First America – Land, Not Liberty | Episode 5
OPENING
We don’t hear about it a lot, but founding father Thomas Jefferson had a lot to say about the U.S. economy. And what it should look like.
He didn’t want Americans working in factories or hourly jobs. He didn’t want Americans living in cities, renting apartments. Jefferson thought that if you had a boss or a landlord, you weren’t economically independent. And therefore, you couldn’t be politically independent.
Jefferson wanted every American to own their own land and be their own boss. He envisioned a country of small, family farms. He wrote that farmers were closer to God. And he thought those kinds of citizens could hold a fragile democracy together.
That dream Jefferson laid out, I think it’s still with us. Today we might call it the American dream. I mean, we didn’t keep the farm part. But owning a home. Having ==enough money to take care of yourself and your family… Isn’t that what we’re all still striving for?
Somewhere along the way…that dream got off track.
[maybe some ambi to get us into the scene]
Referee: one million four hundred ninety-three thousand three hundred thirteen dollars and thirty cents. Do I have any bids above that? Four million.
Every Thursday at the King’s County Supreme Court in Brooklyn, there’s an auction.
Referee: One million four hundred. Excuse me, one million four hundred ninety-four.
Foreclosed homes are sold to the highest bidder. Some of these homes have been in families for generations.
Going once,
And just like that,
going twice,
they’re sold out from under them.
sold.
A foreclosure happens when a home owner gets behind on their mortgage payments. Eventually, the bank takes the house back, and can auction it off.
Referee: HSBC Bank versus [ BLEEP] Property address is [ BLEEP] Gates Avenue. [duck] Parties approached, you hear this, please.
This property caused a commotion.
Judge: Straight across, folks. Keep going. You know the rules. // Do I stutter? [duck]
So many people got up to bid, the judge had to do a little crowd control.
Referee: Once again, we’re opening at five hundred and seventy-six thousand- Six fifty-five and thirty cents. // One point three. I heard one point three. One five twenty-five.
This house is in Bed-Stuy, a historically Black neighborhood in Brooklyn where home prices have gone through the roof.
Referee: I’m at one million five twenty-five. One million five fifty. Casey? One point six, Casey. One point six. Casey? Six twenty-five. Next bid? Six twenty-one. One million six twenty-five.
The astronomical increase in home prices there means some families are suddenly sitting on multi-million dollar properties. It can be a vulnerable position.
Referee: Anyone else? One million six hundred and fifty thousand to Casey. We’re in you out. In you out. One million six fifty going once. Twice. Three times. Sold to Casey.
The home on Gates Avenue sold for 1.6 million dollars.
Bidder: The gates is worth four million dollars. they paid one six for it.
In the crowd outside the courtroom we met a housing activist, who comes to these auctions weekly just to observe. She says her home is also facing foreclosure.
Home owner: They got loans on my house that I don’t owe the money to.
Home owner: The loans weren’t done by me.
Home owner: It was the lawyers. Two lawyers I hired, one of them threw me into some loans. And the other one said I signed a modification and I didn’t.
Some people will do anything to get their hands on valuable real estate.… including tricks and scams.
Home owner: I have another court date, and I’m fighting the loans. I’m fighting it.
The housing crisis is particularly bad in New York City. But it’s bad everywhere. I live in rural Oklahoma, and even here, rent and home prices keep going up and up.
In the last few decades, the average cost of a new house in the U.S. has more than tripled. According to one analysis, people with average incomes can’t afford most houses on the market.
Younger generations are giving up on the dream of home ownership all together.
And folks who do own their homes are having a harder time keeping them.
How did we get here? From a founding vision that property ownership was for every one. To a modern real estate market where that dream turned into a nightmare?
BILLBOARD
[THEME MUSIC]
You’re listening to First America–the true story of how the United States came to be. And how our current political moment is 250 years in the making. From Pushkin Industries and Critical Frequency, I’m your host Rebecca Nagle. Gohini daqwadoa. Tsalagi Ayetli gela. Citizen of Cherokee Nation.
