Saturday, January 27, 2018


I think Patrick Henry's death may have been a release. At the urging of George Washington, in the spring of 1799, Patrick stood for one last election - for the Virginia House of Delegates. He ran as a Federalist. That may seem an odd for a man who had had opposed the new Federal Constitution, and Hamilton's Bank of the United States. What swayed his thinking was the threat of war with France  – which never came. Patrick won his last election, but he never occupied his seat. He died of stomach cancer on 6 June, 1799. His second wife, Dorothea, quickly married Patrick's friend, Judge Edmund Wilson, thus protecting the family investments from predators who might have cheated a naive widow, probably a predator like  Senator James Gunn..
Once the details of the Yazoo Land sale became public, Senator Gunn was almost universally despised. But he still had six years to serve as a United States Senator. Toward the end of his term he announced he was “disgusted with everything connected with public life” - it was certainly disgusted with him. In March of 1801 he returned to the old state capital of Louisville, Georgia and at the end of July 1801, in a room full of people, James Gunn died so quietly no one noticed he was dead for several minutes. That would have galled him. One obituary called him “General Yazoo”, a reminder of those runaway slaves he had murdered so many years before. A kinder obituary hoped he was “beyond the reach of friendship, or of hatred.”  Not me.
James Jackson was twice elected Governor of Georgia. In his first two year term he personally wrote sections 23 and 24 of the new Georgia constitution, which insured that " “no...order shall pass the General Assembly, granting a donation or gratuity in favor of any person whatever...” except by a two-thirds vote.  During his second term he finally disposed of the temptation of the Yazoo Lands by selling them to the Federal Government for $1,250,000. Georgia was no longer broke.
And when the “Prince of Duels” died on 19 March, 1806, no one was more surprised and disappointed than James Jackson, that he met his demise in bed.
And so most of the speculators who tried to profit from the selling the Yazoo swamp  -  Patrick Henry, David Ross, Robert Morris, John Nicholson, James Wilson and James Gunn - most lost everything. Taking a profit would be up to the next generation of “land jobbers”, starting with John Peck, and his partner in “ legal crime”, Robert Fletcher.
The story goes - and it was a fictional story - that on 14 May, 1803, 75 year old John Peck sold to 43 year old Robert Fletcher 15,000 acres of Yazoo land around the Tombigby River, in exchange for $3,000, or about 4 and 1/3 cents an acre.  Fletcher was concerned about receiving a clear title because of the "The Rescinding Act”,  so Peck had included the following addendum; “The title to the premises as conveyed by the state of Georgia (in 1795)...has been in no way constitutionally or legally impaired by virtue of any subsequent act of any subsequent legislature of the...state of Georgia.”
The addendum was important because of the 1603 English case of Chandler v Lopus, which you remember established the legal doctrine of Caveat Emptor.  Peck had now provided the guarantee in writing that the 1796 Rescinding Act did not apply, even though Georgia had just sold the Yazoo Swamp-Land to the Federal Government. And in doing so, he had provided legal grounds for Fletcher to sue Peck to get his money back.

Because Fletcher was a resident of New Hampshire and Peck resided in Massachusetts, the case moved directly into the federal court system – what a lucky break that was. There  it was heard at the circuit court level by the cranky, craggy 74 year old New Englander, William Cushin , who was also a Supreme – another lucky break. Cushin  decided the case for Peck, which allowed Fletcher to appeal to the Supreme Court.

And it is now that the final character in our farce, John Marshal, steps upon the stage. He was a cousin to Thomas Jefferson, and a close friend to George Washington. When the case of Fletcher v Peck reached the high court in March of 1806, Chief Justice Marshall decided that the arguments made by Peck's team of lawyers had been “incorrect”, and so the case was “continued by consent”,  meaning held over for the next term, to be re-argued in October of 1807.  And even then, Marshall did not issue the final ruling until 16 March, 1810, 3 years later, probably because it took him that long to build a unanimous decision. The decision had to be unanimous because for the first time ever, the Supreme Court was declaring that a state law - the Rescinding Act -  violated an article of the Federal Constitution – in this case, section 10 of Article One.

