Just to flesh out the tromp-account, and correct some misstatements.
The constitutional source of federal power over the disposition of federal lands – the initial boundaries of which were fixed in the Articles of Confederation days – is Art. 4 § 3: “The Congress shall have the power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States.”
The Land Ordinance of 1785* divided federal lands into thirty-six square mile townships, comprised of thirty six one square mile lots (labeled 1-36). Section 16 of each township was reserved for the maintenance of public schools within the township, which meant – at least – that revenue from that lot was to be dedicated to schooling. The Morrill Act of, Chris was right, 1862 reserved the revenue from the sale of broad swathes of federal land for the creation of land grant colleges (hence the name).
The history of the disposition of federal lands divides into three phases. In the first phase Congress sought to profit from from the sale of lands – $2 per acre – but was thwarted by squatters. This phase came to a close with the Preemption Act of 1841, which, in an attempt to legitimate squatters, conferred the right of first purchase – at a discount rate – to those who had already occupied and improved federal lands. This was followed by the Homestead Act of 1862 – which further conceded to the squatters’ fait accompli, but was also supposed to lure surplus labor from the cities to the West – conferring free title to 160 acres of land after a five year period of occupation. A series of subsequent homestead acts increased five-fold the maximum claimable land.
Finally, phase three, which began with the reservation of Yellowstone in 1872**, is characterized by a federal policy more geared (though not exclusively geared, obviously) toward conservation.
* Holy hell. I just spent far too much time trying to figure out why the Land Ordinance of 1785, which antedates the Constitution, is still in force. Bottom line seems to be just ’cause. That is: there’s an article – which looks quite good though I just skimmed it – called “Homage to Clio: The Historical Continuity From the Articles of Confederation into the Constitution” that insists the United States has been a continuous entity since at least 1776, but it is really short on case law. Nobody really seems to know what the hell was going on back then. Another awesome example from the same article is that, apparently, the journal Constitutional Commentary offered a reward to anybody who could prove that George Washington was authorized to be president of the United States – he was neither a natural born citizen nor arguably – as a citizen of Virginia, which did not ratify the Constitution until after the nine states necessary for its going into effect – a citizen at the time of adoption, and so not eligible to be President, arguably, by the terms of Art. II § 1. I wonder if there were birthers back then?
** Fun fact: I gather they’re called Indian reservations because the federal government reserved – a legal quasi-term-of-art – the land for Indians. They are certainly referred to as reservations by the time of the Dayes Act, but I think that’s a function of earlier usage of the term “reserve” in the context of property law.