If I were to characterize the United States, it should be by the appellation of the land of speculation. (William Priest.)By the God of Heaven, if we go on in this way, our nation will sink into disgrace and slavery. (John Tyler.)Millions of acres are easily digested by such stomachs. They buy and sell corruption in the gross. (John Randolph.)When a law is in its nature a contract, when absolute rights have vested under that contract, a repeal of the law cannot divest those rights. The people can act only by their agents and, within the powers conferred upon them, their acts must be considered as the acts of the people. (Marshall.)
If I were to characterize the United States, it should be by the appellation of the land of speculation. (William Priest.)
By the God of Heaven, if we go on in this way, our nation will sink into disgrace and slavery. (John Tyler.)
Millions of acres are easily digested by such stomachs. They buy and sell corruption in the gross. (John Randolph.)
When a law is in its nature a contract, when absolute rights have vested under that contract, a repeal of the law cannot divest those rights. The people can act only by their agents and, within the powers conferred upon them, their acts must be considered as the acts of the people. (Marshall.)
The Honorable William Longstreet was an active and influential member of the Georgia Legislature during the winter of 1794-95. He was also a practical man. An important bill was then before that body, and Mr. Longstreet employed effective methods to forward its passage. The proposed legislation was to authorize the sale to four speculating land companies[1359]of most of that territory which comprises the present States of Alabama and Mississippi.
"Why are you not in favor of selling the western lands?" frequently asked Representative Longstreet of his fellow member, Clem Lanier. "Because I do not think it right to sell to companies of speculators," was the answer. "Better vote for the bill," observed his seat mate, Representative Henry Gindrat, one day as they sat chatting before the Speaker of the House took the chair. "It will be worth your while. Senator Thomas Wylly says that he can have eight or ten likely negroes for his part."
That afternoon Senator Wylly came to Lanier and began to talk of the land bill. A Mr. Dennison sauntered up. Wylly left, and the newcomer remarked that, of course, he advised no legislator how to vote, but he could not help noticing that all who favored the sale of the lands "were handsomely provided for." If Lanier should support the bill, he would be taken care of like the rest. He was buying, Dennison said, from members who wished to sell lands allotted to them for agreeing to support the measure.
Once more came Longstreet, who "presented a certificate entitling the bearer to two shares of twenty-five thousand acres each," as security that Lanier would be rewarded if he voted for the sale bill. The obdurate Representative, who wished to probe the depths of the plot, objected, and Longstreet assured him that he would immediately procure "another certificate ... for the same number of acres." But Lanier finally declined the bribe of seventy-five thousand acres of land.[1360]
Representative Gindrat had offered to sell his shares for one thousand dollars, the price generally given; but, securing "a better market," declined that sum.[1361]Representative Lachlan M'Intosh received six shares in one of the land companies, which he sold at a premium of two hundred and fifty dollars each.[1362]
After the bill had passed, Senator Robert Thomas,who had no means of acquiring ready cash,[1363]brought two thousand dollars to the house where he boarded and asked Philip Clayton, the owner, to keep it for him. Clayton was curious—did Senator Thomas get the money for his share of the lands? he inquired. "It is nothing to you; take care of it," answered the suddenly affluent legislator, smiling.[1364]
Representative Longstreet offered Representative John Shepperd one hundred thousand acres, but Shepperd was not interested; then Philip Clayton, the tavern-keeper, offered him seventy pounds to go home for the session.[1365]
A saturnalia of corruption was in progress in the little village of Augusta, where the Legislature of Georgia was in session.[1366]The leading men of that and neighboring States were on the ground urging the enactment of the law in which all were interested. Wade Hampton of South Carolina was on hand. State and National judges were present. James Wilson of Pennsylvania, Associate Justice of the Supreme Court of the United States, was there with twenty-five thousand dollars in bank bills.[1367]
William Smith, Judge of the Superior Court of Georgia, added his influence, receiving for his services as lobbyist thirteen thousand dollars. Nathaniel Pendleton, Judge of the United States Court for that district, urged the legislation and signed and issued the certificates for shares that were given to the members for their votes.[1368]Directing all was General James Gunn, United States Senator from Georgia: his first term in the National Senate about to expire, he was now reëlected by this very Legislature.[1369]
A majority of Georgia's lawmaking body thus became financially interested in the project, and the bill passed both houses. But Governor George Mathews vetoed the measure, because he thought the time not propitious for selling the lands, the price too low, the reservations for Georgians too small, and the principle of monopoly wrong.[1370]Another bill was prepared to meet some of the Governor's objections. This was introduced as a supplement to a law just enacted to pay the State troops.[1371]Again every possible influence was brought upon the Legislature to pass this bill with utmost dispatch.[1372]Some members, who would not support it, were induced to leave the tiny Georgia Capital; others, who were recalcitrant, were browbeaten and bullied.
Senator Gunn, the field marshal of this legislative campaign, strode about the village arrayed in broadcloth, top boots, and beaver hat, commending those who favored the bill, abusing those who opposed it. In his hand he carried a loaded whip, and with this the burly Senator actually menaced members who objected to the scheme.[1373]In a little more than one week the bill was rushed through both houses. This time it received the reluctant approval of the Governor, and on January 7, 1795, became a law.