As usual, Marshall wrote the court's opinion. He acknowledged that the members of the 1795 Georgia legislature were guilty of reprehensible actions. However, he reasoned, “The grant, when issued, conveyed an estate...(and) This estate was transferable; and those who purchased parts of it were not stained by that guilt which infected the original transaction.” Thus was born the legal fiction of the “innocent third party” in the Yazoo land fraud, meaning the speculators who had bought the land from the men who had bribed the legislature.  As if they had not often been the same men.

Marshall argued that if a concealed defect in a contract could be held against the victim of that concealment, then “All titles would be insecure”. That might be true in the abstract, but referring to the members of the New England Mississippi Company as “innocent” was almost as much a legal fiction as insisting that written guarantees protected buyers in an age when only 3% of the population could read.

Oddly, the only member of the court to disagree with Marshall in writing was Jefferson's only appointee on the court,  William Johnson, from South Carolina. And his only objection was that he thought the Indians had a better claim to the land than did the state of Georgia. Still, Johnson managed, at the end of his argument, to state the obvious. “I have been very unwilling to proceed to the decision of this cause at all,” he wrote, because, “It appears to me to bear strong evidence... of being a mere feigned case.” But having stated that, Johnson then folded his tent and concurred with Marshall's decision. And so the court had decided in favor of the New England Mississippi Company and all the other speculators in the Yazoo land sales.

The cost of that decision became clear in 1814, when the Federal government reached a settlement with all the “innocent third parties” in the Yazoo land fraud. Having already paid Georgia $4 million in 1802  for the land -  the modern equivalent of $63 million -  they now paid the speculators in the various Yazoo companies another $5 million for the same land - the modern equivalent of $50 million.

It made Patrick Henry's scheme to cheat the tax payers of Georgia seem small potatoes. And this would be far from the last time the lawyers wrote and interpeted laws to assist thieves in robbing the public. Such behavior is a stab to the heart of the public's faith in their government. And it all began at the very birth of our Republic.

It was the next generation of Americans who would risk their fortunes to build dams and levees, to drain the Yazoo swamp and keep the river to a path, and who would finally lay bare some of the richest agricultural soil in the world, upon which they would plant and grow cotton. There were profits aplenty for all...except, of course, for the natives who had originally owned the land and the slaves who picked the cotton. It is a sad truth about speculators that like villains in a horror story they generate life for no one but themselves, and misery and debt for everyone and everything else they touch.  And capitalism empowers them.
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Friday, January 26, 2018


