In the struggle for the control of Oregon lands, Thurston was an ally of Jason Lee against John McLoughlin, the chief of the Hudson's Bay Company at Fort Vancouver who had helped thwart settlement in the territory. As Congressional delegate, Thurston authored the Donation Land Claim Act so as to give McLoughlin's HBC claim to the state legislature. Thurston and Lee made false statements about McLoughlin before the United States Supreme Court in an effort to publicly discredit him. The statements resulted in the denial of McLoughlin's land claims to his homestead in Oregon City. Thurston's major political achievement was in helping pass the Donation Land Claim Act in 1850. The act legitimized existing land claims in the Oregon Territory and granted 640 acres to each married couple who would settle and cultivate the land for four years. The act is considered a forerunner of the 1862 Homestead Act. In 1850 he wrote an address to Congress urging the prohibition of free African-Americans from the Oregon Territory, in which said:
is a question of life or death to us in Oregon. The negroes associate with the Indians and intermarry, and, if their free ingress is encouraged or allowed, there would a relationship spring up between them and the different tribes, and a mixed race would ensure inimical to the whites; and the Indians being led on by the negro who is better acquainted with the customs, language, and manners of the whites, than the Indian, these savages would become much more formidable than they otherwise would, and long bloody wars would be the fruits of the comingling of the races. It is the principle of self preservation that justifies the actions of the Oregon legislature.
Along with Joseph Lane, he was instrumental in 1851 in blocking ratification of the Tansy Point Treaty concerning the lands of the Clatsop and Nehalem tribes along the Oregon Coast. The lack of ratification resulted in a legal limbo for the tribes which continues to this day.
Death and legacy
While returning to Oregon via Panama, Thurston died of the effects of a tropical fever off Acapulco, Mexico while aboard the steamer California. According to a contemporary obituary:
He died on the 9th ... eight days from Panama... His arduous labors at Washington had prepared his system for an attack of the malignant fever incident to the Isthmus, from the effects of which he had not recovered before experiencing a severe attack of diarrhea, which, together with an affection of the liver, under which he had sometime labored, terminated his earthly existence.
Thurston's body was originally interred in Acapulco, but his remains were brought to Oregon two years later by an act of the Oregon Legislature. His body was reburied in the Salem Pioneer Cemetery in Salem. The inscription reads: "Here rests Oregon's first delegate, a man of genius and learning. A lawyer and statesman. His devotions equaled his wide philanthropy, his public acts are his best eulogium." Thurston County, Washington, originally part of the Oregon Territory and now home of Olympia the capital of Washington, was named in his honor.