The land of the endless naught
The landed history of discovery and conquest

America: discovery and conquest.

"I thank God we have no free schools or printing, and I hope we shall not have these in a hundred years; for learning has brought disobedience and heresy and sects into the world, and printing has divulged them and libels against the government. God keep us from both."
Governor of Virginia, Sir William Berkeley, 1671.

The United States is now considered the world's most dominant power. Whatever one might think of that, the US economy affects all others, and is very definitely cyclical in its behavior; busts have followed economic booms with great regularity. This chapter is designed to give some historical background, and a bit more depth and meaning, to the specific chapters that follow about business cycles. One should observe in particular the role the frontier has played in American history, and the real estate speculation that went on around it. To get land was the name of the game. Men fought over it, went to war because of it, corrupted governments with it. Many even travelled half way around the world to get a piece of it. And because land's supply was ultimately limited, in the face of increasing numbers of persons desirous to own it, the land increased in value. It is with this in mind that the following historical summary is given. The chapter is not an attempt to be a concise guide to US history.

Christopher Columbus returned to Spain (Barcelona) in 1492. The response to his discoveries was immediate; the king of Spain sent an ambassador to Rome petitioning the Pope for a grant, to the king, of all the newly discovered real estate. Fortunately the Pope, one Alexander VI, was Spanish. He granted to the Spanish monarch his wishes - all lands discovered, or to be discovered on the Western Ocean. Any person disregarding such grant faced excommunication.

The Portuguese monarch, incensed at the Pope's actions, negotiated a treaty with Spain in 1494, dividing the spoils, should there be any. The English royalty supported the sailing of John Cabot across the Atlantic in 1497 to see what all the fuss was about.

The French, 23 years later, demanded of Charles V, king of Spain, by what right he and the king of Portugal undertook to monopolize all the land on earth ? "Had our first father Adam made them his sole heirs ? If so, it would be more than proper for them to produce a copy of the will. Meanwhile he should feel at liberty to seize upon all the land he could get." (Alfred Chandler, Land Title Origins, page 3.) Such began the fight for the New Americas.

Throughout the 1500's, numerous voyages of discovery and plunder were made to the newly discovered Americas. To prove the discoverers had indeed been there, many a ship captain brought Indians back as slaves. By 1540 French fur traders were occupying the Hudson River. In 1592 they had built a fort on Manhattan Island. "From these voyages arose the conflicting claims of the sponsoring monarchs to various portions of North America. Repeated fights took place between the British, French, Spaniards, Dutch and Swedes." At this time, "the land was not claimed for the people of those nations, but for the reigning monarchs personally, or for some incorporated company." (Chandler page 6)

However, the voyages of discovery took on a slight, but important variance after 1578 and the grant of Queen Elizabeth to Sir Humphrey Gilbert. Now the desire to profit from the direct ownership of land in the Americas made its first appearance. Elizabeth decreed the following: "Elizabeth by Grace of God, Queen of England; to all people to whom these presents shall come, greeting: know ye that we give and grant to our trustie and well beloved servant Sir Humphrey Gilbert of Compton Devonshire, and to his heirs and assigns for ever, free license to discover remote lands not possessed by any Christian prince or people and the same to have and enjoy for ever, paying unto us, our heirs and successors one-fifth of all gold and silver discovered."

Gilbert, it is reported, did indeed make it to Newfoundland in 1583 whereupon he proclaimed to the assembled fisherman there, his ownership of the land granted to him by royal edict. Gilbert then proceeded to parcel out the same land to those assembled "to be held by them so long as they paid him the rent for the land." (Chandler page 8) Gilbert's ship, with all aboard, was lost upon its return voyage to England. The Queen re-issued the grant to Gilbert's half brother, Sir Walter Raleigh. This was the time of the Spanish Armada. Raleigh's eventual clearing of the North Atlantic Ocean of Spanish vessels soon allowed for the uninterrupted settlement of the new Americas by other Europeans.

An attitude to speculation.

The English called the Americas New England. The Dutch named it New Netherlands. The French, Swedes and Spanish also took great interest in this New World, but it is the English history we shall concentrate on. It is necessary to do such a (brief) review of how they settled the US because it will be useful to help in understanding how the American attitude to speculation developed, particularly in land.

