GEORGIA PEACHES Chapter Three

I don't want you to think Patrick Henry did not suffer tragedy in his life.  Shortly after the birth of her sixth child Patrick's  beloved wife Sarah became so depressed she could work up no interest in her new child, and in 1771 the doctors diagnosed her as being possessed by demons. Two centuries later it seems likely she suffered from post partum psychosis. Over the next 4 years Sarah was kept locked in a cellar “apartment” beneath her own home (above) where she was kept (below) and cared for by a slave woman who shared the cellar with the lady. 

The standard treatment – exorcisms, restraints, regular enemas and laxatives, bleedings and beatings – probably hastened her death in 1775.  Just as the American revolution was starting.  They buried her in a since lost unmarked grave someplace in the backyard - unhallowed ground. 

On 15 July, 1788, Federal Secretary of the Treasury Alexander Hamilton (above) suggested that Georgia cede her “vacant territories” west of the Apalachicola River to the Federal government.  In exchange the Federal government would assume Georgia's entire war debt. But Georgia politicians said “no thanks”.

Instead, on 21 December, 1789, Georgia Governor Edward Telfair (above), signed grants of five million acres between the Apalachicola River and the Mississippi River, selling the land to the Virginia, Tennessee and Carolina Yazoo companies. 

In exchange, within two years, the Yazoo companies were to pay Georgia $207,000 – or about 24 cents per acre.  The first payment was to be made in six months. 

A disinterested observer might ask, when undisputed land in the same swamp was selling for two pennies an acre, how could the investors in the Yazoo swamp lands, where the claims were likely to be disputed by the Spanish crown and the residents of other states, and perhaps even by the very civilized native populations, expect to to make a profit after paying 24 cents and acre?  Well, there was the golden foundation rock of all capitalism -  Caveat Emptor. 

The concept has officially been a part of English law since 1603, when a goldsmith named Lopus sold what turned out not to have been the magical gallstone of a wild goat (above) to a Mr Chandler, for 100 pounds. When Chandler realized he had bought a useless chunk of cholesterol with a little bilirubin,   he sued.  And a court ordered Lopus to give Chandler his money back. 

But on appeal the case was thrown out, because the higher court said it didn't matter what the sales pitch had been - “for everyone in selling his wares will affirm that his wares are good...(yet) the warranty ought to be made at the same time of the sale.” In other words, without a written guaranty (the warranty), there was no legal promise.  What the salesman tells you is just so much horse manure. Or gallstones.

That was quite a barrier to justice when the vast majority of the population could neither read nor write. But almost two hundred years later, in 1790, buyer beware was the business model for all three of the Yazoo companies, never mind that the buyers were unsuspecting investors and Revolutionary War veterans who had never seen the waterlogged swamp land they were buying.

But again, how do you make a profit buying swamp land for 24 cents an acre, when adjacent dry land was selling for 2 cents an acre? The answer to that is simple - you pay in play money. And in 1789 there was a lot of  funky paper floating around.

At America's lowest point in the revolution, a desperate Continental Congress had created the Bank of North America, and it had furnished the financial framework to support Washington's army. The BNA was the great unsung hero of the revolution. But in 1785 the new Confederation Congress withdrew the bank's charter, leaving the Federal government $11 million in debt to France and Spain, and the states about $48 million in debt to their own citizens. In exchange the moneyed class got “free market” banking, which they have been trying to sell again ever since.  And it was utopia. Right?

Within 2 years bonds issued by the American government were selling for ten to fifteen cents on the dollar, and most state bonds were selling for less than that. State legislatures were reduced to borrowing money just to pay the interest on earlier loans. There were more than fifty currencies in circulation, including English pounds and Spanish “pieces of eights”.  

Individual cities were chartering banks, which then issued their own money. And in the woods of western Pennsylvania, where their were no banks, the standard medium of exchange was home brewed whiskey. The collapse of the American economic system was the major reason the Articles of Confederation were scrapped in 1787; free banking.

