Fletcher v. Peck

My 11th grade US history teacher was popular with some of my classmates. She was young, petite, and very serious. After I graduated she married another very serious young faculty member, a biology teacher who taught some of my friends. I wasn’t a fan of Ms. F. She had a habit of outlining various truths on the blackboard, for example “the four causes of the Civil War” and then expecting us to regurgitate them on her exams. There was an unspoken emphasis on the word “THE” because I lost points on those exams for combining two of her ideas into one, adding ideas of my own, and most definitely for leaving one or more of her ideas out of my essays. 

There were definitive correct answers for surprising questions. During a unit on the early Republic Ms. F asked us to organize and present a debate on Jay’s Treaty (on which more later) which was the subject of great controversy in 1794 when it was negotiated and signed. That controversy was in some part responsible for the division of the United States into political parties. I really wanted to participate in that debate because I had some strong opinions based on what I read in our textbook, but I was not chosen. My disappointment didn’t last long, because, immediately after the debate, Ms. F told us what the correct answer was, (Jay’s Treaty was good) accompanied as always by four reasons why which she wrote on the board. We were expected to copy this and repeat it on the next exam. I wrote my own assessment on that test, which differed on every point from hers, and received no credit, of course.

I bring all this up to give some context to the view of history that we were taught. It was the era of what came to be called “consensus history” which I will describe as the view that the US has been wonderful from the beginning and defined by internal unity, not conflict. Yes, there were shortcomings to American democracy, but our essential goodness led to step-by-step rectification of those blemishes: voting rights were extended to men without significant property and - much later - to women, slavery was abolished, and the country grew in size and power.

Generally speaking, our study of the major decisions of the Supreme Court followed that  same narrative path, that the Promise of America unfolded stepwise with the Court’s recognition of what that promise entailed.

One early decision interested me greatly because it seemed to defy elementary common sense, although our textbook and Ms. F both described it as a great step forward. Fletcher v. Peck, 10 U.S. 87 (1810) was the first time the Court declared a state law unconstitutional. We were taught that it upheld the sanctity of contracts and that it meant that business people could trust that the United States would be a safe place to invest.

The background meant that it was a real test because the original contract was beyond ethically questionable, it was corrupt in the extreme. When the US became independent the boundaries of the 13 new states were, let’s say, uncertain. Virginia, for example claimed what became the states of Kentucky, Ohio, Indiana, Illinois, Michigan, and Wisconsin, along with its own west, which seceded to become West Virginia during the Civil War. Georgia, which is the subject of Fletcher v. Peck, claimed most of what is now Alabama and Mississippi. In 1795, expecting that they would soon by ceding that territory to the United States, the Georgia State Legislature sold that land, which it called the Yazoo District, to land-speculation companies for a little over a penny an acre, which was a ridiculously low price even then. The territory was significant, larger than the entire State of Georgia is today. And every member of the legislature either were shareholders in the companies, or received bribes for their votes, or both. The scandal was so great that almost every one of them were kicked out by the voters in the next election. And the new legislature immediately repudiated the sale, going so far as burning the original law in public. And that original sale, which I have no problem calling fraudulent, is the sacred contract that the Supreme Court chose to call inviolable.

The speculators who created and benefited from the law expected Congress to support them. Congress did not, so they appealed to the Supreme Court. The Court’s decision upheld the original sale. The Court concluded that the State of Georgia had a right to sell the land and so the thoughts the legislators were not relevant. The language of the Court made this simple:

The Legislature of Georgia, in 1795, had the power of disposing of the unappropriated lands within its own limits.

In a contest between two individuals claiming under an act of a legislature, the Court cannot inquire into the motives which actuated the members of that legislature. If the legislature might constitutionally pass such an act; if the act be clothed with all the requisite forms of a law, a court, sitting as a court of law, cannot sustain a suit between individuals founded on the allegation that the act is a nullity in consequence of the impure motives which influenced certain members of the legislature which passed the law.

When a law is in the nature of a contract, when absolute rights have vested under that contract, a repeal of the law cannot devest those rights.

A party to a contract cannot pronounce its own deed invalid, although that party be a sovereign State. A grant is a contract executed.

A law annulling conveyances is unconstitutional because it is a law impairing the obligation of contracts within the meaning of the Constitution of the United States.

To sixteen-year old me, this looked a lot like Hamilton’s 1790 assumption of the US debt. Much of that earlier debt was issued to soldiers of the Continental Army instead of pay. Finding it worthless, the Revolutionary veterans passed it off to speculators for pennies on the dollar, many of whom were members of HamiIton’s personal circle. Hamilton, as Secretary of the Treasury, ensured that those speculators be paid at full face value. The argument was both that the desperate veterans had betrayed a lack of trust in their own country, and that - in any case - the US could only be assured that its bonds would be purchased if whoever the holders might be at maturity were paid back. 

Like that debt assumption, this decision benefited financiers and speculators over the people of Georgia, who I, at the time, believed were the ones being defrauded.

