by Nick Wynne
For hundreds of thousands of Americans, Florida captured the spirit of the Jazz Age. It was virgin territory that could be shaped to fit the desires of a restless population. Unfettered by the strictures of older societies in the East and Midwest, and somewhat insulated from the conservatism of the agricultural South, Florida was a tabula rasa that could and would be whatever the new owners wanted it to be.
The boom in Florida lands meant that a mighty torrent of people was pushing south, seeking the latest American El Dorado. As trains crossed the Georgia line, they were met by hordes of “binder boys,” real estate agents who carried hundreds of deeds with them—all for sale to a willing public. Between Jacksonville and Miami, some 350 miles, a single deed might be bought and sold several times and then sold several more times between the last train station and the nearest hotel. Unseen, unsurveyed and unsettled, land was important only as a commodity that could be bought and sold rapidly for a profit. “The only person who doesn’t make money on Florida land,” remarked one wag, “is the man who doesn’t own any.”
Binder boys of all ages boarded southbound trains in Jacksonville with full briefcases of deeds. As the trains rolled south across the Georgia-Florida border, there was an active trade in deeds, and it was not unusual for a single deed to be bought and sold ten or fifteen times as the train rolled south or another ten or more times before the last purchaser had arrived at his hotel after exiting the train. Al Trafford, an old-time resident of Cocoa and the owner of a realty company, recalls, “My father would meet the train each morning and board with a satchel full of deeds. He would return that evening with an empty bag. The next morning he would meet the train again and repeat the process. This went on for four or five years.”
By 1924, promoters in Florida advertised in most of the nation’s newspapers and magazines. For those who were too busy or too far away to come to the Sunshine State immediately, purchasing a homestead by mail was a quick and easy thing to do. Courtesy of Special Collections, University of South Florida.
Florida’s flat topography and lack of hard, rocky soil allowed developers to shape and mold it into whatever configuration they desired. Here workers clear palmettos and other brush from the site of the future town of Oldsmar. Courtesy of the Tampa-Hillsborough County Library System.
T.H. Weigall described how the system worked in his recollections of Miami during the apex of the land boom:
Towards the end of the year [1925], the rush for land at any price reached such insane proportions that the “binder Boys” used to meet the trains bringing fresh arrivals from the north, and often enough sell the alleged options for cash even before their clients had left the railway station. I am not suggesting that the majority of these options were not perfectly genuine, as indeed most of them were; but the complications attaching to them were in nearly every case so hopelessly involved that in the event of anyone actually wanting to take possession of the property (a very remote contingency) the difficulties would have been almost unthinkable.
For serious developers like Carl Fisher and George Merrick, the activities of the binder boys brought chaos to the marketplace, but the energy and excitement they generated translated into more interest in large-scale communities like Miami Beach and Coral Gables. The unlicensed binder boys also created havoc for professional real estate agents denied a commission of the informal sales and for government officials charged with recording land transactions. Although Florida law specified that a resale could not take place until the first sale was duly recorded in the county clerk’s office, the reality was that, during the early years of the boom, a single deed might change hands five or six times in a single day. Newspapers were full of stories about the tremendous fortunes made by speculators, and no claim was so absurd as to be ignored. One story that appeared several times in various papers featured a young bank clerk who arrived in Miami on a ten o’clock train, purchased a property from one of the notorious binder boys, sold it to another person without leaving the train station and caught the next train north with a profit of $15,000 in his pocket. True? Perhaps. Try as they might to eliminate them, binder boys remained a fact of life throughout the boom. By 1926, however, professional real estate agents (and the staffs of developers) had gained the upper hand, and the number of binder boys decreased.
