The weekly Chasing Shadows feature focuses on the county’s first boom-and-bust cycle
The first boom-and-bust cycle in Franklin County was not the cotton trade in Apalachicola. Rather, it involved land speculation.
When Colin Mitchel was able to buy 1,427,290 acres for less than nine cents an acre in 1819, high profits seemed unavoidable. Then again, the story of the men who gave “swampland in Florida” a bad name is worth remembering. After all, “the more things change, the more they stay the same.”
Forbes’ land sale to Mitchel
Trading deer hides for muskets and gunpowder turned out to be a losing proposition for the Lower Creek Indians. By the time John Forbes took over the Panton, Leslie and Company trading firm, the account books claimed that the Creeks owed $66,533. In exchange for their debts, Creek elders ceded a large tract in 1804. A second trade in 1811 added St. Vincent Island and the west end of St. George Island. (Figure 1).
Forbes’ title was valid in Spanish Florida, but he knew it would be challenged if the United States acquired Florida. In 1818, he transferred control of the firm to his partners, James and John Innerarity at Pensacola, and moved to Cuba.
In Havana, Forbes met Colin Mitchel, a merchant in the company of Carnochan and Mitchel. The firm included brothers Robert, Peter, and Octavius Mitchel (an attorney), in addition to John, Richard, and William Carnochan. Several of the brothers lived in Savannah, Georgia, where they were cotton factors, land speculators, and slave traders who also owned a sugar mill.
On May 29, 1819, Colin Mitchel paid $111,676 for the lands still owned by Forbes and Company. The deed was signed in Spanish Pensacola by attorneys from Matanzas and Havana on behalf of the two businesses. By Sept. 1820, four more deeds were signed, paying $18,200 to John and James Innerarity in Pensacola, with Octavius Mitchel signing on behalf of Carnochan and Mitchel. At about 9 cents an acre for over 3 percent of all the land in Florida, the land deal seemed too good to be true.
Battle for a U.S. land title
In 1821, the first order of business in the new Territory of Florida was to conduct surveys and settle land claims. In order to establishing titles, deeds needed to be tied into townships and ranges of the US Public Land Survey System. Carnochan and Mitchel hired private surveyors to establish a grid work based on river boundaries and natural landmarks
By 1820, the purchase had cost Carnochan and Mitchel $135,000 and their legal battle to establish title had barely begun. The firm became insolvent by 1823. To get around the problem of no valid titles, they subdivided “the Purchase” into 2,400 tracts of 500 acres each, and paid creditors with paper scrip entitling them to land.
On behalf of the firm, Robert Mitchel wrote to Congress and asked for a ruling about their claim’s validity. Instead, Congress passed an act in 1828 allowing claimants to sue for title through the courts. Accordingly, the firm filed suit in the Middle Court of Florida, which delayed for two years and then dismissed the claim.
The firm appealed the case to the U.S. Supreme Court, where it became known as Mitchel v. the United States. The court requested documents from Havana and Madrid, and delayed ruling for four years. Finally in 1835, 16 years after they bought Forbes Purchase, Carnochan and Mitchel received a favorable ruling that established their title.
The Apalachicola Land Company
With a clear title, Colin Mitchel and his associates formed the Apalachicola Land Company in order to raise cash by selling 2,500 stock certificates. The firm was registered in New York, and in each Florida county included in the Purchase. The men who signed the articles of association included Colin and Peter Mitchel, John and Richard Carnochan, and New Yorkers Benjamin W. Rogers, Thomas Vermilya, John Graham and Benjamin Marshall.
The company quickly gained visibility by appointing prominent men as trustees. Joseph M. White was the Territory of Florida’s representative to the US Congress, and Louis McLane had served as Secretary of the Treasury for two years, making them popular board members for land, canal, and railroad companies.
The company opened one office at the corner of Chestnut and Water Street, and another on Wall Street in New York. Until then, Apalachicola had grown haphazardly as squatters built homes and businesses on land that they assumed was owned by the Territory. The directors drew up a neat street plan based on Philadelphia, including town squares and lots for wharves, businesses, and homes. Dr. John Gorrie was asked to write articles about the healthfulness of the area. He advised the company to drain swampy areas, and they complied.