In such fashion was enacted the legislation which disposed of more than thirty-five million acres of fertile, well-watered, heavily wooded land at less than one and one half cents an acre.[1374]The purchasers were four companies known as The Georgia Company, The Georgia Mississippi Company, The Tennessee Company, and The Upper Mississippi Company. The total purchase price was five hundred thousand dollars in specie or approved currency, one fifth to be deposited with the State Treasurer before the passage of the act, and the remainder tobe paid on or before November 1, 1795. The Governor was directed to execute a deed in fee-simple to the men composing each company as tenants in common; and the deferred payments were secured by mortgages to the Governor, to be immediately foreclosed upon default of payment, and the one fifth already deposited to be forfeited to the State.
Two million acres were reserved for exclusive entry by citizens of Georgia, and the land companies were bound to form settlements within five years after the Indian titles had been extinguished. The lands were declared free of taxation until they should be so occupied that the settlers were represented in the Legislature.[1375]Governor Mathews executed deeds in compliance with the law, and, the entire amount of the purchase money having been paid into the State Treasury before November 1, the mortgages were canceled and the transaction was closed in accordance with the provisions of the statute. So far as that legislation and the steps taken in pursuance of it could bring about such a result, the legal title to practically all of the domain stretching from the present western boundary of Georgia to the Mississippi River, and from the narrow strip of Spanish territory on the Gulf to the Tennessee line, was transferred to the men composing these four land companies. The greatest real estate deal in history was thus consummated.
But even while this bill was before the Legislature, popular opposition to it began. A young man of twenty-three was then teaching in a little school-house at Augusta, but he was destined to become United States Senator, Minister to France, Secretary of the Treasury, and candidate for President. Enraged at what he believed the despoiling of the people by a band of robbers using robbers' methods, young William H. Crawford hurried to his home in Columbia County, got up a petition to the Governor to reject the bill again, and hurried to the Capital where he presented it to the Chief Executive of the State.[1376]But Governor Mathews, against whom no man, then or thereafter, charged corrupt motives, persisted in signing the measure.
And it must be said that the bill was not without merit. Georgia was but thinly populated, not more than fifty thousand human beings inhabiting its immense extent of savanna and forest. Most of these people were very poor[1377]and unable to pay any public charges whatever. The State Treasury was empty; the State troops, who had been employed in the endless Indian troubles, were unpaid and clamoring for the money long due them; the State currency had so depreciated that it was almost without value. No commonwealth in the Union was in worse financial case.[1378]
Moreover, the titles of the Indians, who occupied the country and who were its real owners, had not been extinguished. Under the Constitution, the National Government alone could deal with the tribes,and it had long been urging Georgia to cede her claims to the United States, as Virginia and Connecticut had done. Indeed, the State had once offered to make this cession, but on such terms that Congress had refused to accept it. The purchasers now took whatever title Georgia had, subject to these burdens, the State to be saved from all annoyance on account of them.
The tribes were powerful and brave, and they had been prompt and bold in the defense of their lands. The Creeks alone could put nearly six thousand fighting men in the field, and the Choctaws had more than four thousand trained warriors.[1379]The feeble and impoverished State had never been able to subdue them, or to enforce in the slightest degree the recognition of the State's title to the country they inhabited. Georgia's right to their lands "depended on her power to dispossess the Indians; but however good the title might be, the State would have been fortunate to make it a free gift to any authority strong enough to deal with the Creeks and Cherokees alone."[1380]
The sale of the territory was not a new or novel project. Six years earlier the State had disposed of twenty-five million five hundred thousand acres of the same territory to four land companies on much poorer terms.[1381]Jefferson, then Secretary of State, rendered a careful opinion on the right of Georgia tomake the grant.[1382]These purchasers had tendered payment in South Carolina and Continental scrip that was practically worthless; the Treasurer of Georgia had properly refused to accept it; and there ended the transaction as far as the State was concerned. A suit was later brought against Georgia by the grantees[1383]to compel the performance of the contract; but the Eleventh Amendment of the Constitution thwarted that legal plan. So these speculators dropped the matter until the sale just described was made to the new companies six years later.
The most active promoters of the first purchasing companies, in 1789, were mere adventurers, although at first Patrick Henry and other men of honor and repute were interested in the speculation. Henry, however, soon withdrew.[1384]The consummation of their deal with Georgia required the payment of sound money andbona-fidesettlement by actual tillers of the soil. Also, the adventurers got into trouble with the Indians, became gravely involved in Spanish intrigue, and collided with the National Government;[1385]so the enterprise lost, for a time, all attractiveness for these speculators.
The new land companies, on the other hand, were for the most part composed of men of excellent reputations.[1386]At the head of the largest, The GeorgiaCompany, were United States Senator James Gunn and United States Attorney for the District of Georgia, Mathew McAlister; associated with them, in addition to Judges Stith and Pendleton, and Justice Wilson, were Robert Goodloe Harper, Representative in Congress from Maryland, Robert Morris, the financier of the Revolution, and others of substance and position.[1387]Also, as has been stated, they paid for their lands in the money called for by the act—the best money then circulating in America. The first sales of Indian lands to which Georgia claimed title were known as the "Yazoo" speculation, and this designation stuck to the second transaction.
