hi-,-

YALE UNIVERSITY
LIBRARY

DEPOSITED BY THE

LINONIAN AND BROTHERS LIBRARY

THE LIFE OF
JAMES J. HILL
VOLUME I

JAMES J. HILL
At about 35 years of age

THE LIFE OF
JAMES J. HILL

BY
JOSEPH GILPIN PYLE
AUTHORIZED "

ILLUSTRATED

VOLUME I

GARDEN CITY NEW YORK
DOUBLEDAY, PAGE & COMPANY
1917

COPYRIGHT, 1916, 1917, BY
DOUBLEDAY, PAGE & COMPANY
ALL RIGHTS RESERVED, INCLUDING THAT OP
TRANSLATION INTO FOREIGN LANGUAGES
INCLUDING THE SCANDINAVIAN

PASSWORD
"Make it plain and simple and true."
This was the instruction, and the only one, given
by James J. Hill to the writer of these volumes.
They are an endeavour to realize that ideal and to
fulfill that trust.

AUTHOR'S NOTE
The principal and richest source of material for this
work was the letters, papers, and other documents of
Mr. James J. Hill, placed at my disposal by him during
his lifetime for this purpose; his answers to my ques
tions, and his conversations with me, at different times
during the ten years prior to his death, about the
various phases of his work and his thought.
I wish to acknowledge also with gratitude the valu
able assistance I have received from others, both before
and since that date. The members of Mr. Hill's family,
many of his old friends, later associates, and co
workers have been generous in their contributions of
fact. Since in only a few cases was it practicable to
give personal credit in immediate connection with the
information they supplied so willingly, I take occasion
here to thank them all for invaluable aid in setting
forth clearly and accurately the facts and the meaning
of Mr. Hill's life.
Greatest and deepest of all is the debt I owe in the
production of this book to her whose sympathy and
understanding have been to me continuing strength
and inspiration, my wife. J. G. P.

CONTENTS VOLUME I PAGE
Password  v
Author's Note  vii
CHAPTER I Life's Beginnings  3
II Arms and the Man  24
III Labour and Love  50
IV Getting into the Game .... 66
V The Forgotten, Memorable Years . . 83
VI Journeyings and Adventurous Days . 106
VII Early Railroad Development in the
Northwest  131
VIII The St. Paul and Pacific . . . .151
IX The Genesis of an Idea . . . .168
X The Idea Takes Form and Substance . 184
XI The Tangled Web of Negotiations . . 209
XII The Purchase and Its Obligations . .231
XIII The Breathless Year  252
XIV The St. Paul, Minneapohs and Manitoba 277
XV Building the Canadian Pacific . . . 298
XVI Four Years of Fatness  327
' XVII Finances and Farmers  349
XVIII Westward Ho!  377
XIX A Peak in Darien  402
XX The Great Northern  435-
XXI Capital and Cheap Money .... 470
ix

LIST OF ILLUSTRATIONS
James J. Hill. At about 35 years of age
Photogravure Frontispiece TACING PAGE
A Boyhood Portrait of Mr. Hill  112
Mrs. James J. Hill. From a photograph taken
in 1888  256
"Commodore" Norman W. Kittson, Mr. Hill's
partner in the steamboat business on the Red
River  368

THE LIFE OF
JAMES J. HILL
VOLUME I

CHAPTER ONE
LIFE'S BEGINNINGS
\THE forerunners of James J. Hill were of that sturdy
stock, close to the soil and bound by life's homely duties,
on which from time to time genius flowers]^ There was
among them no prophecy or hint of coming greatness.
But in their veins was the blood of the Celt, which flows
naturally toward greatness because, for it, all things are
possible. The imagination, the fervour, above all the
insight into the future through perceptions raised to
an almost uncanny power that gave form to his life
plan and coherence to his work are a part of the dower
of race. Apparently they were this boy's sole inheri
tance of distinction.
Forty miles west of Toronto lies the little village of
Rockwood, containing to-day a population of perhaps a
thousand people. It is in the township of Eramosa, to
which came, from Ireland, in the early part of the last
century, the Hijls and the Dunbars. Mr. Hill's grand
father was James Hill, of Mar's Hill, Blackwater River,
Armagh, Ireland. His grandmother was Mary Riggs
of Newry, in County Down. They migrated to Canada
in 1829, coming out to the brother-in-law of Mr. James
Hill, a Colonel John Riggs, who lived on the shore of 3

THE LIFE OF JAMES J. HILL
Lake Ontario, an officer who had served with distinction
in the English army. Another uncle of James J. Hill
was Admiral Warren Riggs, who was killed in a battle
off the coast of Ceylon. A third was an Episcopal
clergyman in Armagh. All told, there were four boys
and four girls in the family of Mr. James Hill , of whom
James Hill, the father of James J. and the second oldest
boy, was born August 1, 1811.
The father was one of the earliest occupants of what
were known as the Canada Company's lands. He had
settled with his family on a section of land near Guelph,
in what was subsequently the county of Wellington.
From him his grandson inherited some marked physical
and mental characteristics. Those who knew him speak
admiringly of his tremendous force of character. He
had the powerful voice, the constitution of steel, and the
will of adamant that reappeared in the second genera
tion. He was especially distinguished for love of hos
pitality and hatred of any form of injustice. Of his
wife, those who remember her sum up everything good
that can be written of any one in calling her a Christian
gentlewoman. The Dunbars, the family of James J. Hill's mother,
were originally from Scotland. The Dulmages, or
Delmage as it is sometimes spelled, from whom
they descended, had landed on the west coast of Ire
land in the seventeenth century, and, later on, were
induced with encouragement from the Government, to
4

LIFE'S BEGINNINGS
start a woollen factory at Templemore. There the
Dunbars, five brothers and two sisters, grew up and all
of them came later to Canada. Anne Dunbar left
Templemore, in Tipperary, and came with the others to
the new western country in 1832.
Among the children of the two families thus trans
planted to new soil ready to receive the longing and the
hope of that distracted fatherland across the sea, were
these two, James Hill and Anne Dunbar, man and maid,
just strong, simple, wholesome people, such as the Old
World gave to the New in that generation|| They were
neighbours; and acquaintanceship ripening rapidly into
a deeper feeling, they were married at Eramosa, Ontario,
in 1833. Both had been reared on farms; and upon fifty
acres of land, within two miles of Rockwood, James Hill
and his wife settled down to the common life of the
people of the frontier.
The two families were poor and the conditions of life
were those familiar to all America, outside of a few large
cities, in that era. The young couple lived in a log
house which was put up by the husband right in the
bush, as they called the forest land. He split the
shingles for it, and tilled the soil for a living. His wife
often said later that the happiest day of her life was
when the last tree that could reach as far as the old log
house, if it fell, had been cut down; then she felt safe.
Here were born, in the little log house, the four
children, of whom James Jerome Hill was the third. 5

THE LIFE OF JAMES J. HILL
A boy born earlier and also called James had died, and
the tradition that the oldest son should always be so
named held good. His sister, Mary EUza, the oldest
child, was born on Christmas Day, 1835, and died June
25, 1905. She married John Brooks, a neighbouring
farmer, and had thirteen children. The youngest of the
three, A. S. D. Hill, was born September 6, 1839. He
married Emma Day and had four sons, of whom three
grew to manhood. Mr. A. S. D. Hill lived on the old
farm until he was of age, when it was sold. He taught
for twenty-five years in the schools of Rockwood and
neighbouring places, but the pull of the land was always
strong and he eventually settled back into the congenial
life of the farm. He farmed five hundred acres of land;
a strong, active man, interested in life and bearing a
decided physical resemblance to his brother. To his
remarkable memory many of the details of their early
family life given here are due.
In 1848 the Hill family moved to Rockwood and
kept a smaU hotel until the death of the father. James
Hill died December 25, 1852, and his wife survived him
until December 18, 1876. After her husband's death
she removed, with her children, to the town of Guelph
and hved there until she died, f James J. Hill's father
was industrious, plodding, a Type of the millions
who have subdued a continent, content to live labor
ious, unmarked days and to die unknown^ ; His
mother was of strong character and intense tempera-
6

LIFE'S BEGINNINGS
ment, but with the limited outlook and unawakened
ambitions that marked the earliest pioneers., James
J. HiU inherited from her, whom he most resembled,
many of his striking qualities. The necessities of life
were paramount; and to have won a vantage ground
from the wilderness and opened wider possibilities to
the children took the place of those larger but, perhaps,
not worthier conquests shaped by the ideals of a later
age. Quiet, competent, undistinguished, useful people,
they understood themselves and the world better than
most, and found the best gift of life in harmony between
their outward lot and the individual quality and the in
dividual limitations.
Upper Canada was different in no essential at that
time from western New York and northern Ohio.
The environment was the same that furnished suste
nance and stimulus to a generation which left an
indelible mark upon the history of this country. Life,
though strenuous in the old sense, a constant struggle
to wrest from nature the simple living which was the
time's measure of prosperity, was uncomplicated. The
new industrial era was not yet born. The railroad itself
was a novelty only a little more substantially practical
than the airship is to-day. The soil was the universal
resource for industry. iThe family was the social unit,
impaired only when some adventurous spirit broke the
ranks, leaving doubt of mind and quaking of heart
behind him. And the family life itself was as patriarchal 7

THE LLFE OF JAMES J. HILL
as it had been in rural England or Ireland for centuries.
The farm supplied most of the necessaries of life; a
few came from the village store; and the local shoemaker
and tailor made their periodical rounds, took measures,
and furnished the remainder. Children grew up with
strong bodies, clear faces, steady nerves, and minds sen
sitive to new experiences.
f There was nothing to create or rouse ambition.
About were homely surroundings, hill and valley, farm
fields and woodlands, with the village as the only
opening to larger vistas?^ With its single straggling
street it is to-day littlfe different from what it was
seventy years ago. But then the outer spaces were
more distant, the silences more profound. The weekly
newspaper was still a luxury. V^The rumble of the world,
so different even at its intensest centre from the roaring
activity of to-day, did not penetrate country fastnesses.
Life was quiet, ruminant, without initiative. Futile
aspirations were not drawn out as they are now by the
existence of a world atmosphere through which throb
constantly the vibrations of a general consciousness and
a vivid common life. But, on the other hand, actual
genius of any type must be sensitive indeed to hear its
call through all the mufflings of circumstance.
In that day children grew like other products of
nature, and one forced his way into the thick of events
only as the lord of the forest overtops his fellows r^by
virtue of that mysterious natural selection which gives

LIFE'S BEGINNINGS
to one seed germ rather than to another itspotency of
surpassing vigour and capacity for growth.! James J.
Hill, the second child of these parents, was born into
this environment September 16, 1838. He was not
notably precocious but, from his earliest days, exhibited
one tendency that persisted in the man to the end of his
life and was one source of his wonderful fund of informa
tion. He was desperately fond of reading. Although
bright and active and ready for sport, books drew
him more strongly than play. He started to school
at five years of age. The journey of two and a half
miles through the bush to the district schoolhouse was
nothing to a child of that time in that part of the
country. The settlement was largely comprised of
members of the Society of Friends, commonly called
Quakers, and his first schoolmaster was an old man,
John Harris, a Quaker born in Cork, Ireland.
James Hill was a well-to-do man, according to the
standards of his time. This meant that by constant
labour his farm could be made to give to his family all
the comforts considered essential in that day, and to his
children such education as the community had to offer.
In scope this was meagre; in quality, admirable as com
pared with the more pretentious but less thorough in
struction of our own time. The little boy in whom none
remarked unusual precocity or promise had grown to
school age, and the question of education became practi
cal. Any old school register tells the story of country 9

THE LIFE OF JAMES J. HILL
school life in Canada sixty years ago. It differed little
from that familiar to the generation of Americans now
past the prime of life. The day's work began with read
ing from the Bible, and there was a distinct though
indirect religious influence, in all the teaching done.
School work was held secondary to the real business of
life, which was to help in the duties of the farm and
home. A bad storm, the rise of sweet sap in the
maples in spring, any one of a score of such events as mark
the calendar of the rural year, put the school in the back
ground and impeded its work. Only elementary sub
jects, as a rule, were pursued. Many parents objected
to teaching the elements of Latin, then almost univer
sally regarded as the foundation for all higher mental
development. As many scoffed at English grammar as
a useless refinement. The school was a sternly practi
cal affair, constituted' for practical uses. The aver
age salary of the teacher was £55 per year; and for
this sum, insignificant even in those days, the com
munity must usually take its choice between some up
start youngster, using his little stock of knowledge as a
ladder to lift him to the academy and the college, and
the incapacitated clergyman or unsuccessful adventurer
in business or one of the professions. Hundreds of
country schoolhouses gave over tens of thousands of
children to such inspiration as failure has to offer.
James HiU sought something more than an ordinary
education for his oldest boy. It was one of the first
10

LIFE'S BEGINNINGS
characteristic notes of both father and son. This deter
mination, so common in our time, was comparatively
rare in farthest Canada in the 'forties. It existed only
where there was a special quality both in the old genera
tion and in the new. Most men of hmited education
held firmly that what was good enough for them was
good enough for those who came after them; and that
the higher education was, when not positively dangerous,
a waste of time and money. Most children were only
too eager to get away from the atmosphere of the school
room altogether, and to rebel against or misuse the larger
opportunity. The fact that young Hill was from the
very beginning an exception to this rule is proof of the
existence and appearance in him already at this tender
age of unusual qualities of mind — quick perception, in
stant absorption of elementary knowledge and thirst
for more; and in his parents of an appreciation which,
however far it may and must have been from any pre
vision of the development and grasp of this young mind,
was at least a sufficient consciousness of its divergence
from the average. It was something worth care and
cultivation. It merited transplanting into a richer
soil than that of the ordinary village school. To such a
district school James J. Hill went until he was eleven
years of age. Then occurred the first critically decisive
event in his life. The circumstances of the father and
the eager mind of the son made fitting a larger educa
tional outlook. The opportunity for it came in the 11

THE LIFE OF JAMES J. HILL
institution of a private school, Rockwood Academy, to
which the boy was transferred. This school was started
by William Wetherald, a Quaker, and supremely fortun
ate was the relation established between him and his new
pupil. Most men who have made their mark in the
world can trace their mental awakening to the touch of
some understanding mind in earliest youth. This office
WiUiam Wetherald performed for James J. Hill; and the
relation thus formed was so close and fine that death
alone could impair it.
Wetherald was an Englishman of good birth, with
Quaker ancestry and a college education. Such men,
three quarters of a century ago, were to be found in
charge of the academies which then furnished nearly
all higher education. The public school system
as we know it to-day had no existence. Colleges
were few and small, the American university a rare
and feeble growth. Every boy ambitious to learn
looked to the academy for education. And these
institutions, often more complete in their methods
and more admirable in their adaptation of work to the
bent of the individual student than the secondary
schools of our time, were everywhere. The relation
between teacher and pupil was personal. The sacrifices
necessary before a child in a community where all were
poor could enjoy these advantages made them a coveted
privilege, instead of a hated burden or a mere conven
tional social veneer. Boys worked hard and studied
12

LIFE'S BEGINNINGS
hard, and must give evidence of sound mental stuff
besides, before they could aspire to the academy.
And the teacher in charge, called "Professor" only by
those who aped the fine jargon of a more artificial
society, conceived himself called to the noblest mission
and honoured by the highest responsibility given to men.
Such were the fitting-schools where young men and
women of that generation, sometimes in coeducation
but mostly apart, were prepared for the function of inde
pendent thought and the trade of useful and noble living.
During his formative time, the period of burning, in
destructible impressions, of mental fluidity joined with
dawning fixity of intellectual purpose, James J. Hill was
under the influence of this remarkable man, William
Wetherald. Starting with a few pupils who were ambi
tious of something better than the district school could
offer, Wetherald soon found the number growing as his
reputation as an instructor spread. So Rockwood
Academy was founded, and there the mind and spirit
that were to compass a work so mighty were forged and
tempered by a master hand. Probably no other human
being, down to the time when he became the centre of a
family of his own, not parents or friends or associates,
understood this boy as did his Quaker schoolmaster.
And his capacity for helpfulness was freely exercised and
never forgotten. Under this direction the boy pur
sued the ordinary English studies with Latin, a very
little Greek, algebra, and the beginning of geometry. 13

THE LIFE OF JAMES J. HILL
At that time, in addition to the elementary studies of
reading, writing, geography, and grammar, the entire
essentials of a good education were acquaintance with
mathematics and the classics; but the material to work
with was always secondary, the first requirement was
thoroughness. The mind was treated as an implement;
like the hand which, when trained to the limit m supple
ness and muscular control, would be fit for anything
because it had been made fit for all. Mental discipline,
not mental craftsmanship, was the ideal. As a "sys
tem" this educational method would seem to-day
poverty stricken and incomplete. As a method of assur
ing the best possible intellectual product it has never
been surpassed. Under it James J. Hill spent four busy,
happy years at Rockwood Academy. He was quick
to learn and incessant in application. At fourteen years
of age his formal education was finally broken off.
After that time his only schooling was to be contact with
the world; but through all his after life his powerful
mind moved in the grooves then appointed for it, and
wrought upon its new material with all that these years
had given to it of precision and of power.
Another influence was at work during this period —
the magic touch of character upon character. In the
attraction of opposites or some like obscure law may
possibly be found the explanation of the extraordinary
impression that the Quaker system makes upon the
mind of youth. This gray creed of soberness in act
14

LIFE'S BEGINNINGS
and quietism in thought does not hold the restless years
in leash. Boy and girl rush into livelier, less rigidly
governed living, as the sparks fly upward. But its
effects persist. No other training, not even that of the
convent, fixes more firmly the mould that gives charac
ter its final shape. William Wetherald was a man of an
incorruptible rightness of spirit. He chose deliberately
what seemed to him the best things, without regard to
the world's valuation. We are fashioned so largely
by our standards that this example of plain living and
high thinking in the master had more permanent effect
than any rule of discipline or all the lore of books.
Thirty years after this discipleship James J. Hill, then
firmly seated in control of what he was to make the
greatest enterprise of his day, and busied with a thou
sand cares, addressed William Wetherald at his home
in St. Catherine's as "My Dear Old Master." In the
height of his prosperity he begged his old teacher to
pay him a visit. "I have a nice little family of children
and my good wife will be more than happy to have you
as our guest. I have looked forward for some years to a
time when I could have you pay us a visit and renew
some of the days that were spent so pleasantly under
your care. Again let nothing prevent your coming to
visit your old pupil." This from the man of forty-
three, to whom all eyes were turned because of the dar
ing masterstroke that had already set him in places of
command! It is the tribute of a soul that knows and 15

THE LIFE OF JAMES J. HILL
rejoices in its obligations. And after this visit had been
paid, Wetherald wrote back that he had thought much
of the children whom he had seen growing up in the
family in St. Paul and of their right education. He
photographed himself and disclosed for the world the
sort of sway under which the early years of James J,
Hill had been passed in this sentence: "Knowledge,
after all, is to the teacher only what colours are to the
artist; tact, insight, patience, and sympathy are needed
in order to give a fitting relation to light and shade and
develop a perfect picture." Up to its fourteenth year, a
mind singularly virile and a potential activity whibh had
by that time received its strongest directive impulses
were committed by providential fortune to this simple,
straightforward, and noble soul, who still signs himself in
the trembling fines of age, "Thy old friend and teacher."
Meantime the home life was as simple and serene as
the growth of mental strength, and social life on the
frontier was what it is in any primitive society. Work
was the order of the day, but the evenings were free.
Occasionally a party of young people would pile into a
sleigh, go to some neighbour's house, and dance until
midnight. There were the picnics and celebrations
which make the events of the year in all rural communi
ties. There was also the life in the open air whenever
opportunity offered. The boy was fond of all outdoor
sports, but especially of shooting and fishing. At that
time he became a fine shot and an expert with the rod;
16

LIFE'S BEGINNINGS
tastes which were to be strong in him always and to
furnish him with intense joy in the few periods of relaxa
tion that he permitted himself in his busy years. His
father had always intended that he should be a doctor,
and he himself was not averse to that future. But the
accidental stroke of an arrow in boyhood deprived him
of the sight of one eye. This was as serious an obstacle
to the plan as was the death of his father and the conse
quent interruption of his studies. His parents were
both deeply religious people; the father was a Baptist
and the mother a Methodist, but the strong faith of
both, uniting upon a common basis of essentials, gave
the children that broad certainty of a moral and religious
order in things which was one in the deepest facts in
the mind and heart of Mr. Hill.
His books were few. Nowhere, at that time, outside
of cities, were there libraries or access to general reading
matter. Few people in the country took a newspaper;
few households possessed any other books than some
collections of household recipes or common remedies.
The Hill home was more fortunate. It made up in
quality what was everywhere lacking in quantity. Its
literature consisted of the works of Shakespeare, the
poems of Burns, a dictionary, and the Bible. After
all, a boy who grows up thoroughly familiar with all
these is furnished with no mean literary equipment and
no doubtful standard of taste. When young Hill was
thirteen or fourteen years old he got hold of a Life of 17

THE LIFE OF JAMES J. HILL
Napoleon. This interested him immensely, and pos
sibly had more or less influence upon his future. Here
his already dawning idea, that if a man made up his
mind to do a thing it was already half done, was con
firmed. And William Wetherald had opened to him the
wider field of what was then, and to some great extent
stiU is, the world's best literature.
Responsibility came just at the time when it would be
most valuable in strengthening the lines of character,
without the distortion that may follow the pressure of
crushing circumstance. In 1852 James Hill died; and
the event, maturing rapidly a thoughtful boy, altered
outwardly the whole aspect of his life. The burden of
family care was now shifted to the mother's shoulders;
and James J. Hill was not one to bear the thought of a
too great sacrifice in that quarter. His purpose was to
help; and the hope of a professional life yielded at once
to the practical suggestion of the changed situation.
He refused to continue at school, though both mother
and teacher urged it, at the price of becoming an ad
ditional charge upon the household. For the next
four years he was employed as clerk in a village store.
This was no empty or useless season. The bent of his
mind was fixed. Work already acted upon him like a
tonic. And at night and on Sundays, in every leisure
hour, he read and continued his studies. His wise guide
was still near, and he had the advantage of Wetherald's
advice and suggestion. But he was now for the first
18

LIFE'S BEGINNINGS
time measuring his strength a little against the world,
and the experience was stimulating.
To this time belongs the interesting recollection of
Mr. W. J. McMillan, who was at the time of Mr. Hill's
death a conductor on the Great Northern Railway, grown
old in the service, the head of the Veteran Employees'
Association, and one of Mr. Hill's most devoted men.
Mr. McMillan said that he first met Mr. Hill when he
was taking a party of guests over the road. The latter
addressed him with that unfailing friendliness that he
always showed to his men, especially when they had
been long with him, and asked him if he had not been a
raihoad conductor before and where he had worked.
"Yes," said Mr. McMillan, "on the Great Western of
Canada." "Then," said Mr. Hill, "you must have been
in Guelph." Then he asked him if he remembered
a little grocery store near the track, and said that was
where he earned his first money.
After four weeks' work his Scotch employer, on
Saturday night, put his hand on his shoulder and said,
"James, ye hae done right weel. If ye keep on, ye'U
mak' your way in the world." Then he handed him
an envelope. The boy hastened home to give the
four dollars it contained, his pay for his first month
of hard work, to his mother. "I never felt so rich,"
he said, " I never expect to feel so rich again in my life, as
when I looked at those four dollars and when I handed
them over to my mother." Formal education was trans- 19

THE LIFE OF JAMES J. HILL
formed into a process of severe self -instruction, never to
be interrupted even by the demands of such care and
responsibility as rarely centre in a single individual.
Moral and intellectual manhood were ripening.
Already the early environment had been exhausted; it
had contributed to development all that it had to give.
Already the eager spirit projected itself afar. The mind
of the boy, fed by historical reading, full of Plutarch,
saturated with the melody of Lalla Rookh, breathing
free air with Byron, creating its own congenial environ
ment, had been drawn to that field which has always
fired imagination and with which some of the great
projects of the man were to deal — the Orient. Youth
built its romance about India; and when young Hill
determined to leave home and make for himseff a work
in the world, it was with the more or less fixed idea in his
mind that he would venture to the region where both
Alexander and Napoleon had found their lure. At that
time any youth whose daring stretched to projects like
this turned to the sea as his only highroad; and it was
with the idea of shipping as a sailor that James J.
HiU began his journey into the unknown. He had
saved but little capital to finance his adventure. His
earnings had been given gladly to help his mother.
The boy of eighteen started out with little other equip
ment than a sublime faith in himself and his future. He
struck southward, but his money gave out when he was
near Syracuse, New York. There he obtained tempo-
20

LIFE'S BEGINNINGS
rary work with a farmer and earned enough to start him
again on his way. He went slowly through the state of
New York, reached the seacoast, visited Philadelphia
and Richmond, but found no suitable opportunity for
carrying out his original scheme. In the meantime a
more adventurous plan suggested itself to him and was
approved as an enlargement of experience and a sus
tained invitation to opportunity.
In every distinguished life appear movements and
events which, looking backward, we call, for want of
understanding of the universal scheme, happy accidents
that colour all the after years. Such, in the life of
James J. Hill, was the trifling circumstance that among
his schoolmates at the Rockwood Academy were some
boys from the Red River settlement, and one from the
far Canadian west, now the Province of Alberta. A
visit to them had been talked of; and the suggestion
in those days, when the interior of the continent was still
as the Stone Age left it, carried romance. Moreover, the
visit could be fitted into the general plan. Dissatisfied
with the chance of escape into new worlds by the
Atlantic seaboard, he recurred to the idea of making the
trip across the plains and sailing from the Pacific coast to
the Orient. So westward the star of his life led the way.
Comparatively recent as is the date, it requires an
effort to recall the meaning of such a journey into such
a country in 1856. In 1838, the year when James J.
HiU was born, Joseph N. Nicollet, the French as- 21

THE LIFE OF JAMES J. HILL
tronomer and explorer, with whom was John C. Fre
mont, had completed his explorations and made the
first reliable map of the upper Mississippi country.
The Pathfinder was the first RepubHcan candidate for
President in the year when this boy's western trip ended;
the region he had helped to explore was still the far
frontier. Chicago was an outpost of civilization. Be
yond that one must make his way to the Mississippi,
take steamboat to the head of navigation, and join the
Red River brigade of trappers and traders that made
trips during the season between the settlement at St.
Paul and those about Lake Winnipeg. Thence the way
westward across the plains led into vague distances of
adventure. Young Hill, full of his scheme, passed
through Chicago when the walls of the Massasoit House
were rising, and arrived at St. Paul, July 21, 1856, only
to find that the last brigade for the Red River had left
on July 5. Mr. Hill said in later years : " Major Hatch,
whom some of the old settlers will recall, had been ap
pointed agent for the Blackfeet Indians. I came in
the middle of July, and it was so late in the season that
he could not reach the Indian tribe of the eastern slope
of the Rocky Mountains, the agency of which had
recently been conferred upon him, and he had to wait
untU next year and go by way of Fort Garry, over the
plains with the hunter to the head of the Saskatchewan
and Reindeer, and so on into the country where now it
takes thirty hours to reach. At that time the trip

LIFE'S BEGINNINGS
would consume at least three months." There would
not be another departure untU the foUowing spring,
and he settled down to pass the winter in some occupa
tion that would employ his restless vigour and secure
to him means of support which were now exhausted.
But the journey, the independent contact with people,
the inspiration of travel, and the play of free circum
stance had, in nearly a year of wandering, conferred a
second and different education; one instant, imperative,
lasting. He was now marooned in St. Paul, the little
trading station at the head of navigation on the Missis
sippi; could make no further step toward the Red River,
the Pacific, the Brahmaputra, or the Ganges for many
months. He must wait there, and incidentally he
must work for a living, until another spring should
bring the train of creaking bullock carts down from the
north and set him on his way. The vision of boyhood
was never entirely to be fulfilled. In the newest instead
of the oldest world his lot was to be cast; and while, in
years to come, his ships were to ride in the harbours
of Cathay, to-day the circle of prosaic life was bounded
by the muddy levee of a little trading settlement whose
name had only lately shaken off the indignity of "Pig's
Eye" and become "St. Paul." Transplantation had
been effectively accomplished; and the strong shoot was
left to gather maturity and fitness for its purpose in the
new soil where it was one day to tower aloft as lord of
the forest. 23

CHAPTER TWO
ARMS AND THE MAN
JAMES J. HILL arrived in St. Paul, July 21, 1856.
An alien by birth, without an acquaintance or a friend,
without means of support, he was left upon the con
fines of civilization to make terms with his new environ
ment. One can almost fancy the ironic humour of
Destiny observing these insignificant conflicts out of
which mighty things were to be born. With difficulty,
however, since events now move so swiftly, can one
frame a true picture of the Northwest as it was in the
middle of the last century. From this remote outpost
only a few high spirits were gazing at the beacons lighted
on the Pacific by the recent discovery of gold in Cali
fornia, across the expanse of what all except some
enthusiasts, who were tacitly accepted as fanatics,
agreed to dismiss with finality from future consideration
as "The Great American Desert."
In 1856 St. Paul was a little town of from 4,000 to 5,000
people. The territorial census of 1855 optimistically
gave it 4,716. Minnesota Territory, of which St. Paul was
the capital, contained from 100,000 to 150,000 inhabit
ants. The federal census of 1860 made it 172,000. Its
limits included the present area of the state together with
24

ARMS AND THE MAN
the country now embraced in the Dakotas, to the Mis
souri and White Earth rivers. Its industries, agricul
tural, lumbering, and fur trading, were, with the exception
of thedast-mentioned, mostly local. Means of communica
tion with the outer world were too circuitous and slow to
permit rapid development. At the World's Fair, held in
New York in 1853, the contributions from Minnesota
consisted, exclusive of daguerreotypes, unmanufactured
products of the country, furs, grains, minerals, and In
dian curiosities, in all amounting to sixty-two different
articles. Settlement was confined to the river valleys.
Along the Mississippi and the Minnesota were rich
farms and flourishing villages. Back of these were the
open prairie and the Big W^oods, where the Sioux and
the Chippewa still lorded it undisturbed. The Red
River Valley, which was to play so important a part
in the new commonwealth and to witness the first
great achievement of the raw boy now hunting for
employment on the streets of St. Paul, was as desolate
as nature had made it. From east to west, from north
to south, it was known only to the Indian and the half-
breed; a level waste, the home of buffalo and antelope,
the hunting ground of the fox and the woff. One
might travel from the headwaters of the Bois de
Sioux down to the Red River and follow its course
to Pembina without meeting a human being or a
domesticated animal. Farther south 'this condition
varied only as, year by year, new settlers pushed 25

THE LIFE OF JAMES J. HILL
out from their base of suppUes along the larger water
courses. Life was primitive in its isolation. The upper Missis
sippi River country had as yet no rail communication
with the East. All intercourse between them was by
way of Galena or some other Mississippi River point,
and thence to Chicago. The air, it is true, was full of
great projects and a few certainties of development.
In 1856 a railroad was aheady built for one hundred
miles west of Chicago, with promise of reaching Prairie
du Chien in another year. Another was building from
Milwaukee to the Mississippi. Everything was grow
ing. The amount of public lands entered or located by
warrant in the territory in 1855 was more than a miUion
and a quarter acres. This, the most fertile land in the
world, was valued at about one dollar per acre. But
there was not a foot of railroad in the territory, and
industry necessarily was restricted to its crudest forms.
St. Paul was a typical river town of the period. Its
first inhabitant dated from the year when Mr. HiU
was born. Founded by the natural law which placed
a settlement at the head of navigation of every river, it
had received its first charter from the Minnesota
legislature in 1854, and was now bustling with the
importance of the convention to frame a constitution
for the state that was to be. Its site was unpromis
ing. Rugged bluffs rose from the river bank, with
sluggish streams oozing through the marshy ground
26

ARMS AND THE MAN
between. All activity centred on the levee; the strip
of ground, reached often by rough plank-ways across
sloughy spaces, along the river that was the only high
way to the world. There was life. There business
was to be done. On that hung the enterprise of the
primitive business concerns, the frame hotels, the rude
residences of the frontier capital. The buildings
clustered around the landing places or ran up the rough
slopes of the hiUs. But red blood raced in every vein
and leaped to every touch of promise and of hope.
A daily line of boats plied between St. Paul and Galena,
the port of arrival and departure for river trade above St.
Louis. A dozen steamboats ran between St. Paul and set
tlements on the Minnesota River. Each of these was
crowded on every trip with freight and passengers ; volun
teers for the occupation of the rich wilderness that lay be
yond. In 1855 the number of boats engaged in the river
trade at St. Paul was sixty-eight, and it had increased 59
per cent, a year for the last five years. The town,
consequently, was enjoying the doubtful benefits of a
"boom." Rents were high and vacant houses hard to
fiind. A four-room house, one story high, was worth
from twenty to thirty dollars a month. And during the
long, rigorous winter of that clime, before the first
boat came through in the spring with supplies from
without, prices soared. On April 10, 1856, says an
old account, "flour sold at ten dollars a barrel, oats were
eight-five to ninety cents a bushel, butter forty-five 27

THE LIFE OF JAMES J. HILL
cents a pound, and eggs and poultry were not to be had
for love or money." Of money, indeed, there was an
annual famine; since the currency supply was cut off in
winter and exchange did not exist. But people Uved
happily on notes of hand and orders on business houses,
that would be paid when lumber and furs and cranber
ries and a little grain went out in the spring and the
cash came back. The community, at any rate, was
heart-whole and care-free; with the splendid audacity
of youth and a supreme confidence in its own future.
History was in the making, and every man was intensely
alive. No weakling could live in such an atmosphere;
but to the strong it was like heady wine.
• Peering over the rim of this little crater of activity,
northward and westward, the newcomer viewed a debat
able land. Between St. Paul and the Pacific Coast, where
the early founding of Astoria and the growth of Portland
had already erected stations of settlement and sent vague
messages of invitation to adventurous spirits in the East,
stretched two thousand miles of territory held by some
of the fiercest of the aboriginal tribes. Over its quality,
over the mere possibility of adapting it to agricultural
uses, the best-informed men of the day wrangled hotly.
Professor Henry, of the Smithsonian Institute, an
authority whom it was then almost blasphemy to ques
tion, had rendered his emphatic judgment in these
words : " The whole space to the west, between the 98th
meridian and the Rocky Mountains, is a barren waste
28

ARMS AND THE MAN
over which the eye may roam to the extent of the visible
horizon, with scarcely an object to break the monotony.
The country may also be considered, in comparison with
other portions of the United States, a wilderness, un
fitted for the use of the husbandman, although in some
of the mountain vaUeys, as at Salt Lake, by means of
irrigation, a precarious supply of food may be obtained."
To the great majority of people, outside the north
western country itself, this was final. But it was
vigorously combated by those who had explored the
region through which it was hoped that a new route
to the Pacific might be found. Their testimony was
necessarily ex parte. There were no resident witnesses
to call to the stand. In the year 1856 one might
draw a north and south line from the Red River to the
lower boundary of Nebraska, and in all the northern
half of the country west of it, from Minnesota to the
Rocky Mountains, he would find no settlement, no
pioneers, nothing but "savage beasts and still more
savage men."
But the Smithsonian could not put down Major Isaac
I. Stevens, governor of the Territory of Washington. He
had himseK explored this country, with a view to the
railroad of the future that had already captured the
imagination of a few bolder spirits. He could talk of
what he himself had seen. In an address delivered in
1858 he said of the country denounced by Henry:
"Nearly the whole is susceptible of continuous occu- 29

THE LIFE OF JAMES J. HILL
pancy by our people. There is no such thing as a desert,
properly so speaking, on the entire route. There are
gaps or intervals where it is only a grazing country;
there are portions of the country occupied by mountam
ranges which would not admit of profitable cultivation;
but, as a whole, the country is fitted for settlement,
and must be settled and occupied at an early day."
He carried the war into the enemy's country by pro
claiming this heresy in an address the same year before
the American Geographical and Statistical Society. Yet
the controversy was not ended or the public mind con
vinced. In 1875, after settlement had pushed out upon the
prairies and a northern transcontinental line had been
partially built. General Hazen, a scientific authority,
then stationed at Fort Buford and supposedly acquainted
with every detail, published a pamphlet to establish the
position he had announced a year before; that "there
can be no general agriculture between the 100th meridian
west, the Sierra Nevada Mountains, the British Pos
sessions, and Mexico." Even so late as 1860, when
William H. Seward was at St. Paul and made the famous
speech that has heartened its people ever since, pro
claiming it the site of the future great city of the
continent, his genius for making people feel happy went
no further in the practical line than the rather Delphic
utterance, "God ordained that what is useful to be done
should be done." Yet that aphorism might fall signifi
cantly upon the ears of a young man who had lived for
30

ARMS AND THE MAN
four years in St. Paul upon hard work and gorgeous
visions of a future in which he was to play a not in
conspicuous part.
Only to the northwest, up beyond the Red River
country, where Lord Selkirk's enthusiasm had planted
the first outpost for the real agricultural and com
mercial conquest of the interior of the continent,
did the rim of the crater break away to reveal in the
distance civihzed life instead of savage wilderness.
Great visions were to enter through that gap, but the
time for them and for an account of this most iaterest-
ing Red River settlement will come later in this
story. Meanwhile, James J. Hill looked about him in
the little Minnesota town where his travels had ter
minated for the present, to see what could be done. Here he
was to work nine years for independence; here he was to
build up a flourishing business of his own; here he was to
conceive and carry through the negotiations that started
him upon his career as the greatest constructive raihoad
genius of his age; and until he made the bond purchases
of a worse than bankrupt system that startled his
associates and revealed him either lunatic or genius,
he had not moved his business office or the centre of his
active life five hundred feet from the spot on the
Mississippi levee in St. Paul where he first found em
ployment and set himself to work with a will.
Between 1856, when Mr. Hill reached St. Paul, and
1865, when he went into business for himself, the years, 31

THE LIFE OF JAMES J. HELL
though critical in their bearing upon the future as every
such formative period must be, were empty of starthng
events. It was a second and rougher but not less
decisive schooling. The boy of eighteen, without
friends or capital or equipment of business experience,
turned for occupation to the centre of activity in the
new community. This was the levee. The willing could
always find work there; and he became a clerk for J. W.
Bass & Co., agents for the Dubuque & St. Paul Packet
Company's line of Mississippi River steamboats. By
the river route all the commerce of the little town and
the outlying settlements tributary to it was carried on.
The shipping clerk was not a specialized employee in
those days. He received incoming and discharged
outgoing freight. He looked after the contents of the
warehouse. He made out waybills and had an eye
open for new business. He had to be ready to do any
thing, and on occasion must work as hard as a roustabout.
This was a splendid all-around education for a live young
fellow. After one season's experience with it, the jour
ney to the Red River country and thence westward was
no longer considered. Work had ousted adventure;
and when the firm of Brunson, Lewis & White suc
ceeded Bass & Co. in the packet company agency, they
took over as part of the assets the young shipping clerk,
who remained with them three years. After that he
spent a year with Temple & Beaupre, and four years
with Borup & Champlin, who were agents for the Galena
32

ARMS AND THE MAN
Packet Company and the Davidson line of steam
boats. These outwardly uneventful years were among the
busiest of a life seldom equalled in intensity of application.
The characteristics of the youth persisted. His vivid im
agination made the day's work interesting, because in
vested with unknown possibilities. His head teemed with
ideas and schemes, new and old. He still dreamed of
business conquests that might one day be made in the Ori
ent. Now his new experience came into play, and he
thought Seriously of the project of building steamboats like
those which carried traffic on the Mississippi to operate on
the rivers of India. But it was no longer a wild vagary.
The more disciplined mind was aheady learning how
fact and fancy may be made to work in double harness.
He studied steamboat construction and operation. He
read everything available about India. He knew
exactly what sort of boats would be required and how
much travel they could hope to secure. Fifty years
later his judgment affirmed the soundness of the venture
that he had dreamed of on the Ganges when, as a raw
boy, immured in mid-America, he had ascertained that
the district between Delhi and Allahabad offered the most
promising field for a beginner. Nor was the scheme
finally stricken from the list of future possibilities
until the period of general railway building began.
Then his mind, as swift to grasp the meaning of
events as to act upon its own conclusions, realized the 33

THE LIFE OF JAMES J. HILL
mighty scope of the coming development in the United
States; and aU thought and effort were turned m that
direction. But who can wonder that the young associ
ates in 1858 or thereabouts, in a frontier town in
Minnesota, of a boy who not only imagined but talked
seriously during long walks with his companions of
creating a transportation system in India by placing
steamers on the Hoogly and the Brahmaputra, should
not understand him; should set him down as a dreamer
or a "romancer".''
This did not prevent him from being immensely
popular with the youth of full blood and high spirits
who breathed the air of a community so vivid and so
crude. He was the life of their somewhat rough society,
the leader in many a madcap freak. He was a per
petual fountain of practical jokes. The Celtic sense
of humour, which he never lost, overflowed ui him.
High spirits had their way. Here is one of his very
few letters of this time that have been preserved. It
was written to one of his boy friends back in Rockwood,
and the envelope bears on the flap the stamp "Borup-
Champlin, Grocers, St. Paul"; Saint Paul, February 11, 1858.
Deak William :
Your epistle bearing date of seventeenth ult. came to hand on
good time and your fertile imagination can scarcely conceive what
an amount of pleasure I derived from it, as it was the first epistle
of William to James at St. Paul for a "long back." My surprise
at receiving your letter was only surpassed by my siu-prise at not
34

ARMS AND THE MAN
receiving one from you after you left St. Paul, or sometime during
the ensuing season. Still, a good thing is never too late or "done
too often." It gave me much pleasure to hear that you were all
well and enjoying yourselves in the good and pious (as I learn)
little town of Rockwood. I did intend to go to Canada this winter,
but it is such a long winter trip I thought I should defer it until
summer, when I hope to be able to get away, as I intend to go on
the river this summer if all goes as well as I expect. Capt. W. F.
Davidson wrote me from Cincinnati about going with him as first
clerk on the side-wheel packet Frank Steele, a new boat about
the size of the War Eagle. The Captain is Letter A, No. 1,
and I think I shall go with him. If not, I have two or three good
offers for coming season on the levee, besides my present berth,
which is nevertheless very comfortable.
I think it mighty strange that some (of my letters) have not
reached home as I wrote several times to my brother Alex, and
I never was more surprised in my life than when old Bass handed
me a letter of inquiry as to my whereabouts. But after the boats
stop running our mails are carried so irregularly that whole bags
of mail matter are often mislaid at way stations for weeks, and
some finally lost or otherwise destroyed. On the tenth of No
vember last I was returning from the Winslow House with Charley
Coffin, Clerk of the War Eagle, about eleven o'clock, and when
we were coming down Fourth Street passing one of those rum holes,
two Irishmen, red mouths, came out and, following us, asked us if
we would not go back and take a drink. Charley said "no," and
we were passing on when two more met us who, along with the
other two, insisted that they meant no harm and that we should
go in and drink. I told them that I did not drink and that, gener
ally speaking, I knew what I was about. We attempted to go on,
but they tried to have us go back, so I hauled off and planted one,
two in Paddie's grub grinder, and knocked him off the sidewalk
about eight feet. The remainder pitched in and Charley got his arm
cut open and I got a button hole cut through my left side right
below the ribs. The city police came to the noise and arrested
three of them on the spot and the other next day and they turned
out to be Chicago Star Cleaners, a name given to midnight ruf- 35

THE LIFE OF JAMES J. HILL
fians. I was not compelled to keep my bed, but it was some two
months before I was quite recovered from the effects of the cut.
One day on the levee I was going aboard one of the boats and
slipped on the gang plank and sprained my knee, which laid me up
for about two weeks. About a week ago my pugnacious friend
who gave me his mark escaped from the penitentiary at Stillwater,
along with all the rest of the prisoners confined at the time. I
am sincerely very grateful to you for your generous offer in your
letter and fully appreciate your kindness. But notwithstanding
my bad luck I have still "a shot in the locker," about $200, which
will put me out of any trouble until spring. Our winter here has
been very mild and open. We have scarcely had any snow, but
what was altogether unprecedented, rain storms lasting three or
four days in succession. Times have been mighty dull here this
winter and money scarce. Write to me as soon as you receive this.
and give me a bird's eye view of Rockwood and its inhabitants
Believe me Yours sincerely
J. J. Hill.
Send me some papers.
This is life and adventure with a will. Nor is it unin
teresting to consider James J. Hill as fortified against mis
fortune and provided for a northern winter's siege by
that heavy "shot in the locker," a saving of about $200
to stand between him and the world. He lived, in a
sense, much alone. Just as his associates could not un
derstand his tropical imagination as applied to practical
things, so they would not share in the severe regimen that
he prescribed for himself in other ways. His artistic
sense, innate and true, expressing itself later in one of
the finest private collections of paintings known to this
country, turned to work with water colours as a favour
ite recreation. He read and studied increasingly,
36

ARMS AND THE MAN
unceasingly. It was already his habit, whenever any
new subject came within his horizon, to search out the
highest authority he could find, to ask for a list of the
best books on the topic that could be had, to send for
them and devour them in the hours that could be spared
from work. He covered their margins with notes of
his own. Once mastered, the contents were his for all
time. The extraordinary memory, rivalling that of
Lord Macaulay, which characterized the man, served
well the purpose of the boy. He was omniverous in
his search for information; he tore the heart out of his
subject and made it so thoroughly his own that it
was at his service ever thereafter. One of his young
acquaintances of this time says: "Mr. Hill was a
studious young man and did not read trash. I remem
ber on one occasion my brother was sick and Mr. Hill
volunteered to sit up with him at night. My mother
found him reading a book; and, looking over his shoul
der, found it was a book on engineering. She asked
him if he intended to be an engineer, and Mr. Hill
replied that he did not know what he might be 'You
see I am only a young man yet, and a little knowledge
about engineering may prove useful some day.'" That
is the way this particular twig was bent.
Kindness of heart and love of reading and study —
here are two fundamental and lasting traits again
illustrated by two other stories of those early days.
While Mr. Hill was rooming as a bachelor in St. Paul 37

