The Yazoo land scandal , Yazoo fraud , Yazoo land fraud , or Yazoo land controversy was a massive real-estate fraud perpetrated, in the mid-1790s, by Georgia governor George Mathews and the Georgia General Assembly . Georgia politicians sold large tracts of territory in the Yazoo lands , in what are now portions of the present-day states of Alabama and Mississippi , to political insiders at very low prices in 1794. Although the law enabling the sales was overturned by reformers the following year, its ability to do so was challenged in the courts, eventually reaching the US Supreme Court . In the landmark decision in Fletcher v. Peck (1810), the Court ruled that the contracts were binding and the state could not retroactively invalidate the earlier land sales. It was one of the first times the Supreme Court had overturned a state law, and it justified many claims for those lands. Some of the land sold by the state in 1794 had been shortly thereafter resold to innocent third parties, greatly complicating the litigation . In 1802, because of the ongoing controversy, Georgia ceded all of its claims to lands west of its modern border to the U.S. government . In exchange the government paid cash and assumed the legal liabilities. Claims involving the land purchases were not fully resolved until legislation was passed in 1814 establishing a claims-resolution fund.
22-532: The Yazoo land fraud is often conflated with the Pine Barrens speculation , another land scandal that took place in east Georgia at about the same time. In this case, the state's high-ranking officials were making multiple gifts of land grants for the same parcels, resulting in the issuance of grants totaling much more land than was available in the state of Georgia. The origins of the Yazoo land scandal lay in
44-602: A secret society called the Combined Society was formed; the members' sole purpose was to make money by land speculation. This group secured influence in the Georgia legislature to further its aims. In 1789 three companies, The South Carolina Yazoo Company, The Virginia Yazoo Company (which was headed by Patrick Henry ), and the Tennessee Company were formed by Combined Society interests to buy land from
66-627: The Yazoo River . This area included the Natchez area and was in the area also claimed by Spain. The state appointed civil and judicial officers for the new county, but under pressure from the federal government, Georgia dissolved Bourbon County in 1788. The federal government opposed Bourbon County because of the unresolved Spanish claim, and because claims to the area by the Choctaw and Chickasaw Nations had not been extinguished. In about 1789,
88-738: The Combined Society was also exposed in 1792; some of its principals continued to be active in attempts to develop Georgia lands. In 1794, four new companies were formed: the Georgia Company, the Georgia-Mississippi Company, the Upper Mississippi Company, and the new Tennessee Company. Their principals included individuals active in the 1789 purchases, as well as leading Georgia politicians such as James Gunn and United States Supreme Court Associate Justice James Wilson . These companies persuaded
110-550: The Georgia legislature. Governor Edward Telfair signed a deal to sell 20,000,000 acres (81,000 km) of land to the Yazoo companies for $ 207,000, or about 1 cent per acre. These lands were located north of the mouth of the Yazoo River and extended eastward from the Mississippi. The deal collapsed in 1792 when the companies sought to pay with depreciated old currency, which the state refused to accept. The existence of
132-458: The Georgia state assembly to sell more than 40,000,000 acres (160,000 km) of land for $ 500,000. Many Georgia officials and legislators were offered shares in these companies or bribes to secure their agreement to the sale. On January 7, 1795, Governor Mathews signed into law a bill authorizing the sale of the 40,000,000 acres (160,000 km), known as the Yazoo Act. The territory that was
154-537: The Supreme Court in 1810. The landmark Fletcher v. Peck decision marked one of the first times the Court overturned a state law, deciding that the land sales were binding contracts and could not be retroactively invalidated by the passage of superseding legislation. During the same period, in what was called the Pine Barrens speculation , the governors and legislature of Georgia made overlapping land grants in
176-582: The army as a private. During the war, he demonstrated leadership and was promoted to the rank of colonel. He was a member of the state convention that adopted the Constitution of 1789. Soon after the end of the war, Georgia and other states rapidly tried to develop their frontier lands. It was an environment ripe for scandal and speculation, which took place in Georgia and other states. Because of public outrage about millions of acres of state lands' being sold for low prices to insider speculators, Irwin
198-562: The desire of the U.S. state of Georgia to firm up its territorial claims after the American Revolutionary War , and to satisfy a great demand for land to develop. The territory claimed by Georgia ran as far west as the Mississippi River , and included most of the present states of Alabama and Mississippi (from 31° N to 35° N , excepting only the coastal areas of those states). Some of this territory
220-819: The eastern part of the state, effectively granting three times more land than existed in the state. Although land grants were supposed to be limited to 1,000 acres (4 km) per individual, the state awarded multiple grants of 1,000 acres (4 km) to certain people. Pine Barrens speculation From 1789 to 1796, Georgia governors George Walton , Edward Telfair , and George Mathews , while in office, made gifts of land grants covering more than three times as much land as Georgia then contained. In all, they made grants of 29,097,866 acres (117,755 km ) of land in counties that consisted of only 8,717,960 acres (35,280 km ). In Montgomery County alone, with an area of 407,680 acres (1,650 km ), three men received land grants totaling 2,664,000 acres (10,780 km ). All
