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−	{{DISPLAYTITLE:''Disputes over land settlement in 18th-century western Virginia''}}	+	{{DISPLAYTITLE:''Hyperinflation and Debt in Virginia Before and During the Revolution''}}
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−	Some of the cases on Wythe's docket involved competing claims for land. These claims often arose out of Virginia's history in trying to lay claim to its western frontier.	+	Beginning in the 17th century, the American colonies began printing their own paper money to settle debts due to a lack of coins coming from Great Britain. This paper money was a promise from the colony that the paper's holder could exchange it to the colonial government for the amount of coin listed. The crown was not pleased with the development, because as far as it was concerned, only the king could issue money. London's irritation was not enough to lead it to do something, though, so the practice continued successfully until the buildup to the Revolutionary War. The colonies printed more money to fund the Revolution in hopes that it would end quickly and give the colonies time to find coins to back up the paper money. As the Revolution continued with no end in sight, the problems began.<ref>Richard G. Doty, [http://www.history.org/Foundation/journal/summer03/pay.cfm "Promises to Pay, Promises Unkept,"] ''Colonial Williamsburg Journal'' (Summer 2003).</ref>
−	==The land companies==
−	Virginia's original 1609 charter granted it the land for 200 miles north and south of [https://en.wikipedia.org/wiki/Old_Point_Comfort Old Point Comfort], located in present-day Hampton, from the eastern to western seashore. The Ohio Valley lay within this grant, but France also claimed that area, and the Virginia colonists knew they could not take on the French without help from London. In 1744, though, France signed a treaty that put it opposite Great Britain in the ongoing [https://en.wikipedia.org/wiki/War_of_the_Austrian_Succession War of the Austrian Succession], and Virginia felt comfortable attempting to settle the valley.<ref>Otis K. Rice, ''The Allegheny Frontier: West Virginia Beginnings, 1730-1830'' (Lexington, KY: Univ. Press of Ky., 1970): 33-34.</ref>
−	Virginia's colonial government arranged deals with land speculators to help settle this frontier because it had worked well before. The speculators would form land companies. Virginia then granted land to those companies, which sold title to the land to would-be settlers. Virginia would granted the land companies 1,000 acres of land for every family settled, so long as those families settled within four years from the original grant.<ref>Rice, 34.</ref>	+	Virginia's financial situation during the Revolution was dire. Much of the money raised by taxes in previous years had gone straight to the Royal Treasury, leaving the colonial government strapped for cash. On top of that, many Virginia farmers and plantation owners were laden with crippling debts to English merchants. These debts were huge and could usually be inherited, so that several generations of many Virginia families found themselves in hock to London merchants. Thomas Jefferson estimated that Virginians owed British merchants over £2 million.<ref>Isaac S. Harrell, "Some Neglected Phases of the Revolution in Virginia", ''William & Mary Quarterly'' 2nd Series 5(3) (July 1925): 159, 167.</ref> To add insult to injury, money printed in Virginia was quickly losing its value against the British pound sterling,<ref>Harrell, 166. Wythe estimated that when Virginians started paying debts to the Loan Office, the money was worth between 1/70 or 1/1000 of its value when the debtor originally incurred the debt. Wythe 211, 217 footnote f.</ref> and many collectors refused to accept Virginia paper money to settle debts with English merchants.<ref>Emory G. Evans, "Private Indebtedness and the Revolution in Virginia, 1776 to 1796", ''William & Mary Quarterly'' 3rd Series 28(3) (July 1971): 349, 352.</ref>
