“Men not of us, men from aboard, many of them of fair, some of them of high name, had long had their avaricious gaze fixed on Georgia’s vast and fertile Indian domain (great speculations in wild lands were a fashion and a rage in those days), and they had conspired with self-seeking, influential persons among our own people to enrich themselves by despoiling the State of it on a huge scale . . . The main cause which had held them back was the unsettled state of the title, which was in strong dispute between South Carolina and Georgia.” – (Chappell’s Miscellanies of Georgia.) The Treaty of Beaufort in 1787 yielded to Georgia the pretensions of South Carolina, and the legislature of the latter Commonwealth (hardly more than a fringe of Carolina) – eleven senators and thirty-four representatives-had to decide between the policies of relinquishment to the United States or making a bargain with the land speculators. To the United States in 1788 was offered the region annexed to West Florida before the war, with conditions which the United States asked modifications of, as well as the cession of the whole back country. Dropping that negotiation then, the legislature gave its ear to the speculators.

According to the statement of the main western agent of the South Carolina company, Dr. James O’Fallon, in his letter to Governor Miro at New Orleans, (May 1790) the project was conceived by himself “a long time ago;” he said that the members of the general company were “all dissatisfied with the present Federal government,” and some of them disposed to have recourse to Great Britain; that it was his private intention all the time to found a state as a rampart of the Spanish possessions, of which the inhabitants should be “the slaves of Spain;” that during the two years he had been secretly employed by the company and they were working with the members of the Georgia legislature, he was also in correspondence with and obtaining information from the Spanish government, and working up a colony of Irish, Americans and Germans for East Florida. O’Fallon’s representations to the Spanish authorities are, of course, to be taken with consideration of his purpose to secure Spanish indulgence.

The act of the legislature, approved by Governor Telfair December 21, 1789, was entitled, “An act for disposing of certain vacant lands or territory within this State.” It asserted in the preamble that “divers persons” from Virginia and the Carolinas had made application for the purchase of land on the Tennessee, Tombigbee, Yazoo and Mississippi Rivers, “within this State, and have offered to engage to settle the same, a part of which territory has already been settled, on behalf of some of the applicants,” under the Bourbon County Act, a statement which appears dubious in the light of later reports of the land commissioners. It was therefore enacted that all the land between Cole’s Creek and a line from its source east to the Tombigbee, and the line of latitude 33 degrees, bounded on the east and west by the Tombigbee and Mississippi, containing about five million acres, “shall be reserved as a preemption for the South Carolina Yazoo company, for two years,” from the passage of the act; and if the company paid into the treasury of the State at that time, $55,964, then the governor was empowered to grant to “Alexander Moultrie, Isaac Huger, William Clay Snipes, and Thomas Washington, and the rest of their associates, and to their heirs and assigns forever, in fee simple, as tenants in common, all the tract of land” described.

The region on the Mississippi, north of 33 degrees and up to the “northern boundary of this State,” and south of the Tennessee River, and east to Bear Creek and the Tombigbee, was to be granted on the same conditions to Patrick Henry, David Ross, William Cowan, Abraham B. Venable, John B. Scott, William Cocke Ellis, Francis Watkins and John Watts, and their associates of the “Virginia Yazoo company,” seven million acres for $93,741.

A third tract east of Bear Creek and south of the Tennessee River, joining the Virginia Company Tract on the west, bounded on the south by the 34th parallel, and running east from the Tombigbee 120 miles, bounded on the north by “the north line of this State,” and the Tennessee River, was to be granted on the same conditions to Zechariah Coxe, Thomas Gilbert and John Strother and associates, called the “Tennessee Company;” 3,500,000 acres for $46,875.

It was provided that the grantees “shall forbear all hostile attacks on any of the Indian hordes, which may be found at or near the said territory, if any such there be,” language which verged on the humorous, considering the situation of the frontier; “and keep this State free from all charges and expenses which may attend the preserving of peace between the said Indians and grantees, and extinguishing the claims of the said Indians under the authority of this State,” which practically meant that the companies would maintain a military establishment and treat with the Indians, which they made preparations to do. It was afterward claimed by the companies that it was the understanding that any credit paper of the State would be received in payment, except the “rattlesnake money.” The minority of the legislature made a protest, claiming that more advantageous offers had been made, payable in tobacco and other property and paper issues and public securities. (Moultrie vs. Ga., U. S. sup. Court).

