and Hastings, which also had designed the
New York Public Library
The New York Public Library (NYPL) is a public library system in New York City. With nearly 53 million items and 92 locations, the New York Public Library is the second largest public library in the United States (behind the Library of Congress ...
and the
Pan-American Exposition. Built in 1902 as a wedding present to Mary Lily, Whitehall (now the
Flagler Museum
Whitehall is a 75-room, 100,000 square foot Gilded Age mansion open to the public in Palm Beach, Florida in the United States. Completed in 1902, it is a major example of neoclassical Beaux Arts architecture designed by Carrère and Hastings fo ...
) was a 60,000-square-foot (5,600 m²) winter retreat that established the Palm Beach "season" of about 8–12 weeks, for the wealthy of America's
Gilded Age.
By 1905, Flagler decided that his Florida East Coast Railway should be extended from Biscayne Bay to
Key West
Key West ( es, Cayo Hueso) is an island in the Straits of Florida, within the U.S. state of Florida. Together with all or parts of the separate islands of Dredgers Key, Fleming Key, Sunset Key, and the northern part of Stock Island, it cons ...
, a point past the end of the Florida peninsula. At the time, Key West was Florida's most populous city, with a population of 20,000, and it was also the United States' deep water
port closest to the
canal that the
U.S. government
The federal government of the United States (U.S. federal government or U.S. government) is the national government of the United States, a federal republic located primarily in North America, composed of 50 states, a city within a fede ...
proposed to build in
Panama. Flagler wanted to take advantage of additional trade with
Cuba and Latin America as well as the increased trade with the west that the
Panama Canal would bring.
In 1912, the
Florida Overseas Railroad
The Overseas Railroad (also known as Florida Overseas Railroad, the Overseas Extension, and Flagler's Folly) was an extension of the Florida East Coast Railway to Key West, a city located beyond the end of the Florida peninsula. Work on the line ...
was completed to Key West. Over 30 years, Flagler had invested about $50 million in railroad, home and hotel construction and had made donations to suffering farmers after the freeze in 1894. When asked by the president of
Rollins College
Rollins College is a private college in Winter Park, Florida. It was founded in November 1885 and has about 30 undergraduate majors and several graduate programs. It is Florida's fourth oldest post-secondary institution.
History
Rollins Colle ...
in
Winter Park about his philanthropic efforts, Flagler reportedly replied, "I believe this state is the easiest place for many men to gain a living. I do not believe any one else would develop it if I do not..., but I do hope to live long enough to prove I am a good business man by getting a dividend on my investment."
Alleged use of convict leasing and debt peonage
Flagler allegedly used convicts leased from Florida prison camps, the majority of them African-American, to clear land for the Royal Palm Hotel in Miami and to build the Florida East Coast Railway from West Palm Beach to Miami and the rail extension to Key West. He also used labor agencies to bring around 4,000 new immigrants to Florida who contracted to work until their transportation costs had been paid off. Due to the harsh working and living conditions in the railway construction camps, many workers became victims of
debt slavery.
When the Department of Justice prosecuted four Flagler employment agents in 1908 for "conspiracy to hold workmen in peonage and slavery," the Flagler-owned
The Florida Times-Union and other Florida newspapers depending on the Times-Union for material or owned by Flagler published articles to "influence juries and public opinion." The judge instructed the jury to find them not guilty because the "prosecution had failed to prove 'an agreement of minds with evil intent to conspire'."
A congressional investigation in 1909 concluded that "there had been little immigrant peonage in the South and none in the ...
ailway campscamps in the Keys. Congress concluded that newspapers in Florida and across the South spread the deceitful news against Flagler."
According to historian Joe Knetsch, reformers and muckrakers exaggerated charges of peonage regarding construction of the Florida East Coast Railway in 1893 to 1909. Flager and his lawyers defeated all legal challenges and neither the company or its employees were ever convicted in court. However there were many reports harsh working conditions and forced indebtedness to the company, and malfeasance by labor agents who hired men for the railway. Knetsch concludes that "Flagler in fact provided health care for his employees and was a far better employer than the press alleged."
Death and legacy
In March 1913, Flagler fell down a flight of marble stairs at Whitehall. He never recovered and died in Palm Beach of his injuries on May 20, 1913 at 83 years of age. At 3 p.m. on the day of the funeral, May 23, 1913, every engine on the Florida East Coast Railway stopped wherever it was for ten minutes as a tribute to Flagler. It was reported that people along the railway line waited all night for the passing of the funeral train as it traveled from Palm Beach to St. Augustine.
