The Knox-Duer Purchase
“WERE I to characterize the United States,” wrote the English traveller William Priest in 1796, “it would be by the appellation of the land of speculations.”89 This characterization could well have been applied to the young nation for the preceding fifteen years at least. Though there had been speculation in land and in commerce during the colonial period, scarcity of surplus capital, difficulties of communication, the lack of a uniform currency, and other factors combined to prevent speculative activity on a large scale. Once the Revolution had started, however, conditions changed. Like other wars, the struggle for independence produced its crop of profiteers, many of whom had made large fortunes by the end of the conflict. As early as 1779, Caesar Rodney could complain that “those termed speculators are as thick and industrious as bees, and as active and wicked as the devil himself.”90 With the coming of peace, opportunities for speculation increased. Despite the postwar depression, Americans with surplus funds to invest became more numerous. The 1780’s saw, too, the appearance on the American scene of European speculative capital, the establishment of close relations between European bankers and American monied men, and a growing realization on the part of Europeans that the United States offered an almost unparalleled field for investment. The 1780’s saw as well the gradual development of interstate economic institutions, particularly banks, with the result that American capitalists, concentrated in a few cities, came into closer and closer communication. With the ratification of the Constitution and the adoption of the Hamiltonian financial program came a further stimulus to speculation, as these measures brought relative stability to American finance, and as the Hamiltonian program itself made possible increased speculation in both state and national debt.
The familiar story of speculation in government securities and bank stock need not be recounted here. It was simply the most striking manifestation of speculative enterprise during this period. Furthermore, under the pressure of this boom, a close working relationship was established among the capitalists of Boston, New York, Philadelphia, and Europe which could be utilized for financial adventures in other fields. Land speculation had by no means ceased during the 1780’s; and though it had been temporarily eclipsed by the boom in government securities, it proved all the more attractive once the security market had become stabilized. Then it was that many of the same European and American speculators who had been active in the purchase of stock turned to American lands. The result was a boom in wild lands all over the country, with Ohio, Georgia, and the western parts of New York and Pennsylvania proving the most popular areas for investment. A few years later Talleyrand could write that land speculation was producing all the great fortunes in America and that Europeans who invested their capital in American wild lands would never have cause to repent it.91
In the midst of this land bubble, it is not surprising that the wild lands in Maine should have been noticed and examined as a possible field for profitable speculation. Nor is it surprising that with the failure of the lottery scheme, the Massachusetts Land Committee should see in the country-wide boom in wild lands a rare opportunity of unloading some of their hitherto unmarketable property. Foremost among those speculators interested in Maine stand Henry Knox and William Duer. Not only were they first on the field. The very magnitude of their purpose, namely, to corner all the wild lands available for purchase down east, gives them distinction. For sheer nerve, if for no other reason, these two men deserve a prominent place among the speculators of their day, for they embarked upon, this grandiose scheme with almost no financial resources of any kind.
General Henry Knox
Promoter of the District of Maine
Unfinished portrait by Gilbert Stuart
Henry Knox, soldier of the Revolution, was Boston born and bred. Though he had made his living as proprietor of “The London Book-Store” in his native town prior to the Revolution, he had early shown an interest in military affairs and had been active in the local militia. In 1774 he had married Lucy Flucker, daughter of the then royal secretary of the province and a granddaughter of Samuel Waldo, who had acquired extensive land holdings in Maine. As the Revolution approached, young Knox declared himself for the patriot cause, a move which completed the break between him and his wife’s Tory family, who had opposed the marriage from the start. Once hostilities had begun, Knox hastened to enlist under General Artemas Ward and rose rapidly in the army as a specialist in artillery. During the winter of 1776 he performed the difficult feat of bringing to Boston from Ticonderoga the pieces of artillery which Ethan Allen had taken from the British the previous spring. It was this same artillery, mounted on Dorchester Heights, which forced the British to evacuate Boston, taking with them all of Knox’s Flucker inlaws. Colonel Knox’s reputation from this exploit won him a place on Washington’s staff, where he distinguished himself throughout the remainder of the war. After the surrender at Yorktown, Knox—now a major-general—assumed command of the West Point garrison pending the final peace negotiations and during this period was the leading spirit in the founding of the Society of the Cincinnati.
With the coming of peace, General Knox returned to Boston for a brief period, where he served in 1784 as one of a commission appointed by the General Court to treat with the Penobscot Indians on the subject of their lands in Maine. The year 1785 found him again in public service, this time as Secretary of War under the Confederation. During the dying days of this government, Secretary Knox was one of the leaders in the movement to establish a stronger federal authority, and when the Constitution was drawn up, he played an important part in getting the instrument ratified in Massachusetts. His wide experience in military matters and his friendship with Washington prompted the latter to retain Knox as his first Secretary of War, a position which he was to hold through 1794.
The courage and daring which had distinguished Knox as a soldier were not unmixed blessings in times of peace. He soon became launched on a variety of speculative enterprises most of which eventually led either to financial difficulties or to nothing at all. In 1787 he had been helpful in getting through Congress bills which authorized the sale of huge tracts of land to the Ohio and Scioto Companies. He had grandiose plans for developing the Waldo Patent in Maine, which he had acquired through his wife’s inheritance. He was one of the backers of the Massachusetts Canal Corporation, held scattered lands purchased for speculative purposes in other parts of the country, and was always interested in any get-rich-quick venture that happened along. Though he was never accused of peculation, his conduct as Secretary of War in connection with army contracts disclosed a willingness to favor his friends. Through it all he and his wife lived extravagantly. Knox soon acquired the title of the “Philadelphia Nabob,” and his damn-the-cost attitude led eventually to bankruptcy. Early in 1791 he had discussed with his friend William Duer the possibility of a land speculation in Maine and soon the two were deep in plans for carrying out this venture.92
Knox’s associate, William Duer, had had an equally varied and colorful career. An Englishman by birth, he had served for a few years in India under Lord Clive, only to leave that service to try his hand in the American colonies. In 1768, armed with a contract with the British navy to furnish masts and naval timber, he arrived in New York and soon had negotiated with Philip Schuyler the purchase of a large tract of timberland above Saratoga. By 1774 Duer had decided to remain permanently in America and when the Revolution broke out, he proved an active patriot, serving consecutively as delegate to the New York Provincial Congress, the New York Constitutional Convention, and finally, in 1777, to the Continental Congress. It was there that his determination to rise from a sickbed and cast his vote helped to forestall the machinations of the Conway Cabal.
After 1780 Colonel Duer left public service to devote himself to mercantile affairs and soon became a wealthy man. He was an active promoter of the Bank of New York and attempted with others to set up an international banking house to replace the Dutch in the handling of American loans. He was one of the prime movers in the Scioto Company, a scheme to purchase vast tracts of land in Ohio and unload them on unsuspecting Frenchmen. His marriage to “Lady Kitty” Alexander gave him increased social prestige, and his range of business activities continually widened. He returned to public service in 1786 as a member of the Treasury Board and in 1789 became Assistant Secretary of the Treasury under his friend Alexander Hamilton. As Assistant Secretary, Duer used his public office to further his own ends. Acting on information which his intimacy with Hamilton made available to him, he proceeded to organize a syndicate of European bankers and American stock jobbers to invest heavily in both federal and state debt, in anticipation of their being eventually paid at par. After six months in office, he resigned his post in the Treasury to devote all his time to speculative concerns. Not content with his extensive activities in the field of public securities, he plunged into land speculation as well. In 1791 he was apparently still at the height of his power, undaunted by the failure of the Scioto scheme and unwilling to admit that bankruptcy was staring him in the face if he did not retrench.93
Knox and Duer had had several business associations before 1791. Several of the latter’s army contracts had been gained with the assistance of the Secretary of War, both had participated in the Scioto affair, and both were active in public stock speculation. Duer was interested in devising a means of salvaging something from the wreck of the Scioto Company; Knox’s holdings in Maine, together with his influence with Massachusetts politicians, led him to explore the possibilities of speculation down east. As their plans matured, they found that one of Duer’s associates, William Constable94 of New York, was interested in the same object, and to avoid competition in dealing with the Massachusetts Land Committee, they offered to take Constable in. By June, 1791, the final agreement had been reached.
Knox-Duer Agreement, New Brunswick, 2 June 1791 [KP]95
1791. Principles of agreement between Henry Knox of the State of Massachusetts, but at present residing in the State of Pensilvania, for himself, and associates, and William Duer of the City and State of New York, for himself and associates, relative to the purchase of lands belonging to the State of Massachusetts situate in the Province of Maine, viz.:
1st. The parties agree to be jointly and equally interested in purchasing of the State of Massachusetts in one or more tracts situated in the Province of Maine a quantity of land, not less than one million, or more than four million of acres.
