A small band of so-called “militia” now occupies a tiny federal outpost in Oregon. Their discontent surrounds issues involving lands that are owned by the United State Federal Government and how they are managed. This “occupation” raises a central question that many have glossed over: why does the federal government own land in the first place? Additionally, why does the federal government’s land-holdings seem to heavily concentrate in the west?

The answer to the first question has to do with revenue: the answer to the second has to do with geography.

At the insistence of Alexander Hamilton, the best source of revenue for the new United States government was a bank: a national bank to be exact, and a bank that could sell bonds internationally just like the European banks across the Atlantic. It took a couple of years, and over steep objections from the likes of Thomas Jefferson, the First United States Bank opened on 3rd Street in Philadelphia after Congress – through much debate and compromise – awarded the bank only a twenty year charter beginning in 1791. Twenty years later, in 1811, the charter for the bank was not renewed. Nope.

What happened?

The federal government realized that the acquisition of new lands as the country streamed west over the Appalachians, and mostly at the expense of Native American tribes east of the Mississippi River, were a great commodity to possess. In short, the federal government could raise funds by selling lands acquired from natives.

Bad timing, though. As soon as the charter was pulled, war with Britain followed the very next year – a war that lasted until 1815. And, thus, the creation of the Second National Bank, given another twenty year charter by Congress in 1816 (to sell bonds), this time to open just a block and a half west of where the first bank sat back in Philadelphia.

But it was President Andrew Jackson’s re-election bid in 1832 that condemned the bank as a haven for a corrupt few, a place where the wealthy could take advantage of the average American. In a slight of hand political maneuver, Jackson was able to kill the bank three years ahead of its expiration (1836). Thus, for the first 72-years of the federal government’s existence (1789 to 1861) only two national banks had been created by Congress and those two served the country for a total of 37 years. For the other 35 years, a good portion of the government’s revenue stream did not come from bonds, but rather through the sales of federally acquired lands.

The lands sold prior to the American Civil War went mostly to Wall Street speculators such as the New York and Mississippi Land Company who divided the properties of the defeated Chickasaws in the 1830s. Federal lands also were sold at the cheap to homesteaders and to railroad corporations. The idea was to settle the west.

Current lands owned by the federal government.

Current lands owned by the federal government.

Except, that once you hit the Rockies, the land out west was not really suitable for farming. The geography of the great west – desert, scrub, and mountainous pine – did not find many buyers. Where the federal government found success in transferring federally owned lands east of the Rocky Mountains into private hands, the feds did not have as much luck way out west. It was mostly to miners, timber, and ranchers that federal government correlated western land policies. For example, in 1872 there was the General Mining Act; in 1877 Congress passed the Desert Land Act; in 1920 it was the Mineral Leasing Act; and then there was the Taylor Grazing act of 1934. The Bureau of Land management absorbed these agencies (and others) at its creation in 1946.

Somewhere in there are the environmentalists and conservationists such as John Muir that demanded federal agencies to be created so as to manage some of these lands in perpetuity: this became our national park system which began in 1916.

True, the very creation of the Bureau of Land Management was to absorb a plethora of federal agencies into one. True, it thus appears that the BLM is a tremendously huge federal agency – and it is. But the absorption of numerous agencies into one entity meant that the BLM would have to undertake numerous “mission statements,” for lack of a better term. The BLM is a many-headed beast, but whose existence streamlined a process where ranchers, miners, timber-folk, fisheries, fowl-watchers, and the general public could all make claims to and/or petition the rights to federally owned land. The rents are cheap, really cheap compared to private leases in the west – but they do come with strings attached. This is what the “Bundy Militia” folks protest. What happens from here? Only history will tell.