Flagler was entombed in the Flagler family mausoleum at
Memorial Presbyterian Church
__NOTOC__
The Memorial Presbyterian Church is a historic church constructed in St. Augustine, Florida, in 1889 by American industrialist Henry Flagler, Henry Morrison Flagler. It is located at 32 Sevilla Street. It was dedicated to the memory of h ...
in St. Augustine alongside his first wife, Mary Harkness; daughter, Jenny Louise; and granddaughter, Marjorie. Only his son
Harry Harkness Flagler
Harry Harkness Flagler (December 2, 1870 - June 30, 1952) was president of the Philharmonic Symphony Society of New York and the National Orchestral Association.
Biography
He was born in Cleveland, Ohio on December 2, 1870, to Henry Morrison F ...
survived of the three children by his first marriage in 1853 to Mary Harkness. A large portion of his estate was designated for a "niece" who was said actually to be a child born out of wedlock.
When looking back at Flagler's life, after Flagler's death, George W. Perkins, of
J.P. Morgan & Co., reflected, "But that any man could have the genius to see of what this wilderness of waterless sand and underbrush was capable and then have the nerve to build a railroad here, is more marvelous than similar development anywhere else in the world."
Miami's main east-west street is named
Flagler Street
Flagler Street is a main east–west road in Miami. Flagler Street is the latitudinal baseline that divides all the streets on the Miami-Dade County grid plan as north or south streets (the east-west division is along Miami Avenue). Flagle ...
and is the main shopping street in
Downtown Miami. There is also a monument to him on
Flagler Monument Island in
Biscayne Bay in
Miami;
Flagler College and
Flagler Hospital are named after him in St. Augustine.
Flagler County, Florida,
Flagler Beach, Florida and
Flagler, Colorado are also named for him. Whitehall, Palm Beach, is open to the public as the
Henry Morrison Flagler Museum; his private railcar No. 91 is preserved inside a Beaux Arts pavilion built to look like a 19th-century railway palace.
On February 24, 2006, a statue of Flagler was unveiled in
Key West
Key West ( es, Cayo Hueso) is an island in the Straits of Florida, within the U.S. state of Florida. Together with all or parts of the separate islands of Dredgers Key, Fleming Key, Sunset Key, and the northern part of Stock Island, it cons ...
near the spot where the Over-Sea Railroad once terminated. Also, on July 28, 2006, a statue of Flagler was unveiled on the southeast steps of Miami's Dade County Courthouse, located on Miami's
Flagler Street
Flagler Street is a main east–west road in Miami. Flagler Street is the latitudinal baseline that divides all the streets on the Miami-Dade County grid plan as north or south streets (the east-west division is along Miami Avenue). Flagle ...
.
The
Overseas Railroad, also known as the Key West Extension of the
Florida East Coast Railway
The Florida East Coast Railway is a Class II railroad operating in the U.S. state of Florida, currently owned by Grupo México.
Built primarily in the last quarter of the 19th century and the first decade of the 20th century, the FEC was a pr ...
, was heavily damaged and partially destroyed in the
Labor Day Hurricane of 1935. The railroad was financially unable to rebuild the destroyed sections, so the roadbed and remaining bridges were sold to the State of Florida, which built the
Overseas Highway to Key West, using much of the remaining railway
infrastructure
Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and priv ...
.
Flagler's third wife,
Mary Lily Kenan Flagler Bingham was born in
North Carolina. The top-ranked
Kenan-Flagler Business School at the
University of North Carolina at Chapel Hill is named for Flagler and his wife, who was an early benefactor of UNC along with her family and descendants.
After Flagler's death, she married an old friend,
Robert Worth Bingham, who used an inheritance from her to buy the Louisville Courier-Journal newspaper. The Bingham-Flagler marriage (and questions about her death or possible murder) figured prominently in several books that appeared in the 1980s, when the Bingham family sold the newspaper in the midst of great acrimony. Control of the Flagler fortune largely passed into the hands of Mary Lily Kenan's family of sisters and brother, who survived into the 1960s.
[Walter E. Campbell, ''Across Fortune’s Tracks: A Biography of William Rand Kenan, Jr.'' (UNC Press, 1996)]
See also
*
Standard Oil
Standard Oil Company, Inc., was an American oil production, transportation, refining, and marketing company that operated from 1870 to 1911. At its height, Standard Oil was the largest petroleum company in the world, and its success made its co-f ...
