Cash or credit

Buying federal land on time

On the fourth day of January, 1830, a federal land patent was issued for the west half of the northeast quarter of section 5 in Township 2 North and Range 2 East in Orange County, Indiana.

CVAnd with that patent, title to 82.6 acres of land was transferred from the federal government to “Thornton Kendall, Assignee of Jesse Ferguson.”

And two things about the transaction puzzle reader Genevieve Netz today.

The first is the fact that it’s recorded on the website of the Bureau of Land Management General Land Office as being a Credit Volume Patent. And, she wants to know, “what’s that?”

The second is the notion of credit in this deal: “Does this mean that Thornton Kendall took over payment and ownership of land that Jesse Ferguson had originally arranged to purchase?”

Good questions, and the answer — as usual — comes from the law.

When the Revolutionary War ended with the Treaty of Paris, the right of the United States to more than 270 million acres of land east of the Mississippi River (but outside of the original 13 colonies) was recognized by law. The initial purpose of the public lands was for the benefit of soldiers from the Revolutionary War.1

By 1785, it was clear that there was far more land than was needed for that purpose and the first statute to dispose of the federal lands was passed by the Continental Congress: the Land Ordinance of 1785 required that the lands be systematically surveyed into “townships of six miles square” and subdivided into sections of “one mile square, or 640 acres.” Once surveyed, the land was to be offered for sale at public auction in units of a section or more at a minimum price of $1.00 per acre.2

And, with $640 as a minimum cash price, “Few settlers had the necessary capital to make so large a purchase and the debt-ridden national government received a relatively small revenue from its lands …”3

So in 1800, Congress tried again. It adopted the Credit Act of 1800,4 known as the Harrison Land Act, under which a land sale could be for as little as a half section (320) acres for a minimum price of $2.00 an acre — but the price could be paid over time:

Under the credit system, a person buying a tract of land had to pay one-twentieth of the agreed price at the time of the sale and one-fourth 40 days later. A second quarter was due at the end of the second year and the rest during the third and fourth years. The Government charged 6 percent interest on the unpaid balance, but offered an 8 percent discount for payments made before the due date. Land not fully paid for after the fifth year was forfeited and resold at an auction.5

And those terms also proved that they weren’t good enough to allow ordinary people to acquire land easily. So it passed the Land Act of 1804, which reduced the minimum acreage to 160 acres and continued to allow for credit purchases.6

Other minor changes followed and many credit sales were made… until the Panic of 1819 dropped the bottom out from under the entire system. Suddenly, there was a shortage of hard cold cash — and individual farmers stood at risk of losing their lands.

And Congress acted again. First, in 1820, it ended the credit sales of federal lands. Under the Land Act of 1820, the minimum acreage was reduced to 80 acres and the minimum price to $1.25 an acre, with a down payment of only $100 — but everything had to be paid in cash.7

Then in 1821, Congress passed the Relief Act to benefit individuals who had bought under the old credit system. Under that law, buyers could turn some acreage back to the government, and they were given more time — up to eight more years — to meet the payments due under the old credit sale system.8

So what does this mean for our friend Kendall here?

The designation on the BLM website of this transaction as a “Credit Volume Patent” simply means it began as a credit sale, under one of the original credit acts, between 1800 and 1820, and was recorded as such.

And the reference to Thornton Kendall as the “Assignee of Jesse Ferguson” means only that Ferguson originally filed for the land and, somewhere along the way, Kendall secured the same rights to the land that Ferguson would have had if he’d completed the transaction.

An assignee is simply the “person to whom an assignment is made,”9 and an assignment is the “act by which one person transfers to another,… the whole of the right, interest, or property which he has in any realty or personalty…”10

The phrase, by itself, doesn’t tell us how it happened that Ferguson’s rights ended up in Kendall’s hands. It might have been, as Genevieve suggests, that Kendall took over the payments and so acquired ownership of land that Ferguson had originally arranged to purchase. But it could have been anything from Ferguson selling his rights to Kendall, to a court ordering the transfer because Ferguson owed Kendall money, to Ferguson losing the land to Kendall in a card game.

In other words… more research to do!


