The Civil War ended in 1865. It wasa good time for Americans to start newbusinesses. The money that had beenput toward fighting the War could nowbe used toward growing the nation. Allthis money helped to launch Americaas an industrial nation that producedwealth among the business class. Theidea of such a wealthy business class wasnew to people all over the United Statesand the world.

Before the Gilded Age, mostbusinesses in the United States weresmall. They were run by individuals orgroups of individuals called partners.This was a simple form of businessorganization. It increased risk forthe owners and limited the size ofbusinesses. For example, partnershipsmade each partner personallyresponsible for the financial actions ofother partners. Bad decisions by onepartner could cause all partners to losemoney. This changed when individualstates passed laws allowing businessesto incorporate more easily. Partnershipsoften became corporations. This greatlyreduced the financial risk for individualowners and stockholders. Corporationscould sell their stocks and bonds. Thishelped them raise huge sums of moneyfrom many investors.

Limiting and spreading of risk helpedto create large businesses. StandardOil was a large-scale corporation.It began as a partnership but soonincorporated. It quickly grew into one ofthe nation’s largest and most successfulcorporations. Early investors in StandardOil, such as Henry Flagler and John D.

Rockefeller, were richly rewarded fortheir willingness to take a risk.

Corporations grew in number.America’s economy became basedmore on capitalism. Capitalism is aneconomic system. It brings investorstogether to compete with each otherto make products and earn money. Thiswas a fairly new way to organize bothbusiness and society. Before the CivilWar, American businesses served localcommunities. After the Civil War, thebusinesses and industries served a morenational community. Capitalism grewin importance. By the Gilded Age, itwas the normal way of organizing theeconomic world. This affected everythingfrom the way workers earned a livingto how they spent their incomes asconsumers.

Henry Flagler was born in the villageof Hopewell, New York, on January2, 1830. He was the son of ReverendIsaac and Elizabeth Caldwell HarknessFlagler. Leaving home at age 14 aftercompleting the eighth grade in 1844,Henry Flagler headed west to Ohio toseek his fortune. His business careerbegan with an entry-level job in a grainstore in Bellevue, Ohio. He worked atL.G. Harkness and Company. HenryFlagler learned about the grain businessquickly. The company promoted him toits sales staff in 1849. He earned $400per year. That is the same as $10,000 intoday’s dollars. In 1852, Henry Flaglerand his half-brother, Daniel Harkness,

became partners in D.M. Harknessand Company. The following year,November 9, Henry Flagler marriedMary Harkness. Together they hadthree children: Jennie Louise, Carrieand Henry.

During his years in New York andOhio, Henry Flagler worked hard andlearned a lot about business. He wassuccessful because of his strong traitsof character. These included personalhonesty, tenacity and creativity. Hewas also wise and paid attention todetail. These character traits helpedhim be successful throughout his lifein the hectic and competitive world ofbusiness during the Gilded Age.

The rise of modern business was made possible byadvancing technology of the Gilded Age.

Henry Flagler with Mary and Isabella Harkness.

Henry Flagler’s YouthHenry Flagler’sEducation

Henry Flagler’s eighth-gradeeducation in the 1840s may haveincluded classes that today peopletake in college, including in Greekmythology and Latin. Henry Flaglerwas fortunate to have received hiseducation. In the 1840s, less thanhalf of the children between theages of five and 17 were enrolledin school, and fewer than 2%received high school diplomas.Henry Flagler’s eighth-gradeeducation gave him an advantagein his successful business career.

The Rise of Modern Business

As the business class grew wealthier,they recognized their responsibility tosupport the growth of communities andindividuals. Andrew Carnegie wroteto other Gilded Age businessmendiscussing this idea, stating, “… richmen… have it in their power duringtheir lives to busy themselves inorganizing benefactions from whichthe masses of their fellows will derivelasting advantage…” The captains ofindustry became philanthropists,or people who give their money toimprove the well-being of humankind.Out of this came the nonprofitcorporation. Nonprofit corporationshelp people and communities. Someexamples of nonprofit corporations aredisaster relief organizations, museumsand schools.

Many nonprofit corporations grewup during the Gilded Age. Henry ClayFrick, Chairman of U.S. Steel, created anonprofit corporation called the FrickCollection. This was an art gallery andhome open to the public. It displayedart for people to enjoy. Henry Frickwanted to make sure the collectionwould benefit the public in the future.He set up an endowment , or a largetrust that could be used to maintainand improve the gallery.

John D. Rockefeller was partnerwith Henry Flagler in StandardOil. In 1913, John D. Rockefelleralso established a foundation tohelp people around the world. TheRockefeller Foundation has given

over $13,000,000,000 to culturalgroups, public health research, medicaleducation and world hunger relief. Ithas also given money to technology-related projects.