242-530: The grants given in Montgomery County totaled 7,436,995 acres (30,096 km ). While single grants were limited to a maximum of 1,000 acres (4 km ) per person, multiple 1,000-acre (4 km ) grants were given to individuals. The land was portrayed as fertile when in reality it was a pine barren. The Pine Barrens speculation is often conflated with the Yazoo land scandal , which occurred at about
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#1732798156304264-485: The matter was not over. The state refunded money to people who had purchased land, but some refused the money, preferring to keep the land. The state did not recognize their claims, and the matter was to wind through courts for the next decade. In 1802 the state ceded to the federal government all claim to lands west of its present border (which were organized into the Mississippi Territory ), along with
286-414: The ongoing legal disputes. Claims by third-party owners who had innocently purchased land from the original companies were not fully resolved until 1816. Spanish claims to the Georgia territory were resolved with the 1795 Treaty of San Lorenzo ; Native American claims to the area were extinguished by a series of treaties ending in the 1820s. Legal challenges to Georgia's attempt to repeal the sale reached
308-403: The reform efforts: Irwin was elected Governor of Georgia and, less than two months after taking office, signed a bill on February 13, 1796 nullifying the Yazoo Act. The state burned all copies of the bill except for one that had been sent to President George Washington . Jackson resigned as Senator to run for office as next Governor of Georgia. He was elected and took office two years later. But
330-704: The same time and dealt with land in present-day Alabama and Mississippi . The Yazoo scandal "quickly overshadowed" the Pine Barrens scandal. In the Yazoo case, the Georgia legislature authorized sales of millions of acres of land at low prices, to enable speculation by political insiders. It led to a landmark United States Supreme Court decision in 1810, Fletcher v. Peck . Jared Irwin Jared Irwin (1750 – March 1, 1818) served twice as elected Governor of Georgia (1796–1798) and (1806–1809). He first
352-544: The state law was unconstitutional in trying to nullify valid contracts. Jared Irwin was born in 1750 in what was then Anson County, North Carolina . (His birthplace is now located in Mecklenburg County , which was formed from the western portion of Anson County in 1762.) His family moved to Burke County, Georgia when he was young. Irwin fought in the American Revolution , in which he entered
374-697: The state's second land lottery , as land sales and development were still a priority for the state. In September 1794, 1,200 Georgia militiamen, led by General Irwin acting in conjunction with federal troops stationed on the Oconee , surrounded and isolated General Elijah Clarke 's fortifications on the Oconee called the Trans-Oconee Republic . After some negotiation, Clarke agreed to surrender, provided that he and his men would not face prosecution for their actions. Clarke and his followers departed, and
396-445: The subject of these purchases included most of the land that had been the subject of the 1789 purchase attempt, and a significant portion of it was resold to buyers in other parts of the country who were not aware of the shaky nature of the transactions. When the details of the sale were revealed, public outrage was widespread, and people protested to federal officials and Congressmen. Jared Irwin and U.S. Senator James Jackson led
418-595: Was a 1784 proposal to establish Houstoun County in the Muscle Shoals area. This attempt never got off the ground because its major proponents became involved instead in an effort to establish the State of Franklin in present-day eastern Tennessee . In 1785 Governor George Mathews signed the Bourbon County Act, which organized Bourbon County, Georgia in the area east of the Mississippi and south of
440-605: Was claimed and occupied by Native Americans, and southern portions of the territory were also claimed by Spain as part of Spanish Florida . Lands along the Mississippi River near present-day Natchez, Mississippi had been settled during the British administration of West Florida , and had a strong Loyalist presence. Some Georgia authorities and speculators thought these developed lands could be seized. The first attempt of Georgia to organize settlement in this area
462-407: Was elected Governor in 1795 to clean up the Yazoo land scandal . On February 13, 1796, less than two months after taking office, Irwin signed the bill nullifying the Yazoo Act. To make a public statement, he burned a copy of the Yazoo Act on the grounds of the capital. The legislature had just moved the capital to Louisville in response to the scandal. During his second term, Irwin administered
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#1732798156304484-480: Was elected to office as a reformer based on public outrage about the Yazoo land scandal . He signed a bill that nullified the Yazoo Act, which had authorized the land sales. Challenges to land claims purchased under the former act led to the United States Supreme Court 's hearing the case Fletcher v. Peck (1810). In a landmark decision, the Court upheld the land contracts , and ruled that
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