Homesteaders and Railroads

Homesteaders and Railroads

The Homestead Act of 1862A law encouraging Western migration by granting sections of federal lands that were west of the Mississippi River so long as certain conditions were met. Chief among these conditions was that settlers “improve” the land by cultivating fields and building homes and utility buildings. took effect on January 1 of the following year, the same day as the Emancipation Proclamation. For many Americans, both laws seemed to promise liberation. For millions of families, homesteads provided a path to independence through landownership, just as emancipation brought deliverance from bondage and the hope of economic independence. For many, the hardships of life on the Great Plains and a life as a Southern sharecropper offered something less than freedom. The dangers of the Western trek were nothing compared to the trials of former slaves who first tested the Emancipation Proclamation. However, homesteaders who headed west and former slaves who labored in the South shared a common faith that hard work and eventual landownership was the path to achieving the promise of freedom in America.

Horace Greeley was not the first to exhort the young men of his nation to “Go West.” However, his voice as editor of the New York Weekly Tribune carried the most influence. Both as a journalist and presidential candidate in 1872, Greeley expressed the belief held by millions of Americans that Western expansion would act as a “safety valve” for US cities. The option of leaving the city permitted laborers who could not find decent employment or decent housing the option of starting anew in the “salubrious and fertile West.” By removing millions of unemployed and underemployed urban workers, Greeley’s safety-valve theoryA name given by historians to the idea that Western expansion would benefit the leading cities and established rural districts of the East by providing an alternative to wage labor. Without such a “safety valve,” tensions would grow as farmland and jobs became increasingly scarce. suggested, Western expansion would also benefit workers who remained in the cities by reducing the number of workers. As a result, the law of supply and demand would operate in favor of workers who could demand better pay and conditions as employers competed with one another for labor.

Western expansion would succeed where industrial unions and urban reform organizations had failed, many promoters of the West believed. Unscrupulous factory owners would lose their employees and slums would clear themselves, Western boosters predicted. Employers and cities would be compelled to create attractive working and living conditions that would rival the prosperous and “salubrious” life of the homesteader. Eastern businesses would also benefit from Western expansion, Greeley and others argued. Western expansion would create new markets for manufactured goods in America’s interior. Believing in this synergistic relationship between rural expansion, urban renewal, and commercial opportunity, national leaders backed legislation that transferred a billion acres of Western land to homesteaders and railroad developers between the 1860s and 1890s.

Of these billion acres, only 30 percent were granted under the terms of the Homestead Act and other government initiatives that provided free land. The most desirable lands were sold or granted to developers. The rest were distributed to homesteaders who were required to build homes and clear fields, thereby “improving” the land. In addition, homesteaders were required to pay a small fee at the land office when they filed for the deed. The other 700 million acres of Western land were purchased, usually by those who had the financial means to secure fertile lands that were near a navigable river or railroad. The federal government relied on these land sales in an era before federal income tax and toleration for large budget deficits beyond financing wars. Given the importance of land sales, many were concerned that the government’s practice of granting free land to railroad companies to spur construction was a form of graft.

In 1864, Congress granted twenty sections of free land for every single mile of track constructed by the builders of the First Transcontinental RailroadFinanced largely by an 1864 grant of federal lands to the Union Pacific and Central Pacific railroads. The two companies built track between Omaha, Nebraska, and Sacramento, California. San Francisco and Oakland were connected with the East and South when both lines were completed in 1869. Ogden, Utah, served as the connection point between the two rail lines., which would stretch from Omaha to the California coast. The federal government essentially cosigned the railroad’s bonds and also granted the railroad millions of acres of free land that they could sell as they built track. The commercial value of these lands increased significantly as they built the track, providing a constant stream of revenue to the developers as they moved west. In addition to the land sales, the Union Pacific and Central Pacific would completely own and control the track the government subsidized. Although the phrase “corporate welfare” would not come into common usage for another century, it seemed to many as if the federal government had shouldered the risk for the private companies that built the railroads by backing their bonds and then went a step further by giving these companies millions of acres of land. The federal government would eventually grant over 100 million acres to various railroads throughout the West, a fact that concerned many would-be settlers.

