Land Act of 1820

Date April 24, 1820

Enacted in response to mounting federal budget needs, the Land Act of 1820 laid the basis for transferring public domain lands in former Indian lands to individual U.S. citizens over the next two decades.

Locale Washington, D.C.

Key Figures

• Alexander Hamilton (1755-1804), secretary of the Treasury, 1789-1795, who advocated using proceeds of land sales to reduce the federal debt
• Albert Gallatin (1761-1849), secretary of the Treasury, 1801-1814, who organized the system of Land Offices
• William Henry Harrison (1773-1841), victor in the Battle of Tippecanoe, which opened Indiana to Euro-American settlement
• Anthony Wayne (1745-1796), Army general who forced American Indians to cede large parts of the Old Northwest

Summary of Event

From their beginnings, Great Britain’s North American colonies were colonies of settlement. By the time of the Revolutionary War (1775-1783), most of the good agricultural land in the original thirteen colonies had been turned into farms by the settlers, and many settlers were eager to move west of the Alleghenies, to the area later known as the Old Northwest. To ensure the friendship of the Native American societies in that region, the British forbade settlement. With British defeat in the Revolutionary War, the unsettled area now belonged to the thirteen colonies, where pressure to open it to settlement was overwhelming.

In 1785, the Confederation Congress began deliberations about how to arrange the transfer of land in the Old Northwest, as well as portions of the Old Southwest, acquired by the 1783 Treaty of Paris with Great Britain. Several principles were agreed on: Before settlement and transfer of title, the land would have to be ceded by treaty with the Native Americans; the land would have to be surveyed, in square township units, and sale would be by portions of the surveyed townships; and the proceeds of sales would be applied to the federal debt. These principles were embodied in the Ordinance of 1785, which continued to bind the federal government after the adoption of the Constitution in 1789.

In addition to pressure from would-be settlers, the federal government owed obligations to thousands of veterans of the Revolutionary War who had been promised land grants in lieu of pay during the war. Many veterans had received scrip, redeemable in grants from the public domain. As a result, the federal government attempted to begin surveying the land. After a modest portion of land was mapped, it was to be subdivided into townships and offered for sale.

In 1784, 1785, and 1786, treaties had been negotiated with some of the Indian tribes by which the tribes ceded much of western New York and western Pennsylvania and large portions of southern Ohio to the United States. In Congress a belief prevailed that this laid the foundation for surveying and subsequent settlement by Euro-Americans. However, some of the Indians refused to accept the treaties, and they fought battles with federal troops during the early 1790’s. The Indians won the first battle in 1791 but in 1794 they lost to a force commanded by General Anthony Wayne at the Battle of Fallen Timbers . Wayne then ravaged the Indian settlements in northern Ohio and forced the Indians to accept the Treaty of Greenville (1795), by which they accepted confinement to a reservation in northwestern Ohio and ceded the rest of Ohio, as well as parts of Indiana, Illinois, and a small part of Michigan, to the United States.

In the region known as the Old Southwest—which would become the states of Mississippi and Alabama, as well as parts of western Georgia—numerous treaties were concluded with the local tribes. These treaties defined tribal lands and opened up significant lands for Euro-American settlement, mostly in the southern portions of the area.

Meanwhile, Alexander Hamilton, the secretary of the Treasury, began organizing the system that would administer sales of the land. According to the Ordinance of 1785, the land was to be sold at auction for at least one dollar per acre after being surveyed. Sales were to be administered by the Department of the Treasury, and surveying was to be supervised by the U.S. geographer (a post abolished in 1796 and replaced by the surveyor general). Surveys were to be of townships in six-square-mile units. In 1796, the price was raised to two dollars per acre, but plots of 640 acres were allowed. However, sales on this scale proved disappointing.

In 1800, William Henry Harrison induced Congress to change the terms of sale. Sales of smaller parcels were allowed, and purchasers were permitted to make their payments on the installment plan over four-year periods. Simultaneously, Albert Gallatin, the new secretary of the Treasury, put in place an organization of land offices located in the areas to be sold. In 1812, these offices were subordinated to a General Land Office that supervised the local offices. They increased rapidly in number as more land was surveyed and put up for sale. This rearrangement of the system, particularly the inclusion of purchases on credit, laid the basis for a large land boom between 1812 and 1819.

The land boom revealed the weakness of the system created in 1800. Purchases on credit were hard to monitor because of the limited clerical help in the local land offices and in the General Land Office. Also, Congress passed a number of relief acts after 1800, extending the time limits on credit purchases. By 1820, only about one-third of the purchase price of the lands recorded as sold had been collected. Federal finances were in perilous shape after the War of 1812, which had raised the federal debt to new heights. Since receipts from land sales, along with tariff receipts, were the only sources of federal income, and as the South opposed any increases in tariff, reform of the sales of public lands was needed.

Significance

Passed by Congress on April 24, 1820, the Land Act abolished credit purchases on land, requiring full payment in cash. However, prices were reduced from $2 to $1.25 per acre, and those who still owed money on previous credit purchases were given more time to complete their payments. Purchasers who still owed money would be allowed to surrender part of the land they had bought to cover the remaining debt due. Although this law dealt with some of the problems in the system of selling off the public domain, it failed to still criticism, for the public lands issue had become deeply enmeshed in sectional politics, which would determine subsequent modifications.

Bibliography

Carstensen, Vernon, ed. The Public Lands: Studies in the History of the Public Domain. Madison: University of Wisconsin Press, 1963. This book remains a standard source for the most controversial issues associated with the public lands.

Clark, Thomas D., and John D. W. Guice. Frontiers in Conflict: The Old Southwest, 1795-1830. Albuquerque: University of New Mexico Press, 1989. An account of the difficulties with the tribes of the Old Southwest and the problems in securing their acceptance of Euro-American settlement.

Gates, Paul W. History of Public Land Law Development. Washington, D.C.: Zenger, 1968. This large compendium of information, written for the Public Land Law Review Commission, is the ultimate source of information on the land laws.

Hurt, Douglas. The Ohio Frontier: Crucible of the Old Northwest, 1726-1830. Bloomington: Indiana University Press, 1996. Comprehensive study of the early settlement of Ohio, which was one of the territories affected by the Land Act of 1820.

North, Douglas C., and Andrew R. Rutten. “The Northwest Ordinance in Historical Perspective.” In Essays on the Economy of the Old Northwest, edited by David C. Klingaman and Richard K. Vedder. Athens: Ohio University Press, 1987. The most useful of several chapters relating to the disposition of the public domain.

Rohrbough, Malcolm J. The Land Office Business: The Settlement and Administration of American Public Lands, 1789-1837. New York: Oxford University Press, 1968. The best detailed history of the operation of the various land offices.

Sword, Wiley. President Washington’s Indian War: The Struggle for the Old Northwest, 1790-1795. Norman: University of Oklahoma Press, 1985. A detailed account of the conflict with the American Indians to free up the Northwest Territory for Euro-American settlement.