Don't Blame the RRs

[MichaelSol]

Since the government got a transportation system built, and the investors got a return on the investment with a successful railroad, exactly who was and how were they "bilked?"

Is this for real?

You never heard of the Montana Improvement Company scandal (NP) or the Credit Mobilier (UP)?

By that, I mean that I am entirely convinced that you haven't, but why are you commenting on a subject where you transparently have no background? This is pretty basic history here, and you seem to be completely unaware of any of it, notwithstanding an apparently irresistable desire to prove it publicly.

You are also not aware that both of the land grant transcontinentals went broke in 1893. The "investors" lost everything.

Your measures of "success" and mine are different.

 

[MichaelSol]

TomDiehl:

Government shipping at regular or special rates was not a substantial portion of the railroad's business.

Bob Wilcox:

The so called land grant rates lasted untill the late 1940s.  In WW II the federal government was not a small potato rather they were the railroads largest customer.

Well, facts are just being thrown around here. I think Bob is correct and TomDiehl is making up whatever justifies his argument de jure.

Tom wants to argue government policy now, which is a long, long ways from discussing whether or not the Homesteaders enjoyed the same financial benefits as the railroads did through receiving vast land grants.

When in doubt, change the subject I guess.

The point is, historically, it is an insupportable proposition to declare that Homesteaders got "vast land grants." It never happened.

Railroads did, on the other hand, receive vast land grants, valued at the time far in excess of the valuation of the proposed construction. Homesteaders received nothing in excess of anything -- TomDiehl doesn't think their land was even worth what they paid for it.

Nor did the Homesteaders receive vast government loans to build an ostensibly private business.

Further, when Homesteaders went bust and couldn't last out the prove-up, the land went back to the government, for another round of fees and sales. Five years was a long time to "prove-up" on the Great Plains, formerly called the "Great American Desert" until the government and the railroads decided that wasn't a very attractive name. The Government sold and resold a lot of land.

When the railroads defaulted on their obligations of survey and proving, no such event occured. See the earlier cite to Bagely. And Union Pacific and Northern Pacific could not be seen returning any government land in their 1893 bankruptcies.

TomDiehl:

The land wouldn't even be worth the $1.25 an acre until the government could afford to build some type of system for transport.

Earlier, TomDiehl felt it was apparently a bargain.

TomDiehl:

Wow a WHOLE $1.25 an acre. How did they ever come up with so much money?

The bulk of U.S. government land ever offered for sale was sold at $1.25 an acre, and most of this occured before railroads existed as an economic force.

Apparently the land was worth it.

The first Homestead Act was enacted years before the UP was completed and over two decades prior to the completion of the Northern Pacific.

The Homesteaders in "Giants in the Earth" were out in the Dakotas ahead of any railroad construction.

Montana's first railroad, the Utah & Northern, was built specifically because of existing commerce in Montana measured by riverboat traffic on the Missouri River, which that railroad thought justified construction. [Rex C. Myers, Montana: A State and It's Relationship with Railroads, 1864-1970, Master's Thesis, University of Montana, 1972, p. 231].

There is simply no doubt that Government policy drove transcontinental railroad construction. Ironically, no one has disputed that. What the historical record does not support is the earlier contention on this thread that Homesteaders got "vast land grants."

 

[TomDiehl]

  All in all, I would venture to say it was fair for both sides (rails and government). 

When railroads carried an all time high of government traffic in WWII, they enjoyed historical profitability. After the government rates were cancelled in the late 1940s, railroads declined substantially in profitability.

Why is it that "proofs" on these things always seem backwards from what actually happened even while they are offered as proof of something that didn't actually happen?

Further, from a financial point of view, a concession offered in 1862 simply cannot, by any NPV or IRR valuation, be justified by anything happening 80 years later, unless the value of that consideration 80 years later was approximately $40 billion.

And, it wasn't.

The total transportation budget for WWII, planes, trains, automobiles and trucks, was only $12.8 billion.

The government did not get "a good deal" using standard investment criteria, but rather an extraordinarily negative rate of return (IRR).

If you look at the government's financial involvement in railroad development in terms of "standard investment criteria," you'd be right, the rate of return was poor at best.

