Donald Lines Jacobus wrote his article “Austin Bearse and His Alleged Indian Connections” for The American Genealogist 15 (1938-9):111-18 based on an article which was published in The Utah Genealogical Magazine in July 1935 (vol. 22, pp. 99-100), which in turn relied upon Franklyn Bearse’s two manuscripts at the Library of Congress. Written in 1933, the main manuscript is entitled “Who our forefathers really were, a true narrative of our white and Indian ancesters [sic]” by Franklyn Bearce (Ele-wa-tum, or Swimming Eel).
A Contribution to the Genealogy of the Bearse or Bearss Family in America: 1618-1871 by John Bearss Newcomb (Elgin, Ill.: 1871), which I believe is the earliest treatment of the Bearse family in a genealogy, also does not contain anything about the Hyanno myth. It is noteworthy that this work follows the exact same first three generations (Austin, Joseph, Josiah) as Franklyn Bearce does and never mentions any Native American connection nor any Gypsy connection.
So we can narrow down the genesis of this myth to between 1871 and 1907. One major event of that time frame is the birth of Franklyn Bearce in 1878. He would have been 29 in 1907. Either he influenced the 2nd edition of the Narragansett Episcopal Church or it influenced him. It is impossible to say.
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