SETTLEMENT OF THE NEW FRONTIER: THE HOMESTEAD ACT OF 1862
The new United States was a pitifully poor nation, and its western lands were one of
its principal assets. The early land policies of the young republic were designed to
obtain revenue from the sale of these lands rather than to encourage their settlement, but
for decades the halls of Congress echoed with debates about the minimal price at which
land should be sold and the minimal acreage that a buyer should be required to purchase.
Some congressmen from the East managed to find virtue in all the
blunders that had been made in settling New England. Revenue could be raised most
efficiently, they argued, by selling land only in large blocks to men of substance, who
could bear the costs of subdividing, reselling, and settling it. Dividing the land into
small parcels (initially) would appreciably increase the cost of surveying it, and parcels
would fetch a lower price if they were so small that wealthy buyers could not be bothered
to bid on them. Furthermore, they said it would be more difficult for prospective
purchasers to select only the better land and bypass the poorer if the land were sold in
large blocks, and the danger of Indian attack would be reduced if settlements were grouped
on blocks of land instead of being scattered through the wilderness. Underlying all these
rationalizations, although it was rarely articulated, was the fear that factories in the
East would lose their supply of cheap labor if workers were lured westward by the
availability of small blocks of land at low prices.
The congressmen from the West argued that settlers were performing a
patriotic service when they tamed the wilderness and advanced the frontier. Land should be
free, they said, or at least it should be available in tracts so small and at prices so
low that every person who wanted a farm could afford the "threshold price" (the
minimal acreage of land multiplied by the minimal price). They gradually managed to hammer
down the minimal sales unit from 640 acres in 1785 to 320 acres in 1800, 160 acres in
1804, 80 acres in 1820, and 40 acres from 1832 until 1862, when the Homestead Act gave 160
acres free to anyone who would live on the land and cultivate it for five years.
Before 1820, federal government land sales had to compete with those of
the states, which had land of their own to sell, and with holders of military warrants,
most of whom wanted only to convert their warrants into cash as quickly as possible. When
these sources of cheaper land began to dry up, however, the minimal purchase price for
federal land was reduced from $2.00 an acre, where it had been set in 1796, to $1.25 an
acre. In other words, the threshold price for a farm was reduced from $1,280.00 (640 acres
at $2.00 an acre) in 1796 to $100.00 (80 acres at $1.25 an acre) in 1820 and to $50.00 (40
acres at $1.25 an acre) in 1832, where it remained until 1862. For comparison, the wage
for a farmhand in Ohio ranged from $5.00 to $15.00 a month and board, so after 1832 the
minimal cost of a farm worked out at somewhere between three and ten months wages
for a farmhand.
The Homestead Act of 1862 was largely irrelevant in
the Midwest, where most of the land had been bought and paid for before the act was
passed. Much of the eastern Midwest was purchased during the land boom of the 1830s, and
most of Iowa and Wisconsin during the land boom of the 1850s, when the minimal purchase
unit was only 40 acres. By 1862 most of the land that was still available for homesteaders
was in Minnesota, the Dakotas, Nebraska, and Kansas.
In the early days few people bought more than the minimal acreage
required by law, because farm machinery was primitive, and a man with horses could not
cultivate more than 40 to 80 acres even if he had a large family of husky sons. Some
settlers bought larger blocks, but most of the eastern Corn Belt was alienated in parcels
of 40 to 80 acres, and even today few farmers own as much as 160 acres, although they farm
far more because they rent land from their neighbors.
The areas that once had the smallest farms still have the smallest
farms, and the areas that began with the largest farms still have the largest farms.
Farms in Ohio and Indiana still are smaller than farms in areas farther west that were
opened up later with the kinds of improved machines that had been developed on Ohio and
Indiana farms. The largest farms in Ohio are in the Virginia Military District, where
people used military warrants to acquire land and did not have to pay cash for it. Therefore, the geographic stability of property boundaries and farm
size suggests that the size of contemporary farms in the Midwest may be a function of the
acreage that the first settlers originally obtained from the federal government more than
a century ago.
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