Flagler was born in Hopewell, New York. His father was Isaac Flagler, a Presbyterian minister and great-grandson of Zacharra Flegler, whose family had emigrated from the German Palatinate region to Holland in 1688. Zacharra worked in England for several years before moving to Dutchess County, New York, in 1710. His grandson Solomon changed the spelling of the surname to Flagler and passed it on to his 11 children. Flagler's mother was Elizabeth Caldwell Harkness Flagler, Isaac's third wife and a widow who had a stepson, Stephen V. Harkness, and a son, Daniel M. Harkness, from her marriage to deceased widower David Harkness of Milan, Ohio.
Flagler attended local schools through eighth grade. His half-brother Daniel had left Hopewell to live and work with his paternal uncle Lamon G. Harkness, who had a store in Republic, Ohio. He recruited Henry Flagler to join him, and the youth went to Ohio at age 14, where he started work in 1844 at a salary of US$5 per month plus room and board. By 1849, Flagler was promoted to the sales staff at a salary of $40 per month. He later joined Daniel in a grain business started with his uncle Lamon in Bellevue, Ohio.[citation needed]
In 1862, Flagler and his brother-in-law Barney Hamlin York (1833–1884) founded the Flagler and York Salt Company, a salt mining and production business in Saginaw, Michigan. He found that salt mining required more technical knowledge than he had and struggled in the industry during the Civil War. The company collapsed when the war undercut commercial demand for salt. Flagler returned to Bellevue having lost his initial $50,000 investment and an additional $50,000 he had borrowed from his father-in-law and Daniel. Flagler believed that he had learned a valuable lesson: invest in a business only after thorough investigation.

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