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Published online by Cambridge University Press: 11 June 2012
Were frontier land investments during the nineteenth century as unprofitable as most scholars have surmised? The history of one of the most significant land-investment firms serves as a useful case study in suggesting an answer.
1 See for example, Gates, Paul W., “Land Policy and Tenancy in the Prairie States,” Journal of Economic History, I (May, 1941), 60–82CrossRefGoogle Scholar, and “Southern Investments in Northern Lands before the Civil War,” Journal of Southern History, V (May, 1939), 155–85Google Scholar; Bogue, Margaret B., Patterns from the Sod: Land Use and Tenure in the Grand Prairie, 1850-1900 (Springfield, 1959)Google Scholar; Swierenga, Robert P., “Pioneers and Profits: Land Speculation on the Iowa Frontier” (Ph.D. Thesis, University of Iowa, 1965).Google Scholar
2 A classic expression of this view is Gates, Paul W., “The Role of the Land Speculator in Western Development,” Pennsylvania Magazine of History, LXVI (July, 1942), 314–33.Google Scholar
3 A recent example of this common allegation is Stewart, William J., “Speculation and Nebraska's Public Domain, 1863-1872,” Nebraska History, XLV (Sept., 1964), 272.Google Scholar
4 For a summary of the literature, see Bogue, Allan G. and Bogue, Margaret B., “‘Profits’ and the Frontier Land Speculator,” Journal of Economic History, XVII (March, 1957), 3–8.Google Scholar
5 The “James S. Easley Papers,” preserved at the Alderman Library, University of Virginia, Charlottesville, contain 115 bound volumes of letter copy books, incoming letters, ledgers, tract books, and a file drawer of loose material. It is the only complete record of early Iowa speculation now known to be extant. Professor Paul Gates of Cornell University, the only other scholar to use the collection, has briefly summarized his findings in “Southern Investments in Northern Lands,” 161-63; “Land Policy and Tenancy,” 63-64; “The Homestead Law in Iowa,” Agricultural History, XXXVIII (April, 1964), 69Google Scholar; and The Wisconsin Pine Lands of Cornell University: A Study in Land Policy and Absentee Ownership (Ithaca, 1943), 83–84.Google Scholar Unless otherwise indicated, all manuscripts cited hereinafter are from the Easley Papers.
6 Gates, “Southern Investments in Northern Lands,” 161; “Land Policy and Tenancy,” 64.
7 For biographical data on Easley see American Historical Society, History of Virginia, VI (Chicago, 1924), 561–62.Google Scholar The author also benefited from correspondence with Mrs. Richard Coles Edmunds, Sr., of Halifax, Virginia.
8 Congress between 1847 and 1855 enacted four bounty warrant acts granting almost 61,000,000 acres to veterans (or their heirs) of every war, including many an Indian skirmish, beginning with the Revolution (U.S. Department of the Interior, Report [1907], I, 259).Google Scholar
9 U.S., Statutes at Large, X, 3–4.Google Scholar Beginning in 1830, the Treasury Department issued assignable scrip, eligible for promiscuous entry in Ohio, Indiana, and Illinois, to veterans of the Revolutionary War in exchange for land warrants of various state governments, particularly Virginia (ibid., IV, 422-24). In 1852 Congress made this scrip acceptable on all public lands subject to private entry (ibid., X, 143).
10 The firm's major western agents were Hugh D. Downey of Iowa City, Hoyt Sherman of Des Moines, Jefferson P. Casady of Council Bluffs, and George Weare of Sioux City. All of these men carved prominent niches for themselves in Iowa history. For detailed information on Iowa land agents, see Swierenga, “Pioneers and Profits,” chap. V.
11 Easley & Co. to H. W. Fry, July 4, 1853; Easley & Willingham to Wm. H. Brown & Co., June 25, 1853. Since Iowa law in the 1850's placed the interest ceiling at 10 per cent — far below the market value of capital — Easley did not include interest charges in his time entry contracts but rather stated an inflated sale price.
12 See Rohrbough, Malcolm J., “The General Land Office, 1812-1826: An Administrative Study’ (Ph.D. Thesis, University of Wisconsin, 1963), 134.Google Scholar
13 James S. Easley to Casady, Moore & Clark, Feb. 11, 1856. Easley's comments were in response to the request (Jan. 4, 1856) of this Sioux City real estate firm to “locate time wts for Speculators where we know the selections to be good.” See also Easley to S. Salisbury, March 4, 1858.
14 Hoyt Sherman, one of central Iowa's leading pioneer land agents, noted that in the 1850's both settlers and speculators profitably entered land on time at “forty per cent, interest” (“Early Banking in Iowa,” Annals of Iowa, Third Series, V [April, 1901], 2).Google Scholar
15 Easley's Sioux City agency entered on its own account several thousand acres on time with his warrants (Easley to Casady, Moore & Clark, Oct. 7, 1856). Another agency requested 25,000 acres of warrants, offering $3.00 per acre on three years' time (Easley to J. N. Frazier, Sept. 11, 14, 1857). An advertisement of Bruce & Son, Fort Dodge, in the Iowa City Republican (March 10, 1858) read in part: “We also pay particular attention to the loaning of land warrants to non-residents.”
