What was one reason Congress gave subsidies and land grants to railroad companies in the 1800s?
To entice investors into building a continuous line from the Mississippi River to the Pacific shore, Congress agreed to give the railroads 10 square miles of land for every mile of track.
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To encourage rapid construction, the government offered each company land along its right-of-way. (About 1-5 miles on either side of the tracks) The railroads sold the land on either side of the tracks to settlers to pay for the cost of building the railroad.
Land Grants were given to railroad companies and allowed them to sell land to settlers, real estate companies, and other businesses to raise the money they needed to build the railroad.
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.
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.
The two lines of track would meet in the middle (the bill did not designate an exact location) and each company would receive 6,400 acres of land (later doubled to 12,800) and $48,000 in government bonds for every mile of track built.
In 1862 the Central Pacific and Union Pacific railroads were orginally promised ten miles of checkerboard land on each side of the tracks, but to help meet expenses, ten was changed to twenty miles on each side in 1864.