In the nineteenth century the state of Texas granted 36,214,878 acres of its public lands to encourage various internal improvements, specifically in transportation, the establishment of new industries, and the increase of agricultural production. Among other goals, these improvements were meant to promote population growth, increase land values, and extend the commercial markets for goods produced in the state.
Almost 90 percent of the land granted went to railroad companies. By the time of annexation, many Texans had come to believe that a comprehensive rail system was the key to future progress for their state. In the early 1850s the legislature responded by chartering several railroads. To encourage rapid construction, each charter granted eight sections of public land for every mile of track laid. Very little mileage resulted, however, so in 1854 a general law doubled the sections granted per mile. This legislation, plus a measure passed in 1856 authorizing the loan of state funds to railroad companies, increased railroad construction until the beginning of the Civil War.
Soon after the war the legislature liberalized the land law, but the Constitution of 1869 prohibited further grants to railroads. An amendment in 1873 allowed grants of up to twenty sections per mile built, but the Panic of 1873 discouraged construction. The Constitution of 1876 authorized legislation granting sixteen sections per mile constructed. Such a measure was passed the same year. This law, coupled with economic recovery, stimulated renewed railroad construction. In 1882 the legislature, on learning that little unappropriated land remained, repealed the law. Altogether, forty-three companies received 32,153,878 acres of the state's public land during the three decades. Although, as might be expected, this transfer of a large portion of the public domain into private hands involved a degree of political manipulation and fraud, the grants played a significant role in hastening railroad construction in Texas (see RAILROADS.)
The remainder of the public land granted to encourage internal improvements during the latter half of the nineteenth century, amounting to 4,061,000 acres, was scattered among various persons and corporate enterprises in exchange for carrying out such projects as building roads, constructing and improving canals, digging irrigation ditches, and establishing factories to manufacture goods needed for the Confederate cause during the Civil War. Legislation in the 1850s authorized land grants to encourage the construction of steamboats, steamships, and other seagoing vessels and also to encourage the drilling of artesian wells in South Texas. It is not clear to what extent shipbuilders or well drillers took advantage of this legislation.