The Yazoo Land Fraud
by Robert M. McAllister
Frank McAlister and I recently visited Bill Vincent in Lutherville,
MD, to discuss constructing a data base for easy retrieval
of some basic records being abstracted on Scottish McAllister
families, Bill gave me a copy of a message from Beth Colvin,
one of his many correspondents. The message answered one
of Bill's queries to determine if Pickett's History of
Alabama: and incidentally of Georgia and Mississippi,
by Albert James Pickett, Charleston: Walker and James, 1851,
contained any McAllister references. Beth's reply quoted
the following from page 446:
The June 1995 issue of our Mac-Alasdair Clan journal includes an
article by Thomas Gamble, written for the Savannah Morning News
issue of October 5, 1930. On pages 22 and 23, he writes about Matthew
McAllister's (A04-2-5) involvement in the Yazoo Land Fraud of 1795. A
reading of Gamble's article leaves one with the impression that this was
an unfortunate action on Matthew's part, since it did not ring true to
his character otherwise. Such men as James Wilson of Pennsylvania, signer
of the Declaration of Independence and at the time a Justice of the US
Supreme Court, General Wade Hampton of South Carolina, and Senator James
Gunn of Georgia were also members of the companies which bought the Yazoo
land. At the time, Matthew McAllister was the first U.S. District Attorney
for Georgia, having been appointed in 1789.
In the early years of the of the United States, particularly before 1800,
there was a great deal of speculation in land, especially in the lands
to the west of the original thirteen colonies. From a financial point
of view, large loans were owed by the states to their bond holders and
other creditors, a massive national debt was owed to the countries which
had helped us, and much of the state and federal currencies were worth
very little. The nation was beginning to put into effect the hard money
fiscal policies of the first Secretary of the Treasury, Alexander Hamilton.
However, there was a commodity which the United States had in great abundance.
The land of the nation itself was a treasure of great value. It had not
been farmed by the Indians, it was watered by streams and rivers which
were full of fish, and game was abundant. Across the Appalachian Mountains,
extending west to the Mississippi, and south of the Ohio, was a vast expanse
of land which was well known to only a few. The states whose western borders
joined the Appalachians, such as Virginia, North and South Carolina, and
Georgia, laid claim to the land extending westward to the Mississippi.
After the Revolutionary War, the states sought to turn their vast holdings
into cash which was desperately needed.
The origin of the Yazoo Land Fraud really got started in 1785 with the
organization of the Combined Society and the creation of Bourbon County,
Georgia. The Combined Society was a secret society whose only purpose
was "By means of certain influences brought to bear upon those in authority
to obtain from the state (Georgia) large grants of land, either for immigration
or sale, in either case for the end of making a large sum of money out
of the transaction." Bourbon County, Georgia was located on the Mississippi
and included the site of the future city of Natchez. Georgia appointed
civil and judicial officers for Bourbon County but repealed the Bourbon
County Act in 1788. The Combined Society faded away, but the opportunity
remained in the minds of many speculators.
In 1789, three companies, the South Carolina Yazoo Company, the Virginia
Yazoo Company, headed by Patrick Henry, and the Tennessee Company were
formed to buy land from the Georgia Assembly. On December 21, 1789, Governor
Edward Telfair signed into law a bill selling 20 million acres of land
to the Yazoo Companies for $207,000. The deal fell through when the companies
tried to pay in old and, in some cases, worthless currency.
In 1794 four new Yazoo companies, (see map) the Georgia Company, the Georgia-Mississippi
Company, the Upper Mississippi Company and the Tennessee Company bribed
and intimidated a bill through the Assembly that sold them more than twice
the amount of land for $500,000. It passed the Georgia House 19 to 9 on
January 2, 1795, and the Senate 10 to 8 the following day, and was signed
into law by Governor George Matthews on January 7, 1795. A bid of $800,000,
with a deposit of $40,000 in hard money by the Georgia Union Company was
ignored. Senator James Gunn was a major stockholder in the companies,
as were a number of other Georgia legislators.
"For the sum of two hundred and fifty thousand dollars
the (Georgia) legislature sold to James Gunn, Matthew
McAllister, George Walker and their associates, termed
the 'Georgia Company' an immense territory, which now
embraces the following modern counties: "Alabama: Clarke,
Marengo, Greene, Perry, Autauga, Bibb, Shelby, Tuscaloosa,
Pickens, Fayette, Jefferson, St. Clair, and southern portions
of Wilcox, Monroe, Dallas, Sumter and Baldwin.
In order to get some background on Matthew McAllister's role in this incident,
I referred to The Almanac of American History by Arthur M. Schlesinger,
Jr., G.P. Putnam's Sons, New York, 1983, and found the following entry for
7 January 1795: "The corrupt Georgia Legislature sells 35 million acres
in the Yazoo River territory (including most of Alabama and Mississippi)
to four land speculation companies for a nominal sum. The following year,
a newly-elected Georgia legislature will invalidate the Yazoo land sale.
The confusion over land claims will lead to a congressional investigation
and an 1810 Supreme Court decision ruling that the state of Georgia could
not revoke its original act."
"Mississippi: The
larger portions of Kemper, Neshoba, Leake, Madison, Yazoo
and Issaquena, and all of Washington, Holmes, Attala,
Winston, Noxubee, Lowndes, Oktibbeha, Choctaw, Carroll,
Sunflower, Bolivar, Tallahatchie, Yalobusha, Chickasaw
and Monroe."
At the time of this action in the Georgia legislature, the state capital was at Louisville in Jefferson County. The public reaction was severe because of the large amount of land sold for such a small sum of money, and the overwhelming feeling that a number of insiders were about to reap immense profits. Later in 1795 the electorate expressed its dissatisfaction by voting most of the bill's supporters out of office. Senator James Jackson led the opposition which rescinded the act on February 18, 1796. In his speeches, Jackson vowed to repeal the Yazoo grant law even if it cost him his life. He was prepared to call out and shoot every person involved in passing the 1795 law. All the records of the bill and resulting sales were collected in front of the Capitol building on February 21, 1796, and "consumed by Holy Fire from Heaven" summoned with the aid of a magnifying glass. The state refunded the money already paid for the land, but some of it had already been resold to people who refused the money, preferring the land instead. These claims were not recognized by the state, and the matter ended up in court.
On April 26, 1802, Georgia ceded the disputed Yazoo land, along with associated problems to the United States for $1,250,000 and the removal of the Cherokee Indians from Georgia at Federal expense. Finally, in 1810, the U.S. Supreme Court handed down its decision in the case of Fletcher vs. Peck. Chief Justice Marshall and his associates established the inviolability of a state's contracts, by overturning as unconstitutional the 1796 act of the Georgia legislature which had rescinded the Yazoo Land Act of 1795.
This decision of the Supreme Court ended the involvement of Matthew McAllister in the movement to expand Georgia to the west. The states of Mississippi and Alabama and were admitted to the Union in 1817 and 1819 respectively. Matthew later served as the mayor of Savannah in 1812.
His son, Matthew Hall McAllister (A04-2-5-3), enjoyed a distinguished
career in Georgia politics, and later moved to San Francisco, California
in 1850, where he served as a U.S. Circuit Court judge. McAllister Street
in San Francisco was named for him.