Last episode we talked about the 15-year war between Myaamia Nation and the United States. But why was that war fought in the first place? Why was the U.S. so hell bent on building a fort in Kiihkayonki?
To answer that question…we’ve gotta follow the money.
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Our founding fathers had a big problem. One that we don’t talk about that often. Their new country…was broke.
Michael Blaakman: The United States had fought its war for independence, um, on a wing and a prayer,
This is Michael Blaakman.
Michael Blaakman: I’m an associate professor of Early American History at Princeton University.
The Revolutionary War–it was expensive.
Michael Blaakman: You know, imagine a commissary who’s like on campaign with the continental Army and they pass by a farm and there’s three delicious looking cows in the field. You know, the, the continental army is not gonna, not gonna pay for those cows with silver coin, they’re not gonna pay for them with gold. It’s not gonna pay pay for them with specie, it’s, they’re gonna write up a little IOU and and say, you know, the, the, the Continental Army or the Continental Congress promises to pay thus much in the future.
Instead the army would write out an IOU. These little IOUs were everywhere. The government tried just printing more money. But that led to runaway inflation.
Michael Blaakman: There’s like jokes in the newspapers about people walking around with wheelbarrows of continental dollars because they’re gonna use them to, uh, wallpaper their rooms.
The US also paid for the Revolutionary War with loans from countries like Spain and France. But then…it couldn’t make the payments.
Michael Blaakman: Oh man. At the end of the Revolutionary War, the, the United States was, it was in a financial disaster.
The Constitution hadn’t been written yet. That wouldn’t come for a few more years. Which means the federal government doesn’t have the power to tax people. The U.S. is drowning in debt and has no clear way out. There’s widespread fear that this great experiment in democracy…will fail.
Rebecca: How did our founders plan to pay that debt?
Michael Blaakman: I mean, land really was essential to how they thought they were gonna address this, this fiscal crisis. Um, you know, members of the Continental Congress, state legislators, state governors, um, look west and they see, uh, what they believe to be a vast expanse of land that like more than is theirs for the taking that they have already taken.
so as Patriots are looking westward, they’re thinking about trying to solve their financial problems by selling off what is in reality other people’s land.
The plan to fund the federal government? Sell Indigenous land.
[music cue]
When the US won the Revolutionary War in 1783, most Americans lived on a small strip of land hugging the east coast.
The US claimed land that went all the way out to the Mississippi River. But in reality, most of the land was controlled, governed and occupied by Indigenous nations.
Nick: If you go back and read Thomas Jefferson’s writings, he thought that there were still woolly mammoths or other sort of magical beings, out here.
This is Nick Estes again, history professor at University of Minnesota and citizen of the Lower Brule Sioux Tribe.
Nick:Um, it’s like kind of like one of those like old maps of the world you see with like the kraken emerging from the sea.
Nick: Like they just didn’t know.
Rebecca: Yeah, I mean I feel like that just kind of brings home the fact that like, even though, you know, the US signed this treaty with England, it’s legislating the future of how this land will become a US state. It’s all kind of in their heads.
Nick: Yeah.
It’s confusing when you think about it. It would be like New York claiming all of the land in Connecticut because New York wants it. But the people of Connecticut still live in Connecticut–are still governed by Connecticut. New York’s claim is just that–a claim.
Rebecca: How does that work legally? How could you encounter a continent that is already occupied by hundreds of Indigenous nations and say, this belongs to me, it belongs to me, England, and then later, me, the United States.
Nick: That’s a foundation of international law, actually. anyone who was not Christian was sort of ca cast out as savage. And so Indigenous nations were seen as savage, you know, uh, black and African people were seen as savage. therefore they had no property rights.
The thing Nick is talking about is called the Doctrine of Discovery. It comes from a series of decrees issued by Popes in the 15th Century that declared any land, treasure, and even people belonging to non-Christian nations were free for the taking.
Rebecca: Like, so if indigenous people don’t have property rights, what rights do we have?