I suppose you've heard the story of how a group of civic minded men had gathered in Philadelphia during the summer of 1787 to create a “more perfect union”. Well, they did, except it would be well to remember that civics is not a science, but an art form, in which each artist expresses a different vision of perfection. And in the case of James Wilson, future justice of the Supreme Court under the new constitution and briber in-chief for the Yazoo land fraud, perfection included the right to steal from the tax payers.
Remember the story of Robert Morris and the Bank of North America? That was the financial institution which Morris had used to finance the American Revolution. Well, the bank had originally been chartered in Pennsylvania, and after the Revolution its charter had been revoked. But in 1786 the state was sued by a share holder in that bank, who claimed the repeal had violated the rights of an innocent party – i.e. him, James Wilson. And a year later Mr. Wilson was one of those civic minded men who gathered in Philadelphia to draw up the new Constitution for the United States.
The state of Pennsylvania had backed down from Wilson's lawsuit, and re-charted the bank. But Wilson was determined the new Federal government would not show the same disrespect for business as Pennsylvania had. So, in drawing the new constitution for America, James Wilson added what became Section 10 of the first Article of The Constitution, supposedly dealing with the formation, duties and responsibilities of the Congress. But Section Ten, Article One reads in part; “No State shall enter into any Treaty...coin Money...pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility...”. This was to be a capitalist nation, and respect for contracts was thus written into its constitution.
All of which brings us back to 1795 when the Georgia Yazoo Company bought 11 million acres of swamp land for 1/4 cent an acre.  In August of 1795,  the Georgia Company was bought by James Greenleaf. He paid 1 cent an acre. Then in November of 1795  Greenleaf sold the company to yet another group of speculators, for 8 cents an acre, giving Greenleaf a 650% profit. The new owners renamed the company the New England-Mississippi Company  But why were these speculators paying so much for a dead company? Hadn't the new owners ever heard of Caveat Emptor?
Listed first among the directors of the New England-Mississippi Company was Boston lawyer, Benjamin Hichborn, a  cousin to Paul Revere on his mother's side.   But Benjamin's real talent was as a gossip, knowing which ear would be most receptive to which dirt.  In the late 1790's he aligned himself with the  Democrats, becoming a trusted and rare New England confidant for Thomas Jefferson himself. 
The other company directors were equally well connected. Samuel Brown had made a fortune financing the slave trade, insuring ships which were running the British anti-slave patrols off the African coast. Benjamin Joy was a speculator in Massachusetts real estate, and Thomas Winthrop was the thirty-something son of the iconic Boston family. George Blake was yet another lawyer-speculator . And finally there was John Peck.  Remember him?
He was 75 years old in 1800. He was secretive, “Often argumentative and egotistical, tending to alienate those with whom he interacted”. In other words, the people who knew him best, disliked him the most. Most people knew him for what he considered his hobby – he was “The most scientific and most successful naval architect” in the new nation, having designed small and fast privateers for the colonial navy. But someone else had to build the ships, because John did not work or play well with others.
John Peck saw himself as a merchant, starting with a store and trader's post on Crabtree Neck, where the Skillings River flows into Frenchman's Bay, not far from Bar Harbor, Maine. It is still labeled Peck's Point on the maps. John Peck invested his profits in land, and there are few communities in today's Maine,which do not list him on their early property rolls. So it was a natural that the wealthy landowner would be asked to join in the New England-Mississippi Company. And it was John Peck who on 14 May, 1803, sold to Robert Fletcher of New Hampshire, 15,000 acres of the New England- Mississippi company holdings, at the inflated price of $5 an acre. If the lawyers are to be believed Robert Fletcher felt cheated by Peck, and in 1803, just like Mr. Chandler in 1603 - remember him? - sued to get his money back
Robert Fletcher was a lawyer from Amherst, New Hampshire, He was only 42 years old in 1803, and owned extensive properties in Nashua, Amherst and Dunstable. He was a very successful husband, fathering 13 children, but ultimately, an unsuccessful businessman.  His final investment was in timber lands in Montreal, Canada. And when this venture failed in November 1809, Robert Fletcher shot himself. But even after his suicide, the court case he had launched continued all the way to the Supreme Court – just as it was intended to. Which was amazing because it was a set up, a fake case. And everybody knew it.
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Thursday, January 25, 2018