−	The Greenbrier Company was the first land company to get a grant. Its members were powerful and also had previous experience settling frontier lands, which likely helped it become one of the most successful land companies, and managed to successfully survey at least 50,000 acres of land in the [https://en.wikipedia.org/wiki/Greenbrier_%28Great_Smoky_Mountains%29 Greenbrier Valley].<ref>Rice, 34-35.</ref> Another land company, the Loyal Company, did not do as well; the Loyal Company lost at least one 50,000-acre land grant because they failed to settle any families there.<ref>Rice, 35.</ref>	+	On November 27, 1777, the Continental Congress passed a resolution recommending that the states seize and sell loyalists' property.<ref>[http://memory.loc.gov/cgi-bin/query/r?ammem/hlaw:@field%28DOCID+@lit%28jc00950%29%29 9 ''Journals of the Continental Congress'' 971 (Nov. 27, 1777).]</ref> In response, the Virginia Assembly passed a law sequestering British property that passed on January 22, 1778; the British owner kept the title to the property, but the Virginia government would administer the property and collect any profits from it.<ref>Ch. 9, 9 Hening 377 (Oct. 1777 Session).</ref> This law included a program designed by Jefferson to help relieve Virginians of their British debts; a Virginia citizen could pay any money they owed a British subject to the recently-formed Virginia Loan Office instead. The Virginia Loan Office would give the Virginia debtor a certificate of payment that would relieve the debtor of any obligation to repay that debt.<ref>Wythe took advantage of this program to relieve a debt of £20. Evans, 355.</ref> The 1778 law said nothing about whether the Virginia government was required to pay the British creditor.<ref>Evans, 352-53; 9 Hening, 379-80.</ref>
−	==The French and Indian War and the Proclamation of 1763==
−	The [https://en.wikipedia.org/wiki/French_and_Indian_War French and Indian War] complicated Virginia's expansion efforts. A poorly-executed offensive by British forces in 1755 depleted their ranks and forced them to retreat eastward. As a result, settlers in the Greenbrier Valley were practically defenseless against the French's American Indian allies. Practically all the settlers in the area abandoned their homestead that year to escape the slaughter.<ref>Rice, 40-41.</ref>
−	==Military Land Warrants==
−	In order to bolster its army's and navy's ranks during times of conflict, Virginia awarded land rights to people who served its military during the French and Indian War<ref>Daphne Gentry, "[http://www.lva.virginia.gov/public/guides/va16_colonial.htm Colonial Wars Bounty Lands]," Library of Virginia, accessed October 24, 2014.</ref> and to those who served for at least three years in the Virginia army or navy or the Continental army.<ref>"[http://www.lva.virginia.gov/public/guides/opac/bountyabout.htm About the Revolutionary War Bounty Warrants]," Library of Virginia, accessed Oct. 24, 2014.</ref> These land grants were often called "military warrants", and gave their holder the right to a certain amount of land in a designated area of Virginia's western frontier. A surveyor would later determine the land's precise boundaries.<ref>"About the Revolutionary War Bounty Warrants."</ref> Many of the veterans would never personally settle their gifted land, opting to sell their military warrants to speculators instead.<ref>"About the Revolutionary War Bounty Warrants."</ref>
−	==After the French and Indian War==
−	Great Britain gained large amounts of French territory when the French and Indian War concluded, but London still wanted to settle its relations with the American Indian tribes on the colonies' western frontier. As a result, King George III issued the [https://en.wikipedia.org/wiki/Royal_Proclamation_of_1763 Proclamation of 1763].<ref>Reprinted in Clarence S. Brigham, ''[https://archive.org/details/royalproclamations12brigrich British royal proclamations relating to America, 1603-1783]'' (Worcester, MA: American Antiquarian Society, 1911): 212.</ref> This proclamation banned any British settlements west of the Allegheny Mountains, and with a few exceptions, settlers grudgingly complied.<ref>Rice, 59.</ref> This proclamation would present a problem for settlers down the road, as it made it effectively impossible for settlers to survey and register any land they had claimed before the French and Indian War began.<ref>Kirtland, 238.</ref>