From 1974 to 1999 I taught US History, among other things, to my high school students. I cannot remember ever teaching Fletcher v. Peck. So far as it established the Court’s power to overturn laws it deemed unconstitutional, I was always more interested in Marbury v. Madison, 5 U.S. 137 (1803) which came first and seemed to me to show how Justice Marshall could be slick in asserting power for the Court (which the new President, Thomas Jefferson, opposed) by overturning a law that Jefferson didn’t like anyway and which didn’t require him to do anything he didn’t want to. 

And here, twelve paragraphs in, is where I finally begin to arrive at my point, which is not about Ms. F nor how 16-year old Rick disagreed with her. It is foreshadowed, though, by that phrase about who I believed at the time was being defrauded. Because when Edward Baptist published The Half Has Never Been Told: Slavery and the Making of American Capitalism in 2014 it upended so much of what I thought I understood. Especially the importance of the enslavement of African people and their descendants to the development of American finance capital. And, as you will see, that turned out to be only one thing. Because I believed that Fletcher v. Peck was about contracts. It never occurred to me that it was about race. It never occurred to me that it was about enslaving Black people. And it never occurred to me that it was about robbing, dispossessing and removing Indigenous people.

The center of the crime of slavery, to me, had been the theft of people’s lives and labor. I knew - and taught - that unpaid labor enriched the white people who bought, branded, and beat their Black neighbors and even their own Black kin. I also knew and taught that slavery enriched the whole United States. The coerced cotton crop accounted for more of the country’s gross production than all other products put together. But I mistakenly thought of the domestic trafficking of Black people as incidental to that production, a westward movement that was driven by the way the drivers of enslaved people had impoverished the soil of their own land. Baptist's book recentered domestic human trafficking as an essential source of profit, as a foundation for financial markets, and as an essential marker of whiteness, of what it meant to be a white man. 

What does this have to do with Fletcher v. Peck, you ask? I will quote Baptist at length:

For although coffles got no closer than Pennsylvania Avenue to the room in which John Marshall read out his 1810 decision in Fletcher v. Peck, their chained footprints walked all over the case file. The technical issue before the Court was whether the Georgia state legislature could overturn a contract of sale into which a previous session had entered. Marshall and the Court ruled that the people of Georgia could not overturn the sale. The contract might have been accomplished by bribery. It may have contravened the will of the majority of white Georgians. But the sale to the investors’ land companies was a sale of property all the same, and property rights, by the chief justice’s interpretation of the contract clause of the Constitution, were absolute. The people who invested in the company—mostly New England money-market types and bankers—should be repaid from the sale of the land, which was now held by the federal government. 

Baptist acknowledges that Chief Justice Marshall never mentioned slavery in his decision. But, Baptist asks, “If the people of Georgia couldn’t overturn a contract born from obvious corruption, how could a legislature or any other government entity take slaves away from owners?” 

And take a closer look at the financing, too. This is really hard to fathom and I had to read it - along with related passages about the Panic of 1837 - multiple times (multiple times!) before I could wrap my head around it. The Yazoo land:

was now being sold by the federal land office in Huntsville to purchasers who typically relied on credit. By the end of 1818, the land office had dealt away almost 1 million acres, which officially brought in $7 million. But speculative purchasers, including Andrew Jackson, James Madison, and the chief employees of the local land office, paid only $1.5 million up front. Of that amount, $1 million was in the form of scrip that the federal government had given to investors who had received compensation after the 1810 Fletcher v. Peck decision. Thus government-supplied credit had financed 93 percent of the cost of the land in the valley before Rives - money that would have to be repaid from sales of cotton not yet planted by slaves not yet bought. 

Francis Rives, being a Virginian who rode into Huntsville, Alabama in January, 1819, at the head of twenty-some Black people who he had marched - in chains - 670 miles from Southampton County, Virginia. This means that the same bank credit, underwritten by the US government, that financed the purchase of land in Alabama and Mississippi financed the purchase of the enslaved people who would enable the borrowers to pay back all those loans. Do you wonder why people who have inherited all that wealth don’t want anybody to learn this history?

And that is not all. That land was sold by Georgia before it was owned by Georgia! It is not just that the territory was disputed. It is not just that Georgia sold it on the eve of ceding it to the United States to create the territory that became Alabama and Mississipi. Georgia sold it while it was still occupied by the Creek, Choctaw, and Chickasaw Nations and while they still retained legal title! We don’t just use the term “speculators” for those initial purchasers because they were speculating that the land would be worth something. We call them speculators because they were speculating that the United States would assert legal title to those lands, not just sovereignty, and that they would then use the full power of the United States Army to actually fight the Indigenous owners and drive them - in the case of the Creeks - 760 miles from Fort Mitchell, Alabama to Fort Gibson, Oklahoma. 

