Abandoned Keys

Far down the sunlit golden sands

Lie gleaming rails--the twin steel bands Of Commerce--spanning verdant isles, Running o'er the sea miles on miles; In old Key West their mission ends, Dreadnoughts to her each nation sends And wealth & fame all this portends.

The first seven lines of an acrostic continuing through Florida East Coast Railway, this verse was written by one J. B. Killegrew and included in a souvenir booklet issued in 1912 during the festivities that marked the opening of the so-called "Key West Extension," the 128-mile over-water rail route to the southernmost city in the U. S. It was dedicated, as was virtually everything else on that occasion, to Henry Morrison Flagler, most brilliant of John D. Rockefeller's Standard Oil partners. Having lavished his brains and his oil wealth on a Florida railroad and Florida hotels, Founder Flagler proposed to open up Cuba and the Caribbean. With a terminal only 92 miles from Havana by car ferry, the Key West Extension was to provide all-rail communication to the Island Republic, and Key West was to become a great port of entry for Central and South American trade. Built in the twilight of Manifest Destiny, the Key West Extension was started in 1905 after Mr. Flagler gave his engineers the legendary order: "Go to Key West!" It was one of the most famed engineering achievements of its day. Every inch was built not by contractors but by the railroad itself. Novels were written around the heroism of its construction crews. On three occasions long sections were destroyed by hurricanes. When a hurricane approached, floating equipment was scuttled to preserve it, and then raised after the wind and seas abated. It took $27,985,000, hundreds of lives and nearly eight exasperating years to build the Key West Extension.

Founder Flagler lived only one year after his triumphal entry into Key West. The bulk of his fortune was left to his wife, Mary Lily Flagler, who was a seamstress in a Newport mansion when Mr. Flagler met her while visiting her employers. Later she married Robert Worth Bingham, now U. S. Ambassador to Great Britain. To him she left $5,000,000, but again the bulk of the Flagler fortune went undivided into a trusteed estate. In her will, Mrs. Mary Lily Flagler Bingham made one provision which has kept lawyers guessing ever since. For 21 years the residuary estate was to be used at the trustee's discretion "for the purpose of carrying out the maintenance, administration and development of the Florida East Coast Railway and Flagler hotels, the primary purpose of this trust being the keeping together of the enterprise into which my beloved husband, Henry M. Flagler, put so much of his energy, ambition and life."

Until the collapse of the Florida boom, this will had only academic interest for the public. All of Florida East Coast's stock was held by the Flagler estate, the only publicly-owned securities being equipment trust certificates and a small first mortgage bond issue. But in order to handle boom traffic, the road had to embark upon a development program which included double-tracking the main line from Jacksonville to Miami. Consequently $45,000,000 of bonds were marketed through J. P. Morgan & Co. Peak year for the 812-mile "Flagler System" was 1926, when gross revenues were $29,400,000, of which $2,700,000 were retained as clear profit. Next year revenues started to toboggan, reaching a low of $6,600,000 in 1933. Deficits piled up year after year until in 1931 Florida East Coast plunked into receivership. Interest was defaulted not only on the bonds floated by the House of Morgan but on equipment trust certificates as well. Last week a bondholders' committee sponsored by the House of Morgan made an interim report on the current state of Florida East Coast. The road's immediate problem is the Key West Extension, 40 miles of which was completely wrecked by the hurricane that howled over the Florida Keys last autumn (TIME, Sept. 16). Since then not a train has run south of the mainland jump-off station of Homestead. The road estimates that nearly $3,000,000 is needed to replace spans and causeways with steel structures, $1,800,000 to do it with wooden trestles. Another $500,000 is needed for other hurricane damage. "After making inquiries of bankers and officials of the RFC," gloomed the bondholders' committee last week, "the receivers report that application for a loan to finance reconstruction of the Extension would not be looked upon favorably." In other words, the 128 miles of over-water railroad will probably be abandoned. Only hope is the Flagler will. The receivers have won the first round of a legal battle to compel the Flagler trustees to come to the aid of the Flagler System, but an appeal is expected, since the trustees apparently believe that further investment in the road would be folly.* Meantime Florida East Coast's Havana freight traffic is being handled economically through Miami and Port Everglades. Key West's 12,000 inhabitants are virtually stranded. Cessation of railroad service wrecked Key West's fishing industry, disrupted other business, ruined Federal plans for making the city a winter resort. It is estimated that one-half the population will have to be moved when WPA projects cease. There is vague talk that the State of Florida might take over the old right-of- way, use it to build a continuous automobile road down the Keys. Unless it does so, Key West, the last jewel inserted in the Flagler crown of empire, is liable to become a ghost city, reverting to sand & sea.

*Only one of the road's two receivers brought suit, since the other, William Rand Kenan Jr., occupies the curious position of being also a trustee of the Flagler estate and a big beneficiary under the Flagler will. A brother of Mrs. Mary Lily Flagler Bingham, he will divide the residuary estate in 1938 with his two sisters, Mrs. Sarah Graham Kenan and Mrs. Jessie Kenan Wise. Last week all three were socialiting upon Florida sands.

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