In the six years that had intervened between the sales to the irresponsible land-jobbers of 1789 and the solvent investors of 1795, an event of world importance had occurred which doubled and trebled the value of all cotton-bearing soil. Eli Whitney, a Connecticut school-teacher twenty-seven years of age, had gone to Georgia in 1792 to act as a private tutor. Finding the position taken, he studied law while the guest of the widow of General Nathanael Greene. This discerning woman, perceiving that the young man was gifted with inventive genius, set him to work on a device for separating cotton from the seed. The machine was built, and worked perfectly. The news of it traveled with astonishing rapidity throughout Georgia and the South. The model was stolen; and so simple was the construction of it that everywhere in cotton-growing lands itwas freely reproduced by planters great and small. The vast sweep of territory stretching from Georgia to the Father of Waters, the best cotton land in the world, thus rose in value as if the wand of a financial deity had been waved over it. Settlers poured into Georgia by the thousand, and Indian atrocities were now as little feared as Indian rights were respected.[1388]
The purchase of the unoccupied Georgia lands by thebona-fide, if piratical, land companies of 1795 became, therefore, an adventure far more valuable in possibilities for the investors, and incomparably more attractive in the probability of political advantage to those who resisted it, than the innocuous and unopposed sale to the Yazoo swindlers of six years previous.
So it fell out that the mechanical genius of Eli Whitney, in 1793, called into action, exactly eighteen years afterward, the judicial genius of John Marshall. His opinion in Fletchervs.Peck was one of the first steps toward the settling of the law of public contract in the riotous young Republic—one of the earliest and strongest judicial assertions of the supremacy of Nationalism over Localism. And never more than at that particular time did an established rule on these vital subjects so need to be announced by the highest judicial authority.
Since before the Revolution, all men had fixed their eyes, hopes, and purposes upon land. Not thehumble and needy only, but the high-placed and opulent, had looked to the soil—the one as their chief source of livelihood, and the other as a means of profitable speculation. Indeed, dealing in land was the most notable economic fact in the early years of the American Nation. "Were I to characterize theUnited States," chronicles one of the most acute British travelers and observers of the time, "it should be by the appellation of theland of speculation."[1389]
From the Nation's beginning, the States had lax notions as to the sacredness of public contracts, and often violated the obligations of them.[1390]Private agreements stood on a somewhat firmer basis, but even these were looked upon with none too ardent favor. The most familiar forms of contract-breaking were the making legal tender of depreciated paper, and the substitution of property for money; but other devices were also resorted to. So it was that the provision, "no state shall pass any law impairing the obligation of contracts," was placed in the Constitution.[1391]The effect of this on the public mind, as reported by conservatives like Marshall, is stated in theCommercial Gazetteof Boston, January 28, 1799: "State laws protected debtors" when they "were citizens ... [and] the creditors foreigners. The federal constitution, prohibiting the states to clear off debtswithout payment, by exactingjustice, seemed ... to establishoppression." The debtors, therefore, "pronounced ... theequalreign of law and debt-compelling justice, the beginning of an insidious attack on liberty and the erection of aristocracy."
The "contract clause" of the Constitution was now to be formally challenged by a "sovereign" State for the first time since the establishment of the National Government. Georgia was to assert her "sovereignty" by the repudiation of her laws and the denial of contractual rights acquired under them. And this she was to do with every apparent consideration of morality and public justice to support her.
The tidings of the corruption attending the second "Yazoo" sale were carried over the State on the wings of fury. A transaction which six years before had met with general acquiescence,[1392]now received deep-throated execration. The methods by which the sale was pushed through the Legislature maddened the people, and their wrath was increased by the knowledge that the invention of the Connecticut schoolmaster had tremendously enhanced the value of every acre of cotton-bearing soil.
Men who lived near Augusta assembled and marched on the Capital determined to lynch their legislative betrayers. Only the pleadings of members who had voted against the bill saved the lives of their guilty associates.[1393]Meetings were held in every hamlet. Shaggy backwoodsmen met in "old-field" log schoolhouses and denounced "the steal." The burning in effigy of Senator Gunn became a favorite manifestation of popular wrath. The public indignation was strengthened by the exercise of it. Those responsible for the enactment of the law found it perilous to be seen in any crowd. One member leftthe State. Another escaped hanging only by precipitate flight.[1394]Scores of resolutions were passed by town, rural, and backwoods assemblages demanding that the fraudulent statute be rescinded. Petitions, circulated from the "mansion" of the wealthy planter to the squalid cabin of the poorest white man, were signed by high and low alike. The grand juries of every county in Georgia, except two, formally presented as a grievance the passage of the land sale act of 1795.
Among other things, the land sale act required the Senators and Representatives of Georgia in Congress to urge the National Government to speed the making of a treaty with the Indian tribes extinguishing their title to the lands which the State had sold. Upon receiving a copy of the nefarious law, Senator James Jackson of Georgia laid it before the Senate, together with a resolution declaring that that body would "advise and consent" to the President's concluding any arrangement that would divest the Indians of their claims.[1395]
But although he had full knowledge of the methods by which the act was passed, the records do not show that Jackson then gave the slightest expression to that indignation which he so soon thereafter poured forth. Nor is there any evidence that he said a word on the subject when, on March 2, 1795, Georgia's title again came before the Senate.[1396]Some time afterward, however, Senator Jackson hurried home and put himself at the head of the popular movement against the "Yazoo Frauds." In every corner of the State, from seaport to remotest settlement, his fiery eloquence roused the animosity of the people to still greater frenzy. In two papers then published in Georgia, theSavannah Gazetteand theAugusta Chronicle, the Senator, under thenom de guerreof "Sicillius," published a series of articles attacking with savage violence the sale law and all connected with the enactment of it.[1397]
It came out that every member of the Legislature who had voted for the measure, except one,[1398]had shares of stock in the purchasing companies.[1399]Stories of the extent of the territory thus bartered away kept pace with tales of the venality by which the fraud was effected. Bad as the plain facts were, they became simply monstrous when magnified by the imagination of the public.