Nick we had occupancy rights
Rebecca: almost like we’re like the renter and the United States was our landlord.
Nick: Well, we’re the future renter. We were just waiting for a master. we didn’t have civilization, so therefore we couldn’t own the land.
Rebecca: Mm. It’s so insulting.
Under early versions of international law Indigenous people didn’t have property rights because we weren’t Christian. Because we weren’t civilized. From those original Papal decrees, the concept was adopted by England…and then later the United States.
Rebecca: And is that still the law in the United States today?
Nick: That is still the law in the United States today.
The Doctrine of Discovery was adopted by the Supreme Court in 1823. It was cited by the Court as recently as 2005, in a case that undermined the treaty and land rights of Oneida Indian Nation. Ruth Bader Ginsberg wrote that opinion.
The Doctrine of Discovery is still part of federal Indian law. But it’s also the foundation of something else: property law.
Nick: So treaties actually turn, begin to turn land into property.
Rebecca: So treaties are kind of the first step in this project of the United States, like turning the continent of North America into property that can be bought and sold.
Nick: Right. the United States has already set in motion a machinery of dispossession. So that means, they have to justify, not only the taking of native land, but the erasure of indigenous sovereignty, to be on that land, it has to do both things at once.
Saying that Native people couldn’t own land. Saying that we were racially inferior and didn’t have the same property rights as white people. That was actually the first step in creating private property in the United States.
[ Music Cue]
What happened next in the young, broke United States, is the story of a heist. It involves 18th Century finance bros, expensive oyster lunches, Congressional bribery and a drunk minister.
But it’s an important story. Because it’s how this thing called the U.S. real estate market first got built.
It starts with a group of businessmen who want to make money in real estate.
Michael Blaakman: They get together in a tavern in Boston called the Bunch of Grapes
This is Michael Blaakman again.
and hatch this scheme to try and buy land from the Continental Congress.
They name their business the Ohio Company. Because their eyes are set on the Ohio Country–the hot new frontier. This is the land Myaamia Nation and the Taawaawa Siipiiwi alliance were fighting to protect last episode.
And they’ve got a pretty good business idea. They want to buy land from the federal government for cheap and sell it to settlers for a profit.
That land of course, comes with a hitch.
Michael Blaakman: the majority of, of this land was still squarely owned and unceded by Native Nations.
The Ohio Company’s thinking was this: the US government would eventually force those Indigenous people off their land. And then the company could sell it for more money to white settlers. This business model was called land speculation. It’s the same thing we talked about George Washington doing in episode one.
But first, the Ohio company needs a land grant from Congress. In short, they need Congress to agree to a real estate sale.
Michael Blaakman: they send a guy of kind of a stodgy, I think of him as kind of stodgy, uh, minister and school master named Manasseh Cutler
And so Minister Manassseh heads to New York City, where Congress meets at the time.
Michael Blaakman: They have a pitch to make. They say, you know, this scheme will a, enable the continental Congress to retire a bunch of its debt. and will help bring in their mind security and order and stability and social institutions like schools and churches.
So kind of like a modern day developer might say, hey, city council if you cut me a deal I’ll turn this industrial zone into a ritzy neighborhood. Minister Manasseh told Congress if you cut us a deal we’ll turn Indigenous land into white settlement.
But he runs into a problem. Congress is in the middle of a moral debate. And that debate has nothing to do with Indigenous people. They’re fine with selling off our land. But they’re debating who they should sell our land to.
Michael Blaakman: Congress was opposed at this point, still opposed to selling land to speculators. Congress was still attached to the idea of selling land directly to ordinary farmers.
Those hardworking farmers Thomas Jefferson imagined would hold the country together. That’s who Congress wanted to sell the land to.
And so after Minister Manasseh makes his pitch to Congress it falls flat. The deal stalls.
Michael Blaakman: And here’s the, the truly corrupt part.
That’s when a guy named William Duer enters the scene.
Michael Blaakman: who I think of as like the late 18th century version of a finance bro.
