PRIVATE CONTRACT PROVISION IN ORDINANCE OF 1787

HOW CAME IT THERE?

As there is no clause of similar import to be found in any of the early constitutions of the several states, it is a matter of some historical interest to inquire whether there was any special reason for its introduction into the organic law of the territory northwest of the river Ohio. The clause is in the following words: "And in the just preservation of rights and property, it is understood and declared that no law ought ever to be made or have force in said territory that shall in any manner whatever interfere with or affect private contracts or engagements bona fide and without fraud previously formed." The object is seen to be the "just preservation of rights and property" in said territory.

What kinds of "rights and property" were at that particular time under consideration that would be the subjects of "private contracts"? It is well known that the attention of congress was called at that time to a large sale of land. Land constituted the only kind of property which was then liable to be bought under "private contracts." The parties engaged in that purchase of lands were consequently more directly interested in such a provision than any others. Is it probable that congress was influenced by their wishes and interests?

That the originators of the land purchase had previously given the matter attention is evident from the manner of their dealing with it, and the reasons why they preferred a private to a public contract for lands. At a meeting of the Ohio company, held at Brackett's tavern, March 8, 1787, "It was unanimously resolved, that three directors should be appointed for the company, and that it should be their duty immediately to make application to the honorable congress for a private purchase of lands, and under such descriptions as they shall deem adequate for the purposes of the company."

On the 16th of March Manasseh Cutler (one of the trustees appointed for the above purpose) wrote as follows to Hon. Nathan Dane, at that time one of the Massachusetts delegates in the continental congress: "The trustees entertain hopes that congress, notwithstanding this land ordinance, will not refuse to make a private sale to this company, as it will greatly accelerate the settlement, save the company a large expense,

and enable them to purchase the whole in one body." We are thus presented with the plan and intention of the company to make a private purchase of land. But why a private purchase? It is evident that they wished to avoid the terms of sale as fixed by the land ordinance of May 20, 1785, as Dr. Cutler says they hope that "notwithstanding this land ordinance they will not refuse to make a private sale."

Now, what were the terms of the land ordinance which were in their way? Briefly, as follows: 1st. After being surveyed and platted by the general government, the different townships were divided up by lot among the several states. 2d. The ranges would only be sold out by offering alternately a full township and the next one in sections. 3d. The sales were at public vendue, after due notice of time and place.* Congress had therefore adopted the system of public sales, while the Ohio company wanted to negotiate for a private purchase; this for the reason stated, that they would have their land in one body.

When the Ohio company appeared before congress they asked that the law then in force should be ignored or set aside, so that they might acquire lands by a "private contract" instead of at a public sale. The above provisions of the law of May 20, 1785, were in force at the time the purchase of the Ohio company was made, and remained so until July 9, 1788, when they were repealed.

It would seem that it was a very proper precaution for the just preservation of rights and property that no law should have force in that territory that could invalidate “private contracts." Whether this irregularity of congress in violating their own laws by making a large "private contract" in the face of the lawful provisions for "public vendue" was the occasion for protecting "rights and property" in the territory, or not, it is evident from the following extract from a letter written by R. H. Lee to General Washington, dated July 15, 1787, that the "sale of lands" was the occasion for a "strong-toned" government, and for the "right of property to be clearly defined." He says: "I have the honor to enclose to you an ordinance that we have just passed in congress for establishing a temporary government beyond the Ohio as a measure preparatory to the sale of lands. It seems necessary for the security of property among uninformed and perhaps licentious people, as the greater part of them who go there are, that a strong-toned government should exist, and that the right of property be clearly defined."

Now, if we accord to the managers of the Ohio company that degree of intelligence and business capacity which was requisite for a successful *Life Rev. M. Cutler, Vol. I., p. 191.

performance of their duties, it would seem to be a natural result that a provision so clearly calculated to protect their interests would have received their attention and have been inserted at their instance. That their agent regarded the transaction as a private contract is evident from his entry in his journal, October 27, 1787, at the time he paid $500,000 to the United States on the purchase. He speaks of it as the "greatest private contract ever made in America." *

But there are other considerations that may be presumed to have had weight with the Ohio company. By their articles of association, adopted March 3, 1786, it was provided that in any purchase that should be made of land the fee was to pass from the government into the trustees. Then it was provided that individual shareholders might select agents to whom deeds of lands were to be made by the trustees-then the agents to the shareholders.