Nearly every man elected[1400]to the new Legislature was pledged to vote for the undoing of the fraud in any manner that might seem the most effective. Senator Jackson had resigned from the National Senate in order to become a member of the Georgia House of Representatives; and to this office he was overwhelmingly elected. When the Legislatureconvened in the winter of 1795-96, it forthwith went about the task of destroying the corrupt work of its predecessor. Jackson was the undisputed leader;[1401]his associates passed, almost unanimously, and Governor Irwin promptly approved, the measure which Jackson wrote.[1402]Thus was produced that enactment by a "sovereign" State, the validity of which John Marshall was solemnly to deny from the Supreme Bench of the Nation.
Jackson's bill was a sprightly and engaging document. The preamble was nearly three times as long as the act itself, and abounded in interminable sentences. It denounced the land sale act as a violation of both State and National Constitutions, as the creation of a monopoly, as the dismemberment of Georgia, as the betrayal of the rights of man. In this fashion the "whereases" ran on for some thousands of words. On second thought the Legislature concluded that the law was worse than unconstitutional—it was, the "whereases" declared, a "usurped act." That part of the preamble dealing with the mingled questions of fraud and State sovereignty deserves quotation in full:
"And Whereas," ran this exposition of Constitutional law and of the nature of contracts, "divestedof all fundamental and constitutional authority which the said usurped act might be declared by its advocates, and those who claim under it, to be founded on, fraud has been practised to obtain it and the grants under it; and it is a fundamental principle, both of law and equity, that there cannot be a wrong without a remedy, and the State and the citizens thereof have suffered a most grievous injury in the barter of their rights by the said usurped act and grants, and there is no court existing, if the dignity of the State would permit her entering one, for the trial of fraud and collusion of individuals, or to contest her sovereignty with them, whereby the remedy for so notorious an injury could be obtained; and it can no where better lie than with the representatives of the people chosen by them, after due promulgation by the grand juries of most of the counties of the State, of the means practised, and by the remonstrances of the people of the convention, held on the 10th day of May, in the year 1795, setting forth the atrocious peculation, corruption, and collusion, by which the usurped act and grants were obtained."[1403]
At last the now highly enlightened Legislature enacted "that the said usurped act ... be declared null and void," and that all claims directly or indirectly arising therefrom be "annulled." The lands sold under the Act of 1795 were pronounced to be "the sole property of the State, subject only to the right of treaty of the United States, to enable the State to purchase, under its pre-emption right, the Indian title to the same."[1404]
Such was the law which John Marshall was to declare invalid in one of the most far-reaching opinions ever delivered from the Supreme Bench.
The Legislature further enacted that the "usurped act" and all "records, documents, and deeds" connected with the Yazoo fraud, "shall be expunged from the face and indexes of the books of record of the State, and the enrolled law or usurped act shall then be publicly burnt, in order that no trace of so unconstitutional, vile, and fraudulent a transaction, other than the infamy attached to it by this law, shall remain in the public offices thereof." County officials were, under the severest of penalties for disobedience, directed to "obliterate" all records of deeds or other instruments connected with the anathematized grants, and courts were forbidden to receive any evidence of title of any kind whatever to lands from the grantees under the "usurped act."[1405]
The Governor was directed to issue warrants for repayment to those who, in good faith, had deposited their purchase money, with this reservation, however: "Provided the same shall be now therein."[1406]After six months all moneys not applied for were to become the property of Georgia. To prevent frauds upon individuals who might otherwise purchase lands from the pirate companies, the Governor was directed to promulgate this brief and simple act "throughout the United States."
A committee, appointed to devise a method for destroying the records, immediately reported that this should be done by cutting out of the books the leaves containing them. As to the enrolled bill containing the "usurped act," an elaborate performance was directed to be held: "A fire shall be made in front of the State House door, and a line formed by the members of both branches around the same. The Secretary of State[1407]... shall then produce the enrolled bill and usurped act from among the archives of the State and deliver the same to the President of the Senate, who shall examine the same, and shall then deliver the same to the Speaker of the House of Representatives for like examination; and the Speaker shall then deliver them to the Clerk of the House of Representatives, who shall read aloud the title to the same, and shall then deliver them to 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 now do!!!!'"[1408]
Every detail of this play was carried out with all theatrical effect. Indeed, so highly wrought were the imaginations of actors and onlookers that, at the last moment, a final dash of color was added. Some one gifted with dramatic genius suggested that the funeral pyre of such unholy legislation should not be lighted by earthly hands, but by fire from Heaven. A sun-glass was produced; Senator Jackson held itabove the fagots and the pile was kindled from "the burning rays of the lidless eye of justice."[1409]
While the State was still in convulsions of anger, a talented young Virginian of impressionable temperament went to Georgia upon a visit to a college friend, Joseph Bryan, and was so profoundly moved by accounts of the attempt to plunder the State, that a hatred of the corrupt plot and of all connected with it became an obsession that lasted as long as he lived.[1410]Thus was planted in the soul of John Randolph that determination which later, when a member of Congress, caused him to attack the Administration of Thomas Jefferson.[1411]
Swift as was the action of the people and legislature of Georgia in attempting to recover the Yazoo lands, it was not so speedy as that of the speculators in disposing of them to purchasers in other States. Most of these investors bought in entire good faith and were "innocent purchasers." Some, however, must have been thoroughly familiar with the fraud.[1412]The most numerous sales were made in the Middle States and in New England. The land companies issued a prospectus,[1413]setting out their title, which appeared to be, and indeed really was, legally perfect. Thousands of copies of this pamphlet were scattered among provident and moneyed people. Agents of the companies truthfully described the Yazoo country to be rich, the climate mild and healthful, and the land certain of large and rapid rise in value.
