“America’s Playground”: Tourism, Vice, and the Spoils of Winter

Miami Beach was the “seasonal amusement centre of the United States,” as a group of bar owners noted in 1942.Footnote ⁹ “Amusement” was coded language for vice tourism: legal drinking and illegal gambling.Footnote ¹⁰ As an amusement center, Miami Beach operated under the so-called liberal policy—similarly coded language for official acceptance of illicit vacation behaviors.Footnote ¹¹ Dade County Sheriff “Pop” Lehman captured the sentiment in 1932 when he pledged to stay a “liberal course but liberality within bounds.” “I realize that Dade County is the world’s playground,” he affirmed. “People come here from all over the world to rest and to play. If their toys are taken away from them, they will seek resorts where they may play as they please.” In that same spirit, four-time Miami Beach Mayor Louis Snedigar, who hosted such dignitaries as President Herbert Hoover, Governor Al Smith, and pilot Charles Lindbergh, typically concluded his welcoming remarks to visitors by “giving them permission to do in Miami Beach ‘as you—please.’”Footnote ¹² Being a vacation playground meant letting adults enjoy themselves. Vice, repackaged as harmless fun, was the attraction. The regulatory challenge, therefore, was managing vice providers to sustain a “liberal” atmosphere full of “amusements.”Footnote ¹³

Gambling and drinking were an integral part of the city’s liberal reputation. Historian Gary Mormino has argued that “in the half century between the Florida boom of the 1920s and the beginning of Disney World in the 1970s, no other Florida destination so captivated and tempted Americans as Miami and Miami Beach.” Miami Beach offered tourists “sex, sport, and sin.… Part Monte Carlo and part Babylon … bold and risqué.”Footnote ¹⁴ The city was founded as a rich man’s resort where executives brought their families for the winter. Vacationing with and like the affluent remained part of the city’s allure even as the ethnically mixed middle and working classes became the main source of tourists.Footnote ¹⁵ City advertising focused on the “glorification of the bathing beauty,” broadcasting the healthy sexuality of girls in swimsuits enjoying outdoor recreation and sporty fashions.Footnote ¹⁶ Renowned journalist Walter Winchell made the Roney Plaza Hotel his headquarters for reporting on celebrities and gangsters enjoying their winter holidays.Footnote ¹⁷ Betting on horses, sipping cocktails, and watching showgirls rendered vice a safe component of an exciting, upscale vacation.

Other centers of amusement likewise presented vice in a nonthreatening but titillating package. In New Orleans, civic leaders modernized the city’s bawdy, male-oriented tourist culture, epitomized by the infamous Storyville prostitution district, by transforming the raunchy into the romantic. The revamped French Quarter offered “a more sedate urban space” that was nonetheless a “liberating oasis” by “balancing the wild with the mild” and disguising the ribald past in “an old world of Creole culture born of Spanish and French ancestors.”Footnote ¹⁸ Mexican border towns, such as Ciudad Juarez, Mexicali, and Tijuana, sold vice by suppressing its most tawdry elements and promoting a festive combination of booze, music, gambling, and celebrity. Tijuana’s famous Agua Caliente hotel and casino, built by American investors and frequented by gangsters and Hollywood stars, appealed because of “its ability to generate racing excitement infused with a casual, anything-goes tenor.”Footnote ¹⁹ Havana competed with Miami Beach for the vice tourism trade. Its casinos and nightclubs drew visitors “looking for relaxation, intoxication, excitement, or thrills” on “a Latin isle of unfettered pleasure that catered to North American tastes.”Footnote ²⁰ Miami Beach did not have to suppress seedy commercialized sex or disguise vice as foreign exoticism to make it palatable; instead, the city democratized the privileges of wealth: the freedom to drink, gamble, and enjoy life, even when it was done on the cheap.

Illegal gambling was the most problematic aspect the city’s vice economy.Footnote ²¹ For fiscal reasons and over the fervent objections of conservatives, Florida legalized pari-mutuel betting on horse and dog racing in 1931, but not bookmaking or casino gambling. Both, however, were common in South Florida, where tourists could find Coney Island–esque games of chance at the South Beach “amusement center”; bookie joints on street corners, in barbershops, and in hotel cabanas; and “socialite gambling” havens such as the Beach and Tennis Club on Miami Beach, Club Boheme in nearby Broward County, and the swank Royal Palm Club, operated by Miami Beach Councilman Arthur Childers. Other leisure businesses were complicit. As Louis Snedigar observed in 1941, “Gambling effects the butcher, baker and candle-stick maker” on Miami Beach, and they did not hide their support for maintaining a “wide-open town.”Footnote ²² Symbolic enforcement was the norm—so much so that nationally syndicated columnist Westbrook Pegler called Miami Beach “the crookedest town in the United States” in 1936, a condition that drew the attention of the Federal Bureau of Investigation.Footnote ²³

Compared to gambling, liquor became a less controversial part of the vice economy thanks to legalization. Only four Florida counties were wet in 1918, and Dade County was not among them (although as historian Lee L. Willis has argued, Florida was dry “by law, but never in practice”). Prohibition transformed South Florida into a center of rum-running and illicit alcohol consumption. Miami “cared little for Prohibition,” according to historian Lisa Lindquist Dorr; tourists “drank openly and excessively.” In 1929, a U.S. Coast Guard commander observed that “there are more booze joints already opened here and at Miami Beach than in any other part of the United States I have ever seen.”Footnote ²⁴ When Florida reinstituted a local option for alcohol in 1934, forty-two of sixty-seven counties voted wet and Dade voters approved a return to legal booze by a hefty margin of four-to-one.Footnote ²⁵