Duer is a former member of the Continental Congress. He even works for a while as the Assistant Secretary of the Treasury.
Michael Blaakman: and then leaves because he says I can do better for myself. That’s actually, he, that’s a direct quote.
Duer wants to sell the land he buys from Congress to foreign investors — basically rich people in Europe. But that pitch is so far from Thomas Jefferson’s vision, it can’t be public. Duer wants to secretly buy land through the Ohio Company. They’d be like his cover. Duer starts talking to Minister Manassah.
Michael Blaakman: They’re having oyster lunches in Brooklyn where they’re not gonna be overheard by, uh, you know, people who might write about this in the newspapers
At one dinner Minister Manasseh drinks 15 different kinds of wine. Can you imagine the hangover?
Duer has some powerful people bought into his scheme, including at least one member of Congress.
Michael Blaakman: he says, it has to be kept a profound secret. I can bring my group, which he describes as including a number of principle characters in the city. It’s a nice vague, a nice vague descriptor. We’ll join in and we’ll expand the size of your purchase, just keep our involvement a secret.
The scheme works.
Michael Blaakman: And as a result, Congress authorizes a sale that was eventually much bigger than what the Ohio company had come asking for.
With the help of Duer’s political connections, they buy 20% of the land that is now Ohio.
On the other side of this scheme, was the war we talked about last episode. On the other side of oyster lunches and 18th Century finance bros was extreme violence, ethnic cleansing and eventually genocide. All that…so these men could make more money.
The Ohio Company sale was like a fork in the road. Congress needed to decide between selling land to small farmers…or big business. Congress chose big business. And that decision stuck. The deals for land speculators kept coming. And so did the bribes.
Michael Blaakman: I mean, they are offering shares of the scheme to like influential members of the Massachusetts state legislature.
When land companies wanted to buy over half the land in present day Alabama and Mississippi, they offered bribes to members of the Georgia state legislature. All but one lawmaker who voted for the sale took a bribe.
Michael Blaakman: Oh, this is, the land market is awash with corruption and fraud.
So that dream of selling small parcels of land to individual farmers–it died on the vine. Through an orgy of corruption and greed, 18th Century finance bros bought almost 100 million acres of land from the government.
Michael Blaakman: we’re talking about basically half of present day Ohio. Um, the western third of present day New York, the western third or so of Pennsylvania. Um, pretty much all of Kentucky and Tennessee, uh, and big chunks of, uh, Alabama and Mississippi.
Michael Blaakman: not to mention Georgia itself.
Michael Blaakman: my gosh, um all of West Virginia. And
Michael Blaakman: and a huge extent of Maine.
If you live in the eastern half of the United States, there’s a fair chance you live on land that was caught up in this scheme.
When I first heard this story, it reminded me a lot of what’s happening today. I feel like our government still bends to the whims of finance bros. Billionaires have sweetheart deals with the President. Meanwhile his own family is getting richer off the office. After Elon Musk laid off a bunch of federal workers, he became the world’s first trillionaire. And so many people still struggle to pay for basic things, like housing. Bernie Sanders keeps telling me I live in an oligarchy. And I think I agree.
The problem of money in politics feels so modern. So present day. But what I learned is that it’s always been there. The corrupting power of money is part of the foundation of our political system.
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Land speculators in the late 1700s bought so much land so quickly, it created a bubble. And then the bubble burst. Some of the most prominent land speculators, including Duer, wound up in debtors’ prison. The land market falling short also meant it didn’t pay off the federal debt. That’s part of why we have taxes.
So you might think that land speculation as a business model ended. But no. The opposite happened. It grew. With the Lousiana purchase, Indian removal, and westward expansion…speculation continued. And it became a cornerstone of the American real estate market.
As the US expanded from sea to shining sea, it ran out of Indigenous land to take.
K-Sue Park: the frontier formally closes in 1890. and there’s a real question on the table, like, “How are we gonna keep making tons of money? We’re running out of land
This is K. Sue Park, she’s a law professor at UCLA.