Three of the companies[1414]opened an office in Boston, where the spirit of speculation was rampant. Then ensued an epidemic of investment. Throngs of purchasers gathered at the promoters' offices. Each day prices rose and the excitement increased. Buying and selling of land became the one absorbing business of those who had either money or credit. Some of the most prominent and responsible men in New England acquired large tracts.[1415]The companies received payment partly in cash, but chiefly in notes which were speedily sold in the market for commercial paper. Sales were made in other Northern cities, and many foreigners became purchasers. The average price received was fourteen cents an acre.[1416]
Some New Englanders were suspicious. "The Georgia land speculation calls for vigor in Congress. Near fifty millions acres sold ... for a song," wrote Fisher Ames.[1417]But such cautious men as Ames were few in number and most of them were silent. By the time reports reached Boston that the Legislature of Georgia was about to repeal the act under which the companies had bought the lands, numerous sales, great and small, had been made. In that city alone more than two millions of dollars had been invested, and this had been paid or pledged by "every class of men, even watch-makers, hair-dressers, and mechanics." The Georgia Company conveyed eleven million acres on the very day that the Legislature of Georgia passed the bill declaring the "usurped act" to be null and void and asserting the title of the whole territory still to be in the State.[1418]
Three weeks later, the news of the enactment of the rescinding law was published in the New England metropolis. Anger and apprehension seized the investors. If this legislation were valid, all would lose heavily; some would be financially ruined. So a large number of the purchasers organized the New England Mississippi Company for the purpose of defending their interests. A written opinion upon the validity of their titles was procured from Alexander Hamilton, who was then practicing law in New York and directing the Federalist Party throughoutthe Nation. He was still regarded by most Federalists, and by nearly all moneyed men, as the soundest lawyer, as well as the ablest statesman, in America.
Hamilton's opinion was brief, simple, convincing, and ideally constructed for perusal by investors. It stated the facts of the enactment of the sale law, the fulfillment of the conditions of it by the purchasers, and the passage of the rescinding act. Hamilton declared this latter act to be invalid because it plainly violated the contract clause of the Constitution. "Every grant ... whether [from] ... a state or an individual, is virtually a contract." The rescinding act was therefore null, and "the courts of the United States ... will be likely to pronounce it so."[1419]
Soon after its passage, President Washington had received a copy of the Georgia land sale act. He transmitted it to Congress with a short Message,[1420]stating that the interests of the United States were involved. His principal concern, however, and that of Congress also, was about the Indians. It was feared that depredations by whites would cause another outbreak of the natives. A resolution was adopted authorizing the President to obtain from Georgia the cession of her "claim to the whole or any part of the land within the ... Indian boundaries," and recommending that he prevent the making of treaties by individuals or States "for the extinguishment of the Indian title." But not a word was said in Washington's Message, or in the debate in Congress, about the invalidity of the Georgia sale law or the corrupt methods employed to secure the enactment of it.[1421]
Two bills to protect the Indians failed of passage.[1422]Just before adjournment the House adopted a Senate resolution which had been offered by Senator Rufus King of New York, requesting that the Attorney-General report to the Senate all data bearing on Georgia's title to the territory sold to the land companies; but again the invalidity of the sale law was not even suggested, and the corruption of the Georgia Legislature was not so much as referred to.[1423]
A year later, Charles Lee, Washington's Attorney-General, transmitted to Congress an exhaustive report containing all facts.[1424]This report was referred to a special committee, headed by Senator Aaron Burr of New York, who, on May 20, 1796, reported a resolution authorizing the President to treat with Georgia for the cession of the territory.[1425]Once more no attention was paid to the fraud in the sale act, or to the rescinding act of the Georgia Legislature.
