Henry Flagler

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Henry Morrison Flagler
Portrait of Henry Flagler
Born	Henry Morrison Flagler (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.
Resting place	Memorial Presbyterian Church, St. Augustine, Florida, U.S.
Children	3, including Harry Harkness Flagler

Henry Morrison Flagler (January 2, 1830 – May 20, 1913) was an American

Flagler attended local schools through eighth grade. His half-brother Daniel had left Hopewell to live and work with his paternal uncle Lamon G. Harkness, who had a store in Republic, Ohio. 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. 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, ^{[citation needed]} and made a small fortune distilling whiskey. He sold his stake in the business in 1858.^[4]

In 1862, Flagler and his wife's 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.^[5]

Business and Standard Oil

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 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.^{[citation needed]}

Needing capital for his new venture, Rockefeller approached Flagler in 1867. Flagler's stepbrother Stephen V. Harkness invested $100,000 (equivalent to $2.18 million in 2023^[7]) on the condition that Flagler be made a partner. The Rockefeller, Andrews & Flagler partnership was formed with Flagler in control of Harkness' interest.^[8] 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. Equivalent to a 15% discount, they put Standard Oil in position to significantly undercut other oil refineries.^[9] By 1872, it led the American oil refining industry, producing 10,000 barrels per day (1,600 m³/d). 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 location.^{[citation needed]}

By the end of the

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.[11] 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

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.[14] 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.^[15] 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.^[16]

In 1877, Standard clashed with Thomas A. Scott the president of the Pennsylvania Railroad, 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.^[17] 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.^[18]This subsidiary, the Empire Transportation Company, which Joseph D. Potts created in 1865 and also ran, owned other assets including a small fleet of ships on the Great Lakes.^[19][20] 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.^[21] 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.^[22]

Monopoly

Standard Oil gradually gained almost complete control of oil refining and marketing in the United States through

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.[30] 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.^[31] 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.^[32]

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, which was tasked with enforcing equal rates for all railroad freight, but by then Standard depended more on pipeline transport.^[33] 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.^[34] 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.^[34]

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,

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. She documented the company's espionage, price wars, heavy-handed marketing tactics, and courtroom evasions.^[35] 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 affair.^{[citation needed]}

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."^[36]

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

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."[40] 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."^[41] 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.^[41] 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."^[42]

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.^[43] Standard Oil's combined assets equalled approximately $42,882,650 (equivalent to $1.45 billion in 2023^[7]) in Indiana, Kentucky, New Jersey, New York and Ohio. Standard Oil also had the highest capitalization, totaling $26,000,000 (equivalent to $882 million in 2023).^[43] 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.^{[citation needed]}

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 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.'"^[44] 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.^[45]

Florida: resort hotels and railroads

When Flagler's first wife Mary (née Harkness) fell sick, his physician recommended they travel to

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,[47] 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.^[48]

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 used convict leasing — "a method undertaken by the Southern States to replace the economic setup of slavery"^[49] — to modernize the existing railroads, allowing them to accommodate heavier loads and more traffic.^[50]

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 3,840 acres (15.5 km²) for every mile (1.6 km) of track constructed.^[51]

Flagler completed the 1,100-room

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 (97 km) 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

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.^[citation needed]

By 1896, Flagler's railroad, the Florida East Coast Railway, reached

Flagler's second wife, the former Ida Alice Shourds, was declared insane^[52] 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; 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.^[53] 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. Flagler was the only person to be divorced under the law before it was repealed in 1905.^[54] It was not until 1969 that a spouse's incurable insanity (mental incapacity) again became a ground for divorce in Florida.^[55] It remains a ground today,^[56] but since Florida became a "no fault" divorce state in 1971,^[57] there is less need to use that ground to obtain a divorce (dissolution of marriage).

