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Did 1920s Fla. Real Estate ‘Mania’ Kick Off Great Depression?

Did 1920s Fla. Real Estate ‘Mania’ Kick Off Great Depression?

Source: https://www.floridarealtors.org/news-media/news-articles/2020/01/did-1920s-fla-real-estate-mania-kick-great-depression
100 years ago, Fla. land speculators fought each other to flip land, jacking up prices with each sale. Later, stunned by massive losses, they moved money out of stocks too.

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MIAMI – Forget the Florida man, alligators in swimming pools and random shark attacks. During the Roaring ‘20s, this wacky Sunshine State was known for two things: real estate and booze.

In his new book “Bubble in the Sun: The Florida Boom Of the 1920s and How It Brought on the Great Depression,” Christopher Knowlton explains how Florida went from proverbial swamp land to a decadent playground for millionaires, socialites, gangsters and bootleggers.

“After my last book (“Cattle Kingdom”), the subject of Florida seemed to pursue me,” Knowlton told The Palm Beach Post. “I started thinking I could write about the human drama of the Florida land boom of the 1920s.”

As it turned out, Knowlton said, the topic was so much more interesting than he initially thought. “I couldn’t find many books about Florida in the ‘20s, and not many were written about real estate development in the state. The great Florida land boom was one of the most consequential financial manias in U.S. history, and it has never received the attention it deserves. “

What is amply documented is that people began to come to Florida in droves, wanting a piece of the real estate pie that was rapidly baking. “George Merrick’s new city (Coral Gables), Addison Mizner’s new club (the Everglades in Palm Beach) and Carl Fisher’s Miami Beach were perfectly timed to meet the onslaught of a sudden new migration,” Knowlton writes. “In sheer numbers, the flow of people to Florida in the mid-1920s would exceed any of the great rushes of the past.”

It didn’t hurt that authorities kept turning a blind eye to the obvious proliferation of alcohol that was pouring free in hotels and casinos. “If there was any place during the Prohibition years where the Volstead Act was laxly enforced, it was in Florida,” writes Knowlton.

The book primarily focuses on who Knowlton calls “the uncrowned kings” of real estate: Carl Fisher in Miami Beach, Addison Mizner in Palm Beach and Boca Raton, George Merrick in Coral Gables and David Paul “D.P.” Davis in Tampa and St. Augustine.

“These four great developers, their stories are so very interesting to me,” Knowlton said. “Boom bust stories have this unique narrative arc. This is a staple of American society. We get easily caught in financial euphoria, and the book is a cautionary tale of greed and power.”

But it wouldn’t be a book about the Florida land boom without mentioning a man who was instrumental for putting Florida on the map: Standard Oil founder Henry Flagler.

“Flagler created the template for real estate development in Florida, but he didn’t have a lot of control over his personal happiness. His first wife died from tuberculosis, the second went insane and the third one was way too young,” Knowlton said.

The book describes a turning moment in Florida history, when Flagler sailed his yacht along the coast and happened to stumble onto a slim barrier island, which he began secretly exploring by mule cart and on foot.

He would name this island Palm Beach.

Flagler not only created a new seasonal playground for the rich. But with the construction of his Royal Poinciana Hotel and later projects like The Breakers Hotel and his home, Whitehall, Flagler decided in 1893 to move his predominantly black work crews “out of the nearby impromptu shantytown known as the Styx. “

This new 200-acre settlement would be known from that moment on as West Palm Beach, forever creating a dividing line between the working class and the well-to-do.

Knowlton learned much of Florida’s past not only from extensive research, but also from spending countless spring breaks in Florida in the 1950s and ‘60s, mainly at his grandmother’s Vero Beach house.

He took periodic trips with her to Orlando, Palm Beach and Cape Canaveral. Knowlton kept coming back after that, and eventually chose Key West as a location to live for a month when he was writing his first book.

His fascination with Florida lingered, particularly with the people who raked the soil for what the state would become. “Miami, for example, is such a cultural melting pot, which was made that way by all the people who started coming south with the real estate boom,” Knowlton said. “Carl Fisher’s wife just saw a ‘rooted and evil-smelling molasses,’ as where Fisher saw Miami Beach ‘blazing like a jewel’ with untapped potential.”

