We have seen that although Jamestown was the first successful British colony in North America, it did not really contain the elements of American exceptionalism, for it was not primarly founded with a Christian and Protestant religious focus (instead it was founded with an economic focus); and while it did have elements of common law, it took the colony until 1619 to formally put these elements in place. The Plymouth colony, on the other hand, arrived with three of the four “Pillars” of exceptionalism: a Christian, Protestant religious foundation, common law (they elected their governor immediately), and private property with written titles and deeds.
Both colonies arrived with a socialist economic system, only to see it fail and each then switched to a more prosperous early form of free market capitalism. Mind you, this was nothing like in the late 1790s after the ideas in Adam Smith’s Wealth of Nations began to circulate.
Meanwhile, another group of English dissidents—also Puritans but not Separatists like the Plymouth colonists—were heading for America. A new company, the Massachusetts Bay Company, which was composed of parts of a failed Dorchseter Company that had settled at Cape Ann in 1623, and the Massachusetts Bay Company, arrived in 1628 in southern New England in an area around modern day Salem and Boston. Overwhelmingly Puritan, the leadership of the company (like Plymouth) was elected. But unlike Plymouth’s Pilgrims, the Massachusetts Bay settlers were “freemen” who had already been approved for their religious views. They were all members of the congregations of Puritan churches.
Once again, we see the congregational structure being an important component here. This was bottom up church governance, not top down like the Catholic or Anglican churches. Puritans were not particularly tolerant of the “corrupt” Anglican Church they had left, or “heretical” Baptists who later came over. However, rather than kill the members of other faiths—as might have happened across much of Europe—a certain degree of genuine toleration did develop in that they were allowed to just move on and found their own colonies. Rhode Island, for example, would become a Baptist colony; Maryland (later) would receive a grand as a Catholic colony. The point was, the Puritans still believed the other religions were “damned, doomed, and going to hell,” but they were not particularly enthusiastic about sending them there! This seems a rather “intolerant” view today, but in the context of the time, when Protestants in France were physically persecuted, and where Catholics in England would be under constant threat, it was incredibly open and tolerant.
A major breakthrough in understanding and toleration of other faiths—even variations in Puritanism—came with the English Civil War of 1642-1651, where Oliver Cromwell’s New Model Army of mostly Puritans found that in the field every night soldiers would read their scripture. Before long, differences developed, some insignificant, some serious. The Puritan army realized that if Company A had a different understanding of the Jonah and the whale story from Company B, this could be a problem. In the past, one company would be declared heretical, and possibly killed. But they needed each other to kill Anglicans in the morning! Therefore, the widespread acceptance set in where even when it was believed that other sects/denominations/religions might be going to hell, it was a matter for God to decide in the next life. This was a profound change and capped the early “religious toleration” of the Puritans. Although there would still be violence and even executions of “heretics” and witches, slowly an acceptance of different Christian religions and even Jews began to permeate all of the Puritan world, especially in the American colonies.
Already, however, all three colonies—Jamestown, Plymouth, and Massachusetts Bay—had established the basics of private property in the New World, but with a key ingredient missing in most of the rest of the globe: written titles and deeds. Written accounting came down from the Italian merchants in the middle ages with their introduction of “dual entry” bookkeeping in which all assets were offset by liabilities, thereby permitting a reasonable depreciation of capital equipment. By the time the Jamestown colonists arrived in America, there was an English tradition of titles and deeds, dating back at least to the Magna Carta in 1215 where the Crown had to certify that it had indeed bestowed titles on the nobility. This was not foolproof, and of course on both sides of the Atlantic, governments and monarchs violated property rights frequently. But a dynamic developed even with the nobles in England, where by supporting their right to their lands, one slowly ensured legal security for all property to all people.
The concept of written titles and deeds became even more important in the New World, where settlers could claim lands where they found them, then deal with the Indians later. As best as it could, the King (and various other monarchies whose authority extended to Canada and Spain) continued to hand out charters, or rights to the land for the purpose of settling and doing business. These charters were early contracts and would be confirmed as such by the U.S. Supreme Court in 1819 in the Dartmouth College case, where it was established that a royal charter to Dartmouth College was indeed a contract that took precedence over a change in administration. The “sanctity of contracts” would therefore become a key element in American business greatnesss, as it allowed certainty in business dealings.
