Why did the US government support rail-road development?

The creation of a system of railroads throughout the entire country was an important aspect of national economic development and national security.  Thus the United States government strongly supported railroad development and subsidized it.  During the early years of the development of the system, though, the creation of the railroads was solely a private endeavor.  It was not until the seventies that a government-owned railroad, Amtrak, began. 

The railroad, which became truly transcontinental in 1869,...

The creation of a system of railroads throughout the entire country was an important aspect of national economic development and national security.  Thus the United States government strongly supported railroad development and subsidized it.  During the early years of the development of the system, though, the creation of the railroads was solely a private endeavor.  It was not until the seventies that a government-owned railroad, Amtrak, began. 

The railroad, which became truly transcontinental in 1869, when the western and eastern railroads finally met, was the nation's first interstate "highway."  Other means of transportation, such as water transport and wagon, were not effective because there was not a means of moving goods everywhere coast to coast via waterways and wagons took a great deal of time and were limited in the number of goods or people that could be carried.  Thus the railroad was key to real interstate development and the settling of the American west.  Goods and materials could move freely through much of the country, and this made the United States more of a national economy than a collection of state economies. In times of war, troops and materiel could be transported more efficiently, which was the case during the Civil War, since even at that point, before the completion of the transcontinental railroad, the north had built up a substantial system of railways.

If you can picture a world before there were cars and trucks, it is easy to see that railroads were what enabled the United States to have a real interstate economy and that the railroads made a great contribution to the winning of the Civil War as well.  It made a great deal of sense for the government to support railroad development.  In many other countries, railroads are nationalized for the same reasons, although the United States has not done this, having only Amtrak as its sole "national" railroad transport.