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Homestead History
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When the first transcontinental railroad was completed, banners flew in California reading "California Annexes the United States."

n July 2, 1864, President Abraham Lincoln signed an act of Congress that created the Northern Pacific. Though the Northern Pacific didn't receive the enormous loans which Congress had offered to the Union Pacific-Central Pacific, lawmakers did give the railroad the largest land grant in history: over 44 million acres, 17 million of which lay in the Montana Territory. The land grants became a key issue in construction, as the railroads sold off their land to prospective settlers and businesses to finance the project. The projected path of the railroad, from Lake Superior to Puget Sound, crossed what was (and still is) the most sparsely populated areas of the country. The Northern Pacific would have to outdo itself luring settlers to the areas astride its tracks, for, as one railroad executive pointed out, "You can lay track to the Garden of Eden, but what good is it if the only inhabitants are Adam and Eve?"

After languishing for a few years, construction on the Northern Pacific finally began in earnest in 1870. Eastern crews began pushing West from Carlton, Minnesota, and Western crews began pushing East from Kalama, Washington Territory. The directors of the Northern Pacific hired Jay Cooke and Company, famous bond sellers during the Civil War, to promote that the railroad. Cooke devised a mammoth advertising campaign, which proclaimed the route of the railroad (which included the present-day states of Minnesota, North Dakota, Montana, Idaho, and Washington) had a "temperate, invigorating, and mild climate, similar to that of Virginia." Additionally, Cooke and Company cited bogus "scientific" evidence that locomotives passing through the arid Plains stimulated the development of rain clouds, insuring bountiful harvests. Cooke sold over 8,000 bonds to investors, and the "temperate" route of the railroad was soon jokingly referred to as "Jay Cooke's Banana Belt."

By 1873, the Eastern crews of the Northern Pacific had reached Bismarck, Dakota Territory, and the Western crews had reached Tacoma, Washington Territory. Then, disaster struck. Cooke and Company failed to sell enough bonds to support expenses, and its bank failed. On September 18, 1873, Cooke and Company closed its doors, and progress on the Northern Pacific halted, much to the chagrin of homesteaders and other settlers in Montana Territory. In addition to halting railroad construction, the bank's collapse also helped touch off the Panic of 1873, an economic depression that affected much of the country.

Five years later, Frederick Billings (after whom the Montana city is named) and a group of Eastern investors reorganized the Northern Pacific, contributing more than $40 million in new bond sales to the completion of the project. Construction began anew, and soon a new player, railroad speculator and shrewd entrepreneur Henry Villard, would enter the scene.


Transports at landing, White House, Va. Railroad wharf under construction. National Archive.

Villard, born Ferdinand Heinrich Gustav Hilgard in Germany in 1835, emigrated to the United States at the age of eighteen. Villard rose to renown as a journalist, covering such important stories as the Lincoln-Douglas debates and major battles of the Civil War for New York City newspapers. During the Panic of 1873, Villard returned to Germany and met several European investors interested in American railroads. After the Panic, Villard returned to the U.S. as a representative of these investors, and soon had a railroad empire in the Pacific Northwest. In what would today be termed a "hostile takeover," Villard raised over $8 million from European investors, and secured controlling stock of the Northern Pacific. As its President, he would oversee its completion.

Work proceeded at an unprecedented pace. By 1882, the Eastern construction crews reached Montana Territory, entering at Glendive. Four thousand men pushed the railheads deeper into the Territory, creating boomtowns of saloons, restaurants, whorehouses, and stores as they passed. By January of 1883, they had reached Livingston. Work crews blasted tunnels, built switchbacks, and constructed trestles. Though the celebration of the railroad's completion was slated for September 8, 1883, the Northern Pacific -- after all of its trials and tribulations -- was actually completed early. On the morning of August 22nd, the Eastern and Western crews were nine miles apart. By 3:00 in the afternoon, the two crews met and the railroad was complete. This "unofficial" completion did not go unnoticed by Montanans; a crowd of nearly 500 gathered to watch the historic moment, and, as a Missoula newspaper reported, they "came in carriages and dashing turnouts, flitting hither and thither over the freshly mowed greensward."

Company officials, eager for the railroad's gala opening, kept the completion secret. No newspapers east of Montana reported that the railroad was finished, or that a boxcar had followed Lewis and Clark's path in reverse, making the journey across the Northern Plains from the Columbia River to the Twin Cities.

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