Land Grants and Railroad development.

[trice]

Sirs, I've always been fascinated with the use of Land Grants. Recruiters were sent to Europe with literature and sales pitches of the wealth and bounty of the cheap available land and promises of each landholder a king. Some of these grants are still held by the descendant railroad corporations. The 'domestication' of these land grant plots not only increased the economic input to the 'grantee' rail lines but also increased the value of the surrounding and near-by acreage. The mid-country and northern routes at least provided some hope to prospective homesteaders as farm land, (up to the eastern side of the Rockies).

I split this off from the "Why "the South" did not get a railroad to the Pacific" thread since it seemed like it deserved its' own topic.

What possible incentive could the rail companies provide to attract potential settlers to any southern route through west Texas, New Mexico, Arizona, and extreme southern California?

At the time, I do not think there was much in the early 1850s. While there were certainly people willing and wishing to travel to California, places like Texas, New Mexico, and Arizona were regarded as part of the "Great American Desert" -- more a place to get through than a place to live.

The hydrocarbon bonanza was as yet unknown. Mining likewise. Irrigation infrastructure for current crops, (like cotton!), was a long way off. Ranching?

Other than California, there was the Pike's Peak Gold Rush (started in 1858) and the Comstock Lode in Nevada (also 1858). Without a RR or reasonable access to the sea, Colorado had a major transport problem and suffered badly in the late 1860s. It was only when they built a RR up to Cheyenne to connect to the TRR that the situation reversed in the 1870s (then collapsed again in the 1880s-1890s).

There were lots of cattle in Texas, but it wasn't until the early 1840s-1850s that real long-distance cattle drives up to Kansas-Missouri really started (these were very controversial with settlers and in 1859 Kansas actually passed a protective law against the drives. There were cattle driven to New Orleans from Texas.

The California Gold Rush created a big demand for beef in that state. There actually were some cattle drives along the California Trail from Texas in the late 1850s as a result. If a RR connection to California was available, some cattle might have moved by RR instead.

Most development in that area (western Texas, New Mexico, and Arizona), however, needed a RR in place to be worthwhile. In 1850, there is no RR track in Texas at all. In 1860, there is still less than 500 miles of it, mostly around Houston, IIRR. Texas is pounding the table for more protection from Mexican Banditos, Comancheros, and Commanches/Apachees/Kiowas/etc. Pushing a RR West to places like San Antonio and El Paso would have been helpful to development but would have required a lot of assistance from East of the Mississippi.

Land Grants immediate worth were not only to sell to homesteaders but for loans and increased shareholder value.

Yes. They became an asset that could be used to secure loans -- and the asset would appreciate in value when the land was developed (which would also lead to increased traffic on the RR).

At the time frame we are reviewing, how much fiscal benefit would have been derived from land grants across New Mexico as opposed to say Nebraska or Minnesota?

I have no real way of estimating that. I suppose that it was quicker to get a value from closer locations. In 1851, Texas began laying track for their first RR -- which was only the 2nd RR with track West of the Mississippi River. By 1856 you have a RR bridge across the Mississippi River at Rock Island, Illinois. Kansas and Nebraska had much better access to the eastern US in the mid-1850s than New Mexico could have had until the proposed TRR reached it sometime after 1860 (and probably more like 1870). It was a matter of geography and logistics that would delay things probably 10-15 years on the fiscal side.

 

[USS ALASKA]

They became an asset that could be used to secure loans -- and the asset would appreciate in value when the land was developed (which would also lead to increased traffic on the RR).

"...and the asset would appreciate in value when the land was developed." If it could be. Sir, I guess my point was that land grants in and of themselves only brought in immediate money when they were sold or if an assessor from potential investors saw something of value - like green things already growing. That would have been along potential Central and Northern routes across the plains. As for the Southern route across the "Great American Desert", who would pick that for investment if there were other available options?
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Cheers,
USS ALASKA

 

[USS ALASKA]

For an interesting look at how to finance a railroad...

https://civilwartalk.com/threads/civil-war-railroad-papers.149039/page-4#post-2090838

Cheers,
USS ALASKA

 

[trice]

"...and the asset would appreciate in value when the land was developed." If it could be. Sir, I guess my point was that land grants in and of themselves only brought in immediate money when they were sold or if an assessor from potential investors saw something of value - like green things already growing. That would have been along potential Central and Northern routes across the plains. As for the Southern route across the "Great American Desert", who would pick that for investment if there were other available options?
39

Cheers,
USS ALASKA

Until it was done, there really was no sureness about the route from Sacramento through the mountains. Back before the Civil War, the "southern route" was the most likely workable route. Nobody knew, of course; most of what was said about routes in the early 1850s was guesswork and high hopes. No one had actually done the detailed surveys and hard exploration work that was needed to really make a decision. Even the final route chosen for the TRR was a triumph of human ingenuity, grit and determination over daunting terrain and nature.

The whole idea of land grants was that the governments didn't want to come up with the needed vast sums (no one really knew how large) to invest in building the railroad. So the government gave the RRs the land grants as an incentive to build a project that was offered a very dubious return, hard to justify to potential investors. No real skin off the government's nose: if the railroad didn't get built, the land grants wouldn't be given (or if the RR was only partially built, the land grants would only partially be given).

This gave the RR something to show the investors. Instead of a RR to nowhere story, or an if-we-build-it-they-will come argument, the RR's now had real property to show as an asset. With every mile of track laid, the RR got additional land grants -- more and more assets to protect the investors' stake. Even if the RR never completed, there would be valuable assets on the parts that did get built. This makes it easier to get investors to fork over their money for a risky project.

If this all sounds a bit like the land grants Kings used to start the American colonies a few hundred years back, that's probably because it pretty much is the same deal.

 

[USS ALASKA]

...if the railroad didn't get built, the land grants wouldn't be given...

And land grants have been forfeited by their receivers.

The whole idea of land grants was that the governments didn't want to come up with the needed vast sums... If this all sounds a bit like the land grants Kings used to start the American colonies a few hundred years back, that's probably because it pretty much is the same deal.

Sirs, the one thing that the USG had to support growth and advancement was the awarding / assignment of land rights. Not tax dollars, not issuing bonds but the most valuable asset we had in abundance...I don't believe the USG - at that time - could have done it any other way.
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Cheers,
USS ALASKA

 

[USS ALASKA]

Back before the Civil War, the "southern route" was the most likely workable route.

Interestingly sirs, the first 'southern route' was by the Southern Pacific Railroad, (SP), connecting with the Atchison, Topeka and Santa Fe Railway, (AT&SF), which then turned north / northeast to get back up into the mid-plains area. Later that year, the SP then connected with the Texas and Pacific Railway (T&P) becoming the first purely 'southern' TRR route.

Cheers,
USS ALASKA