Editor's note: Seventy-five years ago, at the end of February 1933, just before Franklin D. Roosevelt was inaugurated for his first term as president, Nelson Poynter wrote a series of articles for the Scripps-Howard chain of newspapers to take stock of how Florida was faring more than three years after the stock market crash and even longer since the Sunshine State's boom went bust. (This was two years before Poynter began buying stock in the St. Petersburg Times from his father, which led to his running the paper for decades.) To provide some context for the current financial crisis, we have condensed his series so readers can know what life in Florida was like then. It is perhaps a reminder that in many ways, fully 75 years later, what is new is old.
ST. PETERSBURG (February 1933)
Numerous hurricanes, tropical and economic, have hit Florida since its insane land boom of 1924-25. Yet the visitor in Florida today hears less about the Depression, sees less fear, privation, destitution, unhappiness and ill health than almost anywhere in the land. It may be the sunshine as they claim, it may be pioneering blood in their veins, but the Floridians seem to have extraordinary powers of recovery.
Bankruptcies and receiverships by the thousands, wholesale foreclosures, the Miami hurricane of 1926, the Palm Beach hurricane of 1928, millions in defaulted taxes, cities sunk by public debt, the Mediterranean fruit fly threatening the citrus fruit industry, the cattle tick, rate fights and depreciated currencies threatening the fresh vegetable winter market, then bank failures, and at least a blight on the winter tourist crop due to the depression in the north — these are just a few of the troubles Floridians have experienced since their economic jag of 1924 and 1925.
How has it affected the bulk of the population — which incidentally has grown by immigration from the north in the meantime? Florida as a whole eats better food, lives in better houses, travels on more paved roads, plays more golf, fishes more, swims more, and seems to enjoy life more than during her mad prosperity.
More winter tourists are here this year than ever before, according to reliable indices. Schools have larger enrollments, the University of Florida has had to expand, Miami University and Rollins College have made notable progress, a junior college in St. Petersburg and numerous preparatory schools have been started — all since the boom.
Florida cities look better than ever before. Seven thousand miles of paved roads have been built since the boom, largely out of the state gasoline tax. Road-builders have been the best customers of the state's new cement plants. When selling land to suckers collapsed as the state's chief industry, new and sounder enterprises arose to absorb Florida citizens. Many returned to agriculture. Paper mills, large fruit canneries, small toy factories, a rattlesnake meat cannery, fern growing are a few of the things started since the boom.
The boom brought high profits and wages for almost everyone, from the banker to the domestic servant. The price of rents and necessities ate up the increased wages, and most of the profits were dissipated in real estate.
Predicted the crash
During the height of the boom eight years ago, the Scripps-Howard Newspapers sent a correspondent to Florida to examine the boom. The correspondent wrote a series of articles in which he warned of the impending crash. The series was bitterly criticized by loyal Floridians and by professional Florida boosters, but the conclusions and warnings were justified by subsequent events.
The Scripps-Howard writer in 1925 was first struck by uncomfortable living conditions due to inadequate housing, and the fantastic prices for food and necessities. The American dollar seemed to depreciate upon crossing the state line.
At Jacksonville he was shocked at paying 50 cents for two slices of "fried bread," or French toast, at a modest but greasy restaurant. Today in downtown Jacksonville, a neat restaurant with real tablecloths and napkins advertises "one strictly fresh egg, toast, grits, coffee — 10 cents."
In 1925, restaurants almost uniformly served poor food, and most of them were uninviting, due to lack of help. Today they serve excellent food, and competition has made most of them clean. Plenty of help is available.
At Fort Pierce in 1925, the reporter paid 35 cents for a cup of coffee and a sandwich. There today is a pleasant restaurant (for which the proprietor pays little or no rent). The visitor may have a full course dinner with soup or fruit cocktail, meat or fish, vegetables, salad, dessert, bread, butter and drink for a quarter. This price is not unusual elsewhere in the state in resorts like St. Petersburg and Miami. For 50 cents, dinner may be had with steak or pompano, stone crabs or other rare fish. For one dollar, dinners are available at some of the best hotels with orchestras and dancing.
