Checkerboarding in the West occurred as a result of railroad land grants where railroads would be granted every other section along a rail corridor. These grants, which typically extended 6 to 40 miles (10 to 64 km) from either side of the track, were a subsidy to the railroads. Unlike per-mile subsidies which encouraged fast but shoddy track-laying, land grants encouraged higher quality work, since the railroads could increase the value of the land by building better track. The government also benefited from the increased value of the remaining public parcels.
Railroad land grants split the land surrounding the area where train tracks were to be laid into a checkerboard pattern. The land was already divided into 640-acre sections (260 ha) according to the Public Land Survey System; odd-numbered plots were given to private railroad companies, and the federal government kept even-numbered plots.
The federal government believed that because the value of land surrounding railroads would increase as much as twofold, granting land to private railroad companies would theoretically pay for itself and also increase the transportation infrastructure throughout the nation. The U.S. government was not able to sell much of the land that it retained because settlers willing to move West were not wealthy. The wealthiest United States citizens of the 19th century remained in the East. The federal government eventually gave away much of this land through the Homestead Acts.