Colonial Land Companies

I

Introduction

Colonial Land Companies, corporations that were organized in the 18th century to speculate in land in the unsettled regions of North America. Companies chartered to control trading activities in these lands had long been a feature of the precolonial period. The Hudson’s Bay Company, for example, held a monopoly over trade in the vast region served by streams flowing into Hudson Bay.

Companies chartered to control the allocation of land in the unsettled regions developed in colonies such as Pennsylvania, Maryland, and New Jersey, which had no frontier borders. These landlocked colonies wanted access to new territories in which their citizens could settle. On the other hand, frontier colonies such as Virginia wanted to control as much land as they could and extended their claims westward. Citizens of colonies without such claims to western lands organized land companies to obtain grants either from the Native American tribes inhabiting the region or from the British government.

Conflicts arose when competing companies claimed the same territory, or when a land company refused to allow settlers from another colony to settle or trade in its territory. The most important colonial land companies were the Ohio Company of Virginia, the Indiana Company, the Illinois-Wabash Company, and the Transylvania Company, all of which focused on land speculation in the Ohio Valley.

II

Ohio Company of Virginia

The first land company to be organized was the Ohio Company of Virginia, which received its charter in 1749. The British government granted the company about 200,000 hectares (about 500,000 acres) of land around the forks of the Ohio River. The colony of Virginia administered the company’s land claims and declared that settlement in the Ohio Valley was restricted to Virginians. The French, who also claimed the region, viewed the colonizing efforts of the company as a threat; the conflict led to the French and Indian War (1754-1763).

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In the meantime, merchants from Pennsylvania were trading with the Native Americans in the Ohio Valley region. During the hostilities of the French and Indian War, these traders had their goods confiscated or destroyed. The traders and their merchant backers vainly appealed to the colonial governments and to the British government for compensation for their losses. They then turned to the Iroquois Confederacy and sought their compensation in the form of a land grant, which they received at the treaty of Fort Stanwix in 1768 (see Fort Stanwix National Monument). By the terms of the treaty, the Iroquois ceded all of their lands east of the Ohio River to the British. Called Indiana, the tract of land was located south of Fort Pitt (present-day Pittsburgh) and was almost the identical territory that had been granted to the Ohio Company of Virginia.

III

Indiana Company

The Pennsylvania merchants and traders now called themselves the Indiana Company, and they went to England to get the grant confirmed. Benjamin Franklin, who became a partner in the venture, aided them. Soon the grant was expanded into a larger scheme for the establishment of a 14th American colony, to be located south of the Ohio River and west of the Allegheny Mountains. The colony was to be named Vandalia in honor of Queen Charlotte of England, who was said to be descended from the Vandals, an ancient Germanic tribe. The American Revolution (1775-1783) broke out before the grant was finalized, and the company representatives returned to the colonies to place their claims before the Continental Congress.

IV

Illinois-Wabash Company

The Illinois-Wabash Company began operation on the theory that Native Americans could make legally valid land grants. The Illinois-Wabash Company received grants north of the Ohio River in 1773 and 1775 from the resident tribes. The members of the Illinois-Wabash Company were primarily citizens from the landless middle colonies, such as Maryland and Pennsylvania. When the American Revolution began, they, like the Indiana Company, began lobbying the Continental Congress for confirmation of their claims. Since Virginia claimed all of the land and declared the grants to the competing companies invalid, Congress was their only hope. The debate in Congress over the claims of the land companies took several years, with the claimants holding up the ratification of the Articles of Confederation. The conflict was eventually resolved when the states ceded to the federal government all of their claims to the western territories.

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