HISTORY OF THE SUPREME COURT
OF THE UNITED STATES
THE SUPREME COURT UNDER
CHIEF-JUSTICE JOHN JAY
If the various elements dissatisfied with the Constitution were led into attaching too much importance to the question of representation in Congress, and too little to the immense potential consequence of the Federal judiciary, the powerful landed class fully understood the supreme might of the courts.
As the superlative court of courts, the newly created Supreme Court of the United States was rightly anticipated by the manorial lords as the chief instrument by which their interests would be conserved and enlarged. Holding an inherited and expanding power, the accretion of centuries, and owning vast estates, the land grandees did not purpose to surrender either wealth or power. Their one guiding aim was to hold, and extend, both. The import of such concessions as during those threatening times had to be made to the populace was cunningly magnified, but a considerable body of the artisans, laborers and small farmers were by no means deceived. Gloss and fine phrases aside, they saw with alarm that not only had the essentials of the old conditions been retained, but that the landholding families and traders were now exercising limitless license in securing great new accumulations of property, and securing the passage of whatever laws their interests and designs required.
Danger to the Manorial Lords.
The Revolution had established the principle of resorting to force to accomplish changes. With this perilous idea permeating the lower orders, there was a considerable degree of probability that it might be repeatedly and formidably applied to strip the manorial landholders of their privileges and possessions, and to abolish all the superstructure of prestige, exclusiveness and caste. The workers were demanding the abolition of barbaric laws, and the small farmers, located as well as intending settlers, were uniting with artisans and laborers in denouncing the great and continual land jobbing by which powerful individuals, lauded as statesmen, were appropriating millions of acres of the best soil and the most valuable resources. The tenants of the great manorial estates were in a restless state, on the verge of resorting to force to throw off the yoke riveted upon them by ancient laws. Above all, subversive doctrines had been agitated ; no longer was there a semblance of reverence felt for the aristocrats ; they were looked upon as enemies, to be divested of power at the first opportunity. Permeating what were stigmatized as the lower orders of society, there was a revolutionary aspiration for equality of opportunity and standing : that much the Revolution had implanted.
It has been said that the great value of revolutions is that at a blow they overcome all established conditions without having to wait for the slow, cumbrous processes of a dragging course of legislation, too often tricky and useless. But the American Revolution was not a Revolution in the sense of the transfer of power from one class to another. The class seizing hold of the reins after the American Revolution had been won well knew that however that Revolution abolished certain forms and details, it did not touch something of far more enduring and incisive effect.
The pillar left untouched was the long line of privileges and precedents established by a powerful feudal aristocracy and maintained by the courts since the reign of Richard II of England, and even before. These precedents had been established for the twofold purpose of justifying the maraudings, thefts and summary frauds by which the dukes, lords and barons had appropriated the British soil, and with the object of holding the working class in complete subjection. They were principles of law enunciated by judges put on the bench by those self-same pillagers ; very often those judges were avowedly corrupt, like Lord Bacon, who admitted taking bribes. Or, if not purchasable by money, they were biased instruments a fact well assured in advance of their appointment ; in fact they would not have been elevated to the high bench by the all-powerful nobility whose purposes they served had their abject compliancy not been well attested. The decisions of these judges were followed by the American colonial judges ; and presently we find the Supreme Court of the United States, when in need of precedents, going back to Lord Coke, Lord Bacon and such jurists.
John Jay Chooses to be Chief Justice.
The landed class, being by virtue of its wealth, its cohesiveness and its long hold on government, the dominant class, had no difficulty in getting President Washington, himself an extensive landholder, to fill the Supreme Court bench with men of its own class. When Washington gave John Jay his choice of Federal offices, Jay selected for himself, in 1789, the post of Chief Justice of the Supreme Court.
Why did Jay choose this position ? It could hardly have been entirely from ambition or taste, inasmuch as six years later he resigned from the Chief Justiceship in order to undergo a long and tedious trip to Europe to execute a treaty by which, among other provisions, alien landholders and their American connections or purchasers were eventually able to recover large and highly valuable areas of confiscated estates. By making this treaty Jay performed a service of inestimable value to the landholding class ; and it can be reasonably inferred that when he picked the seat of Chief Justiceship he realized the immeasurable importance of that commanding office. His appointment was hailed with unconcealed delight and gratification by the powerful landholders ; among the mass of people a corresponding sense of deep dismay was not slow in expressing itself.
By hereditary ties and family and personal connections, Jay was allied by birth, marriage and interest with a number of the mightiest manorial lords in the United States.
His father, Peter, a rich merchant trading with the West Indies, was the only son of Augustus Jay, who, in 1685, had married Anna Bayard. The methods by which Nicholas Bayard, her father, obtained from Fletcher a grant of land forty miles long and thirty wide, have been related in Chapter I. John Jays mother was Mary, a daughter of Jacobus Van Courtlandt, a very rich New York landholder and merchant, and long a politician and office holder of great influence, serving in the Assembly and as Mayor of New York City.
The Van Courtlandt family was one of the largest landholders in the State, having acquired its estate during the corrupt regimes of Governors Slaughter and Fletcher. Stephanus, the elder brother of Jacobus Van Courtlandt, was the right-hand lieutenant of both Slaughter and Fletcher. Of Lord Bellomonts full exposure of Fletchers bribes and corrupt grants, sufficient details have been given in Chapter I. In 1683, Stephanus Van Courtlandt fraudulently secured a great tract of 83,000 acres, extending on the east side of the Hudson River, by an ostensible purchase from the Indians. This was one of the extravagant grants that Lord Bellomont did not succeed in confiscating.
In 1697, this estate was erected into the lordship and manor of Courtlandt ; and Stephanus built a splendid manor house on the northern shore of Croton Bay. He had married, in 1671, Gertrude, a daughter of Schuyler, who had obtained his estate, too, by bribery and fraud, and whose descendants, as told in Chapter I, enlarged the estate by similar fraudulent means by favor of Courtlandt and other functionaries of the Provincial Council. Stephanus Van Courtlandt also secured great holdings of land on the west bank of the Hudson River, on Long Island, and in Sussex County. Jacobus Van Courtlandt married Eva de Vries, stepdaughter of that Frederick Phillips (or Philipse, as it was often spelled), whose career as backer of the pirate, Captain Burgess, and whose methods as land appropriator have also been described in Chapter I. Jacobus had an estate in Yonkers which was uninterruptedly owned by his descendants until 1889, when it was bought by the City of New York and converted into what is now Van Courtlandt Park. He also owned a large estate at Bedford, Westchester County, of which estate a portion descended to John Jay.
Jays Further Powerful Connections.
Descended from an intermingled line of landed families, John Jay married into another mighty landed family, which, despite its support of the Revolutionary movement for political independence, had its alliance of family and interests with powerful British nobles.
This was the Livingston family. Jays wife, to whom he was married in April, 1773, was a daughter of William Livingston, fifth child of Philip, second Lord of Livingston Manor. This manorial seat comprised a tract of about 160,240 acres in the northern part of the present Dutchess County, New York. It had been confirmed to the time-server, political turncoat, sinecurist and army contractor, Robert Livingston, by Governor Hunter in 1715, with the feudal rights of court leet, court baron and advowson.1
This property, however, was only one of the far-reaching possessions of the Livingston family. William Livingston who lived in New Jersey, was a delegate to the Federal Constitutional Convention, and Governor of New Jersey from 1776 to 1790. He was very closely associated with the Lords Proprietors of New Jersey. We have seen how, during that time, John Livingston, another member of the same family, and acting for it, was defrauding the Indians of vast tracts of land, and compelling Phelps and Gorham to admit him and other lessees into a partnership in the spoils.
Peter Van Brugh Livingston, a younger son of Philip, second lord of Livingston Manor (and thus by marriage an uncle of Jay), had become a rich merchant in partnership with his brother-in-law William Alexander, subsequently raised to the peerage under the title of Lord Stirling. We have noted how William Alexander and Robert Morris were partners in that contract to supply the Farmers General of France with 60,000 hogsheads of tobacco. Peter Van Brugh Livingston was an intimate friend of Washington ; he was president of the Provincial Congress ; and after the adoption of the New York State Constitution of 1777, he was elected to the Legislature, and easily managed to have himself chosen president of the Assembly.
Other members of the Livingston family held high Federal, State and New York City offices. They were extraordinarily alert and self-assertive those Livingstons.
At the outset of the Revolution John Jay and Robert R. Livingston were associated as partners in the practice of law. This Robert was a son of the first Robert R. Livingston who had married Margaret, the daughter of Colonel Henry Beekman. How Henry Beekman obtained two land grants from Fletcher, one of sixteen miles of land in Dutchess County, and the other running twenty miles along the Hudson, and eight miles inland, has been related in Chapter I. By combining his possessions with the Beekman estate, Robert R. Livingston (the first) became reputed to be, without exception, the richest landholder in New York.2
The Livingston Familys Sway.
The political motto of the Livingston family was direct and concise : the family should always derive benefit, and nothing of any degree of value was to escape it. Robert Livingston, the founder of their fortune, had got hold of it primarily through being a politician. Assiduously emulating his example, his descendants set out to thrust themselves into every possible office and financial undertaking.
Robert R. Livingston the second was a member of the Continental Congress ; he was on the committee drafting the New York State Constitution of 1777. Upon the adoption of that instrument, he became the first Chancellor of New York State, in which position he was promoter of a certain remarkable transaction which we shall be under pressing need of describing later. While serving as Chancellor he held a Federal office, that of Secretary of Foreign Affairs, a post created by Congress in 1781. In 1783 Livingston resigned this office, Jay succeeding him. Livingston was president of the New York Convention of 1788, called to take action on the Federal Constitution. The whole Livingston family used its influence for the ratification of that document.
For a century, the Livingston family, beginning with nothing, and becoming one of the richest in the colonies, had assiduously pushed themselves, their ties and connections into every office and scheme promising profit and assuring power. Like Robert Livingston, their progenitor, they had been sagacious in discerning the winning side in political contests, and were without compunction in changing front. Now the Livingstons again proved their political skill and great power by having Jay installed as Chief Justice of the Supreme Court of the United States.
Of an intensely aristocratic mind, haughty and arrogant, Jay, filled with the views of his class, both feared and despised the people. The laws so signally and disproportionately favoring the class of wealth, and burdening the workers, were the laws he had studied and absorbed ; he considered them the proper laws and strove at every opportunity to perpetuate them. During the Revolution, he, Hamilton, the Livingstons, the Schuylers and other relatives or personal friends of their class had their private political club, in the arcana of which they discussed the turn of affairs and plotted conservative measures. Previous to the Federal Constitutional Convention, Jay wrote to Washington that he favored a Congress to be composed of two houses the upper chamber to be elected for life.
Many of Jays relatives and associates, as we have already seen, and as we shall perceive yet more clearly, were thoroughly unscrupulous in design, and corrupt in execution. We have remarked how Hamilton, Robert Morris and Jay held a private meeting to discuss land speculations, and how Morris, Livingston and their associates successfully manipulated the legislatures, and defrauded the Indians out of a huge domain ; how Hamilton, as the confidential agent of John B. Church, who had grown extra rich out of the commissary department of the Revolutionary army, advanced money to Morris for his land speculations this, too, has been narrated. Frequently Hamilton was charged with peculations, an accusation against which his partisan and personal friends stoutly defended him.3
Open charges of corruption were also made against Jay. In his celebrated pamphlet4 one of the effects of which was the battering down of the Federalist Party John Thompson Callender boldly asserted Jays corruption. If Washington, wrote Callender, wanted to corrupt the American judges, he could not have taken a more decisive step than by the appointment of Jay.
This statement is merely a general one, made in a partisan spirit, and unsupported by proof. Yet it is invested with a certain weight by reason of the fact that its author was willing to risk indictment and trial by publishing his strictures in the face of the Alien and Sedition Act. This law, passed in desperation by the Federalists to stifle criticism, was rigorously enforced and interpreted.5 Callenders statement came at a time when, as we shall see, Jays relatives and friends were undisguisedly, by force of legislative enactment and by the use of their official positions and the courts, consummating great schemes of spoliation in different directions.
Through Jay, the Landholders Control.
