#247 Henry Flagler Rockefellers partner

Henry Flagler, co-founder of Standard Oil, embarked on an audacious venture to build a railroad from Miami to Key West, a feat many deemed impossible due to the 153-mile stretch over open water. Despite skepticism and the moniker "Flagler's Folly," his unwavering vision and resilience led to the successful completion of one of history's most challenging engineering projects. Les Standiford's "Last Train to Paradise" chronicles Flagler's life, from his impoverished beginnings to his development ventures in Florida, culminating in the railroad that conquered the ocean and left a lasting legacy on the American frontier. Flagler's story is a testament to the belief that with sufficient will, energy, and resources, the seemingly unattainable can be achieved.

• Henry Flagler, co-founder of Standard Oil, announced a project to build a railroad from Miami to Key West.
• The project faced skepticism and was labeled as "Flagler's folly" by the press.
• It was a challenging engineering feat, 153 miles long, much of it over open water.
• The railroad represents the spirit of the era of manifest destiny and the closing of the American frontier.
• The construction was likened to the building of pyramids and cathedrals, showcasing the belief that anything can be accomplished with sufficient will, energy, and money.

"When Henry Flagler, co-founder of Standard Oil and one of the world's most famous and powerful men, announced that he would extend his far-flung empire by building a railroad across the ocean, few could have anticipated how things would ultimately turn out."

This quote introduces Henry Flagler's ambitious plan to build a railroad across the ocean, highlighting his powerful status and the unforeseen outcome of the project.

• Flagler grew up poor and left home at 14 to seek opportunities.
• He was industrious and thrifty, earning the trust of employers and investors.
• His work ethic and reputation were strategic, reminiscent of Benjamin Franklin's approach to industry and frugality.
• Flagler's partnership with John D. Rockefeller in the oil business was pivotal to his success.

"Flagler had grown up poor. The son of a minister, Henry was only 14 when the family's spartan existence prompted him to leave home in 1844 and join his half-brother Dan in northern Ohio."

This quote provides background on Flagler's early life, illustrating his humble beginnings and the determination that fueled his later success.

• Benjamin Franklin emphasized the importance of being industrious and appearing so.
• Franklin's marketing prowess and reputation helped him secure opportunities and trust.
• Flagler's industrious image and dedication to learning were crucial to his success.
• The significance of appearances in building a reputation and securing opportunities is underscored.

"I took care not only to be, in reality, industrious and frugal, but to avoid all appearances to the contrary."

Benjamin Franklin's quote reflects the importance of not only being hardworking and frugal but also making sure these qualities are visible to others, which was a strategy also employed by Flagler.

• Flagler's early success as a grain merchant was due to his hard work and learning.
• He experienced a significant setback in the salt business due to lack of experience and the dangers of margin.
• Flagler's resilience after failure is highlighted, as he refused to regress and sought new opportunities.
• His return to the grain business led to his partnership with Rockefeller in the oil industry.

"Casting about for something more interesting to do, Flagler hit upon the idea of salt."

This quote describes Flagler's foray into the salt business, which ultimately led to a financial disaster but also taught him valuable lessons about the risks of over-leveraging and the importance of sticking to familiar industries.

• Flagler and Rockefeller's partnership in Standard Oil was founded on complementary skills.
• Rockefeller recognized Flagler's marketing acumen and optimism, which were vital to the company's growth.
• They worked closely together, sharing a passion for making money and strategic planning.
• Flagler's negotiation skills, particularly in securing lower freight rates, were key to Standard Oil's dominance.

"Rockefeller would come to freely attribute the secret of their firm's success to his partner."

This quote acknowledges Flagler's vital contribution to the success of Standard Oil, particularly his strategic insight into the importance of controlling freight costs to gain a competitive advantage.

• Andrew Carnegie and Henry Clay Frick emphasized cost management for competitive advantage.
• They advocated producing goods at a lower cost to gain an unassailable competitive advantage.
• Cost control can drive competitors to bankruptcy if they cannot match the low-cost production.

"Gentlemen, watch your costs. That's what they would tell up and down their entire business."

"Low cost can bankrupt your competitors."

These quotes underscore the strategic importance of cost management in business. By maintaining lower costs, a company can undercut competitors and dominate the market.

• Standard Oil was incorporated to raise significant capital.
• Rockefeller and Flagler used rebates and negotiations to control costs and secure massive shipments.
• The company's capitalization grew from $1 million to $82 million within 12 years.
• Flagler's aggressive tactics led to the "Cleveland Massacre," where they outcompeted or acquired many rivals.

"Standard Oil went public in January of 1870 at a capitalization of $1 million... Inside a dozen years, the worth of that company would grow to 82 million."

The quote highlights the exponential growth of Standard Oil, showcasing the effectiveness of strategic cost management and aggressive market tactics.