THE LIFE OF JAMES J. HLLL
and boarding at the hotel, one of the young feUows,
not an intimate but an acquaintance, feU ill. The
trouble was pronounced typhoid fever, which in those
days was thought to involve danger of contagion. After
asking of the others who would sit up with the sick
man and receiving no reply, Mr. Hill appeared that
night and took charge of the friendless youth. On
his recovery Mr. HiU asked him "how he was fixed."
Receiving the reply that the last dollar was about gone,
he handed the convalescent fifty dollars, saying that it
would give him a start and when he was earning money
again he could pay it back. He was always ready to be
kind, always generous, always particularly sensitive to the
call of a real need. And as to his chosen delight. Arch
bishop Ireland, who knew him from 1861 onward, told this
story in his presence years afterward at a banquet where the
completion of the Great Northern was being celebrated:
"Mr. Hill once told me an incident of his early career
which reveals him so clearly that I cannot refrain
from repeating it. In the winter, when the river was
closed by ice, the steamboats wintering at St. Paul were
tied up for the season at the levee. It was desirable for
someone to have an eye on them for the owner, and
one winter young Hill's residence was the cabin of such
a boat. He took into the cabin, with a few pieces of '
rough furniture, an armful of books — Gibbon's 'Rome,'
several scientific treatises, and the like. When, in the
foUowing spring, the ice loosened around his boat, he
38

ARMS AND THE MAN
had read and annotated aU his books. He wasted in
foolish frolics neither his money nor his time, he re
solved to grow into a useful man, and he grew into a
great man. This is why he discovered opportunities
and was able to form wise plans. This is why he is the
successful man."
His intensely practical mind, however, never failed
to grip what came nearest to it, and all was grist that
came to his mill. The country to which he had come
and the business in which he had engaged furnished
material for learning and the stimulus of novelty.
Incessantly he investigated. His occupation was some
thing to be mastered, systematized, and improved upon.
It gave him his first lessons in the theory and practice
of transportation. Painstakingly he took up each
detail. He came in these years to a thorough knowledge
of the mechanics of steamboating; of the gentle art of
soliciting business and getting it away from a competi
tor; of the chemistry and kinetic value of fuels, which
he studied with the resistless energy that was now
becoming a fixed characteristic. He forgot neither
amusement nor recreation; but the day's work was the
first thought, and the day's duty the master of every
hour that its complete performance demanded. And
all his wide reading, historical, scientific, and technical,
fell instantly into place and order in relation to the
practical work of his life and its as yet undreamed-of
realization. He was ready for anything. 39

THE LIFE OF JAMES J. HILL
A Buffalo manufacturing company made a contract
with the house in St. Paul for which he was working, to
take an agency for selling three new reaping and thresh
ing machines. These were almost as complicated a
curiosity as a flying machine is now. The house asked
him if he could set the machines up. He said he thought
he could if he could go out and see one running. Here
is a reminiscence of his own about it: "I took an old
horse that we used to drive in a dray, and went up back
of Fort Snelling and found Cormack threshing on what
we used to call Eden Prairie. After looking over the
machine and noting it carefully, I felt quite competent
to set one up in running order; and within a few days
a customer came along and I sold him a machine. I
was young and felt a good deal of confidence in my
ability to run a threshing machine. There is a good
deal in having nerve." That incident epitomizes much
of his after life. It is hardly necessary to add the
epilogue: the machine was set up one evening, started
on trial, and worked all right.
Here is another story in his own words : "I remember
when we used occasionally to run a boat up to St.
Anthony, or more properly I might say Minneapolis,
because the warehouse was on the Minneapolis side of
the river. The pilot wouldn't steer the boat above
Mendota; and having no license and a good deal of
confidence in myself — I was younger then — I used to
steer the boat. I was pilot, and I came very near on
40

ARMS AND THE MAN
one occasion to leaving the steamer Itasca on a pile of
rocks up below Cheever's bar. We only broke about
thirty timbers. The wind was blowing and we just
had to jump her, and we didn't leave her on the rocks;
but when we got her down to St. Paul she was about
half full of water." Most of his enterprises, then and
after, came through the rapids all right. These years
are full of such experiences. They bespeak the daring,
the self-confidence and, behind them both, the ability
to make good which were to turn the years as they came
into servitors.
Another glimpse at short range appears in a letter
to the same boy friend in Rockwood to whom he had
written his lively experience of two years before. It
is on a letterhead of "Borup & Champlin, Wholesale
Grocers, Forwarding and Commission Merchants."
St. Paul, January 30, 1860.
Your letter of the 17th was received yesterday, and I hasten
to answer it as it was the first I have received from Home for a
period of nearly three months. I am glad to hear you are all well,
and also glad to say that my health never was better in my life;
weight 166 lbs., gross; huge, ain't it? As regards the farm, I would
say simply that I would prefer selling it; but if I cannot sell it, I
am in no mind to give it away. I want you to write me particulars,
what it is worth and what it would rent for, for 1 or 10 years; also,
if it is not too much trouble, if James Black or some of the neigh
bours would not rent it. As regards the rent for the past year,
pay my mother some considerable part of it, and afterwards in
amounts as in your judgment she wants it.
Write me particulars about everything and everybody. I have
been up country most of the time since fall, buying grain, and have 41

THE LIFE OF JAMES J. HILL
to make another 160-mile trip to-morrow. But knocking around
agrees with me. Have not had first rate luck in business this
season; however, will come out all right side up with care, marked
"glass." My regards to all my friends, and believe me your
^'"°^' Jas. J. HiU.
The environment and the man were both expanding.
Minnesota imported wheat in 1 854 . The first shipment
from the state of this cereal that has brought it fame
and profit was made in 1857, and passed through the
hands of Mr. Hill. It grew on the Le Sueur prairie,
and by 1859 there were a few thousand bushels to be
sent to St. Louis by boat. There was not enough
of it to load a barge; and to save the costs of transfer
they sent a barge up the Minnesota River, placed the
wheat forward and filled out the cargo with hickory
hoop-poles. A little later than this, business possi
bilities received a great impulse by the expansion of the
milling industry in Minneapolis and the incoming of
the first railroad. The year 1862 is famous for both
these ¦ events. Nobody outside had ever heard of
Minnesota flour; so they branded it "Muskingum
MiUs, Troy, Ohio — ^The Genuine," and sent it out be
fore the days of labelling according to the pure food law.
Within three months the flour won such favour in the
market on its own merits that it was branded "Minne
sota." Fifty barrels of that same flour came down
from Minneapohs to a point as near the steamboat
landing as the bluffs and ravines of the river banks
42

ARMS AND THE MAN
would permit, on the bumping little railroad spanning
those ten miles. Another glimpse of the life and pres
cience of the young feUow who saw and was part of these
new things: "We hauled it down to the steamboat,
and it was upon this occasion of the shipment of flour
that I felt we had sent out more tonnage on one boat
than the cranberry crop would have furnished in a
month. I remember how proud I was to ride up on the
last dray, bringing up the procession." Also the stencil
with which the first flour made in Minnesota was
branded was cut by James J. Hill out of the oil-paper
that he used in his manifold book as a bill clerk on the
levee. Trifles, these, which yet are not inconsiderable
among the early experiences of the Northwest and of the
man. One great interest and one great disappointment fell
within these years. The outbreak of the Civil War
roused nowhere intenser enthusiasm for the Union
or a more generous response in proportion to numbers
than in Minnesota. Young HiU caught the spirit of
the time and, with E. Y. Shelley, raised a cavalry
company for service in the War of Rebellion. This was
offered to the state; but Minnesota was not ready
for cavalry companies, and the proffered service could
not be accepted. Mr. HiU was a member of a local
volunteer organization which had been formed some
time before under the name of "The Pioneer Guard."
With most of the other members he desired to enlist

THE LIFE OF JAMES J. HILL
in the First Minnesota; but the same physical defect
that had barred his way to the medical profession in
boyhood closed the door to the patriotic aspiration of
the young man no w j ust past his ma j ority . Lacking the
sight of one eye, he could not pass the medical inspec
tion, and the glory of forming part of the famous First
Minnesota was denied him. But to the end of his life
he cherished and remembered the Minnesota veterans
as if they were comrades and had been brothers in arms;
and they, in turn, were never better pleased than when
they could secure his consent to talk to them on their
anniversary meetings or on Memorial Day, regarding
him always just as if he had marched with them in the
ranks. One more letter of the time bubbles over with
fun and welcome. It tells its own story. The written
signature is now in every shade and line the same as it
remained to the end of Mr. Hill's life.
BoRtrp & Champlin
Wholesale Groceries
FORWARDING AND COMMISSION MERCHANTS
St. Paul, February 9, 1864.
Capt. H. C. Coates,
1st Minn. Vols.
Dear Sir:
How are you Harry? ¦
It is the wish of the citizens of this little burg to give the 1st a
welcome in the shape of a public dinner, etc., and there is a com
mittee at work to make all necessary arrangements.
44

ARMS AND THE MAN
It will assist them very much if they can ascertain the number
of men likely to come thro' to St. Paul also when they would prob
ably arrive so that if they could come nearly so or all together and
it was generally understood so beforehand the whole town would
go out to meet the boys. Now, Harry, will (you) telegraph me
from Lacrosse how many men will come thro' and if they will all
come together and if they do not all come together, telegraph
about what difference there is in the time of starting from Winona
so we may hurry up for we want to give you a good sound threshing
and we'll do it too. Yours in the Lord
Jas. j. Hill.
Here, also, is a lively incident; a remnant saved
from the interesting story of those days, as told by a
St. Paul newspaper of September 3, 1864:
Theodore Borup, Jim HiU, and Commodore Davidson played
the r61e of heroes on the levee yesterday. A boy belonging to a
party of imigraats who arrived on th&j Albany went in bathing.
"The water is very deep there and the current strong, and he at once
sank. A cry, "Boy drowning," was raised. Theodore Borup,
who' was standing in his office door, heard the alarm and, dressed
as he was, plunged in, merely stopping, to remove his shoes. By
goo'd luck, he managed to catch the* boy when he was going down
for the last time and struck oiit f or* the shore with him. The cur
rent exhausted Mr. Borup, however, and it was nip and tuck
whether he would be compelled to let him go to save his own life.
Suddenly soirieone said: "There comes Jim Hill." The latter
threiy o$ his coat as he rushed across the levee, plunged boldly in,
and was soon 6y Mr. Borup's side. Commodore Davidson soon
followed, and with these reinforcements the party was safely
landed. Whatever else the far-seeing eye might discern for
the future, the actual transportation business of the 45

THE LIFE OF JAMES J. HILL
Northwest at this time was conducted over its navigable
streams. The country had been opened by the high
way of the Mississippi, and settlement extended up the
vaUey of the Minnesota. With a difficult gap between,
the route ran on, by way of the Red River of the North,
to the country about Lake Winnipeg. The ten miles of
track between St. Paul and the Falls of St. Anthony
comprised the whole raUroad system of Minnesota in
1862. No one saw so clearly as this young man
of twenty-four what that scant stretch of raUs,
with its feeble, wobbling engine, fed from woodpiles
at either end, beginning nowhere and ending at nothing,
signified for the future. His words, already quoted,
showed that. MeanwhUe, his business lay with the
river, where experience was widening to meet the
demands presently to be laid upon it. Mark Twain
has immortalized steamboating on the Lower Mississippi
in that era. The upper river business did not compete
with the lower in volume or picturesqueness, but the
Upper Mississippi was even more completely the artery
through which the life blood of the whole community
must circulate. Nor has there been, since then, in the
maddest days of railroad building and rate cutting, a
hotter competition for business in the carrying trade.
By the consolidation of various local interests, the
Galena & Minnesota Packet Company was formed in
1854 for the upper river trade. Three years later the
Northern Line started. Into the same business came
46

ARMS AND THE MAN
"Commodore" Davidson, in 1856, and long remained
to the river trade what "Commodore" Vanderbilt was
to transportation in the East. In 1860, he organized
the La Crosse & Minnesota, and four years later it
and the Northern Line were consolidated under the
name of the Northwestern Union Packet Company.
The rivers carried an immense business for those days.
The boats on the Red River, farther away from civiliza
tion than interior Africa is now, carried nearly a million
pounds of freight in 1861. On th^ Mississippi it was
a free race for all, and the devil take the hindmost.
No railroad manager since then has surpassed the
packet line managers and agents of those days in
fertility of device and ruthlessness of method to secure
business. They cut rates to nothing, they risked
their boats to make time, they drummed up trade by
every conceivable exercise of personal friendship and
business "pull," and they were quite capable of buying
outright a desirable shipment in or out, taking the
chance of selling it, but making sure at any rate that
no rival got the business. The Indian lurking a little
way back from the river banks and flourishing his
tomahawk as he lay in wait for his enemy had no more
gladsome days, and cherished them with no lighter
heart and no grimmer satisfaction, than the rival freight
carriers of the Upper Mississippi in the ten years be
tween 1855 and 1865.
The agent had lavish authority from his principal 47

THE LIFE OF JAMES J. HILL
in such a struggle, and James J. HUl became known as a-
man who got business for his line. He was no longer
the mere shipping clerk, but the experienced representa
tive who knew to a cent the value of a shipment, the
meaning of a rate, when to take and when to refuse
business, the credit standing of consignor and consignee.
For nearly ten years he had hammered away, and the
iron was shaping upon the anvil. Mind and character
had matured with experience, and the ambition to stand
on his own feet would wait no longer. He had mas
tered the business. He was known as a shrewd, care
ful, competent, trustworthy, and endlessly energetic
man, to everybody in the steamboat business, and to
merchants and business men in the communities with
which they dealt. In 1864 he made trial of himself
in the new capacity. For three or four months he was
in Chicago as representative of the circuitous line which
was stiU the speediest method of communication with
the Northwest; by rail or boat from Chicago to Mil
waukee, thence by the newly built railroad to La Crosse,
and from La Crosse by river packet to St. Paul. Again
he made good. While engaged in the shipping business
during the summer, he had bought grain during the
winter months when navigation was closed, to be
shipped out in the spring. Large traffic interests were
glad to secure him as their representative, and in the
spring of 1865 he went into the forwarding and trans
portation business on his own account. He had charge
48

ARMS AND THE MAN
-in St. Paul of the business of the Northwestern Packet
Company, the big river concern that connected with the
Chicago, Milwaukee & St. Paul Railroad at Prairie du
Chien, and with the Illinois Central at Dunleith. He
had served his apprenticeship. Deflnitively the second
stage of his education, the second period of his life, was
cldsed. Henceforth, we have to deal with the man of
affairs, and his action and reaction upon events out of
which wonderful happenings were to be born.

49

CHAPTER THREE
LABOUR AND LOVE
IT IS not because of any lack of values that the first
ten years of Mr. Hill's life in St. Paul are less fully
chronicled than those that follow. It is because he
was going through his business schooling, just as he had
learned to know and use his mind under Wetherald.
And the educational period, whatever line it follows,
in schoolroom or in business office, has little daily
incident worth chronicling. W^hen it has been said
that he was a clerk in the office of the agents of the
Dubuque & St. Paul Packet Company from 1856 to
1858, went from them to the Davidson line of steam
boats and remained with it till 1865, when he was
appointed agent of the Northwestern Packet Company,
the bald statement covers in such few lines the facts
of swift and interesting years. But the earlier ones
were a time of stern tutelage by each day's labour and
experience; while toward the last the man of formed
character and independent action and initiative clearly
appears. The temptation must be resisted to dwell
too long upon these fruitful but, in the main, uneventful
years, until the peaks of young manhood are gUded by
the light that never was on sea or land, and love and
50

LABOUR AND LOVE
life blend to inspire the putting forth of all its stored and
unsuspected power.
There was in the mind of this young man down to
1865, to which time the tale has run, no idea that he had
reached a turning point in life; nor had he. The change
from a subordinate position to one of business indepen
dence was not yet complete. For the next two years
he was busied in gaining mastery of the opportunity
offered by local conditions of trade and transportation
in this new country; destined, if one had a prophetic
eye to see beyond the years, to such wonderful develop
ment. In order to understand where and how and why
this development came to pass, how it wrought into its
fabric the characters and fortunes of the captains of
that period, and to what extent they were stimulated
or modified by it, it will be necessary to describe in a
succeeding chapter both natural and trade conditions
over the vast and undefined territory, under two flags
but having a common commercial goal, which consti
tuted the American Northwest. That story is as
essential to a comprehension of the growth of this
country and the life of James J. HUl as the history of
the colonial period is to an understanding of the origin
of the United States, and the character of Robert
Morris or Alexander Hamilton.
Prior to any description of the planting of mod
ern life in the midst of primeval wUdernesses, the
events of 1866 and 1867 must be recounted briefly. 51

THE LIFE OF JAMES J. HILL
Even then, Mr. HUl was rapidly constructing the foun
dation upon which he was to build directly for ten
years thereafter; and, in a broader sense, for those more
familiar and splendid years to foUow. For this man's
ultimate success was in no lightest particular an acci
dent. Only a superficial view, a mind dazzled by ac
complished results and careless of the infinite labour of
preparation behind them, can fail to appraise the merit
and fix the place of the forty years of life to which Mr.
HiU had served a stern apprenticeship before he seized
the great opportunity and launched the enterprise that
was to create a new industrial empire and make him
one of the foremost figures of his time.
He was not, as will appear presently, when the whole
environment comes into view, simply the young fellow
who is tired of clerking and throws a hazard with for
tune by striking out for himself. He had already
acquired practical business knowledge and formed
business relationships that were to be of value. He
had no more idea of remaining an agent for any com
pany than he had of remaining a clerk for any man.
Aheady he was more than half his own master. The
same boundless energy which characterized him after
ward would not rest content with a mere agent's opera
tions. He was constantly venturing into new fields
for his employers and, when it could be done without
conflictmg with their interests, for himself. Letters
of this time there are none save such as deal with prosaic
52

LABOUR AND LOVE
things like lime and coal and salt and other staples of
freightage contracts. But Mr. Hill was enlarging the
boundaries of his world and the circle of activity of his
powers. Such a man cannot remain unnoticed any
where; but a new community, where business sagacity
and "hustle" are at a premium, is doubly proud of him.
So the newspapers of the time make frequent mention
of him in terms which would indicate rather the man
of independent resources and action than even the
trusted representative of what was, in that time and
place, a transportation concern of no inconsiderable
importance. As soon as he had any sort of free rein,
the community began to sit up and take notice.
The following news items, gleaned from the daily papers
of these years, typical of many others not quoted,
are the completest and most suggestive biographical
sketch of his manner of activity at this time. They
show an exercise of his faculty of going after things and
getting them, so disconcerting to his rivals during his
whole life.
James J. Hill has secured the contract for furnishing the Govern
ment with 15,000 bushels of oats at fifty-eight cents a bushel. As
we have remarked before, Jim Hill has a habit of securing things
when he goes after them.
J. J. Hill is now prepared to give shippers the lowest rates ever
quoted from here to Eastern points. Mr. Hill has nearly all the
important carriers of freight in his own hands. He at first secured
the agency of the Dunleith Packet Lines of river steamers. Then,
one by one, he has had the Chicago & Northwestern, the Milwaukee 53

THE LLFE OF JAMES J. HILL
& Prairie du Chien, and the Illinois Central Raihoad agencies
placed under his control at this point.
James J. Hill beats all his competitors when it comes to making
the very lowest rates on freight shipments to all points east and
south. His valuable services became recognized by the various
rail and water transportation companies, and he is now the sole
agent of the Northwestern Packet Company, the Milwaukee and
Prairie du Chien Railway, and the Illinois Central Railway. Mr.
Hill is also a dealer in salt, coal, cement, lime, etc., and keeps
always on hand a large supply of those articles. Besides being a
hustler for business, he is an agreeable and honourable gentlemen
with whom it is an honour to deal. He also guarantees that all
freight for points east and south addressed in care of Jas. J. HiU
will be transferred at the levee free of charge. This saves five
cents per hundred pounds to the shipper.
Jas. J. Hill's plan of transferring freight free of charge promises
to become very popular with the country shippers. By marking
their consignments "In care of Jas. J. Hill," their goods will be
transferred from the cars to the boats, or vice versa, without
extra charge. This saves the shippers five cents per hundred
pounds, and in return Mr. Hill gets the bulk of transportation
business for the various lines which he represents.
Navigation having closed and the steamboat business being thus
wound up, J. J. HUl has, with a spirit of enterprise which is com
mendable, converted his immense warehouse into a mammoth hay
pressing estabhshment. If he cannot handle freight he can press
hay, and it is a noticeable fact that when Mr. Hill starts to ac
complish a thing he does it complete and single-handed, asking no
aid from any one. He says that all hay offered will be taken,
and if his present warehouse is not large enough there is plenty of
lumber to build others, and plenty of vacant land to erect them
upon. This remarkable young man evidently intends to keep
abreast of the times.
Jas. J. Hill, who has kept accurate statistics for many years of
aU freight coming into and leaving St. Paul, informs us that during
54

LABOUR AND LOVE
the last year 48,000 tons of freight were shipped from St. Paul by
river. The tariff by the present roundabout railway route from
here to La Crosse is $20.00 per ton and by river $10.00 per ton.
Mr. Hill further shows that when the direct line of the Chicago
& St. Paul Railroad is completed the steamers will be forced to
reduce their rates to $5.00 per ton and the railroads to $10.00 for
each ton carried. This will mean a saving at once to St. Paul and
tributary points of more than $400,000 per annum, together with
a steadily increasing ratio as the country fills up. We trust the
means will be forthcoming at once to rail and equip twenty miles
from St. Paul to Hastings by next September.
Mr. Hill has had plans drawn to enlarge the lower floor of his
warehouse by clearing out the space imder the platform. This
will double the capacity of that floor. Cars can be run in, loaded
or unloaded, and sent out without interfering with his usual freight
shipping or receiving business. F. R. Delano, the able and ener
getic superintendent of the St. Paul and Pacific Road, has followed
Mr. Hill's lead.
These are local newspaper notices about a young
fellow only just trying his strength, standing on his
own feet and dependent upon his own initiative.
His capital was that invaluable prescience which
rarely failed him, supreme self-confidence and a capa
city for work that spoke in every line of his strong
features, every movement of his powerful frame, and
became the despair of his employees and associates for
fifty years to come.
He had a finger in many pies. He was getting in
terested in the nature of the traffic carried on with the
Red River country, and in its future profits. He was
discovering that warehousing was as important to all 55

THE LIFE OF JAMES J. HILL
kinds of carriage as the operation of elevators became
later to the marketing of wheat. He was watching the
development of railroading, and thinking out its cer
tain future effect upon water transportation. Even
at that time he startled his shorter-sighted young
associates with predictions of the day when the rail
road would drive the steamboat out of business. Here,
as so often, other people simply dismissed his scientific
foresight as the vagary of an unpractical visionary, and
went on their accustomed ways; leaving him to plan
alone and work by his unaided energies toward that
coming Industrial evolution the scope and methods
and results of which he already began to outline with
some definiteness in his own mind.
He was particularly and immediately concerned with
the fuel question, then and always so vitally related to
trade and to life itself in the rigorous climate of the
Northwest. This business was to be one of the main
connecting links between the old activity and the new.
It was to run a gangway from the steamboat to the
freight car; and by and by to transform the forwarding
contractor into the railroad king. The "Big Woods"
of Minnesota supplied plenty of fuel. He contracted
to furnish and carry it. He was the first man to lay
down mineral coal in St. Paul; and for the next ten
years the fuel supply was his special study and occupa
tion. In the meantime his head was full of practical
affairs, of shrewd arrangements, and of his greatest
56

LABOUR AND LOVE
and most successful adventure — the foundation of a
family life never thereafter to be marred by a cloud,
whatever storms might rock the business world.
He did not intend to carry on his business any great
length of time alone, because his vision was larger than
his unaided strength and resources could fulfil. Within
a year from the time when he ceased to be a ship
ping clerk, he had made a partnership agreement with
Blanchard & Wellington, of Dubuque, for conducting
a general transportation, commission, and storage busi
ness. It is interesting to find, in the details of this
contract, an evidence of the previous thrift of the young
fellow and a measure of his business expectations.
Blanchard & Wellington were officials of the North
western Packet Company, and Dubuque the official
centre of the upper Mississippi business. They put
$5,000 into the deal, and HiU put in $2,500; no smaU
sum for an employee to have got together in the little
Minnesota town in those days. HiU was to draw out
$1,500 for living expenses, and to have profits up to
$3,000, if they should amount to so much. The terms
express the confidence of these veteran river men in their
young associate. So does their correspondence with
him during the life of this arrangement. One of the
Packet Company's representatives was coming to St.
Paul to look things over, and Mr. Wellington writes to
Mr. Hill: "I have told him whatever you agreed to or
told him he could rely upon." Not only a sweeping 57

THE LIFE OF JAMES J. HILL
indorsement, but rather unusual advance information
to impart to an associate still in a sense on trial.
In connection with his river business, and his interest
in the trade of the Red River country, to be told in
detaU later, he concluded now the most momentous
business relation of all: an arrangement with the First
Division of the St. Paul & Pacific Railroad Company,
that formless creation of enterprise and speculation
and greed, which he was one day to subdue to his own
hand and to the uses of half a continent. His own words
explain exactly what this adjunct to his other work was:
"I acted as agent for the St. Paul & Pacific Railroad
Company in St. Paul. This began in the spring of
1866. I handled the freight by the ton and by the car
load under a contract. I built a warehouse, or it
might be said I extended their station — built an addi
tion to it two hundred feet long and about sixty wide — •
in which I received freight from steamboats on the
Mississippi River destined to other points, and local
freight to St. Paul, and did any business that I might
have to do in connection with these boats, giving the
preference as to room to the business of the railway
company. The floor upon which the boats delivered
their freight was a story below the station, on a level
with the car tracks. That arrangement was to save
drayage. A large portion of the business was to St.
Anthony and Minneapolis; and, prior to the construc
tion of that warehouse, steamboats unloaded on the
58

LABOUR AND LOVE
public levee, and freight was drayed to the railway at
an expense of from sixty cents to a dollar a ton. Adding
the cost of drayuig it from the station at St. Anthony
to the merchants' stores, it would have been about as
cheap to haul the freight direct by team from one point
to the other. The railroad was anxious to have this
arrangement made for landing freight directly from
steamboats into the warehouse. There was no charge
made as agent or forwarder on any freight handled by
me going over the railway. "
An agent of the packet company who was also the
agent of the railroad company could do a good stroke of
business by eliminating the wasteful cost of transferring
freight. The railroad company itself was too busy
getting money out of the Hollanders who bought its
endless issues of bonds to study trifles hke efficiency of
operation; not a term in use, scarcely a comprehensible
conception in those days. The man who thought it
out and worked it out, with the capital that he and his
partners had put into their business, was the man who
later, by equally skillful adjustments, multiplied over
three thousand miles of space from East to West, at
tached to the word "efficiency" a new meaning in the
transportation world.
Thus had business progress gone up to and through
the year 1866. In far different fashion the next year
was to be the most momentous of his life. For if Mr.
Hill had been asked, at the summit of his career, by 59

THE LIFE OF JAMES J. HILL
any one intimate enough to put the question and re
ceive an answer, what had been its supremest good
fortune, he would have declared it unhesitatingly to
be the marriage that took place in 1867. One who
essays to write comprehendingly of his life must walk
gently and reverently here, in dealing with a relation
whose strength and sacredness were in proportion to the
strength of his own nature and to the unmarred affec
tion between husband and wife through half a century.
Among the young women of the little town was one,
Mary Theresa Mehegan by name, whose attractive
ness had not passed unnoticed by the struggling young
fellow now beginning to think of a home of his own.
She was of Irish blood, like himself. About the time
that Mr. Hill's forbears were seeking a new home in
Canada, the United States was welcoming from the
same green island another family which was to supply
the profound est impulses and the deepest feelings that
his life could know. Timothy Mehegan, the son of
Patrick Mehegan and Joanna Miles, of the city of Cork,
was born in Cork, Ireland, February 12, 1812, and Mary
McGovern in County Leitrim, February 22, 1828.
These two of the old stock who, like so many thousands
of their race, had sought new fortunes in a new world,
were married in New York, in 1844, in the Church of
St. Joseph, on Sixth Avenue and Eighth Street. In
1847 they removed to Chicago and in 1850 went on to
St. Paul, where the husband died in 1854. The second
60

LABOUR AND LOVE
child of these parents was Mary Theresa, who after
ward became Mrs. James J. Hill.
Miss Mehegan was a sensible, high-principled girl,
of no better fortune than his own in these days of
struggle, dependent on her own exertions for her living,
and gifted with a character which subsequent fortune
might polish to a higher finish but to which it could
impart no element of either strength or grace that it
did not already possess. Between the two a deep
attachment was soon formed. About four years they
had known each other, but neither then nor afterward
did Mr. Hill ever wear his heart upon his sleeve, and
the depth of this attachment had been unsuspected.
The young people, after Miss Mehegan's return from
Milwaukee, where she had been attending a convent
school, went quietly to the bishop's residence of the
Cathedral Parish in St. Paul, August 19, 1867, where
Father Oster made them man and wife. They went
immediately to live in a small but comfortable home on
Canada Street, near Pearl, now called Grove Street.
It was a convenient location, in a good neighbourhood —
the Rev. John Mattocks lived next door — and there
they remained about four years. It was a busy and a
happy time. Mr. Hill was already comfortably
circumstanced, and he had at that time a good
library of his own. "He never," said Mrs. HiU,
" brought his business home." Then and later, in small
affairs as in great, that was a sanctuary from which 61

THE LIFE OF JAMES J. HILL
aU but the gentler and more sacred relations was ex
cluded. This was one of those perfect unions of which the
world hears little because of their completeness.
Through small things and great, Mrs. Hill became and
remained the ideal wife and mother. To her husband
she gave ten children, seven girls and three boys, all
of them reared with democratic plainness and with
thorough preparation for a life of work. All except
one daughter were living at the date of Mr. Hill's death.
No woman of high or ancient lineage could surpass Mrs.
Hill in dignity and grace. She carried all the honours
which the years brought to her with a rare and beautiful
simplicity. Every social duty was fulfilled quietly and
without ostentation. Her charities were many and gen
erous. The transition from the narrow life of the earlier
years to the wealth and position that came so quickly
and with such great contrasts was made without a jar;
as it can be made only by those upon whom nature
herself has bestowed a patent of nobility.
No one can ever estimate the strength, the courage,
the happy power to dare and to do that James J. HiU
drew through all those unblemished years from his
domestic life. He grudged the inroads made upon it by
his business cares. He grew young and rested there.
He was always interested in and with the children, had
time to enter into their work and their play, and never
returned from one of his journeys without a gift for
62

LABOUR AND LOVE
each of them. He was not a man so much as to hint
at the depths where his life was anchored, even to the
confidants of a lifetime. Once when a friend was
complimenting him upon one of his noblest philan
thropies, he turned it aside with the words, "Well, the
best thing about it was that it made Mother happy."
No one who heard the tone or saw the look with which
this was spoken would need to know more about the
share of Mrs. HiU in the best and highest of all life's
relations. Twice he paid publicly to this influence a
tribute so simple and so convincing that it should
have permanent place in the record of his life. __
One of his largest benefactions was the establish
ment and endowment of a seminary for the educa
tion of students preparing for the Roman Catholic
priesthood. This group of fine buildings stands in a
beautiful spot in St. Paul, on a bluff looking down
upon the Mississippi River. The standard of scholar
ship is high. The institution is immensely important
to the cause of Church education throughout the North
west, from all parts of which it draws students. The
gifts to it by Mr. Hill, first and last, fell little if at all
short of a million dollars. When any one endeavoured
to praise this work in Mr. Hill's presence, he turned the
subject, as he did every reference to his benevolences,
about which he was incurably shy, with an economic
explanation: "Look," he said, "at the millions of
foreigners pouring into this country to whom the Roman 63

THE LIFE OF JAMES J. HILL
Catholic Church represents the only authority that they
either fear or respect. What will be their social view,
their political action, their moral status if that single
controlling force should be removed?" It is not, he
declared, of any more importance to the Church that
young men should be educated for its priesthood than
it is to the State that this undigested mass of foreign
material should be dealt with by those who alone have
power to mould it into new shape; the anointed agents
of the only authority that it understands or will obey.
This is as much a matter of good business as is the
improvement of farm stock or the construction of a
faultless railroad bed.
He was sincere about this, and it is true. But it is
not the whole truth. That came out in a moment of
strong feeling, when this seminary was dedicated and
presented to the Church authorities. On that occasion
Mr. Hill, at the close of his presentation speech, used
these words, expressive of the deepest feeling of his
heart and the greatest fact of his life: "Some of you
may wonder why I, who am not a member of your
Church, should have undertaken the building and
endowment of a Roman Catholic Theological Seminary,
and you wUl pardon me if I tell you plainly why. For
nearly thirty years I have lived in a Roman Catholic
household, and daily I have had before me and around
me the earnest devotion, watchful care, and Christian
example of a Roman Catholic wife of whom it may be
64

LABOUR AND LOVE
said, 'Blessed are the pure in heart, for they shall see
God.' On her behalf I desire to present and turn over
to the Illustrious Archbishop of this Diocese this
seminary and its endowment."
Many years after this, when the citizens of Minne
apolis entertained Mr. Hill at a notable banquet in
celebration of his sixty-seventh birthday, the date had
to be put over a week beyond the actual anniversary to
enable Mr. HiU be to present. This is the explana
tion which he gave to his hosts as a part of his response
to their welcome. "There is just one thing that pre
vented my being here on my birthday a week ago. I
had to go East to bring one who to me is the best woman
in the world, and one to whom I always feel that I owe
more than I do to anybody else in the world; because I
have not only had an inspiration to go on, but I have
had the patience and loving support that is necessary
for every man who has heavy burdens to bear."
The story of the public life of Mr. Hill covers great
vicissitudes and startling transformations; but below
them all the current of his private life ran as still and
restful and untouched by change or loss as the eternal
depths of the sea.

65

CHAPTER FOUR
GETTING INTO THE GAME
THE sudden and tremendous success of the great
railroad venture upon which Mr. Hill embarked ten
years after the time now reached has destroyed the
perspective of most persons who have tried to measure
or understand his career. In these ten forgotten years
the ore was being concentrated in the furnace and the
pure metal made ready for the mould of circumstance.
This was another and more important period of educa
tion, discipline, waiting. Without it could not have
come the swift, sure action, the extraordinary triumph
at the end. Here, still, is a man in the making ; and these
unregarded years are as vital to the story as those when
railroad systems were rising or falling, and miUions
being tossed about as mere pawns in the game. He
who matched himself against the best minds and most
experienced heads of the world in 1879 was not an un
tried man. The maturing of him belongs to these ap
parently uneventful years, which all who have tried to
estimate his qualities and integrate them with his experi
ence have failed so utterly to appreciate as constructive
forces in a human life.
For a clear view of the activities in which Mr. Hill
66

GETTING INTO THE GAME
was now, just after the middle sixties, a recognized and
respected factor, and more particularly for an under
standing of the progress of these ten years and the slow
concretion of the project upon whose daring execution
his whole life work was founded, it will be necessary to
take up at this point in some detail a study of North
western development to date. Something has been said
already to show what this country was in 1856. Yet
even then the cornerstone of empire had been laid.
Much happened in the succeeding twenty years. A great
vision of what was sure to happen possessed the popular
mind, and had served to glut the appetite of the specula
tor and the thief. An era unlike any other in the country's
experience was drawing to a close, and carrying down with
it to ruin the high hopes of the pioneers and their imme
diate successors. The new epoch is intelligible only to
those who have made familiar acquaintance with the old.
It seems natural enough that the starting point of
the new impulse should lie up north of the boundary
line, in that country where Mr. HiU was born, and where
the three associates who joined him in his first memor
able railroad enterprise were actively interested. The
more rapid progress of the United States in later days
makes it easy to forget that from the very beginnings of
discovery and exploration the calendar of Canada
marches even with that of our own country. So
it was the Canadian Northwest where permanent set
tlement first struck root. 67

THE LIFE OF JAMES J. HILL
More than twenty-five years before Mr. HiU was
born, when the American Northwest was not even a
name, the first settlement was made in the Red River
VaUey on the Canadian side of the boundary. The
annals of both England and France are full of the tales
of visionaries who believed that they could found in the
New World colonies which, in this unprejudiced en
vironment, would revolutionize the industry or the
sociology of the Old. Enthusiasts were always to be
found to back such projects with political influence and
cash. Such was the Earl of Selkirk, a Scotch noble
man, who had visited the Red River country in 1811
as a director of the Hudson Bay Company, obtained
a grant of land including aU the territory draining
into Lake Winnipeg — covering of course the whole of
northwestern Minnesota — and brought over in the fol
lowing year a colony of his countrymen.
The Hudson Bay Company was a name to conjure
with in those days. It had been formed in 1670 by that
knight of adventure. Prince Rupert, with seventeen
other noblemen and gentlemen. Its object was to
procure by barter furs and skins from the Indians of
North America and sell them in Great Britain. It
had unheard-of rights and privileges. Its territory,
known as Prince Rupert's Land, a name that persisted
in Canada for two centuries, was at first vaguely out
lined as the country about the entrance of Hudson
Strait; but after the transfer of all Canada from French
68

GETTING INTO THE GAME
to British authority in 1763, the revived institution was
commerciaUy supreme over the whole country west to
the Rocky Mountains. After a fight with its single
powerful rival, the North West Fur Company of Mon
treal, ended by the modern method of absorption, the
Hudson Bay Company ruled over British North Amer
ica from ocean to ocean.
In the very year when Mr Hill was born it succeeded
in obtaining a new lease of power. For twenty-one
years from that date it had the sole right of the fur
trade in Canada; and this, in the less settled portions and
throughout the Northwest, was of course equivalent to a
monopoly of every form of trade. For at some stage in
every transaction, furs became the medium of exchange
and decided its terms. This dominion was exercised
with unflinching severity. Inevitably it provoked
resistance on the part of those who desired to share the
rich profits of exchanging cheap trifles brought from
England for peltries that sold at high prices in her markets
and were sought for greedily in every city in Europe.
Long before the date when this monopoly was to ex
pire, opposition to it had become fierce, and the evasion
of its regulations a delightful as well as a profitable oc
cupation. The "free traders" had sprung up, whose
business it was to carry on outside of the Hudson Bay
Company the same traffic in which it was engaged.
Their merchandise had to be brought in by the same
routes, and their furs carried out to the same mar- 69

THE LIFE OF JAMES J. HILL
kets. In taking care of this portion of the business
of Norman W. Kittson, of whom more is to be heard
later, but who was now one of the important agents
in St. Paul for the forwarding of supplies to the
"free traders" in the portion of Rupert's Land lying
about Lake Winnipeg, Mr. Hill first became familiar
with the Red River country, first essayed its resources
and gauged its possibilities.
What is now the Province of Manitoba was, of
course, included in Rupert's Land. After the ex
ample furnished by the Selkirk settlement, other por
tions were soon occupied by the more daring pioneers
who pushed out from the east and made their way
through the wilderness. Fort Garry was established
where Winnipeg now stands. In many places in the vi
cinity of Lake Winnipeg scattered populations began to
appear. Far westward hunters and trappers threw out
the skirmish line of civilization; and trade foUowed
them adventurously, for the gains were great. But all
the people of this community were absolutely cut off
from communication with the outer world except by a cir
cuitous route. The barrier of terrific forest, morass, and
mountain that lay between them and eastern Canada on
the direct land route was not to be pierced for many a
day. On Lake Superior no merchant ships as yet carried
commerce or passengers. The practicable route for
the immigrant as well as for incoming supplies was
from eastern Canada by way of Buffalo and Chicago
70

GETTING INTO THE GAME
to the Mississippi River and thence to St. Paul. From
the latter point the caravans of Red River carts set
out every year for their northward journey; one of
which, it will be remembered, would have borne James
J. Hill away toward the Rocky Mountains and the
Pacific, years before, had he not arrived just too late.
In 1858 the Red River trains consisted at times of as
*
many as 600 carts; and instead of the scream of the loco
motive, the advent of commerce was announced by the
lamentations of their wooden wheels. Even the felloes
were bent strips of wood bound together with hide, and
the wooden axles were guiltless of any lubricant.
Next after the transportation business of the Upper
Mississippi, this trade of the Red River country, it
will be seen, was the most important in the Northwest.
It offered certain special advantages to the enterprising.
The sharp competition already cutting into the profits
of the Mississippi traffic had not invaded this country;
and the time when the railroad should drive the steam
boat out of business was far from the imagination of
traders in the Hudson Bay Company's empire. Mean
time that concern was employing its monopoly after
the fashion of monopolies since the world began; that
is, in such ways as to breed public hostility, compel
competition, and pave the way for the abolition of its own
exclusive privileges. The delays and costs of shipping
goods from England to Montreal or Quebec, thence to
New York by boat, to Chicago, to Dubuque, by rail, to 71

THE LIFE OF JAMES J. HILL
St. Paul by river, to Pembina by ox cart, and down the
Red River to Fort Garry and the settlements there
abouts bore heavily enough on the settler. When to
these natural burdens on the traffic which alone made
existence in that country possible were added artificial
restrictions and imposts, human nature rebeUed.
Therein lay an opportunity which would play no small
part in the commercial education and outlook of James
J. Hill, as well as in his conception of a possible future
enterprise. Of course the Hudson Bay Company, after its legal
monopoly expired, could not prevent a man's trading
on his own account if he wanted to try. But it could
and did secure the same protection that like monopolies
enjoy to-day. A duty of seven and a haK per cent.
was levied in its interest on other imports into the Red
River settlement. Against this the consumer fought
steadily until it was reduced to five, and then to four per
cent., where it remained until Rupert's Land was
divided and Manitoba became a province of the Cana
dian Confederation. In the interval the struggle
against the Hudson Bay Company's monopoly was
carried on not only in the local council and even across
the sea, but still more effectively on its own ground.
Half-breeds insisted on trading in furs. The trappers
and traders of that country and that time were not in
the habit of being dissuaded by anything short of physi
cal violence from doing what they found it to their in-
72

GETTING INTO THE GAME
terest to do. So the " free traders," men bringing in and
taking out goods in defiance of companies and govern
ment regulations, did a growing business. They so far
won their way that little effort was made after 1858 to
enforce the alleged but no longer legally guaranteed ex
clusive rights of the Hudson Bay people.
Now the very existence of this competition com
pelled the big monopoly, in its own defence, to seek the
shortest and quickest route into and out of the country.
In 1859 its managers were induced to try taking in
supplies for Fort Garry by way of St. Paul and the Red
River. The experiment was so satisfactory that in
1861 they put on the Red River of the North a small
steamer for their own trade. They took an old river
craft named the Anson Northup, which had done ser
vice on the Upper Mississippi, pulled her to pieces, car
ried the parts over the prairies to the northern stream,
put them together there and called the craft The
Pioneer. She plied between Fort Abercrombie, in
Minnesota, and Fort Garry. From St. Paul the sup
plies for the Canadian Northwest were conveyed by
wagon to such point on the Red River as was most
convenient for the season's navigation, be it Fort Aber
crombie or another, loaded on the steamboat and car
ried down to Lake Winnipeg and to all the settlements
within reach of the river valley. By another year the
experiment had grown so successful that a larger boat
was needed, and the International was added in 1862. 73

THE LIFE OF JAMES J. HILL
In connection with this traffic James J. Hill ac
quired that knowledge of the fertile Northwest
which was to be the foundation of his great empire-
buUding conception; famUiarized himself personaUy
with the country, its needs and its transportation possi
bilities; and first came into direct contact, one after
another, with the group of men who would, fifteen years
later, follow his lead in what seemed to the prudent
and the knowing the maddest venture launched
even in that day of many chimeras and transparent
frauds. One of these men, who connect the second and
third acts in the life of Mr. Hill, here comes upon the
scene. Norman W. Kittson was born in Sorel, Lower Can
ada, in 1814, entered the fur trade as an employee of the
American Fur Company when he was sixteen years old,
and had engaged in the same business on his own ac
count just above Fort Snelling, at the junction of the
Mississippi and Minnesota rivers, a few miles above
St. Paul, in the spring of 1834. "Commodore Kitt
son" as he came to be called afterward, mastered the
fur trade, went into real estate in the new settlement,
became a member of the Minnesota Legislature and
mayor of St. Paul, and was thus well known throughout
the new country. During all these years he had en
gaged more or less actively in the Red River trade, and
in 1860 he was made agent of the Hudson Bay Fur
Company for that business. By this time the St. Paul
74

GETTING INTO THE GAME
merchants supplied practically all the goods sent into
the country to the northwest of them. He was their
general forwarding agent; and he put on the Red River
the steamboats just mentioned.
Mr. Hill, it will be remembered, was, from 1865 on
ward, in the forwarding business himself. He had an
important place in the river trade. He had his new
freight house on the levee. There he handled the stuff
that came up by water, and that which came over the
little ten-mile railroad down from St. Anthony, after
ward Minneapolis. He knew all about this north
western traffic, every pound of which passed under his
eyes. Mr. Kittson, before becoming the Hudson Bay
Company's agent, had acted for the free traders. He
did not throw them over. The business was profitable;
and he selected Mr. Hill, the rising young traffic man,
to look after it while he was absent for a time in 1863 and
1864. About 1866 he found that he must give up one
branch of the business or the other; so he turned over
the agency for the free traders to Mr. Hill, who had
now become thoroughly familiar with its details. They
included the carrying out from the Red River country
of furs and skins; the filling of orders for supplies from
outside, covering everything from boxes of Bibles to
kegs of whiskey, the two being not infrequently in
cluded in the same individual order; and the taking of
these up into the settlement. The enterprise was not
of great magnitude, but required energy, knowledge 75