In 1925, the experienced visitor to Florida brought everything possible with him. Otherwise the visitor paid $4.50 for a shirt that would cost $2.50 in Washington; $2 for a dollar shaving brush. Many brought trunks loaded with canned goods, cosmetics, toilet articles and other merchandise because of the prevailing policy of slugging the suckers.
Today the price of everything from a shirt to a toothbrush is as low in Florida as it is elsewhere in the United States.
5 cents a quart
The fresh vegetable, fruit and fish prices charm the visiting housewife in Florida today. Strawberries last month sold along the highway near Loaftey for 5 cents a quart. The prevailing price in stores is 15 cents a quart. Fancy, well-bleached celery is advertised for 5 cents a stalk; fresh spinach and cabbage, three pounds for 10 cents, and sometimes as low as 1 cent a pound; turnips, beets and carrots, 5 cents a bunch; cocoanuts, large size, 5 cents each; excellent oranges in stores, 10 cents a dozen, in the groves, all you can carry home for a quarter; grapefruit, name your own price; fresh mullet, one of Florida's most delicate though plentiful fish, 7 cents a pound.
In 1925, milk cost from 18 to 20 cents a quart. Most people preferred canned milk because of the poor quality of fresh milk. Today excellent fresh, pasteurized milk costs 8 to 12 cents per quart, and may be delivered by a former millionaire.
These prices contrast with those of the boom period when there was an actual shortage of foodstuffs in Florida. Fishermen and truck farmers were turned away from their own enterprises to the real estate business.
Room prices drop
In the summer of 1925, the prevailing price for any kind of a bed in almost any kind of a hotel ranged from $7 to $20 per day. In an old frame hotel in the comfortable little city of Gainesville, this writer shared a room with two other men in September 1925 and paid $18 for one night. And the clerk made us feel pretty lucky to even get a room! At that same hotel a pleasant room costs $1.50 today. For $5 a day, rooms and meals are available in some of the most luxurious hotels ever built. Miami Beach hotels, even before the wild boom of 1924 and '25, held to minimum charges of $16 a day.
Recreation and luxuries have been deflated almost as much as real estate. Green fees are down to one dollar on most of the best golf courses and 50 cents on the mediocre ones. Visitors are warned not to tip caddies because of the danger of "spoiling" them for the year-round residents. All-day fishing excursions in parties cost 50 cents to one dollar a person, whereas during the boom it required influence and much cash to promote a fishing party. Sailing, since the collapse, has become more popular in Florida than ever in its history. Residents explain that it is not an expensive sport.
The tempo of Florida night life has not diminished appreciably during the winter season. But a big evening costs now less than the former tips. There are dollar dinners in the best speakeasies, ginger ale and a floor show at some of the most popular clubs for a dollar.
Two-bit night club
Liquor prices, because of competition, did not rise during the boom as much as other commodities, but $10 for a fifth of a gallon of Scotch was considered cheap and at restaurants and hotels it was anything the bellhop or waiter could get. At hotels today, Scotch is available for $2.50 to $3 a fifth, but Floridians and experienced visitors drink aged corn liquor at $4 a gallon or less. They claim that it is good and leaves no bad effect.
Real estate was the basis for the boom and it has taken more of the rap in deflation than anything else. The high water mark of the land boom came when the late Addison Mizner of Boca Raton, one of the excesses of the dizzy period, paid $42,000 per front foot for a lot on Flagler street in Miami. Unless the tax situation is unscrambled it probably will be hard to get $42,000 cash for an entire block on Flagler street. This does not mean that real value is not there; it simply illustrates the terrific adjustments.
