James J. Hill
According to biographer Albro Martin, James J. Hill was "the last and greatest American railroad leader in the heroic era." The native Canadian's name became synonymous with railroad innovation and visionary business leadership in the last quarter of the 19th century.
The transportation pioneer of the American Northwest entered the business world not by rail but on the river. Arriving in St. Paul, Minnesota by steamboat in 1856, the young, ambitious Hill, who had lost an eye to an accidentally-shot arrow, had adventurously planned to become an animal trapper and trader. He went to work for a steamboat company instead. Rejected from enlisting in the Civil War because of his damaged eyesight, Hill organized the First Minnesota Volunteers and learned the business of buying, selling, and transporting goods. After the war, Hill went to work for the St. Paul & Pacific Railroad, then started a business to supply it with coal, not wood, for fuel.
By the early 1870s, Hill saw an opportunity to build a railroad system through the Red River Valley. Though he had already become a wealthy man by skillfully managing his fuel company and diversifying into freight management, it was not only personal prosperity he sought. Hill had in mind the economic development of the entire region. He had shrewdly observed the St. Paul & Pacific's failure to capitalize on the region's wealth of natural resources. With no railroad, the Valley was accessible only by boat, and winter ice was often impassable; people living there would have no way to get the supplies they needed to work the rich soil, or to deliver their crops to market. In short, Hill saw the potential of unsettled lands, and understood what settlers would need to make their communities thrive. By fulfilling their needs, he would allow both the region and his railroad to prosper.
In 1879, Hill and a group of business partners took over the bankrupt St. Paul & Pacific, renaming it the St. Paul, Minnesota & Manitoba Railway Company. Tapped to be its president in 1882, Hill displayed the leadership that sealed his reputation as the West's -- if not the nation's -- best railroad manager. With an eye to efficiency and service, Hill upgraded the Manitoba, switching over from wood to coal, replacing old iron rails with new steel ones. In addition, he expanded the railroad into local markets by conservatively yet strategically developing branch lines throughout Minneapolis-St. Paul.
By the end of the 1880s, after extending the Manitoba into present-day North Dakota and Montana, Hill set his sights on the Pacific. Because no other company had tried building on such a massive scale without government land grants or financial concessions, critics derided the scheme as "Hill's Folly." But Hill was determined to find the straightest, shortest distance across the Northwest, even without the federal assistance other railroads had received. "We do not care enough for Rocky Mountain scenery," he said, "to spend a large sum of money developing it." He dispatched John F. Stevens to survey the route, and in December 1889 Stevens located the elusive Marias Pass, the lowest crossing of the Rockies in the region. Taking his road through the spectacular pass, Hill expanded the Manitoba through the Rockies without a tunnel. On the way to the Pacific, in 1890, Hill renamed his railroad the Great Northern Railway Company. That same year, Stevens conquered a second pass in Washington's Cascade Mountains. By January 1893, with the completion of a tunnel through the Cascades, the Great Northern reached Puget Sound. Hill's Folly became Hill's Fortune.
As Hill expanded his railroad, he allowed immigrants, who arrived mainly from Norway and Sweden, to travel across the country on his railroad for $10, provided that they agreed to settle on the route. He offered assistance by arranging for agriculture experts to teach farming techniques on the rough land. Hill's impact was not only on expansion of railroads, but also populations. By encouraging the creation of settlements and towns along the Great Northern's route, Hill set the stage for the region's economic development -- and his own company's assured future -- in the production of agricultural and other products his railroad would carry to the rest of the country. Other Western railroads may have employed similar tactics, but none embraced the concept of settling populations along the railroads as enthusiastically or as thoroughly as did Hill.
The four-year depression that struck America in 1893 spurred a revolution in corporate organization and redrew the U.S. railroad map around increasingly larger systems. Hill survived the crisis by working with other industries to stave off panic among his customers while simultaneously reducing his company's expenses and increasing efficiency.
Hill had always been able to vanquish his competition. But the Union Pacific's E. H. Harriman proved his equal. Harriman upstaged Hill in implementing a central business philosophy of high volume and low rates. Like Hill, Harriman built, maintained, and managed his railroads to a high standard. As consolidation became king at the turn of the century, the rivalry ignited. Hill entered into an alliance with financier J.P. Morgan that by 1900 gave him control of the Northern Pacific in addition to the Great Northern. The following year, Harriman added to his Union Pacific holdings the Southern Pacific, which was then, with its Pacific ship lines, the largest transportation system in the world.
With consolidation going at full force, Hill and Harriman went to battle over the Chicago, Burlington & Quincy, the strongest independent Iowa railroad. Hill wanted the Burlington's extensive network of Midwestern lines, which would create routes between the Missouri River and his Northern Pacific. If he acquired the Burlington, Hill would be able to compete head-to-head with the Union Pacific in the region. Charles Perkins, the head of the Burlington, knew that his railroad couldn't survive independently; eventually the Burlington would merge with either Hill's or Harriman's system. Hill triumphed, and the Burlington was ultimately sold to his Northern Pacific. But Harriman's near-coup, in which he tried to gain control of the Northern Pacific by buying up its stock, created a stock market panic in 1901. Following the panic, Hill and Harriman jointly formed Northern Securities, a holding company; under this arrangement, Hill and his allies still managed to retain control of the company. Northern Securities controlled the Hill Lines and the Burlington, but it was dissolved in 1904 under the Sherman Antitrust Act of 1890, in a controversial 5-4 Supreme Court decision.
In 1907 Hill passed the presidency of the Great Northern on to his son, but he remained active in strengthening the system, acquiring the Colorado & Southern, linking his lines to the Gulf of Mexico, and building the Spokane, Portland & Seattle. Improvements to all of his roads continued unabated.
Until the week before he died in 1916, the man known as the Empire Builder reported to the office for work every day. During his life, his far-flung influence was felt in farming, education, and the arts. Upon his death, the governor of Minnesota honored him as "the greatest constructive genius of the Northwest."