Julius Rosenwald was part ownerand leader of Sears & Roebuck. Heestablished the Rosenwald Fund. Thisfund gave millions of dollars to supportthe education of African-Americans. Italso supported Jewish charities, publicschools, universities and museums.

Today, more than a billion dollarsof Henry Flagler’s fortune is innonprofit corporations around thenation. The money funds more than$50,000,000 in charitable activitieseach year. Henry Flagler also builtWhitehall. This was Florida’s firstmuseum. It continues to serve as aneducational institution.

Today’s corporations still follow theexamples of the many corporationsthat were built during the Gilded Age.These organizations were not onlyprofitable, they also provided manypeople with new opportunities tobetter their lives.

The Creation of NonprofitCorporations

5

“I wish I’d had the brains to think of it. It wasHenry M. Flagler.” – John D. Rockefeller on makingStandard Oil a business trust.

John D. Rockefeller approached Henry Flaglerabout becoming a partner. This arrangement in 1867created the firm that eventually became Standard Oil.

Standard Oil followed the lead of successfulbusinesses in the communications and transportationindustries by purchasing smaller refineries to formone large corporation. Western Union TelegraphCompany had already done this, creating the largestcommunications business in history. As the U.S.expanded, railroad companies began to merge.This formed more accessible lines for shipping andtravel. In 1870, Standard Oil became a public stockcompany. The public could purchase a share of thecompany for $100.

Eventually, Standard Oil Trust had more than$55,000,000 in capital. It also had land that wasworth $75,000,000. This made it the biggest andbest known business in America. The value ofStandard Oil grew quickly. However, much like whathappened in the computer industry in the 1990s,Standard Oil’s huge operation created economiesof scale. This made it possible for it to provideAmericans with oil for less money. For example,refined oil prices fell from 30 cents a gallon in 1869to just 5.9 cents per gallon in 1897.

There Was NothingStandard AboutStandard Oil

Other American businessmenwere making their mark at thesame time as Standard Oil. Almostall of these captains of industrywere involved in technology-basedbusinesses. There were a handfulof people who led America’sindustrial boom.

Andrew Carnegie was aScottish immigrant who came toAmerica with his family to seek

opportunities and jobs with betterwages. He began his career at avery young age. Andrew Carnegiewas 13 years old when he got hisjob as a “bobbin boy” at a cotton-weaving shop. Later, he took ajob as a telegraph messenger. Hequickly went from operating atelegraph for the railroad companyto becoming the superintendent.He was the manager of an entiresection of the railway.

While working for the railroad,Andrew Carnegie met manybusinessmen and learned aboutnew technology. He began investingin Pennsylvania companies thatowned oil wells. After the CivilWar, Andrew Carnegie becameextremely wealthy and was thecaptain of the steel industry. Heused iron and steel to cheaply andefficiently produce railroad rails.Andrew Carnegie was building asteel-industry empire. By buyingsmaller steel mills that were incompetition with his company,Andrew Carnegie built a steel-industry empire.

John Pierpont (J.P.) Morgan wasborn in Connecticut. J.P. Morgan

became an accountant by the age of23. Eventually, he became America’sleading banker and financier. Healso oversaw the combining of largecompanies in banking, electricity,railroads and steel. He boughtCarnegie Steel Company andturned it into U.S. Steel Company.It was the world’s first billion-dollar company. By 1900, J.P.Morgan owned some part of manyAmerican companies.

America benefited greatlyfrom the capital that J.P. Morganbrought to large companies. Thesecompanies controlled the nation’smost important industries. Withouthis money and financial experience,American business and theAmerican government would nothave fared so well.

J.P. Morgan was also well-known for his collection of art andliterature. When he died in 1913,much of his collection was given tothe Metropolitan Museum of Artin New York City. He gave muchof his wealth to charities, churches,hospitals and schools. The J.P.Morgan name is still associated withbanking and investments today.

The Captains of Industry and Commerce

U.S. Steel Company Founder, Andrew Carnegie.(Library of Congress)

Standard Oil Building, New York.

The Bessemer Process for mass-producing steel revolutionized the steel industry during the Gilded Age.

13

It would be no exaggerationto say that Henry Flagler inventedmodern Florida. When Floridabecame a state in 1845, thepopulation was less than 60,000,and Key West was the largestcity. During America’s Gilded Age(1865-1929), Henry Flagler built arailroad that ran the entire lengthof Florida, from Jacksonville toKey West, and turned Florida intoa tourist destination and one ofthe nation’s biggest agriculturalstates. As a result, Florida’spopulation exploded. By thetime Henry Flagler died in 1913,the population was more than800,000, 13 times larger thanwhen the state was founded.

