University of Rochester Library Bulletin: Reflections Offered to the Capitalists of Europe on the Huge Profits Made Possible by Buying Uncultivated Lands Located in the United States of America, by Captain Benedict Van Pradelles, Amsterdam, 1792

Volume XXIV · Winter-Spring 1969  ·  Number 2 & 3

Reflections Offered to the Capitalists of Europe On the Huge Profits Made Possible by Buying Uncultivated Lands Located in the United States of America, by Captain Benedict Van Pradelles, Amsterdam, 1792.

--TRANSLATED BY R. W. G. VAIL.



Preface

The author has written this little work solely to inform the public and especially the Dutch merchants that the purchase of uncultivated American lands promises, because of the great rapidity of their increase in value, equal and even more certain profits than those which their thorough business experience and resulting reasoned confidence have already secured for them through their investments in the national bonds of this same country. And he has written it to serve as a guide to those who, inspired by the same principles, wish to enter this new field of speculation.

Having worked hard to make it as easy as possible to examine the subject advantageously, the author dares to flatter himself that he will be pardoned his imperfect manner of expression. If his style is sometimes obscure and incoherent, if his writing is sprinkled with faults, he hopes that those reading it will remember that he did not learn the French language in his childhood. Also that, for more than twelve years, while engaged in the kind of business he is now proposing to the public, he has rarely had an opportunity to practice French, since he has been in America most of the time and generally in the interior. And finally that, his interests then being purely personal, he did not imagine that either that language or literature would ever be of sufficient use to him to compensate for the time and trouble it would cost to attain a degree of perfection which would place him at this moment above the necessity of soliciting, in this regard, the indulgence of the public.

 

Preliminary Reflections

That part of the great western continent discovered by Christopher Columbus which was at first called Virginia or New England is now known as the United States of America. It was founded by the English, not as in the case of Louisiana at the beginning of the century on the uncertain existence of gold and silver mines, the exploitation of which has not even yet brought their proprietors any real advantage, but on the only solid and permanent basis of a colony—the cultivation of the soil. Consequently, this agricultural development, protected by a good government and directed by wise laws, has made the country prosper in a most miraculous manner. It has cleared vast forests and has covered an area of more than 500 leagues [1 league = 2 ½ miles] with civilized men and crops where before there were only savages and wild beasts. It has supplied the means of building and maintaining churches and ministers of the Gospel, public schools and teachers for the instruction of the youth in all branches of education. It has furnished the means of extending her commerce to all parts of the world, of building many cities some of which contain several thousands of houses which, in fact, cannot be equalled in beauty and arrangement on this side of the water. All this has been accomplished in such a short time that the most exalted imagination would have difficulty in conceiving it and would find it absolutely incredible were not the facts so well known.1

It promises, moreover, a still greater increase in prosperity, as much from the way the country peoples itself, as from the way the Europeans are beginning to notice the easy and assured method of making a living and even a fortune there. These advantages are offered to those willing to go there to live and especially to those who desire to buy land with an eye to business. As it is much more profitable for European capitalists to buy land for resale rather than for cultivation, it is from this point of view that I shall examine the extraordinary advantages to be derived at this very moment from the unusual situation in North America. But time is precious and this unusual situation is changing by leaps and bounds and soon will no longer exist. Perhaps even since I commenced these lines these lands have increased in value and that would not be surprising since they have almost doubled in value, in certain places, in less than a year without the aid of foreign emigration.

On the other hand, the discontent which has recently broken out in various parts of Europe and the steady and noticeable disappearance of ignorance and prejudice has, at this moment, fixed a universal attention on these States which their war with Great Britain had only feebly attracted.

They are beginning to realize in Europe that the United States of America is one of the most beautiful countries in the world and that its people live in an abundance unknown elsewhere. It is well known that their new government is built on a solid foundation with the almost unanimous approval of all of the citizens; that since its establishment, civil as well as political liberty is better understood and more respected than in any other country in the world and that justice is administered there with the greatest impartiality. And, finally, it is well known that the laws are so well administered in the best interest of all that manufactures, especially shipbuilding which, together with commerce, had languished under ill-advised regulations, have made an inconceivable advance during the three or four years they have been established.

Domestic taxes, compared with most of Europe, are almost nil. The national debt is very small and their sinking funds immense. Public expenses are less than the public revenue which comes regularly from the customs so that agriculture which, in this country, is more than anywhere else the principal source of wealth, which always flourishes where it is not encumbered by debt and repays with usury the encouragements given it, supports a very small percentage of the national budget. And by sound judgment, with which the nation's laws are administered, she receives the most effective encouragement possible. In fact, the taxes which are of course imposed on all the citizens, are light while duties levied on objects of luxury are very steep so that the rich voluntarily pay nearly all the expenses of government, whereas by this excellent law, the poor man enjoys every protection and immunity possible without prejudice to the common good.