The charges of personal corruption were, however, comparatively immaterial. Not so much in a statutory sense but in a far more subtle, efficacious and dangerous degree Jays mind was corrupted. His acts, generally speaking, were the product of that species of corruption. Against the lower orders his mind was filled with a mass of inflexible prejudices ; he distrusted and dreaded them, and he held it laudable to curb their menacing aspirations. But in the rich and well-born, Jay saw nothing but intelligence, wisdom, virtue and stability one of the cant political phrases of the day, manifesting, however, what the aristocracy really thought of itself.
This was the class to whom the directing of government was to be intrusted and vigilantly restricted. In this class, according to Jays creed, lay the right to rule with a strong hand ; it was justifiable to strain every point to advance the political and pecuniary interests of the rich, and assure their supremacy. But nothing should be done to better the status of the workers, by increasing whose power that of the landholders and other capitalists would be correspondingly diminished.
It is idle to inquire into the honesty or dishonesty of these beliefs. Springing from the personal interests of those holding them, they were not individual, but class, beliefs. Those who declaimed against Jays appointment did not clearly see that it was a very natural result. With the landholding class guiding the currents of the Revolution, and controlling the conventions, it was an inevitable conclusion that great landholders should occupy, personally or through agents, the offices of government, especially what they then completely realized was the most puissant branch the judiciary.
The insurrections in various States and the threatening movements of tenants on some of the manorial estates, were among the evidences of deep popular ferment. Laws aimed at the landholders were always a possibility to be reckoned with and provided against. If such laws were passed, the final resource of the landholders would be the courts. The courts would be the bulwark against popular encroachments ; the courts would know how to find means of taking the stings out of laws hostile to their class. All these tactics were not only clearly thought out ; they were discussed in aristocratic clubs, and affirmed in the private circles of the judges themselves. Having himself large landed possessions, and connected by family ties, associations or other connections of interest, with many of the most powerful landholding families in the country, Jay, from that class point of view, was an ideal man for the Chief Justiceship. His associates (the Supreme Court was then composed of five members in all) were likewise of the landholders or attached to them in interest.
The Associate Justices.
The first Associate Justice appointed by Washington, John Rutledge, represented a different division of landholders. He had inherited wealth from his father, who had married Sarah Hext, an heiress of famed beauty. Studying law in England, Rutledge had returned to his home in South Carolina, and there was attorney for plantation owners. In the Federal Constitutional Convention he had been the chief mouthpiece of the Southern slave holders, who, possessing great rice, cotton and other plantations, found negro slavery profitable. He, perhaps more than any other delegate, was instrumental in defeating in that Convention the proposition to prevent the importation of slaves. Rutledge remained on the Supreme Court bench for a short time only, resigning in 1791 to become Chief Justice of the Supreme Court of South Carolina.
Judge William Cushing, of Massachusetts, was the third in order of Washingtons appointments. He was the scion of two generations of royal judges. His grandfather long held the position of a judge of the Supreme Court of Massachusetts, and his father succeeded, remaining a judge of that court for a period of twenty-five years. His father resigning from the Massachusetts Supreme Court bench in 1771, William Cushing became his successor.
At the age of fifteen, William Cashing had entered Harvard, where, as we have noted, it was the custom to tabulate and range students according to their social rank ; as the son of a royal judge William Cushing occupied the first order. During the four plastic years that he studied at Harvard, he could not help absorbing the caste spirit pervading that institution, which experience, added to that derived from his home environment and the atmosphere of rich associates, determined completely the bent of his mind and prejudices. The decisions of his grandfather, father and his own were always favorable to the governing class. Down to the critical years preceding the actual outbreak of the Revolution he so carefully refrained from expressing his views on that event that they were not known until he was directly challenged to reply whether he would receive his salary from the province or the crown. He finally decided to support the colonies an exceptional step, inasmuch as he was the only one of the royal judges in the whole of Massachusetts to turn rebel.
On the reorganization of the Massachusetts judiciary, he became one of the judges of its Supreme Court, and on the resignation of John Adams, Cushing was elevated to be the Chief Justice, which office he held for twelve years.6
Here he made himself extremely obnoxious to the laboring and yeoman classes by his decisions and attitude. In 1785 and 1786 an uprising, or insurrection as it was called, took place in New England. It was a movement caused partially by the continued appropriation of land by a few, and the resulting evils, and more largely by the spurious currency issued by the financiers and other prominent leaders of the Revolution.
Suffering from debts, with no adequate means of paying them, numbers of the people rose in armed revolt. They complained, and with the fullest justice, that while the landholders and shippers were enriching themselves by all manner of schemes and practices, and making laws as they willed, the debtors laws were enforced against the poor with pitiless rigor. The jails were crowded with poor debtors. For this condition the courts were especially blamed ; they were denounced as rich mens courts, and their discrimination in applying law aroused the most intense bitterness. The popular orators pointed out how, while rich knaves and powerful plunderers were allowed to keep their loot, the law was applied mercilessly to those having no property. On one occasion, Cushings court was surrounded by an armed body of insurrectionists ; and although he and other judges declared that mob rule would not influence them, the force of popular feeling was so great and threatening that the Massachusetts Legislature passed a law delaying the collection of debts. Cushing sided wholly with the conservatives, as the land-holders and merchants were termed. He was not only a member of the Massachusetts Convention of 1788, but he presided over the debates during the greater part of the session, during the absence of John Hancock ; and it was by the influence of such men as Elbridge Gerry, Nathaniel Gorham, John Adams and others, joined with his own, that the Federal Constitutional Convention was ratified. As an Associate Justice of the Supreme Court of the United States he presided over that court in the absence of John Jay ; he remained on the bench until his seventy-eighth year, in 1810.
The career of Washingtons next appointee, James Wilson, chosen as an Associate justice in 1789, necessitates so extended a narrative, that the description will be deferred until a few words have been said about Washingtons other appointees.
John Blair, appointed an Associate Justice in 1790, was a personal friend of Washington ; he came from Williamsburg, Virginia, had studied law in London, England, had been a member of the Virginia Council, a judge, Chief Justice, and Chancellor in that province, and, as a member of the Federal Constitutional Convention, had voted for the adoption of the Constitution. After a few years service in the Supreme Court of the United States, he resigned.
James Iredell, appointed in the same year, was the leader of the Federalist Party in North Carolina. He was the son of a merchant in Bristol, England, who, when James was seventeen years old, had sent him to North Carolina. He became a deputy collector, supported the movement for political independence,7 was appointed a judge of the Superior Court of North Carolina, in 1777, and then Attorney-General of that State. In the North Carolina Convention of 1788, called to decide on the question of the Federal Constitution, he strenuously tried to secure its adoption, but failed.
Iredells chief occupation during that period was in acting as the attorney for large North Carolina landholders, especially those whose estates had been confiscated. He was, for instance, the representative of the McCullohs, as well as their kinsman. Henry McCulloh had, under British rule, held various offices, including that of Commissioner of Crown Lands. He obtained a patent for 1,200,000 acres for himself and associates, but because of his failure to induce immigration to his huge domain, his affairs became somewhat embarrassed. However, he held onto a vast area of land ; and in 1761, he caused his son, Henry Eustace McCulloh, an English lawyer, to come to North Carolina and act as his agent. There the younger McCulloh became a member of the Provincial Council, Collector of the Port of Roanoke, and later Representative in England of the Colony of North Carolina. As a member of the North Carolina Council, Henry Eustace McCulloh sold his vote, says Sabine, in favor of the Tuscarora grant of lands to Williams, Pugh and Jones for a thousand acres of land. The fact that he was thus bribed seems to have been notorious. ... Sabine goes on to tell that such was McCullohs tact and address, that when he adjusted his fathers accounts with the Crown, he got 64,000 acres, without the payment of a single dollar. How he managed to do this, Sabine, unfortunately, does not tell.
The elder McCullohs estate was apparently confiscated, but he had previously conveyed it to his son. In 1779, when Henry Eustace McCullohs estate was confiscated, he went to England as agent for the North Carolina loyalists in prosecuting their claims for indemnity from the British Government. He himself, Sabine relates, was a claimant ; and though he received a considerable sum, he was dissatisfied. Sabine further relates that when McCulloh was in England, Judge Iredell rendered him much valuable service in North Carolina for which, in return, Iredell considered himself badly treated ; the particular nature of the service Sabine does not disclose.8 Iredell served on the bench of the Supreme Court of the United States until 1799.
Thomas Johnson, appointed by Washington in 1791, and serving until 1793, came from Maryland, was an ardent Federalist, and also belonged to the landholding group. The arbitrary tone of the judiciary at that time may be seen from the fact that when the Grand Jury, at Baltimore, handed in a presentment against him for holding a place in two courts at the same time, Johnson haughtily told them to confine themselves to their proper sphere.
The next Associate Justice, appointed in 1793 by Washington, was William Paterson, of New Jersey. Paterson was directly connected with the Van Rensselaer family, with the Lords Proprietors of New Jersey, and was the right-hand auxiliary of Governor William Livingston. By family ties of various kinds Paterson was also connected with many other large landholding families. Stephen Van Rensselaer Paterson, a twin brother of William Paterson, was long a Surveyor-General of the Lords Proprietors of New Jersey. The mother of Stephen Van Rensselaer (the elder Stephen there were father and son of that name) was a daughter of Philip Livingston, lord of Livingston Manor. After his graduation from Harvard, in 1782, Stephen Van Rensselaer had been married to a daughter of General Philip Schuyler ; hence by marriage, becoming a brother-in-law of Alexander Hamilton. Stephen Van Rensselaers second wife was a daughter of Justice William Paterson. The immensity of Stephen Van Rensselaers estate may be judged from the fact that in Rensselaer and Albany counties, New York, he owned 3,000 farms, or about 436,000 acres.9 The quasi-feudal conditions prevailing on the Livingston, Van Rensselaer and other New York estates survived to the year 1846,10 and were the prime cause of various uprisings of the eighteenth century, and of the Anti-Renters movement of 1847-49. William Paterson had long been one of the most active politicians in New Jersey ; as a member of the Federal Constitutional Convention he was, of course, aligned with the landholding class. After serving as a United States senator, he had succeeded William Livingston as Governor of New Jersey.
Samuel Chase, appointed an Associate Justice by Washington, in 1796, was a landholder and promoter of various enterprises. Born in Maryland, in 1741, the son of a Protestant Episcopalian clergyman, he became a lawyer representing large landholders and shippers. An indefatigable politician, he invariably got what he sought when he wanted a private act for his special benefit from the Maryland Legislature. He was a signer of the Declaration of Independence, and was authorized by the Maryland act of 1783 to go to England and obtain from two fugitive loyalists a transfer of Bank of England stock belonging to the State of Maryland, for which mission Chase was praised by the Maryland Assembly for his great zeal, fidelity and ability.11
Becoming heavily involved in two land companies, Chase petitioned the Legislature for relief. In his memorial he set forth that, in association with several others in these companies, he had become very largely indebted to the State and to private creditors ; that he personally owed considerable sums of money, and also his partnership debts ; and that his property was greatly insufficient to pay his debts. He further stated that he had proposed to Thomas Dorsey, the only solvent partner in the two companies, to convey to Dorsey all his claims to all property in the two companies, and also his claim to an undivided eighth part of certain confiscated British coal and iron lands called the Nottingham Forges and White Marsh Furnace. These two properties comprised several thousand acres, and carried with them sixty negro slaves, some teams, coal wagons, houses and household furniture, and also three hundred and forty-eight acres of a tract called Darnalls Camp, bought by Chase and his partners from the State.
Why he fell into debt Chase did not explain. But the Legislature was accommodating. It passed a special act that if Chase conveyed the property to Dorsey, he should be discharged from all debts, and that if any process was issued against Chase it should be quashed.12 It need scarcely be said that, at the same time, the iron laws against poor debtors were being ruthlessly enforced in all of the courts with steadfast rigor ; prisons were crowded with debtors whose only crime was that they owed a few dollars.13 Justice Chases extreme arrogance, and his abuse of the functions of the Supreme Court of the United States for partisan purposes, later caused impeachment proceedings to be brought against him.14
Career of Justice James Wilson.
John Jay and the sundry Associate Justices were able men, but in certain respects, the most energetic, dominating member of the Supreme Court from 1789 to 1798 was James Wilson. He, perhaps, more than any other incumbent left the stamp of his particular subtle legal astuteness and his individuality upon the proceedings and annals of that court. Washington valued his learning so highly, that he placed his favorite nephew, Bushrod Washington (later an Associate Justice of the Supreme Court) in Wilsons office to study law, personally paying Wilson for his nephews tuition. Wilson was deeply grounded in all of the subtleties of Roman and mediæval law, and very resourceful in never being at a loss for impressive authorities and precedents.
