contract stipulated that Disston and associates would be deeded half of whatever land his Atlantic and Gulf Coast Canal and Okeechobee Land Company reclaimed around Lake Okeechobe, the Kissimmee, Caloosahatchee and Miami Rivers.
Disston stood to gain up to 12,000,.000 acres with his drainage contract, although it woul displace numerous squatters. Florida's Armed Occupation Act of 1842 had granted land to squatters in order to force the local Seminole Indians off the land,
but Disston's contract would force the squatters off any land that Disston could show was submerged. The drainage contract, however, was in jeopardy because it did not affect the massive debt bearing down on the Internal Improvement Fund. Then Governor of Florida, William Bloxham visited Hamilton Disston in Philadelphia to
of its assets were to be diverted to purposes
other than those of the Fund, such as internal
improvements, drainage, reclamation and
settlement of land.
The fund pledged land to railroad companies
and guaranteed bonds issued by the railroad
companies on the land. When the high costs
associated with the American Civil War and
Reconstruction caused railroad companies to
default on the bonds, the fund became liable
and rapidly sank into debt and eventually
into Federal Court Receivership.
In 1877, the fund was nearly $1 million in debt.
The state constitution forbade issuing bonds
to repay it; investors were not interested in Florida, no rail lines were built, and progress in the state stalled.
In 1877, diplomat Henry Shelton invited Hamilton Disston, an industrialist from Philadelphia and avid sport fisherman, on a fishing trip through Florida. During the trip, Disston realized the possibility that enormous tracts of land could be reclaimed for agriculture by using canals to drain Florida's Lake Okeechobee.
An application for foreclosure of the fund and its land was filed in federal court in 1880. Negotiations to relieve the debt were held with various potential investors but did not come to fruition. Disston, and five associates, meanwhile, entered into a
land reclamation contract with the Internal Improvement Fund in January 1881. The
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