Yazoo Land Fraud

The Yazoo Land Frauds of 1789 and 1795 involved the portion of Georgia west from the Chattahoochee River to the Mississippi River and northward from the thirty-first parallel to what is now the Tennessee state line, forming the present-day states of Alabama and Mississippi.

In 1789 three land companies—the South Carolina Yazoo Company, the Tennessee Yazoo Company, and the Virginia Yazoo Company—organized to buy land in the Yazoo tract. The Georgia legislature agreed to sell about sixteen million acres to the three companies for two hundred thousand dollars in cash to be paid over two years. The companies defaulted, however, and title to the lands reverted to Georgia.

In the mid-1790s, four new and better-financed companies—the Georgia Company, Georgia-Mississippi Company, Tennessee Company, and Upper Mississippi Company—sought to acquire the Yazoo lands. . On 7 January 1795 the Georgia legislature approved the sale of thirty-five million acres—two-thirds of the state’s lands west of the Chattahoochee—to the four companies for five hundred thousand dollars.

The bill’s passage had been accomplished through land company shares and cash gifts to the legislators. Led by US senator James Jackson, the people of Georgia erupted in outrage against the sale. Consequently, the 1796 state legislature, comprised largely of anti-Yazooists, repealed the act on 13 February 1796, voiding any claims or title that arose as a result of the sale and declaring the territory in question the sole property of Georgia. The repeal act provided for refunds to purchasers, but not all purchasers applied, because accepting the money meant abandoning the claim. Further, much of the Yazoo land had been quickly resold, especially to Boston-area investors. Most important for future events, on the same day the repeal act passed, the New England–Mississippi Land Company bought most of the holdings of the Georgia-Mississippi Company—eleven million acres in the southwest section of the Yazoo tract. The New England purchasers maintained their innocence and their ignorance of the dispute surrounding the sale, while the anti-Yazooists argued that there were no innocent purchasers since the repeal act had ordered that the reversal be publicized throughout the country.

Nevertheless, the shareholders pressed their claims, lobbying Congress for compensation between 1803 and 1806. When that effort failed, the shareholders took their case to the US Supreme Court. In Fletcher v. Peck (1810), Chief Justice John Marshall, writing for the Court, upheld the Yazooists’ position, ruling that Georgia possessed the lands in 1795 and that the sale was valid and binding despite the alleged corruption of the legislature. Further, citing the constitutional prohibition against state laws impairing the obligation of contracts, he declared the repeal act unconstitutional because it had broken the contract between Georgia and the land companies. The decision became a landmark in US constitutional history. It made the Contracts Clause of the Constitution the primary safeguard of private property for the next fifty years and was the first major ruling to overturn a state law for violating the US Constitution. Further, the Yazooists were the first interest group to seek to further their cause through the Supreme Court.

Finally in 1814, in the interest of resolving disputed claims in the Mississippi Territory that impeded its organization as a state and of appeasing New England financial interests harmed by the War of 1812, Congress passed and Pres. James Madison signed an act compensating claimants through the sale of lands in the Mississippi Territory up to five million dollars.

Further Reading

  • Thomas Dionysus Clark and John D. W. Guice, The Old Southwest, 1795–1830: Frontiers in Conflict (1996)
  • C. Peter Magrath, Yazoo: Law and Politics in the New Republic; The Case of Fletcher v. Peck (1966)

Citation Information

The following information is provided for citations.

  • Article Title Yazoo Land Fraud
  • Author
  • Website Name Mississippi Encyclopedia
  • URL
  • Access Date February 16, 2020
  • Publisher Center for Study of Southern Culture
  • Original Published Date
  • Date of Last Update April 15, 2018