Henry Flagler

"Henry M. Flagler" redirects here. For the train, see Dixie Flagler.
Henry Morrison Flagler

Portrait of Henry Morrison Flagler
Born (1830-01-02)January 2, 1830
Hopewell, New York, U.S.
Died May 20, 1913(1913-05-20) (aged 83)
Palm Beach, Florida, U.S.
Net worth USD $60 million at the time of his death (about 1/651st of US GNP)[1]
Children Jennie Louise (Mar 18, 1855-Mar 25, 1889)
Carrie Harkness (1858-1861)
Harry Harkness (1870-1952)

Henry Morrison Flagler (January 2, 1830 – May 20, 1913) was an American industrialist and a founder of Standard Oil. He was also a key figure in the development of the Atlantic coast of Florida and founder of what became the Florida East Coast Railway. He is known as the father of both Miami and Palm Beach, Florida.[2]

Upbringing and education

Henry Morrison Flagler was born in Hopewell, New York, the son of Isaac Flagler, a Presbyterian minister, and Elizabeth Caldwell Morrison Harkness Flagler. Henry had a step-brother: future tycoon Stephen V. Harkness, who had become Elizabeth's stepson when she married David Harkness of Milan, Ohio; and a half-brother, Daniel M. Harkness, Elizabeth's own son with David.[3] Widowed by David's death, Elizabeth had brought her family back to upstate New York and there married Isaac Flagler.

Henry Flagler received an eighth-grade education before Daniel convinced him to leave school at 14 to work at Daniel's uncle's store, Lamon G. Harkness and Company, in Republic, Ohio, at a salary of US$5 per month plus room and board. By 1849, Flagler was promoted to the sales staff at a salary of $400 per month. He later joined Daniel in a grain business started with Lamon in Bellevue, Ohio. In 1862, Flagler and his brother-in-law Barney York founded the Flagler and York Salt Company, a salt mining and production business in Saginaw, Michigan. He found that salt mining required a fair bit of technical knowledge and struggled in the industry during the war. The company collapsed when the American Civil War undercut demand for salt, and Flagler returned to Bellevue having lost his initial $50,000 investment and an additional $50,000 he borrowed from his father-in-law and Daniel. Flagler felt he had learned a valuable lesson: invest in a business only after thorough investigation.[4]

Business and Standard Oil

Henry Flagler, c. 1882
Flaglers Gingerbread house in Bellevue, OH

After the failure of his salt business in Saginaw, Flagler returned to Bellevue in 1866 and reentered the grain business as a commission merchant with The Harkness Grain Company. During this time he worked to pay back Steve Harkness. 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.

Standard Oil Articles of Incorporation signed by John D. Rockefeller, Henry M. Flagler, Samuel Andrews, Stephen V. Harkness and William Rockefeller

Needing capital for his new venture, Rockefeller approached Flagler in 1867. Flagler obtained $100,000 (equivalent of $1.7 million in 2015) from family member Stephen V. Harkness on the condition that Flagler be made a partner. The Rockefeller, Andrews & Flagler partnership was formed with Flagler in control of Harkness' interest.[5] The partnership eventually grew into the Standard Oil Corporation. It was Flagler's idea to use the rebate 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. Though the refunds issued amounted to no more than fifteen cents on the dollar, they put Standard Oil in position to undercut other oil refineries.[6] By 1872, it led the American oil refining industry, producing 10,000 barrels per day (1,600 m3/d). The Flagler family moved to New York in 1877 since New York was becoming the center of commerce in the US. In 1885, Standard Oil moved its corporate headquarters to New York City to the iconic 26 Broadway location .

Standard Oil had the same principal owners that Rockefeller, Andrews and Flagler had, give or take a few business associates: one of whom was Rockefeller's brother, William.[7] Standard Oil monopolized quickly and took America by storm.[8] Although Standard Oil was a partnership, Flagler was credited as the brain behind the booming oil refining business. According to Edwin Lefevre, in "Flagler and Florida" from Everybody's Magazine, XXII (February, 1910) p. 183, "When John D. Rockefeller was asked if the Standard Oil 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."[9] Flagler served as an active part of Standard Oil until 1882. John Dustin Archbold, known for being more aggressive, was hired by the Rockefellers. Flagler stepped back to take a secondary role at Standard Oil, but served as a vice president through 1908 and was part of ownership until 1911.[10]

Henry Flagler dabbled in various businesses aside from building up infrastructure in Florida. When he 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."[11] 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."[12] 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.[12] 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."[13]

Henry Flagler’s steam yacht Alicia, 160’ long at the waterline, custom built in 1890 by Harlan and Hollingsworth of Wilmington, Delaware.