2d. In the purchase above mentioned it is understood and agreed that Henry Knox, and William Duer may associate in their respective proportions such parties,, as they may think proper, subject to the general regulations for directing the negotiating and future management of the above purchase as are pointed out in the fourth article.
3d. The price to be given for the lands is not to exceed twelve cents per acre, although the price in contemplation of the parties is at present no more than six; the periods of payment to be fixed at not less than five annual installments; and as many more as can be obtained.
4th. It is understood and agreed that the said Henry Knox and William Duer are to have the exclusive direction of all matters relative to the purchase of the above lands, the sale, settlement, or hypothication of the same. Except Mr. William Constable of the City and State of New York shall at any time within six months express in writing by a letter directed to Henry Knox and William Duer his consent to become a director in the above concern, in which case he is to be admitted. Provided, nevertheless, that in the determination of all measures relative to this concern the consent of Henry Knox shall be necessary.
5th. It is agreed that Henry Jackson of Boston in the State of Massachusetts and Royal Flint96 of the City and State of New York are to be the agents authorised to negotiate and conclude the proposed purchase, agreably to such instructions, as they may receive from the directors, but in case the said Royal Flint should decline, or be unable to attend the business, the said William Duer is to be at liberty with the approbation of Henry Knox to appoint another gentleman to act in his stead.
6th. The agents appointed by the directors are to be authorised to admit such individuals as they may think proper into subordinate interests of the purchases in question, to an extent not exceeding one quarter part of the same, subject however to the following principles, viz.,
1st. That the subordinate purchasers shall be subject to the regulations established by the directors.
2d. That the persons for whom the agents act shall have a right at any time within three years to purchase of them, or the persons acting under them, their respective proportions at a price not exceeding three hundred per cent on the rate of purchase.
3d. That if the subordinate parties interested in the association should wish to sell, they shall in the first instance make an offer in writing of their respective proportions, to the principals for whom the agents act, who shall have a right to accept of the same at any time within thirty days from the date of the offer.
4th. That the principals shall always have a right to sett off to the subordinate purchasers their respective proportions of the land purchased on principles to be agreed on betwixt themselves and the agents for negotiating the general sale.
5th Article. In negotiating the purchase it is understood and agreed, that the agents appointed by the directors are to endevor to obtain of the State the whole or part of the following conditions of purchase.
1st. A power to sell any part of the above lands or to mortgage the same to the citizens or subjects of foreign countries so as to secure their property in the same as effectually as if they were natural born citizens.
2d. An exemption of taxes for ten years, or as long a term as can be obtained.
3d. A right to obtain deeds of the whole, or any part of the said land whenever approved real or personal security shall be given for the same, and in proportion of such lands as they may pay for, not less than fifty thousand acres.
4th. An allowance of— acres per head for every foreign artist or manufacturer not now resident in America who may settle under them on the said land and become a citizen of the State within the space of ten years.
5th. A discount on the anticipated payment of the annual installments, exceeding the rate of interest to be allowed the State.
6th. An allowance of five per cent for highways in the general purchase.
7th. That all the purchasers shall be subjected in as small a degree as possible to any terms of settlement, and that not to commence, under five years.
8th. That commissioners should be appointed from time to time to judge of the security offered by the purchasers, and to give deeds.
7th. That when the above purchase shall be made and completed, or as soon afterwards as either of the above named Henry Knox or William Duer shall request the same, these principles of agreement shall be drawn into legal form, so that the said parties, and their associates, and their heirs and executors shall have and enjoy all the benefits of the purchase herein intended.
8th. In order to secure to the concerned free access to the sea, it is hereby understood and agreed, that in case any part of the lands intended to be purchased shall be bounded upon, or contiguous to the Waldo Patent so called, that Henry Knox will cause a township, or such parts thereof as shall not be disposed of, lying upon the bay or river of Penobscot, or such other rivers within the said Waldo Patent as shall be agreed upon, to be attached to and considered as part of the concern herein contemplated; the other party making him a reasonable allowance therefor.
In the Presence of Henry Jackson, John Lane
- (Signed) H. Knox
- W. Duer
It is scarcely surprising that the Secretary of War should wish to have the negotiations conducted by agents, since the propriety of his engaging in this type of speculation was open to question. Nor was Duer’s reputation such as to give a solid aspect to the venture. The agents elected to negotiate with the Massachusetts Land Committee were old and tried friends. General Henry-Jackson of Boston had been a brother officer of Knox’s during the Revolution and a close friend ever since. As a bachelor and a man with no settled career, he had time and devotion to give to his friend and throughout the intricate dealings which followed, he never wavered in his devotion to “Harry” Knox.97 Royal Flint bore a similar relationship to Duer and had served as a trusted lieutenant in most of the former’s enterprises.98 These two subordinates were to carry on the negotiations with the Massachusetts Land Committee and once the purchases had been made, assign them to the principals. So that there might be no misunderstandings as to the procedure to follow, Knox and Duer drafted a set of instructions to their agents the same day their agreement was signed:
Knox and Duer to Jackson and Flint, New Brunswick, 2 June 1791 [KP]99
New Brunswick in the State of New Jersey
June 2d. 1791
Enclosed you have a copy of an instrument executed by us in behalf of our respective associates, for the purchase of a tract of land belonging to the State of Massachusetts.
The objects we have in view, and the mode in which we wish the contract to be obtained are generally pointed out in this paper: as circumstances however may arise which may render a variation necessary we leave it to your discretion to make it, deviating in as few instances as possible from the spirit of our agreement, especially as to the price of the land, the quantity to be contracted for and the periods of payment. It is of great importance that no time should be lost in carrying our plan into execution, and in doing this you may have occasion possibly to employ counsel, and to make other expences, necessary for the attainment of the object. These expenditures we will defray in full confidence that they will only be made where necessary, and with as much oeconomy as circumstances will admit of.
If the Committee appointed by the legislature should not be competent to the object of a sale on the principles we wish, and can be disposed to come into our views, an application to the legislature had best be avoided. We are sensible that there are some of the principles on which we wish a purchase to be made (such as enabling aliens to hold land, etc. etc.) [which] cannot be effected by the authority of the Committee. But if they are in other respects well disposed (if the terms of settlement should not render the purchase insecure), you had best conclude with them, than hazard a legislative decision. This observation is however founded on general principles: the propriety of its application in the present instance you will be best able to determine on. It may however be necessary to remark that it has been intimated to us that the Committee are not disposed in favor of large purchases—from a jealousy of monopoly, and perhaps other causes. In this case names may be made use of to obtain the whole land we want by different applications varying in some instances in order to avoid suspicion of combination. Should an application to the legislature be necessary no time should be lost in securing an interest favorable to our object, and in then coming forward with such an offer, as in their present temper they will judge liberal.
In making the location you will endeavor to obtain the best information relative to the lands, whether survey’d by the State or not; always giving preference to the townships that shall have been actually survey’d contiguous to navigation and settlements, all other circumstances being equal. On the quality and situation of the lands will materially depend the benefit of the purchase. It is more than probable that four millions of acres well located will cover all considerable tracts of cultivable land, in which case the purchase of half would operate as a monopoly of the whole and enable us to fix the price. You must therefore use your highest exertions to obtain on this point the most authentic information.
It is understood that the Indians have some sort of claim to the lands on Penobscot River, founded on a certain resolve of the legislature or convention of the State of Massachusetts in the year 1775.100 It will be proper after the principles of the purchase shall be generally settled to advert to this circumstance, as an argument for lessening the price of the land. At any rate the assistance of the State should be stipulated for to extinguish the same, at as short a period as may be, to be defined in the agreement. It will be important that the tracts to be purchased contain as much of the seabord and as many islands as possible. You will therefore make this a principle [sic] object of your attention.
Correspond with us by every post, and when necessary dispatch an express. Write to us separately directing the letters for William Duer, to New York; those for Henry Knox to Philadelphia.
William Kerin Constable of New York
One of the Leading Speculators of the 1790’s Portrait by Gilbert Stuart
So that the agents might be free to purchase whatever land in Maine seemed most promising, one other obstacle had to be removed. Samuel Ogden of New Jersey,101 another speculator, had secured the refusal of certain tracts of land on the Kennebec. He must be prevailed upon to relinquish this claim without being given the details of the pending negotiations. This task Knox undertook to accomplish by promising Ogden a slice of the profits at some later date.102 Ogden then dutifully wrote the Massachusetts Land Committee, relinquishing his claim as directed.103 With these preliminaries firmly established, it was up to the two agents to produce the desired result.
