262 READINGS IN RURAL ECONOMICS 



It would in many respects be preferable for the government to 

 appropriate the proceeds of the lands rather than to give the dis- 

 posal of the soil to the states. A distribution act was passed in 

 1 84 1, by which the net amount received for public lands was to 

 be paid to the states ; but it was repealed so speedily that only 

 about seven hundred thousand dollars were thus distributed. A 

 much larger sum has accumulated, and has been paid to the 

 states under the "two-, three-, and five-per-cent funds." By 

 agreement with each state as it has entered the Union the 

 United States consents to pay over a proportion of the net pro- 

 ceeds of the lands within that state. More than seven million 

 dollars have been allowed under this provision. The deduction 

 is not strictly a gift, since the states in return bind themselves 

 not to tax public land till it has been five years in the hands of 

 a private owner. 



In theory the lands appropriated for internal improvements 

 of various kinds have also been sacrificed, in order to make the 

 remainder more valuable. The Ohio five-per-cent fund in 1802 

 was intended to be applied to the construction of the Cumberland 

 road, which was to be the great avenue for purchasers and settlers 

 from the Atlantic coast. This was the beginning of the system of 

 internal improvement at the expense of the nation ; but in prac- 

 tice Congress built the road out of general funds. It was not till 

 1827, four years after the first river and harbor bill, that direct 

 grants of lands were made in aid of internal improvements. 

 The new and momentous policy began with grants for canals. 

 Between 1827 and 1850 about three million acres had been 

 appropriated to this purpose, principally to secure the completion 

 of the system connecting the Lakes with the Ohio and Mississippi. 

 The jealousy caused by the action of Congress brought about 

 the comprehensive grant of five hundred thousand acres to each 

 "public-land state," to which we have already referred. But the 

 most familiar forms of grants for internal improvements date 

 from 1850. By that year the railroad system had been extended 

 so far west as to penetrate large tracts of unsold lands. Congress 

 aided the extension of the system by assigning to the states of 

 Illinois, Alabama, and Mississippi nearly four million acres, to 



