From Public to Private Domain
in a Blink of an Eye
Edward J. Dodson
[An unpublished paper, written February, 2008]
Discovery by European explorers of the vast and thinly-populated
western hemisphere set into motion a migration of groups from the Old
World that eventually overwhelmed others who for tens of thousands of
years slowly created their own distinct civilizations. The fate of the
First Americans was sealed, their displacement (and in some cases
annihilation) secured as soon as they became dependent upon the
weapons and other goods introduced by Spanish, French, English and
other European traders. Slowly, but steadily, what was traded for or
simply taken by force from those First Americans was the land and the
resources the land contained.
An endless series of wars, followed by peace treaties that removed
tribes of First Americans from territory accessible -- at the moment
but also in the somewhat distant future -- to Europeans, opened vast
expanses of land for settlement and the establishment of town after
town after town. The European-American migration westward from the
Atlantic coast and tidal regions exploded following independence from
Britain and the end to the war. As Thomas Jefferson assessed the
prospects for his new nation, he felt assured of a long and prosperous
future. To John Jay, he wrote:
"We have now lands enough to employ an infinite
number of people in their cultivation. Cultivators of the earth are
the most valuable citizens. They are the most vigorous, the most
independent, the most virtuous, and they are tied to their country,
and wedded to its liberty and interests, by the most lasting bonds.
As long, therefore, as they can find employment in this line, I
would not convert them into mariners, artisans, or anything else.
But our citizens will find employment in this line, till their
numbers, and of course their productions, become too great for the
demand, both internal and foreign. This is not the case as yet, and
probably will not be for a considerable time. As soon as it is, the
surplus of hands must be turned to something else."
Looking back over the 19th century, the historian Frederick Jackson
Turner agreed with Jefferson, declaring that the "most
significant thing about the American frontier is, that it lies at the
hither edge of free land." Remarkably, considering the
difficulties of wilderness life, successive stages of migration
rapidly turned the frontier into a network of farming communities and
growing cities. Absent formal institutions of government, settlers
relied on their own collective sense of justice to resolve conflicts
over who held the rights to land and, later on, water and mineral
deposits. However, as newly-populated regions created their own
territorial governments and eventually voted for statehood, the courts
were inundated with conflicting land title claims. More often than
not, graft and corruption played a decisive role in how these
conflicts were resolved.
One crucial factor to remember is that while the original thirteen
states came together to form the Union, each subsequent state
was carved out of the federally-held territory. To a national
government hard-pressed to raise revenue, selling territory to
citizens or investors was far more politically attractive than
imposing taxes on an armed population resistant to all but nominal
governmental powers. Thomas Jefferson's vision of a nation of
freeholders living off the land ran up against both practical
considerations and the broad acceptance of land speculation as the
surest means of expanding modest wealth into a personal fortune. In
his classic study of colonial social structure, Jackson Turner Main
observed, for example, that in the southern colonies, "a very
small number of wealthy men - many of them absentees - held as much as
70 percent of the real property." Many of Jefferson's
contemporaries already had long experience as land speculators. As
evidence for just how common this was, Charles Beard identified
fourteen delegates to the Constitutional Convention has having "invested
in land for speculation."
Speculation in land continued even as victory in the war for
independence from Britain was far from a foregone conclusion. Language
included under Article IX of the Articles of Confederation
empowered the Federal government to intervene when land disputes arose
between the states, and commerce in land continued during the war, as
investors gambled based on their expectation of which side would
emerge victorious and which claims to land would be upheld. In the
words of historian Page Smith: "Whereas in virtually every other
culture arable land was a rare, treasured, and lovingly cared-for
in America it was primarily a form of currency."
Between the end of the French and Indian War and the colonial
uprising against British authority, speculation in land at the
frontier attracted numerous wealthy investors, in Britain and in the
colonies. Many colonial fortunes were at stake, including that of
George Washington, who became a principal investor in the Mississippi
Company, speculating in land where the two great rivers - the Ohio and
Mississippi - meet. Similar ventures included other leading colonial
figures, such as Joseph Galloway and Benjamin Franklin. The degree of
success experienced by speculators in land from earlier years was
recorded by George Washington, who wrote that "the greatest
in [Virginia]" came about "by taking up and
purchasing at very low rates the rich back lands." Migration
into these lands, some of which continued to be occupied by various
tribes of First Americans, was well underway when the first shots were
fired at Concord and Lexington. In the southern frontier region, local
militia defeated the Cherokee and other tribes aligned with the
British, clearing even more territory for eventual settlement. The
same fate fell upon the Shawnee and even the Iroquois League. In 1779,
Washington dispatched a strong force under General John Sullivan
through Iroquois territory, destroying every village, orchard and
foodcrop in their path.
States anxious to create population buffers in the west essentially
gave away land to willing settlers. Thousands of migrants made their
way to Pittsburgh and then down the Ohio River, their arrival
vigorously opposed by desperate First Americans fighting to retain
control over hunting grounds, for their sovereignty and for their very
survival. Years of settler encroachment and tribal uprisings in
response followed, with the tribes occasionally winning battles but
always losing territory and inevitably being displaced by
The First Americans were not the only groups to have land taken from
them during and after the colonials fought for and gained their
independence. The Continental Congress authorized the appropriation of
property from Loyalists who, the Congress declared, had forfeited the
right to protection of the government. Confiscated property was sold
by the states or awarded to leading Patriots in compensation for their
own loss of property or in recognition of their services to the new
nation. Despite provisions in the Treaty of Paris prohibiting further
confiscations at the conclusion of the war, the practice continued and
few Loyalists ever received restitution.
