<P> Collis Huntington, a Sacramento hardware merchant, heard Judah's presentation about the railroad at the St. Charles Hotel in November 1860 . He invited Judah to his office to hear his proposal in detail . Huntington persuaded Judah to accept financing from himself and four others: Mark Hopkins, his business partner; James Bailey, a jeweler; Leland Stanford, a grocer; and Charles Crocker, a dry - goods merchant . They initially invested $1,500 each and formed a board of directors . These investors became known as The Big Four, and their railroad was called the Central Pacific Railroad . Each eventually made millions of dollars from their investments and control of the Central Pacific Railroad . </P> <P> Before major construction could begin, Judah traveled back to New York City to raise funds to buy out The Big Four . However, shortly after arriving in New York, Judah died on November 2, 1863, of yellow fever that he had contracted while traveling over the Panama Railroad's transit of the Isthmus of Panama . The CPRR Engineering Department was taken over by his successor Samuel S. Montegue, as well as Canadian trained Chief Assistant Engineer (later Acting Chief Engineer) Lewis Metzler Clement who also became Superintendent of Track . </P> <P> To allow the companies to raise additional capital, Congress granted the railroads a 400 - foot (120 m) right - of - way corridor, lands for additional facilities like sidings and maintenance yards . They were also granted alternate sections of government - owned lands--6,400 acres (2,600 ha) per mile (1.6 km)--for 10 miles (16 km) on both sides of the track, forming a checkerboard pattern . The railroad companies were given the odd - numbered sections while the federal government retained the even - numbered sections . The exception was in cities, at rivers, or on non-government property . The railroads sold bonds based on the value of the lands, and in areas with good land like the Sacramento Valley and Nebraska sold the land to settlers, contributing to a rapid settlement of the West . The total area of the land grants to the Union Pacific and Central Pacific was larger than the area of the state of Texas: federal government land grants totaled about 203,128,500 square miles, and state government land grants totaled about 76,565,000 square miles . </P> <P> It was far from a given that the railroads operating in the thinly - settled west would make enough money to repay their construction and operation . If the railroad companies failed to sell the land granted them within three years, they were required to sell it at prevailing government price for homesteads: $1.25 per 1 acre (0.40 ha). If they failed to repay the bonds, all remaining railroad property, including trains and tracks, would revert to the U.S. government . To encourage settlement in the west, Congress (1861--1863) passed the Homestead Acts which granted an applicant 160 acres (65 ha) of land with the requirement that the applicant improve the land . This incentive encouraged thousands of settlers to move west . </P>

Why did the government offer each railroad company building the transcontinental railroad land