The Scioto Scandal

In order to raise much needed funds for the new territories and permit settlers to acquire land, the public domain was sold in large parcels at public auction.  The minimum bid was $1 an acre, but no bid would be accepted for less than a whole parcel - 640 acres.  This obviously was more than a single farmer could farm, and it was far too expensive for any settler to afford. 

Therefore, land speculators were the major bidders.  With considerable means and political influence, they were able to win preferential legislation allowing them to purchase large tracts with small payments.  Once secured, the trick was to sell it to would-be pioneers in small plots at high prices. 

One of the most infamous land speculation scandals in the new western areas was the Scioto Scandal.  In 1787-1790 a devious group of speculators attempted to gain title to a huge chunk of public land in the west when the existing policy was prohibiting purchase of large tracts by speculators.

William Duer was the official who handled government land sales.  General Arthur St. Clair was president of the Continental Congress, and Rev. Manasseh Cutler represented the Ohio Company (a group of New Englanders). 

In complex and shady transactions, the Ohio Company was to purchase 65 million acres in Ohio, then secretly turn over five million of those acres to Duer, St.Clair and their associates in the Scioto Company.  An office was even opened in Paris to finance the scheme.  In Paris pamphlets were written promising well-developed land.  600 prosperous city dwellers bought land in the scheme. 

 The dishonesty of those who conducted the sales in France, the unprofessional business methods and the failure of Duer and his associates to meet their contract with the Ohio Company, caused the collapse of the Scioto Company early in 1790, and two subsequent attempts to revive it failed.

Next time...Foreign plots against the new United States
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Today in Pioneer History: On November 12, 1867, after more than a decade of ineffective military campaigns and infamous atrocities, a conference begins at Fort Laramie to discuss alternative solutions to the “Indian problem” and to initiate peace negotiations with the Sioux