“AN ACT to aid in the construction of a railroad and telegraph line from the Missouri river to the Pacific ocean, and to secure to the government the use of the same for postal, military, and other purposes.”

The Pacific Railway Act was approved and signed into law on July 1, 1862 by President Abraham Lincoln.  Simply put, the Pacific Railway Act made the building of the United States Trans-Continental Railroad possible.  The building of the railroad was so expensive that no business could afford to build it.  Because the building of the railroad was of such vital importance to the U.S. government, President Lincoln and the U.S. Congress provided sufficient incentive for railroad men to build the railway.  These key incentives were generous land grants in the Western United States and the issuance of 30-year 6% U.S. Government Bonds to both the Union Pacific Railroad and the Central Pacific Railroad.  The Pacific Railway Act granted 10 square miles of public land on each side of the railroad tracks, alternating every other section (square mile), for every mile of track laid (except where railroads ran through cities and crossed rivers). The U.S. Government Bonds were issued at the rate of $16,000 per mile of tracked-grade completed West of the designated base of the Sierra Nevada Mountains (for the Central Pacific Railroad) and East of the designated base of the Rocky Mountains (Union Pacific Railroad).   The Pacific Railway Act also provided that the issuance of bonds “shall be treble the number per mile” (to $48,000) for tracked-grade completed over and within the two mountain ranges (but limited to a total of three hundred miles at this rate), and doubled (to $32,000) per mile of completed grade laid between the two mountain ranges.  These two key incentives of the Pacific Railway Act of 1862 provided enough economic encouragement to stimulate the greatest railroading project in history.

2 Responses to “Pacific Railway Act of 1862”

  1. Jenny Mathis says:

    Nice post. I love trains and I love history. This post reminds me of how these days Amtrak is looking to reinvest more money and get more trains going again to aid in affordable transportation. And business just can’t afford to refurbish all that track alone, it’s really going to take government help. I hope they can start running more traisn because there’s nothing like a picteresque train ride.

  2. The Conductor says:

    Thanks for the response Jenny. I agree with you, nothing can touch riding the rails through beautiful country!

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