An apartment near Tampa costing $40,000 to build at the time of the boom, and renting for $20,000 a year, was sold in 1925 for $180,000, sight unseen. Today it is available for a song. A small hotel in St. Petersburg, bonded for $150,000, was foreclosed upon and finally sold for $25,000 recently. The new owner still doesn't know whether he got a bargain.
The depreciation in property values has driven rentals down to almost anything the tenant chooses to pay.. Most of Florida's unemployed, and there are plenty of them, live rent free. A welfare worker in Jacksonville said not enough money was available to bother about rent. Landlords are loath to evict because closed houses deteriorate fast in Florida and insurance rates are high on vacant property.
Florida is not cordial to the unemployed. Too many have been attracted there by the pleasant climate. St. Petersburg, one of the friendliest and hospitable of the resort cities, has signs posted:
"Warning, do not come here seeking work."
Most of those who pioneered in Florida were sucked into the boom. They seemed to feel that this sudden increase was a natural confirmation of their own good judgment in coming to Florida before the rest of the United States discovered it. They rode a high wave of sudden prosperity. Those who took it most seriously have suffered most. The upheaval has discredited many. Some of the old names are missing on the society pages of Florida newspapers. Still, many others remain.
Only a few of the old-timers have not been through bankruptcy or receivership. The real believers, not the ballyhooers, suffered most, psychologically and financially, the first three to five years after collapse.
Three years ago, this writer saw two men on a St. Petersburg golf course, whose story is almost symbolic of Florida leaders. These men settled in St. Petersburg more than 10 years ago. They purchased acreage and developed it, and brought it into the city limits long before the boom. Their wealth grew to millions, made honestly from real estate. During the boom, each built a golf course, apartments, hotels and houses. Three years ago, when the writer played behind them, they had "lost" their respective golf courses and all their better holdings. They were carrying their own golf bags. Figuratively, they were holding many bags left by the "binder boys" of the inflation period. They were despondent, harassed, discouraged men. They were trying to hang on to certain equities in real estate. Came the bank failures which brought further depreciation in property values and cleaned them out.
We saw them this winter. They were almost cheery. The worst they had dreaded had happened, yet they were still alive and had been forced into more constructive work than saving equities. One of them had set out to help solve the tax problem and pave the way for substantial future development. The other is buying houses in abandoned subdivisions and moving them to the beach at a profit.
John the barber
The effect of Florida's economic cycle on the small wage-earner can be illustrated by a barber who came to one of the most noted resort cities about 12 years ago. His name is John. He shaved chins for 15 cents and cut hair for a quarter. With his earnings he bought a modest home.
Gradually he watched the boom grow to its wild crescendo. The price of shaves and haircuts and the cost of living rose to dizzy heights. His conversation changed from baseball to binders. He wasn't able to save anything so he mortgaged his home for many times what it cost to "do a little trading" after hours. He became wealthy in terms of lots. Came the crash.
He lost everything but his home, still heavily mortgaged. His conversation became lurid with gruesome stories of the depression's tolls. This was in 1926 and '27. Tips at his shop fell off. Business decreased. The genial barber became querulous as foreclosure on his home loomed. He damned the bankers, the city administration, the newspapers. This was in 1927 and '28, long after most of the United States had forgotten Florida.
Then the foreclosure
Finally, what John thought was the worst happened. The mortgage company foreclosed, but could not sell his house. So John rented "his" house for less than the interest he had paid occasionally to the mortgage company. John's conversation reverted to baseball. Also he said something about hearing a depression was setting in up north. This was in 1929 and '30.
The mortgage company which had foreclosed on John's house failed. He paid rent to a receiver, but not enough to pay the taxes. Meanwhile the price of shaves went back to 15 cents and haircuts to a quarter. John was caught in one of the bank crashes during the summer of 1930 for the little cash he had left. He talked about this for quite a while. He took up fishing again.