But Fisher realized he had been wrong to focus on the aging rich as his target demographic for Miami Beach. “He decided to leave the super-rich and the old money to Palm Beach,” writes Knowlton. “Miami Beach, would be for men like him: the nouveau riche.”

“Bubble in the Sun” recounts the arrival of Addison Mizner to West Palm Beach aboard one of Henry Flagler’s trains in 1918, and his subsequent architectural development in Palm Beach.

“He arrived with a nurse named Joan Bates and his friend, the sewing machine heir, Paris Singer. The original plan had been to continue on to Guatemala to look at colonial architecture, but they ended up heading to Palm Beach instead,” Knowlton said.

Years later, The Everglades Club, The Sailfish Club, the Palm Beach Country Club and Bradley’s Beach Club would be some of Mizner’s most significant architectural accomplishments, making him and his partners not only hefty profits but also reputations.

Knowlton quotes the Palm Beach Post in 1925: “The owners and controllers of Mizner Development Corporation are a group of very rich men.”

“I always wondered about Mizner. He was a dilettante architect, and he took his work very seriously,” Knowlton said. “It’s a transporting experience when you see what he did. His houses are now appreciated as the works of art they are.”

To provide a balance to a narrative filled with mostly male land developers, Knowlton includes a woman who would become not only one of Florida’s most dedicated conservationists, but also a prominent voice in journalism: Marjory Stoneman Douglas.

Stoneman Douglas arrived in Miami to put a failed marriage behind her. As luck would have it, her estranged father Frank Stoneman was the editor of the newly reorganized Miami Herald, which had previously been the Miami Evening Record. He offered his daughter a job at the Herald as society editor, making her the paper’s first female reporter.

“I saw Marjory Douglas as a counterpoint to the developers. She lived in a hut sort of on the outside. She was one of the first to speak out about the destruction of the Everglades,” Knowlton said. “Marjory Douglas is the voice of conscience in the book.”

Real estate bubble burst

As would happen again decades later in 2008, the real estate bubble finally burst in 1929, helped by natural tragedies like the 1926 hurricane that hit the greater part of Miami and Miami Beach. This would be followed a few years later by a devastating recession like the country had never seen before, which brought bankruptcy, unemployment and a cache of abandoned land and homes.

“I believe that the collapse of the Florida land boom pricked the national real estate bubble of the twenties, causing the initial contraction in the economy to begin,” Knowlton writes. “A final lesson to be learned from the land boom is how susceptible we are to the seductions of any speculative frenzy. This was certainly true for Florida’s real estate kings, whose seduction by their own wealth and power offers a sobering lesson for the rest of us.”

Knowlton also touches on the “tremendous transformation” that Palm Beach went through in the years that followed The Great Depression from what it was during the years when Addison Mizner reigned supreme. In the 1950s, a lot of what he had created was all but gone, and a new crop of buyers had arrived in Palm Beach with different architectural tastes.

“Casa Bendita, John S. Phipps’ giant mansion, went before the wrecker’s ball in February 1961,” writes Knowlton. “The beautifully detailed La Fontana vanished in May 1968. It would be a few more years before a group of concerned locals organized the Palm Beach Landmarks Preservation Commission in 1979 to try to protect some of the remaining structures from demolition.”

A year later, a foundation with a similar goal, the Preservation Foundation of Palm Beach, would follow in the efforts to preserve Palm Beach’s “Miznerland” past.

Knowlton holds a special regard for Palm Beach and its history. He cites Worth Avenue, the grave of Mizner’s long-departed monkey Johnny Brown, and the Mizner Memorial Fountain as his favorite places in town.

He is already at work on a third book, another historical and biographical project. Knowlton doesn’t have a title yet, but the book will be centered on the dangerous mining practices of the 1950s.

© 2020 The Palm Beach Post (West Palm Beach, Fla.), Adriana Delgado. Distributed by Tribune Content Agency, LLC.

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