However, the government, in the mid 1800's, wasn't looking for a place to invest public money as a means of financial return. They needed a transportation system built to serve an unsettled part of the country. From that point of view, they got a rather substantial return on the investment.

[TomDiehl]

  All in all, I would venture to say it was fair for both sides (rails and government). 

When railroads carried an all time high of government traffic in WWII, they enjoyed historical profitability. After the government rates were cancelled in the late 1940s, railroads declined substantially in profitability.

Why is it that "proofs" on these things always seem backwards from what actually happened even while they are offered as proof of something that didn't actually happen?

Because you're trying to show a cause and effect by connect two remotely related facts. Government shipping at regular or special rates was not a substantial portion of the railroad's business. Government shipping during WW 2 was at a peak because of the war effort. Rationing of rubber and gas forced a lot of civilian passengers to the rails during the same time. Railroad profitability declined because they were trying to find their new niche in the market with the developing highway and personal vehicle being thrown into the equation.

[TomDiehl]

The companies had to build the transportation system into a wilderness. Otherwise, those farmers and ranchers would be hauling thier products to market in covered wagons. The land wouldn't even be worth the $1.25 an acre until the government could afford to build some type of system for transport.

How on earth do you know what the land was worth without a railroad?

The U.S. Government had settled on $1.25 per acre in 1800. Long before railroads existed.

Are you now arguing that only railroads made land worth anything?

Further, most railroads were private binding the East, Midwest, and South. They didn't need land grants, and they exploited lands that had already been long before sold by the government -- the government didn't need railroads to charge $1.25 an acre.

How much is your farm crop worth if you can't get it to market before it spoils? Or have to pay to ship it in horse drawn freight wagons? Before the railroads were built or promised to be built, how much of this land sold at even $1.25 an acre? The "worth" of the land would be determined on how much of it you can sell at that point in time. You could declare it to be worth $1000 an acre, but if nobody buys any of it, is it really worth that much money? The same can be said if you declared the value to be 50 cents an acre.

The railroads built in the settled part of the country were built to serve already existing markets, they could offer a better service than the freight wagons or stagecoaches. The areas were settled around navigable waterways and primitive road systems, the transportation system available at the time of the area's settling. A simple principle of business, provide a better transport service, in this case, faster and in many cases cheaper, and you will profit.

In the mid 1800's, west of the Mississippi and east of the settled west coast, there were very few existing markets. Left to private investment, railroads would have moved in and served this area over a period of decades, eventually connecting the two developed areas. After the separation caused by the Civil War, the federal government put a high priority on a fast transportation system to connect the settled east and west coasts. They got what they wanted.

[TomDiehl]

"TomDiehl"

"Murphy Siding"    My understanding, from what my ancestors told me, was that my great-great whoevers, had to pay a nominal fee to enroll in the program, then "prove up" to get title of the land.  I seriously doubt any of my Norweigan or Irish ancestors had 2 nickles to rub together, so I can't believe they paid very much.

Wow a WHOLE $1.25 an acre. How did they ever come up with so much money?

Would it make a difference if the average household income in America was $400 a year, and the average farm income less than half of that?

The homesteaders paid a nominal fee for the land then had to develop the land into a farm or ranch. The railroads had to spend investor's money to develop a transportaion system to serve these lands.

The point is "what's the difference?"

Well, $1.25 an acre -- $200 for a farm -- compared to annual income of around $200 per year with little income in excess of necessities is a pretty big deal compared to wealthy speculators building speculative railroads where they "had to spend" investor's money -- i.e. bilk both the investors and the government.

"What's the difference?"

The Homesteaders were honest and paid for their land.

Railroads by and large were not, and got free land.

The railroads only "got free land" if they developed a transportation system on it. Ever heard of a "common carrier" and heard of the obligations of such a classification? They needed to invest in immediate improvements which required buying materials and hiring labor to do these improvements. Since the government got a transportation system built, and the investors got a return on the investment with a successful railroad, exactly who was and how were they "bilked?"

[MichaelSol]

  All in all, I would venture to say it was fair for both sides (rails and government). 

When railroads carried an all time high of government traffic in WWII, they enjoyed historical profitability. After the government rates were cancelled in the late 1940s, railroads declined substantially in profitability.