THE LIFE OF JAMES J. HILL
of details, and famUiarity with the country and its condi
tions. Thus the area of Mr. Hill's operations ex
tended somewhat in the direction of his earlier fancies;
and thus he entered a field to be filled, a little later on,
with stirring events.
What was, at this time, Mr. Hill's ultimate business
ambition? Every vigorous man of thirty years has
formulated an object ; has visioned a goal. It does not in
the least follow that this represents to him the summit of
satisfaction; that he means to relax or wiU relax his
efforts when he has reached it. All reaUy great men
find it merely a starting point for new and larger
achievement. It represents, in fact, not the maximum
but the minimum of what they intend to wring from life.
They secretly believe the future holds much more for
them. But to achieve less would be failure. Absurd as it
sounds now, the mark set for himself in 1866 by the
founder of one of the great fortunes of this country was
one hundred thousand dollars. This, he often said in
later years, was the goal of his ambition then.
It fairly represents the standard of wealth of
the period immediately preceding and immediately
foUowing the Civil War. A man who controlled that
amount of capital was respected as one of the "rich"
men of any community. He could be assured, if he
invested the money, of an income of seven or eight
thousand dollars a year, which the utmost conservatism
could not reduce to less than six. There were prob-
76

GETTING INTO THE GAME
ably more millionaires in the United States in 1916
than there were men who spent eight thousand dollars
a year on their household and personal outlay in 1866.
To be wholly independent financially; to be able, if
necessity or choice directed it, to give up business and
live handsomely on the income of accumulated capi
tal; and to leave a family, in case of death, securely
protected against the buffetings of misfortune is the
sane and proper aim of every man worth his salt.
James J. Hill shared this common ambition. He
set his mark in all good faith; believing that, when
he had hit the bull's-eye, he would be able and willing
at least to relax effort. Temperament, collaborating
with opportunity and intensified by an almost unparal
leled success, made him no readier to retire from the
fray on his seventieth birthday than he was on his
twenty-eighth. A young man, however great his ability and dili
gence, could scarcely hope to amass one hundred
thousand dollars in a few working years by acting as
agent for anybody. As the apprenticeship of the
clerk in a shipping office led to the independence of the
traffic agent, so this was but preliminary to some busi
ness which he himself should control and direct, and
whose profits would go toward that hundred thousand
dollar fund, and not into the till of another. Mr. Hill
did then what he did ever after, what made him
the terror of competitors and a master of the game: 77

THE LIFE OF JAMES J. HILL
he studied local conditions, famiUarized himself with
endless detaU, and then put himself in a position
where these would take the place of business capi
tal and go far toward producing it. First, he
saw quickly that, in this new country where he was
now permanently fixed, where his fortune must be
wrought, the fuel supply was all-important. Every
incident of daily life reminded him of that.
Minnesota and the whole Northwest, which he al
ready believed destined to early occupation, have
frigid winter temperatures. Merely to sustain life in
comfort requires plenty of fuel. The locomotive and
the steamboat had to rely upon it in all seasons. The
fireman, pitching chunks of wood from the tender into
the firebox of his engine, the tall smokestacks of the
river craft showering sparks upon the cords of fuel
heaped ready for the roustabouts at every landing, were
to the man who could look ahead as much a part of the
passing show as the tepee in the forest or the blanketed
Indians who gazed curiously and gloomily at the intrud
ing race. These things must go. Already coal was
lord of industry in the once densely wooded regions of
the East. The forests of the Northwest would be but a
temporary resource. If those great plains beyond,
even now appealing to the imagination, were ever to be
conquered, with their winter temperatures that feU at
times as low as fifty degrees below zero, their future
would hinge upon the fuel supply. St. Paul could be-
78

GETTING INTO THE GAME
come the centre of a new empire and the seat of thriving
industries only by paying tribute to King Coal. The
fuel business offered not only a good present profit, but a
key to possibilities of immense future expansion. It
was, moreover, inseparably connected with the develop
ment of every transportation agency. So for a good
many years it became the especial interest and study of
the young man who had begun to have several irons in
the fire.
Thirty years after this the operating department of
the new northern transcontinental line was surprised
to discover how completely and accurately its fuel
requirements had been foreseen and provided for.
When railroad building began in Montana, the fuel
resources of that immense and little-known territory
were aheady pretty comprehensively catalogued, both
as to quantity and quality, in the head of the president
of the St. Paul, Minneapolis & Manitoba Railroad
Company. The Canadians, who had built a rival road,
were not a little chagrined when it appeared, years later,
that the best coal in all that section came from the
Crow's Nest Pass mines, and that Mr. Hill had long
been in control of them. If an engineer on his road had
trouble to keep up steam, Mr. Hill could probably
tell him just where his fuel came from and what the
proportion of its heat units. These were some prac
tical evidences of the thoroughness of the early study
of the fuel question in the Northwest by a young man 79

THE LIFE OF JAMES J. HILL
who seldom made mistakes and never forgot a fact once
acquired. Mr. HiU, as has been seen, took the agency of the
Northwestern Packet Company's line of steamers
on the Mississippi River in 1865. A year later he
entered into the partnership described with Blanchard
& WeUington. But in 1867 this line was merged with
the competing company of "Commodore" Davidson.
The latter was one of those rough-and-ready, tireless
pioneers who are out to get business and mean to have it.
There was just enough resemblance between the two
men in their imperiousness and intolerance of opposi
tion to make it reasonably certain that they would not
remain long in the same boat. Young HiU had his su
perior officer gauged quite accurately. He summed him
up in a letter of the time, showing his already keen
judgment of men, in this characteristic style: "As long
as the old man thinks he can ride, he will ride; but when
he is forced to go afoot, none so pleasant as he." So by
1867 he was in the game on his own account, had se
cured his contract with the St. Paul & Pacific Railroad
Company for supplying it with fuel, and was fully
launched upon a general transportation and fuel busi
ness. On this substratum rested the multifarious activ
ities of the next ten years. In this splendid school he
became an apt pupil. Hon. Franklin MacVeagh, speak
ing a quarter of a century later, said of this early time:
"It seemed to us who were then his associates that our
80

GETTING INTO THE GAME
friend had found his ultimate transportation ideal in a
flat-bottomed, light-draft river boat while the threat of a
vagrant railroad, which hung without explanation be
tween Winona and Rochester, to penetrate the winter
seclusion of St. Paul and force upon it the all-the-y ear-
around relations with mankind, seemed to us par
ticularly aimed at Hill. And it is really no violation
of confidence to say that a fluctuating river, open
half the year to a relay of dwindling boats, which
before reaching St. Paul were sometimes whittled
to a canoe, was the pride of this gentleman's early
life." It has been necessary to anticipate somewhat in order
to set out clearly the business environment of the time,
and the steps that were leading from the Mississippi
levee to the banks of the Red River of the North, and
from the conduct of water-borne traffic to its junction
with and its final merger with the traffic by rail whose
conquering importance no section and no individual
had yet completely grasped. Lake, river, and canal were
still the highways of transportation in the Northwest;
and the railroad was regarded rather as a useful adjunct
of these, or as a happy means of filling a gap where
water did not exist and could not be conducted in
volume sufficient to float a steamboat or a barge, than
as the commonest and most universal of all the imple
ments of traffic. History shows, with almost the uni
formity of a natural law, that periods of sharp transi- 81

THE LIFE OF JAMES J. HILL
tion in methods, occupations, and ideas about material
things are also periods when the genius arrives to
comprehend, introduce, and establish the new order.
Such a time was this, and the man was not want
ing.

82

CHAPTER FIVE
THE FORGOTTEN, MEMORABLE YEARS
THE next ten years in the life of Mr. Hill, from 1868
to 1878, must be studied in detail and heavily empha
sized. Superficially undistinguished, they go far to
account for the man about to appear and the work
he accomplished. In them will be found the key to
many of his subsequent successes which were most sur
prising and most unintelligible to the general public.
It was once a common thing to hear him referred to as a
favourite of fortune. Here was a man who, according
to the general impression, without previous training or
special fitness, not only accomplished the most tre
mendous coup known up to that time in the railroad
world, but held to his prize and developed it with con
summate skill into one of the completest transporta
tion machines and one of the most valuable properties
in the world. People could not understand how an
obscure man, forty years old, scarcely known out
side of the little frontier town where he lived, could
have conceived and carried through such an enterprise.
They regarded the event much as they would if he had
broken the bank at Monte Carlo. It was just another
astounding bit of "Jim HiU's luck." 83

THE LIFE OF JAMES J. HILL
For years, until painful collisions with him had shat
tered many illusions and not a few fortunes, this theory
of accident prevailed. Then men of sense began to see
that qualities, not circumstances, are required to ac
count for such a career. But even then, and to some
extent down to this day, mystery hovers dark about the
practical preparation indispensable to even the best
order of mind for such an accomplishment. The ex
planation lies in the events of these mostly unrecorded
and forgotten years. In that sense they were the most
pregnant years in Mr. Hill's life. After listening to an
address by a brilliant public speaker in 1911, Mr. Hill
burst out: "He is a dynamo — a human dynamo — ^you
can see the sparks and hear him crackle when he talks."
The figure is not inapplicable to himself; and the dynamo
was at its busiest and the storage battery receiving in
exhaustible charges in the years between 1867 and 1878.
At this time, 1867, he himself could not have told
what occupation would eventually claim his entire
allegiance. In this and the succeeding ten years he
worked and planned and studied and threw out feelers in a
dozen directions. While about the middle of this period,
his destiny was finally determined, the clarification of
interest and purpose came to pass for the most part
imperceptibly in the subconscious seK. Like almost
every other energetic and ambitious young man, he
kept his visions for his less active hours. At other
times he was the hustling man of business; and just
84

THE FORGOTTEN, MEMORABLE YEARS
now that business was the contracting for and sale of
fuel, and the storing and forwarding of merchandise.
Already one characteristic which was to differentiate
him from others, and contribute to his most remarkable
achievements, the gift of the clear look forward, was in
evidence. To the end of his days James J. Hill was
always planning for half a century ahead. He obtained
his first railroad interest that way, because he saw a
future invisible to others. Fifteen years after that he
carried his transcontinental line to the coast, amidst
universal predictions of failure, because he visioned the
growth of the country traversed as distinctly as if it
were mapped out before him. He foresaw the great
economic changes that took place during his lifetime
and provided for or against them. Because of his
prescience as applied to national economics, the whole
conservation movement, of which he was the actual
originator, came into being. These were not isolated
or accidental chapters in a life singularly logical and
compact. They were the outcome of temperament
strengthened by lifelong habit. Whenever Mr. HiU
considered any enterprise in a practical way or con
templated taking any share in it whatever, he im
mediately proceeded to throw a mental view of it
upon the screen and study its probable aspect after
the lapse of half a century. Then he knew whether it
contained for him any practical use or attractiveness.
His mainsail was always trimmed to catch the breeze 85

THE LIFE OF JAMES J. HILL
of to-morrow. First he planted himself firmly on facts ;
the exact facts, aU the facts. Then he applied to them
his powerful constructive imagination. His careful
inquiries into the nature and value of our coal measures,
with particular reference to the Northwest, have been
mentioned. He was one of the first to appreciate the
extent and value of the coal deposits of Iowa; and some
years later the gentlemen who needed them were amazed
to find 2,300 acres of valuable coal lands in one county
of the state held under lease by James J. Hill. He
read every book on the subject, visited every locality
within reach where coal could be obtained, questioned
travellers and prospectors, commissioned others to get
information for him. In 1872, with a practical geolo
gist, he explored the little known Turtle Mountam
country for coal. He became what he remained to
the day of his death, an expert on the quantity and
quality of the coal measures of the American North
west, and no mean authority on those of the entire
world. Meantime, his firm was mostly occupied with trans
actions in the cruder and less costly fuel used in every
new country. The individual, the manufacturer, the
railroad, were still using wood in that country of bitter
temperatures. One thing an enterprising man could
do — supply the best kind of wood so long as wood had
to be used. Mr. Hill obtained, early in 1866, a con
tract from the old St. Paul & Pacific Railroad Company,
86

THE FORGOTTEN, MEMORABLE YEARS
of which a great deal will be heard presently, to furnish
it with fuel. Said one of his contemporaries of those
days in St. Paul : "At that time the supply of cord wood
brought into St. Paul was of the most wretched charac
ter. The farmers used to bring in a load on their
wagons, dump it and then pile it up scientifically so as
to make a cord and a half out of a cord. They used
all the gnarled and knotty stuff they could get hold of,
because it made the pile measure more. The result was
that the ctizens got wretched fuel and were robbed
besides. When Mr. HiU got hold of the wood con
tract, all this changed. He shipped into St. Paul all
the best and straightest hard wood he could out of the
Big Woods. The railroad took from him all the light
and soft wood for their locomotives, and we got all the
good stuff." A little later he put mineral coal upon the
St. Paul market for the first time.
This railroad contract, however, was no jug-handled
affair, but a business proposition of benefit to both
parties. When the terms and effects of it were exam
ined after the railroad went into bankruptcy, the sworn
testimony showed that while, from 1862 to 1865 the
price of wood in St. Paul and Minneapolis was from
six to twelve dollars per cord, and the cost to the rail
road company from three to eight dollars, the contract
with Hill, Griggs & Co., reduced the charge to the rail
road company until in 1871 it was but $1.70, while
the cities got wood at from four and a half to six 87

THE LIFE OF JAMES J. HILL
and a half dollars. The company was enabled to
furnish wood at low prices to settlers on the prairie,
it obtained a large revenue from the wood handled for
city consumers, and at the same time the price of wood
lands advanced and labourers found better employ
ment. Here, as later, Mr. Hill had gone upon the
principle that he could make a good thing for himself
by making new business adjustments that would serve
the best interests of the public.
Another agreement had been made early in 1866
between Mr. Hill and the railroad company, for the
handling of its freight at St. Paul and the eventual
transfer to the company of the warehouse he had built.
This was to last for a year only; but when a partnership
with E, S. Litchfield was formed later, it was extended to
1872 and afterward to 1874. The fulfilment of it was
no sinecure. Mr. Hill saw personally to the carrying
out of its provisions. He says: "For many years I
bought wood land and cut the wood." He took the land
from the company, supplied it with fuel for its locomo
tives, and marketed the surplus in St. Paul and Minne
apolis. At the same time there was the immense detaU
of the shipping business, by both river and rail, to be
looked after. The personal records of this time, devoid
of stirring event though they are, exhibit days and years
packed so closely with the infinite details of business
that one wonders how a man had strength and patience
to carry it all. Mr. Hill declared that at one time the
88

THE FORGOTTEN, MEMORABLE YEARS
business furnished to the railway company by his firm
amounted to fully one third of its entire earnings from
freight. From the first it was undoubtedly the transportation
side of his business that interested him most, however
important the other may have been then as a resource,
or later as an asset, in the carrying out of larger under
takings. His first business partnership, entered into
under the name of J. J. Hill & Co., was formed in 1867
with Egbert S. Litchfield. In 1869 the partnership
became Hill, Griggs & Co., formed to carry on a general
business in wood, coal, and commission. Mr. Hill had
bought out the Litchfield interest, and the new firm
took it over, being capitalized at $25,000. This made
it of respectable size for those days. Mr. Griggs
said: "Mr. Hill was remarkably clear-headed and
shrewd, and he very early realized that the development
of the Northwest would be great and that whoever could
furnish facilities for transportation would find an almost
limitless field for his energies, capital, and enterprise."
The firm and business changes of the next few years
are lightning-like. They correspond to the varying
needs of the now growing country, and to the restless
aggressiveness and as yet unconcentrated energy of Mr.
Hill. He held aU these different interests in his hand.
He had not yet definitely determined to which one he
would finally give his undivided allegiance. Until
then he could not afford to relinquish his control of any. 89

THE LIFE OF JAMES J. HILL
The warehouse, the river trade, the agency for the Red
River buyers, the fuel contract with the railroad, the
fuel business in St. Paul and the storage, forwarding
and commission business — surely here were enough
activities to keep a man hustling and to involve him in
many firm combinations. The articles of incorporation
of HiU, Griggs & Co. are dated August 20, 1869. HUl
was to look after the transportation end; Griggs after
the wood and coal end, and a separate partnership
agreement was made the year following with one De
Witt C. Kinsey, for the purpose of "carrying on a
merchandising and transportation business on the Red
River of the North." Also another side partnership
agreement was made in 1870 with another Griggs —
Alexander, who knew boats like a book — to cover the
building and operation of a steamboat on the Red
River. Then there was a pooling of interests with one
Armstrong, who also had a contract for the transporta
tion of wood over the one railroad of the town. Mr.
Hill left no loose ends showing if he could help it, and
the merger idea is by no means the newest thing
under the sun. Scattered through the St. Paul news
paper files of 1868 are plenty of items to show that
this is no longer merely the hard-working clerk, but
now the substantial man of business whose enterprise
and successes constitute an important part of the
record of the growing capital city of a big state. "J.
J. HiU and Beaupre & Kelly were the only two com-
90

THE FORGOTTEN, MEMORABLE YEARS
petitors to put in bids to furnish the government with
6,000 pounds of bacon." "James J. Hill's transfer
house at the lower levee will soon be filled with flour.
Its capacity is 28,000 barrels. During the past week
Mr. Hill disposed of 800 cords of maple wood at $7
per cord." "J. J. Hill, in addition to his already num
erous lines of business has, with characteristic enter
prise, opened an extensive wood, coal, and brick yard
down at the levee. He gets his wood from the main
line of the Pacific Road, which is the very best brought
to market. He has already received about a dozen
barges of coal, and he says he will have enough on hand
before winter to supply the entire city." Most signifi
cant of all is this, also of the year 1868: "A meeting
was held in St. Paul to give aid to distressed settlers in
the Red River Valley. The total contributions were
$1,137. The Ust was headed by Mr. J. J. HiU with a
subscription of $200." A man of weight and position,
this, who gave nearly twenty per cent, of the entire
relief fund contributed by his town. Also one to whom
a crop failure in the Red River Valley was already a
subject of interest and a call for help.
James J. Hill was by this time a familiar figure in the
public as well as the business life of St. Paul. In 1869
he was unanimously chosen president of the Demo
cratic county convention. In 1871 his name appears
among the Democratic nominees for alderman of St.
Paul. He was a man of note and activity in his com- 91

THE LIFE OF JAMES J. HILL
munity; and it is curious in this connection that as yet
he had not formally adopted the new citizenship. His
naturalization papers are on record in the Clerk's office
of the District Court of Ramsey County, in which St.
Paul is situated, bearing date October 18, 1880. Evi
dently he had made no previous declaration of inten
tion, because a search of the records of the Clerk of the
State Supreme Court and those of the Clerk of the United
States District Court fails to reveal any such entry.
The affidavit of 1880 was filled out in Mr. Hill's own
handwriting. He declared on oath that he had been a
resident of this country the required number of years,
and that during all this time he had intended to be
come a citizen. This declaration took the place of
"first papers," having been made legal in 1878. It is
clear that Mr. Hill had regarded himself as so thor
oughly identified with the United States that he, like
many others at that time, put off and forgot an act
which, to them all, seemed a useless formality. His re
lation to a great business enterprise under American
law made it material that this form should be complied
with. But for many years before that Mr. Hill, though
always devotedly attached to the land of his birth and
to his kinsmen across the sea, was as thoroughly an
American citizen in heart and feeling as if all the laws
and all the courts had so declared it.
The gross earnings of Hill, Griggs & Co. ran from
$40,000 to $65,000 a year, a big business for St. Paul.
92

THE FORGOTTEN, MEMORABLE YEARS
For in 1869 all Minnesota raised only 8,000,000 bushels
of wheat, and Dakota was not in the list as a producer
of anything. Whatever they made was put at work
again as speedily as possible. There was no idle
capital, as there was no idle man in this enterprise.
The firm lasted, with several unimportant permuta
tions and combinations not necessary to record, until
May, 1, 1875, when Mr. Hill bought out the Griggs
interest. Immediately the Northwestern Fuel Com
pany was established to conduct the business. It had
to be done now without the direct participation and
control of Mr. HiU himself. For before this date he had
made his definite choice. More and more the trans
portation business had come to appeal to him per
sonally. More and more the great idea, the great pos
sibility in connection with it, that had occurred to him,
absurd, chimerical, but dazzling and insistent, obsessed
him. By 1878, when this idea was materializing into
one of the most splendid facts in the history of American
development and the constructive genius of American
railroading, the fuel interest was cut out altogether.
Control of the Northwestern Fuel Company was sold
to other parties, and Mr. Hill vanished from the fuel
business except as the expert on coal supplies and coal
values, whose authority nobody in the Northwest was
able to dispute satisfactorily.
Forty years after this he was showing the people of
Minnesota what wealth they possessed in their exten- 93

THE LIFE OF JAMES J. HILL
sive deposits of peat; forcing home his point with facts
and figures brought from Germany, to which country he
had sent a man to investigate the processes, cost, and net
returns of peat reduction. His early experience in the
fuel business was invaluable to him as an auxiliary in the
conduct of his railroad. The subsidence into its proper
place of this particular absorbing interest is a typical
phase of the growth of the whole man; which was like
the assembling of the parts of a crystal, under obscure
but mathematical and irrefragable laws, to form a sym
metrical whole.
While fuel and freighting were furnishing the bread
and butter of life, the future possibilities of the trans
portation business were inspiring its visions. The boy
who had dreamed of steamboat lines on the sacred
streams of India, the young fellow who had fought for
Mississippi River consignments, the representative of
an important part of the Red River trade, was feeling
now the pull of a man's full-grown inclination toward his
inevitable destiny. / The fuel branch of the business
came to mean less and less to him and to be turned
over more completely to others, and the transporta
tion branch grew until its luxuriance obscured all other
purpose. Blindly, in one sense; accidentally, if there
were any such thing as accident in the world; intui
tively, the wise would say, James J. Hill followed his
nature's leading and became more and more absorbed
in mastering the various and different details of trans-
94

THE FORGOTTEN, MEMORABLE YEARS
portation in this Northwestern country, and in conjur
ing up pictures of its future whose prismatic fantasies
were one day to be changed into sober-hued truth.
At first his business connections were, as has been
seen, with the Mississippi River Packet Company, the
First Division of the St. Paul and Pacific Railroad
Company — the only rail line which the country could yet
boast — and the Red River Valley trade. The time was
now approaching for the combination of the last two, from
whose union a future for him and for the country was to
be born. The Mississippi River business was already
ceasing to interest him. Although it was in its glory
for many years to come, that foresight of his told him
that the day when it could capture ambition and re
ward energy of the first order had passed for ever. The
boy who had exulted in the first load of freight over the
iron rails into and out of St. Paul had glimpsed a
finality. He hitched his wagon to the new regime.
When he struck out for himself, the real assets of J. J.
HiU & Co. were their share of the Red River business
and their contract with the railroad.
For the first two years of independence he had sailed
under his own flag. Although he did not yet appreci
ate the future value of the Red River business and its
relation to the growth of the Northwest, he realized its
present importance and looked after it closely. After
1866 he handled this trade, as described in his own
words: "I took the representation of the outside parties .95

THE LIFE OF JAMES J. HILL
— the outside traders and the different Church societies
and persons other than the Hudson Bay Company,
living in the Red River settlement at that time. I re
ceived their furs and skins and sold them for them; re
ceived their merchandise and goods coming from Eng
land; held them here; filled their orders for merchandise
bought here, and for machinery or anything they wished
to buy; acted for them as their factor and agent." He
had secured the handling of freight for the railroad
company. He had made his contract for furnishing it
with fuel. AU these enterprises prospered. The young
business man was making money as well as acquiring
experience. He was testing the value of the two meth
ods of transportation and balancing them against each
other, although he never doubted which of them would
control the future.
The raUroads creeping out from the Great Lakes to
the west and south cast over the Mississippi River busi
ness the pall of an inevitable decline. But up in the
north there was a flourishing trade, originating in
the early days of the Selkirk settlement, that could as
yet be handled only by team and boat. Some day it
would be a bonanza to a traffic agency yet to be called
into being. Meanwhile, there was good money in it.
As early as 1868 one customer sent in drafts for
£5,000 on England in payment for consignments or
dered. That was a transaction not to be despised even
in the days of "big business." One order sent down by
96

THE FORGOTTEN, MEMORABLE YEARS
a clergyman was for "two cases gin, one cask sugar,
two tuning forks, and one copy each of the works of
Tennyson and Longfellow." Sweetness and hght were
likely to abound in that parish. A lively and profitable
business is indicated by the firm's reply to a Red River
customer who owes them a balance and wants to borrow
from the banks. They tell him that he can draw on
them for $1,000 cash, or draw for $3,000 if he can send
them one thousand mink skins for the market.
Before 1867 these goods were sent from St. Paul by
the clumsy Red River cart trains. The change made
by the beginning of steam navigation on the Red
River of the North, and how that came about, have been
described in a previous chapter. By 1867, the railroad
line having been extended to St. Cloud, that became
the point of transfer to teams. Most of the traffic after
1870 was carried across country to the Red River and
thence by flat boats to Fort Garry — or Winnipeg — by
steamer. This route came to have decisive and per
manent preference. All of the share of this business
faUing to Mr. Hill was handled without neglecting
other interests or ceasing to cultivate local trade. By
this time the Falls of St. Anthony had become the cen
tre of an active miUing industry, and its flour had to be
carried out. In a private letter of 1867 Mr. Hill wrote :
"I am shipping for every one of them, in all seventeen
miUs, with sixty-eight run of stones." So early had
he learned to reach out successfully with one hand with- 97

THE LIFE OF JAMES J. HILL
out letting go with the other. And now he shot his
arrow into the air and saw it faU. He put his capital
and enterprise largely into the transportation business
for the Red River country. Henceforth this was to be
his study and his inspiration, while the other interests
of the firm were looked after more and more by his
partners and associates.
This venture at the outset was, in effect, an invasion
of the territory of the domineering and all-powerful
Hudson Bay Company, which brooked no competition
in its own domain. But the far-seeing young fellow
saw that he must fight for what he would win; and he
never shirked a fight to the end of his days, and never
enjoyed a victory won without dangerous struggle.
He had measured the proportions of this Northwestern
trade and tasted its profits. He was not one to sit
down and look after the office and clerical work while
others gathered the glory and the gain. His little boat,
with a few barges, made ready for business. Once
let him get his nose under the tent and, like the camel,
he trusted to himself to try conclusions with the<pro-
prietor. The following is his own account of the earlier phase and
the growth of his transportation interest in the Red River
country: "My business, commencing in the summer of
1870, included the transportation of a large amount of
freight by teams to the Red River and the building of
flat boats by which the freight was transported down the
98

THE FORGOTTEN, MEMORABLE YEARS
river. The landing or point where the freight was deliv
ered by the teams to the flat boats depended to a great
extent upon the stage of water. Early in the season it
was up near Breckenridge, and later in the season it was
farther down the river. The teams carried the freight
down to whatever point could show a depth of water
sufficient to float the loaded boat. In the summer and
fall of 1870 I sent men up on the upper waters of the
river to get out oak timber and plank for a steamboat.
During the fall and winter of 1870-1871 I built a steam
boat at Fort Abercrombie, and it commenced to run
the following spring. In the faU of 1870 I made several
trips up and down the valley in wagons, and I spent a
good part of the summer of 1871 between St. Paul and
Winnipeg, attending to the transportation of both
freight and passengers."
This move was justffied immediately by its business
results. After the order upset by Riel's Rebellion had
been restored in 1871, considerable immigration from
Old Canada came in by way of Detroit, Port Huron, and
St. Paul, where it was taken in charge by the Hill
firm and sent to St. Cloud over the railway, by stage to
the Red River, and thence by steamer to Winnipeg.
When the Northern Pacffic line reached Moorhead,
goods from eastern Canada and from England were
sent to Duluth by the Great Lakes, thence to the Red
River by rail, and such shipments swelled the volume
of the Red River Valley route. By 1871 Mr. Hill had 99

THE LIFE OF JAMES J. HELL
a regular through fine for both passengers and freight
established to Winnipeg, running on fixed tariff sched
ules. A good share of aU the business of this new coun
try was now passing through his hands.
The boat and barges were operated one season by
Mr. HiU's firm, and their competition was severely felt.
Next year a joint arrangement was made between the
firm and Mr. Kittson, who owned the other boat on the
Red River and was building a second, and who decided,
from his experience, that it would pay better to consoH-
date than to fight. The agreement, dated January 19,
1872, between N. W. Kittson and Hill, Griggs & Co.,
was concluded "for the better accommodation of said
transportation and to enable them to reduce expenses of
maintaining and operating their boats for the same."
Kittson had the steamer International, another boat
building near Breckenridge, and a barge. Hill, Griggs
& Co., had the Selkirk and a barge. The consolidated
concern was called the Red River Transportation Line,
and Kittson, at first, was to be manager. "The tariff
for freight and passengers shall not be less," says the
agreement, "than one dollar and fifty cents per one
hundred pounds freight and eight dollars for each pas
senger between Moorhead and Fort Garry, or Winni
peg." The Hudson Bay Company had a special
contract at one dollar a hundred for its business.
A year or two later Mr. Hill and Mr. Kittson to
gether bought out the interest of Hill, Griggs & Co., in
100

THE FORGOTTEN, MEMORABLE YEARS
this line, and then the two men formed the Red River
Transportation Company. All the transportation in
terests on the Red River were brought together in the
Red River Transportation Company, most of the stock
being owned outright by HUl and Kittson.
The business interests of Mr. HUl in the Red River
country, now increasing every year, had been rein
forced by a personal experience and adventure whose
influence upon the plans and decisions of the future it
would perhaps not be easy to overestimate. This
was a visit in person to Winnipeg, during which he re
ceived impressions that were to dominate the next
twenty years of his life, and became acquainted with
one of the men who were intimately associated with
him in the purchase of the railroad that brought him
wealth and fame.
A combination of circumstances had suggested the
desirabiUty of a visit by Mr. Hill to the settlements of
the Northwest with which he was conducting this ex
tensive and growing business. As is always the case
with trade at long range, there were many outstanding
accounts which required somebody on the spot to
coUect or secure them. The country was in a state of
great confusion owing to the outbreak of what is known
as "Riel's RebeUion." The haK-breed settlers around
Fort Garry had been alarmed by the transfer to the
Dominion of Canada, created in 1869, of the terri
torial rights of the Hudson Bay Company. The old 101

THE LIFE OF JAMES J. HILL
authority they knew; they looked on the new with sus
picion and distrust. They believed their holdings
threatened and their agreements with the company
endangered. In October, 1869, Louis Riel, the turbu
lent leader of these Metis, or half-breeds, met the new
governor, Hon. William McDougall, about twenty-five
miles out of Winnipeg, and compelled him to return to
the American boundary. In November his followers
captured Fort Garry. In December they set up a pro
visional government, with Riel as president. It was
desirable that some one from St. Paul who knew the
people should make the trip and size up the situation.
There was a personal reason in the fact that Governor
McDougaU had come through St. Paul with several
letters of introduction from Canadian friends of Mr.
Hill. Everybody believed the crisis to be more serious
than it actually proved. But there was no doubt that
it needed personal investigation.
The task of spying out the new land was accepted
joyfully by Mr. Hill. At the back of his mind was al
ways his private estimate of the coming value of this
country. It was not aU day-dream or conjecture.
When the Red River carts moved over the prairie on
their long journey northward, he had watched the ruts
made in the soft black soil. He saw that, the foUow
ing season, the grass grew lush and heavy where the
under earth had been thrown up and exposed to heat and
moisture. This, he reflected, was a proof of great fer-
102

THE FORGOTTEN, MEMORABLE YEARS
tility. It meant that, at some future day, splendid crops
would reward the labour of the coming husbandman.
It marked the country, then almost universally de
spised as hyperborean and unfitted for any uses save
those of trappers and traders, as fit to become some
day the seat of an exceptionally profitable agriculture.
He was to learn now that the area of this rich soil was
practically unlimited. It was the same not only out of
St. Paul and around St. Cloud where the big carts
started, but all the way up through the Red River
country to Winnipeg and out to the edge of Dakota.
The whole wide horizon to the west of that, still un
occupied and unclaimed, carried the same promise.
To the multitude it meant nothing. To this one ob
server it was another thread that wove fittingly and
richly into the alluring fabric of his dreams.
The national conception of the Northwest as a coun
try dedicated for ever to the Indian and the blizzard was,
however, beginning to suffer some modification. The
granting by Congress of a charter to the Northern Pa
cific Railroad Company, the reports on the country that
preceded and accompanied this, and the debates while
it was under .consideration had opened flaws in the con
fident assertion that in this section home-making by
the white man was an impossibility. The eagerness of
promoters to secure a land grant could not be ex
plained readily unless the land was good for some
thing. In this same year, 1870, Jay Cooke and his as-103

THE LIFE OF JAMES J. HILL
sociates took up the construction of the Northern Pa
cific through the northern part of Minnesota. A great
impetus to settlement resulted. Where capital was
daring so much, the people foUowed. This was the
first large movement to occupy the land north of
St. Paul and Minneapohs and south of the international
boundary. Of course the first thought of the men behind this
enterprise was not the settlement of Minnesota.
When they fixed the headquarters of the line at Brain-
erd, which is almost the geographical centre of the state,
it was for convenience in construction work and not as a
preliminary to land entries. The general officers who
had to live in that little town ringed with pines, and
endure the discomforts of such winters as they had
never known, deprived of the alleviations that attend a
more finished civilization, regarded their fate much
as might the governor and other officials of the
prison settlement of Saghalien. But the people close
to the soil knew more and feared less. Now, as ever,
so soon as any means of communication was opened,
they followed and struck roots in the earth. It began
to be demonstrated that there was good farming coun
try here. But on the whole, the popular conception of
the Northern Pacific Railroad was that it was a line pro
jected to form another transcontinental link, to unite
the northern portions of the Atlantic and Pacific
coasts as the Union and Central Pacific were planned
104

THE FORGOTTEN, MEMORABLE YEARS
to connect California with Omaha, Chicago, and New
York; a national and political necessity rather than a
sound business or economic venture. It was too far
north to have substantial merits of its own.
The availability for ordinary cultivation of the coun
try still farther toward the Arctic was an idea too
fanciful to be seriously entertained by anybody. There
was but one man to whom it appealed as solid fact.
But it haunted the brain of that man by day and the
visions of his head upon his bed by night. Now he
was going to look it over, as well as to hunt up customers,
make contracts, and supervise the management of a few
scows towed by a steamer which, in the words of the
time, was built to run wherever there was a heavy dew.
It had to be if it was to navigate the shallow, shifting,
uncertain waters of the Red River of the North, little
fitted by nature and unimproved by man for the use of
commerce. Adventure sent its call to young blood;
and enterprise, imagination, daring, and endurance
were all summoned to some of those tests from which
later years cannot take the sharp delight of danger and
the pitting of one's forces against nature herself.

105

CHAPTER SIX
JOURNEYINGS AND ADVENTUROUS DAYS
IN THE spring of 1870, about the middle of March,
Mr. HiU set out from St. Cloud, going to that point by
rail and thence by stage to a place called Burns, about
one hundred miles to the west. There it was necessary
to take a dog train and go through by way of Pembina to
Fort Garry. The whole journey was one of adventure
and hardship. Under date of April 17, 1870, a St.
Paul paper published the following news item:
Mr. J. J. Hill, who left here for Fort Garry, is having a strenu
ous experience, together with his stage companions, in forcing their
way through the huge snow drifts which have recently fallen in
that district. At one place the driver, agent, and passengers had
to shovel their way for over twenty miles. Several nights they
were compelled to lie out, and they were compelled to send a man
in on foot to bring back a fresh team, as the one they had was com
pletely exhausted. At Old Corner Mr. Hill bought a dog train
and proceeded on his journey.
Judge Malmros, of St. Paul, who met Mr. Hill on this trip, said:
"Mr. Hill has a splendid team of dogs, the best that could be found
anywhere, and was getting on capably. The dog sledges are flat
bottomed, like a log slab, with the forward end curved upward and
are eight or nine feet long and from twelve to fourteen inches wide,
being some two inches narrower at the rear. "
Several days out from his starting point the traveUer
was overtaken by one of the severe snow and wind
106

JOURNEYINGS AND ADVENTUROUS DAYS
storms common to the country at that season. The
dogs lost the trail and wandered in circles, and their
master was for a time perilously near death. As
night fell he blundered upon a little cabin where warmth
and food could be had. It was an experience not un
common in the early life of the Northwest, but it came
near to changing the history of the country. Up and
back again it was hard going; over the unmarked prairie,
along the barely discernible watercourses, camping or
chancing upon a lonely cabin or wigwam by the way.
The trade situation in the North proved less trouble
some than had been feared. Whether the British or
the half-breeds were in the saddle, business was brisk.
Furs had to go out, supplies had to come in; and do
mestic necessities took little heed of political compli
cations. But the horizon of the young man who had
made the trip from St. Paul, and was to make it again
and again, in the face of every kind of hardship, in the
next few years, was vastly widened. He spied out the
land for himself. He was always gathering facts and
thinking, silently thinking, of the opportunities scat
tered here so lavishly for the foresighted and the ener
getic. Why not for him as well as another? He rode
up and down on his steamboat. He tired out the cap
tain and the engineer with questions. He knew every
piece of wood and metal in her, and how to take them
apart and put them together if necessary. He hob
nobbed with the settlers, and did not forget to cultivate 107

THE LIFE OF JAMES J. HILL
the acquaintance of those who could give destiny a
push. On his return from one of these early trips to
Winnipeg, he met Donald A. Smith.
Of this second of his three associates in his approach
ing great enterprise — ^Kittson being the first — ^passing
note must be made. As Lord Strathcona and Mount
Royal he was to become an imperial figure in later
times, preserving his vigour and adding to his honours
after he had passed ninety years. Donald A. Smith, a
Scotchman by birth, came over to this country, like
many of his nation, to try his fortunes at an early age. He
arrived in Canada at the age of eighteen years, in 1838,
the year in which Mr. HiU was born. He was first a
clerk in the employ of the Hudson Bay Company and
for thirteen years was stationed in Labrador, where he
roughed it in the inhospitable wilderness. At the
end of this apprenticeship he was transferred to a post
on Hudson's Bay, where he remained for ten years,
rising to the position first of chief trader and then of
chief factor. In 1868, having proved himself, he was
made resident governor for the Company, with head
quarters at Montreal. The next year came the Riel
Rebellion, and the new Dominion needed a strong
and capable man to handle the situation. The govern
ment sent Mr. Smith to Fort Garry as special com
missioner. While he was stationed there the fateful cross
ing of trails brought about his first meeting with Mr. HiU.
It is curious to look back, through the perspective
108

JOURNEYINGS AND ADVENTUROUS DAYS
supplied by our knowledge of after events, upon this
apparent accident. Mr. Smith was travelling out of
Fort Garry, which he had left March 19, 1870, by dog
team over the great wastes of snow. Mr. Hill was
travelling toward Fort Garry in the same manner. Each
man had heard of the other, and the solitudes of nature
are evocative of human friendliness. " We met on the
prairie," said Mr. HiU. " The nearest house behind him
was one hundred and forty miles away, and I had stayed
the evening before at the frontier house of the Hudson
Bay Company of which he was the chief executive."
They stopped, made themselves known to each other and
interchanged the courtesies of the frontier. This inter
view was charged with momentous consequences. "I
liked him then," said Sir Donald Smith a quarter of a
century afterward, "and I have never had reason to
change my opinion." Mr. Hill was to know later the
value of this friend in the great transaction in which they
both engaged, and was to inspire him with practical
faith in another dream, realized later in the building
of the Canadian Pacific. If it could be ascertained,
that spot on the prairie is worth some permanent me
morial. Each man impressed the other as a character of
force, and each stored away in his mental notebook his
impression of the stranger for future reference. Mr.
Smith rose rapidly in place and honours. He dealt
with the Riel disturbance diplomatically. Nothing 109

THE LIFE OF JAMES J. HILL
more was possible than to quiet the minds of the people,
so that when the inevitable mihtary suppression of the
uprising should come, as it did in the summer of 1870,
it would usher in a permanent peace instead of a tem
porary truce. So well did he acquit himself that he
was elected to the first legislative assembly of Manitoba
from the city of Winnipeg in 1870, and to the Dominion
House of Commons in 1871. In the same year he was
made Chief Commissioner. He, too, was acquiring
knowledge and making powerful friends, both of which
were to find place and use in the scheme already haunt
ing the days and nights of James J. Hill, to emerge as a
plan of action a few years later.
The preliminary events which may well have made
these two men measure each other with speculative
and approving eyes, and which had already advised
the Hudson Bay Company that it must be prepared
to deal with a new force in the Northwest, are as
interesting when observed from the other side of the
Red River firing line. They are related as follows by
Beckles Willson, in his life of Lord Strathcona :
The nearest point to Manitoba touched by a railroad was the
town of Brainerd, in the state of Minnesota, which was the ter
minus of the Northern Pacific Railway. Between St. Cloud and
the Red River the brigades of carts continued to make trips for the
purpose of transporting the supplies demanded for the inhabitants
of the province. The only steamer navigating the waters of the
Red River was the International, belonging to the Hudson Bay
Company, which carried only the Company's goods. But sud
denly an American steamer, the Selkirk, appears, heavily freighted
110

JOURNEYINGS AND ADVENTUROUS DAYS
with merchandise for the province. This ciTcumstance alone
would not have contributed to the complete breakdown of the
cartage system; but it appeared that, according to American law,
all goods passing through American territory intended for Canada
were required to be duly bonded in the United States customs.
This law had been practically a dead letter so far as the Red River
carts were concerned, but the promoter of the new steamship
enterprise had found means to induce the American government
to enforce it. The result was that, having himself taken the pre
caution of entering bonds, and as neither the cart brigades nor the
Hudson Bay Company's steamer International had complied with
the law, the newcomer for a brief space enjoyed a handsome and
lucrative monopoly. It is interesting to recall that the tariff levied
from St. Paul to Wimiipeg was sixteen shillings sterling per one
hundred pounds. Moreover, it was payable in cash, whereas the
freight by carts had been payable half in cash, half in kind, a prac
tice which considerably lessened the actual freight charges.
When Mr. Smith heard of this proceeding he was for a moment
nonplussed. But with his surprise was mingled considerable admi
ration for the shrewdness displayed by his trade antagonist in this
exploit. "He must be a very able man," said he to a friend, after
ward his successor as Commissioner. Then he added, "We must
not be caught napping. "
The promptness of the Commissioner's measures must have
convinced the owner of the SeUcirk that he had met his match in
shrewdness. The steamer International was instantly transferred
to the Company's agent at St. Paul, Mr. N. W. Kittson, who was
an American citizen. In this capacity he secured her bonding,
and now instead of carrying merely Company goods, he announced
the steamer as ready to transport general freight and passengers.
Moreover, the moment the Manitoba merchants heard of the ar
rangement, they gave the preference to the new pseudo-American
boat, and a powerful competition thus sprang up. But it was not
destined to last long. Mr. Smith and his rival from over the border,
Mr. Hill, met for the first time. A coalition was suggested and
agreed to, and Mr. Kittson was appointed manager of the new
steamboat company. Ill

THE LIFE OF JAMES J. HILL
Mr. Hill had foreseen and worked toward exactly
the end that was afterward accomplished. It was a
foretaste of surprises and victories won many a time in
later years in the railroad world. He had meant to
break into the Red River trade. It had a future,
whereas he perceived that the Mississippi traffic had
none. In that territory and at that time there was no
rival whom it appeared so hopeless to compete with as
the all-powerful Hudson Bay Company, with its re
sources, its arrogance, and its almost immemorial as
cendancy over the people and the commerce of the
upper half of the North American continent. A prac
tically unknown young man, with a capital of but
a few thousand dollars, had set the trap and baited it.
The result was the formation of the Red River Trans
portation Company, consolidating the steamboat in
terests on the Red River. Said Col. C. W. Griggs,
Mr. HiU's partner, in an interview published in 1893,
"I do not think at that time that Mr. HiU's avaUable
capital exceeded two or three hundred thousand dol
lars." That figure is probably in excess of the true
amount; since it will be seen later on that, six years
afterward, Mr. Hill had to put at stake everything he
had in the world for the payment to be made on his rail
road option.
Whatever the exact amount of his resources at this
time, and they were smaU in any event, they had to
carry the fuel business, the storage and forwarding
112

A BOYHOOD PORTRAIT OF MR. HILL

JOURNEYINGS AND ADVENTUROUS DAYS
business, the fuel supply contract with the railroad
company, the explorations into coal deposits and lands
in the new country, and the building and operation of
the Red River craft. This caUed for almost as competent
financing as some of the big deals of years to come,
where hundreds of millions were involved. The freight
and passenger business of the steamboats increased
rapidly. Immigrants began to pour into the North
west, and the Red River Valley was their objective
point. Mr. Hill during these years was one of the busiest
men in the United States. In his office in St. Paul,
on the levee looking after his contracts, out on the
prairie with the teams in summer and the dogs in
winter, down in the engine rooms of the boats on the
Red River helping to mend a valve or patch a leaky
steam pipe, up at Winnipeg making friends, getting
business, and collecting accounts — ^he was working
with the tremendous and sustained energy that made
him a marvel to both rivals and associates. His
northern journeys grew in number and frequency.
At one time, late in 1871, he was gone three months.
During all these years the ambition to compass greater
things grew within him ; and he brooded over his con
ception of the one road that would lead to them. As
yet it was apparently too fantastically improbable to be
mentioned to any one. Only when universal faUure
came with the panic of 1873 could it be whispered into 113

