The Southwestern Historical Quarterly, Volume 49, July 1945 - April, 1946 Page: 519
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Land Grants to Texas Railroads
total of $1,685,000 to secure certain other roads, and nine cities
-Houston, Waco, Dallas, Jefferson, Sherman, McKinney, Hen-
derson, Waxahachie, and Brenham-issued bonds to the extent
of $675,000 for the same purpose. All of the roads except one,
the San Antonio and Mexican Gulf, fulfilled the conditions un-
der which the bonds were issued and met the expectations and
purposes of their donors by providing the transportation facil-
ities promised, enhancing the value of property, and enlarging
or protecting the cities' trade territories. The Constitution of
1876 prohibited such bond issues in the future.
Freedom from taxation was extended only to the Interna-
tional and Great Northern Railroad Company. In 1870 the
"Carpetbag" legislature had granted this road bonds running
for thirty years at eight per cent interest, underwriting the
railway at the rate of $10,000 per mile of track. Bonds valued
at $200,000 were issued, but the comptroller refused to coun-
tersign them, and the state courts upheld his act. The legisla-
ture then compromised with the International and Great North-
ern by giving it a land grant and relieving it from taxation
for twenty-five years.
In making land grants Texas was following the plan adopted
with excellent results by the Federal government. The policy
was more essential in Texas than in the more populous states
since there was not in Texas at that time the population or the
business to warrant the investment of private capital in such
From 1836 to 1852 thirteen charters for railroads were
granted by the Republic and the state. The last charter was
issued on February 10, 1852. Up to that time not one of these
roads had begun construction, and only two of them had done
a little grading. The lawmakers realized that there was not
enough private capital in Texas to finance transportation as in
other states and that the state could not afford to extend aid in
money as many of the older states had done. It was also appar-
ent that aid of some kind had to be given by the state. Texas
had millions of acres of land which was bringing in no revenue
and which was hard to sell at fifty cents an acre because of
lack of transportation facilities. Land grants to railroad com-
panies seemed to be the answer, and in 1852 the first aid of this
kind was given in the charter for the Henderson and Burkville
Railroad-eight sections to the mile. Similar grants were made
in several other charters but with no results. It was decided
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Texas State Historical Association. The Southwestern Historical Quarterly, Volume 49, July 1945 - April, 1946, periodical, 1946; Austin, Texas. (texashistory.unt.edu/ark:/67531/metapth146056/m1/602/: accessed June 24, 2017), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; crediting Texas State Historical Association.