Why is it that "proofs" on these things always seem backwards from what actually happened even while they are offered as proof of something that didn't actually happen?

Further, from a financial point of view, a concession offered in 1862 simply cannot, by any NPV or IRR valuation, be justified by anything happening 80 years later, unless the value of that consideration 80 years later was approximately $40 billion.

And, it wasn't.

The total transportation budget for WWII, planes, trains, ocean shipping, automobiles and trucks, was only $12.8 billion.

The government did not get "a good deal" using standard investment criteria, but rather an extraordinarily negative rate of return (IRR).

[MichaelSol]

The companies had to build the transportation system into a wilderness. Otherwise, those farmers and ranchers would be hauling thier products to market in covered wagons. The land wouldn't even be worth the $1.25 an acre until the government could afford to build some type of system for transport.

How on earth do you know what the land was worth without a railroad?

The U.S. Government had settled on $1.25 per acre in 1800. Long before railroads existed.

Are you now arguing that only railroads made land worth anything?

Further, most railroads were private binding the East, Midwest, and South. They didn't need land grants, and they exploited lands that had already been long before sold by the government -- the government didn't need railroads to charge $1.25 an acre.

[MichaelSol]

"TomDiehl"

"Murphy Siding"    My understanding, from what my ancestors told me, was that my great-great whoevers, had to pay a nominal fee to enroll in the program, then "prove up" to get title of the land.  I seriously doubt any of my Norweigan or Irish ancestors had 2 nickles to rub together, so I can't believe they paid very much.

Wow a WHOLE $1.25 an acre. How did they ever come up with so much money?

Would it make a difference if the average household income in America was $400 a year, and the average farm income less than half of that?

The homesteaders paid a nominal fee for the land then had to develop the land into a farm or ranch. The railroads had to spend investor's money to develop a transportaion system to serve these lands.

The point is "what's the difference?"

Well, $1.25 an acre -- $200 for a farm -- compared to annual income of around $200 per year with little income in excess of necessities is a pretty big deal compared to wealthy speculators building speculative railroads where they "had to spend" investor's money -- i.e. bilk both the investors and the government.

"What's the difference?"

The Homesteaders were honest and paid for their land.

Railroads by and large were not, and got free land.

[TomDiehl]

              How many farmers received  land grants? 

 

    How many?  Literally thousands of farmers did.  Around here, they called it homesteading.  What did they call it there?

Wasn't massive, but one of my ancestors did.  In 1851.  In south Georgia.  I imagine most of his neighbors did, too.

Seems to me that many settlers of our western states did indeed receive massive land grants from the Federal and in some cases (California) state land grants to settle and cultivate vast lands.

Ya know, it's so elementary - you just bait the hook, cast your line, and wait patiently.

First time I've ever caught three at once, though!

Homestead lands and railroad land grants were two different things.  With homesteading, the farmer had to make his living off that land, a measley 160 acres, and if he failed (as many did), the land went up for auction by the revenuers.

The land was the farmer's sole source of income for the most part.  No one in their right mind would call it a "land grant" because it wasn't.

With the railroad land grants, the land itself was mainly used to provide collateral for construction bonds  The rest was kept as future collateral, basically banked right up until just recently by most of the railroad companies.  The land itself was not meant to provide a sole source of revenue for the railroads, rather incentive for construction of the lines themselves.  Little if any of the railroad land grants were ever reaquired by the feds via seizure and auction.

Hmmmmm, 160 acres is some kind of moral equivalent to the millions of acres of railroad land grants per company?

Nice try, rookies.

And to you Dave, I'll say "lame try." The government wasn't in a financial position to build the railroads at that point in time. If they had, maybe you'd see how well your "open access" fantasy would work with the rail lines in as bad a shape as the interstate highway system.

The companies had to build the transportation system into a wilderness. Otherwise, those farmers and ranchers would be hauling thier products to market in covered wagons. The land wouldn't even be worth the $1.25 an acre until the government could afford to build some type of system for transport.

If the land granted to the railroads wasn't supposed to be a source of income for the railroads, exactly what was the incentive the railroads received from the grants besides what was needed for right of way?

