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The Minnesota and Northwestern Railroad Land Grant Scandal of 1854

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Map reproduced in William Watts Folwell's <em>History of Minnesota</em>, Vol. 2 showing railroad lines in Minnesota as graded, located, proposed, and constructed between 1857 and 1862.

Map reproduced in William Watts Folwell's History of Minnesota, Vol. 2 showing railroad lines in Minnesota as graded, located, proposed, and constructed between 1857 and 1862.

In 1854 legislators in St. Paul requested a grant from the federal government to create a rail line across Minnesota Territory. Public outcry led to scandal and the repeal of the territory's first land grant bill.

Railroad land grants were a controversial measure used by the federal government to promote the building of rail lines in the West. First, companies were given land to build rail lines on. Then, after meeting predetermined conditions, they were allowed to sell unused plots to recoup their costs. Because of the potential for large profits, many companies used underhanded tactics to obtain these grants. This often resulted in scandal.

In Minnesota Territory in the 1850s, construction of a railroad system stood to benefit both the local and federal governments. An 1847 Ojibwe land cession, the 1851 Treaty of Traverse des Sioux, and other treaties had opened up new land to Euro-American immigration. In bringing a railroad to these areas, local legislators hoped to hasten the newcomers' arrival. They estimated that well-placed rail lines would bring immigrants to two million acres. Nationally, access to railroads gave the federal government the ability to move U.S. property and to transport troops during wartime at a reduced rate. It also allowed them to transport U.S. Postal Service freight at a discount.

In 1854 territorial governor Willis Gorman proposed that the local legislature ask the U.S. Congress to grant land for a single railroad system in Minnesota Territory. Such a grant would fund construction without public upfront cost. On March 4 legislators approved the formation of the Minnesota and Northwestern Railroad to own and operate one of the new rail lines. It would begin at the northwest shore of Lake Superior, continue through St. Paul, and end at the territory's southern border. Gorman signed a law chartering the line just before midnight. It was the final day of the legislative session.

The charter included a controversial provision stating that future land grants to the territory would be passed to the Minnesota and Northwestern. The transfer was to be direct and automatic, leaving little chance for the legislature to impose conditions.

In February territorial delegate Henry Rice had presented a land grant bill to the U.S. House of Representatives. The House rejected it for being too limiting. It claimed that unfair advantages were given to the Minnesota and Northwestern due to suspect partnerships within the Minnesota legislature.

Most of the company's top managers lived in New York and London, raising concerns about their intentions in the territory. Minnesota citizens complained that a company without local interests wasn't concerned with the well-being of the area. A Minnesota company, they argued, was best suited to construct a line that benefitted the territory. They maintained that employing outsiders would carry the financial windfall from the land grant outside Minnesota.

On May 6 a new bill, drafted by Henry Sibley, was submitted. It was carefully worded so that only companies that had not yet been "instituted or organized" were eligible for land grants. The new bill was designed to allow future Minnesota legislators to choose from a pool of yet-to-be-formed companies.

The second bill passed the U.S. Congress on June 28. Before President Franklin Pierce could sign it into law on June 29, its wording was changed to disallow land ownership by companies that hadn't been both "instituted and organized." This subtle change returned eligibility to the Minnesota and Northwestern Railroad. A member of the Committee on Public Lands claimed the change was requested by men who had contacted him. He refused, however, to name them.

Though minor, the revision altered the meaning of the Sibley-written bill. The original bill gave the land to Minnesota Territory; the modified version returned it to the railroad company. On July 24 U.S. Representative Elihu Washburne brought charges of fraud and called for an immediate investigation. On August 3 the second bill was repealed by the U.S. Congress. The Minnesota and Northwestern Railroad tested their legal ownership of the grant but was eventually forced to waive it.

The awarding of railroad land grants continued to stir up controversy in the late 1850s and 1860s. In 1871 the federal government abandoned the policy, marking the nationwide end of an era.

