Government Aid to the Rails
To encourage railroad growth and help offset the financial burden
construction entailed, the federal government passed the Land Grant Act of
1850. The Act was intended to promote construction of a railroad that would
run from the Great Lakes to the Gulf of Mexico. Illinois, Alabama, and
Mississippi received the first lands. In return for the land, any railroad
that built lines had to transport government property at a reduced rate.
Later all railroads had to offer the government reduced rates under
legislation designed to equalize rail competition. The government also
profited from the land grants by raising the price of land surrounding the
grant land from $1.25 per acre to $2.50 per acre. The promise of rail
lines made the once unwanted land valuable. Railroads received 131,000,000
acres of land from the government grants during the policy's life between
1850 and 1871.
To learn more about land grant railways, go to the
RiverWeb Archives and view excerpts from
J.L. Ringwalt's 1888 book, The Development of Transportation Systems
in the United States.
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