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#247 Henry Flagler and the Spectacular Rise and Fall of the Railroad that Crossed an Ocean
1 hours 16 minutes 19 seconds
🇬🇧 English
Speaker 1
00:00
When Henry Flagler, co-founder of Standard Oil and 1 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. Many immediately dismissed Flagler's intentions as impossible. They were hard-headed scientists, engineers, and businessmen who thought what Flagler proposed – to build a railroad 153 miles from Miami to Key West, much of it over open water – was a crackpot notion on the face of it. Flagler's Folly, the press dubbed the project, though the man who proposed it was undeterred.
Speaker 1
00:42
He would press on. The story behind the very being of this railroad may be its most amazing aspect. It is a story that concerns 1 of the world's richest men, 1 of the most difficult engineering feats ever conceived, and the most powerful storm ever to strike American shores. In a sense, this railway is what remains of 1 of the last great gasps of the era of manifest destiny and an undertaking that marked the true closing of the American frontier.
Speaker 1
01:15
The building of the railroad across the ocean was a colossal piece of work, born of the same impulse that made individuals believe that pyramids could be raised, cathedrals erected and continents tamed. The highway is a ghost really, All that remains of an era where men still lived who believed that with enough will and energy and money that anything could be accomplished. That is an excerpt from the book I'm going to talk to you about today which is Last Train to Paradise Henry Flagler and the Spectacular Rise and Fall of the Railroad that Crossed an Ocean and it was written by Les Standiford. Okay before I jump back into the book I just want
Speaker 2
01:57
to tell you how this fits into everything else that you and I have been talking about. I've had this book for a very long time I haven't got around to reading it and I think now is the perfect opportunity to do so because I'm rereading the very next podcast I'm working on is I'm rereading the fantastic biography of John D Rockefeller called Titan I read it for all
Speaker 1
02:14
the way back on podcast number 16 but I didn't really know how to make
Speaker 2
02:17
a podcast back then and that book is way too important. And so I figured before I reread that biography, let me go ahead and find a biography on Rockefeller's partner. And I'm glad I did because this book is absolutely incredible and I should have known It was good because I had read 1 of Les' books in the past.
Speaker 2
02:33
In fact, 1 of my favorite books I've ever read for the podcast was all the way back on Founders number 73. It's called Meet You in Hell, Andrew Carnegie, Henry Clay Frick, and the Bitter Partnership that Transformed America. That was part of a three-part series I did on Andrew Carnegie and his partner Henry Clay Frick and that was my favorite book. It's absolutely fantastic story.
Speaker 1
02:52
So what this book is about is exactly what that excerpt said. It's about 1 of the world's richest men at the time, so that's Henry Flagler, 1 of the most difficult engineering feats, which
Speaker 2
03:01
is the second career that he does after Standard Oil, where he becomes a developer and builds essentially like most of the state of Florida, and then the most powerful hurricane to ever strike the American shores. So I'm going to focus mainly on Henry Flagler and the work he's doing, but it's an absolute fantastic book. So if you like the podcast, make sure you pick up the book.
Speaker 1
03:19
So at the very beginning, the author is doing the drive from Miami down to Key West. I've done this drive myself about probably at least 10 times in my life. And so this is fantastic because it gives
Speaker 2
03:28
you an idea of how insane Flagler's undertaking was. And so this is 2 people talking in modern day, because you can still see some of the remnants of the railway. It's going to wind up being destroyed by a hurricane in 1935.
Speaker 2
03:42
This is many years after Flagler died, though.
Speaker 1
03:45
So it says, much of the original railroad bridge was left standing. Some of it now serves as a fishing pier. Massive stretches jutting out from the water, pilings, and arches, which are as mystifying to the modern traveler as Stonehenge.
Speaker 1
03:57
And so now you have a conversation between 2 people. So it says, what's that over there anyway? That's an old railroad bridge. Railroad?
Speaker 1
04:05
Yeah. Across the ocean? That's what it is. Who would build a railroad across the ocean?
Speaker 2
04:12
Now that's another story. And that is where I want to start because the author does an incredible job describing who exactly Henry Flagler was. He was an incredible formidable individual.
Speaker 2
04:23
Let's jump right into it. In early 1904 when Henry Flagler made his fateful decision to begin the building of the Overseas Railroad He was already
Speaker 1
04:31
74. The drive to make money had little to do with his decisions in those days, even if money or the lack of it had been the central force in the first part of his life. And this is absolutely incredible. A million ideas came to my mind when I got to this section.
Speaker 1
04:47
So it says, 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. And he does this because he's going to want to be a salesman in a general store that his uncle owns. And says Flagler, who arrived with a few pennies in his pocket, was determined to make the most of his opportunity, working long hours to save his money and often refusing invitations to join friends on weekend getaways.
Speaker 1
05:21
His hard-working, sober-sided ways would persist through much of his life, earning him the trust of employers and later of influential investors and partners who would change his life beyond his dream.
Speaker 2
05:34
So that's the first thing that pops to mind. This is the importance of not only being industrious and hard-working but also appearing industrious and hard-working intentionally. That is a very very old idea.
Speaker 2
05:46
When I got to that section the very the person that popped my mind was the autobiography of Benjamin Franklin I covered this all the way back on founders number 62 and in his autobiography Ben talks about this he was obviously 1 of the greatest marketers to ever live as well and he's this has been writing this Benjamin Franklin writing in his autobiography
Speaker 1
06:03
he says I took care not only to be in reality industrious and frugal, but to avoid all appearances to the contrary. I dressed plainly. I was seen at no places of idle diversion.
Speaker 1
06:16
And to show that I was not above my business, I sometimes bought home the paper I purchased at the stores, through the streets, in a wheelbarrow. So I'm going
Speaker 2
06:23
to switch to, that is Franklin's autobiography. Now let's go to Isaacson's, Walter Isaacson's biography of Benjamin Franklin. This is, I think, Founders Number
Speaker 1
06:32
115. And he's going to describe why is Franklin doing this or he's going to elaborate on why Franklin is doing this. Franklin became an apostle of being and just as important of appearing to be industrious. Even after he became successful he made a show of personally carting the rolls of paper he bought in a wheelbarrow down the street to his shop rather than having a hired hand do it.
Speaker 1
06:55
And this is what Franklin said about it. The industry visible to our neighbors began to give us character and credit. So he's saying that's an interesting way to say, hey, I'm working hard and other people are noticing that I'm working hard and that opens up opportunities for you. And so he says, 1 of the town's most prominent merchants said of Franklin, the industry of that Franklin is superior to anything I ever saw of the kind.
Speaker 1
07:17
I see him still at work when I go home from the club, and he is
Speaker 2
07:19
at work again before his neighbors are out of bed. And so at that point in Franklin's life, when he's still coming up as an entrepreneur, all the people that
Speaker 1
07:27
are older, more successful, they
Speaker 2
07:28
have more money, they open up all these opportunities because they see, oh, Franklin is 1 of us. That's exactly what happens to Flagler and part of his the fact that he was always about his business, always focused on the task at hand, is what is going to have him link up with John D Rockefeller later on And obviously the creation of Standard Oil changes his life forever and it's the reason that we know his name to this day and that I'm holding this book about his life in my hand. So let's continue.
Speaker 2
07:54
Not only
Speaker 1
07:54
is he working hard, he studies intentionally. Check this out. Part of the ambitious young Flagler's duties came to involve the brokering of corn to shipping agents in nearby Cleveland.
Speaker 1
08:04
Though he knew nothing of the grain business at the outset, he threw himself into its study with his characteristic devotion to the job at hand. His single-minded approach was so successful that he was able to buy into the Harkness that's his half-brother's family into the Harkness family's business within a few years and shortly afterward made the acquaintance of 1 of his of 1 of his Cleveland counterparts in the grain brokerage business. That person's name was John D. Rockefeller.
Speaker 1
08:36
Gotta pause there. That part is so important. Let's go back to that. Though he knew nothing of the grain business at the outset, he threw himself into its study with his characteristic devotion to the job at hand.
Speaker 1
08:49
When I got
Speaker 2
08:49
to that section, this paragraph that I read a long time ago, written by David Ogilvie in the book Ogilvie and Advertising, that's Founders No. 82, it's the good ones no more.
Speaker 1
09:00
He just gives us great advice for life. You can be the best informed. You don't have to be the smartest.
Speaker 1
09:05
You can just simply collect more information than other people. That is a completely achievable task. So let's go to what Ogilvy recommended. At this point, he's writing.
Speaker 1
09:15
He's super successful. He's already built this gigantic advertising empire and he's giving advice to younger people on the way up. And this is what Ogilvy said, set yourself to becoming the best informed person in the agency on the account to which you are assigned. If for example, it is a gasoline account, Read books on oil geology and the production of petroleum products.
Speaker 1
09:34
Read the trade journals in the field. Spend Saturday mornings at gas stations. Talking to motorists. Visit your clients' refineries and research laboratories.
Speaker 1
09:44
At the end of your first year, you will know more about the oil business than your boss. And so a combination of those ideas is what produces Henry Flagler's first fortune. Remember he arrived in town with pennies in his pocket. All you have is energy and enthusiasm.