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Chatelain, Verne E. "The Federal Land Policy and Minnesota Politics, 1854–60." Minnesota History 22, no. 3 (September 1941): 227–248.
http://collections.mnhs.org/MNHistoryMagazine/articles/22/v22i03p227-248.pdf

Draffan, George. "Taking Back Our Land: A History of Railroad Land Grant Reform." Railroads and Clearcuts Campaign.
http://www.landgrant.org/takingback.pdf

Hubbard, Lucius F., William Pitt Murray, James H. Baker, Warren Upham, R. I. Holcombe, and Frank R. Holmes. Minnesota in Three Centuries, 1655–1908. Vol. 2 New York: Publishing Society of Minnesota, 1908.
https://archive.org/details/minnesotainthree02hubbuoft

Gilman, Rhoda. "Territorial Imperative: How Minnesota Became the 32nd State." In The North Star State: A Minnesota History Reader, 49–62. St. Paul: Minnesota Historical Society Press, 2002.

"Land Grant Repealed." St. Paul Daily Minnesotian, August 14, 1854.

"Minnesota and North-Western Railroad." St. Paul Daily Minnesotian, July 13, 1854.

Minnesota Department of Natural Resources: Division of Lands and Minerals. "Public Land and Mineral Ownership in Minnesota: A Guide for Teachers."
http://files.dnr.state.mn.us/lands_minerals/PLteachersguide.pdf

"Our Land Bill in the Senate." St. Paul Daily Minnesotian, July 10, 1854.

"Progress of the Investigation." St. Paul Daily Minnesotian, August 3, 1854.

Session Laws of the Territory of Minnesota Passed by the Legislative Assembly at the Session Commencing Wednesday, January 4, 1854. St. Paul: Olmstead and Brown, 1854. http://books.google.com/books?id=cw0yAQAAMAAJ&pg=PA60&lpg=PA60&dq=laws+of+minnesota+1854&source=bl&ots=5RgVUnHhQ1&sig=TqBgLPcYvgKOj204jmcDiMVvCEc&hl=en&sa=X&ei=4EcfU5a9DOjhyQH2yICoCQ&ved=0CGwQ6AEwCA#v=onepage&q&f=false.

Justia U.S. Supreme Court Center. "United States v. Minnesota & N.W. R. Co. - 59 U.S. 241 (1855)."
http://supreme.justia.com/cases/federal/us/59/241/case.html

Related Images

Map reproduced in William Watts Folwell's <em>History of Minnesota</em>, Vol. 2 showing railroad lines in Minnesota as graded, located, proposed, and constructed between 1857 and 1862.
Map reproduced in William Watts Folwell's <em>History of Minnesota</em>, Vol. 2 showing railroad lines in Minnesota as graded, located, proposed, and constructed between 1857 and 1862.
Sepia-tone photograph of railroad construction taken by Benjamin Franklin Upton, c.1868.
Sepia-tone photograph of railroad construction taken by Benjamin Franklin Upton, c.1868.
Oil-on-canvas painting of Henry H. Sibley, 1860.
Oil-on-canvas painting of Henry H. Sibley, 1860.
Black and white photograph of former Territorial Governor Willis Gorman, c.1872.
Black and white photograph of former Territorial Governor Willis Gorman, c.1872.

Turning Point

On July 24, 1854, a U.S. Representative brings charges of fraud against those associated with the recently signed Minnesota land grant bill and calls for an immediate investigation.

Chronology

February 7, 1854

The U.S. Senate passes a bill granting land to Minnesota Territory for construction of a railroad.

March 4, 1854

The territorial legislature charters the Minnesota and Northwestern Railroad to build a railroad within Minnesota Territory.

March 7, 1854

The land grant bill reaches the U.S House of Representatives.

May 6, 1854

In response to growing concern over the power granted to a single company in the initial bill, Henry Sibley writes a second version.

June 20, 1854

The U.S. House of Representatives passes the second bill.

June 29, 1854

The U.S. Senate passes the bill; President Pierce signs it into law.

July 1, 1854

The Minnesota and Northwestern Railroad forms in New York.

July 24, 1854

Questions are raised in the U.S. House of Representatives about the wording of the written bill as compared with the one signed by the President.

August 3, 1854

The second bill, mired in scandal due to unapproved changes, is repealed by the U.S. Congress.