Model Land Company

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Model Land Company

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History

Henry Flagler, founder and president of the Florida East Coast Railroad (FECR), created the Model Land Company (MLC) in 1896 to manage his rapidly expanding real estate holdings in the state of Florida. The growth and expansion of the FECR was crucial to the development of Florida, and the MLC, with its three subsidiary companies, managed Flagler's "land empire" until its demise in 1967.

Henry Flagler arrived in Florida in 1885 and launched a railroad system that extended the length of Florida's east coast, from St. Augustine to Key West. The railroad spurred the economic development of Florida, and, in turn, the state actively promoted the development of railroads. Both state government and local businesses offered land as an inducement to anyone who could finance the construction of a railroad line.

Under these circumstances, Flagler acquired several million acres of real estate between 1885, the year he purchased two short-line St. Augustine railroads, and 1912, which marked completion of the Key West railroad extension. Flagler obtained a portion of this land from Florida's Internal Improvement Fund (IIF), although he received the bulk of real estate from other Florida corporations. As Flagler secured deeds to lands, he established a "Land Department" within his railroad corporation. To encourage Flagler's railroad plans, the state of Florida offered him approximately 2,050,000 acres of public lands. Flagler received the customary 3,840 acres per mile allotted to railroads for his work in northern Florida. The State legislature also passed a special land grant law to award Flagler 8,000 acres per mile for the extension of his line south of Daytona.

The Swamp Land Grant Act of 1850 authorized the federal government to "patent" or "deed" selected swamp lands to the State of Florida provided that the state grant these lands to developers interested in drainage and reclamation. The revelation that the state legislature awarded valuable lands to railroads led the federal government to terminate the land grant program. As a result, the state did not provide a great deal of the land promised Flagler.

Political considerations also complicated the acquisition of land by Flagler. Progressives in Florida's Democratic party, including Governors William Sherman Jennings and Napoleon Bonaparte Broward, obstructed Flagler's efforts to obtain lands. Jennings argued successfully against railroads receiving land intended for drainage projects. Facing such opposition, Flagler initiated a series of lawsuits to acquire these lands. A protracted legal battle ended in compromise, as Flagler accepted 260,000 acres, less than ten percent of his original grant. The location of Flagler's property varied; portions were located in Broward, Dade and Palm Beach Counties, but the largest portion, 210,000 acres, belonged to the swampy Cape Sable area.

Flagler continued to pursue additional land acquisitions, however, with notable success. Facing obstacles with the IIF, Flagler began to acquire real estate indirectly from other corporations. Two corporations, the Florida Coast Line Canal and Transportation Company (FCLCTC) and the Boston and Florida Atlantic Coast Land Company (BFACLC), received abundant public lands, yet faced financial difficulties in canal construction and business ventures. Flagler subsidized the canal company for $100,000 in return for debenture bonds and a note for the difference in the two amounts. Flagler was also named head of the company although he did not own any large block of stock. Flagler then financed dredging projects and promised to transform these land holdings into valuable real estate by building a railroad.

By 1895, good relations began to deteriorate. Albert P.Sawyer, head of the BFACLC feared a takeover of the FCLCTC and attempted to force Flagler out of the company. Although Flagler would not relinquish his power in the company entirely, he agreed to exchange the subsidy note he held for land in southern Dade County at a rate of $6.00 per acre. To entice Flagler to build the railroad on their land, the FCLCTC and the BFACLC also "donated" lands to Flagler. The FCLCTC promised 1,500 acres per mile for the extension south of Lake Worth, and the BFACLC agreed to provide 10,000 acres for the Miami extension. Other individuals and corporations made similar pledges.

Rather than provide the railroad an outright land grant, the BFACLC donated land in the form of a one-half interest in its planned immigrant communities. George Miles, a company official, proposed this plan to protect the BFACLC from "being discriminated against by...the railroad company...if they decided to offer advantages to settlers which we would not be in a position to parallel." The BFACLC and the railroad began their joint venture in 1896, and organized the colonies of Modello and Hallandale. Disputes soon arose over the freight rates charged by the railroad.