−	The Loyal Company had more success after the French and Indian War was over and gained political influence; at the same time, the Greenbrier Company continued to be a powerful force. The Loyal Company claimed over 200,000 acres of land in western Virginia by the Revolutionary War. In addition, [http://www.history.org/Almanack/people/bios/biodun.cfm Virginia Governor Dunmore] told would-be frontier settlers that they would have to purchase land rights from either the Greenbrier or Loyal Companies or from veterans holding military land warrants.<ref>Rice, 78.</ref> In 1773, Governor Dunmore also issued an order allowing the Greenbrier and Loyal Companies to survey and develop their land grants, even though independent settlers were still not permitted to survey their claims in the area.<ref>Kirtland, 238, referring to "At a Council held December 16th 1773", in Vol. 6 of ''Executive Journals of the Council of Colonial Virginia,'' ed. Benjamin J. Hillman (Richmond, VA: Va. State Library, 1966): 553-554.</ref>	+	The [https://en.wikipedia.org/wiki/Treaty_of_Paris_(1783) Treaty of Paris]<ref>8 Stat. 80 (1783).</ref> that ended the Revolutionary War included a provision that all genuine debts Americans owed British merchants before the war were to be paid in British pounds sterling.<ref>Harrell, 169.</ref>
−	==The Virginia Land Law of 1779==
−	By the late 1770s, someone who struck out on their own to claim land in western Virginia might have found themselves contending with multiple conflicting claims for the land they had settled; a person holding a military warrant might survey out the land for their use, and the Greenbrier and Loyal Companies still had vaguely-defined claims to thousands of acres. In 1779, the Virginia Assembly passed a law that created the Virginia Land Office as well as a system for settling disputes over land claims. The Land Law of 1779<ref>Ch. 12, 10 Hening 35; Ch. 13, 10 Hening 50 (May 1779 session).</ref> validated claims to land that were surveyed by an accredited county surveyor before 1778. Coincidentally, most accredited country surveyors belonged to either the Greenbrier or Loyal Companies, so rival land companies' claims ended up invalid under this law.
−	Surveys of claims under 400 acres made before 1763 were also deemed valid, as were claims made under military warrants from the French and Indian War. Settlers on land who had arrived before 1778 could buy 400 acres for a small fee, and had preemption rights (the right to buy land provided no one had previously established title to it<ref>Bryan A. Garner, ed., "preemption", ''Black's Law Dictionary'' (St. Paul, MN: Thomson Reuters, 10th ed., 2014): 1369.</ref>) to buy 1,000 adjacent acres at a cost of £40 per 100 acres. The Greenbrier and Loyal companies scored a big win, though, when the law confirmed thousands of acres-worth of their land claims that they had surveyed out.<ref>Rice, 129.</ref>	+	In 1787, the Virginia Assembly passed a law stating that it would only be liable for debts that Virginia debtors had paid to the Virginia Loan Office up to the original amount of the debt plus six percent interest, and that it would pay in Virginia paper money.<ref>Ch. 34, 12 Hening 529 (Oct. 1787 Session), ''citing'' Ch. 22, 10 Hening 471 (Nov. 1781 Session).</ref> So, if a Virginian incurred a debt from a British merchant for 5,000 British pounds sterling in 1770, then paid £5,000 to the Virginia Loan Office in 1778, the state of Virginia would only be liable for £5,000 plus six percent interest per year, payable in Virginia paper money (which was still worth considerably less than British pounds sterling at that time).
−	The law created divided the area in Virginia around the Ohio Valley into four districts. The Governor of Virginia appointed a four-person commission to each of those districts to rule on any outstanding disputes over land claims.<ref>Rice, 129.</ref> Under the law, someone could appeal the commissions' decisions to the General Court of Virginia, whose word would be final.<ref>Kirtland, 239, citing Ch. 13, Hening, 10: 48.</ref> The Supreme Court of Appeals of Virginia, however, would weigh in on one of these disputes in [[Maze v. Hamilton]], a case in which both Wythe and his nemesis Edmund Pendleton sat on the court.	+	Several of the cases at Wythe's High Court of Chancery involved British debtors who wanted to be paid the full value of their debt suing Virginia debtors who asserted that their debt had been cleared by a payment to the Virginia Loan Office. Wythe demonstrated his integrity by requiring the debtor to honor the British debt. Wythe was hardly a fan of the British crown, but in the case of ''[[Page v. Pendleton]]'', Wythe said that under the law of the United States, British debts from before the War must be honored. To hold otherwise, Wythe thought, would be to succumb to basest demagoguery. Wythe's decision was deeply unpopular at the time, but the U.S. Supreme Court would agree with him years later in the case of ''Ware v. Hylton''.<ref>3 U.S. (3 Dall.) 199 (1796).</ref>
−
−	==References==
−	<references/>
−
−	[[Category:Cases]]

