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are thus compelled to pay for all the necessaries and comforts of life, and more will be done for the benefit of American labor than if millions were added to the profits of manufacturing capital by the enactment of a protective tariff.

B. Ease of Acquisition of Public Lands in 18321

A magazine writer of the times called attention to the ease with which a laborer could acquire land for himself as follows:

A few facts on this subject will set this matter in its true light. Land is now sold in tracts of 80 acres, at $1 25 per acre. For 100 dollars, an unimproved tract of 80 acres may be purchased. In any of the states west of the Ohio river, a labourer can earn 75 cents per day, and if his living be supposed to cost 25 cents a day, which in this plentiful country is a large estimate, he can, by the labour of two hundred days, or about eight months, purchase a farm. But as the working days in a year, excluding bad weather, would not amount to more than 200, it may be safely asserted, that a labourer can purchase a tract of 80 acres, by one year's steady labour. Again, a labourer can get his boarding and $10 per month, the year round, which would amount to $120, and if $20 be deducted for clothing, he will in this way have earned the purchase money of a farm, in one year. All kinds of stock can be raised in that country with facility, and at little cost. A good horse is worth fifty dollars, a cow from five to eight dollars, a fat steer from ten to fifteen, and hogs two dollars per hundred pounds. A man then can purchase eighty acres of land, by the sale of two horses, or from eight to twelve head of cattle, or twenty to twenty-five hogs; and as individuals are not prevented from settling on the public land, but rather encouraged, the means are thus afforded to farmers of acquiring this property, previous to the purchase of land. Mechanics' wages are much higher; and those who work in the most useful arts, such as carpenters, blacksmiths, shoemakers, &c., are greatly needed. An individual of this class, may earn money enough to buy eighty acres, in six months. A person who teaches a common English school, receives three dollars per quarter for each pupil, and such persons are in great demand. A school of thirty scholars will yield ninety dollars per quarter, or $360 per year. The school-house and fuel being furnished by the patrons, and boarding costing about one dollar per week, such an individual may in one year buy a tract of land. . . .

American Quarterly Review (Philadelphia, 1832), No. XXII, 280.

III. SPECULATION IN PUBLIC LANDS

A. Land Speculation, 18401

The favorable terms on which government lands could be acquired and the rapid growth of the population in the west caused speculators to buy up the land in the hope of reselling it at a substantial advance in price. Oftentimes towns were laid out in the forests or on the open prairie and advertised as future centers of trade and industry. Some of the cities thus advertised more than realized the claims of their friends, but a great majority of them have no existence at the present time. This speculation did the people a positive injury. It created the desire to become wealthy without labor, and tended to minimize the successes that came under ordinary conditions. Of this practice, Mr. Hildreth, the historian, had the following to say:

Simultaneously with this increase in the regular trade, and as generally happens in like cases, a good many new speculations were brought forward and pursued with ardor. Among these, the speculation in Maine timber lands was the first in order, the most extravagant and irrational, and the most ruinous to those engaged in it. An idea was started that the timber in Maine was diminishing so rapidly that the supply must soon be exhausted, and that those who engrossed what remained, could not fail to grow rich. The rage to purchase these lands became excessive, and the most extravagant prices were paid. Many gross frauds were committed, and many arts were resorted to, to entrap purchasers and keep up the price. But it was soon discovered that the foundation upon which this speculation rested, was unsound. The lands, late so precious, became altogether unsalable, and many who imagined they had made great fortunes, found themselves bankrupt. New England and the city of New York were the chief sufferers in this business, which however was of too limited a character to produce any general effects.

The speculations in the public lands, by which this period was distinguished, were of a far more extended character. Lands were purchased of the government, in the years 1834, '35, and '36, to the amount of forty-seven millions of dollars, being nearly half of the total amount which, up to that time, had been received from that source. The cause of these immense purchases is to be found in the following considerations. By the Indian removal policy, which formed a part of General Jackson's system of administration, vast tracts of land, both in the North and South, had been suddenly denuded of

1 Banks, Banking, and Paper Currencies. By Richard Hildreth (Boston, 1840),

their aboriginal inhabitants, and brought into the market. Many of these lands held out a great temptation to settlers from their fertility and situation; and the high prices of cotton and flour brought a flood of emigration into the South and West, and held out great temptations to speculators to take up large quantities of the government lands, in hopes to sell again at a profit. The influx of emigrants into these states led, of course, to a great increase of trade. This caused many villages, and even some considerable towns, to spring suddenly into existence, and led to a great speculation in "town lots" and sites for new towns, of a much more extravagant and dangerous nature than the mere purchase of public lands. Many of those purchases, considering the situation and means of those who made them, were no doubt injudicious; but taken as a whole, they will perhaps prove a source of profit to the purchasers.

B. A View of Western Speculation before the Civil War 1

Naturally the center of land speculation was in the west, where land was plentiful and cheap.

