Do you think government should subsidize any business?
COOPERATION BETWEEN GOVERNMENT AND INDUSTRY
The state legislature of 1837 was 20 years ahead of its time. It
recognized the importance of transportation in building the state and authorized a massive
program of internal improvements.
The depression of 1837 and the realities of frontier economics doomed
the ambitious plans. Only one section of track, linking Springfield with Meredosia, was
ever completed, and it was a financial disaster. The underlying assumptions of the
program, however, were sound and would be proven correct (if in altered form) within two
Throughout the 1840s such men as Judge Sidney Breese supported the idea
of a north-south railroad. Since the state could not afford to finance it, Illinois
politicians turned to the federal government. US Sen. Stephen H. Douglas sponsored subsidy
legislation, and after some concessions to Southern interests, got his bill passed in
1850. The first federal subsidy of its kind in the nation's history, the Illinois Central
legislation set the model for future railroad development in the West. The federal
government granted alternating six-mile sections of land along the railroad route to the
state. Sales of the 2,600,000 acres financed construction of the 705.5-mile railroad.
The Illinois Central followed the route originally planned in 1837 with
one important exception. A "branch line" veered off from Centralia to Chicago,
now a growing port on Lake Michigan. Construction of the world's longest railroad (twice
the length of any other at the time) required a work force of 10,000 men. The major
contract went to a group of eastern financiers who owned the- Michigan Central Railroad
when their spokesman, Robert Rantoul, promised the state 7 percent of the gross receipts
from the main line and the branch, an important future source of state revenue. The first
section of track was opened in 1852, and the entire road was completed in 1856.
While the Illinois Central was becoming the wonder of the
transportation industry, Chicago promoters were busy luring new lines to the Lake City.
This ran counter to the official state policy of discouraging any venture which would
benefit other states, a policy largely the work of Alton politicians who hoped to destroy
the dominance of rival St. Louis by diverting rail traffic away from the Missouri city.
Its actual effect was to severely limit railroad development in Southern Illinois.
Chicago ignored the policy, and its boosters actively encouraged
out-of-state lines to extend to and through the city. By the eve of the Civil War Chicago
was the nation's rail capital, the hub of 11 lines. Illinois boasted 2790 miles of track
(only 300 of which were located south of Route 40 compared to 9000 miles for the entire
Confederacy. The premature optimism of the 1837 legislature had been more than surpassed
20 years later, and the pattern of cooperation between the government and private industry
which began with the construction of the Illinois Central was set to open the
trans-Mississippi West by rail.
I don't agree that it is always necessary for government to intervene in private enterprise. Government is necessary for actions not able to be handled by individuals or corporations. This brings to mind: interstate highways and rail, waterways, and the ability to fund standing armies for protection.
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