Giving Away an Empire: Corrdination of Railroads and Homesteaders Through Incentives

Abstract: In 1862 the U.S. federal government passed the first of several transcontinental railroad land grant acts and the Homestead Act. Each gave away massive amounts of federal lands, created incentives for early railroad construction and early settlement, and dissipated some of the value of the lands given away. Here it is argued that the state used the private incentives created by these legislative acts to coordinate the actions of private railroads and settlers in order to establish meaningful de facto ownership over the entire frontier through occupation. That is, first possession of land was used to align the incentives of the railroads and settlers with the desire of the state. This paper examines the tenuous U.S. sovereignty in the West, the institutional details of the railroad land grants, and --- using new digitized homesteading patent records --- the relationship between railroads, homesteads, and cash sales in three states (Kansas, Nebraska, and South Dakota), to test the theory that ``giving away an empire'' was a second-best strategy to gain control over the West.