Under the new Constitution, establishing a stable economy was the job of President Washington's bright-eyed boy, Alexander Hamilton (above). Having been orphaned twice while growing up (even his adoptive parent had died), the new Secretary of the Treasury had an aversion to chaos. Hamilton's imposition of economic order was simple, brilliant and realistic. And he had a little help when reality kicked the money classes right in their pocket books.  

That summer, when agents for the Virginia Yazoo Company showed up in Georgia to make their first payment for the Yazoo land grants, they were carrying a huge pile of paper money.  Some of it was Federal bonds, but the rest was cash and bonds issued by various state banks, all bought at a discount. It was sort of the 19th century crypto-currency. None of it was gold or silver.  Still Patrick Henry and friends expected their payment to be accepted at "face value".  But the state of Georgia refused to fall for that.  They deemed the offer insufficient and canceled grants to all three Yazoo companies – No sale.

That left Patrick Henry, David Ross and Thomas Jefferson, et al, holding huge piles of paper which had just been officially declared worthless. Which is when Alexander Hamilton (above) offered to exchange their “worthless” paper “at par”, meaning at the best rate offered in the open market - for new U.S. government backed bonds.  In other words, he was offering them something for nothing. And all they had to do was convince the state of Georgia (and the other 13 states) to give up claims to any western lands. 

Oh, and Hamilton also wanted to set up a new Bank of North America - this time to be called The First Bank of the United States. It was the deal which saved the Virginia and Georgia speculators' collective behinds, but it was a bitter pill for the would-be capitalist to swallow. Thomas Jefferson, a life long land speculator, would later say bitterly that Hamilton had fooled him. But he still cashed the check.

And when Georgia accepted Hamilton's offer, it seemed  all of the Yazoo swamp land deals were dead and buried.  Except they weren't. Like movie zombies the capitalists would rise again. It is the nature of capitalism that its keeps screwing  the very people who have the most faith in it.  Have I mentioned that greed makes you stupid?

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GEORGIA PEACHES Chapter One

 

I have always been confused by Patrick Henry. He is famous for saying, “Give me liberty or give me death”, a bold statement that should have gotten a lot of press. Yet nobody at the time recorded him saying it.  

He also supposedly said “If this be treason, let us make the most of it”, another bold statement which, again, nobody wrote down at the time. What is fact is that he was always suspicious of the power of government. We largely have him to thank for the Bill of Rights, today a beacon of freedom for billions of people world wide. But he was also the CEO of the Virginia Yazoo Company, which sold swamp land to war veterans, trusting customers and unsuspecting tax payers. The Yazoo Company and its fellow scams shows that from the moment it was born the United States was a nation dedicated to the success of rich liars cheats and thieves.

My guess is the Yazoo Indians were only joking with French explorer Robert de La Salle.   In 1682, la Salle asked about the water at the edge of their town and the Yazoos told him it was a river, A 180 mile long by 100 mile wide “river” which did not so much flow into the Mississippi River, as seep. It was a swamp.  But the last laugh was on the Yazoo Indians because La Salle named the “river” after them. And after the Revolution, that patriot Patrick Henry used his freedom of speech to fleece a lot of unsuspecting would be capitalist by selling them Yazoo swamp land.

Now, even in 1789 nobody was interested in buying a swamp, So the American crooks decided to call their inventory the Yazoo Lands, instead.  Besides patriot and ex-governor Patrick Henry's Virginia Yazoo Company, there was the Tennessee Yazoo Company and the Carolina Yazoo Company. And together they formed the first American lobbying firm, what they called "The Combined Society".  It's stated purpose was  “By means of certain influences...to obtain from the State (of Georgia) large grants of land...for the end of making a large sum of money...” They were certain they could obtain a deed from Georgia, because although Georgia did not claim the swamp, Georgia was also flat broke.

Georgia had paid for its share of the American revolution by claiming lands westward to the Mississippi river and beyond, and used them as collateral to borrow gold and silver from European speculators. The problem was that land was mostly swamp during part of the year, and during the rest of the year was completely swamp. And that sliver of semi-dry land was was already claimed by the King of France.