16 Easley & Willingham to Casady & Sherman, Jane 15, 1853; Easley to same, Nov. 9, 1853.
17 Easley to Hoyt Sherman, Sept. 20, Aug. 1, 1855; Same to Johnson, Casady & Test, Sept. 24, 1855; Same to Barney, Davis & Co., Nov. 5, 1855; Same to Greene & Weare, Jan. 7, 1857; Easley & Willingham to Casady, Myers & Moore, Dec. 18, 1855.
18 Easley to John Fitzgerald, June 26, 1855; Same to W. Downs, Nov. 17, 1857; Easley & Willingham to E. B. Stiles, Nov. 20, 1854; Same to Johnson & Casady, Feb. 19, 1855.
19 Easley & Willingham to Head & Russell, Aug. 23, 1867; Easley to Richardson & Likens, Dec. 2, 9, 1856.
20 Easley to Greenway Bro. & Co., Jan. 14, 1854.
21 Easley to H. W. Fry & Sons, June 11, 1855; Same to Hoyt Sherman, June 13, 1855; Easley & Willingham to Johnson, Casady & Test, July 2, 1855.
22 U.S., Statutes at Large, XI, 9Google Scholar: Iowa House Journal, 1856 (Extra Sess.), 3, 11. See also Lokken, Roscoe F., Iowa Public Land Disposal (Iowa City, 1942), 118, 126, 238–40.Google Scholar
23 Easley to Cyrus Aldrich, March 3, 1857; Same to Jas. S. Wilson, July 23, 1868.
24 As recorded on the firm's books, the loans totaled $212,378.13 but cash discounts reduced the effective amount loaned to $195,056.52. The rate of return — calculated on the 239 loans (74 per cent) repaid prior to the Civil War — was determined by dividing the weighted average daily cash balance ($12,575.65) by the total interest earned ($20,060.71). The result (159.5 per cent) was then divided by the total number of years of the investment (4.88 years) to obtain the average annual return. On 21 loans (6.5 per cent), which remained outstanding until the immediate postwar years, the partners earned approximately 20 per cent per year. Sixty three loans (19.5 per cent) were defaulted in whole or in part and foreclosed. These figures were compiled from accounts in the Easley Ledger 1853-1857, Easley Journal 1854-1881, and Easley Day Book 1853-1881. Agent commissions were 5 per cent of the amount loaned, prorated if less than a year.
25 Easley to Hoyt Sherman & Co., Jan. 7, 15, 1857; Same to Greene & Weare, Jan. 7, 1857.
26 Easley to J. A. Black, Feb. 11, 1857; Same to Cyrus Aldrich, March 3, 1857; Easley & Willingham to Wm. T. Smithson, Jan. 28, 1857; Same to Casady & Clark, Aug. 11, 1857.
27 These forfeiture rates are somewhat deceptive. Prior to 1857, when Easley & Willingham made nearly three-fourths of their total entries, less than 7 per cent were forfeited. And fully one-half of the total acreage defaulted (25,960 out of 53,071 acres) lay in the Sioux City and Fort Dodge land districts where it appears, by inference, that speculative buyers with little money or time invested were the chief “sufferers,” not bonafide squatters. The census marshal in 1860, for example, recorded only 30,782 acres in farms, both improved and unimproved, in the entire twelve-county Sioux City Land District (U.S., Bureau of the Census, Eighth Census of the United States, Agriculture [Washington, 1864], II, 46, 50)Google Scholar. Moreover, Easley's detailed correspondence concerning the forfeited tracts at no time mentions homesteads or improvements of any kind.
28 Easley to S. Noble, April 20, 1861.
29 One agent explained immediately after the war that the best way to handle Easley's property had been to ignore it entirely. With confiscation “the order of the day” and public anger overflowing against “‘d—d rebels,’ we were convinced that ‘mum’ was the word, & least said on the subject the better for your interest, for the least agitation of the matter would cause you to lose all” (Weare & Allison to Easley & Willingham, July 27, 1865).
30 Easley to P. M. Henry & Co., April 23, 1863.
31 In 1866 Easley journeyed to Wisconsin and secured the release of the suit (W. W. Willingham to Henry L. Brooke, Jan. 21, 1868).
32 Easley & Willingham to Hoyt Sherman, May 12, 1865; same to J. P. Casady, Aug. 23, 1865; Easley to A. T. Stewart & Co., Aug. 23, 1865; W. W. Willingham to Hoyt Sherman, Aug. 23, 1865.
