Railroad land grants in the United States made in the 1850s to 1870s, were instrumental in the building the nation's railway network in the Central United States west of Chicago. They enabled the rapid settlement of new farm and ranch lands as well as mining centers. 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.
History 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. A total of were granted to the railroads before the program ended, supplemented by a further granted by the states, and by various government subsidies.Paul Gates, History of Public Land Law Development (1968, government document and not copyright) online; railroad land grants on pp 341–386. 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.James R. Shortridge, Cities on the plains: The evolution of urban Kansas (UP of Kansas, 2004).
The Illinois Central Railroad in 1851 was the first railroad to receive a federal land grant. The grant was part of the Land Grant Act of 1850, which provided 3.75 million acres of land to support railroad projects. The Illinois Central received nearly 2.6 million acres of land in Illinois.John F. Stover History of the Illinois Central Railroad (Macmillan, 1975), pp. 15–30 online.
The main laws, known as the Pacific Railroad Acts, were passed in 1862.Heather Cox Richardson, The greatest nation of the Earth: Republican economic policies during the Civil War (Harvard UP, 2009) pp.170–208. 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.
The main factor, Republicans argued, was the immediate military emergency.Richardson, p. 178. The Civil War was underway and was not going well for the Union; no one knew how many years it would last or which side would win. Furthermore there was a serious risk that Britain and France might enter in support of the Confederacy—there was a war scare with Britain in late 1861, and France was now favoring the Confederacy.Stève Sainlaude, France and the American Civil War: A Diplomatic History (2019) p.160. A war would cut off the ocean route to California (and its gold). The Confederate army was already marching toward California and there were fears that pro-Confederate political elements would take control of California, or it might split off as an independent country. A transcontinental railway thus was a military necessity.Brian Schoen, "Containing Empire," in Kristin Hoganson and Jay Sexton, eds. The Cambridge History of America and the World: Volume 2, 1820-1900 (2021) p. 363. The transcontinental link finally became operational in May 1869, four years after the Civil War ended.Walter R. Borneman, Iron Horses: America's Race to Bring the Railroads West (2010) pp. 31–44. Nationwide, railroad mileage doubled from 35,085 miles in 1865 to 70,268 in 1873.U.S. Bureau of the Census, Historical Statistics of the United States: Colonial Times to 1970 (1976) p.731.
Railroads for military, settlement, and economic needs
The government granted vast tracts of land to railroad companies as an incentive to build railways across the undeveloped western half of the country. They came during the Civil War of 1861–1865, when most of the cash budget was devoted to military expenses, and the gold mined in California was urgently needed. There was a military danger: in 1862 the Confederacy was attempting an invasion of California from Texas through New Mexico and Arizona. Furthermore, war with Britain and France was a serious possibility, which would cut off the oceanic connection to the West Coast. Financially, these land grants acted as a form of non-cash subsidy, making the construction of extremely expensive rail lines across a thousand miles of unsettled land financially feasible for private companies. Economically they would allow the creation of many thousands of new farms, ranches, mines and towns.Richard White, Railroaded: The transcontinentals and the making of modern America (WW Norton, 2011) pp.9–21.
The land grants were made in twenty- or fifty-mile strips, with alternate sections of public land given for each mile of track built. The federal government kept the in-between sections, which were open to homesteaders and land speculators. 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. It gave out 123 million acres. All together 1850 to 1872 Washington gave 223 million acres, of which 35 million were forfeited. Washington also loaned cash for every mile built by these lines, at the rate of $16,000 for flatlands to $48,000 in the mountains. These loans were used to pay the construction crews, and were all fully paid back with interest by 1900. The largest grant went to the Northern Pacific, which obtained 40 million acres (about the size of New England).Richard White A New History of the American West (1991) pp 140–141.
After the policy of giving land grants was ended, one profitable transcontinental railroad was built in the 1880s and 1890s without subsidies, the Great Northern Railway. However, its system did absorb a small line that was given 3 million acres in 1857.John B. Rae, "The Great Northern's land grant." Journal of Economic History 12.2 (1952): 140-145. online
Settlement of the Great Plains
The availability of railroad transportation made previously remote areas more accessible to settlers, encouraging westward migration and the establishment of new communities. This expansion of settlement helped to populate and develop the frontier regions of the United States.
