land grant

A government grant of public land for a railroad, highway, or state college.

From the beginning of European settlement in America, land was the principal basis of wealth. Successive governments assumed ownership and distributed much land for private settlement and development. In early cases, the Supreme Court implicitly accepted the premise that private property in land was a constitutionally protected element of the American political economy. In Fletcher v. Peck (1810) the Supreme Court held that a state land grant was protected from legislative repeal by the Contracts Clause of the Constitution (Art. I, sec. 10, cl. 1). Later cases similarly held that land became private property on conveyance by the Federal government to private persons.10

The Property Clause of the Constitution (Art. IV, sec. 3, cl. 2) gives Congress the power to “dispose of” land owned by the federal government. Under this clause, Congress distributed most federal land through sales or grants to states, firms, or individuals. Many grants were made specifically to support education, the construction of railroads, or other beneficial activities.3

The Court has consistently held that the power of disposing of public lands rests in Congress, not the courts. In general, the Court has construed congressional grants liberally in favor of the government. But whenever the government has sought to recover land for the failure of the grantee to comply with a condition stated in the grant, the Court has tended to construe the condition strictly and has insisted that the government follow proper forfeiture procedures.

See also Property Rights; Public Lands.

— Bruce A. Campbell

Land Grants This entry includes 3 subentries:
Overview
Land Grants for Education
Land Grants for Railways

Overview

The public lands of the United States consisted of all the land acquired from American Indian tribes, stretching west from the trans-Appalachian region to the Pacific coast, excluding only the original thirteen states, along with Kentucky, Tennessee, Vermont, and Texas. The public domain consisted of about 1.25 billion acres of land. Its potential included some of the following natural resources: the richest farmlands in the world in what became the Corn Belt and Wheat Belt of the Midwest, and the Cotton Belt of the Lower Mississippi Valley; the California gold fields and the Nevada silver fields; the oil and gas lands of Oklahoma; the coal lands of Wyoming; the Iron Range of Minnesota; and the great forests of the Pacific Northwest. In short, the public lands of the United States represented an extraordinary patrimony for the nation. It is no exaggeration to say that the American industrial revolution of the nineteenth and early twentieth centuries was fueled by the enormous riches extracted in one way or another from the public lands.

A Public Trust

The public lands of the United States were (and are) a public trust of the federal government, every bit as much of a trust as the dollars in the U.S. Treasury. So the judgment of history is directed toward determining how well the federal trustees managed their trust. Consider a trustee managing a simple undeveloped parcel of land. The trustee has a number of choices about how to best execute the trust. The trustee can sell the property and try to maximize income for the trust. The trustee can develop the property to promote future revenues. Or the trustee can hold onto the real estate asset for future generations. These three choices were also the ones that the Congress of the United States faced in managing the trust of the public lands. And it exercised all three of those choices from the time that the public lands were established in 1785 through the end of the twentieth century. The focus is rightly on the Congress, for it was the legislative body that set the specific policies for public land management. The Executive Branch, including the president, the secretary of the Treasury, and after 1849, the secretary of the Interior, carried out laws passed by Congress on managing the public lands.

With the benefit of historical perspective, it is possible to see that the Congress exercised its trusteeship of the public lands in three broadly defined chronological eras that correspond with the three abstract choices of a trustee of an undeveloped real estate parcel. First, from 1785 through 1819, the Congress passed a set of public land laws that had the intent of maximizing income to the Treasury through outright sales. Second, from 1820 through about 1902, the Congress made use of the public lands for a host of development projects. Instead of selling land for cash, the Congress established a set of donation programs with the idea that recipients would use their land grants to conduct congressionally approved projects. Finally, beginning about 1900, and especially after 1933, the Congress determined that the public lands should no longer be sold outright, but rather should be held in trust for the long term.

To be sure, there was overlap in policymaking among these three separate historical eras. During the first era, between 1785 and 1820, for example, the Congress legislated the policy that one square mile out of every thirty-six-square-mile township should be dedicated to support public education. After a township was surveyed by federal land surveyors into thirty-six square-mile sections, the sixteenth section was withheld for public education. This policy was later doubled to two square miles per township held from sale or donation, sections 16 and 36 in each township. In practice, this did not mean that the little red schoolhouse was invariably located in section 16 or 36. Rather, the acreage of those sections was turned over to state officials who then became the trustees for the land. Usually, the state land commissions sold the so-called school lands for cash and then used the proceeds to build and maintain public schools.

The Nineteenth Century

The most interesting period of trusteeship was the second phase, the nineteenth-century phase, when Congress passed laws donating public lands for a wide variety of purposes. This was the era of land grants: land-grant universities; land-grant railroads; land-grant old-age pensions; and especially land-grant homesteads for farmers. These land grants were made by Congress to four types of recipients: the states; business corporations; veterans and their dependents; and farmer-settlers.