Speaker 1
10:00
And so he's going to also be in a right place at the right time This is gonna be the beginning of the Civil War and it says the onset of the Civil War proved to be a boon to Flagler why is that he's a grain merchant, right? He's in the merchandising of corn a grain merchant began Flagler a grain merchant began to realize the truth of the maxim that an army travels on its stomach Business boomed and Flagler was soon rich by his own standards rich, but bored he had $50, 000
Speaker 2
10:29
in his bank account and it was 19 shooting
Speaker 1
10:32
1862
Speaker 2
10:34
And this is where he makes his first catastrophic mistake as a young man. He's just going to repeat. History doesn't repeat.
Speaker 2
10:39
Human nature does. This happened back then. It's happening today. It will happen in the future.
Speaker 2
10:44
And it is the dangers of margin. I love the way that Warren Buffett writes about this in his shareholder letters. And he says, over the years, a number of very smart people have learned the hard way that a long string of impressive numbers multiplied
Speaker 1
10:56
by a single 0 always equals 0. That is not an equation whose effects I would like to experience personally. That is exactly what Flagler is about to feel right here.
Speaker 1
11:08
Casting about for something more interesting to do, Flagler hit upon the idea of salt. Intrigued by a discovery of vast deposits of salt in nearby Michigan and an act on that state's legislator that made the business tax exempt, Flagler sank every penny he had into the venture along with an equal amount that he borrowed. But the great salt rush had drawn a horde of competitors, some of who actually knew a few things about the business, unlike Flagler, right? When the end of the Civil War brought a collapse in prices, Flagler's operation fell apart.
Speaker 1
11:39
He found himself not only penniless, but now $50, 000 in debt. It was a lesson the ambitious young man would never forget. But he also does something smart here. He does not compound 1 bad mistake with another.
Speaker 1
11:52
Ok,
Speaker 2
11:52
shouldn't have done that. Now I'll know that for the future. And what does he do?
Speaker 2
11:56
Flagler was resolute. He might have been beaten, but he would not move backwards. So now he's negative 50, 000 his bank account. He's got to borrow a few hundred dollars to try to get back on his feet with a few hundred dollars in his pocket, advanced to him by his father-in-law.
Speaker 2
12:10
He moved in with Mary, his wife of 11 years,
Speaker 1
12:15
to Cleveland and renewed his old acquaintances in the grain dealing world, right? So that's where he made all his money. He's like, oh, I'm bored.
Speaker 2
12:21
I'm gonna jump into some other business I don't know that well. And then that obviously didn't work out well.
Speaker 1
12:24
So he goes back. And why is that important? Because he takes a post in a firm that had just been vacated by his old friend Rockefeller, who had just left grain for an intriguing new substance called oil.
Speaker 2
12:38
And so Rockefeller and Flagler are going
Speaker 1
12:41
to find themselves at the right place at the right time with the right set of skills because of its position on Lake Erie and its proximity to the newly discovered oil fields in western Pennsylvania, Cleveland where they are, had developed over the past dozen or so years into a shipping and refining center for oil which at the time was still competing with whale oil and lard for supremacy as a fuel and lubricant.
Speaker 2
13:04
And so that is where Rockefeller was going to set up his business. This is the business that Flagler's eventually going to be invited into. Rockefeller had invested in a refining business during the Civil War and by the time of Flagler's arrival in Cleveland he had decided to devote all of his energies to the business of making and shipping oil.
Speaker 2
13:21
Rockefeller did not believe in diversification. He said they had no outside interest that is an immense task. Building a successful company. It's silly to
Speaker 1
13:28
go out and diversify into other lines or to make other investments. Focus on your business. If Rockefeller, later in his life, he had a ton of other investments, right?
Speaker 1
13:37
But if he never had a single investment, other than his own company, he still would have been 1 of the richest people alive. What does that tell you? Back to the book. Because Flagler had rented a house on the same street as Rockefeller and kept his offices in the same building.
Speaker 1
13:49
The 2 often walk to and from work together, comparing notes and sharing their chief binding passion, the desire to make large sums of money around this time. Rockefeller's going to be about 25 and I think Flagler's either 32 or 34. I can't remember
Speaker 2
14:05
if he's... He's about 7 or 9 years older than Rockefeller. But when I got to that part, I read Rockefeller's autobiography too a while back.
Speaker 2
14:12
I think it's like Founders 155 or something like that. But the reason that came to mind when I was reading this section is because when Rockefeller wrote that autobiography when he was a very old man, well after Flagler died, and as he's writing the autobiography, he says that this, right here, walking back and forth, working every day with Flagler, he says this was some of the best times of his life. And so when I got to that section I left a note to myself, reminder you are in the prime of your life now. Do not take this for granted.
Speaker 2
14:42
The older version of you is going to look back on what you are experiencing right now fondly, which means that you must go after what you want in life like your life depends on it. Why? Because it does. I don't want to get to the end of my life and look back at this precious time and be like wow you played it safe and now I'm about to go to my grave never achieving what I wanted in life.
Speaker 1
15:09
That is why I think autobiographies especially are such gifts to humanity because you see they're just further down the path than you and I are, usually by a few decades. It's foolish to think all these smart and formidable people, like we're gonna avoid their fates. They're not writing about how great it is to be 75.
Speaker 1
15:27
They're writing about, man, I wish I could go back in time in my 20s, my 30s, and my 40s as I was building this business.
Speaker 2
15:34
So I try to wake up every day with gratitude. It's like I'm in it right now. The older version of me, the happiness I should say, of the older version of me depends on my decisions and what I do right now.
Speaker 1
15:43
So that's exactly where we are in this story. Rockefeller was convinced,
Speaker 2
15:46
oh this is so this is part 2, I'll tell you what I was thinking about when
Speaker 1
15:49
I got to this section of the book too. Rockefeller was convinced that oil was the conduit to success and had joined forces with a chemist by
Speaker 2
15:54
the name of Andrews who possessed technical expertise upon which the refining process was founded. So this again what Rockefeller does is really smart, that you need to find partners that have skills that you lack. If both of
Speaker 1
16:04
you are doing the same thing, 1 of you isn't necessary, right? Rockefeller himself was the consummate manager, but he was well aware of his own shortcomings as a marketer, and that is where Flagler came in. So it's like, I'm not technical, and I'm not a marketer, So let me go find people that are right flagler was 1 of the most successful grain brokers Rockefeller had known before the war so that goes back to where the section started the importance of him a flagler being hard-working single-minded learning as much as he could and Not only being industrious but appearing to be industrious because now Rockefeller's remember that's like hey, I need help I'm about to but
Speaker 2
16:37
he doesn't know this yet, but
Speaker 1
16:38
he's about to build maybe the most profitable company that ever existed. Who do I know that can help me? Imagine the difference in Flagler's life if he had messed up that opportunity when he was a young man.
Speaker 1
16:50
If he was lazy, if he was drinking all the time, if he wasn't studying. He's just basically an average human being. That opportunity that Rockefeller's gonna offer him, let's say 5 years into the future thereabouts, that would have been foreclosed. That is why it's so important.
Speaker 1
17:04
It's so crazy how these things connect together. So Rockefeller's going to recruit them and really think about Standard Oil.
Speaker 2
17:09
I know it's funny from our perspective, what is it, 120 years later, something like that, maybe even more, 150, I try not to
Speaker 1
17:17
do public math. But it's really funny from our perspective, they're building the most valuable technology company of the day, of their day. That's exactly what they're doing.
Speaker 1
17:26
Rockefeller valued Flagler's undying optimism and drive as well as his relative maturity, which would come in handy for a fledgling business founded upon a new technology and seeking to attract investment from others.
Speaker 2
17:37
And so it says, for the next 15 years, Flagler and Rockefeller worked side by side, walking to the office together in the mornings, passing drafts of letters and detailed business documents between their desk during the day and walking home together at night, always planning and calculating. Yeah, that's that's an understatement. These are some of the
Speaker 1
17:54
these are 2 of the most calculated humans I've ever read about. The result of their efforts was Standard Oil, the largest, most powerful, most profitable and perhaps most notorious corporation ever created. Rockefeller would come to freely attribute the secret of their firm success to his partner, for they were not long in
Speaker 2
18:11
the business before Flagler realized that the negotiation of a lower freight rate was the key to the entire matter. So there's a lot to admire about Flagler that we're gonna get to in the book, but 1 thing you have to know about him upfront, you would not wanna deal with him. He was absolutely completely ruthless, business and personal wise.
Speaker 2
18:29
And I wanna read about people like that. I want to constantly remind them that these people are walking the earth today. We have to have defense against them. So this is a, they're like, okay, well we've figured, okay, the low freight rate.
Speaker 2
18:40
So the actual transportation of their product, right? Was the key to the entire matter. What does that mean? If oil could be brought to their refineries at a rate below that offered to competitors, it would create an unassailable competitive advantage.
Speaker 2
18:52
In the highly competitive oil market, no other factor in the process could differentiate 1 player from the next to such a degree. And That's why you see over and over again throughout history, Sam Walton, Andrew Carnegie, Jeff Bezos, they all say, gentlemen, watch your costs. That's a direct quote from Carnegie. He was obsessed and his partner Henry Kelly Frick.
Speaker 1
19:12
Watch your costs, watch your costs. Actually, it might be Frick's quote. I can't remember.
Speaker 1
19:16
Carnegie, or 1 of
Speaker 2
19:16
them said it, but they said, gentlemen, watch your costs. That's what they would tell up and down their entire business. We will have an unassailable competitive advantage if we can produce, in their case, steel at a cheaper rate than anybody else.
Speaker 2
19:27
Rockefeller does a similar thing.