Although Prohibition-era alcohol consumption in Miami Beach involved flagrant disdain for the law, repeal of Prohibition normalized it as a cosmopolitan pleasure. Scholars have shown that alcohol was domesticated after Prohibition, and its “menace … almost entirely neutralized” by new approaches to “alcoholic sociability,” such as home consumption, mixed-gender drinking, and recognition that moderate use posed no medical danger.Footnote ²⁶ In Miami Beach, repeal did not so much change the role of alcohol as it removed the annoyance of a formal barrier that had long been ignored: The festivities continued, but without the shadow of illegality.Footnote ²⁷ It is worth noting in this regard that Carl Fisher, the Indianapolis industrialist who built much of Miami Beach during the 1920s and who labored to preserve its reputation as the “winter home of prominent Americans,” was an active participant in rum-running, for no executive’s vacation would be complete without liquor.Footnote ²⁸ Especially when it was associated with the temporary liberation of a holiday, alcohol was a social lubricant, even in the conservative South.Footnote ²⁹ And although there were several drinking cultures in the city (including lowbrow beer consumption at barbecue stands), sophisticated urban nightlife endowed drinking in Miami Beach with an air of urbane conviviality. “The atmosphere of Miami Beach is the atmosphere of Manhattan,” Fortune magazine observed in 1936. “Its world is the moneyed world of industrialists and their playfellows on holiday.”Footnote ³⁰ Nightclubs were central to that experience of cosmopolitan leisure with their pairing of top-notch entertainment and heterosocial drinking and dancing. Alcohol thus contributed to the city’s mystique as an adult playground.Footnote ³¹

For municipal officials, the goal with liquor was the same as it was with other elements of resort infrastructure: bringing discipline to a rowdy market, keeping competitors within bounds, and devising ways to divide the spoils of the winter season—the hectic ninety days between December and April when visitors from the frigid north packed hotels. Many providers wanted in on the seasonal bounty, and this created an “almost chronic headache” for the council “trying to cook up cures for the island resort’s annual attack of growing pains,” reported the Miami Herald. “Chief symptom of the troublesome though welcome disease is the frantic scramble of applicants for liquor and night club licenses, taxi-cab permits and parking lot locations.” In 1938, the city issued 220 taxicab permits; in 1939, there were 468 applications—were all of them granted, “taxicabs would be so thick … that they would be bumping into each other and none of them would do any business.” The city confronted an annual “bumper crop of itinerants,” derisively called “vags,” looking for work; the police arrested them and expelled those with previous criminal records. Around November, peddlers and unlicensed solicitors appeared in abundance. Local laundries pleaded with the council to regulate the “bobtailers” who offered mobile cleaning services to tourists; the council responded by outlawing “single truck solicitation by itinerant salesmen.”Footnote ³²

Nowhere was this competition more evident than in the alcohol market. Miami Beach hosted a fun-seeking crowd interested in music, singing, and dancing, with alcohol widely available twenty-four hours a day, but especially at night. As the owner of the Paddock Club told the council, “The Paddock does little or no business during the day time or in the evening and the main part of its business only begins around midnight, after its patrons have visited other places.”Footnote ³³ Bar and nightclub owners thus jockeyed for clients during the coveted hours from 11:00 p.m. to 4:00 a.m. This created an entertainment market with two main arenas of competition: first, among alcohol purveyors hoping to serve the largest possible share of the drinking public; second, among hotel operators protecting tourists from nighttime noise and alcohol vendors thriving on the “whoopee” that filled the night air with music and laughter.

Regulating Retail Alcohol Vendors: Chaotic Competition

It took three attempts to create a regulatory apparatus with enough nuance to manage the emerging entertainment market. The council adopted its first post-Prohibition alcohol ordinance on May 17, 1933, nine days after the legislature ended its bone-dry policy. Consistent with state law, Ordinance 325 allowed one-year licenses and identified four types of retail vendors: restaurants, hotels, private clubs, and stores, with fees ranging from $7.50 to $50.00 depending on establishment size.Footnote ³⁴ During the next eighteen months, the alcohol market blossomed, prompting the council to adopt an emergency measure on January 24, 1935.Footnote ³⁵ Ordinance 370 required license renewals every six months; raised fees (on package stores to $150.00, on retail vendors to $250.00, and combined retail/package stores to $350.00); and prohibited the use of “any screen, blind, curtain, partition, article or thing” obstructing the inquiring gaze of the newly created liquor inspector. So armed, in March 1935 the council granted forty-eight retail liquor licenses to an increasingly diverse collection of hotels, bars, package stores, restaurants, and nightclubs (a term that never appeared in state statutes).Footnote ³⁶ By the summer of 1935, the swelling ranks of alcohol vendors compelled City Manager Claude Renshaw to recommend that the council and city attorney take steps “in order to perfect an ordinance suitable for passage.”Footnote ³⁷ Between June and October, the council enacted a new framework comprised of four ordinances: 289 (land-use zoning, adopted in 1930 and amended in 1935 to include nightclubs); 391 (alcohol sales); 394 (occupational licensing); and 402 (alcohol zoning). Ordinance 391 was the most consequential: The council amended it thirty-three times over the next decade to fine-tune rules for competing in a tourism market that was larger than the city’s permanent population (Miami Beach had only 6,494 residents in 1930, rising to 28,012 in 1940, and 46,282 in 1950).Footnote ³⁸ During that time, the council elaborated regulatory distinctions in two areas—vendor types, and closing times and musical performances—to divide the pie among alcohol purveyors while keeping them in their market niches.Footnote ³⁹