General Jackson, throughout the history of this speculation a most energetic subordinate, set out at once for Boston. Upon his arrival he soon learned that the Massachusetts Land Committee had power to sell all the unappropriated land in Maine, but that they wanted fourteen cents an acre and were chary about selling more than one million acres to a single party. Perhaps Ogden had better hold his claim for a while, Jackson suggested. They might need him to act as front for some of the purchase.104 Believing that an appeal to the General Court might remove the Committee’s scruples as to the size of the purchase, Jackson made such an appeal and reported that the desired result had been obtained and that the Committee was now authorized to sell two million acres.105 The problem of limiting the size of the purchase troubled Knox not a whit. Simply use different names, he wrote Jackson; let Royal Flint represent another company if need be. Now was the time to get a cool four million acres, Knox thought—now or never.106 Meanwhile, General Jackson neither slumbered nor slept and by 23 June wrote that a preliminary agreement for two million acres at ten cents an acre had been reached.107 Since the location presented a problem, he had obtained a forty-five-day period, during which time a decision could be reached as to whether to take the full two millions between the Penobscot and the Schoodic, or whether to take one million there and another million on the upper Kennebec.108 As a result of these negotiations the following contract was drawn up on 1 July 1791 and the venture was off to a propitious start.
Jackson and Flint-Massachusetts Contract 1 July 1791 [BP]109
Commonwealth of Massachusetts
Articles of agreement made and entered into this first day of July one thousand seven hundred and ninety one between Samuel Phillips, Leonard Jarvis, and John Read, a major part of the Committee for the sale of unappropriated lands in the eastern parts of this Commonwealth, of the first part; and Henry Jackson and Royal Flint for themselves and associates of the second part, witness as follows, viz.:
It is hereby mutually covenanted and agreed by and between the parties aforesaid of the first and second part that the parties of the first part shall sell, and they do hereby in behalf of the said Commonwealth contract to sell to the parties of the second part two millions of acres of eastern territory on the east side of Penobscot River including all the Lottery Townships which are ungranted (excepting such parts thereof as the adventurers in the land lottery are entitled to by virtue of any existing act or resolve of the General Court) also Township No. 9 on Cobscook south branch110 and Township No. 6 on Schoodick River,111 the residue to be bounded easterly by the river Schoodick and by a line running north from the source of the said river and westerly by a line running six miles east of the river Penobscot and parallel to the general course thereof and the tract to extend northerly from the Lottery Townships between the east and west lines or boundaries abovementioned until a line running east from the river Penobscot to the river Schoodick or to a line running north from its source shall compleat two millions of acres including water, but exclusive of four lots of three hundred and twenty acres each to every township or tract of six miles square to be reserved for the following purposes: one for the first settled minister; one for the use of the ministry; one for the use of schools; and one for the future appropriation of the General Court: the said lots to average in goodness and situation with the other lots in the respective townships, and also exclusive of a tract or tracts (not exceeding five) equal in the whole to one tract of six miles by thirty to be reserved for the use of the Commonwealth in such part or parts as the parties of the first part shall judge best adapted for furnishing masts in case such tract or tracts shall be found as in the opinion of the parties of the first part shall be suitable for this purpose and not otherwise. The said tract or tracts not to be laid out within six miles of any boundary lines except the north and to be located within two years from this date, but no part of it to be located in the Lottery Townships unless laid out within one year from this date. Provided however that the parties of the second part may take one million of acres at the south part of the tract beforementioned, and one million on the Kenebec, beginning on Kenebec River on the north line of the second range of townships above the northern bounds of the Plymouth Claim, being twelve miles north of said claim as surveyed by Samuel Titcomb and laid down on a plan executed by Samuel Weston in one thousand seven hundred and ninety, and extending on the same course with the abovesaid line eighteen miles east of Kenebeck River and on the west side of said river to the dividing line between the counties of Cumberland and Lincoln being about twenty three miles from the said river, and from each of the two points at the extremity of the line above described runing east and west a line to extend north until another line running east and west shall comprehend a million of acres including water, but exclusive of the reservation for public uses and for masts as beforementioned. The reservation of the land for masts to be made in either or both of the said tracts as the land shall be found best adapted for the purpose, but not to exceed in the whole the quantity of six miles by thirty. The purchasers to make known to the parties of the first part their option in forty five days from the date, as to the locations herein before expressed.
It is hereby farther covenanted and agreed that the parties of the second part shall, and they do hereby contract to, purchase of the parties of the first part, two millions of acres of the land aforesaid and to pay to the Treasurer of the said Commonwealth at the rate of ten cents for every acre of land and water that may be conveyed to them conformably to the first article and to allow an interest of six per cent after twelve months from the date hereof, the payments to be made at the periods and in the proportions specified in the third article.
It is farther covenanted and agreed by the parties of the second part that they will compleat the payments according to the instalments as proportioned in this article in which the interest stipulated to be allowed in the second article is involved with the principal as follows, viz., five thousand dollars in forty five days. Twenty five thousand dollars on the first of June, seventeen hundred and ninety two. Thirty thousand dollars on the first of June, seventeen hundred and ninety three. Thirty thousand dollars on the first of June, seventeen hundred and ninety four. Thirty thousand dollars on the first of June, seventeen hundred and ninety five. Thirty thousand dollars on the first of June, seventeen hundred and ninety six. Thirty thousand dollars on the first of June, seventeen hundred and ninety seven. Thirty thousand dollars on the first of June, seventeen hundred and ninety eight. Thirty two thousand eight hundred and two dollars on the first of June, seventeen hundred and ninety nine. All the foregoing payments to be made in specie, and on failure of payment of any of the preceeding sums at the periods respectively mentioned, such deficient payments to be on interest at six per cent per annum from the time of such deficiency, till discharged.
In order to secure the fulfilment of the two preceeding articles the parties of the second part do hereby covenant and agree to procure personal security such as the parties of the first part shall approve of to the amount of sixty thousand dollars to be divided into eight parts for which eight obligations shall be given, respectively conditioned for the payment of the several sums hereafter mentioned: One for five thousand five hundred dollars payable the first of June, seventeen hundred and ninety two. One bond for six thousand dollars payable on the first of June, seventeen hundred and ninety three. One bond for six thousand five hundred dollars payable on the first of June, seventeen hundred and ninety four. One bond for seven thousand dollars payable on the first of June, seventeen hundred and ninety five. One bond for eight thousand dollars payable on the first of June, seventeen hundred and ninety six. One bond for eight thousand five hundred dollars payable on the first of June, seventeen hundred and ninety seven. One bond for nine thousand dollars payable on the first of June, seventeen hundred and ninety eight. One bond for nine thousand five hundred dollars payable on the first of June, seventeen hundred and ninety nine. Said obligations to be considered as security for part of the sum stipulated to be paid in each year in the third article.
The parties of the first part do farther covenant and agree that the said Commonwealth shall and will execute good and sufficient deeds of the lands aforementioned to the parties of the second part or their legal representatives as often and whenever they shall have paid for any quantity not less than one hundred and twenty five thousand acres at the price stipulated in this contract, subject however to the conditions expressed in the following articles.
It is hereby mutually covenanted and agreed by the parties, that should the parties of the second part choose to make payment of any or all the sums specified in the several instalments prior to the respective periods when the same shall become due, they may have right so to do and on the anticipation of any payment such a discount shall be made therefrom as shall leave a sum to be received by the Treasurer of the said Commonwealth which with an interest of six per centum paid annually would have compleated the payment so anticipated at the period it would have become due.
The parties of the second part do farther covenant and agree to place on the land they have stipulated to purchase four hundred settlers within five years from the date hereof and at the rate of two hundred annually for three years afterwards, and then at the rate of three hundred and seventy five annually for the four years next succeeding, which will make in the whole two thousand five hundred settlers in twelve years.
It being an important object with the said Commonwealth to secure the settlement of the lands in the manner expressed in the seventh article, it is hereby covenanted and agreed by the parties of the second part that the said Commonwealth shall be held to give deeds only of one half of the lands that may be paid for till the terms of settlement as before expressed are complied with, or till the stipulations in the ninth article shall be fulfilled.
The parties of the second part having stipulated to pay for the lands at earlier periods than they are obliged to compleat the number of settlers, and also having a right to anticipate the payments stipulated in the third article, it is hereby understood and agreed by the parties of the first part that the parties of the second part shall, notwithstanding what is expressed in the eighth article, be entitled to receive clear and compleat deeds of the whole quantity of land paid for, provided that at the time of requiring such deeds they shall have deposited in the treasury of the said Commonwealth thirty dollars of the six per cent stock of the United States for each and every settler deficient of the number stipulated to be placed on the land, but it is understood that the number of settlers for which a deposit is to be made for the purpose of obtaining a deed of land which shall have been paid for, is to bear the same proportion to the quantity of land for which deeds are demanded as two thousand five hundred settlers bears to two millions of acres.