ESTABLISHING PUBLIC LAND POLICY
Thanks to Benjamin Franklin and John Jay, the newly-independent,
sovereign and loosely
united States of America became stewards over a vast
wilderness empire. The Congress responded by adopting in 1785 a Land
Ordinance calling for a survey of this territory. Once again,
investors envisioned enormous profits from purchasing large tracts of
land cheaply, then reselling surveyed parcels to settlers lured by
promises of fertile soils, a mild climate, plentiful rainfall and
access to expanding markets along the Ohio, Mississippi and other
interior rivers. New England land prices that in some places reached
$50 an acre triggered a large scale migration in the Ohio River
Valley, Kentucky and Tennessee.
The restless and adventuresome showed the way westward, living in the
wilderness by hunting and trading with the tribes they encountered.
Traders followed, then settlers to clear the land and establish their
farms. Their motivation is described by historian Ray Allen
"Many who left New York and Pennsylvania were
frontiersmen who, living on the western fringe of civilization,
drifted naturally with the moving tide. In Virginia, Maryland, and
North Carolina soil exhaustion forced thousands to abandon their
farms, particularly in the hilly Piedmont region where heavy rains
had washed essential minerals from cultivated soil. More were driven
from their homes by the expansion of plantation agriculture into the
Piedmont and Great Valley during the post-Revolutionary years."
Many speculators - either without cash or not wanting to risk their
own cash - entered into contracts to pay for land by installment -
hoping to quickly find others to take them out at a substantial
profit. Even George Washington continued to invest in land after
taking office as the first President of the United States. At his
request, Benjamin Stoddert purchased key parcels of land in the area
that would become the nation's capital. Thus, Washington benefited
significantly by the increase in land prices that occurred after the
location was publicly announced.
DISPOSING OF THE PUBLIC DOMAIN BEGINS
As one could predict, rapidly rising land prices, fueled by credit,
ended in a market collapse by early 1792. Shareholders in the most
highly-leveraged land companies endured huge losses. Nonetheless, new
companies were formed to acquire the holdings of those that failed.
Billington writes that by the end of the eighteenth century nothing
short of a "mass exodus was under way" from the original
states into the wilderness. The Secretary of the Treasury, Alexander
Hamilton, sought to dispose of the public lands in large tracts in
order to raise as much revenue as possible as quickly as possible.
Responsibility to carry out this policy was entrusted to a new General
Land Office headed by three commissioners.
In 1795, Hamilton resigned and was replaced by Oliver Wolcott.
Wolcott was charged with implementing the Land Law of 1796, setting up
a sales office in Pittsburgh. Yet, at this early date the initial
sales went very slowly until the public lands were surveyed. The
appointment of Rufus Putnam as surveyor general demonstrated what
historian Malcolm Rohrbough described as "the strong connection
between the administrators of the public land and the land business."
Putnam had been a principal of the Ohio Company and heavily involved
in land speculation.
Following the creation of the Northwest Territory in 1800, William
Henry Harrison was sent to the capital as the Territory's non-voting
representative. Harrison, writes Malcolm Rohrbough, was charged with
obtaining "changes in the land system: smaller tracts, lower
prices, credit, more convenient land offices, and pre-emption."
A new land law, signed by President Adams, was soon passed and put
Following his election to the Presidency, Thomas Jefferson appointed
Albert Gallatin as Secretary of the Treasury. Gallatin, who had
immigrated from Geneva in 1780, was, himself, something of a land
speculator. He had speculated in Virginia land warrants, then settled
in western Pennsylvania, where he farmed and also speculated in lands.
As a matter of public policy, he advocated the sale of small tracts of
land to actual settlers.
In 1803, President Jefferson negotiated the purchase from France of
the Louisiana territory, adding more than 500 million acres of public
lands west of the Mississippi River. Congress created 14 new districts
besides those established in 1800. For each new district a land office
had to be set up and two new officials appointed to run the district.
By law, the land offices were to be closed and districts consolidated
when less than 100,000 acres of land in a district remained open for
Over the next twelve years, Gallatin supervised his department's sale
of some 4.3 million acres of land. Successive Republican
administrations lowered the minimum number of acres required to be
purchased. Despite these measures, speculation in land remained a
constant. The states facilitated the process by chartering banks with
a mandate to provide credit to land companies and individual
investors. Sales of public lands doubled, then doubled again.
Speculators resold to farmers in tracts of between 40 and 160 acres.
Farmers then cleared and planted the land until its fertility
disappeared, after which they packed up to move further west. By this
process, population moved out along the tributaries of the Mississippi
Although laws were passed prohibiting squatters from settling on
public land and calling for their forcible removal, these laws failed
to prevent settlers from occupying land that was not yet available for
sale. In many cases, these settlers were eventually forced off the
land by legal purchasers. Eventually, however, the Congress was
persuaded that squatters ought to have an opportunity to purchase land
they had been living on.