Regulating Nighttime Nuisances: Interproducer Conflicts

Concurrent with its efforts to control chaotic competition among alcohol vendors, the council mediated conflicts between those same providers and hotel operators who served a different clientele, one interested in peace and quiet rather than nighttime merrymaking. Council members recognized both as legitimate businesses and essential aspects of resort infrastructure. Accordingly, the regulatory goal was not to extinguish the vice, but to insulate it, thus rendering it compatible with the more sedate leisure functions of the multifaceted resort city.

Land-use and alcohol-sales zoning (Ordinances 295 and 402) were the easiest techniques for separating entertainment vendors and residential areas, and in a handful of cases they did the job. Most notably, after property owners around Forty-First Street pleaded with the council to protect the “high moral conditions” and “civic virtue” of their neighborhood from the “Liquor Interests” composed of “Beer stands and Mixed Cocktail Stands and Saloons,” “Package Stores,” and nightclubs, the city prohibited new alcohol sellers along that thoroughfare. However, this was a rare easy solution (and not entirely satisfactory because existing vendors, including nightclub Patio Moresque, were grandfathered in and continued to provoke outrage), and zoning was usually inadequate to the task for several reasons.Footnote ⁷⁴ Although single-family homes and most apartment buildings were well segregated from nightlife districts, many hotels and some multifamily dwellings were intermixed with bars, restaurants, nightclubs, and other businesses—a proximity that some advertised as a tourist feature. To complicate matters further, some hotels had service bars that attracted a rowdy crowd. The city grew spectacularly between 1934 and 1942, with infill development surrounding isolated lots with new buildings. Because the council could not neatly separate producer groups in conflict, it employed other techniques: imposing mitigation costs on noisemakers, enforced by inspections, closures, licensing delays, and revocations.

Nightlife noise became a problem as early as 1935, but the council had only one tool for addressing it (closure), which forced the city to choose between producer groups. That January, in response to complaints from citizens “regarding noise and nuisance being created by 23rd Street Bar-Rooms, Council ordered all bars in the 23rd Street District closed at 12 o’clock midnight” and then rejected pleas from attorneys for Buccaneers Bar and Mother Kelly’s who “pledged their cooperation stopping the noise and nuisance at 12 o’clock.”Footnote ⁷⁵ By that time, Twenty-Third Street had already acquired a reputation for “excessive drinking,” and homeowners near the Dade Boulevard nightlife district had appealed to the council to withhold the reissuance of Mother Kelly’s liquor license because of noise.Footnote ⁷⁶ The problem was, therefore, not new when it emerged as a major issue in 1937, prompting the council to search for new techniques to bring conflicting groups into harmony. That year, with the number of bars, nightclubs, and hotels growing, complaints about nighttime noise multiplied even as the value of noisemaking businesses increased. Closure, consequently, became a blunt instrument for dealing with a complex problem of conflicting, but equally valuable, economic interests.

Complaints about the nuisance aspects of alcohol consumption were predictably colorful, revealing both the diversity of drinking cultures and class tensions among resort goers. Although protests came from many quarters, some establishments distinguished themselves as especially difficult. Club Deuce on Washington Avenue, operated by Mr. and Mrs. Tom Heeny, provoked considerable outrage from the manager of the William Penn Hotel who complained of “unnecessary yelling, loud talking, the playing of music and especially the singing of ribald songs,” “coonshouters,” and “the commonest lot of music until at least one o’clock, and then to have a bunch of inebriates coming out of the place for another hour of cursing, starting automobiles and blowing horns.” Max Bublitz of the El Patio Apartments described Club Deuce as a “chamber of horrors” and the “most obnoxious one on the Beach,” with noise lasting until 6:00 a.m.—prompting the council to deny the renewal of Heeny’s alcohol license (though it was later reissued).Footnote ⁷⁷ Operators of the Clay and Barcelona Hotels complained bitterly of noise emanating from McNally’s Fruit Market on Espanola Way, an open-air lunch counter attracting a certain “class of people” where “most of their business is solicited by the sale of beer with the result that a rowdy disorderly crowd patronize the place.”Footnote ⁷⁸ A homeowner pleaded with the council about the Derby Bar on Ninth and Washington Avenue: “This place has now new talent noisemakers commencing to sing after eleven o’clock to attract the outside world. It is the most unreasonable noisemaking, and it usually lasts until about 2 a.m.”Footnote ⁷⁹ A group of residents signed a petition against the Belmont Club on Alton Road, describing it as “a constant source of annoyance to the neighborhood with its all-night shows, revelry, general commotion and a large blinking Neon Sign from dusk to dawn,” with one especially troubled winter resident protesting the “modern ‘swing’ music, with all its discordant notes,” “frequenting swarms of ‘jitter bugs,’” “interior commotion, applause, cat-calls, orchestrations and vocal renditions—all amplified by a microphone and loudspeaker,” and the constant hum of exhaust fans, lasting seven days a week until 4:00 a.m.Footnote ⁸⁰ Hotel bars drew similar criticism. The manager of the Indian Creek Apartments told the council that the bar at the neighboring Leroy Hotel “keeps open until 3:00 or 4:00 a.m. and at times all night, the bartender singing in very loud voice and noisy playing of piano, many drunks starting their cars with loud voices, and even curse in early morning hours.”Footnote ⁸¹ Another resident wrote the council “to strongly protest the playing of music and the shouting of drunkards coming from the bar in the Hotel Evans” on Collins Avenue.Footnote ⁸²