The solution was first suggested by an ex-militia Colonel named Thomas Marston Green, sr. (above).  He'd been farming out in the Pine forests when a bunch of Spanish soldiers and surveyors showed up looking to inventory the lands they had just bought from the French. Colonel Green realized that after such an inventory would come the taxes. And Thomas hated paying taxes.  Luckily Green had no objection to collecting taxes. 

So in the fall of 1784 Green showed up in the then state capital of Louisville, Georgia, suggesting the state take over his plantation as "Bourbon County", now encompassing all land between the present Georgia border and the Mississippi river south of the Yazoo river. Thus it would be the largest county in the United States, and Marston Green would, of course, run it, selling any land he did not want and splitting the take with the state. And on 7 February, 1785, the rich white men running Georgia passed the Bourbon County Act, and waited for everybody not as smart as them, to buy into this hairbrained scheme. 

The greedy Thomas Marston Green decided to speed things along. He gathered a little army of 32 gullible fools  and led them on a march into the Spanish outpost of Natchez (above) on the Mississippi river. 

Once there he informed the Spanish Governor Manuel Gayoso de Lemos (above) that the American state of Georgia now owned everything south of the Yazoo river, and the Spanish should just get out.  

Governor de Lemos wasted no time in having all the idiots arrested, and shipped down river to New Orleans (above) where they could safely rot in a prison (below)

The state of Georgia lifted not a finger to rescue their new governor of Bourbon County, let alone his little army.  The only person who showed up in New Orleans (above) to plead for the release of any of these idiots was Martha Green, Thomas' long suffering wife. The journey to New Orleans left her in such a pitiable state, that shortly after her arrival she died. Governor de Lemos felt so sorry for the late lady and her now motherless children, that he sent Thomas home with a warning - don't do it again.  

But de Lemos also decided the upstart Americans could no longer use the port of New Orleans to ship their produce to market. That made the settlers in western Georgia, very unhappy.  In 1788 the state of Georgia backed down and repealed the Bourbon County Act. The port of New Orleans was re-opened to Americans.  But that still left Georgia flat broke.

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GEORGIA PEACHES Chapter Two

 

I don't want to judge Patrick Henry too harshly. Shortly after the birth of her sixth child Patrick's  beloved Sarah became so depressed she could work up no interest in her new child, and in 1771 the doctors diagnosed her as being possessed by demons. Two centuries later it seems likely she suffered from post partum psychosis. 

Over the next 4 years Sarah was kept locked in a cellar “apartment” beneath her own home and was cared for by her eldest daughter Martha, and her slaves. Mostly by her slaves. The standard treatment – exorcisms, restraints, regular enemas and laxatives, bleedings and beatings – probably hastened her death in 1775. 

On 15 July, 1788, Federal Secretary of the Treasury Alexander Hamilton suggested that Georgia cede her “vacant territories” west of the Apalachicola River to the Federal government.  In exchange the Federal government would assume Georgia's entire war debt. But Georgia politicians said “no thanks”. 

Instead, on 21 December, 1789, Georgia Governor Edward Telfair, signed grants of five million acres between the Apalachicola River and the Mississippi River, selling the land to the Virginia, Tennessee and Carolina Yazoo companies.  In exchange, within two years, the Yazoo companies were to pay Georgia $207,000 – or about 24 cents per acre.  The first payment was to be made in six months. 

A disinterested observer might ask, when undisputed land in the region was selling for two pennies an acre, how could the investors in the Yazoo swamp lands, where the claims were likely to be disputed by the Spanish crown, and probably defended by native populations, expect to to make a profit after paying 24cents and acre?  Well, there was the golden rule of business - Caveat Emptor

The concept has officially been a part of English law since 1603, when a goldsmith named Lopus sold what turned out not to have been the magical gallstone of a wild goat to a Mr Chandler, for 100 pounds. When Chandler realized he had bought a useless rock, he sued, and a court ordered Lopus to give Chandler his money back. But on appeal the case was thrown out, because the higher court said it didn't matter what the sales pitch had been - “for everyone in selling his wares will affirm that his wares are good...(yet) the warranty ought to be made at the same time of the sale.” In other words, without a written guaranty, there was no legal promise.  What the salesman tells you is just so much horse manure.

