For Sale —American Paradise (25 page)

Menninger also used some reverse psychology to counteract the anti-Florida campaign.

“If these attacks succeed in slowing down the influx of tourists to Florida just a little, it would help Florida wonderfully,” he wrote in the
Developer
. “We don't want as many people as we are getting because we cannot accommodate them.”

Still, the momentum of Florida's stunning rise was about to shift.

The shift started when the Florida East Coast Railway had to halt freight shipments to its overcrowded yards in Miami. There simply wasn't any more room, and its equipment was nearly worn out from constant use.

Miami's harbor also was packed with ships forced to wait days to unload their cargoes.

The halt in the flow of building materials was a disaster for Florida's boom-ers. Without lumber, tile, nails, and concrete, they couldn't even build the shoddy housing that was allowing them to reap quick fortunes from the newcomers.

Out-of-work carpenters added to the problem by leaving town to search for work elsewhere.

The speculators—especially Miami's ubiquitous binder boys—who had made fortunes from real estate took a hit when the Bureau of Internal Revenue decided to take a closer look at the profits of some especially successful speculators. The investigators made a ruling that was disastrous for real estate speculators: Those who sold real estate would have to declare the full price of the sale as income, rather than only the amount of the down payment.

This meant that if a binder boy sold a lot valued at $10,000 but received only $1,000 as a down payment, he still had to pay taxes on the full sale price, rather than merely the deposit.

Suddenly, Florida's brisk real estate sales slowed.

And yet, people continued to pour into Miami, and they all needed a place to sleep. Enterprising residents were renting their porches as bedrooms for $25 a night—more than $330 in twenty-first-century dollars. Other newcomers were simply bedding down in public parks. As the winter of 1925 approached, the
New York Times
reported that roads into Florida were still clogged with southbound traffic, and that 600,000 people in the state were sleeping in tents.

By the fall of 1925, the country's fascination with Florida was finding its way into newspaper cartoons and comedians' punch lines. Jokes circulated about
returning tourists selling the Florida sand from their tires for thousands of dollars. A service station operator in Stuart said he'd soon be selling his land for a dollar a spoonful.

Humorist Will Rogers started making Florida a regular topic in his syndicated newspaper columns. Carl Fisher, Rogers said, “took Miami away from the alligators and turned it over to the Indianans.

“He put in a jazz orchestra, and one-
way excursions; advertised free heat the year around; fixed up the chug holes so the Fords could get in; rehearsed the mosquitoes till they wouldn't bite you until after you bought; shipped in California oranges and tied 'em on the trees; whispered under his breath that you were only ninety miles away from Palm Beach, with its millionaires and its scandals.”

Florida as a source of humor hit the bright lights of Broadway in December when
The Cocoanuts
, starring the manic Marx Brothers, opened in New York's Lyric Theatre.

The national obsession with Florida and instant riches had caught the eye of George S. Kaufman, who made it the topic of a two-act play set in a boom-time hotel in the fictional “ideal” development of Cocoanut Beach. Groucho Marx played Hammer, the greedy, unprincipled owner of the Hotel de Cocoanut, who also is selling lots in Cocoanut Manor. Brothers Chico and Harpo played a pair of deadbeat opportunists out to steal anything they can from Hammer and the hotel guests.

The show's musical score was written by Irving Berlin, and Kaufman brought in writer Morrie Ryskind to help with the script.

The play was a biting satire of the amoral greed that had been unfolding in Florida for more than a year. After working through some rough spots with performances in Boston and Baltimore, the show opened in New York on December 8.

The show received good reviews, especially Groucho's portrayal of Mr. Hammer, the hotel owner who also is auctioning lots in the ideal city of Cocoanut Manor. The
New York Times
review noted that some of the lots were in a residential district that was so exclusive that no one lived there.

During the auction scene, Groucho delivered a spiel that could have predicted the course that Florida real estate would take in the year to come:

“You can have any kind of home you want. You can even get stucco—oh, how you can get stuck-o.”

Groucho added his personal guarantee: “If these lots don't double in value in a year, I don't know what you can do about it.”

CHAPTER SIX

T
HE
N
EW
Y
ORK
G
IANTS DID NOT WIN THE
1925 N
ATIONAL
L
EAGUE PENNANT
, but if their second-
place finish had anything to do with Florida real estate, manager John McGraw didn't talk about it.

By the fall of 1925, however, there were some cracks appearing in the foundation of Florida's remarkable get-rich-quick market. Ads in out-of-state newspapers cautioning readers about Florida investments were causing many potential investors to hesitate and were infuriating to the state's chambers of commerce.

And some of the news stories coming out of Florida were adding to the state's image problems. In November 1925,
New York Times
readers learned that Charles Ponzi, whose name had become synonymous with fraudulent investment schemes, was in Florida trying to regain the fortune he'd lost in the infamous pyramid scam that had sent him to prison in 1920.

The embargo of freight shipments was starting to put a serious crimp in housing, and it would not be lifted until May 1926.