It is hereby farther mutually covenanted and agreed that the six per cent stock which may be deposited by the parties of the second part in the treasury of the Commonwealth of Massachusetts to secure the settlement expressed in the seventh article shall be restored to the parties of the second part in proportion as they shall put the number of settlers on the lands at the several periods specified, and thirty dollars of the aforesaid stock shall be forfeited to the said Commonwealth for each and every settler which shall be deficient of the number stipulated at the respective periods, the interest accruing on the unforfeited six per cent stock while in the treasury, as aforesaid, to be for the benefit of the parties of the second part.
It is hereby agreed by the parties of the first part that the lands contracted for in this agreement shall be surveyed by surveyors under oath, to be by them appointed and within twelve months of this date at the expence of the Commonwealth, and shall be exempted from state taxes for the space of ten years to be calculated from the date hereof and a plan of the lands so surveyed shall be delivered to the parties of the second part within two months after the surveys are compleated.
It is hereby agreed by the parties of the second part that each and every settler now on the land whereon improvements were begun before January, one thousand seven hundred and eighty four shall, on paying to the parties of the second part five dollars, be quieted in the possession of one hundred acres to be laid out in one lot so as to include his improvements, and that each and every settler whose improvements were begun since the first of January, one thousand seven hundred and eighty four shall, on paying to the parties of the second part twenty dollars, be quieted in the possession of one hundred acres of land to be laid out in one lot so as to include his improvements. In both cases every settler shall receive a deed to hold the land aforesaid to him, his heirs and assigns forever, within two years after the parties of the second part shall receive a deed of the same land if the said settlers shall make payment as aforesaid within the same period. And to prevent dispute a settler is understood to be a male inhabitant of twenty one years of age or upwards who shall have taken up a certain parcel of the land with intent to dwell thereon and shall there be established in carrying on some trade or in cultivating the soil. And all such settlers quieted according to this article shall be considered as part of the settlers which are required to be placed on the land by virtue of this agreement.
It is agreed by both the contracting parties that within sixty days after the surveyors shall return a plan or plans of the tract or tracts hereby contracted to be sold, either of the parties of the second part being notified thereof, the parties of the second part will make to the Treasurer of the said Commonwealth, in addition to the bonds mentioned in the fourth article, eight other bonds respectively conditioned for the payment of the several sums and at the respective periods hereafter mentioned, viz., One bond for nineteen thousand five hundred dollars payable on the first of June, one thousand seven hundred and ninety two. One other bond for twenty four thousand dollars payable on the first of June, one thousand seven hundred and ninety three. One other bond for twenty three thousand five hundred dollars, payable on the first of June, one thousand seven hundred and ninety four. One other bond for twenty three thousand dollars payable on the first of June, one thousand seven hundred and ninety five. One other bond for twenty two thousand dollars payable on the first of June, one thousand seven hundred and ninety six. One other bond for twenty one thousand five hundred dollars payable on the first of June, one thousand seven hundred and ninety seven. One other bond for twenty one thousand dollars payable on the first of June, one thousand seven hundred and ninety eight. And one other bond for twenty three thousand three hundred and two dollars payable on the first of June, one thousand seven hundred and ninety nine. The eight bonds last mentioned with those described in the fourth article compleating the sums stipulated to be paid by the third article. And that the said Commonwealth shall and will make and execute to the parties of the second part, their heirs and assigns forever, sixteen good and sufficient warranty deeds bearing date with the bonds abovementioned. Each of the said deeds to convey one sixteenth part of the tract or tracts herein contracted to be sold. Beginning at the southerly and progressing to the northerly part of the said land, all the deeds aforesaid to be deposited in the hands of three persons such as both the contracting parties shall agree on and to be by them delivered to the grantees in the following manner, viz., One of the said deeds on the payment of the bonds which conformably to this and the fourth article shall become due on the first of June, one thousand seven hundred and ninety two. And one other of the said deeds on the payment of the bonds which shall become due at the expiration of each of the seven next succeeding years. And one other of the said deeds to be delivered as aforesaid on the performance of each and every eighth part of the settling duty as stipulated in the seventh and ninth articles. Provided that no deed shall be delivered till the bonds which shall have become due previous to the bonds given for the lands described in the deed applied for, shall have been cancelled.
In Witness Whereof both the contracting parties before named have hereunto interchangably set their hands and seals the day and year herein first mentioned.
(The words “in behalf of the said Commonwealth” in the 2d line of the first article and the words “the first part” in the 23d line of the first article, the words “said Commonwealth shall and” in the 25th line of the 13th article, and the words “good and sufficient warranty” in the 27th line of the same article were interlined before signing.)
Signed, sealed and delivered in presence of
- David Morey
- Thomas Wallcut
- Samuel Phillips seal
- Leonard Jarvis seal
- John Read seal
- Henry Jackson seal
- Royal Flint seal
Agents and principals alike were pleased with the contract, as well they might be, considering the price. If he had asked for more than two million acres, the whole deal would have fallen through, wrote Jackson; nor could he purchase any land between the Penobscot and the Kennebec; nor the Indian claims.112 Just how best to locate the lands, in line with the option in the contract, was a matter for serious consideration; if the entire two million were taken between the Penobscot and the Schoodic, the tract would reach north “to the Devil,” said Jackson, for the maps of that country were by no means accurate.113 Meanwhile he urged the purchase of one half of Mount Desert and of Trenton, presently owned by Bartolemy de Gregoire and wife—it “opens a wide door” on the rest of the purchase, he said. This land had been granted to the De Gregoires in 1787 by the Massachusetts General Court on the basis of an early French grant to Cadillac, Madame de Gregoire’s grandfather. Though the legislature insisted that no precedent was to be established by their action, they were desirous of recognizing the bonds of friendship between France and the United States, thus the grant. The De Gregoires had not been able to make their property pay, and were known to be willing to sell. Acquire this valuable property, urged Jackson, and access to the lower million from the sea would be an accomplished fact and the value of the whole lower tract increased by twenty-five per cent.114 The principals agreed on this point and by the end of July, Jackson had closed with De Gregoire for the purchase of his tract at sixpence per acre.115
During this same month Jackson had written to Phineas Bruce, a lawyer and one of the leading citizens of Machias, to get information on the lower million, the tract between the Penobscot and the Schoodic.116 Bruce in reply had urged the speculators to take one million there and the other million on the upper Kennebec. The land was good for grazing, he said, but he thought they would do better not to put all their eggs in one basket.117 When this report was forwarded to the principals they sent the following instructions to their agents:
Knox and Duer to Jackson and Flint, New York, 30 July 1791 [BP]118
New York 30 July 1791
We authorize and request you in pursuance of your agreement in our behalf with the Commonwealth of Massachusetts for the sale of the lands in the Provence of Maine to locate one million of acres on the river Kenebec and the other million of acres [?] between the river Schoodick and Penobscot both tracts being more particularly defined in your agreement with the said Commitee executed on the first day of this present month.
Independent of the foregoing two millions of acres and in addition thereto, we authorize and request you to negociate for another million of acres, [to] join the million lying [?] between the Schoodic and Penobscot, as particularly described in the aforesaid agreement which you entered into with the said Committee on the 1st instant and which additional million will complete the two millions lying between Penobscot and Schoodic described in the said agreement. The terms to be the same in all respects as for the first two millions or as nearly thereto as possible.
And we also request that you would endevor further to negociate or put into a train of negociation in our behalf the purchase of all the land lying on the east side of Penobscot River so as that the aforesaid two millions may be entirely extended up to the said river of Penobscot and join thereon. This purchase you have informd us cannot be effected without the concurrance of the legislature. But the influence of the Committee for this object may now be obtained and the purchase completed at the next meeting of the legislature.
If you could possibly induce the Committee to enter into a conditional agreement for this last object subject to the approbation of the legislature it would be an important and desireable circumstance.
For your services in the purchase of the first two millions of acres we hereby agree to allow each of you the residuary proffits arising upon the sale or other negociation of one hundred thousand acres of the said lands. And legal instruments to that effect shall be delivered to you as soon as they can be properly prepard.
