THE WESTERN PENNSYLVANIA HISTORICAL MAGAZINE Volume 57 October 1974 Number 4 JOHN NICHOLSON AND THE PENNSYLVANIA POPULATION COMPANY Robert D. Arbuckle Nicholson, 1757-1800, was an early Pennsylvania land spec- Johnulator, financier, and entrepreneur. While serving as comptroller- general of the state, 1782-1794, he was a major factor inhelping Penn- sylvania achieve financial solvency after the revolutionary war. In this capacity Nicholson created political alliances with those who stressed state rather than national sovereignty, and in the 1790s he was instru- mental inhelping to form the Democratic-Republican party. Nicholson was a friend of many prominent national and state political figures, such as Alexander Hamilton, Thomas Mifflin,Robert Morris, Aaron Burr, and Edmund Randolph. Inaddition to his political activities, Nicholson engaged in many entrepreneurial promotions. He and his partners were the major pri- vate purchasers of building lots in the Federal District (Washington. D.C.) in its infancy; he was a flour merchant and an ironmonger, helping to establish with John Haydn the first iron furnace west of the Allegheny Mountains, near present-day Uniontown; owned many lead, copper, silver, and coal mines; promoted inventors like John Fitch, James Rumsey, and Oliver Evans; managed and spon- sored internal improvement projects, such as the Philadelphia-Lancas- ter Turnpike and the Delaware and Schuylkill Canal ;and participated in many humanitarian activities, such as helping blacks inPhiladelphia. However, Nicholson's primary activity was land speculation. He Dr. Arbuckle is associate director of academic affairs and is an assistant professor of history at the Pennsylvania State University, New Kensington, Pa., campus. —Editor 354 ROBERT D. ARBUCKLE OCTOBER became the major land speculator of Pennsylvania and one of the major speculators of the nation. In order to meet the expenses of tax payments and of promoting sales of his vast holdings, he became en- tangled in many incorporated and unincorporated land companies which eventually helped to cause his ruin. His first stop on the road to disaster was the Pennsylvania Popu- lation Company, which was incorporated on May 4, 1792. 1 Pennsyl- vania was a fertile field for speculative endeavors in the 1790s. The population was increasing every year; for example, in 1787 it was estimated at 360,000, and by 1791 it had grown to 434,713. 2 Thus, speculators had an increasing number of settlers to purchase their lands. Charles Maurice de Talleyrand, who later invested in lands in Pennsylvania, calculated that if a speculator bought lands in the state at four dollars per acre in 1794, he could expect to sell those lands twelve years later at 13% dollars per acre and realize a profit of 233 percent. 3 Little wonder then that Nicholson was so enthusiastic about this avenue of investment. The lands which formed the basis for the Population Company's operations were chiefly Nicholson's and were located primarily in the Erie Triangle. The boundary line between the states of New York and Pennsylvania had been drawn at the forty-second parallel by James Clinton and Simon DeWitt for New York, and David and Andrew Ellicott for Pennsylvania, the latter both friends of Nichol- son's, in 1788-1789. By the Fort Harmar treaty of January 9, 1789, the Iroquois Nation sold the Erie Triangle to the United States, which in turn sold it to the state of Pennsylvania. Joseph Brant, the Mohawk chief, denounced the sale by Cornplanter and Little Billy at Canandaigua, New York, in October of 1794; for acting without au- thority ;and for receiving only the paltry sum of $4,000. 4 This led to Indian resistance which helped to thwart the operation of the Popula- tion Company and brought pleas for assistance from Nicholson to Governor Thomas Mifflin. 1 For an account of the company see Robert Hale, "The Pennsylvania Popu- lation Company" (Ph.D. diss., University of Pittsburgh, 1950). This article is an attempt to highlight Nicholson's connection with the company. 2 Gazette of the United States, Apr. 15, 1789. 3 Hans Huth and Wilma Pugh, eds., Talleyrand in America as a Financial Promoter ... (Washington, 1897), 161-62. 4 Sherman Day, ed., Historical Collections of Pennsylvania— (Philadelphia, 1843), 315-16; Northern Boundary of Pennsylvania Middle of Lake Erie, pamphlet of the Pennsylvania Department of Internal Affairs, Bul- letin 2 (no. 11) :17-19. 1974 JOHN NICHOLSON AND THE POPULATION COMPANY 355 Contributing factors to the purchase of the triangle by the state had been the efforts of General William Irvine (another friend of Nicholson's and a stockholder in the Population Company) who saw the need for Pennsylvania to secure an outlet on the Great Lakes. 