SPECULATION ALONG THE INLAND CANALS
The earliest and most significant investments in infrastructure were
the inland canals. By the early 1790s there were some thirty canal
companies in operation. The first major project occurred in
Massachusetts, from Boston Harbor to Chelmsford, on the Merrimac
River. Speculators purchased all the shares in the company, and
between 1794 and 1804 (when the canal was opened for business), the
market price for the shares rose from $225 to $475. Historian Page
Smith describes what then occurred:
"The Middlesex Canal was a manifestation of
energy and ingenuity. It was also typical that the undertaking
proved much too ambitious.
Its debts were never discharged,
and thousands of investors lost their money. But other thousands who
had speculated in the canal stocks during the nine years the canal
was being built made small fortunes."
Other canals followed - in Connecticut, Massachusetts, Rhode Island,
and Virginia (with George Washington as President of the Potomac
"A seven-mile canal around the falls at Richmond
was completed in 1789, opening up almost two hundred miles of river,
and a flood of goods
poured into Richmond. The city
experienced a boom, and land values rose for the farms and
plantations along the river."
By far, the most ambitious and important canal project was the Erie
Canal, begun in 1817. The finished canal stretched out over 363 miles
from Lake Erie to the Hudson River. The main impact of the canal was
to catapult New York City above Boston and Philadelphia as a
commercial center. Moreover, the canal was a financial success, even
with the rapid expansion of railroads about to spread across the
continent. Pennsylvania countered with a canal system stretching from
Philadelphia to Pittsburgh, a $10 million, 320 mile project, completed
in 1834. Ohio's canal system actually opened a year earlier and was
continuously extended throughout the decade. More sparsely populated
Indiana initiated its canal program in 1832, beginning at Ft. Wayne,
with the objective of linking the Wabash and Miami rivers.
RAILROADS MOVE THE FRONTIER WESTWARD
Even as the canal system continued to be constructed, railways were
entering the transportation competition. One of the first was the
Baltimore and Ohio Railroad system, which opened operations between
Baltimore and Frederick, Maryland in 1831. A decade later the system
was extended westward to Cumberland, Maryland, then crossed over the
mountain range into northwestern Virginia and Ohio. Railway lines were
started across Illinois and Michigan. These and other internal
improvements were funded by the issuance of bonds sold in New York and
London. The enormous amount of revenue raised by these bond issues,
combined with currency issued by state-chartered banks, resulted in a
surge in land speculation. As Ray Allen Billington observes:
"Speculators were so active in laying out 'town
sites' in the West that one legislator seriously proposed setting
aside two acres in each township for farming."
In the meantime, the East was experiencing a severe economic
downturn, which stimulated Horace Greeley's newspaper, the New
York Tribune, to declare: "Fly, scatter through the country,
go to the Great West, anything rather than remain here." These
stresses brought on a burst of the western speculative land market.
Mounting loan losses forced bank after bank to close their doors.
State finances collapsed and most defaulted on outstanding bond debt.
Investors absorbed losses in excess of $100 million. Hard currency
(i.e., specie) was in extremely short supply, credit was nearly
impossible to acquire, so settlers simply resorted to squatting on
Within a few years, the credit fueled inflation in land prices
throughout the frontier regions was checked by the broad economic
contraction. Still, huge numbers of settlers poured into the Ohio
River Valley and continued on. At the same time, improvements in
railroad technology attracted new sources of private investment in
railways. New rail lines out of Philadelphia and Baltimore extended
deep into the interior - as far as Chicago, Indianapolis and St.
By a wide margin, the biggest beneficiaries of Federal land grants
were the railroads. Thanks to the efforts of U.S. Senator Stephen A.
Douglas of Illinois, Congress in 1850 adopted legislation granting "alternate
sections of land on either side" of a right of way from Chicago
to Cairo, "to a distance of six miles." Thusly
encouraged, by the early 1870s, the railroads acquired rights to
nearly 160 million acres of land adjacent to the new transcontinental
rail lines. They were given legal title to an area exceeding the
entire northeastern region of the United States.
Expansion of the railroads across the interior of the nation
facilitated the growth of cities into industrial and financial
centers, as well as creating new markets for agricultural commodities
and meat. Immigration provided almost all of the labor force, causing
the populations of most cities to explode within just a few decades.
Jefferson's hope for a nation of self-sufficient farmers, working the
land they owned, quickly disappeared after conclusion of the War
Between the States. By 1900, the population of New York City more than
tripled, to 3.4 million. Chicago grew from just over 100,000 to nearly
1.7 million; and, San Francisco's population jumped from around 56,000
to over 340,000. In parts of the cities, many stately homes were
replaced with tenement apartment buildings and dirty factories as the
industrial demand for land intensified. Sanitation was next to
nonexistent, and conditions were, to say the least, dangerously
overcrowded. Living through this period in California, Henry George
"In all the new states of the Union, land
monopolization has gone on at an alarming rate, but in none of them
as fast as in California, and in none of them, perhaps, are the evil
effects so manifest."