I shall now prove these assertions. First let us consider the extraordinary promptness with which the federal securities have recovered since the new government's financial regulations went into effect. Misfortune, especially because of the long duration of the war, had thrown them into a state of complete depreciation. At the beginning of 1789 they were still more than eight per cent below par but towards the middle of 1791 they had not only returned to par but, moreover, had paid twelve and one-half percent profit. Afterwards, the facility with which the government found the means of securing sufficient revenue to pay regularly each quarter in cash the interest on the public debt, to finance the increased public expenses and to have enough left to establish a sinking fund which cannot help growing in proportion to the rapid growth of population and national wealth, makes it evident that it will not take long to pay off the debt completely.

Perhaps it will be objected that the United States has not paid either France or Holland who lent them considerable sums in the moment of their distress, that, far from it, they have made still other new loans. This is perfectly true and they have also made frequent public expressions of their regret at not being able to fulfill such sacred obligations. But how should a debtor in arrears act to succeed in clearing himself of debt? It is obvious that this can only be done by working with zeal and above all with wisdom at his own affairs. America has done just this and you will soon see her beginning to make payments to the two powers to whom she is indebted2 and these same loans which, at first glance, appear to enlarge the debt, are one of the means which she very wisely uses to reduce it.

In fact she has been paying six per cent annual interest on her old debts but has now replaced them with new loans on which she pays only four per cent. In this way she reduces her total interest a third and increases her sinking fund by that amount. A third proof is the considerable increase in her exports. In spite of agriculture's huge loss, because of the war, of the manpower on which she is largely dependent, her commerce has grown more than ever. It appears, by the report of the Secretary of the Treasury, that the exports of the thirteen months ending in September, 1790, made excellent gains to nearly £4,100,000 sterling. The American wholesalers are beginning to pay with quarterly punctuality for the goods which they import from abroad whereas it was only four or five years ago that they could never remit even at the stipulated times and it was only seven or eight years ago that they were, for the most part, absolutely unable to make the least payment.

In Europe they can no longer ignore the fact that the population of America is growing faster than that of any other part of the world, that her population doubles every twenty years and that this could go on for more than another century without the least inconvenience. Also it ought to be possible for wealth to grow just as fast in a country with so much good land, where all sorts of resources are so abundant and which is so intersected from its center to nearly all parts of its circumference by navigable waters.

The time is not far off when those Europeans who have followed this information to a reliable source, whose superior and enterprising genius is capable of overcoming the numerous obstacles which ignorance, prejudice, faint-heartedness and blind attachment to old habits have piled in a heap to obstruct the road to fortune, and especially the rare men who, in addition to such genius, have large financial resources, will seize with alacrity the favorable opportunity which briefly offers itself to throw a bright light on the soundness of their judgment.

For some years Holland and England have made large sums in this way by investing in United States government securities and the shrewd people who were the first to put their confidence and cash in them were presently getting an annual interest of more than 40 per cent. This has completely restored the credit which had been almost totally destroyed by the unfortunate situation of American finances at the beginning of the war. Since then conditions certainly have changed and the loans which these States have made in Holland and Belgium have met with the greatest success.

At the present time several Dutch capitalists, seeing that there are no more opportunities in American government securities, and being too shrewd to ignore the fact that there are always good speculations in prospect in new countries of which most people have only a superficial knowledge3 and lacking a suitable opportunity [for other investments], sent agents to make extensive purchases [of these American lands]. Here, then, is the right time to make such speculations. Here is the moment when, since they are little known, they sell for such a low price that, however bad the outcome of such an enterprise, it could never result in a loss and, if successful, might gain immense profits which would be infinitely greater than could be promised by any other commercial activity whatever. It is only a question of knowing which are the parts of this vast expanse of uncultivated American lands most suitable for investment with the greatest probability of success.

 

Reasons Which Should Decide the Speculator

Since the general reasons which make this kind of speculation better in one country than in another are known to almost the whole world, I will only refer here to those peculiar to America, namely: the low price of the land and the practice of most Americans of constantly moving back towards the interior of the country. These are the sole arguments which should absolutely decide the speculator, for without the low price there will be little migration to the frontier and therefore no rapid rise in population or in the demand for lands and no quick increase in their value. Consequently, unless one has a great deal of knowledge of the locality before beginning such an undertaking, whatever may be the subsequent success, one ought not to expect in the meantime anything but uncertainties and delays.

 

The Reason Which has Until Now Kept Down the Price of the Wild Lands on the American Frontier

Up to the present time when peace guaranteed these states their independence from Great Britain, the English were absolutely the only ones who could establish new settlements. They alone had the detailed and accurate information and consequently they were then and they are at this very moment almost the only ones who can still profit by the opportunities offered to European capitalists.

The existence of a useful piece of information ought to be known for a long time before careful men should dare to gamble large amounts on it. I am not speaking here of that caution, founded on habitual fear, which certain people have of leaving the beaten track along which they have plodded for long years, but that which has compelled investors, by the involuntary loss of inflated securities, to seek a new field of action.

According to these rules a man is often very prudent who, in the judgment of the many, passes for foolhardy. Therefore most people call him happiest who has made the best bargains. The individual, on the other hand, believes himself very unfortunate because he has made a mistake, whereas the difference between the success of their respective enterprises generally depends on the exact knowledge of the one and the false judgment of the other. It is true that many individuals among the people of  Great Britain have been, for a number of years, in the possession of information on America sufficiently extensive to turn to good account the situation in which they have been for a long time. But there has existed among them, because of the revolution which caused the great political change of which I have just spoken, extreme prejudices which are still far from being eradicated, against the government and inhabitants of this country and consequently against the ownership of all kinds of good investments located there. These prejudices have turned their attention away from advantageous enterprises in which they might have engaged.