Relying on your best exertions for our interest we are with esteem
Your sincere friends and humble servants,
(Signed) H. Knox
Royal Flint, Esquires
The only sour note thus far in the whole venture was sounded by Samuel Ogden, who was outraged at having his claims ignored. He detested men who unjustly took advantage of him, he said, and thought Duer’s conduct would disgrace an Israelite. Obviously, he had received nothing in return for relinquishing his claims to the Kennebec.119
The fall of 1791 found the principals and agents sanguine about the speculation. General Jackson approached the Massachusetts Land Committee on numerous occasions with offers to purchase another million as directed by Knox and Duer. But he found the Committee hesitant about selling any more large tracts without getting the approval of the General Court. A “parcel of Old Women,” Jackson thought them.120 Negotiations were suspended for the rest of the fall, while agent Jackson devoted himself to the needs of a company of French émigrés interested in settling in Maine, under Madame Bacler de Leval and Jean Baptiste de la Roche, as will be recounted in a later chapter.121 By December, however, with the prospective French customers back in New York, attention could again be turned to the acquisition of additional land. By this time, the principals had determined to extend their operations much further, as the following letter of instructions shows:
Knox to Jackson, Philadelphia, 17 December 1791 [KP]122
Philadelphia 17 December 1791
General Henry Jackson
It is our desire to purchase of the State of Massachusetts all the unsold townships to the southward of our million of acres, laying between the Scoodic and Penobscot Rivers. These townships from the imperfect information we possess appear to be marked on the map No. 7, 8, 9, 10, 11, 12, and 13 west of Machias. But if there should be any others belonging to the State they are to be included in the purchase you may make.123
You may conduct this negociation either with the legislature or Committee of Eastern Land as you may upon your mature information and reflection judge proper.
You will endever to obtain them at as low a price as possible. Our opinion is that fifteen or twenty cents per acre would be a good price for the State. But you must purchase them at all events even if you should be obliged to give much higher, and most especially you must purchase Nos. 8 and 9 and as many others as you can.
You will endevor to obtain the same terms in all other respects as for the two million you and Mr. Flint contracted for in June last. We flatter ourselves from your knowledge of the subject that you will conclude the bargain in such a manner as to price and other terms as to merit our full approbation. We shall therefor depend upon you to make the earliest arrangements on this subject at your arrival at Boston, and inform us severally of your progress therein.
It is our desire to establish two or more convenient harbors on the sea coast to serve as ports to the above mentioned million of acres lying between the Scoodic and Penobscot Rivers, and also an entrance upon Passamaquoddy Bay on the east and another either from Penobscot Bay or River on the west. The great depth of water and easy communication to each of these harbours will be essential. It would be also important that we shall own as much land as possible lying on the harbours and places proper for the erection of towns. The points which have appeared to us as most proper for this purpose are:
1st. On Passamaquoddy—part of Townships No. 1, 2, 4, and 5
- Part of Machias
- Blue Hill
- and No. 6 on Blue Hill Bay
3rdly. Penobscot or Bagaduce on Penobscot Bay, and part of the Townships No. 10 and 11 at the head of the tide on Penobscot River
We are aware we are now speaking of private property. We authorise you in our behalf to make the enquiries relatively of the above places. We desire to have at each port from 5 to 10,000 acres or an agreeable quantity of good land of a main place [?] making in all 30 or 40 or even 50,000 acres more or less.
The price and terms of payment must be left in a great degree to your judgment. We suppose however that as you have been offered the Gouldsborough lands at twenty-five cents per acre the other places may be obtained at or nearly the same sum. It will however be proper that the installments be arranged in the following manner, provided better terms cannot be obtained, to wit, one fourth on signing the deeds, the second fourth in nine months afterwards; the third in two years, and the last in three years from signing the deeds with interest.
We have before written to you relatively to the purchase of another million of acres for us in the Province of Maine. We now give you particular instructions in conjunction with Royal Flint. This part of these instructions we therefore addressed to him as well as to you.
We should chuse if possible that a million of acres to join [sic] the west part of our lands between the Schoodic and Penobscot Rivers and thence extending up to and bounding upon the said river Penobscot from the head of the tide and extending north on both sides thereof for about forty miles, so as to comprehend a million of acres, the State to extinguish the Indian claims. We should be willing to give for a million so located from fifteen to twenty cents if not to be had cheaper and on same terms of settlement and payment as you obtained for the two former millions purchased in June last.
The second best location in our opinion would be between the Kennebec and Penobscot Rivers always as far south and as much on the navigable waters as possible. The third location being the least desirable would be the lands lying back or north of the million already located between the Scoodic and Penobscot. But with respect to this location it is to be observed strongly that the claim of the British government that the river Scoodic should be considered as the St. Croix would be embarrassing extremely were we to purchase any land to the north of the Scoodic. It is therefore to be avoided decidedly. But as much land as lies to the westward and southward of the said river might be purchased safely, provided however it should be well ascertained to be of good quality and to be southward of the mountains which divide the waters running into the St. Lawrence from those running into the Atlantic.
But we would greatly prefer the first mentioned million on Penobscot and secondly the million lying between that river and the Kennebec. If either or both of those tracts should be attainable you might go to the sum of the fifteen or twenty cents above mentioned, if after having tried all your powers at negociation you should fail to obtain it at a less price, and provided also the other terms should be the same as you gave for the former two millions.
Having thus invested you and Royal Flint jointly with our joint authority in the premises we rely that you will execute it with all due dispatch and intelligence for our interest.
It is probable that notwithstanding these instructions, in order to avoid imputations of monopoly, we may think it expedient to send a person to make the purchase ostensibly, but he will act under your directions entirely, to be the ostensible negociator.
Again Jackson got to work, this time with more effectiveness. In January he reported that he could probably get six townships back of the seashore for about twenty cents an acre, but he was disturbed to find bidding from another quarter, for the rest of the land north of the million between the Penobscot and the Schoodic. This territory, from now on known to the speculators as the “back tract,” must not fall into other hands, Jackson insisted.124 The opposition in this case, as it later developed, proved to be an agent for a New York company named Richard Soderstrom, who, with the backing of Alexander Macomb,125 was endeavoring to acquire large land holdings in Maine. Macomb had written to William Tudor126 of Boston to assist Soderstrom in the purchase, especially in dealings with the Massachusetts Land Committee. Arrangements were also made with Thomas Russell of Boston to help with the financing of the purchase.127 Jackson started the bidding early in March with an offer of eleven cents. Tudor immediately countered with one of twenty cents. Though this was clearly much more than the lands were worth, their location gave Jackson no choice but to go to twenty-one cents.128 Lest Tudor bid the price even higher, as he threatened to do, Jackson bought him off with a thousand-guinea note to stop the bidding.129 The next year, when Knox, at Jackson’s request, was looking into this business, he discovered that Tudor had probably deceived Jackson about the whole transaction:
Knox’s Statement on Tudor Note [KP]130
23 February 1793.
Mr. Soderstrom this day has informed me that his offer of twenty cents per acre to the Committee in March 1792 for lands, specified precisely they should be bounded on the rivers of Penobscot and Scoodic.
That in consequence of this power of General Jackson to the said Read the Committee informed Soderstrom, or rather his agent William Tudor, that although the offer of twenty cents was liberal yet that General Jackson had offered more. That upon receipt of this letter, and knowing the lands alluded to for which General Jackson had offered twenty-one cents were not upon the rivers, that he Soderstrom declared to Mr. Tudor that he would go no farther, nor would he give any thing for the lands for which Jackson had offered the twenty-one cents.
Well, replied Tudor, as Jackson has acted in this manner you cannot have any objection to my making him pay for the said lands without involving you, to which Soderstrom replied no.
Upon which Tudor without authority commenced the operation with Jackson and obtained from him the note for one thousand guineas.
Soderstrom has promised to show me the correspondence between the Committee and him of which I will take copies with his permission. Soderstrom must be made to declare the same things to Major Jackson, and perhaps he may obtain Soderstroms permission to copy these letters.
The question is whether under these circumstances the note was not fraudulently obtained.
1st. The competition was not for the same lands.
2dly. Tudor asserted an untruth when he asserted that he had authority to go to thirty cents.
With Tudor out of the picture, General Jackson was now free to close with the Committee. On 23 March 1792 he signed a contract for Townships Nos. 8, 9, 10, 11, 12, and No. 7 north of Gouldsborough, at a price of twenty cents an acre, and on 18 April the “back tract” of at least another million acres was similarly acquired for twenty-one cents. In each of these contracts, provisions for payment, public lots, settling duties, and the like followed closely the pattern of the agreement of the preceding July. By these three contracts with the Commonwealth, Knox and Duer had acquired well over three million acres and possibly a good deal more.131
As far as quantity of land was concerned, the speculators were well supplied. Yet their holdings were all situated back from the seashore. It therefore became necessary to open more doors on the interior tracts by purchases from individuals who held coastal property. Here, too, Jackson proved indefatigable. The purchase of Mount Desert and part of Trenton has already been mentioned. Now the good General went ahead to purchase a tract on the harbor of Gouldsborough from William Shaw,132 who had inherited from Francis Shaw, one of the original grantees of the town. Shaw assured the agent of the excellence of the land and harbor, said it was cheap at the 1/6 per acre price, and, as will be noted later, prophesied that a full-fledged port might one day be developed there.133 In 1789 the Massachusetts legislature had granted the Beverly Manufacturing Company £500 worth of land in Maine to encourage cotton manufacture in the state. Early in 1792, in accordance with this resolve, the tract was finally located in Township No. 7, north of Gouldsborough. Since this was one of the townships Jackson wished to buy, there was nothing to do but buy out John Cabot and the other proprietors of the Beverly Company for £500.134 Finally, part of the present-day Jonesborough was purchased from one John Lucas, some 6,000 acres at 1/3 per acre.135 The following letter, written at the height of the business, shows how involved the enterprise had become:
Jackson to Knox, Boston, 25 March 1792 [KP]136
Boston March 25. 1792
Your favor of the 14th instant came to hand by the post last evening.
