After the close of the War of 1812 attention was focused in the incipient United States on the arena of internal improvements, particularly in newly formed states. For several decades the halls of Congress echoed with debates concerning the merits, constitutionality and sectional feasibility of the federal governmeent's participation in the various forms of improvements. Immediate consideration was given to the construction of roads and canals, and subsequent land grants to the states met with approval, due to the nature of transportation involved.

With the introduction and promising potential of railroads, however, a new chapter in land grants began -- since railroads were for the most part privately owned and controlled. Sectional harmony was necessary before Congress could pass legislation to encourage construction, and the encouragement desired by private companies was the granting of land to them by the government. Plans were drawn up for connecting the extreme northwestern and southern parts of the states plus connecting lines to vital areas of the South and Fast. Political maneuvering and economic necessity led to the passage of the Illinois Central grant in 1950 -- the first of many.

The Illinois Central grant made land available for the proposed railroads from Chicago, Illinois to Mobile, Alabama, and from the Ohio River to Dubuque, Iowa. Along the projected route alternate sections of land extending for six miles on each side of the line were transferred to the states who later transmitted them in the form of a subsidy to the private company. The alternate sections remaining were held in possession of the government which would benefit as their value increased concurrently with the value of the land owned by the railroad.

The government turned over land to the Illinois Central as soon as it commenced construction and thus the building of the railroad became closely interwoven with the sale of land. Huge advertisements appeared in the United States and also in foreign countries, in the hope of encouraging immigration. Thus immigrants and settlers were encouraged to migrate westward with the expectation of becoming farmers. The requirement was that land purchased in this manner could not remain idle but had to be placed under cultivation so that rail traffic would increase. Eighty percent of the area designated as "mortgage land" sold for approximately $8.50 an acre -- and twenty percent regarded as "free land" brought about $7 an acre. The remuneration received by the railway company from the sale of 1and covered the initial construction cost. But it wasn't long before the criticism was raised that the companies were more interested in land speculation than in running the railroads.

From 1850 to 1871 the Illinois Central received grants of more than two and a half million acres -- but that was less than two percent of the total given to rail lines. Most of the land obtained by the Illinois Central was subsequently sold at $11 to $12 an acre. Their total gross receipts from land sales has been estimated at thirty million dollars -- a sizeable sum for the encouragement of one railroad.

Numerous voices were raised throughout this period against giving away the country's natural resources. President Franklin Pierce, four years after the passage of the first land grant to a private company and after thirty million acres had been withdrawn from public sales, spoke out ardently against further land grants. The President and others recognized that the rights of the preemptors and homesteaders were being violated and that much of the most valuable land was passing into private bands and railroad ownership.

Foremost among those who spoke against this polity was Horace Greeley. In a reply to Daniel Webster in which he stated that land grants made the public lands more valuable, he wrote: "Settle the lands compactly and railroads will be constructed through them rapidly and abundantly. Establish the principle that improved land is a free gift of God, to be dispensed as air and water, to all who need, and as they need, and ample capital will be released from land speculators to construct any number of railroads."