I do not doubt state Representative and ex-U.S. Senator James Jackson's resolve to overturn “the infamous” Yazoo Land sale. Privately he let it be known that he was prepared to challenge to a duel and shoot down every man who had voted for the sale. And in his public speeches from the floor of the assembly, he swore to overturn the Yazoo sale, even if it cost him his life. The pledge carried weight, since Jackson was known as a duelist. But after the new state legislature convened in Louisville on 11 January, 1796, several of the members were threatened and challenged to duels unless they stopped trying to overturn the sale. Amazingly, they all forged ahead. These people were ticked off.
First things first; the assembly elected the logical Jared Irwin as the new Governor. Two years earlier this Revolutionary War hero had been called up to expel an organized group of of squatters who had occupied Indian lands just across the Florida border. Having gone to the expense and trouble to call up 1,200 militia, gathered supplies and crossed the Oconee river, everybody expected a bloody showdown. Instead, Irwin made the squatters an offer they couldn't refuse. If they would just go home, they could have amnesty for all their actions. Seeing the logic in not getting shot, and not facing jail time, the squatters went home. Clearly the logical Irwin would be a good balance to the emotional Representative Jackson.
A special committee was created – chaired by Jackson – to take testimony on the sale, and it was here that the whole sordid tale of bribery came out, under oath.  If even half of the testimony was half true, a great crime had been committed in Louisville in the fall and winter of 1794-95.   Jackson's report dripped with indignation. “The public good was placed entirely out of view, and private interest alone consulted;...the rights of the present generation were violated, and the rights of posterity bartered... and the principles of aristocracy established in their stead.”  Now that is what a class war warrior really sounds like.
The Committee offered up what became the “Rescinding Act”, which spent a thousand words justifying itself.  And then it declared the Yazoo land sales null and void. The buyers could have their money back (initial payments had been made). But Jackson insisted on going a step further. The act ordered that the government had 3 days to expunge any reference to the sale in public books. Any county officer or court clerk found with a reference to the Yazoo sale on his record books, even in the index, was to be fined $1,000 a day until the offending passage was removed. Accepting any new paperwork refereeing to the sale would result in a fine and firing. The courts were even ordered not accept any lawsuits involving the Yazoo sale. Georgia would not even respond to any future Federal lawsuits involving the sale, or so said the “Rescinding Act”.  It was Orwellian two centuries before Orwell. The legislature of 1795 had all become “un-persons”, and the citizens of Georgia were in a condition the English futurist would describe as “Newspeak”.
On 13 February, 1796 both houses of the Georgia state legislature approved the Rescinding Act, by 43 to 3 in the house and in the Senate by 14 to 4. That same day Governor Irwin signed it. Immediately the state house swarmed with men wielding knives, slicing out all references to the sale. The Act also ordered what was to happen to all those edited references, three days hence. “A fire shall be made in front of the State House door, and a line to be formed by the members of both branches around the same. The Secretary of State... shall....then produce the ... usurped act... and deliver the same to... the... Messenger of the House, who shall then pronounce “God save the state! And long preserve her rights! And may every attempt to injure them perish as these corrupt acts do now!” And at about four on the afternoon of 15 February, 1796, that is exactly what happened.
The local papers published romanticized accounts of the bonfire that followed. In the Chronicle it was noted that a magnifying lens had been used to assist the sun in starting the fire. Thus, wrote the reporterr, “God Almighty is at last brought into the scrape.”  But a Charleston, South Carolina newspaper also observed that the blaze was of  “very little to the satisfaction of the bystanders.” It wasn't that they didn't approve of the conflagration, but they had a new worry - the entire world's economy had just dropped into the toilet. And the man who had dropped it there was the Philadelphia speculator and American ambassador to Holland, James Greenleaf.
