In 1825, President John Quincy Adams saw in the renewed sale of Public Lands a way to provider financial relief to the farmers, eliminate the national debt and make the United States into a great nation from the Atlantic to the Pacific. By allowing farmers to relinquish their lands and pay off their debts, the government would receive immediate revenue and reap even greater rewards when the land was resold.
In 1820 and 1821, Congress passed a pair of land acts to address the mounting debt owed to the United States by farmers who were having difficulty making loan payments on the purchase of public lands from the United States, especially during the Panic of 1819. First, the land Act of 1820 ended the ability to purchase public lands from the United Sates on credit; as of July 1st, 1820 full payment for the land was required at time of purchase and registration. To encourage new land sales, both the minimum price of land and the size of the land was reduced. The new minimum price was $1.25, and the minimum size was now 80 acres, down from $2 and 160 acres. Second, the Relief Act of 1821 provided relief to farmers who were unable to make current payments by readjusting their debt payment schedules over four years. But by 1824, there was still a significant amount debt on the books, so Congress provided additional relief. On May 18, 1825, Congress passed a bill that would allow purchasers of public lands to relinquish any portion of their lands, and pay off their debt at a discount (An Act to provide for the extinguishment of the debt due to the United States by the purchasers of public lands). The act provided that if any property was relinquished, the entire debt would need to be paid off, but at a discount of 37.5. For example, if a farmer bought 160 acres of land at $320, but still owed $200 they could relinquish half of their land to pay off the $200 debt at a discount of $130. To encourage these transactions, the service fees were doubled.
While, it may seem like the government was acting out of compassion to provide relief for the farmers, it was actually financially savvy move to extinguish the national debt. By allowing farmers to relinquish property, the U.S. government gained back valuable land that they could then resell. In 1825, President John Quincy Adams shared with Congress that the payments from the proceeds of public land sales in 1825 was expected to be $1.5 million, a 50% increase over what was originally estimated. In addition, it was estimated that the government would receive an additional $3 million of revenue from the payment of public land sales debt. In 1821, the debt owed from the sales of public lands to the United States was $22 million. By 1824 it was down to $10 million and was expected to be only $7 million by the end of 1825 due to the relief acts. Now, in his first State of the Union Address, Adams was encouraging Congress to extend the relief act for one more year to perhaps extinguish the entire debt altogether.
"The payments into the Treasury from the proceeds of the sales of the public lands during the present year were estimated at $1,000,000. The actual receipts of the first two quarters have fallen very little short of that sum; it is not expected that the second half of the year will be equally productive, but the income of the year from that source may now be safely estimated at $1,500,000. The act of Congress of 1824-05-18, to provide for the extinguishment of the debt due to the United States by the purchasers of public lands, was limited in its operation of relief to the purchaser to the 10th of April last. Its effect at the end of the quarter during which it expired was to reduce that debt from $10,000,000 to $7,000,000 By the operation of similar prior laws of relief, from and since that of 1821-03-02, the debt had been reduced from upward of $22,000,000 to $10,000,000.
It is exceedingly desirable that it should be extinguished altogether; and to facilitate that consummation I recommend to Congress the revival for one year more of the act of 1824-05-18, with such provisional modification as may be necessary to guard the public interests against fraudulent practices in the resale of the relinquished land. "President Adams, continued to explain how this act helped not only the "most useful of our fellow systems", but also the federal government. This was not just debt owed to the United States, but revenue that the federal government had already spent through borrowing. Adams explained that the debt contracted under the "credit sales had become unwieldly", but now that the we have learned from our experience, and adapted the system of sales to better match the times, the public lands have become "an abundant source of revenue". While the federal government was only collecting 62.5 cents on the dollar for past purchases, they could turn around and resell the land for cash. President John Quincy Adams painted a very rosy picture. He said that the sale of public lands would not only the extinguish the entire national debt, but would also provide a "swelling tide of wealth with which they replenish the common Treasury may be made to reflow in unfailing streams of improvement from the Atlantic to the Pacific Ocean."
"The purchasers of public lands are among the most useful of our fellow citizens, and since the system of sales for cash alone has been introduced great indulgence has been justly extended to those who had previously purchased upon credit. The debt which had been contracted under the credit sales had become unwieldy, and its extinction was alike advantageous to the purchaser and to the public. Under the system of sales, matured as it has been by experience, and adapted to the exigencies of the times, the lands will continue as they have become, an abundant source of revenue; and when the pledge of them to the public creditor shall have been redeemed by the entire discharge of the national debt, the swelling tide of wealth with which they replenish the common Treasury may be made to reflow in unfailing streams of improvement from the Atlantic to the Pacific Ocean. "
References
Presidency.ucsb.edu. (2017). John Quincy Adams: First Annual Message. [online] Available at: http://www.presidency.ucsb.edu/ws/index.php?pid=29467 [Accessed 30 Dec. 2017].Anon, (2017). The Wilson Quarterly (1976-). [online] Available at: https://www.loc.gov/law/help/statutes-at-large/18th-congress/c18.pdf [Accessed 30 Dec. 2017]. page 24
En.wikipedia.org. (2017). Land Act of 1820. [online] Available at: https://en.wikipedia.org/wiki/Land_Act_of_1820 [Accessed 30 Dec. 2017].
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