Speculation Nation: Land Mania in the Revolutionary American Republic

BOOK REVIEW: Speculation Nation: Land Mania in the Revolutionary American Republic by Michael A. Blaakman (Early American Studies. Philadelphia: University of Pennsylvania Press, 2023)

The mark of excellent historical analysis is a fresh point of view on highly contested, deeply entrenched issues, whether you fully agree or not with its arguments. This is the case with Michael A. Blaakman’s new book, Speculation Nation: Land Mania in the Revolutionary American Republic. Over the past several years, there has been intense debate over whether the practice of slavery was foundational to the emerging United States. The Princeton University professor poses a different argument. He asserts that the dispossession of Native American land is also central to America’s founding (page 18). As a collateral contention, Blaakman claims that settler colonialist access to Native territories sparked maniacal land speculation inappropriately dominated by commercial elites turning land ownership rights into financial commodities (7). This unbridled sale of large land blocks created an economic system that Blaakman terms speculative capitalism. He argues that the resulting land mania helped knit the nascent union and solidified the Federal government’s power and authority (279). The first part of the author’s thesis is solidly supported, while the second part is open to additional debate.

Over the first hundred and sixty years of American colonization, European settlers amassed control over new land through conquest and purchases. Blaakman argues that starting after the American Revolution, leaders of the new nation created a financial derivative, preemptive property, based upon the right to procure land that was not physically or legally acquired. Preemptive property rights to land could be bought and sold while Indigenous groups occupied and governed the land. The development of this right permitted land speculation in territories not under American governmental control, to the dismay of Indigenous Peoples. Blaakman’s chapter on preemptive rights uniquely contributes to understanding Native American residents and White settler property disputes and lays out in easy-to-understand terms complex legal principles. This alone is an outstanding reason to read the book.

The author describes two types of preemptive rights, backed up by impressive land sales research. First, revolutionary-era governments issued land bounties to Continental Army and militia veterans instead of cash compensation for their wartime service. Blaakman identifies fifteen military districts, mostly in regions controlled by Native Americans, where veterans could use their bounty certificates to obtain clear land titles. An active secondary market quickly emerged as most veterans had no way to support themselves other than to sell their land bounties, often at a deep discount to the eventual sale price. Second, the new federal and state governments needed ready cash, so they entertained proposals from aspiring land barons, such as Robert Morris and Henry Knox, to purchase large land tracts, some of which were in the millions of acres. Blaakman identifies sixteen of these ventures, which amassed land rights to eighty million acres.

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As several of these land companies received preferential access through political connections and backroom deals, Blaakman asserts that their “maniacal” land speculation redefined the commercial landscape, creating speculative capitalism (312). While government and private sector corruption damage society, he casts the practice of speculation in negative terms, including “irrational,” “absurd,” “inexplicable,” and “unbridled” (5). Readers would benefit from a definition of financial speculation and why it is unscrupulous. For example, the Oxford Dictionary defines speculation as “to buy goods, property, shares, etc., hoping to make a profit when you sell them, but with the risk of losing money.”[i] Another scholar who analyzed Robert Morris’s large land purchases assesses they were not bubble prices but solid investments with profit potential of nine percent that failed simply due to increasing interest rates and the Panic of 1797.[ii] Additionally, some eighteenth century examples of speculative investments have been portrayed positively or neutrally. For instance, sea privateering ventures involved risky and speculative investments of capital in the hopes of turning a profit from captured ships and cargoes, which significantly contributed to the Rebels’ cause.

A more balanced perspective or examples of additional adverse effects from mega-land consortiums would improve the support for his thesis. In several instances, the author could have substituted “investor” for “speculator” to provide a fairer view and highlight the fundamental issue of displacing Native nations. Other terms, such as developers, market makers, and government funders, could be used in various places in the book to describe multiple roles and motivations of the large land consortiums. Another example is land right purchasers, who provided valuable liquidity to thousands of destitute veterans without other assets for daily sustenance and shelter. Additionally, the author asserts that the unbridled land policies produced “negative moral connotations of speculative finance” (272). His work does not clarify how speculation or massive land investment is iniquitous a priori. The immorality is the forcible taking of Native American land.