THE LIFE OF JAMES J. HILL
ears long incredulous, and transmitted to brains that
recognized in it only the vagary of an incorrigible
dreamer. To repeat the old phrase of one of his boyhood
associates, "Jim HiU was always a romancer." The
time was getting big with events whose birth should
change romance into actuality.
Meantime, flashlights of men and times and conditions
illuminate the course of the years just before 1873.
They make little moving picture shows of a life now
strangely remote, and an activity long ago tr9,nsferred
to a bigger setting. Here are three extracts from an old
diary of the strenuous life :
"Sept. 12. Started from Grand Forks for Pembina with Donald
Smith by stage."
" Sept. 15. Started by stage from Pembina for Fort Garry and
arrived at nine P.M.
And at another time:
"Started down the Red River at daylight and made slow time
all day owing to flats. Before laying up I told Captain Griggs
to have his freight covered, as he had good tarpaulins. About
bedtime I heard the rain falling quite heavy, and upon look
ing out I saw the tarpaulins were not spread, but it could not
well be done in the hurry and the consequence is that some
freight was damaged. The captain is too careless and trusts
to what he calls his luck. The furnace is entirely used up and is
unsafe for an hour. Every night the whole brick work has to be
pulled down and built over, unless it has already fallen down.
The boilers have fallen through on to the bottom of the boat, and
the whole thing is in worse shape than I ever saw a steamboat.
The hull has had some hard usage, and must have about twenty
new cylinder timbers to replace those broken."
114

JOURNEYINGS AND ADVENTUROUS DAYS
In April, 1911, just forty years afterward, Mr. HUl
received the following letter :
Deae Me. Hill:
I desire to call your attention to an occurrence of forty years ago,
which you were very much interested in at that time, and were
present on the occasion.
Sunday, April 23, 1871, forty years ago, the steamer Selkirk
left McCauleyviUe, Minnesota, on her maiden trip, down the Red
River of the North, bound for Winnipeg, Manitoba, having on
board one hundred and fiifteen passengers and one hundred and
twenty-five tons of freight.
The direct result of this trip was the opening of the great North
west to the Twin Cities.
Of the crew, you and I are the only two now living, according
to the best information obtainable. Yours very truly,
M. L. McCoRMACK.
When the subject of his early days was mentioned,
Mr. Hill was fond of telling his family and friends
about some of his thrilling experiences. The following
account of several of the most interesting was furnished
by an intimate friend who had these narratives from his
own lips:
"The light and buoyant step which has often been
remarked upon by those who met Mr. Hill walking as
he always did between his office and the Minnesota
Club, where he frequently lunched while in St. Paul,
attested his early activity and the ability he must have
had in his youth to perform feats requiring unusual
strength and endurance. While in later life he fre
quently weighed more than two hundred pounds, 115

THE LIFE OF JAMES J. HILL
he never gave an impression of heaviness in his move
ments, and was fond of saying that at the time of his
marriage he weighed but 135 pounds and had a waist
measure of 29 inches. It is easy, therefore, to under
stand how he bore the hardships of his early journeys
through the unsettled Northwest.
"The stopping places of which Mr. Hill always spoke,
and which must have been on the usual trail between
the various terminals of the lines stretching north
westward from St. Paul to Fort Garry, were George
town, about thirty-five miles north of Barnesville;
Fisher's Landing, on the Red River about sixty miles
north of Georgetown, and the Cavalier house near
Emerson, about seventy-five miles from Fisher's Land
ing. The latter was the point to which the Red River
boats ran, and must have been something of a settle
ment. During the season when navigation on the
Red River was closed by ice and high water, the stop
ping place seems to have been the log cabin at the
junction of the Red River of the North and the Red
River. The distance from the boundary to Fort Garry
was about seventy miles.
"There are three principal journeys between St.
Paul and Fort Garry, the story of which I have heard
him tell several times. The first was a trip starting at
some station between Willmar and Morris, on the line
of the old St. Paul & Pacific — I think it was Benson
— which was at that time the last station on the line.
116

JOURNEYINGS AND ADVENTUROUS DAYS
Going by raU from St. Paul to the terminal, Mr. HiU,
accompanied by a half-breed guide, in the late winter
when the ground was deep with snow, with camping
supplies packed on a sled hauled by dogs, started
north, following the prairie trails and guided by the
landmarks with which he had by that time become very
familiar. As the trip progressed Mr. Hill becoming sus
picious of the loyalty of his companion, who insisted
that the weather was too forbidding and the condi
tions too hazardous for making a successful trip,
after reaching a point a little south of where the city
of Grand Forks now is, rid himself of his unwelcome
companion by a subterfuge, and continued the journey
alone. "That night he camped in a little grove of trees
on the Dakota side of the Red River, not very far
from the point at which one now finds the buildings
of the University of North Dakota. With melted
snow he made tea and that, with pemmican, formed his
evening meal. With the shelter of a few bushes and
without fire, because he did not wish to make his loca
tion known by the smoke, he spent the night wrapped
in his blankets with his dogs close around him. Before
daylight the following morning he broke camp, crossed
the river, and followed along its easterly bank until
late afternoon, when he camped again for the night
under somewhat similar conditions. The following
morning, long before daybreak, he started again with 117

THE LIFE OF JAMES J. HILL
the intention of reaching the home of the Cavaliers
near Emerson, on the Canadian boundary, before dark
ness came. Despite the soreness caused by the straps
of his snowshoes, which he always called 'Mai de
Racquette,' he trotted along behind his dogs, making
only short stops for rest, and finally as night was fall
ing, saw the lights of the Cavalier cabin, at which he
was always wont to find a most hospitable welcome.
It did not fail him on this occasion. From there he
completed the journey to Fort Garry in a sleigh drawn
by horses. Mr. Hill always referred to this trip as the
one on which he made his longest day's snowshoe
tramp; and figured that he had covered, following the
trail, about seventy miles from the time he broke
camp on the east side of the Red River until he reached
his destination at the home of the Cavaliers — ^probably
some fourteen hours.
"The second eventful trip was his return from Fort
Garry during the spring of a later year, when the St.
Paul & Pacific had been completed through to Mor
ris. It was made by sleigh where the roads were
still covered with snow, and by wagon on the southern
portion. All went well despite the poor roads and the
flooded streams, in which ice cakes were still floating,
until he came to the crossing of the Bois de Sioux
River, not very far from where now is the prosperous
town of Wahpeton. The river was too deep to ford,
bridge there was none, and no boat was to be had.
118

JOURNEYLNGS AND ADVENTUROUS DAYS
With that restless energy which never admitted ob
stacles, Mr. Hill told his driver to turn back; and
that he would swim the river, walk on to the house of a
farmer whom he knew, get another team and complete
his journey. As I recall it, this was on a late March
or early April afternoon. Taking some lumber which
happened to be in the wagon, Mr. Hill made a light raft
on which he placed the valise containing his papers
and the few extra clothes which he carried with him on
these trips, undressed, put the clothes he was wearing on
the raft and pushing it before him, waded into the river
until it was above his depth and then struck out for the
opposite shore. He landed successfully, dressed again and
reached the farm house where he expected to get another
team without mishap. By this time night had fallen and
one of the late snows not unusual in that section had
started to fall. After a warm supper he began the
last part of his fifty -five mile drive to Morris, accom
panied by the farmer's boy. It was somewhat after
daylight, but the morning train had not yet left when
the tired team reached Morris. It is interesting to
recall that Mr. Archibald Guthrie, who was afterward
an officer of the Great Northern and then one of the
leading contractors of the Northwest, was the con
ductor of the train on which Mr. Hill completed this
trip to St. Paul.
"The third of Mr. HiU's especially exciting trips
was made after the other line of the St. Paul & Pacific 119

THE LIFE OF JAMES J. HILL
had reached Barnesville. This was in the summer or
early fall, when Mr. Hill was bringing back negotiable
securities amounting to some $30,000 in value; a
very large sum in those days, and particularly difficult
to take safely through this little-settled and rough
frontier territory. The securities were packed in a
bag, to which, for precaution, Mr. Hill had attached a
light chain running from the handle to his own wrist.
He was a passenger on the regular stage from Fort
Garry, and spent the second night of his journey at the
usual stopping place, a log cabin on the banks of the
Red Lake River near its junction with the Red River
at Grand Forks. A portion of this cabin is still stand
ing in the grounds of the Country Club at Grand Forks.
There were a number of suspicious looking characters
about the cabin, and in order to avoid comment upon
the close watch he was keeping upon his sack, Mr. Hill
flung it carelessly in a corner of the single room which
served the purpose of office and dining room, but not
where he could not keep a sharp watch of it. Then the
problem of getting the sack to the little room under
the roof, which had been assigned to him for the
night, confronted him. He, however, while eating his
supper, pretended to have a very severe toothache;
and immediately after supper, saying that he had some
drops which would give him relief in his sack, picked it
up and took it to his room, where he spent a wakeful
night, fearing that the presence of the securities had
120

JOURNEYINGS AND ADVENTUROUS DAYS
been discovered. When he resumed his journey the
next morning, however, the suspicious characters had
disappeared, either having been frustrated by his
watchfulness or else never having known the value of
the contents of the sack which had been thrown about
so carelessly the evening before."
Two dramatic incidents from the vivid and pictur
esque life of that old day have been preserved in the
words of Mr. Hill himself. They serve as reproduc
tions of the time, and as separate chapters in the life of
the pioneer; an experience that has formed the charac
ters and led to the achievements of so many of the
greatest men in American history.
The first is an account, taken from a diary kept by
Mr. Hill at the time, of a Fenian attack on Pembina,
of which he was a witness during one of his numerous
trips back and forth between St. Paul and Winnipeg.
At that time trouble between Great Britain and Ireland
was acute, as it generally was, and there were in the
United States a lot of Fenian sympathizers who were
great talkers and plotters, and little else. The Riel
Rebellion in Manitoba gave them a hint. They be
lieved that by fanning the embers of this recently
blazing fiame they could make trouble for the hated
oppressor. They even had visions of capturing Winni
peg as Riel had done, making it the centre of a Fenian
state, and eventually driving British authority out of
Canada. That they were regarded seriously in the 121

THE LIFE OF JAMES J. HILL
Dominion is proved by the fact that Riel was able to
rehabilitate himself with the Dominion Government
in this very year, 1871, and to win from it amnesty
for past offences by advising the Metis to unite
with the Canadians in repulsing the Fenian advances.
In the United States the agitation went far enough
to gather together some of the ragtag and bobtail,
who set out for the north with all the dignity of a
Coxey army, to expel Great Britain from this con
tinent. The following is the story written by Mr.
Hill at the time. It is transcribed literally; and
its vigorous statement, attention to detail, and excel
lence in expression show to what purpose he had
trained his powers of observation and description. It
is a bit of good reporting, though not destined for the
public eye, which here sees it for the first time.
"Oct. 5, 1871. This a. m. at 7 o'clock a band of
thirty Fenians under Generals Curley, O'Neill, Don
nelly, and O'Donahue, composed of about twenty of the
hardest looking roughs and ten Pembina loafers, made
an attack on the Hudson Bay post at North Pembina,
which was occupied by one of the Hudson Bay Com
pany officers and his clerk, and captured it without
resistance being offered. They at once set about cloth
ing their half -naked squad of roughs and loading up a
wagon with provisions. Either the plunder had too
much attraction for them or they thought they could
122

JOURNEYINGS AND ADVENTUROUS DAYS
rest on their freshly-gained laurels, for they remained
in the post until 11 o'clock a. m., when they were sur
prised by Colonel Wheaton with twenty-three men from
Fort Pembina coming down the road in an army ambu
lance and a four-mule wagon. Wheaton unloaded his
men and deployed them as skirmishers and advanced
upon the fort at double quick. As soon as the Fenian
leaders saw the United States troops coming over the
Canadian boundary they at once dropped everything
and fled. And such a flight ! Some on foot and some
on Indian ponies, with the wagonload of provisions aU
scattering to the woody banks of the Red River.
"Wheaton saw they were gaining on him and he at
once headed his men into the mule team and charged
after them. In about twenty minutes he returned
with Generals O'Neill, Donnelly, and Curley in the
ambulance and about ten men on foot. They had
thrown away their arms and concealed themselves in the
bushes about six hundred yards east of the Hudson
Bay post, and as Wheaton was returning they gave
themselves up. O'Donahue and the half-breeds made
good their escape over the boundary line into the Prov
ince of Manitoba. Colonel Wheaton took charge of
all the stores, guns, etc., consisting of a few sacks of
flour, about 200 United States breechloading rifles, a
case of sabres, a few old carbines, and 14,000 rounds of
metaUic cartridges, and marched the whole affair back
to Fort Pembina. 123

THE LIFE OF JAMES J. HILL
"I was a close eye-witness of the whole affair and I
never saw a more ridiculous scattering or silly farce.
It certainly looked as if the leaders would have been
very much disappointed if they had not been kindly
taken charge of by the United States troops and in that
way kept out of harm's way. The whole thing was
laughable in the extreme, but notwithstanding it kept
up quite an excitement at Pembina, where the party
had made many friends among the hordes of Pembina
outlaws and thieves. About five o'clock the same
evening a French half-breed named Gordon rode
through Pembina to the United States fort on a gallop,
and it proved later that he was taking Colonel Wheaton
news of the capture of Mr. O'Donahue. It seems that
O'Donahue got hungry or dry and went into a half-
breed's house and was there taken prisoner by the
breeds, but not until he had made them pledge him
that they would not deliver him to any but the United
States authorities. He was armed and said he would
shoot as long as he had power to before he would be
arrested unless upon condition that he would be deliv
ered only to United States authority. Colonel Wheaton
sent a small guard under Captain Bannister up and
handed him over to Captain Bannister, who sent him at
once to Fort Pembina."
The farce ended by the subsequent acquittal of the
prisoners, after trial before Colonel Wheaton, on the
124

JOURNEYINGS AND ADVENTUROUS DAYS
ground of want of jurisdiction, they having been ar
rested on soil claimed by British authority. The story
gives an interesting picture of the place and time. This
was the lawless frontier, the international boundary, the
rendezvous of all the pariahs of the new country, where
they could hurry from one side to the other according
to the authority that threatened to repress or apprehend
them. It will also be observed that although the writer
of it had Irish blood in his veins, he was blessed with a
good head on his shoulders and a particularly keen sense
of humour.
The second story, also given in the words of Mr. HiU
himself, describes an experience of one of his trips on the
frontier. Nothing could so well set before the reader
of to-day the tale of hardships now vanished, and of
what had to be undergone by the men who made the
American Northwest. It is worth recording for its
own sake also, as a specimen of descriptive relation by a
man who, to the end of his life, held the "Pilgrim's
Progress" to be a model of the best Enghsh style:
"I remember my first trip out of North Dakota. I
had slept up at Tongue River, in the northern part of
the state, and it was a nice, gray, misty morning. Soon
after daylight we started. I was on horseback and had
a half-breed or a breed-and-a-half for a guide, and he
had a cart and an extra pony. I know that I fell asleep
on horseback, and the horse awoke me by snorting. I
125

THE LIFE OF JAMES J. HILL
looked ahead, and in the fog, sitting on a knoll, was a
wolf. I thought that wolf was bigger than a horse.
He got up, looked over his shoulder at me, loped away,
and I haven't seen him since.
"That afternoon it turned cold. There was a grove
on the headwaters of Turtle River, and as it grew colder
and the wind was from the northwest and kept picking
up little pebbles and throwing them at me, I thought
I would go into that grove and camp, and we would
have some wood to make a fire. TSTien we got there
the little stream had frozen to the bottom and the
water was running over the ice. It was April, the
water had backed up, there was a lot of slushy ice,
and there was no place to rest, not a dry spot in the
grove. In going out of it and getting across the stream
my breed-and-a-half had to lift on the cart wheel. I
got over all right with the saddle horse and went back
and took hold of the bridle of the black mare hitched to
the cart, and he put his shoulder in under the spoke of
the wheel, made an extra effort, and the wheel came
around and struck his arm and dislocated it; just
knocked it out. He spoke some Indian which I didn't
understand, and he had some knowledge of French,
such as it was.
"We moved down to where the water was four Or
five feet deep, and the banks were rather high on both
sides, and the wind was howling from the northwest.
There we camped. We had no tent, but we had a piece
126

JOURNEYINGS AND ADVENTUROUS DAYS
of canvas which we put over the shafts of the cart, and
under that we got through the night. Our ponies were
hobbled; they wanted to get under cover with us and
keep us company, but there wasn't room for aU of
us. "The next day I had to set the man's arm and I did
it. Down below there were some box elder trees grow
ing. No breakfast that morning. But we got down
there and saw those box elders. Two or three had dead
limbs on them, and of these we made a fire and boiled a
kettle of water. I took the axe and cut a box elder
stick about five or six inches in diameter, with a crotch
or fork at one end. I took my underclothes and bound
them in a roll and put it under the man's arm and got
him under the cart with a stick between his legs. I put
the fork against this, cut a notch in the end and let the
rope twist in through the notch and back to the wheel.
Then I got a stick or standard out of the cart, and took a
twist on the rope so that the same power that hauled
his arm ahead pressed through the fork on the notches
and pushed the end of the stick down tight. I took
care to sit across him. I had his head under the cart.
I felt reasonably certain that there would come a time
when it would become necessary for me to keep him in
that position. I gave him a stick to hold, and he
thought that possibly if he let go of the stick he would
be able to let go of the rope; but I had several turns of
it around his wrist. When I got a good strain on him 127

THE LIFE OF JAMES J. HILL
he began to yeU, but I kept going until I felt that the
bone pressed into its place. I got him out from under.
He found that the joint was back. Through the night
he was a little delirious, and he tried to have me take
two of the best horses and said he would take the worst
one and try to make the trip back to his home. If he
didn't, he said his father would take care of his wife
and children, but that it was more important for me to
get back.
"But I had set his arm, and that is about the only
successful surgical operation I ever performed. As
soon as I got the horse hitched up and our things in
the cart and was ready to start, he wanted to say his
prayers. He was a very devout fellow and had a httle
bit of a French prayer book. Some of the missionaries
had given it to him, or maybe his mother. At any rate,
he got it out and wanted to say his prayers, and I wanted
to give him an opportunity; but at the same time I was
ready to go on, and suggested in the best way I could
that if he would repeat after me I could do the work
more quickly than he could, probably. I remember I
commenced at the beginning and went through the
various services: marriage service, christening of chil
dren, baptism, and burial of the dead. I remember I
took a line at the top and one in the middle and some
times one at the bottom. I got through the entire
prayer book, I think, in less than twenty minutes. He
felt that he had done the biggest day's work of his life.
128

JOURNEYINGS AND ADVENTUROUS DAYS
He had gone through his prayers and he was very faith
ful and good.
"Presently we got down to Goose River, where the
old trail crossed, and it was evening. We wanted to
get across, because there was a little timber on the other
side and we could get in there for shelter. I wore moc
casins and my underclothing and, perched on the with
ers of that black mare, I started to ford. The cold
weather had stopped the running of the water to some
extent, and there was a little ice; maybe fifteen or
twenty feet on each side, and a black stream of water
in the middle. It was a hard crossing. Down near
Georgetown I was crossing again on ice which looked as
though it might be all right. AU of a sudden it gave
way, and as I didn't know how deep the water was I had
occasion to think of all the good things and all the bad
things I had ever done between the time I started down
and when I struck the ground, with the water reaching
to my vest pockets. It was hard work getting back to
the ice again. The ice kept breaking as I tried to clam
ber out; but at last I got on to a small pile of earth
heaped up by a beaver when the water was not so high,
and by that help was able to get up again and continue
to Georgetown."
The journeys to Fort Garry and back were a dividing
line between epochs in the life of James J. HUl. They
broke the routine of ordinary business in St. Paul, which
was never thereafter to constitute the first interest of his 129

THE LIFE OF JAMES J. HILL
life. The physical man, fitted by nature to confront
her hardiest moods, and the mind that had something
of the old berserker daring, tenacity, and contempt of
opposition, were matched for a time against the wUdest
aspects of the storm-swept plains of the Northwest and
the rage of its winter climate. The knowledge of the
country and its potential resources that had been
accumulating for years was reinforced by minute per
sonal observation. The man and the opportunity
had come into actual contact. The wire and the
dynamo were connected. Energy began to gather and
to flow toward the point where its ordained work was
waiting.

130

CHAPTER SEVEN
EARLY RAILROAD DEVELOPMENT IN
THE NORTHWEST
WHEN certain chemical elements come into juxtaposi
tion, any shock may unite them with startling results.
The shock which came to open to James J. Hill a new
and great career, to evoke his latent possibilities, and to
change the aspect and fortunes of the Northwest, was
the panic of 1873. That made the opportunity for
which he waited and of which he dreamed. Severe
everywhere, it broke in full fury upon the railroad enter
prises of this new country; financially ill-supported,
built on rainbows of unlimited credit and profits to
accrue from business still in the womb of the future,
handled in some cases by men who cared less for the
fortunes of the country than for their own personal
aggrandizement. It needed but the first turbulent
breath of the coming storm to bring this flimsy scaffold
ing, without even an uncompleted building to steady it,
to the ground with a crash. When this opportune
moment came, it found also the man ready, equipped
and waiting to wrest from it a talisman with which to
touch the prairie and the iron rail and transmute them
into achievement and power. 131

THE LIFE OF JAMES J. HILL
The other essential element, the opportunity pre
sented by the railroad situation in the Northwest, can
be appreciated properly only after a prehminary glance
at actually existing conditions there. It would be
impossible to estimate the greatness of Mr. Hill's plan,
slowly maturing at this time, or that of his later ac
complishment, without a fairly accurate knowledge of
the progress of railroad building in the Northwest, and
of the condition in which existing enterprises found
themselves before and after the storm that broke in
fuU force in 1873.
In 1830 there were but twenty-three miles of railroad
in the United States, and the cars operated over most of it
were drawn by horses. A rapid subsequent increase in
growth was checked by the panic of 1837. After that
the business went forward again, everywhere with
liberal aid from interested communities, until the panic
of 1857 gave it a second setback. The Civil War by
no means put an end to this form of enterprise. Al
though only 3,303 miles were built between 1860 and
1865, that was a pretty fair record for the times and the
circumstances. By 1873 the total mileage of the coun
try was 70,653, and it had more than doubled in the
preceding eight years. The business was speedily
overdone. While there were 1,026 inhabitants for each
mile of railroad in 1860, there were 730 in 1870 and 590
in 1873. It is estimated that at that time it required
at least 850 people to support a mile of railroad.
132

EARLY RAILROAD DEVELOPMENT
Booms, over-confidence, reckless financing by the issue
of state or local bonds to promote the building of roads
that could not do anything but a paper business for
years to come, reckless discounting of these securities
for the immediate benefit of promoters and construction
companies — all the wild-cat financiering with the his
tory of which during that epoch the country is tolerably
familiar — came in to hasten the inevitable catastrophe.
Naturally, the cyclone raged with greatest fury
where the hypothecation of the future had been most
pronounced; where there was the smallest ratio of real
assets and actual business to the total volume of debt
that these spindling supports must carry. That lo
cated the storm centre north and west of Chicago; and
nowhere was its violence felt more sensibly than in the
territory which Northwestern railroad projects had
taken for their Own. To financial misfortune incident
to the times were added causes of collapse less creditable
and almost as general. In 1873, Cushman K. Davis,
afterward to become one of the political leaders of the
nation, said in a speech during his gubernatorial cam
paign, "I am perfectly satisfied that there is not a rail
road company in Minnesota whose franchises are not
subject to forfeiture for flagrant, repeated, and probable
malversation and abuse."
On the third of March, 1857, the United States govern
ment had granted six sections of public lands to the
mUe, which was raised to ten sections in 1865 in the 133

THE LIFE OF JAMES J. HILL
state of Minnesota, to aid the construction of certain
lines of railroad. In May of the same year the legis
lature of the Territory, which did not achieve statehood
untU 1858, chartered the Minnesota & Pacific Railroad
Company, with a capital of $5,000,000, to buUd a line
of railroad from Stillwater, on the St. Croix River, form
ing part of the eastern boundary of the state, by way of St.
Paul and St. Anthony, as the site of the Falls where Min
neapolis now stands was then called, to Breckenridge, on
the western border. The distance, as the road was to
run, was 225 miles. There was to be a branch line, from
St. Anthony by way of St. Cloud and what is now Brainerd
to St. Vincent, on the Canadian boundary. This distance
was 285 miles; and the grant of lands made by the
federal government, as stated, was then assigned by the
Territory to this company. "The very name, 'Minne
sota & Pacific,' betokened the wide and ambitious
sphere of its intended operations. It was to bring
prosperity with the iron horse into the great grain and
fur-bearing regions of the North." The legal and
actual successor of this Minnesota & Pacific Company
was the St. Paul & Pacific Company. Mention has
been made of Mr. HUl's contracts with the latter for
handling wood and freight. Inseparably connected
with his name, it wUl appear several times in this chap
ter, and its history forms the subject of the next.
Three other Minnesota companies were made at the
same time beneficiaries of the same act. These were
134

EARLY RAILROAD DEVELOPMENT
the Transit Company, to build from Winona to St.
Peter and the Big Sioux River; the Root River and
Southern Minnesota, to build from La Crescent to
Rochester, and from St. Paul and St. Anthony to the
Iowa line by way of Minneapolis, Shakopee, and
Mankato; and the Minneapolis & Cedar VaUey, to
build from the Iowa line at or near Cedar River, by
way of the valley of the Strait River, to Minneapolis.
Helped by their land grants and the proceeds of
Minnesota bonds issued in their behalf, considerable
grading was done on these lines and the state saw untold
prosperity presently to be enmeshed in their ambitious
network. But as there was neither real capital nor a
developed business community behind them as yet, all
of them failed. Their properties were bid in by the
state in 1860, with nothing but about 240 miles of
grading to represent exhausted finances and blasted
hopes. The remnants of the Transit Company's- prop
erty were transferred to the Winona & St. Peter, and
so eventually were merged in the Chicago & North
western system of to-day. The Root River Valley
and Southern Minnesota did not begin work until
after 1864, and its feeble efforts were soon absorbed by
other projects. The property of the Minneapolis &
Cedar Valley, the second company in the state to build,
was incorporated later with what is now known as the
Chicago, Milwaukee & St. Paul. But the fortunes of
the first-mentioned company, the Minnesota & Pacific, 135

THE LIFE OF JAMES J. HILL
it will be the business of this story to follow later as
the St. Paul & Pacific, which Mr. HiU and his associates
were so daringly to covet and acquire.
The Northwest was raihoad-mad ; anybody who prom
ised to build one could get almost anything he asked
for. No less than twenty-seven raUroad companies
were authorized and chartered from 1853 to 1857. But
the financial upheaval of 1857 had for the time made it
impossible to raise the cash necessary to the prosecu
tion of the various railroad schemes under way. The
first legislature of the state of Minnesota, in response
to a popular demand for some measures that would
enable these now helpless companies to carry forward
their projects, authorized a constitutional amendment,
afterward approved by the people, providing for an
issue of $5,000,000 of state bonds against these ceded
lands, to be divided equally between the four companies.
Only $2,275,000 of these bonds were issued; but they
supplied money for the beginning of railroad construc
tion. Much of the proceeds was wasted, or worse, the
state afterward refused for years to honour the bonds, and
a bitter controversy ensued that was not finally settled
until a quarter of a century had elapsed. One hundred
thousand doUars' worth were issued for each ten miles
of grading, and a like amount for each ten miles of
completed and equipped road. Ground was broken in
May, 1858, and this was the first sod turned for a raU
road in the state of Minnesota. In 1858-9, sixty-two
136

EARLY RAILROAD DEVELOPMENT
and a half miles of line were graded and bridged from
St. Paul via Minneapolis toward St. Cloud. Then the
loan was exhausted, credit failed, the hopelessly in
volved company stopped construction, and the prop
erty was bid in by the state at a foreclosure sale. There
the project lay dead through 1860 and 1861.
It is hard to reahze to-day the crudeness of the coun
try from the Great Lakes and the Mississippi to the
Pacific Coast in the sixties and the early seventies.
Yet one will see that it had made great progress since
the last note taken of it at that earlier date, less than
twenty years before, when Mr. Hill arrived in St. Paul.
Between 1860 and 1870 the population of St. Paul
had risen from ten to twenty thousand. It was to
double again in the next ten years. St. Anthony had
become Minneapolis, and had grown from 2,500 people
in the former year to 13,000 in the latter. Edward
Eggleston's "Mystery of Metropolisville," the scene of
which was located there,had a greatvogue for a time,less
because of intrinsic merit than for its picture of life on
what was still considered the American frontier. And,
indeed, no one was likely to forget that it was yet but a
decade since Minnesota had been in the grip of a serious
Indian war, preceded by the most horrible massacre of
whites in all the later history of the country. Duluth
showed up in the census of 1860 with 80 people, which
had risen to 3,000 by 1870. St. Paul's importance was
based less on commercial activity or outlook than on its
137

THE LIFE OF JAMES J. HILL
strategic position as the head of navigation on the
Mississippi, and centre of tlie big railroad systems whigh
a deluded public had been led to believe were im
mediately to cover the Northwest; growing out of land
grants and subsidies, tangible and grabbed at or hoped
for though still unseen.
That the country itself, unaided by legislative favours,
would soon support such enterprises as business
ventures, was an idea that had scarcely entered any
mind save that of Mr. Hill; and when presented
seriously made material for the scoffer and the
humourist. Americans had a right to resent the jibes
of Dickens in "Martin Chuzzlewit," which represented
the ludicrously inflated boaster as the typical American,
or at least the typical Westerner. The truth is that
the hard-headed pioneers who settled all the West
were in a practical way, the least boastful, the most
matter-of-fact, of men. Their faith in the future was,
indeed, ardent and unbounded; but, like their religion,
it looked far into the distance for its rewards. They did
not correctly gauge the lively rate of coming progress,
or anticipate the events that were so nearly upon them.
They were sanguine enough; but what they saw as
background in their mental picture of the future was in
reality foreground.
Southern Minnesota was by this time pretty weU
settled. The valley of the Minnesota had carried the
immigrant as far west as Big Stone and Traverse
138

EARLY RAILROAD DEVELOPMENT
Lakes, on the Dakota boundary, and daring settlers
were beginning to venture farther out upon the nor
thern plains. The valley of the St. Croix had carried
them some distance to the east and north, and the
Mississippi to Brainerd and beyond. Railroad com
munication came in by La Crosse, and extended from
St. Paul to Breckenridge and Duluth, and from Duluth
to Moorhead, on the Red River. Of this northern
country Mr. E. V. Smalley, in his "History of the
Northern Pacffic," after noting the speculative quality
of the settlement at Duluth, goes on to say:
Across the Bay of Superior was a straggling little hamlet called
Superior City, which could count, perhaps, twenty years of sleepy
existence, hibernating in the winter when the lake was tightly
frozen, and living at all times chiefly on hope. Beyond these two
rival places there was not a town, village, or hamlet westward
on or near the line marked out for the Northern Pacific Railroad
for a distance of more than a thousand miles. Between the head
of the lakes and the mining camps among the Rocky Mountains in
Montana no abodes of civilized men existed, save two or three
mihtary posts and Indian agencies, and a few isolated trading
stations. Northern Minnesota was a forest into which the lumber
man had not yet penetrated, save for a few miles back of Superior.
The beautiful region in the^^western part of the state, dotted with
little lakes separated from each other by park-Hke stretches of
woodland, had but lately been the home of the warlike Sioux, and
was then quite destitute of population. On the Red River of the
North there were two houses at the old Hudson's Bay trading post
of Georgetown, and farther up the stream the ruins of a settlement
at Breckenridge which the Sioux had destroyed.
The Dakotas were still part of the Western wilder
ness. Western Minnesota was the same. According 139

THE LIFE OF JAMES J. HILL
to an eye-witness of the time, there was not an acre
under cultivation between Crookston and Glyndon,
and only a house out there near Wild Rice River. It is
worth repeating and emphasizing that when a practical
railroad man of that era went hunting for actual
traffic, as distinguished from the more famihar and
customary chase of subventions and land grants, he
headed for the country about Winnipeg; where, as
already described, there was real business to be done.
This was not only the prize at present to be struggled
for, but it was to determine the direction and character
of railroad planning and railroad building in this part
of the country for a long time to come.
In 1870, Charles Carleton Coffin wrote an interesting
book on the Northwest, called "The Seat of Empire,"
for which personal inspection furnished the material
and the famous speech of Seward gave inspiration and
title. In it he said: "Hundreds of Winnipeggers were
upon the road, either going to or returning from St.
Cloud. . . . The journey down and back is be
tween eight and nine hundred miles; and as the average
distance travelled is only about twenty miles a day, it
takes from forty to fifty days to make the round trip.
No wonder the people of that settlement are anxious to
have a railroad reach the Red River." He estimated
the value of that trade at ten millions of dollars per
annum, increasing yearly. Jacob Y. Shantz, a Men-
nonite who visited Manitoba in 1872, said: "Fort
140

EARLY RAILROAD DEVELOPMENT
Garry, the principal trading post of the Hudson Bay
Company, contains a small fortress and a garrison of
soldiers. ... At a distance of about a quarter of a
mile or so lies the town of Winnipeg, the capital of the
Province, only founded a few years ago but already
containing twelve stores, five hotels, and a large saw
mill. On the eastern side of the Red River lies the vil
lage of St. Boniface." He said that Winnipeg that year
had nearly 1,500 people, while two years before it
claimed but 300. One of the most reliable historians
of Canada says that in 1871 the white population of
Canada west of Lake Superior and east of the Rocky
Mountains was 12,225; while ten years later Manitoba
and the Territories, exclusive of the land awarded to
Ontario, had 118,706 people. Most of this immi
gration was now going in and most of the products of
that country must go out through the United States.
The all-Canada route merely from Fort William to
Fort Garry was between four and five hundred miles,
through the roughest kind of wUderness, with dozens
of portages. From Toronto, the point of departure of
most Canadian immigration, to Fort Garry, the most
acceptable itinerary was to Detroit and Chicago by
water, and thence to St. Paul; or from CoUingwood to
Duluth by boat, thence by rail to the Red River, and so
by steamer to destination. The former route was
1,572 miles long, and the latter was even more incon
venient. Everything clamoured for better facilities. 141

THE LIFE OF JAMES J. HILL
Already a thoughtful man might see that a through rail
road from St. Paul to tap the business reservoir about
Winnipeg would find a considerable and very profitable
traffic ready-made.
The Canadian Pacific enterprise had made some sur
veys for various projected lines from the upper vaUey
of the Ottawa River to Winnipeg, but these were all ten
tative. The country could not support a railway, the
through business would not warrant the building of a
long stretch of line which even the imagination could
not picture as productive, the company itself was
in bad odour, and only political considerations,
long after, provided Canadian rail connections east
ward for the people of Winnipeg and the Canadian
Northwest. Meantime, they had to be served by Amer
ican agencies; and the competition for their business
was a prime factor in the development of the country
on the American side of the border, and determined the
fate of great enterprises. In spite of real and rapid de
velopment, the American Northwest was still crude
and primitive. Only a lively imagination and an intel
ligence gifted with almost unnatural prevision could
regard it seriously as a fit theatre for great plans and
great deeds destined to full fruition within the lifetime
of the existing generation.
The natural entrance and exit for the upper Missis
sippi country, for a railroad as well as for a settler,
was by the river valley. Under old charters and
142

EARLY RAILROAD DEVELOPMENT
amendments to them a line was conceived to run down
the Mississippi River from St. Paul to the Iowa fine,
and in 1867 the St. Paul & Chicago Railway Company
was formed to handle it. In two years twenty miles
of track down the river had been finished, and in two
more it reached Winona, more than one hundred miles
from St. Paul. By 1872 it was buUt to La Crescent,
across the river from La Crosse, and became a part of
the Milwaukee & St. Paul Railway Company, the
Chicago, MUwaukee & St. Paul system of a later day.
The eastern connections were all right. But to the
west and north were two big ventures that had come to
grief. The difference between them was that, while
the prestige and the admirable advertising system of
the firm of Jay Cooke & Co. had made everybody
familiar with the Northern Pacific enterprise, and re
duced the number of doubting Thomases, the St. Paul
& Pacific, its only possible rival, which had done most of
its promoting among the burghers and bankers of
Amsterdam, had long been a laughing-stock at home
and now appeared about to become a hopeless para
lytic. It really came to owe its future, later, to the
fact that its repute fell so low that nobody would invest
a dollar in it on any terms; that the public, which had
never thoroughly believed in it, turned the cold shoulder
to it altogether; that the Hollanders, who had sunk a
good many millions in it on the advice of the promoting
artists of that generation, declined to risk another penny 143

THE LIFE OF JAMES J. HILL
on the most tempting promises of future return; and
that, finally, like a desperate bankrupt, they were ready
to make almost any bargain to get rid of the property.
Its indebtedness had become a hopeless burden, its
securities were a liability instead of an asset, and in its
future only one man in the whole Northwest at this
time could discern a gleam of promise.
Of course the Northern Pacific offered the most
dazzling prize if a man could reach it. But it was a
difficult proposition to handle. Big capital would be
required. Eastern investors must be dealt with, who
would demand the lion's share in case of a successful
reorganization, and who could not yet believe that they
would not somehow come out whole or better from in
vestment in a company dowered with a charter from
the United States Government, then supposed to be
the very hall-mark of solvency. As a matter of fact,
it will be shown in the next chapter how the Northern
Pacific at this time had gobbled up all that seemed to be
worth digesting of the St. Paul & Pacific Company it
self. Had it not been for the financial crisis of 1873,
which threw that company into bankruptcy and pre
vented it from carrying to completion its ambitious
scheme for a traffic control of the Northwest, the
course of the railroad history of that section, and of
the life of Mr. Hill as weU, would probably have been
changed. The federal charter granted to the Northern Pacific
144

EARLY RAILROAD DEVELOPMENT
in 1864 authorized the construction of a railroad whose
line was to run from Ashland and Superior, in the state
of Wisconsin at the head of Lake Superior, to Puget
Sound. Funds were difficult to obtain ; and it was not
until February, 1870, that actual construction was be
gun. The authorization by Congress of a bond issue,
with an extension of the time limit for completing the
line, helped to bring in money enough to keep the en
terprise going. In 1871 the line had been built west
ward from the head of the lakes, through Brainerd,
Minnesota, to Moorhead, on the Red River, and twenty-
five mUes of track had been laid in the state of Wash
ington. Construction was pushed as rapidly as the sale
of bonds brought in ready money; and by 1873, when)
panic struck the country, the eastern end of the systen^
had been extended to Bismarck, on the Missouri River,
and the western end southward from Tacoma to the
Columbia River. Then universal financial distress,
absolutely preventing further marketing of bonds for
an enterprise such as this, whose future, however prom
ising, was still below the horizon, put an end to the work.
The company struggled on against adverse conditions
for two years more, and then passed through a receiver
ship and a reorganization. At the date which has been
reached in the life of Mr. Hill and in the crystallization
of his plans, the Northern Pacific was not available to
a newcomer in the transportation world. Although
tottering, it had not yet fallen. Its stockholders had 145

THE LIFE OF JAMES J. HILL
not yet yielded to despair; and no one except an Eastern
man, enjoying extensive credit with Eastern finan
cial concerns and the personal acquaintance and confi
dence of the Eastern creditors who had poured their
savings into Jay Cooke's glittering scheme, could hope
to gather the Northern Pacific from the tree, even when
it became ripe enough to fall of itself.
~^he Lake Superior & Mississippi Railroad had just
been built, with the aid of a land grant embracing much
valuable pine lands, from St. Paul to the new town of
Duluth, at the head of Lake Superior. The fundamen
tal thought of the dreamers of that time was a raU
connection between the Great Lakes and Puget Sound.
A transcontinental road in those days suggested princi
pally the idea of the distance from ocean to ocean.
Cargoes of imagination were more welcome than pon
derable freight. The experience of the Union Pacific
and the Central Pacific, tended to confirm this
predisposition. But some of the practical men who
were using these flights of fancy to coax money
out of old tea-pots saw further. They knew that the
head of navigation on the Mississippi River was des
tined to be a traffic point of strategic value in the future
of local business and of transcontinental business as well.
They saw that the watershed dividing northern from
southern Minnesota had a profound meaning for the
railroad; and that it was necessary to hold both slopes
against all comers. Therefore, it wUl be noted that,
146

EARLY RAILROAD DEVELOPMENT
with the smallest possible flourish of trumpets, at
a time when every doUar and more was needed for
pushing the work of actual construction on the new
line, they found time and funds to tie up with a lease
the recently built road from St. Paul to Duluth, the
Lake Superior & Mississippi just mentioned.
This would help both as a collector and as a distribu
tor of business in the territory south of the head of the
lakes. It would be a formidable competitor in case
some other visionary should start buUding another
line toward the Pacific from the Upper Mississippi.
Its possession was strategically necessary. Nothing
convinces the student of early developments in the
Northwest of the shrewdness, the grasp, and the daring
of these pioneer railroad men more surely than this
control, for reasons of policy far in the future, of a line
built over country then regarded as a barren wilderness,
to a ridiculous little hamlet which Proctor Knott
made known to the country as "The Zenith City of the
Unsalted Seas." This was a joke of truly national
proportions, received with guffaws of inextinguishable
laughter by all the wise men who saw only humour in the
immense earnestness of these people trying to maintain
a railroad in a part of the country where nobody could
live and nothing could grow, because of a barren soil
and an inhospitable climate. Accepting the raillery in
good part, the ridiculed gentlemen did not neglect to
button up this Superior-to-Mississippi Railroad, that 147

THE LIFE OF JAMES J. HILL
was to be for many vexatious years one ward in the key
to the railroad situation in the Northwest.
Nor were they unmindful of the only other enterprise
in this section that could possibly interfere with their
plans. They, too, had an eye upon the curious aggi-e-
gation presently to be described, and known as the St.
Paul & Pacific. But for the reverses that overtook
the Northern Pacific, the actual ownership of that
property which it acquired would have been asserted
and changed into real possession. They did not, any
more than the general public, at all grasp its signifi
cance or value as an independent property, or forecast
the future that was already forming a coherent pic
ture in the mind of ]\Ir. Hill. What tliey were after was
to stifle all possible competition in their territory.
As it was, the Northern Pacific was able, by the
rights which it acquired at this time, to enforce later
its claim to valuable trackage privileges in and out of
St. Paul and Minneapolis, terminal facilities, and a
right of way north from INIinneapolis along the Missis
sippi that grew to be of immense value, in fact indis
pensable to its development as a transcontinental line.
How this came about will be told in its proper place, in
the tale of the St. Paul & Pacific. From tliis point
the Northern Pacific remained a steady and watchful
enemy of other railroad enterprises in the Northwest;
determined, according to the accepted code of that
time, to acquire them or drive them into bankruptcy;
148

EARLY RAILROAD DEVELOPMENT
prevented only by its own financial collapse from as
similating every competing interest near its path. One
of the bitterest drops in the cup of the able men who
had built up that company and understood its pos
sibilities must have been the knowledge that what
threatened to become a rival interest was picking up
for a song the materials by which its rivalry could be
made real and dangerous; and that the sum required
to take them away from it, which would have seemed
a mere bagatelle either earlier or later than at this time
of mortal stress, was wholly beyond the command of the
Northern Pacific at the moment of its own life-and-
death struggle.
To the outside observer, who did not know the inside
facts of the situation, it seemed hardly worth while
for a possible competitor of the Northern Pacific
to consider any further venture in a territory already
so well occupied by a company that had warily estab
lished itself, under a national permit, in a position
from which it could be dislodged only with great diffi
culty. Mr. Hill thought differently. He had become
a regular mine of information about the St. Paul
& Pacific Railroad Company. This picturesque wreck
he eventually decided could be made into a fine
merchantman, more seaworthy and serviceable than
the bigger and stauncher boats already flying the flag;
and on it he ventured to embark his entire fortune, the
whole accumulation of shrewd and toilsome years, to-149

THE LIFE OF JAMES J. HILL
gether with all his hopes of future success and fame.
For any proper understanding of his thought and his
achievement, it is necessary to get in mind clearly
the story and all the details of fact relating to the St.
Paul & Pacific. This alone can bring the tale down
to the daring conception, the startling act which was to
reveal his genius to the world, as doubtless it helped to
reveal it fully to himself.

