Non- mineral Character
The federal policy of the time of early settlement was not to offer for private sale lands chiefly valuable for mineral development. Lands remained within the "public domain" until surveyed and offered for disposal as "public land"* under land patent through the agency of the General Land Office (later Bureau of Land Management).
[* "The words 'public lands' are habitually used in our legislation to describe such as are subject to sale or other disposal under general laws." Newhall v. Sanger, 92 U.S. 761; See also Leavenworth, etc., R. Co. v. U. S., Id. 733; Doolan v. Carr, 125 U.S. 618, 8 Sup. Ct. 1228.
See also, Union Pac. R. Co. v. Harris, 215 U.S. 386 (1910): "What is meant by 'public lands' is well settled. As stated in Newhall v. Sanger, 92 U.S. 761, 763, 23 S. L. ed. 769, 770: 'The words 'public lands' are habitually used in our legislation to describe such as are subject to sale or other disposal under general laws.' See also Barker v. Harvey, 181 U.S. 481-490, 45 L. ed. 963-968, 21 Sup. Ct. Rep. 690; Minnesota v. Hitchcock, 185 U.S. 373-391, 46 L. ed. 954-964, 22 Sup. Ct. Rep. 650."]
In 1846, Congress abandoned the leasing policy for federal minerals used in the Midwest and offered mineral lands for sale by means of various statutes applying selectively to particular geographic areas.
About the same time,Congress began to divide public domain lands into two categories - mineral and non-mineral lands. Only non-mineral lands were opened to various general land disposal policies. Because a homestead claimant would take title to full property ownership, including any minerals subsequently discovered, a determination of whether lands were mineral or non-mineral in character was called for when a nonmineral claimant asserted a right under disposal laws. (See 1914, Burke v. Southern Pac.)
With GLO (BLM) inefficiency in facilitating the settlement of public lands in California and the absence of clear federal direction, the California Supreme Court in 1864 ruled that whether public land could be considered closed to settlement would be based on whether, on the whole, the lands appeared better adapted to mining than other uses.
Although the disposal of mineral lands were debated in 1850-51 and 1858-60, it was not until the Civil War was drawing to a close that a generic policy was developed with the Act of 1866, which stated: "In all cases lands valuable for minerals shall be reserved from sale, except as otherwise expressly directed by law." (See 1918, United States v. Sweet.)
As populations poured into western regions in advance of land sales, from one half to two thirds of settlers "squatted," unauthorized on public domain not officially opened as public lands for settlement. Possessory property rights were recognized and defended under natural equity - "good against all but the 'true' owner."