JULY 2018

JULY 2018
One Hundred Years Later, Same Message. 1916 - 2017


Sunday, March 20, 2011


I wonder if you realize how little different America was in the first decade of the nineteenth century from the America we know today. The 1810 census recorded the nation's population as just over 7 million. The industrial revolution was still a generation away. But what America did posses in 1800 that we do not have today was was land. For the only time in American history, the adage about land being the one thing “they were not making any more of” was not true. For that was exactly what was being created on the American frontier. And yet, curiously, land prices remained cripplingly high.
This all came about because of Alexander Hamilton's great compromise. He exchanged setting the Federal district between Virginia and Maryland, two states which had little debt, for allowing the Federal Government to take over all the States' debts. This put the American economy on a solid financial footing. This was a good idea, but there was a downside, as explained in “Land Speculation and Other Processes in American Historical Geography”, by Donald Holtgrieve, published in the Journal of Geography in 1976. “Hamilton’s plan was to gather quick returns even if speculators would also profit greatly from land sales...over one-half of the land disposed of by the federal government in the history of this country went through the hands of professional land dealers before it was occupied.”
What this meant for early America was noted by Krout and Fox in their seminal 1944 book, “The Completion of Independence”. “The price of farmland, except near cities, averaged between ten and fifteen dollars per acre...Many an Eastern farm must have sold in 1800 at a higher price than it did, with better buildings, in 1900.” The values of actual sales were in direct contrast with the official price, set in 1795 at a mere $2 an acre. But those official bargains were only available in parcels of 320 acre lots.
And as was, again, noted in “The Completion...” “The common Carey Plow (above) was made entirely of wood, save for an iron collar to cut the sod...With such an implement an acre was a good days work." In other words, any farm over forty acres was simply of no use to a family depending upon farming for its livelihood.
The only people who could afford to buy into the Federal auctions were wealthy speculators and combines of speculators, who re-surveyed and subdivided the land, and then re-sold it to smaller speculators, who re-surveyed and re-sold it to even smaller speculators. Of course, most of these "after market sales" were made with borrowed money, usually borrowed from the previous owner. And should a speculator be caught short on a payment, the lands would return to the lender. So, many land sales were foreclosed upon again and again. And at the bottom of this pyramid of profit it was possible for yeoman farmers to pay as much as 40% interest to buy their farms. "Farmers were thus forced to grow (not food for their own tables, but )cash crops like tobacco or cotton, to pay their debts.” And even if, “...a farmer who found a desired piece of land became a squatter by clearing and planting it with the hope of one day purchasing the acres he had improved... when the cleared lands went up for auction, a speculator could out-bid the squatter....”
George Washington was a speculator, as was Thomas Jefferson, John Adams and Andrew Jackson, and Meriwether Lewis. And none of these great men were above hiring thugs to drive squatters off “their” land. It was the speculators who drove Abraham Lincoln's father off his farm in Kentucky, and again off his farm in Indiana and eventually drove him to Illinois, where Abraham gave up farming entirely. As another source writing about this unromantic American frontier points out, “As a consequence of monopolistic tactics and official fraud, northern Alabama lands were overwhelmingly engrossed by absentee speculators and wealthy settler elites.” The leveling process of the American frontier was largely a myth, created by the wealthy in a natural effort to romanticize their past. On the frontier, as in the Eastern cities, money talked. America did not have to be settled in this fashion. But it was.
The image was that everyone seemed to be getting rich off land speculation. But the reality was that a majority of speculators lost money. And the farther you were down the food chain from the original government auction, the less chance you had to see a profit. Like the stock market bubbles of later generations, those drawn into the land market bubble had to quickly sell at profit or they went broke. That drove the prices up, which made the almost unlimited American lands, painfully expensive. As it was in 2000, so it was in 1800; the only guarantee of a profit was to be an Eastern Banker, or to have one as a partner.
It was this reality which faced Meriwether as he first stepped on the docks of St. Louis.
Lewis did two things immediately which almost assured he would be a failure as a Governor. First he announced that should he be out of the territory for any reason, then his old comrade William Clark (who Jefferson and made the Indian Agent) would serve as acting Governor. This made sense to Meriwether because he was new in territory and he knew and could trust Clark. But it was also a disaster, because Frederick Bates was the Lieutenant Governor, and had been the acting Governor for almost a year while Lewis had slowly made his way west. Bates was, officially,  the man who was legally required to be the acting Governor. It was an insult Lewis was not required to deliver and had probably not intended upon delivering. But because he had insulted Frederick Bates, from that moment forward Bates was Lewis' sworn enemy. He would prove to be an effective opponent - for Frederick Bates was a very good at being an unpleasant man.
As Bates wrote to his brother, “My habits are pacific. Yet I have had acrimonious differences with almost every person with whom (I) have been associated in public business…But before God I cannot acknowledge that I have been blamable in one instance.” And he never would admit it.
A few weeks later, Bates (above) related how he was getting along with Lewis. “Sometime after this there was a ball in St. Louis, I attended early, and was seated in conversation with some gentlemen when the Governor entered. He drew his chair close to mine – there was a pause in the conversation – I availed myself of it – arose and walked to the opposite side of the room...He knew my resolution not to speak to him except on business, and he ought not to have thrust himself in my way.”
And these two men now found themselves in charge of dispensing millions of acres of land to the hundreds of speculators who had flocked to St. Louis to avail themselves of the bounty. With that much profit to be made, such an collection of offended egos did not portend a profitable future for any one not skilled at bureaucratic infighting. 
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