On the other hand the local descriptions of these lands are very rare and imperfect; they throw very little light on the nature of the soil and the location of the wild lands. Furthermore, they are hard to find and the descriptions of them, being generally in English, they remain unknown to almost all of Europe. Also the distance from America makes us almost indifferent to her concerns and keeps in the background not only the educated people whose ambition and desire to improve their condition find a large enough field of activities in the cramped circle of their own province, but still more to the most numerous class of all, those whose poverty, ignorance and timidity hold the individuals chained to the land where they were born. From these circumstances it should appear natural enough that few people have, up to now, dared to rush into speculations which are so little known and are apparently so hazardous; and that several tracts of land, in spite of the fact that they are equal in size and fertility and superior in natural resources to most of the best provinces of France and England, have remained in an almost total oblivion, and so should sell at extremely low prices.

 

The Custom of a Large Percentage of the Americans Constantly Moving Back to the Interior of the Country

This custom began only a few years after their first settlement; it still continues and will continue until the country is sufficiently settled to bring the value of the lands to a price proportionate to their fertility, their natural resources, and to the advantages of their location. There are several reasons for this.

The first is the great and rapid growth of the family which is caused by the ease with which it can be raised, encouraged by the fertility of the soil, the many forms of legal assistance to agriculture, and the moderation of local taxes. These circumstances, while promising a constantly rising value of their lands and property, make it unnecessary to work so hard because of anxiety over the future of their children, as to serve as an obstacle to the vows of nature. And so the human race multiplies much more rapidly here than in any other part of the world.

The second reason is, on the one hand, the great fertility of the frontier lands, and on the other, the poor quality and the exhaustion of those near the seacoast, which are now, you might say, the only settled areas.

The third reason is based on the low price to the first settlers and the increased price to those coming afterwards.

The fourth reason comes from the diminution of natural pasturage to be found everywhere in the frontier forests, which feed the livestock without human help during the greater part of the year. This diminution of pasturage is proportionate to the increase in the number of cattle, since most plants growing in the woods do not grow from the roots and so are soon exhausted by the large number of animals in a populated region, and because the loss of that rich and great natural resource decides a great many families to move inland.

The fifth reason stems from the spirit of extravagance to which the example of the rich, that is to say, the most industrious and active, is thought worth copying by nearly all the farmers of the country. This extravagance begins by running them into debt and generally ends by their being threatened with the loss of lands. But, happily, the latter, being by this time much increased in value because of the growing number of people who have come to the neighborhood since the time of their first settlement and selling as settled territory for eight or ten times the value of frontier lands, the settlers realize sufficient profits not only to free them of their debts but, in addition, to acquire in the back country much larger and incomparably more fertile properties than they were compelled to give up. They are thus able to leave to their children not only their fine principles but also the means of following their example which, up to the present, the latter have been only too willing to do.

The sixth and last reason which I shall cite, which perhaps is the most important of all, is an inexplicable and boundless longing always to fall back to the frontier as a neighborhood grows in population and lessens in wild game. This longing rules among those Americans who have once become accustomed to life on the frontiers and have developed a taste for hunting. This class of men, which is already very considerable, is added to every year by the majority of those who move inland whether to pay their debts or to find a richer pasturage for their stock, and by the poorest of the European emigrants.

From these considerations it is easy to see that these removals to the back country will probably be very great and that they necessarily will go to the part of the country with the most local advantages and the best and most firmly established reputation.

As soon as a new fashion is adopted by the "elegants" of the city, it is immediately taken up by some of the leaders, then everybody else wants to follow suit, and happy is the merchant who, either by clever foresight or by a lucky chance, finds himself forewarned or among the first with a supply of the desired merchandise. Equally fortunate is the land speculator who is sufficiently wise to local conditions to be able to give a decided preference to one part of the country over all others and who has been able to assure himself, when the price is low, which lands will soon be or are already in general demand.

 

The Qualities Which the Land Needs to Attract Many  Settlers

I will not expand here on the qualities already sufficiently known to everyone in the least familiar with country life and farming. I will, however, repeat the principal arguments to refresh the memory and especially those arguments that attract the most attention among the Americans, since it is they and not the European emigrants who, because of their removal inland, are growing in numbers. And they are the ones who [on their worn-out and debt-ridden eastern farms] are kept on tenterhooks and in a depressed state because they have forgotten about all the available new American lands. These arguments in favor of frontier lands are: fertility, the quantity and quality of natural pasturage, navigable waters, the healthfulness of the climate, the nearness to markets, hunting and fishing, the number of sites for water mills, the existence and health of sites suitable for the building of one or more towns. There is still one more asset which, however, applies only to that part of the country which already has the beginning of a reputation and population, but which is ready to make that reputation universal and solid and to increase its population and land values at an unprecedented rate. That final asset is the number and quality of the settlers already there and being brought there every day.