The task of reconciling these groups fell to City Manager Renshaw. Despite his efforts at suasion, complaints continued, prompting him to recommend earlier closing times and music cutoffs, even as the council granted more permits, and liquor dealers again pledged their commitment to self-regulation. The impasse was broken in December 1938 with Ordinance 536, which specified that nightclubs “shall be sound-proofed and their windows, doors and other openings kept closed in order that the noise therefrom may not disrupt the peace and quiet of the neighborhood,” allowing them to offer music throughout the night, while requiring bars to cease music at midnight.Footnote ⁸³ Liquor dealers suggested a governing board to deal with the problem, but the council rejected the idea, with Mayor Val Cleary (certainly no enemy of alcohol vendors) saying, “This was the proper time to tell the Liquor Dealers to get their house in order, this is the first time that the Council have revised the ordinance against them, and that they must now regulate themselves and keep down the complaints.”Footnote ⁸⁴

Ordinance 536 gave the city a new tool for rendering nightclubs and hotels compatible. The El Chico Club failed to have its license renewed because it “was not in proper shape to operate as a night club.” After cancelling its soundproofing contract, the troublesome Belmont Club was denied a license and then granted one after making renovations. Lew Mercur’s Nut Club and Club Continentale were granted licenses subject to inspection for soundproofing. The Riptide Club was refused a license for lack of soundproofing. When Harry Nixon of the Park Avenue Hotel complained of noise from Bill Jordan’s Bar of Music, Jordan made the renovations and invited Nixon to personally inspect the results, which he pronounced satisfactory; City Building Inspector J. J. Farrey then reported to Renshaw that the building was “partly sound-proofed and has an air-conditioning plant installed; when the doors are closed, the music cannot be heard”—and Jordan was immediately granted a license.Footnote ⁸⁵

By imposing the costs of soundproofing on nightclubs, the city addressed the externality that caused conflict between valuable producer groups. For those producers unable to shoulder the cost of soundproofing, late-night hours were limited. When, in 1942, bar operators again pressured the council to grant them access to the late-night music market, the council extended this solution (in the form of the new regulatory category of cabarets) by requiring that any establishment seeking such a privilege “shall be sound-proofed and their windows, doors and other openings kept closed in order that the noise therefrom may not disrupt the peace and quiet of the neighborhood,” and placing responsibility for enforcement on the chief of police.Footnote ⁸⁶

Regulating Hotel Entertainment: Monopolistic Business Practices

Hotels presented special problems for entertainment regulation, ultimately posing a mortal threat to nightclubs. Postwar changes in the lodging industry raised the specter of monopolistic business practices as investors created hotels packed with consumer amenities, from bars and restaurants to nightclubs, movie theaters, and bowling alleys—expanding their scope of services in the same way as Max Blum. These autonomous resort hotels were designed to keep affluent tourists inside. Rather than seeking nighttime fun in the city’s entertainment districts, guests at the Sherry-Frontenac (1948), Saxony (1949), Casablanca (1950), San Souci (1951), Algiers (1953), and Fontainebleau (1954), among others, got all their resort revelry in one place. For nightclub operators, this was nothing less than an attempt to monopolize the market and put them out of business—which is precisely what happened.

Even before postwar resort hotels entered the game, the nightclub market was intensely competitive, prompting efforts to restrict entry. In 1936, the council adopted a resolution saying that “the number of nightclubs … has increased greatly from season to season at a rate far out of proportion to the increase in population and the growth of the city” and insisting that additional establishments would be “injurious to and demoralizing to the usual, ordinary, and legitimate business operation of the citizens.”Footnote ⁸⁷ In 1940, the council unanimously agreed “that no applications be considered this year for Night Clubs on properties not used for Night Club purposes last year.”Footnote ⁸⁸ A year later, Councilman Wolfson urged his colleagues to stand by the policy “that they would not give out any additional Night Club licenses over those issued the preceding year because they had considered that there were enough of them on Miami Beach” only to be reminded by Councilman Burbridge that “each time it has been broken up.”Footnote ⁸⁹ Nightclubs proliferated nonetheless. After the war, Miami Beach became even more of a center of cabaret entertainment, with clubs large and small offering everything from “name” entertainers to debut performances by aspiring stars. As one veteran nightlife reporter noted, “All of it adds up to a competition that not even New York, or any other center of amusement attractions, could afford,” resulting in “investment suicide for some” and “profits for the wiser in a year of choose-the-place spending.”Footnote ⁹⁰ As a practical matter, only high license fees served as a barrier to entry into the nightclub market.

