Henry Flagler (1830-1913) was a self-made millionaire and industrialist who co-founded the Standard Oil Company. He masterminded the plan that transformed Standard Oil into the most successful monopoly of the nineteenth century. During the second half of his life, he developed land and built railroads in Florida, establishing agriculture and tourism as the state's leading industries.
Henry Morrison Flagler was born January 2, 1830 in Hopewell, New York, to Isaac and Elizabeth Flagler. Both parents had been married twice before and Henry had three half sisters and one half brother. Isaac was an itinerant Presbyterian minister who settled in Toledo, Ohio, in 1836. There, he became involved in the temperance movement and advocated racial equality. In 1838, Flagler's parents separated and Elizabeth, Henry and a younger sister moved to Rock Hill, New York.
At the age of 14, Flagler left school and moved to Bellevue, Ohio, near Cleveland, to live with a half-brother, Dan Harkness. The two boys worked at a general store owned by Harkness's uncle. Flagler earned $5 a month, plus room and board. He proved to be a good salesman and his responsibilities and salary increased.
When he was 23, Flagler married Mary Harkness, a frail, 20-year-old cousin of Dan Harkness. Within six years, Henry was earning enough money to purchase a showy Victorian house in Bellevue. The couple had two daughters, Jennie Louise, born in 1855, and Carrie, born in 1858. Carrie died at the age of 3. Several years later, in 1870, their only son, Henry Harkness Flagler, was born.
Flagler and Dan Harkness remained friends and business associates and, in 1852, they opened a distillery. Flagler also worked as a grain merchant. During the Civil War, he earned large profits selling food and other commodities to the Union army. The business also profited from the sale of seeds and farm implements. Flagler's wheat and wine weres sold in Cleveland through a commission agent named John D. Rockefeller, who became a friend.
Flagler became restless with his distillery and grain business and, in 1863, he moved to Saginaw, Michigan, where he invested in the salt industry. However, the salt market collapsed after the Civil War and Flagler lost approximately $100,000.
Partners with Rockefeller
The experience in Saginaw was humiliating for Flagler. He returned to Bellevue and worked as a grain merchant to pay off his debt. In the meantime, his friend Rockefeller had gotten into the oil business. He and his partner, Samuel Andrews operated the largest oil refinery in Cleveland. They needed capital to expand. Flagler's cousin, Stephen Harkness, invested in the company with the understanding that Flagler be made a partner.
The new company, Rockefeller, Andrews and Flagler, refined crude oil into kerosene, which was used as an illuminant. Flagler and Rockefeller worked well together and they became very close friends. They lived near each other and shared an office. They walked to and from work together, discussing business along the way. Flagler and Rockefeller developed some innovative business tactics. They packaged their kerosene in leak proof, five-gallon tin cans, which they made themselves. Customers often reused the barrels and they were very popular.
Flagler and Rockefeller's oil company was one of several in Cleveland and among many scattered throughout the country. They conceived a plan to compete against other refineries. They asked the Lake Shore and Michigan Central Railroad for a rate reduction to ship crude oil to their Cleveland refineries. In exchange, the railroad would get large shipments of oil. The railroad consented and agreed to keep the discount a secret. By 1869, Cleveland was the second largest refinery city, behind New York City.
The company's advantage on railroad rates forced other Cleveland refineries out of business. Rockefeller, Andews and Flagler bought many of their failing competitors. As the company grew, the owners decided to organize it as a stock corporation, a relatively new business structure. They named the company the Standard Oil Company, because they were attempting to stabilize and apply standards to the oil business.
Standard Oil extended its railroad agreements to more railroads and different regions of the country. Flagler was a ruthless negotiator. He played one railroad against another in order to increase concessions. By 1872, Standard was the only refinery in Cleveland. In 1878, it controlled most of the refineries in the country. Standard went on to build and buy oil pipelines and, by 1884, it controlled not only refining, but transportation of crude oil.
Standard was doing more and more business in New York, and Flagler traveled between Cleveland and New York frequently. His wife's health was deteriorating and, by 1876, she was essentially an invalid. Flagler was devoted to her and read to her every night when he returned home from work. New York doctors advised him to take his wife to the Florida panhandle, which, because of its climate, served as a respite for the infirm.
The couple traveled to Jacksonville and St. Augustine. The accommodations were poor, there was no entertainment, and the cities were populated with sick people. With the exception of a few coastal towns, the rest of Florida was essentially an uninhabited wilderness. The Flaglers returned to New York, where his wife's condition deteriorated. She died in 1881.
At midlife, Flagler's personal and professional life were changing. Having achieved his goal of transforming Standard Oil into a monopoly, he retained his seat on the board of directors and turned over his day-to-day responsibilities to younger workers. His personal life was changing as well. Two years after being widowed, Flagler married Ida Alice Shourd, his late wife's nurse. Shourd hosted gala parties at the couple's New York estate, Satan's Toe. But she suffered from mental illness and, in 1897, was committed to an asylum, where she remained for the rest of her life.
Flagler suffered additional family tragedies when his oldest daughter died from complications of childbirth in 1899. Flagler's son dropped out of school and failed to follow his father into business, causing a lifelong rift between the two men.