But when the public finally learned of the "Yazoo Fraud" and of the repudiation by the Georgia Legislature of the corrupt law, the whole country was deeply stirred. A war of pamphlets broke out and was waged by both sides with vigor and ability. Abraham Bishop of New Haven, Connecticut, wrote a comprehensive answer to the prospectus of the land companies, and copies of this pamphlet, whichappeared in four parts, were widely circulated.[1426]Georgia had no fee in the lands, said Bishop.[1427]Sales to "innocent purchasers" could not give them what Georgia had no right to sell. Neither could such a device validate fraud. Much litigation had already grown out of the swindle, and the Georgia rescinding act had "brought ... matters to a crisis, and one decision of the supreme court of the United States may probably influence the decisions of lower courts."[1428]Bishop discussed brilliantly, and at length, every possible question involved. The power of the State to pass and repeal laws was "wholly uncontrolable,"[1429]he asserted. The history of other dishonest and imprudent speculations was examined—the South Sea Bubble, the Mississippi Bubble,[1430]and the interposition of the legislative power of Great Britain in the one case and of France in the other. Should like power be denied in America? Georgia's rescinding act "nipt in the bud a number of aspiring swindlers."[1431]Courts could not overthrow such legislation. The "sacredness of contracts" was the favorite cloak of fraud. Bishop urged buyers to resist the recovery of money pledged in their purchase notes and, by so doing, to restore "millions of dollars ... to the channels of industry."[1432]
Hard upon the publication of the first number of Bishop's pamphlet followed one for the land companies and investors. This had been written by Robert Goodloe Harper of Maryland a few months after Hamilton had rendered his opinion that theGeorgia grant was inviolable.[1433]It was an able and learned performance. The title of Georgia to the lands was carefully examined and held to be indefeasible. The sale of 1795 was set forth and the fact disclosed that Georgia had appropriated one hundred thousand dollars of the purchase money immediately upon the receipt of it.[1434]It was pointed out that the rescinding act ignored this fact.[1435]
Harper argued that only the courts could determine the validity and meaning of a law, and that no Legislature could annul a grant made by a previous one. To the Judiciary alone belonged that power.[1436]The sale law was a contract, fully executed; one party to it could not break that compact.[1437]If Georgia thought the sale act unconstitutional, she should have brought suit in the United States Court to determine that purely judicial question. The same was true as to the allegations of fraud and corruption in the passage of the measure. If any power could do so, the courts and they alone could decide the effect of fraud in procuring the enactment of a law. But even the courts were barred from investigating that question: if laws could be invalidated because of the motives of members of lawmaking bodies, "what a door would be opened to fraud and uncertainty of every kind!"[1438]
Finally, after a long altercation that lasted for nearly three years, Congress enacted a law authorizing the appointment of commissioners to settle the disputes between the National Government and Georgia, and also to secure from that truculent sovereignty the cession to the Nation of the lands claimed by the State.[1439]In the somewhat extended debate over the bill but little was said about the invalidity of the Yazoo sale, and the corruption of the Legislature that directed it to be made was not mentioned.[1440]
Under this act of Congress, Georgia ceded her rights over the disputed territory for one million, two hundred and fifty thousand dollars; provided, however, that the Nation should extinguish the Indian titles, settle British and Spanish claims, ultimately admit the vast domain as a State of the Union, and reserve five million acres for the purpose of quieting all other demands. A later law[1441]directed the National commissioners, who had negotiated this arrangement with Georgia, to investigate and report upon the claims of individuals and companies to lands within the territory thus ceded to the United States.
At once the purchasers from the land companies, especially the New England investors, besieged Congress to devote part of this five million acres to the salvage of their imperiled money. The report of the commissioners[1442]was wise, just, and statesmanlike. It was laid before the House on February 16, 1803. Although the titles of the claimants could "not be supported," still, because most of the titles had been acquired in good faith, and because it would be injurious to everybody, including the Nation, to leave the matter unsettled, the report recommended the accommodation of the dispute on terms that would save innocent purchasers at least a part of the money they had paid or legally engaged to pay.[1443]
When a bill to carry out the recommendations of the commission for the payment of the Yazoo claimants came before the House, John Randolph offered a resolution that went directly to the heart of the controversy and of all subsequent ones of like nature. It declared that "when the governors of any people shall have betrayed" their public trust for their own corrupt advantage, it is the "inalienable right" of that people "to abrogate the act thus endeavoring to betray them." Accordingly the Legislature of Georgia had passed the rescinding act. This was entirely legal and constitutional because "a subsequent Legislature of an individual State has an undoubted right to repeal any act of a preceding Legislature, provided such repeal be not forbidden by the constitution of such State, or of the United States." Neither the fundamental law of Georgia nor of the Nation forbade the repeal of the corrupt law of 1795. Claims under this nullified and "usurped" law were not recognized by the compact of cession between Georgia and the United States, "nor by any act of the Federal Government." Therefore, declared Randolph's resolution, "no part of the five millions of acres reserved for satisfying and quieting claims ... shall be appropriated to quiet or compensate any claims" derived under the corrupt legislation of the Georgia Legislature of 1795.[1444]After a hot fight, consideration of the resolutions was postponed until the next session; but the bill authorizing the commissioners to compromise with the Yazoo claimants also went over.[1445]
The matter next came up for consideration in the House, just before the trial in the Senate of theimpeachment of Justice Samuel Chase. A strong and influential lobby was pressing the compromise. The legislative agents of the New England Mississippi Company[1446]presented its case with uncommon ability. In a memorial to Congress[1447]they set forth their repeated applications to President, Congress, and the commissioners for protection. They were, they said, "constantly assured" that the rights of the claimants would be respected; and that it was expressly for this purpose that the five million acres had been reserved. For years they had attended sittings of the commissioners and sessions of Congress "at great cost and heavy expense."