The 1,366 2/3ds dollars which I drew on Colonel Walker137 was to make the first payments to Mr. Lucas and Mr. Shaw agreeably to the purchases I have made of them on your account. The 2,800 dollars I have not drawn for, as a draft on New York at this moment is a very unpopular thing. I have therefore writen to Mr. Flint to bring or send me on eight thousand dollars for the following purpose, viz.,
First payment 6 townships
do 12 do G. Dearborn
Supplies Fountain Laval by Colonel Jones and forward’d by order Colonel Walker
To make first payment Mr. De Gregoire and expense of surveys the purchase, purchasing a farm Fountain Laval138
As I am every moment call’d upon for monies on account of purchases made, and to be made, I ought to have at least one thousand dollars allways in advance, but this is not the case, as I have never had one penny in hand from the first of this business, but on the contrary I am this moment in advance for the concern.
Besides the engagements mentioned above I have directions to purchase Colonel Jones tract of 7 or 8,000 acres laying in Trenton, which he will not sell under 3/ lawful money per acre. Also four or five farms in No. 8 and 9. I have imployd Major Trescott to make these purchases and I expect every day his draft for the first stipulation, which I engaged him should be duely honourd.139 As to a bill on New York it is out of the question, therefore I can have no assistance from that mode. You will then see the necessity of some monies being allways in my hands to comply with my engagements.
The inclosed copies of papers and letters will inform you the situation of the proposed purchases, with the directions I have received on that head. I please myself that my conduct and exertion will fully meet with your approbation. The 11th instant I forward you the copy of my letter of the 9th to Mr. Flint by express,140 and also my proposals to the Committee of twenty one cents. You will observe by the paper signed by my competitor, that I have given him my note of hand for one thousand, guineas, payable in twelve months. This was necessary as I had every reason to believe, he would bid twenty two cents, as he gave me his honour he had directions to go to that price, or higher if he please’d; this being the case, I advised with my friends, and show’d them the letters I had received on the subject, and it was their opinion, I ought to make the purchase at all hazards, and on the best terms in my power, that every cent on a million acres was ten thousand dollars, and the thousand guineas was less than a half cent, and the field would then be my own. Considering the positive directions contained in Mr. Flint’s letters of the 26th and 28th February and also of the 12th instant by the return of the express, I concluded to give the note, as you will observe by the paper signed by him the 17th instant.
Mr. Flints letter of the 17th instant has given me much pleasure, and I hope he will come on here immediately agreeably to my letter to him this day. I am much gratified to learn that you are not connected with Mr. D. in any money matters that may injure you. This information gives me infinite pleasure. I had my fears and was made unhappy on account of it. On Saturday night I expect to hear from you on the subject of the canal.141
Let me know Mrs. Knox’s determination with respect to her visit in this quarter and the time I may expect her, and every thing shall be prepared for her reception. I shall wish to know the number that will be in her family, that I may make the necessary arrangements. I shall find a difficulty in procuring bed and table linnin. It will therefore be best that you send a trunk of these articles round by water. Everything else I can provide for. You will give me the necessary information in season.
My love to Mrs. Knox and your family, my best respects Mrs. Flucker.
To my great disappointment I believe Doctor Eustis will decline the appointment. I am clear in it he cannot justify it to himself.142
Nor did Jackson stop with these purchases. Acting again on Knox’s instructions, he prepared to purchase the rest of Trenton, made inquiries about the possibilities of further acquisitions on the upper Penobscot and in the area north of the Waldo Patent, and discussed with General Henry Dearborn the transfer of twelve townships between the Penobscot and the Kennebec on which the General had acquired an option. Since the Massachusetts Land Committee refused to sell more than one township to a customer in this region, Dearborn had been obliged to get eleven of his friends to take up options for him, thus getting secure control of all twelve townships. Though none of these tracts was ever actually purchased, it is significant that the appetite of the speculators for land in Maine was still insatiable.143
The speculation had thus far been conducted on a shoestring. If the “back tract” contract is included, the promoters had bound themselves to pay to the Commonwealth of Massachusetts and to various private individuals somewhere between four and five hundred thousand dollars, while as yet something under ten thousand dollars had been paid in. Having successfully obtained a near monopoly of the wild land between the Penobscot and the Schoodic, the speculators must now pay for it. Twenty-five thousand dollars was due on the first contract within sixty days after the completion of the survey, a task which the Land Committee reported was almost accomplished. Jackson had given his note for five thousand dollars to bind the “back tract” contract, another obligation which was fast becoming due. Payments on the purchases from individuals were eating up whatever spare cash could be scraped up, not to mention the expenses of the French colony, which will be noted below. Into the middle of this precarious financial situation was now hurled a thunderbolt in the form of Duer’s failure in March, 1792, and his eventual confinement in debtors’ prison. To make matters worse, at the same time the government instituted a suit against Duer in connection with various unbalanced items in his accounts while he was a member of the Treasury Board.144 Since Knox’s financial position was equally shaky, Jackson began to fear that the contracts would go by default.
There followed the most tortuous maneuvering, as Duer attempted to extricate himself from the toils of bankruptcy. His share in the Maine venture was the most valuable asset he had that was not already attached. Accordingly, he determined to try every possible method to cash in on his holdings. In April rumors reached Knox of a new concern that Duer was forming to handle the Maine property. In anxiety, the Secretary of War wrote to Royal Flint:
Knox to Flint, Philadelphia, 8 April 1792 [KP]145
Philadelphia April 8 1792
I am in debt to you two letters, the first dated the 29th ultimo, the last the 5th instant.146 I should have replied to the former immediately had I not expected the proposals to which you alluded.
I beleive Mr. Duer meant well to me relatively to the eastern lands, and that he intended to have executed liberally the spirit of the agreement between us. I have been expecting to hear from him some mode by which the business was to be pursued.
I am sorry I confess that any method should have been taken by you to form a new association without his full concurrence and approbation. I have ever held you as worthy of full confidence and I feel satisfied that in the steps you have taken you have not done any thing inconsistent with yourself.
The demand General Jackson made for the money was indeed sudden. He ought to have been aware of the state of things and gained more time, but perhaps that was impossible.
I pray you to inform who are the persons you have admitted as associates, and upon what terms they have made the advances and what are the proportions they are to hold. That they [?] will not militate with the two millions purchased the last year must be clear. The six townships are indispensably necessary to the former purchases and they cannot and must not be seperated from it.
As candor is the basis of friendship and of confidence I must pray you to be precise and particular in the business of the new concern which you have formed. As Mr. Duer and myself were the principals in that business, we ought to have been previously consulted. And it appears to me to be equally necessary that you should also inform Mr. Duer of the particulars. I am sure neither of us will be wanting in liberality. I hope you and Mr. Duer still continue to have a good understanding with each other. I shall not mention any thing of your first letter, but it appears necessary that he should be informd of the measures taken relatively to a new concern. A generous man in his situation requires the utmost attention of his friends. I am desirous therefore that he should continue to repose entire confidence in the friends.
Please to answer me explicitly these two queries:
1st. Upon what terms could a new association be formed (supposing Mr. D. and myself consenting thereto) to embrace the whole concern not much less than four millions of acres, the new associates as a condition of their being received to make all the advances required this year as well as those to be required annually hereafter until publik [?] be sold whether for the payments on the new purchases, the payments on the remaining quantity between Scoodic and Penobscot, the advances to Madam La Val and the payments to the State on June next, the whole amounting to a sum not exceeding 50,000 dollars; that is, for what proportion would they make the said advances?
2dly. How much money or six per cent stock would they give Mr. Duer and myself, or either of us, including the amount to refund yourself and General Jackson, were we to relinquish all claim whatever?