 

The American Lands Best Suited to Profitable Speculation

Kentucky, located beyond Virginia and on the bank of the Ohio, has, since the peace, attracted the most general attention and the greatest number of immigrants. Her population which, before that time, was reduced almost to nothing, was after an exact census made by order of Congress at the end of 1790, that is to say, after seven years [since the end of the Revolutionary War], 73,677 souls, not counting 40,000 scattered over the adjacent country. The single year 1786 is supposed to have gotten the state nearly 20,000, so that the land which previously was worth, the one with the other, scarcely thirty French sols [ca. 6 cents] per acre4 is generally selling today at about fifteen to eighteen francs. They generally give twenty-four livres [francs] for those anywhere near new towns. Most of the lands there are already divided among many owners and are, comparatively speaking, well settled. In consequence, they no longer promise that large and sudden increase which is the soul of the proposed speculation. Moreover, the war which flared up in 1788 against the savages in the surrounding territories, and especially the depredations which they frequently carry on along the road there, have almost entirely stopped immigration to that part of America.

Georgia also contains a number of large tracts of good land, but in addition to their too great nearness to the savages, they are in too hot a climate to ever merit that decided preference which frequently obtains in more central locations.

The State of New York has at this moment the greatest vogue and most good unsettled lands. It combines in an incredible degree all the qualities necessary to attract a large population and a commerce of the greatest importance. Among these lands the best and those which, for several years, have attracted the most general attention and have secured the most settlers, are known under the name:

 

Of the Genesee Country—Called the Genessie

This country, named for the river which crosses it from the south to the north, is located on the shores of lakes Erie and Ontario in a temperate climate suitable to all the products of France, between the 42d and 43d degrees of north latitude and between the 12th and 5th of longitude west from Philadelphia. It is so intersected by little lakes and rivers that in whatever place you settle you can never be more than a little ways from one or several navigable waters, so that produce may be carried by water in all directions to the various markets of the country and even by four different routes to the ocean.

The first of these routes which flows to the southwest, is the Alleghany River which, after being joined by the Monongahela at Fort Pitt, takes the name of the Ohio. The latter flows into the Mississippi, which enters the ocean a little below New Orleans, which is located, as you know, on the Gulf of Mexico and in 29° 57' north latitude and 14° 40' longitude west of Philadelphia.

The second means of communication between this country and the ocean is by way of lakes Erie and Ontario, which reach the ocean by way of the St. Lawrence River, whose seaport is Quebec, located in 46° 55' north latitude and 4° 56' longitude.

The third route is to the northeast [i.e., southeast] by way of the Hudson and to that river by two different routes, one of which is to go east by way of Seneca Lake, down the river of the same name, up the Onondaga River and Lake, to Wood Creek, which you ascend for about half a league [1¼ miles] to the Mohawk. You then descend the latter to the Hudson, which it joins a little above Albany where the tides end and ocean navigation begins. Then down the Hudson, passing Albany, Claverack, Hudson, Poughkeepsie and, after having reached the island on which the city of New York is located, the shores of which the river washes on almost all sides, it is discharged into the ocean six leagues [15 miles] from there.

The other way of reaching this river is to the north by way of Lake Ontario, which forms the northern boundary of the entire Genesee Country and into which that river flows, as well as several others of less importance. You leave this lake at Oswego by the Onondaga River, which you ascend to the lake of that name from which you follow the route I have already described and by which route many settlers arrive from the four Northern States.5

The fourth water route from this country to the ocean is to the southeast by way of the Susquehannah River, several branches of which water the western and central parts of this country and at the present time serve as the principal water routes by which the settlers from New Jersey, Delaware, Pennsylvania, and the southeastern part of New York arrive. They go by way of Newton [Newtown or Elmira] in the latter state, Tioga Point, Wilkesbarre, Northumberland, Sunbury, Louisbourg and Newtown in Pennsylvania. The river finally flows into Chesapeake Bay at Havre de Grace in Maryland. After having in this way joined together these three states with a 200-mile waterway, they also join Virginia which covers most of both shores of this great bay.

The chain of lakes of which Erie and Ontario are a part is the greatest accumulation of fresh water in the world. They bring together by inland navigation an extent of country larger than all of Europe, so that when, in addition to that, you consider the respective distances of the ports of entry of the four outlets which I have just described, and all the advantages which agriculture and commerce might draw in the course of time from these immense water routes, you cannot help being struck with astonishment. If you also add to these considerations that of the great fertility of the soil and the health of the climate, you are forced to conclude that this happy land is destined some day to become the greatest on earth.

It is true that up to the present time these water routes have been obstructed, in some places, by rocks and in others by accumulations of stones or dead wood, but you can understand that most of the latter as well as the larger obstructions could be removed and canals dug between the principal rivers which, by their location are susceptible to it, for the sum of 200,000 guineas.6

Many of these useful works have already been begun and several are about to be carried out. In order to succeed with greater certainty General Washington, President of the United States of America, who is as distinguished in the peaceful government of his country, after having saved it, as he was in command of its armies, in the moment of its financial difficulties continually works to increase its wealth and prosperity by all the means his most profound wisdom and most far-reaching enlightenment can suggest to the human understanding. He has just hired in Europe a person of long experience and distinguished ability in the department of canals and locks, to come to this country for several years and there to supervise the carrying out of these works and especially to decide the practicability of new enterprises which they hope to be able to carry out.7

But whatever the result of these measures, the lakes in their present state already assure the Genesee Country a very considerable part in the well-known trade in furs as well as in another which they could easily develop, that in copper.