The English settled first at Jamestown, Virginia, in 1607. The Mayflower colony got to Plymouth in 1620. On the English throne at this time was James I, who, by royal edict, made it known that he was claiming all the American lands between where the French had settled in the St Lawrence region and where the Spanish were in Florida. These lands he considered his personal property, to do with as he pleased. And this he did.

Historian Alfred Chandler notes the first Virginia charter, issued by the king on April 10 1606 was: "Granted to Sir Thomas Gates and three others named, 'and any others whom they join with them, to be called the first colony, all the lands, woods, soil, havens, ports, rivers, mines, minerals, marshes, waters, fishings, commodities and hereditaments whatsoever for fifty miles north and fifty miles south from the seat of their first location in America, and directly into the main land for one hundred miles'…The grants cited 'they shall order the search for gold, silver and copper, giving to us our heirs and successors the one-fifth part of such gold and silver, and one-fifteenth part of all copper found. Authority is granted to capture any persons, ships or goods which shall be trafficking without license within the limits of said plantations. Upon petition, we shall grant unto such persons and their heirs and assigns, as either council shall nominate, all the lands and tenements which shall be within that colony.' "

Writer Paul Johnson, in his book A History of the American People, (Page 13) notes that: "James I was keen on colonization, provided that it could be carried out without conflict with either Spain or France. As in Elizabethan times, the method was for the crown to issue charters to 'companies of adventurers', who risked their own money."

Immediately upon receiving the charter, the grantees began planning how to finance the venture. This they did by marketing subscriptions to shares in the charter company at par value of 12 pound 10s per share. More than one thousand persons subscribed. Many more inquired about emigration. Finally, three ships of the London Charter company set sail January 1st 1607, with about 100 on board. Before the year was out, stockholders started clamoring for a distribution of profits. It could be argued America was born as a speculation.

Johnson says about this, (page 14): "The financing…was right: this was a speculative company investment, in which individuals put their cash into a joint stock to furnish and equip the expedition, and reinforce it. The crown had nothing to do with the money side to begin with. Over the years, this method of financing the plantations turned out to be the best one and is one reason why the English colonies in America proved eventually so successful and created such a numerous and solidly based community: capitalism, financed by private individuals and the competitive money market, was there from the start. At Jamestown, in return for their investment, each stockholder received 100 acres in fee simple (in effect perpetual freehold) for each share owned, and another 100 acres when the grant was 'seated', that is actually taken up. Each shareholder also received a head right of 50 acres for each man he transported and paid for. That was the theory. But in practice the settlers, who were adventurers rather than farmers - most were actually company employees - did not know how to make the most of their acres."

Maybe. As we shall see however, those already in control knew exactly how to get the most from their 'in fee simple': add people to increase the land value. Plain and simple. Anything else was not tolerated.

In 1609, the king expanded the area granted to the London Charter Company to more than one million square miles of the new land. In particular, the land was "made over to the sole use of the company and their assigns for ever, with authority to distribute and assign the lands therein granted." (Chandler page 50.) The Aristocracy (privileged interests) adding to their power base.

Bad reports filtering back to England of deaths and starvation in the new colony caused many company subscribers to question the further installments due on their shares, so other ways to finance the continuing venture were sought, including a series of lotteries. But what probably saved the day was the planting of tobacco, where demand in Europe for the weed became so great the colonists were soon planting nothing else.

It was a settler by the name of John Rolfe who began the experiments with tobacco, apparently out of fear of the newly promulgated 1611 law severely punishing any idleness within the colony. "After trying various seeds, he produced a satisfactory crop, the first sweet-tasting Virginian tobacco." (Johnson page 26.) The guy must have been busy in other areas too. In 1614 he had married the Indian princess Pocahontas, who was apparently venturing in and out of the colony virtually from the beginning. So much for idleness. The marriage did however bring a sort of peace between the colony and local tribes.

And what of the natives ? Here is what Columbus said of them: "They are", he reported, "so ingenious and free with all they have, that no one would believe it who had not seen it; of anything they possess, if it be asked of them they never say no; on the contrary, they invite you to share it, and they show as much love as if their hearts went with it." (Chandler page 23) Compare this however, to what king Louis XIV ordered of his governor in Canada: "To diminish as much as possible the number of Iroquois; and moreover, as the savages who are very strong and robust will serve usefully in my galleys, I will that you do everything in your power to make a great number of them prisoners of war and have them conveyed to France." (Chandler page 27.) It is probable that many of the first American colonies would not have survived without the assistance of the native Indians, at least in the beginning. Indeed, the Jamestown colonists were so busy with the new tobacco weed they even gave the natives guns, with which to supply the colonists with meat.