Okay, maybe it wasn't all his fault. But this silver tonged liar does seem to have been at the center of all the distress in America. Mr. Greenleaf was the partner with Robert Morris and John Nicholson in the North America Land Bank. They were buying up as much land as possible to satisfy the anticipated demand from Dutch bankers, with whom young Greenleaf insisted he had intimate connections, He had proven this in 1788, when, within two weeks after arriving in Holland, the 22 year old American con man had met the Baroness Cornelia Elbertine Scholton van Ascht et Oud-Haarlem, and impregnated her.  Shortly there after, he not only left town, he fled the continent.
When she turned up pregnant, her family insisted they marry, and the reluctant Greenleaf was somehow convinced, probably with money, to return to Holland, where he wed the Baroness. Secretary of State Thomas Jefferson saw Greenleaf's abilities as a seducer as a diplomatic skill and appointed him America's envoy to Holland, and her bankers. Eventually the Baroness realized her new husband was an amoral sleaze ball, and she attempted suicide. When Jefferson called Greenleaf home, the Baroness remained in Holland, with their son. The now 25 year old Greenleaf convinced a judge in Rhode Island he had been “tricked” into the marriage, and was granted a divorce. James Greenleaf was once again free, still handsome and young enough to be a seducer of women, and speculators like Morris and Nicholson..
Within minutes of the Yazoo land sale being approved by the Georgia assembly, James Greenleaf was bound back for Holland, to offer the wealthy Europeans a “safe” place to invest their money.  He arrived to find everybody in Europe investing their money in cannon and gun powder.  His old Dutch banking contacts gave him the cold shoulder. The only two banks that were willing to offer his shares in the American Land Bank, Elsevier and Beelde-maker, did so halfheartedly, and attracted no buyers. There was no money coming from Holland to fund the Yazoo land scheme. Defeated, James Greenleaf returned home, and Robert Morris and John Nicholson had to figure out some way to replace all that money they had been counting on. Left out on a very long and skinny limb they sent Greenleaf out buying and selling of housing lots in the new Federal City which would become Washington, District of Columbia
The government was not supposed to move-in until 1800, but construction of the capital and the President's mansion had already begun. And of course there had to be buildings for a Post Office (a cabinet position in the new government), a State Department and a War Department. The government would build those, eventually.  Somebody was else would have to supply housing for the workers, and places for them to buy groceries, restaurants to eat in, clothing, and 'entertainment' – everything from books to ladies of the evening. A city had to be established where there was no reason for it being, except politics insisted it be there.  And Morris and Nicholson saw this new town as an opportunity to cover the debts they had incurred in buying the Georgia legislator.
At some point Robert Morris had given young James Greenleaf $7,000 in cash to pay for a section of city lots. But the money never made it to the seller. That drove Morris to take a closer look at the company books, where he discovered  Greenleaf had signed all of his personal debts over to the  North American Land Company, making Morris and Nicholson responsible for repaying them. The young seducer, had seduced two more victims, Morris and Nicholson. 
Disingenuously, Morris later wrote to Benjamin Harrison, claiming, “Twas he (Greenleaf) that encouraged the very extensive land purchases which were made under a promise that he would procure in Holland the money necessary to support the same...” Suddenly the financial Mozart of the Revolution was claiming the entire Yazoo Swamp-Land Fraud, the wholesale bribery of an entire state legislature, had actually been the dastardly plan of a  28 year old serial Casanova. It was ridiculous, but I suppose such whining is a natural reaction when a “master of the universe” speculator ends up broke.  It must be somebody else' fault.  It can't be that the justification for the rules they were breaking eventually caught up with them.  Blame it on the government regulators, or the greed of a business partner. It is never their greed that is blame. And by believing in such fairly tales we remain on the same foolish, childish economic yo-yo which we call the business cycle.
And then there is the legal cycle, in which everybody starts out friends, until somebody gets an eye put out.  And then the suing starts.
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Wednesday, January 24, 2018


