This Day In Market History: North American Land Company Is Formed, Precursor To The Modern-Day REIT

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened?

On this day 223 years ago, Robert Morris created the North American Land Company, precursor to the modern-day real estate investment trust.

Where Was The Market?

The S&P 500 and the Dow Jones Industrial Average were nowhere to be found, and the United States Constitution was only about six years old.

What Else Was Going On In The World?

In 1795, the University of North Carolina opened, becoming the first U.S. state university. The U.S. and Spain signed the Treaty of Madrid, which established the boundaries between the U.S. states and the Spanish colonies. A dictionary cost about 50 cents.

The First Major American REIT

Robert Morris was one of the largest private financiers of George Washington’s army during the U.S. Revolutionary War, personally contributing more than 10 million pounds to the cause. After the war, Morris, James Greenleaf and John Nicholson pooled their money and resources and created the North American Land Trust in February of 1795. The trust’s massive land holdings included more than six million acres in the District of Columbia, Georgia, Kentucky, North Carolina, Pennsylvania, South Carolina and Virginia.

Morris initially sold 30,000 shares of stock in the trust to the public for $100 per share, and shareholders were paid a 6 percent annual yield on their investment. Unfortunately, the Panic of 1797 led to a credit crunch, and Morris was sent to debtors prison after he could not secure the financing to pay back investors. Morris was eventually released from prison in 1800 after the passage of the U.S. Bankruptcy Act of 1800.

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