Editing First transcontinental railroad (section)

===Land grants===
To allow the companies to raise additional capital, Congress granted the railroads a {{convert|200|ft|m|adj=on|abbr=}} [[Right-of-way (transportation)|right-of-way]] corridor, lands for additional facilities like sidings and maintenance yards. They were also granted alternate [[section (land)|sections]] of government-owned lands—{{convert|6400|acre|ha}} per mile (1.6&nbsp;km)—for {{convert|10|mi|km}} on both sides of the track, forming a [[Checkerboarding (land)|checkerboard pattern]]. The railroad companies were given the odd-numbered sections while the federal government retained the even-numbered sections. The exception was in cities, at rivers, or on non-government property.<ref name="walton">{{cite book |last=Walton |first=Gary M. |author2=Rockoff, Hugh |title=History of the American Economy |edition=10th |year=2005 |publisher=South-Western |location=United States |isbn=0324226365 |pages=313–314 |chapter=Railroads and Economic Change}}</ref> The railroads sold bonds based on the value of the lands, and in areas with good land like the Sacramento Valley and Nebraska<ref>Ambrose, Stephen, 2000, p. 376.</ref> sold the land to settlers, contributing to a rapid settlement of the West.<ref>[https://web.archive.org/web/20050228222737/http://memory.loc.gov/cgi-bin/displayPhoto.pl?path=/award/mhsdalad/120000/&topImages=120033r.jpg&topLinks=120033v.jpg&displayProfile=1 Map of Land Grants to Railroads] linked to archived version, page not available as of February 2023. Originally accessed 2009</ref>{{verify source|date=October 2016}} The total area of the land grants to the Union Pacific and Central Pacific was larger than the area of the state of Texas: federal government land grants totaled about 130,000,000 acres, and state government land grants totaled about 50,000,000 acres.<ref>The Silent Spikes: Chinese Laborers and the Construction of North American Railroads, comp. and ed. Huang Annian, trans. Zhang Juguo (n.p.: China Intercontinental Press, 2006), p. 36.</ref>{{verify source|date=February 2023}}

It was far from a given that the railroads operating in the thinly-settled west would make enough money to repay their construction and operation. If the railroad companies failed to sell the land granted them within three years, they were required to sell it at prevailing government price for homesteads: {{convert|1.25|$/acre|$/ha|2}}. If they failed to repay the bonds, all remaining railroad property, including trains and tracks, would revert to the U.S. government.{{citation needed|date=October 2016}} To encourage settlement in the west, [[37th United States Congress|Congress]] (1861–1863) passed the [[Homestead Acts]] which granted an applicant {{convert|160|acre|ha}} of land with the requirement that the applicant improve the land. This incentive encouraged thousands of settlers to move west.<ref>{{Cite web |date=2022-09-13 |title=Homestead Act: 1862 Date & Definition |url=https://www.history.com/topics/american-civil-war/homestead-act |access-date=2025-01-03 |website=HISTORY |language=en}}</ref>

In return for the land grants, the railroads were required to haul government personnel and cargo at significantly reduced rates (generally half of the normal rate).  In addition, the land was granted in a checkerboard fashion, with the government retaining every other section.  The land that the government retained typically doubled in value as a result of the railroad being built.  The land grants were a good deal for the government.<ref>Holbrook, Stewart H.  ''The Story of American Railroads,'' pp. 156-7, 161-2, Bonanza Books, New York, New York, 1947.</ref><ref>Locklin, D. Philip.  ''Economics of Transportation,'' pp. 134, 136-7, Richard D. Irwin, Inc., Homewood, Illinois, 1972.</ref>

The government guaranteed loans to several Pacific railroads, which were all paid off by 1899 ($63 million in principal, and $105 million in interest).  After receiving rate discounts of approximately 50% on government personnel and cargo for 80 years (including during two world wars), Congress finally discontinued the rate reductions at the end of World War II.  The land grants had been more than paid for (several times over).<ref>Holbrook, Stewart H.  ''The Story of American Railroads,'' pp. 156-7, 161-2, Bonanza Books, New York, New York, 1947.</ref><ref>Locklin, D. Philip.  ''Economics of Transportation,'' pp. 134, 136-7, Richard D. Irwin, Inc., Homewood, Illinois, 1972.</ref>