Speaker 1
19:30
As a result, Flagler soon became a master of the negotiation of rebates from the major rail carriers who served the oil fields. And so the
Speaker 2
19:36
author does a fantastic job here. This is just really in like 2 or 3 sentences. This is a basic, very basic description of their future moat.
Speaker 2
19:43
And so just in case you don't already know, that's a term from Warren Buffett. This is how he defines it. When our long-term competitive position improves as a result of our almost unnoticeable actions, we describe the phenomenon as widening the moat. And in doing that, it's essential if we are to have the kind of business we want a decade or 2 from now.
Speaker 2
20:01
When short-term and long-term conflict, widening the moat must take precedence. So this is just a fancy way of saying, why are you difficult to compete with? That is your moat. That is the way I think about it, at least.
Speaker 2
20:11
So let's go back to this. He's like, OK, Flagler's negotiating with all the major rail carriers who serve the oil fields. And it says in return for lower rates, Flagler would guarantee massive shipments to the railroad. So I'm giving you something in return to meet these goals.
Speaker 2
20:25
Flagler would in turn have to acquire more crude and increase his refining capacity in order to make that happen. He and Rockefeller would need money and a lot of it. So that is when they incorporate Standard Oil. They raise, it says Standard Oil went public in January of 1870 at a capitalization of $1 million.
Speaker 2
20:41
It was divided into 10, 000 shares. Rockefeller took about 26% of the shares and Flagler had about half that. Why is that important? Inside a dozen years, the worth of that company would grow to 82 million.
Speaker 2
20:52
You're talking about 1882, that is insane. 82 million, a staggering rate of increase and 1 fueled largely by Flagler's remorseless goal to control completely
Speaker 1
21:03
the production of refined oil in Cleveland.
Speaker 2
21:05
And so they keep whiting the moat. We're going to get to this thing called the Cleveland massacre. This is just 1 paragraph.
Speaker 2
21:10
I'll talk more about this next week on in Rockefeller's biography. But it says Flagler was a ferocious tactician at the office when in a few months he and Rockefeller had either bought out or scared off 20 of their 25 competitors. The choice offered to their competitors was simple, except what they always insisted was a fair price for your company or go broke trying to compete with a powerhouse that's standard oil obviously with a powerhouse that could do business more cheaply and so again that's why they're obsessed with low cost they can make money at a lower price than their competitors They are willing to drive down that price to make you go bankrupt low cost can bankrupt your competitors and Rockefeller and Flagler are both ruthless enough to make sure that that happens. And there's a great story in Titan where Rockefeller is told from the story of 1 of their competitors where Rockefeller shows them shows the guy he's trying to buy out that was competing with Rockefeller and Flagler at the time, shows him his books, shows him their cost structure.
Speaker 2
22:10
And I forgot exactly what the guy said, but essentially he's like, oh no, these guys can make money at a prices that'll bankrupt me. I have no choice but to sell to them.
Speaker 1
22:18
And so once they consolidated on the refinery aspect, they said, okay, how can we control oil prices? Now you have
Speaker 2
22:23
to remember, when we're dealing with people like Rockefeller, Flagler, JP Morgan, Vanderbilt, they did not look at competition as something like in a similar vein that we might look of today. Most people think, oh, businesses are competing. That's usually good.
Speaker 2
22:36
Direct competition between businesses is usually good for the end consumer, right? They thought of competition as something to get rid of. 1 of the funniest descriptions of their mindset that's very different, I think, from most people's is when JP Morgan was advising clients about they were having problems with, it might have been Moet and Hennessey, I can't remember, they were manufacturing champagne.
Speaker 1
22:58
And so JP Morgan's like, well Have you thought about just buying up the whole Champaign region, not buying up your competitor, literally buying up the entire industry? And he said this is because then you
Speaker 2
23:08
could just control prices. So it just gives you insight into how these people thought Flagler Flagler. So now they're about to like, OK, let's we're going to control the price of oil.
Speaker 2
23:17
Flagler's tactics were not limited to his fellow refiners. In 1872, he took advantage of a fall
Speaker 1
23:23
in oil prices to persuade most of the Pennsylvania oil producers to join with him in a scheme directed at the entire railway industry. And what may sound familiar to those accustomed to today's OPEC shenanigans, Flagler proposed an industry-wide agreement to limit oil production, thereby guarding against price fluctuations and also forcing rate concessions from railway carriers who would have to play ball or be frozen out. So that is part 1 of his idea, but part 2 is where the leverage actually comes to be able to do this idea.
Speaker 1
23:56
What is stopping the railway saying, no, you're gonna pay the prices because you have no way to get your oil out? Standard Oil, because they'd been making so much money because they knocked out all their refinery competitors, right? Standard Oil could afford to construct its own transportation systems, including a newly developed network of pipelines. So the railway had a choice.
Speaker 1
24:15
Transport our product at the lowered price that we're all
Speaker 2
24:18
going to agree on or we're just going to run it through our own network and we're just going to use pipelines instead. By 1877 the company had become a behemoth that had far outgrown its Cleveland roots. Rockefeller and Flagler determined to move their operations to the burgeoning city of New York.
Speaker 2
24:32
Flagler was not keen, even when he lived in New York, his schedule didn't really change much. He kept the same schedule that he did when he was in Cleveland. He was not keen to join the New York City social swirl. Even in Cleveland, he had virtually no social life.
Speaker 2
24:47
His wife had been plagued by a lifetime of chronic bronchitis, and when Flagler was not at his office, he was with her.
Speaker 1
24:54
Her condition continued to worsen, and
Speaker 2
24:55
in May of 1881, she died. Her death was a stunning blow to Flagler. And I'm almost done giving this brief overview about it because I want to get to his second career, which is what the main meaning of the book is about.
Speaker 2
25:07
And so at this point, he's like, I'm really rich. My wife died. He's going to get remarried and he's looking for his next adventure. Flagler was a wealthy man.
Speaker 2
25:15
His net worth was nearly 20 million dollars and climbing with every barrel of crude oil that the vast Standard Oil Company pumped out of the ground. He had made it beyond his wildest expectations. This poor puritanical boy from the sticks. And it seemed he was ready to enjoy the fruits of his labor at last.
Speaker 1
25:33
Wrong. Somebody like Flagler is incapable of just sitting down on a beach. He's a builder at his heart, at his core. So the reason they're saying, oh, he's gonna enjoy himself, he's remarried, he's really rich, he's spending a lot of time
Speaker 2
25:45
in Florida, which is completely undeveloped at
Speaker 1
25:46
the time. And so he's like, oh, OK, I guess I'll just start developing real estate. I like hotels.
Speaker 1
25:50
Why don't I build 1? And he liked hanging out in St. Augustine so much, he decided, OK, this is where I'm going to build a hotel. So in short order, he had brought up a large section of unproductive orange groves and hired himself an architect and embarked upon building a lavish Mediterranean themed hotel called the Ponce de Leon in St.
Speaker 1
26:06
Augustine.
Speaker 2
26:07
And so this confused everybody. It's like, why is the standard oil guy building? He's like, you make a ton of money on oil.
Speaker 2
26:15
You're not
Speaker 1
26:15
going to make nearly as much on hotels. And I just love his answers. Like, I do it because I want to.
Speaker 1
26:21
No degree of success in hotel management could ever provide an income rivaling what he had from oil. Flagler was asked to explain why on earth a man with a major interest in the most powerful company on earth would want to get into the hotel business. Flagler responded by telling a story that he'd grow fond of. That of the elderly church deacon asked to explain a sudden unaccountable bout of drunkenness.
Speaker 1
26:43
The deacon explained to his pastor that he had spent all his days before in the Lord's service, Flagler said, and now he was finally taking 1 for himself.
Speaker 2
26:52
And so Flagler's about to say, I'm doing the
Speaker 1
26:54
same thing. For the last 14 or 15 years I've devoted myself exclusively to my business and now I am pleasing myself. So essentially I'm doing it because I want to.
Speaker 1
27:03
He says, I want something to last for all time to come. I would hate to think that I'm investing money that will not bring a return in the future, but I will however have a hotel that suits me in every respect, and 1 that I can thoroughly enjoy, cost what it may. And so why am I bringing this up? Because it's the very first step in developing Florida that is going to lead him eventually say, hey, I'll just run a, I built a hotel in St.
Speaker 1
27:26
Augustine, I need to bring people from the north, so
Speaker 2
27:28
I gotta build my own railway. And then he's like, oh, I'll just keep going down. So he's gonna run rail lines all the way down the state of Florida to the very tip when he gets to Key West, which is what the book is about.
Speaker 2
27:39
And even at an advanced age, he's almost 70 years old at this time, he was still very hands-on. It took nearly a year and a half to build the 540 room hotel, a process that Flagler himself oversaw down to the opening of crated furniture alongside his crew.
Speaker 1
27:54
So once he completes the hotel, he's like, wow, I enjoyed that. I want to do more of this. So he says he had learned something from the building of the Ponce de Leon.
Speaker 1
28:01
He had become a creator instead of an accumulator and he had found much more satisfaction in such an accomplishment.
Speaker 2
28:08
And so he makes the point later it's like yeah we're taking oil from the ground it's very useful you know people have energy needs But we're taking out of
Speaker 1
28:15
the ground and we're shipping it
Speaker 2
28:16
and goes all over the world But a hotel like I can see I can touch I can feel I can actually experience it myself But it's during the construction of the hotel that his wife his second wife goes crazy
Speaker 1
28:26
She starts to believe spirits are talking to her.
