Calculating Homestead Fraud Rates

From Homesteading the Plains: Toward a New History, by Richard Edwards, Jacob K. Friefeld, and Rebecca S. Wingo (University of Nebraska Press, 2017), Kindle pp. 89-90:

After careful analysis, our most conservative (i.e., highest) estimate is that in the study area, 8.5 percent of proved-up homesteads may have been gained through fraud, and we derived plausible estimates of roughly half that rate. In these ten townships in the last decades of the nineteenth century, it appears that more than 91 percent of homesteads went to bona fide or “actual” settlers.

The evidence from Dawes and Custer Counties requires us to take a second look at the scholarly consensus regarding fraudulent homestead claims. Fred Shannon asserted an implicit fraud rate of between 22 percent and 37 percent; later scholars have contended that half of all homestead entries before 1900 were fraudulent or even that half of all homestead entries were fraudulent.

Our evidence makes those conjectures appear absurdly high. Rather than the homesteading process being rife with corruption and fraud, the results reported here suggest that the overwhelming majority of homestead patents on claims filed in the nineteenth century were probably valid; perhaps as many as 8.5 percent of patents issued may have been based on some form of fraud. The government granted a total of 80,103,409 acres as homesteads during the period 1868–1900. If we assume our estimated fraud rate of 8.5 percent applies to all these homesteads, then fraudulent claimants wrongly obtained approximately 6.8 million acres; alternatively, more than 73 of the 80 million acres were obtained by bona fide homesteaders.

So was homesteading more like the railroad giveaways or the modern Medicare program? The government gave 131.2 million acres to the railroads, and as Richard White has so eloquently demonstrated, much of this subsidy was unneeded and corrupt, simply a transfer of public assets to private individuals and corporations. Indeed, concerning just one transaction involving one railroad, and by no means the greatest fraud, financier Jay Cooke boasted that he gained “at once over 5 million acres between the Red River and the Missouri intact, not an acre of it lost. This of itself is worth a good deal more than the cost of the [rail]road on both coasts all the expenditures up to this date to say nothing of our other larger grant on the Pacific and in Minnesota & the completed railroad.” Cooke’s one land grab of 5 million acres was only slightly less than the 6.8 million acres that would have been lost to all fraudulent homestead claims (at the 8.5 percent rate) over the entire forty-year period.

By contrast, recent studies of improper payments and fraud in Medicare put the swindle rate at about 8.3 percent—extremely close to our most conservative estimate, 8.5 percent, of fraud in homesteading. Any loss of public land (or Medicare funds) to fraud is of course regrettable and wrong, but the exaggerated claims of Shannon and others of “an astonishing number” or “half were fraudulent” appear to have no basis in fact.