As migration to the Pacific Coast increased, politicians began to realize the importance of crossing Nebraska. In 1844 U.S. Representative Stephen A. Douglas of Illinois began a campaign to organize the Nebraska Territory to encourage the construction of a railroad to the Pacific Coast. By allowing white settlement on what had been Native American land, Douglas and other Northern leaders hoped to build a transcontinental railroad through their states rather than through the South. He was supported by politicians from Iowa and Missouri, whose people were already moving into Nebraska and who also realized the possibilities for regional growth a transcontinental railroad might bring.
In 1854, after prolonged debate, the Congress of the United States passed the Kansas-Nebraska Act, which created the territories of Kansas and Nebraska and opened much of the land to legal white settlement. The act also provided that the residents of each territory could decide if they would permit slavery, a provision that repealed the Missouri Compromise of 1820, which had prohibited slavery in the area north of 36°30′.
In 1854 U.S. President Franklin Pierce appointed Francis Burt of South Carolina as the first governor of the Nebraska Territory. Burt died eleven days after arriving at Bellevue, however, and Territorial Secretary Thomas B. Cuming of Iowa became acting governor. Cuming chose Omaha, which had been laid out during the summer of 1854, as the territorial capital.
The Nebraska Territory comprised a vast region bordered on the north by the 49th parallel (the Canadian frontier) and on the south by the 40th parallel (just north of Kansas) and extended from the Missouri River to the Rocky Mountains.
Most of the early settlements were located along the Missouri River in the east and along the Platte River. Early immigrants were much more interested in reaping quick profits from land speculation than in farming. Land speculation was encouraged by the debate over which town along the Missouri River would become the eastern terminus of a transcontinental railroad. Until the construction of a railroad connecting Council Bluffs to the East, however, the territory depended on Missouri River steamboats for contact with the rest of the country, and Omaha and Nebraska City prospered from the trade in goods brought up the Missouri on steamboats and shipped in wagons to military posts and mining camps in the West.
Although violence quickly broke out in Kansas over whether or not slavery should be permitted in the Territory, there was little interest in establishing slavery in Nebraska. The census of 1860 showed only 82 blacks in the Nebraska Territory, two-thirds of whom were free. Nebraskans concentrated on settling the land, later encouraged by the Homestead Act of 1862, which promised 65 hectares (160 acres) to families that resided on the land for five years. The first Homestead Act farm was near Beatrice, Nebraska. In 1862 President Abraham Lincoln also signed the Pacific Railroad Act, which authorized the building of a transcontinental railroad that would pass through Nebraska. The act gave to the Union Pacific Railroad huge tracts of land along the proposed railway. The railroad then sold this land to settlers, thereby encouraging immigration and providing money to build the railroad at the same time. Under these two laws and subsequent acts about half of Nebraska’s public lands were transferred to white settlers. "Nebraska" © Emmanuel BUCHOT, Encarta, Wikipedia
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