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Railroad Land Grants in the Dakotas: Was One Fourth of North Dakota Really Given to Railroads?
By Ken Vogele
Editor, Black Hills Chapter GRHS Newsletter
Was One Forth of North Dakota Really Given to Railroads? Railroads were the “engines of settlement” on the Great Plains of the US. Essentially all of our German Russian ancestors rode the rails from their ports of entry to their stopping off places on the Plains. The massive expansion of rail lines into the North Central US during the last part of the 19th Century was to no mean extent responsible for the nearly complete settling of the Plains between 1880 and 1920.
“Between 1850 and 1871 the United States government used a portion of the public domain (federally owned land) to assist and encourage the building of railroads.”(1) This was given in the form of so-called “land grants” to help defray the costs of constructing the railroads. Land was granted only after rail had been laid. Ownership of land gave railroad companies an asset that could be used as collateral to back mortgage loans and the selling of bonds in the short-term and that could be sold to citizens in the future. All of the great transcontinental lines with the exception of the Great Northern (the last) used land grants as part of their business models.
In all, the railroads were granted a total of 131 million acres of federal land or the equivalent of a little more than the states of Wyoming and Colorado combined. This amounts to a little under 7 per cent of the total continental US land mass. Grants were located in 27 states but the largest grants were in Montana (14.7 million acres), California (11.5 million acres), North Dakota (10.6 million acres), Minnesota (9.5 million acres) and Kansas (8.2 million acres).
Our concern here is primarily with the Northern Pacific Railroad since that is the transcontinental road that traversed that portion of Dakota Territory that would become North Dakota and which accounted for the bulk of land granted in the Territory. The amount of land granted in South Dakota was insignificant:
“One small land-grant railroad did exist within the boundaries of South Dakota. The Winona & St. Peter Railroad, a subsidiary of the Chicago and North Western, received a land grant to build a line west from New Ulm, Minnesota to Lake Kempeska, near what is now Watertown, South Dakota. Constructed in 1872 and 1873, the line included 34.48 miles of track in South Dakota. The railroad was of such tenuous construction, however, that trains operated only as far as the town of Gary on the state line. The federal land grant was apparently the only reason for construction into the state, since the area was virtually unpopulated at the time and few settlers were entering the region. The line remained unused until 1878.” (2)
The Northern Pacific Railroad received its charter in 1864, signed by President Abraham Lincoln. The charter gave the company twenty alternate sections of land [a section is one mile square] per mile of track on each side of its road in territories of the US including Dakota Territory. As the railroad was being built, land was being surveyed ahead of the railroad into 6 mile by 6 mile townships each containing 36 square miles numbered 1 to 36. The Northern Pacific charter gave the railroad all odd-numbered sections of land extending out 40 miles on either side of the tracks and resulting in an 80-mile-wide “checkerboard” of land across the Territory that was half railroad land grant and half government land.(3)
Example of a Checkerboard Land Grant
of 20 Miles on a Side. The Northern
Pacific Land Grant was Twice as Wide.
“The federal government believed that because the value of land surrounding railroads would increase as much as twofold, granting land to private railroad companies would theoretically pay for itself and also increase the transportation infrastructure throughout the nation. Much to its own misfortune, the US government was not able to sell much of the land that it retained after checkerboarding because settlers willing to move West [including and especially German Russians] were not wealthy. The federal government would eventually give away much of this land through the Homestead Act.”(4)
Construction of the Northern Pacific Railroad began in Minnesota in 1870. It crossed the Red River in the summer of 1872 and reached Bismarck in summer 1873. There it stopped because the railroad went bankrupt. The company was revived and in 1881 the line crossed the border into Montana. All in all, the NP main line extended 1,775 miles from Duluth, MN to the Puget Sound of which about 420 were in North Dakota [my estimate].(5)
In total, the Northern Pacific Railroad received land grants totaling 45 million acres, over double what any other transcontinental line received. 10.6 million of these were in North Dakota, or approximately 23.9 per cent of the land area in the entire state.
Northern Pacific Railroad’s Land Grant
Checkerboard Across North Dakota
In order to pay off debt and to eliminate taxes on land grants, the Northern Pacific sold land cheaply and as quickly as it could, mostly to speculators. As of December 1896, the company still owned 6.85 million acres, but sales, particularly between 1888 and 1900 were so great that holdings had decreased to 1.27 million acres by September 1900. This amount had decreased further to 279 thousand acres by 1910, and by 1952 there remained only 6,541 acres.(6) Railroad land sales to individuals were usually recorded appropriately in county land offices.
Prior to 1871, only 45,000 miles of track existed in the US. Between 1871 and 1900, another 170,000 miles were laid. Surprisingly, only 18,738 miles of this track was built as a direct result of land grants and loans.(1)
Were land grants good or bad for the country? That depends on how one looks at it. There is no question that transcontinental railroads would not have been built as early as they were without government support. And once they were built, they tied the expanding nation together, opening up huge tracts of land for settlement and economic, including mineral, development. The US population became more mobile, goods were more efficiently moved, jobs were created, markets were made more efficient and travel became easier and safer.(6)
Certainly there was corruption associated with some land grants and the grants probably made the recipient railroads less efficient than those lines that had to fend for themselves economically. Checkerboarding caused problems in some areas, especially in forested regions where railroad lands were sold at low prices to large corporations which then clear-cut section after section. But most economists feel that the US government came out ahead economically. Settlement resulted in economic activity that resulted in increased federal taxes and, in addition, land grant railroads were mandated to carry mail at reduced rates and soldiers and some government freight without charge until the 1940’s.
German Russians rode these rails, shipped their produce on them, and some of their menfolk even helped lay the land grant railroad track.
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This article was originally published in June 2016, Volume 21, Issue 3, p 6- 7, of the Black Hills Chapter of the Germans from Russia Heritage Society.
Reprinted with permission
1. Railroad, Federal Lands Grants to (Issue), http://www.encyclopedia.com/doc/1G2-3406400787.html
2. South Dakota’s Railroads: An Historic Context, http://history.sd.gov/preservation/OtherServices/SDRailroad.pdf
3. Checkerboarding (land), https://en.wikipedia.org/wiki/Checkerboarding_(land)
4. Northern Pacific Railroad Land Grant Charter, http://www.rootsweb.ancestry.com/~mtyellow/history/amend1864.htm
5. Across the Continent, p. 106 in www.google.com
6. “Northern Pacific Officials and the Disposition of the Railroad’s land Grant in North Dakota after 1888” in North Dakota History: Journal of the Northern Plains, Vol. 37, No. 2
Picture 1 citation:
This picture is in the public domain.
Picture 2 citation:
This picture is believed to be in the public domain. The picture used in the article is a clip from this picture.
Rand McNally And Company, and Northern Pacific
Railroad Company. New and correct map of the lines of the Northern Pacific Railroad and Oregon Railway & Navigation Co. Chicago, 1883. Map. Retrieved from the Library of Congress, <https://www.loc.gov/item/98688749/>.