Early Government Aid to the Rails
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The Land Grant Act of 1850
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 East St. Louis Archives
and view excerpts from J.L. Ringwalt's 1888 book, The
Development of Transportation Systems in the United States.