TourismDuring the Gilded Age, new

technology and wealth gaveAmericans more time to enjoyleisure activities. People werelooking for ways to spend theirfree time. The Gilded Age gaveAmericans more time for traveland vacations. Henry Flaglermade Florida a place to go toenjoy time away from work.He built the tourism industryof Florida. Henry Flagler’s first

trip to Florida was in 1878.He brought his wife to Floridato help her recover from anillness. Florida’s warm weathermade it a refuge for the sick andrecovering.

Henry Flagler and his wifetraveled to Jacksonville by takingthe railroad down America’s eastcoast into Georgia, then intonorth Florida. A few years later,Henry Flagler visited Floridaagain. This time, he traveled toSt. Augustine, the oldest cityin the United States. ThoughSt. Augustine was founded bySpanish settlers in 1565, it wasa small city. By the time HenryFlagler visited in 1878, the city’spopulation was still less than2,000 people. Henry Flaglerknew Florida was a perfect placeto bring people for rest andrelaxation. The tropical climateand many beaches made Floridaa beautiful place. He realized St.Augustine would be a fantasticplace for people to relax. HenryFlagler helped to make St.Augustine one of the most exoticvacation places in America.

When Flagler came to St.Augustine, there were no

modern hotels for successfulbusinessmen and their familiesto enjoy. He decided to buildhis very own modern luxurioushotel. This decision was animportant part of Florida’sdevelopment.

Henry Flagler made surethat the hotels he built weremagnificent. He was involvedwith many parts of the planningand building of these luxurioushotels. When Henry Flaglerbuilt his first hotel, the Poncede Leon, in St. Augustine, heinsisted that all of his ideas befollowed very carefully. HenryFlagler believed in offeringpeople the latest in technology.He made electricity and allother new technologies of theday available to his guests. In1888, electricity was installedthroughout the Hotel Ponce deLeon. The first home in Americahad been lit by electricity onlythree years earlier, in 1885, andby 1912, only 10 percent of ruralhomes had electricity. In additionto electricity and other modernconveniences, Henry Flaglermade sure that every roomwas decorated with the finestmaterials.

HENRY FLAGLERINVENTOR OF MODERN FLORIDA

Benjamin Lainhart and his f irst house on the west side of Lake Worth, builtwith assistance of M.E. Spencer, May 9, 1876.

Tarpon fishers, Florida.

Early Florida settlers

Introduction

17

St. AugustineHotel Ponce de Leon

The first of Henry Flagler’s Florida hotels, the Hotel Ponce de Leon opened inSt. Augustine in 1888. In addition to the latest and most luxurious accommodationsfor tourists, the Hotel Ponce de Leon also served as an artists’ colony for such famedAmerican painters as Martin Johnson Heade. The hotel is now home to Flagler College.

Hotel Alcazar

While not as grand as the Hotel Ponce de Leon, Hotel Alcazar was both ahotel and St. Augustine’s main casino, a place for recreation and amusement in itsinaugural season of 1889. The Hotel Alcazar boasted an indoor pool that was120 feet long and fed from an artesian well. The Moorish style, designed by thesame architects who designed the Hotel Ponce de Leon and Whitehall, resembledthe Alcazar in Seville, Spain.

Hotel Ponce de Leon, St. Augustine.

Henry Flagler’s vision for Florida’stourism industry was grand. Threeyears after his first visit to St.Augustine, Henry Flagler built theHotel Ponce de Leon. The HotelPonce de Leon was a luxury hotel.Then he built the Hotel Alcazar inSt. Augustine, a more affordable hotel.He also bought a third hotel in St.Augustine, which was named the CasaMonica. Henry Flagler was successfulin his goal to make St. Augustine athriving destination for tourists.

Henry Flagler changed the hotelindustry when he opened the HotelPonce de Leon. The 450 -roomhotel sat on five acres of land andoffered tropical views, large verandas,fountains and a courtyard. HenryFlagler was creative when buildingthe hotel. He used a special concretemixture. When it was complete, itwas the largest structure in the worldbuilt of concrete. It was also the mostluxurious hotel Florida had ever seen.

When Henry Flagler was buildingthe Hotel Ponce de Leon, he becameinterested in the southern part ofFlorida. He wanted to make southFlorida a place for travel and vacation.He first purchased the Jacksonville,St. Augustine, and Halifax railroads.He then added more track, expandingthe railroad south along Florida’s coast.South of St. Augustine, Henry Flaglerbought a hotel and renamed it theHotel Ormond.

Henry Flagler wanted tourists to beable to travel easily to the grand hotelshe built. He began building additionalroutes and railroad tracks that wouldtake people from the Jacksonville andSt. Augustine area all the way to southFlorida. He expanded his railroad fromOrmond Beach to Lake Worth. Thebarrier island that formed the easternboundary of Lake Worth was knownas Palm Beach. Henry Flagler decidedto build the famous Hotel RoyalPoinciana in Palm Beach.