150

CHAPTER EIGHT
THE ST. PAUL & PACIFIC
THE bankruptcy of the St. Paul & Pacific Railroad
Company, in 1873, gave the signal for which Mr. Hill
had been waiting, and fused his hopes and desires into a
definite plan. Since this was the nucleus of his
future fortune, the germ of that great railroad system
which, under the name of the Great Northern, made
him known all over the world, it is of considerable im
portance to state here all the facts up to date about the
St. Paul & Pacific; what opportunities it offered, and
what difficulties its acquisition and extension pre
sented. The detailed story of his conception of a plan to pur
chase the St. Paul & Pacific and of that plan's execution
has never been told before. Most accounts published
have been bare outlines, not always either accurate
or unprejudiced. The one given here is uncoloured
by opinion, and unassailable as to accuracy because
it is composed largely from sworn testimony. Sub
stantially every important fact stated in this connection,
down to the organization of the St. Paul, Minneapohs
& Manitoba Railroad Company, is vouched for by
witnesses on the stand for Mr. Hill, against Mr. Hill, 151

THE LIFE OF JAMES J. HILL
or by Mr. HiU's testimony himself in the celebrated
suit brought by Mr. Farley. The residuum of these in
quiries, winnowed by the Courts, embodied in their
decisions and supported by contemporary knowledge
of events, may be relied upon as the absolute and irre
ducible fact.
The last chapter, contained a description of
the large grant of lands in Minnesota by the Fed
eral Congress in aid of railroad construction; and
the acceptance of these and their transfer by the
state to four railroad companies whose future fortunes
were briefly summarized. The unrealized assets of the
first and most ambitious of these, the Minnesota &
Pacific, were to bolster up for a time another and
more colossal failure, the St. Paul & Pacific. It is
time to see when and how and why this latter came to
be. It was provided in the original act of Congress making
the grants of land in the Northwest that if any of the
lines specified were not completed within the time set —
and all of them within ten years from the original date
— the lands should revert to the United States. The
state was as anxious to save the lands as any individual
could be. In 1860, notwithstanding liberal favours to
the companies, not a rail had been laid within the state
of Minnesota. Therefore, in that year, the state en
forced forfeiture of all the grants thi\t had beet made
to the favoured companies. Some of those concerned
152

THE ST. PAUL & PACIFIC
in the fortunes of the Minnesota & Pacific refused to
give up; and procured, in 1861, a re-grant of the old
rights and privileges. They believed that they could
carry the thing through in some way, but failure
brought a second lapse of these concessions. Still
they were not finally baffled or beaten. Practically the
same parties who had been behind this old Minnesota
& Pacific organized a new concern under the corporate
name of the "St. Paul & Pacific Railroad Company,"
having secured some modifications of terms from the
state which they believed would open to them the way
of success.
Why were they so persistent.'' Success, be it re
membered, to all this procession of failures and their
promoters, meant substantially one thing. These
predecessors of Mr. Hill started from a point exactly
opposite to his. All of them were bent on disposing
profitably of some stock and getting possession of the
land grant. They were willing to build the track, if
they could raise money enough, in order to get title to
the lands. Out of these latter and their stock interests
they would make, they thought, snug fortunes; and the
raUroad was only the troublesome bridge to this end . As
an end in itself, comparatively few people gave it much
consideration. Mr. Hill was one of these. He wanted
the lands earned, as a basis of credit to put the railroad
into good shape; then the railroad would bring in new
people, the new lands settled would make more business 153

1

THE LIFE OF JAMES J. HILL
for the raUroad, and so on indefinitely, as actually hap
pened. But in 1862, "The subsidy's the thing," was
a perfectly sincere and honourable slogan, following the
ideas and practices of the times, no matter whether the
subsidy consisted of lands, or pledges of credit or ad
vances of cash.
Enter, now, therefore, the St. Paul & Pacific Railroad
Company; to which, March 10, 1862, the Minnesota
legislature granted all the lands, rights, franchises, and
privileges which it held from the defunct Minnesota &
Pacific. The ten-mile stretch between St. Paul and St.
Anthony (Minneapolis) was completed and running by
June 28, 1862, being "the first stitch in the network of
railways that covers Minnesota." The foUowing year a
further authorization of construction, with land grant,
was made to the St. Paul & Pacific for a line down the
Mississippi River from St. Paul to Winona. And again, in
1864,lands for building a railroad from some point near St.
Cloud, seventy -five miles above St. Paul on the Mississ
ippi, to the head of Lake Superior, were turned over to
the same company. It is interesting to note that, at the
very date when the Northern Pacific received its charter
from Congress, the St. Paul & Pacific held under its
charter the right to construct a total of 770 miles of
railroad and to receive a total land grant of 5,184,000
acres. There had been a lot of lobbying at Washing
ton and at St. Paul between representatives of the rival
projects. The backers of both of them had yet to be
154

THE ST. PAUL & PACIFIC
taught in the school of insolvency that business success
in railroading must be sought through efficiency rather
than legislative favours.
Already had begun that fearful and wonderful financ
ing of the St. Paul & Pacffic which has had few equals
in railroad history. Its debt totals, insignificant
though they would be now, were plutocratically start
ling at that time and in that latitude and longitude.
The holders of certain special and preferred stock of the
St. Paul & Pacific Company, under legislative permis
sion, organized another Company in 1865 known as the
"First Division of the St. Paul & Pacific," a wheel
within a wheel, facilitating all sorts of manipulations.
The company contracted with E. B. Litchfield, of
Brooklyn, N. Y., who held 8,500 shares of these special
and preferred stocks, to take over the lines from St.
Anthony to Watab (Sauk Rapids) and from St. Paul
to Breckenridge, with the land grant belonging to them.
This was the cream of the property. He agreed to form
this new company, called for convenience "The First
Division," and to finish the lines taken over. As a
matter of fact, the arrangement became a mere screen
for much high-soaring and not a little subterranean
financiering. It smoothed the way later to the conquest
of the property by the Northern Pacific.
Long before this the Northern Pacific people had got
busy with their troublesome rival. They had built
their own line from Duluth to Moorhead, by way of
155

THE LIFE OF JAMES J. HILL
Brainerd, and had no mind to divide the field. There
were, among the earliest advocates of a northern trans
continental route, more speculators, promoters, and
traffickers in daring projects affected by legislation and
the stock market than practical railroad men. The
pubUc wanted more transportation facilities, and was
ready to make any sacrifice in the way of land grants
and the voting of bonds in order to get them. A
good many people wanted these lands and bonds, with
out being willing to give value received. What the
government had done to aid the building of the Union
Pacific sharpened appetites. Before a definite project
was matured for the building of a northern transcon
tinental railroad, there were, as has been seen, two lob
bies at Washington, one fighting for the scheme after
ward known as the Northern Pacific and the other for
that later issuing as the St. Paul & Pacific. Each was
intent on securing for itself any legislative favours that
might be going; and each was equally bent on blocking
the schemes of the other. It was five years after
the Northern Pacific was chartered before its friends
were willing to abandon the fight for a big subsidy
in the shape of cash or bonds and get down to real
work. The St. Paul & Pacific, being in an inferior position,
was the first to feel the pressure of necessity. Long be
fore the receivership, it had begun to disintegrate. The
Northern Pacific, on the other hand, was at least a
156

THE ST. PAUL & PACIFIC
tangible property. Its main line, as stated, was fin
ished to the Red River in 1871 and to the Missouri be
fore 1873. It had secured by lease in 1872 the whole
line of the Lake Superior & Mississippi. Until the line
of the St. Paul & Pacific was actually connected with
the Red River, the Northern Pacific had the whip hand
in the fight for the Red River trade, because it had the
uncompleted extension line that was headed toward
St. Vincent completely bottled up. The St. Paul &
Pacific was in no position to make any effective resis
tance. Its main line and the branch line to Sauk
Rapids were completed by 1871; but its money was
gone, its credit exhausted, its business inconsiderable,
its necessities pressing, its securities in the enemy's
hands. It will be recalled that one of Mr. HiU's partners in
his arrangement for handling the freight of the St.
Paul & Pacific Company at St. Paul was Mr. Egbert
S. Litchfield. He had two half brothers, E. C. and E.
D. Litchfield, who were owners of stock in the First
Division Company. The Litchfields were the original
contractors by whom the line from St. Paul to Watab
had been completed in 1864. They represented inter
ests in sympathy with or controlled by the Northern
Pacific. Mr. E. V. Smalley, in his History of the North
ern Pacific, says:
The importance of St. Paul as the first great railroad centre
northwest of Chicago was fully realized by the Northern Pacific 157

THE LIFE OF JAMES J. HILL
managers, and by controlling the stock of the St. Paul & Pacific
Company they expected to be able to make its lines virtually exten
sions and feeders of their own road. They also appreciated the
value of the then entirely undeveloped valley of the Red River of
the North as a region likely to furnish heavy traffic in the future,
and rightly considered that rich agricultural region as properly a
part of the area of country which by its geographical position was
naturally tributary to the Northern Pacific enterprise. They went
so far in the execution of the wise plan thus early matured for con
trolling the lines chartered to be built from St. Paul to the Red
River Valley and the Manitoba boundary as to furnish large sums
of money and to direct the location and construction of a consider
able portion of the St. Paul & Pacific system; but its realization
was afterward frustrated by the financial troubles of the Northern
Pacific Company, which compelled it to part with the stock of the
other company.
Early in 1870 the Northern Pacific Railroad Company
had purchased from Mr. E. D. Litchfield, of London, to
whom the other Litchfield interests had been trans
ferred, the capital stock of the First Division Company,
carrying with it all property, rights, franchises, land
grants — everything. It had already, as noted, secured
the stock and franchises of the St. Paul & Pacific Com
pany, and paid Mr. Litchfield with $1,500,000 of bonds
of that road and $500,000 in cash. This was a good
trade for the Northern Pacific. A little money went
far in those days. The Northern Pacific had, after
these deals, " an absolute monopoly of the railroad
situation in the Northwest. It owned both the com
panies by which every railroad enterprise in that
section was controUed. To save appearances, the sev-
158

THE ST. PAUL & PACIFIC
eral corporations maintained a nominally separate ex
istence; but their boards of directors were not merely
interlocking, they were identical. The following ex
tracts from the report, January, 1871, of General George
L. Becker, President of the First Division Company,
illuminates the situation thoroughly:
Since the date of my last report Mr. E. D. Litchfield, who has
heretofore owned a controlling interest, has sold all the shares held
by him to the Northern Pacific Railroad Company.
The Northern Pacific Company, which had previously pur
chased the charter and land grant of the old St. Paul & Pacific
Railroad Company (of which our lines were originally a part)
has transferred the same to this Company.
The Northern Pacific is thus the continuation across the con
tinent of the St. Paul & Pacific, through the two branches of which
it reaches its terminus on the Mississippi River at St. Paul, and
there connects with the network of railroads extending all over the
United States.
The power thus obtained was ruthlessly exercised.
The Northern Pacific was greatly interested in getting a
line built down the Red River Valley to "handle the
Manitoba business, and in getting a line of its own into
St. Paul and terminal facilities there. The St. Paul &
Pacific Company covered both grounds, either in fact
or in right. It might also be used as a convenient
medium for holding part of the property, if it should
become desirable to let go of the rest, and to use as a
basis for another bond flotation. Nobody gave a
thought to railroad stocks in those days, except as con
veying nominal title and so conferring control. Intrin- 159

THE LIFE OF JAMES J. HILL
sic value they were not supposed to have. They were
the premium which promoters — though that word with
its later content was then unknown — reserved for
themselves and their friends. Construction was car
ried on by the proceeds of bond sales, after many palms
had been salved in the process. The St. Paul & Pacific
had not neglected any opportunities. The Branch Line
began in a modest sort of way with three smaller mort
gages issued at different times. Then, getting a httle
into the stride, it put out $2,600,000 of new and re
funding bonds in 1865. But the year previous the
Main Line had made one issue of $1,500,000 and an
other of $3,000,000. In 1868 there was a crop of
$6,000,000. Then came the great stroke of business
which fairly dazzled even the operators of that time.
This was the contract made by one of these companies
with the other, already referred to, that is a contract
of some people with themselves, by which the First
Division was to finish the unfinished lines, equip them,
take them under lease, and get the land grant; against
all of which privileges, or obligations — according to the
angle of vision — it proceeded to issue, in 1871, a trifle
of $15,000,000 of bonds.
This was a huge total, considering the nature of the
security behind it. American investors would not have
touched it. The bonds were disposed of through a firm
of bankers in Amsterdam, in the big deal that placed these
$15,000,000 of securities with the investors of Holland.
160

THE ST. PAUL & PACIFIC
Enough of the purchase price was held back to pay in
terest on the issue for five years, in order that the holders
might be sure of returns, even if paid out of their own prin
cipal, and the prosecution of the railroad work remain
uninterrupted by financial squalls. When this and the
commission charged for negotiating the loan had both
been deducted, less than 50 per cent, of the cash paid
in was left to apply to actual construction. There
were many hands between the thrifty Dutchmen and
the Minnesota prairie; and ultimately the bonds netted
to their owners less than forty dollars on the thousand
of face value. These bonds, defaulted and dishonoured,
became seven years later the basis of the purchase and
development of the property by those who knew how;
and who were more interested in the business of rail
roading than in high-flying finance.
Out of the proceeds of these various transactions
had been built some fragments of road, cheaply con
structed and utterly incoherent as a railroad system.
The property possessed by the St. Paul & Pacific
and the First Division companies together included,
at the time when they were finally submerged, a choice
assortment of railway odds and ends. To the First
Division, as the concern organized to tempt the foreign
investor, had been assigned the lion's share. It had a
fine from St. Paul by way of St. Anthony (Minneapolis)
to Watab (Sauk Rapids) , a distance of about 76 miles ;
and another from St. Anthony to Breckenridge, a dis- 161

THE LIFE OF JAMES J. HILL
tance of about 207 miles. The parent company, the
St. Paul & Pacific, rejoiced in a line running from Sauk
Rapids to Brainerd, about 60 miles graded but not
ironed, and a theoretical line from east St. Cloud (near
Sauk Rapids) northwest to Glyndon, where it crossed
the tracks of the Northern Pacific, and thence was sup
posed to run north down the valley of the Red River
to St. Vincent or Pembina on the international bound
ary. When completed, this line would be about 310
miles long.
As a matter of fact, at the time of the general col
lapse in 1873, and thereafter until Mr. Hill and his
friends came into control, the property was a pitiful
heap of unrelated scraps. Only the first two lines men
tioned, namely those from St. Paul to Sauk Rapids and
to Breckenridge, were finished. They were operated,
in a slipshod way, so far as the trifling local business
seemed to warrant. The other and more ambitious
lines, on which hung a big land grant, were patches of
roadbed hung up in the air. A few miles of iron had
been laid on the Brainerd branch; 35 miles from St.
Cloud to Melrose; and 104 miles on the stretch north
and south from Glyndon. But this latter piece was
separated from the rest of the system, and depended
for its business and its life on its connection with the
Northern Pacific. A good deal of grading had been
done elsewhere. In 1871 there remained to be com
pleted 435 mUes of the original system. In that year
162

THE ST. PAUL & PACIFIC
some changes in the route first chosen were author
ized by Congress and validated by the state; the chief
benefit and purpose of this being the incidental re
confirmation of the land grant on which the promoters
stiU hoped to hang more indebtedness. But not all of
these lands had been duly entered and secured to the
road, and their possession was an occasion of litigation
for years.
The condition of the property was dispiriting enough
to the representatives whom the bondholders sent to
look it over. Grading had been done in hit-or-miss
fashion. Iron rails, of course, were used. Large
quantities of ties, bridge materials, and other property
were scattered along the right of way. Nobody seemed
to know to whom they belonged. Lawsuits usually
assigned them to contractors or other private individ
uals. Only on the older portions of the main lines
mentioned was there any business worth speaking of.
The construction done on what was called the "St.
Vincent Extension " was a joke. Years after this, when
the property had passed into the hands of the new
company, its Chief Engineer wrote to the General
Manager, then Mr. James J. Hill, as follows: "I beg
to state that I was engineer on the Branch Line during
construction and tracklaying from St. Paul to Sauk
Rapids, 1862 to 1867 inclusive; during which period
the railroad company had much difficulty in building
and operating the road from certain financial difficulties 163

THE LIFE OF JAMES J. HELL
not necessary to mention here, but which necessitated
the purchase by the contractor of iron in small lots
wherever he could purchase it cheap. Some of it being
iron in use on other roads, it took five years to build the
seventy-five miles of line to Sauk Rapids. The iron
being purchased in small lots and of different manufac
turers, caused the road to be covered when finished
with from thirteen to fifteen different patterns of rail,
which is exemplified now on the line running into
Grand Forks, where thirteen different patterns can be
seen in a distance of two miles of track laid with scrap
iron from the St. Cloud line." In such fashion had at
least the later built portions of the St. Paul & Pacific
been constructed. Not much of value there but a right
of way, a land grant if it could be saved, and a draft
upon an unknown future. Its material condition was
the twin brother of its financing. "Two streaks of rust
and a right of way," they used to call it.
The stretch of track from Glyndon north and south
was up in the air, beginning and ending nowhere. Mr.
J. P. Farley, receiver of the St. Paul & Pacific, stated
that in 1873, when he took charge, you could get over
it with a hand car, but that a locomotive or train could
not be run over it at all. In 1875 he reported as follows
on the operation of this piece of line: "In December,
1873, and January, 1874, we ran a few trains over the
Red River portion of our road, 104 miles long. We
found the traffic so extremely light that we could not
164

THE ST. PAUL & PACIFIC
make operating expenses, and we abandoned the opera
tion of the line till the following May, from which time
we continued the operation of the road until November
of the same year, closing the season's business with a
light profit above the actual expenses." Clearly a
property which could at least earn its bread and butter
in one direction, and which could give connections
with St. Paul and the Mississippi River in the other,
would be worth holding on to if it could be done with
out too much expenditure of ready cash, scarce in
those days.
The Northern Pacific, which had still a couple of
years' lease of life, was not ignorant of the situation or
desirous of relinquishing the control that it had secured.
Had not financial disaster intervened, nothing would
have induced it to surrender virtual possession of an
adjunct so valuable, and a potential competitor that
the future must make so troublesome as the St. Paul &
Pacific. But the Northern Pacific itself was already
staggering to its fall. Eastern capitalists had lost faith
in it. The small investor, once enthusiastic, now re
garded the whole scheme as chimerical. After his fash
ion, he rushed from one extreme to the other. Under
the plan of reorganization that was being mooted, the
preferred stock into which Jay Cooke's bonds were
converted hung flat at from twenty-five to thirty cents
on the doUar. After 1873 times were hard, business
duU, capital more than ever distrustful. Bankrupt 165

THE LIFE OF JAMES J. HILL
itself, the Northern Pacific not only could not come to
the relief of the bankrupt St. Paul & Pacific, but it
could not fulfil the terms stipulated on its purchase
of the First Division Company. That stock was
turned back to Mr. Litchfield, to reappear later. The
St. Paul & Pacific defaulted on its bonds, and the sub
sequent foreclosure sale extinguished the rights of the
stock on which the Northern Pacific had relied. The
relations between the two systems were to be a matter
fruitful of controversy and a thorn in the flesh to Mr.
Hill for many years to come. They will reappear from
time to time in their fitting places in this story.
Meantime there was every kind of friction. The North
ern Pacific threatened to control the Red River business
frbm Glyndon north to the international boundary line,
or to destroy it. It threatened to parallel that line by
building one on the other side of the Red River, and
to do the same for the line from Sauk Rapids to
Minneapolis. It worked to get different portions of
the land grants belonging to the St. Paul & Pacific
set aside. It claimed part of them for itself, and insti
tuted litigation that dragged on interminably. Each
one of its aggressive acts was a body blow to the infirm
old enterprises grouped under the general name of the
St. Paul & Pacific. They made any attempt to re-
habUitate that concern seem hopeless against opposi
tion which, even in its doleful days, was a powerful
force in the Northwest; and the most powerful force
166

THE ST. PAUL & PACIFIC
at Washington, when Northwestern aft'airs were under
consideration, until Mr. Hill took a hand in the game.
It is now possible to trace with understanding the
lines of what he himself forty years later called "the
great adventure" of his life, as they took shape and
grew in his brain into inteUigence, purpose, and power.
The events whose outline has been traced lightly through
the obscurity cast upon them by the flight of years and
the unsettled condition of everything in the Northwest
in those times of daring, speculation, panic, and yet
much underlying healthy growth withal, were converg
ing toward a definite end. Mr. Hill was almost ready
to take up the part that he was to play with such mag
nificent assurance and success, and that was, in turn, to
fix and temper all his faculties and help to fashion him
into the most notable man of his time.

167

CHAPTER NINE
THE GENESIS OF AN IDEA
SUCH was the property which, four years later, was to
be acquired through purchase of its defaulted bonds
by four men: James J. Hill, Donald A. Smith, George
Stephen, and Norman W. Kittson. This was the seed
from which sprang the Great Northern Railway system.
The steps by which the transformation was accom
plished, the difficulties that had to be surmounted, the
genius required to bring such an enterprise into being
and to steer it through the shoals of jealous opposition
by rivals and material obstacles as well, to make of it a
great property and not a basis for the issue of sham se
curities, have a real dramatic quality. The genius
of the creative idea, the parentage of this daring con
ception, is of major interest.
There is not the slightest contradiction or conflict
between the facts which assign the first notion of taking
over the St. Paul & Pacific to Mr. Hill and those that
caused the biographer of Lord Strathcona to assign
precedence to him. For the two men looked at the
matter from entirely different angles and, at first, with
an eye to totally different results. A through rail con
nection with the Atlantic coast had become necessary
168

THE GENESIS OF AN IDEA
to the people of Manitoba and the country west of it.
They expected Donald A. Smith to push the matter, on
account of his official position and his connection with
parliaments and high political influences. He saw that
it was indispensable to the interests in his care and to his
own advancement, possibly even to the maintenance of
the place he had won in the community. It was
clear to anybody but a blind man that there was, at this
time, no such connection possible except by way of the
Red River Valley and St. Paul. Moreover, a good
part of the line was already completed, after a fashion.
Mr. Smith knew that he could handle, through his
government, the building of the Canadian link south
from Winnipeg to the boundary. It was, therefore, the
most obvious thing in the world that he should consider
the possibility of filling in the gaps on the American side.
But it was in this aspect that he saw it — as an end, and
not a beginning. The St. Paul & Pacific might bridge
the traffic gap between the Winnipeg country and the
outside world. In that subordinate relation, Mr. Smith
was curious about it, and early began to look into it
and collect information as to the possibility of securing
a control. Of its larger future, its effect upon the
growth of the American Northwest and its possible
expansion, he was at that date oblivious, as it was
natural that he should be. In December, 1915, Mr.
HiU said, in speaking of him, "Strathcona was a
strong and able man, but knew little about and had 169

THE LIFE OF JAMES J. HILL
little to do with railroading." That tells the whole
story. About Mr. HiU's attitude and feeling there is no
room left for doubt. The testimony of his intimate
associates at this time is unanimous and positive. At
what time the practical project of obtaining possession
of the St. Paul & Pacffic, and making it the nucleus of a
great system and the means of development for an
agricultural empire in the United States, first presented
itself full-fledged, definite, concrete, to his mind, no
one knows. He said that he could not fix such a date
himself. It had not been a revelation, an inspiration,
one of those sudden liftings of the veil that change in an
instant human lives and history. It was a birth, and
a slow and silent growth. Subconsciously his thought
had worked upon it powerfully before he gave to the
product a firm outline and a name. Gradually his
earlier dreams and aspirations had turned to this new
possibility, woven themselves unconsciously into the
new pattern. From the moment when he made his
first trip to Fort Garry, saw the quality of the country,
understood what this black soil that lay heaped up be
side innumerable gopher holes would do, and imaged
the procession of immigrants who would fill these deso
late spaces within the next generation, he understood
dimly what was to be done. Destiny, though stiU
half hidden, grasped him. The light brightened on
the design with each passing year. When the St. Paul
170

THE GENESIS OF AN IDEA
& Pacffic went to the wall, he knew that the hour had
struck. He had already in his mind the outline of that
creative thought which fiUed his active years and made
him known everywhere as the "empire builder."
But there is better authenticated evidence even than
the word of personal friends, whose recollection might
have been influenced by the glamour that surrounds an
astounding accomplished fact. Credit for the plan
that hardened into purpose and found an outlet in act
has been fixed by the final determination of the highest
courts of law. Among other unique experiences, Mr.
Hill enjoyed that of having the Supreme Court of the
United States assign to him a property right in the
origination of his great idea.
Mr. J. P. Farley had been named receiver by the
court to take charge of the St. Paul & Pacific when it
went into bankruptcy in 1873. He continued to hold
that post, as well as that of General Manager of the
First Division Company, until 1878, when it passed into
the hands of the four associates mentioned above. ;
Necessarily he had some inkling, in the later stages of
the game, of what was going on. There were a thou
sand details that could not be looked into without letting
the man who was managing the property know that
something was in the wind. Mr. Farley was a man en
tirely without education, and devoid of experience worth
mentioning in railroad matters; but he was not a fool,
and he had a keen eye to the main chance. After the 171

THE LIFE OF JAMES J. HILL
purchase was completed and the new company organ
ized, he suddenly woke up to the fact that a great thing
had happened and that millions would be made out of
it. He was grieved that he did not share the profits,
though he had shared neither the conception nor the
risks. It occurred to him that there was still a chance
to turn a pretty, if not an honest, penny. He set up the
claim that the idea of the purchase was his own; that
he had suggested it to the associates, had cooperated
with them in carrying it out and had received from them
a promise of an equal share in the division of the stock
of the new company. He, therefore, brought suit to
compel the payment to him of the moneys, or the as
signment of the securities he claimed.
The case was fought long and bitterly. Farley's
fundamental claim was that he and his assistant, who
took the stand in his behalf, had originated the enter
prise, and communicated the project to Mr. Hill in
1876. He said that his interest was kept concealed
because he was receiver of one railroad company and
general manager of the other; and that he had been
defrauded of his share in profits amounting, according
to his estimate, to $15,000,000. This, it wiU be ob
served, goes right to the heart of the matter. Who
originated the scheme.? The original bill in the higher
court was filed in 1880, only one year after the new
company had come into existence, and two years after
the purchase of the lines had been made. The facts
172

THE GENESIS OF AN IDEA
were easily ascertainable and the circumstances fresh
in mind. Testimony and documents in this famous
case, where everything bearing on the question was win
nowed down to hard wheat, fill four bulky volumes.
In the end. Judge Brewer, of the United States Circuit
Court, decided it against Mr. Farley, his decision clos
ing with this delicate sarcasm: "I think that Mr. Far
ley, as a receiver, did not fail in his official duty, and al
though such conclusion carries an imputation upon his
recollection or veracity as a witness, it sustains his in
tegrity as an officer."
Still not satisfied, Farley carried his case to the Su
preme Court of the United States. The masterly argu
ment of Mr. HiU's counsel, a treasury of facts relating
to the great enterprise, unassailable because all estab
lished under oath in a court of law, was made in 1892.
In the intervening twelve years the ingenuity and re
search of opposing laviyers, contending for so great a
stake, could find nothing to break the force of the
record, and the Supreme Court finally gave its quietus
to the Farley legend by dismissing his case. In re
jecting him as the author of the plan, it necessarily,
though unofficially and indirectly, assigned that role
to Mr. HiU.
There had been, of course, no question about it in
the minds of those who knew him and were on the spot
at the time. His earliest visions of a career in trans
portation; his work of twenty years, aU going to trans- 173

THE LIFE OF JAMES J. HILL
late imagination into practical possibiUty; his entry
into the Red River busmess; his partnership in the
Red River Transportation Company; his arrangement
with the St. Paul & Pacific that put him in charge of
business at St. Paul, had all been educating influences
and formative experiences. But the spring and foun
tain of inspiration were in himself. One of his most
intimate friends testified in the Farley case in these
words: "It (the project of securing the St. Paul & Pa
cific) became from day to day an all-absorbing subject
with him. I used to tell him that he was getting it on
the brain. He thought of nothing else." Mr. Griggs,
one of his partners, said: "Mr. Hill was an enthusiast
on the subject of the resources and future of the North
west, so much so that he was often joked about it.
He endured the facetious remarks made at his expense
with philanthropic calmness, however, and pushed
ahead steadily with his projects. His connection with
the St. Paul & Pacific freight transfer agency no doubt
first directed his attention to the possibilities of devel
oping the Red River Valley country."
Another intimate friend, Mr. HiU's next-door neigh
bour for years, Mr. H. P. Upham, afterward president
of the First National Bank of St. Paul, told of the
origin of the scheme in these dramatic words — a per
sonal touch which those who knew Mr. Hill would
recognize instantly as carrying conviction: "From .the
time he first conceived it, he was possessed by the rail-
174

THE GENESIS OF AN IDEA
road scheme. He used to talk it at all times. He sat
in the old club house holding Kittson in a corner and
boring the plan into him with a threatening forefinger.
He ate and drank and slept with it." Personal and
legal records leave no doubt of the paternity or legiti
macy of this offspring. But, for some slow-passing
years, all that could be done was "to labour and to
wait." James J. Hill never had to learn to labour. He was
born with an instinct and an appetite for it that he
never lost. Waiting, however, was with him an ac
quired faculty. The years when he had to fit himself
for the work at hand and the work yet to come; when
he was making his way from a clerk on the levee to one
of the most active and prosperous business men in the
little city where he had cast his lot; and above all
when he must wait, first for the possibility of moving
toward the realization of his great dream, and second
for an opportunity to realize it even if funds should be
forthcoming, were in one sense the hardest, and in an
other among the brightest of his life. A man of san
guine temperament and restless activity, he chafed to see
the slow months and years pass without perceptible
progress toward his golden goal. Yet the glow of its
promise, shining ever a little more brightly, a little
nearer, fed 'hope and compensated for many disap
pointments. The five years from 1873 to 1878 had
few events that brought him into public prominence. 175

THE LIFE OF JAMES J. HILL
But they were the seedtime from which a splendid har
vest sprang.
It has been seen that, early in the seventies, the ma
turing conception, as a practical working affair, of a
great transportation enterprise in the Northwest,
built on the ruins of the old St. Paul & Pacffic, focussed
to a definite point the more or less vague but always
persistent ideas that had dominated his subconscious
self ever since, as a boy, he had left home with the
thought that somewhere in the Orient, on the waters
of the rivers that had drawn as a magnet the ambitions
of Alexander and Pompey and Napoleon, he might
introduce a modern system of transportation. Hence
forward it was to be no nebulous creation of a young
man's fancy, but the perfected scheme of the strong,
determined, and tempered mind, that beckoned him on.
But it was no time yet to act. So far as the railroad
itself was concerned, its affairs showed an utter im
passe. Mr. Hill, after acquiring and furnishing not later than
1874, some of the information desired by Mr. Smith, did
not rest there. He had the matter always in mind, and
went to the extent of estimating at that time the prob
able cost of purchasing these railroad bonds. But, as
he himself says, "There was a time when everybody
waited." That was hardest of all for him. The stock
holders had a strong position, and it was believed that
the mortgages, under conditions contained in them, and
176

THE GENESIS OF AN IDEA
the utter confusion of a perfect mosaic of unintelligible
and contradictory legislation by both Congress and
the Legislature of Minnesota concerning the various
land grants, could not be foreclosed in less than eight
or ten years. By that time the land grants themselves
would be hopelessly lost. The time was full of hardship
for the Northwest. The grasshoppers had begun their
memorable invasion by appearing in the western part
of Minnesota in 1873. In the three following years
they destroyed the crops all over the southern portion
of the state. Farm mortgages were foreclosed; farmers
moved out of the state; it was no time for ambitious
developments. The receiver of the St. Paul & Pacific
reports for the month of June the magnificent earnings
of $353.95, which feU in July to $305.83. That side
splitting record was filed with a railroad commission
just created, which had hereafter also to be reckoned
with. The following extract from its report for 1874
is a thumb-nail sketch of the railroad situation: "Of
those companies having lines wholly within the state,
two are in the hands of receivers, three others have de
faulted in interest upon their debt, and two have re
sorted to funding interest for a term of years; while
the remainder of the roads within the state have main
tained their credit by continued assessments upon their
stockholders in one form or another."
The single bright spot on the horizon hovered over
the future of the particular system whose troubles Mr. 177

THE LIFE OF JAMES J. HILL
Hill was following with an interested eye. In 1874
the government of the Dominion of Canada resolved
to go ahead and complete a line of railway from
Winnipeg to Pembina, to connect with the St. Paul
& Pacific, when the latter should be able to get
there; and the sum of $650,000 for that purpose was
included in the estimates for that year. The first
sod on it was turned in the month of September. Can
ada was also prepared, in order to secure this indispen
sable outlet for Manitoba, to negotiate with the Dutch
bondholders, if necessary, and this was another thorn.
But Donald A. Smith was in a position to put a spoke
in that wheel, if occasion should call for it.
Not for a moment did Mr. Hill permit his big
idea to possess him to the extent of persuading
him to neglect the ordinary business of life. It
was, indeed, his beacon and his goal. But meantime
he was, as has been seen, one of the busiest men in the
Northwest. Whatever was to happen, he was broad
ening and deepening the foundations of his career as a
successful man of business. In 1875 his fuel interests
had so extended that he formed, in connection with
others, the Northwestern Fuel Company, which be
came one of the largest concerns in its line in this
country. He was attending carefully to the freight
and forwarding business. In 1876 the business of
the coal company ran from 20,000 tons upward; and
as the total coal purchases of St. Paul, Minneapohs, and
178

THE GENESIS OF AN IDEA
Stillwater at this time were about 18,000 tons, he
must have been up and doing aU the time. A letter
dated May 1 , of this year says that his shipments of flour
will average "about 1,000 barrels of flour per day right
along." Little incidents of his business life about this
time show the quality of the man, and his keen grasp of
both situations and methods. He had salt for sale in
his warehouse. One day a boat came in with a cargo
of this commodity for sale at cut prices. He looked it
over,. to be sure of the quality; then, instead of meeting
the cut, he bought the whole stock himself, got it out of
his way, and kept his market. He wrote to a customer,
"Whenever your freight is delayed at this point over
night, I shall be satisfied to lose your business." In
April he let a contract for a propeller to be used in
the Red River business, and before the year was over
his company had seven steamers running. One of his
diaries notes the offer of a person to give him $10,000
in stock for assisting in placing $100,000 of stock in a
mine. His comment might be placed at the head of
the chapter of his financial management of his railroad
system: "Informed him that I would oblige in any con
venient and honom'able way, but was opposed to stock
jobs on principle."
In this day of stenographers, typewriters, and efficient
correspondence machinery, the work that he did alone
looks appalling. Volume after volume of letterbooks
is fiUed with copies of letters aU written by his own hand. 179

THE LIFE OF JAMES J. HILL
The manual labour is almost as impressive as the range
and diversity of the subjects with which they deal. He
traveUed a great deal, visiting agencies of the trans
portation companies in which he was interested, looking
after business, and getting into personal touch with cus
tomers. He was Secretary of the State Agricultural
Association. He had a love for fine horses and a thor
ough knowledge of them, and took special interest and
an active part in the management of the Driving Park
then established in St. Paul. He kept in close touch
with political affairs, both as a citizen and as a student
or the railroad situation, which was surrounded by a
labyrinth of hopelessly tangled grants, concessions,
withdrawals, extensions, conditions, amendments, and
repeals, so that nobody knew quite where any raihoad
enterprise stood. But the most striking thing dis
closed by the voluminous correspondence of these years
is the familiarity with conditions and the grasp of detaUs
displayed in relation to almost every kind of business.
It deals with the quality and fuel value of different
coals, with changes in the anthracite combinations
even then existing in both East and West, with public
and gas contracts, with boats and machinery, with
prices, rail and water routes, freight rates, with every
aspect of the business life of his own community and
its relation to the outer world.
Mr. HiU's notebooks of the year 1873 show how busy
he was with his private matters, and how alert mentally
180

THE GENESIS OF AN IDEA
as well as physically. Here is an entry of the departure
from St. Paul of the first through train to Chicago over
the West Wisconsin Railway; here a note of the agree
ment with Mr. Kittson to pool the earnings of their
three boats and divide the profits equally; here a mem
orandum that Donald A. Smith passed through on his
way to Ottawa; and here an entry of the modest cele
bration of the sixth anniversary of his wedding. Most
interesting are the notes and lists of books read or to
be read. They cover the whole early history of the
Northwest, and other subjects on which any well-edu
cated man would desire to be informed. But the
most characteristic fact is that only those by the high
est authorities and only the best editions of them are
entered. Here, as always, Mr. Hill had no time to
waste on any inferior subject, man or book. Only the
best was of value to him. His mind had unerring
selective power, and provided him with the best in
abundance, and with that alone.
There was almost nothing that his mind did not
touch, nothing touched that it did not grasp, nothing
of any possible future value that his amazing memory
did not retain. That memory passed beyond a per
sonal characteristic and became a business asset.
Throughout his life it was a marvel to all who knew
him. The books that he mastered as a boy he never
forgot. He could repeat at pleasure pages from Byron
and Lalla Rookh, reel off Father Prout at length with 181

THE LIFE OF JAMES J. HILL
gusto, and restore from memory the substance of
"Plutarch's Lives." Like Lord Macaulay he had a
prodigious faculty for retention and recollection of
every kind of fact. Many years later, when he had
acquired a notable herd of blooded cattle, he would give
offhand the pedigree of any one of them for genera
tions back. Engage him in a discussion over proposed
regulation of freight rates about the year 1900, and he
would break out like this: "Why, our average freight
rate now is so and so, while on the Breckenridge Divi
sion in 1879 the rate on third-class freight was so and so,
and on the Midland Railroad of England it is so and so";
and continue this until his listener failed to foUow him at
all. His engineering department would spend some
weeks in preparing a blue print of a proposed change in
the freight yards at a point somewhere out on the line,
and submit it to him before going at the work. They
had found that it was not good for one's health to omit
that preliminary. He would give a casual glance at it,
take his pencil, draw some lines on it and say, "You
want to put this track over there, and change this switch
to work that way." Maybe he had not seen the
place for months, and had not looked at it then with
any reference to future developments. But the en
gineers say that a careful subsequent comparison of the
plans with the location invariably showed that the al
terations would add to convenience and efficiency in
operation. Phenomenal memories and phenomenal
182

THE GENESIS OF AN IDEA
insight and foresight occur from time to time in the
careers of conspicuously successful men. But they
rarely meet in a single owner; and it may be doubted
whether they have been all possessed in modern times
by any man to the same extent as by Mr. Hill. With
out the manifold and varied powers already so well
in evidence, the idea whose genesis has just been
traced could not have become the master key before
which all doors were to open wide.

183

CHAPTER TEN
THE IDEA TAKES FORM AND SUBSTANCE
THE original bondholders of the St. Paul & Pacific, as
has been stated, were mostly burghers of Amsterdam.
Looking at the map of America and cajoled by the vast
spaces which it seemed that these lines were going to
conquer, and by the glowing promises of the prospectus,
they had put their money into the enterprise; relying
also on the promises of the not too careful banking
house that had placed the bonds. ^Vhen mortgages feU
due and were dishonoured, they were appalled by the
revelation of actual financial conditions. From foolish
expectation they passed to the extreme of unreasonable
despair. They believed that there was nothing to be
done now but send good money after bad, or wait and
hope that a few gulden would drift back to them some
day in some fashion. They had an opportunity to save
themselves; but who can blame them for seeing in it
only a lure to enlarge the total of their losses? When
the court appointed a receiver for the St. Paul & Pacific,
in 1873, it authorized the sale of $5,000,000 of deben
tures to secure the completion of the branch to St.
Vincent by December 3 of that year, to save the land
grant. Neither the directors of the road nor the Dutch
184

THE IDEA TAKES FORM
bondholders were able or disposed to furnish the money.
The receiver actually got $100,000 to spend.
The bondholders, including the partners of the Am
sterdam banking house through which they had dealt,
organized a committee of their own members to act
for them, which will appear throughout this time and
until the conclusion of all negotiations as the "Dutch
Committee." They selected the firm of John S. Ken
nedy & Co., of New York, to represent their interests
in the United States; and afterward gave Mr. Kennedy
power of attorney to act for them. In 1873 Mr. John
Carp, one of the members of this committee, came to
the United States for the bondholders, visited St. Paul,
spent some weeks there, and went over the property.
Obtuse as he was, he saw its possibilities. But neither
he nor any one else could devise a scheme for realizing
these without more investment. The report that he
made to the Dutch Committee in 1873 simmers down
to that; and is the kernel of a much longer report
and scheme of reorganization presented by him after a
second visit in 1876. As the bondholders resolutely
refused to part with more cash, and could hardly be per
suaded even to surrender coupons from their delinquent
securities, these efforts were necessarily fruitless. The
principal importance of the Dutch Committee and Mr.
Carp is that one was a witness to the intrinsic value of
the property, and the other a means of transferring con
trol of it to astuter brains and hands more skilful. 185

THE LIFE OF JAMES J. HILL
Its future had not seemed so desperate even to Mr.
Carp, who said in his earliest report, after the most
superficial examination and with little or no practical
knowledge of the country: "In the meanwhile, it has
already appeared with great probability that the mutual
relation of the different lines operated by this company
is interwoven to such an extent, and that so many law
suits between those who are interested in the various
parts shall have to follow, that a consolidation of the
property into one whole shall appear to be necessary.
Competent judges have already expressed the opinion
that these three lines (Main, Branch, and St. Vincent)
can only exist profitably when they are managed by one
company and operated for the benefit of all." One of
these "competent judges" was Mr. Hill, who never
had any other idea for a moment, and who kept his
eye on Mr. Carp and everybody else who showed an
interest in the future of the property. In a deposition
General George L. Becker, President of the First Divi
sion Company, said: "Deponent denies that the shares
of the capital stock of the St. Paul & Pacific Companies
are of no a(ftual value as property, and says that in his
judgment they are of great value though precisely what
value, owing to the contingencies that affect it, it is
impossible for deponent to state." That, with the
exception of the words, "of very great value," was the
opinion of everybody else about not only the stocks but
the bonds of these companies, with a sinking scale of
186

THE IDEA TAKES FORM
appreciation for the five years from 1873 to their pur
chase in 1878.
The first step, of course, for Mr. Hill, from the mo
ment that his thought, taking form and substance,
sought to find realization in action, was to secure the
cooperation of men able to help. It was a nearly
hopeless undertaking; both because men with the neces
sary means and influence were scarce in the raw North
west in those days, and because nearly everybody re
garded his notion as rather worse than chimerical.
So he began with what material he had. Naturally,
he turned to Kittson first. He was his partner, he
had some means, and he knew the country and
its business thoroughly. While Norman W. Kitt
son was agent of the Hudson Bay Company, he
was obliged to be absent a great deal of the time, during
which Mr. Hill had transacted his business and kept his
accounts for him. He knew the tireless energy and
scrupulous fidelity of the man. Afterward he had seen
him edge into the Red River transportation business
until Kittson had felt it wise to take him as a partner
if he did not wish to be bested. In this company, later
on, Kittson held $75,000 worth of stock and HiU $15,000
worth. Here he acquired a more intimate knowledge
of Mr. HiU's sagacity and of the soundness of busi
ness plans that looked more than venturesome in their
inception. This railroad scheme seemed wild to him; but at last 187

THE LIFE OF JAMES J. HILL
he was won over, if not convinced. Mr. HiU "bored
away," and the deadly forefinger got in its work. Kitt
son decided that he, too, would take the plunge. But
in his heart he was not over-sanguine about it. He re
lied on the man rather than on the idea; and probably
thought that, though it might not turn out the briUiant
performance which the younger man dreamed of, it
could doubtless be made profitable, as a trading propo
sition, if they could handle and hold on to it. His reti
cence about it for four or five years during which Mr.
Hill had it first in his thoughts and conversation is
proof that he was a rather unwilling convert. General
Sibley, who was at that time perhaps the most promi
nent and influential man in the state, of which he had
been the first governor, and who was intimately ac
quainted with Kittson, said afterward: "He did not
say a word to me about his contemplated participation
in the purchase of the railroad bonds, and I only learned
of it after the deal had been consummated. He said
one day that the reason why he did not tell me of the
plan was because he knew I would endeavour to dissuade
him from it. 'You may not know, Sibley,' he said,
' that everything I had in the world was risked on that;
an enormous risk at my time of life, and I did not
dare to tell you of it.'" Not only General Sibley,
but every other friend he had in the world, would
have tried to dissuade him from what they would
have regarded, had they known about it, not as a
188

THE IDEA TAKES FORM
gambling venture, but as outright folly if not sheer
madness. Of the second man to become interested in the idea,
Donald A. Smith, the Lord Strathcona, covered with
imperial honours, who died in 1914 at the age of ninety-
four, still vigorous enough to take his place daily at his
working desk, a brief sketch was given in a preceding
chapter. By this time both Mr. Hill and Mr. Kittson
had become well acquainted with him. He was al
ready quite a personage, having held the office of
Chief Commissioner for the Hudson Bay Company
from 1871 to 1874. Since 1869 he had been familiar
with the country. Since 1870 he had known and ap
preciated Mr. Hill. And he had his eyes fixed on the
other side of the shield; the possibility of development
not on the American, but on the Canadian side of the
border, where his interests were. The Canadian Pacific
idea was in the air and the first charter for it was
granted in 1873. It amounted to little as yet, but it
cast its shadow before. It was to have a land grant of
50,000,000 acres and a subsidy of $30,000,000. UntU
it materialized, it would be imperatively necessary for
the people of Winnipeg and the people of the territory
about and beyond it, already beginning to be settled,
to get direct rail connection with the outside world.
It could not materialize at all, could not get construc
tion material, until that connection was supplied.
There was but one way. Canada must build a line 189

THE LIFE OF JAMES J. HILL
from Winnipeg to the border, and connect there with
some line built through the United States to St. Paul.
There was only one such line projected, and it lay par
tially completed and financially ruined. Obviously the
future of Rupert's Land, governed by the Hudson Bay
Company down to 1870, was tied up, willy-nilly, with the
lines that the receiver was muddling over in St. Paul.
That company had some 9,000,000 acres of land up there,
whose settlement and value depended on railroad con
nection with the outside world. These were the consid
erations that had counted most to make Mr. Smith an in
terested partner in the scheme. What might happen in
the way of American expansion westward, and what
were the possibilities of such a transportation agency
as a future railroad system, were matters to which he
gave less thought, because at this time they were less
interesting to him. His aims were tangible and imme
diate. Late in 1874 he was passing through St. Paul, and
availed himself of the opportunity to talk with Mr. Hill
and Mr. Kittson. He knew them well by this time,
and had been brought into frequent business com
munication with them by common interests in the
Northwest. He requested them to get information
about the property, land grant, equipment, and debt of
the companies which, for convenience, may stiU
be designated by the single name, "St. Paul & Pacffic."
That information Mr. Hill had been collecting every-
190

THE IDEA TAKES FORM
where. He seemed to absorb it from the very air.
The hunt was on. It was still a long cry to the kill;
but here was a third party whose interests made him
inevitably an associate, whose connections would be
valuable in rounding up the necessary financial as
sistance and taking care of the portion of the new hne
to be built on Canadian territory, and for whom geo
graphical and political argument coincided with the hope
of possible profit.
At first, however, Mr. Smith was not a convert to the
plan to purchase, which, to him, seemed Ulusory. He
wanted to find out who were the owners of the bonds
of the raihoads, and to see if these parties could be
persuaded to put enough more money into them to give
Winnipeg its rail connection. He learned that there
was no hope of that. The Dutch bondholders had
sent a representative over and received the report
already quoted. It was not a hopeless document, read
in cold blood to-day, but the revelation it made of
how money had been obtained and wasted on work
iU-done stirred the bile even of phlegmatic Holland.
They swore that they would not put in another dollar
on any terms.
Thus baffled in his first idea, Mr. Smith had pro
gressed far enough in 1874 to reach the foUowing opin
ion, stated in his own words: "Failing to get the road
through in any other way, I should have been glad to
induce others along with myself to take it up, if it
191