Speaker 2
28:28
She starts to believe that her purpose in life. I guess is to be the lover of the Tsar of Russia. She's obsessed with the Ouija board and talking to spirits.
Speaker 2
28:38
She winds up getting committed, then she comes out. And I need to bring this part up because what he's going to do soon is just really ruthless. So it says, it was not long before Ida Alice, so that's his wife, was again begging for her Ouija board. This is after she got out of
Speaker 1
28:54
the mental institute the first time. And friends were advising Flagler to have her committed once more. Flagler stood firm.
Speaker 2
29:00
He's like, no, she's not going to. But he had to change his mind because Ida Alice attacked her doctor with a pair of kitchen shears. The matter was then decided.
Speaker 2
29:09
Ida Alice was removed to a private asylum. Flagler would never see her again. And so remember that part. I'm going to circle around back to that part, just keep that in your mind.
Speaker 2
29:19
I love this idea though. This is actually 1 of the most exciting parts about reading all these biographies. You see like the same idea, something like an insight they learned previously, and then you see like that idea or that premise behind that idea applied to a different industry.
Speaker 1
29:32
So it says, 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 so many years before. All that experience in railroading was about to be put to use in an entirely different context as he tried to make sense of 1 of the most chaotic rail systems in the United States.
Speaker 2
29:57
So the existing lines that he found in Florida made no sense. So of course, Flagler being the kind of person he is, like, I'm going to fix this, I'll just do
Speaker 1
30:03
it myself. The lines that did exist had been built without regulation and with no regard for consistency of track. It was a situation that a man who had worked with peerless organizer John D.
Speaker 1
30:13
Rockefeller could scarcely comprehend.
Speaker 2
30:16
So at first he tries to work with them to try to make it uniform and he's like oh
Speaker 1
30:19
these guys just don't get it I'm just gonna buy you out. When talks with existing line owners proved fruitless Flagler did what anyone with resources might he ponied up half a million dollars and bought the railroad And then as soon
Speaker 2
30:30
as he owns a railroad, he starts expanding. And this is where we get like, why would somebody try to build a railroad over the ocean? The only way to get to the keys at this point, and this is a I talked about this a little bit about the Ernest Hemingway podcast I did.
Speaker 2
30:43
Because this this book at the helm and actually starts out with the from the perspective of Ernest Hemingway, because he's in the keys in 1935 and he's discovering all these dead bodies these people that were sent down by the US government to do construction the keys there was no advanced warning system people like just hurricanes just happen like you'd see a drop in the pressure and then it'd be unpredictable like 12 hours later you know you're being pounded to death people are drowning everything like that but before Flagler came about the only way to get to the keys was by boat there was no bridge there was no railroad and he's gonna change all that And so this is kind
Speaker 1
31:16
of a precursor to the mentality he has. This is years before he's going to get to the keys. So he's still up in like central to northern Florida.
Speaker 1
31:24
And he says his first decision was to build a bridge across the St. John's River. The moment that the company's engineers heard of Flagler's plans, they came forward quickly announcing that no 1 had ever sunk railroad support piers in 90 feet of water, the depth that they would have to cross. And so they're saying, no, no, this is impossible.
Speaker 1
31:42
And his point is well, how different is it to build a pier than a bridge? I just want a bridge to put my railroad on and so it says Flagler pondered this information for a moment, then turned back to the engineers. Can you not build a pier in 90 feet of water after a brief huddle? The engineers said, yeah, we can then build it And so I bring that
Speaker 2
32:01
to your attention because there's gonna be multiple paragraphs, multiple conversations in the book where Flagler's constantly telling Nod, he just pauses, tries to break down things into like the smallest units, attacks them one-on-one. He's like, just combine those units together and you can do it. And I'll get to more about that when we
Speaker 1
32:16
get to the keys. So now he starts to start in St. Augustine.
Speaker 1
32:19
He's like, all right, I'll just keep moving down. And so he's actually discovers Palm Beach, which is like this super wealthy enclave in present day. And it says he took to writing his own railroad incognito. The better to scout out likely targets for acquisition without arousing the attention of local speculators certain to jack their prices sky high should it be known that the great Henry Flagler might be interested.
Speaker 1
32:42
So that's another thing that he does over
Speaker 2
32:43
and over again. He's always disguising his true intentions. What is he searching up and down?
Speaker 2
32:49
Like what's his primary goal? Like why is he going further south? He wants to build more hotels
Speaker 1
32:53
and once he gets to Palm Beach he's like oh I'll just stop here. He loved it so much he thought
Speaker 2
32:56
it was paradise on earth. He's like actually went to building his giant home there and to this day like you can go to West Palm Beach or excuse me Palm Beach and there's a Flagler Museum all over South Florida. There's Flagler Museums his street he's got like little towns made after him are named after him building streets so he's considered along with Julia Tuttle like the founder of Miami, which we'll get to
Speaker 1
33:19
in a minute. In 1982, he had visited Palm Beach in such a manner and had returned to St. Augustine in a lather.
Speaker 2
33:25
And this is what he said. I had found a veritable paradise. So that's eventually where he's going to move his his operations.
Speaker 2
33:31
And so he's going to run this playbook. He goes, he scouts out places, hides his intention, buys land, builds a hotel. Once the hotel's there, then he just keeps moving that line down further down south. Hardly had he completed his line to Palm Beach, then people living in Miami, which is not called Miami at the time, I'll get there, were begging him to extend the rails southward to Miami even though there was no such thing as Miami at that time.
Speaker 2
33:56
And so now we get to the chapter called The City That Flagler Built and this
Speaker 1
34:00
is all about Miami. This is remarkable. In the 1890s, all that existed where the modern metropolis of Miami sprawls today was a muddy settlement of fewer than 500 souls.
Speaker 1
34:11
The place was called Fort Dallas at the time. Those who moved to Fort Dallas to seek their fortunes were interested and encourage others to join them. Among the most active of those pioneers was a woman from Cleveland named Julia Tuttle. So she is important.
Speaker 1
34:25
She's considered 1
Speaker 2
34:26
of the founders of Miami as well. If you have ever flown into Miami and driven from Miami International Airport to Miami Beach, which is where most people come when they visit. I happen to live in Miami.
Speaker 2
34:35
I've lived in Miami a long time. The path you most likely took from the airport to get to the beach, you go over a causeway. It's called the Julia Tuttle Causeway. And so she was also a remarkable person
Speaker 1
34:44
in her own right. She was intending from the outset to carve a city from the wilderness. There was nothing here but 500 people.
Speaker 1
34:51
She went to work remodeling 1 of the original settlement structures into a home for herself and her 2 children. That's insane that she brought her children there. Mindful of what it would take to turn their sleepy settlement into a city, she approached Flagler's rival, Henry Plant. So at the same time that Flagler is building all these hotels and rail lines on the east coast
Speaker 2
35:11
of Florida, there's this guy, Plant, that's doing so on the west coast. And so She's like, hey, why don't you extend your railroad from Tampa across the Everglades to Fort Dallas? Remember Fort Dallas is what Miami is called at the time.
Speaker 2
35:24
Flagler was actually gonna rename it Miami. And so you can think about Julia Tuttle's intentions. Like we need, it's simple, like we need a way to get people to the new city that we're building. Really, it's a metaphor for creating a new product.
Speaker 2
35:37
But this plant guy is completely different from Flagler. He's like, it's impossible to build, because you have to go through Everglades, it's essentially just swamplands, it's disgusting over there actually. He just dismissed the idea that it was impossible to build a railroad across such territory now and forever. And then this is where you just have to admire Tuttle because she's relentlessly persistent.
Speaker 1
35:59
Tuttle Undaunted turned to the other great railroad builder in Florida, offering Henry Flagler half of her land if he would only bring his railroad southward to Miami along the East Coast route. When Tuttle began her campaign, Flagler was also not interested.
Speaker 2
36:13
And the reason he wasn't interested is because he said, Flagler saw no immediate reason to press his road beyond Palm Beach, not when the quote unquote city was little more than a squatter's outpost. So that is a description of what Miami was when Julia Tuttle approached Henry Flagler. But things changed fast.
Speaker 2
36:30
Flagler is 1 he likes to keep his options open and 2 he reacts to new information and then fortune intervened in
Speaker 1
36:36
the winter of 1894 1 of the worst freezes in Florida history swept across the state wiping out crops and citrus groves all the way to Palm Beach. The suffering that Flagler saw among farmers growers and laborers stunned him. He sent 1 of his employees out on a private relief mission with $100, 000 in cash instructing him to disperse it all.
Speaker 1
36:57
And so Julia Tuttle sees an opportunity here. Flagler was mindful of the news that was sent to him by the indefatigable Julia Tuttle that Fort Dallas had not been touched by the freeze. And so that's where Flagler sees an opportunity. He is 66 years old this time, and even at 66 years old, Flagler moves fast.
Speaker 1
37:18
How many times have you and I discussed the importance of speed when talking about the history of entrepreneurship? It is insane that they all just move rapidly. The decision did not take long, it's 3 days later, that's how fast he goes. And then check out how crazy it was just to get from West Palm Beach at this point in history down to Miami This is insane and he's 66 flag.