Further, the arguments about the late eighteenth century impact of large-scale real estate companies on the American acquisition of indigenous lands would benefit from better context and defined dimensions. First, while the author notes that these companies amassed rights to a hefty eighty million acres, this acquisition represents about ten percent of the territory east of the Mississippi and about twenty percent of the “unsettled” territory. Therefore, the land companies only controlled a fraction of the land. Second, the large-scale land companies were spectacularly unsuccessful and existed primarily on paper, with little real estate development. In financial terms, the governments’ experiment with outsourcing land sales to large wholesale purchasers failed, forcing the implementation of a new retail land sales process to individual investors through government-run land offices. The outsourced land sale model existed for a few short years, proved unprofitable, and entered bankruptcy by the late 1790s. It would seem that their enduring legacy would be minimal.

However, the author makes a strong case that, despite their short and unprofitable lives, the failed land consortiums had discernable lasting impacts, including ensnarling the land titles of subsequent purchasers, facilitating Federal power, and establishing the principles of turning Native lands into financial commodities. In some cases, subsequent land purchasers found their real estate titles in dispute as a failed company’s creditors sought to repossess their properties. Several large consortiums operated across state lines and lobbied the new Congress, which enhanced federal power and provided the new government operating funds from land sales. Lastly, President Thomas Jefferson employed the principle of preemptive property rights in the Louisiana Purchase, a region controlled by Native Nations.

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A counter-example of the large-scale land company domination thesis is the experience of White American settlers in the present-day boundaries of Vermont, which is not addressed in the author’s book. Native Americans largely abandoned the Vermont region due to the intense fighting during the French and Indian and Revolutionary Wars, opening up the area for White American settlement. Ethan Allen and his relatives formed the Onion River Company, the only large land company in Vermont. At its height, the Allen clan controlled sixty-thousand acres.[iii] This considerable property represented only one percent of the total Vermont acreage. During the 1780s and 1790s, Vermont experienced a hefty influx of property purchasers and settlers. The Vermont government sold townships to small groups of Revolutionary War veterans and others who moved to the state. The land owners fit Blaakman’s characterization of “yeoman republican farmers.” The mega-land company ventures identified by the author did not operate in the Green Mountain region. Vermont-style land acquisition and settlement patterns existed in other parts of the country, including the Scotch-Irish immigrants in Western Pennsylvania and Appalachia regions and the Revolutionary War veterans in Eastern Kentucky.

Given the minimal actual land development by the million-acre land companies, Blaakman’s summary that America became a “republican empire with financial speculation at its core” might be better written as America operated a republican government that incentivized investment in western land (16). In any event, America’s land acquisition and development policies worked to dispossess Native Americans of their lands, making huge new territories available for White American settlement.

While one may disagree with the author’s assessment of the importance of risky million-acre land companies or whether speculative investment is good or bad, I recommend reading his book thoroughly and with an open mind. The best histories engender new thoughts and ideas. I especially recommend this book to those who debate the role of slavery in America’s economic and political development. After reading Blaakman’s work, many will embrace a fresh point of view and will conclude that the dispossession of Indigenous homelands is America’s fundamental foundation. The forcible taking of Native nations’ domains opened up fertile regions for slavery to grow and prosper.

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[i]“Speculation,” in Oxford Learning Dictionary (Oxford, England: Oxford University Press, 2023).

[ii]Edward L. Glaeser, “A Nation of Gamblers: Real Estate Speculation and American History,” American Economic Review 103, no. 3 (March 2013): 1–42, 10.

[iii]John J. Duffy, H. Nicholas Muller, and Gary G. Shattuck, The Rebel and the Tory: Ethan Allen, Philip Skene, and the Dawn of Vermont (Barre, Vermont: Vermont Historical Society, 2020), 296.