A Scotch lawyer, Wilson had emigrated to America. Here he made good headway ; his clients were rich, and he was successful in their suits. Although he supported the movement for independence, he brought upon himself popular hatred by his sneers at the lower orders, and his utterances and acts in support of rich Tories whom he defended during the Revolution. Pamphlets and other writings of the time abound in ridicule of his lofty strut, and in denunciations of his attitude.
More serious was an attack upon him, on October 4, 1779, during his stay in Annapolis. Enraged at his conduct, a group of patriots rushed up to his house, and opened fire with a cannon. Anticipating this, Wilson had gathered his friends and had turned his house into a miniature fortress. The city troop were hurriedly summoned, the attackers was fired on, and several were killed and wounded.
Whatever were Wilsons acts and crimes, he, at least, was audaciously open and honest in his truckling to the rich and in his advocacy of their class interests ; at a time when most politicians were secretly betraying the Revolution, while in words prating of democracy, this candid duality of Wilsons was certainly a virtue. Had he been lost, the whole capitalist class of to-day would have had good reason to mourn him. In the Federal Constitutional Convention, in which he was a delegate from Pennsylvania, he did some extraordinary skillful work ; to him is due the farsightedness of inserting in the Constitution of the United States a modest-looking little clause which, however, has had the most far-reaching consequences. And the fact that it was the personal experience of himself, Robert and Gouverneur Morris, Thomas Fitzsimmons and other Constitutional molders, in the notorious Bank of North America transaction, that led to the drafting and adoption of that clause, tends to prove that the men who drafted the Constitution knew fully the secret and ultimate purport of every clause.
The Bank of North America Transaction.
Under the patriotic pretence that the charter for which they asked was for a union of citizens to supply the army, a group of politicians, on April 1, 1782, pushed an act through the Pennsylvania Legislature, incorporating the Bank of North America. This bank had been chartered by the Continental Congress in 1781, but under the then loose Confederated government, that charter was not believed to be of any comprehensive account. The principal promoter of that charter in the Continental Congress was George Clymer, of Philadelphia ; he and John Nixon were appointed by Congress to receive subscriptions for the Bank of North America. Clymer, in 1765, had married Elizabeth, a daughter of Reese Meredith, one of the leading Philadelphia merchants and shippers. With his father-in-law, and later with his brother-in-law, Samuel Meredith, Clymer engaged in an extensive mercantile business. He subsequently became the first president of the Philadelphia Bank.
By the provisions of the Pennsylvania Legislative act, the capital of the Bank of North America was placed at ten million Spanish milled dollars and no more.15 The directors of the bank, as specified by name in the act, comprised some of the foremost merchants and lawyers in Pennsylvania. Thomas Willing, partner of Robert Morris, was designated as president. The directors named were James Wilson, Thomas Fitzsimmons, Cadwallader Morris, Samuel Osgood, William Bingham (one of the richest Pennsylvania merchants), Samuel Inglis, Samuel Meredith and others.16 Wilson was also attorney for the bank, and in that representation Gouverneur Morris was associated with him. Of these men, four became delegates to the Federal Constitutional Convention held five years later James Wilson, Thomas Fitzsimmons, George Clymer, and Gouverneur Morris. Robert Morris, who was deeply interested in the bank through his partner Gouverneur Morris, was also a member of the Federal Constitutional Convention.
In his work, published in 1833,17 Gouge says that in nowise did the bank aid the Government ; that the stockholders acted fraudulently in paying in only $70,000, or seven-fortieths of its capital. Robert Morris, then controlling the financial department of the Revolution, deposited $254,000 in the Bank of North America, and credited the Government with that amount of stock in the bank. Thus, by this ambidexterous operation, the individual stockholders acquired the power to circulate $400,000 in the banks notes. The Governments own money was loaned back to it, and to other borrowers, as also the $400,000 additional money which the Governments deposits and sanction soon made current at par value. From these fraudulent methods the banks stockholders reaped from twelve to sixteen per cent. dividends. In 1785, says Gouge, of the Bank of North America, the effects of its operation began to be apparent... . A temporary plentifulness of money, followed by great scarcity, usury, ruin to the many, riches to the few.
The Origin of a Famous Constitutional Clause.
Public outcry compelled the Pennsylvania Legislature to act. On September 13, 1785, an act repealing the Bank of North Americas charter was passed, the preamble of which act read :
Whereas the bank established in the city of Philadelphia hath been found to be injurious to the welfare of this State, and in its tendency appears to be incompatible with the public safety, Therefore, etc., etc.18 The profits, however, were so rich that the directors had no intention of allowing the repealing act to stand. James Wilson and Gouverneur Morris, as the banks attorneys, argued vigorously in the Legislature : Was not the passage of the original act a grant of a vested right ? Could the charter be repealed without impairing vested rights, and the rights of innocent parties ? Whether it was influenced by these or more tangible arguments, the Legislature yielded. On March 17, 1787, it reincorporated the Bank of North America for a term of fourteen years and allowed it an increased capital of $2,000,000 all told.19 Thomas Willing still remained president, and Fitzsimmons, Nesbit and some of the other original directors were renamed in the new act. Among the stockholders, then or later, were some of the most eminent judges ; Justice Yeates, of the Supreme Court of Pennsylvania, did not sit in a subsequent action because of his being a stockholder.20
In the very year that the Bank of North America was rechartered, the Federal Constitutional Convention adopted the well-known clause forbidding any State to pass legislation impairing the obligation of a contract. Seven years later, Wilson and other noted politicians bribed an act through the Georgia Legislature, giving four companies a grant of about thirty-five million acres of public land, which transaction is fully described later in this chapter. When Georgia passed an act rescinding the grant, the Supreme Court of the United States later took refuge in that Constitutional clause forbidding the impairment of the obligation of a contract, and declared the rescinding act void. Under that decision, and later decisions, every privilege or franchise obtained by bribery or other fraud, since then, has been perpetual and indefeasible in law, and could not be repealed.
Commenting upon the origin of the Constitutional clause in question, Hunter, one of the most learned attorneys of his time, argued in the noted case of Sturges vs. Crowninshield The judges of the State Courts and of this Court have confessed that there is in these words impairing the obligation of contracts an inherent obscurity. ... They are not taken from the English common law, or used as a classical or technical term of our jurisprudence in any book of authority. No one will pretend that these words are drawn from any English statute, or from the States statutes before the adoption of the Constitution. Were they, then, furnished from that great treasury and reservoir of rational jurisprudence, the Roman law ? We are inclined to believe this. The tradition is that Mr. Justice Wilson, who was a member of the Convention, and a Scottish lawyer, and learned in the civil law, was the author of the phrase:21
And, according to a letter written by Gouverneur Morris to Timothy Pickering, in 1814, he (Gouverneur Morris) stated that the Constitution was written by the fingers which write this letter. Morris went on to say in that letter : Having rejected redundant and equivocal terms, I believed it to be as clear as our language would permit, excepting, nevertheless, a part of what related to the judiciary. On that subject it became necessary to select phrases, which, expressing my own notions, would not alarm others. Gouverneur Morris was so active in drawing up the final document, that Madison wrote of him that the finish given to the style of the Constitution fairly belongs to Mr. Morris. Considering that Wilson and Gouverneur Morris, as the attorneys for the Bank of North America, had jointly made that noted argument before the Pennsylvania Legislature, those statements are of high importance.
The Sequel of Wilsons Bank Scandal.
But who was to determine the question of whether legislation impaired the obligation of contract, and was therefore unconstitutional ? Self-evidently, the courts. Quite true, the majority of the Federal Constitutional Convention, in the face of the popular resentment against the courts, discreetly refrained from voting affirmatively on any proposition to endow the courts with power to set aside laws as unconstitutional. But the charge of the impairment of an obligation of contract presupposed, and carried with it, an action at law ; such a contest would come exclusively within the jurisdiction of the courts. It would be the courts, and not the executive or Congress that would pass upon the controversy, and have the final decision as to whether legislation was unconstitutional or not. To this extent the adroit leaders in the convention, who understood perfectly at what they were aiming, succeeded in deceiving, not only many of the delegates, but the great body of the people.
With this clause accepted, no explicit provision was needed vesting power in the courts to declare laws unconstitutional. And that Wilson and his class colleagues had the foresight to discern the great and wide latitude allowed the courts by the acceptance of that seemingly harmless clause, is shown by the large number of laws which, under it, the Supreme Court of the United States has declared unconstitutional.
To understand fully the serene confidence that the landholders and traders of the Revolutionary period had in the courts as the final and unchangeable bulwark of their interests, and what they expected from the judiciary, it is only necessary to point out that the courts during the Revolution put themselves above law. They usurped power when they willed, and construed law as they pleased. Wilson knew that many of their acts were sheer usurpations, for, in a pamphlet, he defended usurpation. When he caused that memorable clause of his to be inserted in the Constitution, he knew, also, that the usurpations already put in practice would serve as precedents to invite and justify further usurpations.
In Chapter III we have already described how the Virginia court, established at Vincennes from 1779 to 1787, usurped the power of granting lands, and then, after its Judges had usurped that power, clandestinely granted large areas of land to themselves.
So audaciously did they make a grand division of the plunder among themselves that they took only the most superficial precautions to conceal their malfeasances, nor do they seem to have been proceeded against in any actions, civil or criminal.
Without dwelling, reported John Bandolet and Nathaniel Ewing, Government Land Commissioners for the district of Vincennes, to Gallatin, in 1812, on the extraordinary circumstances of the above recited supposed grants, wherein the members of a court of justice have made to each other such unusual donations, and appropriated to themselves such a large and valuable part of the country, the Commissioners will observe that the State of Virginia never authorized the courts to grant lands. ...
In the same document (No. 1333, Vol. VII, American State Papers : Public Lands) the full details of that usurpation are further reproduced in a report of Secretary of the Treasury Levi Woodbury, on February 16, 1835. But the usurpations of the judiciary extended to the more serious and sinister length of annulling legislative acts.
Court Usurpation Already Established.
This usurpation Shirley seeks to explain thus : In the dark days which preceded the Revolution, he says,22 the people of the Colonies had been thoroughly indoctrinated with the idea that the acts of Parliament of which they complained were unconstitutional, and therefore void, and that, in consequence, they were justified in resisting their enforcement. Judge Wilson, in a great pamphlet, had urged with great ingenuity and force that it was the right and the duty of the courts to set aside those acts. This view was supported by many of the most eminent politicians, statesmen and jurists of that day. This doctrine had sunk deep into the popular mind.
But it was not against acts of Parliament that the courts presumed to usurp this power. The unpopularity of the laws passed by Parliament supplied a very good pretext and justification for the assumption of a power directed, not against Parliament, but against the mass of the people. The fact that all the judges were royal officials, and that, when the Revolution broke out, only a few of those judges supported the movement for political independence (and they only under virtual compulsion) shows Shirley to have been in complete error on this point. Certainly judges drawing pay from the crown, were not likely to forfeit their positions and salary by declaring the laws of the crown null and void.
The usurped power of declaring laws void was a power first exercised by the courts at precisely that time during the Revolution when the insurrectionary movements of the people were manifesting themselves. These movements had for their object an armed protest against the old mediæval laws still in force and being reŽnacted, against the extortions of the landholders and merchants, and against the schemes and political and financial lootings so shamelessly carried on by the members of the governing class. The courts, representing the interests of the landlords, and composed of landowners or their retainers, came quickly to the rescue of their class..
That this usurpation of power was exercised against the legislatures is admitted by Shirley in his next paragraph. The judges in Rhode Island, he wrote, had set aside an act of the Legislature as unconstitutional. The same is true of New Jersey. In 1788 and 1793, the Court of Appeals in Virginia had done the same thing. The power of the highest court to set aside such acts was recognized in New Hampshire soon after the adoption of the written Constitution of 1784. From 1790 to 1799, they were repeatedly declared void by the highest court, and sometimes by inferior tribunals.23
The additional fact that James Wilson, the author of the clause in the Constitution prohibiting any State legislation impairing the obligation of a contract, had written a pamphlet urging the right of the courts to declare laws invalid, is of the greatest significance.
Hamiltons Banking Interests.
