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2. The Agrarian Dream

Thomas Jefferson may have been the first to express what has become known as the American dream of homeownership. “It is not too soon to provide by every possible means that as few as possible shall be without a little portion of land,” he wrote to James Madison in 1785. “The small landholders are the most precious part of a state.”¹ At that time, Jefferson’s ideal was near-universal farm ownership, rather than what we think of as urban homeownership, but the sentiment remains the same.

The Agrarian Myth

Many historians and popular writers make much of the fact that Jefferson, in the 1780s, believed that the United States should be a nation of farmers. They have built this belief up into a mythical “agrarian movement” that somehow stood up against Alexander Hamilton and others who would turn America into a nation of mercenary bankers and filthy industrialists—with an unwritten and sometimes written regret that the agrarians lost.

Jefferson did express a preference for farmers in 1785. “Cultivators of the earth are the most valuable citizens,” Jefferson wrote to John Jay in that year. “They are the most vigorous, the most independent, the most virtuous and they are tied to their country and wedded to its liberty and interests by the most lasting bands.”² Widespread farm ownership, Jefferson thought, would lead to better government. “I think our governments will remain virtuous for many centuries; as long as they are chiefly agricultural,” he wrote to Madison in 1787. “When they get piled upon one another in large cities, as in Europe, they will become corrupt as in Europe.”³

In the 1780s, Jefferson apparently believed that subsistence farmers were more self-sufficient than office or factory workers, and thereby more inclined to liberty. “Those who labor in the earth are the chosen people of God,” Jefferson wrote in the early 1780s, while “dependence begets subservience and venality.”⁴ “Jefferson is saying that it is impossible to corrupt an entire nation so long as the majority of its citizens are small landowners, dispersed across the landscape, dependent on no one but themselves for their livelihood,” comments environmental historian Donald Worster.⁵

Jefferson himself was a farmer, but the fact that he romanticized that occupation does not mean that there was a significant anti-industrial, pro-agrarian movement in the late 18th and early 19th centuries. “Jefferson was not an agrarian fundamentalist,” says one historian. “He did move with his times.”⁶ The myth of Jeffersonian agrarianism sprang up around 1943, the bicentennial of Jefferson’s birth, and was probably influenced by the Southern Agrarians, a group of writers featured in a 1930 book titled I’ll Take My Stand: The South and the Agrarian Tradition. Ironically, considering Jefferson’s role in eliminating feudal land policies in Virginia, one idea suggested by the Southern Agrarians was to restore feudalism in order to “bind” people to the land and create the small, independent farmers that the Agrarians (and Jefferson, at least in the 1780s) believed were essential to a free country. ⁷

After the end of the Revolutionary War in 1783, the United States developed a thriving trade with England, exporting agricultural crops such as tobacco and importing manufactured goods. When Jefferson wrote the quotes above, he had never seen an American factory because the first such factory (which produced spindles of yarn) did not open until 1790.⁸ By 1810, New England alone had at least 250 such factories, small and large.⁹

Perhaps exposure to those factories helped soften Jefferson’s stance after he became president. “I trust the good sense of our country will see that its greatest prosperity depends on a due balance between agriculture, manufactures and commerce,” he wrote in 1809.¹⁰ He doesn’t say what that balance is, but no doubt it is less than the 100 percent agriculture he appeared to favor in 1785.

A few years later, the nation went through another war with Britain, and Jefferson realized the country should not rely exclusively on England for manufactured goods. “Experience has taught me that manufactures are now as necessary to our independence as to our comfort,” he wrote in a letter in 1816.

“You tell me I am quoted by those who wish to continue our dependence on England for manufactures,” the letter notes. “There was a time when I might have been so quoted with more candor, but within the thirty years which have since elapsed, how are circumstances changed! We were then in peace. . . . A commerce which offered the raw material in exchange for the same material after receiving the last touch of industry, was worthy of welcome to all nations.”