In

In this way there was provision for three private contracts: Ist. As between the government and the trustees. 2d. Between the trustees and agents. 3d. As between the agents and individual shareholders. addition to this system of transfer of title, bonds and obligations were entered into between the directors and agents jointly and severally, and between the agents and the shareholders, conditioned upon the faithful performance of their several duties. This manner of managing the large real estate that fell to the disposal of the company was a system of "private contracts or engagements," upon the validity of which would depend the "just preservation" of their "property" to themselves and to all future owners. The perfect order and regularity of the proceedings of the company, as shown by their journals and voluminous statements, filed away and still preserved, testify to the care and rigid exactness of their fulfillment of their trust. No shadow of doubt has ever rested upon a title

growing out of this system.

It has been claimed that this important provision of the ordinance originated with Mr. Dane. If this were true it is certainly very remarkable that he did not insert it in the ordinance reported on April 26, 1787, as he was a member of the committee making the report. It does not appear there or in the resolutions of April 23, 1784. In fact, it does not appear in any organic law of prior date to July 13, 1787. That Mr. Dane or some other member of congress, in the exercise of his legislative function, performed the duty of writing it out and moving its insertion is beyond doubt. But for the long period that the subject of a government for the western territory was exclusively in the hands of congress, with no outside

*Life Manasseh Cutler, Vol. I., p. 326.

person to influence their action, it certainly had not occurred to any o. them to propose that service. But the Ohio company came to them with this identical principle as an essential and indisputable part of their plan. They must have a private contract or nothing; and, at the instance of their agent, congress ignored their own law and plan of sale by “public vendue" and gave them a private contract, that threw around that transaction, as well as all others of the same nature, the sanction of organic law.

After the close of the revolutionary struggle there prevailed a very trying and disturbed condition of affairs among the people generally throughout the country. Business of all kinds had been disarranged by the war, debts had been contracted, money was scarce, paper currency depreciated, taxes heavy-in a word, the great mass of the people were sorely distressed. In Massachusetts this resulted in open insurrection. The same weapons that had gained Independence were now turned against the lawful authorities. It required the strong arm of the state to meet open revolt by force.

These exciting scenes, known as "Shays' Rebellion," were enacted in the immediate neighborhood of the men who were at the same time engaged in the principal enterprise of relief from prevailing distress by the scheme of settlement on the banks of the Muskingum and Ohio. The following extract from Dr. Cutler's journal shows the close contact he was brought into with that disturbed state of affairs: "January 8-13, 1787: Men sent to oppose the insurrection in the western counties of the commonwealth. January 15: Militia company called together in order to get men for opposing the insurrection. I read to the people at 10 o'clock the address from the General Court, and then addressed them on the nature of constitutional government and the present dangerous state of our affairs, and endeavored to point out the consequence of opposition to the laws. January 20: The men marched to Cambridge."

This occurred four months before he was called upon in New York to consider this very subject of a constitutional government, as applicable to his own future home and the homes of the associates for whom he was acting. To him the lesson of the insurrection was vastly important, and he must have been a dull learner if it failed to stimulate his efforts in the direction of a "strong-toned government" and securing pledges for the "just preservation of rights and property."

MARIETTA, OHIO, March, 1889.

LINCOLN'S RESTORATION POLICY FOR VIRGINIA

THE BROADSIDE-OFFICIAL SUMMONS

Mr. Stiles' admirable paper with the above title, published in the September number (1889) of the Magazine of American History, lacks one fact of importance to make it exhaustive of the subject-the final act in the drama which he so skillfully pictures. That fact I am able to supply in the official call to the Virginia legislature to convene in Richmond under the permission given by President Lincoln. I have never seen it in print except in the broadside which I own.

The disorded condition of Virginia immediately following General Lee's surrender made transmission of accurate news somewhat difficult. Governor Smith, Hon. Samuel Price, president of the senate of Virginia, and Hon. Hugh W. Sheffry, speaker of the house of delegates, were at their homes in Virginia and Augusta. From these alone an official call for the meeting of the legislature could issue. As soon as it was possible to authenticate the report of Mr. Lincoln's action and that of the prominent citizens in Richmond, Messrs. Price and Sheffry published the following summons to the senate and the house. It was issued from Staunton seven days after Mr. Lincoln's permission had been recalled, of which recall the honorable gentlemen were evidently entirely ignorant.

"WHEREAS, the undersigned have received satisfactory information that with the sanction of the military authorities of the city of Richmond, acting by authority of the President of the United States, a number of members of the general assembly and other prominent and influential citizens of Virginia have requested the general assembly to re-assemble in the city of Richmond on the 25th instant, to take into consideration the condition of the commonwealth, full guarantees of safe conduct and protection having been given by said military authorities to members and officers of the two houses while going to, remaining in, and returning from the city of Richmond, and of free discussion in their legislative deliberations; and,

Whereas, the undersigned have been advised and requested by members of the general assembly, the attorney-general of the commonwealth, and other influential citizens, to summon the members of the general assembly to convene in the city of Richmond at as early a day as prac ticable: