Economics and Business

Bonanza Farms

What were bonanza farms?

Bonanza farms were extremely successful and large farms, principally on the Great Plains and in the West, that emerged during the second half of the 1800s. The word bonanza, which is derived from Spanish and means literally “good weather,” was coined in the mid-1800s; it is used to refer to any source of great and sudden wealth—including mines rich in minerals. Large-scale farming had been aided by the development of machinery that greatly increased production, especially of wheat and other grains. The innovations included reapers invented by Cyrus Hall McCormick (1809–1884) and steel plows developed by John Deere (1804–1886). Several events further helped farming interests west of the Mississippi River. To promote westward settlement, Congress passed the Homestead Act (1862), which allowed for ready and cheap acquisition of vast tracts of land: settlers could buy land for as little as $1.25 per acre or they could live on a tract and farm it for a period of five years, at the end of which they were granted 160 acres. The U.S. Army’s defeats of rebel Indians were followed by peace treaties that confined Indian agricultural activities to reservations. In 1872 the Northern Pacific Railroad arrived at Fargo, North Dakota, allowing farmers to ship their products greater distances. Finally, dry farming techniques (which allow fields to lie fallow every other year in order to regain their nutrients and moisture to support crops the following year) proved to be a successful method for growing in the Great Plains—previously thought to be too dry for cultivating crops. All of these factors combined to turn some western farms into “bonanzas”—sources of great wealth for their owners. Encouraged by their success, settlers poured into the West. But not all farmers fared as well, and many were severely hit by the Panic of 1873. A drought in the plains states in the 1880s caused farm prices to drop, further hurting western farmers.


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