That was quite a barrier to justice when the vast majority of the population could neither read nor write. And in 1790, buyer beware was the business model for all three of the Yazoo companies, never mind that the buyers were unsuspecting investors and Revolutionary War veterans.

But again, how do you make a profit buying swamp land for 24 cents an acre, when adjacent dry land was selling for 2 cents an acre? The answer is simple - you pay in play money. And in 1789 there was a lot of  funky paper floating around.

At America's lowest point in the revolution, a desperate Continental Congress had created the Bank of North America, and it had furnished the financial framework to support Washington's army. The BNA was the great unsung hero of the revolution. But in 1785 the new Confederation Congress withdrew the bank's charter, leaving the Federal government $11 million in debt to France and Spain, and the states about $48 million in debt to their own citizens. In exchange the moneyed class got “free market” banking.  And it was utopia. Right?

Within 2 years bonds issued by the American government were selling for ten to fifteen cents on the dollar, and most state bonds were selling for less than that. State legislatures were reduced to borrowing money just to pay the interest on earlier loans. There were more than fifty currencies in circulation, including English pounds and Spanish “pieces of eights”.  Individual cities were chartering banks, which then issued their own money. And in the woods of western Pennsylvania, where their were no banks, the standard medium of exchange was home brewed whiskey. The collapse of the American economic system was the major reason the Articles of Confederation were scrapped in 1787.

Under the new Constitution, establishing a stable economy was the job of President Washington's bright-eyed boy, Alexander Hamilton. Having been orphaned twice while growing up (even his adoptive parent had died), the new Secretary of the Treasury had an aversion to chaos. Hamilton's imposition of economic order was simple, brilliant and realistic. And he had a little help when reality kicked the money classes right in their pocket books.

That summer, when agents for the Virginia Yazoo Company showed up in Georgia to make their first payment for the Yazoo land grants, they were carrying a huge pile of paper money.  Some of it was Federal bonds, and the rest was cash and bonds issued by various state banks, all bought at a discount. None of it was gold or silver and Patrick Henry and friends expected their payment to be accepted at "face value".  But the state of Georgia refused to fall for that.  They deemed the offer insufficient and canceled grants to all three Yazoo companies – No sale.

That left Patrick Henry, David Ross and Thomas Jefferson, et al, holding huge piles of paper which had just been officially declared worthless. Which is when Alexander Hamilton offered to exchange their “worthless” paper “at par”, meaning at the best rate offered in the open market - for new U.S. government backed bonds.  In other words, he was offering them something for nothing. And all they had to do was convince the state of Georgia (and the other 12 states) to give up claims to any western lands.  Oh, and Hamilton also wanted to set up a new Bank of North America - this time to be called The First Bank of the United States.

It was the deal which saved the Virginia and Georgia speculators' collective behinds, but it was a bitter pill for the capitalist to swallow. Thomas Jefferson, a life long land speculator, would later say bitterly that Hamilton had fooled him. But he still cashed the check.

And when Georgia accepted  Hamilton's offer, it seemed that all of the Yazoo swamp land deals were dead and buried.  Except they weren't. Like movie zombies the capitalists would rise again. It is the nature of capitalism that its keeps screwing  the very people who have the most faith in it.  Have I mentioned that greed makes you stupid?

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GEORGIA PEACHES Chapter One

I have always been confused by Patrick Henry. He is famous for saying, “Give me liberty or give me death”, a bold statement that should have gotten a lot of press. Yet nobody at the time recorded him saying it.  