Undoubtedly Wilson with his Bank of North America experience fresh in mind, had a valuable coadjutor in Alexander Hamilton, whose speeches and writings prove that he fully grasped the overshadowing importance of lodging the real power in the judiciary. Hamilton had his own banking and other interests, not to speak of the vast interests of his relatives, connections and associates, and those of the whole class which he so brilliantly represented, to protect against the possibility of hostile legislation, then so imminent because of the bitter popular demonstrations.
The profits of the Bank of North America were so great that Hamilton and his associates decided to start a bank in New York City. In 1784, they organized the first banking company in New York State with a capital of $500,000 ; Hamilton personally drew up the articles of copartnership.
But the people had been so badly cheated in depreciated paper currency, that the Legislature was afraid to charter banks. A memorial, says John C. Hamilton, to incorporate the bank of which the constitution had been framed by Hamilton, was presented to the Legislature early in 1784, but so prevalent was the jealousy of moneyed influence that it was compelled to conduct it affairs during six years without corporate immunities.24 So anxious was Hamilton to start his bank, that he opened it even before he had obtained lawful authority, and without waiting for those legislative favors by which directors were individually exempted from being sued. From 1784 to 1788 he, personally, was a director ;25 and up to the very day of his death he controlled that institution. It held a monopoly of banking powers in New York, and, like the Bank of North America, it was of the greatest service in facilitating great land speculations, and exercising pressure upon merchants in elections.
Not until March 21, 1791, was Hamilton able to secure a charter from the New York Legislature. How, it may be fairly asked, in view of later developments, did he get it ? Was it given as a partisan present by his Federalist associates ? Or was some stronger and more metallic inducement necessary to influence the legislators to defy public opposition inducements such as Aaron Burr, it was revealed, gave in 1799 when he obtained the charter for the Manhattan Bank, and inducements such as others gave later in getting charters for the Mercantile Bank, the Bank of America and other banks ? This we may suspect, but do not know. But we do learn that in 1790, a year after his becoming Secretary of the Treasury, Hamilton made the Bank of New York the agent for the sale of 200,000 guilders,26 and that when he and Morris established the Bank of the United States, it was evidently Hamiltons plan to make the Bank of New York a branch factor of that institution ; between the two banks, however, a friendly arrangement was made.27 This matter of the chartering of banks deserves to be kept constantly in mind ; in its proper place we shall have to make a further exposition of bank charters, and the close connection existing between the particular interests that certain other renowned Justices of the Supreme Court of the United States had in them, and some notable decisions following.
James Wilsons Bank of North America enterprise, his success in getting it rechartered in the teeth of the most violent popular antagonism, and the great service he rendered the propertied class both in the Federal Constitutional Convention and in the Pennsylvania Convention made him a man of mark. But, notable as were Wilsons banking activities, his land operations were far more extensive, and were considered more scandalous. Before, however, describing these, it is advisable to give an additional series of facts as to the continued and widespread seizure of land, under color of law, then in unmitigated process. Plundering of the public domain was the recognized order of the day.
The associated politicians and capitalists were exercising the freest hand in appropriating as much of the public domain as they wanted. The continued alienation of the State lands, and the despoilment of the National lands were carried on at the same time, and by politicians and capitalists of both political parties. Nearly all of Chief Justice Jays relatives, intimate friends and business connections were deep in these legalized seizures ; Associate Justice James Wilson was particularly conspicuous, as were Robert Morris, Hamilton, Fitzsimmons, Jonathan Dayton, Aaron Burr and a large number of other leading lights, not omitting Washington himself.
The Sufferers Get a Donation of 500,000 Acres.
First the appropriation of the lands owned by the various States will be considered. The State of Connecticut held a large area, called the Western Reserve, in Ohio. In May, 1792, the Connecticut Legislature passed an act, under the pretence of making indemnity for losses caused by the incursions of the British army into various Connecticut towns. By this act, and another act passed in May, 1795, a tract of 500,000 acres of land in Trumbull County, Ohio, fronting Lake Erie, were conveyed to Thaddeus Burr and others.28
Another act was passed in October, 1796. It was entitled, An Act for Incorporating the Proprietors of the Half Million Acres of Land lying south of Lake Erie. This act created the recipients as a corporation, and provided that they and their heirs should have succession. The next clause made provision that the Proprietors should have agents in meetings to represent them ; the regulations prescribed show clearly that the act was designed to benefit men of wealth, and not the poor who had suffered. Proprietors in those towns whose allowed losses were £10,000 or less, could send one agent ; those whose losses ranged from £10,000 to £20,000 could send two agents ; those with a loss from ú20,000 to £30,000 could send three ; and so on in the same proportion. The voting in the meetings for the selection of agents was thus arranged by this law : Those whose losses were less than £100 should have one vote ; those having lost £100 to £200, two votes ; those with losses from £200 to £300, three votes, and so on up the list. But no single loss was to give more than ten votes.29 Another act, along the same lines, passed in May, 1797, allowed deeds of conveyance, for which no provision was made in the original act.30 It became necessary, also, to get an act of incorporation from the Ohio Legislature ; and this was obtained in 1803. This act incorporated the owners and proprietors of half million acres of land lying south of Lake Erie, in the county of Trumbull.31 The act pathetically called the land Sufferers Land, although the company was composed very largely of capitalists and politicians who had bought up claims of losses on speculation, and had often fraudulently magnified them. The Ohio lands donated comprised all that valuable section of which the city of Cleveland is now the seat and center.
A Few Capitalists Get 5,542,000 Acres in New York.
After the Revolution, the State of New York owned, within its limits, more than seven million acres of what were then called wild and unappropriated lands. In 1791, the New York Legislature enacted a law, authorizing the State Commissioners of the Land Office to dispose of these lands in such parcels and on such terms and in such a manner as they should judge most conducive to the interest of the public. The law thus virtually allowed the Commissioners to do as they pleased ; Hammond says that the act was passed by consent of both political parties.32 The Commissioners of the Land Office consisted of the Governor (then George Clinton), the Secretary of State, and the Attorney-General (then Aaron Burr), and the State Treasurer and the State Auditor.
These officials at once proceeded to do business. In the same year 1791 they sold the enormous area of 5,542,173 acres of land for the trifling sum of $1,030,432. This fact of itself caused a considerable public scandal ; but the one circumstance looked upon as particularly and inexplicably flagrant was that to one individual Alexander McComb they disposed of a vast tract of 3,635,200 acres for the ridiculous price of eight pence an acre. Nor was this slight sum to be paid down ; McComb was allowed to pay it in five installments, without interest and subject to a discount of six per cent., on payment in advance, which still further reduced the actual price.33
At the same time other large tracts were sold to other capitalists, among whom were the Roosevelts, James Caldwell, McGregor and others. These sales, however, were made at a higher rate than the sale to McComb ; some of the lands were sold at about three shillings an acre, others for two shillings six pence, and some for one shilling an acre. Hammond relates that these sales were widely criticised as building up a land monopoly, and that it was urged as a suspicious matter that three and a half million acres of land were sold to McComb at eight pence an acre, while, on the other hand, five hundred thousand acres were sold by the same Commissioners, and at about the same time, to John and Nicholas Roosevelt for three shillings and a penny an acre. In the debate in the Legislature it was insinuated that Clinton, Burr and their friends were secretly interested in the McComb purchase, which accusation McComb denied.34 Great profits were made by these speculators in disposing of the land at high prices to actual settlers.
The Holland Company.
It is necessary now to revert to the operations of the Holland Company, in the background of which we have seen Hamilton advancing John B. Churchs money to Robert Morris. Presently Associate Justice James Wilson will enter.
Morris, as will be recalled, sold more than 3,000,000 acres of his 4,000,000 acres in New York State to eleven Dutch bankers and other capitalists incorporating themselves as the Holland Company. It will also be remembered that Jays relatives, the Livingstons, were among the group of capitalists interested in the fraudulent Phelps and Gorham purchase of 2,600,000 acres in New York State. When Morris project of conveying 3,000,000 acres of land to a coterie of foreign capitalists became known, the wildest popular excitement resulted. The argument was advanced (and sound law it was, too), that property could not be conveyed to aliens or held by them. Morris, Wilson, the Livingstons and others, and particularly Jay, as we shall see, had long had the best of interested reasons for desiring the effacement of any such prohibitive law. Pressure was brought to bear upon the Legislature, and on April 11, 1796, an act was passed authorizing the Dutch bankers, Willinck, and other aliens and their descendants to hold property.
Both Burr and Hamilton were engaged in extensive land grabbing, Hamilton in many different directions. Both of these eminent patriots were, according to Turner,35 contractors for lands west of the Genesee River ; the former [Burr] for a tract upon the Holland Purchase. Burr, says Turner, had made a contract for the purchase of the tract, at twelve shillings per acre, at an early period of the Holland companys ownership. Turner quotes in full a letter written to Theophilus Cazenove, first General Agent of the Holland Company, in which Burr says that it appears that the Tonawanta Bay falls within my tract on Lake Ontario. Burrs transaction with the Holland Company, Turner continues, was blended with other transactions, and eventually abandoned. But out of it had originated a bond for $20,000 which was given up. The surrendering of the bond gave rise to reports that Col. Burr had been bribed by agents of the Holland Company to favor the passage of the bill allowing aliens to hold lands. Burr held John B. Church responsible for the report, and challenged him to a duel, the result of which was ineffectual. Turner concludes by saying that Church apologized.36 Perhaps Church was too hasty in accusing without being able to get the legal proof. Certainly, direct accusations of bribery were not wanting against Burr when he persuaded the Legislature to pass his artful Manhattan Bank bill, in 1799 ; at least ten legislators, it appeared,37 knew of the real character of the bill which was ostensibly passed to provide New York City with pure water, but which contained a covert clause conferring banking powers on the Manhattan Company.
In the Pennsylvania activities of the Holland Company, James Wilson was openly and conspicuously interested. So, indirectly, was Hamilton, working through John B. Church and Tench Coxe. As Assistant Secretary of the Treasury under Hamilton,38 Coxe seems to have been very close to Hamilton.
Justice Wilsons Participation.
In 1792, the State of Pennsylvania received a formal grant from the United States of what was called the Erie Triangle, comprising 202,187 acres in the northwestern corner of Pennsylvania, bordering on Lake Erie. Under the Pennsylvania act of 1786, opening all lands to settlers, the State officials began to sell it.
But they made no pretence of disposing of it to actual settlers, despite the law requiring that it be sold to actual settlers, and that it be settled within two years. Through dummies, and with the full connivance of the State officials, principally Comptroller-General John Nicholson, the Holland Company, in 1792-1793, bought eleven hundred and sixty-two tracts of four hundred acres each, paying at the rate of £10, ten shillings per hundred acres ; from those 1,162 tracts, 386 tracts were later deducted by reason of prior settlements, bounties and on other grounds.39 The headquarters of the Holland Company was at what is now Meadville. Of about $380,000 that the Holland Company professed to have expended for improvements, settlements, etc., Judge James Wilson was credited with contributing the sum of $222,071.10 in all ;40 he must have been an uncommonly rich man to have been able personally to put in so large an amount ; no doubt his bank of North America supplied him with part of the funds.
Had it not been for the courts, however, especially the Supreme Court of the United States, this great fraudulent operation, and similar seizures in Pennsylvania, would never have succeeded. In a case that came up before Judge Huston, in the Supreme Court of Pennsylvania, thirty-eight years later, involving land in western Pennsylvania, Huston gave a very comprehensive survey of the land frauds of the time here dealt with.
At one period of our history, wrote Judge Huston, in delivering the courts opinion, from 1784 till December, 1786, our then Supreme Court made some decisions which alarmed everybody ; and an act of Assembly was passed, declaring all warrants issuing for lands on which a settlement had been made, except to the settler or his legal representative, should be null and void. And soon after, the courts decided that all such warrants which had issued for land occupied by a settler were void. The same thing had been decided, and was the settled law, before the Revolution.41 Judge Huston then cited from a decision of Judge Yeates42 in which Yeates wrote that for some years after the Revolution the sentiments of some of the judges of the Supreme Court of Pennsylvania were unfriendly to settlers and improvers, but that a change of opinion took place about the year 1793. The precise nature of this change Judge Huston did not state.
