Sunday, July 5, 2015

How Andrew Jackson Made A Killing In Real Estate

We all know the warrior president kicked Indians off their land. What's less known is why.

Then there’s the debate over Andrew Jackson, whose portrait decorates the $20 bill. This spring a campaign calling to replace Jackson with a woman gained national attention, and social media erupted with outrage when the Treasury Department chose instead to nudge aside Alexander Hamilton on the $10.

Those two symbols—Jackson’s face and the Confederate flag—have much to do with one another.

It’s not merely that both were products of the South. It’s that Jackson built the heart of the South, literally clearing the way for the settlement of part or all of seven Southern states: Kentucky, Tennessee, Mississippi, Alabama, Georgia, North Carolina and Florida. Although he was no Confederate (to the contrary, he was a pre-Civil War leader who used all his power to hold the Union together), Jackson was a central figure in shaping the region that finally rebelled in 1861, and that has remained vital to American culture and politics ever since.

Most Americans don’t think of Jackson that way. In popular culture, he’s remembered as the warrior president with the wild hair; the victor of the Battle of New Orleans, where his army repelled British invaders in the War of 1812; and the first common man (not born into wealth and status) to rise to the presidency, which he did in in 1828.

It’s also well known that Jackson was involved in expelling American Indians from their homelands, which is how he made room to create so much of the modern South. But it’s not well understood why Jackson made Indian removal a central theme of his career. Jackson was making space for the spread of white settlers, including those who practiced slavery. And he was enabling real estate development, in which he participated and profited.

One titanic land grab shows how Jackson operated. It was the seizure of the Tennessee River Valley, where the great river bends in what is present-day Alabama. While serving as a U.S. Army general, Jackson wrested control of the valley from Cherokees, and turned it into an explosive real estate opportunity. Jackson and several friends made off with a breathtaking 45,000 acres, colonized the area and even founded a new city. They then established multiple cotton plantations run by enslaved laborers just as cotton prices were reaching record highs. All told, Jackson both created and scored in the greatest real estate bubble in the history of the United States up to that time.

The story of that land grab helps us to see Jackson clearly. He’s sometimes portrayed as an Indian hater, a description that misses his complexity. He could treat Indians and white men equally. During the War of 1812 his army included a regiment of Cherokees, and Jackson promised them pay and benefits equal to white soldiers, “in every respect on the same footing,” as he wrote. After the war, Jackson discovered that the widows of his Cherokee soldiers had never received proper death benefits. He wrote his superiors in Washington insisting that Cherokees “must be placed in the same situation of the wives & children of our soldiers who have fell in battle.”

What motivated him to treat natives unfairly at times was less racism than real estate. He would stop at nothing when he saw an opportunity to advance his financial interest or that of his friends. Land was the way to wealth on the frontier, and that drove Jackson’s elaborate scheme to capture immense Indian lands south and north of the Tennessee River.

He’d started life in modest circumstances, the son of Scots-Irish immigrants to the Carolinas. His father died shortly before he was born in 1767. After the American Revolution young Jackson moved to west to seek his fortune on the frontier, which in those days was barely west of the Appalachians.

Once settled in Nashville, he became a politician, a land speculator, a land owner, a slave owner and eventually a state militia general. But he fell in disrepute after killing a man in a duel; and like many in the frontier elite he was land-rich but cash-poor. A letter from 1814, when he was 47 years old, shows he was uncertain if he had even $300 in the bank.

The War of 1812 changed everything. Early in the conflict he was promoted to command federal troops. His 1815 victory at the Battle of New Orleans made him a national hero, propelling him into a government position that gave him the chance to transform the South.

During the war, in 1814, Jackson had crushed a rebellion in the Creek Nation, compelling Creeks to surrender 23 million acres. It was a land area the size of Scotland, seized from an independent Indian nation and added to the public land of the United States. By taking it, Jackson cleared the way for the creation of a new federal territory called Alabama. The modern cities of Montgomery and Birmingham sprawl across the land Jackson seized.

Vast as it was, this conquest didn’t include the real estate Jackson really wanted. He had his eye on land just a bit farther north, on the banks of the Tennessee. Speculators had been trying for years to obtain the fertile land around Muscle Shoals, with its easy river connections to New Orleans.

Jackson, a longtime speculator himself, knew its potential. But it was in possession of Cherokees, and claimed by Chickasaws and Creeks as well. In 1816, Jackson moved to change this.

Having been placed in charge of postwar military affairs throughout the region, General Jackson proceeded as if the Tennessee Valley were part of the land he’d won from the Creeks during the war and had his best friend, John Coffee, appointed to survey the “captured” land. Jackson assured the Coffee in an 1816 letter, “your own Judg[men]t is your guide” as to where to lay down the stakes in identifying the territory’s borders. But the same letter also very clearly suggested which parts of the land Coffee should tag as U.S. property—and that included the parcels Jackson personally had his eye on.

