At the same time that homesteaders were getting free land from the government, large tracts of land were granted to railroads by both the states and the federal government. The goal was to encourage the railroads to construct their tracks where few people lived, and to help settle the country. The federal government was especially interested in creating a transportation system that would link the eastern seaboard with the western coast. Not only would a transcontinental railroad help populate the Great Plains, but it would tie the country together and also provide links to the potentially rich Asian trade.
Approximately 16 percent of Nebraska's total land mass was given to various railroad companies, either by the federal government or by the state. Along the lines of the state's two major railroads, the Union Pacific and the Burlington, every other square mile of land (called a "section") went to the railroads. This checkerboard of land extended back twenty miles on both sides of the track. So, the railroads owned a total of twenty sections of land for each mile of road constructed.
Thousands of pioneers traveled to and through Nebraska in covered wagons. But after the first railroad was completed across the state in 1867, thousands more took the train to Nebraska. With the completion of the transcontinental railroad in 1869, people could travel from coast to coast in relative luxury. The Oregon Trail was gradually abandoned. Railroads encouraged settlers to move to Nebraska and had a tremendous impact on settlement.