The Civil War brought about a dramatic transformation of the American economy, as the storekeepers and farmers who had previously typified the Northern states made way for industrialization on a grand scale. The pre-war secession of eleven Southern states also gave Northern Congressmen the chance to pursue policies they had long wanted to implement.
For several years, Congress had hotly debated a Republican-backed plan to give free land to settlers in the West. But Southern Congressmen had thrown it out at every opportunity, fearing that a rise in the number of small farms would threaten large plantations. Southern secession gave the Republican Party the chance it needed, and the Homestead Act came into effect on January 1, 1863, the same day as the Emancipation Proclamation.
The Homestead Act offered the opportunity for settlers to claim 160 acres of publicly owned land in exchange for a nominal fee, on the condition that they remain resident on the land for the first five years.
Homesteads were particularly attractive to new immigrants and to the sons of previously established farmers. By the early twentieth century, the act had enabled over 600,000 families to claim farms of their own. Its honorable, small-scale intentions became outdated as agricultural corporations increased, however, and it was eventually repealed in 1976.