Speaker 1
37:39
We had made plans for what was then an arduous trip He'd take rail to West Palm Beach then launch into a boat in Fort Lauderdale and then more than 30 then travel the more than 30 miles from Fort Lauderdale to Miami by horse and carriage. This is when he finally agrees I'm going
Speaker 2
37:57
to extend my rail south he's going to build this gigantic hotel right on Biscayne Bay. And so the city, and I'm putting cities in quotation marks, they try to reward him by naming it after him. He's like, no, no.
Speaker 2
38:07
And I didn't know this.
Speaker 1
38:07
This was fascinating. Within 3 months, the city had been incorporated as Miami. Flagler had had to gently urge the new town council to choose the original Native American name for the new city over his own name.
Speaker 1
38:20
So Flagler is actually the 1 that chose to name it instead of Flagler, Miami. And so he builds this fantastic hotel. It's completely
Speaker 2
38:29
out of, it doesn't make sense in its surroundings, which is essentially like just a swamp at this point and we see his formula. I already mentioned this earlier but I'm gonna read it
Speaker 1
38:36
to you. The hotel is called the Royal Palm. The Royal Palm was not only an impressive feature of the new city but virtually the very reason for Miami's beings.
Speaker 1
38:43
Flagler was not dismayed at this of course. For over the past dozen years he had seen development thrive in the wake of his method so this is his formula build a railroad to a place erect a destination worthy resort hotel there and other development was sure to follow
Speaker 2
38:57
and so he felt comfortable like this I'll put the money up I know people essentially like I if you build it they will come is what he's thinking about but then it says but even Flagler could not have predicted the events that would cause Miami's growth to explode in exponential terms and part of that explosion is going to be caused by
Speaker 1
39:13
the Spanish American War so he had no intention he's gonna stay in Miami and then he got the idea to go all the way down to the Keys, which crazy at this time, just blew my mind that the Key West, remember you can only get there by boat, is still the largest city in Florida at the time. I think it's like 2, 000 people, 20, 000 people, I can't remember exactly. We'll get there, so we'll figure it out, but this is what caused like why would a why would he think?
Speaker 1
39:36
They know railway That he has to construct over an ocean is actually gonna be valuable So it says the Coleman the the ending of the Spanish-American war Reawakened his interest in the matter in the treaty that concluded the war Spain agreed to give up its authority over Cuba virtually assuring that the United States interest would prevail in Cuba.
Speaker 2
39:55
And so the first idea is, well, you're going to have all these goods traveling from the Caribbean, Central and South America. The place that it makes sense to land is in this bustling little town of Key West, but we can't get the goods out. We can dredge deep water ports and then what we'll do is we'll just run a railroad up and connect it to the mainland.
Speaker 1
40:16
And so this is 1898. He's around 60. It says he's 68 years old at
Speaker 2
40:20
this point. The railway is not gonna be finished for quite a bit of time.
Speaker 1
40:23
But I want to just, I'm gonna read this section to you because I really think it helps you understand like who this person is, right? And I admire this. He was, even though he was 68 years old, and while his investments in Florida had not prospered to the degree that those in oil business had, he was still 1 of the most wealthy and influential men in the United States.
Speaker 1
40:39
Despite his familiar jest, and he would say over and over again
Speaker 2
40:42
at this point, that I would have been a rich man if it hadn't been for Florida, That part is technically true. He's still obviously rich. I think he leaves behind, it's insane how how wealthy he was, I think he leaves behind like a hundred million dollars and that's in like early 1900 dollars so I think multiple billions if I'm not mistaken.
Speaker 2
40:58
But he winds up dumping 30 to 40 million in the development of Florida and he never turned a profit on it so that he says that in jest but it's accurate. He's like I would have been a rich man if it hadn't been for Florida. He could have chosen at that moment to retire and live out his years in luxury basking all the while in the gratitude of an entire state citizenry. So he's been developed like he developed an entire railway down the east coast of Florida.
Speaker 2
41:19
He's developed all these resorts. He's promoting it. A lot of people
Speaker 1
41:22
are moving there. That's what they're talking about. But Flagler's not he's not gonna lift a foot off the gas until he dies.
Speaker 1
41:28
And so I don't want to left myself here. The only exit strategy is death.
Speaker 2
41:33
But Flagler was not about to quit, not when he had
Speaker 1
41:35
come so close to the accomplishment of a goal that only a decade before had
Speaker 2
41:38
been dismissed as an utter fancy. Even in his late 60s,
Speaker 1
41:41
he was still a vigorous and powerful man. He had great wealth and technical expertise at his disposal, And laid before him was an engineering task that had galvanized the minds of every professional in the field, even as its magnitude sobered, the more practical minded. So this is
Speaker 2
41:57
the idea of I'm gonna, just this line I started all the
Speaker 1
41:59
way in Northern Florida, that's gonna run right over the ocean into the Keys and
Speaker 2
42:03
if you've ever done that drive before. The author, so me and him might have a little bit of disagreement, I can understand why he thinks it's a beautiful drive, he said he thinks it's 1 of the best drives in the United States. Maybe I'm jaded because I've done it so many times.
Speaker 2
42:14
There are some cool parts of it like the 7 mile bridge which at the time is constructed I'm pretty sure was the largest longest bridge over an open water in the world and you know you are literally driving on like a four-lane bridge if I'm not mistaken directly in the ocean
Speaker 1
42:28
it is kind of beautiful but it's very flat and the Keys are just in general just a very strange like it's got a like a pirate history and you still see that even Key West it's very small but like I've tried to have a good time
Speaker 2
42:41
in the Keys, I'm incapable of it because I don't really drink and I don't fish, And everybody there is drunk all the time. And so the thing I just happen to enjoy the most, the best thing I've ever done is I rented a tandem bike and me and my daughter love this because Key West I think is like 2 by 4 miles, like it's real small. And we just biked over the entire city.
Speaker 2
43:03
So that was fun. But if you don't really drink and if you don't fish, there's just not much to do.
Speaker 1
43:08
So anyways, back to this. They're saying, hey, you're taking on a task. It's galvanizing the people that are super ambitious, but the sober-minded and practical people are like, yo, you're a little crazy.
Speaker 1
43:17
It was a time, and I love what, this is why I love Les' writing, and I just love that he draws the parallel. It's all the same dream. He says, it was a time in history when men were tempted no longer to regard themselves as the mercy of the fates, but as masters of their environment. To think of young rocket scientists at the middle of the 20th century staring up at the moon, equally inspired and awed at the prospect of someday reaching that destination, is not unlike a similar conjuring a railroad engineer 50 years before staring out over the Straits of Florida towards Key West filled with the same sense of wild surmise.
Speaker 1
43:56
And again, I think that's really important because from our vantage point, okay, what's the big deal? Like it's a bunch of bridges. This is the 1898. We're talking about before the invention of like widespread automobiles obviously existed but before the widespread adoption of automobiles before the Wright brothers.
Speaker 1
44:13
It's just insane to think that you're going to build a railroad over the ocean. And what's even more insane is, I'm going to, the last part, the last chapter of
Speaker 2
44:22
the book is all about the gigantic storm. It's a fantastic, it's like 20 pages. I highly encourage you reading it.
Speaker 2
44:28
I'm obviously not going to include it in
Speaker 1
44:29
the podcast because it's after Flagler dies, but what's crazy is like this this most powerful hurricane ever come destroys most of the railway right but there's still parts that survived like the bridges and the arches and everything else like it the engineering feet that they figured out 40 years earlier survived the most powerful storm to ever hit the United States. That's incredible to me. So I already mentioned this earlier like this is really his like why would he
Speaker 2
44:55
do this this is the reason he thought though though that his work would be valuable to others really the thing about this is like you can have a reasonable assumption, but it wind up being wrong. And he's just saying, hey, what I just said earlier, Cuba, Caribbean nations, South and Central America, they're going to have
Speaker 1
45:09
all these goods that Americans are going to want. This is the port they're going to come through. Never materializes.
Speaker 1
45:13
He builds the port. He builds a railroad. The goods never materialize. So I think that's the important part.
Speaker 1
45:18
Just want to pull out something here. Key West was no undiscovered town. They had more than 20, 000 residents. It was the largest city in Florida at the time and had been for more than 50 years.
Speaker 1
45:28
That is insane. In 1900, Key West was the large, had 20, 000 people. A place you could only get to by boat Largest city
Speaker 2
45:36
in Florida time and had been for more than 50 years And so the author was talking about hey This is a time when people thought you know you could be masters of your own environment They were way more ambitious in his opinion and he talks about this over and over again in the book, that just more ambitious back then than we are today. And it's also like that kind of person also just thinks like not only is the environment malleable, but my entire world is malleable. And so this is what I mean.
Speaker 2
45:59
I asked you to remember it earlier. This is ruthless, ruthless,
Speaker 1
46:03
And a reminder that you need good, you need a good defense. That's something I learned from Ed Thorpe. I recently re-read his fantastic autobiography.
Speaker 1
46:11
It's Founders Number 222. The first time I covered it was all the way
Speaker 2
46:15
back on Founders number 93. I'd always listen to the latest ones. You can listen to both of them if you want, but 222 is where I would start with that.
Speaker 2
46:21
And something he taught me is the fact that, he talks about, he's been in the financial markets for half a century at that point, and he's writing a book, and he's like, getting rich and staying rich are 2 separate skills. And so he's like, a good offense is the way you get rich and a good defense is the way you stay rich. And he talks about, you know, there's all kinds of people trying to scam you out of money, all ways you can lose your money, all types of ruthless individuals out there that'll take your money. So you have to have a good defense.
