Allotments and Inherited Wealth

The Homestead Act was passed on May 20, 1862, and signed into law by Abraham Lincoln, providing up to 160 acres of land free of cost. An applicant would file an application for land with the appropriate land office, and swear that the property was for one’s own use with the purpose of cultivation and settlement. After this, the person had six months to move onto the land and begin improvements (e.g. “proving” the land). Any time after five years, the applicant was entitled to receive a patent for the land, after providing evidence that all conditions had been fulfilled and paying nominal charges to the appropriate land office. It was a way for even the poorest of people to have the opportunity for upward mobility and a more secure future for oneself and one’s children because land is wealth. With legal title to their own land, a person could accumulate wealth from their land, which could lead to upward mobility, and had a tangible asset to pass along to descendants to continue building wealth.


The case can be made that once persons successfully survived on a homestead for five years and obtained a title, they became active participants in the developing economy. Whether family members continued in farming or took on other professions, future generations could have a tie to property and obtain a positive inheritance that set the groundwork for generational wealth.


On the other hand, Indian Allotments were a form of land issuance that didn’t result in generational wealth. Under the Dawes Act, allotments were granted to certain tribal members as a means of “civilizing” them in a manner similar to the Homestead Act. However, unlike the Homestead Act which led to land owned in title by the individual, the Dawes Act led to land held in “trust” by the US Government on behalf of Indigenous people. This trust status meant that the government held a paternalistic position above the tribal citizen whereby certain decisions were made by the government official (e.g. Indian Agent) who had a veto over any decision that an indigenous land owner wanted to make in regards to their land. Because of this, the land was often exploited for uses that did not benefit the tribal landowner, put them in a position where they could not use their land as an asset for purposes of obtaining things like bank loans, and made inheritance difficult – leading to a situation in the 21st century where one single allotment owned by one original allottee might now have upwards of a thousand descendant owners each holding a fractional interest that is meaningless.


Even when an Indigenous person wanted to avail themselves of a homestead instead of an allotment, the government might step in an take their land from them, as is the case with my great great grandmother’s land. She had originally taken her land under the precepts of the Homestead Act, proved her land (as per the homestead rules), but when she went to obtain title to the land it was instead taken from her and converted to an Indian Allotment. Unlike her white counterparts who were granted title to their land and the opportunity to create generational wealth for their descendants, her land fell under the oversight of Bureau of Indian Affairs “trust” and now the land is unusable in 2022 due to literally 200+ owners who cannot amass enough of a share to do anything on the land.


Instead, the land is rented out at pennies on the dollar and the owners share these pennies when they are deposited into their individual indian monies accounts.


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