By 1902, Miles suspected the FECR of financially suppressing the BFACLC to prevent construction of a canal along the east coast. Although no evidence exists to support this suspicion, Miles urged against the appointment of joint land agents. However, the BFACLC's lands continued to be sold through Flagler's "alphabet soup" of corporate enterprises by the Miami-based MLC agents until the 1920's.

As Flagler received land titles from the IIF, the BFACLC, other companies and individuals, he established a special "Land Department" of the FECR to manage operations. James E. Ingraham, former president of Henry S. Sanford's South Florida Railroad Company, served as Land Commissioner. Ingraham, a Wisconsin railroad engineer, came to Florida in 1874. In 1892, he surveyed the Everglades for a possible railroad route for Henry B. Plant's railroad system. Ingraham caught Flagler's attention when he reported that the east coast would serve as a more practicable route. Flagler immediately hired Ingraham and eventually placed him in charge of all land holdings.

Ingraham soon made Flagler's real estate holdings as profitable an enterprise as the FEC railroad and hotels. The key to Ingraham's early success proved to be advertising. Ingraham distributed booklets, pamphlets and a magazine, the Florida East Coast Homeseeker, in which he described the attractions of Florida's east coast as well as the lands for sale at most points along the railway. By 1896 the Land Department was incorporated as the Model Land Company (MLC), and Ingraham appointed president. Although Flagler first intended the MLC to serve as his colonizing agent for Modello and other colonies in South Florida, the MLC soon became the primary land company in the Flagler System.

Henry Flagler owned all capital stock of the FECR and the MLC. He also established the MLC as a separate corporation for "business and bookkeeping purposes." In 1902 Flagler's auditor began the transfer of titles of FECR lands to the MLC. In addition to allowing financial transactions to appear as "the true and proper sums received, paid and due by each of the said companies," this separation and transfer of titles also had the advantage of improving the financial status of the railroad company for purposes of borrowing on bond markets. In 1909, Flagler instructed his auditor to place all lands "for farming or for other than railway purposes" in the MLC account. In 1911, the FECR transferred lands in Dade, Palm Beach, Brevard, Volusia, St. Lucie and Monroe counties.

Flagler also created three subsidiary land companies to sell lands in specific areas. The companies served as separate corporate divisions for bookkeeping purposes. A central office in St. Augustine oversaw administration of the land companies. The Fort Dallas Land Company (FDLC), created on March 17, 1896, sold Miami-area lands; the Perrine Grant Land Company (PGLC), organized on May 6, 1899, sold Perrine lands; and the Chuluota Land Company (CLC), established 1912, sold Chuluota (Central Florida) lands. The four companies together with the FECR and the Federal East Coast Hotel Company (FECHC) constituted the Flagler System. The land companies assumed control of the majority of Flagler's real estate holdings, and the FECHC and the FECR retained property pertaining to their respective businesses.

The three subsidiary land companies differed in the types of property sold, in dates of operation and levels of success. The FDLC, the agency used for Flagler's Miami development, possessed the most valuable property. Flagler purchased eighty per cent of the company's stock for $ 8,000; he then divided the remaining twenty per cent between two FECR Vice Presidents, Joseph R. Parrot and James Ingraham. Ingraham, as president of all the land companies, controlled FDLC sales. The FDLC sold lots ranging from $ 50 to $ 100, and constructed cottages which sold for $ 1,500. By 1899 sales were booming and in 1902 property sales totalled approximately $ 182,600. The FDLC survived until 1908 when it was "amalgamated with the Model Land Company" to "simplify the work and reduce the operating expenses." FDLC profits, totalling $248,000, and several Miami lots and buildings, were transferred to the MLC.

