Land Act of 1804
Map of Ohio drawn by John Melish in 1818.
The United States Congress passed the Land Act of 1804 to create terms for the sale of federal lands in Ohio. This act replaced the Harrison Land Act of 1800, which applied to federal land in the Northwest Territory. Under the Harrison Land Act, a person had to purchase at least 320 acres of land for a minimum of two dollars per acre. At the time of the sale, the purchaser provided the government with at least one-half of the price plus administrative costs. The remaining 320 dollars was paid in four equal payments. The purchasers had to make one payment per year, and the loan could not exceed four years. The Harrison Land Act had permitted many people to move to Ohio. Nevertheless, many settlers could not afford the cost of 320 acres. The Land Act of 1804 made it easier for Ohioans to purchase federal lands. Although the cost per acre was still set at two dollars, the minimum purchase was reduced to 160 acres. The total of 320 dollars was still too much for most settlers to pay at one time, and once again the federal government allowed people to pay the money in installments.
As a result of the Land Act of 1804, many Ohioans purchased land on credit. During the War of 1812 and afterwards, farmers bought many acres of land from the federal government. This land had been part of the Congress Lands, set aside by the national government as it organized the Northwest Territory. Additional Native American land became available as a result of the Treaty of Maumee Rapids in 1817 and the Treaty of St. Mary's in 1818.
It was not difficult for Ohioans to make payments on their loans as long as the economy remained strong, but by the late 1810s the state and the country had severe economic problems. During the Panic of 1819, there was a shortage of currency that made it impossible for many farmers to make their loan payments. Many people feared that they would lose their farms as a result.
Congress responded to these concerns with the Land Act of 1820 and the Relief Act of 1821. The Land Act reduced the number of acres that Ohioans had to purchase from 160 to eighty and the cost from two dollars per acre to $1.25 per acre. The Relief Act permitted Ohioans to return land that they could not afford back to the government and the owner would not have to pay for the extra land that was given back to the government. Additionally, Congress extended credit to the buyer for eight more years. It was hoped that with the time extension, the economy would improve. Farmers would then be able to sell their crops and make payments on their loans. By allowing the return of land that Ohioans could not afford, Congress helped farmers not lose the land for which they had worked. Many people could afford a smaller acreage, but not the 160 acres originally mandated by the Land Act of 1804. Overall, the federal government's policies were successful.