And what is your source for the statement "basically banked right up until just recently by most of the railroad companies." How much? How recent?

And are you also trying to tell us that EVERY railroad that received land grants was a financial success?

[MP173]

Hmmm, lets see.

US Mail and troop trains were pretty significant reductions for the government. 

Dave you seem to be placing a present valuation on speculative actions after the fact.  Sure, it worked out well for the railroads.  But, shouldnt it have worked out well in order for it to be a fair deal?  All in all, I would venture to say it was fair for both sides (rails and government).  And speaking of present value on speculative actions, that land purchased at $1 per acre sure seems like a pretty good deal right now too.

Bob, you said it about your customer in Texas.  Sometimes you win a battle only to lose later on. 

I deal with pricing on a daily basis by establishing my own selling price (offer to sell).  Each and every situation is different.  My personal view is to maximize profit while being able to justify it.  That is where "value added" comes into play.  If you have nothing to add and it becomes $$$ only you lose. Either you dont gain the sale or it is so riduculously priced there is nothing in it.

I dont have a lot of sympathy for the large shippers.  I get cut to pieces on a large Fortune 50 company and will lose business for the amount of $1.  No problem tho, he is simply doing his job.  My turn will come.

The same shippers that scream and yell "captive" will have no mercy when they are in a commanding position.

Moral of the story is if you are buying have several options.  If you are selling eliminate as many options as possible. 

 

ed

 

[Murphy Siding]

              How many farmers received  land grants? 

 

    How many?  Literally thousands of farmers did.  Around here, they called it homesteading.  What did they call it there?

Wasn't massive, but one of my ancestors did.  In 1851.  In south Georgia.  I imagine most of his neighbors did, too.

Seems to me that many settlers of our western states did indeed receive massive land grants from the Federal and in some cases (California) state land grants to settle and cultivate vast lands.

Ya know, it's so elementary - you just bait the hook, cast your line, and wait patiently.

First time I've ever caught three at once, though!

Homestead lands and railroad land grants were two different things.  With homesteading, the farmer had to make his living off that land, a measley 160 acres, and if he failed (as many did), the land went up for auction by the revenuers.

The land was the farmer's sole source of income for the most part.  No one in their right mind would call it a "land grant" because it wasn't.

With the railroad land grants, the land itself was mainly used to provide collateral for construction bonds  The rest was kept as future collateral, basically banked right up until just recently by most of the railroad companies.  The land itself was not meant to provide a sole source of revenue for the railroads, rather incentive for construction of the lines themselves.  Little if any of the railroad land grants were ever reaquired by the feds via seizure and auction.

Hmmmmm, 160 acres is some kind of moral equivalent to the millions of acres of railroad land grants per company?

Nice try, rookies.

     Potato/pottotto.  The land my Irish ancestors homesteaded, combined with the adjacent land they lease under long term grazing rights, is an area 1 mile by 7 miles.  While perhaps not the *moral equivilent*, one could argue it may be the *reletive equivilent*.  Seven square miles of the American dream was to one immigrant family what "millions of acres of railroad land grants" was to a railroad.  I would venture to guess, that you live on land that your ancestors homesteaded-no?

[TomDiehl]

"TomDiehl"

"Murphy Siding"    My understanding, from what my ancestors told me, was that my great-great whoevers, had to pay a nominal fee to enroll in the program, then "prove up" to get title of the land.  I seriously doubt any of my Norweigan or Irish ancestors had 2 nickles to rub together, so I can't believe they paid very much.

Wow a WHOLE $1.25 an acre. How did they ever come up with so much money?

Would it make a difference if the average household income in America was $400 a year, and the average farm income less than half of that?

The homesteaders paid a nominal fee for the land then had to develop the land into a farm or ranch. The railroads had to spend investor's money to develop a transportaion system to serve these lands.

The point is "what's the difference?" The government got the land developed. Dave likes to shoot his mouth off that railroads got government welfare, then made the mistake of asking "who else?" He got a deluge of answers, and has no reply to cover his foot-in-mouth statement.

[solzrules]

              How many farmers received  land grants? 

 

    How many?  Literally thousands of farmers did.  Around here, they called it homesteading.  What did they call it there?