On August 24, 1901, 10 days after his divorce, Flagler married Mary Lily at her family's plantation,

By 1905, Flagler decided that his Florida East Coast Railway should be extended from Biscayne Bay to

In 1912, the Florida Overseas Railroad 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 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."^[59]

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.^[60][61]

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'."^[60]

A congressional investigation in 1909 concluded that "there had been little immigrant peonage in the South and none in the ... [railway camps] camps in the Keys. Congress concluded that newspapers in Florida and across the South spread the deceitful news against Flagler."^[61][62]

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 of 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."^[63]

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.^[64][65] 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.^[66]

Flagler 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 Harkness Flagler 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.^{[citation needed]}

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."^[67]

Miami's main east–west street is named

On February 24, 2006, a statue of Flagler was unveiled in Key West near the spot where the Overseas 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.^{[citation needed]}

The

• Standard Oil
• Florida East Coast Railway
• Mary Flagler Cary
• St. Augustine, Florida

• Casa Monica Hotel - purchased by Flagler and renamed Cordova
• Ponce de León Hotel
  - Built by Flagler
• The Alcazar Hotel now the Lightner Museum
• Flagler Memorial Presbyterian Church St. Augustine, FL

• Palm Beach, Florida

• Royal Poinciana Hotel
• Whitehall now Henry Morrison Flagler Museum
• Breakers Hotel

• Miami

• Royal Palm Hotel (Miami)

• Flagler Beach, Florida
• Flagler, Colorado
• List of railroad executives

References

Bibliography

• Chandler, David Leon (1986). Henry Flagler: The Astonishing Life and Times of the Visionary Robber Baron who Founded Florida. New York: Macmillan Publishing Company.
  ISBN 9780025236905
  .
• ISBN 978-1-4000-7730-4
  .
• Derbyshire, Wyn (2008). Six Tycoons: The lives of John Jacob Astor, Cornelius Vanderbilt, Andrew Carnegie, John D. Rockefeller, Henry Ford and Joseph P. Kennedy. London: Spiramus Press.
  OCLC 231588563
  .
• Hawke, David Freeman (1980). John D. The Founding Father of the Rockefellers. Harper & Row.
  ISBN 978-0060118136
  .
• Knetsch, Joe. "The Peonage Controversy and the Florida East Coast Railway," Tequesta (1999), Vol. 59, pp 5–28.
• 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.
• Rockefeller, John D. (1984) [1909]. Random Reminiscences of Men and Events. New York: Sleepy Hollow Press and Rockefeller Archive Center.
  ISBN 978-1-79049-499-6
  .
• Segall, Grant (2001-02-08). John D. Rockefeller: Anointed With Oil. Oxford University Press.
  ISBN 978-0-19512147-6
  . Retrieved December 19, 2012.
• Standiford, Les (2002). Last Train to Paradise. Crown Publishers, New York.
  ISBN 0-609-60748-0
  .
• Tarbell, Ida M. (1905). The History of the Standard Oil Company. New York: McClure, Phillips & Co.

Further reading

• Akin, Edward N. (1991). Flagler: Rockefeller Partner and Florida Baron. University Press of Florida.
  ISBN 0-8130-1108-6. online
• 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.
• 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.
• Klepper, Michael; Gunther, Michael (1996). The Wealthy 100: From Benjamin Franklin to Bill Gates — A Ranking of the Richest Americans, Past and Present.
  OCLC 33818143
  .
• 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 (1984). Fifty Feet in Paradise: The Booming of Florida. Harcourt Brace Jovanovich.
  OCLC 10348448
  .
• Ossman, Laurie; Ewing, Heather (2011). Carrère and Hastings, The Masterworks. Rizzoli USA.
  ISBN 9780847835645
  .

External links

Wikimedia Commons has media related to Henry Morrison Flagler.

• Henry Flagler biography
• History of The Breakers Hotel
• Flagler College
• Indiana Transportation Museum exhibit of Henry Flagler's private railroad car (Florida East Coast No.90)
• Photo of Flagler and his wife
• Ohio Historical Marker 5-39^{[permanent dead link]} located in Bellevue, Ohio
• Henry Flagler at Find a Grave
• Railroad Bells at A History of Central Florida Podcast