RAILROAD LANDS

In the days of transcontinental railroad building, large tracts of
land were given to the railroad companies by the government, with
the expectation that they would dispose of it at reasonable prices
to settlers attracted by the new transportation facilities, and
would use the proceeds in railway development. In fact, however,
large quantities of this land have been held in an unproductive
state for speculative purposes.

An illustration of this is the case of the Oregon and California
Railroad land grant, made by Congress in 1869 and 1870, and
comprising more than 4,200,000 acres, most of which bore a heavy
growth of valuable timber. "This railroad grant ... contained a
special provision to the effect that the railroad company should
sell the land it received to actual settlers only, in quantities
not greater than one-quarter section to one purchaser and at a
price not exceeding $2.50 an acre. By this precaution it was
intended that in aiding the construction of the railroad an
immediate impetus should also be given to the settlement and
development of the country through which the road was to be
constructed."

After selling some of the lands according to the terms of the
agreement, the railroad company ceased to live up to these terms
and sold large bodies of the land to lumber interests, thus
putting a stop to the development of the region in the way
intended by the government. The government brought action against
the railroad company, the outcome of which is that the government