THE LIFE OF JAMES J. HELL
could be got upon such terms as these gentlemen thought
it could be obtained. The stock was looked upon as
valueless, and that there would be no great difficulty
in acquiring it; then it was to get the bonds — a majority
or controlling interest in the bonds — on the best terms
on which they could be got, which I believed would be
at a very low price." The words italicized here, but
not in the original, are proof positive that Mr. Hill had
already investigated the details and terms of the possible
transaction. For Mr. Kittson is on record as saying
that he knew very little about it, but followed the lead
of Mr. Hill, who did know, and whom he trusted impli
citly. The idea of buying in the St. Paul & Pacific
system entire had existed, large and whole and luminous,
in the mind of Mr. Hill; had become, as his friends well
remembered thirty years afterward, a sort of obsession
with him. They regarded it now as a part of the
"romancing" in serious matters that with him was
temperamental; the fatal weakness of the weak, the
unconquerable strength of the strong.
External circumstances and collateral activities had
now begun to make the time seem more propitious for
such a venture. The Fates themselves, so long be
sieged, showed a less frowning countenance. The Red
River Transportation Company, which was another
name for Hill and Kittson, was increasing its business
and endeavouring to improve its position. In 1875
a rival line was established, which lasted but four
192

THE IDEA TAKES FORM
months, and their boats were bought at the marshal's
sale by the old firm that continued untroubled to do
business at the old stand. It had built a little rail
road, fourteen miles long, from Crookston to Fisher's
Landing, on the Red River. In this way it could send
and bring freight by the Red River to and from Fisher's
Landing, with a direct rail communication to St. Paul.
But that involved shipping it for some part of the way
over Northern Pacific trackage. In 1875 these two
gentlemen made another shrewd move. Under the
names of friends they had a new railroad organized, to
build a connection from the St. Paul & Pacific that
would let them in by that line to Fisher's Landing, and
so give them an independent through line. But the
financing, which Mr. Smith had undertaken, proved to
be too difficult, and the project was abandoned for the
time. In August, 1875, the Northern Pacific system was
sold at foreclosure, and reorganized by a committee
of the bondholders. It was to be expected that, from
this time, it would interpose an opposition more
effective than it had been able to make during the last
few years of helplessness. Also, there were other
fishers on the shore of the promising pond. The
Litchfields succeeded in getting the consent of the
Dutch Committee and other bondholders for a re
organization of the St. Paul & Pacific according to a
scheme which they had matured. It was really the 193

THE LIFE OF JAMES J. HILL
most dangerous moment in the life of Mr. HiU's plan;
for if this reorganization had gone through, his oppor
tunity could have come again only on very different
terms, if it ever came at all . But the Litchfields no longer
had unlimited credit, their plan involved the floating
of a big issue of consolidated stock which could not be
placed, and it provided that if its terms were not fuUy
executed within twelve months, either party could
withdraw. It fell through because ninety per cent, of
the bondholders did not deposit their bonds, as re
quired; but it was a warning signal of what would hap
pen when times became easier, and the development of
the Northwest, even under the present depressing
conditions, became more fully known. Part of the
St. Paul & Pacific system was now in a position to
become self-sustaining, by virtue of the Manitoba busi
ness that it carried, from which Mr. HiU's boats were
taking their toll. For its ninety-seven miles of track in
the Red River Valley it reported net earnings of more than
$8,000 for the first eleven months of 1875. The re
ceiver, in congratulating himself upon this showing,
says: "We expect to control over our own line the
entire traffic of Manitoba by running in connection
with a daily line of boats terminating at Fisher's
Landing." This was Mr. HiU's idea, and he had fore
seen something of the sort from the moment when he
personally went into the Red River business. He
had actually brought the combination about, as part of
194

THE IDEA TAKES FORM
his own far-reaching plan. It is interesting to note that,
at this time, three years before he acquired any real in
terest in the property, it was started along the line of
its first successful operation and of its future develop
ment by the shrewd but unsuspected direction of the one
man who was able to look ahead and forecast its future.
t In 1876 the plan for getting control of the St. Paul &
Pacific properties began to appear at the same time ur
gent and practicable. From 1873 to 1876 inclusive, only
eighty-seven miles of railway were built in the state of
Minnesota. Therefore, the lines already in operation in
creased their business, and new settlement began to dem
onstrate the need of extensions. The company had
erected a new passenger station in St. Paul and, by filling
in low lands for a thousand feet along the Mississippi,
had formed the nucleus of a terminal system which alone
would be worth in the future more than the whole prop
erty was then. People were coming in and business was
growing; not merely now as an adjunct to the Red River
trade, but as a part of the growth of the Northwest itself.
The receiver of the road wrote, in June, " The emigration
to the main line continues without apparent abatement,
and the number of prairie plow teams at all points west
of WUlmar is perfectly astonishing." Mr. Carp, who
made a second trip to this country in behalf of the Dutch
Committee, very weary of holding securities that
brought them no return but requests for more money,
reported in 1877: "The country between Glyndon and 195

THE LIFE OF JAMES J. HILL
Moorhead and north of those places, and more than
twenty-five miles in width, is very fertile, in which,
during the last year, important farms have been
started." It was clear that capital would not neglect
much longer a mine whose outcroppings were becoming
plainer to the naked eye every year. Moreover, the
panic of 1873 was now in the background, confidence
was partially restored, capital was ready for new ven
tures, and the fictions about the unpromising charac
ter of the Northwest as an agricultural region were
pretty well dissipated. Something was going to be
done; the only practical question was who would get the
opportunity. The Litchfield agreement, just referred to, both
stimulated activity and opened a way for it. This
agreement for the first time brought all the parties
who must be dealt with by a purchaser into a common
fold. It required the bonds of the railroad to be
deposited in Amsterdam, London, or New York, so
that they were now where they could be handled as a
whole. It was assented to by the Dutch Committee
and by the First Division Company. The bond
holders, under the plan of reorganization, would have
direct management of the property. It required 90
per cent, of the bondholders to give their assent to all
the conditions within a year. If that happened, then
the reorganization went into effect and the property
could never again be obtained on any terms that Mr.
196

THE IDEA TAKES FORM
Hill and his associates could hope to meet. On the
other hand, the legal obstacles to an actual and im
mediate movement to get possession of the property
and all the assets were cleared away just at this time.
As a result of the difficulties in which other railroads,
as well as this one, found themselves and by which all
the bankrupts stood to lose their cherished land grants,
an act was passed, March 6, 1876, making it possible
to foreclose a mortgage on a land-grant railroad without
destroying the immunity from taxation of its granted
land; to all of which had been attached originally the
condition that such immunity should last only "until
sold or contracted to be sold." This end was attained
by authorizing the purchasers "to organize as a cor
poration, with all the franchises and exemptions of the
original company." This was nothing less than the
removal of a mountain from the path. Nobody could
have been found, probably, to furnish the necessary
funds unless the land grants were a part of the security.
As a matter of fact, the best and real security was the
roads themselves, and their assured future as carriers.
Mr. HiU knew that. But moneyed men in London
or New York not only could not believe it, but they
could scarcely credit the man who made such a state
ment with honesty of conviction. Before they hazarded
a dollar, they wanted land as a basis for mortgage
and other bonds. Up to this time it had been practi
cally impossible to organize a new company to take over 197

THE LIFE OF JAMES J. HILL
the old properties without forfeiting those lands by
the very act. Now such a proceeding was specifically
authorized by law. It was, indeed, time to get busy.
There was not an atom of available fact bearing- on
the proposed transaction which Mr. Hill had not mas
tered. He had familiarized himself with the condi
tion of the road and the details of its working. He had
at his fingers' ends all the legislation in connection
with construction and land grant. He knew exactly
what had to be done in order to make a railroad system
and to finance it. He had made careful inquiries from
time to time into the market value of the discredited
bonds, in so far as they could be said to have a market.
He knew exactly the probable figure that would have
to be paid, the amount of money required, and had in
mind a plan for raising what would have to be pro
vided after control had been secured. Ever since 1873
it had been one of his tasks to accumulate and arrange
information on this subject and to keep it brought down
to date. Here are the words in which he himself
summed up his activity during this interval: "I com
menced to get aU the information that I could find,
copies of the mortgages, of the complaints, and paper
books published in connection with the lawsuits, records
in the court, and such information as I could gather
from parties who were likely to have information as to
the situation in HoUand, as to the situation with the
bondholders, and their relations to the Dutch Com-
198

THE IDEA TAKES FORM
mittee, the position of the several lawsuits, the grounds,
so far as I could learn, upon which the lawsuits were
brought, and with counsel discussed the merits or prob
able merits of those cases." Donald A. Smith said
that the two of them met frequently in 1874 and 1875;
that "we repeatedly talked the matter over, and he ap-,
neared to have a perfect knowledge of the whole thing."
The critical moment had come. Mr. Hill had
some business to transact at this time with the Cana
dian government, in relation to the carriage of rails to
Manitoba for its new line; and he left St. Paul for Ot
tawa, March 17, 1876, having prepared first to see Mr.
Smith and arrive at something definite if possible. Up
to now everything had been in the air, though the
nebulous idea had been concentrating steadily toward a
solid centre. Mr. Smith believed that he could interest
some of his friends in London in the enterprise. He and
Mr. Hill breakfasted together "in a little cottage back
of Ottawa," and Mr. Smith finaUy told Mr. Hill to go
back home and see at what price the Dutch bondholders
would dispose of their holdings. Nobody knew yet
what attitude the Dutch Committee would take or
what price they would ask. But at last somebody be
lieved that the money necessary to carry through the
scheme might be raised. The "Bank Cottage" inter
view separates definitely the time of planning from the
time of action. Meeting in Chicago, on his way home,
with one of the friends to whom he had for years 199

THE LIFE OF JAMES J. HILL
talked of his scheme, Mr. Hill burst out, the moment
he saw him, with, "Donald A. Smith is ready to take
hold." He had already ceased to handle steamboat
business outside of his own, and in June he gave up his
arrangement for handling railroad freight in St. Paul.
Bigger things were in prospect. The waiting time was
over. Three men were now ready to take up the plan and
to stake their future upon it. But that was not
enough. The outstanding indebtedness of the St. Paul
& Pacific system aggregated nobody knew how much,
but a huge sum. Perhaps it was as well none of them
knew what developed later, that it aggregated about
$44,000,000 in all. Bold as they were, that would have
been something of a dampener to their courage. What
they thought, and what proved true, was that the out
standing bonds could be bought at a low figure. There
was little market for them at this time even at the prices
to which they had dropped. Worse than this, they
were the occasion of continual demands on their holders
for more cash. To be rid of this would be pure gain.
But even if the buyers drove a sharp bargain, what was
to be done with the property after they got it? It was,
as has been seen, in unbelievably bad condition. Its
land grant was saved again and again only by eleventh-
hour extensions of the time limit, granted by legislators
who hung desperately to the slim chance that, by show
ing lenience, they might eventually get, by some miracle,
200

THE IDEA TAKES FORM
the raUroad that the people wanted and needed, instead
of the lands that they did not now need and that would
be nearly valueless without it. And to meet the es
pecial desire of Mr. Smith for a line to Winnipeg,
which was also indispensable to the immediate develop
ment of the road into a profit-earning carrier, a large
amount of construction must be done, for which the
new owners would have to provide funds. Where
were these to be got? A fourth associate must be se
cured who had money or the confidence of men of
means; who either was the rose, or lived near the rose.
Mr. Hill knew, and the others had taught themselves
to believe, that they had to seek for credit as well as
for cash. If they could handle the purchase, he was
convinced that a line of credit which should enable
them to finance the new concern at the start would be
enough to put it on its feet and enable it to finance it
self. Where was the person through whom this credit
or cash or both could be procured? The man to whom
they turned was Mr. George Stephen, afterward as weU
known in the British Empire under the title of Lord
Mount Stephen as Mr. Smith was under the title of
Lord Strathcona.
Mr. Smith, by virtue of his position in Canada, had
a large acquaintance with men of means in Montreal,
in London, and in New York. His first idea was to
obtain the needed support in one of the two latter
places. He had for years confided his plans, and now 201

THE LIFE OF JAMES J. HILL
turned for advice and cooperation, to this friend who
here comes into the story. In the final event Mr.
Stephen's influence carried far in completing the success
ful arrangement for the sinews of war. It is interesting
to note the resemblances in the early lives of the men who
were to be so closely associated and who were so different
in personal qualities and in environment. George
Stephen, born June 5, 1829, was the son of a carpenter
of Dufftown, Scotland. He was educated in the parish
school, served for a season as herd boy on the glebe of
Mortlach, and then was sent to Aberdeen to learn the
drapery business. One day a customer from Montreal
noticed that the clerk signed the order "George Ste
phen," and learned by a few inquiries that the boy
was his cousin. He was taken to America, became
afterward a partner in the firm, and later turned to
finance and to the development of Canada. In 1871 he
was elected a director of the Bank of Montreal, of which
he became president in 1876.
At this time, therefore, his mere counsel on such a
project as these gentlemen had in mind was of no in
considerable assistance. Since three of these four
associates not only came to great wealth but afterward
achieved world-wide fame and the highest honours that
the societies in which they lived could confer, it is
worth while, in passing, to glance at the light in which
his labours appeared to the last of them in retrospect.
On being presented, in 1901, with the freedom of the
202

THE IDEA TAKES FORM
City of Aberdeen, George Stephen, then become Lord
Mount Stephen, used the following words, in response,
which might have come from Mr. Hill himself, and are
in curious contrast with modern ideas of the handling
of youth, and the conditions that promise most for its
future: "Any success I may have had in life is due in a
great measure to the somewhat Spartan training I re
ceived during my Aberdeen apprenticeship, in which I
entered as a boy of fifteen. To that training, coupled
with the fact that I seemed to have been born utterly
without the faculty of doing more than one thing at a
time, it is due that I am here before you to-day. I had
but few wants and no distractions to draw me away
from the work I had in hand. It was impressed upon
me from my earliest years by one of the best mothers
that ever lived that I must aim at being a thorough
master of the work by which I had to get my living;
and to be that I must concentrate my whole energies
on my work, whatever that might be, to the exclusion
of every other thing. I soon discovered that if I ever
accomplished anything in life it would be by pursuing
my object with a persistent determination to attain it.
I had neither the training nor the talents to accomplish
anything without hard work, and fortunately I knew
it." This should be a man after Mr. HiU's own mind and
heart. When these two get into double harness, some
thing may be expected to happen. But it was a long 203

THE LIFE OF JAMES J. HILL
time after the plan was moving toward form and fruit
before Mr. Stephen actually came into the arrange
ment. The first idea was to get the required support
through Sir John Rose, who was one of the Governors
of the Bank of England; through the banking firm of
J. S. Kennedy & Co., of New York; through any of the
moneyed men or representatives of moneyed men who
could be reached. In putting out feelers in these di
rections Mr. Smith was very active, and he consulted
privately about it with Mr. Stephen. But Mr. HiU
himself did not meet the latter until 1877. Sometime
between March and May of that year, the different
parties to the meeting could not fix the month exactly,
after much progress had been made in the practical
working out of a plan to deal with the owners of the
property, and to tie up some of the thousands of loose
ends that had to be gathered in and fastened before it
would be safe, Mr. Smith wrote asking Mr. Hill to meet
him in Montreal. There Mr. Hill was introduced to
Mr. Stephen. He had had no knowledge of the latter's
connection with the Bank of Montreal, nor any idea that
he would personally come into the railroad project.
The suggestion was that Mr. Stephen was about to go
abroad, and that he might be able to interest some of his
powerful friends in England. He thought that they
might be willing to advance money on the security of
the bonds still to be bought from the Dutch holders.
At this meeting they reached a positive decision that they
204

THE IDEA TAKES FORM
would try to get the property by buying its defaulted
bonds and foreclosing on them. Mr. Stephen himself
said of this meeting, when testifying in the Farley case:
"Mr. HiU explained to me then more fully the position
of the property and the method of acquiring it. It was
decided that Mr. Hill and Mr. Kittson should try to
ascertain the price at which the Dutch Committee would
sell their holdings of the bonds. It was understood
that if we succeeded in getting the Dutch Committee
to agree to take the price for the bonds that we had
determined upon, we should endeavour to find the
money in London to pay for the bonds." This was the
first outline of a practical scheme ; and this was the scheme
that the parties first endeavoured to carry out. In
September of the same year, 1877, about the first or
second, Mr. Stephen was called to Chicago by business
for the Bank of Montreal, of which he was then presi
dent. Together with Mr. Smith and Mr. R. B. Angus,
the General Manager of the Bank of Montreal, he ran
up to St. Paul, and Mr. Hill took them on a trip over
the railroad that was becoming so interesting to them
aU. This journey produced an effect upon the mind
of Mr. Stephen and upon the future of the plan which
was scarcely suspected at the time. The following in
teresting confirmation of that point is supplied by
Ai'chbishop Ireland: "During a visit to London in the
year 1899 it was my privilege to meet Lord Strathcona
several times and to converse leisurely with him of men 205

THE LIFE OF JAMES J. HILL
and things in Minnesota and Manitoba. The foUowing
incident that impressed Mr. Stephen and possibly con
verted him, he related to me twice. On a special train
Mr. Stephen, Mr. Smith, and Mr. Hill left St. Paul.
AU went well at first. Between St. Paul and Litchfield
there were settlers and villages. But beyond Litchfield
it was almost nothing but wild, untenanted prairie.
Mr. Stephen shook his head ominously. Whence was
business to come to the railroad? When would there be
settlers in this barren waste? At last the station of
DeGraff was reached. It was Sunday morning. Around
a rude but good-sized structure there were crowds of
people; the trails leading toward it were covered with
conveyances, most of them drawn by oxen. ' What is all
this ? ' inquired Mr. Stephen. ' Why, ' answered quickly
his friends, 'this is but an instance of what is soon to oc
cur along the whole line of the railroad. This is a col
ony opened by Bishop Ireland one single year ago.
Already the settlers brought in by the Bishop are
counted by hundreds, and hundreds of others are com
ing to join them from different parts of America and
Europe. This is Sunday morning, and the settlers are
going to mass.' The certain rush of immigrants to the
West was pictured to Mr. Stephen in glowing terms.
He already saw enough to make the prophecy credible.
From that moment he was won over to the new enter
prise. Lord Strathcona added: 'In a manner unknown
to yourself, you were the friend of Mr. HUl and myself
206

THE IDEA TAKES FORM
in a moment when we needed friends. Whatever I can
do for you is but a return of thanks for what you and
your colony once did for us.' "
The colonization work of Bishop Ireland continued
along the line of the St. Paul & Pacific, later the St.
Paul, Minneapolis & Manitoba. It soon went be
yond DeGraff, taking into its area Clontarf in Swift
County, and Graceville in Big Stone County. Said
Archbishop Ireland : " Mr. Hill, becoming the manager
and afterward the president of the road, cooperated in
every possible way, affording rare privileges of trans
portation to the incoming settlers and especially facili
tating the acquisition of lands in favour of his settlers.
This latter favour was particularly valuable in the
colony of Graceville, where the indemnity lands of the
road were put at the disposal of the Bishop at very low
rates and these rates were guaranteed to remain the
same up to the time when full title could be acquired.
Title, as a matter of fact, was not acquired for nearly
twenty years. The settlers, meanwhile, paid no taxes,
and finally purchased their lands for a small price,
although these had increased in value meantime more
than fivefold."
In the year when Mr. Stephen was initiated into the
value of the enterprise by this tour of personal inspection,
he and Mr. Hill, Mr. Smith, and Mr. Kittson had a meet
ing at Montreal at which was present Mr. John S. Barnes,
of the firm of John S. Kennedy & Co., New York City, 207

THE LIFE OF JAMES J. HILL
representatives of the Dutch bondholders. At this meet
ing the prices to be offered for the bonds were practically
agreed upon; and it was also understood, though nothing
was yet put in writing, that each of the four principals
interested in the negotiations now going forward would
have a one fifth interest in the profits to be realized,
while the remaining one fifth could be used by Mr.
Stephen, at his discretion, in securing the capital neces
sary to the enterprise, wherever that might be found.
All this was still subject to a thousand contingencies,
and menaced by a thousand probabilities of complete
breakdown. It was an agreement to divide the estate
of a bankrupt individual, very ill indeed, but not yet
dead, whose property was encumbered to many times
its selling value, about whom were flocking all the vul
tures of the law, and whose testamentary ideas and
residuary legatees might upset the most carefully
matured plans by any one of a host of unforeseeable
events. It was like apportioning the winnings of to
morrow evening's play with outsiders. But the con
federation which was to conquer so great an empire was
fully formed at last.

208

CHAPTER ELEVEN
THE TANGLED WEB OF NEGOTIATIONS
WHEN a syndicate in these days wants to buy a rail
road, it proceeds to gather in, at such market prices
as can be secured by bargaining or established by
manipulation, a majority of the outstanding stock.
It must either outbid or outwit all opposing
interests. If the railroad is already bankrupt, it
negotiates also with the bondholders; submits a plan
of reorganization, based on the exchange of old bonds
for new; and, with their consent, the thing is done.
Nothing so simple as this was possible in the
scheme to which Mr. Hill was committed. He must
take the leading part in it; because it was his idea, and
also because he was the man on the ground, where he
could watch the property every day and checkmate
any moves against the interest of himself and his
associates. Beyond lending his political influence to
such legislative measures as were desirable and helping
to block those 6f an opposite nature, Mr. Kittson had
little share in the intricate processes of this purchase and
reorganization plan. He was satisfied to follow the lead
of Mr. Hill in the scheme to which he had assented with
so many misgivings, but with a fine faith in the fore- 209

THE LIFE OF JAMES J. HILL
sight and judgment of the younger man. That scheme,
even if the necessary financial support could be had,
involved a dozen ramifications and contingencies.
The old bonds must be bought from the Dutch Com
mittee, and scattered amounts not in their hands must
be quietly obtained. Negotiations must be carried on
with the firm of J. S. Kennedy & Co., in New York
City, whose advice the Dutch owners were pretty sure
to follow. Trustees for the bondholders had seized
the First Division Company in 1876, but the outstand
ing stock of that company, in the hands of Mr. Litch
field, must be secured to avert future trouble. Legis
lation must be watched, secured, prevented, according
to its origin and aim. Search for a working partner
with capital must go on. A scheme for the organiza
tion of the properties when obtained must be drawn up;
and it must show reasonable probability of success and
profit on the basis of ascertained fact. In truth, the
real fight for a tangible possession in exchange for a
vision, attractive but unsubstantial, had now to be
made. Speed was of the essence of all these matters. The
Northern Pacific was now on its feet again and eager for
a finger in the pie. Land grants, the time limits of which
could not be extended indefinitely, had to be saved. The
managements of the Chicago & Northwestern and the
Chicago, Milwaukee & St. Paul were not blind to the
situation. If they had not had their own hands full
210

THE TANGLED WEB
in taking care of their growing territory, they would
have become active competitive bidders. They were
played judiciously against each other during this time
by Mr. Hill, who had the confidence of both.
Each was pacified by the assurance that the other
should have no part in the new undertaking. Thus
powerful rivals were not only kept out of the field
as possible purchasers, but transformed into friends
by the promise of equal treatment later on, and no
exclusive advantage to anybody in the exchange of
business with the new concern. That promise was
faithfully kept through all the subsequent years.
Public sympathy with the enterprise threatened to
change into hostility. It was represented continuously,
in the years of receiverships and lawsuits, that there
was no intention of ever completing the lines; that a
few bankers in New York and Holland meant to block
all these enterprises indefinitely until they should be
able to buy in the bonds on speculation for a trifle.
Public opinion in Minnesota was generally sceptical or
hostile. Newspapers and legislative debates of the
time reflect this continually. Some definite move
must be made, some proposition outlined to lay
before the Dutch Committee; either an offer whose
acceptance could be expected, or a tentative proposition
for a trading basis, or a sop to hope deferred which
might prevent its seeking elsewhere a solace for its
disgust. 211

THE LIFE OF JAMES J. HILL
Mr. John Carp had come over from Utrecht again, in
December, 1 876, to see what might be done for the desper
ately weary bondholders. He had a complicated scheme
of his own for the reorganization of the property. He
invited propositions from Mr. Hill and Mr. Smith.
His plan was hopeless; but it was wise to flatter his
vanity a little, and also to keep the bondholders en
couraged with a show of something doing. Mr. Carp
could not help, but he was in a position to do a lot of
mischief if antagonized. Mr. Smith was not yet
educated in diplomacy, and would have nothing to do
with an affair from which nothing could come. Mr. Hill
and his faithful follower Kittson, therefore, joined in a
tentative offer to the bondholders, transmitted through
Mr. Carp; the first actual proposition looking to the
transfer of the property ever definitely put into writing
by them. A letter was sent to Mr. Carp, January 29,
1877, making an offer to take over a part- of the
properties, those of the First Division, on terms
that would certainly not be accepted; on conditions
that it would be far more difficult for the seller than the
buyer to meet. It was never even submitted to the
Dutch Committee. Nobody had expected that it
would be. It was made, by Mr. HiU's advice, merely
to humour Mr. Carp; to prevent him from becoming
hostUe, and to prepare the way for future negotiations
on a different basis when the time should be ripe.
Incidentally it was made a medium through which
212

THE TANGLED WEB
might be conveyed to the bondholders some unpleasant
information about their properties. The writers
" knocked " some of the lines pretty hard, but no one can
say they misrepresented facts. So its terms were of no
practical importance.* And yet, so obtuse was every
body at the time, that it was not the unreasonable
terms of the proposed purchase, but the possibility
that a bona fide purchaser on any terms whatever should
exist which troubled the minds of the best-informed.
They thought they were seeing the ghost walk.
Mr. John S. Barnes, of the firm of Kennedy & Co., in
New York, representatives of the Dutch interests and
personally familiar with things in Minnesota, wrote as
follows one week after this proposal had been sub
mitted: "I have gone over Mr. HiU and Mr. Kittson's
proposition to Carp with him very fully, and discussed
all its points fully. , I don't think Mr. Carp has come
to any conclusions in his own mind about it; but I
think he is a little troubled as to the way he shall be
able to convince his committee that the offer is one
which Mr. HiU and Mr. Kittson have the abUity to
perform, and he has asked me repeatedly how he can do
this. Now I have personally the highest regard for
both these gentlemen, and I would take their word as
soon as that of any men of whom I know so slightly;
but except that I have a general notion that some.
Canadian gentlemen stand behind them, and who are
•For study by the curious the proposition is printed as Appendix I. 213

THE LIFE OF JAMES J. HILL
able and willing to furnish the large sum mentioned,
I can say nothing which adds strength to Mr. HiU's
and Mr. Kittson's proposition, or is in the nature of
the sort of guarantee that the committee might require."
Literally everybody thought that the mooted purchase
was for Canadian account. Mr. Barnes, who ought
to have known or suspected the truth if any outsider
could, wrote, a little later, "Except these Canadians
there would not be found persons ready to give any such
sum in these times as is now offered." And the re
ceiver of the railroad, the man who sued for fifteen mil
lion dollars' payment for his alleged paternity of the
idea, wrote a letter on the same theory, which is not
only to the same point but is also too good fun not to
be preserved in this history, verbatim et litteratim:
J. S. Barns Esqb
I leave Town for a few days. I Red your leter 17th to Friend
Kitson he feels somewhat disapointed. The Old Gentleman has
great confidence in the future of this Property if it could be ob
tained for the present Selling Price of the Bonds. His Friends
who is expected to furnish the .money has unlimited control of
Canadian Politicks. It might become a Canady projeck, but
that would be a mater of no moment to you or me if we could
make some money. Yours &c J. P. Faklet.
w. The only important result of this tentative offer was
to obtain, in return — which was one of its objects — an
idea from Mr. Carp of the prices at which and the terms
214

THE TANGLED WEB
on which, instead of those offered by Mr. Hill, he thought
the Dutch Committee might feel willing to part with
their holdings. This was precisely the information
that Mr. HiU had been fishing for in these shallow waters.
Taken with all the other advices gathered in, there was
now something to go upon. Mr. Smith had at last
succeeded in convincing his friend, Mr. Stephen, that the
thing deserved looking into. Now, in the spring of 1877,
Mr. Hill went to Montreal on Mr. Smith's request, as
aheady stated, and for the first time met Mr. Stephen.
At this conference all details of the project were dis
cussed quite thoroughly. Several days were spent in
maturing a plan to buy the bonds held by the Dutch
Committee. "Mr. Stephen said he thought he could
interest some English parties known to Mr. Smith and
himself; and together they would be able to negotiate
a loan on the security of the purchase of the bonds,
pending the foreclosures." Nobody seemed to doubt
that he could raise the cash in London, and it was
agreed that when Mr. HiU returned to St. Paul he
should make a real and comprehensive proposition, like
that outlined above, to the Dutch Committee through
Mr. Carp. The total value of the property was what
Mr. Hill, Mr. Stephen, and Mr. Smith considered
chiefly. They had made up their minds, thanks to
infinitely careful study by Mr. Hill, what they could
afford to pay for it as a whole. They proposed to set a
price on each class of bonds; then the bondholders might 215

THE LIFE OF JAMES J. HILL
readjust the prices to be paid for different classes, so long
as the total purchase price was not increased. With
this understanding the Montreal conference broke up
and Mr. Hill, after visiting New York and trying to
make some arrangement with Mr. Edwin C. Litchfield
for the stock that he held in the First Division Com
pany, came back to St. Paul to take immediate steps
for carrying out the programme thus settled upon be
tween the three active associates who had drawn it up.
Mr. Kittson, having been detained in Chicago by illness
on his way to Montreal to meet the others, had not
been present at their deliberations; but he approved
the steps taken and was ready to go ahead with them.
Accordingly a second proposition was made by Mr.
Hill and Mr. Kittson, May 26, 1877. It was under
stood by the bondholders as an offer to purchase for
cash. The associates would have been only too glad
to make it such if they had had the money. And it was
possible that it might become such; for Mr. Stephen was
soon to leave for London, where he hoped to interest
capitalists in the scheme. Meantime, it served its
purpose as a working basis from which to get down to
hard pan in the determination of the prices to be paid
for the many issues of dishonoured bonds, differing
greatly in value and in the security back of them.
Thereupon began a chaffering about prices which
lasted through the rest of the year, and ended in dis
closing that an agreement could be reached between the
216

THE TANGLED WEB
parties for the sale of the bonds for cash. In the letter
of January 29, 1877, Hill and Kittson, acting alone,
had offered $3,500,000 in cash, and agreed to surrender
the unsold portions of the land grant. But they asked,
in return, "delivery to us of a perfect title, vesting in us,
under such corporate name as we may adopt, said rail
road and its franchises, and all other property clear of
incumbrance." This for a part of the property only.
It was a condition clearly impossible of fulfiUment for
the present, if at all, by its owners.
The offer was a mere "feeler." The next proposal,*
that of May 26th, in the same year, from the same
gentlemen, contained a valuation of the different classes
of bonds outstanding, ranging from 80 cents to 11 cents
on the doUar. It advised the bondholders that Messrs.
Smith andlStephen are to furnish the money, and it asked
for notice of sixty or ninety days, in case the proposal
was favourably received, in which to obtain the necessary
funds. On request of the Dutch Committee, the propo
sition was extended until September 10. Mr. Carp
was trying to get better terms than those that had been
named. On December 27, 1915, Mr. Hill, reviewing
this transaction, summed it up thus in conversation:
"I remember when Stephen went to England to try
to raise funds. He was sanguine, and said to go ahead
and make an offer for the property. But I feared a
miscarriage. When Mr. Kittson and I made the offer
•Printed as Appendix II.
217

THE LIFE OF JAMES J. HILL
to the Dutch bondholders, I worked all night over the
form of the proposition to be made, and took it to
Judge Young in the morning to see that the phrase
ology was all right. It was construed by them as an
offer for the property outright; but it was, in reaUty,
only an option under which we secured a certain time to
raise the money, and were not bound if we did not suc
ceed. Mr. Stephen failed, and we were not bound.
Then came the proposition to send the Dutch bonds
over here, we to assume charge of the road and conduct
of the foreclosure proceedings and to pay interest until
the time when a reorganization could be completed
and a new company put on its feet."
Mr. Carp's own plan, written in his hand and dated
London, October 8, 1877, gave a total valuation of
$6,866,759 for the property; including in this not
only the selling price of the bonds, but the money
necessary to build additional lines to save the land
grant, the receivers' debentures, and the value of equip
ment. He stated that the property so to be transferred
will consist of 552 miles of road (but this includes 132
miles yet to be built), 1,584,104 acres of unsold lands,
$465,911 due on lands already sold or contracted for,
besides 165,000 acres claimed by the Northern Pacific,
$116,852worthof townsite property, and about $115,000
cash in the hands of the trustees. He worked out an
elaborate scheme for exchanging new bonds, land cer
tificates, and stock for old bonds, which need not be de-
218

THE TANGLED WEB
scribed, since it did not appeal favourably to any of the
parties. Two statements* stiU exist in the handwriting of Mr.
Hill, one describing the lines and their property, under
date of September 1, 1877, and the other listing the
bonded indebtedness, which show that he was in
possession of even completer details of the business than
were the owners themselves. He listed 455j miles of
completed track, ten miles from Crookston to Fisher's
Landing, and thirty-four miles under construction from
Breckenridge to the end of the track south of Glyndon,
for which the bondholders had at last been persuaded to
furnish some money and which was opened for traflSc
October 22, 1877. There were 229J other mUes on which
most of the grading was done, but nothing else. He
catalogued all the rolling stock, with current valuation,
and the real estate. He showed the net earnings of the
First Division Company to have been $264,142, which
was about $6,000 less than they were six years before.
But he also noted that during the fiscal year 1877 there
had been expended on additions and improvements to
the property $188,250 which had been charged to oper
ating expenses instead of to construction and equipment.
That detail, which attracted little notice when railroad
accounting was such a mass of jugglery with figures
that nobody paid much attention to any item of it,
had vast significance for his practical mind. It showed
•See Appendix HI. 219

THE LIFE OF JAMES J. HILL
net earnings, on a fair operating basis, of $450,000 a
year — a more than respectable total.
The rest of the inventory is even more interesting.
Mr. Hill listed every fraction of the debt, described the
securities, and valued them as if he had been dealing
with them all his life. He showed that the cost of the
bonds at prices set in his proposal would be $4,330,180.
To this he added costs of foreclosure and of completing
uncompleted portions of the line, and arrived at the
figure of $5,540,180 as the "total amount required to
buy the property as it now stands and complete the
system as far as at present desirable." But the list of
assets is different. How the eyes of the Dutch Com
mittee would have bulged if they could have seen the
prospective purchaser's estimate of what he was going
to get! So fixed, however, was their own unbelief
that it would have only convinced them that he was an
unpractical dreamer. Every detail is there; and every
item is valued by a man who knew personally its qual
ity and quantity, and who was never accused of getting
the bad end of a bargain or of overvaluing what he was
trying to purchase. Putting the moderate figure, ab
surd in the eyes of to-day, of $20,000 a mile on the track
of the 570 miles that would exist after work under way
had been finished, and the expense of completing which
he had figured into his cost prices, and adding the actual
value, with depreciation, of equipment, shops, supplies,
etc., the raUroad property alone stood at $12,216,718.
220

THE TANGLED WEB
Townsites and land grant, the latter estimated only at
the current figure of $2.50 per acre, the price then put
on public lands in general, footed up $6,586,205 more.
Here was a total property value of a little less than
twenty million dollars, to be had at a little more than
twenty-five cents on the doUar. And this was a flat bar
gain; allowing not a penny for the certain increase of
business and rise of values with the development of the
country. In a supplementary note, so as not to mar
the severe austerity of the estimate itself, Mr. Hill said:
"We believe that $600,000 per year would be a low es
timate, and with fair average crops the net earnings
would undoubtedly reach $700,000; which amount
will increase from year to year as the country is settled
up." It is not much wonder that, with these facts
at his fingers' ends, Mr. Hill was dominated by the sense
of unparalleled opportunity.
All his life it was his custom to know all the facts
about anything in which he was interested, a good deal
earlier and a little better than anybody else. For
twenty years he had live^ in the country where the
situation had been preparing. For four or five years
he had been consumed with anxiety to get posses
sion of this property. He alone fully understood
its present value; he alone conceived its future
with any degree of justness. These months of diplo
matic negotiation, slow because of lack of funds and
credit, with the possibility that at any time the mere 221

THE LIFE OF JAMES J. HILL
progress of events might make some of his expert
information pubhc property and set more powerful
forces on the trail, were a torture to him. Nor was the
danger imaginary. In October, 1877, the receiver of
the road sent a cipher telegram to Kennedy & Co., in
New York, advising them of one danger that threatened
the property. Translated, it ran: "We have positive
information that the Northern Pacific Railroad is
negotiating with the Canadian government for exclusive
control of their railroad from St. Vincent to Fort Garry.
They promise to build from their road to St. Vincent,
and have a forfeiture declared on the St. Paul & Pacific
line from Crookston to St. Vincent. They are now
making liberal arrangements to secure election of their
friends to the legislature. Present outlook decidedly
in their favour. This done, St. Paul & Pacific ruined
and First Division badly damaged. Canadian govern
ment ministers have been in secret session with Nor
thern Pacific oflScials two days this week at St. Paul and
Brainerd." Among other things, the purchase would
include a fight with the most powerful railroad system
in the Northwest, and in the legislatures of two govern
ments. The first two spikes in the Pembina branch of
the Canadian Pacific were driven in September of this
same year by Lord Dufferin.
Mr. HiU's anxiety cropped out in a letter to Mr. Smith
in August, in which he said: "Every indication leads
us to think that the present is the favourable time to
222

THE TANGLED WEB
purchase the property; in fact, I do not think we could
get it for less than a million dollars' increase after the
present indications are realized." But he had, as he
always had, exactly the same confidence in himself as
in his matured plan. He never let go. It was no
small comfort that the firm of Kennedy & Co. stood
firmly by him throughout the transaction. Mr.
Kennedy was a Scotchman and a business man
of the old school. He was trustee in this coun
try for the bondholders. He had a slow-moving
mind, a comfortable New York inability to sense what
must happen soon on the then frontier, and an implac
able sense of honour. He wanted to make the best
bargain he could for the Dutchmen. He believed that
if they did not do something quickly, they stood a
chance of losing everything; as, indeed, through hostile
legislation, they would. He knew and trusted Mr.
HiU. At this juncture his firm wrote: "The proposi
tion of Kittson and Hill is one that the bondholders
should accept, and we have advised them to do so
without reservation." It was good advice. For the
potential profits which this property contained could
not be realized by alien owners, five thousand miles
away, unprepared either for the strategic contest or for
the vast investment of additional capital needed. As
a matter of fact, and in the light of later events, it is
not too much to say that this property would neither
have maintained its independence nor gained at once 223

THE LIFE OF JAMES J. HLLL
the confidence of the financial world if it had found any
other purchaser, or if its first General Manager had
been any other man than James J. HiU.
After much dickering over prices during the latter
part of 1877, a schedule at which the various classes of
bonds might be bought in was accepted by Mr. Hill
and Mr. Kittson and by the Dutch Committee. As
was stated, the former had so worded their offer
as to make it cover only an option to purchase, and
began with redoubled energy to try to raise the cash.
The latter understood that they had made a sale, and
made public announcement to that effect. But in
December of that year Mr. Stephen came back from
England to report a flat failure. Capitalists there
would have nothing to do with a scheme which looked
to them like a wild speculation. Money for the
enterprise could not be raised, even though the as
sociates put everything of their own into it, and offered
any newcomer a one fifth interest in the entire owner
ship if he would put up the cash. No man with the
necessary means could be induced to look at it seriously,
and the offer made in May had to be withdrawn. The
associates could not complete the purchase they so
much desired, because they could not raise the money.
On the other hand, the Dutch bondholders were bitterly
disappointed. They had been told that the sick horse
which they had doctored for so long was off their hands.
Here it was thrown back on them.
224

THE TANGLED WEB
This was a terrible setback for the Dutch Committee,
who had foreseen an end to the troublous responsibUities
of their stewardship; and to the bondholders of all
degrees, who had been counting on a little cash in
exchange for their depreciated paper. As always hap
pens, in such circumstances, the owners' appetite for a
sale was whetted. There was no other customer in
sight so far as they knew. It might be years before
another would appear. In the meantime, hostile inter
ests and legislatures might take away even the poor
remains of their property. They became desperate for
a trade; for any kind of trade that would put an end to
their worries, their negotiations, their apprehensions,
their responsibilities. All that they possessed in their
bonds was a dishonoured promise. Why should they
not exchange this for another promise that might con
ceivably be honoured, to some extent at least, at some
future day.? They could scarcely be worse off; and,
meantime, it would be the purchaser who had to walk
the floor at night.
On Mr. Stephen's return from abroad, Christmas
Day or the day afterward, 1877, the four disappointed
associates had a meeting at Montreal. Every road but
one had been closed to them. They could not get cash.
It remained only to be seen whether an offer to
buy these bonds by pledging their credit would be con
sidered. At this meeting they drew up another prop
osition. The prices of the bonds as already agreed 225

THE LIFE OF JAMES J. HILL
upon were to stand. But an effort was to be made to
get the securities by putting up only such amount of
cash as these gentlemen could raise themselves; and
providing for payment of the balance only after the
foreclosures should have been completed and the
property thus put in shape for a future issue of credit
against it. With this understanding they all went to
New York about January 2, 1878, to negotiate anew
with Kennedy & Co. Here, in the evening, Mr. Hill
personally drew up the memorandum which was the
basis of the discussions that ended finally in the transfer
of the property.
He proved himself as shrewd here as in his inventory
of the property itself. This memorandum,* of two
printed pages in length, is the patent of nobility for the
whole Great Northern system of to-day. It proposed
that the bonds should be turned over at the prices
already agreed upony That controversy would not be
reopened. Then it agreed to pay to the bondholders
interest on the purchase money at 7 per cent, until the
various mortgages could be foreclosed and clear title
obtained. Within six months after that, the whole
purchase price was to be paid in 6 per cent, gold bonds
of the new company, together with $250 of 6 per cent.
preferred stock for each $1,000 of such bonds. The
purchasers were to obtain and advance the money
necessary for the extensions of the system urgently
•See Appendix IV.
226

THE TANGLED WEB
demanded to save forfeiture of land grants. Until all
was completed, the bonds were to be put in escrow; but
the purchasers were to get immediate possession and
management of the foreclosure proceedings, and through
these of the property. Such was the substance of the
new, and as it was to be, the successful offer to the
Dutch bondholders, which was formally made January
5, 1878.
Negotiations on the basis of a purchase for cash had
now become negotiations for a purchase on credit.
The bondholders were brought by disappointment to a
humble frame of mind; and made ready to assent to a
kind of sale where the men eager to buy could meet
them at last with a definite and binding proposition.
AU these tedious, trying, and fruitless negotiations of the
year 1877, as wearing on one side as on the other, though
for very different reasons, built the foundation on which
the actual transfer of the property was to take place
early in the succeeding year. At last the associates
were able to act without securing the approval of the
capital to which they had so long pled on their knees
in vain to multiply itself a thousandfold. At last
they could consummate the hope of their years of
waiting and working. They saw a way to get control
of these railroad properties and put their plan to the
test. Only — and they were fully aware of it — a failure,
judgment not vindicated by the event, any mischance
that could not be foreseen and guE^rded against, would 227

THE LIFE OF JAMES J. HILL
leave all of them ruined in fortune, broken in hope,
discredited before the world, and stamped as adventurers,
or worse. This was the supreme test. Blithely they
welcomed it and put in pawn their entirely worldly
possessions and their business honour.
During all these years the four men had been
working together with the most absolute faith in one
another, but without the stroke of a pen to prevent any
undue advantage being taken by one of them, or to show
what each might expect to receive in case of success.
The matter had, indeed, come up indirectly during the
conference before Mr. Stephen left for England on his
unsuccessful mission. It was agreed that no capitalist
could be expected to come forward with the desired
support unless it were made to his advantage by assur
ing him a share in the profits of the project. Therefore,
the associates advised Mr. Stephen that he might prom
ise at least a one fifth interest in the control and profits
of the enterprise to such person as he should be able to
enlist. He was empowered to do more if necessary.
Either this railroad scheme was an illusion, in which
case all of them would be ruined, or it was something so
big that there would be enough for everybody and no
need to haggle about a division. Since, however, no one
could tell in advance what it might be necessary to
concede in order to bring in the fifth man, no one could
say what would be left to divide. The other shares,
therefore, were left indeterminate.
228

THE TANGLED WEB
Now that no partner had appeared, and it seemed
probable that their last offer, which they could make
good, might be accepted, a formal agreement was re
quired. It was still most desirable to get some financial
backing other than the very limited means of the as
sociates themselves . Should they get the property, they
would need help desperately in extending their credit,
in paying the expenses and interest that were running
aU the time, and in placing their new securities for cash
until the property should begin to show results. This
ofiice was still left to Mr. Stephen, who might hope to
obtain the lesser assistance where he had not been able
to command the greater. So it was agreed in writing*
by the four associates first in a preliminary memoran
dum of January 21, and, after the purchase had been
ratified, in a formal document known as the "Montreal
Agreement" and dated March 27, 1878,thataUtheprofits
and losses to accrue from the possession and operation
of the railroad companies were to be divided in the
proportion of two fifths for Mr. Stephen and one fifth
for each of the others. It was thus that the matter was
settled, and some hundreds of millions of future values
were allotted among these sanguine and desperately dar
ing men . No higher tribute could be paid to the financial
honour of any of them, or to any man, than to state
what is the exact truth about this agreement; and that
is, that if no line of it had ever been written, the prop-
•Sce Appendix V. 229

THE LIFE OF JAMES J. HILL
erty would have been distributed just as it was.
Achievements such as those which it is the work of
these pages to chronicle are not wrought by men who
hold their word more lightly than their bond.