• Flagler and Rockefeller were ruthless in business, using their cost structure to force competitors to sell or face bankruptcy.
• They controlled oil prices by limiting production and negotiating with railways.
• Standard Oil built its own transportation systems for leverage against railway carriers.

"Rockefeller shows them, shows the guy he's trying to buy out... 'oh, no, these guys can make money at prices that'll bankrupt me. I have no choice but to sell to them.'"

This quote illustrates the power of having a superior cost structure, which can be used as leverage to consolidate the market and eliminate competition.

• Flagler moved Standard Oil operations to New York but maintained his work-focused lifestyle.
• His wife suffered from chronic bronchitis, and her death was a significant personal blow to Flagler.
• Despite his wealth, Flagler sought new ventures rather than retiring.

"Flagler was a wealthy man... he's going to get remarried, and he's looking for his next adventure."

This quote reflects Flagler's relentless drive and unwillingness to settle, even after achieving great success.

• Flagler developed Florida by building hotels and infrastructure.
• He built the Ponce de Leon hotel in St. Augustine, initiating his involvement in the hotel industry.
• Flagler's interest in the hotel business was driven by personal satisfaction rather than financial gain.

"I do it because I want to... Cost what it may."

Flagler's statement reveals his passion for building and creating lasting legacies, beyond just accumulating wealth.

• Flagler used his experience from Standard Oil to develop transportation for his hotels.
• He bought a railroad to improve consistency and expand the network.
• Flagler's ambition led to the development of Palm Beach and Miami, significantly shaping Florida's future.

"Hardly had he embarked upon a career in hotel building. Then he realized that transporting customers to his hotels was as important a link in the process as moving crude oil to his refineries had been."

This quote demonstrates Flagler's strategic thinking, applying logistics expertise from the oil industry to his new ventures in hospitality and development.

• Flagler faced personal challenges, including his second wife's mental health issues.
• He continued to focus on his projects despite these setbacks.
• Flagler's approach to business and life was characterized by problem-solving and persistence.

"Ida Alice was removed to a private asylum. Flagler would never see her again."

The quote, while highlighting a difficult personal moment for Flagler, also underscores his ability to compartmentalize and continue pursuing his business interests.

• Flagler's developments in Florida, including railways and hotels, left a lasting impact on the state.
• He is considered a key figure in the founding of Miami and the development of the region.
• Flagler's vision and investments transformed Florida into a major tourist destination and economic hub.

"In 1982, he had visited Palm beach... 'I had found a veritable paradise.'"

Flagler's description of Palm Beach indicates his vision for developing Florida into a premier destination, which he achieved through his investments and development projects.

• Henry Flagler exhibits swift decision-making, deciding within three days to extend his railroad south.
• He undertakes an arduous journey to scout the location for his railroad extension and hotel.
• Flagler is determined to build the Royal Palm hotel in Miami, despite the challenging environment.

"The decision did not take long. Three days later, that's how fast he goes." "I'm going to extend my rail south." "He's going to build this gigantic hotel right on Biscayne Bay."

These quotes demonstrate Flagler's quick decision-making and his commitment to action, highlighting his entrepreneurial spirit and willingness to take on challenging projects.

• Flagler plays a pivotal role in the incorporation of Miami, influencing the town council to adopt the original Native American name instead of his own.
• The Royal Palm hotel becomes a central feature of Miami, showcasing Flagler's formula for development: build a railroad, erect a resort hotel, and watch the city grow.

"Within three months, the city had been incorporated as Miami." "Flagler had to gently urge the new town council to choose the original Native American name for the new city over his own name."

These quotes illustrate Flagler's influence on the early development of Miami and his preference for the city's original name, which reflects his respect for the local heritage and his strategic vision for urban development.

• The Spanish-American War's conclusion sparks Flagler's interest in extending the railroad to the Florida Keys.
• Flagler envisions the Florida Keys, particularly Key West, as a strategic location for trade with Cuba and other Caribbean nations after the war.
• Despite his age and the challenges, Flagler is determined to pursue this ambitious project.

"But even Flagler could not have predicted the events that would cause Miami's growth to explode in exponential terms." "The ending of the Spanish-American War reawakened his interest in the matter."

These quotes underscore the unforeseen circumstances that led to the explosive growth of Miami and Flagler's renewed interest in extending his railroad as a result of geopolitical changes following the Spanish-American War.

• Flagler invests heavily in the development of Florida without turning a profit, demonstrating his dedication to his vision over immediate financial gain.
• He jokes about the cost of his Florida investments but recognizes their impact on his wealth.

"I would have been a rich man if it hadn't been for Florida." "He winds up dumping 30 to 40 million into development of Florida, and he never turned a profit on it."

These quotes reveal Flagler's perspective on his investments in Florida, acknowledging the financial toll while also hinting at the significant legacy he created through his developments.

• Flagler's team faces extreme challenges while surveying and constructing the railroad through the Everglades and over the ocean to the Keys.
• The project is seen as an engineering marvel, compared to the ambition of space exploration in the mid-20th century.
• Flagler's determination and problem-solving skills are highlighted as he overcomes numerous obstacles.

