Amounts granted to railroads
| Alabama | $15,800,000 |
| Arkansas | $7,100,000 |
| Delaware | $600,000 |
| Florida | $4,000,000 |
| Georgia | $4,000,000 |
| Illinois | $12,000,000 |
| Indiana | $1,800,000 |
| Kentucky | $200,000 |
| Louisiana | $7,700,000 |
| Maryland | $6,800,000 |
| Massachusetts | $41,000,000 |
| Michigan | $3,200,000 |
| Minnesota | $2,200,000 |
| Missouri | $31,700,000 |
| New York | $5,400,000 |
| North Carolina | $11,400,000 |
| Ohio | $500,000 |
| Pennsylvania. | $12,700,000 |
| South Carolina | $5,700,000 |
| Tennessee | $34,100,000 |
| Texas | $4,800,000 |
| Virginia | $15,400,000 |
| Total (approximately) | $228,500,000 |
| United States: | |
| Bonds | $64,600,000 |
| Interest to 1887 | $114,000,000 |
| $400,000,000 | |
| Municipal and local | $300,000,000 |
| $700,000,000 |
A true estimate of the proportions of this public aid recognizes, of course, that many of these grants possessed only a nominal value. The eighty-mile line in Texas, cited by Potts as the recipient of 588,000 acres of land, was glad enough to dispose of them for sixteen cents an acre. Stickney mentions a Minnesota half-breed member of the legislature who took ten dollars in cash for his vote on a railroad bond subsidy, rather than $100,000 in capital stock. But, on the other hand, if the land or bonds had little value, the roads themselves were actually laid down at a very low cost. It was the proportion of public aid to total real investment which was significant. Wisconsin to 1874 had officially subsidized its roads to the amount of over $21,000,000, including lands at three dollars per acre. This sum was sufficient to have met one-half the legitimate cost of construction of the properties then existent. Reliable evidence[24] tends to show that the state and National governments, up to 1870, had pledged themselves one way or another for a sum equivalent to one-fifth of the cost of construction of the 47,000 miles of line then in the United States. And approximately another fifth, at the very least, must have been contributed from local and municipal sources.
In point of time, public aid by the states was quite unevenly distributed.[25] Massachusetts and Maryland, about 1826, were the first to take notice. But in the northern states most of the activity was confined to the period of 1837-1840; whereas, in the South, governmental subsidies did not become frequent until 1850. The whole movement, so far as the separate states were concerned, came to an end about 1870; after which time, with the exception of Massachusetts and Texas, little more financial encouragement of the sort is recorded. In many instances the hands of legislators were tied by constitutional prohibitions; and in other cases the railway net had been so far completed as to lessen the zeal of the public in the work. The centre of interest after the Civil War, in fact, is to be found in the activities of the Federal government.
More than a broad-line sketch of the land grants and subsidies to railroads by the United States would be out of proportion.[26] Sporadic grants in the South were made directly as early as 1835; but the first considerable transfer was made by act of Congress in 1850. This statute ceded to the state of Illinois the alternate, even-numbered sections of land for six sections in width on each side of the projected Illinois Central Railroad and its branches. The state then promptly turned over these lands to the promoters of the line. The Federal government lost nothing by the transaction. Rather did it gain,—the lands having been long in the market,—through the sale of the odd sections at a more than doubled price. Similar extensions of this grant soon followed down through Alabama and Mississippi. Then other states demanded recognition. Missouri, Arkansas, Iowa, Louisiana, Wisconsin and Minnesota were in turn appeased. The last direct grant to a state was made to Michigan in 1872. With the rise of interest in the Far West, the Federal government during the Civil War period inaugurated a new policy of direct charter and subsidy. Under this plan most of the transcontinental lines were built.
The Union Pacific Railroad was the most notable beneficiary of the Federal government. Its experience may be offered as typical. By an act of 1864, twenty alternate sections of land per mile were granted, together with a subscription to junior bonds to the amount of $27,600,000. With this substantial encouragement the road was soon completed. The following table gives details concerning the succeeding grants to other companies.[27]
Federal Aid to Railroads