The costs of developing raw land into subdivisions were enormous, and an explosion of bankers, banks and banking accompanied the land frenzy. Historically, banking in the Sunshine State was problematic. Given the legacy of the nineteenth-century frontier and Andrew Jackson’s epic struggle with Nicholas Biddle’s Bank of the United States, banks and bankers were usually regarded with a great deal of suspicion. The failure of the Union Bank in 1843 and the subsequent indebtedness brought about by the Civil War reinforced the general anti-bank sentiments of Floridians. Despite the innate distrust of banks in the Sunshine State, they were necessary elements in fueling and funding the boom of the 1920s. In 1920, Florida’s banking community had deposits in federal banks that totaled a mere $61 million, only slightly more than Mississippi’s $53.3 million. However, the Standard Statistic Company of New York reported that the consolidated total for both national and federal banks that year was $187 million. By 1924, the amount of deposits in Florida banks had grown to $263 million. By 1925, Miami banks alone counted more than $60 million in deposits, while Tampa banks reported an additional $25 million. In Palm Beach, bank deposits exceeded $5 million, while total bank deposits in Jacksonville in May 1925 also passed the $5 million mark. The aggregate total of deposits for that year exceeded $375 million.
After 1920, scores of new state and federal banks opened to receive deposits of monies paid on land purchases and to lend money for development. Between 1920 and 1929, some 127 new state banks were chartered and 36 new national banks received charters. Raymond Vickers, in his seminal book Panic in Paradise: Florida’s Banking Crash of 1926, documents the “iffy” nature of Florida banks, which were poorly funded and suffered from dubious dealings from organizers. Vickers also documents the unsound practices of interlocking directorates, the transfer of funds from “corresponding” banks, the looting of bank resources by bank officers and the criminal—although unprosecuted—actions by state regulators who took advantage of their positions to gain unsecured loans. These transgressions would become apparent after the real estate bubble burst in 1926, but until that time, Florida’s bankers assured depositors and investors alike that there was no end to prosperity, all the while using their state and federal banks as personal cash registers.
Although some developers, like Carl Fisher and Glenn H. Curtiss, were millionaires before the Florida boom began in 1920 and brought their money with them, the majority of the big players depended on loans from banks. In 1925, banks committed $300 million—or roughly 80 percent of all deposits—for real estate development in the Sunshine State. As developers sought to implement more and more grandiose plans, they raised the percentage of the purchase price for land and houses by as much as 20 percent. The cash generated was put back into development, while promissory notes for the remainder provided the collateral for bank loans to pay for additional expansion.
Much of the money placed in Florida banks came from outside the state. In order to encourage investment from inside and outside the state, banks and chambers of commerce around the state prevailed upon the legislature to place an amendment on the ballot to prohibit the collection of a state income tax, which was approved in the November 1924 general election. In the same election, Florida residents voted to abolish the state inheritance tax in the mistaken belief that this would encourage more investments in the state. However, since the Revenue Act of 1924 allowed for up to 80 percent of any inheritance taxes paid to a state to be deducted from the federal taxes due, the repeal of the state law governing inheritance taxes deprived Florida of badly needed income. In their eagerness to cater to investors, Florida legislators had shot themselves in the foot. The Florida amendment was subsequently repealed in 1930.
Traditional individual borrowers who wanted to finance their home purchases did so at an annual average interest rate of 8 percent for ten or fifteen years, with a 25 percent down payment and a 5 percent bonus to the bank making the loan. According to a report issued by the Standard Statistic Company, “Unless there is to be continued a rather rapid enhancement in real estate values, this interest rate is likely to work very considerable hardship on a purchaser.” Of course, the company continued, “If the buyer is able to place his property immediately on the market and sell, this is not a matter of serious concern, but otherwise he stands a fair chance of having to hold on to a non-income property, the carrying charge on which is high.”
Still, the report continued, there were 35 million acres of land in the Sunshine State, and 22 million were “capable of development.” Nevertheless, the report concluded that “local trades and industries” required to service a rapidly growing population offered the best investment opportunities for the post-1925 era. While acknowledging that some of the early developers would continue to reap profits, the report warned that “the boom has reached the stage where the greatest future profits will be realized not so much from ventures in real estate, as from carefully considered investments in sound business or industrial concerns.”
