Question

Explain the negative impact of government subsidies for railroads (AP U.S. History)

Answer 1

The government gave subsidies for railroads companies with money from the people, these companies had land grants and received millions of acres of public land meanwhile some people did not have a place to live. The companies sold the land, made money from it and built their railroads. This also increased corruption in the government - historians say that members of the state legislature would deliberately introduce legislation threatening the interests of railroads in his state if the railroad's companies would not pay some sort of blackmail -.

Railroad companies would also use the power to destroy existing competitors in the field and prevented this way the emergence of new ones, for this they used the political connection.

Railroad companies would also create railroad projects with the only means to obtain government cash without any true commercial evaluations. They would pocket money and vanish without building anything.