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The Preemption Act of 1841, also known as the Distributive Preemption Act (27 Cong., Ch. 16; 5 Stat. 453), was a federal law approved on September 4, 1841 during the early presidency of John Tyler. It was designed to "appropriate the proceeds of the sales of public lands... and to grant 'pre-emption rights' to individuals" who were already living on federal lands (commonly referred to as "squatters").
The Preemption Act of 1841 was widely utilized by settlers in Kansas Territory and Nebraska Territory (which were opened to settlement in 1854). When the Homestead Act was enacted in 1862, claims under the Preemption Act sharply decreased.
The Preemption Act of 1841 permitted "squatters" who were living on federal government owned land to purchase up to 160 acres (65 ha) at a very low price (not less than $1.25 per acre, or $3.09 per hectare) before the land was to be offered for sale to the general public. To qualify under the law, the "squatter" had to be:
The act further provided that Ohio, Indiana, Illinois, Alabama, Missouri, Mississippi, Louisiana, Arkansas, and Michigan, or any state afterward admitted to the Union, would be paid 10% of the proceeds from the sale of such public land.
The Preemption Act allowed individuals to acquire federal land and claim it as property. To preserve ownership, the claimant had to do some things to legitimize the claim. One way was to be actively residing on the land. Another was to be consistently working to improve the land (for a minimum of five years). It was not necessary that the claimant be titled to the land; living there and working toward improving the stake was enough. If, however, the land remained idle for six months, the government could step in and take the property.
Sections 8 and 9 of the Preemption Act provided for the granting of 500,000 acres of land to each included State and provided that the proceeds from the sales of such lands "shall be faithfully applied to objects of internal improvement . . . namely, roads, railways, bridges, canals and improvement of water-courses, and draining of swamps...."
The Preemption Act of 1841 helped to establish the doctrine of Manifest Destiny in North America. The Kansas and Nebraska Territories were largely settled by claims brought under the act. In 1891, the Preemption Act was repealed by Congress with the adoption of the Land Revision Act.