SOURCES

  1. Public Lands History,” U.S. Department of the Interior, Bureau of Land Management, General Land Office (http://www.glorecords.blm.gov/reference/ : accessed 14 May 2014).
  2. 28 Journals of the Continental Congress 375-381 (Washington, D.C. : Government Printing Office, 1933); digital images, “A Century of Lawmaking for a New Nation: U.S. Congressional Documents and Debates, 1774-1875,” Library of Congress, American Memory (http://memory.loc.gov/ammem/index.html : accessed 14 May 2014).
  3. Land Ordinance of 1785,” About Indiana, Indiana Historical Bureau (http://www.in.gov/history/ : accessed 14 May 2014).
  4. “An Act to amend the act intituled ‘An act providing for the sale of the lands of the United States, in the territory northwest of the Ohio, and above
    the mouth of Kentucky river,’” 2 Stat. 73 (10 May 1800).
  5. Our Record Keeping History,” U.S. Department of the Interior, Bureau of Land Management, General Land Office (http://www.glorecords.blm.gov/reference/ : accessed 14 May 2014).
  6. “An Act making provision for the disposal of the public lands in the Indiana territory, and for other purposes,” 2 Stat. 277 (26 March 1804).
  7. “An Act making further provision for the sale of the public lands,” 3 Stat. 566 (24 April 1820).
  8. “An act for the relief of the purchasers of public lands prior to the first day of July, eighteen hundred and twenty,” 3 Stat. 612 (2 March 1821).
  9. Henry Campbell Black, A Dictionary of Law (St. Paul, Minn. : West, 1891), 97, “assignee.”
  10. Ibid., “assignment.”
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9 Responses to Cash or credit

  1. Kathy Nitsch says:

    Judy,

    You know I can’t resist an interesting GLO land patent puzzle. The GLO Tract Book record is the first place I’d look to start researching this land transaction. Even though I haven’t had time to decipher all of the information (I was on my way out the door when I peeked at your blog post), I can point Genevieve Netz to the FamilySearch website where there’s a digitized image of the entry in the BLM Tract Book for this land parcel:

    “United States Bureau of Land Management Tract Books, 1820-1908,” images, FamilySearch (https://familysearch.org/pal:/MM9.3.1/TH-1971-32471-9454-63?cc=2074276&wc=M7WS-724:356163201,356218501 : accessed 15 May 2014), Indiana > Vol 2 (Jeffersonville) > image 17 of 591; citing Records Improvement, Bureau of Land Management, Washington D.C.

    The information in the entry at the top of this page (actually it is spread over two pages, but both are included in this one image) gives an abbreviated history of the events which led to issuing final certificate number 2534.

    Kathy Nitsch

    • Judy G. Russell says:

      I’d forgotten that those tract books were online. Sure makes you wonder exactly what happened after January 1817, doesn’t it?

  2. Genevieve Netz says:

    Thank you for addressing my questions and explaining the various credit acts. I had not realized that land was so expensive. I guess that explains why people got so excited about homesteading when the government came up with that idea later on.

    I have another ancestor from Indiana (Eli Scotton) whose name appears in a similar land transaction. An 1819 GLO record (credit volume patent) gives ownership of 160 acres in Fayette County to “Archibald Pruitt, assignee of Eli Scotton.” In that case, I’m pretty sure that Eli Scotton was deceased before 1819.

    Kathy Nitsch, I did not know those records existed. I foresee spending some quality time with them! I will transcribe the record at your link so I can understand it better. Of immediate interest to me when I scanned over it: “William C. Griffith of Nelson County, Kentucky.” Thornton Kendall came to Indiana from Nelson County.

    Thanks again,

  3. Dixie Petty says:

    Further research can be done using the land entry case file which can be obtained from the National Archives. It is a bit pricey when ordered online, especially if the file only contains s few receipts. Sometimes a file contains much more than receipts. A researcher can be hired to photocopy the contents of the file if you prefer.

    • Judy G. Russell says:

      For any cash or credit sale, I’d definitely go the route of hiring someone to get the file (and everything else you can think of that you might need at NARA at the same time). It’s much more cost effective.

  4. Genevieve Netz says:

    Thanks for the suggestions.

  5. Phil Grass says:

    para 14 ” minimum prize to $1.25″ I assume you mean price.

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