A nation growing at such a rapid rate consumed natural resources,
particularly timber, at an almost unimaginable rate. Timber companies
not only devastated the land, they also engaged in numerous land
speculation schemes. Wherever forests existed, the timber companies
found ways to circumvent laws to harvest the timber without having to
compensate state or Federal agencies for the privilege.
As the frontier receded with the arrival of settlers, the pace of
land speculation accelerated. Public land auctions in some regions
brought in little revenue, in part because bidders colluded to keep
bids low. Each time government agents negotiated the transfer of
tribal lands to the United States, speculators waited in the wings.
The construction of railway lines required other internal
improvements, including bridges and tunnels. The mere announcement
that a railroad bridge was to be planned ignited speculation in land
along the anticipated routes. Sometimes speculators reaped tremendous
profits; in other instances, development did not follow as quickly as
hoped and speculators were faced with having to carry debt for many
years without a corresponding income.
WESTWARD FROM THE MISSISSIPPI RIVER
The Mississippi River long had been a major thoroughfare for both
commerce and people. Other major river systems flowed from the East
and the West into the Mississippi and provided a natural path for
settlement, although there were significant topographical obstacles
and other challenges facing pioneers venturing beyond the Mississippi.
The opening of the Far West to Americans began with the expedition
led by Meriwether Lewis and William Clark on orders from Thomas
Jefferson. They made their way from the nation's capital to St. Louis
late in 1803, and in the spring of 1804 headed west and then north
following the course of the Missouri River. After wintering in the
Dakotas with the Mandan people, the expedition made its way to the
Pacific Ocean. Late in September of 1806 they arrived back at St.
Louis. Other expeditions followed, as did a virtual avalanche of
frontiersmen eager to trap beaver for sale of the animal's fur in the
East. They also served as a vanguard, discovering the best routes
westward through the mountains to lands where there was fertile soil,
reliable rainfall and few hostile First Americans to engage in a
struggle for territorial control.
Settlers had begun to arrive in Missouri soon after the end of war
with Britain in 1815, establishing farms along the Missouri and
Mississippi rivers. Missouri became a state in 1821, after which
immigration accelerated even more. New towns were laid out every year,
with a pattern repeating again and again:
"The earliest newcomers occupied the prize spots:
the rich-soil river bottoms, the loess hills, the most fertile
grasslands. Nearby salt springs were also an attraction, as were
timber stands needed for housing, fuel, and fencing. As these
filled, the rate of occupation diminished while later-comers moved
onto the better lands of the next adjacent region. This tended to
drive down the price of the less-favored portions where the soils
were less fertile and the terrain more rugged. As soon as
speculators lowered the price to reflect the true value of the land,
settlement began again, flowing over the hills and the less-fertile
One after another the tribes of First Americans were encroached upon,
defeated in battle, and then forced to move further west. Iowa was
thus opened for settlement in 1832, and some 10,000 settlers staked
their claims by 1836. Four years later that number had jumped to over
43,000. None had yet acquired legal ownership of the land they
claimed, but they joined together to protect one another's claims from
outside speculators and agreed to bid only the minimum accepted price
once the Federal government set up a land office and conducted formal
sales. These measures did not deter all speculators, who found ways to
circumvent the wrath of the so-called Claim Associations. One
way the speculators did this was to purchase land, then enter into a
contract with another party to sell the land at a stated price at some
future date. Iowa entered the Union in 1846, and by 1850 its
population had climbed to nearly 200,000.
A similar process occurred to the north, following the 1837 cession
of lands by the Sioux and Chippewa nations. Here, the initial
attraction was timber. Farmers followed, catering to the needs of the
lumber industry. More land was taken from the Sioux in 1851, and a
flood of settlers and land speculators followed. Minnesota came into
the Union in 1858, with a population of some 172,000.
The story of the settlement of the area that became Kansas City,
Missouri is not unique. At the end of 1856 a group of investors
arrived in the Kansas Territory with the attention of acquiring land
and beginning construction of a new frontier town. They chose the land
where two rivers - the Kansas and Missouri - met. At the time, the
location was peacefully inhabited by the Wyandot tribe, so the
investors met with representatives of the tribe to negotiate purchase
of the land. After surveying the area and laying out a plan for the
town, sales began in mid-1857 at an initial price of $500 per share,
with the final 400 shares sold at double the initial price.
Texas Is Added to the Union under Rather Different Circumstances
Decades earlier, in 1825, the newly-independent Mexican government
sought to encourage settlement in Texas, exempting new arrivals from
taxation for ten years. Stephen Austin had already obtained a
significant grant and approval to bring 600 Catholic families into
Texas, and by 1833 land was distributed to nearly 1,100 families.
Austin received 12-1/2 cents for each acre of land settled on.
The situation in Texas intensified with the election of Andrew
Jackson as President of the United States. Jackson wanted to add Texas
to United States territory, raising the threat of a military invasion.
The government in Mexico City decided to encourage Europeans and
Mexicans to settle in Texas and to increase the number of troops based
there. Further immigration from U.S. territory was prohibited. These
measures all failed; and, in fact, far less law-abiding migrants took
the place of Austin's carefully selected settlers.