Most of the early settlers were given grants of land in fee simple. Others, who had rendered effective service to the Charter Company, were also granted land in fee simple as payment. The rent was payable in tobacco. Tobacco was pretty much from the start, the currency of choice within the colony. There was little coin. There was also not too many women folk either. And since no colony was likely to prosper without them, the Charter Company made efforts to bring some over. This was a company expense, which the company passed on, so that each accepting suitor had to pay 120 pounds of tobacco for the privilege. Ninety maidens were sent over in 1619, one hundred more the following year. (Chandler page 55.)

1619 was an important year for two other reasons also. First, in this year, the charter company gave to the colonists their 'rights as Englishmen', and on July 30, the first ever General Assembly of Virginia met within the Jamestown Church, the meeting lasting about a week. In one sense this was quite an historic development; the meeting was modeled upon the English Lords and Commons houses, the governor acting as the House of Lords, with 22 elected men as the commons. Over time, the colony got used to such rights, especially voting to elect their leaders: far different to the average worker in England. The second reason involved a Dutch ship bringing in and selling to the colony '20 negars'. The governor bought 15 of the blacks and put them to work as indentured servants on his tobacco plantation. Not that tobacco planting was actively encouraged; indeed His Majesty the King himself hated the weed, saying that it 'tended to general and new corruption both of men's bodies and manners'. However the economics of the crop was excellent, farmers reporting that for the same application of labor, tobacco yielded at the time up to 6 times more than anything else that could be grown.

By 1622, the colony had extended greatly into the upper reaches of the James River, causing the Indians to realize that the ever increasing arrivals would likely push them further and further from their previous hunting and fishing grounds. Consequently they attacked the settlements along the river in March of 1622, those guns coming in handy no doubt, leading naturally to white reprisals. "The sparse settlement lacked concentration of population for defense, and the practice of granting land in large tracts to absentee holders was severely condemned after the massacre. But protests against this policy were of no avail. The apparent policy of the company was to dispose of all the land possible to appease the demands of shareholders for land dividends, and to increase the land rents, regardless of the safety of the settlers." (Chandler page 58.) This was a common early complaint of nearly every new settlement. Despite whatever else happened in those early days, the private land privilege was never surrendered. This is highly significant, as a nation's land policy underlies practically everything else that happens within it.

Chandler writes further that: "Factional differences, disputes, strife and slander within the company, and the growth of popular government in Virginia, prompted King James in 1624 to force a revocation of the company charter. After a strongly waged contest in England, the lord Chief justice declared the charter null and void. Thereupon James appointed Sir Francis Wyatt royal governor with a council of eleven members…(US states are still run by their governor)…James assured the company shareholders that their vested interest in land would not in the slightest respect be infringed; that his intention was to alter the charter only as to form a government, with the preservation of the land privilege of every holder. The following year he again so assured them. The land grantees included a great array of noblemen, guilds and bishops, including the Archbishop of Canterbury. To have revoked the land grant, which the company was attempting to monopolize while making use of only a very small area about Jamestown, would have been considered an outrage on the recently acquired vested rights of these nobles and bishops. They wanted to hold the territory for themselves and their heirs to use to exact ground rents from succeeding generations." (Chandler page 58) Before the company charter had been revoked, any land rents were owed to the company. After the revoking, the rents become payable to the king, collected by designated persons for this purpose.

Universal suffrage for the colony went out in 1670, after the Virginia assembly took to the establishment of a property qualification for voting. Now only freeholders, landholders, and housekeepers could have a voice in the election of burgesses. Governor Berkeley was quoted in 1671 as stating, "I thank God we have no free schools or printing, and I hope we shall not have these hundred years; for learning has brought disobedience and heresy and sects into the world, and printing has divulged them and libels against the government. God keep us from both." (Chandler page 65) Again the privileged interests consolidating their power base.