In 1926, Frank Parker Stockbridge, a journalist, with the cooperation of John Holliday Perry, a Florida banker and journalist, coauthored Florida in the Making, a book with the specific purpose of convincing Americans of the underlying solidity and safety of investing in Florida real estate. Published prior to the devastating hurricane of that year and the subsequent bank failures that accompanied it, the authors assured readers that “the very existence of speculative activity implies the existence of underlying values. One might well ask whether the Stock Exchange rests upon a sound and stable base. Speculation in stocks would cease were there no values behind the share traded in.” Governor John W. Martin, a Jacksonville lawyer with strong banking ties, praised the authors for their efforts. “The sun of Florida’s destiny has arisen,” he wrote in the foreword, “and only the malicious and the short-sighted contend or believe that it will ever set. Marvellous [sic] as is the wonder-story of Florida’s recent achievements, these are but heralds of the dawn.” Martin promised “that all which has yet been done in Florida is but a beginning toward what is to come.” Prophetic words, indeed.
CHAPTER 5
Going Full Bore
SELLING THE BOOM
Then the land rush began. Thousands upon thousands of people, attracted by the stories of wealth made over-night, began the hopeful trek to Florida. In cities and towns men sold out their small shops; on western prairies and New England hillsides families disposed of their holdings; waiters, clerks, salesmen, writers, lawyers, mechanics and medicine men, all fevered by a dream of wealth, formed an astounding cavalcade of teams and trains and motor cars, dribbling from all parts of the Union into the glutted highways of Florida. Sanity fled the scene; Tom o’ Bedlam was the uncrowned king; caution and common sense were out of hand and out of mind. Folly was rife.
—Burton Rascoe, Introduction, Boom in Paradise, 1932
With a system of banks in place and a statewide atmosphere of favorable financing for even the most extreme project, Florida’s land boom exploded and reached its zenith in 1924 and 1925. More than one million people flocked to the Sunshine State each year to sample the excitement of America’s tame frontier. Florida was where the action was, where all the “best” people came and where the “in crowd” of movie stars, politicians, literary icons and athletes could be found whiling away the days playing golf, betting on the horses, dancing all night at exotic nightclubs or engaging in some other “go-go” activity. Not even the golden sunshine of California or the French Riviera could compare to that of Florida, and Californians and Europeans abandoned their slices of paradise to come to the Sunshine State. Once they had crossed the state’s borders, many of these arrivals were caught up in the hurly-burly that was the boom. It was too difficult to escape the economic tumult that saw instant millionaires created overnight or to forego the opportunity to rub elbows with the famous and powerful. The possibility of becoming a part of the new American elite attracted both the possessors of old money and the renters of new money. Speculation on the stock market, involvement in criminal activities like Prohibition and the installment plan made it difficult to distinguish the newly rich wannabes from the established upper crust. The Florida boom was, in the words of one observer, “truly a democratizing experience.”
To keep the image of Florida as a hub of activity, large-scale developers like Carl Fisher and George Merrick employed a large staff of in-house publicists who worked around the clock to ballyhoo the achievements of their employers. Newspapers and magazines of the era, eager to save money without having to employ reporters and facing empty pages, faithfully reprinted the press releases they received from them. T.H. Weigall, a British expatriate who worked for the Merrick organization in 1925, described the advertising department to which he was assigned: “The main feature of the Advertising Department was a vast battery of electric duplicating machines, with double crews working three eight-hour shifts all through the twenty-four hours.” Out of this “Niagara” of propaganda came letters written by machines, press releases, posters and circulars of all kinds.
By trains, boats, cars and even airplanes, Americans flocked to the Sunshine State in the early 1920s. Florida promised a freewheeling atmosphere when rich and poor, famous and infamous, nouveau riche and scions of European thrones mixed freely and engaged in land speculation. Florida State Photographic Archives.
