Subsidy, << SUHB suh dee, >> is a money payment or other form of aid that the government gives to a person or organization. Its purpose is to encourage some needed activity by furnishing funds, free land, tax relief, or legal rights that might otherwise be lacking.
In the 1800’s, the United States government gave large tracts of land to the railroads on the condition that they would build lines across the continent. Altogether, the railroads received about 160,000,000 acres (64,700,000 hectares) of land in this way. The government also granted subsidies to telegraph and cable companies. In the 1920’s, it granted subsidies to ship companies. It gave them generous mail-carrying contracts and allowed them to buy government-owned ships at a fraction of their actual cost. Government airmail contracts have also aided the airlines since the 1920’s.
Federal, state, and local governments award subsidies for a variety of activities. Taxes on goods imported into the United States are indirect subsidies to U.S. manufacturers who make the same kind of goods. Subsidies also help finance many schools. Subsidies are sometimes improperly awarded to gain the political support of those receiving the aid.