In 1684, King Charles made the use of a printing press strictly illegal. Virginia did not get a public school till 1728, the first newspaper was not published until 1745, and there were very few roads prior to 1750. "With these backward social conditions, land grabbing, land speculation and other forms of gambling, were diversions of the gentry." (Chandler page 70) And there was plenty of diversion. Speculation became the national past time. By 1700, land was generally being granted on payment of a fee, on land rent of 5s per fifty acres, payable in coin or tobacco, with the rent only to begin after the end of the 7th year. The object of the settlement exercise was to dispose of land; the more the better since this would increase the likely revenue from land rents. Much land was granted to the tobacco growers and /or speculators, whose main aim was to sell or rent it to others, and who, under the law of the land, had seven years to sit on it before any land rents became due. Increasing population might make your newly acquired wealth more valuable within that time frame. The land office of Virginia soon became a sink of corruption, with all the governors owing their appointments to politics and intrigue. (Chandler page 69.)

The pressure to find cheap or untitled land could only increase. "New arrivals coming to create homesteads, and indented servants wanting land at the expiration of their services, found that land all along the streams (in the densely wooded country, the only means of travel and communication) had been appropriated, either by large plantation owners, or by speculators. Shut out from temporarily free land on which to supply their labor, newcomers were forced to become tenant farmers, share croppers, or laborers for others." (Chandler page 69.) Or they could move on, which is exactly what Robert Green did as early as 1653, leading a hundred pioneers from Virginia, into the Carolinas. One Virginian historian, Robert Beverley, described the locals in 1705 as "not minding anything but to be masters of great tracts of land - lords of vast territory". Some 3 million acres of land had been granted to owners, often absentee, by 1718.

Even George Washington, considered by many as the father of the US, was much taken by speculation and land grabbing. "Land was plentiful, and obtainable for the asking by men of influence. They saw no harm in the practice." Indeed, Washington, in 1767, then aged thirty-five years, wrote his friend and associate, William Crawford: "Any person who neglects this opportunity of hunting out good lands and in some measure marking and distinguishing them for their own (in order to keep others from settling them), will never regain it; if therefore you will be at the trouble of seeking out the lands, I will take it upon me the part of securing them as soon as there is a possibility of doing it…By this time it may be easy for you to discover that my plan is to secure a good deal of land." Washington carefully advised Crawford to carry on his operations "snugly, under pretense of hunting game." (Chandler page 71.) We will revisit America's founding father and first president next chapter.

From Virginia to Kentucky.

Such is the manner in which Virginia was settled and then developed. Plenty of other settlements were started in the Americas by the English and others, for example in Massachusetts, Maine, New Hampshire, Rhode Island, Pennsylvania, Maryland and not forgetting, New York. Settlement patterns were not the same everywhere of course, but the land speculator was always present in each of them. A few quotes taken from Paul Johnson's history help illustrate this.

Writing about Roger Williams, pastor of Salem in 1635, a New England colony first settled in 1630, Johnson says, (page 47): "Williams friendships with individual Indians led him to conclude that there was something fundamentally wrong with settler-Indian relationships. The Europeans had come to bring Christianity to the Indians, and that was right thought Williams. Of all the things that they had to impart to the heathen, that was the most precious blessing - far more important than horses and firearms, which some settlers were keen to sell, and all Indians anxious to buy. But in practice, Williams found, few New Englanders took the trouble to instruct Indians in Christianity. What they all wanted to do was to dispossess them of their lands and traditional hunting preserves, if possible by sheer robbery. Williams thought this profoundly unchristian. He argued that all title to Indian land should be validated by specific negotiations at an agreed price. Anything less was sinful."

Williams also believed in the separation of church and state, anathema to popular thinking of the time. He was kicked out, going on to found Providence, Rhode Island (after negotiating a land purchase from a local tribe) where he welcomed dissidents of all kinds, including Indians, and his was the first colony to make freedom of religion the principle of its existence.

In speaking of the development of Maryland (page 57) Johnson reports: "The actual apportioning of land proceeded swiftly - something Americans learned to do very well in their history, and which was for 300 years one of their greatest strengths. A settler went to the secretary of the province, and requested a grant of land. The secretary then presented a warrant of survey to the surveyor-general, who found and surveyed the appropriate tract. When he reported, the secretary issued a patent, which described the reasons for the grant, the boundaries and the conditions of tenure. The owner then occupied the land and began farming. Compared to the difficulties of acquiring land in England, even for ready money, it was amazingly simple." Johnson continues (page 61): "Studying the history of those early settlements one is astonished - and delighted - by the variety of it all, and by the way in which accidents, events, and the stubborn individuality of ordinary men and women take over from the deep-laid schemes of the founders. The Calverts in Maryland attempted to create a perfect baronial society in America, based on status rather than wealth. But such an idea, it was already clear, simply did not work in America. The basic economic fact about the New World was that land was plentiful; it was labor and skills that were in short supply. To get immigrants you had to offer them land, and once they arrived they were determined to become individual entrepreneurs, subject to no one but the law. So the manorial courts rapidly gave place to elective local government."