The Hotel Royal Poinciana wascompleted in 1894. The railroadthat Henry Flagler built droppedoff guests at the doorway of theHotel. It became the largest woodenstructure in the world in 1905. TheHotel was so large that many peoplecalled it “the city under one roof.”This grand hotel served over 2,000guests at one time and included arestaurant that seated 1,600 people.Hotel guests enjoyed a round ofgolf on Florida’s first professionallydesigned golf course, opened in 1897.Guests also enjoyed fancy lunchtimeteas, bicycling, tennis and many otheroutdoor activities.

In 1896, Henry Flagler built hissecond hotel in Palm Beach andnamed it the Palm Beach Inn. WhenHenry Flagler doubled the size ofThe Palm Beach Inn, he renamedit The Breakers. In 1903, the hotelgrew in size again. During the fourth

expansion, The Breakers burned down.In 1904, it reopened to universalacclaim, offering top of the line service.Rooms started at $4 a night, a pricethat included three meals a day.There were many famous Americanbusiness people who came to visitThe Breakers. The Rockefellers,Vanderbilts, Astors, Andrew Carnegie,Henry Clay Frick and J.P. Morganvacationed alongside United Statespresidents and European nobility. TheBreakers remains one of the world’sgreat hotels even today.

Henry Flagler continued to buildgrand hotels as well as expand hisrailroad, the Florida East CoastRailway, to Miami. The Hotel RoyalPalm was as impressive as the rest ofHenry Flagler’s luxury hotels. It wasnamed for the type of palm tree thatgrew in the hotel’s courtyard and thesurrounding area of Biscayne Bay.

Eventually, Henry Flagler owned8 luxury hotels all along the coast ofFlorida from Jacksonville to Miami,transforming Florida into one of theworld’s great tourism destinations.

Flagler’s Hotels

Hotel Alcazar, St. Augustine.

Swimming pool at the Hotel Alcazar, St. Augustine.

19

THE LEGACY OF HENRY FLAGLERAND THE GILDED AGE

By the time of his death in 1913,Henry Flagler had accumulated almostunimaginable wealth from his businessdealings in Standard Oil, the FloridaEast Coast Railway, Florida EastCoast Hotel Company, Model LandCompany, and his ownership of majorFlorida newspapers and utilities. HenryFlagler’s estate was worth an estimated$100,000,000; that’s about the same as$2,000,000,000 today.

Although he worked for 68 yearsof his life, starting as a teenager andliving past his 83rd birthday, HenryFlagler was never selfish with hisfortune. Henry Flagler’s contributionsprovided land for dozens of schools,churches, parks, courthouses, librariesand cemeteries throughout Florida. In1913, Henry Flagler donated the landon which the courthouse in West PalmBeach was built. Today, this land is thesite of the future history museum. Itwas Henry Flagler, too, who owned theland that the Norton Museum of Artnow occupies.

In May 1888, Henry Flagler suggestedto a committee of St. Augustine’s mostinfluential people that a hospital beconstructed. He proposed to build ahospital for the community if local peoplewould form an organization to maintainthe facility. The people of St. Augustineaccepted the challenge and immediatelywent to work planning fundraising eventsand asking for contributions. Out ofthis effort, a new nonprofit hospitalopened on March 1, 1890. Continuing thespirit of giving, a generous donation fromMary Lily Kenan Flagler funded a newhospital after a fire destroyed the firsthospital in 1916.

The city of Miami’s first librarywas founded by the Ladies AfternoonClub with help from Henry Flagler.Although the club maintained a readingroom as early as 1905, it did not openits first library until 1913, on propertydonated by Henry Flagler. When theclub moved from its original location,the Flagler Memorial Library wasestablished in its place.

IntroductionLike many of the wealthiest

Americans, Henry Flagler put hismoney to work, funding publiclibraries, schools and hospitals. Duringhis lifetime, he often thought abouthow best to use his resources, saying,“The hardest problem a man has ishow to help people. The desire to helpothers comes when a man has morethan enough for his own needs. I havecome to the conclusion that the bestway to help others is to help themhelp themselves.”

Henry Flagler and other captains ofindustry and commerce understoodtheir obligation to society todistribute their wealth in such away that created opportunities foreveryone. Andrew Carnegie warnedabout the social dangers of one man’scollecting a large sum of money withoutgiving to worthy causes. The captains ofindustry and commerce of the GildedAge gave to causes that benefitedthe public and set a standard ofphilanthropy from which we continueto benefit.

The Flagler FortuneWhitehall, 1902.