By Bob Holladay
Florida Bookman

In 1920, four years before Tallahassee celebrated its centennial, Miami already had more than 24,000 residents, nearly four times that of the state capital.  Despite that, there was still a kind of uncertainty about what kind of city Miami was going to become, and how much deference the rest of the state should pay to it.  Tallahassee was certainly the seat of governmental power—as it remains today, though perhaps with less political goodwill directed toward it—but it was clear that the real economic power was moving south at an accelerated rate.  There were a lot of people responsible for that: Henry Flagler, and his railroad, which reached Key West in 1912; Carl Fisher, who began building everything in Miami, particularly hotels; George Merrick, who developed Coral Gables; Willis Carrier, who came up with air conditioning; the Mizner brothers, one of them an architect, the other one a con man, who helped sell the public on the idea of Florida as the new Eden.  And then there were the bankers, who loaned all the money to buy and develop the land and speculate with depositors’ money, out of sight of the regulators. The result of all these personalities, combined with the post-World War I economic prosperity, plus the sense of cultural liberation that went with it, was the South Florida land boom of the 1920s that still, a century later, is a major factor in the state’s image as a playground for reckless people.

The best book about what ultimately happened in Florida beginning in 1926 is my friend Raymond “Vic” Vickers’ 1994 study, Panic in Paradise: Florida’s Banking Crash of 1926, but a new book, Bubble in the Sun: The Florida Boom of the 1920s and How It Brought on the Great Depression by Christopher Knowlton, former bureau chief for Fortune Magazine, puts the South Florida land bubble in national perspective.  In our own lifetimes, we have seen other bubbles: the dotcom bubble of the 1990s, the subprime bubble of the 2000s.  All of those were preceded by the orgy of building and speculation and financial abuse that took place in South Florida beginning with World War I and ending with the hurricane of 1926 that reminded people that Mother Nature might have something to say about attempting to build paradise in a tropical climate.  We are, as the coronavirus reminds us, less in control than we think we are.

The South Florida boom, which occurred at almost the same time as a similar migration was beginning to transform California, ushered in what Knowlton calls a “subdivision civilization” that has only spread in the last century with lasting ramifications for many things, including the environment.  As Knowlton reminds us—and which remains the watchword through Florida political and economic corridors of power— all of this transformed the language itself, particularly the word “progress.” South Florida became the dress rehearsal for America writ large through the 20th century: material prosperity merging into excess;  open violation of gambling and drinking laws during Prohibition; the idea that bigger and more opulent is always better.  South Florida in the 1920s was perhaps the last vestige of a frontier mentality in the lower 48 states.

None of this would have been possible without the easy money that has come to symbolize the 1920s: the ability to buy stock, for example, on 10% margin, or the willingness of Florida’s banks to loan money for all sorts of speculative schemes, and then to speculate with depositors’ money.  Vickers’ book, which is a major source for Knowlton’s, would not have been written or published in 1994 without the author going to court to force the opening of 70-year-old bank records that demonstrated, in Knowlton’s words, that “90 percent of the Florida banks that failed were guilty of self-dealing or outright fraud by insiders.” 

The characters in Knowlton’s book are indeed larger than life, frontier characters, really.  Fisher, who had started the Indianapolis 500 and then both the Lincoln Highway and the Dixie Highways, understood that the possibilities of South Florida could not be realized without the means to get there in the post-Flagler era, via the automobile.  Flagler, of course, built the railroad, but also the Ponce de Leon and Alacazar Hotels in St. Augustine. George Merrick inherited an orange grove and turned it into Coral Gables; Addison Mizner and his friend, Paul Singer (heir to the Singer sewing machine fortune) turned Palm Beach into the winter capital of the world, complete the huge Spanish-style homes that became Mizner’s trademark.  Addison’s brother, Wilson, a playwright, wit and con artist, teamed with his brother to create Boca Raton. Merrick brought William Jennings Bryan, former presidential candidate and Secretary of State to Coral Gables to hawk real estate. Set against them, Knowlton presents the young Marjorie Stoneman Douglas, newspaper reporter on her father’s paper, just beginning to take an interest in the Everglades. The saga of South Florida is endlessly fascinating and has eclipsed the history of the rest of the state.  The Forgotten Coast has been playing catch-up ever since. When Tallahassee marked its centennial in 1924, it was a true statewide celebration; representatives from across the state came to North Florida. With the center of gravity having shifted so far south in the 20th century, it is doubtful that anything like that will happen in 2024.

The first South Florida land boom (there would be another, more sustained one following World War II) was literally washed away by the hurricane of September 1926 that hit Miami head on.  Damage in 2020 figures was nearly $7 billion; 373 people were known to have died, though the true figure was surely much higher; tens of thousands were left homeless. The category 5 hurricane brought real estate speculation and construction to screeching halt.  Within two years, Merrick, Fisher, the Mizners and most of the others were literally running out money. By the middle of 1927, the pages of the Miami newspapers were full of tax delinquencies; today, it is estimated that 90 percent of the people who invested in the land boom lost money.

Knowlton’s history of what happened in Florida during the 1920s is inarguable.  What is arguable, I think, is his larger point that the land bubble and bank failures led directly to the Great Depression across the entire nation.  The stock market and the overall economic prosperity kept going for another three years until October of 1929 when the stock market crashed, and the Depression did not set in for almost a year after that.    He really doesn’t offer much of a persuasive cause-and-effect except that one happened after the other. It is true that the lessons of the South Florida boom should have taught us something, though the last 100 years have pretty much shown us that it didn’t:  that capitalism really can run amok, though it is less clear that we can do much about it without creating an authoritarian economic system. What the land boom—and bust—and every bubble since then has really said concerns human nature and our desire to make a lot of money, fast, without much regard for the rules. That appears unchangeable. The question in 2021 is whether the creation of all of the economic, social and cultural infrastructure and the institutional hegemony that usually goes along with it is worth it.  Whether, in other words, it still constitutes what we would call progress.