Florida's Unique Version of the Roaring '20s.

• Author: McKinley, Vern

The debate over precisely what brought about the Great Depression has raged for nearly a century. Contemporaries initially blamed the stock market crash, which in reality was more of a reaction to the building Depression than a cause. Other points of blame include the collapse of the German financial system in 1931, which according Co one author triggered an international liquidity crisis that led to the banking crisis in the United States. (See "Did Germany Contribute to the U.S. Great Depression?" Winter 2019-2020.) As evidenced by the subtitle of this book, former Fortune writer Christopher Knowlton points his finger at the bursting of the Florida real estate bubble as a major cause.

I had heard disparate references to the Florida real estate bubble during my research on the history of financial crises. But, before finding this book, I was not familiar with any of the underlying details of the Florida boom and bust. The story is fascinating.

Satisfactory ways to spend money / Typical of many tales about the ups and downs of the economic and financial cycle, Knowlton tells his story through colorful characters that he unearthed during his research. Fie begins with a pioneer of Florida's development, "the Gilded Age oil tycoon Henry Flagler." Flagler developed a business model for tourism in Florida that would ultimately draw millions of 20th century visitors and inhabitants. He wrote of the state:

I liked the place and the climate, and it occurred to me very strongly that someone with sufficient means ought to provide accommodations for that class of people who are not sick, who come to enjoy the climate, have plenty of money, but could find no satisfactory way of spending it. Flagler took some of his gains from the Standard Oil Trust and built the Hotel Ponce De Leon and Alcazar in St. Augustine. He also accumulated railroads, an industry he was familiar with since his Standard Oil days, to enable well-off travelers to traverse the many miles from northern states to their destination in the sun. Knowlton credits Flagler with creating "the main infrastructure artery ... for the next great boom in the state's astonishing development."

The bubble begins in earnest / When we think of Florida today, we think of a massively populated state of more than 20 million people (third largest, behind California and Texas). But at the beginning of the 1920s, Florida was known as the "last American frontier," a place that was largely undeveloped, with a...