Wasn't massive, but one of my ancestors did.  In 1851.  In south Georgia.  I imagine most of his neighbors did, too.

Seems to me that many settlers of our western states did indeed receive massive land grants from the Federal and in some cases (California) state land grants to settle and cultivate vast lands.

Ya know, it's so elementary - you just bait the hook, cast your line, and wait patiently.

First time I've ever caught three at once, though!

Homestead lands and railroad land grants were two different things.  With homesteading, the farmer had to make his living off that land, a measley 160 acres, and if he failed (as many did), the land went up for auction by the revenuers.

The land was the farmer's sole source of income for the most part.  No one in their right mind would call it a "land grant" because it wasn't.

With the railroad land grants, the land itself was mainly used to provide collateral for construction bonds  The rest was kept as future collateral, basically banked right up until just recently by most of the railroad companies.  The land itself was not meant to provide a sole source of revenue for the railroads, rather incentive for construction of the lines themselves.  Little if any of the railroad land grants were ever reaquired by the feds via seizure and auction.

Hmmmmm, 160 acres is some kind of moral equivalent to the millions of acres of railroad land grants per company?

Nice try, rookies.

 

 

HEH HEH HEH HEH

 

ZING!

[Anonymous]

              How many farmers received  land grants? 

 

    How many?  Literally thousands of farmers did.  Around here, they called it homesteading.  What did they call it there?

Wasn't massive, but one of my ancestors did.  In 1851.  In south Georgia.  I imagine most of his neighbors did, too.

Seems to me that many settlers of our western states did indeed receive massive land grants from the Federal and in some cases (California) state land grants to settle and cultivate vast lands.

Ya know, it's so elementary - you just bait the hook, cast your line, and wait patiently.

First time I've ever caught three at once, though!

Homestead lands and railroad land grants were two different things.  With homesteading, the farmer had to make his living off that land, a measley 160 acres, and if he failed (as many did), the land went up for auction by the revenuers.

The land was the farmer's sole source of income for the most part.  No one in their right mind would call it a "land grant" because it wasn't.

With the railroad land grants, the land itself was mainly used to provide collateral for construction bonds  The rest was kept as future collateral, basically banked right up until just recently by most of the railroad companies.  The land itself was not meant to provide a sole source of revenue for the railroads, rather incentive for construction of the lines themselves.  Little if any of the railroad land grants were ever reaquired by the feds via seizure and auction.

Hmmmmm, 160 acres is some kind of moral equivalent to the millions of acres of railroad land grants per company?

Nice try, rookies.

[bobwilcox]

     My understanding, from what my ancestors told me, was that my great-great whoevers, had to pay a nominal fee to enroll in the program, then "prove up" to get title of the land.  I seriously doubt any of my Norweigan or Irish ancestors had 2 nickles to rub together, so I can't believe they paid very much.

Wow a WHOLE $1.25 an acre. How did they ever come up with so much money?

Was it possible for a  homesteader to get a loan for the land using the land as collateral?

[MichaelSol]

In return for the land grants, railroads provided the US Government vastly reduced rates for the movements of passengers and freight.

 

Is that meaningful in the larger context of railroading? The US Government was not a producer, and didn't actually consume much in that era.  The US Government was pretty small potato(e)s.

The so called land grant rates lasted untill the late 1940s.  In WW II the federal government was not a small potato rather they were the railroads largest customer.

 

A World War was probably not something either side anticipated in 1862, but notwithstanding that, "government rates" during WWII still seem to have supported the period of the greatest profitability of railroads prior to the Staggers Act.

Either those rates were profitable in their own right, or other shippers were really paying through their collective nose(s).

[bobwilcox]

The real problem is not the railroad's pricing, but the failure of the system to adequately address any disagreements.  I find the method to settle, involving an average 3.3 years and $3million per case to be outrageous. 

If I were a pricing manager of a railroad it would be full throttle on the pricing until further notice.  Sorta like driving 65mph in a 55mph zone, just dont get caught.

There is a lot of truth in what you say about a price setting in cases with captive shippers but as one of my captive shipper from TX once told me, "you've got me by the bxxxs but I'm in a perfect position to pxxx on you".  He did just that when he arranged with another railroad to build into his facility by the time the contract was up for renewal.