Hotels posed little danger to nightclubs thanks to two provisions in the zoning ordinance. First, “accessory uses” were defined as those “customarily incident to the principal uses as permitted, but not including any commercial activity,” acknowledging that big hotels offered limited services to their guests, though the council later specified “accessory uses for tenants only.” Second, the ordinance permitted hotels with over one hundred rooms to contain businesses of the BAA use classification, including restaurants, barbershops, clothing outlets, and drugstores (among other things) but attempted to restrict them to hotel guests by “providing that the exterior of the building shall not contain store fronts or have the appearance of commercial or mercantile activities or any display of articles or services for sale which are visible from the exterior of the building or on the grounds facing a public highway or water frontage” and which “shall only be entered from within the building.”Footnote ⁹¹ When nightclubs were added to the ordinance in 1935, they were placed in the BA classification and thus could not be included in hotels of any size, though a handful of existing hotel nightclubs (at the Floridian and Roney Plaza, for example) were grandfathered in as nonconforming uses. Bars were treated differently. In 1936, the council exempted bars in hotels with over fifty rooms from the “one per block” limitation, but later amended the ordinance to apply only to hotels with over one hundred rooms, with the proviso that no storefronts or entrances could attract the drinking public from outside the hotel.Footnote ⁹² The council rebuffed subsequent efforts to expand accessory uses for small hotels because this would “commercialize the hotel and apartment districts to an objectionable degree,” with one councilman warning that, should such uses be allowed, “he did not know where it was going to end.”Footnote ⁹³

Hotel operators chipped away at these restrictions by petitioning for additions to their scope of services, seeking even to become “Hotel Night Club Operators,” as one observer put it. When they joined bar proprietors in 1942 to ask for later closing times and musical performances, Councilman Baron De Hirsch Meyer rebuked them for their covetous behavior:

After all, he reminded them, “The hotels are not in business to operate bars, but are in business to sell rooms.”Footnote ⁹⁴

These small-scale incursions multiplied after the war. In January 1947, nightclub operators asked the council that restrictions “be rigidly enforced” after seeing “advertisements of entertainment in several hotel cocktail bars” even though “no type of entertainment other than string music is permitted under the ordinance.” Hoteliers called the ordinance “outmoded” because “trends in entertainment change frequently” and because “it is essential that hotels have music for their guests.” They did not want to offer “vaudeville,” they claimed, only “entertainment that will not conflict with the nightclubs”—specifically, full orchestras for dancing and water shows, an end to the “string music” limitation, and a 1:00 a.m. closing time instead of midnight. After a year of acrimonious negotiations, the city adopted Ordinance 828, which gave the hotels almost exactly what they requested, subject to the standard proviso that “no such music or entertainment shall be conducted in such a manner as to be seen from a public street or thoroughfare.”Footnote ⁹⁵

Although hotel operators argued that they were “not set up for unlimited entertainment, that their first business is renting rooms,” this was not true of those on the drawing board. Most hotels had neither the physical space nor the financial means to host entertainers. The manager of the 110-room Marine Terrace Hotel noted that “the majority of the hotel owners are against turning hotels into nightclubs,” and the reason was clear, as another hotel operator explained: “The hotels built 10 or 12 years ago were built with the understanding that the zoning in effect at the time of building would remain unchanged. If the hotels are allowed to have cabarets, then the hotels that are first-class, but which would not be able to have cabarets, would then become second class.” Recognizing the changes for what they were, another hotel operator added: “This proposed ordinance is the beginning of a relaxation of zoning to permit nightclub operations, and it will ruin the small hotels financially, those hotels that have no room for cabarets.”Footnote ⁹⁶ Changing the rules created new possibilities for investors while threatening most hotels with obsolescence.

Nightclub operators perceived these incremental changes as existential threats. During the debates over Ordinance 828, Bill Jordan of the Bar of Music, told the council “that if the cabaret law is passed the nightclubs will have to go out of business.” Danny Davis of Kitty Davis’s Airliner “was frank to admit that the nightclub business has been rather rough and with 30 or more competitors, he might as well close.”Footnote ⁹⁷ Murray Weinger of the Copacabana complained that “it costs him $35,000 to $40,000 a week to operate, and that he would not be able to bring down big-name acts if he has to go into competition with twenty or thirty hotels.” Arthur Courshon, an attorney for hotel owners, showed no sympathy for the nightclub operators, whom he accused of demanding a monopoly over the entertainment market: “Competition never hurt anyone,” he taunted them presciently. “If they cannot stand the competition in the event this measure becomes a law, then they should not survive.”Footnote ⁹⁸

Hotels became much more of a threat to nightclubs as peacetime affluence poured money into Miami Beach. “The Florida winter of 1945–46 saw the most spectacular and savage spending in American history,” wrote acclaimed journalist John Gunther. “Northerners, released from the burden of war at last, free to travel, heavy with cash, fought to buy an inch of land,” pouring money into “amusement industries.” “Dollars are rolling down to Florida, with nightspots, hotels and sporting events reaping a harvest from tourists,” reported the entertainment press.Footnote ⁹⁹ The number of hotels in Miami Beach had increased from 71 in 1930 to 239 in 1940, and then to 262 in 1944. After the record-breaking building boom of 1947–1948 added nearly 40 hotels, the city’s inventory reached 356, leaving the market for small- and medium-sized hotels saturated. By 1951, almost three quarters of the city’s 367 hotels had fewer than one hundred rooms (down from over 85 percent in 1944) and just over 40 percent had fifty or fewer rooms, encouraging investment to shift toward larger properties: The city had 33 one-hundred-room hotels in 1944 and 99 of them by 1951.Footnote ¹⁰⁰ Small, non-oceanfront hotels (which constituted a majority of guest rooms in the city) charged only a fraction of the rates of larger hotels along the beach and suffered with extremely low occupancy in the off-season, but not because there were fewer tourists.Footnote ¹⁰¹ Miami and Miami Beach remained the state’s premier attractions, drawing two million visitors in 1950 with their familiar combination of sun, sand, surf, and the sizzle of a “liberal” atmosphere. Nearly five million tourists came to Florida that year, a figure that doubled by 1959, and again by 1967.Footnote ¹⁰² However, inventory exceeded demand, which meant that rooms went unfilled, encouraging proprietors to compete by cutting prices.