Still, the nation was obsessed with Florida. The US Post Office in Atlanta reported in August that it had on file 16,000 orders for forwarding mail to Florida addresses, and that was well before the usual seasonal migration had begun.

“All our gold rushes, all our oil booms, and all our free-
land stampedes dwindle by comparison with the torrent of migration pouring into Florida from all parts of the country,”
Literary Digest
magazine said in its edition of October 24, 1925.

Two days before Thanksgiving, US Senator T. Coleman du Pont resigned from the board of directors of Addison Mizner's company, Mizner Development Corporation. It was a staggering blow for Mizner. Du Pont was one of the marquee names on the board that was—for publicity purposes, at least—guiding the development of Boca Raton. His name provided the gravitas behind the ambitious—and at times outrageous—promises that the Mizner brothers were making for the miraculous city they were building.

Du Pont quit the board because he'd had it with the antics of Wilson Mizner and publicist Harry Reichenbach, who were making outrageous claims
in newspaper advertisements for Boca Raton. Some of the ads claimed that Boca Raton could not possibly fail because the men backing it controlled more than one-third of the wealth in the United States.

Du Pont told the
New York Times
that he'd quit because of “differences of opinion” about “proper methods of business management and organization.” The newspaper said the differences were so radical that the senator could not continue on the board.

Mizner tried to downplay du Pont's resignation, saying that he'd quit because of internal politics and a failed bid to add his cronies to the board of directors.

It was a foolish comment for Mizner to make. Five days later, more board members resigned in support of du Pont, including another blue-chip name in American finances, Jesse Livermore. In a statement to the
New York Times
, the former board members said their efforts “to regularize the affairs and the management of the corporation and to eliminate exaggerated publicity have been met with criticism rather than cooperation.”

The gushing promises for Boca Raton and other developments would continue, but du Pont's widely publicized resignation widened the cracks in the real estate market's foundation.

Still, John McGraw moved ahead with plans to spend $3.75 million—almost $50 million in twenty-first-century dollars—to build Pennant Park, a baseball-themed subdivision in Sarasota. McGraw was urged to build the development by his friend John Ringling, the circus magnate who spent winters in Sarasota.

Full-
page ads for Pennant Park were placed in Florida newspapers in December 1925 urging Florida residents to buy now rather than wait until a national advertising campaign started, when lot prices would be considerably higher. In the ads, McGraw admitted that he didn't have “maps nor plats, nor anything save Pennant Park and unbounded faith in the future.

“You, too, must have faith—faith in me—and vision,” McGraw's ad said.

While McGraw was asking potential investors take his word for it that Pennant Park would be a viable moneymaking venture, the city of St. Petersburg was determined to show clear proof that Florida was a solid investment. For months, the city had been planning its reception for the fourteenth annual convention of the Investment Bankers Association of America. Hundreds of bankers who controlled immense wealth across the country would be coming to St. Petersburg—which billed itself as the “Sunshine City”—in early December 1925.

The bankers were encouraged to bring their families, and the
St. Petersburg Times
promised that the convention would be “particularly attractive to the ladies,” offering dances every evening and golf and day trips to nearby attractions during the day.

The
Times
noted that the convention meant much to the city and to Florida because it would bring hundreds of bankers, who would give their presumably
favorable opinions to the world. Those favorable opinions could, and likely would, mean investments.

And unlike the greedy throngs flocking to Florida looking for fast fortunes, the bankers would be men of “great vision and rare judgment in investment matters,” the
Times
said.

“On their return home they will spread the news that Florida is enjoying extraordinary development and is a haven for those seeking safe investments and homes in a state whose climate is excelled by none,” the
Times
predicted.

Unfortunately, just about everything that possibly could go wrong did go wrong during the bankers' visit.

St. Petersburg's claim that they were the Sunshine City was not an idle boast. The city averages about 360 days of sunshine per year, and when the
Guinness Book of World Records
started keeping track of such things, the city logged 768 consecutive sunny days.

Sunshine was so predictable and so much a part of St. Petersburg's public image that the city's afternoon newspaper, the
Evening Independent
, gave away copies on days when the sun didn't shine.

The
Independent
gave away a lot of newspapers between December 7 and December 11, 1925. Northeast winds brought a gloomy drizzle that parked itself over Tampa Bay and refused to budge. Golf tournaments and picnics were canceled. Sightseeing tours didn't get off the bus.

The city's business boosters might have salvaged some good-
time jocularity if they'd been able to keep the bankers lubricated with booze. But local cops picked that time to get serious about cracking down on bootlegging. Around nine p.m. on December 10, three Pinellas County sheriff's deputies raided a room in the Soreno Hotel that had been rented by James E. Coad, the executive vice president of the St. Petersburg Chamber of Commerce.

The Soreno was the headquarters for the convention. The room had become what the bankers were calling a “reception room.”

The officers seized thirty-
nine quarts of various types of whiskey and three gallons of rum. Coad wasn't arrested during the raid, but police said they were going to Clearwater, the county seat, to get a warrant.