In the third decade of an uncertain century and in the wake of an international health crisis, Florida stands out as the freest American state. Its elected leaders are unabashedly pro-growth. Unpopular federal-government directives are routinely ignored. A devil-may-care attitude prevails over a dreary “abundance of caution” that dulls much of the rest of the country. Large numbers of people arrive from harsher climes in search of new opportunities, fairer weather, lower taxes, more excitement, better lives, or just a fresh start. Low interest rates and easy credit combine with their hopes and dreams to fuel a sudden and unpredicted real estate boom. Fabulous wealth is flaunted. Bathing beauties abound. A seductive patina of vice enhances every sense of intoxication.
Yes, Florida certainly was as exciting in the 1920s as it is in the 2020s. In Bubble in the Sun: The Florida Boom of the 1920s and How It Brought on the Great Depression, Christopher Knowlton, a financial journalist and former investment banker, sets out to chronicle the Sunshine State’s rise and fall during the Roaring Twenties. Knowlton’s narrative history is built around the lives of four great Florida men, each of whom was essential in founding a respective major municipality in what had been trackless wilderness only a few years before: Carl Fisher in Miami Beach, George Merrick in Coral Gables, David Davis in Tampa, and Addison Mizner in Boca Raton (and in Palm Beach in its modern form). All built real estate empires and rested on them in fame and fortune—for at least a few years. Inevitably, their eccentricities helped do them in, along with what Knowlton characterizes as a rush of greed and, it seems, serious personality disorders.
The scale of the Florida Bubble, captured lastingly and hilariously in the Marx Brothers’ uproarious stage musical and first film, The Cocoanuts (1929), is hard to overstate. Following the creation of a modern transportation and infrastructure network by Henry M. Flagler—a founder of Standard Oil who took on developing southern Florida as a retirement project—land speculation was rampant and fueled a massive construction and hospitality boom. Publicized by modern advertising and marketing techniques, which dazzled a country in the post–World War I economic doldrums, Florida’s allure led to what Knowlton argues was the largest migration in American history. Huge numbers descended on the peninsula in the 1920s; Knowlton claims that some 2.5 million migrants, businessmen, and tourists entered the state in 1925 alone. At least within the continental United States, Florida was America’s final new frontier, a wilderness that had to be wrested from the elements and beasts of the land, water, and air.
The advance of technology made that development easy and profitable, just as flaunting new manners, mores, and excesses made Florida an irresistible wonderland for a liberated new generation. The excitement generated vast fortunes overnight, as businessmen, artists, movie stars, gangsters, spoiled heiresses, sports legends, louche politicians, international celebrities, and multitudes of ordinary people jostled for a place in the sun. Knowlton makes the case that the investor Barron G. Collier’s vast land purchases in 1925—which added up to an area the size of Rhode Island—made him America’s first actual billionaire, just a few months before Henry Ford’s net worth qualified the car magnate, by most estimates, for the title.
Any delight was for sale.
Prohibition went almost totally unenforced. State taxes on inheritance and personal income were banned by the first amendment to Florida’s constitution, which still stands nearly a century after it was passed. Any delight was for sale. President Warren G. Harding played golf with an elephant for a caddy while vacationing in Miami as a personal guest of Carl Fisher. Local politics were largely in the hands of the business community, which made self-dealing in contracts, municipal bonds, and lawmaking a state pastime. Ongoing development became an environmentalist’s nightmare, with the Cassandra-like voice of Marjorie Stoneman Douglas, an aspiring writer who became much better known as a conservationist of the Everglades, advocating restraint and restoration.
The boom’s end came swiftly and brutally. Knowlton admits that we can probably not ascribe just one cause for the bust. Speculative bubbles rarely last more than a few years before the money and emotion start to run out. Charles Ponzi, among other fraudsters of the era, had an almost obligatory stint fleecing people in bogus Florida land deals. Hardly anyone in the game had the sense to cash in while still ahead; some 90 percent of investors lost money in those years. As criminal convictions followed investment horror stories, law enforcement and credit regulators applied the brakes and brought an end to the party.
Nature herself seemed to cast judgement on the mayhem below. Hurricanes took their toll, especially in a time before radar was around to predict their arrival, and before construction firms took into account their fierce winds and water surges. Major storms that hit Miami in 1926 and Palm Beach in 1928 depressed already faltering real estate values by as much as one third overnight. Hurricanes continue to be a taboo subject for potential investors to this day.
The “vastly underappreciated” argument suggested in Knowlton’s subtitle—that the Florida boom “brought on the Great Depression”—is this otherwise well-researched book’s greatest letdown. Most financial failures caused by speculation in Florida were locally contained, with major bank and investment company collapses occurring within the state roughly from 1927 to the mid-1930s. The author presents little evidence that those failures led in turn to the Depression-inducing collapse of the New York banks, which were done in to a much greater extent by unregulated marginal credit granted to Wall Street speculators, and by injudicious lending to public and private European borrowers.
Of Knowlton’s lodestone Florida Men, the first three—Fisher, Merrick, and Davis—became raging alcoholics, while Mizner overindulged in other vices before dying both enormous and enormously in debt. Fisher and Merrick lost everything and died in virtual penury. Facing a similar fate, Davis jumped, fell, or was pushed from an ocean liner during an Atlantic crossing. However inglorious their ends, the men left behind legacies that have secured them at least local immortality. As Florida rides the wave of its current boom, Mizner’s Palm Beach stands, according to many brokers, as our COVID-afflicted world’s hottest real estate market. Weather permitting, this boom may be more lasting.