At first sight it might seem as if these companies had all at once become awake to their obligations. When it is remembered, however, that in 1869 the junction of the Union Pacific and Central Pacific railroads was effected, and thus a continuous line across the continent formed, the conclusion lies near that the haste with which the three Iowa land-grant roads were completed was simply the result of a strife for the large amount of through business which the completion of the Pacific route promised to bring to them.
No such inducement existed for the Dubuque and Sioux City Company, and twelve years after receiving its grant it had not yet built half of its line. In his message to the Twelfth General Assembly, delivered January 14, 1868, Governor Stone said: "Under the provisions of the act adopted by the General Assembly, at its extra session (in July, 1856), this (the Dubuque and Sioux City) company became the beneficiary of the grant designed to secure the construction of a railroad leading from Dubuque to Sioux City, and this valuable donation was accepted from the State, with all the terms and conditions imposed. A large portion of this grant has already been absorbed by the company, in various ways, by pretended sales and incumbrances. This road has been constructed to Iowa Falls, a distance of 143 miles from Dubuque, but I am unable to discover any reliable evidence of earnest intention on the part of this company to construct the line to its terminal point on the Missouri River."
The Governor further recommended that the General Assembly pass an act resuming the control over these lands. At about the same time an agreement was effected between the Iowa Falls and Sioux City Railroad Company (which was organized in the fall of 1867) and the Dubuque and Sioux City Railroad Company, by which the latter transferred to the former its land grant for the unfinished portion of the Dubuque and Sioux City road. This agreement was confirmed by the General Assembly, through an act approved April 7, 1868. The road was completed to Fort Dodge in August, 1869, and to Sioux City a year or two later. The entire line was then leased to the Illinois Central.
The land grant to this line of road embraced over 1,000,000 acres of the finest lands of the State. We can appreciate the magnitude of this donation when we consider that, had these lands been sold at only $8 per acre, the proceeds would have paid the whole expense of building and equipping the road from Dubuque to Sioux City. The lands granted to the C., R. I. & P. R. R. were sold at an average price of over $8 per acre, and those of the B. & M. at over $12 per acre.
Among the other important land grants is that made to the McGregor Western Railroad Company. This company was the successor of the McGregor, St. Peters and Missouri River Railroad Company, which was organized in 1857 for the purpose of constructing a railroad from McGregor to the Missouri River. The construction of the road was commenced in 1857 at McGregor. Large local subscriptions were taken along the proposed line, the writer being one of the subscribers. Work was continued the next year until much of the heavy grading had been done, when the road was allowed to go through the process of foreclosure, like many other roads built in the West at that time. The old stock was completely wiped out, and new owners came into possession of the property, reorganizing under the name of the McGregor Western Railway Company. Nearly all the early investments of Iowa people were thus confiscated by the same class of men who now cry out loudly against confiscatory measures. By an act of Congress approved May 12, 1864, the State of Iowa was granted, for the use and benefit of the McGregor Western Railroad Company, every alternate section of land designated by odd numbers for ten sections in width on each side of the proposed road. The act contained the condition that in the event of the failure of said McGregor Western Railroad Company to build twenty miles of said road during each and every year from the date of its acceptance of the grant the State might resume the grant and so dispose of it as to secure the completion of the road in question. The McGregor Western Railroad Company failing to comply with the conditions of the grant, the General Assembly on the 27th day of February, 1868, resumed the lands and on the 31st day of March of the same year regranted them to the McGregor and Sioux City Railway Company. The act specially provided that the company accepting the grant "shall at all times be subject to such rules, regulations and rates of tariff for the transportation of freight and passengers as may from time to time be enacted and provided for by the General Assembly of the State of Iowa, and further subject to the conditions, limitations, restrictions and provisions contained in this act and in the acts of Congress granting said lands to the State of Iowa." It also contained the condition that at least twenty miles of road should be built by the company every year and that the whole road should be completed to the intersection of the then proposed railway from Sioux City to the Minnesota State line by the first day of December, 1875.
The McGregor and Sioux City Railway Company also failing to comply with the terms of the grant, the lands were again resumed by the General Assembly on March 15th, 1876, and regranted to the McGregor and Missouri River Railroad Company upon the condition that it complete the road to the intersection of the Sioux City and St. Paul Railroad on or before the first day of December, 1877.
But the State found itself again disappointed, and two years later the General Assembly for the third and last time resumed its grant and then conferred it upon the Chicago, Milwaukee and St. Paul Railway Company upon the express conditions that it complete the road to Spencer on or before the first day of January, 1879, and to Sheldon within a year thereafter, and that the road should at all times be subject to State control. The road was completed to Sheldon without delay, and on the 30th of November, 1878, the Governor of the State certified to the Secretary of the Interior that the Chicago, Milwaukee and St. Paul Railway Company had completed its road from Algona to Sheldon in compliance with the conditions of the original grant and the laws of the State.
It thus took over twenty years to complete this road. Ten years after its construction had commenced it had only reached Calmar in Winneshiek County. In 1869 the road was completed to Clear Lake and in 1870 to Algona. This point remained its terminus until it passed into the hands of the Chicago, Milwaukee and St. Paul Railway Company.
The State of Iowa has not derived that benefit from the large land grants made to its railroads which her people had a right to expect. In spite of these grants roads were built only when there was reason to believe that they would be immediately profitable to their owners. The land grants enriched the promoters of these enterprises much more than they did the State in whose interest the grants were presumed to be made. As a rule they enabled scheming men to hold the selected territory until a railroad through it promised to be a safe and profitable investment, and to avoid the payment of taxes on their millions of acres of land, which in the meantime became very valuable. Other roads were built at an early day without Government aid. They were pushed forward by the current of immigration until the threatened competition of roads favored by these grants checked their progress. The Chicago, Iowa and Nebraska road may be cited as a fair illustration. It was projected on the 26th of January, 1856, in the town of Clinton, to be built from Clinton to the Missouri River via Cedar Rapids. It was opened to De Witt in 1858 and completed to Cedar Rapids the following year. The road was 82-1/2 miles long and was built entirely with private means, receiving neither legislative aid nor local subsidy. It is more than probable that this road would at an early day have been completed to the Missouri River, had it not feared the rivalry of the subsidized Cedar Rapids and Missouri road.
The total number of acres of land granted by Congress to aid the construction of Iowa roads is 4,069,942. A fair idea of the value of these lands may be obtained from the fact that the Chicago, Rock Island and Pacific Railroad Company sold over half a million acres of its lands at an average of $8.68 per acre, and the Chicago Burlington and Quincy sold nearly 350,000 acres at an average of $12.17 per acre.