K-Sue Park: it’s not very long before they revamp that entire property market, through the production of a standardized mortgage.
The mortgage market really starts in the early 1900s, as a way for financial institutions to keep making money off land.
K-Sue Park: almost every one of those little parcels on the ground then has a mortgage attached to it, and then that becomes a huge market in mortgage-backed securities. And now there’s, like, markets on top of that.
Rebecca: So, it’s almost like once the United States ran out of space to [00:08:00] expand, it kept building wealth through land, but almost through like mortgages by like kind of just like piling more money into real estate through these other economic ways.
K-Sue Park: Exactly. Yeah.
And that whole financial system that’s built on debt and credit and land and loans and bundling mortgages and selling them, it would not exist without foreclosure.
K-Sue Park: it becomes a really lucrative way of running a market because once you give that kind of option to lenders to take land and kick people off forever, more people are willing to lend.
K. Sue says foreclosure, it wasn’t always a thing.
K-Sue Park: In England it had really been very hard to take a family’s land from them forever for non-payment of even a secured debt.
there were just other kinds of remedies,
so if somebody owed you money and you couldn’t pay them back, that person could move into your house for a while, [00:01:00] But they could not take the land from you forever.
But when settlers got to North America, taking people’s land suddenly got a lot easier. K Sue looked into it, and the first instances of foreclosure are in colonial America. And its invented as a way to take Native people’s land.
K-Sue Park: there’s all of these stories of saying, “Well, we’ll take your lands to settle these debts.”
And then this kind of set-
Rebecca: do it to Native people first,
K-Sue Park: Exactly.
Rebecca: it to be done to other people.
K-Sue Park: Exactly.
So the idea of kicking someone out of their house or off their land because they can’t pay a debt starts in the American colonies…as a way to kick Native people off their land.
And eventually foreclosure was not just happening to Native people, but any one with property and an unpaid debt.
From its creation in the 1920 and 30s, the mortgage market kept growing.
K-Sue Park: Even in the 1950s, you would have maybe three years if you went into default, if you fell behind on your loan, and now it’s three months.
Rebecca: oh wow
And as the mortgage market grew, it got more hostile.
Rebecca: If I’m just a person where I’m really frustrated with the price of groceries or rent, why should I care about this history? What– Like, what does it have to do with my life?
K-Sue Park: I mean, like it or not, this history determines how everyone is able to live today. It determines the logic of our economy, how much you’re paying in rent, you know, whether [00:10:00] you can buy a house or not.
And that, I think, is a super important story for us to realize because it’s so naturalized today, right? Like, everyone thinks about real estate, and everybody thinks that real estate prices can just go up forever.
But it’s, like, insane because that’s literally where people have to live, and
Rebecca: Yeah.
K-Sue Park: can’t go up forever because people can’t afford that, you and eventually everybody’s homeless,
We built our economy on stolen, Indigenous land. And after our country had taken most of what it could, the real estate market still needed to grow. It couldn’t grow out anymore, so it started growing up. Which meant property just got more and more expensive.
[music cue]
And that same system that left a lot of people struggling, made other people rich.
Nick: I think of private property in the United States as a cornerstone for not just American wealth or u US wealth, but also for the familial and generational wealth of white families.
This is Nick Estes again. At the founding, over half of all wealth that Americans owned was land.
Nick I mean, everyone has benefited from the dispossession of indigenous land. And I, I think oftentimes we, uh, we get into this sort of generational moment where we think like, well, I’m not responsible for the sins or the crimes of my ancestors, but you inherit the system that they created. So you are responsible and you, you inherit quite literally the land that they acquired as well. And you also inherit the wealth that they acquired.
A quarter of white families in the US descend from settlers who got free, Indigenous land from the government. This is true for the white side of my family.
And while settlers were building all that wealth with Native land, Native people were collateral damage.
Nick Um, so our family became cattle ranchers actually. Um, my great grandfather Ruben was called tongue because he would take the tongue of a cow and give it to, uh, people, and it was considered the most prized item, you know, um, cow tongue. Um, and he would give it to families as sort of like a goodwill gesture. Um, a way to kind of get back to the community.