Johnson notes further, page 90: "By mid-century (1750) all the original thirteen colonies were in actual, though not always legal, existence, and all were being rapidly transformed by unequal, sometimes patchy, but on the whole overwhelming prosperity. It was already a region accustomed to dealing in millions - the land of the endless naughts. In 1746, a New Hampshire gentleman, John Mason, sold a tract of land totaling 2 million acres, which had been in his family for generations, to a group of Portsmouth businessmen for a planned settlement of new towns. This was merely the largest single item in a continuing process of buying and selling farms, estates, and virgin soil, which had already made British America the biggest theatre in land speculation in human history. Everyone engaged in it if they could - a foreshadowing of the eagerness with which Americans would take to stock market speculation in the next century."

We might also note his comments, page 85: "The frontier was already a physical reality and a powerful metaphysical concept by the year 1700. The overwhelming dynamic was the lust to own land. Now, for the first time in human history, cheap, good land was available to the multitude. This happy prospect was now open, and it remained so for the best part of the next two centuries; then it closed, forever. In the early 18th century, the movements to acquire land outside the original settlements and charters, and dot it with towns, was just getting into its stride, which was not to relax until the frontier ceased to exist in the 1890's."

The date the frontier ceased to exist, around 1890, is important for future real estate cycles discussion.

Settlement of the Kentucky 'Blue Grass' region.

"Land companies were organized in Virginia to obtain land west of the Alleghenies. One of these was the Loyal Company, to which Virginian officials granted eight hundred thousand acres in Kentucky, with no obligation imposed to make a settlement. It was purely for speculation. Dr Thomas Walker, of Albemarle County, Virginia, a noted land speculator, was selected to lead an expedition in 1750 to explore and locate the land. Crossing through Cumberland Gap, the expedition came into southeastern Kentucky, which had not previously been visited by white men. At a point near the present town of Barbourville they constructed a log cabin. Being terrified by Indians, they returned to Virginia, but continued for many years to assert their claim." Alfred Chandler, Land Title Origins, page 441.

The increasing numbers of immigrants coming to the Americas, and the increasing amount of land held by those who got there beforehand, land held often out of use by absentee owners, caused a spontaneous westward movement in the US over the Appalachian mountains, and also the Alleghenies.

In May 1769, a chap named Boone, Daniel Boone, decided upon a hunting expedition, with five of his companions, to Kentucky; staying two years. But for a purely hunting expedition, it was a bit of an odd time to go. It was May and corn planting season. Survival through the next winter was greatly assisted by having a good corn crop and all hands were generally needed to get one. Other groups of prospectors followed Boone into Kentucky, but no attempt at permanent settlement was made until four years later, when Boone, with his own and several other North Carolina families went there, along what became known as the wilderness road.

Now a lot has been written about this chap Boone, there was even a Walt Disney TV series in the 1960's. A good summation of his life, taken from the Daniel Boone biography at the web site states: "(Daniel's) father, Squire Boone, came from England, and took up residence in a frontier settlement in Pennsylvania, where Daniel received the merest rudiments of education, but became thoroughly familiar with the arts and hardships of pioneer life. When he was 18 years old the family moved to the banks of the river Yadkin, in North Carolina, where he married Rebecca Bryan, and passed some years as a farmer. He made several hunting excursions into the wilderness, and finally, in 1769, set out with five others to explore the border region of Kentucky. They halted on Red River, a branch of the Kentucky, where they hunted for several months. In December 1769, Boone and a companion named Stewart were captured by the Indians, but escaped, and Boone was soon after joined by his brother. They were captured again, and Stewart was killed; but Boone escaped, and his brother going shortly after to North Carolina, he was left alone for several weeks in the wilderness, with only his rifle for means of support. He was rejoined by his brother, and they continued their explorations till March 1771, when they returned home with the spoils which they had collected. In 1773 he sold his farm and set out with his family and two brothers, and five other families, to make his home in Kentucky. They were intercepted by Indians and forced to retreat to Clinch river, near the border of Virginia, where they remained for some time, Boone in the meanwhile conducting a party of surveyors into Kentucky for Patrick Henry, the Governor of Virginia. He was afterward appointed, with the commission of a captain, to command three garrisons on the Ohio, to keep back the hostile Indians, and in 1775 was employed to lay out lands in Kentucky for the Pennsylvania Company. He erected a stockade fort on the Kentucky River, which he called Boonsborough, which is now in Madison County, and removed his family to the new settlement, where he was again employed in command of a force to repel the Indians.