He also supposedly said “If this be treason, let us make the most of it”, another bold statement which, again, nobody wrote down at the time. What is fact is that he was always suspicious of the power of government. We largely have him to thank for the Bill of Rights, today a beacon of freedom for billions of people world wide. But he was also the CEO of the Virginia Yazoo Company, which sold swamp land to war veterans and unsuspecting tax payers. The Yazoo Company and its fellow scams shows that from the moment it was born the United States was a nation dedicated to the success of rich liars cheats and thieves. 

My guess is the Yazoo Indians were only joking with French explorer Robert de La Salle.   In 1682, la Salle asked about the water at the edge of their town and the Yazoos told him it was a river, A 180 mile long by 100 mile wide “river” which did not so much flow into the Mississippi River, as seep. It was a swamp.  But the last laugh was on the Yazoo Indians because La Salle named the “river” after them. And after the Revolution, that patriot Patrick Henry used his freedom to fleece a lot of unsuspecting would be capitalist by selling them Yazoo swamp land.

Now, even in 1789 nobody was interested in buying a swamp, So the American crooks decided to call their inventory the Yazoo Lands, instead.  Besides patriot and ex-governor Patrick Henry's Virginia Yazoo Company, there was the Tennessee Yazoo Company and the Carolina Yazoo Company. And together they formed the first American lobbying firm, what they called "The Combined Society".  It's stated purpose was  “By means of certain influences...to obtain from the State (of Georgia) large grants of land...for the end of making a large sum of money...” They were certain they could obtain a deed from Georgia, because although Georgia did not claim the swamp, Georgia was also flat broke.

Georgia had paid for its war of revolution by claiming lands westward to the Mississippi and beyond, and used them as collateral to borrow gold and silver. The problem was that land was mostly swamp during part of the year, and during the rest of the year was completely swamp. And sliver that was hardly ever swamp  was owned by native American tribes,  like the Yazoos, and claimed by the King of France.

The solution was first suggested by an ex-militia Colonel named Thomas Marston Green.  He'd been farming out in the Pine forests when a bunch of Spanish soldiers and surveyors showed up looking to inventory the lands they had just bought from the French. Colonel Green realized that after the inventory would come the taxes. And he hated paying taxes.  Luckily Green had no objection to collecting taxes. So in the fall of 1784 Green showed up in the state capital of Louisville, Georgia, suggesting the state take over his plantation as "Bourbon County".  It would be the largest county in the United States, and Marston Green would, of course, run it, selling the land he did not want and splitting the take with the state. And on 7 February, 1785, the rich white men running Georgia passed the Bourbon County Act, and waited for the money to roll in. 

Unfortunately, Green went home and told the Spanish to get out because Georgia was now running things. They threw him in jail. And as long as Georgia was taking that attitude, the Spanish decided Americans could no longer use the port of New Orleans to ship their produce to market. That made the settlers in western Georgia, very unhappy.  In 1788 the state of Georgia backed down and repealed the Bourbon County Act.  But that still left Georgia flat broke.

The next answer they tried in the fall of 1788 was the infamous Pine Barren Land Speculation, in which a dozen rich white men surveyed (badly) about thirty million acres of Georgia and sold it off (quickly), mostly to smaller speculators,  Everybody thought they were going to get rich. The problem this time was that Georgians occupied only about nine million acres. And for the new fast spaces claimed, there were a lot of duplicate titles, and five or six owners for every section of land. Over night land prices went from sky high to bargain basement,  inspiring a fake advertisement, offering, “ Ten millions of acres of valuable pine barren land in the province of Utopia, on which there are several very sumptuous air castles, ready furnished”.

This business model would later be called a Ponzi scheme, and the only people who got rich were the ones at the top, and none of that money trickled down to the state of Georgia. So in 1789, this time under the Governorship of an arrogant fire plug named George Mathews, they tried it for a third time,  only bigger. And this was when Patrick Henry got into the game.

It was enough to make you wonder why the American people continue to have such childlike faith in capitalism, considering how often they keep getting screwed by it. It's a morality play, of sorts, if the moral is "There's a sucker born every minute".