Then, going on to describe at length the fraudulent processes by which, through fictitious settlers, large speculators obtained the land, and the prolonged scenes of riot and bloodshed ensuing in conflicts between pretended and actual settlers up to the year 1802, Judge Huston continued, The lands west of the Alleghany were taken upon warrants paid for by Judge Wilson, John Nicholson, Robert Morris, and many others, none of whom were ever in or near that country, but they had agents who procured the surveys, and paid for them money furnished by the owner... .43 Further facts concerning the Holland Company we shall be under the necessity of narrating later in their appropriate place in relation to a certain decision of Chief Justice Marshall.
Wilsons land operations were by no means confined to any particular section of Pennsylvania. His gathering in of land extended throughout that State ; many of the most valuable coal tracts in Pennsylvania derive title from his ownership. He owned large areas of coal land in Huntington and Northampton Counties, Pennsylvania. We find from the court records that, in consideration of debts that he owed to Benjamin R. Morgan of Philadelphia, and General Henry Lee of Virginia, Justice Wilson, on August 20, 1796, made a deed to them of all his real estate in those counties, which deed was followed by a trail of litigation lasting for more than three-quarters of a century.44 At the same time, Tench Coxe and John B. Church were jointly acquiring extensive tracts of timber and coal lands in Luzerne County and in other counties ; in 1795 they made a division of their holdings, part going to Coxe, and part to Church ;45 Hamilton must have been acting for Church, who was not in the United States at that time.
The scandalous methods by which these valuable lands had been obtained, the accompanying violence and trickery and the public bitterness induced the Legislature to pass an act, on April 11, 1795, to prevent intrusions on lands within the counties of Northampton, Northumberland and Luzerne. Section II of this act provided that every person who combined or conspired to convey, possess or settle any lands under halfshare rights or pretended titles, should, for each offense, pay $500 to $1,000 fine, and should be subject to imprisonment at hard labor for a term not exceeding eighteen months. If any State officer were resisted in ejectment proceedings, he was empowered to call out the militia.46
But the very courts expected to enforce this act, civilly and criminally, were then composed of judges who were either interested or subservient ; and the act was almost entirely diverted, it is quite clear, and used as a weapon against actual settlers. The land speculators had seen to it that their lawyers were put on the State benches equally as well as upon the bench of the Supreme Court of the United States.47 This fact was well known ; and at a time when the Pennsylvania Legislature was kept busy with impeachment proceedings against judges and officials, the State judges who had been counsel for the Holland Company preferred frankly to state the fact, and not sit in cases affecting it, rather than inflame public excitement, already great, and risk impeachment. The fact, however, that various kinds of actions, brought long after in the courts, were against the heirs, legatees or the assignees of Wilson, Coxe, Nicholson and others shows that these original appropriators were eventually successful in getting original title, by reason, as will be seen, of decisions of the Supreme Court of the United States.
Wilsons Illinois and Wabash Company.
The land transactions, individually or jointly, of Robert Morris, James Wilson, John Nicholson and their associates or connections were, indeed, phenomenally extensive and ubiquitous. One of Wilsons enterprises, however, met with failure ; its character was so very shady that Congress, many of the conspicuous members of which were promoting that scheme and other great land grabs, dared not finally sanction it. This particular project of Wilsons was the Illinois and Wabash Land Company ; the nature of this company was thus particularly described by President Jefferson : 48
During the regal government two companies, called the Loyal and the Ohio Company, had obtained grants from the Crown for 800,000 or 1,000,000 acres of land each on the Ohio, on condition of settling them in a given number of years. They surveyed some and settled them ; but the war of 1755 came on and broke up the settlements. After it was over they petitioned for a renewal. Four other large companies then formed themselves, called the Mississippi, the Illinois, the Wabash and the Indiana Companies, each praying for immense quantities of land, some amounting to 200 miles square ; so that they proposed to cover the whole country north between the Ohio and the Mississippi and a great portion of what is south.
All of these petitions were depending, without any answer whatever from the Crown, when the Revolutionary War broke out. The petitioners had associated to themselves some of the nobility of England and most of the characters in America of great influence. When Congress assumed the Government, they took some of their body in as partners to obtain their influence ; and I remember to have heard at the time that one of them took Mr. Girard as a partner, expecting by that to obtain the influence of the French court to obtain grants of those lands which they had not been able to obtain from the British government. All these lands were within the limits of Virginia.
This, however, is only a general, incomplete description ; the other necessary details will be here supplied. Both the British and the Continental Governments had refused to recognize the claims of the Illinois and Wabash companies. After the organization of the National Government, the Illinois and the Wabash companies were fused into one corporation, and James Wilson became its president.49 On December 17, 1791, Justice Wilson, William Smith and John Shee submitted an elaborate petition to the United States Senate, praying confirmation of their claims. They represented that during the years 1773 and 1775 William Hurray, an Illinois merchant, and specified others composing the Illinois Company, and Lord Dunmore and various British and American lawyers and merchants comprising the Wabash Company, had bought from the Indian tribes the great stretch of territory claimed on the Illinois and Wabash rivers.50 In the petition neither the exact extent of the tract was mentioned, nor specifically what the Indians had been paid.
Despite the fact that this claim obviously could not hold in law because, even if an actual purchase had been made (which was doubtful), it was in contravention of King Georges proclamation of 1763, forbidding purchases from the Indians. Justice Wilson, acting for the company, made this proposition to the Senate : That, however clear the claim of the company to the whole of their purchase may be, they hesitate not to express their willingness and desire that a reasonable compromise upon the subject may take place between the United States and them. The company modestly agreed to surrender to the United States all the lands claimed, on condition that the Government reconvey to the company one-fourth of the lands.51
That an offer of this character should have been urged was suggestive of the crass effrontery of its proposers.
The Senate Committee on Public Lands balked at this extraordinary proposal ; it reported that the petitioners held no legal title to the lands, and it declined the proposition in toto.52 On the other hand, the fullest encouragement was met with in the House in which the notorious Jonathan Dayton, himself putting through great land jobbery, was, with others of his kind, all powerful. The House Committee on Public Lands reported that the companys Indian deeds were good and valid, and it was recommended that the United States should agree to the proposal.53
As casting a piercing ray of light upon the methods used in Congress during this time, the great scandal arising from the bribery of members by Robert Randall to grant a twenty-two million acre claim, may be briefly referred to.
Three members of the House, Smith of South Carolina, Murray of Maryland and Giles of Virginia, testified, in December, 1795, that Randall had made overtures to get their support for a bill granting for a nominal sum a huge tract of land containing from eighteen to twenty million acres bordering on Lakes Erie, Huron and Michigan. Other members of the House corroborated the charges against Randall. It was brought out that Randall told members of the House that he already had thirty or forty members pledged in support of his bill ; that shares in the grant were to be divided among members of Congress so as to get a majority ; and that those who did not want shares, could get cash.54 In view of these revelations, the House virtuously had to take some action in its own defense ; by a vote of 78 to 17 it found Randall guilty of attempting to corrupt the integrity of its members.55
Congress Refuses to Admit Wilsons Claim.
During this time Justice Wilson was actively pushing his Illinois and Wabash bill in Congress. In 1796, acting upon the favorable report of the House Committee on Public lands, he sought to get a confirmation from the Senate, claiming that the original cost and interest, exclusive of the consideration money paid to the Indians, amounted to £40,000 at least.
No doubt, the pushers of this fraudulent claim expected that by the application of perseverance and possibly of other means, they would be able to obtain some compromise or indemnity.
But with Randalls bribery scandal fresh in the public mind, both Senate and House were disposed to be exceedingly circumspect. That the House of Representatives was by no means to be accused, as a whole, of having during those years an immoderate degree of integrity, was conclusively demonstrated by the fact that Jonathan Dayton (some of whose transactions have been described) was elevated to be its Speaker. Wilsons memorial was referred to a committee consisting of Ross, Livermore, Tracy, Tazewell and Stockton, which committee, on February 3, 1797, reported, adopting the Senate Committees adverse report of March 26, 1792. The Senate, as a body, adopted the committees adverse report on February 16, 1797.56 This action of the Senate thwarted Justice Wilsons large project, the only one of his enterprises that he did not succeed in consummating.57
In order to give a further clear account of the numerous other land undertakings and their ramifications, of Morris, Nicholson and their associated or abetting group of other politicians, it is necessary from here on to interweave the narrative of various other land transactions.
Robert Morris & Co. Get Nine Thousand Lots in Washington.
It need hardly be said that when the site of the present city of Washington was chosen as the location for the national capital, the politicians in touch with Washingtons administration had the fullest advance knowledge. It is a circumstance further worthy of note that the Carrolls, especially Daniel Carroll of Maryland, owned a large part of the then waste lands now embraced within the District of Columbia. In the suit of Van Ness vs. the City of Washington, which came up before the Supreme Court of the United States, in January, 1830, the Government stated in its plea that, when the city was first laid out, David Burns (the father of Marcia Van Ness) had sold a considerable area of land to the Government for £25 (or a fraction more than $66.66) an acre,58 which price was more than threefold the market price or real value, independently of the adventitious and speculative valuation, superinduced by making this the permanent seat of government.59
The District of Columbia was ceded by Maryland and Virginia in 1789. In 1791, the greater part of the individual owners conveyed the land to Thomas Beall and John M. Gantt, in trust to be laid out as a city ; Beall and Gantt, by order of President Washington, transferred their trust to Gustavus Scott, William Thornton and Alexander White, the Commissioners for laying out the City of Washington. All these men, it may be remarked, soon after branched out as extensive capitalists, having possessed themselves of funds to start various enterprises ; Scott, for example, became one of the incorporators of the Washington and Baltimore Turnpike Company, chartered by the Maryland Legislature, in 1796. The Beall family was represented in the same company.
On September 29, 1792, President Washington directed that Washington city lots be sold, at public or private sale by the Commissioners. On December 10, 1793, Robert Morris, John Nicholson and James Greenleaf formed the North American Land Company, and signed articles of copartnership of the purchase and sale of large tracts of land in Pennsylvania and elsewhere in the United States. This partnership was to last five years certain, or for a longer time if the parties should consent. The purchases were to be made by Morris and Nicholson for the account of the company. Not only the lands so purchased but other great tracts then owned by Morris and Nicholson were to become the joint stock of the company. Greenleaf was to pay cash to the other partners for one-third of the said lands. No partner was permitted to buy lands on his own account, so as to interfere with the objects of the company. The clear profits were to be equally divided.60
Greenleaf had been speculatively buying up large tracts of Washington city real estate, about as early as 1791, from Stoddert.61 On December 24, 1793, two weeks after the copartnership articles between Morris, Nicholson and Greenleaf were signed, an act was lobbied through the Maryland Legislature (which still had jurisdiction) providing that certificates granted by the Commissioners of the City of Washington should be sufficient to vest the legal estate in the purchasers. But a clause reserved the Commissioners the right to resell any lots not paid for. On that identical day, immediately after the passage of the act, Greenleaf, specifically as Morris agent, made a contract with the Commissioners for the sale to them of nine thousand city lots. Of these, the purchase of three thousand lots had already been contracted to Greenleaf as Morris agent at £35 each, current money (which was at the rate of about $2.66 U.S. money, per £1), payable yearly in seven equal payments without interest ; the other six thousand lots were sold at £30 each, to be paid annually in seven installments without interest.62
The negotiating attorney for Greenleaf was Judge William Cranch, a nephew of John Adams, and therefore a cousin of John Quincy Adams. Cranch had married a sister of James Greenleaf. It is chronicled that so heavily involved was Cranch by his own indorsements of notes in this transaction, that he had to seek the protection of the insolvency laws.63
Now was publicly seen the full and real import of the special law passed by the Maryland Legislature. If a poor person had bought goods payable in installments, the legal ownership would have remained in the seller until the last penny of the debt had been paid. But Morris and Greenleaf secured title as soon as they received a certificate from the Commissioners, and could sell at once, paying the Government from the proceeds of their gradual sales. Thornton, Forrest, Scott and other Commissioners, and President Washington himself, were buying Washington city lots.64
When, sixteen years later, an action growing out of this contract was decided by Chief Justice Marshall, that jurist, who customarily made light of charges of bribing legislatures, and even after the charges had been proved, treated them as fiction, made (for him) this unusual comment as to the special act passed by the Maryland Legislature and the Morris and Greenleaf contract :
A contract for 6,000 lots was concluded on the day that this act passed, immediately after its passage. In this contract was merged a former contract for 3,000 lots made with one of the purchasers in this second contract. It is impossible to reflect upon this fact without being persuaded that the law was agreed upon by the parties to the contract, and was specially adapted to it. The immensity of property disposed of by this sale, furnished motives of legislative aid by giving a speedy remedy to the commissioners which might not exist on the sale of particular lots occasioned by any partial default in the purchasers.65
Greenleaf as Morris agent also contracted for the purchase of 220 lots owned by Daniel Carroll ; about 428½ lots from Notley Young ; and, on July 15, 1794, he made a contract with Uriah Forrest and Benjamin Stoddert for the sale to him of 239 lots owned by them. He, moreover, bought much additional Washington real estate.66
But, although Greenleaf, in these purchases, acted as Morris agent, and by agreement was to buy all lands for joint account of Morris, Nicholson and himself, he nevertheless reserved certain large lots in Washington to himself, by agreement with Morris and Nicholson.