A large river flows into the western end of Lake Superior on the banks and in the vicinity of which there is a large amount of virgin copper. There are, moreover, around the eastern shore, a lot of little islands which abound in mines of this metal. 8  The ores from these mines have a greenish appearance. They are located in various veins and can be taken out, put in boats and transported very cheaply by water on lakes Erie and Ontario and so make a very profitable sort of business for the country.

Another circumstance, no less interesting for this region, is the discovery that for the past two years they have been making granulated sugar from a tree called the maple and making it as excellent and even of a finer quality than that extracted from cane. This tree is so abundant in this country, as well as in the adjoining regions, that it could not only supply the whole United States but also export several millions of hundredweight to foreign countries.

Seemingly the most different things wish to join the bounty of nature in advancing this country towards wealth and prosperity. At the very moment when the first attempts, always difficult and uncertain, of manufacturing this kind of sugar, are being made with an eye to commerce, this product has risen to such a high price that the most inept could make money at it. Moreover, the decision of several thousand families in America as well as in England to use no more sugar made by slave labor promises a continuance of the particularly high price of this country's sugar which is all made by free men, long enough to considerably increase manufacture in this field. This can be done without the least danger of the failure of the enterprise but with the hope of making a great deal through the establishment of a more permanent business. When this is once well established it will continue to be very lucrative because you can always supply this product at a moderate price. And when you realize that the lands where there are the most maples are generally the best, the number of trees which you have to leave is not great enough to prevent cultivating other crops as well as, at the same time, making a large amount of sugar. On the other hand, this industry calls for little additional work. A man generally makes a thousandweight of sugar in the season which lasts only six weeks at most and comes at a time of the year when farming has scarcely any need for his arm.

To finish the list of the numerous advantages with which this country is favored, I shall add that, in addition to the great number of sugar maples which cover every part of it, as well as a great variety of other trees of the greatest usefulness, the oak which abounds here also offers a great source of wealth by amply supplying the material for the manufacture of potash.

The regulations which the different states have made from time to time for manufacturing in their respective localities have given them, in almost every way, a decided superiority over similar regulations in the greater part of Europe. Those relating to potash are of this number, for the American product is preferred to all others in almost all the workshops where it is used. It is however made on most of the farms of this country and consequently by all sorts of people, but the inspection of it at the seaports condemns the bad potash and saves the reputation of and demand for the good. The excellence of this measure does not limit itself there, but forces the farmer to take to this manufacture such a special care that he is not slow in becoming very skillful and in serving as a model for the newcomers. This business could not help having an importance proportionate to the immense number of oaks in the country and to its population. In fact, the exportation of potash has grown constantly each year, that for 1790 increasing, according to the report already cited, to £231,048 sterling and no one can doubt that, after the intervening growth in population, this exportation would have grown much larger by the following year.

I will conclude the description of the Genesee Country with the translation of an extract from a letter written on the spot and inserted in a little English work on the same country, printed in London during the past year [1791]. After having mentioned several particular locations the author of the letter continues thus: [From: An Account of the Soil . . . , London, 1791.]

"Besides these settlers who actually occupy the Genesee tract, there is an establishment of Quakers, called the Friend's Settlement [named for its leader, Jemima Wilkinson, 'The Public, Universal Friend'], situated on the eastern ridge of the Crooked Lake [Keuka], consisting of 260 persons, who are very industrious, and have already made considerable improvements, having completed an excellent grist and saw mill some time since. It is excepted there will be double that number before a twelvemonth. To the northward of this settlement, twelve or fifteen miles distant,9 at the north-west corner of the Seneca Lake, and about three miles from the boundary of the grant, is the town of Geneva, in the neighborhood of which there are many settlers, and so on northwardly to Lake Ontario, and in different directions for about thirty miles. About twenty miles south from the Friend's Settlement, near the head of the Seneca Lake, is the village of Culvers [Reading Center], and four miles further on is Catherine's Town [Watkins and Havana]. In the neighborhood of these villages there is a district of country bounded by the Pennsylvania line on the south, and the heads of the Seneca and Cayuga lakes on the north, and running east from the Genesee southern boundary, to Owega Creek, in which there are near 600 families settled. Between the Seneca and Cayuga lakes, and particularly to the eastward of the latter, the country is settling very fast, and so on along the east branch of the Susquehanna, to the source at Lake Ocsega [Otsego]. It would be difficult to ascertain the present population of the lands adjoining the Genesee grant, but it may be safely concluded, from the progression of settlements for two or three years past, that in the course of a very few years, the whole country to the eastward of the preemption line will be well and thickly inhabited. The New-England settlers [ceux qui y sont venus des quatre Etats du Nord] 10 who have already fixed themselves on the Genesee tract, have made such favourable reports of the climate and soil, that there are vast numbers of their countrymen preparing to remove thither. Some of these, who at first bought townships [Municipalit√©s] 11 of the original grantees, are selling farms to new settlers at from two to three dollars an acre, according to quality, situation, and other local advantages.

