Speculation, Boosterism, and Frontier Settlement

The Land Office Business: The Settlement and Administration of American Public Lands, 1789-1837 Malcolm J. Rohrbough, 1968

This mostly administrative history of western expansion is a necessary if not joyful read; but Malcolm Rohrbough offers some interesting hints at culture, mostly unintentionally and between the lines. “The distribution of the public domain had a profound effect on the economic life of the nation,” Rohrbough says. Not only for the “great agricultural empire” of the early twentieth century, but because “In the first fifty years of the Republic’s history, citizens spent much time devising ways to get something for nothing from the public domain” (238). As time passed, “The politicians who increasingly administered the public domain did not do so out of a feeling of service but to make a profit” (229). Rohrbough shows that appointees as early as Albert Gallatin were heavy speculators. “Land speculation,” he says, “was part of the American scene from the first settlements.” So, it seems, was the tendency to mix the public and private domains for personal enrichment.

A recurring issue in distributing public lands was how to deal with “pioneer families [who] defied the Indians [and] challenged the authority of entrepreneurs,” speculators, and bureaucrats (3). Pre-emption deals had to be made throughout the period of western expansion, to accommodate but also to rein in those who squatted on frontier lands.  But the land and money expended on this was a drop in the bucket, compared with the fortunes and political power that accrued to the well-connected. “Congress...sold one million acres to the Ohio Company of Associates in the same week that it passed the Northwest Ordinance.” And “John Cleves Symmes (a territorial judge and William Henry Harrison’s father-in-law) concluded an arrangement with the Treasury Board for one million acres.” (11, 18-9)

Public officials dominate Rohrbough’s story, even when he describes the distribution of small parcels to actual settlers.  “As a Congressman, Gallatin...constantly supported the sale of small tracts to individual settlers,” he says (24). Perhaps, given the size of the western frontier, distributing some small parcels did not seem at odds with Gallatin's speculations, or those of his social set. “William Henry Harrison, Governor of the Indiana Territory, made a series of extensive purchases from the Indians” in the first decade of the 1800s, Rohrbough continues (30). The terms of these purchases are not disclosed, but it’s not surprising that the Indians next appear in the story as “two thousand infuriated Hell Hounds” (quoting a settler, 49). Chances are, even if the settlers didn't know what had infuriated the Indians, people like Harrison and Gallatin had a clue.

The War of 1812 “had broken the grip of the Indian on the western lands,” Rohrbough says.  And the urge to move west wasn't restricted to people in the original 13 states. “Altho you say the Ohio feever is abated in Vermont--the Missouri & Illinois Feever Rages greatly in Ohio, Kentucky, & Tennessee and carried off thousands” (quoting a letter from a son to his father back east, 74). Indeed, “Old America seems to be breaking up, and moving westward,” wrote a contemporary traveler. “We are seldom out of sight, as we travel on this grand track, towards the Ohio, of family groups, behind and before us, some with a view to a particular spot; close to a brother perhaps, or a friend, who has gone before, and reported well of the country” (103). In 1819, the eastern half of Michigan was contained in a Land District whose office was at Detroit. By 1834, a new District had been formed for the western half, centered on Bronson (Kalamazoo), est. 1831. The towns of White Pigeon and Bronson were “strategically placed on the Chicago Road.” June 1835 land sales in Bronson totaled $138,000; in October, White Pigeon’s sales exceeded $194,500 (193). Much of this purchasing was speculative and based on shaky credit, as shown by the experience of Allegan, Michigan, “One of the paper cities that vanished beneath the waves of the panic of 1837” (194).

Around 1816, Secretary of the Treasury William H. Crawford complained that many “Banks have been incorporated, not because there was capital seeking investment; not because the places where they were established had commerce and manufactures...but because men without active capital wanted the means of obtaining loans, which their standing in the community would not command from banks or individuals having real capital and established credit.” This is an interesting chicken-egg statement. To some extent, it could be interpreted as a desire to limit economic access to the “haves.” But it also seems reasonable that when “bank capital increased from $65,000,000 to more than $125,000,000” between 1813 and 1819, some bad credit decisions were probably made (111). The Second Bank of the United States’ “loss of regulatory power...following Jackson’s veto of the bill for recharter and the removal of deposits led to the rise of innumerable state banks which expanded loans at a dizzy rate” (178). As a result, “In the thirty months from the fall of 1834 to the spring of 1837, the American people generated the largest land office business in the history of the Republic. From the timberlands of Maine to the Cotton Kingdom of Mississippi, in city lots of Chicago, and in the wilderness of central Michigan, the dimensions of the land boom touched people of all stations and locations” (187). This is certainly true of the people I've been studying. The Ranneys made a side trip to Michigan and invested in land there just as they were moving from Ashfield Massachusetts to Phelps New York!

April, 1837 land purchase by Samuel Ranney

“The desire for lands,” Rohrbough says, “was not dampened by Andrew Jackson’s declaration that after September 1 only specie would be received in payment for public lands. The Bank of Michigan in Detroit quickly ordered specie from the East, acquired $500,000 in hard money from New York in October alone, and supplied land office money to continue the Michigan boom” (197). Perhaps the Panic of 1837 and the subsequent ongoing scarcity of cash in places like upstate NY can be attributed partly to the fact that hard money continued to flow toward the frontier. But in spite of the continued Michigan boom, Rohrbough concludes that “The specie circular...and the panic of 1837 marked the decline of the land office business as a dominant force in American life...The depression marked the passing of a period in which the land business dominated the thoughts and dreams of the nation. A new world was emerging. It was a world in which people would be drawn to cities rather than the land, in which the rise of the factory system would sharply distinguish a laboring class, in which great industrial complexes would attract the investment capital of the nation” (238).

This conclusion seems to raise more questions than it answers. Looking back at this period, Rohrbough describes what happened next, but he seems to miss an opportunity to explore why. Of course the factories created their own success; but did changes in access to land or the administration of the land office, dampen the speculators’ enthusiasm? Why did such a high percentage of immigrants stay in Eastern cities of move to Western cities rather than farms? Was there a difference between the German immigrants of the later 1830s and people who had preceded them? Did a reduced interest in the west by speculators diminish the flow of real settlers? Were there no longer enough reports of “fabled tracts of rich land, fertile beyond all imagination,” just over the next hill? (4) More needs to be said about this change. Rohrbough made a good start -- now a social and cultural history of the people who came west, and the communities they formed, needs to take the next step.