Bubble in the Sun by Christopher Knowlton

Author:Christopher Knowlton
Language: eng
Format: epub
Publisher: Simon & Schuster
Published: 2020-01-13T16:00:00+00:00

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The winter season that followed would be a confusing period for the Florida economy. As 1926 dawned, there were more intimations that the tempo of the boom had changed. For one thing, the binder boys were gone—discouraged by the much higher down payments required by developers such as Carl Fisher and by new regulations stipulated by the state’s association of realtors. The binder boys would leave behind $8 million worth of unpaid binders. As one journalist wrote, “If they could be viewed as rats leaving a sinking ship, then the plight of the ship was hardly a happy one.”

The plight of the Prinz Valdemar, by now capsized and blocking the channel in Miami Harbor that January, was not a happy one, either. An object of fury and derision, it prevented entry into the harbor until the end of February, compounding all the problems created by the railroad embargo. Still, the business news was largely favorable. Local papers reported that Tatum Brothers Company, a well-known firm of realtors in Miami, had reported revenues of $65 million for 1925, up from $14 million the year before—and promptly paid out a massive $400,000 in bonuses to its seventy-two salesmen. That fact alone had to bode well for the local economy.

As Florida’s real estate kings’ businesses stalled—temporarily, they believed—it provided the perfect opportunity to take stock and take some of the risk off the table. And yet, not one of the big developers chose to do so. Instead, they succumbed to the temptation to celebrate their spectacular success by buying new cars and building new homes. As the New Republic aptly reported in late January, “We are all practitioners in greater or lesser degree of the new hedonism. We insist on living, if not for pleasure alone, at least a life in which comfort and ease are predominant aspects.… The Florida madness is itself sufficient proof that this civilization is still far from having found its equilibrium.”

What the Florida developers, their bankers, and the local politicians—and, indeed, the leaders at the national level as well—did not fully comprehend was that the liberal and unfettered approach to capitalism that they espoused was not lifting all boats. Nor was it addressing the underlying fragility of the new industrial economy and the discontent that was arising from the profoundly inequitable distribution of wealth. Instead, this era of fads seemed to be leading inexorably to a succession of financial manias. These were simply fads of a different order that were likely to be temporary, as fads are, and to overshoot and then end in disappointment for everyone, including the onetime winners of the boom.

Florida’s real estate kings were by now enormously successful. And yet the greater their success, the harder it was for them to see their success as something separate and distinct from their own labors; to believe that circumstances, even luck, might have played a part in what they had accomplished. In the months ahead, Fisher, Mizner, Merrick, Davis, and even Singer would double

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