One of the grandest "Manifest Destiny" goals of the United States was the connection of the Pacific with the rest of the United States. While the goal was not always well expressed in writing, it probably had its origins with the purchase of the Northwest Territories.

It came to the forefront of American imagination with the discovery of the California gold fields in 1849. And let's not forget the immensely important discovery of the Comstock lode of western Nevada.

In the 1850s, it took six months of travel, by water or land, to reach the west coast. Essentially, the wealth of the western U.S. was unprotected. A land connection became vital.

The problem was that such a rail connection would have been unbelievably expensive and risky. And the vast, unprotected wealth of the West meant the government had to push business westward -- quickly.

To insure that a railroad was laid in an expedient manner, the federal government offered substantial loans and other inducements. Central to those inducements was the granting of 12,800 acres of land for every mile of track laid to connect California with the rest of the nation. Elsewhere, similar considerations were given to other companies, although the amounts of land varied.

Follow this link to learn more about land grants, and their relationship to railroad bonds.