Let’s return, however, to the issue of private property rights with written titles and deeds—the third Pillar of American Exceptionalism. Now ordinary people could settle on land and develop it with reasonable assurance that they could not be removed on a whim. After the Revolution, but significantly under the Articles of Confederation and not the Constitution, this principle was reaffirmed in the Land Ordinance of 1785.
It is important to recognize that Thomas Jefferson, on whose ideas most of our early land laws were drawn, had concluded that land was an essential ingredient in human happiness. He wrote, “The earth is given as a common stock for man to labour and live on . . . . It is too soon yet in our country to say that every man who cannot find employment but who can find uncultivated land, shall be at liberty to cultirvate it, paying a moderate rent. But it is not too soon to provide by every possible means that as few as possible shall be without a little portion of land. The Virginia Company, short of laborers, had thought it could draw workers to America through the “headright” system, wherein each person received up to 75 acres and a family of four 250 acres for coming to Virginia. Of course, this didn’t solve labor shortages at all, but rather only created more farms needing labor. Jefferson mulled a birthright of 75 acres for every native-born Virginian as well.
We will deal with labor, indentured servitude, and slavery in another discussion, but in keeping with our focus on written titles and deeds, a breakthrough came in 1785 when the Articles of Confederation Congress passed the Land Ordinance. It is not known if the drafters had read Jefferson extensively, though James Madison had. Jefferson had already concluded that the new Ohio lands (known as the “Old Northwest”) needed to be conveyed from the states to new settlers who could form the areas into new territories having “the same rights of Sovereignty, Freedom, and Independence” as the original thirteen colonies. In a letter to Madison in 1784, Jefferson warned “For God’s sake put this at the next session of the [Virginia] assembly [as it] is for the interest of Virginia to cede so far immediately; because the people beyond that will separate themselves, because they will be joined by all our settlements beyond the Alleghaney if they are the first movers.” In other words, Jefferson feared a new “United States” would develop of the far-western lands if the people there were not extended citizenship rights in the original United States. Again, Jefferson wrote George Washington, urging that Virginia cede its western lands immediately or risk losing control altogether.
Congress apparently had heard Jefferson’s words. With the Land Ordinance it started a survey system in southeast Ohio that laid out the territory in big boxes called “townships” each divided into 36 “sections” one mile square. The land was to be opened up for purchase at remarkably low prices as soon as it was surveyed. Naturally, the survey would start at “section 1" and proceed in order through “section 36,” mostly to ensure protection against Indian attacks.
Then something remarkable happened: people began settling in all the sections without waiting for the survey. This was a problem, in that they were technically violating the spirit if not the letter of the law. In other societies, with monarchs or top-down governments, the army would have been dispatched to kick these settlers out. But America was built on common law, which said the people themselves were the law, and they elected leaders to carry out what they already knew was right. The U.S. government accordingly adjusted by passing “preemption” laws, known today as “squatter’s rights.” These laws said that if a person staked out land and resided on it for seven years and built either a house or a farm on it without being evicted, the land was his. He could draw up a map and get a title deed to it.
It’s also interesting that “small government” Jefferson did not, in this case, fight for Virginia’s right to maintain its land, but instead called for a national distribution that would benefit the “landless” states (those states locked along the eastern seaboard). In short, Jefferson thought in national terms, not the terms of a group of confederate states. Jefferson called for “cultivat[ing] the idea ofour being one nation, and to multiply the instances in which the people shall look up to Congress as their head.” Congress headed the words of the Sage of Monticello. In October 1778, the Continental Congress, at the urging of the Virginia delegation, resolved that all ceded lands “shall be disposed of for the common benefit of the United States and be settled and formed into distinct republican states, which shall become members of the federal union, and have the same rights of sovereignty, freedom and independence, as the other states.”
What Jefferson and others did not discuss was the impact such title deeds would have on the newly emergent capitalism. But, of course, they couldn’t because Adam Smith had just written his Wealth of Nations in 1776 and the ideas were still percolating over to the young Republic.