The act proposed to convey the right of preemption to almost the whole of the lands of the Choctaws and Chickasaws and part of the Cherokee and Creek land. The attitude of the United States government was, “that although the right of Georgia to the preemption of the lands should be admitted to its full extent, yet should the State, or any company or persons claiming under it, attempt to extinguish the Indian claims, unless authorized thereto by the United States,” such action would be repugnant to the treaties of Hopewell and Seneca, the constitution of the United States, and the law regulating trade and intercourse with the Indians. Chappell observes that the transaction amounted to a license to the companies to go and make a conquest at their cost and risk; that the terms of the act professed ignorance whether the Indians were at or near the land, and made the pretense of forbidding “hostile attacks on them,” when the settlement itself was bound to be regarded as a hostile act. “Such was too much the logic and ethics toward the Indians of that period of mingled dread and exasperation in Georgia.” But giving such provisions of the act their most favorable interpretation, “still they were unavoidably mere empty, ineffective words,” as Georgia was not able to any sense to make them good.

O’Fallon, “general agent for and proprietor with, the South Carolina Company, through the whole western territory of the United States and in New Orleans and Pensacola,” as he called himself, made his headquarters at Louisville. He sought to involve George Rogers Clark in the enterprise, but did not succeed further than marrying the general'’ daughter. Col. John Holder, a noted Kentucky pioneer, “was persuaded to become military commander. When these agents applied to Wilkinson for assistance, that wily agent-in-chief of Spain, amazed at the letters and certificates they presented, his breath quite taken away by the audacity of the scheme, finally was convinced that the documents were not forgeries and proceeded to attempt to manipulate the enterprise in the interests of his employers.

The company’s agents, Cape and Holder, were advised from Charleston October 1, before the act was passed, (according to Gayarre, III, 272) that “everything was already settled with out sister State of Georgia and with all parties concerned here,” and the essential thing to do was ‘to take possession of and settle the land at once.” Holder was urged to go down as soon as possible “with your complement of emigrants, and form the establishment as agreed on,” because it would materially help the sale of land to say that settlements were already begun. Holder was told to make friends with the Indians and tell the Spaniards that their interests were “intimately, connected and inseparable,” that they would “form a highly advantageous rampart for Spain . . . . .At all events, take possession, exhibit this letter and even our contract to the Spaniards, and conceal nothing from them.” General Wilkinson, in Kentucky, knew about the project long before the act was passed. On January 4, 1790, he wrote to Moultrie and the others that he had talked it over with Governor Miro on his last trip to New Orleans. He advised the company that they could not possibly make a settlement before the next fall, and meanwhile they must send an able representative to confer with Miro, as nothing could be done without his favor and his influence with the Choctaws. Holder, Wilkinson informed Miro, was under his protection, and Cape he had loaned $3,000, and both were “insignificant creatures.” O’Fallon was a man of education, but flighty and vain. He had asked authority of the company to take charge of the project himself, and would “experience no difficulty in adding their establishment to the domains of his Majesty.”

Governor Miro was disposed to look at the project as “taking a foreign state to board with us.” He did not understand that if the South Carolina Company succeeded, “all the hopes of the United States (for limits at 31 degrees) would vanish, or at least they would find it no trifling enterprise to send an army to gain that point.” He wrote to Spain a discussion of the matter, being at a loss what stand to take. “These people,” he said, “are imbued with the conviction that these lands belong to them by purchase, and, in order to obtain them, they may momentarily accept all sorts of conditions. But would they not violate them, as soon as they should find themselves powerful enough to do it with impunity?”

He began preparations to erect a new fortification, at Walnut hills, the key to the lower Mississippi Valley. Meanwhile he notified Moultrie and his associates, through Wilkinson, that Spain was in possession, and until the question of limits were settled, an attempt to seize any part of the land would be an act of hostility. “It would be exceedingly painful to me to march with arms in my hands against citizens of the United States.” It appears that the companies urged the treaties of Hopewell and Seneca as basis of title of Georgia, the same treaties that Georgia had repudiated by act of legislature. Wilkinson advised the Carolinians that their Indian title was “not worth a pinch of snuff,” and Miro said that a concession of land based on the treaties “is a chimera.”