In addition to buying from the railroads, prospective farmers could use the homestead law to obtain free land from the federal government. They had to file a claim and then work the land for five years. Or they could purchase from speculators who bought many homestead claims or bought land from the railroads. In general the railroads offered the best land with the best credit terms, but at slightly higher prices. Married couples planning a permanent family farm were usually the buyers. Single women were also eligible on their own for a free homestead from the government.
In the Great Plains the population of the six states of the West North Central region (Iowa, Kansas, Minnesota, Nebraska, North Dakota, South Dakota) soared from 988,000 in 1860 to 6,253,000 in 1890. The far West grew from 619,000 to 3,134,000.U.S. Bureau of the Census, Historical Statistics of the United States: Colonial Times to 1970 (1977) p.22–32.
The amount of improved farmland in the West North Central states soared tenfold from 11.1 million acres in 1860 to 105.5 million acres in 1890.David R. Meyer, "The national integration of regional economies: 1860–1920." in North America: The historical geography of a changing continent (1987): 321-345 at 327.
The land rush climaxed in the 1870s in Minnesota, Dakota, Nebraska, and Kansas, as the population more than doubled from 1.0 million in 1870 to 2.4 million in 1880, while the number of farms tripled from 99,000 to 302,000, and the improved acreage quintupled from 5.0 million acres to 24.6 million.Gilbert Fite, The Farmers’ Frontier, 1865–1900 (1966) pp 53–54. 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. For the family table, the housewife and the older daughters cultivated potatoes and vegetables, and cared for the chickens and the milch cow.Fite, pp. 46–53.Gilbert C. Fite, "Great Plains farming: A century of change and adjustment." Agricultural History 51.1 (1977): 244-256.David J. Wishart, ed. Encyclopedia of the Great Plains(U of Nebraska Press, 2004) pp. 35–39, 56, 217–25, 807–808.
Union Pacific Railroad
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 land grant gave it ownership of 12,800 acres per mile of finished track. The government kept every other section of land, so it also had 12,800 acres to sell or give away to speculators and homesteaders. 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.Maury Klein, Union Pacific: 1862-1893 (1987) pp. 324–328.
Northern Pacific Railroad
The Northern Pacific Railway (NP) was a transcontinental railroad that operated across the northern tier of the western states, from Minnesota to the Pacific Northwest. 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. Construction began in 1870 and the main line opened all the way to the Pacific in September, 1883. 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. In addition, the NP had an international branch to Winnipeg, Manitoba, Canada. The main activities were shipping wheat, cattle, timber, and minerals; bringing in consumer goods, transporting passengers; and selling land.James Blaine Hedges, Henry Villard and the Railways of the Northwest (Yale UP, 1930) pp. 112-132. online
During the existence of the Dakota Territory (1861 to 1889, when it split into the states of North Dakota and South Dakota), the population first increased very slowly. Then it grew very rapidly with the "Dakota Boom" from 1870 to 1880.Howard R. Lamar, ed., The New Encyclopedia of the American West. (Yale UP, 1988) p. 282 The surge can largely be attributed to the growth of the Northern Pacific Railroad and its vigorous promotion in the U.S. and Europe. Settlers came from other western states as well as many from northern and western Europe. They sold their old farm and bought much larger farms on credit. They included large numbers of Norwegians, Germans, Swedes, and Canadians.John H. Hudson, “Migration to an American Frontier.” Annals of the Association of American Geographers 66#2 (1976), pp. 242–65, at 243–244; onlineJames B. Hedges, "The Colonization Work of the Northern Pacific Railroad" Mississippi Valley Historical Review (1926) 13#3 pp. 311-342 online Cattle ranching on the vast open ranges became a major industry. With the advent of the railroad agriculture intensified: wheat became the main cash crop. Economic hardship hit in the 1880s due to lower wheat prices and a drought.Lamar, The New Encyclopedia of the American West, p.282
Migration from Europe