The land-grant donation from Congress to the states is the element of continuity between the first, or income-producing phase, of public lands policy history and the second phase after 1820. The congressional thinking was that the states were the proper political bodies to carry out national goals, but that the states lacked the resources. For that matter, so did the national treasury lack resources in the form of cash reserves, but the public domain provided a sort of bank account from which to fund what today we would call federal block grants to the states. At first, the form of federal land grants was limited to supporting public primary education in the new states from Ohio on west. But, in 1862, Congress extended the goal of supporting public education to the college and university level with the passage of the Morrill Land Grant Act. The Congress provided the means for each state to build and support a public college that would promote agriculture. In time, these institutions became the state universities that were the pillars of American public higher education in the twentieth century. The funding idea for the Morrill Land Grant Act was simple: each state in the Union was entitled to select undeveloped public land and use that land as a trustee to support the new state agricultural college. Thus, New York, which had no public lands, was able to secure almost 3 million acres of public land from Congress with which to support the new Cornell University. It is no accident that Cornell was named in honor of the state's land agent, Ezra Cornell, who operated so successfully as a land trustee in managing the 1 million acre endowment. In most other states, the land grant college became the University, as in the University of Illinois. States that had a preexising state college or university before 1862, such as the University of South Carolina or the University of Michigan, later established a separate land-grant college specifically for agricultural education, for example respectively, Clemson University and Michigan State University. Overall, Congress granted about 90 million acres in public land grants to the states for primary and higher education.

The nineteenth-century era of congressional land grants to states also coincided with the widespread development of the corporate form of enterprise as the way that Americans conducted business. As the size and scale of corporate enterprises grew, so too did the demand for capital and financing of corporate enterprise. Private capital markets, such as the New York Stock Exchange, supported a limited number of corporate businesses, but private investors shied away from supplying capital to the biggest of projects, the long-distance transportation projects that united the different states into a single national market for production and exchange. Here was a dilemma for congressional policymakers: if they trusted the stock exchange only to underwrite the capital needs of the builders of turnpikes, canals, and railroads, then private business would only construct such projects in the more densely populated parts of the nation. In practice, this meant that transportation would follow population, and not the other way around. So starting in the 1820s, and then increasingly each decade up through 1870, Congress donated grants of public land to private entrepreneurs who pledged to construct the road, canal, or railroad, and then operate it as a private business. The congressional thinking was that land-grant support of transportation would speed the settlement of the West. Especially for railroads, Congress thought that jump-starting transportation connections would speed settlement and subsequent development. Between 1850 and 1870, Congress donated about 91 million acres to numerous private railroad companies. The results were twofold: the transcontinental railroads that linked San Francisco and Omaha, Duluth and Puget Sound, and New Orleans and Los Angeles, were built way ahead of when private enterprise would have done the task. The nation was bound together in a national transportation network and a national market in goods and services developed thereafter. The second result was that almost all the land-grant railroads were unprofitable and defaulted on their obligations and went into bankruptcy by the early 1890s. Yes, the transportation network was completed, but settlement did not occur rapidly enough to make the railways profitable as ongoing private enterprises. "Premature enterprise," as one scholar termed it, had its benefits, but also its costs.

A third type of land grant was made to American veterans of past wars as a sort of old-age pension. This particularly applied to veterans of the War of 1812 (1812– 1815) and the host of Indian wars that the United States fought between 1800 and 1860. Pensions in cash were strictly limited to those soldiers who had been wounded and disabled in battle, a relatively small number of individuals. By contrast, more than 400,000 men had done some military service in the War of 1812, and collected little for it. As the surviving War of 1812 veterans became old men in the 1840s and 1850s, they began to demand of Congress that the public lands be used as pension grants. Congress eventually agreed in a series of laws passed in 1850, 1852, and 1855. Some 60 million acres of public land were granted to more than half a million veterans of the various American wars. The old veterans got their land pension in the form of what was called a military bounty land warrant, or certificate for land. Almost invariably, the veterans sold their warrants for cash, which provided them a modest one-time pension. The sold warrants were collected by New York bankers, who in turn sold them with interest to would-be farmer-settlers in western states and territories. In effect, the private capital markets worked very efficiently to turn veterans' land warrants into both pensions for the old men and credit for young farmers.