The luxury market seemed immune to this problem. A local reporter discovered this when attempting to explain why eleven new hotels were under construction despite the “abrupt slump” in demand during the 1947–1948 season. Those hotels, the reporter observed, “will provide an extra 1,131 rooms for northern visitors—who, incidentally, did not fill all the rooms that existed last season.” The “optimistic hotel men” responsible for the additions forged ahead because the “larger, more luxurious hotels fared well enough” despite the downward pressure on prices. “Their clientele is reasonably stable and these perennial vacationists are financially able to pay the price for grandeurous [sic] living. The real cut-throat competition,” he added, “was among the smaller, lesser-known hostelries.” That would change, he speculated, because most of the new hotels “will fall into the plush, high-priced class and all those additional premium-priced rooms might well turn the luxury hotel field into a competitive grab-bag affair.”Footnote ¹⁰³ By 1948, therefore, the strategy for investors was clear: appeal to affluent tourists with all the glamour and excitement that had always attracted them to Miami Beach, but inside one hotel.Footnote ¹⁰⁴

The strategy itself was not new, nor was it confined to Miami Beach.Footnote ¹⁰⁵ The city already had grand hotels that provided elite visitors with self-contained vacation havens. Carl Fisher’s largest hotels, the 259-room Flamingo (1920) and 256-room Nautilus (1924), had everything their upscale clientele could desire, including shops, restaurants, bars, and ballrooms, as did the 350-room Fleetwood Hotel (1925), 350-room Roney Plaza (1926), and 252-room Floridian Hotel (1926). A handful of large prewar hotels emulated these pre-Depression giants by offering entertainment venues advertised to the public.Footnote ¹⁰⁶ The postwar period differed because affluence increased the volume of funds available for hotel investment; a saturated market directed that investment toward affluent tourists; and the luxury market compelled hotel operators to offer the best entertainment, which meant creating their own nightclubs and booking the top acts in the field. The final constraint preventing hotel investors from implementing this strategy was the regulatory regime that kept entertainment vendors in separate market niches.Footnote ¹⁰⁷ And like Max Blum, someone stepped out of their lane.

That step was taken by the 260-room Sherry-Frontenac in 1948: a twin-towered, $3 million “city within a hotel” designed by well-known Miami Beach architect Henry Hohauser and funded by a group of New York investors. Guests at the Sherry-Frontenac could enjoy two Turkish baths, complete spa facilities, an Olympic-sized pool with a double-tiered cabana colony and a promenade deck for watching water shows, a ballroom with bandstand, a nightclub (not legal when constructed), multiple bars, three restaurants, and rooms so large that “it will outclass all other hotels on the Beach.” Hohauser announced proudly that “the Sherry-Frontenac is as close to being self-contained as any hotel in the south” by including “physicians’ and dentists’ offices, drug store, dry cleaning and laundry, flower shop, barber, beauty salon, men’s and women’s apparel shops, cigar store and jewelry shop.”Footnote ¹⁰⁸

When hotel operators next petitioned the council to enlarge their scope of services, they took aim at the distinguishing feature of nightclubs—the type of entertainment they provided. In November 1949, they asked for “the right to employ such entertainment or entertainers as we may so desire”—and this was a step too far.Footnote ¹⁰⁹ Danny Davis, vociferous spokesperson for nightclub operators, captured the threat represented by the hotels’ petition:

From the perspective of nightclub operators, autonomous resort hotels monopolized tourists. Rather than share customers with other businesses (the essential feature of the symbiotic urban leisure-services economy), hotels like the Sherry-Frontenac hoarded them, depriving nightclubs, restaurants, bars, and retailers of their lifeblood. Rather than fulfilling their customary role as providers of lodging, these hotels were casting a net around the entire resort economy.Footnote ¹¹⁰

Matters slipped out of the council’s hands thanks to the Sherry-Frontenac. In December 1949, owner Samuel Cohen was convicted in municipal court for violating the ordinance limiting hotel entertainment to “string music, mechanical phonograph, and radio.” Cohen booked the hotel’s Pompadour Room with a five-piece orchestra led by dancer Nino “The Great” Yacovino (so dubbed by Danny Davis), along with mind reader Ralph Passer. The hotel was operating a nightclub with emcee, orchestra, and novelty act, and doing so without a license. Cohen challenged the city all the way to the Florida Supreme Court, which (although customarily solicitous of municipal authority) concluded on August 1, 1950, that “the ordinance … is entirely artificial and unreasonable and cannot be said to rest upon any sound or reasonable basis.”Footnote ¹¹¹

