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Show CREDIT SALES EXPERIMENT, 1800-1820 139 as a result of the same set of circumstances: careless banking and currency policies, temporarily favorable agricultural prices, opening of new lands to speculative purchasing before there was any real demand for them from settlers. It was to take a number of such catastrophies similar to that which struck the Alabama speculators before sounder practices were to be followed. In the Huntsville district bordering on the Tennessee River, where Brahan's acquisitions were located, and in the Creek lands in central Alabama, a total of 2,453,506 acres was sold for $12,535,443, or an average price of $5.10 an acre, from January 1, 1807, through 1820. When the Alabama Legislature later appealed to Congress for mercy for the debtors who had bought these lands at such high prices, it referred to the "infatuation produced by the period of unexampled but deceitful prosperity. . . ." The high cotton prices had given a "fictitious value to every article of merchandise, and to wild and unsettled land in the Mississippi Territory a supposed value beyond that of the best improved lands in the most populous parts of the United States."40 Included in the acreages acquired by Brahan and other speculators there was doubtless much very good land that might produce a bale of cotton to an acre. But it was to take much labor and capital to clear the land, drain or install levees in alluvial land, build fences, plow and prepare the land for crops. The capital costs proved to be heavy and losses of labor (slaves) from malaria, typhoid, cholera, and yellow fever were high. For the moment the cost of the land did not seem excessive to those bidding for it, but the day of reckoning came swiftly. Over-expansion of cotton production reduced prices; Europe decreased her purchases of American staples; banks began calling in their loans and soon were in financial difficulties that forced many of them to close; credit was no longer available; land became a drug on the market. Tracts that earlier had sold on credit for the prices Brahan had paid now went begging. The Panic of 1819 was followed by a long slow period of readjustment. Most disillusioning to Congress, the officials of the Treasury Department and the national administration was the tremendous debt owed by western land buyers. In 1819-20 they owed the government more than $24,000,000, "a fearful sum," said Senator John W. Walker of Alabama, where the largest proportion of the debt was owed.41 In the excitement of the time the buyers had bid the price up to levels not justified by any use to which the land could be put. Only liberal treatment of the debtors could save the West from bankruptcy. In the height of the excitement about acquiring lands in the West, when banks were pouring out their paper notes in ever increasing quantities, and land purchases were breaking all previous records-reaching a million acres in 1816, 2 million in 1817, and 5,475,648 acres in 1819-Congress still found it necessary to postpone the forfeiture and resale feature of delinquent contracts in 1818, 1819, and 1820. None could doubt that there was an abundance of money and credit but it was being used to pyramid holdings, without regard to the possibilities of a decline, rather than to retire outstanding obligations.42 40 Memorial of the Alabama Legislature, Jan. 14, 1826, in American State Papers, Public Lands, IV, 528. Long after the Act of 1821 with its right to relinquish part of the land bought of the government and to have all payments applied to the remainder had lapsed some of these land buyers were still trying to salvage a larger part of their holdings than the act permitted. 41 Annals of Congress, 16th Cong., 1st sess., Vol. 1, pp. 444, 448, 481. The amount owed the United States for land was $23,100,615 on June 30, 1820, and $21,173,489 on Dec. 31, 1820. Of the latter amount $11,229,685 was owed for land in Alabama; $2,527,008 for land in Ohio; $2,360,856 for land in Missouri; $2,219,168 for land in Indiana. American State Papers, Public Lands, III, 645; and Finance, III, 645. 42 Acts of April 18, 1818, March 3, 18, 19, and March 30, 1820, 3 Stat. 433, 509, and 555. |