Given the state of American finance in the mid-nineteenth century, however, few other ways were available to finance a railroad line of this magnitude. American investors and companies did not have the kinds of resources to finance the construction of a transcontinental railroad. Congress recognized that its land reserves were the only resource the federal government controlled that could be used to finance the completion of such a mammoth project. Without access to a railroad, these lands had little commercial value. In fact, these isolated lands could scarcely be given away as homesteads. However, once a single railroad line connected the West Coast with the East Coast and the Great Plains, the total value of the lands the government still controlled in the vicinity of that railroad line would suddenly become quite valuable. Upon completion of the First Transcontinental Railroad, millions of acres of government land throughout the West would eventually be served by feeder railroads that would connect the hinterlands to the main line. The government’s willingness to give away these lands to spur railroad construction also spurred land sales and resulted in far greater revenue for the government in the long run. The railroad network that grew from the First Transcontinental Railroad allowed the government to sell rather than give away the majority of its lands throughout the West.

Figure 2.7

This photo of homesteaders in Nebraska in 1886 demonstrates the pride that pioneer families took in the homes and farms that they built.

Those who could afford to purchase land near the railroads had the best chance of creating a financially successful farm. However, the majority of Americans could not afford land near railroads. Free land could still be acquired through homestead grants until the 1880s, but these lands were generally of marginal value and isolated. Those with modest resources developed these fields in anticipation of the day when a railroad might be built in the general vicinity. These farmers joined with boosters of nearby towns and pooled their scarce resources to purchase local railroad bonds under promises of repayment and the construction of feeder lines that would connect their farms to the market economy. In these instances, farm families, local merchants, and real estate boosters mortgaged their futures together in hopes that a railroad would bring wealth to their community.

If successful, farm and real estate values increased dramatically, while the holders of the bonds could look forward to repayment of their investment with interest. In many cases, however, the local railroads were ill-conceived and inadequately financed. In such cases, the result was often bankruptcy for the railroad developers and a total loss for the hopeful investors. In dozens of instances throughout the 1880s and beyond, entire towns were built on the hopes of railroad access. Many of these disappeared nearly overnight when it became clear that the railroad would not be built. Many area farmers were so poor they had no choice but to resign themselves to another season of transporting their grain by wagon. In other cases, buildings and homes were moved by wagon to the nearest town with railroad access. As a result, for every successful city created by the railroad, there were also several ghost towns.

Figure 2.8

By 1887, four transcontinental lines connected the West Coast with an expanding rail network throughout the Mountain West and Great Plains.

The workers who built the rails the commercial West was built on may have taken the greatest risks of all. Tens of thousands of construction workers migrated to America from China and Europe with little more than a hope to earn a decent wage and then return to their homelands. Others workers, particularly the Irish and African American laborers who were often recruited by the railroads had lived in the United States for generations. These men were joined by Anglo homesteaders who had lost everything, failed mining prospectors hoping to return home, and orphans barely tall enough to swing a hammer. As a result, the Union Pacific and Central Pacific work camps represented a cross-section of the developing nation. In some ways these camps were both melting pots and the most egalitarian of institutions, establishing pay scales based only on the amount of track built each day. Time-and-a-half bonuses were held as incentive for days when a certain number of miles were completed.

The consequence was both faulty construction and a pace of work that created old men and amputees as quickly as it built track. Under these circumstances, the First Transcontinental Railroad was completed when the westbound Union Pacific crews met with the eastbound Central Pacific on May 10, 1869, at Promontory Point, Utah. Congress soon approved a series of similar land grants that spurred construction of four other major rail lines. The Atchison, Topeka, and Santa Fe line connected Kansas City and the Missouri River Valley to the Southwest in the 1870s. The Southern Pacific linked New Orleans to Southern California in the same decade. The Northern Pacific connected Chicago with Portland in 1883. Ten years later, a fifth transcontinental line was completed even further north, connecting Seattle with the Great Lakes.