230

CHAPTER TWELVE
THE PURCHASE AND ITS OBLIGATIONS
THE long chase was now almost over, with the quarry
in sight. The holders of the bonds were in a frame of
mind to take what they could get for them; and the
offer made was so far above anything to be obtained in
the open market that they could afford to accept new
securities in exchange. Besides, they were to get
back in cash very considerable advances which they
had grudgingly made from time to time to avert
immediate and outright loss of the property; and
they had the guarantee, from responsible parties, of
good interest on the purchase price until the reorgani
zation should be effected. Certainly this was better
than holding dishonoured paper which brought them in
nothing. As for the associates, not only were they able to secure,
through the influence of the Bank of Montreal and its con
nections, a line of credit where it had been impossible to
raise cash, but Mr. Smith and Mr. Stephen were
wiUing to take chances now where they would have
hesitated before. Now it was either take the property
or leave it. They knew that, in the latter case, it
would faU either to the Northern Pacific or to the 231

THE LIFE OF JAMES J. HILL
Canadian Pacific promoters, and be lost forever.
This was positively the last chance. They had had
time to get better acquainted with its value and pros
pects. And undoubtedly they felt the grim impulse of
every man who goes, step by step, into an enterprise of
doubtful issue. If he has any courage, it is stimulated
by pursuit. If he has any determination, he is ashamed
to have followed so long only to drop out at the last.
Better risk everything than abandon the results of so
many years of inquiry, effort, and hope. Like horses
running a hurdle race, they had come to the last and most
dangerous obstacle, and must clear it or balk disgrace
fully. Mr. Hill, in spirit, had long been over this final
barrier; and the others were now persuaded that the
leap must be taken.
So, January 5, 1878, the new proposition was
agreed on by the four associates, at a meeting in New
York City, and left with Mr. Kennedy to be submitted
to the Dutch owners. Mr. Kennedy had put himseK
on record as to the first proposal, that to buy for cash,
in the words quoted in the last chapter. Of the
second proposal, to buy for credit, he wrote, on Jan
uary 7: "At all events I will do everything I can
to have it so, both as the best thing for the Dutchmen,
under aU the circumstances, and as a good thing for
Kittson and Hill and their friends; and if it does not go
through it will be no fault of mine." This was the
advice of a level-headed business man, who was, on the
232

THE PURCHASE AND ITS OBLIGATIONS
one hand, the representative under power of attorney
of both the Dutch bondholders and the house of Lipp-
man, Rosenthal & Co., the Amsterdam bankers who
stUl controlled some bonds; and, on the other, a friend
of the associates and their financial representative in
New York. His opinion was likely to prevail, and it
did. After some dickering about prices, the offer was
accepted substantially as made, and an agreement
of purchase and sale was drawn up and signed by both
parties, March 13, 1878.*
The details of this Magna Charta of the Great Nor
thern, this realization of all the dreams and hopes of a
lifetime for Mr. Hill, this opportunity for the display
of qualities and activities beyond any that even his
most intimate acquaintances believed to exist in the
man to whom they attributed indomitable energy and
business shrewdness rather than real greatness, establish
two general conclusions. First, they prove that the
purchase was, on the face of it, a good thing for the
bondholders; so far as one could see at the time, a fair
trade for them. If the bonds had been held in New
York instead of in Amsterdam, it is reasonable to
believe that the owners would have jumped at the
chance just the same. The secondfact is that the sale
carried with it conditions so onerous for the purchasers
that one finds it difficult to understand how they could
have hoped to make them good. The obtaining of cash
•See Appendix VI. 2S3

THE LIFE OF JAMES J. HILL
and credit was a lighter affair than the material obstacles
which they pledged themselves to overcome. These
appeared almost insuperable; and they would have
proved such under any leadership less tireless, any
determination less unconquerable, than that of Mr. Hill.
Even with him at the head, it was a close thing. Events
to be related a little later showed that it was touch
and go whether some of the most important inter
ests of the property could be saved from legal annihila
tion. The sale was a good thing for the bondholders, be
cause they obtained prices above reasonable expectation.
It was frequently said, during the years following the
sale and reorganization of the property, that the bond
holders had been unjustly dealt with; that the pur
chasers had hoodwinked them and obtained from them
a valuable property for a song. The same story was
repeated in later years. It was purely the inven
tion of envy and disappointment on the part of those
who did not recognize the opportunity until it had
passed beyond their reach. The pubhc attitude has
already been described. Only a few believed in the
future of the property. Nobody believed in the future
of the bonds, except as bits of coloured paper. Mr.
F. R. Delano was for years the superintendent of the
First Division Company. He held various official
positions, knew the property as thoroughly as any one
could, beheved in its possibilities, and made himself its
234

THE PURCHASE AND ITS OBLIGATIONS
partisan. He ought to be a good witness to bond values
if there were such. In an address delivered before the
House of Representatives of the Minnesota Legislature,
February 23, 1875, an address so impressive that five
hundred copies of it were ordered printed by that
body for its own use, Mr. Delano said : " The bonds have
depreciated in Amsterdam. Until lately they have
sold at eight and one half cents on the doUar, and most
of them have gohe into the hands and ownership of the
bondholders' committee at a very low price, and I
beheve that the present owners expect to get their
money out of the wreck in some other way than by
building and equipping the road." If anybody had
been wronged by a purchase below value, it would not
have been the thrifty Dutch who had originally sub
scribed for these bonds, but the financial agencies that
had first placed them by methods already described, and
then gathered them in, after depreciation, at the figure
named by Mr. Delano. Nobody would have shed
tears over them. But, as a matter of fact, the
owners were extraordinarily well paid for their prop
erty, according to the only impartial standard, the
market range of prices.
The various classes of discredited bonds were of
different intrinsic value, according to the dates and
amounts of the different issues, and the amount and
quality of the property by which they were secured.
Some were bought at 75 per cent, of par, some at
235

THE LIFE OF JAMES J. HILL
28, some at 35, some at 30, and $11,400,000 of
that extraordmary $15,000,000 issue at 13f . The bids
for these bonds on the New York Stock Exchange,
September 28, 1877, three months before the offer of
the associates was prepared, ranged from 45| for those
for which they offered to pay 75, to 6| for those they
took at 13j. Clearly a very handsome advance, even
when payment was to be made in new securities. The
ghost of that "unfair bargain" story ought never to
walk again. The purchase price was to be paid either
in gold or in first mortgage bonds of the new company
to be organized, at a date on or before the expiration of
six months from the sale of the properties under fore
closure; thus giving time to acquire legal title and to
organize a new company, under the law already referred
to, without making the land grants subject to taxation
and, therefore, impossible for a poor and struggling
concern to hold. If paid for in securities, first mortgage
7 per cent, gold bonds were to be given, to the amount
of the purchase price; and, in addition, preferred full
paid stock of the new company at the rate of $250 for
each $1,000 bond. These were the terms contained in
the memorandum drawn up by Mr. Hill previously, as
described in a preceding chapter. The stock was to
bear 6 per cent, interest, if that could be paid from net
earnings, less interest on bonds. The bonded debt
was not to rise above $12,000 per mile of completed
road, and the stock issue should not exceed 25 per
236

THE PURCHASE AND ITS OBLIGATIONS
cent, of the bond issue. Pretty rigorous terms, even
for a purchase on credit. About 85 per cent, of the
bonds came in under this agreement. The rest had
to be picked up on the outside, and the associates had
already been looking after that. When the time came,
it was found that they had it neatly coraUed.
Some of the securities of the St. Paul & Pacific Com
panies, of course, were held in this country; part of them
in St. Paul and elsewhere in the Northwest. The holders
of these were bitterly disappointed— and some con
sidered that they had a grievance — when they found
that they had parted for a song with something that
afterward acquired substantial value. This is merely
the old story of the man who, lacking foresight or busi
ness sagacity, blames fortune or fate or his more enter
prising fellow for his own failure. Quite a little local
business had been done by individuals or small associa
tions in these old bonds. Foreign quotations were
watched, and more or less trading went on. For six
years, from the time when construction stopped in
1872 to the purchase in 1878, the property lay there for
any man to see and estimate. Mr. Hill had talked
freely, as has been seen, of his plan to get control of it if
he could. Any man who believed in the country, no
matter whether he believed in Mr. Hill or not, could
have foreseen that these securities must have value;
should have bought bonds instead of selling. Of course,
from the moment that things began to shape themselves 237

THE LIFE OF JAMES J. HILL
definitely toward a purchase of the bonds held by the
Dutch Committee, Mr. HUl and his friends gathered in
aU that they could, at as low prices as they could. It
was a common sense business transaction in the open
market, precisely as such securities are bought to-day
by persons contemplating the acquisition of control
or of a heavy interest in some property, and sold by
those who are sorry for it afterward.
What other consideration passed.? One can hardly
understand to-day how these men dared to engage
to do what they actually performed. They paid more
than $280,000 in gold to bind the bargain. They
bound themselves for the payment of the semi-annual
interest on the purchase price of the bonds, amounting
to from $270,000 to $280,000 a year. They had to
find money to pay for other outstanding bonds as fast
as they were turned in. They must furnish the capital
required to complete and equip the extension to St.
Vincent, more than 200 miles of road. Not only did a
land grant depend on this, but it was vital to the
whole plan of a through system to Winnipeg, and it had
to be promised specifically in the agreement. To as
sure performance, the associates had to execute a
$100,000 bond, to be forfeited as damages if this work
were not done within two years from date. They had
to pay back in gold the cost of the Breckenridge-Barnes
link, for which the bondholders had advanced cash,
with interest at 7 per cent. They had to buy out, as
238

THE PURCHASE AND ITS OBLIGATIONS
best they could, the stock interest that Mr. Litchfield
still held in one of the companies, to avert endless fu
ture trouble. Finally they must supply from time to
time the ready cash to conduct the whole enterprise
after it came into their hands. Just to keep a bankrupt
railroad running, just to furnish out of your own pocket
sufficient working capital for a solvent road, would be
no slight financial strain. But this engagement was
reaUy a tremendous venture for those days. Computed
in terms of risk, it looked appalling. No syndicate
to underwrite it; no big financial concern, insurance
or trust company from which to get money; while
everything in the West — its railroad enterprises above
all — was thoroughly discredited. No railroad or in
dustrial deal of later times has required the nerve
and the daring involved in this purchase. ' ' Altogether, ' '
says Mr. Hill, "I would estimate the cash liabUity in
curred by us at between four and five million dollars."
Of course the associates had no such sum. The mere
$280,000 forfeit money looked as big as a mountain.
They had to throw whatever they had into the pool.
Mr. Hill said: "Mr. Smith and Mr. Stephen called upon
Mr. Kittson and myself to put up everything we had;
everything that was available as security and for any
money we might need in prosecuting the work we had
in hand, including the amount borrowed to pay the
expenses of the Dutch Committee at the date of the
closing of the agreement." The grasping Dutch bank- 239

THE LIFE OF JAMES J. HILL
ers in charge of the negotiations meant to grab $280,000
and were taking no chances with it. He added: "I
sent to the Bank of Montreal whatever stocks or other
securities I had, and such additional securities or se
curity as I could make up from deeds of trust and prop
erty." In other words, this successful business man,
with a family growing up about him, and what was con
sidered a competence in those days, deliberately staked
his all on this enterprise. He did it not because he
believed in its future, but because, by that gift of pre
science which served him so well in all the great crises
of his work, he knew.
It is no wonder that Mr. Kittson, who did not know
and only about half believed, did not dare tell his most
intimate friend of this rash gamble on which he, too,
had staked pretty much all he had. Not only miscalcu
lation as to the future, but a mere delay in the scheduled
foreclosures and reorganization would ruin the whole
party financially. But the die was cast. And now —
an almost intolerable thing for a man of Mr. HiU's
temperament- — the next thing was not to plunge head
long into the rehabilitation of the property, but to per
suade hostile legislatures not to batter it any more;
and to wait upon the maddeningly slow processes of
the courts in matters where delay might destroy every
thing. Before describing the breathless activity on Mr. HiU's
part which began the instant the agreement was signed,
240

THE PURCHASE AND ITS OBLIGATIONS
and which could not be relaxed for a moment without
insuring the collapse of the enterprise, a story in its
way as dramatic as that of the bond purchase itself,
it will conduce to clearness to glance at other influences
at work and other interests busy with their claims. The
value of the railroad properties which had been tenta
tively acquired depended above all else on the character
of the country they traversed, and the probability of
its settlement and cultivation. Because the facts
about this were becoming known, it had been important
to act quickly. An old immigration pamphlet gives
the wheat crop of the state in 1877 at 32,280,637 bush
els, of corn 1,100,000, and of oats 13,819,630. In Au
gust of this year, when the negotiations were nearing a
practical point, Mr. HUl wrote to Mr. Smith: "The
present crop of the state of Minnesota and its effect in
the older states where they are experiencing so much
trouble on the labour question has already caused a large
inquiry for lands along the line of the St. Paul & Pacific
Railroad, and I learn that the prospects are very fa
vourable for a heavy immigration this fall and spring.
Every indication leads us to think that this is the favour
able time to purchase this property; in fact, I do not
think we could get it for less than a million dollars' in
crease after the present indications are realized." The
Northern Pacific was an open enemy. The Milwaukee
and the Northwestern systems had been placated and
were busy taking care of their own territory, but had a
241

THE LIFE OF JAMES J. HILL
covetous eye nevertheless on the property for which
Mr. HiU was negotiating. The Canadians, from the
government at Ottawa to the government at Winnipeg,
were ready to do anything and make terms with any
body to secure a through line from Manitoba to the
outer world. It had been hard enough to hold all these
forces at bay so far. Let them once see what the North
west was becoming and what effect its improvement had
already produced on the balance sheets of the St. Paul
& Pacific properties, and if there were any failure to
fulfill conditions agreed upon, there would be no chance
either to hold off other competitors for the system or
to obtain its securities at such prices.
Another vexation was the persistency of legislative
attacks. The people of the Northwest were weary of
the Hollanders. They were not touched by the losses
which these people had sustained, or their poor chance
of recovering the investment if they put in more money.
What they wanted was railroads; honourably if possible,
on any terms if necessary. The railroad had halted.
So any proposal that aimed at taking away the privileges
or even the rights of the Dutchmen, by threatening
forfeiture of land grants or making more onerous the
terms on which they could be held, found a large foUow
ing in the state legislature. The other enemies of
the St. Paul & Pacific, and the men who were trying
for their own ends to keep Mr. Hill and his friends from
obtaining control, had a powerful weapon ready to their
242

THE PURCHASE AND ITS OBLIGATIONS
hands. The bankrupt railroad company owed a con
tractor. The ownership of a large amount of material
already on the ground was in dispute between them. A
state law assigned as solatium to the contractor a
certain portion of the lands so soon as earned.
One land grant had been secured only by letting it be
come forfeited and then getting it re-granted to the
Western Railroad Company, controlled by the associates.
The time limit for completing other portions of the line
must be extended . The only effective means of nullifying
adverse public opinion was to urge the presumed ad
vantage to the people of having these roads owned and
managed at home. This was the plea with which Mr.
HiU worked unceasingly to extract concessions from the
legislature, as well as to ward off hostile attacks. " The
people of the state," he wrote to Mr. Kennedy, "ap
pear to be very anxious to have the property owned by
home interests, and are correspondingly afraid of the
large Eastern companies; the Minneapolis millers es
pecially." He was at this time and always greatly interested
in the milling business which had grown up around
the Falls of St. Anthony. It was to become a great and
growing feeder for his road; and for a time, while the
miUs relied upon water for their power, he had an
interest in the business, through purchase of the St.
Anthony Power Company. That came later ; but at the
present time the alliance with the millers was a close 243

THE LIFE OF JAMES J. HILL
and helpful one. For a long time, with his scheme ever
foremost in his thoughts, Mr. HiU had protected indi
rectly in the legislature the interests of the St. Paul &
Pacific as best he could. Now that more substantial
concessions were desired, now that it was necessary
to satisfy the legislature that the road would soon be
completed if these were granted, somebody had to come
out into the open. Mr. Hill must be able to say, in
opposing the Northern Pacific interest, the Litchfield
interest, the interest of De Graff & Co. — the belligerent
and politically powerful contractors — that these things
were asked "not on behalf of the unpopular Dutchmen
and their receiver, but on behalf of our own citizens;
who had bought the bonds and who had agreed to finish
the lines and had the will and the ability to do it."
About this time such entries in his diary as the foUow
ing, scattered among notes of the dates of baptism of
his children and other personal matters, are frequent:
"Attended a meeting of the joint committee of house
and senate on extension of St. Paul & Pacific Railroad."
"Incorporators of the Western Railroad Company met
at Kittson's office and elected officers. I was elected
Secretary." "Attended meeting of railroad committee
of the house in evening at the capitol, on extension of
time to the St. Paul & Pacific Railroad." " Saw N. W.
Kittson in regard to railroad matters." "Donald A.
Smith expects to be here by Monday or Tuesday of
next week." There were no idle moments, and every-
244

THE PURCHASE AND ITS OBLIGATIONS
thing was moving toward the focal point of his life and
thought. Actual work, moreover, was going forward, which
on the one hand helped to pacify an impatient
public and on the other hand roused fear lest the
lethargy of the existing management of the railroad
might be so far stirred that it would begin to think of
saving the property, after all. While these negotiations
to buy the bonds for cash were being discussed, the Red
River & Manitoba Company was organized, in 1877. By
November 15 of that year it had completed the long-
desired "cut-off, " or link, between Breckenridge and the
Une of the St. Paul & Pacific south of Glyndon. The
length of this track was only thirty-three and one half
miles, but its importance was great. It opened the way
for a direct communication with the Red River Valley, so
soon as the extension up there should be completed; and
it saved to the St. Paul & Pacific a considerable haul over
Northern Pacific lines that had heretofore been necessary
on much of its business. This track was laid with money
for which the bondholders had grudgingly agreed that the
property might be held responsible. It was constructed
largely of old iron, scattered at points along the right
of way and of disputed ownership. That is a faiij/l
sample of the business management of the railroad' s| i
early affairs. There were 1,000 tons of iron at Duluth \j
and 1,700 tons at Glyndon which were claimed by both \
the railroad and the contractor. Since both parties 245

THE LIFE OF JAMES J. HILL
agreed that it could not be used eventually for any other
purpose than the building of the line, it was finally
decided to use it, pay the duties on this imported stuff
which were still delinquent, and let the balance of the
purchase price go to whichever of the warring claimants
the courts might ultimately decide to be entitled to it.
Rails were rails in those days. This iron was bought
at from $32 to $37 a ton. New iron rails were quoted
that same season at $38 per ton f. o. b. Milwaukee.
Steel rails were a luxury, and a few were bought at a
bargain this year at $55 a ton. In Chicago they
were quoted at $61. A railroad manager or financier
who should have been asked in boom times to lay his
track with $60 steel rails and sign an agreement to bond
his road at not more than $12,000 per mile of completed
track would have thought it a crazy proposition.
There were other irons in the fire. Mr. HiU was
ready to risk all his fortune on the railroad venture,
but he did not have to bestow on it all his overflowing
energy. The fuel business was flourishing; and he was
looking after sources of supply as well as business. He
wrote to a friend in 1877: "We have about 1,100 acres
of this coal land and all continuous; in this respect it
has an advantage of from 25 to 50 cents per ton over
any coal in Iowa, and this will always enable us to
deliver on the cars for less money than any other
locality." Then he quoted the best authorities on the
coal fields of America, showing a profound acquaintance
246

THE PURCHASE AND ITS OBLIGATIONS
with the subject. Two things are manifest here:
First, his knowledge of coal supplies and quality, which
was to give his railroad a marked advantage in this
particular; second, the value that he placed on cir
cumstances affecting efficiency and economy in opera
tion; which was the same principle that he applied to
railroading with results that astonished railroad men
and brought them all, in the end, to take his system as
their model and school of instruction. Earlier than
this he had shown the qualities of the practical traffic
man. Some years before, when he was just making
headway in the freighting business, he wrote to an asso
ciate: "My trip to Chicago was to get some Chicago
commission merchants to advance on flour in my ware
house, and I succeeded in getting Culver & Co. to send
a man to remain all winter, who is ready to advance
$7.50 per barrel on 30,000 barrels in store, but I do not
think the millers can get the wheat to grind as much.
My great object has been to secure the control of the
flour interest as far as shipments are concerned, and
also to get control of the new railway dock — both of
which objects I feel accomplished as far as can be."
He was up and doing all the time; and his principle was
that while he would take all kinds of chances to secure
his opportunity, he would take none at all on success
in improving it.
In these years there was but one shadow on the
famUy and personal life of Mr. Hill. This was the 247

THE LIFE OF JAMES J. HILL
death, in August, 1876, of an infant daughter, Cather
ine, the only child of Mr. Hill who did not survive him.
Intensely domestic, all that the busy hours left him of
leisure was devoted to his home; to the wife who was
always his anchor and inspiration; to the children who
came to bless their union. At first St. Paul did not
boast a distinct residence section. As in other small
towns, the business district merged gradually into the
district of homes. Mr. Hill had been living since
1871 in the house on Canada Street. As years passed,
increased family and enlarged income seemed to
require a change, and he prepared to build a suitable
home. He left the old place, no longer adequate, and
from October, 1876, to February, 1879, lived temporarily
on Dayton's Bluff, the hill that overlooks St. Paul from
the east. It has the most beautiful outlook in that city
of sweeping vistas, but at that time the movement
of population was in the opposite direction. In the
interval Mr. Hill built what was then considered the
most modern of houses, on a site long before selected,
still in the lower part of town and not very far removed
from the place where he first lived. It was built on the
site of the cottage at Ninth and Canada streets. There
he remained, from 1879 to 1891, until the tide that
carried all his old friends and neighbours up to St.
Anthony Hill, as the western heights of the city are
caUed, swept him along with it, to build the mansion,
modest for a millionaire, but solid as the man himself
248

THE PURCHASE AND ITS OBLIGATIONS
and one of the most beautiful of the private homes, as
distinguished from the show places, of the country.
While the events just related were taking place in the
progress of his railroad scheme, he was undergoing the
heavy expenses incident to his first house-building and
removal. The new house in lower town was not ready
for occupancy until about a year after the successful
offer was made to the Dutch Committee for their bonds.
It took more than faith, it required the absolute knowl
edge of the outcome which this man believed that he
possessed to stake, without a quiver, everything, includ
ing the home so long looked forward to, where the lights
of the house-warming were almost ready to blaze.
The financial obligations to be incurred before any
substantial progress could be made were so many and
so great that there could be no stopping halfway. It
was win or lose everything. Besides their bond of
$100,000 to the Dutch Committee and the g,greement
they had to make a little later with the courts to furnish
a million doUars or more to complete the extension lines,
the associates had joined in the note for $280,000 for
money to pay the expenses of the Dutch Committee,
whatever they were; in another for $140,000 for funds
to meet the first six months' interest on the bonds
for which they were now responsible; in another of
$250,000 in the latter part of 1878 to cover overdrafts
that they had been compelled to make; and in raising
half a million to pay for the Litchfield stock, which 249

THE LIFE OF JAMES J. HILL
everybody felt must be got out of the way. To secure
these obligations and make them exchangeable as col
lateral for cash, they were only too glad to pledge every
particle of property and other security they had in the
world. Kittson did not go too far when he said that,
if the enterprise had miscarried, they would all have
gone to the poorhouse. Besides the cash sums men
tioned above, funds must be found to build and equip the
new line to St. Vincent, indispensable to the traffic plan
as weU as to saving the land grant and the amount,
whatever it was, that had been expended on the thirty-
three miles from Breckenridge to Barnes, which had for
the first time united all the scattered pieces of the old
St. Paul & Pacific into one connected though stUl un
finished system.
Here the services of Mr. Stephen became invaluable.
He had been unable to raise the cash at home or abroad;
but he could aid in extending an important line of
credit through the Bank of Montreal, of which he had
for years been a director and of which he became presi
dent two years before the railroad purchase was carried
through. This bank was at that time the greatest
and most important financial institution on the conti
nent. It had powerful connections and the highest
standing in both London and New York. Credit
there, if not pushed too hard, was perhaps a more
valuable asset than cash; because the hmit would be
more elastic and because there would be less of the
250

THE PURCHASE AND ITS OBLIGATIONS
publicity which, at this time, could inure only to the
benefit of the Northern Pacific people or the Litch
fields. At one time, so strenuous was the situation
and the demand for real money to keep things moving,
that Mr. Hill and Mr. Kittson took $75,000 bodily
out of the treasury of their Red River Transportation
Company and rushed it to Montreal. Though the
worst of the money troubles were over, so far, at least,
as getting possession of the bonds was concerned, the
other troubles were just beginning. The campaign
that preceded the bond purchase was only a skirmish
as compared with the campaign to make that purchase
amount to something; the terrible months that elapsed
between the time when the associates became nominally
the owners of the property — an ownership hedged about
with onerous conditions and ever-present dangers —
and the day when the property could formally change
hands, a new company be organized, a new system of
financing be installed, and a competent management
begin the real development of a real railway system.

251

CHAPTER THIRTEEN
THE BREATHLESS YEAR
NEITHER before, when they were moving heaven and
earth to secure the property, nor afterward, when
they were breaking all construction records in buUding
a line to the coast, did the associates live through a time
so breathless, so full of sharp anxiety, so dedicated to
almost impossible accomplishment as the remainder of
the year 1878, after the contract for the purchase of the
bonds had been signed. They now had three stretches
of track to complete, with money to be furnished by
them and within time limits set grudgingly by indiffer
ent or hostile legislatures. To build from Melrose to
Sauk Center they had only until August 1st, and to
Alexandria only until December 1st. If they failed,
the land grant, which formed so large an element in the
value of the bonds as security, would be forfeited.
The line to St. Vincent did not, indeed, under the law,
have to be finished during this year. But its immediate
completion was of the utmost importance to the plans
of the associates for controlling the connecting line on
Canadian soil, fi'om St. Vincent to Winnipeg, and
checking the threatened construction by the Northern
Pacific of the line built afterward on the other side of
252

THE BREATHLESS YEAR
the Red River to the boundary. If they had had all
the money they needed in their treasury and a free
hand at the work, it would still have been no inconsid
erable enterprise to comply with these conditions.
They were, however, far from such good fortune. The
receiver of the Main Line, who was also manager of the
First Division Lines, was running the property under
direction of the court. He must be theoretically respon
sible for the new construction. He could not go ahead
without orders from the court. And he was not one
of the purchasers, or in any way interested in move
ments that were vital to them. The new owners of the
bonds were almost in the position of outsiders. Yet
they must do everything on time and in accordance
with the conditions which they had accepted. The
only way to make sure of this was to have the receiver
make a contract with them, themselves, to build the
road. Then the work upon whose rapid progress so
much of their fortune depended would actually be in
their own hands. Time was so all-important, and the
loss consequent upon the failure of the; receiver, or any
other person with whom he might make such an agree
ment, to comply with the legal requirements would be so
enormous and irreparable that this seemed absolutely
necessary to them for self -protection. The receiver
was willing enough. But first the court, who gave
orders to the receiver, must be convinced. Federal
courts, in the Northwest, in those days, did not deal 253

THE LIFE OF JAMES J. HILL
very generously either with railroad companies that had
made promises and failed to keep them, or with new
railroad projects that could not show control of ample
resources. So the slow-moving wheels began to revolve tediously.
The completion of the St. Vincent extension was too
big a job to be made a cash affair. Credit was already
pledged to the limit for the bond purchase and the
carrying of the property. Receiver's certificates against
the property itself, including its valuable land grant,
were the only recourse. The receiver applied to
the court for permission to build, and to issue de
bentures for that purpose. Upon this petition an order
to show cause was made April 8, 1878, returnable
April 18 at Jefferson City, Missouri. After the hearing.
Judge Dillon, who was inexorably against haste, no mat
ter what delay might cost, issued an order April 26,
appointing two commissioners to inquire into and
report on the matters specifically submitted to them
which would determine the propriety of issuing the
order requested. The associates, who were already
straining every nerve to build the other lines within
their time limits, must now induce these commissioners
to make their investigation and report at an early day.
It is a high tribute to their persuasive powers that they
were able to get the report made within a month; and
to the bona fide nature of their proposition that the
commissioners were, as a whole, in favour of it.
254

THE BREATHLESS YEAR
The report of the commissioners was presented to the
court at Des Moines, Iowa. Mr. Hill and his counsel
were there, hoping that the judge would issue the nec
essary order at once, and make the terms of it such as
they could accept. They had gone over every possible
phase of the question in good faith. They advised that
the receiver be authorized to contract with any respon
sible persons for building the line at the lowest figure
he could get, paying for the work in debentures
issued against the property, at par; payments to
be made on completion of each ten-mile section. The
associates knew that they could discount these deben
tures at the bank and thus carry them until the prop
erty itself was in shape to retire them. They only knew
how short that interval would be. They were pro
foundly disappointed when the court demurred and
showed a disposition to make troublesome reser
vations. Judge Dillon had faith in the men; but, like
everybody else, very little in their scheme. He did not
dechne to issue any order; but he said that, to prevent a
repetition of former troubles, he would not allow the issue
of debentures until the road had been built. This, of
course, was practically equivalent to a total prohibi
tion; since it was upon the security of the debentures
that cash for immediate expenses must be obtained.
Mr. Kennedy's help was invoked, Mr. Hill and his
counsel went to Davenport to present to the judge the
facts and urgent needs of the situation, and he finally 255

THE LIFE OF JAMES J. HILL
agreed to issue an order whose terms were fairly satis
factory to them. All this had deferred action until
the last day of May. And when the order was issued,
it contained new conditions, inserted after a copy of the
one already agreed to by the judge had been made.
Judge Dillon, in signing it even after these multiplied
precautions, said that "if the associates failed to carry
it out, it would destroy them and ruin him."
Notwithstanding these maddening difficulties and
delays, the report of the receiver of the property, made
November 13, 1878, showed that the whole of the hnes
from Crookston to St. Vincent and from Melrose to
Alexandria had been built and equipped ; more than one
million dollars having been paid out by the receiver
to the contractor out of moneys furnished by the asso
ciates. Had they not been their own contractors,
had they not been in command of a good line of credit,
this would have been impossible. A heavy crop this
year made labour scarce and wages high. Two and one
third miles of line from St. Vincent to Emerson were
finished, and the first train of the St. Paul & Pacific
entered the latter place November 11. This made
a through line at last to Winnipeg in connection with the
Pembina branch of the Canadian Pacific, which was
still under construction and to which they had also
to lend a hand. The last rail of the work to be done
under the agreement was laid December 4, 1878. The
line to Sauk Rapids, covered by the order of the court,
256

MRS. JAMES J. HILL
From a photograph taken in 1888

THE BREATHLESS YEAR
was completed just twenty-four hours prior to the date,
August 1, 1878, fixed by law for the forfeiture of the
land grant.
This was but one incident of a year so memorable
that only by following the calendar can any idea be
gained of what had to be and was accomplished. Sub
stantially everything that follows in this chapter is
taken from the hundreds of letters, all in Mr. HiU's own
hand, that witness his unremitting activity. The
events of the opening month have already been re
lated, down to the signing of the agreement with
the Dutch Committee. February 8, 1878, Mr. HiU
wrote to Mr. Stephen: "Enclosed please find promis
sory note on demand, signed by N. W. Kittson and my
self. We hope nothing will occur now to prevent the
Dutchmen carrying out their part of it." There were
none of the tremors that the most confident business
men are apt to feel after they are committed irretriev
ably to a hazardous undertaking. On the contrary,
he wrote to Mr. Kittson, five days later, that the head
of another big railway system had applied to him for an
interest in the purchase, and said: "I told him we had
made arrangements which prevented our taking in any
one. If we should want to sell our contract, his road
would pay a million dollars cash for it and let us out."
This was magnificent confidence, and at the same time a
shrewd bit of comfort for the man who had not dared tell
anybody of his rashness, and still saw glimpses of
257

THE LIFE OF JAMES J. HILL
the poorhouse in his visions of the night. A week later
he wrote to Mr. Stephen about the infinitely tortu
ous work of getting the Minnesota state legislature to
refrain from interposing obstacles, about keeping the
newspapers silent until the purchase should have been
concluded, and about preventing the Canadian legis
lative authorities from accepting overtures by the
Northern Pacific for a connection with the Canadian
Pacific branch to the boundary.
HostUe legislation was the greatest bugbear of aU.
Had the settlement with the HoUanders been delayed,
the repeal of the law giving a lien to the belligerent
contractor, De Graff, would have been impossible; and
an immediate declaration of forfeiture of the land grant
coiUd not have been prevented. At this very time a
bill was also before Congress proposing an omnibus
forfeiture of all railroad land grants still unearned.
The Minnesota delegation and all other friendly powers
had to be united against it. One law-making body at
St. Paul, another at Washington, a Federal judge sitting
sometimes at Jefferson City and sometimes at Daven
port, and the raising of one huge sum of money after
another to comply with the terms of the agreement,
gave occupation enough, outside of problems of con
struction and operation. Mr. Hill took charge of it all
with the incredible lightness of spirit of an old cavalier
going forth for a combat to the death. There is a
very human note, however, in a letter to Mr. Stephen:
258

THE BREATHLESS YEAR
"Messrs. Kennedy & Co. have just telegraphed that a
large majority of all classes of bonds have assented to our
proposal, so that we have virtually 'Crossed the Rubi
con.' This is a great relief."
The first week in March saw the clearing up of the old
De Graff trouble, an insuperable obstacle untU it
could be got rid of by a compromise which turned over
to the contractor the first $125,000 received from the
sale of lands. This left the company free to fix prices
for its lands and to dispose of them without a shadow
on the title. Mr. Hill, in a letter of March 8 to
Mr. Kennedy, reported in his piquant way the finish:
"It was very late before we felt able to say that we
represented ourselves and not the Dutchmen, and
consequently we had to make our fight a bitter one.
The whole pack, 'Tray, Blanche, and Sweetheart,'
fought hard, and had letters and cables from HoUand
fresh every day or so saying that we had bought no
bonds, that our negotiations had entirely fallen through,
etc. We pushed right ahead, and finally they offered
terms. I am satisfied we would have beaten them out
entirely had we a week's more time, and I know our
chances were good anyway, but I thought best to make
it sure. The leader of the opposition is very angry and
refuses to be comforted."
The farmers of the Northwest were already complain
ing bitterly of the control over prices which the monopoly
of wheat elevators by the Minneapolis MiUers' Associa- 259

THE LIFE OF JAMES J. HILL
tion gave the mills, and were writing to Mr. HiU to
know what they could expect. Early in April he repUed
to one of them: "I would say that we do not know as
yet what plans we will adopt further than to say that
we desire to make the matter as free as possible, so as
to give the shipper the benefit of aU competition."
The necessity of building elevators to relieve the farmers
from this disability was one of the early problems, and
by the next year had assumed an important place
in the calculations of the managers. But there was
supreme consolation for every effort in the growing cer
tainty that the property would make good. Indeed, if
outsiders could have known the facts, that Mr. Hill
knew at this time, the possibilities of litigation would
have been exhausted to prevent the bond purchase
agreement from being carried out. Mr. Hill wrote
some of these facts to Mr. Kennedy, April 11:
"The road is doing a very heavy business, and to-day
Mr. Fisher had to hire two engines from the Duluth
road. The Fisher's Landing train is the largest and
fullest train leaving St. Paul over any road, and it cer
tainly looks as if we would have more of it. The exten
sion lands north of Crookston to the end of the track
are all applied for, and, in fact, I believe all the extension
lands outside of the limits disputed with the Northern
Pacific have been applied for by desiring settlers; and
if we can get the authority from Judge Dillon to convey
lands and let proceeds go with the suit, we can have
260

THE BREATHLESS YEAR
a wheat crop on that line next year of not less than
500,000 bushels. You can form no idea of the rush of
immigrants to Minnesota this year." Then, as always,
Mr. HiU was looking after business for the railroad. To
others, the struggle for granted lands was everything.
They could see only the money that these would bring
in. Mr. HiU did not despise them; he put up a
splendid fight to save them. He, too, knew what could
be done with this big debt by trading lands for bonds.
But, after all, no matter who controlled the lands, to get
people on them, to make them productive, and so to assure
a permanent traffic for the railroad interested him most.
Not $500,000 to be picked up, but 500,000 bushels of
wheat to be carried, came first to his thought. This
conception embodied one of the first principles of a life
of signal success in the profitable management of rail
roads. Later, many others came to accept and act upon
it. At that time it was unique among the men in real
control of railroad affairs in this country.
The construction of one extension line, as already
noted, was finished July 31, with but one day to
spare before the date of forfeiture. Now that it was
finished, it became a source of real danger in the opposite
direction. This line was, for the present, controlled
by trustees for the bondholders. It was bound to
be a money-maker. Under the favourable conditions
set forth in the letter from Mr. Hill just quoted, it was
going to make a profit right away. He had reason to
261

THE LIFE OF JAMES J. HILL
fear that it would begin to earn and pay the interest
on its bonds before mortgages could be foreclosed and
possession obtained. In that event, ;the stockholders
would resume their right of control; and the purchasers
of the bonds would, indeed, make a handsome profit
on their deal, but they would not get the railroad, which
was what they wanted. The valuable terminals at St.
Paul would be separated from the rest of the property.
"The property of the main line and of the extension
line," said Mr. Hill on the witness stand some years
later, "without the line between Minneapolis and St.
Paul, and the access to St. Paul and the terminals in
St. Paul, would have been worth very much less money
than with or in connection with the branch line, so-
called, between St. Paul, Minneapolis, and Sauk Rapids.
I would not have gone into an enterprise to pay as much
for the bonds of the main line and extension as we
offered for them without the branch line being in
cluded." This has two interesting aspects. It exhibits
the multitude and varied character of the anxieties of
this period, between the signing of the agreement to buy
the bonds and the obtaining possession of the property.
And it brings out clearly the thought and purpose of
Mr. Hill. He was not engaged in a speculative deal.
At any time and in any one of several ways he could now
have retired from the affair with profit enough to make
him probably the richest man in the Northwest and
assure his financial future, instead of going through with

THE BREATHLESS YEAR
the original plan and continuing to risk not only these
profits in sight but also everything already invested and
all his wordly possessions. But his fixed purpose
was to create a great railway system in the North
west. The plan had been formed, the results clearly
foreseen for many years. No possibilities of loss or
failure could turn him from the realization of that idea.
He stood pat. The other construction work that
had been promised was being rushed with what was
wonderful rapidity for those days, and for the conditions
under which it must be done. In a letter of July 30
he wrote: "We are putting down a mile and a half of
iron daily now."
By September the load of anxiety, growing out of
reasons beyond any one's control, became almost un
bearable. The building of the first little link had drawn
heavily even on Mr. HiU's energy, so short was the
time allowed. Worse was to come. The new line
to Alexandria was what the people of Minnesota were
most interested in just then. So determined were they,
that the last legislature had ordered this to be finished
and in operation by December 1, 1878, under the usual
penalty of forfeiture. But at that time one could not,
as now, place an order for railroad material and have it
delivered with certainty anywhere near a given date.
Intolerable delays threatened the defeat of the project.
No activity on the part of those in charge of it could
cure this trouble. The Cambria Iron Company had 263

THE LIFE OF JAMES J. HILL
agreed to deliver 8,650 tons of iron by September 10.
On September 25 only 3,820 tons had been shipped.
Of the 2,500 tons that were to be delivered during this
particular month, only 1,130 tons had gone forward.
" W^e must commence laying iron north of Sauk Center by
October 1," wrote the receiver to Mr. Kennedy, "to
save our land grant. W^e have done nothing on this line
for want of iron. We have now exhausted every effort
to hasten the delivery of iron, and when winter sets in
and this line is not completed, I do not wish any party
connected with this matter in St. Paul to be blamed for
the delay." And the following day, this: "I have a
man in Chicago watching the movement of the iron
and starting it almost the day it arrives there. We
have had since August 1 all the men, ties, etc. neces
sary, and could have completed both these lines by Oc
tober 1 if we had received the iron." Mr. Hill himself
was out in the field, seeing that construction was not
delayed an instant. It was heart-breaking to have
the machine all ready, everything depending on its swift
operation, and no material to feed it. Wherever he was
not in personal control — and he needed to be in aU
places at once — the pressure on the others became too
great, and things sagged. He wrote characteristically
to Mr. Stephen in October, after a visit to the front:
"The work seems to drive and control everybody in
stead of being controlled and driven." So long as he
could be on the ground himself, that criticism would
264

THE BREATHLESS YEAR
not be made. His driving and controUing power were
the mainspring of this work for the next thirty years.
In October he wrote to one of the associates: "I have
been up at the front on both lines, and I find it pays to
be where the money is being spent."
Over all obstacles, the lines promised were finished
within the designated period. The lands were saved,
the conditions accepted in the agreement were per
formed. The herculean tasks of 1878, preliminary
to possession, to the real beginning of the enterprise
as it was to become, were performed. Mr. Hill did
many remarkable things in his later career. The world
looking on, measured the value of the idea, ap
praised the power of execution, and gave credit ac
cordingly. But what was done in this year, 1878, when
everything was still in the air, when the purchase was
still only conditionally valid, when the new company
could not yet be formed, when it was a sheer race of
life and death, under a killing handicap, against terms
that seemed to most people impossible to meet, is most
wonderful. This story is related here with more than
customary detail because of its intrinsic importance, its
remarkable quantity and quality of performance, and
the fact that it is here written for the first time into the
history of railroad building in the United States and the
development of the Northwest. It was, indeed, with a
new force that the public must reckon.
Some other things deserve to go into the record. 265

THE LIFE OF JAMES J. HILL
The final settlement of the everlasting controversy
with the Northern Pacific dates from this year; and it
alone would have been enough to occupy one man's
time and energy. The new management of that sys
tem were by this time forced to admit to themselves
that they must abandon the hope of monopolizing the
Northwest by securing control of the St. Paul & Pacific
properties. Grudgingly they admitted the latter to
the rank of a permanent competitor. But that gave
more reason for limiting and embarrassing it in
every way. In feeling and acting thus they were
not moved by viciousness, they were but conforming
to the accepted railroad ideas of the day. Not to fight
a competitor to the last ditch, and by any means that
came to hand, would have been thought, in that era, a
silly sentimentalism; and would, indeed, in most cases,
have resulted in speedy extinction. It would have been
like going alone through the worst slum district of a
great city with valuable property displayed conspicu
ously, and a placard that you carried no other defensive
armour than a kind heart, a fixed policy of non-resis
tance, and a forgiving disposition.
' The suggestion that the Northern Pacific might break
into the Winnipeg trade, just now a main reliance of
the new venture, was no idle threat. In this year that
company made a survey for a branch from its main
line at a point west of the Red River to the Interna
tional boundary line, and twenty miles of it were built
266

THE BREATHLESS YEAR
the next. It was, of course, intrinsically valuable as a
feeder; and it could not at present connect with any
thing, because the branch of the Canadian Pacific was
already located, and connected with the St. Paul & Pa
cific. But it threatened trouble, just the same. The
vexatious practice of adjusting tariffs so as to do the
greatest possible harm to a competitor still largely at their
mercy, and the contests instituted for lands wherever
there was a shadow of conflicting claim, have been men
tioned in another chapter. A time was soon to come
when the contest would be more equal, and the bullied
party able to strike back. It would be childish to go on
stirring up trouble about trifles when reprisals could be
made. The newly reorganized Northern Pacific, still
only in the convalescent stage after its two years in the re
ceivership hospital, could not afford to declare and con
duct a dangerous war. It could not hope to destroy;
it might be badly crippled itself. So overtures for peace
were made.
Late in May, 1878, Mr. HiU went to New York to con
fer with a meeting of the directors of the Northern Pa
cific, called to consider the relation to each other of the
interests of the two railroads . The latter parties expected
to receive an offer of some concession if they would caU
off their project to build to a Canadian connection.
On the contrary, they received a stiff buffet in the face.
Under an existing agreement with the St. Paul & Pacific,
the Northern Pacific had been running its trains from 267

THE LIFE OF JAMES J. HILL
Sauk Rapids to St. Paul over the former company's
lines at a pro rata charge. It was now informed that
this agreement should terminate, higher charges be
made, and possibly another charge be imposed for the
use of the St. Paul terminals. The Northern Pacific
retorted by more threats to build through the Red River
Valley; and by a more disagreeable proposition to build
its own line north from Minneapolis along the west
side of the Mississippi, thus paralleling the line of the
St. Paul & Pacific on the east bank. So far, it was not
much more than an exchange of "defis." How
shrewdly Mr. Hill had sized up the situation is seen m
a letter that he wrote to Mr. Stephen, who was not
unnaturally a little disturbed by these rumours of war:
"We do not think the Northern Pacific people intend
to build any road in Minnesota, either in the Red River
Valley or from Sauk Rapids to Minneapolis. If they
had any money to spare, they would be more apt to
build west of Bismarck and save their land grant."
He made a report to Mr. Stephen, three months later,
of what was really a decisive conference with the en
emy. It is a very interesting document, giving his
whole plan of campaign in one of his most important
earlier contests, where he was matched against some of
the shrewdest and most experienced railroad men of
the country: "I said to Mr. Wright that up to the pres
ent time we had been very careful neither to do nor say
anything to prevent a harmonious settlement of aU
268