Apparently nothing came of this scheme of Duer’s, for in June he drew up a new agreement with Knox to buy out the latter—an astonishing move in view of his financial condition. By this new arrangement, Duer was to pay the $25,000 soon to be due to Massachusetts, pay Knox $37,500 for his rights in the concern, and give General Jackson a mere $3,750 for his pains.147 Jackson was puzzled by this turn of events; he and his friend Knox had got the worst of the bargain, he was sure.148 Again, however, Duer failed to pay anything, and by July Jackson was turning to the Dutch agent, Theophile Cazenove,149 for help. But this source proved as unpromising as the others, and Jackson wrote Knox that the situation was really becoming desperate:
Jackson to Knox, Boston, 22 July 1792 [KP]150
Boston July 22. 1792
My dear Harry:
Your favor of the 15th is before me. Not a word from Duer or Flint since I wrote you, nor do I expect to hear from them until I make a visit to New York. My situation is disagreeable in the extream and I cannot see where it will end. The Committee are so much dissatisfied with our conduct, that I every day expect they will sue me for my 5,000 dollar note. They will never consent to relinquish the half of the first purchase. I suppose they would have no objections to our giving up the first two purchases, and to hold the last at the twenty one cents.
Mr. Cazneau is here with whom by appointment I have had a conference on the subject of our concern; he introduced the business with his professions of friendship for you, Colonel Duer, and Madame Laval, and it was his wish and desire to serve you and lend a helping hand to extracate us out of our present embarrasments, provided it could be effected without too much risque, and a prospect of some emolument to himself. Much was said on the subject, as I placed the business in several points of view in which I supposed he might have engaged, but I soon found him a man of address, as he evaded every proposal I made. In the conversation it was very apparent that he was satisfied we were unable to proceed in the contract for the want of the necessary funds, and that we must finally give it up, as it was out of our power to obtain them. It was evident to me that he and others are upon the watch to take advantage of our situation. As to his friendship, detach’d from his interest, it is my opinion it will not weigh a feather.
Mr. La Roche and Madame Laval are here, and are much enraged and distressed on account of their situation; they see no prospect of proceeding, and to give up the object is death to them. I feel very sensibly on their account and they are really to be pity’d. As it respects ourselves it is of the first consequence to promote and encourage that settlement, for on that in my opinion depends the present and future importance and emolument of all our purchases, and therefore every nerve ought to be exerted without loss of time to set the wheels in motion, and all we want for this purpose is 30,000 dollars, by the strength of which we make a sale of 300,000 acres at half a crown. This will give a neat profit of at least 122,000 crowns, besides which we establish a settlement that will give an immense value to the remaining tract, and effectually comply with our settling duty. That is certainly a consideration of the first magnitude to the concern, therefore it must and ought to be pursued.151
As the million acres on the Kennebeck are so far detached from any part of our other purchases, from that I think we may raise what funds we want for present purposes. To put that tract up for sale at publick auction in the market of New York or Philadelphia, condition’d on our contract with the Committee, except the settling duty, which we would take upon ourselves, as we should have every prospect of complying with the terms of settlement on both millions on the one we should retain, and we to pay the first 25,000 dollars, which will be considered to answer the first payment on the two millions—in that case those who may make the purchase proposed will have no payment to make to the government until 1793 in June, which then will be only 15,000 dollars. Under these considerations I should suppose we could sell that million at fifteen cents per acre free of any terms or conditions of settlement. That would give us a neat profit of 50,000 dollars. That sum would answer all our purposes, and in fact the purchaser would give an advance of only two cents per acre, as the settling duty amounts to three, which he would be entirely free from, and likewise he will have no payment to make until 1793, which in some measure will reduce the two cents advance. The million proposed for sale may be totally unconnected with others in every point of view, that there cannot be any dificulty on that head, and when the deeds are made by the government that million can be made out in the name or names of the persons who may buy it. If fifteen cents is too much, say fourteen, or thirteen. This last sum is on the same terms we bought as the difference is only three cents, which is exactly the settling duty, and that we comply with.
If we cannot do any better, sell that million for ten cents on the same terms we bought it, the person to advance 30,000 dollars—half of which to be considered on our account and loan’d to us for a certain term of time. The other half would operate as the proportion of their first payment. I am satisfied that something of that kind may be done which will put the business in a train of operation and give satisfaction to all parties. It may certainly be made a good speculation, by which you and myself ought to make something that will compensate us for our trouble and make us smile on the world ever after—only let me have the funds—I will do all the rest, you and every body may keep your names out of sight. I will give five years of my life to the completion of this object. I have health, strength, and knowledge of the thing sufficient to pursue it, and no exertion of mine shall be wanting to render the business of importance to the concern.
I have written Duer and Flint without any effect sometime past. I have therefore given up writing to either of them. They know my situation and I am willing to believe they would give me relief if in their power.
I very much dislike a grey or white horse—a bright bay is the colour most agreeable to me. I am in no hurry, therefore wish it may be a bay.
Jackson to Knox, Boston, 29 July 1792 [KP]154
Boston July 29. 1792
My good Friend:
Yours of the 23d I have received. Colonel Duer must be a strange man indeed not to have writen you of his situation and prospects. He certainly saw the necessity of it, or why did he inform me he intended it that very post.
The first and second purchases are of importance, and we must not from any cause let them slip thro’ our hands, unless we can obtain a satisfactory compensation. But Harry the last purchase is a damnable one and big with every disagreeable circumstance of which we shall not, nor cannot get clear of on such easy terms as you imagine, for I assure you the Committee are much dissatisfied and are determined to hold me strictly to every point and condition of the agreement. This being the case my situation is a very disagreeable one. For you must remember they have my note of hand for 5,000 dollars payable on demand with my bond for 10,000 dollars more. And Tudor has my note payable next February for 4,500 dollars, of which he will never relinquish one farthing. From this state of facts you will judge of my anxiety and embarrassments.
Mr. Cazneau left this for New York yesterday. I believe it is his intention to take the advantage of our want of ability and endeavour to get the whole of that first purchase into his own hands without a proper and ample consideration, therefore be on the look out.
Mr. De Gregoire has disappeared ever since I tender’d him the money, but I have taken every measure of the law to bring him to a compliance with the terms of his agreement. I have sent Mr. Bruce down to Mount Desert to make an attachment of the property for fear he may be rogue end’ to convey it under cover to some other person. On Friday a deed was put into my hand as from him, which he was willing to sign, but that I refused to accept. I accordingly prepared another which he has under consideration. I am to have his answer tomorrow. I think he will comply with it, as he cannot help himself. This business must be brought to a close before I can set out for New York; it is the only thing that has detain’d me the week past. I know he wants my money, which I have ready to pay the moment the papers are executed. From this circumstance I expect to finish with him in a day or two, which if I am able to effect, it is my intention to set out in the stage, tomorrow week, that is Monday the 6th August, therefore you will not write me after you receive this. My receipts of expenditures etc., I shall bring on with me.
Isaac Winslow has writen to his brother Samuel on the subject of your offer, but he has not heard from him. Oliver Smiths deed is sent to Lincoln and Hancock to be recorded, but I have not yet made a new one.155 I hope you will be able to meet me in New York, as it will be exceedingly disagreeable in this warm season to visit Philadelphia, indeed it will be death to me.
James, your coachman, is a drunken fellow. Yesterday Mrs. Knox dismiss’d him. I hope to be able to procure her another, but they are very dificult to procure, such a one as will fully answer her purpose. They will write today. They are all well.
The more agent Jackson thought about it, the more convinced he became that Duer must be bought out. Unless he took his name and management out of the concern, he would damn the most favorable prospects.156 Late in July Royal Flint had promised Jackson money by the middle of August, but when that date arrived, Jackson was still empty-handed.157 Jackson was finally prompted to journey to New York City—“Hell at this season of the year,” he wrote—only to find as much confusion as ever, Duer without funds, rumors of Cazenove’s trying to take advantage of the situation, frantic plans to rewrite the contract with the French settlers so as to bail out all those involved in the sorry business.158 Jackson returned to Boston with as gloomy a view of the future as he had had when he left.
Early in September Knox decided to try his hand again and began negotiations with a New York capitalist named William Green159 to see if he might possibly be the angel who could rescue all concerned from their trouble:
Knox to William Green, Philadelphia, 12 September 1792 [KP]160
Philadelphia 12 September 1792
Mr. J. Jarvis161 arrived here the last evening, and departed in the mail stage this morning so that I had not time to write by him. From your letter of the 5th instant and from his communications, I shall place entire reliance on your furnishing in due season the sum of 20,000 dollars and also upon the further sum of 5,000 dollars to complete the payment which will become due in sixty days after the survey shall be notified; and upon the punctuality of which, the validity of the agreement with the State will most materially depend. General Jackson on the 2d instant informed me that the notification of the survey’s being completed might be expected by the every post. I shall also depend upon your exertions for the reimbursement to me of five thousand dollars, and for the further payments in January and February next of about 9 and not exceeding 10,000 dollars, one half of which will be due the State for the six sea coast townships, and the other half for Goldsborough, No. 7, and little Machias.162 When I take the liberty of saying I shall depend upon your exertions to produce the last mentioned sums, I meant it in the qualified sense until you shall inform me that you declare so to do, and that you will hold only the proportion which the 25,000 dollars may bear to the 39, or 40,000 dollars.
