Phelps and Gorham Purchase

Within a year, monetary values rose and, in combination with poor sales, the syndicate was unable to make the second of three payments for the land west of the Genesee River, forcing them to default on exercising the remainder of the purchase agreement.

They were also forced to sell at a discount much of the land they had already bought title to but had not yet re-sold; it was purchased by Robert Morris of Philadelphia, financier, U.S.

Archaeological evidence suggests that Iroquoian peoples lived in the Finger Lakes region from at least 1000 CE; the nations known to the colonists are believed to have coalesced after that time, and formed their confederacy for internal peace among them.

Allied as one of the most powerful Indian confederacies during colonial times, the Iroquois prevented most European colonization west of the middle of the Mohawk Valley and in the Finger Lakes region for nearly two centuries after first contact.

In 1753 remnants of several Virginia Siouan tribes, collectively called the Tutelo-Saponi, moved to the town of Coreorgonel at the south end of Cayuga Lake (near present-day Ithaca).

The French colonized northern areas, moving in along the St. Lawrence River from early trading posts among Algonquian-speaking tribes on the Atlantic Coast; they founded Quebec in 1608.

When Samuel de Champlain explored the St. Lawrence River, he claimed the region French Canada as including Western New York.

[4] The Iroquois resisted colonists encroaching into their territory, which roughly comprised the Allegheny, Genesee, Upper Susquehanna, and Chemung river basins.

In response, on July 31, 1779, George Washington, who was then commanding the Continental Army, ordered Gen. James Clinton and Gen. John Sullivan to march from Pennsylvania near present-day Wilkes-Barre to the Finger Lakes area of New York.

[8] By an act of the Massachusetts Legislature approved April 1, 1788,[9] it was provided that "this Commonwealth doth hereby agree, to grant, sell & convey to Oliver Phelps and Nathaniel Gorham, for a purchase price of $1,000,000, payable in three equal annual installments all the Right, Title & Demand, which the said Commonwealth has in & to the said 'Western Territory' ceded to it by the Treaty of Hartford.

[10] Another competitor was the Niagara Genesee Land Company formed by Colonel John Butler, Samuel Street, and other Tory friends of the Iroquois.

"[14] Kirkland also benefitted from the land sales, receiving 6,000-acre (24 km2) around present day Utica from New York State and from the Oneida people.

[10] Phelps and Gorham wanted to buy 2,600,000-acre (11,000 km2), but the Iroquois refused to sell the rights to 185,000 acre (749 km2) west of the Genesee River.

Within this area on the west bank, Phelps and Gorham gave 100 acres (0.40 km2; 0.16 sq mi) at the high falls of the Genesee River to Ebenezer "Indian" Allen, on the condition that he build the grist mill and sawmill.

[18] After the Revolutionary War ended, the Iroquois chiefs had been assured by the US government in the 1784 Fort Stanwix treaty that their lands would remain theirs unless the Indians made new cessions—as a result of regular councils duly convened and conducted according to tribal custom.

[6] Phelps believed that the line ran through Seneca Lake and included the former Cayuga settlement of Kandesaga, present-day Geneva, New York.

This raised the value of the consolidated securities Phelps and Gorham had used to buy the land, effectively quadrupling the syndicate's debt[6] and substantially inflating the amount required to purchase title from the Iroquois for the remaining 1,000,000-acre (4,000 km2).

In August 1790, the reverses forced Phelps to sell his Suffield home and his interest in the Hartford National Bank and Trust Co. of Connecticut In early 1791, the syndicate was unable to make the second payment on the preemptive right to the lands west of the Genesee River, comprising some 3,750,000 acres (15,200 km2), and these preemptive rights reverted to Massachusetts on March 10, 1791.

On August 10, 1790, the syndicate sold the remaining lands of the Genesee tract directly to Morris, with the exception of about 47,000 acres retained by Phelps and Gorham.

"[21] Some accounts from early in the 20th century attribute errors discovered during the second survey to the primitive instruments used by the surveyors, but allegations of fraud were also made.

"[22] Adam Hoops was hired to lead a team of new surveyors, who discovered that Maxwell erred on both the eastern preemption line and the western boundary.

Maxwell had located the westernmost boundary of the Millyard Tract in the belief that the Genesee River ran due north.

To make it easier, Morris' syndicate returned an equivalent amount of land on the west, a 87,000 acres (350 km2; 136 sq mi) parcel known as the Triangle Tract, to the Iroquois.

Robert Morris prevailed upon the New York Legislature to repeal that ordinance, which it did shortly thereafter, as it was eager to have the lands developed into settlements.

The investors expected a significant profit if they could obtain clear title from the Iroquois and sell unencumbered parcels of land.

The Dutch gave presents to the influential women of the tribes, and offered generous payments to several other chiefs to influence their cooperation.

In 1802, the Holland Land Company opened its sales office in Batavia, managed by surveyor and agent Joseph Ellicott.

The Company granted some plots of land to persons with the condition that they establish improvements, such as inns and taverns, to encourage growth.

Morris kept 500,000 acres (2,000 km2) in a 12-mile-wide (19 km) strip along the east side of the lands acquired from Massachusetts, from the Pennsylvania border to Lake Ontario.

[25] As noted above, in September 1797 under the Treaty of Big Tree, negotiated and signed at Geneseo, New York, Morris gained the remaining title to all the lands west of the Genesee held by the Iroquois.