The speculative holdings of the trio now were enlarged. On January 13, 1794, they entered into an agreement with Thomas Stokely and John Hoge by which Morris and Nicholson bound themselves to buy from the State of Pennsylvania, warrants for 120,000 acres of land located between the Ohio and the Alleghany rivers. Morris and Nicholson were to supply the funds ; and for their work in locating and surveying the lands, Stokely and Hoge were to get one equal third part of the whole property.67 In order to carry on his vast commercial and land speculations Morris already had been forced to borrow immense sums of money. From whence were the funds for the purchase of these 120,000 acres to come ? How was Nicholson to raise his share of the money ? As Comptroller-General of Pennsylvania, Nicholson received only a moderate salary.
Impeachment Proceedings Against Nicholson.
The means by which Nicholson obtained his capital were revealed, in 1794, when the Legislature of Pennsylvania was called upon to institute impeachment proceedings against him.
For twelve years Nicholson had been Comptroller-General ; he was a powerful politician ; and it was largely through him, William Bingham and Governor Thomas Mifflin (another member of the Federal Constitutional Convention of 1787) that Robert Morris and Justice James Wilson and their associates had been able to get a charter and a recharter for the Bank of North America. It was due to their connivance that Morris, Wilson, Coxe and others had been able to grasp enormous areas of the most valuable land in Pennsylvania. Nicholson and Morris, Bingham and others were associates in more than one corporation. While converting themselves into great landholders, they were rushing bills through the various legislatures, granting themselves valuable charters and rights for canal and other corporations. Thus, in 1792-1793, the Pennsylvania Legislature, under Governor Mifflin, passed an act incorporating the Conewago Canal Company, and naming Robert Morris, John Nicholson, William Bingham, David Rittenhouse,68 Alexander J. Dallas and other politicians as proprietors and directors.69 Dallas, as we have noted, was the first Reporter of the Supreme Court of the United States. Robert Morris was also president of the Schuylkill and Susquehanna Navigation Company,70 and Rittenhouse one of the incorporators of the Delaware and Schuylkill Navigation Company, chartered in 1791.71
One particular charge on which impeachment proceedings were brought against Nicholson was made by Christian Febriger, the State Treasurer. He accused Nicholson of having, as Comptroller-General, made a personal profit of at least twenty-five per cent. in illegally redeeming certain State certificates, called New Loan certificates.
These were an outgrowth of the Revolutionary debt. According to this charge, Comptroller-General Nicholson had declared them redeemable, and certified them to Governor Mifflin, despite the fact that the law neither recognized them as a part of the State indebtedness, nor provided funds for their redemption. Of their total value of $63,075.37 it was charged that $60,220.41 of the certificates were subscribed for by Nicholson personally, were owned by him, and were in his name. Ten out of fourteen members of the whole Pennsylvania Senate pronounced Nicholson guilty of two of the most serious charges, but the vote failed of being the constitutional two-thirds required for impeachment. The question of removing him was then taken up, but Nicholson anticipated further action by resigning the office of Comptroller-General .72
Had not the most powerful political and social influences been used effectively in Nicholsons behalf, it is certain that he would not have been allowed to escape impeachment.
Did Nicholson now retire to private life a ruined man ? By no means. He already owned millions of acres of land ; and his associates had by then put through a gigantic land transaction in Georgia which eclipsed any land jobbery hitherto accomplished. It caused a national scandal of the widest and most lasting proportions, not only then deeply implicating Justice James Wilson, as it did, but seventeen years later, as we shall see, it figured importantly in the case of a decision of a noted Chief Justice of the Supreme Court and in the activities of a certain distinguished Associate Justice.
A Thirty-Five-Million-Acre Grant, and Wilsons Part.
Robert Morris, Nicholson, Zachariah Cox and Greenleaf were already interested in 12,500 acres of valuable land in Georgia which had been obtained in 1787, and came to them by route of a fraudulent sheriffs sale.73 On January 7, 1795, an act was passed by the Georgia Legislature, over the Governors protest, granting to four companies, more or less associated, a colossal total area of land, then owned by the State of Georgia. The entire tract covered, it was variously estimated, from thirty to forty million acres. The four companies were supposed (reckoning by the total purchase price of $500,000) to pay the State 2½ cents an acre for their grants ; this sum, at $500,000, would seem to have made their total area in the grants 21,500,000 acres. But according to the terms and boundaries of the grant, the area really amounted to 35,000,000 acres ; the grantees themselves estimated the area at nearly 40,000,000 acres.74
This act was passed under the patriotic guise of being a law for appropriating a part of the unlocated territory of this State for the payment of the late State troops, and for other purposes etc.75 What the act did was to dispose of Georgias vacant lands west to the Mississippi River. Hence the grants were called the Yazoo grants, from the river of that name. The four companies were :
I. The Georgia Mississippi Company. The beneficiaries of the grant of nearly twelve million acres obtained by this company were New England capitalists of whom we shall have pressing need of saying more hereafter in the proper place.
II. The Upper Mississippi Company.
III. The Tennessee Company, of which Zachariah Cox was the head.
IV. The Georgia Company. James Greenleaf held 2,500,000 acres in this company. The other incorporators and promoters of the company were a crowd of the most conspicuous Southern politicians and aristocrats. The company had been incorporated on January 1, 1795 only a little more than a month before it received its grant. Among its incorporators and promoters were Zachariah Cox, General and United States Senator James Gunn, Matthew McAllister, George Walker, William Longstreet and others, acting in trust for Wade Hampton.76 John Randolph was credited with 28,000 acres, J.P. Carnes and Mrs. Elizabeth Carnes received an allotment of 162,000 acres ; Robert Walton, an ancestor of the present enormously rich Goelet family, obtained as his share 74,000 acres.
The companys chief financial backer was Associate Justice James Wilson, of the Supreme Court of the United States ; he advanced £25,000, which he got by selling land at exorbitant prices to settlers in Pennsylvania. For this £25,000 Wilson received ten shares entitling him to an allotment of 750,000 acres.77 Others advanced sundry sums, varying from a few hundred pounds to £2,000, £3,000 and £5,000. The purposes to which a large part of this money were put will presently be seen. In view of a decision handed down by Wilson in the Supreme Court in a case against Georgia the Chief Justice and two Associate Justices concurring that the States were not sovereign, this connection of Wilsons with the Georgia Land Company has its added significance when considered in connection with a subsequent decision of the Supreme Court of the United States.
In payment for their grants, the four companies tendered payment to Georgia in depreciated currency, which the State officials refused to accept. But claiming that it was legal payment, the companies, for ulterior reasons, which we shall describe later on, went rapidly ahead selling or distributing the lands. The Upper Mississippi Company sold more than 11,000,000 acres, for ten cents an acre, to Thomas L. Winthrop, Ebenezer Oliver, Benjamin Jay, George Blake, John Peck, Joseph Sewell, and other New England (chiefly Boston) capitalists ; the Upper Mississippi and the Tennessee Companies appropriated their grants, and the Georgia Company distributed a total of 6,728,000 acres among its members and to others, and, in addition, reserved 1,000,000 acres to sell to settlers.78
Within, therefore, a brief time after these vast areas had been corruptly obtained, the allotments had been hastily made on a grand scale among a small clique of beneficiaries.
The North American Land Company.
Thirteen days after the Georgia Legislature passed the act making these grants, Robert Morris, John Nicholson and James Greenleaf, on February 20, 1795, entered into an agreement by which they formed the North American Land Company. By this agreement, 647,046 acres of the lands in Pennsylvania belonging to the copartnership of Morris, Nicholson and Company, as well as other large quantities of land belonging to those partners, amounting in the whole to about six million acres, were to constitute the capital of the said land company. These lands were valued by the men making this contract at fifty cents an acre, and were to be divided into thirty thousand shares at $100 a share, at which price they were to be sold. The company was to exist fifteen years, and dividends were to be paid annually.79
In that same year a tract of five hundred thousand acres, in what is now West Virginia, were patented to Robert Morris by the State of Virginia,80 but this tract does not seem to have been included in the North American Companys holdings. If Justice James Wilson was a member of this company, the court records do not state it ; his heirs or assignees may have been included in the others sued. As we have seen, James Greenleaf held two million five hundred thousand acres in the Georgia Company, in which Justice James Wilson had put £25,000, constituting, by far, the largest investment made by any one of the interested individuals.
At this identical time, according to the bill in the action, twenty-two years later, of Gilmore vs. North American Land Company and others, Morris, Nicholson and Greenleaf were insolvent or greatly indebted, and they entered into the agreement of February 20, 1795, with intent to defraud their creditors. The answers of Greenleaf and the directors of the North American Land Company denied that they were insolvent at the time, but admitted that they were indebted to a large amount. Furthermore, those answers asserted positively that the purchase money for the particular lands bought by Gilmore under execution had been paid by Nicholson and not by Morris.
Justice Bushrod Washington, in delivering the decision of the Supreme Court of the United States, in October, 1817, held that, inasmuch as Morris had not paid in any money, his title was only an equitable one, arising from his partnership with Greenleaf and Nicholson. Hence, the agreement of 1795 could not, in law, be set aside. But an accounting was decreed, under Section 13, Statutes of Queen Elizabeth, by which a conveyance was deemed fraudulent if voluntarily made by the grantor at a time when he was indebted ; such a conveyance, held Justice Washington, must have been made with intent to defraud creditors and others.81
The Great Disclosures of Bribery.
To resume the story of the Georgia Land grant : The news of the passage of the law giving the enormous grant of approximately thirty-five million acres to a few speculators was read with amazement throughout the entire Union. In Georgia, the mass of the people were roused to fury.
The real circumstances of the grant, however, might never have been revealed, had it not been that another group of capitalists had vainly tried to get the grant for themselves, after offering the State of Georgia a definite payment of $800,000. Defeated in their aim, and smarting for revenge, they at once got busy, and soon the entire State was ringing with charges that the associated four companies had used bribery to get their grant. That this was no idle rumor, but a serious enough fact, was soon proved by the results of Grand Jury investigations.
Clem Lanier, a Georgia State Senator, testified that he was offered two shares for twenty-five thousand acres to vote for the grant, although Longstreet had previously told him that a legislators share was seventy-five thousand acres. The certificates of shares were signed by Judge Nathaniel Pendleton.82 This was the same Pendleton who had been elected to the Federal Constitutional Convention, but had never taken his seat. Of Pendletons earlier land grabbing we have already given facts in Chapter III.
State Senator Philip Clayton testified as to State Senator Robert Thomas : ... After the passing of the act, he [Thomas] brought a considerable sum of money to my house and asked me to take care of it ; I believe it was two thousand dollars ; on which I asked him how he got it, or if he got his proportion of the lands, or words to that effect ; he said it is nothing to you, take care of it, and smiled... .83
Another legislator, R. Flournoy, swore that Judge Pendleton offered him a share provided the business succeeded ; that the meetings of the Georgia Mississippi Company were held in his [Flournoys] quarters ; and that General Gunn had tried to get him to bribe Senator Mitchell with shares for seventy-five thousand acres, but that Mitchell had refused the offer.84
State Representative James Sims testified that Gunn had said to him : Sims, I suppose from what I have heard, you are a poor man, and now you have an opportunity of making something handsome for yourself and family ; if you will prevail on Mann to vote for the bill, I will give fifty thousand acres of land.85
State Senator Thomas Wylly told Representative Gindrat that he [Gindrat] could have ten likely negroes for his share.86 Many other legislators testified similarly.87
The Rescinding Act.
