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Show 160 HISTORY OF PUBLIC LAND LAW DEVELOPMENT could raise the money, now much tighter than in 1838, for the purchase of the land.44 Henry Shephard brought a bill in chancery to set aside a speculator's sale because it was in violation of the act, but how many other settlers took this course can only be determined by a detailed examination of the court records.45 Other moneylenders present at the Burlington sale were Lewis Benedict of Albany, New York, who bought for settlers 39 quarter-sections, 80 half-quarters and 9 irregular tracts; Lyne Starling of Franklin County, Ohio, whose total purchases at Burlington and Dubuque were 22,134 acres in addition to 4,091 acres bought at LaPorte, Indiana; Lawrason Riggs of the Washington and Philadelphia banking family of Elisha and Romulus Riggs; and Arnold Naudain, Edward Tatnall, and Merritt Canby of Delaware. All these individuals or groups entered much land in other offices. A considerable portion of Starling's land was never conveyed to the original squatters who had contracted with him for its purchase; 3,762 acres were still held by him in 1853 and another part had been sold by then for $38,000.46 Lewis Benedict's entries for settlers at Burlington came to 20,369 acres in 1838 and 1839. His 44 Iowa News, quoted in the Davenport Iowa Sun, Sept. 11, 1839. Section 5 declared that any agreement by persons to enter land for settlers at the public sale was illegal and all persons involved in such agreements were subject to heavy punishment. 4 Stat. 392. 45 Shepherd brought a bill in chancery in the district court at Burlington in September 1840, stating that in November 1838, he was in possession of certain lands of the United States on which he was entitled to preemption of 160 acres, that a special contract was made with Lewis Benedict by which he was to purchase the land and resell it to Shepherd at a greater price. The bill prayed for a conveyance of the land upon payment of the consideration and interest, and also for general relief. Benedict was ordered by the court to plead or demur to the bill. Iowa Territorial Gazette and Burlington Advertiser, Jan. 9, 1841. 46 Courtesy of Andrew D. Rodgers, March 31, 1966. annual interest terms, made possible by reselling the land at $1.50 to $2.00 an acre plus the maximum interest the usury laws permitted, were 50 percent for 2 years, 40 percent for 3 years, 30 percent for 4 years, 25 percent for 5 years. Benedict would enter the land for settlers who had 40 to 80 acres in cultivation on quarter-section tracts; recent arrivals with claims but slightly improved were not such good risks. An observer of Benedict's business operations declared that no charge of unlawful interest or usury could be brought against him because he entered the land in his own name. Twenty percent interest was lawful when a contract was made but if the rate was not mentioned in the contract only 6 percent could be charged.47 Of the 1,140,000 acres sold in the Dubuque and Burlington offices in 1838 to 1840, roughly 9 percent was acquired by individuals or groups in amounts exceeding 1,000 acres. Most of these large entries we may assume were made for settlers, many of whom were not able to pay their high interest obligation and lost their claims. What occurred at Burlington was characteristic of the public land sales. In the Chicago land office, for example, William B. Ogden, who was later to be mayor of Chicago and president of the Chicago and Northwestern Railroad, was able to negotiate loans to settlers on terms that were even more onerous than those of Barrett. The title was patented to him, and the settlers agreed to pay $465 over the course of 4 years for the $200 he paid for each quarter-section. Apparently this was more than some of his competitors were asking, so he lowered his charges to a total of $440 over 4 years. There was no usury in such charges, Ogden declared, since the settlers never had a legal claim to the land and he had a perfect right to sell it after he had made the entry for whatever price was agreed upon. Ogden as- 47 D. W. Kilbourne, Montrose, Aug. 24, 1839, to Samuel Marsh, Kilbourne MSS., Iowa State Department of History, Des Moines. |