In 1778 he went to Blue Licks to obtain salt for the settlement, and was captured and taken to Detroit. His knowledge of the Indian character enabled him to gain favour with his captors, and he was adopted into one of their families. Discovering a plan laid by the British for an Indian attack upon Boonsborough, he contrived to escape, and set out for the Kentucky settlement, which he reached in less than five days. His family, supposing that he was dead, had returned to North Carolina; but he at once put the garrison in order and successfully repelled the attack, which was soon made. He was court-martialed for surrendering his party at the Licks, and for endeavouring to make a treaty with the Indians before the attack on the fort; but, conducting his own defence, he was acquitted and promoted to the rank of major.

In 1780 he brought his family back to Boonsborough, and continued to live there till 1792. At that time Kentucky was admitted into the Union as a State, and much litigation arose about the titles of settlers to their lands. Boone, losing all his possessions for want of a clear title, retired in 1795 in disgust into the wilderness of Missouri, settling on the Femme Osage Creek, in St. Charles County. This region was then under the dominion of Spain, and he was appointed commander of the Femme Osage district, and received a large tract of land for his services, which he also lost subsequently because he failed to make his title good. His claim to another tract of land was confirmed by Congress in 1812, in consideration of his eminent public services.” End quote

Why study this Boone chap ? Well it gives great insight into how the interior of the US was settled and developed – how the West was really won, so to speak. And Boone's real life story is far more interesting for what is left out than merely what has been written.

From the Ohio history central website, ( we learn, start quote: “In 1750, the Boones moved to North Carolina, arriving at Buffalo Lick on the Yadkin River a year later. In 1755, he participated with a detachment of North Carolina militiamen in Edward Braddock's assault on Fort Duquesne. Before the British force could reach the fort, a combined French and Native American force ambushed the English. Braddock was killed, and Boone barely escaped with his life. It was during Braddock's expedition that Boone met James Finley, (possible site error here, should be John) a hunter and explorer who had visited the Kentucky wilderness on several occasions. Because of Finley's stories, the young Boone became fascinated with the region.

Following the French and Indian War, England issued the Proclamation of 1763. This act forbade England's colonists from moving west of the Appalachian Mountains. The land that England claimed between the Appalachian Mountains and the Mississippi River was to become an Indian reserve. Despite the Proclamation of 1763, the colonists continued to move west of the Appalachian Mountains. Most of these people settled along the Kentucky bank of the Ohio River. Hoping to prevent tensions with the Ohio Country natives, the English government tried to negotiate a treaty establishing a new boundary between the two sides. In 1768, the Iroquois Indians and the English signed the Treaty of Fort Stanwix (1768). In this agreement, the Iroquois ceded all of their lands east and south of the Ohio River to the English. While the Iroquois agreed to give up this land, most Ohio Native Americans did not, including the Delaware Indians, the Mingo Indians, and the Shawnee Indians. These tribes claimed that the Iroquois, who did not even live in the Ohio Country, did not have the authority to negotiate for the other tribes. White settlers immediately moved into the region. By the spring of 1774, violence had erupted in the disputed area as these different tribes, especially the Shawnee, tried to drive the English colonists back east of the Appalachian Mountains.” End quote.

As early as 1764 or so, Boone had been employed by one Richard Henderson to spy out the western lands for his group, though the English 1763 proclamation probably prohibited any plans the Henderson company may have had at the time of securing title to the lands so surveyed. Though the English were trying to slow down the movement west, and keep lands for Indian reservations, public sentiment and speculator pressure was against them. Public sentiment was far more likely to be with the surveyors like Henderson. In fact the settlers often disregarded the English proclamation, and even men such as George Washington had already started acquiring huge tracts of western land through secret purchases.