In 1830, James Bowie went to the capital and obtained a large number
of grants purchased from Mexicans who agreed to apply for them based
on his promise of purchase. The Mexican government relented on the
question of further immigration of Americans into Texas, but tensions
were already escalating. The situation worsened when General Santa
Anna became president in 1832. Armed conflict broke out in 1835,
ending with Santa Anna's defeat and capture in April of 1836, and the
independence of Texas.
Between 1836 and 1845 (the year Texas came into the Union as a result
of a resolution adopted by the U.S. Congress), immigrants brought the
population up to 142,000. Five years later, that number had jumped to
212,000. Every arriving family received an outright grant of 1,280
acres of land.
EASTWARD FROM THE PACIFIC
The European powers competed for control of the Pacific coast of
North America for almost as long as they fought over the Atlantic
coast. The Spanish explorer Vasco de Balboa was the first European to
set foot on the Pacific coast. Magellan followed by sailing around the
southern tip of the continent to enter the Pacific Ocean. The prospect
of claiming land in the Americas proved to be extremely enticing to
the second or third sons of Europe's aristocratic families, who,
because of the laws of primogeniture, were disinherited of their
family's landed estates. In quick succession, the Aztec, Mayas and
Incas fell to these Spanish conquistadors. Then, firmly in control of
these territories, the Spanish sent expeditions north.
Spanish immigrants soon arrived to establish settlements on the South
American continent, some 200,000 making the journey during the late
16th century. Their arrival resulted in decimation of the indigenous
populations. In less than a century, only 1 million of an estimated 25
million native people survived. Yet, the exploration and settlement of
territories north of Mexico City languished. Efforts to colonize the
northern reaches of Spanish-held territory finally began as a result
of the Seven Years War in 1756 and the challenges this presented to
Spain's hegemony in the region. A series of military forts were
constructed along the California coast, northward from San Diego to
Santa Barbara, San Francisco and Monterey. Small towns (pueblos)
sprang up near the forts and missions, and the towns offered land
grants to settlers. Even so, very few Spaniards able to do so were
interested in settling in New Spain. Eventually, land grants were also
awarded to non-Spanish settlers in an effort to encourage loyalty to
Spanish culture and Spain's system of government in the region
survived only until the 1840s and the discovery of gold. The
population of San Francisco, a small village of just a few hundred
families, became the epicenter for adventurers seeking their fortunes
in the gold fields. The demand for land in San Francisco skyrocketed,
as entrepreneurs competed for choice locations. Land parcels that sold
for just a few dollars in the mid-1840s were commanding over $40,000
or more by the end of the decade.
No one person benefited more by the Gold Rush to California than
Samuel Brannan, who arrived in San Francisco in 1846 intent on
establishing himself as a newspaper owner. By January of 1847 his
California Star, was being published. He also owned a hotel,
flour mill and general store. When he noticed a trickling of miners
were using gold to make purchases, he guessed what was ahead and began
to accumulate goods of every kind for resale. He opened several new
stores, including one at Sutter's fort. Brannan, it is said, actually
went out into the streets of San Francisco, loudly announcing that
gold had been discovered on the American River. As prices for supplies
needed by the miners skyrocketed, Brannan began to amass a sizeable
fortune, a good deal of which he converted into land purchases. By
1856 he owned one-fifth of San Francisco and a similar portion of
Sacramento. He went on to establish several banks, as well as railroad
and telegraph companies. Ironically, the effects of alcoholism later
drained his fortune, and he died in 1889 without notice in rural San
The region north of San Francisco was also hotly disputed by the
European powers, as well as the fledgling United States. Originally,
Spain, Great Britain, Russia, and the United States claimed the
territory. In 1819, however, Spain ceded its claims to the territory
to the United States. Shortly thereafter the United States challenged
the Russians over fishing, whaling, and commercial rights. The U.S.
pointed to the explorations of Lewis and Clark as a basis for its
territorial claims, as well as the presence of trading posts built by
the Pacific Fur Company (owned by John Jacob Astor). Britain based its
claim, in part, on James Cook's exploration of the Columbia River.
As early as 1818 British and American Commissioners agreed to set the
border between the United States and Canada at the 49th parallel from
the Lake of the Woods (Minnesota Territory) west to the Rocky
Mountains and joint occupation of the territory beyond to the Pacific
Ocean. Some agreement was reached in 1842, but the treaty of that year
still did not define the border of the Oregon Territory. Settlers were
making their way along the Oregon Trail in every increasing numbers,
creating pressure on U.S. President James Polk to try to get the
British to agree to a firm border. With some minor modifications,
which reserved the whole of Vancouver Island to Canada, Great Britain
agreed to the 49th parallel. The stage was then set for the
unrestricted opening of the Oregon Territory to settlement.