"It is in contemplation at present to make a water communication between the Susquehanna and the Skuylkill, which, if effected, will lay open the market of Philadelphia for the reception of the produce of all the Genesee 12 Country. And as the soil and climate are supposed to be extremely good for the raising of [Van Pradelles' conservative translation of the over-enthusiastic original: the best in the world for raising large and productive crops of] hemp, flax, Indian corn, wheat, rye, barley, oats, buckwheat, peas, beans, and every other species of grain produced in North America, much benefit will be derived to the settlers, by every improvement which can be made in facilitating carriage by inland navigation.

"At present wheat can be sent from the Genesee settlements to Philadelphia, at one shilling sterling per bushel; but if the water communication be opened between the two rivers, the cost will not exceed four pence.

"Dry goods can now be sent to these new settlements at about eight shillings sterling per hundredweight, which will probably be reduced to three shillings, when the navigation is completed.

"No country in the world is better adapted for raising cattle than the Genesee grant. One of the first settlers in that country asserts, that he can every season cut wild grass on his own farm in the Genesee flats sufficient to maintain 2,000 head of cattle through the winter; and that such hay, with rushes and vegetables which are found above the snow, generally keep the cattle fat without any expense. Hogs can also be raised in the woods at little or no expense to the farmer.

"As the distance from Philadelphia (between which and the Genesee lands a road was to be completed in 1791) is somewhat less by land than 200 miles, there can be no difficulty in driving fat cattle and hogs to that market for sale as they can transport themselves at a very small expense, and as the demand for provision increases every year and a liberal price is given for beef and pork there can be no doubt but the rearing of cattle and hogs, as well as horses for sale in the low countries, will soon become a great object of profit to the settlers, as the extensive ranges of meadow ground on the flats, and the blue grass, white clover, and pea vine in the woods must enable the farmer to feed almost any number he can raise or find capital to purchase. . .

"It is said that there are many wild horses upon the tract, which is an additional proof of there being winter food in the flat lands and in the forests."

 

Importance of the Excellent Locations and Good Qualities of the Genesee Lands, and the Reason for Their Remaining Unsettled Until the Beginning of the Year 1788

It would not have been surprising, in view of all that we have read about this country, if, as soon as it was opened for settlement, it had attracted the general attention of all America. Even Europe had already cast its eyes on these shores, as we have observed above. London in particular has gone still farther and, during the past year, has taken over 1,100,000 acres [the English Associates purchase], the sale of which the grandson of the celebrated Doctor [Benjamin] Franklin, the one who was his Ambassadorial Secretary at the Court of France [William Temple Franklin], came over to promote. And that example has already been followed by several of the leading Dutch merchants who have bought at least 200,000 acres. So it can no longer be doubted that, since they have made so much and have even more yet to gain by these land purchases than they did in the speculation in American federal bonds, they will not be slow to see in this new fashion as many speculators as we saw in the other.

But it would seem very surprising that such excellent and such well-located lands have remained unsettled until 1788. The reason for this apparent paradox is that the ownership of the property was disputed for a long time between the states of Massachusetts Bay and New York.

This dispute which has forcibly kept this beautiful country in a state of complete neglect was caused by a mistaken and unrealistic location of the boundaries of the two states in their royal grants from the King of England. It was finally settled in 1787 by commissioners from the two states. Ownership of the soil was given to Massachusetts and its political jurisdiction to New York. That arrangement, which was finally ratified by the two states as well as by Congress, was scarcely finished when two citizens of Massachusetts [Oliver Phelps and Nathaniel Gorham] bought a third of all this great country which is 147 miles long by ninety-six wide and contains nearly seven million acres of land. The success of their enterprise was complete for they quickly sold more than half in small tracts and, in a little more than two years from the time of their purchase, they disposed of all that remained, consisting of 1,100,000 acres, to a private individual [Robert Morris] who sold it in London a few months later [to the English Associates] for more than three and a half times the purchase price.

The buyers of these lands [the English Associates] immediately sent out an agent [Captain Charles Williamson] to sell them in small tracts and to set up establishments which could not fail to bring in a considerable revenue, to attract many settlers and to increase more rapidly the value of these lands.

The remaining two-thirds of this great tract containing about 4,500,000 acres is now the best and almost the only field open to large-scale speculation. It is the only one promising a quick return on the investment and so the only one satisfactory to most speculators. We can judge the future by the past. In a period of less than three years almost 2,500,000 acres have been sold and resold many times, and always with an infinitely greater profit than that ordinarily realized from other commercial enterprises. Since the end of 1788, a period when this territory was still uninhabited, it had attracted more than a thousand and the neighboring lands nearly seven thousand settlers by the end of 1789. Between forty and 50,000 souls moved to the frontiers annually, and in the year 1786, the period when the fashion of going there was well established, Kentucky added 20,000 inhabitants, in spite of the almost continual depredations and the frequent murders committed there by the savages. And in spite of the fact that the same savages have carried on, since 1788, an open war which has completely stopped the migration to Kentucky and has turned it towards the Genesee.13 From these facts we cannot hesitate to conclude that the lands will soon be sold in small tracts and covered with settlers.

