Fletcher v. Peck 6 Cranch 87 (1810)

Author:Leonard W. Levy

Page 1067

Fletcher was the Court's point of departure for converting the CONTRACT CLAUSE into the chief link between the Constitution and capitalism. The case arose from the Yazoo land scandal, the greatest corrupt real estate deal in American history. Georgia claimed the territory within her latitude lines westward to the Mississippi, and in 1795 the state legislature passed a bill selling about two-thirds of that so-called Yazoo territory, some 35,000,000 acres of remote wilderness comprising a good part of the present states of Alabama and Mississippi. Four land companies, having bribed every voting member of the state legislature but one, bought the Yazoo territory at a penny and a half an acre. Speculation in land values was a leading form of capitalist enterprise at that time, provoking an English visitor to characterize the United States as "the land of speculation." Respectable citizens engaged in the practice; the piratical companies that bought the Yazoo included two United States senators, some governors and congressmen, and Justice JAMES WILSON. In a year, one of the four companies sold its Yazoo holdings at a 650 percent profit, and the buyers, in the frenzy of speculation that followed, resold at a profit. But in 1796 the voters of Georgia elected a "clean" legislature which voided the bill of sale and publicly burned all records of it but did not return the $500,000 purchase price. In 1802 Georgia sold its western territories to the United States for $1,250,000. In 1814 a Yazooist lobby finally succeeded in persuading Congress to pass a $5,000,000 compensation bill, indemnifying holders of Yazoo land titles.

Fletcher v. Peck was part of a twenty-year process of legal and political shenanigans related to the Yazoo land scandal. Georgia's nullification of the original sale imperiled the entire chain of Yazoo land speculations, but the ELEVENTH AMENDMENT made Georgia immune to a suit. A feigned case was arranged. Peck of Massachusetts sold 15,000 acres of Yazoo land to Fletcher of New Hampshire. Fletcher promptly sued Peck for recovery of his $3,000, claiming that Georgia's nullification of the sale had destroyed Peck's title: the acreage was not his to sell. Actually, both parties shared the same interest in seeking a judicial decision against Georgia's nullification of the land titles?the repeal act of 1796. Thus, by a collusive suit based on DIVERSITY OF CITIZENSHIP, a case involving the repeal act got...

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