A plan for migration to Oregon was put into motion by one Hall
Jackson Kelley, who in 1831 formed the American Society for
Encouraging the Settlement of the Oregon Territory. Kelley's efforts
failed for lack of government support, but his vision stimulated
another group under Nathaniel J. Wyeth to make the journey west. Wyeth
made it to Ft. Vancouver but was forced to return east because a ship
carrying the goods he anticipated to engage in the trading business
was lost at sea. A second venture proved only marginally successful,
resulting in the construction of several forts soon sold to the
monopolistic Hudsons' Bay Company. Kelley and Wyeth were followed by
several groups of settlers organized by religious leaders eager to
bring their Christianity to the far west. By 1840 there were some 120
farmsteads established in the Willamette valley. Economic problems in
the East, setting off the Panic of 1837, also contributed to the
growing number of settlers arriving. Additional migrations lifted the
population to around 6,000 by 1845. A first hand account of the
migration is left to us by Francis Parkman, Jr., who wrote in 1847:
"Many of the emigrants, especially those bound for
California, were persons of wealth and standing." "I have
often perplexed myself to divine the various motives that give
impulse to this strange migration; but whatever they may be, whether
an insane hope of a better condition in life, or a desire of shaking
off restraints of law and society, or mere restlessness, certain it
is that multitudes bitterly repent the journey, and after they have
reached the land of promise are happy enough to escape from it."
URBAN SPECULATION IN A NATION OF FREEHOLDERS
There are, of course, many more specific stories that might be told,
and have been told in the countless books detailing the establishment
of settlements throughout the continent. The patterns described above
repeated again and again. Only the Mormons settling at the southern
tip of the Great Salt Lake adopted a system of land distribution based
on need and permanent community control. Everywhere else, land became
just another type of commodity, to be bought and sold, its fertility
or natural resources exploited, and the land abandoned. The
wilderness, after all, was thought to be a limitless expanse.
Cities in the Midwest experienced rapid bursts of population growth
once connected to one another by railway lines. In 1855 the first
railroad bridge was completed across the Mississippi River. Additional
rail links were constructed throughout the 1860s, halted only by
another economic collapse in 1873. Remarkably, the decision to
construct a transcontinental rail line was approved by the U.S.
Congress in mid-1862 - while war raged on with the rebellious southern
states. The two companies enlisted for the project - the Central
Pacific Railroad and the Union Pacific Railroad - were granted
rights-of-way of four-hundred feet, plus ten alternate sections of
land for each mile of track completed. When private financial
resources did not materialize, the size of the land grants were
doubled and other subsidies were provided by the government. This did
the trick. Investors purchased stock in the two companies, enabling
construction to be completed in May of 1869, when the rail lines met
Railroad lines were crucial to development of an integrated national
economy, but they were only one of many technological innovations that
encouraged the growth of population in much of the West. Windmills
served to secure a steady source of water where rainfall was
unreliable. Barbed wire enabled farmers to affordably enclose large
areas of cropland and protect crops and domesticated animals from
predators and free ranging herds of steers. New cultivating and
harvesting machines made large-scale commercial farming profitable. As
costs per unit of output fell, farmer profits increased, but the cost
advantages were capitalized into higher and higher land prices. The
nation was already well into a new era characterized by agrarian and
industrial landlordism and political corruption, as described by Ray
"With the machine age control of the government
slipped from the hands of farmers into those of eastern
industrialists. The 'robber barons', concerned less with expansion
than exploitation, not only frustrated every western effort to erect
a satisfactory land system but plundered the public domain so
ruthlessly the frontier advance was seriously retarded."
In what must be the greatest give-away in human history, the U.S.
federal and state governments awarded grants to the railroads of over
180 million acres of land. Road and canal companies received an
additional 3 million acres. Millions of acres more were acquired at
minimal cost. The final total approached 500 million acres.
Curiously, one of the era's most successful land speculators, John
Jacob Astor, brought the profits he made in the Western fur trade back
to New York City rather than invest them in the new cities of the
interior. At the time, few others looked upon New York City real
estate as an opportunity for building a massive fortune. "When
Astor began buying property in 1804," observes Dana L. Thomas, "no
one could have foreseen that within twenty years a canal would be
built - the Erie - linking New York by waterway with the Great Lakes
and turning it into the number one commercial center of the nation."
Astor's fortune was reported to be around $20 million when he died in
1848. His son, William, continued to build on his father's real estate
holdings. "By 1875, Astor owned over seven hundred buildings and
houses, besides numerous tracts of raw land." His fortune was
estimated at $200 million at the end of the nineteenth century.
John Jacob Astor's fortune was nearly matched by a Midwest land
speculator named Nicholas Longworth, who managed to gain control over
a significant portion of the city of Cincinnati. Longworth arrived in
the frontier town in 1803, apprenticed himself to a judge and
eventually entered the practice of the law. He soon acquired his first
tract of land and, realizing the potential for Cincinnati to develop
into a major commercial center, continued to quietly amass land at the
edge of town. By 1830 the population of Cincinnati reached 25,000;
twenty years later it reached 173,000. Land values escalated, and
Longworth became a very rich man. His heirs received a fortune
estimated at $50 million, which continued to grow as the Cincinnati
region grew and prospered.
Every region had its share of successful land speculators. In New
Orleans there was Daniel Clark, who settled there after immigrating
from Ireland in 1784 and began acquiring acreage in and around the
city. His estate had an estimated value of over $50 million.
In Nebraska, George Francis Train had the foresight to purchase five
hundred acres of land where the city of Omaha would soon rise as a
meat-packing center served by the Union Pacific Railroad.