Coffee took the hint. Exceeding his instructions from Washington, the surveyor went to work expanding the land cession. When local Indians protested, Jackson threatened “immediate punishment,” authorized the surveyor to hire bodyguards and promised that the gunmen would be paid, “even though I am not Legally authorized to call for such a force.” Jackson also turned a blind eye to white settlers who were illegally moving into the Indian land. They were swiftly altering the facts on the ground. Jackson was taking two million acres—more than 3,000 square miles—a land area somewhat greater than one-third of the size of New Jersey.

To Jackson’s outrage, he was stopped. A delegation from the Cherokee Nation happened to be in Washington at the time of the attempted land grab. John Ross, a young English-speaking Cherokee who was a veteran of Andrew Jackson’s own army, complained to Jackson’s civilian superiors at the War Department. He argued that Cherokees had proven their “attachment” to the United States in war, so their rights must be respected. Jackson’s superiors agreed, and ordered Coffee to stop his illegal activity.

Jackson raged against the decision, writing to President James Madison that the government had “wantonly surrendered” territory of “incalculable Value to the U. States.” He then set about undermining his civilian superiors. As the commanding general in the area, it was his duty to evict the white settlers squatting on the Indian land. Jackson dragged his feet, arguing the settlers were poor families without the means to relocate. And the national hero could not long be denied. Having been thwarted in his effort to steal the land, he was given permission by Madison’s administration to try to buy it. He conducted tough, coercive negotiations with Cherokees in late 1816, telling them that they had a choice: sell him the land he wanted, or run the risk that their nation would be destroyed by encroaching white settlers anyway.

Cherokee negotiators kept some of their real estate, but agreed to sell the areas Jackson wanted most. The federal government paid the Cherokees $65,000 for the south bank of the Tennessee, a tiny fraction of the amount for which it would soon be subdivided and sold. In a different treaty that he negotiated on behalf of the U.S. government, Jackson obtained a strategic chunk of the north bank.

What followed was the colonization of the Tennessee River Valley. The federal government put land up for auction in 1818, and crowds of prospective settlers mobbed the auction site in the tiny settlement of Huntsville, Alabama. Land prices soared from $2 per acre to as high as $78. Millions of dollars changed hands. Jackson took part: An 1818 document shows he went into business with other speculators from as far away as Philadelphia to buy key plots. Jackson’s purchases included several town lots and a full square mile of farmland. Many of his plots were ideally situated, since they would be alongside a newly built road leading toward New Orleans. It should come as no surprise that the road’s route was chosen by men who happened to be working under Jackson’s direction.

Jackson’s friends even founded a city: Florence, Alabama. They paid $85,000 for the land in 1818, subdivided it and resold it for nearly triple the price—with some strategic plots going to Jackson and his friends. Today Florence remains a vibrant city, and the area is still graced with the Romanesque ruins of the Forks of Cypress, a plantation house built by one of the general’s business associates.

Not only did the Tennessee Valley acquisition help Jackson’s finances; it helped his politics. His real estate coup sharply increased white settlement in Alabama, which soon became a state. His friends who had colonized the Tennessee Valley were among the new state’s leading citizens. A few years later, as Jackson began seeking the presidency, there could be no question who would receive Alabama’s electoral votes.

Was Jackson’s land acquisition corrupt? This depends on how you weigh his motives. He had more than one. In his letters, he insisted that putting the region under formal United States control was vital to national security. And he believed that filling the region with new settlers would also populate it with men who could be summoned into an army for its defense in an emergency. But in thinking about national security problems, Jackson also arrived at solutions that perfectly matched his business interests.

His solutions also matched the needs of the slave-based economy. Each of the seven states that owed its growth to Jackson was a slave state. The chained offspring of East Coast slaves were shipped westward to hack new plantations out of former Indian land. Jackson himself owned slaves throughout his adult life, and put many to work in northern Alabama.

Land deals like Jackson’s are what made the Confederacy and its flag. White men grew addicted to a constantly expanding market for land and slaves. Northern manufacturers and financiers benefited along with Southern slave owners. Progressive Southerners had once spoken of slavery as an unfortunate passing phase, but as the slave economy grew, some of the same Southerners defended the institution ever more stridently, constantly refining an ideology of white supremacy.

His land deals also made Andrew Jackson. Up until 1819, Jackson and his wife Rachel were living in a two-story log cabin outside Nashville. Soon after the Alabama land bubble, the Jacksons were wealthy enough to move to new house on the same property. It was the mansion that, with changes and additions, still stands today as a tourist attraction—the Hermitage. Their old log cabin became slave quarters.

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