The PGLC managed valuable farmlands located along Biscayne Bay, eighteen miles south of Miami and extending 6 miles west. Information compiled by George Robbins, an FECR attorney who had extensive correspondence with the Perrine heirs, as well as an abstract of title, allowed Miami attorneys Hudson and Boggs to trace the title of the Perrine Grant for the MLC in 1914. Their research revealed the circumstances enabling Flagler to acquire an interest in the Perrine property. In 1838, the Legislative Council of the Territory of Florida granted land to the Tropical Plant Company of Florida, directed by Henry Perrine, J.A. Webb and Charles Howe. During that same year, the Congress of the United States also granted a township of land to Dr. Henry Perrine, provided that every section in the tract have "an actual settler engaged in the propagation or cultivation of useful tropical plants" by 1846, or eight years after the passage of this act. If Perrine failed to meet this condition, the land would be forfeited to the United States After Perrine was killed by Indians during a war with the Seminoles, Congress renewed the conditions of the grant in 1841 for another eight year period for the benefit of Perrine's widow and his children.

Mrs. Ann Perrine requested the aid of Charles Howe, a former associate of Henry Perrine, promising him a twenty per cent interest in the land if he could have it surveyed and settled in accordance with the conditions of the grant. Howe surveyed the land and brought thirty-six Bahamian families as settlers. Conflicts with the Seminole Indians, however, soon drove these new settlers off the land.

In spite of the Perrines' failure to meet the conditions of the grant, the heirs attempted to secure a patent to the land in 1862. Their efforts bore no success until 1896 when the FECR intervened on behalf of the Perrines, obtaining the patent, and settling claims with independent homesteaders who had settled on the land. The FECR also assisted the heirs in a second lawsuit initiated by the American Contract and Finance Company, a New York corporation assigned the interest of Charles Howe and others. The Supreme Court of Florida finally decided in favor of the Perrine heirs in 1899. According to MLC records, "After securing the patent, the [Perrine] heirs, ...undertook to convey an undivided one-half interest in the grant...to the Federal East Coast Railroad Company."

To FECR representatives the deed was "open to serious and fatal objections as to certain of the grantors." The deed was ineffective to convey the claims of one heir "as her signature and her husband's lack witness;" the sanity of another grantor at "the time of conveyance" was "extremely doubtful" and a third did not sign the document "at all."

As a result of these circumstances, litigation concerning the title to the Perrine land continued. James Thomas Walker, for example, sued the MLC and the FECR in 1911 for his interest in the grant because the companies had negotiated the purchase with Walker while he was in the New York State mental asylum. Ingraham was notified of a suit filed in the United States Court in the State of Rhode Island and instructed his Miami sales agent to "simply reserve the lands set aside in the suit with Mr. Walker and not to make any explanation of it to anybody." There are no records of the suit in the MLC Records, although the MLC sold the Walker lands in 1913.

In spite of early legal problems, the PGLC was profitable and survived into the 1960's, longer than the other subsidiaries. The third subsidiary company proved unsuccessful. The Chuluota Land Company was unable to sell the 11,000 central Florida acres allotted it by the MLC, and was phased out of the Flagler system during the 1930's.

The main office of the MLC, located in St. Augustine, managed the lands belonging to the land companies, although numerous sales agents operated throughout the state. The practice of employing agents began during Ingraham's operation of the Land Department. Occasionally, railroad agents doubled as MLC representatives and provided information on soils, crops and farm production on lands at various stations. The original MLC sales agents included Frederick S. Morse, Miami; F.J. Powers, Homestead; J.B. McDonald, West Palm Beach; Austin and McNeil, Okeechobee; C.D. Brumley, Chuluota; Miller Hallowes, Ft. Pierce; and others. The original Miami agent, Frederick Morse, maintained extensive files which clarify the role of the local sales units within the larger corporation, especially their significance in bringing local politics within the realm of MLC control.

The relationship between the Miami agent, Frederick Morse, and the MLC began in 1907 with Morse acting as "special agent for the Railway Company during the time it was building in and out of Miami." He purchased much of the right-of-way and other properties between Miami and Key West for the FECR. The agency, officially titled Frederick K. Morse Real Estate and Fire Insurance, "was planned and developed for the sale of MLC land jointly with the Boston Company Land" which Mr. Ingraham formerly sold in his St. Augustine office. Like other agents, Morse worked on a commission basis.