The banker Jay Cooke made huge profits as part owner of the
Philadelphia and Erie Land Company, then invested heavily in land in
northern Minnesota, at the head of Lake Superior, guessing that Duluth
would become a major railroad terminus. He then added certainty to his
speculation by acquiring a large holding of shares in the Northern
Pacific Corporation, after which he used his influence in Congress to
obtain a railroad land grant of 1.5 million acres. One Congressman,
critical of the giveaway, declared: "It leaves no land for
another road in the whole northern part of the United States, and
provides a single syndicate with a monopoly of the wheat fields,
pastureland, forests, fisheries and mines of the Pacific Northwest."
A frenzy of land speculation followed, until other events intervened
to bring Cooke's house of cards crashing down. A chain of bank
failures and a temporary closing of the New York Stock Exchange
occurred in rapid succession. The nation's economy came to a
screeching halt. Although Cooke's corporation was forced to declare
bankruptcy, his landholdings remained intact and eventually returned
huge returns to Cooke and others who managed to hold on during the
recession years of 1873-78.
Chicago's growth began in the mid-1830s on news that a canal was
planned to connect the city with the East. Speculators arrived daily
at a new government land office ready to purchase city lots. Prices
for centrally-located parcels in the city tripled within a year. By
the middle of 1836, the total market value of land in Chicago reached
$10.5 million, an increase of 10,000 percent from 1830. Even so, the
great fortunes made from Chicago land speculation were still to come.
Potter Palmer, already wealthy from other business ventures, opened a
store in Chicago in 1852 and began acquiring choice land parcels. He
was followed by Marshall Field, who came to Chicago to work in the
dry-goods business. Field was eventually approached by Palmer, who
invited Field to purchase Palmer's store. The deal went through, and
Field managed to outlast an economic slowdown following the end of the
War Between the States to see a significant return on his investment.
Then, in October 1871 fire broke out, spread by a dry wind, consuming
everything in its path. Three and a half miles - some 17,000 buildings
-- were totally destroyed. And, of course, land values fell
dramatically among a pessimistic population. Palmer immediately began
to rebuild and acquire additional parcels. Field did much the same,
buoyed by a $2 million insurance policy on his store.
Fortunes build on land speculation depended on one dynamic, more than
any other: the rapid increase in population. Thomas Jefferson looked
over the vast expanse of the American domain and thought the
wilderness would provide a safety valve for the nation's people for
two centuries, perhaps longer. He grossly underestimated the
attraction of free or inexpensive land to both Americans of European
heritage and millions of people in the Old World. In 1840, just
fourteen years after Jefferson's death, there were some 10 million
people living in the states from Maine to Florida, as far inland as
the Appalachian mountains. Another 6 million resided in the
Mississippi Valley and along the Gulf of Mexico. Moreover, the
percentage of the population living in villages, towns and cities had
increased from 10 percent to 25 percent.
The number of immigrants arriving in 1826 was around 11,000 (half of
whom were Irish). Nearly 80,000 immigrants arrived in 1837; and, after
the devastating blight hit the Irish population's main food crop, the
potato, a flood of Irish immigration began. By 1854, immigration rose
to over 427,000, with over 3 million new arrivals entering the United
States during the decade. Nearly one-third of this total had come from
Despite terrible living conditions, low pay for grueling work, and
all manner of discriminations against them by earlier arrived
European-Americans, immigrants slowly but inevitably established
themselves and began to spread out across the continent. Eastern
cities were in no position to absorb the huge number of immigrants who
passed through on their way westward. Neither employment, housing nor
other public services were available. Despite these problems, however,
whole sections of eastern cities served as staging areas for wave
after wave of new immigrants. One cannot fault New York's mayor in
1826, Philip Hone, for wanting nothing more than to stem the flow of
the uneducated poor from abroad:
"Every part of Europe is uttering the appalling cry
of bread! Bread! and (strange and wonderful state of things) the New
World supplies the wants of the Old, the mother derives nourishment
from the child.
All Europe is coming across the ocean; all
that part at least who cannot make a living at home; and what shall
we do with them? They increase our taxes, eat our bread, and
encumber our streets, and not one in twenty is competent to keep
As we now know, tragically unjust socio-political arrangements and
institutions destined most immigrants to lives of desperate poverty.
The wilderness continent provided some measure of opportunity and a
living superior to that offered in the eastern cities, but the safety
valve was insufficient to prevent the cities of the East from
nurturing the worst behaviors associated with an entrenched class
system. Life in the nation's cities would get much worse before
essential reforms were even considered. Even then, the one reform that
had the power to end speculation in land and its detrimental effects -
the public collection of the rental value of land - was rejected by a
citizenry addicted to a form of property that often yielded huge
profits without the need to risk investing in buildings or commerce.
Henry George lived thru the period covered by this brief historical
overview. In his last years, George's message was being spread around
the globe by other thoughtful reformers committed to implementing his
solution to the land question. His sense of optimism for the future
came through in his editorial printed in the final edition of his
newspaper, The Standard, which ceased publication at the end of
"Where in the beginning it stood alone, there are
now scattered over the United States hundreds of local journals
devoted to the same cause, while the columns of general newspapers
of the largest circulation are freely opened to the advocacy of our
The ignorance and prejudice which the earlier files of
'the Standard' showed that we then had to meet, have
disappeared, and among our most active friends are thousands of men
who then believed our success would be the destruction of society.
