Final answer:
Beneficiaries of the Homestead Act included homesteaders who improved their land, wealthy individuals who purchased land near railroads, and railroad companies that profited from high transportation rates and land sales. The government also benefited financially from land sales.
Step-by-step explanation:
The Homestead Act of 1862 enabled many individuals to seek new opportunities by claiming free land provided by the government. While homesteaders who endured the hardships of improving their land had the opportunity to gain from the act, those who were able to purchase land near railroads stood a far better chance of creating a financially successful farm. Railroad companies and businesses involved in agricultural supplies also profited from selling goods and land to these settlers. Additionally, the government benefited from the sale of lands to fund its budget in times before the federal income tax.
The act was part of several measures by the Republican-controlled Congress aimed at increasing agricultural output and encouraging northward migration for the war effort. People who had the means to buy the more desirable lands sold or granted by the government also profited significantly. The railroads, created to connect the country, were pivotal as they charged high rates that only wealthier individuals could afford, facilitating a potentially profitable farming opportunity for these landowners.
Despite the challenges of isolated and marginal quality lands, the hopes of eventual railroad expansion motivated those with fewer resources to invest in these properties. Community efforts to purchase local railroad bonds often mortgaged their future on the speculative promise that railroads would increase the value of their lands and integrate them into a larger market economy.