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Show 200 HISTORY OF PUBLIC LAND LAW DEVELOPMENT quired to sign notes for $270 for 160-acre tracts; $210 for 120-acre tracts; $138 to $140 for 80-acre tracts; and $68 to $70 for 40-acre tracts. By 1856 they were demanding $280, $140, or $70. In the more prosperous years of the fifties the turnover of capital was rapid; some settlers offered to pay before the year was up and were allowed 10 or sometimes 5 percent discount. (The Whites were Quakers and when fellow members of their religion objected to their making land entries with military bounty warrants, they ceased entering land for settlers.) Most settlers met their payments promptly until 1857. Some were delayed a few days or months, and others did not complete payments for as long as 2 years. After 1857 conditions changed and payments were delayed longer. The third of the agencies that made many loans to Iowa settlers was Cook & Sargent, a Davenport banking and exchange firm, much of whose capital was supplied by Boston people. It maintained branches in every land office town in Iowa and another at Florence, Nebraska. The firm kept its $300,000 of notes in circulation by issuing them in Boston and Florence and redeeming them in Davenport, with other notes redeemable in Florence. In other words, it was kiting its circulation, which was not uncommon at the time. It is not easy to separate the various operations of the different partnerships, for Cook & Sargent had a third partner in each land office town, the best known being Hugh D. Downey of Iowa City. The two Sargents, two Cooks, and Downey entered altogether 178,000 acres, some doubtless for speculation but the larger part for settlers on terms similar to those of the Whites and Easley. The over-extended credit of Cook & Sargent reached a breaking point in 1859 and the partnership was forced into bankruptcy. 51 Few investors in Iowa, or for that matter in Wisconsin, Illinois, Arkansas, or Alabama, seem to have had any fear that the prosperity of the 185O's would end abruptly. Large and small investors purchased to the limit of their resources, expecting that they would be able to turn over their investments quickly, as they had in 1854 and 1855. But the sustained period of prosperity was broken by the failure of the Ohio Life Insurance and Trust Company on August 24, 1857. This was followed by a swift contraction of bank loans, suspension of specie payments by most banks, and the failure of numerous banks, railroads, and industrial companies. Some recovery set in before long but in 1860 the withdrawal of the South from the Union, the suspension of payments on its bonds, and the cessation of trade between the two sections brought the economy of the country to a near halt. Immigration declined sharply, the westward movement slowed down, agricultural prices dropped, and the demand for land, so active only a little earlier, fell off sharply. Land speculators and capitalists carrying the land debts of settlers could neither make sales nor collect outstanding obligations. Two years later William H. Willingham said that he and James Easley were "land loaded, and it takes all the means we can raise to pay taxes. ..." An Easley & Willingham agent reported on May 4, 1860, that no immigrants of consequence were coming in, that many of the actual residents were anxious to sell a part of their land, that there was no demand for land, and no money available. Land speculation in Iowa had outrun all reason and was suffering a reaction from which it would not recover for 3 or 4 years.52 Easley & Willingham during the Civil War could not pay taxes on their western lands and consequently the titles became clouded 51 Milo M. Quaife (ed.), The Early Days of Rock Island and Davenport. The Narratives of J. W. Spencer and J. M. D. Burrows (Chicago, 1942), pp. 241 ff. 52 Easley & Willingham, Sept. 1, 1858, to Bennett & Maxon (copy); William H. Willingham, Aug. 20, 1860, to H. D. Downey (copy); and Thos. Mercer, May 4, 1860, to Easley, Easley & Willingham Papers, University of Virginia Library. |