[Murphy Siding]

     My understanding, from what my ancestors told me, was that my great-great whoevers, had to pay a nominal fee to enroll in the program, then "prove up" to get title of the land.  I seriously doubt any of my Norweigan or Irish ancestors had 2 nickles to rub together, so I can't believe they paid very much.

If they worked hard, and endured what is described in Willa Cather's "O Pioneers" or Rolvaag's "Giants in the Earth," they paid a lot.

     That's quite true, but it was a lot better than where they came from.

[bobwilcox]

     My understanding, from what my ancestors told me, was that my great-great whoevers, had to pay a nominal fee to enroll in the program, then "prove up" to get title of the land.  I seriously doubt any of my Norweigan or Irish ancestors had 2 nickles to rub together, so I can't believe they paid very much.

If they worked hard, and endured what is described in Willa Cather's "O Pioneers" or Rolvaag's "Giants in the Earth," they paid a lot.

They paid a lot more on the High Plains when the rain stopped.

[bobwilcox]

In return for the land grants, railroads provided the US Government vastly reduced rates for the movements of passengers and freight.

 

Is that meaningful in the larger context of railroading? The US Government was not a producer, and didn't actually consume much in that era.  The US Government was pretty small potato(e)s.

The so called land grant rates lasted untill the late 1940s.  In WW II the federal government was not a small potato rather they were the railroads largest customer.

 

[MichaelSol]

     My understanding, from what my ancestors told me, was that my great-great whoevers, had to pay a nominal fee to enroll in the program, then "prove up" to get title of the land.  I seriously doubt any of my Norweigan or Irish ancestors had 2 nickles to rub together, so I can't believe they paid very much.

If they worked hard, and endured what is described in Willa Cather's "O Pioneers" or Rolvaag's "Giants in the Earth," they paid a lot.

[MichaelSol]

"TomDiehl"

"Murphy Siding"    My understanding, from what my ancestors told me, was that my great-great whoevers, had to pay a nominal fee to enroll in the program, then "prove up" to get title of the land.  I seriously doubt any of my Norweigan or Irish ancestors had 2 nickles to rub together, so I can't believe they paid very much.

Wow a WHOLE $1.25 an acre. How did they ever come up with so much money?

Would it make a difference if the average household income in America was $400 a year, and the average farm income less than half of that?

[MichaelSol]

In return for the land grants, railroads provided the US Government vastly reduced rates for the movements of passengers and freight.

 

Is that meaningful in the larger context of railroading? The US Government was not a producer, and didn't actually consume much in that era.  The US Government was pretty small potato(e)s.

[MP173]

In return for the land grants, railroads provided the US Government vastly reduced rates for the movements of passengers and freight.

 

I just read the GAO report (all 31 pages) and found it very interesting.  I agree with Ken...they DONT know what to do with this issue.  After laying out the entire process they finally admit that there needs to be a balance between captive shippers and revenue adequacy for the RR's.

The entire R/VC (180%) seems somewhat flawed, but it is the current law. 

The real problem is not the railroad's pricing, but the failure of the system to adequately address any disagreements.  I find the method to settle, involving an average 3.3 years and $3million per case to be outrageous. 

If I were a pricing manager of a railroad it would be full throttle on the pricing until further notice.  Sorta like driving 65mph in a 55mph zone, just dont get caught.

Finally, the system no doubt needs to be fine tuned, ok probably overhauled...but any adjustments would jack the 180% upwards in my opinion.

 

ed

[TomDiehl]

     My understanding, from what my ancestors told me, was that my great-great whoevers, had to pay a nominal fee to enroll in the program, then "prove up" to get title of the land.  I seriously doubt any of my Norweigan or Irish ancestors had 2 nickles to rub together, so I can't believe they paid very much.

Wow a WHOLE $1.25 an acre. How did they ever come up with so much money?

[Murphy Siding]

     My understanding, from what my ancestors told me, was that my great-great whoevers, had to pay a nominal fee to enroll in the program, then "prove up" to get title of the land.  I seriously doubt any of my Norweigan or Irish ancestors had 2 nickles to rub together, so I can't believe they paid very much.

