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Show CASH SALES, 1820-1840 159 claims association ordinarily could give them no further protection. At every land sale, capitalists or agents of capitalists were present, ready and anxious to lend their money which they could not use for land speculation because of the influence of the association. If a settler's claim was well located, or had some improvements on it, or the demand for land was such that it was worth more than the $1.25 an acre, he could readily borrow from the moneylenders. Commonly the lender would enter the land in his own name at the minimum price ($200 for 160 acres) and resell to the settler for $230 or $240 plus interest and give a bond for a deed, pledging to convey the title at the end of a year if fully paid. In some instances the lender took title and conveyed one-half the land to the settler. Neither the lenders nor the settlers seemed to fear that the anti-collusion section of the Act of 1830 would or could be invoked against their joint agreement.40 Richard F. Barrett, a director of the State Bank of Illinois, and active in town development, wild land speculation, and transportation improvements, made extensive loans at the Burlington and Dubuque sales in Iowa and at the Quincy, Vandalia, Springfield, and Galena sales in Illinois. Well in advance of the sales he announced that he would be in attendance with ample means to buy any land which he was requested to purchase by settlers and that he would resell to them at a "reasonable advance on credit of from one to five years."41 With $100,000 provided by the State 40 The Iowa Territorial Gazette and Burlington Advertiser, Dec. 22, 1838, reported that the territorial assembly had passed a bill on the 12th of that month making the legal rate of interest 6 percent, but in cases of special agreement any amount up to 20 percent was allowed. 41 Iowa Territorial Gazette and Burlington Advertiser, Sept. 15, 1838; Iowa News, Sept. 29, 1838. E. S. and J. Wadsworth & Co., bankers of Chicago, advertised similarly in the Milwaukee Advertiser, Dec. 22, 1838, that a representative was travelling through the Territory of Wisconsin, contracting with settlers to enter their lands at the approaching sales. Bank of Illinois he entered in his own name 72,184 acres in these six land offices. At the Burlington sale he entered 44 quarter-sections, 90 half-quarters, and 10 irregular tracts ranging from 6 to 456 acres. For a quarter-section for which he paid $200, Barrett required payment in five annual installments of $90 each which in true interest is close to 35 percent. Squatters seemed only too glad to take advantage of Barrett's loans at the time, but when it came time to make payments they resented his charges and accused him of being a usurer. In 1842, a Burlington land agent advertised the lands of Richard F. Barrett for sale, for which the paper of the State Bank of Illinois would be accepted, indicating that some of the settlers had not been able to complete their payments to him and had forfeited such sums as they had paid.42 A Burlington paper bitterly inveighed against Barrett and other moneylenders and the ineffective usury laws:43 But what is the language of our usury laws? They say in effect to the capitalists and the speculators, 'Come to the land sales in Iowa-come with your pockets lined with cash but lend it not to our settlers to relieve their necessities. Furnish them with money at high prices, but take the titles of the land yourselves. Affix such conditions to its redemption as very probably they may not be able to fullfil, and when they fail to comply therewith, turn them pennyless adrift, and grasp the fruits of their toil forever. We will stand by you and aid you in this business. We will prevent the settler from obtaining money elsewhere, by prohibiting any one to loan except at a rate which he cannot afford.' Another Iowa paper urged the hard pressed settlers in 1839 to use the procedure authorized in Section 5 of the Act of March 31,1830, to have the titles of Barrett and other lenders set aside but did not show them how they 42 Burlington Hawkeye and Iowa Patriot, March 10, 1842. 43 Iowa Territorial Gazette and Burlington Advertiser, Nov. 21, 1838. |