There were now four settlements in the Transylvania grant: Boonesborough; Harrodsburg, fifty miles west, with about a hundred men; Boiling Spring, some six or seven miles from Harrodsburg; and St. Asaph. The crown lands to the north and east of the Kentucky, obtained by the Fort Stanwix treaty, contained two small settlements; forty miles north of Boonesborough was Hinkson's, later known as Ruddell's Station, where were about nineteen persons; lower down the Kentucky, also on the north side, was Willis Lee's settlement, near the present Frankfort; and ranging at will through the crown lands were several small parties of "land-jobbers," surveyors, and explorers, laying off the claims of militia officers who had fought in the Indian wars, and here and there building cabins to indicate possession.

Henderson had no sooner arrived than he prepared for a convention, at which the people should adopt a form of government for the colony and elect officers. This was held at Boonesborough, in the open air, under a gigantic elm, during the week commencing Tuesday, the twenty-third of May. There were eighteen delegates, representing each of the four settlements south of the Kentucky. Among them were Daniel and Squire Boone, the former of whom proposed laws for the preservation of game and for improving the breed of horses; to the latter fell the presentation of rules for preserving the cattle-ranges. The compact finally agreed upon between the colonists and the proprietors declared "the powers of the one and the liberties of the others," and was "the earliest form of government in the region west of the Alleghanies." It provided for "perfect religious freedom and general toleration," militia and judicial systems, and complete liberty on the part of the settlers to conduct colonial affairs according to their needs. This liberal and well-digested plan appeared to please both Henderson and the settlers. But the opposition of the governors, the objections raised by the Assembly of Virginia, of which Kentucky was then a part,[12] and finally, the outbreak of the Revolution, which put an end to proprietary governments in America, caused the downfall of the Transylvania Company. The Boonesborough legislative convention met but once more—in December, to elect a surveyor-general.

The May meeting had no sooner adjourned than Transylvania began again to lose its population. Few of the pioneers who had come out with Boone and Henderson, or had since wandered into the district, were genuine home-seekers. Many appear to have been mere adventurers, out for the excitement of the expedition and to satisfy their curiosity, who either returned home or wandered farther into the woods to seek fresh experiences of wild life; others had deliberately intended first to stake out claims in the neighborhood of the new settlements and then return home to look after their crops, and perhaps move to Kentucky in the autumn; others there were who, far removed from their families, proved restless; while many became uneasy because of Indian outrages, reports of which soon began to be circulated. Henderson wrote cheerful letters to his partners at home, describing the country as a paradise; but by the end of June, when Boone returned to the East for salt, Harrodsburg and Boiling Spring were almost deserted, while Boonesborough could muster but ten or twelve "guns," as men or boys capable of fighting Indians were called in the militia rolls.

The infant colony of Kentucky had certainly reached a crisis in its career. Game was rapidly becoming more scarce, largely because of careless, inexperienced hunters who wounded more than they killed, and killed more than was needed for food; the frightened buffaloes had now receded so far west that they were several days' journey from Boonesborough. Yet game was still the staff of life. Captain Floyd, the surveyor-general, wrote to Colonel Preston: "I must hunt or starve."

As the summer wore away and crops in the Eastern settlements were gathered, there was a considerable increase in the population. Many men who, in later days, were to exert a powerful influence in Kentucky now arrived—George Rogers Clark, the principal Western hero of the Revolution; Simon Kenton, famous throughout the border as hunter, scout, and Indian fighter; Benjamin Logan, William Whitley, the Lewises, Campbells, Christians, Prestons, MacDowells, McAfees, Hite, Bowman, Randolph, Todd, McClellan, Benton, Patterson—all of them names familiar in Western history.

In the first week of September Boone arrived with his wife and family and twenty young men—"twenty-one guns," the report reads; Squire and his family soon followed; four Bryans, their brothers-in-law, came at the head of thirty men from the Yadkin; and, at the same time, Harrodsburg was reached by several other families who had, like the Boones, come on horseback through Cumberland Gap and Powell's Valley. This powerful reenforcement of pioneers, most of whom proposed to stay, had largely been attracted by Henderson's advertisements in Virginia newspapers offering terms of settlement on Transylvania lands. "Any person," said the announcement, "who will settle on and inhabit the same before the first day of June, 1776, shall have the privilege of taking up and surveying for himself five hundred acres, and for each tithable person he may carry with him and settle there, two hundred and fifty acres, on the payment of fifty shillings sterling per hundred, subject to a yearly quit-rent of two shillings, like money, to commence in the year 1780." Toward the end of November Henderson himself, who had gone on a visit to Carolina, returned with forty men, one of whom was Colonel Arthur Campbell, a prominent settler in the Holston Valley.

This increase of population, which had been noticeable throughout the autumn and early winter, received a sudden check, however, two days before Christmas, when the Indians, who had been friendly for several months past, began again to annoy settlers, several being either killed or carried into captivity. This gave rise to a fresh panic, in the course of which many fled to the east of the mountains.

During the year about five hundred persons from the frontiers of Pennsylvania, Virginia, and North Carolina had visited and explored Kentucky; but now, at the close of December, the population of all the settlements did not aggregate over two hundred. The recent outbreak had much to do with this situation of affairs; but there were other causes conspiring to disturb the minds of the people and postpone the growth of settlement—the clashing of interests between the Transylvania Company and the governors of Virginia and North Carolina, uncertainty as to the possibilities of a general Indian war, the threatened rupture between the colonies and the English crown, and the alarming scarcity of provisions and ammunition throughout Kentucky.

Nevertheless, over nine hundred entries had been made in the Transylvania land-office at Boonesborough, embracing 560,000 acres, and most of these tracts were waiting to be surveyed; two hundred and thirty acres of corn had been successfully raised; horses, hogs, and poultry had been introduced, and apple- and peach-trees had been started at several settlements. The germ of a colony was firmly planted, laws had been made, the militia had been organized, civil and military officers had been commissioned, and in the face of several slight Indian attacks the savages had been repelled and the country maintained. Most promising of all, there were now twelve women in the country, all of them heads of families.

The principal pioneers were nearly all of sturdy Scotch-Irish blood, men of sterling merit, intensely devoted to the cause of American liberty, and destined to contribute powerfully to its aid in the great war which had now begun, and concerning which messengers from over the mountains had during the year brought them scanty information.