epressed the condition of
the peasantry in all western Europe.[3] With the lower prices that
resulted when the fertile lands of the western prairies were opened
to the world's markets, the less fertile lands of the older districts
could not compete. Many other changes, of no less moment in
limited districts, resulted from the building of railroads. Local
trading-centers decreased in importance. Villages and towns, hoping
to be enriched by the railroads, saw their trade going to the cities.
Commerce became centralized. Enormous increases of value at a few
points were offset by losses in other localities.

Sec. 6. #Reasons for governmental aid#. The growth of railroads in
America was more rapid than in any other part of the world, but it
did not occur without much help to private capital from governmental
agencies. The railroad enterprise was uncertain, the possibilities of
its growth could not be foreseen, and private capital would not invest
without great inducements. In European countries the railways were
built through comparatively densely populated districts to connect
cities already of large size. Yet railroad extension was very slow
there, even tho the states in many ways aided the enterprises. America
was comparatively sparsely populated, and most of the railroads were
built in advance of and to attract population, business, and traffic.
In many cases railroad building in America was part of a gigantic
real-estate speculation undertaken collectively by the taxpayers of
the communities.

Sec. 7. #Kinds of governmental aid#. American states recklessly abandoned
the policy of non-interference, and vied with each other in giving
railroad enterprises lands, money, and privileges, in loaning bonds,
in subscribing for stock, and in releasing from taxation. These
fostering measures were expected to increase wealth and to diffuse a
greater welfare through the community. Many states were forced to
the point of bankruptcy by their reckless generosity, and some states
repudiated the debts thus incurred.

The national government then took up the same policy and granted lands
to the states to be used for this purpose. The first case of this kind
was the grant to the Illinois Central road, in 1850, of a great strip
of land through the state from north to south. Grants were made in
fourteen states, covering tens of millions of acres of land. Then the
national government, between 1863 and 1869, aided the building of the
Pacif