Old West Group

With the war over, the federal government focused on improving the governance of the territories. It subdivided several territories, preparing them for statehood, following the precedents set by the Northwest Ordinance of 1787. It also standardized procedures and the supervision of territorial governments, taking away some local powers, and imposing much "red tape", growing the federal bureaucracy significantly.

Federal involvement in the territories was considerable. In addition to direct subsidies, the federal government maintained military posts, provided safety from Indian attacks, bankrolled treaty obligations, conducted surveys and land sales, built roads, staffed land offices, made harbor improvements, and subsidized overland mail delivery. Territorial citizens came to both decry federal power and local corruption, and at the same time, lament that more federal dollars were not sent their way.

Territorial governors were political appointees and beholden to Washington so they usually governed with a light hand, allowing the legislatures to deal with the local issues. In addition to his role as civil governor, a territorial governor was also a militia commander, a local superintendent of Indian affairs, and the state liaison with federal agencies.

State legislators , on the other hand, spoke for the local citizens and they were given considerable leeway by the federal government to make local law, except in extreme cases, as when the Federal government suppressed polygamy by the Mormons in Utah.

These improvements to governance still left plenty of room for profiteering . As Mark Twain wrote while working for his brother, the secretary of Nevada, "The government of my country snubs honest simplicity, but fondles artistic villainy, and I think I might have developed into a very capable pickpocket if I had remained in the public service a year or two."......

"Territorial rings" , corrupt associations of local politicians and business owners buttressed with federal patronage, embezzled from Indian tribes and local citizens, especially in the Dakota and New Mexico territories.

Federal land system

In acquiring, preparing, and distributing public land to private ownership, the federal government generally followed the system set forth by the Land Ordinance of 1785. Federal exploration and scientific teams would undertake reconnaissance of the land and determine Native American habitation. Through treaty, land title would be ceded by the resident tribes. Then surveyors would create detailed maps marking the land into squares of six miles (10 km) on each side, subdivided first into one square mile blocks, then into 160-acre (0.65 km2) lots. Townships would be formed from the lots and sold at public auction. Unsold land could be purchased from the land office at a minimum price of $1.25 per acre.

In theory, the system would provide a fair distribution of land and reduce large accumulations of land by private owners. In reality, speculators could exploit loopholes and acquire large tracts of land. There was no limit to purchases of the unsold land by speculators. Furthermore, settlers often got to the land ahead of the surveyors and became squatters, living on land they held no title to.

As part of public policy, the government would award public land to certain groups such as veterans, through the use of "land script". The script traded in a financial market, often at below the $1.25 per acre minimum price set by law, which gave speculators, investors, and developers another way to acquired large tracts of land cheaply. Land policy became politicized by competing factions and interests, and the question of slavery on new lands was contentious. As a counter to land speculators, farmers formed "claims clubs" to enable them to buy larger tracts than the 160-acre (0.65 km2) allotments by trading among themselves at controlled prices.

The federal government also began to give away land for agricultural colleges, Indian reservations, public institutions, and the construction of railroads. It also gave away land when a territory became a state, and it gave each state 30,000 acres (120 km2) for each senator and representative.

In 1862, Congress passed three important bills that impacted the land system. The Homestead Act granted 160 acres (0.65 km2) to each settler who improved the land for five years, to citizens and non-citizens including squatters, for no more than modest filing fees. If a six months residency was complied with, the settler then had the option to buy the parcel at $1.25 per acre. The property could then be sold or mortgaged and neighboring land acquired if expansion was desired. Though the act was on the whole successful, the 160-acre (0.65 km2) size of parcels was not large enough for the needs of Western farmers and ranchers, and it failed to address the needs of the mining and timber operations as well.

Early on after the California Gold Rush, the federal government decided to leave the regulation of mining claims to local governments. This was reversed by later acts, which helped legitimate land acquisition for all purposes but which also made it easier for speculators and swindlers, especially in the timber and ranching industries. Given the necessity of water for ranching, squabbles over water rights ensued and complicated the situation. The railroads got much of the best land, and the land available to homesteaders was not always arable or commercially useful. On the whole, only about one-third of all Homestead Act claimants actually completed the process of obtaining title to their land.

The Pacific Railway Acts provided for the land needed to build the transcontinental railroad. Since several routes were under consideration, the amount of land so provided was huge, over 174,000,000 acres (700,000 km2). The land given the railroads alternated with government-owned tracts saved for distribution to homesteaders. In an effort to be equitable, the federal government reduced each tract to 80 acres (320,000 m2) because of its perceived higher value given its proximity to the rail line. Railroads had up to five years to sell or mortgage their land, after tracks were laid, after which unsold land could be purchased by anyone. Often railroads sold some of their government acquired land to homesteaders immediately to encourage settlement and the growth of markets the railroads would then be able to serve. However, the railroads were slow to build in some areas, waiting for the population to grow adequately on its own, before selecting final routes. This caused a "chicken-and-egg" situation which, in some cases, impeded rather than hastened settlement. Congress also made loans to the railroads based on the mileage of rail.

The Morrill Act provided land grants to states to build institutions of higher education for agricultural purposes, in an effort to stimulate rural economic growth and the education programs to support it. The states would sell the bulk of the land to raise funds to build the institutions.

The federal government even attempted to forest the prairies to make better use of undesirable land. Relying on the theory that planting trees would alter the climate enough to produce the rainfall need to sustain the forests long term, the government encouraged homesteaders to plant trees. When the "rain-follows-the-plow program" failed due to drought and pests, the federal government turned instead to more practical programs to develop irrigation, though large-scale irrigation projects came decades later.

But by the 1870s, the large land giveaways raised concerns about the management of remaining public lands, particularly those of unique value such as the Grand Canyon and Yellowstone, and the conservation movement was born.

In 1872, Yellowstone became the first national park in the United States (and in the world).