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On December 11, 1816 the U.S. Congress granted statehood to Indiana pursuant to the fulfilment of five provisions. One of the provisions granted four sections of land (2560 acres) for the establishment of a state capital with the condition that the location be decided prior to the public sale of federal lands surrounding the new capital. These four sections donated by the federal government to the new state became known as the Indianapolis Donation.
The Indiana legislature approved an act on January 11, 1820 which allowed for the appointment of eight commissioners to select land and report their proceedings to the next legislature. The commissioners were George Hunt of Wayne, John Conner of Fayette, Stephen Ludlow of Dearborn, John Gilleland of Switzerland, Joseph Bartholomew of Clark, John Tipton of Harrison, William Prince of Gibson and Thomas Emison of Knox counties.
In an act of January 6, 1821 the legislature approved the commissioners' recommendations and provided for three commissioners, James Jones, Samuel P. Booker and Christopher Harrison, to survey and plat the town and an agent, John Carr, to sell the lots. Section 21 of the Act affixes the town as the permanent seat of government and "shall be called and known by the name of Indianapolis'."
Of the three commissioners, only Christopher Harrison arrived at the site on the designated date. Harrison appointed Elias P. Fordham and Alexander Ralston as surveyors and Benjamin I. Blythe as clerk. The plan for the town included four diverging avenues from a central circular street, an adaptation from the Federal Capital plan, by Ralston "whom it was said had been connected with the surveys of Washington City."
The town was laid off into squares of 420 feet, with all streets 90 feet wide, except Washington Street at 120 feet and Circle Street at 60 feet. The squares were subdivided into twelve lots with dimensions, when abutting a 30-foot alley, at 67 by 195 feet deep. Lots that abutted a 15 foot lane were 65 by 202 feet deep. Governor's Square, composed of the quadrant blocks surrounding the circle, each contained ten rectangular lots and four odd shaped parcels. The diameter of the circle was 330 feet. The squares which were bisected by the four radiating avenues resulted in two triangular parcels. Each half block contained one rectangular lot at the square corner and five ill-shaped lots or parcels of different dimensions. Each had a depth of 32 feet at right angles to the avenue side and an angle inside the lot which created a right angle with the abutting street, all extending through the block from the avenue to the street.
The Indiana legislature stipulated which lots of the Donation were to be sold and reserved lots from sales for various purposes. Squares 12, 19, 90 were reserved for religious purposes, 53 for the State House and 58 for the Marion County Court House. The southern half of squares 43 and 50 were designated as city markets. Every lot numbered 1, 5 and 9 was withheld from the first sale with the prospect of receiving a higher price at a later sale. In 1823 four acres adjacent to White River in square 133 were designated as a "Grave Yard" and in 1827 square 22 was reserved for a hospital and lunatic asylum and 25 for a state university. All monies from sales were held by the state treasury to fund the proposed new government buildings.
Sales were held on October 8-13, 1821 and March 9, 1822. In 1824 the Agent of State was ordered to lay off 20 out-lots (lots outside the original mile square) to the west and east of town and to conduct their sale on the 4th Monday in January of 1825. Also in January of 1825, the Agent was ordered to lay off 20 out-lots to the north and south of the town, thus establishing North, East, South and West streets with this plat. These out-lots and the reserved in-lots numbered 1, 5 and 9 were offered for sale on May 2, 7 and 8, 1825. On May 1, 1827, all remaining unreserved, unsold lots and all relinquished lots were sold.
The Act of January 6, 1821 required the Agent to issue certificates to lot purchasers. The certificates recorded the date of sale, the amount paid and the date and amount of future installments. The initial payment was one fifth of the purchase price with four equal, annual installments. Purchasers could earn an 8% discount by making payments on time. A 6% annual interest rate was charged if the installment payments were not made on the date they were due. Purchasers that failed to complete their payments within three months after due date of the last installment forfeited the property. Deeds were issued when the lot was paid in full.
An act passed on January 20, 1826, provided for the relief of lot purchasers. This act, and subsequent relief acts, enabled a purchaser to file with the Agent a relinquishment of any lot or lots upon which payments were not completed. All sums paid on any relinquished lot were applied toward installments due on any lots which were not relinquished.
All information concerning the Indianapolis Donation derives from State Board of Accounts of Indiana, Department of Inspection and Supervision of Public Offices, Report by Field Examiner George Pence, May 24, 1913.