When private property first came to Nick’s reservation, the government assigned land to every citizen. His great-grandfather got land next to the river.
Nick along the Missouri River Bottom lands,we ran our cattle there and it was prime like real estate, so to speak, it was like riverfront property.
But then the government wanted that land too.
Rebecca: why did the states, and why did local white residents want a dam there?
Nick: to protect white settlement down river. Uh, in, in places like St. Louis they decided to sacrifice native lands. when they came up with their plans in their, in the thirties, they didn’t even put reservations on the map. And so my great-grandfather, and now I know my great-grandmother had found out about this and actually wrote, um, the congress person at the time and said, we oppose this.
Rebecca: how many families were flooded out?
Nick: every Dakota and Lakota reservation along the Missouri River was affected. This resulted in the relocation, the forced relocation of 30% of reservation populations. Uh, on some reservations like ours, if you think about it in terms of capitals: so like our capital city is the lower Brule town. The entire lower Brule town was flooded and destroyed.
Imagine, you know, flooding Albany, New York. It would probably cause a lot of political, economic turmoil. Um, and that’s actually what happened to us at that, at that time.
Rebecca: what happened to your family after your land was flooded?
Nick: personally, we lost our cattle herd to that. Because the land we were relocated on was just not suitable. It’s gumbo. If anyone knows our area, gumbo is just kind of this like hard clay when it gets. It just sticks onto your shoes, onto your vehicles. You can’t really, it’s, it’s unusable. grass doesn’t really grow on it, you know? Um, you can’t grow crops on it.
Rebecca: Yeah. And was that your grandparents’ generation?
Nick: My great grandparents’ generation. My grandparents’ generation and my dad’s generation. So it was three generations impacted.
Yeah. And I remember seeing photos of my great-grandparents after the relocation, and they’re literally like living in a tar paper shack, like, because their home was destroyed.
And they were all smiling. I mean, they like happy as can be, but I, I know it impacted them. I mean, my, my grandparents, um, perhaps for, for a variety of reasons, were economically, socially devastated by it, to the point where they couldn’t even take care of their own children. And so a lot of them were taken to boarding school.
Um, so every one of my aunts and uncles went to boarding school, um, for at least until the eighth grade. My dad went to boarding school until he was a graduate of high school. He was the youngest.
Rebecca: Mm. Because they just couldn’t provide for them at home.
Nick: Yeah, they couldn’t provide for ‘ em. And the churches preyed on that too. They knew that people um, couldn’t take care of their own kids.
Rebecca: one thing I think about a lot when like we study colonization of, um, like there’s always this thing of like, why are native people so poor? Like, how do we solve poverty in Indian country? And it’s like, because we were made poor.
Nick: And this wasn’t a 19th century phenomenon, this was an act that happened in the 20th century.
Rebecca: how do you think your life would’ve been different if the dam had never been built?
Nick: I don’t know. I don’t really do counterfactuals that much, but I do think that the boarding school, the Catholic Indian boarding school would have had less of an impact and influence on the absolute horror that inflicted on my family and my aunts and uncles. Um, but I can’t, I don’t want to like speculate like if some of them would be alive today, but perhaps they would.
We created a cruel system to consume Native land. And I think for a long time in our country, most Americans thought it would only affect those people. Those Indigenous people that didn’t really have property rights. But that cruel system–it’s the same real estate market we have today. So when the market feels inhumane, when families get kicked out of their homes. When rent goes up and up until everyone is struggling to find a place to live. That’s not a system run off the rails or out of control. That’s the system doing exactly what it was created to do.
[music shift]
How all this history explains the chaos we’re seeing today.
Ryan: Another ICE agent climbed into the back seat and put his arm around my neck and headrest and used his other hand to click my seatbelt to take my seatbelt off.
Maggie: It’s like, it’s it’s not, it’s not a new thing. We’re, this is what we’ve done. We’re good at this.
Next time on First America.