Railroad land grants in the United States

Overall, government land grants to Western US railroads during the 1850s to 1880s played a crucial role in shaping the economic, social, and geographic landscape of the United States, laying the foundation for much of the nation's modern transportation infrastructure and facilitating the westward expansion of settlement and industry.

The federal government operated a land grant system between 1850 and 1871, through which new railway companies in the west were given millions of acres they could sell to prospective farmers or pledge to bondholders.

[1] This program enabled the opening of numerous western lines, especially the Union Pacific-Central Pacific with fast service from San Francisco to Omaha and east to Chicago.

West of Chicago, many cities grew up as rail centers, with repair shops and a base of technically literate workers.

[4] The highest priority at the time was to open speedy communications with the new state of California, to avoid going on foot or by a sea voyage that took six months.

[9] The government granted vast tracts of land to railroad companies as an incentive to build railways across the undeveloped western half of the country.

After the success of the Illinois Central grant of 1851, Congress extended the program in 1862-1872 to help new railroads that planned to link to California.

[12] The availability of railroad transportation made previously remote areas more accessible to settlers, encouraging westward migration and the establishment of new communities.

In addition to buying from the railroads, prospective farmers could use the homestead law to obtain free land from the federal government.

[16] Selling corn, wheat and cattle provided the cash for paying off the loans and taxes, and savings—the savings often went into speculative purchases of more farmland.

[17][18][19] In addition to charges for freight and passenger service, the Union Pacific Railroad (UP) made its money from land sales to farmers and ranchers.

The UP's goal in this regard was not to make a profit, but rather to build up a permanent clientele of farmers and townspeople who would form a solid basis for routine sales and purchases.

It was approved by Congress in 1864 and given nearly 40 million acres (62,000 sq mi; 160,000 km2) of land grants, which it used to raise money in Europe for construction.

The railroad had about 6,800 miles (10,900 km) of track and served a large area, including extensive trackage in the states of Idaho, Minnesota, Montana, North Dakota, Oregon, Washington, and Wisconsin.

The main activities were shipping wheat, cattle, timber, and minerals; bringing in consumer goods, transporting passengers; and selling land.

[26] For example, the Union Pacific, the Burlington, Illinois Central, and the other western lines, opened sales offices in the East and in Europe, advertised heavily,[27] They offered attractive package rates for farmer to sell out and move his entire family, and his tools, to the new destination.

By providing land grants, the government facilitated the construction of railroads, which in turn spurred economic development in the West by making it easier to transport goods, people, and resources.

[30] The historians' debate about the wisdom of providing railroad land grants in the 1860s centered on the government's strategy, with discussions focusing on the potential benefits, drawbacks, and implications of this policy.

The government's intention was to promote railroad construction, which would in turn give military protection to the West Coast, facilitate cross-country movement of goods and passengers, stimulate population growth, and boost commerce, mining and industry.

Thus the projects turned out to be profitable although it was generally expected by contemporary observers that the roads would be privately unprofitable without the land grant aid.

After the Civil War the cattle industry expanded rapidly in Texas, but it lacked rail connections to the main packinghouses in Chicago.

[35][36] Finally after a month or two on the trail they reached a destination where the herd was sold to local dealers who shipped them east to packinghouses in Chicago.