General Clarke had served as a general in the American Revolution, but after the war concluded he became involved in French-supported schemes to invade East Florida, which was then controlled by the Spanish. In February of 1794, Clarke resigned from the Georgia militia to lead an expedition against Spanish East Florida. When the filibuster failed to materialize, General Clarke and several hundred followers decided to establish an independent state on hunting grounds reserved for the Creek Indians west of the Oconee River. These settlements were located in present-day Greene, Morgan, Putnam, and Baldwin counties. The settlers built several towns and forts over the next few months and even wrote a constitution, which indicated the permanent nature of their endeavor.
The newly constituted United States government viewed this action as a violation of the Treaty of New York of 1790 and pressured Governor George Mathews to remove the illegal settlers from the Creek lands. The Georgia governor hesitated to act and took only token measures to stop Clarke and his party, such as issuing a proclamation in July that went unenforced. It is unlikely that Mathews had enough public support to make a move against General Clarke at that juncture, but the tide of public opinion soon changed. In late August, Judge George Walton issued a scathing charge to an Augusta grand jury in which he condemned the actions of Clarke and his followers as essentially an attempt to steal western lands, "the richest jewel the state of Georgia possesses," before other Georgians had a fair chance of acquiring title to them. In fact, Clarke welcomed all settlers to join the enterprise and specifically forbade issuing large tracts of the land in the new republic to speculators or other investors who would not actually settle there. In any case, Walton's charge changed public opinion to a degree that allowed the Governor to muster a sufficient force of militia to march against Clarke, the former militia commander and hero of the American Revolution who was still held in high regard by white frontier settlers. In September several hundred Georgia militiamen, acting in conjunction with federal troops stationed on the Oconee, surrounded and isolated General Clarke's fortifications. After a some negotiation, Clark agreed to surrender providing that he and his men would not face prosecution for their actions. Soon thereafter Clarke and his followers departed, and the militia burned down the new settlements and fortifications.
The establishment of Clarke's independent state generated an increasing interest in the disposition of Georgia's western land claims, which at that time stretched as far as the Mississippi River. As a result the Georgia General Assembly passed a bill in late 1794 allowing a portion of the lands west of the Oconee River, the same land that Clarke's followers had recently occupied, to be distributed among veterans of the Revolution and various Indian conflicts. A supplementary act was attached to this bill which provided for the sale of millions of acres of land to four private land speculation companies, an infamous agreement that came to be known as the Yazoo Land Fraud.