When land was acquired from other countries by the United States, every effort was made to respect the grants given under the previous governments. Some of these grants were extensive, especially in the southwest, and many of them were very indefinite. Some of the effects of these early grants are seen today. In 1917 in the eight counties of southern California approximately 50% of the land not owned by the railroads or the public was owned in holdings of 2,00o acres or more; seven holdings exceeded 50,000 acres each. These large holdings are for the most part a result of Mexican and Spanish grants. The foreign grants in the Ohio sec tion were not so large. But in all these sections the foreign claims made for confusion and obstructed land settlement since the Government attempted to determine these claims before opening up the land for surveying and sale. Because of this delay a good many people settled on the land before it was surveyed and this made the situation still more difficult and confusing.
was dominated by the Federal government's urgent need for money after the Revolution. Since the chief asset was land, the government decided to obtain the needed revenue by selling the public domain, a motive that persisted well into the 19th century. The ordinance of 1785 was the first act passed dealing with the disposal of the public domain. One of the most important features of this act was the establishment of the rectangular survey. Attempts were made to alter this in later acts, but fortunately it was never changed. The great importance of the rectangular sur vey is its cheapness, quickness and definiteness, with the result that the possibilities of error as to title are reduced to a minimum. Under the ordinance of 1785 land was first to be bought from the Indians, then to be surveyed and sold by townships or by sec tions of 64o acres for a minimum of $1 an acre. This was a com promise between the New England and southern method of settle ment. The land did not sell rapidly and insufficient revenue was obtained. Several companies were ready to buy large tracts and the government sold about 1,500,000 acres to the Ohio Company and to Symmes.
Most of the settlers during this period went on land owned by private companies or reserved by the original state. These tracts could be obtained in smaller units and in more settled parts of the country where there was less fear of attack by the Indians. Some states at this time offered the land at a price even less than that of the national government, and also allowed a longer time in which to pay.
(2) 1800-182o.—The credit system was introduced when it be came clear that actual settlers could not buy land in such large tracts as 64o acres, especially if they had to pay for the land within a year. Either the size of tracts offered or the price of the land had to be reduced or the amount of time allowed for pay ment had to be lengthened. The minimum price had been raised to $2 an acre in 1796 and was not changed, but in i800 the amount of time allowed for payment was extended to five years and the minimum area that might be bought was reduced to a half-section. With this extended credit and the more prosperous condition of the country the land was taken up very rapidly. Settlers then needed very little capital. However, speculation was encouraged, for only a small payment down was required; no further payment was required for the first two years and the land was not forfeited until five years after settlement. Thus there was the constant temptation to take up as much land as possible, with the hope that land values would rise or that the government would extend the time for payment. Under the credit system 19,399,158 acres were sold.