Preemption Act, statute passed (1841) by the U.S. Congress in response to the demands of the Western states that squatters be allowed to preempt lands. Pioneers often settled on public lands before they could be surveyed and auctioned by the U.S. government. At first the squatter claims were not recognized, but in 1830 the first of a series of temporary preemption laws was passed by Congress. Opposition to preemption came from Eastern states, which saw any encouragement of western migration as a threat to their labor supply.
A permanent preemption act was passed only after the Eastern states had been placated by the principle of distribution (i.e., the proceeds of the government land sales would be distributed among the states according to population). Distribution was discarded in 1842, but the preemption principle survived. The act of 1841 permitted settlers to stake a claim of 160 acres (65 hectares) and after about 14 months of residence to purchase it from the government for as little as $1.25 an acre before it was offered for public sale. After the passage (1862) of the Homestead Act, the value of preemption for bona fide settlers declined, and the practice more and more became a tool for speculators. Congress repealed the Preemption Act in 1891.