The people of Georgia were thoroughly exasperated by these revelations. They elected an entire body of new representatives, pledged to rescind the act. This annulling act was passed on February 13, 1796, and was so remarkable a document that it is well worth giving at length.
The preamble described the corrupt act of 1795,
By which an enormous tract of unascertained millions of acres of the vacant territory of this State was attempted to be disposed of to a few individuals, in fee simple, and the same is not only unfounded, as being without express constitutional authority, as well as to principles and form of government, the good citizens of this State have chosen for their rule, which is democratical, or a government founded on equality of rights and which is totally opposed to all proprietary grants or monopolies in favor of a few, which tend to build up that destructive aristocracy in the new, which is tumbling in the old, world ; and which, if permitted must end in the annihilation of democracy and equal rights those rights and principles of government which our virtuous forefathers fought for and established with their blood.
The preamble then went on to say that such extravagant grants tended to establish a republican aristocracy, and that the said usurped act was not for the public good :
I. Because self preservation, or the protecting itself, is the greatest good and first duty of every government ; and, as has been shown, immense monopolies of land, by a few individuals, under the sanction of the Government are opposed to the principles of democracy or the fundamental laws the citizens of the State have chosen for their rule which, so far from being for the good or self preservation of democratical or equal government, is most manifestly for its destruction and injury.
2. Because the expression good of the State embraces the enjoyment of all rights, natural or acquired, not expressly delegated for the purposes of government ; and the sale of such an enormous tract to a few speculators which was, and is, the common right of all the good citizens of this State, is contrary to those rights, and therefore, to their manifest injury, and, of course, to the injury of the State.
The fourth reason given in the preamble for the repeal of the act said that there was no necessity or pressing urgency for the sale of such an immense tract of territory, equal to some European kingdoms ; that the passage of the said usurped act had been accomplished by subterfuge ; that the State needed only $30,000 for the alleged purpose for which the land was sold to the speculators, and that more than that sum was in the treasury unappropriated ; and that no State or nation is justified in wantonly dissipating its property or revenues, and a legal alienation can only take place from the most pressing necessity ; and the territory attempted to be disposed of (was the said usurped act valid) was wantonly dissipated, it being disposed of for the trifling sum of five hundred thousand dollars, a sum not adequate to the annual quit rents such lands were charged with previously to the Revolution, by the British king ; which wanton dissipation cannot be for the good of the State.
The fifth reason for the repeal declared : Because, exclusive of the immense loss of revenue to which the State is exposed, from the relinquishment of taxation, the sum of five hundred thousand dollars was accepted as the consideration money for the sale, and the sum of eight hundred thousand dollars, offered by persons of as large a capital, and as much respectability and credit, and on terms more advantageous to the State, was refused ; which, as it was (should the said usurped act have been declared valid) a clear loss of three hundred thousand dollars to the revenues of the State, it is evident that the law authorizing the sale was not deemed by the Legislature for the good of the State, which must have consisted in obtaining the highest price and the most advantageous terms.
The preamble continued :
... And whereas, it does appear from sundry affidavits and proofs satisfactory to this Legislature, as well as from the presentments of the grand juries, on oath, of a considerable majority of the counties of this State ... as also from the self evident proof of fraud, arising from the rejection of eight hundred thousand dollars, and the acceptance of five hundred thousand dollars for which the said territory was sold ; that fraud and corruption were practiced to obtain the said act and grants, and that a majority of the members of the Legislature who voted in favor of the aforesaid act were engaged in the purchase, and a majority of one vote only appeared in favor of this usurped act in the Senate, and on which majority in that branch the same was passed, and corruption appears against more than one member of that body ; which, exclusive of the many deceptions used, and the inadequacy of price for such an immense and valuable tract of country, and supposing it to be constitutional, which this Legislature declares it is not, etc., etc.88
The annulling act ordered that the act giving the grant be expunged from the records, and the deed be publicly burnt. This was done ; the Legislature marched in solemn order to the front of the Capitol, and put the deed to the flames.
And the Remarkable Sequel.
Did this repealing act hold ? Was it the finality of the transaction ? Did the grant become thereby forfeited to the State of Georgia, and had the distinguished bribers spent their money for nothing ?
At this point it would seem so. But there is a sequel still to be told in its appointed position later in this work a sequel of the most impressive importance, in many respects, in the narrative of the Supreme Court of the United States. In due place further along in these chapters the termination is described and its immense significance to the generation of that time and to all generations since is pointed out. There the connecting links are all appropriately brought together how the capitalists obtaining the claim of these grants refused to accept the repealing act as valid ; how they fell back upon that very Constitutional clause which James Wilson, the principal backer of the briberies, had proposed in the Federal Constitutional Convention after his Bank of North America experience, that no State had the right to pass legislation impairing the obligation of contracts ; how a certain illustrious lawyer, fifteen years later, acted as the chief attorney for the claimants and obtained from the Chief Justice then presiding a decision in their favor under which they received from the Government a total indemnity of nearly five million dollars ; and how the very next year that attorney was put upon the bench of the Supreme Court of the United States, where he presently handed down a decision in favor of the Chief Justice, in a case involving that particular Chief Justices personal interests.
Robert Morris Thrown Into Jail.
Some final facts remain to be given concerning the outcome of those great land transactions, in other parts of the United States, of Robert Morris, James Greenleaf, Justice James Wilson, John Nicholson and their train of associates.
On May 28, 1796, an agreement was made between Greenleaf, on the one part, and Robert Morris and Nicholson, on the other, by which Greenleaf agreed to sell to Morris and Nicholson his interest in the North American Land Company for a large sum of money. Morris share in the property was not to be transferred until the money was paid ; this sum, according to the answer in the suit of Gilmore, in 1817, was not paid.89 The arrangement, as the court found, was a fraudulent one, intended to defraud creditors, which creditors were mainly the Government and various States ; already, in 1795, Morris, Nicholson and Greenleaf were so deeply in debt as to be virtually insolvent. Their object was to retain as much of the land as they could ; anticipating judgments against them, they were resorting to various circumventing devices.
On June 8, 1797, a judgment was obtained in New York against Morris ; his commercial and land operations had been so enormous, and to carry them he had had to borrow such volumes of money, that, when pressed by private creditors, he could not pay. The court judgment resulted in his being put in jail90 in Philadelphia, where he remained imprisoned for some years. He persuaded Gouverneur Morris to advance the money for the payment of the judgment, which was then assigned to Adam Hoops, a personal friend of Robert Morris, and agent for the various parties concerned. One of the purposes of this assignment was to preserve to Morris the right to redemption in 1,500,000 acres which he had conveyed to the Holland Company, in the nature of a mortgage, as he supposed. Hoops later assigned the judgment to Gouverneur Morris, and on September 16, 1799, Robert Morris confirmed the trust deed. To an arrangement entered into by Robert Morris that Hoops, acting for the trustees, should buy in such lands as were sold under execution, Gouverneur Morris consented.
Certain of Morris lands in New York were sold under judgment on February 6, 1800. Hoops made his bid at the sale, but being outbid and not having sufficient funds on hand, persuaded the sheriff to adjourn the sale until May 13, following, Gouverneur Morris supplying Hoops with the poundage for the sheriffs fees.
But on April 2, 1800, Gouverneur Morris, without letting Robert Morris, or the trustees, know anything about his plan, and without notice, assigned the judgment in question to the Holland Company, for a full consideration in money. Gouvernetir Morris, after this act of duplicity toward his partner, made an agreement, on the same day, with Thomas L. Ogden, agent of the Holland Company, that the sale of the lands should take place under the judgment, and should be bought in by Ogden for the Holland Company. Ogden did, indeed, buy in the lands at the sheriffs sale, but it seems that he, too, did some profitable fraud on his own account ; he turned over to the Holland Company only 58,57o acres, not half the extent of land claimed by that company.91
This transaction caused an extended litigation between the various personages concerned, three of whom the two Morrises and Fitzsimmons had been, as we have seen, members of the Federal Constitutional Convention. In fact, a long series of litigation for thirty-five years followed Morris land jobbing transactions in New York, Pennsylvania, Washington and in other places. The docket of the Supreme Court of the United States was full of these involved cases.92 Morris had also owned land in New Jersey, some of which, near what is now Belvidere, he had given, in 1793, to his son-in-law, Charles Croxall, who built a mansion there. Those who really benefited from Morris misfortunes were a crowd of politicians and capitalists mostly in the background.
Nicholsons Enormous Estate.
Greenleaf held on to much of his property or passed it over to lessees. Nicholson left, at his death in December, 1800, an enormous estate in land in Pennsylvania, Virginia, Kentucky, North Carolina, South Carolina, Georgia and other States. Some of the Pennsylvania legislative documents estimated the area at from three to four million acres ; other reports, notably a report in 1842, by the judiciary committee of the Pennsylvania House of Representatives, stated that it was five million acres.
The bulk of this estate was in Pennsylvania, and included extensive tracts of the very richest coal deposits. Nicholson was deeply in debt for taxes to the State of Pennsylvania, but by various legal devices he had, while Comptroller General, transferred large areas to various land companies in which he was a leading figure. One of these was the Asylum Company a speculative land company organized for the purpose of selling land to settlers. The State of Pennsylvania held a lien upon Nicholsons estate for unpaid taxes amounting to $300,000. In 1805 the Legislature passed an act for the more effectual and speedy recovery of debt due from the late John Nicholson,93 and on March 19, 1807, it enacted a law to force the Asylum Company to give information which it had refused, and compelling it to file a schedule of the lands claimed by it.94 Considerable of the coal lands and iron deposit holdings of some of the largest present corporations in the United States, such as the Steel Trust and the Coal Trust, can be traced back to their acquisition by Nicholson and his partners.
Wilson Evades Warrants for His Arrest.
As for Justice James Wilson, signer of the Declaration of Independence, author of a memorable Constitutional clause pushed by him in the Federal Constitutional Convention, outclassing Jay on the high tribunal of the Supreme Court of the United States in point of legal skill, fertility and vigorous, dominant individuality he presented a sorry figure in his last years.
That he had long been a notorious land speculator ; that he had supplied the principal part of the funds to wrest the public lands from the Commonwealth of Pennsylvania, and to bribe the Legislature of Georgia these and other acts in nowise lessened his standing in the great court. No impeachment proceedings were brought against him ; nearly all the members of the Senate, and other high officials or personages, had been associated with him in his jobberies, or were concerned in similar ones.
But with the collapse of the Morris-Greenleaf-Nicholson fabric of colossal land ownership, difficulties poured fast on Wilson. Writs of arrest were issued against him, but to the last he was agile and resourceful. He evaded arrest in Pennsylvania, by exchanging circuits with his colleague, Justice Iredell of North Carolina.95 Still in intense fear of being pursued, arrested and prosecuted, he died at Edenton, N.C. on August 28, 1798. He left two children who were his heirs ; and the cases which we have hitherto cited reveal that before writs of arrest were issued against him, he had made disposition of much of his property.
1 Court leet was an ancient English feudal right investing the holder with the right to hold court. Advowson was the right to nominate ministers, and otherwise control churches.
2 The foregoing genealogical details are cited from Prominent Families of New York, National Cyclopedia Of American Biography, and other genealogical and biographical works.
3 See Henry Adams New England Federalism, 1800-1815 : 63.
4 The Prospect Before Us, p. 34.
5 It was partly for the methods used in procuring Callenders conviction that impeachment proceedings were brought against Justice Samuel Chase, in 1805. See later.
6 Prior to the Revolution, judges of the high courts in Massachusetts dressed impressively in scarlet robes, with deep facings and cuffs of black velvet. They wore wigs adorned with black silk bags, and were privileged to wear swords while on the bench. In the summer, however, black silk gowns were substituted for the robes. The object was, of course, to invest themselves with an atmosphere of awe.
7 It was said of Iredell that by taking this step he alienated the favor of a rich uncle whose fortune he would have inherited.
8 Loyalists of the American Revolution, Vol. II: 54.
9 Each of the various members of this family were large landholders. In 1782 John Van Rensselaer held about 32,000 acres in New York, part of which land he had leased on permanent ground rents, part for life, and the residue in fee simple. Out of the entailing of his estate grew protracted litigation. (See case of Van Rensselaer vs. Kearney et. al., Howards Reports, Supreme Court of the United States, Vol. II: 259.)