Speculation in real estate has for many years been the ruling idea and occupation of the Western mind. Clerks, labourers, farmers, storekeepers, merely followed their callings for a living, while they were speculating for their fortunes. There are no statistics which show how many Yankees went out West to buy a piece of land and make a farm and home, and live and settle, and die there. I think that not more than one-half per cent. of the migration from the East started with that idea; and not even half of these carried out the idea. The German immigrants, indeed, were better entitled to be called settlers; but all classes and people of all kinds became agitated and unsettled, and had their acquisitiveness perpetually excited by land speculations in some shape or other — new railways, roads, proposed villages and towns, gold mines, water-powers, coal mines- some opportunity or other of getting rich all at once by a lucky hit. . . .

The people of the West became dealers in land, rather than its cultivators. Scorning cheap clocks, wooden nutmegs, and appleparers, the Yankee, stepping from the almost ridiculous to the decidedly sublime, went out West, and traded in the progress of the country. Every one of any spirit, ambition, and intelligence (cash

1 Ten Years in the United States. By D. W. Mitchell (London, 1862), 325–9.

was not essential), frequented the National Land Exchange, a vast concern: extending from the Mississippi to the Pacific.

By convenient laws, land was made as easily transferable and convertible as any other species of property. It might and did pass through a dozen hands within sixty days, rising in price at each transfer; in the meantime producing buffaloes and Red Indians. Millions of acres were bought and sold without buyer or seller knowing where they were, or whether they were anywhere; the buyer only knowing that he hoped to sell his title to them at a handsome profit.

To keep up and encourage the great western staple, the Progress of the Country; to inflate as largely and rapidly as possible the magnificent bubble, public improvements were called for: canals and railroads were made or proposed, from the established centres of trade, commerce, and travel, to the indefinite West. Where was the money to come from to create these costly works, on a vast scale, in a savage territory, to give value to that territory on the Land Exchange? It was a grand problem, one would think, but really as simple as the discovery of America. Endow the railway with a few millions of acres of the lands it runs through and brings into the market; then sell these acres to pay for constructing the line, and to yield the shareholders their interest.

To extend and facilitate these land transactions, these speculations in the Progress of the Country, the system of selling land on time was adopted. The instalments of the purchase-money were made payable within various periods (frequently ten years) at low interest, in the first instance. Thus, A., after much thinking, and watching, and saving, or borrowing, secured a corner lot in his favourite city (that was to be), or his half-section in some future garden of the Union (often actually indicated in the deed of sale by the latitude and longitude); this he sold at a profit to B., on a few years' credit (secured, of course, by mortgage); B. did the same to C.; and so on.

It happened that, while this system was going on, the United States Government rewarded the services of those who had borne arms in the wars of the country, by giving them Land Warrants for 80, or 160, or 320 acres, according to services in all amounting to many millions of acres. So in 1856 the railroad and canal companies and the holders of these Land Warrants were everywhere selling, selling, selling, in large or small parcels of land, until everybody in the West had a share of God's earth, quietly increasing in value at the rate of perhaps a hundred, or at least twenty per cent. per annum it was

hoped.

As an example of the effects of this real estate mania take Chicago. There land, for building purposes, was dearer than in the larger Eastern cities; and house-rent twice as much as in New York. In 1857 it is probable that upwards of eight hundred millions of dollars were invested in idle Western lands, and lots in proposed cities, which had been paid for to the extent of one-fourth, the remainder continually being paid in instalments.

Of course, this business, then, required a good deal of money, which was forthcoming - while prices were still rising. But the progress of speculation had got far ahead of its object or subject, the Progress of the Country.

The Western merchant or storekeeper came to New York, Boston, Philadelphia, bought goods on credit of the jobbers or importers, went home, sold them, and invested the proceeds in lands and lots. Land was becoming the circulating medium. The importers had to obtain an extension of time to pay the European manufacturer his dues - unless he would take a few sections of land in such and such a latitude and longitude.

Of course, such a business as this, engrossing the attention of perhaps a majority of the population, could not go on long. Unfortunately, the bankruptcy and misery that followed the long put-off day of settling accounts are already almost forgotten. The whole domestic history of the time, which ended in the panic of 1857, affords a striking illustration of the state of mind which has become habitual in the Northern States; the tendency to seize upon some project or idea, to dwell upon it, inflate it, make it into a mania, run it into the ground, as they say, and then forget all about it. But what is most important to consider is, that the leaders and promoters of these ruinous, demoralizing manias are, in public opinion, respectable, intelligent, and educated people.

C. Early Land Speculation in Illinois, 1830-18401

The land speculation carried on in Illinois was perhaps typical of all similar enterprises of the times. Governor Ford of that state had an opportunity of seeing it in all its phases and describes it as follows:

In the spring and summer of 1836, the great land and town lot speculation of those times had fairly reached and spread over Illinois. It commenced in this State first at Chicago, and was the means of building up that place in a year or two from a village of a few houses, 1 History of Illinois. By Thomas Ford (Chicago, 1854), 181–2.

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