Signed into law in 1862 by President Abraham Lincoln, the Homestead Act essentially legalized the long-standing American practice of squatting on the vast federal landholdings in the West, much of it taken from Native American tribes. Ever since the United States became a nation, intrepid pioneers rushed westward well before the government was prepared to oversee an ordered transfer of land into private hands. Ignoring legal niceties like titles or rent payments, the pioneers began farming and ranching wherever they found promising land, and often the government simply looked the other way.
By the mid-19th century, illegal squatting had become such an established practice in the Far West that pioneers began to argue for its legalization. Settlers pointed out that they were building a new civilization in the West with their own money and sweat. Why should they have to pay for public land when they had already shouldered the heavy cost of clearing, breaking, and fencing it? Since the government clearly wanted Americans to settle the West, settlers argued that the government should give land to anyone willing to work hard and sacrifice enough to develop it.
Congress eventually agreed, and it passed a weak version of a homesteading bill in 1860. However, President James Buchanan vetoed the bill under pressure from pro-slavery southerners who wanted to slow the development of non-slave-holding western states. With the outbreak of the Civil War the following year, southern opposition was no longer a consideration, and Lincoln signed the even stronger Homestead Act into law in May 1862. The act authorized any citizen or intended citizen to settle on any surveyed but unclaimed 160-acre tract of public land. If settlers made the specified improvements to the land and paid a small fee, they would gain full title to the property after five years.
Unfortunately, the government failed to reserve much of the best western land for claim under the Homestead Act and instead let it pass into the hands of railroads and speculators. By the 1890s, many homesteaders found that only marginal semi-arid tracts were still available for homesteading. Profitable farming on only 160 acres of such dry land was nearly impossible, and at least half of the original homesteaders abandoned their claims before they gained title to the property. In the early 20th century, the claim sizes were gradually increased to as much as 640 acres, making irrigation and efficient large-scale farming techniques feasible. Thus, while the majority of early homesteads failed, more than 1.6 million farmers and ranchers eventually fulfilled their contracts and became landowners in the West.