Settling of the west was a land speculators paradise. And whoever got there first could carve out a lot of land for himself. Later settlers would have to buy their own piece from you, as new owner, on your terms, subject only to market conditions. Such were the dreams and schemes of Judge Richard Henderson, who: "formed the Transylvania Company and persuaded the Cherokee to sell him all of 'Old Kaintuck' at the Treaty of Sycamore Shoals (1775). That the Indians had no legal right to sell under British law made no difference to Henderson; imperial controls were rapidly dissolving and any lucky jobber actually in possession might make good his claim. Even before the Cherokee chiefs had affixed their marks to the treaty, Judge Henderson sent Daniel Boone with thirty axemen to cut the Wilderness Road through the Cumberland Gap to the Blue Grass country. Henderson followed a few days later, leading a band of settlers who were willing to risk Indian wrath and uncertain land titles to pioneer this newest frontier. Before they reached the Kentucky River, where Boone's men were throwing together the cluster of crude cabins they called Boonesborough, the individualism common among frontiersmen began to assert itself. Lustily proclaiming the Transylvanian Company had no right to the soil, a group under Benjamin Logan broke away to found their own outpost, St Asaph's Station…Eventually these rebels petitioned Virginia to organise the County of Kentucky, a step that ended Judge Henderson's last hope of securing any profit on his venture." (Billington, The Westward Movement in the United States, page 27.)

But back to Boone. After 1775, says the web site at "Boone spent the next several years exploring, surveying, and trapping. He also faced constant opposition from local Native Americans, especially the Shawnees, who disliked the whites moving onto their lands. During the American Revolution, Boone played an active role against the British and their native allies in the Ohio Country, accompanying both militia forces and regular army troops north of the Ohio River on several occasions to secure this territory for the Americans and to open it up for settlement.

In February 1778, while Boone and approximately two dozen settlers were collecting salt at Blue Licks in Kentucky, a band of one hundred Shawnee Indians under Chief Blackfish captured Boone...Boone and his men spent the rest of the winter with the Shawnee at Old Chillicothe. The Shawnees adopted most of them into their tribe. Boone especially acted as if he enjoyed his new life. In reality, he was looking for a chance to escape. In June 1783, while he accompanied his adopted family to a saltlick along the Scioto River, Boone found his opportunity and successfully made it back to Boonesborough. He assisted the settlers in preparing for a Shawnee attack, which the whites successfully repelled in September of that year. Boone spent the next five years in various government positions, including sheriff, deputy surveyor, and a delegate to the legislature. The frontiersman also continued to assist the American military against natives in the Ohio Country. By 1788, Boone was nearly bankrupt. He had laid claim to large tracts of land in Kentucky during the 1770s, but Boone had filed all of the paperwork establishing his ownership incorrectly. The end result was that he lost all of his Kentucky lands. By 1799, Boone had left Kentucky for Missouri, where he died in 1820." End quote.

An interesting life, to say the least. Someone else thought so too. Boone would probably have died in obscurity, just another land speculator, had it not been for John Filson. In 1784, Filson published The Adventures of Col.Daniel Boon (surname mis-spelt), basically a story of Boone's travels and exploits in exploring the US west. The book romanticised Boone's life up to that time, a eulogy to the life of the American frontiersman. Altruistic it was not however. Filson was a speculator in western (Kentucky) lands, like everyone else, and the book about Boone was designed with a view to help promote his investments in it. “Filson's work was successful in its first printing in America, but successive printings did not receive the same interest. However Filson's work was quite successful in Europe, where enlightenment thinkers seized upon Boone as an American original, the 'natural man'.” (see xroads. for further information on how Boone was created in this way) A lot more books and eulogies followed, even the poet Byron included a tribute to Boone in his Don Juan poem of 1824. In Boone's time, and later, settlement of the West was dividing the nation. The need for a pioneering hero with civilising purpose was evident - from the speculators' point of view at least anyway - and Boone became that hero.

The myth making around Boone continues to this day. Many times he has been resurrected, once especially in the gilded age of the 1860's as the frontier finally began to close. Boone the coloniser, civiliser, - natural man – representative of an enduring trait in American culture; the frontiersman. Boone remains famous in Kentucky itself naturally; Kentucky celebrates June 7 as Boone day. However in the book, The History of Tennessee, by James Phelan written in 1888, and quoted by Chandler page 443, Phelan wrote: "The immortal lines which Byron gives to Daniel Boone are poetical but they are not true. Daniel Boone was a speculator, and the agent of land speculators and, in the expressive phraseology of the day, would be called a 'land shark'. He entered enough claims in Kentucky to have made him wealthy had he but known how to perfect his titles."