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.[14] Standard Oil's combined assets equalled approximately $42,882,650.00 (U.S) from: Indiana, Kentucky, New Jersey, New York and Ohio. As well as the highest capitalization, totaling $26,000,000 (U.S).[14] The history of American oil refining begins with Henry Morrison Flagler, and his business associate and friend, John D. Rockefeller, as they built the biggest, most prosperous and monopolizing oil empire of their time: Standard Oil.

Florida: resort hotels and railroads

On the advice of his physician, Flagler traveled to Jacksonville for the winter with his first wife, Mary (née Harkness) Flagler, who was quite ill. Two years after she died in 1881, he married again. Ida Alice (née Shourds) Flagler had been a caregiver for Mary Flagler. 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.[15]

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,[16] so Flagler began construction of the 540-room Ponce de León 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.[17]

Florida East Coast Railway, Key West Extension, express train at sea, crossing Long Key Viaduct, Florida. photo from Florida Photographic Collection

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. He modernized the existing railroads for them to accommodate heavier loads and more traffic.

His next project was the Ponce de León 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.

Ponce de Leon Hotel - Now Flagler College

This project sparked Flagler's interest in creating a new "American Riviera." Two years later, Flagler 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 León Hotel. The Alcazar stands today as the Lightner Museum next to the Casa Monica Hotel in St. Augustine that Flager 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.

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.[2] 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 Breakers Hotel Complex 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. Sixty miles 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, 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, 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 there. 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 had been institutionalized on and off starting that year. At the same time he began to have an affair with Mary Lily Kenan. In 1899 Flagler had created a strong enough acquaintance with Mary Lily that papers began to openly question whether the two were having an affair. That year he reportedly gifted her more than $1 million in jewelry.[18] In 1901, Flagler bribed the Florida Legislature and Governor to pass a law that made incurable insanity grounds for divorce, opening the way for Flagler to remarry. He paid out at least $125,000 to members of Florida's state government to shape the law so that his case would be the exact qualification for divorce.[19] Judge Minor S. Jones of Florida's 7th Judicial Circuit presided over the divorce. Flagler was the only person to be divorced under the law before it was repealed in 1905.[20] 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 and the Pan American Exposition.[21] Built in 1902 as a wedding present to Mary Lily, Whitehall (now the Flagler Museum) 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, a point 128 miles (206 km) past the end of the Florida peninsula. At the time, Key West was Florida's most populous city, and it was also the United States' deep water port closest to the canal that the U.S. government 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 was completed to Key West. Over thirty years, Flagler had invested about $50 million in railroad, home, and hotel construction and gave to suffering farmers after the freeze in 1894. When asked by the president of Rollins College 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."[22]

Death and heritage

Statue of Henry Flagler that stands in front of Flagler College (Flagler's former Ponce de León Hotel) in Saint Augustine, Florida.

In 1913, Flagler fell down a flight of marble stairs at Whitehall. He never recovered from the fall and died in Palm Beach of his injuries on May 20 at 83 years of age.[23][24] He was entombed in the Flagler family mausoleum at Memorial Presbyterian Church in St. Augustine alongside his first wife, Mary Harkness; daughter, Jenny Louise; and granddaughter, Marjorie. Only his son Harry 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 his death on May 20, 1913, 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." [25]

Miami's main east-west street, is named Flagler Street, 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.[26]

On February 24, 2006, a statue of Henry Flagler was unveiled in Key West near where the Over-Sea Railroad once terminated. Also, on July 28, 2006, a statue of Henry Flagler was unveiled on the southeast steps of Miami's Dade County Courthouse, located on Miami's Flagler Street.

The Overseas Railroad, also known as the Key West Extension of the Florida East Coast Railway, was heavily damaged and partially destroyed in the Labor Day Hurricane of 1935. The Florida East Coast Railway 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.

Flagler's third wife, Mary Lily Kenan Flagler, 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.[27] 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.