10 New York Constitution ; Debates In Convention, 1846 : 1052-1056. Mr. Jordan, a delegate to the Convention of 1846, denounced the feudal conditions. It was, he said, from such things relief was asked ; which although the moral sense of the community will not admit to be enforced, are still actually in existence.
11 Laws of Maryland. 1682-1784, Vol I, Chap. 76.
12 Ibid., Vol. II, Chap. 10.
13 This condition long continued. A report for the year ending November 26, 1831, revealed that nearly one thousand citizens had been imprisoned for debt in Baltimore. More than half of this number owed less than ten dollars, and of the entire number, only thirty-four were individually under debts exceeding one hundred dollars. Reports of Committees, First Session, Twenty-Fourth Congress, Vol. II, Report No. 732: 2.
14 See Chapter V.
15 Statutes At Large of Pa., 1779-1781, Vol X : 4o6-4o8. The actual amount of its capital in American currency was about $400,000.
16 Statutes at Large of Pa., 1779-1781, Vol. X : 406-408.
17 A Short History of Paper Money and Banking In The United States.
18 Statutes at Large of Pa., 1785-1787, Vol. XII : 57.
19 Ibid., 415-416.
20 Bank of North America vs. Fitzsimmons, Binneys Reports, Supreme Court of Pa., Vol. III: 360. This bank is still in existence. By a special act of Congress it is the only national bank in the United States not compelled to use the word national. In view of the facts given in these chapters pertaining to the origin of the Bank of North America, it is extremely interesting to find that bank advertising in a recent number of the Financier : A Record of ProgressFor 130 years this institution has upheld the principles of sound banking and its efficient service to financial institutions throughout the country has contributed largely to its success.
21 Wheatons Reports, Supreme Court of the United States, Vol. IV 151.
22 Dartmouth College Causes (Edition of 1879) : p. 390.
23 Dartmouth College Causes: 390.
24 Hammonds Political History of the State of New York, Vol. I : 323.
25 A History of the Bank of New York, 1784-1884: 122. Hamilton, as Secretary of the Treasury, dealt extensively with the Dutch bankers, Willinck, the same to whom Robert Morris sold 3,000,000 acres of New York land.
26 A History of the Bank of New York, etc., 39.
27 Ibid., 42.
28 Connecticut Laws : Public Statute Laws (Edition of 1808), Vol. I: 456-457.
29 Ibid., 451-455.
30 Connecticut Laws, etc., 456-457.
31 Ohio Laws, 1803, Chap. XXIX : pp. 106-114.
32 Hammonds Political History of the State of New York, Vol. I : 326.
33 Davis Memoirs of Burr, Vol. I: 326.
34 Hammond, Vol. I:58.
35 History of the Holland Purchase (Edition of 1850) : 418.
36 Ibid., 419. Hamilton and Burr were rivals in more than the political respect. Was it Hamiltons aim to discredit Burr through Church ?
37 See statement of facts in Spencer vs. Southwick, Johnsons Reports (N.Y.), VOL IX: 314.
38 American State Papers : Miscellaneous, Vol. I: 57.
39 See, Case of Commonwealth of Pa. vs. Tench Coxe, Dallas Reports (Supreme Court of Pa.), Vol. IV: 175.
40 Ibid. This is the exact amount stated in the court record in a suit brought by Pennsylvania in 1800, two years after Wilsons death.
41 Case of Campbell vs. Galbreath, Watts Reports, Vol. I: 70, etc.
42 Lessee of Bonnet vs. Devebaugh, III Binneys Reports.
43 Ibid., 105.
44 See, Case of Alleghany Railroad and Coal Company vs. Casey, Pennsylvania State Reports, Vol. 79: 84-85.
45 See, Case of Steiner and Newbold vs. Coxe, IV Pa. State Reports, 14.
46 Carey and Biorens Pa. Laws, Vol. V : 72.
47 Thus, Judge Breckenridge of the Pa. Supreme Court had been, as an attorney, counsel for the Holland Company (IV Dallas Reports, 196). In the case of the Commonwealth of Pa. vs. Coxe he was disqualified from sitting, having, as he inserted in the records, been counsel for the Holland Company.
48 In a letter dated Washington, March 20, 1801, to M. de Reyneval.
49 American State Papers : Public Lands, Vol. I: 27. (Docs. Nos. II and 12.)
50 Ibid. As nearly as can be made out from the records, one tract extended about forty by thirty leagues, and the other of the same dimensions, between the mouth of the White River and the mouth of the Wabash. The promoters claimed to have given the Indians large quantities of strouds, blankets, guns, flour, beads, etc. They had tried in 1781 to get the Continental Congress to confirm their claim, but were unsuccessful. American State Papers : Public Lands, Vol. II: 253.
54 Journal of the House of Representatives, First Session, Fourth Congress, 1795, PP. 58, 68. 72-8o, etc.
55 American State Papers : Miscellaneous, Vol. I: 131. (Doc. No. 66.)
56 American State Papers : Public Lands, Vol. I : 72-73. (Doc. No. 30.)
57 But, twelve years after his death, the persistent promoters succeeding him again petitioned Congress. The House Committee on Public Lands refused to consider the claim. Your committee submit, was its report in part on January 30, 1811, as the result of their inquiries on this point, that although a few solitary instances may be found in the early settlements of the country of Indian deeds of land being recognized as valid, yet such were the consequences resulting from frauds practised on the simple natives, such the collision of claims and controversies ... that Government, at a pretty early day, interfered and assumed a kind of guardianship over the rights of the natives [requiring the consent of the Government to make a conveyance of lands valid]. American State Papers : Public Lands, Vol. II: 253.
58 In 1790 £1 equaled about $2.66 U.S. money.
59 Peters Reports, etc., Vol. IV: 240.
60 See statement of facts in the case of Gilmore vs. North American Land Company et. al., Peters Reports, Vol. I : 460-465.
61 See, Case of James Greenleafs Lessee vs. James Birth, V Peters, 132-140.
62 The full copy of Morris and Greenleafs contract is to be found in Doc. No. 141, American State Papers : Miscellaneous, Vol. I : 223-224.
63 In 1802 Cranch was appointed Reporter for the Supreme Court of the United States, succeeding A.J. Dallas.
64 American State Papers : Miscellaneous, Vol. I: 226-228.
65 Case of Oneale vs. Thornton, VI Cranch, 69.
66 Case of Gilmore vs. North American Land Company et al., I Peters, 460-465. The Duddington estate of Daniel Carroll was taken over within the limits of the City of Washington.
67 Ibid. An act passed April 3, 1792, by the Pennsylvania Legislature recited that as the most valuable lands in Pennsylvania, included in the purchase made from the Indians in 1758, had been appropriated to purchasers, those remaining lands which were inferior should be sold at a reduced price. The price was accordingly reduced. Carey and Biorens Pa. Laws, Vol. IV: 133.
68 The Rittenhouse family of Philadelphia became well known to later generations by reason of its wealth and aristocratic airs. It shared in the profits of the great land jobbing of the times. A House Committee (of Congress) reported, on March 3, 1797, that when the Government brought suit for moneys due, David Rittenhouse fraudulently transferred all his estate to his father ; and after having made a fallacious return of outstanding debts, to assignees, he obtained a discharge, under the insolvent laws of Pennsylvania, from his private creditors. See, American State Papers : Miscellaneous, Vol. I : 157. (Doc. No. 96.)
69 Carey and Biorens Pa. Laws, Vol. IV: 252, and American State Papers : Miscellaneous, Vol. I: 851. Nicholson was also a director of a company chartered to build a bridge over the Delaware. Dozens of charters for canal, turnpike, insurance and other companies were being rushed through the Legislature at this time.
70 American State Papers : Miscellaneous, Vol. I : 853.
71 Ibid., 847.
72 Impeachment Trial of Judges Hopkinson and Nicholson (Published in 1795), Vol. I, etc.: 69, 87, 762, 764, etc. This volume gives the official account of the testimony and proceedings.
73 See, Case of Field and others vs. Holland and others (VI Cranch, 8). The record in this case includes a letter written by Holland, in 1795, stating that Morris, Nicholson, Greenleaf and Zachariah Cox were concerned in the property, and saying that he expected them to send a draft to lift an execution which he (Holland) held upon it.
74 American State Papers : Public Lands, Vol. I : 134. (Doc. No. 74.)
75 Ibid., 152.
76 Ibid., 139-140.
77 Ibid., 141. Wilsons schemes and projects were numerous. On December 24, 1795, he secured the passage of an act by the Maryland Legislature by which he and others were authorized to raise $50,000 by means of a lottery for the capital of a company to improve the navigation of the Susquehanna River.Laws of Maryland, 1785, etc., Vol. II, Chap. 62.
78 American State Papers : Public Lands, Vol. I : 141.
79 Case of Gilmore vs. North American Land Company et al., I Peters, 460-465.
80 See, Case of Henry C King vs. Mullills (171 U.S. Reports, 404-437). King, in 1808, claimed to have derived title to certain of this land from Morris through various conveyances. King lost, the Supreme Court deciding that the lands had been forfeited by reason of non-payment of taxes from 1884 to 1888. See also case of King vs. Panther Lumber Company, same volume and same result.
81 I Peters, 460-465.
82 American State Papers : Public Lands, Vol. I: 145. (Doc. No. 74.) Judge Pendleton, it may be remarked, was a close personal friend of Alexander Hamilton. He removed to New York City, and was one of Hamiltons seconds in the duel with Burr.
83 Ibid., 141.
84 Ibid., 145.
85 Ibid., 147.
86 Ibid., 145.
87 For full testimony see Ibid., 144-149. Chided for having sold his vote for $600 when others were getting $1,000, Representative Thomas Roburn replied, according to the testimony, that it showed he was easily satisfied, and was not greedy (p. 144).
88 This document is given in full in American State Papers : Public. Lands, Vol. I: 156-158.
89 Gilmore vs. North American Land Company, et al., I Peters, 460. The companys affairs were in such a queer and confused state that the courts decision in this case stated : It appears that many shares in the company were disposed of ; but it is quite uncertain what the real condition of the companys affairs is.
90 Washington, who was a very intimate friend of Morris, wrote Mrs. Morris an autograph letter inviting her, during her husbands incarceration, to stay indefinitely in his mansion at Mount Vernon.
91 The foregoing details are set forth in the case of Fitzsimmons and others vs. Ogden and others, VII Cranch, 2-22. (February 4, 1812.) Slow in his physical movements, Gouverneur Morris was exceedingly nimble mentally. He had lost a leg, and thereafter contented himself with a wooden leg, scorning to buy one of those fancy legs.
92 See, for example, the case of Van Ness vs. the City of Washington and the U.S., IV Peters, 232-286 (January, 1830), and other cases growing out of his Washington real estate speculations.
93 Carey and Biorens Pa. Laws, Vol. VII: 528.
94 Ibid., Vol. VIII: 210-211. Despite the States lien, different individuals and corporations contrived to get hold of most of this valuable estate during the next forty years ; the frauds and thefts by which they did so are set forth in many legislative documents, and formed a continuous scandal. To quote one of these documents : Writing on January 24, 1842, to William Elwell, chairman of the Judiciary Committee of the Pennsylvania House of Representatives, Judge J.B. Anthony of the Nicholson Court (a court especially established to pass upon questions arising from the disposition of the estate) said :
On the 11th of April, 1825, an act passed the Governor to appoint agents to discover and sell the Nicholson lands at auction for which they were allowed twenty-five per cent. A Special Board of Property was also formed to compromise and settle with claimants. From what has come to my knowledge in relation to this act, I am satisfied that the commonwealth was seriously injured by the manner in which it was carried out by some of the agents. It was made use of principally for the benefit of land speculators ; and the very small sums received by the State treasurer for large and valuable tracts sold and compromised, show that the cunning and astute land jobbers could easily overreach the Board of Property at Harrisburg... Many instances of gross fraud might be enumerated, but it would serve no useful purpose. Judge Anthony further said that very many of the most influential, astute and intelligent inhabitants and gentlemen of high standing were participants in the frauds. (Pa. House Journal, 1842, Vol. II, Doc. No. 127: 700-704.) Much of the coal and iron lands now owned by the Coal Trust and the Steel Trust were thus obtained at the time by various individuals and corporations.
95 At that time and for more than eighty years afterwards, it was the assigned practice of each Supreme Court justice to preside over the circuit court in the district from which he came.