Native Rights attorney Walter Echo-Hawk discussed this in his 2010 In the Courts of the Conqueror: The 10 Worst Indian Law Cases Ever Decided. And Fletcher v. Peck isn’t even one of his ten worst; it just serves as introduction for Johnson v. M’Intosh 21 U.S. 543 (1823), which is even more egregious. Reading Echo-Hawk I discovered that Fletcher was actually a feigned case: the attorney for the speculators, having failed to convince Congress, invented a fake land sale to convince the Justices that an honest purchaser, in all innocence, had purchased land from one of the people the original Georgia legislature sold to. The attorney for the speculators selected the “purchaser” who would bring suit against his clients. He also arranged for that “plaintiff” to be represented by an attorney who was a notorious drunk. (Chief Justice Marshall actually postponed the hearing a few days so that attorney could dry out.) He brought in as co-counsel Joseph Story, one of the speculators who stepped down from the House of Representatives to protect his financial interests in the Yazoo lands and who would, within the year, be appointed to the Supreme Court himself! It is also worth mentioning that Chief Justice Marshall was himself a speculator in western land.

But the center of this is the Court’s willingness to discuss the validity of the sale of Native lands that the Natives themselves had never yet transferred, land on which they had their farms and homes, land on which their towns were built. In some cases it was land worked by African American people who had been enslaved by wealthy Natives. Marshall never addressed Indigenous land ownership of the Yazoo in Fletcher v. Peck, any more than he addressed the issue of slavery. He didn’t get to it until 1823, in Johnson v. M’Intosh.

This was another fake case, arranged by the same attorney who arranged Fletcher v. Peck. This time, though, he not only chose both plaintiff and defendant, he also hired his opposing counsel. But that is a side issue. So is the fact that, in this later case, Chief Justice Marshall actually had a personal interest in the lands in question, ie, he was one of the original speculators! It is his decision that matters. Echo-Hawk wrote of Marshall’s decision:

Similar to disclaimers in the slave cases, Marshall began the inquiry into the nature of Indian landownership by saying his analysis cannot examine “principles of abstract justice,” nor could the Court question rules by which property is acquired. This is judicial code for “something very unjust is about to happen.”

I’ll spell it out briefly. Because land thefts and “purchases” by private individuals had brought chaos and bloodshed to the western frontier even before the Revolution, the British government had outlawed them. That policy was continued by the US government after independence. But Marshall then turned that into the right of the US government to dispose of the Natives’ land at will. He claimed that England possessed that right simply by having “discovered” the land(!) and that it had now passed into the hands of the United States. Echo-Hawk explains that:

the discovery of Indian land by Europeans operates to transfer legal title from the Indians to the government, according to Marshall. This title was variously described by the Court as the “fee,” “absolute title,” or the “absolute ultimate title,” and the Indian right was described as a “right of occupancy” or “right of possession,” which could be extinguished by the government through purchase or conquest.

This was not spelled out in Fletcher, but it clearly underlies that fact that an entire argument about a territory larger than the State of Georgia, and which was still occupied by Native peoples in 1810, could be the subject of a Supreme Court case in which the Native inhabitants never received legal counsel or even a mention. 

I want to review:

• The original Yazoo land transfer was of land claimed by Georgia, but occupied by Indigenous peoples
• That sale was made by a legislature knowing that it was going to have to transfer the territory to Congress (and did, immediately after)
• The sale was made at a price that was transparently and dramatically below market value
• The legislature that made the sale was made up of individuals who were either purchasers or bribed by the purchasers or both
• The people who purchased that land, whether immediately or in the secondary market, had no interest in the land itself except as the source of windfall profits to the eventual purchasers
• Those eventual purchasers didn’t have money to actually buy the land, but were heavily subsidized by means of cheap Federally-backed credit
• The only way they would be able to repay those loans was not by farming the land themselves, but by enslaving and coercing other people (Black people) to farm the land
• They didn’t have the money to purchase enslaved people either, but were able to secure credit by using the land (which was already the subject of a speculative loan) as collateral!

A part of this story is how a “fact” of US History takes on so many different forms as you shine different lights on it. 16-year old me learned from my textbook about the conflict among white people over the Yazoo Purchase. I saw no reason to look back until I read Edward Baptist and Walter Echo-Hawk on how a Court case like Fletcher v. Peck can be about people who aren’t mentioned in the briefs, arguments, or decisions, and who are neither present in the Court room or represented by attorneys. 

I promised to returned to the Jay Treaty, the one Ms. F asked us to debate and then told us was the right choice, regardless of how controversial it may have been in 1794. When I was sixteen I felt that this treaty was an effort by wealthy Federalists to ally the US with the British monarchy instead of revolutionary France. True, the treaty forced England to give up its interior forts, but they had already promised to do that in the Treaty of Paris, which secured US independence in 1783. But there is always another light to shine. Now I’m reading Ned Blackhawk’s 2023 book The Rediscovery of America: Native Peoples and the Unmaking of U.S. History. He explains how those interior British forts - at Detroit, Mackinac, Niagara, Oswego, and Toledo - provided a counterbalance to US military and economic power that allowed the Native people of the area some defense against predatory white settlers who wanted to murder them, displace them, and steal their land. With a British military presence they were able to demand that the Ohio River be a northern boundary to the United States. Without those forts, US government promises and treaties meant nothing.

This has been a discussion of case law. It has been a discussion of how history can be hidden even while being taught. I want to return to some of the underlying issues that explain why even that history is being made illegal.