The War of 1812 completely altered Jefferson’s perception of industry. “We have experienced what we did not then believe, that there exists both profligacy and power enough to exclude us from the field of interchange with other nations: that to be independent for the comforts of life we must fabricate them ourselves. We must now place the manufacturer by the side of the agriculturist.” The question of the day, Jefferson wrote, was, “Shall we make our own comforts, or go without them, at the will of a foreign nation? He, therefore, who is now against domestic manufacture, must be for reducing us either to dependence on that foreign nation, or to be clothed in skins, and to live like wild beasts in dens and caverns. I am not one of these; experience has taught me that manufactures are now as necessary to our independence as to our comfort.”¹¹

A Nation of Farmers

If Jefferson changed, it was from emphasizing the self-sufficiency of individuals and their families to emphasizing the self-sufficiency of the nation as a whole. Yet whatever Jefferson and Hamilton wanted, the bulk of the American population remained rural through the end of the 19th century. That circumstance is at odds with our stereotypical view of the nation in, say, 1790, when we might think of Samuel Adams in Boston, Alexander Hamilton in New York, and Benjamin Franklin in Philadelphia. But these examples are atypical of how people lived in the nation’s early years. The 1790 census found that the combined populations of Boston, New York, and Philadelphia (including the Northern Liberties and Southwark “suburbs” of Philadelphia) had fewer than 100,000 people, or just 2.4 percent of the nation’s population.¹² For comparison, in 2008, when the nation’s land area had grown tenfold, the Boston, New York, and Philadelphia urban areas held more than 9 percent of the nation’s population.

That census also found only 24 communities—not all of them incorporated as cities—with more than 2,500 people. The combined population of those two dozen communities was just over 200,000, or about 5.1 percent of the nation’s 3.9 million residents. Although some people lived in communities with fewer than 2,500 people, the vast majority of the nation’s population was rural.

As of 1790, it is likely that the majority of Americans did not own the homes they lived in. The Census Bureau did not record homeownership status until 1890, but scattered data indicate that farm ownership and homeownership rates at the end of the 18th century were low and declining.

Breaking the Feudal Chains

In rural areas, the 1890 census found that 66 percent of farmers owned their homes, but there are several reasons to believe that the share was lower in 1790. Most importantly, farm ownership and homeownership were hampered by the large land grants created in the colonial era combined with the customs of primogeniture and entail that prevailed in most of the colonies before the Revolution. In many of the colonies, those customs kept much of the land in a few large estates. In addition, the 1790 census found that almost 18 percent of American residents were slaves, who obviously did not own their own homes.

The first widespread weakening of primogeniture and entail began in 1737, when the British Parliament passed the “Act for the More Easy Recovery of Debts in His Majesty’s Plantations and Colonies in America.” This act made land, buildings, and other real property “equivalent to chattel property for the purpose of satisfying debts,” making it easier for people to borrow against the value of their land. Although increasing the risk to landowners, the act boosted economic growth. After the Revolution, most states, recognizing “the importance of the expansion of commerce to the creation of an American meritocracy,” followed this precedent.¹³

Revolutionary-era Americans clearly considered entail and primogeniture to be inappropriate for an egalitarian nation. To prevent the establishment of a landed aristocracy, they rapidly moved to abolish these customs. Thomas Jefferson persuaded the Virginia legislature to abolish entail in 1776. The preamble to Jefferson’s law claimed that entail “tends to deceive fair traders, who give a credit on the visible possession of such estates, discourages the holder thereof from taking care and improving the same, and sometimes does injury to the morals of youth, by rendering them independent of and disobedient to their parents.” The law itself immediately changed any “fee taille” land to fee simple land and prevented landowners from entailing their land to their heirs in a will.¹⁴ Years later, Jefferson listed the abolishment of entail as one of the six greatest accomplishments of his life.¹⁵

South Carolina and Delaware abolished entail shortly before Virginia, and within 10 years after 1776 all the remaining states except Massachusetts and Rhode Island had done so as well.¹⁶ Massachusetts (and by extension Maine, which was formed out of the original Massachusetts colony) and Rhode Island still allow entail today, though in a modified form: Someone may entail a property to his or her heir or heirs, which would mean the heirs cannot sell it. But the entail would disappear on the death of the heir unless the entail was included in his or her will.

