The allocation of property rights to land: US land policy and farm failure in the northern great plains

Abstract

Federal land policy led to the establishment of farms that were too small to be viable over the long term in the northern Great Plains. Under the Homestead Act, hundreds of thousands of 160 to 320-acre farms were founded. Settlement took place during a period of unusual rainfall, but when drought returned between 1917 and 1921, such farms failed in waves of “homestead busts.” Early efforts to revise the land laws to allow for larger allocations were resisted. We examine the political economy of the Homestead Act to show why politicians opposed major policy changes. Using primary data sources, we then provide the first statistical analyses of the characteristics of farms that survived or failed during drought. We conclude with a description of the gradual process of farm-size consolidation after 1921 that led to units more reflective of the semi-arid region’s requirements.