Question

What was one reason the united states government gave subsidies and land grants to railroad companies in the 1800s?

Answer 1

In simple words, one of the reasons why the United States Government gave subsidies to Railroad companies was the benefits railroads would bring to the regions.

At the time, the United States wanted to connect the coasts in order to favor trade and conquer the West, and it wouldn't be possible if Railroad companies had to rely only on bank loans and their own capital, and since the benefits for the US and its population would be humongous they subsided the companies.

Answer 2

Since building a railroad was very expensive, and could take time, this was frowned upon by private banks, because railroad companies would take a long time to pay the huge debts. When the government realized this, it knew that there would be very few railroads and its goal of connecting the coasts of the United States would not be possible, so the federal government decided to support large sums of money to the railroad companies; and create the Pacific Railways Law: there were five transcontinental trains for 1900, four of which, the government financed, and with this, it favored the expansion and conquest of the western United States.