Would not Congress at last afford them relief? If a "judicial decision" was desired, let Congress enact a law directing the Supreme Court to decide as to the validity of their title and they would gladly submit the matter to that tribunal. It was only because Congress seemed to prefer settlement by compromise that they again presented the facts and reasons for establishing their rights. So once more every aspect of the controversy was discussed with notable ability and extensive learning in Granger and Morton's brochure.[1448]
The passions of John Randolph, which had never grown cold since as a youth, a decade previously, he had witnessed the dramatic popular campaign in Georgia—and which during 1804 had been gathering intense heat—now burst into a furious flame. Unfortunately for Jefferson, the most influential agent of the New England claimants was the one Administration official who had most favors to bestow—Gideon Granger of Connecticut, the Postmaster-General.[1449]He was the leader of the lobby which the New England Mississippi Company had mustered in such force. And Granger now employed all the power of his department, so rich in contracts and offices, to secure the passage of a bill that would make effectual the recommendations of Jefferson's commissioners.
As the vote upon it drew near, Granger actually appeared upon the floor of the House soliciting votes for the measure. Randolph's emotions were thus excited to the point of frenzy—the man was literally beside himself with anger. He needed to husband all his strength for the conduct of the trial of Chase[1450]and to solidify his party, rather than to waste his physical resources, or to alienate a single Republican. On the report of the Committee of Claims recommending the payment of the Yazoo claimants, one of the most virulent and picturesque debates in the history of the American Congress began.[1451]Randolph took the floor, and a "fire and brimstone speech"[1452]he made.
"Past experience has shown that this is one of those subjects which pollution has sanctified," he began. "The press is gagged." The New England claimants innocent purchasers! "Sir, when that act of stupendous villainy was passed in 1795 ... it caused a sensation scarcely less violent than that produced by the passage of the stamp act." Those who assert their ignorance of "this infamous act" are gross and willful liars.[1453]To a "monstrous anomaly" like the present case, cried Randolph, "narrow maxims of municipal jurisprudence ought not, and cannot be applied.... Attorneys and judges do not decide the fate of empires."[1454]
Randolph mercilessly attacked Granger, and through him the Administration itself. Granger's was a practiced hand at such business, he said. He was one of "the applicants by whom we were beset" in the Connecticut Reserve scheme, "by which the nation were swindled out of some three or four millions of acres of land, which, like other bad titles, had fallen into the hands of innocent purchasers." Granger "seems to have an unfortunate knack of buying bad titles. His gigantic grasp embraces with one hand the shores of Lake Erie,[1455]and stretches with the other to the Bay of Mobile.[1456]Millions ofacres are easily digested by such stomachs.... They buy and sell corruption in the gross." They gamble for "nothing less than the patrimony of the people." Pointing his long, bony finger at Granger, Randolph exclaimed: "Mr. Speaker, ... this same agent is at the head of an Executive department of our Government.... This officer, possessed of how many snug appointments and fat contracts, let the voluminous records on your table, of the mere names and dates and sums declare, ... this officer presents himself at your bar, at once a party and an advocate."[1457]
The debate continued without interruption for four full days. Every phase of the subject was discussed exhaustively. The question of the power of the Legislature to annul a contract; of the power of the Judiciary to declare a legislative act void because of corruption in the enactment of it; the competency of Congress to pass upon such disputed points—these questions, as well as that of the innocence of the purchasers, were elaborately argued.
The strongest speech in support of the good faith of the New England investors was made by that venerable and militant Republican and Jeffersonian, John Findley of Pennsylvania.[1458]He pointed out that the purchase by members of the Georgia Legislature of the lands sold was nothing unusual—everybody knew "that had been the case in Pennsylvania and other states." Georgia papers did not circulate inNew England; how could the people of that section know of the charges of corruption and the denial of the validity of the law under which the lands were sold?
Those innocent purchasers had a right to trust the validity of the title of the land companies—the agents had exhibited the deeds executed by the Governor of Georgia, the law directing the sale to be made, and the Constitution of the State. What more could be asked? "The respectability of the characters of the sellers" was a guarantee "that they could not themselves be deceived and would not deceive others." Among these, said Findley, was an eminent Justice of the Supreme Court,[1459]a United States Senator,[1460]and many other men of hitherto irreproachable standing. Could people living in an old and thickly settled State, far from the scene of the alleged swindle, with no knowledge whatever that fraud had been charged, and in need of the land offered—could they possibly so much as suspect corruption when such men were members of the selling companies?
Moreover, said Findley—and with entire accuracy—not a Georgia official charged with venality had been impeached or indicted. The truth was that if the Georgia Legislature had not passed the rescinding act the attention of Congress would never have been called to the alleged swindle. Then, too, everybody knew "that one session of a Legislature cannot annul the contracts made by the preceding session"; for did not the National Constitutionforbid any State from passing a law impairing the obligation of contracts?[1461]
Randolph outdid himself in daring and ferocity when he again took the floor. His speech struck hostile spectators as "more outrageous than the first."[1462]He flatly charged that a mail contract had been offered to a member of the House, who had accepted it, but that it had been withdrawn from him when he refused to agree to support the compromise of the Yazoo claims. Randolph declared that the plot to swindle Georgia out of her lands "was hatched in Philadelphia and New York (and I believe Boston....) and the funds with which it was effected were principally furnished by moneyed capitalists in those towns."[1463]
At last the resolution was adopted by a majority of 63 to 58,[1464]and Randolph, physically exhausted and in despair at his overthrow as dictator of the House, went to his ineffective management of the Chase impeachment trial.[1465]He prevented for the time being, however, the passage of the bill to carry out the compromise with the Yazoo claimants. He had mightily impressed the people, especially those of Virginia. The RichmondEnquirer, on October 7, 1806, denounced the Yazoo fraud and the compromise of the investors' claims as a "stupendous scheme of plunder." Senator Giles, in a private conversation with John Quincy Adams, asserted that "not a man from that State, who should give anycountenance to the proposed compromise, could obtain an election after it." He avowed that "nothing since the Government existed had so deeply affected him."[1466]
The debate was published fully in the newspapers of Washington, and it is impossible that Marshall did not read it and with earnest concern. As has already been stated, the first case involving the sale of these Georgia lands had been dropped because of the Eleventh Amendment to the Constitution, abolishing the right to sue a state in the National courts. Moreover, Marshall was profoundly interested in the stability of contractual obligations. The repudiation of these by the Legislature of Virginia had powerfully and permanently influenced his views upon this subject.[1467]Also, Marshall's own title to part of the Fairfax estate had more than once been in jeopardy.[1468]At that very moment a suit affecting the title of his brother to certain Fairfax lands was pending in Virginia courts, and the action of the Virginia Court of Appeals in one of these was soon to cause the first great conflict between the highest court of a State and the supreme tribunal of the Nation.[1469]No man in America, therefore, could have followed with deeper anxiety the Yazoo controversy than did John Marshall.