Let us now see what effect this will have on their value. In this regard I am forced to judge by comparison as I have done for the population, and I will choose as illustrations some examples which have a great similarity and some others which are not too far from the lands in question to make a comparison.

In 1780 the lands in Kentucky were not worth, one with the other, six Dutch sols [stuyvers] an acre, but by 1788 they had already brought, in spite of such extraordinarily unfavorable circumstances as I have just mentioned, very easily from seven to nine florins,14 and they paid as much as twelve for those near towns.

Those in the vicinity of the Mohawk River rose in value in ten years from thirty to ninety Dutch sols to twenty to thirty florins and some of the best sold for sixty florins.

Those near the Unadilla River were not worth more than from twelve to fourteen sols four or five years ago, and two years later, when I was in the neighborhood, generally sold for around fifty or sixty sols.

Even the Genesee lands, during the same period and while I was there, sold at from twenty to twenty-five sols per acre, and the agent of the London owners [Captain Charles Williamson] of whom I spoke above, reported last year that he was besieged with offers of fifty sols and advised them early this year that he had already disposed of about 300,000 acres at from one to three piastres each [2 piastres = 1 English crown = $1.11 in 1775].

Finally, they have already sold several thousand at the same price from the last two-thirds still owned by the one who bought them from the State of Massachusetts [Robert Morris] about the middle of last year, and who has several agents in Europe commissioned to sell them.

Perhaps you will ask why they are being sold here [in Europe] when there is such a good and easy market for these lands on the spot. The reason is very simple. There they sell in small parcels and on time, while here they hope to dispose of large tracts easily for cash. Before their agents set out, these lands were not selling as fast or at as high a price as they do now and they hoped that the low price [at which the agents in Europe could offer them] would result in a quick sale here. Several other reasons which one might suggest have decided the owner to try to make sales in Europe. [Robert Morris was hard up and needed cash].

You can hardly doubt, from what you have just read that, since the cost of the lands just described in some detail is so low, they could ever cause much loss to the speculator for they could not possibly deteriorate or go down in price. They cannot cause any additional expense for they are exempt from all kinds of taxes for the next fourteen years and, on the other hand, it is evident that, if successful, they will bring in huge profits, in all probability still more extraordinary than those from the same country's public securities [Revolutionary War bonds which paid a profit of forty per cent].

You may object to the bad luck in this type of speculation of many Europeans who had heard on all sides the noise of the extraordinary profits which the purchase of wild lands had given to clever business people and who, without looking to see whether they were themselves in possession of all the light necessary for that sort of operation, plunged into it thoughtlessly. [The Scioto Land Company Fraud, 1789-1790, found many victims in France.] They had committed fatal errors, suffered great losses and after that thought that they had a perfect right to curse a business they did not understand. Others, prejudiced against remote purchases following unfortunate precedents, did still worse, if possible. They bought land near the American towns in communities already settled. These investments would have been all right for tired business men who were no longer trying to improve their fortunes. They might in this way and without much cash enjoy a peaceful, comfortable and even prosperous life. But those who were fired by a desire for a profitable speculation, ought to have known that the lands near the great centers of population have reached their peak price and should have noticed that prices had begun to decline. Furthermore, from the Atlantic to the Appalachians, with a few exceptions, the soil is poor and worn out; it is generally only four or five inches deep and for long years has been subject to a badly planned economy. It is therefore hardly to be wondered at that the population drifts back towards the banks of the Ohio and the lakes to find more permanent locations, and it is for the same obvious reason that those who have bought near the ocean for resale have made a great mistake and by their own fault. However the bad example remains as a warning to others not to venture into such an obviously dangerous career. It is one of the principal and most effective reasons restraining Europeans from this sort of investment. But it cannot last long for the losses suffered by intruders into business affairs, serious as they sometimes have been, have never deterred the true speculators from well-planned enterprises which their experience suggested to them. The mistakes of some have no influence on the extent of the knowledge or the justice of the judgment of others.

