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Show 16 HISTORY OF PUBLIC LAND LAW DEVELOPMENT expand their credit facilities. When the Panic of 1837 struck, they were faced with heavy debts they could not pay and had to default on their obligations.35 Various proposals to restore the credit of the defaulting states were considered, including an effort to induce the Federal government to assume the debts, which exceeded $170 million. This proposal obtained little support among Jackson's Democratic followers but a new distribution bill, this time made more palatable to the West, did gain favor. Distribution would aid the states in resuming payments on their discredited obligations and might counter the rising tide of reform sentiment in the West calling for graduation of the price of land, preemption, and cession. In legislature after legislature, now under Whig control, resolutions were adopted instructing Representatives^ to vote for distribution. A Massachusetts resolution declared that the public lands, whether acquired by conquest, cession, or purchase, were "emphatically the property of the Union and ought to inure to the use and benefit of all states in just proportion" and could not legally be appropriated to the use and benefit of one; thus the resolution hit hard at grants then being made to each western state. In addition to declaring for distribution, Massachusetts condemned graduation of the price of lands as injurious to all states. Similar resolutions were adopted by Vermont, Rhode Island, Kentucky, New York, New Jersey, Pennsylvania, and North Carolina. Under the control of Democrats loyal to Jackson, New Hampshire opposed distribution, as did Ohio, Missouri, and Georgia.36 35 R. G. Me Crane, Foreign Bondholders and American State Debts (New York, 1935), pp. 6 ff. 36 House Journal, 26th Cong., 1st sess., 1839-40 (Serial No. 362), pp. 202, 278, 636, 668, 721, 943, 948; and 26th Cong., 2d sess., 1840-41, pp. 225, 235, 237; American State Papers, Public Lands, VI, 654, 951; Laws of New Hampshire, 1837, p. 290; Laws . . . 1839, p. 416; Laws of Missouri, 1838-1839, p. 342. Interestingly, after the adoption of the Distribution Act the South Carolina Legislature declared that it To win support in the West for distribution, now being increasingly demanded in Congress, a prospective preemption clause was grafted onto the bill. This provision for the first time would allow settlers to move upon and develop a quarter-section of surveyed land before it was offered at public auction and to purchase their tract before auction at the minimum price of $1.25 an acre without having to bid for it against speculators. The West had long worked for such a measure but Congress had only grudgingly given way by adopting a series of retrospective preemption measures forgiving illegal settlement of the past. A second major concession to the West was the inclusion of a section that would give to each public land state which had not as yet received it a half million acres for internal improvement. Louisiana, Michigan, Mississippi, and Missouri, the only public land states not having received land grants for internal improvements, would have been the immediate beneficiaries. New states admitted after 1841 were to receive the same bounty. Finally, each western state was to receive 10 percent of the net proceeds from the sale of public lands within its borders together with the 5 percent already authorized for internal improvements. This would leave 85 percent of the net proceeds to be distributed to all the states on the basis of their representation in Congress. Unlike the deposits of the Act of 1836, the distribution funds were to be outright grants, not recallable deposits. An amendment to the distribution bill that would have allowed the western states to tax public lands the day they were sold was defeated in the Senate by a vote of 22 to 18. would not appoint an agent to receive the funds, so strongly was it opposed to the measure; the Maine Legislature declared that distribution was "subversive of the principles of our free institutions" and that it threatened "to transform our Republican system of Government into one of arbitrary and consolidated powers." New York and Missouri Legislatures urged the immediate repeal of the Distribution Act. House Journal, 27th Cong., 2d sess., 1841 (Serial No. 400), pp. 395, 662, 739, 800- |
