Mortgaged Montauk

Four miles from Miami there used to be a tidal bog. A promoter with imagination bought the semi-swamp, surrounded it with bulkheads. Miami was dredging its harbor and was glad when the promoter said they could dump the silt on his land. As the tidal bog grew into a fertile island the promoter built roads, hotels, trolley lines. The island became known as Miami Beach and one of Florida's most popular resorts. When the great boom of 1923-26 began, the promoter, Carl Graham Fisher, came zooming out of a deep hole with fat profits from his onetime bog.

Promoter Fisher was by no means a product of the Florida boom. In 1912 when he bought his bog he was already a man of wealth, having made his first money in a bicycle shop, then in PrestOLite which he sold to Union Carbide, then in the Indianapolis Speedway which he sold to Capt. Edward Rickenbacker & friends.

Last week Promoter Fisher's bright star of fortune was not burning so high. Since 1925 his chief interest has been Montauk Beach Development Corp., a concern which has sunk many millions into a 10,000-acre real estate project on the heathery tip of Long Island, 118 mi. east of Manhattan.

Although Montauk Beach Development Corp. has its hotel (Montauk Manor), its golf and yacht clubs, it has not prospered.

It received wide publicity last summer when the Navy's scouting force maneuvered off its shores (TIME, Aug. 24) but few homesites have been sold. Plans to establish a transatlantic ship terminus there to save nearly a day have come so far to nothing.

Last week, after defaulting principal and interest on a $3,724,000 mortgage, Montauk Beach Development Corp. was placed in friendly receivership. Chairman Fisher, still enthusiastic, said this was "the best step that could be taken," insisted that the company's $12,000,000 worth of investments are now worth at least $15,000,000 against liabilities of $5,614,000. Smiling as always, Promoter Fisher added: "I am convinced that this seashore property will be the greatest seashore development in the world. . . . The control of it passes to bondholders for the ultimate certain payment of their debts, but the satisfaction of having made it and of seeing it continue as a great property will always remain with me." He said he thought that because of the Depression many people, especially Midwesterners, who used to want to be in the East for the summer but thought it would take an investment of $50,000 to $75,000, may now want to own a Montauk home for $6,000 to $12,000.

Cooperating with the new management last week was Long Island Railroad, part of the Pennsylvania system. Although the road has no direct interest in the development it stands to prosper with it, especially if the plans for a big harbor ever mature.

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