Speaker 2
46:46
This is again when I when we're about to reach you like you just realize like there's some People just feel they have no limits And if you happen to get in these people's way they will run you over My own personal choice is avoiding these people at all cost and so he's second wife is His first wife is dead his second wife is in asylum. He's, I think he's dating, he's like 7 years old at the time, he's dating like some girl that's like 30. To give you an idea, maybe 34. Her family's like, hey, can you please marry our daughter?
Speaker 2
47:14
He can't marry their daughter because divorce is illegal at that point. The only way he could get
Speaker 1
47:21
a divorce if he could prove adultery. So let's go to the book. Flagler was feeling pressure from Mary Lilly's family and the public so he decided to make an honest woman of her.
Speaker 1
47:30
There was 1 obstacle however. Flagler was still a married man. In typical fashion, Flagler went immediately to work on the problem. In 1899, 3 weeks after proposing to marry, Flagler announced that he was moving his legal residence from New York to Florida.
Speaker 1
47:43
Why is he doing that? He allowed another 2 months to pass and then petitioned the Supreme Court of New York that Ida, which is his second wife, should be certified insane and thus incompetent, a matter that could scarcely be contested as she had been for more than 2 years been locked in a private asylum carrying on a one-sided conversation with the Tsar of Russia. New York's divorce law was similar to that of Florida, in that divorce could only be granted where adultery could be proven. While Ida had stated that she had indeed committed adultery on several occasions, she's saying this, that she committed adultery with the Tsar of Russia.
Speaker 2
48:19
The Tsar of Russia is in Russia. He's not in her asylum. So this stuff is happening in her mind.
Speaker 2
48:26
It was not the sort of contention that would hold up in court. So Flagler turned to more practical methods. It took considerable doing, but on April 9th, 1901, 2 years later, a bill was introduced into the Florida legislature to be entitled an act making incurable insanity a ground for divorce. He changed the law to get divorced.
Speaker 2
48:47
Before the month was out, the bill had sailed through both houses and had been signed into law by the governor. How do you think he convinced him to do that? He convinced him to do it the same way they convinced him to do it today, with money. It was rumored that it cost him $20, 000 in bribes to see the bill passed and a number of quote-unquote gifts made to by Flagler to Florida's public universities were documented.
Speaker 2
49:10
That's ruthless. It is well documented that Flagler planned his actions carefully, Though he might appear to have acted in haste at times, as with his controversial divorce and his marriage to Ida, Flagler's actions were genuinely undertaken as the culmination of a meticulous process of preparation on his part. And so let's get another insight into his personality and what dealing with Henry Flagler would be like. In the 1890s when Flagler had announced his intention to extend his railway along the central coast of Palm Beach, a group of landowners from the then prosperous town of Juneau, I'm going to say that on purpose.
Speaker 2
49:47
Remember, then used to
Speaker 1
49:48
be prosperous. What happened to them? I wonder.
Speaker 1
49:50
And the then prosperous town of Juneau had formed a consortium, pooling their real estate holdings in order to force up the price Flagler would have to pay for his right of way. The group was certain that Flagler would have to meet their inflated price in order to avoid sending his line through a broad swath of marsh and swamp that would drive the cost of construction through the roof. Presented with their demands, Flagler ordered his railroad built exactly where his foes had assumed it could not be done. At tremendous expense, Flagler's railroad went southward to Palm Beach nonetheless, and the town of Juneau withered and died.
Speaker 1
50:30
Now keep in mind, where we are in this story, Flagler is almost 70. And this is what he's got going on in his life. He was still a member of the board of directors of Standard Oil, the largest corporation in the world at the time. And as the chief executive officer of the Florida East Coast Railway and its various subsidiaries, he was called upon to oversee a vast network of undertakings that stretched the entire length of Florida, including extensive freight and passenger operations, the management of a wide variety of hotels and resorts, the direction of massive land sales and development operation, and much more." And
Speaker 2
51:00
what I love is this. I'm going to read a paragraph. I'm going to extend this because there's several paragraphs in
Speaker 1
51:06
the book like this. He is not at all interested in retiring. And it's in fact, if you think about what he is, he's choosing to run directly towards more difficulties.
Speaker 1
51:16
That is actually 1 of his admirable traits in my opinion. He could retire long at last, join his new bride at their fabulous new mansion in Palm Beach, where he could rest and enjoy the fruits of his labors. Instead, he continued on. That Flagler chose The latter path says more about the man than any other action undertaken in his lifetime." And so now I have a question for you.
Speaker 1
51:39
What is Jay Z and Henry Flagler have in common? They know the value of a faint. And so this is something that Jay talked about in
Speaker 2
51:48
his autobiography, back on episode
Speaker 1
51:51
238.
Speaker 2
51:52
And Henry uses over and over again in this book, it says, company records, meaning Henry's company records, indicate that since reaching Miami in 1896, Flagler had been making tentative moves southward Fainting here and there like a fighter waiting for the right time to wade in for real. That's exactly what Henry said This is what Jay-z said every hustler knows the value of a faint It keeps you 1 step ahead of whoever's listening in.
Speaker 1
52:19
And so to get to his end goal, which is to build the line all the
Speaker 2
52:22
way to the keys, he's gonna have to go through this swampland. Now, remember when I told you Julia Tuttle went and talked to Flagler's rival, Plant, and Plant had been like, no, you can't. He'd sent an expedition down there.
Speaker 2
52:34
He's like, it's a swamp, it's Everglades, you can't. The whole area is like, there's no way
Speaker 1
52:38
you can build a railroad through there well Flagler wants to investigate for himself he sends his people down and they found all it's hell but really that I'm just gonna read 2 paragraphs to you, a little longer, 2 and a half paragraphs maybe. But really the way I think about this and what I wrote to myself when I got to this section as I sat here and thought about, because I sat on these 2 pages for a while, that the metaphor here is during your attempt at doing something difficult, you're gonna have several points where all of the options in front of you would not be described as good. Flagler at this point is trying to figure out, okay, I have 2 ways to build the railroad.
Speaker 1
53:14
Neither is good, but he has to do this. This part, where most people fail and trip up, he's gotta actually solve this problem just to have the opportunity to get to an even more difficult problem, which is that of the building in the road actually in the keys. So it's really insane. And If you're building, especially if you're engineering physical difficult products, this book is probably interesting because, again, it's 1 of
Speaker 2
53:40
the most challenging engineering feats that humans have done, especially at the time.
Speaker 1
53:44
It said, his surveying party were to encounter the same daunting conditions that James Ingram and his men met while crossing the Everglades in the opposite direction. So those are plants guys, okay? Decade before.
Speaker 1
53:55
Endless stretches of marshland and muck, dense stands of 10-foot high sawgrass with edges as sharp as razors, clouds of stinging insects so thick you could swing a can about the end of a string and come up with a court of mosquitoes. This is the guy's name is Chrome.
Speaker 2
54:13
This is the guy that that flag was sent down there. This is just fantastic writing. So this is why I'm going to read you this whole section.
Speaker 1
54:18
A distance that can be traveled by car in
Speaker 2
54:20
an hour or so today took Chrome and his men 13 days. I found a most godforsaken region, he wrote in a report to his supervisor. It's going to take us much longer to get a survey than I had expected.
Speaker 2
54:31
Chrome did press on, often forced to drag his shallow bottom boat that they had brought along over terrain that
Speaker 1
54:37
was an indefinable mix of muck and water, sucking at every footstep. Now how crazy is this? So it's hard to walk on, but it's not liquid enough to cross by boat.
Speaker 1
54:48
I mean, it's a swamp, right? The men were tortured by heat, humidity, insects and often lost their way in the featureless landscape. If not for the aid of the occasional backcountry hunter or a member of the of the native tribe, Chrome's only memorial might have been a long forgotten pile of bones. And so again, he's gotta solve a series of extremely difficult problems just for the opportunity to then tackle, it's like the final boss, like the most difficult problem.
Speaker 1
55:20
It's just remarkable. But this is 1 of his most admirable qualities in my opinion, based on the reading of this book. To a pragmatist like Flagler, the route seemed possible. When questioned, so now they're talking about building across open water, okay?
Speaker 1
55:34
When questioned how he would cross those mammoth stretches of open water, Flagler replied, it is perfectly simple. All you have to do is build 1 concrete arch and then another and then another and pretty soon you'll find yourself in Key West.
Speaker 2
55:49
And so he's like, all right, who's going
Speaker 1
55:51
to build this thing for me? He searches the entire world for a quote-unquote concrete expert.
Speaker 2
55:56
He finds this guy named Meredith. Meredith is actually gonna die on the job a few years from now. He winds up being diabetic.
Speaker 2
56:03
But Meredith, I want to read Meredith's interpretation of Flagler, which I thought was really, really fascinating.
Speaker 1
56:10
So it says Meredith remember being summoned directly from Mexico where he was working to St. Augustine for his interview. And so now he's talking about Flagler.
Speaker 1
56:17
Permanence appeals to him more strongly than any other man I ever met. He often told me to build for all time. The interview was brief and to the point. Once Meredith has assured Flagler that nothing about his plans seemed impossible, the matter was settled.