Primogeniture soon followed: of the states that observed this custom, Georgia abolished it in 1777; North Carolina in 1784; Virginia (led again by Jefferson) in 1785; Maryland and New York in 1786; South Carolina in 1791; and Rhode Island in 1798.¹⁷ Landowners could still will their land to their eldest sons, but property of people who died without a will was divided equally among their male heirs or, if they had no sons, their female heirs. The abolishment of entail and primogeniture, combined with the adoption of the credit policies in the Act of 1737, led to the gradual breakup of the great landed estates and in turn increased the share of farmers who owned their own land and homes.

Abolishing primogeniture and entail eventually led to a more egalitarian nation. “No sooner was the law of primogeniture abolished than fortunes began to diminish, and all the families of the country were simultaneously reduced to a state in which labor became necessary to procure the means of subsistence,” observed Alexis de Tocqueville in the early 1830s. “Several of them have since entirely disappeared, and all of them learned to look forward to the time at which it would be necessary for everyone to provide for his own wants. Wealthy individuals are still to be met with, but they no longer constitute a compact and hereditary body.”¹⁸

The rejection of feudalism turned America into a magnet for European immigrants. As historians Doucet and Weaver note, “Nineteenth-century immigrants to North America identified property ownership with freedom from customary restrictions,” meaning feudal traditions that survived in many European nations until the beginning of the 20th century.¹⁹

One of the largest 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 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 finally settled in 1862, when Congress passed the Homestead Act, granting any actual settler 160 acres (320 for married couples) at a nominal fee of $18 provided they lived on the land for five years. Eventually, about 270 million acres of land were distributed to 1.6 million people under this law.⁴⁷ Distribution was not immediate, however: homestead claims did not peak until 1910, and actual title transfers peaked in 1913.

Between 1862 and 1900, only 80 million acres of land were granted under the Homestead Act. At 160 acres per claim, they were enough for 500,000 people. But since many claims were filed by married couples, far fewer families were probably represented. Rural populations grew by 20 million people during that period, which (at the then-average family size of 5.5 people) represent about 3.6 million families. The Homestead Act provided land for just 7 to 14 percent of those families.

During the 19th century, the United States acquired vast amounts of land, including the Louisiana Purchase, more than half of Mexico, the Oregon Territory, and Alaska. Yet most of that land remained unavailable or unaffordable to many settlers until the 1862 Homestead Act. Even the Homestead Act was insufficient since the 320 acres of land that could be granted to a married couple was too little to make a living in the arid West, where most of that land was located.

Through the combined effects of the Homestead Act, the Donation Land Claims Act, and other laws, Congress eventually managed to get several hundred million acres of once-federal lands into the hands of settlers with secure titles. Economist de Soto argues that “the result was an integrated property market that fueled the United States’ explosive economic growth thereafter.”⁴⁸ That’s probably a stretch. Although those laws gave nearly two out of three farmers secure title to their land by 1890, urban home- and landownership rates remained low through the end of the 19th century. Yet most of the nation’s economic growth after 1840 took place in cities, not in agricultural areas. What can be stated with greater certainty is that secure title to farms contributed to agricultural productivity in the late 19th century, while increased urban homeownership contributed to small-business growth in the latter half of the 20th century.

In sum, it appears likely that homeownership and farm-ownership rates were something less than 40 percent in 1800, or no more than the rate recorded by the 1890 census. From there, historians agree that rates declined for at least the first half of the 19th century.⁴⁹ That decline occurred both because of the difficulty farmers had in obtaining title to lands acquired by the federal government and because the nation’s growing cities increasingly housed low-paid working-class employees who could not initially afford to own their own homes.