Wisconsin, and much of Minnesota. That was a huge amount of land, about 60 acres for every resident of the United States in 1790. Rather than give the land to settlers, however, Congress, at the urging of Alexander Hamilton, tried to sell the land to pay off the nation’s debt.
In contrast to Hamilton, Jefferson was against selling land to pay the national debt. “The people who will migrate to the Westward whether they form part of the old, or of a new colony will be subject to their proportion of the Continental debt then unpaid,” he wrote in 1776. “They ought not to be subject to more.” But by 1784, even Jefferson had accepted the idea and his land ordinance of that year provided for sales.29
Selling the Federal Domain
In 1785, Congress asked a minimum of $1 an acre in cash for blocks of at least 640 acres. The lands were to be sold at auction, but only after lands had been surveyed. Surveys were slower than anticipated, and only about 1.5 million acres were sold to private parties, mostly speculators, under this system.30
In 1796, Congress raised the price to $2 an acre for a minimum of 640 acres, with half the money paid within 30 days and the other half within a year.31 That amount may sound inexpensive today, but in the late 18th century those were high prices: based on the consumer price index, $640 dollars in 1785 would be almost $15,000 today. More significantly, in relation to the wages earned by unskilled workers, it would be more than $240,000 today.32 That amount is far more than an unskilled worker could pay in cash, especially for land that initially at least would have to be worked on a subsistence basis since it was located too far from markets to sell any crops. As a result, sales were slow, averaging only a little more than 500 640-acre parcels per year from 1800 through 1810.33
In 1800, Congress reduced the down payment to one-twentieth of the total cost and extended the time allowed for full payment, at 6 percent interest, to four years. The 1800 law also reduced the minimum number of acres that could be purchased to 320, which was reduced still further to 160 acres in 1804. The low down payment encourage speculators, while the high cost per acre still led large numbers of settlers to default on their payments, especially after the recession of 1819. As a result, in 1820 Congress once again changed the terms of land sales: purchasers could buy as few as 80 acres for $1.25 an acre. To discourage speculation, all purchases were to be in cash.34
One settler who had trouble gaining secure title to land was Thomas Lincoln, the father of the future president. In 1803, he purchased a 250-acre farm in Kentucky for 118 English pounds, but lost 38 acres of it because of an erroneous recording of the land survey. Five years later, he made a $200 down payment on a 348-acre farm, but lost the farm and the down payment because of a title dispute. He then bought a third farm that was part of a 10,000-acre grant received by Thomas Middleton in 1784. Lincoln and nine other farmers who had purchased part of that grant lost their land in a title dispute with Middleton’s heirs. As one historian comments, “There were likely no people in America so cursed with land litigation as the pioneer Kentuckians, because of the lack of adequate land regulations pertaining to priority of ownership.”35
Giving up on Kentucky, in 1816 Lincoln moved his family to Indiana. There he claimed 160 acres of federal land in 1817 with a down payment of $16, or one-twentieth of the total cost. Within 40 days, as specified by law, he paid another $64, bringing his total payment to one-fourth of the cost. However, he was unable to make any further payments. In 1821, Congress passed a law extending the payment period to as long as eight years. In 1827, Lincoln gave up some of his land to gain clear title to the rest, but then turned around and sold the land in 1830.36
Congress debated the sale of trans-Appalachian lands for more than 70 years. “More than half our time has been taken up with the discussion of propositions connected with the public lands,” complained South Carolina Senator Robert Hayne in 1830. “Day after day the charges are rung on this topic, from the grave inquiry into the rights of the new States to the absolute sovereignty and property in the soil, down to the grant of a preemption to a few quarter sections to actual settlers.”37
Meanwhile, settlers who could not afford to put up $640 were nevertheless moving west of the mountains, staking claims, and claiming squatters’ rights to the land. In 1787, the federal government sent troops to burn homes and evict squatters along the Ohio River. But the squatters returned as soon as the troops left.38 From 1781 through 1788, Massachusetts aggressively tried to remove squatters from Maine.39 Continuing troubles with squatters contributed to the decision to spin off Maine as a separate state in 1820.
Another obstacle to pioneers’ taking title to the land was Indian ownership of some lands. Although the federal government recognized Indian title to much of the trans-Appalachian territory, it did not recognize the right of Indian tribes to sell land to white settlers. This policy and the government’s acquisition was based on an 1823 Supreme Court decision, Johnson v. M’Intosh, which in turn was based on a long-standing European tradition that only a sovereign nation has the right to extinguish Indians’ interests in their land. The British government, for example, proclaimed in 1763 that “no private person do presume to make any purchase from the said Indians of any lands reserved to the said Indians.”40
Although the federal government did eventually negotiate the purchase of most trans-Appalachian lands from Indian tribes, the government’s acquisition further delayed the ability of settlers to take title to land. In 1807, Jefferson ordered troops to expel squatters from lands recently purchased from the Chickasaw and Cherokee Indians as well as from lands still owned by Indians.41
Giving Away the Federal Domain
Eventually, Congress gave up on the idea of selling land to repay the Revolutionary War debt and began giving land to various groups. Between Ohio in 1803 and Arizona in 1912, Congress eventually gave new states 218 million acres of federal land (plus another 105 million acres to Alaska in 1959) on statehood with the intention that the states would sell or manage those lands to pay for schools and other public programs.42 Starting in 1823, Congress eventually granted 140 million acres (some of which were never claimed, were returned, or were revested by Congress) to private companies to promote the construction of canals, wagon roads, railroads, and river improvements.43
Congress intended that the states, railroads, and other entities would sell those lands to settlers, but that didn’t always happen. Alaska still owns about 90 million acres of the land it received on statehood, and 22 of the 29 other states that received land grants still own about 45 million acres of their grants.44 Millions of acres of railroad land grants were either retained by the railroads or sold in large blocks to timber companies.
In 1841, Congress allowed squatters to purchase up to 160 acres of land they had lived on for at least 14 months for not less than $1.25 per acre, and $2.50 an acre on alternate sections of railroad land grants.45 That price was still prohibitive for subsistence farmers, and land sales—which had peaked in 1836—were 70 percent lower in the decade following the act than the decade before.
In 1850, Congress passed the Donation Land Claim Act, which allowed settlers in the Oregon Territory to claim up to 320 acres each (640 for married couples) at no charge provided that they cultivated the land for four years. This act led 7,317 people to claim about
2.8 million acres, mostly in Oregon’s Willamette Valley. The law was mainly for the benefit of settlers who started coming over the Oregon Trail in 1841 in an overt effort to claim the Oregon Territory for the United States, which had jointly held the land with Great Britain since 1818.46 But it was a generous grant, as Willamette Valley farmlands were much more productive than much of the land that was later homesteaded in parcels of just 160 acres.
The debate over whether to sell federal land to help pay the public debt or give it away to settlers to promote economic expansion was
