Yazoo land scandal

The Yazoo Land Scandal, Yazoo Fraud or Yazoo Land Fraud was a massive fraud perpetrated by several Georgia governors and the state legislature from 1795 to 1803 by selling large tracts of land to insiders at ridiculously low prices.

The Yazoo Land Fraud is often conflated with the Pine Barrens Speculation which occurred at about the same time and also involved corrupt land deals in Georgia.

Pine Barrens speculation

From 1789 to 1796, Georgia governors George Walton, Edward Telfair, George Mathews and Jared Irwin, while in office made gifts of three times as much land as Georgia then contained. In Montgomery County alone with an area of 407,680 acres (1,650 km²), three men received gifts totalling 2,664,000 acres (10,780 km²). All the grants given in Montgomery County totalled 7,436,995 acres (30,096 km²). In all 29,097,866 acres (117,755 km²) of land were granted in counties that consisted of only 8,717,960 acres (35,280 km²). While single grants were limited to a maximum of 1,000 acres (4 km²) per person, multiple 1,000 acre (4 km²) grants were given to individuals.

Yazoo land scandal

The Yazoo Land Scandal itself had two chapters. It had its origin in 1785 when Governor Mathews signed the Bourbon County Act which organized Bourbon County Georgia, on the Mississippi River (containing the present day city of Natchez, Mississippi). At the same time, a secret society, called the Combined Society was formed with the single purpose of making money by selling land and using influence with politicians to accomplish that end.

Georgia appointed civil and judicial officiers, but under pressure from the U.S. government, Georgia dissolved Bourbon County in 1788. The U.S. government opposed Georgia's actions because at that time, a portion of the land was also claimed by Spanish West Florida and because Native American claims to the area had not been extinguished. The Combined Society faded away.

The second chapter began in 1789 when three companies, The South Carolina Yazoo Company, The Virginia Yazoo Company, and the Tennessee Company were formed in order to buy land from the Georgia legislature. Governor Telfair signed a deal to buy 20,000,000 acres (80,000 km²) of land to the Yazoo companies for $207,000, or about 1 cent per acre ($2.50/km²). The deal fell through when the companies attempted to pay with worthless old currency. The Virginia Yazoo Company was headed by Patrick Henry.

In 1794, four new companies, the Georgia Company, the Georgia-Mississippi Company, the Upper Mississippi Company, and the new Tennessee Company managed to convince the Georgia state assembly to sell them more than 40,000,000 acres (160 km²) of land for $500,000. Many Georgia officals and legislators happened to be stockholders in these companies. On January 7, 1795, Governor George Mathews signed into law the act of the legislature agreeing to sell the 40 million acres.

There was widespread public outrage when the details were revealed, reaching all the way to the U.S. capital. U.S. Senator James Jackson led the reform efforts, resigning as Senator to be elected Governor. The bill authorizing the Yazoo land sales was repealed in 1796, and Jackson burned all copies of the bill except for one that had been sent to President George Washington.

But the matter was not over. The state refunded money to persons who had purchased land, but some refused the money preferring to keep the land. But the state did not recognize the claims and the matter was to wind through courts for the next decade. However, the state ceded all claim to lands west of its present border, along with the legal disputes, to the U.S. in 1803.

The matter reached the U.S. Supreme Court in 1810, and the Fletcher v. Peck decision ruled that the sales were binding contracts and could not be retroactively invalidated.

See also: Political scandals of the United States, Historic regions of the United States