Again and again, session after session, the claimants presented to Congress their prayers for relief. In 1805, Senator John Quincy Adams of Massachusetts and Senator Thomas Sumter of South Carolina urged the passage of a bill to settle the claims. This led Senator James Jackson of Georgia to deliver "a violent invective against the claims, without any specific object."[1470]After Jackson's death the measure passed the Senate by a vote of 19 to 11, but was rejected in the House by a majority of 8 out of a total of 116.[1471]
Among the lawyers who went to Washington for the New England Mississippi Company was a young man not yet thirty years of age, Joseph Story of Massachusetts, who on his first visit spent much time with Madison, Gallatin, and the President.[1472]On a second visit, Story asked to address the House on the subject, but that body refused to hear him.[1473]
From the first the New England investors had wished for a decision by the courts upon the validity of their titles and upon the effect of the rescinding act of the Georgia Legislature; but no way had occurred to them by which they could secure such a determination from the bench. The Eleventh Amendment prevented them from suing Georgia; and the courts of that State were, as we have seen, forbidden by the rescinding act from entertaining such actions.
To secure a judicial expression, the Boston claimants arranged a "friendly" suit in the United StatesCourt for the District of Massachusetts. One John Peck of Boston had been a heavy dealer in Georgia lands.[1474]On May 14, 1803, he had either sold or pretended to sell to one Robert Fletcher of Amherst, New Hampshire, fifteen thousand acres of his holdings for the sum of three thousand dollars. Immediately Fletcher brought suit against Peck for the recovery of this purchase money; but the case was "continued by consent" for term after term from June, 1803, until October, 1806.[1475]
The pleadings[1476]set forth every possible phase of the entire subject which could be considered judicially. Issues were joined on all points except that of the title of Georgia to the lands sold.[1477]On this question a jury, at the October term, 1806, returned as a special verdict a learned and bulky document. It recited the historical foundations of the title to the territory in dispute; left the determination of the question to the court; and, in case the judge should decide that Georgia's claim to the lands sold was not valid, found for the plaintiff and assessed his damages at the amount alleged to have been paid to Peck.
Thereafter the case was again "continued by consent" until October, 1807, when Associate Justice William Cushing of the Supreme Court, sitting as Circuit Judge, decided in Peck's favor every question raised by the pleadings and by the jury's special verdict. Fletcher sued out a writ of error to theSupreme Court of the United States, and so this controversy came before John Marshall. The case was argued twice, the first time, March 1-4, 1809, by Luther Martin for Fletcher and by Robert Goodloe Harper and John Quincy Adams for Peck. There was no decision on the merits because of a defect of pleadings which Marshall permitted counsel to remedy.[1478]
During this argument the court adjourned for two hours to attend the inauguration of James Madison. For the third time Marshall administered the Presidential oath. At the ball that night, Judge Livingston told Adams that the court had been reluctant "to decide the case at all, as it appeared manifestly made up for the purpose of getting the Court's judgment upon all the points." The Chief Justice himself had mentioned the same thing to Cranch.
Adams here chronicles an incident of some importance. After delivering the court's opinion on the pleadings, Marshall "added verbally, that, circumstanced as the Court are, only five judges attending,[1479]there were difficulties which would have prevented them from giving any opinion at this term had the pleadings been correct; and the Court the more readily forbore giving it, as from the complexion of the pleadings they could not but see that at the time when the covenants were made the parties had notice of the acts covenanted against."[1480]
The cause was argued again a year later. Thistime Joseph Story, so soon thereafter appointed an Associate Justice, took the place of John Quincy Adams. Martin's address was technical and, from the record, appears to have been perfunctory.[1481]On behalf of Peck, two thirds of the argument for the soundness of his title was devoted to the demonstration of the validity of that of Georgia. If that were sound, said Story, the Legislature had a right to sell the land, and a subsequent Legislature could not cancel the contract when executed. The Judiciary alone could declare what a law is or had been. Moreover, the National Constitution expressly forbade a State to pass an act impairing the obligation of contracts. To overthrow a law because it was corruptly enacted "would open a source of litigation which could never be closed." However, "the parties now before the court are innocent of the fraud, if any has been practiced. They were bona fide purchasers, for a valuable consideration, without notice of fraud. They cannot be affected by it."[1482]