Things are not always the way we are commonly taught. It is much the same when the subject raised is money.

A brief word about Colony money, and some things to learn about it as currency.

In early America it was commodities that were first used when an exchange of goods and services was required. Beaver fur and wampum - colored beads - with the Indians (Indians did not consider gold or silver of any value), rice in the Carolina's, and tobacco in Virginia, where the warehouse receipts for the storage of tobacco soon started to circulate as currency. As the towns grew however, gold and silver coins minted in other countries came into use, simply out of convenience if nothing else. Do note, that since gold and silver have been recognized commodities the world over, any foreign coins containing such could circulate as acceptable currency domestically, unless the power of the government is such to outlaw it, should it wish to. Just out of interest, the word 'dollar' came from 'thaler', a coin minted by the Count of Schlick, in Joachimstal, Bohemia. The thalers were continuously minted successfully for many years, without becoming too debased, so the word seems to have stuck.

The issue of fiat money i.e. paper not convertible at some nominal gold or silver (specie) value and given its legitimacy simply through government decree, took place first in Massachusetts. It was paper issued by the government, and it happened this way, as Murray N Rothbard tells the story in A History of Money and Banking in the United States, page 51: "Massachusetts was accustomed to launching plunder expeditions against the prosperous French colony in Quebec. Generally the expeditions were successful, and would return to Boston, sell their booty and pay off the soldiers with the proceeds. This time, however, the expedition was beaten back decisively, and the soldiers returned to Boston in ill humor, grumbling for their pay. Discontented soldiers are ripe for mutiny, so the Massachusetts government looked around in concern for a way to pay the soldiers… Finally, Massachusetts decided in December 1690 to print £7000 in paper notes and to use them to pay the soldiers. Suspecting that the public would not accept irredeemable paper, the government made a two-fold pledge when it issued the notes: that it would redeem them in gold or silver out of tax revenue in a few years, and that absolutely no further paper notes would be issued."

Trust a government ? Both pledges were quickly broken, and to pay further (soldier) outstanding debts, and perhaps other debts as well, the Massachusetts government went on to issue another £40000 more in notes.

In relation to the above government actions therefor, we should learn the following, as the subject will come up again soon:

  1. As the government issues more and more paper, the value of the paper notes goes lower, (depreciates), against the silver or gold that the community is also accepting for payment of goods and services, i.e. it takes more and more notes, to collect the same quantity of gold or silver, particularly if the public gets to see that the issuer will continuing printing ever increasing quantities of paper to pay its debts.
  2. People will hoard the gold and silver coins, which will therefore soon go out of circulation.
  3. Prices will rise.
  4. If the paper money is not accepted outside of the colony, merchants will have difficulty; since they may be forced to accept payment from buyers in paper money, but have to pay their suppliers in gold or silver coin, further hastening the outflow of specie, which,
  5. will continue despite the best efforts of the government to prevent it by laws say, compelling acceptance of the paper for transactions, backed by fines, imprisonment, or confiscation of one's property.
  6. Debtors might make use of this inflationary process, enjoy it even. Receive a grant of land, organise to have it paid for over time, if the price of the land rises the contractual value of the debt remains the same.
  7. Under such a process, if the inflation was high enough, creditors would seek to avoid their debtors, (usually it is the other way around), or demand repayment of the debt in hard coin.
The relevance of this to us ?

a) It was observed that the issue / contraction of paper money created a boom / bust economy during this colonial period. When the paper money was issued and put into the economy, a boom developed, but when the note supply contracted for any reason, business activity turned down. (The colony of Maryland at one stage even gave away its printed notes.) Debtors - most often farmers - tended to favor therefore the issue of paper money, merchants and 'moneyed' men did not. This ended up as a great source of friction, sometimes even rebellion, amongst colony settlers.

b) The British government forbade the creation of banks within the colonies. This indicates to you the power the establishment believed lay inherent within the banking process, something that will become self evident in the following chapters.

Further reading:

Chandler, Alfred. Land Title Origins, A Tale of Force and Fraud, Beard Books reprint 2000.

Johnson, Paul. A History of the American People, Harper Perennial, 1999.

Rothbard, Murray N. A History of Money and Banking in the United States, Ludwig von Mises Institute, 2002.

Billington, Ray Allen. The Westward Movement in the United States, D Van Nostrand Co. Inc. 1959.

Copyright: Phil Anderson 2004

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