Even before the Supreme Court’s decision, city officials and hotel operators understood the implications of lower court rulings in Cohen’s favor. In April, the city attorney opined that “it would mean that the City could not successfully attempt to enforce its restrictions upon entertainment in hotels and restaurants.”Footnote ¹¹² By the eve of the Supreme Court’s decision, the new Casablanca, with its five-hundred-seat Morocco Room, had already jumped into the “talent-buying ranks,” followed by the Blue Sails Room at the San Souci and the Shell-I-Mar Room at the Saxony.Footnote ¹¹³ “Miami Beach is undergoing an historic stage of overdevelopment at the hands of hoteliers to the degree that, besides the normal innkeepers’ services, they are now very much in the nitery business,” observed Variety magazine. “As a result, it is kayoing most of the nite life not directly in the beach-front hostels.”Footnote ¹¹⁴ By 1954, there were thirty-nine hotels with cabaret licenses and they dominated the market.Footnote ¹¹⁵ That year, the city council passed three ordinances that gave hotels a 2:00 a.m. closing time, effectively depriving nightclubs of their traditional “second show” time—the last piece of the market pie that gave them any advantage.Footnote ¹¹⁶

Although independent nightclubs did not suddenly disappear from Miami Beach following the Cohen decision, the entertainment market change dramatically. Danny and Kitty Davis briefly focused on a mainly Jewish audience by transforming their Airliner nightclub into the Roumanian Theater Restaurant; shortly thereafter, they staged “legitimate theater” for a few months before Danny died of a cerebral hemorrhage in November 1950 at age fifty-two (a fate that also befell Murray Weinger, who died at age forty in 1957, and Ned Schuyler of the Beachcomber, who died of an overdose of sleeping pills that year), after which Kitty Davis began staging shows at the Sea Gull Hotel.Footnote ¹¹⁷ Several small clubs became “ghosts of the past,” while others became strip joints, including the Five O’Clock Club (which, in 1955, offered such “girlie show” fare as the “Peepholes of Paris,” while legendary singer Harry Belafonte, who had performed there years before, headlined at the Eden Roc hotel) and the Paddock Club, which subsequently became the Paper Doll.Footnote ¹¹⁸ The city’s largest clubs—Copa City, Beachcomber, and Latin Quarter—struggled to stay in business, going through multiple changes of ownership and bankruptcies; all had closed permanently by 1957.Footnote ¹¹⁹ Miami Beach nightlife was soon plagued with the “B-girl” problem, as bar owners hired young women to entice patrons to buy them drinks. South Beach hotels, unable to compete with autonomous resorts, shifted to a residential market, conflicting with the city’s apartment owners, who blamed their troubles on the new breed of large hotels. As Morris Gold of the Miami Beach Apartment Association told the council in 1955, “Prior to the building of the luxury hotels the tourists came to Miami Beach and went to hotels with all the conveniences—with the exception of not having nightclubs, restaurants and retail stores—which takes away the livelihood of the average merchant. This is also the main cause of the vacancies in the smaller hotels.”Footnote ¹²⁰ When nightlife shifted decisively into large hotels, the symbiotic urban leisure-services economy fell apart. Without that combination of nightlife providers, the city had no identifiable tourist attraction—a fact admitted by business leaders who, in 1961, petitioned the city to build some sort of “Permanent Tourist Attraction” to give visitors a reason to come to Miami Beach.Footnote ¹²¹

Vernacular Economic Theory and Regulated Capitalism in Miami Beach

It might be argued that there was only one genuine market failure for which entertainment vendors turned to the city council. Nighttime noise was a bona fide externality properly addressed by government. Although business operators troubled by the noise could simply have moved, the council’s decision to require bars and nightclubs to pay for soundproofing appears to have been a judicious one: narrowly tailored to assign property rights correctly, imposed only after multiple attempts at self-regulation, and supported even among producers bearing the costs of mitigation.Footnote ¹²² Chaotic competition, however, hardly signaled market failure. From an orthodox perspective, there is no such thing as an overabundance of producers. There may be so many that marginal providers exit, unable to make a go of it in the face of low prices. The failure of individual firms might then reduce supply, thus increasing prices, and so on, as part of the dynamic process of market adjustment. That bar owners did not want to be run out of businesses is understandable, but hardly a sign that the market was not working. Even more troubling, nightclub operators turned the notion of monopolistic business practices on its head. If anyone had a monopolistic advantage, it was the nightclub operators themselves. Beneficiaries of council largesse (or at least consideration), they enjoyed protection of a limited nature, if not an outright monopoly. Hotel investors threatened that privileged position not by monopolizing the market but simply by building a better mousetrap. Hotels could amortize the cost of entertainment better than independent nightclubs (writing off losses, it was said, as “publicity” expenses); affluent consumers preferred to get their entertainment in their hotels; dozens of hotel nightclubs competed for patrons; unable to compete, independent nightclubs exited the market. This was a market functioning well, not failing.

Miami Beach’s entertainment vendors and the public officials who regulated them did not see things that way. They were not anti-market, but neither were they in favor of allowing unregulated private decisions to determine the fate of producers and the choices available to consumers. None of their debates (so far as the historical record reveals) included references to economic theory, nor did they invoke contemporaneous New Deal political or ideological battles, though they certainly involved many of the same issues, so theirs was not a subset of a larger national discussion over the role of government. Neither was this a case of unprincipled rent seeking, with firms crassly petitioning for political favors to protect their bottom lines and politicians auctioning their services to the highest bidders.Footnote ¹²³ Instead, it is possible to discern the elements of a coherent vernacular philosophy of competition and regulation in these efforts to shape the entertainment market—one that depended on the fact that the city itself was a collective economic enterprise in competition with other cities for tourist dollars.