The fourth and largest type of land grant in the nineteenth and early twentieth centuries was the homestead grant. This was also known as a free-land donation. It, too, was passed as policy by Congress in the year 1862, the same year as the Morrill Land Grant Act. The Homestead Act provided that settlers on the public lands could have five years to live without charge on a parcel of up to a quarter-section of 160 acres (a quarter-mile in area). At the end of five years, if the settler had made improvements to the unimproved quarter-section, then the United States would pass title to the land to that settler. Today, we would call such a policy a "sweat equity" program, where the settler or dweller trades labor today on a property for eventual ownership of an improved property in the future. In America between the Civil War (1861–1865) and World War I (1914–1918), the homestead policy was an enormously popular federal program. The homestead idea combined Jeffersonian veneration for the farmer with the Lincolnian active use of the federal ownership of the public lands to speed development. Some 1.4 million settlers began homestead claims on more than almost 250 million acres of western lands, especially concentrated on the northern Great Plains in Nebraska, the Dakotas, and Montana. Despite droughts, grasshoppers, and sometimes low farm commodity prices, the majority stuck out their five years and earned farm ownership by their own hard work.

By the end of the nineteenth century, much of the arable lands of the West had passed from public ownership into private hands. Congress increasingly had to turn to public monies in the Treasury to fund its development projects rather than public lands.

The historian's judgment is that in the nineteenth century, Congress was determined to support public education, transportation development, veterans' benefits, and new farm settlement. The Treasury simply did not have enough dollars to fund these policies. But the public lands offered a way to convert a wealth in land into material support for congressional policies. So the public lands passed into private ownership by the hundreds of millions of acres between 1820 and 1900. In return, what the modern United States has to show for this spending of its national wealth in land is the establishment of a national commitment to public university education, a national transportation network, a belief that veterans should be supported in old age, and a long-term support for farming as a way of life. That is a fair legacy of trusteeship that the Congress established with its grants of land from the public domain.

Bibliography

Feller, Daniel. The Public Lands in Jacksonian Politics. Madison: University of Wisconsin Press, 1984.

Fogel, Robert William. The Union Pacific Railroad: A Case in Premature Enterprise. Baltimore: Johns Hopkins University Press, 1960.

Gates, Paul W. The Wisconsin Pine Lands of Cornell University: A Study in Land Policy and Absentee Ownership. Ithaca, N.Y.: Cornell University Press, 1943.

———. History of Public Land Law Development. Washington, D.C.: Government Printing Office, 1968.

Oberly, James W. Sixty Million Acres: American Veterans and the Public Lands before the Civil War. Kent, Ohio: Kent State University Press, 1990.

Opie, John. The Law of the Land. Two Hundred Years of American Farmland Policy. Lincoln: University of Nebraska Press, 1987.

Pisani, Donald J. To Reclaim a Divided West: Water, Law, and Public Policy, 1848–1902. Albuquerque: University of New Mexico Press, 1992.

Robbins, William G., and James C. Foster. Land in the American West: Private Claims and the Common Good. Seattle: University of Washington Press, 2000.

Souder, Jon A., and Sally K. Fairfax, eds. State Trust Lands: History, Management, and Sustainable Use. Lawrence: University of Kansas Press, 1996.

Land Grants for Education

The American colonies generally followed the practice of making land grants to aid in supporting public schools. The Confederation, borrowing from the New England land system, provided in the Land Ordinance of 1785 that the sixteenth section (640 acres) of each township, or 1/36 of the acreage of the public land states, should be granted to the states for public schools. New states after 1848 were given two sections, or 1,280 acres, in each township. Utah, Arizona, New Mexico, and Oklahoma were given four sections in each township when they entered the Union. At the same time, states were given a minimum of two townships, or 46,080 acres, to aid in founding "seminaries of learning," or state universities. Such great institutions as the Universities of Michigan, Wisconsin, and Indiana benefited from these grants.

The next important step in federal aid to education came in 1862 as the result of an energetic campaign undertaken by Jonathan Baldwin Turner of Illinois, Horace Greeley through the New York Tribune, and various farm and labor journals. The Land Grant College Act, generally called the Morrill Act, was fathered in the House of Representatives by Justin Smith Morrill of Vermont. This measure gave each state 30,000 acres of public land for each representative and senator it had in Congress to aid in establishing colleges of agriculture and mechanical arts. States that had no public lands received scrip that could be exchanged for public lands available elsewhere. As a result of this act, agricultural colleges were established in every state, with two in each southern state because of the states' insistence on segregation. Special land grants were made also to endow normal schools, schools of mining, reform schools, and a women's college.

Congress was unusually generous in sharing its public lands with Alaska for education and other purposes upon its admission to the Union in 1959. In place of numerous grants for education, internal improvements, and public buildings, Congress granted a total of 103,350,000 acres to be allocated as the new state wished and promised 5 percent of its net return from all land sales in the state for school use.

This liberal distribution of public lands reflects the ever growing interest of the American people in free public education. It encouraged the states early to create schools, helping to finance them when local resources were unequal to the task. It also made it easier for those of a later generation who favored direct money grants for education by setting a constitutional precedent for the practice of granting land for schools. Altogether, Congress granted to states for public education an area much larger than California. The first public land states recklessly mismanaged their bounty, while others, such as Minnesota, managed theirs so well that they built up a large endowment for education.

