After the Revolutionary War, North Carolina had little or no money in its treasury. Faced with accumulating debts to soldiers and military suppliers, the state began to grant or transfer its western land to individuals to pay for war service and supplies in lieu of cash. The process of receiving land was not easy. After the claimant selected or “located” a desired tract, he paid the necessary fees and registered his entry in the appropriate entry taker's office, where he obtained a warrant authorizing the survey. The plat (an official scaled drawing by the surveyor) and survey (legal description of boundary lines), together with the warrant (ownership authorization) were forwarded to the secretary of state, who issued the grant. Registration of the grant in the county where the land lay completed the process. Litigation, brought about by overlapping boundary lines, later clogged the courts.
Entry taker offices opened in the newly erected counties of Washington in 1777 and Sullivan in 1779; these offices closed in 1781. Two years later, John Armstrong's office opened in Hillsborough, North Carolina, for redemption of war provision certificates and specie issued during the war and for sale of the western land. Ignoring Indian rights, the entire western area–now Tennessee–was opened for sale, except the military bounty land reservation in northern Middle Tennessee and the extreme southeastern corner of the state, where the Cherokees lived. North Carolina legislative acts of 1780, 1782, and 1783 established the military reservation, which covered much of the area originally designated as Davidson County.
Discouraged by North Carolina's failure to provide military assistance against the Indians and worried by the Spanish closing of the Mississippi River, settlers in the area that would become northeastern Tennessee illegally formed the State of Franklin, which existed from 1784 to 1788. Acting within the context of the new “state,” settlers moved south of the French Broad and Holston Rivers. Although unable to obtain title to their land for many years, the claims or preemption rights of these settlers were protected by Tennessee's first constitution.
In 1784 North Carolina accepted fees for the transfer of title to individuals for much of the Tennessee area. Following the example of other states that credited their western lands to the newly formed Confederation of States, North Carolina also offered to cede its unappropriated western land (Tennessee) in 1784. Although withdrawn before it was accepted, this offer permanently closed the John Armstrong office in Hillsborough, North Carolina. A second cession made in 1789 paralyzed Tennessee land grants. Unlike North Carolina, the United States did not permit the occupation of territory not obtained through treaties. This left most of the state free of settlement, and until 1805, a wilderness existed between the settlements of northern East Tennessee and the Cumberland River area in northern Middle Tennessee. North Carolina had sold most of the Chickasaw area west of the Tennessee River in 5,000-acre grants, but the United States closed this area to white settlement until the Chickasaw treaty of 1818 was signed.
North Carolina had accepted money for patchwork grants throughout Tennessee and was legally obligated to honor these sales as well as the military bounty land promises. Therefore, North Carolina's cession deed to the United States included the following restrictions: 1) all entries and surveyor's warrants, which had been made and for which grants had not been issued, would be honored and completed into grants; 2) North Carolina reserved the right to continue issuing military warrants until all the veterans were paid, even if it meant issuing warrants outside the reservation; 3) land promises made to members of Evans Battalion, who had come to the aid of Cumberland settlers during Indian attacks in the 1780s, would be honored; and 4) special promises made to commissioners, surveyors, hunters, and their guard for laying off the military reservation, and preemption rights to those settlers who occupied the land prior to its official opening, would be honored.
When the United States accepted the cession deed containing the restrictive clauses, it found that the title conveyed only an undetermined amount of residue land, and it was impossible to determine if any land would remain after all North Carolina promises were honored and Indian claims respected. In 1790 Tennessee became the Territory South of the River Ohio, but the only territory land granted by the United States was 640 acres for Pulaski, the county seat of Giles County. Under these existing and conferred conditions, Tennessee achieved statehood in 1796.
The Compact of 1806 between the United States, North Carolina, and Tennessee authorized Tennessee to complete North Carolina's obligations by making land grants. A congressional reservation line separated the land obtained by Indian treaty from land otherwise obtained. The two areas were designated as land East and land West of the Congressional Reservation line. The land was divided into surveyor's districts, with the survey using the rectangular system in townships and ranges similar to that of other federally owned land. Boards of Commissioners were provided for East and West (Middle) Tennessee to determine the validity of North Carolina warrants. Only those grants initiated by North Carolina and grants for occupancy were issued at this time. Later, the bits and pieces lying between the patchwork grants were sold. Certain portions of the land–section 16 in each federally surveyed township, as well as most of the Ocoee and Hiwassee Districts–were reserved for the benefit of schools.
As the Chickasaws released their land west of the Congressional Reservation Line and the Cherokees released their reservations (in the land south of the French Broad and Holston Rivers, and the Hiwassee and Ocoee Districts), the granting of these lands followed earlier practices. Only the Ocoee and Hiwassee Districts were free of North Carolina warrants.
Thomas Abernathy, From Frontier to Plantation in Tennessee (1932); Walter T. Durham, Before Tennessee: The Southwest Territory, 1790-1796 (1990); John Haywood, The Civil and Political History of the State of Tennessee from its Earliest Settlements up to the Year 1796 (1823); Henry D. Whitney, The Land Laws of Tennessee (1893)