Henry Flagler (1830 -1913)

A Giant of Industry… Of Two Industries

Henry Flagler was born in Hopewell, New York on January 2nd, 1830.  He went to school until the 9th grade when he quit in 1844 to work for his uncle in his store.  Flagler was paid $5 a month and given room and board.  He prospered there until in his early twenties when his uncle started a grain business and made a small fortune servicing the whiskey distilling business.  He later put that small fortune ($950,000 in today’s money) into a salt mining business. The business collapsed after the Civil War and Flagler lost not only his investment, but an equal amount he had borrowed from his father-in-law. 

Retuning to the grain business, Flagler worked to repay his family.  It was there that Flagler would meet J.D. Rockefeller, who worked for a competitor.  In 1867 Rockefeller would approach Flagler for investment in an oil refining company he wanted to start. Flagler’s stepbrother would invest $100,000 and Flagler would be a partner and control his brother’s interest. The market for Kerosine, which was the primary product of oil refining at the time, was booming and Rockefeller, Andrews and Flagler – which would evolved into Standard Oil – quickly became a major player.  It was Flagler who was behind the innovation of rebates – where Standard Oil would get lower rates and rebates on their competitors’ shipping – that allowed the company to undercut competitors and play the railroads against one another, thereby quickly growing into the 800 lb gorilla on the block.  While this tactic, which was initially done in secret, was a catalyst for Standard Oil’s growth, when discovered became a lightning rod for criticism of the company. 

By the mid 1870’s Standard Oil gained control of virtually all of the refining capacity in Ohio by harnessing Cleveland’s transportation strength, being ruthlessly cost competitive and buying out its competitors. Standard Oil leveraged that Ohio stronghold to grow throughout the country and by the end of the decade it controlled 90% of America’s refining capacity. It was during this time the state of Pennsylvania sued Rockefeller and Flagler for charges of monopolizing the oil trade.  This would be the first of a cavalcade of legal assaults on the company which would eventually lead to it being broken up into 34 smaller companies in 1911 when the U.S. Supreme Court ruled that it was an illegal monopoly. 

Flagler stepped back from active participation in Standard Oil in 1882 when he decided to turn his attention south.  Having visited Florida for the first time in 1878 when his wife fell ill, he was immediately captivated by the lightly populated state.  His first project was the 540 room Ponce De Leon hotel in St. Augustine, which took two years to build and opened in 1888.  The hotel was one of firsts, being both the first of its kind to be built with the then new technique of poured concrete and also one of the first hotels in America to be wired for electricity, powered by Flagler’s friend, Thomas Edison.

But Flagler kept looking south and built a railroad along Florida’s east coast all the way down to Palm Beach, where he would build the Royal Poinciana hotel in 1894 and the Palm Beach Inn hotel in 1896. The latter, renamed The Breakers still stands, although this version is the third of that name, the original and a replacement both burning down, the former in 1903 and the latter in 1925.

Still not done, Flagler extended his railroad to what we know as Miami, but at the time was a lightly populated unincorporated area.  Flagler’s railroad reached Biscayne Bay in 1896 and he promptly opened the Royal Palm Hotel a year later. A decade later Flagler finally decided to run his railroad to Florida’s then most populous city, Key West, 128 miles away.  After seven years the Florida Overseas Railroad was completed in 1912, but Flagler would not build a hotel there. He didn’t have time. He died the next year the result of a fall. The Overseas Railroad would last for only 20 years however, as sections of it would be destroyed in 1935 by the Labor Day Hurricane.  A highway would be built in its place.

Few men make a household name of themselves in one industry.  Henry Flagler did it in two.  In oil he was unmatched:  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.” In 1896 when Miami was to be incorporated the citizens wanted to name the city after him but he demurred. 

Henry Flagler was a giant of his industry in his time. After transforming the face of American energy, he went on to become one of the pioneers behind what he called the “American Riviera.”.  Over a quarter century he built railroads, hotels, hospitals and donated to communities over much of Florida and today his genius can be seen in the map of Florida. From the general path of US Route 1 to Flagler County, to Flagler College to Flagler Beach to Flagler Hospital to the Flagler Museum, and countless monuments to him across the state, Henry Flagler was a giant in the development of one of America’s most popular states.  For a man born in the middle of winter in the virtual tundra in northern New York, one has to imagine that he’s happy that he is resting in peace in the paradise he loved so much, St. Augustine, Florida.