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Revision as of 14:23, 31 October 2014

Beginning in the 17th century, the American colonies began printing their own paper money to settle debts due to a lack of coins coming from Great Britain. This paper money was a promise from the colony that the paper's holder could exchange it to the colonial government for the amount of coin listed. The crown was not pleased with the development, because as far as it was concerned, only the king could issue money. London's irritation was not enough to lead it to do something, though, so the practice continued successfully until the buildup to the Revolutionary War. The colonies printed more money to fund the Revolution in hopes that it would end quickly and give the colonies time to find coins to back up the paper money. As the Revolution continued with no end in sight, the problems began.^[1]

Virginia's financial situation during the Revolution was dire. Much of the money raised by taxes in previous years had gone straight to the Royal Treasury, leaving the colonial government strapped for cash. On top of that, many Virginia farmers and plantation owners were laden with crippling debts to English merchants. These debts were huge and could usually be inherited, so that several generations of many Virginia families found themselves in hock to London merchants. Thomas Jefferson estimated that Virginians owed British merchants over £2 million.^[2] To add insult to injury, money printed in Virginia was quickly losing its value against the British pound sterling,^[3] and many collectors refused to accept Virginia paper money to settle debts with English merchants.^[4]

On November 27, 1777, the Continental Congress passed a resolution recommending that the states seize and sell loyalists' property.^[5] In response, the Virginia Assembly passed a law sequestering British property that passed on January 22, 1778; the British owner kept the title to the property, but the Virginia government would administer the property and collect any profits from it.^[6] This law included a program designed by Jefferson to help relieve Virginians of their British debts; a Virginia citizen could pay any money they owed a British subject to the recently-formed Virginia Loan Office instead. The Virginia Loan Office would give the Virginia debtor a certificate of payment that would relieve the debtor of any obligation to repay that debt.^[7] The 1778 law said nothing about whether the Virginia government was required to pay the British creditor.^[8]

The Treaty of Paris^[9] that ended the Revolutionary War included a provision that all genuine debts Americans owed British merchants before the war were to be paid in British pounds sterling.^[10]

In 1787, the Virginia Assembly passed a law stating that it would only be liable for debts that Virginia debtors had paid to the Virginia Loan Office up to the original amount of the debt plus six percent interest, and that it would pay in Virginia paper money.^[11] So, if a Virginian incurred a debt from a British merchant for 5,000 British pounds sterling in 1770, then paid £5,000 to the Virginia Loan Office in 1778, the state of Virginia would only be liable for £5,000 plus six percent interest per year, payable in Virginia paper money (which was still worth considerably less than British pounds sterling at that time).

Several of the cases at Wythe's High Court of Chancery involved British debtors who wanted to be paid the full value of their debt suing Virginia debtors who asserted that their debt had been cleared by a payment to the Virginia Loan Office. Wythe demonstrated his integrity by requiring the debtor to honor the British debt. Wythe was hardly a fan of the British crown, but in the case of Page v. Pendleton, Wythe said that under the law of the United States, British debts from before the War must be honored. To hold otherwise, Wythe thought, would be to succumb to basest demagoguery. Wythe's decision was deeply unpopular at the time, but the U.S. Supreme Court would agree with him years later in the case of Ware v. Hylton.^[12]

1. ↑ Richard G. Doty, "Promises to Pay, Promises Unkept," Colonial Williamsburg Journal (Summer 2003).
2. ↑ Isaac S. Harrell, "Some Neglected Phases of the Revolution in Virginia", William & Mary Quarterly 2nd Series 5(3) (July 1925): 159, 167.
3. ↑ Harrell, 166. Wythe estimated that when Virginians started paying debts to the Loan Office, the money was worth between 1/70 or 1/1000 of its value when the debtor originally incurred the debt. Wythe 211, 217 footnote f.
4. ↑ Emory G. Evans, "Private Indebtedness and the Revolution in Virginia, 1776 to 1796", William & Mary Quarterly 3rd Series 28(3) (July 1971): 349, 352.
5. ↑ 9 Journals of the Continental Congress 971 (Nov. 27, 1777).
6. ↑ Ch. 9, 9 Hening 377 (Oct. 1777 Session).
7. ↑ Wythe took advantage of this program to relieve a debt of £20. Evans, 355.
8. ↑ Evans, 352-53; 9 Hening, 379-80.
9. ↑ 8 Stat. 80 (1783).
10. ↑ Harrell, 169.
11. ↑ Ch. 34, 12 Hening 529 (Oct. 1787 Session), citing Ch. 22, 10 Hening 471 (Nov. 1781 Session).
12. ↑ 3 U.S. (3 Dall.) 199 (1796).