Patrick Henry had never been much of a business man. When he was 18, the “indolent, dreamy (and) procrastinating...ill-dressed young man” impulsively married the equally impulsive, plump and buxom Sarah "Sallie" Shelton.  He went to work for Sarah's father in his Hanover Tavern, but after a few months as a barkeep Patrick decided on a career which would not require so much physical labor. With only six weeks of study he passed the Virginia bar. The parents of the bride were so thrilled, they set the fecund couple up with some land and slaves – an instant entrance into Virginia's upper class. It was the perfect foundation for a politician. But, alas, Patrick would be short of money his whole life. Which is why he formed the Virginia Yazoo company.

The 53 year old Patrick Henry assembled a slightly odd group of investors. At 53, droll and humorless, Paul Carrington was a long time member of the Virginia House of Burgesses, and a judge of the Court of Appeals. At barely 30 years old, Abraham Venerable was an up-and-comer in Virginia society, while 50 year old Francis Watkins was the clerk for the local courts.

But the key investor, the actual money behind the original Virginia Yazoo Company was David Ross, who had already assembled 100,000 acres in Virginia, buying up plantations and farms abandoned by loyalists during and after the revolution.  Ross also owned 200,000 acres of Kentucky, and several thousand more in what would become Tennessee (claimed at the time by North Carolina). He was a very land rich young man. And, oddly, he was Scottish

See, after the 1746 battle of Culloden, Scotland was under the royal lash, and David Ross stood to inherit nothing from his father's now looted Scottish estates. So in the middle of the 1750's he joined the horde of Scots emigrating to the American colonies. But where most Scotsmen chose the less settled Carolinas, and arrived with little but the clothes on their back, David Ross chose Virginia and arrived with contacts in the colonial government, and with cash,  Almost immediately he invested in the Oxford Iron Works along the Potomac River and the Antietam Iron Works in Maryland. He then began buying land and planting tobacco. It is hard to escape the suspicion that David Ross's family had sold out their fellow Stuart supporters, perhaps his own cousins. It is what the losing side of a rebellion often has to do to save the family fortunes.

Most years the iron works struggled to get by, and the tobacco barely covered operating expenses.  To really build a fortune, Colonial Virginia planters - such as the gout ridden George Mason - used their large plantations as collateral to buy cheap Indian land north of the Ohio River. The new owners then surveyed it quickly, subdivided it in haste and sold it off in 100 to 600 acre sections to land hungry farmers at inflated prices.  To quote from Wood Holton's 1994 paper in 'The Journal of Southern History:  “Land speculation was a principal source of income for the Virginia gentry, the 2-to-5 % of families who stood atop the colony's pyramid of wealth and power...During the frontier years, absentee landholders owned three-quarters of the region's total acreage...little acreage was left for residents. ”

The only draw back was that the invasion of English farmers set off the French and Indian War, which brought the sale of western lands to a halt for nine long years.  Then  in 1763, after the peace was signed, King George III issued a Royal Proclamation that henceforth no colony could lay claim to any land west of the crest of the Appalachian Mountains. Individual farmers were still free to negotiate with tribes for acreage on Indian lands, but their property rights would not be recognized by the English crown, meaning the land could be handed down father to son but could not be resold, ending speculating in Indian lands.  Wood Holton argues it was this loss of income which spurred Virginians, like the “great land-monger” George Washington, and speculators Thomas Jefferson, George Mason and Patrick Henry, to support the American Revolution

Even before the American victory at Yorktown, in June of 1779, Virginia and her governor Patrick Henry, joined the other southern colonies in reviving virtually all of the land claims rejected by George III's government. George Mason rehired his old employee Daniel Boone to began “exploring” new lands to the west of Boonesborough, paying him in land -  from which Boone earned $20,000, a hefty fortune during the revolution. And on 20 November, 1789, the Virginia Yazoo Company, headed by Patrick Henry and David Ross,  along with the Tennessee Company and the Carolina Company, formally applied for land grants from the state of Georgia for tracts along the Yazoo River/swamp.  

To the wealthy speculators who were also the founding fathers, this is what they meant by the word “freedom”. And that is the morality play we shall now follow.

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