First, they judged markets by their ability to provide participants with a decent livelihood. This was not a matter of entitlement, but a standard of social utility. Competition that drove producers out of business was undesirable, although there was considerable turnover among bar and nightclub owners despite their protected environment. This did not mean eliminating competition but structuring it so that there were many winners rather than many losers among those who decided to cast their lot with Miami Beach. Those many winners were important because they functioned as a unit, drawing customers to the city through their collective efforts to create a lively resort atmosphere with a great deal of consumer choice. Fairness, therefore, required that the council regulate competition so that many small businesses could survive, even if that meant keeping newcomers out of the market.

Second, they were unabashed boosters who believed in a limited version of local solidarity. Councilman Wolfson articulated this perspective in 1942. “One of the important objectives of our positions as representatives of the citizens of Miami Beach in the Council is to aid and assist them thru legislation in the pursuit of usual and ordinary business transactions, so that our citizens may prosper,” he affirmed. “A fairly liberal policy has been the custom of this Council because the city is a resort city. Under ordinary and usual circumstances and times, we do all in our power to help the legitimate nightclub and entertainment and beverage people in the city.” Miami Beach was the product of myriad individual businesses that together created a festive destination. Success was both individual and collective, and individuals could be asked to contribute to that collective success, even if it meant restricting liberty and imposing costs. This was part and parcel of democratic capitalism as they understood it. “I hesitate to think what would happen to the business men of this community if we had to take orders from foreign dictators,” Wolfson emphasized in response to army requests for earlier bar closing times. “Thank God, we are living in a democracy—America!”Footnote ¹²⁴

Third, they believed that too many producers harmed the market. There was only so much business to go around even in the best of years, and not every year was good, especially in the midst of the Depression. Too many producers, especially nightclubs, could result in too few producers, with a subsequent loss of glamour and national notoriety; a bunch of bars playing music at all hours was not the same thing as a bunch of bars with limited musical offerings plus a couple dozen nightclubs, several with national reputations, offering a remarkable gamut of entertainers. Letting the market pick winners and losers could thus lead to collective ruin. It was the job of local government to structure the market and regulate competition so that existing participants could earn a living without encroaching too much on one another’s business while providing tourists with plenty of amusement in a liberal resort. Restricting the number of producers was, they admitted, a problematic approach to achieving that goal. City Manager Renshaw, who did more than anyone to create, implement, and monitor the regulatory system, described the “one per block” rule as an “evil” that effectively gave the landlord monopolistic control over the alcohol license because it was place based, not operator based.Footnote ¹²⁵ However, limiting licenses appeared to most public officials and vendors as the lesser of evils.

Fourth, they believed that most businesses had a primary purpose and could be confined to that in the regulatory process. Hotels provided rooms; restaurants provided food; bars provided drink. Nightclubs were distinctive because, by definition, they offered three leisure services: food, drink, and entertainment. Alcohol and music cut across these categories, but they could be carefully apportioned to preserve the essential structure of the market. Restaurants could offer string music during lunch and dinner hours; hotels and restaurants could serve alcohol, but only to their guests, because they were not bars in the primary business of serving the drinking public off the street; some bars could have music, but never so much that they became nightclubs without paying for the privilege of being in that business. The basic regulatory strategy of municipal government, therefore, was to set up lanes for each type of business, limit the number of participants in each lane so that consumers had plenty of options while producers could earn a living, and then keep everyone in their own lanes. This understanding of the local industrial structure only makes sense within the urban framework of nightlife: Small businesses, providing narrowly defined services, shared the customers attracted to this symbiotic economic agglomeration, rather than to individual businesses that happened to be in the same place. Giant hotels like the Sherry-Frontenac, for example, would be built on Caribbean islands in subsequent years, thriving by means of their self-containment rather than symbiotic urban co-location.

When large hotels asked to have their own nightclubs, they disrupted the careful parceling of economic functions at the heart of the regulatory system. The consequences were exactly those predicted by Danny Davis and small hotel operators. Although investment flowed into autonomous resort hotels, it did so at the expense of the city as a collective entertainment enterprise. By internalizing the entertainment market, large hotels assumed the mantel of star-studded glamour that had once graced the city’s entertainment districts. Simultaneously, those areas declined, leaving both public officials and business groups to lament the fact that, without them, Miami Beach had no tourist attractions. Dazzling resort hotels like the Sherry-Frontenac and the fabulous Fontainebleau may have been glamorous, but Miami Beach was not.

It is now widely accepted that cities must compete with one another for footloose capital investment and taxpayers who vote with their feet. According to the conventional wisdom, municipalities should strive for low taxes and limited regulation to improve their competitive position while avoiding redistributive obligations that might send businesses and residents in search of more appealing communities. Business climate, though sometimes couched in terms of lifestyles that appeal to the creative class, is more often defined as low costs that make for efficient, and thus profitable, production.Footnote ¹²⁶ Miami Beach, however, was not a typical producer city. Instead, it was a consumer city, where the city itself was the product. Although tourists came to Miami Beach for many reasons, a significant group of them—a majority, as far as the council could see—came because it was a place to have a rollicking good time, chock-full of bars and nightclubs, with music and drinking twenty-four hours a day, seven days a week, during a feverish winter season when it was “America’s playground.” The council, therefore, saw its role as guardian of collective success, not public cost cutter working in the service of businesses seeking low input prices. In addition to providing roads, bridges, water, sewerage, lifeguards, tennis courts, police, and advertising, the council regulated the supply of nightlife—all to give tourists the best possible experience and to keep them coming back for more. Were unregulated competition to result in a decline in nightlife, the city as a tourist attraction would suffer. For that reason, public officials attempted to limit supply in the name of collective success.