August 25, 1790, President Washington sent out a proclamation calling attention to the laws and treaties and requiring all persons to govern themselves accordingly. But this did not appear to discourage the enterprise. O’Fallon suggested to the president that it would save trouble to turn over to him the regulation of trade and treaties with the Choctaws and Chickasaws. Lt. John Armstrong, in Kentucky, in the latter part of 1790, heard of several persons organizing companies for the Yazoo country. O’Fallon, talking to him, took lightly the president’s proclamation, saying “many of the gentlemen of Congress were concerned in the business,” and offering to read a letter from one. On September 16, O’Fallon completed the organization of the “Yazoo Battalion”, with which a regular contract was made by him in behalf of the Carolina Company, the troops to be paid by grants of land. It was provided as an encouragement to women who might go with the battalion, which 500 acres should be given to the first one to land and 500 “to her who shall bring forth the first live child.” The battalion roster shows: John Holder, colonel; Thomas Kennedy, Lt. Col., Henry Owen, major; Ebenezer Platt, captain of horse; Thomas Reynold, captain of artillery; John McIntire, captain of infantry; and Martin Nall, John Sappington, Charles Hazelrigg, Francis Jones, Philip Alston, James Dromgold and Joseph Blackburn, captains of riflemen.

In the back parts of Virginia and in East Tennessee the talk was of a settlement by the Tennessee company, which advertised by poster, September 2, 1790, from Augusta, Ga., that an expedition would leave the confluence of the Holston and French Broad January 10, 1791, to open up for free distribution 480,000 acres south of the Tennessee, also to sell land on the north side, called the Bent. At this time the Cherokees were gathering at their “greatly beloved town, Estanloee,” on the waters of mobile, to deliberate on the treaty offered by Governor Blount, of the Territory South, and the request that they aid the United States in the war with the Northern Indians. They sent a messenger to the president protesting against the proposed invasion of their lands. Another proclamation was issued forbidding the enterprise. It appears from Pickett’s Alabama that the expedition did not get off until May 1791, when a party floated down in flatboats to mussel Shoals, under the command of Zachariah Coxe, built a blockhouse on an island, and prepared to do a land office business.

In 1790 the United States had made a treaty with Chief McGillivray of the Creeks, who was notified by Ensign Heth in 1791 that the United States ‘disapprove entirely of the projected settlements . . . under the Yazoo companies.” Heth was instructed to assure McGillivray that if the companies, in defiance of the president’s two proclamations on the subject, persisted in making settlements, “they will be considered to all intents and purposes entirely without the protection of the United States.” Coxe and his party found themselves very lonesome before they had been long at Mussel shoals, when a war party of Cherokees arrived under the command of Chief Glass. They agreed to depart and the buildings were burned.

Writing to Philip Nolan February 14, 1791, General Wilkinson said that O’Fallon was at Frankfort, “making wonderful exertions;” he had engaged George Rogers Clark to command his troops, and had made “extensive contracts for provisions, negroes, horses, etc. The company offering me 20,000 acres as a compliment, but I finally refused it.” (Minor papers.) General St. Clair, however, suppressed O’Fallon, under orders from the secretary of war.

Edmund Phelan was sent by the South Carolina Company as its agent to Natchez, through the Indian country, piloted by Thomas Basket, an Indian Trader, who was to be the official interpreter. They arrived at Natchez September 225, 1790, expecting to meet O’Fallon and Holder with settlers and lumber for houses, and goods for the Indians, after which Phelan and Basket were to prepare the Choctaws for a settlement at Walnut hills and on the Yazoo. Early in 1791 Commandant Gayoso showed Phelan a letter he had received from O’Fallon saying they would be down shortly, but they never came.

The report of Madison, Gallatin and Lincoln, in 1803, was, that the Carolina and Virginia Companies, “did, within the two years, tender in payment to the treasurer of the State the whole amount of the purchase money in evidences of the public debt of the State. The payment was refused on the part of Georgia. The money which had been deposited by the Virginia Yazoo Company was withdrawn; but the South Carolina Company instituted, before the Supreme Court of the United States, a suit against the State, which was terminated by the amendment to the constitution relative to the suability of States.”

When Georgia ceded the western lands, the South Carolina and Virginia companies claimed indemnification for a violation of contract on the part of Georgia, attempting to prove by collateral evidence that it was the intention of the legislature that they pay in State certificates of debt. Included in this evidence were their own petitions for the passage of the act, and the protest of the minority of the legislature, made principally, it was alleged, because the payments were to be made in depreciated certificates. The commissioners decided (1803) that they had no equitable claim either for the land or for compensation. The claim was carried before Congress and a committee of the house sustained the judgement of the commissioners in January 1804.