Perhaps the objection will be raised that after having bought some of these lands you would not know whom to approach or how to go about selling them. They could have said exactly the same thing to those who came here to dispose of the American national bonds. Consequently you ought to expect to receive the same answer especially if you should want to offer your American bonds for sale. But did not the American bonds find plenty of buyers here? That is true enough, but didn't the general sale begin after a number of smart speculators had gone into it and had, so to speak, skimmed the cream? And didn't gambling in them increase the value of the bonds? Perhaps so, but it would not happen except for the hope and likelihood of a more or less quick increase independent of the gambling. What, then, makes the purchase of bonds much more uncertain than would now be the case with lands? Simply because the former had done nothing until then but decline in value and in prestige and that the latter have already begun to rise. It seems impossible for them not to continue to rise in value for a long time to come and, considering the numerous precedents, the price could not fail to double several times before it stopped going up. But do lands pay interest? Not, in fact, payable every six months but they do by their steady rise in value which is eight or ten times higher than that on borrowed money and which, moreover, have the advantage of pyramiding one on top of the other at a rate of increase which offers no parallel in the entire field of imaginable business enterprises. Furthermore, are not people buying the different American bonds all the time? Yes, but it takes eight years before they pay any interest and still they sell at more than sixty per cent. At that rate the lands will, no doubt, realize a value eight times greater than the present cost price in this country. And because of the great rapidity with which the area in question has been settled during the past three years, it is very probable that in a short time you would find that you could rent your lands there if you wanted to and could in that way realize a very considerable annual income on them. Considering all this, it is clear that, as soon as they realize here that a number of people have made large profits by the purchase of wild American lands, you will find an equal number of speculators inclined to profit by the steady rise in the value of these lands. They will expect, in three or four years, to make a profit equal to thirty or forty years' interest. This new speculation will interest them because of their previous success in the five per cent American bonds which paid little more than the current interest rate in this country. I do not intend to speak here of those who were the first to venture in this speculation, nor of those who followed them soon after and have also been amply though much less richly rewarded for their confidence, but of that numerous class who, in turn, have bought when they were nearly or even exactly at par. One could boldly conclude from this that the same thing would take place in the case of lands and that, in spite of differences which many people would consider real obstacles and which they will see later are not obstacles at all, the agents will not lack for buyers as soon as the public is told the great profits which the first speculators made in this new line of business.

I think I have brought together enough facts and explanations to guide the steps of those who want to profit by them; and the author, trusting to the long study he made and the great experience he acquired in this field during the eight or ten years he was there, dares to predict that they, and especially the first to follow his advice, will find it perfectly good and will some day be grateful that he published this little work to which, in order to make it that much more useful, he has added a little map to show the location of the Genesee Country, and a prospectus of the way to carry out a land speculation. The author assures you that it is founded on extremely conservative calculations in consideration of the rises, much greater than those he has allowed in the plan, which have been tested at different times in other parts of America. However, no other area has ever combined or will ever again combine so many special advantages as the Genesee Country, nor has it ever offered such a swift increase in the value and sale price of the land, for in a twelvemonth there were bought and resold for very considerable sums more than four million acres at a net profit more than ten times the original investment.


 

Author's Notes

  1. The city of Hudson, located on the eastern bank of the river of that name, 130 English miles above New York and thirty miles below Albany, was founded in the autumn of the year 1783. Its growth was so rapid that it already had 1,500 inhabitants by the spring of 1786 and its commerce had already become so flourishing that, during part of the month of February of that year, 1,200 sleighs entered the city each day from the north, coming from the interior of the country on the snow, loaded with local products.
  2. Since the writing of this account began the United States has completely paid her debt to France.
  3. It is clear that when the circumstances which at this moment promise such great profits to the speculator become generally known, it will only be possible to make moderate profits.
  4. Ninety-three acres are about equal to 117 Parisian arpens. [1 French sol =1 sou. 100 sous = 1 franc. 1 franc = 20 cents]
  5. See Note 10.
  6. See the American Geography of Jedediah Morse, 1789 edition, p. 36.
  7. The Legislature of New York State "in order to encourage agriculture, increase commerce and facilitate general communication between the citizens," passed a law March 30, 1792 "to establish and open lock navigation" and formed for that purpose two companies "to open a lock navigation between the navigable waters of the Hudson River and Lakes Ontario and Seneca and the other for the same purpose between the navigable waters of the Hudson and Lake Champlain."
  8. See the same geography, p. 38.
  9. Five miles equal two leagues.
  10. The Americans prefer to call them New England. This locality was among the first settled and while their good land is of no great extent, it is much the most populous region of all America, so that they furnish annually a greater number of frontiersmen than all the other states put together. (Translator's [Van Pradelles'] note.)
  11. A Municipalité or Township is six miles square, and contains 23,040 acres of land.
  12. Since this letter was written, this communication is actually begun and it will doubtless shortly be completed seeing that the distance to be made navigable is short and the country flat. (Translator's [Van Pradelles'] note.)
  13. The Genesee Country is and will always be exempt from disasters and disadvantages. It has been surely purchased from the savages as fast as it has been settled. It is for the ownership of the soil, which the whites have never bought from the natives in Kentucky or the neighboring country that the war mentioned in the text has been fought. Most of the savages who formerly occupied the Genesee Country fell back voluntarily and have taken the chain of Great Lakes as the border between their old and new homes. The few remaining are so surrounded by whites that, even if they wanted to, they could not in any way become dangerous. Furthermore, the whites are very glad to have them there because of the fur trade which they carry on with them. There is no instance, moreover, of the American Savages ever molesting land they have sold and, far from making war, the chiefs of the savages who formerly owned the Genesee lands, came to Philadelphia early that year (at the moment when the Kentucky war was at its height and without paying any attention to what the other tribes were doing about their lands more than 360 miles away) to renew the ancient treaties which existed between them and the whites. They were even afraid that the latter might break with them because of their dissatisfaction with these other savages.
  14.  [1 stuyver = 1 sol = ca 2 American cents. 20 stuyvers = 1 guilder or florin = ca 40.2 American cents. 50 stuyvers = ca $1.00]