"It is perfectly simple. All you have to do is build one concrete arch and then another, and then another, and pretty soon you'll find yourself in Key west." "The engineering feat that they figured out 40 years earlier survived the most powerful storm to ever hit the United States."

These quotes convey the simplicity of Flagler's approach to a complex engineering challenge and the resilience of the infrastructure he helped create, which withstood one of the most powerful hurricanes in U.S. history.

• Flagler's actions, including his divorce and remarriage, showcase his ruthless and strategic nature.
• He is willing to change laws and use his wealth to achieve his personal and professional goals.
• Flagler's approach to obstacles, both personal and professional, is to tackle them head-on, regardless of public opinion or difficulty.

"It took considerable doing. But on April 19, one, two years later, a bill was introduced into the Florida legislature to be entitled an act making incurable insanity a ground for divorce." "Flagler's actions were genuinely undertaken as the culmination of a meticulous process of preparation on his part."

The quotes highlight Flagler's strategic thinking and determination to overcome personal challenges through meticulous planning and the use of his influence, even if it involves changing laws to suit his needs.

• Flagler's approach to construction emphasized permanence and ambition.
• He quickly made decisions and expected immediate action from those he employed.
• Flagler's work ethic was intense, believing in hard work as his only excess.
• Despite his old age, Flagler maintained a vitality that he compared favorably to the average man of 45.
• He faced the challenge of finding and retaining a sufficient workforce for his construction projects in Florida.
• Flagler's management style involved setting clear goals but allowing his "field general" to determine the day-to-day tactics.

"Permanence appeals to him more strongly than any other man I ever met. He often told me to build for all time."

This quote underscores Flagler's philosophy of building structures that would endure through time, reflecting his long-term vision.

"I believe the only excess I have indulged in has been that of hard work."

Flagler considered hard work to be the primary factor in his success and the only 'excess' he allowed himself.

"One of our most trying problems has been to take a big body of low grade men, take care of them, and build them into a capacity for performing high class work."

Flagler acknowledges the difficulty in assembling and training a workforce capable of the high-quality construction work his projects demanded.

• Flagler's projects involved transforming undeveloped and challenging landscapes, including swamplands.
• Labor shortages were a significant issue due to the harsh working conditions in Florida.
• Many workers from the northern states were unable to acclimate to the heat, humidity, and insect populations.
• Flagler eventually found success by hiring workers from the Cayman Islands and other tropical regions who were accustomed to such conditions.
• The construction of Flagler's railway was repeatedly disrupted by hurricanes, which destroyed progress and required rebuilding efforts.

"The wise commander says, how you achieve it is precisely up to you."

Flagler gave his project leaders autonomy in how they achieved the set goals, showing trust in their expertise and problem-solving abilities.

"The trip made a profound impact upon Flagler, who understood that a steady supply of labor was crucial to the success of his undertaking."

Flagler recognized the importance of a reliable workforce for the success of his ambitious construction projects.

"The spanish workers had always been stayers, and Flagler's eyes meaning that they don't desert, they don't leave."

Flagler valued the reliability of Spanish workers, who proved to be committed and persistent in the face of the project's challenges.

• Flagler's construction efforts were significantly hampered by hurricanes, which caused destruction and loss of life.
• Workers faced life-threatening conditions during these storms, including the risk of being swept out to sea or injured by flying debris.
• Despite these obstacles, Flagler's team demonstrated remarkable resilience and the determination to continue the project.

"These winds were running somewhere between 150 miles an hour. A baseball weighs 5oz. Now try to imagine taking a hurricane tossed five pound clay roof tile to the face."

This description vividly illustrates the dangerous conditions faced during hurricanes, highlighting the severity of the challenges encountered during construction.

"One foreman was caught in a storm and tried to save himself from being swept out to sea by tying himself to the trunk of a tree with his own belt."

The story of the foreman's survival during a hurricane exemplifies the extreme measures workers took to survive the harsh conditions they faced.

• Flagler's determination saw the completion of the Florida East Coast Railway, which was an unprecedented feat of engineering.
• The project involved the construction of the longest continuous bridge at the time and extended the railway from Jacksonville to Key West.
• Flagler's vision and perseverance were celebrated upon the completion of the railway, marking a significant achievement in his life and in the history of Florida.

"On the afternoon of January 20, 112, almost seven years after work on the key west extension of the line had begun, the project's equivalent of driving of the golden spike took place for the first time, traffic was open across a seven mile bridge."

This moment marked the culmination of Flagler's ambitious project, connecting Key West to the mainland with a continuous railway bridge.

"Now I can die happy. My dream is fulfilled."

Flagler's statement upon the completion of the railway reflects his deep personal investment in the project and the fulfillment he felt at its completion.

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The host provides a way for listeners to support the podcast while gaining access to the full story of Henry Flagler and his projects.

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