*
Florida East Coast Railway
The Florida East Coast Railway is a Class II railroad operating in the U.S. state of Florida, currently owned by Grupo México.
Built primarily in the last quarter of the 19th century and the first decade of the 20th century, the FEC was a pr ...
*
Mary Flagler Cary
*
St. Augustine, Florida
St. Augustine ( ; es, San Agustín ) is a city in the Southeastern United States and the county seat of St. Johns County on the Atlantic coast of northeastern Florida. Founded in 1565 by Spanish explorers, it is the oldest continuously inhabit ...
::*
Casa Monica Hotel - purchased by Flagler and renamed Cordova
::*
Ponce de León Hotel
The Ponce de Leon Hotel, also known as The Ponce, was an exclusive luxury hotel in St. Augustine, Florida, built by millionaire developer and Standard Oil co-founder Henry Flagler, Henry M. Flagler and completed in 1888. The hotel was designed i ...
- Built by Flagler
::* The Alcazar Hotel now the
Lightner Museum
::* Flagler
Memorial Presbyterian Church
__NOTOC__
The Memorial Presbyterian Church is a historic church constructed in St. Augustine, Florida, in 1889 by American industrialist Henry Flagler, Henry Morrison Flagler. It is located at 32 Sevilla Street. It was dedicated to the memory of h ...
St. Augustine, FL
*
Palm Beach, Florida
Palm Beach is an incorporated town in Palm Beach County, Florida. Located on a barrier island in east-central Palm Beach County, the town is separated from several nearby cities including West Palm Beach and Lake Worth Beach by the Intracoas ...
::*
Royal Poinciana Hotel
::* Whitehall now
Henry Morrison Flagler Museum
::*
Breakers Hotel
The Breakers Palm Beach is a historic, Renaissance Revival style luxury hotel with 538 rooms. It is located at 1 South County Road in Palm Beach, Florida.
Early history
First known as The Palm Beach Inn, the original hotel was opened on January ...
*
Miami
::*
Royal Palm Hotel (Miami)
The Royal Palm Hotel was a large resort hotel built by railroad magnate Henry Flagler in Miami, Florida. Opened on January 16, 1897, the Royal Palm Hotel was one of the first hotels in the Miami area. It sat on the north bank of the Miami River w ...
*
Flagler Beach, Florida
*
Flagler, Colorado
*
List of railroad executives
This is a list of railroad executives, defined as those who are presidents and chief executive officers of railroad and railway systems worldwide.
A
* Abbot, Edwin H. (1834–1927), WC −1890
* Adams, Charles Francis, Jr. (1835–1915), ...
References
Bibliography
*
*
*
*
* Knetsch, Joe. "The Peonage Controversy and the Florida East Coast Railway," ''Tequesta'' (1999), Vol. 59, pp 5–28.
*
*
*
*
*
*
Further reading
*
online* Noted by the author as the official history of the Florida East Coast Railway.
* Graham, Thomas. "Henry M. Flagler's Hotel Ponce de León." ''Journal of Decorative and Propaganda Arts'' (1998): 97-111. [
* Graham, Thomas. ''Mr. Flagler’s St. Augustine'' (University Press of Florida, 2014)
online
* Keys, Leslee F. ''Hotel Ponce de Leon: The Rise, Fall, and Rebirth of Flagler’s Gilded Age Palace'' (University Press of Florida, 2015
online
*
* Mendez, Jesus. "1892-A Year of Crucial Decisions in Florida", ''Florida Historical Quarterly'', Summer 2009, Vol. 88 Issue 1, pp 83–106, focus on Flager's aggressive urban development of the city of St. Augustine, his improvement of the local railroad networks between several Florida communities, and negotiations regarding international government trade policies and regulations.
*
* Ossman, Laurie; Ewing, Heather (2011). ''Carrère and Hastings, The Masterworks''. Rizzoli USA. .
External links
Henry Flagler biographyHistory of The Breakers HotelFlagler Collegeexhibit of Henry Flagler's private railroad car (Florida East Coast No.90)
Photo of Flagler and his wifeOhio Historical Marker 5-39located in Bellevue, Ohio
*
by Ida Tarbell
Railroad Bellsa
A History of Central Florida Podcast
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