Suez Canal Blockage? Fla.’s Own Ended a 1925 Real Estate Boom
The rising cost of lumber shows the importance of supply chains. In 1925, a sunken ship blocked Miami’s port, leading to the end of a heated market that couldn’t keep up.
MIAMI – The recent blocking of the Suez Canal by the containership Ever Green reminds us that this situation is an old story of financial repercussions. Late last month, we learned about the potential shortages and rising prices that might be caused by the delay of ships passing through the canal.
As the Ever Green remained wedged across the canal for almost a week, we heard yet again about the vulnerability of “supply chains,” which had already gotten our attention with the shutdowns associated with COVID-19. Another blocked channel closer to home almost a century ago brought construction slowdowns and contributed to the crash of Florida’s real estate boom.
At the end of 1925, Florida was in a construction frenzy. Building supplies could not reach Florida quickly enough. There were simply not enough railroad cars to meet the demand. Remember, that in 1926 few goods traveled long distances by truck. Some of the building materials for Florida also arrived on ships.
Construction in Miami needed huge supplies of building materials – and Miami was for the most part at the end of the railway line down Florida’s Atlantic coast. In August of 1925, the Florida East Coast Railway had restricted shipments because of a shortage of rail cars. Builders in Florida were using the rail cars to warehouse materials because of a shortage of storage areas. Jacksonville and Miami hardly had room on their sidetracks for the still-unloaded cars.
Rail cars were slow to head north to pick up more supplies. Probably most of the cars “stuck” in Miami had passed through St. Johns County and St. Augustine. A train horn in the middle of the night had been the crier for the supplies headed southward.
Ships loaded with building materials were also stalled. In late December of 1925, The New York Times reported that 31 ships were waiting off Miami Beach for an opening at the docks to unload. Then disaster struck as Miami was experiencing what we might call a shipping gridlock.
The Prinz Valdemar slowly capsized and sank. The ship was being renovated to become a floating cabaret. The sunken Prinz Valdemar blocked the harbor. Eleven ships were trapped inside the harbor, ships waiting offshore could not enter.
Army engineers had to cut a channel around the Prinz Valdemar. The harbor was closed for six weeks – from Jan. 18 to Feb. 29. Building materials were literally blockaded.
The downturn in the real estate frenzy had already begun by the time of the sinking, although it was difficult for most persons to detect in early 1926. But anyone who tracked deed revenue stamps could see that recorded sales in February 1926 had dropped sharply from the previous February.
But the numbers were ahead of the public’s perception. Advertisements filled The St. Augustine Record in January 1926 boasting about just created subdivisions. D. P. Davis’s Davis Shores advertised “that hundreds of fortunes will be made in Florida – quickly – many this winter.” Menendez Park, another D. P. Davis Subdivision, just south of Davis Shores, was advertised as well, but with less hype. D. P. Davis’s projects appeared in newspapers throughout Florida.
Florida received so much bad press about real estate investment that Florida Gov. John Martin held a press conference at the Waldorf Astoria in New York City, hoping to damage control the negative stories and gossip.
Miami’s issues flowed north. Building slowdown rippled throughout the state. By the middle of 1926, buyers quit making payments on their new property and banks faced heavy withdrawals.
The capsizing of the Prinz Valdemar could not have happened at a worse time for the Florida real estate boom. It was almost as if the real estate boom sunk with the ship.
© Copyright 2021, The Florida Times-Union. All Rights Reserved. Susan R. Parker holds a doctorate in colonial history.