“The Guano Islands Act (11 Stat. 119, enacted 18 August 1856, codified at 48 U.S.C. ch. 8 §§ 1411-1419) is federal legislation passed by the U.S. Congress that enables citizens of the U.S. to take possession of islands containing guano deposits. The islands can be located anywhere, so long as they are not occupied and not within the jurisdiction of other governments. It also empowers the President of the United States to use the military to protect such interests and establishes the criminal jurisdiction of the United States.
Whenever any citizen of the United States discovers a deposit of guano on any island, rock, or key, not within the lawful jurisdiction of any other Government, and not occupied by the citizens of any other Government, and takes peaceable possession thereof, and occupies the same, such island, rock, or key may, at the discretion of the President, be considered as appertaining to the United States.
—first section of Guano Islands Act
In the 1840s, guano came to be prized as a source of saltpeter for gunpowder as well as an agricultural fertilizer. In 1855, the U.S. learned of rich guano deposits on islands in the Pacific Ocean. Congress passed the Guano Islands Act to take advantage of these deposits.
The act specifically allows the islands to be considered a possession of the U.S., but it also provided that the U.S. was not obliged to retain possession after the guano was exhausted. However, it did not specify what the status of the territory was after it was abandoned by private U.S. interests. The implication is that it would return to its former status as terra nullius.
This is the beginning of the concept of insular areas in U.S. territories. Up to this time, any territory acquired by the U.S. was considered to have become an integral part of the country unless changed by treaty and eventually to have the opportunity to become a state of the Union. With insular areas, land could be held by the federal government without the prospect of its ever becoming a state in the Union.
The provision of the Act establishing U.S. criminal jurisdiction over such islands was considered and ruled constitutional by the U.S. Supreme Court in Jones v. United States, 137 U.S. 202 (1890).”