Speaker 1
56:35
When can you start? Flagler asked Meredith, fully expecting that he might ask for
Speaker 2
56:39
a month or so to settle his affairs. What Flagler, excuse me, what Meredith's about to do here is exactly what Andrew Carnegie said to do. Andrew Carnegie did this when he was trying to find an opportunity.
Speaker 2
56:48
Young person, didn't have a bunch of money. He gets hired a job. He's like, I'm going right now. If there's an opportunity, go now.
Speaker 2
56:55
And so Meredith says, I'm ready to go to work this afternoon. And then he asks, he's like, if it's okay, I'd like a few days though. Let me go home to Kansas City pack some things see my family because I'm gonna be on this job for several years. Alright my boy go see your family Flagler said.
Speaker 2
57:09
So the people that knew Flagler well and he was very difficult to get to know they actually described him as a supremely stoic man and so it's part of the promotion for this project there's a there's a reporter that goes down and you know he's got his intention was to write a hit piece on a robber baron
Speaker 1
57:28
and he gets there and he discovers something different so says he embarked upon his assignment ready to deliver a portrait of a robber baron facing his just desserts. He was to spend several weeks inspecting Flagler's vast holdings and several more days in conversation with the man. However he came away with a vastly revised assessment of Flagler and this is what he said about him.
Speaker 1
57:48
You realize that you are before a man who has suffered and has never wept, who has undergone intense pain and has never sobbed, who has never bent under stress.
Speaker 2
58:02
Keep in mind Flagler is 74 at this point and a letter written to an associate at
Speaker 1
58:06
the time, Flagler provides a glimpse of his own self-image. Remember he's 74, okay? I was born with an oak constitution.
Speaker 1
58:14
The only excess I believe I have indulged in has been that of hard work He's 74 this like this part was actually kind of inspiring to me because like the idea You know like if you like do you never know like what what am
Speaker 2
58:28
I gonna feel like when I'm 74? I'm gonna have the energy like I'm are you gonna want
Speaker 1
58:30
to actually like continue doing making working and contributing to your fellow humans to society? And if we're like Flagler if we're lucky enough to like flaggers like yeah, so he says I believe the only excess I believe I've indulged in has been that of hard work. I have however 1 ailment which is uncurable old age and that I am submitting to as gracefully as possible I am quite sure however that I possess as much vitality and can do as much work as the average man of 45 hard work energy and accomplishment for Flagler it seemed to be all he knew and all he needed to know.
Speaker 2
59:09
And so the book describes, I mean, just unbelievable amount of obstacles, as you could imagine trying to do this. But 1 of them I just want to pull out is 1 of the hardest challenges was actually finding enough workers. This is undeveloped, largely undeveloped swampland.
Speaker 1
59:22
The trip made a profound impact upon Flagler who understood that a steady supply of labor was crucial to the success of his undertaking. Labor shortages, which had always plagued his road building efforts in a sparsely populated Florida, would be greatly exacerbated here. 1 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.
Speaker 1
59:49
And so people would come down on the rail line, looking to make money.
Speaker 2
59:52
Most of them are from northern states, and they'd get into the hot, the heat, the humidity, and the insects, and they would last a day, maybe 2 days, and they would just desert. And I think at that point, this point in the story, where he's realizing, oh, I've got a giant problem, he had hired 400 workers, and they had dwindled down to 150 So at this point that guy Meredith the concrete expert that said hey I can go to work right now He's in charge of the project. He's the 1 that's reporting directly at Flagler So this gives you an insight The reason I want to pull up this 1 paragraph, gives you an insight into how Flagler managed.
Speaker 1
01:00:20
For while the undertaking was guided by Flagler's vision, the commander in chief was wise enough to give his field general free reign when it came to the devising of the day-to-day tactics. Here is the goal, the wise commander says. How you achieve it is precisely up to you.
Speaker 2
01:00:36
And again, I don't think I can ever reiterate enough just how difficult this task was. So not only do you have, like, it's undeveloped, you have a hard time getting supplies, you have a hard time getting workers, the conditions are inhospitable, some of
Speaker 1
01:00:47
the sustained comfort giant swaths of open sea. But not only that, during the construction, I think it takes 10 or 12 years, just the keys part. He's in Florida for like 26, I think, something like that.
Speaker 1
01:01:01
But they get hit by 3 different hurricanes And I'm not talking about the the massive hurricane that happens in 1935 that destroys the railway I'm talking during the actual construction of what they're doing So there's many times where it's just like we made progress and the hurricane comes through and destroys everything else We got to do it over again, and it happens multiple times, And there's a lot of just descriptions of, obviously, hurricanes in this book. These storms are a major part. It's a supporting character in the book. And I just want to
Speaker 2
01:01:28
give you a great description of some of the dangers of hurricanes. He's got a ton of great writing but this gives you
Speaker 1
01:01:34
an idea. So it says, it's impossible to stand upright in such winds and even if it were remaining outside for long would be suicidal. Roger Clemens might manage to throw a fastball in the high 90 miles per hour and some major leaguers have suffered fractured skulls when they've been too slow to duck such a pitch.
Speaker 1
01:01:51
These winds were running somewhere between 150 miles an hour. A baseball weighs 5 ounces. Actually I was mistaken this isn't a description of 1
Speaker 2
01:01:59
of the hurricanes they had to deal with. They're actually talking about the difference between the massive storm that hits in 1935 and then Hurricane Andrew, which hit in
Speaker 1
01:02:07
1992.
Speaker 2
01:02:08
Hurricane Andrew was the most property damage. I think this was before Katrina, Hurricane Katrina, but The hurricane in 1935 was the 1 with the strongest wind. So hurricane, so this is about what it would be like if you were outside during Hurricane Andrew.
Speaker 1
01:02:23
So it says, Roger Clemens might manage to throw a fastball on
Speaker 2
01:02:26
the high 90 miles per hour, and some major leaguers have suffered fractured skulls when they've been too slow to duck such a pitch.
Speaker 1
01:02:32
Hurricane Andrew's winds were running somewhere between 150 and 175 miles an hour. A baseball weighs 5 ounces. Now try to imagine taking a hurricane-tossed 5-pound clay roof tile to the face.
Speaker 1
01:02:45
For those who have never lain prone beneath the passage of such a monster, there is no way of knowing beforehand. And so it was for the men encamped on the Northern Keys on October 17th, 1906."
Speaker 2
01:02:57
A few pages later, again this is just 1 of 3 hurricanes that hit the keys during the construction of Flagler's Railway. There's a ton of paragraphs like this in
Speaker 1
01:03:06
the book and it says, Sanders watched another plank, wooden plank, come screaming through the air towards the man who's next to him, who looked up in time to take its full blow, to take its blow full force. The man's chest split open as though it had been cut with a giant pair of shears."
Speaker 2
01:03:26
And so there's all kinds of crazy stories. There's interviews that Les does in the book about some people that survived the 1935 hurricane. There's also some stories about the ones that take place during construction.
Speaker 2
01:03:38
So while that guy that's happening in 1906 that just got cut open, so while that's going on I'm going to read you, There's actually people risking their life. They're experiencing the hurricane too. They're in a boat. And it's just
Speaker 1
01:03:49
a reminder that there's just good people in the world. The people I'm about to describe to you that are on this boat are actually risking their lives to save others. And they wind up doing that.
Speaker 1
01:03:57
It says, they relayed the news to Jenny, which is the ship, to Jenny's captain, who ordered the ship into a full-fledged search by 130 in the morning that Jenny had pulled 49 men from the water and delivered them safely to Key West
Speaker 2
01:04:15
And so there's all kinds of stories about families being separated, mothers and daughters being separated, and fathers and son. This is 1 of the happy endings, 1 of the guys get pulled out
Speaker 1
01:04:24
of the water. It says the son was fortunate enough to grab hold of a plank and managed to keep himself afloat until he was rescued the following day. When he was finally delivered to safety, the son told a railroad official the heart-wrenching story of the loss of his father.
Speaker 1
01:04:40
So he thought his father drowned, he
Speaker 2
01:04:42
thought he was swept away by the storm. "'Tell me your name again, son, ' said the listener.
Speaker 1
01:04:46
The son did so. The official then smiled and clapped the young man on
Speaker 2
01:04:50
the shoulder. You can relax. Your father's safe.
Speaker 2
01:04:53
He told the same story when he was brought in a couple hours ago." Imagine the relief by both father and son. The father's telling the story thinking his son is dead that he watched his son die in a hurricane the son had the exact same experience the experience I cannot believe my father's dead and then there's like no you were actually reunited the next day
Speaker 1
01:05:11
and so after every hurricane they're forced to rebuild they're forced to proceed work again So I was still having a giant problem with personnel and he realizes, okay, we're taking northern people from the northeast in America. They're not acclimated to this condition.
Speaker 2
01:05:27
And so he winds up finding people from the Cayman Islands and from some tropical Central American and Caribbean islands and once he starts importing them he's like oh there you see these conditions they can their humidity and heat is just natural they've been born and raised in this environment So that was like a major breakthrough that he discovered. It's the importance of finding people that have already been accustomed and adapted to the work level that you require, right?
Speaker 1
01:05:55
And so it says, the Spanish workers had always been stayers in Flagler's eyes, meaning that they don't desert, they don't leave. And as word got back to their countrymen about improved living and working conditions on the project, more and more of them came to sign on. Native Cayman Islanders, likewise accustomed to the climate and insects, also had come to constitute a significant part of the workforce.