It was fishing that brought him to Florida, but he had sort of forgotten about that. "It saves the meat bill and is better for you," he says. He cut his own grass for the exercise. Before he knew it, he had saved several hundred dollars in a new bank which had opened. One day, while shaving a regular customer, he learned that he could trade depreciated city and county bonds for the taxes against "his" house and again take title to it. So with less than $200 he got back ownership of his house. John thought that it was a pretty slick deal but did not talk about it when he found that so many others had done the same thing.
He spent a little money on the house after it became his again. He is buying an electric refrigerator on the installment plan. John thinks "things" are a little better and that the Yanks have an awfully good chance, and that Babe Ruth is going to sign when it is time for spring training.
He also talks a good deal about the tax situation and knows just how much the city and county bond issues are.
Paying in scrip
Years of depression have taught Florida business men how to get along without money. Ingenious use of trade deals and scrip was prevalent as early as 1930. At one time the total liquid bank deposits in St. Petersburg, a city of 40,000, were less than $2-million. This cash and credit churned in and out of the bank pretty fast. The city began to pay its employees in "baby" bonds. Merchants accepted these. They could pay taxes with them.
Newspapers began to pay their employees in trade certificates. The merchants liked this. They could pay advertising bills with them.
But more and more taxes became delinquent. South Florida cities and counties which had bonded themselves outrageously during the inflation period began to default.
The state of Florida had no public debt. A clause in its constitution forbids it. This fact had been used during the boom to prove how sound public finances were in Florida. But the state exercised little or no control over city, county, school, drainage and other political units. The Scripps-Howard writer pointed this out in 1925. Six percent was the prevailing interest rate on such public indebtedness. Bonding went merrily on even after the collapse of the land boom.
No one knew what the total debt of Florida's various political units was. Today it is estimated at $630,000,000 or, in round figures, $500 per capita. Today 75 percent of the area and 70 percent of the population of Florida is embarrassed by political units which have defaulted in their bond issues.
Just the interest on this public debt would cost Florida taxpayers $40,000,000 a year if they could pay it. This means an average of more than $10 per month per family for public interest alone. Bondholders' committees and large taxpayers have become very much interested in the situation. For more than three years, they have been doing something about the high cost of local government.
Many municipalities have reduced their operating costs more than 50 percent. Police forces have been reduced. "White Way" street lighting systems projected during the boom by fantastic developers have been dimmed. Boulevards have no lights burning or there is only one in five. Public servants have been discharged and wages ruthlessly cut.
Automobile tags are so high that many cars are left in the garage. A Ford license costs $14, a Cadillac $42. The gasoline tax is eight cents; seven cents state and one cent federal.
In spite of heavy reductions in public expense, the school systems have been fairly well maintained. Schools and welfare agencies have been the last of public services to break down from lack of funds.
Many of the best informed students of Florida's tax problems predict that the state will rescue the school system. Federal funds made available through the Reconstruction Finance corporation rescued public welfare work in many localities during 1932. Floridians, especially business leaders, have become very well informed on tax problems and public debt. G.G. Ware, chairman of the bond and taxation committee of the state chamber of commerce, has no difficulty in obtaining services of busy men for his committee. The problem is so important that he held a scheduled meeting of his committee in a hospital at Gainesville last month where he was recovering from a serious automobile accident.
It is notable that seven years have been required to bring the public debt problem to a head. The new state administration and Legislature is expected to do something about the question this year.
Thus we find the past seven years have not been unkind to Florida from an economic standpoint.
1. Living conditions have actually improved for the bulk of the population due to decreased price levels.
2. Florida business men have become reconciled to the fact that they cannot get rich quick — and stay rich.
3. Actual industrial and commercial expansion has occurred since the deflation began.
4. Public debt is the great stumbling block in Florida's recovery.
5. Prices are cheap in Florida. This very fact proves the scarcity of cash. Therefore, anyone seeking opportunity there had better have enough cash to finance himself for an indefinite period.
Florida is not hospitable to the itinerant without money. Floridians feel they do pretty well to take care of their own people.