Bibliography

Dick, Everett N. The Lure of the Land: A Social History of the Public Lands from the Articles of Confederation to the New Deal. Lincoln: University of Nebraska Press, 1970.

Gates, Paul W. History of Public Land Law Development. Washington, D.C.: U.S. Government Printing Office, 1968.

Zaslowsky, Dyan. These American Lands: Parks, Wilderness, and the Public Lands. New York: Holt, 1986; Washington, D.C.: Island Press, 1994.

Land Grants for Railways

The liberality with which Congress subsidized canal construction by land grants suggested to early railroad promoters that they might also obtain land donations to aid their enterprises. Most persistent were the advocates of a central railroad for Illinois to connect the extreme northwestern and southern parts of the state. When, in 1850, boosters expanded their proposed railroad scheme into an intersectional plan by extending it to the Gulf of Mexico, Congress adopted a measure that gave Illinois, Mississippi, and Alabama a broad right-of-way for the railroad tracks through the public lands. The grant also included alternate sections in a checkerboard pattern for a distance of six miles on both sides of the road, amounting to 3,840 acres for each mile of railroad.

This generosity not only gave railroads the necessary right-of-way but also allowed railroad companies to finance construction by selling adjacent land to prospective farmers. Because the presence of a railroad increased property values, the plan gained approval, even of many strict constructionists, who noted that the government could price its reserved sections within the twelve-mile area at double the ordinary minimum of $1.25 an acre. This assured the government as much return from half of the land as it would receive for all of it without the line. Furthermore, land grants required railroads to provide free transportation for troops and supplies and to offer rate concessions for transporting mail.

Swift completion of the Illinois Central Railroad portion of the intersectional line aided in opening areas to settlement thitherto inaccessible and gave great impetus to immigration, farm and urban development, and rising real estate values in Illinois. This spectacular success produced a scramble for railroad land grants in all existing public land states. The federal government made numerous grants between 1850 and 1871, totaling, with state land grants, 176 million acres, or more than the area of Texas.

Most important and grandest in their conception were the transcontinental railways, which were to connect the Mississippi Valley with the new communities on the Pacific coast. The first of the transcontinentals to be chartered and given land grants, plus loans in 1862, were the Union Pacific, to build west from Omaha, and the Central Pacific, to build east from Sacramento. They met near Ogden, Utah, in 1869. In 1864 the Southern Pacific, the Atlantic and Pacific (a portion of which later became part of the Atchison, Topeka, and Santa Fe), and the Northern Pacific were generously endowed with land, the latter receiving 39 million acres.

All land-grant railroads undertook extensive advertising campaigns at home and abroad to attract immigrants to their lands, which the companies sold on easy credit at prevailing prices. When settlers found it difficult to meet their payments, especially in the poor years after 1873 and in the late 1880s, a chorus of complaints grew against the policies of the land-grant railroads. Critics demanded that the railroads forfeit their undeveloped and unsold lands. Reformers condemned the land grants as inconsistent with the free homestead policy and, in 1871, succeeded in halting further grants. Continued agitation over the large amount of land claimed by railroads that was not in the hands of developers led to the General Forfeiture Act of 1890, which required the return to the government of land along projected lines that had not been built. However, this measure had no effect on the grants earned by construction of the lines. When the railroads succeeded in 1940 in inducing Congress to surrender the government's right to reduced rates for government traffic, it was proposed that the railroads be required to return the unsold portion of their grants to the public domain; Congress did not so provide. Retention of these unsold lands by the railroads was a sore point with many westerners, and agitation for compelling the forfeiture of these lands continued into the twenty-first century.

Land grants encouraged capitalists to invest in railroads and enabled the lines so benefited to advance far beyond the zone of settlement. More than anything else except the free land given to homesteaders by the government, these grants contributed to the rapid settlement of the West.

Bibliography

Ambrose, Stephen E. Nothing Like It in the World: The Men Who Built the Transcontinental Railroad, 1863–1869. New York: Simon and Schuster, 2000.

Gates, Paul W. History of Public Land Law Development. Washington, D.C.: U.S. Government Printing Office, 1968; Washington, D.C.: Zenger, 1978.

Mercer, Lloyd J. Railroads and Land Grant Policy: A Study of Government Intervention. New York: Academic Press, 1982.

A conveyance of public property to a subordinate government or corporation; a muniment of title issued by a state or government for the donation of some part of the public domain.

A land grant, also known as land patent, was made by the U.S. government in 1862, upon its grant to the several states of 30,000 acres of land for each of its senators and representatives serving in Congress. The lands were subsequently sold by the states and, through the proceeds, colleges were established and maintained. Such colleges, which are devoted mainly to teaching agricultural subjects and engineering, are known as land grant colleges.

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