5 Governor Mifflinobligingly appointed John Nicholson to handle the financial transactions for the state; he negotiated the purchase in 1792, with Joseph Nourse acting on behalf of the national government. The Erie Triangle consisted of 202,187 acres and cost the state $151,640.25, or seventy-five cents per acre. 6 In what was probably the best example of Nicholson using his state office of comptroller-general for personal gain, he brashly pre- empted the entire area, with the exception of a few tracts retained by the state for future public use, as soon as the land was offered for sale. One might ponder how he was able to do this since under the Pennsylvania Land Act of 1792 only 400 acres could be granted to any one person. When one considers that Nicholson was a good friend and business partner of Governor Mifflin,coupled with the fact that the governor was to own at least 400 shares in the Population Company out of a total of 2,500, the mystery can be partly solved. 7 Furthermore, Daniel Brodhead in the surveyor-general's office, another friend and partner of Nicholson's, could be useful, because when fictitious names were used in the land offices to cover this large purchase, no questions were asked. Nicholson confessed that since only 400 acres could be taken out, "the necessity resulted of using bor- rowed names as was usual in the Land Office in cases where one per- son takes out more than the quantity aforesaid .. ." 8 Nicholson 5 For Irvine's efforts see C. W. Butterfield, ed., Washington-Irvine Corres- pondence (Madison, Wise, 1882), 69. New York, Connecticut, and Massachusetts all claimed this area at one time. New York relinquished its claim to the national government on Mar. 1, 1781 ;Massachusetts on Apr. 19, 1785 ;and Connecticut on Sept. 3, 1786. 6 Statutes at Large of Pennsylvania, 2: 454-86 (hereafter cited as Pa. Statutes); Pennsylvania Archives, 4th ser., 3: 991-1012; ibid., 4: 225 (hereafter cited as Pa. Archives). For Mifflin's appointment of Nichol- son see Pa. Archives, 1st ser., 12: 91. 7 Diary of John Nicholson, Jan.-July 1792, entry for Apr. 16, 1792, box 3, Public Records Division, Pennsylvania Historical and Museum Commis- sion, Harrisburg (hereafter cited as Nicholson Diary, PRD). For the close association of Nicholson and Mifflin see Robert D. Arbuckle, "John Nicholson, 1757-1800, A Case Study of an Early American Land Speculator, Financier and Entrepreneur" (Ph.D. diss., Pennsylvania State University, 1972), 73-85. 8 Entry for Feb. 21, 1795, Pennsylvania Population Company Minute Books, 1792-1815, Crawford County Historical Society Papers, Meadville, Pa. (hereafter cited as Population Co. Minute Books, CCHS). 356 ROBERT D. ARBUCKLE OCTOBER simply dispersed the various warrants among different land offices using borrowed names with Brodhead and Mifflinproviding a pro- tective shield. On April 3, 1792, the speculator made out 390 warrants of 400 acres each to cover the Erie Triangle. On April 16, 1792, just two weeks after Nicholson had taken out his warrants, Theophilus Cazenove, one of the major stockholders in Nicholson's Population Company, who represented Dutch financiers, made a call on Governor Mifflinand agreed to take 200 of the governor's shares in the com- pany. He also received names which could be used on warrants from Mifflinand turned these over to Nicholson. 9 Some of the more inter- esting names appearing on the list of warranties submitted by Nichol- son to cover the purchase included :John Donaldson, the register- general of the state who was supposed to watch Nicholson's ac- tivities ; Hannah Nicholson, John's wife; Joseph Nourse, register- general of the United States, who had negotiated the sale of the Erie tract with Nicholson ;Jonathan Mifflin,the governor's cousin ;Charles Pettit, one of the leading merchants and Republicans in the state ; John Nixon, president of the Bank of North America; and Edmund Randolph, attorney-general of the United States. 10 Nicholson not only used their names on warrants for the Erie tract, but he also applied these and other names to 250 additional warrants to cover 100,000 acres of land near Beaver and Shenango creeks where another settle- ment of the company was planned. On May 18, 1792, after the company was formally launched and all the subscriptions for stock filled, Nicholson made application for 500 more warrants to cover 200,000 additional acres west and north of the Allegheny and Ohio rivers in the donation district, including land along French Creek. 11 In1793, Nicholson was stillsending blank conveyances to his friends in the land office to be filled out in his name to cover these purchases. Edward Robinson, one of the Land Office clerks, was given seventy-five of these to be backdated to May 1, 1792. Nicholson conveyed 490 acres of Population Company lands to Robinson for "favors rendered." 12 And even after the surveys were 9 Nicholson Diary, PRD, entry for Apr. 16, 1792. 10 List of Warranties of the Pennsylvania Population Company, 1792, in the Pennsylvania Population Company Papers, Francis Spencer Estate Col- lection, Erie Public Museum Manuscript Collections, Erie, Pa.