The Yazoo Land Fraud Becomes Law

• Author: Allen Pusey
• Pages: 72-72

PHOTOS COURTESY OF WIKIMEDIA COMMONS

The Yazoo Land Fraud Becomes Law

From Georgia’s fi rst settlement in 1733 as the 13th and last of the American colonies, its histor y was

one of persistent contradictions. Conceived in popular history as a refuge for imprisoned debtors, early

Georgia was every bit as prudish as older religious outposts to the north. It was fi rst governed by a

corporate board from London and—seemingly whimsically—forbade rum, lawyers and Catholics.

It also resisted the advent of slavery until 1751, long after the odious practice gained an economic

stranglehold on the rest of the American South.

Because the province of G eorgia was viewed

primarily a s a bu er between Engl and’s more

established northern c olonies and Spain’s holdings

in Florida and beyond, its origi nal grant included

a massive swath of land th at stretched westward

above the 31st parallel, al l the way, as the grant

hyperbolically desc ribed it, to “the south seas.”

In historical re ality, that meant as far west as

the Mississippi River.

After the Revolutionar y War, America’s vast

frontier holdings became a fu ll-blown attraction

to pioneers, profi teers, politicians, thieves and

opportunists who env isioned fortunes to be made

from the newly acquired w ilderness. Georgia, like

other states rich in re al estate and little else, was

vulnerable to almost a ny scheme that seemed likely

to attract a new populat ion of white settlers to displace

the indigenous people within its border s.

By 1794, a consortium of four companies sought to buy

40 million acres of G eorgia’s western land for $500,000,

or 1.25 cents per acre. Becau se stockholders in the com-

panies included some of the most infl uential legislators

and o cia ls in state and national government, the sale

was authorized by the G eorgia legislature without serious

opposition. By one account, all but one of the legislat ors

who voted for the sale were stockholders in t he companies

that benefi ted from the Yazoo Land Act, signed int o law

by Gov. George Matthews on Jan. 7, 1795.

The sale yielded an immense a nd almost instanta-

neous profi t to the four companies: the Georgia Co.,

the Tennessee Co., the Upper Mississippi Co. and the

Georgia-Missis sippi Co. It also yielded a fi ery popular

opposition to what quickly beca me excoriated as the

“Yazoo legislature.” When a newly elect ed “anti-Yazoo”

state legislatur e convened in early 1796, the

Yazoo Land Act was repe aled and burned by

state o cials.

Although the sale had be en annulled, the

business of recovery proved problematic. I n

anticipation of the repeal, spec ulators had sold

much of the land to out-of-state interes ts at

remarkable profi ts. On the day of the repeal,

for example, the Georgia-Mi ssissippi Co. sold

11 million acres for eight times the pur chase

price. Moreover, many landholders who had

been unaware of the controversy si mply refused

to yield back their ownersh ip. For much of the next

decade, state o cials moved unsuccessfu lly to undo

the damage wrought by a ma ssive legislative fraud.

In a fragile new nation that s till struggled with the

tensions between stat e sovereignty and federal power,

the issues of compensation and land repatr iation became

a volatile national concern. By 1804, t he Yazoo contro-

versy had swept into the U.S. Cong ress, where Virginia

planter John Randolph raged against fel low Virginian

James Madison and any attempt s to settle Yazoo claims,

even in the national interest . Their feud resulted in a

stalemate in Congre ss, leaving the issue to be decided

by the U.S. Supreme Court.

In Fletcher v. Peck (1810), land speculators Robert

Fletcher and John Peck argued about the val idity of a

sale of Yazoo land that took place bet ween them. The

question was whether Georg ia’s 1796 repeal of the Yazoo

Land Act could inval idate their contract.

In a decision that helped establish pri macy and dura-

bility of the private contra ct, Chief Justice John Marshall

ruled that the Yazoo Land Ac t, even if it proved to be a

fraud on the public, made the ensuing contra cts legal.

Jan. 7, 1795

72 || ABA JOURNAL JANUARY 2018

Precedents || By Allen Pusey

John Randolph