See also

References

Notes
  1. ↑ Klepper, Michael; Gunther, Michael (1996), The Wealthy 100: From Benjamin Franklin to Bill Gates — A Ranking of the Richest Americans, Past and Present, Secaucus, New Jersey: Carol Publishing Group, p. xiii, ISBN 978-0-8065-1800-8, OCLC 33818143
  2. 1 2 "Madoff scandal stuns Palm Beach Jewish community". Reuters. December 19, 2008. Retrieved 2008-12-20.
  3. ↑ Martin 1949. 05.
  4. ↑ Martin. 29.
  5. ↑ Martin. p. 45.
  6. ↑ Martin. p. 64.
  7. ↑ Derbyshire, Wyn. "Six Tycoons: The lives of John Jacob Astor, Cornelius Vanderbilt, Andrew Carnegie, John D. Rockefeller, Henry Ford and Joseph P. Kennedy." London: Spiramus Press Ltd, 2008, p. 132.
  8. ↑ Derbyshire, Wyn. "Six Tycoons: The lives of John Jacob Astor, Cornelius Vanderbilt, Andrew Carnegie, John D Rockefeller, Henry Ford and Joseph P. Kennedy." London: Spiramus Press Ltd, 2008, p. 129-132.
  9. ↑ Martin, Sidney Walter. "Florida's Flagler." Georgia: University of Georgia Press, 2010, p. 56.
  10. ↑ David Leon Chandler, Henry Flagler (New York: Macmillan Publishing Company, 1986), 92-93.
  11. ↑ Martin, Sidney Walter."Florida's Flagler." Georgia: University of Georgia Press, 2010, p. 55.
  12. 1 2 Sammons, Sandra Wallus. "Henry Flagler, Builder of Florida." Sarasota, Florida: Pineapple Press Inc, 2010, p. 4.
  13. ↑ Martin, Sidney Walter. "Florida's Flagler." Georgia: University of Georgia Press, 2010, p. 58.
  14. 1 2 Tarbell, Ida M. The History of the Standard Oil Company. New York: McClure, Phillips & Co, 1904, p. 376.
  15. ↑ Nolan, David: Fifty Feet in Paradise, Harcourt, Brace, Jovanovich Publishers, 1984, page 95
  16. ↑ Nolan, David: Fifty Feet in Paradise, Harcourt, Brace, Jovanovich Publishers, 1984, page 101
  17. ↑ Nolan, David: Fifty Feet in Paradise, Harcourt, Brace, Jovanovich Publishers, 1984, page 105
  18. ↑ Chandler, 168-172
  19. ↑ Chandler, 190-191
  20. ↑ "Divorce Law Was For One Person". The Ledger. March 28, 2010.
  21. ↑ Chandler p. 193.
  22. ↑ Chandler
  23. ↑ "Whitehall Flagler Museum". Destination 360. Retrieved 2010-04-04.
  24. ↑ "Henry Morrison Flagler". Everglades Digital Library. Retrieved 2010-04-04.
  25. ↑ Moffet, Samuel. Henry Morrison Flagler The Cosmopolitan; a Monthly Illustrated Magazine (1902) APS Online
  26. ↑ "Henry Morrison Flagler Museum". Fodor's. May 12, 2014.
  27. ↑ "History". Kenan-Flagler Business School. Retrieved 2010-09-04.
Bibliography
  • Chandler, David. Henry Flagler: The Astonishing Life and Times of the Visionary Robber Baron who Founded Florida(New York: Macmillan Publishing Company, 1986)
  • Standiford, Les (2002). Last Train to Paradise. Crown Publishers, New York. ISBN 0-609-60748-0. 
  • Martin, Sidney Walter (1998). Henry Flagler Visionary of the Gilded Age. Tailored Tours Publications, Buena Vista, Florida. ISBN 0-9631241-1-0. 
  • Martin, Sydney Walter (1949). Florida's Flagler. University of Georgia Press, USA. 

Further reading

  • Akin, Edward N. (1991). Flagler: Rockefeller Partner and Florida Baron. University Press of Florida. ISBN 0-8130-1108-6. 
  • Bramson, Seth H. (2002). Speedway to Sunshine: The Story of the Florida East Coast Railway. Boston Mills Press, Erin, ONT, Canada. ISBN 1-55046-358-6.  Noted by the author as the official history of the Florida East Coast Railway.
  • 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.
  • Nolan, David. Fifty Feet in Paradise: The Booming of Florida. Harcourt Brace Jovanovich, 1984.
  • Ossman, Laurie; Ewing, Heather (2011). Carrère and Hastings, The Masterworks. Rizzoli USA. ISBN 9780847835645.

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