[MichaelSol]

A little rewriting of history going on here. Let me guess that none of you gentlemen actually know anything about the Homestead Act of 1862, or the Enlarged Homestead Act of 1909. Just a guess.

1.   The Homestead Acts were not land grants. Farmers had to pay fees to purchase the title right, then "prove up" in order to receive title by a minimum of five years of working the land. They were required to specifically occupy the land and work it. They could buy the land outright for $1.25 an acre. That rate had been in effect since 1800 for government lands and was available to farmers, railroads, manufacturers, loggers -- the public as a whole. The only thing the Homestead Act did was to substitute an optional, alternative work requirement for persons desiring to purchase agricultural land specifically. The government provided no loans or subsidies to the Homesteaders by which to do this, although the government not only extended land grants for free to the Union Pacific, but provided cash loans as well.

2.   Excise taxes and government land sales (including homestead fee income) were primary sources of Federal Government revenue during that era.

3.    The Desert Land Act of 1877, under which many cattle spreads were created, permitted an initial purchase at 25 cents an acre, but an additional $1 per acre was required to be paid the Federal Government after the owner brought the irrigation required under the act to his parcel. That brought the purchase price up to the standard $1.25 an acre that government lands had been sold for to the general public.

4.   The railroads themselves were the primary advocates and the primary beneficiaries of homesteading, but the territories and states also demanded them because the Federal government paid no property taxes to the states, whereas private landholders did. See the railroad evasion of that requirement set forth below.

5.   The Union Pacific received actual land grants valued in excess of four times the estimated cost of construction of the transcontinental railroad. No Homesteader received anything of any value in excess of what he either paid for outright, or worked for by "proving up" for five long years.

6.   No government receivership proceeding or assistance was available when Dad broke his leg and couldn't farm and lost everything, or when the dry years came -- the dry years that government and railroad settlement "experts" said would never come again -- and blew everything away, or when the blizzard hit and the cattle died. Neither the Bank nor the government looked the other way when the mortgage was due or the taxes due and couldn't be paid. The railroads that made the promises weren't interested when the promises proved to be false, and people's lives and hopes were ruined in human catastrophes of despair resulting from the railroad's "honest" desire to make a buck.

7.  While there were undoubtedly minor instances of homestead corruption, there was nothing like the wholesale corruption of railroad land grants. See, Montana Improvement Company, Credit Mobilier.

8.   With some minor exceptions, only the railroads received bona fide land grants in American history. Farmers did not.

"Underscoring concerns about its monopoly attitude, the Northern Pacific immediately became embroiled in scandal in the form of the Montana Improvement Company, which contracted to cut Railroad timber lands and supply the Railroad with ties, lumber, and cordwood, in return for the Railroad hauling the Improvement Company's lumber for less than half of that of competitors. The Railroad was the majority stockholder, by $100, of the Montana Improvement Company.  Improvement Company foremen did not care to distinguish between railroad land grant sections and the alternating government sections, freely cutting from both.  The abuses were so widespread that by 1885 a government report to President Cleveland charged that "depredations upon public timber are universal, flagrant and limitless." Civil and criminal suits followed against both the Improvement Company and the Northern Pacific Railroad. [from K. Ross Toole, "The Genesis of the Clark-Daly Feud," in Malone, Michael, and Roeder, Richard, History of Montana. p. 295.]

" Taxation would become a sore spot with the residents of the Northern Pacific's territories.  Although the federal grant of land was made in praesenti -- that is by virtue of the act itself -- for decade after decade, the Northern Pacific evaded taxation on these lands by delaying proofs regarding prior settlement and the non-mineral character of the land, which was incident to its perfecting its land patents. "For all these years, the lands of the settler, the even numbered sections, bore the tax burden of all; a greater sum in the aggregate through the years of exemption than the value of the lands on the market."" [Clarence Bagley, History of King County, Washington (Chicago and Seattle, 1929), Vol I, pp. 582-583.]

[SALfan]

How many farmers received massive land grants?  

Wasn't massive, but one of my ancestors did.  In 1851.  In south Georgia.  I imagine most of his neighbors did, too.

[Murphy Siding]

              How many farmers received  land grants? 

    How many?  Literally thousands of farmers did.  Around here, they called it homesteading.  What did they call it there?