33 Easley & Willingham to Treas. & Recorder, Boone Co., Aug. 30, 1865.
34 Easley to B. E. Morton, Nov. 2, 1865.
35 Easley & Willingham to Alex. Ramsey, Feb. 23, 1867; C. N. Overbaugh to Easley, Aug. 5, 1868.
36 Easley & Willingham to Roseberry & Morehouse, July 31, 1867; Same to Durfee & White, Aug. 16, 1867. The penalty was reduced to 20 per cent in 1870. Interest was charged against both tax and penalty (Iowa, Revised Code, 1860, 122-23; Ibid., 1873, 152).
37 The figures were compiled from data in the Easley Day Book 1869-1880, and Easley Journal 1859-1875 (Land Book).
38 The 1879 totals are given in “Inventory and appraisement of the real and personal estate of James S. Easley deed,” Probate Records, Book 32, p. 140, Circuit Court, Halifax County, Virginia (hereafter cited as Easley Probate Records).
39 Easley to Henn, Williams & Co., Dec. 1, 1856; Same to Win. T. Owen, Nov. 29, 1870; Same to Brockway & Elder, Aug. 5, 1873, July 17, 1874; Same to C. S. Carrington, Oct. 15, Nov. 2, 1874; Same to W. W. Henry, July 29, 1874.
40 The total acreage, by state, compiled from data in Easley's tract book, “List of Western Lands, 1865,” is as follows: Iowa, 92,531; Missouri, 37,934; Wisconsin, 17,090; Kansas, 3,413; Nebraska, 2,720; Illinois, 320.
41 Easley & Willingham to H. C. Mathorn, Aug. 12, 1868; Same to D. Carr Early, Nov. 10, 1869. In his will, Easley also specifically directed that his executors should “not be hurried in making sales” so his children might reap the “full benefit” of his lands (“Last Will and Testament of James S. Easley,” Article V, Easley Probate Records, Book 32, p. 122). The executors, however, in the first four years after his death, unloaded land worth $203,629.61, an amount equal to Easley's total sales in the entire post-war period from 1865 to 1879 (compiled from annual accounts of Easley's executors for the period, 1879-1883, in ibid., Books 32-33).
42 Easley to B. F. Yelter, March 20, 1875. Further proof that Easley dealt only in unimproved land is the designation “wild lands” (see Table 6) used by the appraisers of his estate when describing his western lands. The only known exception to Easley's non-leasing policy was his decision in the late 1860's to lease to several local miners a few tracts of lead lands in Christian and Ozark counties, Missouri (Easley to Thomas J. Gideon, Oct. 14, 1867, July 24, Aug. 25, 1873; same to H. B. Chandler, April 2, 1875; same to W. A. Love, April 19, 1875). Although Easley's refusal to rent agricultural land may have been atypical, I can find little evidence to the contrary among other nonresident investors in Iowa, nor did Iowa realtors in their frequent advertisements in the local press offer to manage rental property for nonresidents. But see Gates, “Homestead Law in Iowa,” 68.
43 See Note 40 above for the 1865 totals. The 1880 figures, compiled from inventory data in the Easley Probate Records, Book 32, 139-40, are as follows: Iowa, 34,367 (excluding 9,159 acres of tax-title land); Missouri, 19,698; Kansas, 1,600; Wisconsin, 640.
44 The appraisers of Easley's estate (see ibid.) listed notes on hand totaling $14,195.77 and lands valued at $136,244.08. This was based on a per acre valuation of $2.50 for Iowa and Kansas tracts and $1.50 and $1.25 for Missouri and Wisconsin lands, respectively. That the current market value of at least the Iowa lands was two to three times as great as the appraised value is evident from an old office tract book of Cox and Kirkwood Realtors of Iowa City. The book lists all of Easley's Iowa land by county and quotes the fair market price in each for the years 1878-1879. Prices ranged from $5.00 to $10.00 with the average being $6.53 per acre. See “Book No. I, J. F. Richards, Office Tract Book for the Use of Cox and Kirkwood, Dealers in Real Estate,” Special Collections Department, Library, University of Iowa, Iowa City.
45 Table 5, it will be noted, presented considerably higher earning ratios because, on an accrual basis, the cost of the land inventory in 1879 was carried forward in the amount of $110,360.80. In Table 4, on the other hand, the full cost of the land inventory had been charged to the business before 1879, thus malting it clear profit thereafter except for nominal management and tax costs.
46 See manuscript federal population census of 1850 for Halifax County, Virginia, National Archives, Washington, D.C.
47 Mrs. Richard Coles Edmunds, Sr., to Author, Dec. 5, 1963.
48 For a statistical study buttressing this point, see Swierenga, Robert P., “Land Speculator ‘Profits’ Reconsidered: Central Iowa as a Test Case,” Journal of Economic History, XXVI (March, 1966), 1–28.CrossRefGoogle Scholar
49 Analysis of the transactions of the ten major Iowa real estate vendors whose total entries in nine central Iowa counties exceeded 25,000 acres indicated that more than 70 per cent were entered for other buyers via the time entry system. See Swierenga, “Pioneers and Profits,” 173–76.