After his first wife's death, Flagler developed a new business interest. He and Shourd had spent time in St. Augustine, Florida. The city had changed since Flagler first visited it. Rather than being filled with sick people, it had become a haven for the wealthy. The state was encouraging development by selling swampland for as little as 50 cents an acre.
Flagler purchased land in St. Augustine from a friend and built the grandest hotel in the world, the Ponce de Leon. The Spanish-influenced hotel made of concrete and native coquina shells was designed with the finest materials. It opened in 1888. Flagler then built a second, less-opulent hotel across the street. Both properties were immediately successful.
Railroads and Resorts
Flagler spent the rest of his life developing land in Florida. He discovered that the state's poor transportation was deterring development. The railroads running along the state's East Coast were not compatible. Flagler bought and combined the railroads to form the Florida East Coast Railway. He opened up service to Jacksonville, then Daytona. Over the years, he continued to convert old tracks and build new ones, extending service south.
Along the way, Flagler built additional hotels, establishing Florida's east coast cities as tourist destinations. He encouraged people to farm Florida's land by giving them a break on rail rates to transport their produce. Orange, grapefruit and lemon groves were soon dotting the state. He also established many of the state's newspapers.
In 1893, Flagler bought land on a little known barrier island called Palm Beach. He built the Royal Poinciana, which was the largest resort hotel in the world. It had six floors and 540 rooms. It and a smaller hotel nearby called The Breakers, became gathering places for wealth and fashion during "the season," from December to April 1. After Flagler built a railroad bridge onto the island, wealthy people traveled down in private railcars for parties, golf, tennis, boating, bathing and fishing.
To accommodate the workers who built the hotels, Flagler established a community of tents and shacks called "the Styx" on the island. He generally treated the workers, many of them African-Americans, well, but he didn't want them living near him. So he laid out a city across the lake and built homes, churches and government buildings, creating the city of West Palm Beach.
Flagler continued building his railroad south, laying out the cities of Fort Lauderdale and Miami along the way. He dredged the canal from the ocean into Biscayne Bay, making Miami a deep-sea port. Residents of the new city wanted to name it after Flagler, but he insisted that they call it Miami, an Indian name.
Flagler was generous with his wealth, donating money to build schools, hospitals and churches and to provide relief to farmers after freezes destroyed produce. Most of his donations were made anonymously.
In 1901, Flagler married for a third time. However, before doing so he had to obtain a divorce from his second wife, who was still living in a New York asylum. Flagler had no grounds for divorce, so he changed his residency to Florida and influenced the Florida legislature to pass a law naming insanity as grounds for divorce. After completing the divorce proceedings, Flagler married Mary Lily Kenan, a socially prominent North Carolinian, who was 37 years his junior. Flagler built his new wife a large Southern-style marble home called Whitehall in Palm Beach. It was the first of the island's mansions, costing $3 million.
Mary Lily hosted elaborate parties at Whitehall. Flagler, who married Mary at the age of 71, was losing his hearing and his sight and suffered from a liver ailment. He often slipped away from the affairs through secret doorways installed in the house. As Flagler aged, he became more reclusive, leaving the entertaining to Mary Lily.
In 1903, Flagler began work on his most challenging engineering feat—a railroad from Miami to Key West. The project spanned 50 miles through the Everglades and 106 miles over and between islands. Workers encountered mosquitoes, quicksand lakes and hurricanes during construction. Turnover was high. In order to attract workers, Flagler offered them free rail transportation to Florida. Many left the train in mid-state to work on farms and in groves. Flagler lived to see the Key West railroad open in 1912. He died on May 20, 1913 in Palm Beach, Florida, following a fall at Whitehall.
Flagler's widow died in 1917 and Whitehall passed to her niece, who sold it. For a while, it served as a hotel. In 1959, Flagler's granddaughter bought the mansion, restored it and opened it as a museum. In 1935, the Key West railroad was destroyed in a hurricane. But Highway 1, which connects the Florida Keys to the mainland utilizes many of the railroad's viaducts, bridges and roadbed. It opened in 1938.
The Rockefellers went on to become one of the most prominent families in the United States. In later years, John Rockefeller acknowledged that Flagler was the "brains" behind Standard Oil. The monopoly Flagler helped create at Standard was broken up by the Supreme Court in 1911. Although Flagler was well known in his lifetime, he was forgotten by history. Even in Florida, Flagler is largely known only as the founder of Palm Beach, which remains a resort community catering to the wealthy. Whitehall is now a museum honoring Flagler's life and Florida history.
Chandler, David Leon, Henry Flagler: the Astonishing Life and Times of the Visionary Robber Baron Who Founded Florida, Macmillan, 1986.
Martin, Sidney Walter, Florida's Flagler University of Georgia Press, 1949.
Owen, Jack, Palm Beach Scandals: An Intimate Guide, Rainbow Books, 1992.
"Henry Morrison Flagler," Dictionary of American Biography Base Set. American Council of Learned Societies, 1928-1936. Reproduced in Biography Resource Center . The Gale Group, 2000, http://www.galenet.com/servlet/BioRC(December 20, 2000).
"Henry Morrison Flagler," Henry Morrison Flagler Museum, Palm Beach, Florida, http://www.flagler.org/bio.html(December 20, 2000).