How much did the government pay for each mile of track built?

How much did the government pay for each mile of track built?

The federal government issued bonds, at 6 percent interest, and agreed to pay the two railroads $16,000 for each mile of track laid on level ground, $32,000 for track laid in foothills, and $48,000 per mile for track laid in mountainous areas.

How much money was paid per mile to the railroads?

Federal financing The railroad companies were paid $16,000 per mile (approximately $461,000 per mile today) for track laid on a level grade, $32,000 per mile (about $922,000 per mile today) for track laid in foothills, and $48,000 per mile (or about $1,383,000 per mile today) for track laid in mountains.

How much did the government loan the railroad companies per mile?

The law provided that companies agreeing to undertake the construction of transcontinental railroad lines would be eligible for loans ranging from $16,000 to $48,000 per mile of track laid. The precise amount of the loan was determined by the difficulty of the terrain through which the construction passed.

Did the government subsidize railroads?

Railroads received extensive subsidies in the form of land grants, mostly in the years 1850–70. In the 1862–66 period alone, more than 100 million acres of public land were turned over to railroad companies. Altogether, the roads received about 183 million acres of state and federal lands.

How was the railroad financed?

The rail line was built by three private companies over public lands provided by extensive US land grants. Construction was financed by both state and US government subsidy bonds as well as by company issued mortgage bonds.

How did the government pay for the railroad?

In 1862, Congress passed the Pacific Railway Act, which authorized the construction of a transcontinental railroad. Four of the five transcontinental railroads were built with assistance from the federal government through land grants.

How much money did it take to build the transcontinental railroad?

Oakes Ames testified that the Union Pacific cost about $60 million to build. When the road was completed in 1869, the capitalization of the Union Pacific stood at a staggering $111 million, of which $74 million was in bonds.

How much land did the railroads get?

From 1850 to 1871, the railroads received more than 175 million acres (71 million ha) of public land – an area more than one tenth of the whole United States and larger in area than Texas. Railroad expansion provided new avenues of migration into the American interior.

What was a government subsidy and how did it help create the transcontinental railroad?

How did the federal government use land grants in the West in the 1860s? The government gave land to the railroads to spur the development of a transcontinental railroad. Lincoln signed the Pacific Railroad Act of 1862 into law, which stimulated the construction of the railroad.

Why did the railroad companies receive government subsidies?

Why did the US government need to provide subsidies to railroad companies? it is too risky for private companies to try and build railroads. if a railroad didn’t pass through or near a town the town would not grow and the townspeople would just pick up and leave.

How many railroads were built as a result of land grants?

In fact, only 18,738 miles of railroad line were built as a direct result of these land grants and loans. This figure represents only eight percent of the total railroad mileage built in the United States between 1860 and 1920.

How did the US build the transcontinental railroads?

Four of the five transcontinental railroads were built with assistance from the federal government through land grants. Receiving millions of acres of public lands from Congress, the railroads were assured land on which to lay the tracks and land to sell, the proceeds of which helped companies finance the construction of their railroads.

When did the US start giving away land for railroads?

The earliest land grant bonds in the database date from 1859. While those grants were helpful to the companies involved, they were small in scope, and very much unlike like the millions of acres of land given away for building transcontinental railroads. The earliest grants offered ten square miles of Federal land for every mile of rail built.

What was the purpose of the transcontinental railroad law?

This law was in effect from 1862 to 1871 and its purpose was to encourage the construction of the transcontinental railroads. The law provided that companies agreeing to undertake the construction of transcontinental railroad lines would be eligible for loans ranging from $16,000 to $48,000 per mile of track laid.