Speaker 1
01:06:17
And this is their typical day. A writer visiting the work camps for the Railroad Gazette noted that while mosquitoes were large and fierce all the bunk houses and porches were screened. The men get up at 5 in the morning, take a bath, have breakfast at 530 and then work from 6 a.m. To 11 a.m.
Speaker 1
01:06:33
Have lunch then go back to work at 12 and get off at 5 p.m. With supper from 5 30 to 6 Sundays are rest days many workers reported that conditions at the camp were superior to those at their own homes So essentially working from 6 in the morning to 5 in the afternoon. 1 of Flagler's executives is on
Speaker 2
01:06:53
a boat. He goes from his like underneath the boat to try to go talk to the captain of the boat about, hey we should schedule a stop. I got to check on something.
Speaker 2
01:07:03
And he goes out, and at the same time he goes to the, he's trying to walk on the side of the boat to where the captain is, the boat gets hit by a wave and he falls over. And the engine's so loud that the boat, he's screaming for help, but they can't hear him.
Speaker 1
01:07:16
And so this story is about how not panicking can save your life. So it says, as he worked and willed himself to stay afloat, Ko kept his mind on a story that had always stayed with him, in large part because of his very fear of what had just befallen him. A friend had once told Ko about being on board a small ferry boat that was crossing Lake Michigan.
Speaker 1
01:07:34
The ferry had sunk and the friend had found himself flailing about in frigid waters along with his wife and young daughter, neither of whom could swim. Terrifying, right? Ko's friend had reasoned firmly but reassuringly with his wife and daughter, telling them not to panic and to simply keep their hands on his shoulders. He insisted that he could keep all 3 of them afloat, and if they would simply trust him and stay calm they would be saved.
Speaker 1
01:08:06
Ko's friend had been successful and the message behind the story burned fiercely in Ko's brain as he floated there in the lonely waters and so he's like I'm not gonna panic and he tries to be positive. He had certain things going for him, he told himself. There's plenty of daylight left, and compared to the choppy and frigid Lake Michigan, he might as well have been bobbing in a calm, if enormous, tub of bath water. And so he's treading water, he's like,
Speaker 2
01:08:30
I got plenty of daylight, I'm gonna stay calm, I'm not gonna panic, if I panic I'm going to die. Eventually the people driving the boat go back and try to figure out, hey, where did Kogo go? They realize he's not in his room, that's weird, he's on the boat, then they see where he fell off, it kind of like broke a part of the boat so they immediately turn around and it says and then he
Speaker 1
01:08:48
saw the approaching craft his engineer waving and shouting relief washed over him in moments he was being pulled to safety
Speaker 2
01:08:56
and so that reminded me I had this crazy story a few years ago on a podcast there is a former Miami Dolphins football player named Rob Conrad and he was on his boat 9 miles off the coast of Florida by himself and his boat had autopilot like Greg is cruise control. And so he set it up. It kept going.
Speaker 2
01:09:15
And so he goes to the back of the boat to check something and it like hit a wave or something and it knocked him out of the boat and normally if you fell the boat like the engine would stop and He just realized oh my god the thing's gonna keep going and so on this podcast He is telling the story where he takes 16 hours to swim 9 miles to safety. The whole time he's just thinking of his young daughters and his wife and he's just like I can't give up, you're beyond fatigued. He's severely sunburned. By the time he
Speaker 1
01:09:46
gets to shore, all the skin on his neck and
Speaker 2
01:09:48
his shoulders and everything else are completely gone from the grinding of the saltwater. It was just an unbelievable story about human will. It's just like, I cannot die, my family needs me.
Speaker 2
01:09:59
And it just pushed him. I just could not imagine swimming for 16 hours straight. Another hurricane hits the island, interrupts the construction, kills a bunch of people. There's just 1 story.
Speaker 2
01:10:09
This is just incredible that this
Speaker 1
01:10:10
guy survives. 1 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. He was still being buffeted by the winds when the man began to sense that he might live.
Speaker 1
01:10:26
Then he began to feel a terrible burning sensation at his hands. The searing pain had moved to his face and lips, which were pressed tight against the trunk of the tree. His eyes had begun to burn, and in moments were nearly swollen shut.
Speaker 2
01:10:43
So this is about the intense human desire to survive, to live, right? Not only is
Speaker 1
01:10:47
he about to be blown out by the wind, there's a storm surge, he's tying himself to trees, like, okay, okay, maybe I won't get blown off this tiny little island and I'll actually survive. And he winds up tying himself to a poisonous tree, right? And he still, he survives, like this is crazy.
Speaker 1
01:11:02
So now his face is on fire, his hands are on fire, his eyes are shut, and he's in 100 plus mile an hour winds. He realized the terrible irony of what he had done. He had lashed himself to a manichael tree, most likely pronouncing it correctly, manichael tree, 1 of the most poisonous plants that grows in the tropic. The indigenous Keys Native Americans had used the manicheal to poison the wells of invading Spanish conquistadors hundreds of years earlier, 1 of whom wrote home that he who sleeps underneath a manatee tree sleeps forever.
Speaker 2
01:11:37
So it says Flavio's next birthday would be his 82nd and those closest to him had come to feel that the only thing that kept the old man alive was his dream of seeing the project completed. Yes, he's getting old, he's starting to get hunched over, He's getting a little weaker, but he's still got that fire in the belly. And we see that because this is when he sends 1 of his executives down.
Speaker 2
01:11:56
They're like, OK, we're almost we know we can do this. Where is the train going to terminate at? We got to build a terminal. And so it says by then, the Keys was
Speaker 1
01:12:04
the most popular city in Florida with its port ranked as the 13th busiest in the nation. And so it says it's 1 by 4 miles of territory had been built and overbuilt already. By the time Joseph Parrott arrived, that's the guy that Flagler sent, there was simply no more land to be had.
Speaker 1
01:12:21
Certainly not enough for Flagler's ambitious plans. There's no more dry land in Key West, Parrott reported to
Speaker 2
01:12:27
his boss. Then make some, Flagler replied. And Parrott did.
Speaker 2
01:12:31
He constructed a bulkhead above the northwest corner of
Speaker 1
01:12:34
the island and dredged thousands of cubic yards of marl. I had to look that up. That is unconsolidated sedimentary rock or soil consisting of clay and lime.
Speaker 1
01:12:45
So he takes a bunch of this from the bottom of the ocean and starts building land, right? So it says thousands of cubic yards of maul from the adjoining flats to fill in a breakwater and foundation For a rail yard terminal building and docks the United States Navy tried to block the project complaining that they were removing fill from submerged lands under their control and that they might need that fill for defense purposes someday. Parrott's response was classic Flagler if the time ever came when the Navy needed its mud Parrott said they had his word that it would be returned from whence it came. And this idea, that I'm going to build a railway from the top of Florida all the way to the end, takes over 20 years, but damn it he did it.
Speaker 1
01:13:31
On the afternoon of January 21st, 1912, almost 7 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 the 7-mile bridge, at the time the world's longest continuous bridge. The process of rail building that had begun in 1892 was complete. There were now 366 miles of track linking Jacksonville with Miami and 156 more connecting Miami with Key West.
Speaker 1
01:14:05
The same morning, Henry Flagler, now 82, left his home in Palm Beach. He was frail and his sight was failing, but nothing was about to stop him. Not after spending $12 million on hotels, $18 million on a land-based railroad, and another 20 million more on his railroad across the sea. On this day, he would board his private railroad car at the West Palm Beach station for a 220
Speaker 2
01:14:33
mile trip that would culminate in Key West and punctuate the dream of a lifetime.
Speaker 1
01:14:38
At 1034 a.m. Henry Flagler, his back bent with age and his dim eyes brimming with tears, stepped out onto the observation platform to an ovation the likes of which he had never encountered. He had ridden his own iron to Key West at last.
Speaker 1
01:14:55
A military band played, and a children's chorus of 1, 000 voices sang patriotic songs in Flagler's honor. A choked up Flagler turned to Parrott and whispered, I can hear the children but I cannot see them. Perrett, nearly overcome himself, simply gripped his old friends arm and squeezed. When finally called upon to speak, Flagler managed to rally.
Speaker 1
01:15:19
We have been trying to anchor Key West to the mainland, he said. And anchor it, we have done. The project that so many had turned away from and others had derided became a reality. Few people in history have accomplished so great a task or lived to experience such a moment as Flagler did.
Speaker 1
01:15:38
On his way off the platform, Flagler placed a hand on Parrott's shoulder and whispered, now I can die happy. My dream is fulfilled.
Speaker 2
01:15:50
And that is where I'll leave it for the full story. Highly recommend reading the book. It's just fantastically written.
Speaker 2
01:15:55
Wonderful story, ton of interesting information in here. If you buy the book using the link that's in the show notes in your podcast player, you'll be supporting the podcast at the same time. Another way to support the podcast is to give a gift subscription to a friend, co-worker, or
Speaker 1
01:16:06
a family member. That link is always down below
Speaker 2
01:16:09
in the show notes in your podcast player, you'll be supporting the podcast at the same time.
Speaker 1
01:16:09
Another way to support the podcast is to give a gift subscription to a friend, coworker, or family member. That link is always down below in
Speaker 2
01:16:09
the show notes in your podcast player. It's also available at founderspodcast.com. That is
Speaker 1
01:16:13
247
Speaker 2
01:16:15
books down, 1, 000 to go, And I'll talk to you again soon.
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