Morse's successors, Frank J. Pepper and Burr S. Potter, began working with the Morse agency in 1910. Pepper came to Miami in 1907 and worked for the Engineering Department of the FECR, then engaged in construction of the Key West extension, until he became a partner with Morse. After Morse's death in 1920, Pepper "took Mr. Burr S. Potter in as a partner." "Pepper and Potter" became the official sales agent for MLC land in their territory which is designated as: "... that part of Palm Beach County South from South line of Boyton Canal, Broward County, and Dade County to West line of Range 37 East and to South line of Twp. 61 South including Key Largo Lands, excepting and reserving there from all lands and lots in the City of Miami."

Pepper and Potter devoted "practically all their time and attention to the sale of company lands." They made sales, collected payments on contracts, attempted to prevent the expansion of city limits to keep taxes down and kept local records and surveys. The agency sold the lands of the MLC, the PGLC and occasionally the FEC Hotel and Railroad Companies.

In 1927, the agents relocated to the Ingraham Building on Biscayne Boulevard. The agency prospered in the 1920's, benefitting from the real estate boom of 1924-26, but struggled throughout the economic depression of the 1930's. According to Pepper, "... Miami banks began to fail in 1928, with the Southern Bank and Trust Company, and in 1930 with the Bank of Bay Biscayne. Then is when our troubles began. Our bank accounts became frozen and real estate stopped moving, and of course, our income (commissions) likewise stopped." During the 1930's the agency lost its northern clientele, while local sales grew increasingly difficult. Local farmers began to suffer from tariff laws and poor markets, and they could neither afford to buy new land nor make payments on the land they farmed. A lack of quality farmland compounded the problem; by 1939, Pepper reported that "all our best lands for farming purposes in Palm Beach, Broward, and Dade Counties have been picked over and sold out..."

Conditions improved by the 1940's. Another former associate of Morse, Milo Coffrin, assumed Potter's place within the agency; Pepper and Coffrin, Inc. acted as the MLC local agency. The agency changed its name again in the late 1940's to Frank J. Pepper and Son, Inc. and once again in the 1960's to Frank J. Pepper, Inc. Over the years, the local agency gradually assumed a number of extra duties and came to exercise a certain degree of influence in local politics. Pepper commented on agency activities in the 1920's, and wrote that members of the agency could be found:

"...attending council meetings...and also County Commissioner Meetings in Broward and Dade County in connection with which we are positive thousands and thousands of dollars have been saved the Flagler Companies because of our close attention to these matters and our personal friendship and influence with these officials. We have made it a rule to go over our territory at least once a week...visiting the Court Houses, City Halls, etc., along with our other business to keep up our friendship, acquaintances, and political prestige with these officials, so that when matters come up affecting taxes, zoning, condemnation, or anything else in which your companies are interested, we are informed and in a position to get satisfactory results."

The agency also participated in Drainage District meetings from Lake Worth to Naranja, and also assisted in foreclosure suits by collecting affidavits, testifying and gathering witnesses. Agents maintained records of all these activities, in addition to records of surveys, taxes, sales and all other transactions and information on all significant local events. Their records reveal the depth of the MLC's involvement in local affairs. The MLC and its ability to influence local development supported Flagler's original intention, "...to work in sympathy with the plans of the FECR for building up along its line, thriving settlements and increase the revenues...from freight and passengers" utilizing the line. Flagler once remarked that, "Every new settler is worth $ 300 a year to me. He has to bring in everything he uses and send out everything he produces over my railroad." The power of the MLC also helped the subsidiary land companies as they sought profits from land sales. One MLC sales agent writing in 1911 reports that "Mr. Ingraham...instructed me to sell the land at the best possible advantage to the company on the basis that the company is now working for profits in land rather than traffick."

The activities of the MLC and its associated organizations grew to encompass sales and the promotion of Florida throughout the country. The MLC focussed on advertising the agricultural and industrial potential of the land, and employed agriculturalists, horticulturalists,and stockmen to attend to the development of the East Coast.

The MLC influenced the development of the South Florida region from a tropical frontier to a modern civilization, and the company has had a lasting impact on the area. Through a myriad of activities as a corporate land enterprise, the MLC affected the economic, agricultural, political and social growth of the area. The accomplishments and shortcomings of the MLC, many of which are documented in these records, offer a unique view of regional history.

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