American Nightmare. Randal O'Toole

land grants in America had been Pennsylvania, granted to William Penn by King Charles II in 1681. The Penn family had sold only about one-sixth of the land by 1779, when the Pennsylvania legislature effectively confiscated the rest and sold it to settlers and speculators over the next two decades.²⁰

      Yet the transition from large estates to small landowners did not always happen overnight. As late as the 1840s, well after Tocqueville wrote, much of the Hudson River Valley remained in a few large estates granted by the Dutch in the 17th century. That land was still managed in a feudal manner, with tenant farmers who paid rents to the owners as well as taxes on their land. Just one estate, owned by the Rensselaer family, covered about three-quarters of a million acres and had some 80,000 tenants.²¹

      One indicator of low farm-ownership or homeownership rates is voting data. Rhode Island maintained a property-ownership requirement for voting until 1844.²² Virginia did the same until 1851.²³ These data make it possible to compare before- and after-voting data in national elections. The first year for which state-by-state polling data are available for most states was 1824, when the presidential election was particularly contentious, with four different candidates in the running. Yet only about 6 percent of white males in Rhode Island and Virginia voted that year.

      By 1840, the last year in which Rhode Island enforced a property qualification, 16 percent of males voted for a presidential candidate. After the property qualification was removed, voting males increased to 25 percent in 1856. In Virginia, just 30 percent of white males voted in 1848, increasing to 45 percent in 1856. These data suggest that only a small share of families owned property in 1824, though the share may have increased by the 1840s. During those years, more than 40 percent of Virginians were slaves, which brings down overall homeownership rates still further.

      Another source of data for overall property ownership rates is a 1798 survey of all property in America conducted by the Treasury Department for potential tax purposes. An analysis of this survey led historian Lee Soltow to estimate that the nation had about 433,000 different property owners. Since about 877,000 white males were over the age of 21 at the time, Soltow estimates that about 49 percent of households were landowners.²⁴ Of course, when slaves are counted, that number falls to around 40 percent, and homeowner-ship rates are lower still to the extent that many properties, such as grants to military combatants, were mainly held for speculation by people who did not live on those properties.

      The Trans-Appalachian West

      Settlement west of the Appalachians should have increased ownership of farms and homes. However, except in grants given to military veterans, the government was very slow to make those lands available to settlers, and even slower to make them available at prices most settlers could afford.

      At the end of the French and Indian War in 1763, many American colonists who had fought in the war were granted lands west of the Appalachians. George Washington, who received 20,000 acres in what would become Kentucky, considered the grant “a Lottery only” because the lands were so inaccessible and were largely under Indian domain.²⁵ Indian treaties in 1768 and 1770 opened much of that land to settlement, but by the time of the Revolution only about 12,000 whites lived west of the mountains.²⁶

      Just having the land does not mean that the owners lived on it; instead, many held the land for speculative purposes or sold it to speculators. In the meantime, squatters often started farming lands without a title. Squatters occupied some of George Washington’s land in western Pennsylvania. He met with them in 1796, the last year of his presidency, and offered to sell the land to them. They preferred to dispute his title in court; the court decided in his favor and they had to leave.²⁷

      At the time of the Revolution, Virginia offered actual settlers 400 acres and North Carolina offered 640 acres “at the merest nominal price.” Settlers in Maine could also get 100 acres merely for clearing 16 within four years. Within three years, Virginia settlers were required to build a house, plant one acre, and keep stock for one year, or they would lose the land.²⁸

      After the Revolution, the 1783 Treaty of Paris recognized the United States’ sovereignty over land as far west as the Mississippi River. The states ceded to the United States their claims to land west of the Appalachians—about 237 million acres of land that eventually became Alabama, Kentucky, Illinois, Indiana, Michigan, Mississippi, Ohio, Tennessee, 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