I seemed to have lost track of Patrick Henry in our story, but let me catch you up. After the original 1789 Yazoo Swamp-Land deal fell through, Patrick had sold most of his shares in the now almost worthless Virginia Yazoo Company to Georgia Senator James Gunn and the North American Land Company (Robert Morris, John Nickleson and James Greenleaf). They had renamed it the Northern Mississippi Company, and in 1795 completed the purchase of the same land (and more) from Georgia for 1.4 cents per acre. Patrick seriously considered suing Georgia, claiming he still had a legal claim to the land, but the suit was never filed. In the meantime he had developed stomach troubles, and was popping out children (11 in all) with his second wife, Dorthea Dandridge Henry.
But back to our main story. First of the great speculators to succumb was the young man who had promised so much and delivered so little, James Greenleaf.  Late in 1796, the collapse of his over leveraged lifestyle dropped the silver tongued seducer into Philadelphia's dreaded Prune Street Debtors Prison.
It was part of the larger Walnut Street jail, an imposing structure which housed 300 prisoners, but in the back, in a two story building originally designed as a work house, was the small debtors jail. All the prisoners were expected to pay for their own incarceration. It was a strange system considering the prisoners were in jail because they were broke. Those with wealthy friends willing to pay could receive better food or even a small private apartment. Still, one look at his new dismal surroundings, and a desperate Greenleaf had his lawyers petition for his immediate release. But Robert Morris' instructed his lawyers to intervene. They reminded the court that the young seducer had been granted a divorce in Rhode Island, which meant he was an out-of-state debtor, and the law required they remain in jail for at least six months. In fact James Greenleaf would remain behind bars much longer than that.
Morris may have preferred that Greenleaf was skinned alive, but actually, the debt left him and Nicholson by Greenleaf was a mere drop in his own rising tide of unpaid promises.  Morris' mansion in Philadelphia was so heavy besieged by creditors, that he retreated to the country estate he called “The Hills”.
He was most repelled by the idea of sharing a cell with his old partner Greenleaf. He wrote Nicholson, “I do not want to be under the same roof with such a scoundrel.” But at last, on February 15, 1798, one venal vindictive creditor named George Eddy, aided by a local sheriff, managed to lay hands on the great speculator. The amount owed to Eddy was small (by Morris's standards), but even this pittance the largest private land owner in North America could not pay. Morris wrote to a friend, “George Eddy is the most hardened villain God ever made. I believe if I had bank bills to pay him with he would refuse them on the ground of their not being legal tender. He was positively determined to carry me to Prune Street last night, but the sheriff humanely relieved me from his rascally clutches.” It was only an overnight stay of execution. The next day, Robert Morris, signer of the Deceleration of Independence, entered the Prune Street Debtors jail. Now living under the same roof, Morris refused to even acknowledge Greenleaf's presence, studiously avoiding him in all encounters.
John Nicholson held out for another year, until the winter of 1799 when the 43 year old joined his partners behind bars. But Nicholson lost not only his fortune  - creditors squeezed $8 million from his estate, still leaving him $8 million in debt- but his mind as well. He died in the Prune Street Jail, on 5 December, 1800.  Robert Morris survived the humiliation, supported by his wealthy sons, but died four years later, still $12 million in debt and occasionally harassed by creditors. And James Greenleaf, the despised debonair silver tongued seducer of women and money, survived as well.  He  unloaded his shares in the Georgia Mississippi Company for 10 cents an acre to a group of prominent Boston speculators,  headed by Judge William Wetmore. Then, shortly after his release, James Greenleaf married Anne Penn Allen, a lovely and wealthy Washington socialite. However before the wedding Ms Penn Allen put her sizable estate in a trust, where James Greenleaf was never able to reach it.  Not that he didn't continually try, until his death in 1843.  It gave him something to occupy his time.
Meanwhile, in 1797, Judge Wetmore's group re-sold the Georgia Yazoo company to yet another group,  headed by a Boston speculator named John Peck, who renamed it the New England Mississippi Company. They also hired a Boston Law firm which offered the legal opinion that the “Rescinding Act” by the Georgia legislature had been unconstitutional. That made it legal to sell shares in their Yazoo lands for 33 cents an acre.  By 1798 the New England Mississippi Company had attracted $2 million, mostly from small investors, all gambling that somehow the courts would re-approve the Yazoo Swamp-Land sale.
Senator James Jackson was determined that would never happen. As Governor of Georgia he oversaw, in 1802,  the sale of all of the Georgia's claims to the Yazoo lands, everything beyond the Apalachicola River to the Mississippi, to the federal government for $1.3 million. He remained determined that the deal was D-E-A-D, dead, even refusing to pay a printer who published a codification of Georgia laws under the old constitution, because the volume mentioned the Yazoo swamp land sale.
It wasn't as simple as that, of course. The publisher of the codification was Robert Watkins, son of a state Representative in the excommunicated 1795 legislature. Robert had even received land in the heinous deal, so his inclusion of the interdicted laws was no accident. Still, Governor Jackson stubbornly refused to pay him.
One afternoon in 1802, in the new Georgia capital of Augusta, the ex-Governor and newly elected U.S. Senator James Jackson was confronted on the street by the infuriated printer. Robert Watkins denounced Jackson as a “pygmy general” and a member of a “damned venal faction which has disgraced Georgia.”  Where upon Jackson whacked Watkins in the face with his cane. Watkins returned the favor by using his waking stick to hit Jackson on the head, drawing blood. Jackson pulled a pistol, but somebody knocked it out of his hand. Watkins lept upon Jackson, and tried to gouge his eyes out.  Jackson bit Watkins finger, causing Watkins to roll away, screaming in pain. And while everybody was trying to catch their breath, Watkins pulled a pistol with a spring loaded bayonet, and stabbed Jackson in the chest. The blade missed his heart by an inch. Friends were finally able to pull the two hot heads apart.
It seemed that even five years after the Yazoo Swamp-Land Deal had been “rescinded”, it was still trying to rise from the dead, like any good movie monster would.
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