But when I reflect on the advantages you would experience, both as to the present modifications of the property, as well as the ultimate proffits, by holding it in equal proportions with myself, I trust you will strain every nerve to embrace the whole object, and thereby prevent the evil of our being embarrassed with a number of different wills.
It is to be regretted however that the sale from Mr. Duer is not completed, and that it may be even considerably procrastinated, by his hopes of obtaining better terms. I shall write him this week, and endevor to bring him to a decision. But at the same time it is but candid in me to declare that my hopes are not sanguine as to any speedy result, although from the reasons he stated to me, I firmly believe he will ultimately find it most for his interest to sell his right to me for a valuable consideration.
I think from the unreserved manner in which you and I conversed, and from Mr. Jarvis’s opinion thereon that we understand each other perfectly well; yet as it possibly may be otherwise, in order to prevent mistakes I beg leave to repeat the substance of what I judge to have been our conversations.
First. To purchase out Mr. D. in such terms as should be agreed upon.
2dly. Messrs. Jackson and Flint have an obligation for the residuary proffits each of 100,000 acres, which probably they may not be inclined to sell, but if otherwise, to purchase them out also if it shall be judged proper.
3rdly. The two foregoing objects being arranged the property to be held in equal parts, between you and myself. On condition that you make all the future payments, as well for the sums before mentioned of 39, or 40,000 dollars, as all the remaining installments of sums, either to the State, to individuals, or to Mr. D. And also for any sums we shall ultimately be obliged to pay, to the State, or to Mr. Tudor, for the non performance of the last contract for back lands. The utmost amount of this last mentioned object cannot exceed ten thousand dollars, but it may eventually be evaded, or compromised in a much less sum.
4th. If Mr. D. should procrastinate his decision until the agreement shall be in danger of being lost, would you make the half, or the whole of the advances (as the case may require) first contemplated, not exceeding the 39, or 40,000 dollars, on the best terms we can make with Mr. D.? The object of this question is to secure the purchase at all events—and depending always on an arrangement with Mr. D. which we can make it his interest to accept.
Your mature consideration and favorable answer to this letter would render it unnecessary for me to endevor to find any more partners in the concern.
I have not seen Mr. B.,163 nor communicated with him since my return. Before my arrival he was obliged to leave town, nor have I mentioned the prospects to any person whatever. I believe it would be for our mutual interest to keep the transaction entirely to ourselves for the present, therefore to prevent surmises I do not frank this letter.
I am dear sir etc.
Green appeared favorably inclined to Knox’s proposals:
William Green to Knox, New York, 26 September 1792 [KP]164
New York 26 September 1792
I wrote you a few lines yesterday evening referring to mine of to day, and now reassume the details of the pending business. I did not before mention the reimbursement to you of five thousand dollars, expecting to have seen you here so very soon. I have however now to add that I will accept your bill to that amount drawn any time after the 1st. of next May at 60 days sight payable as the rest are in London. So far I trust that matter is duly arranged.
With respect to the loss on the back lands provided it be remote and eventual, and I have seen no data as yet upon that head, and provided it does not exceed the sum you have mentioned of from 5,000 to 10,000 dollars, it does not strike me as an object of any present very material difficulty.
One part of your remark on my third answer to your proposition respecting my giving a credit to draw, I do not so well understand. When a merchant gives a credit to draw, it is sufficient, so that if any note is ever required to give security with his credit, the thing is unknown. If you enquire into the practice of men of business you will find me right and therefore I deem this explanation all that is necessary to add to place that point in a just view.
When I proposed the acquiescence in certain facilities it was with this view, I have it in idea to negociate a loan upon the lands in London and to give stock of the U.S. or bank stock as security for the regular payment of the interest. I do not therefore wish to put that plan beyond my reach, neither is it agreeable or proper that I take off from the general currency of my circulation as a merchant. The people, either of Holland or England, do not like to lend money without deriving from it a productive income, and it would be found extremely difficult to put this matter into agreeable movement without an impetus derived from other property.
It is impossible to fix a price for the land at this day but the sale ought not to be made at less, all things considered, than Macomb’s or Morris’s;165 but it must be governed by relative circumstances, and unless you can have perfect confidence in the honor, talents, and industry of the agent, as well as in the power of all his resources, this negociation had better be now suffered to expire a natural death.
I have yesterday given my opinion respecting a co-associate, to manage this business with me in Europe; from that opinion I cannot recede.
I must repeat again my idea that the postponement of the second payment is within the terms of the contract, and it is certainly desireable because money resources will be wanting to accelerate and effect an early and advantageous settlement.
What I understood Madam Lavel was to effect was this, that the six per cent stock should not be demanded, in case of the failure of settlement, and also that bonds for 60,000 dollars to be given by persons approved by the State should be dispensed with. This is what my letter meant by the term collateral security. The bonds to be given by us for the remainder of the real purchase money, exclusive of the first payments, I conceive to be direct not collateral obligations.
I also understand that joint engagements shall be entered into for the satisfaction of Mr. D., and that I am to agree to make the payments to him, to which I do not object provided the payments are at reasonable periods.
I do however think it absolutely necessary to get rid of Mr. D. as to the business; his name will totally poison all sort of negociation in Europe as well as here. It is at present between you and him a joint and indeed legally a partnership concern, and you cannot be separated but by his consent. As to the language which he may employ with respect to the payment of his 12,500 or 20,000 dollars, as his proportion, admitting he effects it, he will never do any thing more, and we shall then be under the necessity of continuing the future payments for his amount or of forfeiting our advances. You cannot see this truth too plainly nor feel it too forcibly. It is pregnant with risk and danger to the person making the advances, because he may not only lose his profits, but his capital also. And in this respect, possibly, I might be a material sufferer. It is therefore on this ground particularly that I imagined your presence necessary here very soon. The negociation with him is the key stone of the arch, and should be at once brought to a close.
You can however ascertain without my coming to Philadelphia whether this business between you and Mr. D. is legally divisible and separable into two parts, so far as respects the contract with the State of Massachusetts. I do not think in law that you are mutually bound, and reciprocally responsible for each other.
But perhaps if no other expedient be devised, Colonel D. and yourself may jointly assign the property to me in trust, the form and conditions of which might be hereafter devised. Yet this strikes me too as a desperate resort. But if the parts and connection be deemed legally divisible, I have no objection to acquiesce in the fourth proposition. Here my injunction of secrecy prevents my consulting counsel, and indeed so many of them are connected with his numberless suits, that it would not be very prudent to lay the case at present before them.
I do now believe that I have discusd all the propositions in your several letters and that we are near being at par as to the means to be put into action. You can therefore have the substance of my letters put into the form of a conditional agreement immediately and send it on here to me as soon as possible as it is not convenient to me at present to leave this city, as the scene of negociation ultimately must be here with Duer, and as you will be so soon here as the 10 insuing and it appears at present that that circumstance is the only material one attended with any difficulty. I congratulate you most cordially on the addition to your family and am happy that Mrs. Knox is so well. On the 14 I had the addition of a son to my stock.
I am very desirous to have this matter absolutely decided without delay as two or three propositions ultimately advantageous have been opened to employ my funds. I am much obliged to you for the copy of my letter of the 18; I have none of this as of any other that I have written to you, but I can obtain them hereafter.
I have the honor to be very respectfully
Dear sir, Your most obedient humble servant
After a tentative understanding had been reached, the two approached Duer and succeeded on 21 October in drawing up a thirty-day agreement to buy out the bankrupt partner. Duer was to get $50,000 for his rights in the enterprise and be reimbursed for whatever monies he had advanced in the cause of the concern. Knox, Green, and the firm of Shaw and Randall were to give bonds as security for payment.166 This apparently successful solution to the problem was voided, however, when a dispute arose over the bonds. Since Green was off for Europe in the near future and since he had little real property in this country, Knox was afraid that “by some fatal accident” he might have to pay the bonds.167 Nor was Duer himself any better satisfied. He flatly refused to go ahead with the transaction unless better security could be offered.168 As the end of the year approached, the future of the speculation looked as black as ever. Back in Boston Jackson was still pleading for money; Duer now refused to budge; and Knox was desperately looking for some one with capital. It was at this point that William Bingham of Philadelphia entered the picture to change the whole character and future prospects of the speculation.