The company began civic improvements that would enhance the sale of lots in Apalachicola. In 1836, it raised $20,000 to dredge the harbor to a depth of 12 feet, and donated two lots to Trinity Church. Two of the company directors, Colin Mitchel and Hiram Nourse, were founding vestrymen who helped raise funds to build the church, install pews, and obtain a superb pipe organ. Nourse was a prominent Apalachicola businessman, but there is no evidence Colin Mitchel or any of the other company founders lived in Apalachicola long enough to be included in a census.
Prices and sales of land in Apalachicola peaked within two years after the land company was formed. The sale began in April 1836, and 160 lots were purchased for $248, 835. Sales the first year netted over $462,000, which no doubt helped the board of directors sell stock certificates in New York.
Buyers began construction of homes and at least 40 three-story brick warehouses that fronted the river. The city required warehouse owners to build wharves that could be reached from the newly dredged channel. Within one year, the former shanty town had been transformed with brick buildings and homes along orderly, though unpaved, city streets.
As a way of boosting sales, the company persuaded newspaper editor, Cosamir Bartlett, to move from Columbus and found the Apalachicola Gazette. With new warehouses and wharves, shipping increased, and 150 to 200 vessels arrived in port each year from 1836 to 1845. Although prospects seemed very bright, a hurricane in 1837 damaged the wharves and started a destructive fire. The storm may have been an omen; in any event, the land boom halted abruptly when many residents moved to cheaper land at St. Joseph.
Decline and bankruptcy
The surveyor general of Florida, Robert Butler, reported the Forbes Purchase had been fully surveyed by 1840. Assuming lot prices would escalate, directors of the Apalachicola Land Company advertised new auctions with prices up to $13,000 per lot. However, no lots sold for that price, and in 1838 and 1839, the company sales only amounted to $24,615 and $5,600.
Some of the original purchasers defaulted on their mortgages, and the company angered local businessmen by suing to recover costs. Also, the board of directors changed after Colin and Robert Mitchel and John Carnochan died around 1840. Also, other than landings along the river and a few farmsteads, there was no demand for the pine flatlands, marshes and swamps contained in the enormous acreage.
When the last survey was completed in 1856, the most valuable land was found to be hammocks that contained hardwood and live oak. New York investors learned there were no mineral deposits to boost value, and company stocks were swapped among investment firms, yielding as little as $20 a share.
Investors began suing each other to recover part of their losses. By 1848, the company was insolvent, and in 1849, lots were auctioned in New York City. When other approaches failed, in 1855 the Apalachicola Land Company passed into bankruptcy. (Figure 2)
John Beard of Tallahassee, named as the first receiver for the company, advertised a sale of about one million acres to be held in Tallahassee and Quincy in Dec. 1858. When Beard resigned, Charles Ellis was appointed receiver, and he managed to auction off most of the land at pennies per acre before the Civil War. When he resigned, Judge George Hawkins was appointed the last receiver for the final land sales. (Figure 3)
Although the company folded, lawsuits against the trustees continued for years. For instance, John Forbes’ nephew sued the trustees in 1853, claiming descendants of Thomas Forbes were due a larger share than had been provided. Residents of the area were alarmed that titles to their land might be in question, and Liberty County was formed in 1855 partly to separate it from land that had been in the Forbes Purchase.
The partners cash out
Ironically, a company selling land that had originally been exchanged for debt by the Lower Creeks had to sell that land to pay its own debts as it became bankrupt. From the standpoint of creating a lasting business, the Apalachicola Land Company would appear to have been a failure. It did, however, give life to a city that has continued for almost 200 years.
It is unlikely any of the directors of the Apalachicola Land Company lost money. Every trustee and director received shares of stock equivalent to many acres of land. The stock was sold in New York to other firms involved in land speculation, and the directors gradually exchanged their shares for cash. According to one president whose bank received shares of stock, the Apalachicola Land Company may have had $1.2 million in cash at one time. None of the directors was na´ve enough to hold onto stock that eventually declined to $20 a share, and then to nothing.
The lawsuits that resulted from the bankruptcy of the Apalachicola Land Company also solved a minor mystery. Colin Mitchel was an original member of the board of directors. His name appeared briefly in New York censuses, but never in Apalachicola, and then he vanished.
A lawsuit filed in New York in 1845 noted Colin Mitchel had died at sea in about 1837. Ironically, a letter that one of John Forbes’ partners received stated that Forbes also died while sailing to New York in 1823. One has to wonder if the Lower Creeks had put a curse on those who would swindle them of their homeland.