The crudity and blatancy of many of the poster designs were past belief. The majority of these depicted an entirely mythical city, with gleaming spires and glistening domes making up an idealized blend of Moscow and Oxford, with the exception that they were invariably rising out of a tropical paradise in which lovely ladies and marvelously-dressed gallants disported themselves under the palm-trees.
Representing a concoction of free-reign imaginations and outright lying,
such pictures scarcely ever bore the slightest relation to the dreary flats, occasionally intersected by a few hundred yards of white way lighting…It is scarcely possible to believe that the gullibility of the American public was so unlimited that these incredible pictures could ever have been taken for even a remote resemblance to reality.
Yet believe them the American public did.
Every Florida promoter, large and small, used buses, limousines and trams to transport prospective buyers from their hotels to the sites of new developments. This is Wallace Stovall’s Tampa Beach development, circa 1925. Buses brought potential buyers to the site several times a day. Courtesy of the Tampa-Hillsborough County Library System.
Developers also created trolley lines to bring local visitors and residents to their subdivisions. Larger developers, like Merrick, Fisher, Mizner, Curtiss and Davis, also created their own bus lines, which regularly fetched potential buyers from Montgomery, Atlanta and a dozen other southern cities. On special occasions, these lines were extended as far away as New York City, Chicago and San Francisco. Expensive to operate, such bus lines were considered to be good investments because of the substantial increases in home purchases they engendered.
Between 1920 and 1930, Florida moved from being the thirty-second ranked state in population to the thirty-first. More people became permanent residents in the Sunshine State between 1920 and 1925 than during the previous ten years. So many people wanted to come to Florida during this five-year period that railroads embargoed cargoes of nonperishable goods, and the highways were crowded with tourists and persons seeking to invest in development.
Tampa’s population rose by 84 percent; the number of permanent residents in Miami increased an amazing 165 percent; Lakeland, Orlando and West Palm Beach saw increases of 142, 140 and 121 percent, respectively, during the same five-year period. Cities like Jacksonville, Tallahassee and Pensac
ola, located in the northern section of the state, experienced the lowest growth rates of all—between 3 and 20 percent. Overall, however, the growth rate for the United States was only 7 percent between 1920 and 1925, while Florida’s rate of growth was 29 percent, or four times the national average.
CITY GROWTH IN FLORIDA, 1920–1925
CITY 1920 1925 % INCREASE
Tampa 51,608 94,808 84%
Jacksonville 91,558 94,206 3%
Miami 29,571 71,419 165%
Lakeland 7,062 17,064 142%
Orlando 9,282 22,272 140%
West Palm Beach 8,659 19,132 121%
Florida was different, and its rapidly growing population demanded a new identity that reflected its uniqueness. Part of this new identity could be found in the advertisements of the era, which incorporated the sun, the beach, the automobile, the golf course and the idea of a perpetual vacation into a single poster or magazine cover.
For most newcomers, however, the excitement generated by the promoters and developers could not be assuaged with the construction of homes like those left in the northern states or by traditional American architecture. Instead, they looked to the older civilizations of the Mediterranean—the Romans, Greeks, Spanish and North Africans—for inspiration. What could be more exotic or desirable than a fabled recreation of the sunny playgrounds of wealthy Europeans? In Boca Raton, Addison Mizner, lately of the Alaskan gold fields, became the “god” of Florida architecture as he vigorously promoted his ideas of “Mediterranean revival” as a perfect fit for the endless sunny days of Florida. Mizner’s ability to paint a picture of “new” Florida perfectly blended into Old Europe answered the need for something truly different from the ordinary. According to David Nolan, Mizner explained his architectural vision thusly: “I sometimes start a house with a Romanesque corner, pretend that it has fallen into disrepair and been added to in the Gothic spirit, when suddenly the great wealth of the New World has poured in and the owner had added a very rich Renaissance addition.” Above all, he concluded, it was necessary to remember that “these people can’t stand the sight of anything that doesn’t cost a lot of money.”