What are land grants for railroad companies?

Railroads, as private companies, needed to engage in profitable projects. So the federal government passed the Pacific Railroad Act that provided land grants to railroads. This provided public lands to railroad companies in exchange for building tracks in specific locations.



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The railroad grants helped companies raise the capital they needed to build lines into sparsely settled areas like Nebraska. In exchange, the railways agreed to carry the mail at rates set by Congress and to transport US soldiers and freight without charge.

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To encourage development of rail lines westward, the government offered railroad companies massive land grants and bonds. Railroads received millions of acres of public lands and sold that land to generate money for the construction of the railroads.

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In 1862 the federal government offerred land grants for building transcontinental railroads. The expectation was the railroads would quickly sell the land to settlers to raise the money to pay for the building of the railroad.

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At the same time that homesteaders were getting free land from the government, large tracts of land were granted to railroads by both the states and the federal government. The goal was to encourage the railroads to build their tracks where few people lived, and to help settle the country.

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Railroad companies operate a pretty straightforward business. They charge companies for carrying cargo over their network of rails and railcars. Their rates and other aspects are overseen by the Surface Transportation Board.

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Railroads, as private companies, needed to engage in profitable projects. So the federal government passed the Pacific Railroad Act that provided land grants to railroads. This provided public lands to railroad companies in exchange for building tracks in specific locations.

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Between 1850 and 1872 extensive cessions of public lands were made to states and to railroad companies to promote railroad construction. [18] Usually the companies received from the federal government, in twenty- or fifty-mile strips, alternate sections of public land for each mile of track that was built.

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Approximately 130 million acres were awarded to railroad companies under the Pacific Railroad Act.

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The checkerboard pattern of the land grants had begun during the canal land grant era, and continued with the railroad grants as a concession to opponents both of land subsidies and of interstate railroads. Land grant proponents compromised by agreeing to grant every other square-mile section of land to the railroads.

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