George overestimated the extent to which the movement he started had
penetrated and disrupted conventional wisdom around the globe. He
underestimated the extent to which entrenched privilege dominated the
political will within the world's republics, even those ostensibly
democratic in form. Yet, in one of the articles included in his 1883
book, Social Problems, he accurately forecasted that time was
already running out because of the pervasive nature of land
speculation occurring in the United States:
"The day is near at hand when it will be no longer
possible for our increasing population freely to expand over new
land; when we shall need for our own millions the immense surplus of
food-stuffs now exported; when we shall not only begin to feel that
social pressure which comes when natural resources are all
monopolized but when increasing social pressure here will increase
social pressure in Europe. How momentous is this fact we begin to
realize when we cast about for such another outlet as the United
States has furnished. We look in vain.
Where land is already
granted and where peon labor can be had for a song, no such
emigration can take place as that which has been pushing its way
westward over the United States."
Our struggles to overcome the intense societal problems caused by the
concentrated control over nature are ongoing. Under our existing
systems of law and taxation, the rewards to those who have the means
to speculate in land are often enormous. Even for those of us who own
no more land than the parcel on which our residence sits, the gain in
the selling price for our property is accepted as a reward for years
of taxes paid to our local government and school district. We are, in
so many ways, locked in the embrace of land speculation as a financial
survival strategy. Individually, this makes perfect sense. For our
society, our very civilization, the embrace is a death sentence.
NOTES AND REFERENCES
- Thomas Jefferson to John Jay, 23 August, 1785.
- Frederick Jackson Turner. "The Significance of the
Frontier," American Historical Association, Annual Report
for 1893 (Washington, 1894), 199-227. Reprinted in: Frontier
and Section, Selected Essays of Frederick Jackson Turner,/i>
(Englewood Cliffs, NJ: Prentice-Hall, Inc., 1961), p.38.
- Jackson Turner Main. The Social Structure of Revolutionary
America (Princeton, NJ: Princeton University Press, 1965),
- Charles A. Beard. An Economic Interpretation of the
Constitution of the United States (Toronto, Ontario:
Collier-Macmillan edition, 1965. Originally published 1913),
- Article IX reads, in part: "All controversies concerning
the private right of soil claimed under different grants of two or
more States, whose jurisdictions as they may respect such lands,
and the States which passed such grants are adjusted, the said
grants or either of them being at the same time claimed to have
originated antecedent to such settlement of jurisdiction, shall on
the petition of either party to the Congress of the United States,
be finally determined as near as may be in the same manner as is
before prescribed for deciding disputes respecting territorial
jurisdiction between different States."
- Page Smith. The Shaping of America, A People's History of
the Young Republic, Vol. 3 (New York: McGraw-Hill, 1980),
- Quoted in: Henry Wiencek. An Imperfect God: George
Washington, His Slaves, and the Creation of America (New York:
Farrar, Straus and Giroux, 2003), p.27.
- Ray Allen Billington. Westward Expansion, A History of the
American Frontier, 4th edition (New York: Macmillan Publishing
Co., Inc., 1974), p.240.
- Malcolm Rohrbough. The Land Office Business,/i> (New
York: Oxford University Press, 1968), p.21.
- Ibid., p.23.
- Page Smith. The Shaping of America, A People's History of
the Young Republic, Vol. 3 (New York: McGraw-Hill Book
Company, 1980), p. 331.
- Ibid., p.334.
- Ray Allen Billington. Westward Expansion, A History of the
American Frontier, 4th edition (New York: Macmillan Publishing
Co., Inc., 1974), p. 321.
- Ibid., p.330.
- Henry George. Our Land and Land Policy, National and State
(San Francisco, CA: 1871), p.13.
- Ray Allen Billington. Westward Expansion, A History of the
American Frontier, 4th edition (New York: Macmillan Publishing
Co., Inc., 1974), p. 395.
- Francis Parkman, Jr. The Oregon Trail (Garden City, NY:
Deluxe Editions Club edition. Originally published, 1847), p.1.
- Ibid., p.4.
- Ray Allen Billington. Westward Expansion, A History of the
American Frontier, 4th edition (New York: Macmillan Publishing
Co., Inc., 1974), p. 606.
- Dana L. Thomas. Lords of the Land (New York:
G.P.Putnam's Sons, 1977), p.38.
- Ibid., p.44.
- Quoted in: Ibid., p.106.
- This occurred in 1873, triggered by the fires destroying
three-fourths of Chicago and the commercial district of Boston, as
well as the financial panic caused by Jay Gould's attempt to
corner the nation's gold supply.
- Quoted in: Page Smith. The Nation Comes of Age, A People's
History of the Ante-Bellum Years, Vol.4 (New York: McGraw-Hill
Book Company, 1981), p.740.
- Quoted in: Henry George, Jr. The Life of Henry George
(New York: Chelsea House edition. Originally published, 1900),
- Henry George. Social Problems (New York: Robert
Schalkenbach Foundation edition, 1966. Originally published,