THE BREATHLESS YEAR
difficulties of every nature and kind, but that his man
agement had constantly tried to excite the people on
both lines by representing that we would not treat
them fairly or give them a chance to do business with
us, and were now trying to get up a feeling to vote
local aid for a road on the west side of the Mississippi
from Sauk Rapids to Minneapolis; that this sort of thing
had gone too far already and was only making a settle
ment more difficult every day, and that we had de
cided that a settlement must be had now if at all. I
told him that we had offered to leave matters to arbi
tration, to which he had agreed, but that he had not
brought his arbitrator forward yet, although it was two
months since the agreement was signed, and that if he
wanted any different arrangement he had never said
so; and if he persistently attacked us we would make a
struggle for life and would not come off second-best.
We would at once survey a line from Grand Forks to
Fort Buford at the mouth of the Yellowstone which
was on a good easy line all the way, through a country
as good for agriculture as the very best portions of his
road, and we would ask Congress for half his grant to
the Rocky Mountains and that he knew there were
strong interests opposed to him who would be only too
glad to help us; winding up by saying that our interests
at present lay in developing Manitoba, but we would not
sit quietly down and see him build lines that were un
necessary and only useful to injure us." 269

THE LIFE OF JAMES J. HILL
Fancy a stiff Easterner, perfectly aware of his own
importance and representing an interest so great as the
Northern Pacific then was in public estimation, being
addressed in this warlike fashion by a man just forty
years old, who had never managed a railroad, and was
trying to build up a system on credit, in a race against
time, out of the old junk called the St. Paul & Pacific!
But there were several things about this plain talk
that must have impressed him, and that impress the
reader of it to-day. Probably Mr. Wright saw in the
threat to parallel the through line of the Northern
Pacific only a particularly daring bit of bluff. If
he did not understand at that time the incidental con
tent of that menace, it is clear enough now. Mr. HiU
had already command of the details preliminary to the
construction of just that line. He knew the route and
the grades. He knew the agricultural possibilities of
the country. There is no reasonable doubt that the
project of the transcontinental line to be constructed
later was just as definitely at the back of his mind then,
when he had not even secured possession of the property
on which it was to rest, as the plan of getting hold of the
St. Paul & Pacific by buying in the bonds had been years
before, when he talked about it in the old clubhouse in
St. Paul and could not get anybody to take him seriously.
He procured incessantly and stored up facts against
the day of action. When he surprised the country,
and even those most closely associated with him,
270

THE BREATHLESS YEAR
by something that seemed on the surface thoroughly
reckless, he could always, if he had chosen, have
marshalled in its favour an array of facts known
to him, but not in their entirety to anybody else,
which made his plan as reasonable and as certain from
the logic of his premises as the conclusion of a geomet
rical theorem. That gentle hint of other interests which
might be drawn in was not all bluff. There were
indications about that time of some one's hinting
to Jay Gould that it would be for his interest to
buy control of the Northern Pacific, run or lease
it as it stood, and stop it at the Missouri River.
This might be worth the while of a man who was a
power at the time, and who was supposed to have con
trol of the Union Pacific and at least a strong interest
in the Chicago & Northwestern. The most distant
reference to such a possibility was a prick in a very
tender spot for the Northern Pacific.
At any rate, the Northern Pacific people now went
ahead with their part of the arrangement to determine
by arbitration the differences between the systems.
This covered rates and interchange of tariffs as well
as aU other points in dispute. Mr. Billings and General
Stark, president and vice-president of the Northern
Pacific, went out to St. Paul in the autumn of this
year. • They obtained from Mr. Hill, who was as much
then the power behind the St. Paul and Pacific as he
was a year later behind the St. Paul, Minneapolis &
271

THE LIFE OF JAMES J. HILL
Manitoba, the right to a joint use of tracks between St.
Paul and Minneapolis, and between St. Cloud and Sauk
Rapids. They also received facilities for their passenger
traffic in St. Paul, some land there useful for terminals, ter
minal privileges in Minneapolis, and trackage privileges
on the lines to be built by the St. Paul & Pacific after re
organization on the west side of the Red River, or else the
right to make rates for twenty -five miles on either side
of the track. In return, they agreed not to build any
opposing or competing line, turned over the stock
they held in the extension line, and withdrew their
opposition to the foreclosure suits. The last condition
was worth all the rest put together. This treaty, the
"protocol" of which was drawn in November, was of
incalculable advantage to Mr. Hill. It relieved him of
many annoyances and anxieties, and of a really danger
ous enemy. He had now, as he said : " Only the First
Division Company and the Litchfields to deal with."
A story almost as interesting, but one the details of
which need not be given here, hangs on the building of
the railroad from Winnipeg south to the boundary.
The keystone of the St. Paul & Pacific project,
for many years, was this connection. To build to
St. Vincent, if there were no line from that point
to Winnipeg, would bring little advantage. Cere
monies inaugurating the construction of this "Pembina
branch" were held in September, 1877. Donald A.
Smith had been doing all he could to push matters, but
272

THE BREATHLESS YEAR
the circumstances were far from propitious. In 1878 he
succeeded in arranging for the buUding of this branch,
audits lease for ten years to the American company which
he and his associates were about to form. The contract
to build was made in May, 1878, but in October of that
year the Mackenzie government went down; and with its
fall passed all negotiations with the associates. The con
tractors who built this line had until the end of 1879
to complete their work. Much of it was built be
fore that date, and all receipts from it went into the
pockets of the contractors. There were all sorts of
difficulties, embroilments, and delays. Only when
Mr. HiU and his friends quietly took a hand and,
through agencies not known to the public, helped and
spurred on a new set of contractors to equip and operate
the road, was order brought out of the muddle. At
last, however, trains were run through from the Ameri
can terminus to St. Boniface, and the long-dreamed-of
through line became to this extent a reality.
The construction compulsory during 1878 had now
been completed. It was a marvellous record. If the
reader will turn back to the date of the agreement signed
with the Dutch Committee and read the conditions at
tached in the shape of lines to be finished, if he will bear
also in mind the conditions that have been stated tend
ing to retard the work, he will understand what it meant
to everybody when, November 13, 1878, the receiver was
able to report to the court that the lines from Melrose 273

THE LIFE OF JAMES J. HILL
to Alexandria and from Crookston to St. Vincent,
together with two and a half miles from the latter point
to Emerson on the international boundary, had been
completed; and that the Governor of Minnesota had
accepted the railroads as constructed according to the
requirements of the acts of Congress and of the State
Legislature. At the same time the business of the com
pany was feeling the stimulus of new settlement and
showing the increase that Mr. Hill had predicted, so
helpful to his future though not without danger to
his present plans; and the operating department of the
railroad was evidencing the presence of a new man at
the head. The associates, so soon to become de jure
owners of the property, doubtless gloated secretly over
the statistics of operation of the St. Paul & Pacific for
1878. Possibly it may help to explain the figures, and
certainly it presents an interesting contrast with charges
a generation later, to know that the freight rates from St.
Paul, Minneapolis, and Duluth to Winnipeg were as fol
lows: first class, per 100 pounds, $2.25; second class,
$1.90; third class, $1.60; fourth class, $1.25. There were
special rates on lumber, grain, and live stock. The car
load rate from Chicago to Winnipeg was a trifle of $325.
Here is the official financial record of the St. Paul &
Pacific Railroad for 1878:
MILES GROSS OPERATING NET INCREASE
EARNINGS EXPENSES EARNINGS OVER 1877
First Div. Main Line 150 $741,387.69 $363,008.67 $378,379.02 $279,096.98
Second " " " 57 100,911.01 65,896.29 35,014 72 27,250.71
Branch Line 76 469,070.33 201,881.84 267,188.49 142,063.67
274

THE BREATHLESS YEAR
These earnings, it must be remembered, came from a
territory furnishing as yet little traffic. They were drawn
from through business and from the local traffic of a
country within a comparatively short radius of St. Paul
and Minneapolis, together with a small part of western
Minnesota. The great treasury of the northwestern
portion of the state, the Red River country, the " gran
ary of the world," had stiU to be opened up. It was
not merely undeveloped, it was virgin and unoc
cupied country. Two little vignettes of it as Mr.
HiU himself saw it at this time are taken from
an address made by him before the Minnesota His
torical Society in 1897: "In 1878, from six to eight
miles beyond Fergus Falls we went out of all settlement.
Up to that limit there were a few little houses scattered
over the prairie. In the fall of 1878 north of Crookston
there was but one house; and that house was a hole in
the bank of a stream, dug out, with some poles and
marsh hay thrown over the poles." "I remember that
in 1878, on the Fourth of July, I crossed the inter
national boundary between Manitoba and North
Dakota, coming south toward Grand Forks, driving
down over the country, locating the line of railway that
strikes the boundary at Neche, on the west side of the
Red River of the North. I drove forty -two miles from
the international boundary to what is now the town of
Grafton. There was not one solitary house in that
entire distance, and about four o'clock in the afternoon, 275

THE LIFE OF JAMES J. HILL
on the endless, level prairie, one great sea of waving
grass, the young man who was driving lost his nerve
and told me he was lost. He did not know where he
was going, did not know whether he was going north or
south, and asked me if I knew. I said 'Yes,' and I
took the team and kept on, and finally we came to the
Park River where is now the town of Grafton. There
was one settler there."

276

CHAPTER FOURTEEN
THE ST. PAUL, MINNEAPOLIS & MANITOBA
THE physical labour of complying with the conditions
of the agreement with the bondholders and the pro
visions of law, both necessary to save the land grant, was
now ended. The "breathless year" was over. Finan
cial foundations had been laid so secure and broad
that there was no question of ability to take over the
properties when the time should come. But activity
must still be incessant. The whole life of Mr. Hill is an
unfolding, an evolution. No sooner was one task com
pleted than it opened a vista showing others waiting im
patiently to be done. There were a thousand details to
be looked after — details that would have an important
influence on the future conduct of the enterprise — before
the new company should be launched. Although the
fii'st half of 1879 would not know the desperate anxieties
of the year that preceded, it was a time of tremendous
labour in maturing and arranging plans for the future
of the railway system that was soon to be.
Looking back upon this period and this work more
than thirty-five years later, Mr. Hill said: "It was
a great undertaking and a great risk. We succeeded
in part because the time was ripe. The growth of the 277

THE LIFE OF JAMES J. HILL
country just at that time helped us. But we suc
ceeded also because we worked hard in every way.
We tried to build a good railroad, to attract immigra
tion, to operate economically, and increase traffic.
I remember that I often worked at my office until one
o'clock in the morning. One night my wife said that
she would go to the office with me and bring me home at
haff-past ten. It was a summer night and I gave her a
book and a chair by the window, where she presently
fell asleep. At two o'clock I waked her and took her
home." Many a night she accompanied him and
kept vigil; but the work did not, because it could not,
relax. Four matters were of immediate prime impor
tance: arrangement of a practical through service
to Winnipeg; preparations for the westward exten
sion of the new company's operations; settlement
with the stockholders of the Branch Line, who were in a
position to delay foreclosure and might even jeopardize
the enterprise if they had to be dealt with through court
proceedings; adjustment of terminal facilities to ac
commodate the different railroads that would need to
enter St. Paul, without sacrificing the primacy that its
early possession of the ground had given to the St. Paul
& Pacific. It will be convenient to deal with these in
their order, although negotiations and settlements in
connection with them all were going on at the same time
through the opening months of the year.
Mr. Hill called on the Governor of Minnesota Janu-
278

THE MANITOBA
ary 9, for a certificate showing that the line through
to St. Vincent had been completed. This was the last
legal step, and the land grant was now legally earned.
But the operation of the line had been and still was be
set with vexations. It is probable that, but for his
close and friendly connection with his associates, Mr.
Hill would have been tempted to take less trouble
about it. The through line to Winnipeg, which had
been the Ultima Thule of the project for so many years,
had already dwindled in importance in his far-seeing
vision. Canadian traffic had been, indeed, the mov
ing cause of much that was done. But already
larger interests were in sight. Minnesota was filling
up, and the figures given show the enormous increase of
business there. As fast as lines had been built, merely
to satisfy legislative requirements, they demonstrated
beyond all expectation their value as carriers. Mr.
Hill knew all about the Red River Valley, whose
agricultural possibilities were not yet appreciated
by others at their value. He saw what could and
must take place in the development of the Northwest
on the Canadian side of the line. At the back of his
mind was the ambitious transcontinental project, which
he did not yet allow to appear. He could at this time,
without any great sacrifice of interest or change of
plan, have permitted the whole Canadian connection
of the railroad to go by the board, or work itseff out as
best it might, while he concentrated thought and effort 279

THE LIFE OF JAMES J. HILL
on possibilities nearer home and, in the long run, more
helpful to his final purpose. But he kept faith. Of
his associates, two, Mr. Smith and Mr. Stephen, had
been interested in the first place and were still inter
ested mainly because of Manitoba's need of a rail out
let to the East, and of the relation of this to the future
Canadian transcontinental of which all Canada dreamed.
This inducement had procured for them generous
financial support. So the complex and vexatious
task of putting through the Manitoba connection had
to be performed. Mr. Begg, in his excellent history of
Canada, has stated the situation so succinctly and ac
curately, from the Canadian point of view, that his sum
mary of it may be quoted here:
Although connection was actually made from St. Boniface, with
the St. Vincent extension of the St. Paul & Pacific Railway, at St.
Vincent, Minn., none of the facilities for operating the branch had
been made by the government. On the whole sixty-three miles
of the Pembina branch there was not a single water tank, and, for
want of a turn-table at St. Boniface, an engine running over the
road to that point was compelled to make the entire return journey
tender foremost. An arrangement had been made by the late
government with the St. Paul & Pacific Railroad Company, giving
that corporation the exclusive privilege of running trains over the
branch for ten years; but, in making the arrangement, the govern
ment evidently overlooked the fact that the contractors had until
the first of December, 1879, to complete construction. The latter
stood out for their rights in the matter, and declined to relinquish
any chance of profit that might accrue to them through the opera
tion of the road while construction was still in progress, so the lease
was never really effective. The contractors endeavoured to oper
ate the road. They hired a locomotive and some cars from the St.
280

THE MANITOBA
Paul & Pacific, and entered into a contract with the government
for carrying the mails, but the want of facilities rendered their
efforts unsatisfactory to themselves and the public, and resulted
in a complete breakdown of the running arrangements just at the
most critical season — the early spring — ^when a great quantity of
freight and large numbers of passengers were en route to Manitoba.
In this emergency the new government availed itself of a clause in
the agreement made by Mr. Mackenzie with the St. Paul & Pacific
Railroad Company, and gave a contract to Upper & Co. to equip
and operate the road from Emerson to Selkirk, until the main line
from Thunder Bay should be opened for traffic. So soon as
Upper & Co. had the road equipped, they were, as assigns of the Do
minion Government, required to carry out the terms of the
agreement with the St. Paul & Pacific by interchanging traffic at the
boundary. Upper & Co. made satisfactory arrangements with the
American road, by which the latter were to run their trains through
to St. Boniface until the former had the branch fully equipped.
This arrangement gave great satisfaction to the inhabitants of the
Northwest, for it was felt that the incoming tide of immigration
would have less chance of being turned back at the boundary, as
in former years, to the detriment of the country.
In reality, the tangle would not have been straight
ened out for months or perhaps years if Mr. Hill had
not taken a hand quietly. The change of government
in Canada had left everything at loose ends. The con
tractors stood on their legal right to operate the Cana
dian end of the line until the end of 1879. Naturally,
they wanted to make hay while the sun shone. So
they imposed outrageous charges; and as these must
necessarily become a part of the through rate of
the St. Paul & Pacific, it amounted to almost an
embargo on business. At the same time it made
the American line appear responsible, in the eyes 281

THE LIFE OF JAMES J. HILL
of shippers on both sides, for excessive charges
that were a burden on trade Mr. Hill was not often
caught, even by the unexpected, in a place so tight
that he could find no outlet. He still controlled the
Red River boats, constituting, with their railroad con
nection, the old traffic line which the new was to super
sede. Until that happened, they could be used as a
club to break down this scheme of high freights for
the benefit of the pockets of the contractors. Late
in January he wrote to Mr. Stephen, telling him to put
a flea in the Government's ear:
"While we would very much prefer having the line
to operate at once, I think we have command of the situ
ation and can charge the same rate to Pembina that we
would charge to Boniface if we operated the road, until
the Red River opens; then we can make a rate of, say
$10 per car higher to Winnipeg than to Pembina, and
all freight will go by boat, as it will be landed in Winni
peg. The Winnipeg merchants will not stand the con
tractor's charge and will raise another Riel Rebellion.
If the Government could be got to understand the situ
ation, they would see at once that they are more bene
fited than any one else by our operating the line; and
so much has been said about our contract I wanted to
see the people of Manitoba ask the Government to
carry it out, which they are ready to do, even going so
far as to make it the action of the local Government, if
you think best to have that done." As a matter of

THE MANITOBA
fact, parties in close understanding with Mr. Hill
bought out the interests of the Canadian contractors,
the new Canadian Government was brought to realize
that public opinion demanded the conclusion of the
operating contract with the St. Paul & Pacific, and
matters were arranged accordingly. The St. Vincent
extension had performed its office in helping on the
general plan; and its influence was felt all through the
subsequent years in the controlling part that Mr. Hill
took in inspiring and planning the western extension
of the Canadian Pacific, and in the extensive ramifica
tions of the future Great Northern system on Canadian
soU. He wrote in his diary, January 29: "Stephen
telegraphs me that Pembina branch wUl be turned over
to us."
While clearing away these affairs, his mind was
busy with the first step that the new railroad company,
so soon as organized, must take. This was a step
westward. Two reasons suggested a northward line
on the west side of the Red River, to the boundary.
One was the wonderful richness of the country, prom
ising an influx of settlers and a heavy volume of new
freight for the railway. The second was that here the
Northern Pacific had threatened to parallel his line.
Although a truce had been called, he reckoned that if he
occupied the ground himself nobody could thereafter
take it away from him. As early as January, 1879,
he had lawyers draw up a form of special charter for a

THE LIFE OF JAMES J. HILL
railroad on the west side of the Red River; but after
it was ready he found that the legislature of the Terri
tory of Dakota had no power to grant it. Nothing
daunted, they went to work on a general railroad law
for the Territory of Dakota, to be put through Con
gress and open the westward path. Three years later
his foresight was more than vindicated. Writing to
Mr. Stephen in 1882, he said: "We were very fortunate
in getting possession of the Red River Valley before
other lines got a foothold. . . . Every day's ob
servation convinces me that a railway in a new country
is successful in the proportion its affairs are vigorously
looked after. There is no substitute for hard work, and
the value of a railway is its capacity to earn money."
That, and not "high finance" was the fundamental
conception of the railroad business from which he never
departed. Of not many other men who have held the
fate of great railroad systems in their hands, possibly of
not one of his prominence, could this be said with truth.
The Casselton Branch of his railroad, and the line west
to Larimore, both in Dakota, were finished late in this
year 1879.
The settlement with the Branch Line stockholders
was a private negotiation, which was turned over to
Mr. Stephen. He had to make terms with Mr. Litch
field, so that this stock might not turn up some day in
other hands. In his diary on January 22, Mr. HUl
entered this: "Stephen writes that he has settled with
284

THE MANITOBA
Litchfield, but the fact must remain secret for some
time. This is the happiest news I have received for
many a day." Two days later, articles of incorpora
tion of the St. Paul Union Depot Company were signed.
In March an agreement was made with this corpora
tion for some of the terminal property that the St. Paul
& Pacific, as the first comer, had been able to secure,
and that it must part with to insure the accommodation
of all the railroads entering the city. No short-sighted
policy controUed the action of Mr. Hill. He saw his
own interests advanced by the growth of this railroad
centre. He made a good bargain. The money came
in very conveniently just now for the associates, aU of
whose extraordinary expenses were still going on.
Yet he would not part, at any price, with a yard of
ground that might be required some day, when his
more ambitious plans should be revealed. He wrote
to Mr. Stephen of the transaction in these words:
"Mr. Kittson, Mr. Galusha, and myself met the Union
Depot committee and made them the offer of the ground
not needed by ourselves for $250,000. It takes a little
more than one third of the available ground we have
and leaves us about twenty acres for freight purposes,
in a piece two thousand feet long. The price is a very
large one for the property, and the money wiU be of
great use to us, and I believe we have everything left
which our line can possibly want even if it were 2,000
miles long." Very significant, those last words! The 285

THE LIFE OF JAMES J. HILL
same property could not be bought to-day for miUions;
in fact, it could not be bought at aU.
Everything was now moving toward the consum
mation of the plan that has been followed in these
pages since its birth in the mind of Mr. Hill. There
might be troublesome details to attend to, but nothing
could stop the certain march of events. The de
crees of foreclosure asked for were granted March
15, 1879. Bondholders and stockholders had been
dealt with, and all were satisfied. With his new
career definitely before him, Mr. Hill parted with his
business past by selling out his interest in the North
western Fuel Company. His hands were free, the
preliminary work was done, and he and his associates
proceeded to take definite possession of their heritage
by organizing the new company for which the time
was ripe in fact and in law.
George Stephen, Donald A. Smith, Norman W. Kitt
son, James J. Hill, and John S. Barnes, the last-men
tioned representing the New York firm of J. S. Kennedy
& Co., met in a law office in St. Paul, May 23, 1879.
They were there to complete the work begun in effect
five years before. Mr. Stephen was made chairman
and Mr. Hill secretary of the meeting. Two weeks
earlier the sheriff of the county in which St. Paul is
situated had sold to these gentlemen, under foreclosure
proceedings, the Branch Line of the St. Paul & Pacific
Raihoad from St. Paul to Watab for $200,000, but
286

THE MANITOBA
subject to mortgages aggregating a little more than two
miUions. They now organized the St. Paul, Minneapo
lis & Manitoba RaUroad Company, and appointed
directors. The directors immediately met and made
Mr. Stephen president. Common stock was fixed at
$15,000,000, and the president or some one as his agent
was authorized to attend forthcoming mortgage sales
and buy in the other St. Paul & Pacific properties at
foreclosure. The by-laws of the company authorized
the appointment of an executive committee, consisting
of three members, of whom Mr. Hill was named one,
with this important provision, to assure swift and intel
ligent action: "The executive committee shall possess
and may exercise during the intervals between the
meetings of the board of directors, all the powers
and authority of the board." This body for years
guided the destinies of the new company. It acted
first, with the celerity that the occasion often
called for, and the board of directors simply ratified
its acts at the next meeting. The other defaulting
properties were bought in for the company at fore
closure sales early in June. Stock of the new company
was given in exchange for that of the Red River VaUey
Company, controlling the Red River boats and the
little line from Crookston to Fisher's Landing, and for
that of the Red River and Manitoba Company, con
trolling the line between Breckenridge and Barnesville.
These small but indispensable properties had been, as
287

THE LIFE OF JAMES J. HILL
already stated, either created or acquired by Mr. Hill
in connection with one or more of the other associates.
The system was compacted into a homogeneous whole
and the westward push began.
At this time the total mileage of the system was 667
miles, of which only 565 were completed, and the
balance under construction. The capital stock of the
new company was limited by its charter to $20,000,000;
and enough was issued immediately to the associates to
pay the sum they had disbursed, and the rest to Mr.
Barnes as trustee, until such time as the preliminary
financial operations should be completed. There were
also authorized at this time, June 21, mortgage
bonds for construction and improvement to the amount
of $8,000,000, at 7 per cent., with the proviso that
the total amount of bonds outstanding should never
exceed $12,000 per mile of completed road. In
September another bond issue of $8,000,000 at
6 per cent, was authorized. It is interesting to note
this drop of one per cent, in the rate paid on the
second bond issue as compared with the first,
with an interval of but three months between. So
rapidly was the credit of the new enterprise estab
lished. In October all the stock and all the bonds that
had been authorized, $15,000,000 of the former and
$16,000,000 of the latter, were formally turned over by
the directors to the four associates in payment for
moneys, stocks, bonds, and other properties furnished by
288

THE MANITOBA
them for the purchase or construction of the various
lines. The first bond issue went to settle with the Dutch
bondholders, and such others in this country as had
been or could be reached. All possible outstanding
obligations were gathered in. All of the second bond
issue that was not held as working capital for the
building already under way went to cover outlays of
the previous year. In that year, 1878, before the new
company had been or could be organized, 112 miles of
track were built, and this was exceeded the year fol
lowing. Much equipment was purchased. AU these
expenditures, met by money or credit furnished by the
associates, had now to be made good by the company.
The sum provided was none too great. Mr. Hill had
been made general manager of the system in June.
Everything was now in working order. An indebted
ness of the old companies amounting in all to about
$44,000,000 had been extinguished. The new company
started with a total capitalization in stock and bonds of
$31,000,000. It remained to be seen whether it could
carry this and put real values behind the paper, or
whether it would be added to the long list of railroad
fiascos in the Northwest. In the latter case the asso
ciates still stood to lose all they had ventured and
hoped for. For not one of them was faint hearted
enough to unload his burden on anybody else, now that
such a course had become possible. Indeed, those on
the inside hugged to themselves then' knowledge of the 289

THE LIFE OF JAMES J. HILL
intrinsic value of this property which was going to
bring them "wealth beyond the dreams of avarice."
Such was the genesis of one of the great private fortunes
of the United States; and it is proper to consider at its
source the origin and growth of the wealth of Mr. HUl.
In an era when money was often ill-got and oftener
ill-used, the possession of large quantities of it became a
sort of stigma. Men were abused simply because they
were millionaires, without regard to either how their
miUions were obtained or how they were employed.
Some few people in the muck-raking period included
Mr. Hill in their general denunciation of the rich man
as a criminal ipso facto. But the public as a whole
showed juster discrimination. He alone, among the
very wealthy individuals of his day, was singled
out for a respect revealed by unmistakable indica
tions. In diatribes which mentioned the names of per
sons whom current oratory classed with Dives, his
was rarely found. The features of not a few men noted
for their wealth became better known through cartoons
and abusive caricatures than by the publication of their
portraits. Always you would find their distorted visages
in some one of those Dante's circles that the moralists of
the press held up to the world as terrible examples. Only
in rare instances could the face of Mr. Hill be discovered
there; and then only when fun rather than venom moved
the pencil. With a sure instinct, the rough and ready
censors of public morals distinguished a difference be-
290

THE MAJSriTOBA
tween him and the rank and file of the extremely rich.
That difference rests on two facts : the natural and le
gitimate origin of his great fortune, and his steady
refusal to add to it by means that were not morally as
weU as legally free from reproach.
The root of that fortune had been planted. But
in what rocky soil, and subject to what chances and
what storms! Only a few persons of insight and
familiarity with local conditions would have given the
associates anything at all for the stock that was issued
by the St. Paul, Minneapolis & Manitoba Company in
1879. The destination of the proceeds of the bond
issues has already been indicated. Each of the asso
ciates did receive at the end of his adventure whatever
his one fifth of the stock might some day be worth.
But in the glamour of success one is apt to forget the
years of work, of planning, the tremendous labours,
the hazardous chances which foregoing chapters have
sought to describe with fidelity to truth. Far more
than this amount has been made again and again by a
turn in either business or finance, by some operation
which involved nothing more than taking advantage
of special knowledge or of some happy chance that came
floating by. These men had dared everything. They
had faced apparently insuperable obstacles and ac
cepted desperate ventures for years. Most people stiU
thought them visionaries doomed to shipwreck. What
they received through the organization of the St. Paul, 291

THE LIFE OF JAMES J. HILL
Minneapolis & Manitoba would be, according to modem
ideas, a very moderate commission without taking ac
count of work and risk. Value was put into it only by a
lifetime of the most careful planning, the most masterly
organization, the most unrelaxing labour. The basis of
their fortunes, judged by any accepted standard, is sound
and above reproach.
It will be seen, as this story progresses, that the accre
tions brought by the years were equally deserved, when
submitted to the rigorous judgment of business hon
our. Mr. Hill believed steadfastly in the American
Northwest and its development. This railroad enter
prise was for him no speculation, else he might a
thousand times have taken a big profit and withdrawn
from it. It was a great constructive work, whose
future he had gauged. If he was right, then it must
also be one of the most splendid opportunities for invest
ment that this country ever offered. As such he held it.
He never set his private fortune above that of the raU
road system of which he was the head. At every
moment he stood as ready, should need arise, to
turn over to it every dollar of his own as he had
been to put everything in pawn to buy those old, dis
honoured bonds. The risk was his. So was the profit.
If a man had bought a block in the heart of New
York City in 1879 and held it for thirty-five years, he
would have become many times a millionaire. No reflec
tion would rest upon him because he had made a

THE MANITOBA
fortune through his own foresight of the growth of the
city and its industries. Mr. Hill not only made just
such an investment in the Northwest, but he did what
the other man did not and could not do. He originated
and made possible the improvements that were to give
his property special value.
Because of what he did to create the Northwest,
where property values of billions of dollars grew from
nothing, the raUroad property grew to a value of hun
dreds of miUions. Always scrupulously he took only his
rightful share. He never speculated in the railroad's se
curities or permitted those whom he could control to do so
at its cost. For years he and his friends maintained a
cash pool in New York for the purpose of buying in the
raUroad's stock if the bears attempted to raid it. After
that became known, it was never subject to any but the
ordinary market fluctuations. The policy was purely
protective, and any attempt to manipulate prices was
forbidden. Those who tried to force the stock up or
down for speculative ends got their fingers pinched, and
afterward let it alone. He paid back to every man or
woman who put a dollar in the property the principal
with interest. In a time when railroad presidents
received salaries immense enough to invite criticism
even according to the liberal ideas of the day, he refused
to take a dollar. During the twenty-five years that
he held the office of president and the five years that he
was chairman of the Board of Directors, he would
29.S

THE LIFE OF JAMES J. HILL
accept no pay. The profit on his investment in the
property, he said, stubbornly, in answer to all proposi
tions to vote him a salary, was suflScient compensation
for his services. He never permitted a dividend to be
passed. The stock of his company was as good as its
bonds. If one takes pains to compute the amount
paid out from the beginning in interest and dividends by
his railroad, and compares that with the growth of his
personal fortune, the latter will seem a modest recom
pense. But the distinguishing feature of it among
fortunes that have grown out of financing and managing
railroads is that every dollar accrued in a strictly busi
ness way; a reward of labour whose value is everywhere
recognized to have been unique, and an income from an
investment in property which the growth of the country
was to multiply in value again and again. No honest
inquirer has ever been able to find a "tainted dollar"
in the fortune of James J. Hill.
Everything indicated that the happy fortune of
the new enterprise would not be long delayed. The
Northwest was prospering inconceivably. Minne
apohs was still only a little manufacturing town about
the Falls of St. Anthony, with pasturing cows tethered
where sky-scrapers now stand. But the Minneapolis
mills made a million and a half barrels of flour in 1879,
and their product was known in and sent to every part
of the United States. A summary in the Chicago
Times of that year placed the wheat crop of the state
294

THE MANITOBA
at more than 37,000,000 bushels, with 21,000,000 of oats,
and other crops in proportion. Its table of property
valuations showed that public gain in wealth was far
ahead of any additions to the most swiftly increasing
private fortune.
1865  $45,184,063
1870.  87,133,673
1875  218,855,743
1879  242,489,038
"When I took possession of the reorganized St.
Paul & Pacific Railroad in the midsummer of 1879,"
said Mr. Hill in a public address nearly twenty years
later, "the road had carried during its last fiscal year
2,183,000 bushels of wheat. Of the crop of 1891 it
carried 57,000,000 bushels, more than one third of all the
spring wheat raised in the United States. Of the
crop of 1895 it carried 67,000,000 bushels of wheat,
or thirty-three and a half times as much as sixteen
years before." This is an index of the rapidity
with which settlers came into the country, and a
measure of the enormous additions that their produc
tion made to traffic of every kind, and to the property
value of the railroad that was their principal or only
carrier. Merely to keep pace with this local growth would
have been a remarkable achievement. This was,
however, a small part of the task performed. For
the first fifteen years after Mr. Hill took charge of
295

THE LIFE OF JAMES J. HILL
this system, one mUe of railroad on the average was
built and equipped for each working day in the year.
And, while this nerve and muscle racking construction,
with all the problems it involved, was going on, policies
of every sort had to be determined and forces of the
most diverse character set in motion or restrained.
One or two passages from letters written during
this year are worth more than ordinary notice, be
cause they express lines of action that were fun
damental with Mr. Hill; because, in some measure,
they convey his ideas of what a railroad is for, and
how it should set about accomplishing the purposes for
which it really exists. These principles have not been
sufficiently common in the history of American rail
roading to deprive them of the charm of novelty.
His steamboats were still running on the Red River,
and here is what he wrote to the captain of one of them,
after receiving some complaint of custom house diffi
culties: "I have to ask you to give positive instruc
tions to all your men to comply fully and fairly with
the rules and regulations of the customs departments
on both sides. This must be done cheerfully and
promptly by our men, or we will have trouble on both
sides of the line. // we want the protection of the laws
we must not be law breakers. If any of our men gets
into trouble with the customs at Pembina, his dis
charge from the service of the company will follow."
Writing to Mr. Stephen about the peace negotiations
290

THE MANITOBA
with the Northern Pacific, he said: "I have written
this to give you an idea of how necessary it is for us to
avoid any conditions, in whatever lease we make, that
will give any one the right to control in any way our
rates. It is our best interest to give them low rates
and do all we can to develop the country and create
business." Then, going far afield, he answered a letter
urging him to encourage tree planting on the vast
open stretches of the Northwest by pledging to it his
sympathy and assistance. The reason for his interest
appears in the closing sentence, which sounds the key
note of his whole life and achievement as a railroad man :
"I desire to say that we consider ourselves and the
people along our line as co-partners in the prosperity of
the country we both occupy; and the prosperity of the
one should mean the prosperity of both, and their
adversity wiU be quickly followed by ours." This,
be it remembered, is not an utterance of modern days
in which regulation has taught railroad men moderation
and the reality of a dual interest in the community.
These words were written nearly ten years before the
passage of the Interstate Commerce Law; when, to a
large extent, the will of the railroad manager was law
to the people of the communities that had to depend
upon him not only for prosperity, but at times for the
means of preserving life itself.

297

CHAPTER FIFTEEN
BUILDING THE CANADIAN PACIFIC
IF ONE had been asked to state the most wildly im
probable thing that the men who had undertaken the
tremendous task of organizing and completing this
railway system could be persuaded to do at this
moment, he must have said, if a thought so fantastic
had occurred to him at all, that it would be to assume
at the same time the construction of another transcon
tinental line, still farther north, under the jurisdiction
of another power, through country less known and
destined to be settled only after many years, against
all the difficulties, material and financial, that blocked
the way. Yet that is exactly what they did. The
glamour of Mr. HiU's performance in connection with
the St. Paul, Minneapolis & Manitoba and the Great
Northern has obscured the fact that to him more than
to any other man was due the building of the Canadian
Pacific at this time by the route that made it a
success as a carrier and as an organ of development
for the Canadian Northwest. If he had not built or
operated a mUe of railroad in the United States, he
would have found himseK entitled to no little fame
on this score; and his name would have been writ-
298

BUILDING THE CANADIAN PACIFIC
ten in the list of benefactors of the Dominion of
Canada. To this labour he and his associates now addressed
themselves; and the reasons for their apparently
quixotic undertaking were valid, and their foresight
was justffied. These reasons, to be considered in their
order, were: the value of the new line to their own
original enterprise; the impulse of patriotic interest,
all of the associates being Canadians by birth, or adop
tion, and their place and hope in the growth, of Canada
requiring Mr. Stephen and Mr. Smith at least to lend
themselves to a project that had so long been dear to
the Canadian heart and had inspired much of their
interest in the St. Paul & Pacific purchase; the prospect
of a favourable issue made stronger by the pledge of
government support, which had not been asked or
desired for the American line; and the results of the
first year's business of the latter, which showed them
that they would never be embarrassed by it financially.
Within this first twelvemonth they were already out of
the woods so far as the St. Paul, Minneapolis & Mani
toba was concerned. It could read its title clear.
Mr. HiU's own plan, contemplated taking posses
sion of the whole country between the northern
limit from which the Northern Pacific could hope
to get busiaess and the Canadian boundary. It
contemplated the extension of his road to the Pacific
coast. There would be, therefore, a frontier of nearly

THE LIFE OF JAMES J. HILL
two thousand miles where he must drive his feeders
northward, and where he must make connection and
exchange business with the line, certain to be built
by somebody, that should connect Winnipeg and, later,
Montreal and Halifax with Vancouver, on Burrard
Inlet, in British Columbia. It was highly important
that there should be no wars, and as few misunder
standings as possible, with this power soon to arise.
The best way to secure this desirable consumma
tion was to be that power yourseff. Already the
threat of the Northern Pacffic to invade the Red
River Valley and its propositions to the Canadian
authorities had given uneasiness to the associates.
Worse might follow. Late in 1880, after the Cana
dian Pacffic project was practically assured, Mr.
Hill wrote to Mr. R. B. Angus, vice-president of
his railroad, as follows: "You will see in to-day's
paper a number of railroad schemes in the Red River
Valley mentioned by a Fargo correspondent, but when
they learn that our friends control the Canadian lines
north of the boundary they will not find it worth their
while to build lines looking toward that country, as
the connections will be preempted in our favour." This
put in a nutshell one of the reasons for securing control
of the Canadian Pacific project. It was high railroad
strategy to command both sides of the international line.
Considering the prominent position politically of
Mr. Smith in the affairs of the Dominion and the in-
300

BUILDING THE CANADIAN PACIFIC
fluence of Mr. Stephen in its finances, these men could
not afford to refuse their aid to the consummation of a
plan on which the hearts of the whole Canadian people
were set. The latter wanted a Canadian transconti
nental road; had wanted it for ten years desperately;
were pledged to British Columbia to build it as a con
dition of keeping that province in their confederation;
saw two such lines pushing westward just south of
them; believed that they must be up and doing if their
future expansion were not to be subject to American
veto or, at best, American domination. It would not
do for these influential men to withhold any support
they could give to a home interest, at the very time
when they were venturing so largely and so successfully
in exactly the same field on American soil. Nor was
Mr. Hill proof against somewhat similar considerations.
The most thoroughgoing of Americans, and never for a
moment contemplating a permanent association with
what Mr. Farley might justly have called "a Canady
projeck," he had, as all men who are worth anything
have, a tender spot in his heart for the country of his
birth. Apart from obvious self-interest, he would be
glad to assist the natural aspiration of Canada for a
raihoad that she must inevitably secure in the near
future if he lent a hand.
To reasons of policy and of sentiment were added
other reasons quite substantial. The new line would
be built with ample government support, both in land 301

THE LIFE OF JAMES J. HLLL
grants and in loans and bond and stock guarantees.
The Canadian Government, once committed, would
have to see the thing through. The associates were
reaUy lending their knowledge and experience, both
invaluable to the Dominion, rather than their money or
credit; though Mr. Smith and Mr. Stephen had later
to supply both. Mr. HiU's idea, which he carried out,
was to help put the work on its feet, and then withdraw
from it when no harm could come to it from severing
the connection. He could assist his friends materiaUy,
iticidentaUy benefit his own line, and then leave matters
in their hands while he followed his own predetermined
course. In the meantime, there was a real immedi
ate advantage to accrue to the St. Paul, Minneapo
lis & Manitoba. Construction material of every sort,
men, supplies, and, later, equipment for the new line
in Canada, must be assembled. They could be taken to
the spot only over the lines of the American system.
It made an acceptable accretion to its business. It
would contribute to freight receipts. This business
would last for several years. The situation, with
all these side lights thrown upon it, not only justified,
but actually seemed to require the assumption of the
Canadian Pacific project, that looked so mad on its
face. Most of all, perhaps, were the associates cheered
to the task by the performance of the system which
they were only beginning to lick into shape. If they
302

BUILDING THE CANADIAN PACIFIC
had been fighting a doubtful battle to hold what they
had obtained by the purchase of the St. Paul & Pacific,
they could not have afforded another such venture.
But they could now be certain that their base of sup
plies was secure. They did not have to worry about
ways and means on the St. Paul, Minneapolis & Mani
toba. As a justification of the unwavering faith of
Mr. Hill through his years of lonely struggle, some
records of the business of the new railroad system,
relieved of its past and now under the direction of the
man who was to prove himself the ablest manager
that this country has produced, are worth a glance.
The figures are so astonishing that they are given in
the Appendix* for the fiscal year 1878, the last full
year under the old regime, and for 1880, the first under
the new.
In brief, the increase in net earnings over the year
immediately preceding was more than a million dollars,
or 54 per cent. The net earnings were more than 60 per
cent, in excess of interest on the bonded debt. There
were, March, 1880, only a little more than $2,000,000
of the old bonds still outstanding, and these were speedUy
acquired or extinguished. By October 14, 1880, Mr.
Hill could write, "Yesterday we hauled 130 carloads of
wheat into Minneapolis. This would have been con
sidered good receipts in Milwaukee ten years ago."
Two hundred miles of new line in Dakota were being

•See Appendix, Document VII. 303

THE LIFE OF JAMES J. HILL
built at the rate of a mile and a half per day, while
steel was being put down on the main line at the rate
of two miles per day. Two short lines in Minnesota,
useful to round out the system, were bought. By the
end of the year he said, in a letter dated Decem
ber 28, "We have under contract for next year
about 225 miles, which will give us, say 1,090 miles
of raUway, every mile of which is in good local country
and about half of it in the Red River Valley. . . .
During the past eighteen months we have laid 26,000
tons of steel, and have 12,000 bought for next year."
There must, of course, be a larger financial base for a
system growing like this, every mile of new line being
a money -bringer from the start; so it was ordered by
the Board of Directors in October that there should
be issued $6,000,000 of 6 per cent, bonds against
lines thereafter constructed or acquired in the
Territory of Dakota. Seldom has a newcomer con
quered so quickly a position so honourable as that
of the new system in the financial world. Mr. Hill
wrote to Mr. Angus, October 14: "I received your
message to-day advising of offer made by Winslow,
Lanier & Co. for our bonds, which is as I wired you
entirely satisfactory to me, if yourself and Mr. Stephen
who are on the ground think well of it. I am sure it is
gratifying to have our bonds as well received as those
of the Chicago & Northwestern, especially as our com
pany is comparatively unknown."
304

BUILDING THE CANADIAN PACIFIC
Other interests were looked after as carefully.
There was a double purpose in having more than a close
connection with the milling industry at Minneapolis,
now the most important single business interest in the
Northwest. Mr. Hill never lost sight of the farmer, and
tried to keep him out of the grip of people who would
squeeze his last dollar from him and drive him dis
couraged from the soil. He meant to see that the
farmer had a fair show in marketing his grain.
Also, the control of the mills meant the carriage of
much raw material into Minneapolis and of the
manufactured product out. This was good business for
the railroad. It helped in other ways, especially in
the exchange of traffic with systems running east from
St. Paul. The water power, on which the mills still
depended, was acquired. The details were given in
another private letter from Mr. Hill, under date of
AprU 23, 1880: "On the 16th instant we completed
the purchase of the St. Anthony Falls Water Power,
making the first payment $100,000 in cash. The de
ferred payments in three instalments of $100,000 each,
due in one, two, and three years, with interest at 7
per cent., were to remain as a mortgage on the property;
but we found it impossible to arrange in that way with
out subjecting ourselves to inconvenient restrictions
in dealing with the property. For the purpose of ob
taining immediate and absolute control we undertook
to substitute the individual notes of Hill, Kittson, 305

THE LIFE OF JAMES J. HILL
Stephen, and Angus, collaterally secured by deposit of
second mortgage bonds of the railway company for an
equal amount, $300,000. We are at liberty to pay any
or all of these notes in anticipation of maturity and are
entitled to obtain surrender of an equal amount of
bonds along with the notes for principal and interest."
What a transformation ! Ten months after the organi
zation of the railway company whose financing had
required years of doubtful, and at times, agonizing
effort, the securities of that company were avail
able for financing a transaction of the size of
this. Without a moment's rest went on the prepara
tions for the westward march. No matter how
pressing matters were, Mr. Hill was always gather
ing and storing in his wonderful memory every
fact that could be of service in the projected exten
sion of his system to the Pacific. When he was scarcely
more than warm in his seat of power, he wrote, November
24, 1880, to Paris Gibson, years afterward to become
United States Senator from Montana, the following letter :
" It will give me great pleasure to see you during the com
ing winter and to hear from you a description of northern
and western Montana. If it is not too much trouble
you can get me a description of the country lying at the
foot of the mountains between the Missouri River and
latitude 49, for a distance of one to three hundred miles
and as far east as you can get information; also the
306

BUILDING THE CANADIAN PACIFIC
number of cattle now in the Sun River, Teton, and
Marais River vaUeys, and any other information that
you think will aid me."
The idea of a railroad from ocean to ocean across
Canadian territory was as old as the compacting
of Canada into a political entity. Nobody doubted
its ultimate construction. The only questions were
"when" and "how." It was a political quite as much
as a business need. From the moment that ambi
tious minds in the Britislj colonies of North America
began to entertain the dream of consolidation and the
possibility of future empire, a Canadian Pacific railway
was an essential prior condition to the realization of any
portion of that vision. Nothing less than a single author
ity stretching from the Atlantic to the Pacific was worthy
of their continental situation and ambition. Without
means of communication a united Canada could not main
tain itself, could not really exist. Exactly as the Union
Pacific and the Central Pacific were started in the United
States to bind the Pacific Coast commonwealths, iso
lated, independent, and jealous, to the rest of the Union,
so the entry of British Columbia to any union of the prov
inces could not be secured or safeguarded without the
binding promise of a through railroad line. It was made
a condition of her entry into the Confederation by which
all British North America became one political entity.
Canadian political managers were the readier to make
the pledge because they saw that it was indispensable 307

THE LIFE OF JAMES J. HILL
to unity and progress, whether British Columbia were
satisfied without it or not.
As early as 1871 a reconnaissance of the country
lying west of the Great Lakes was made at the instance
of the Dominion Government, to ascertain the possi
bility of building a railway to the Pacific coast; and a
resolution was moved in the Dominion House of Com
mons for its construction. Private initiative was to be
assisted by public grants of land and cash. The first
charter for the Canadian Pacific was granted in 1873.
The length of the line according to these original plans,
afterward discarded, was to be 2,200 miles. Actual
work began in 1875, and, within three years, more than
one hundred miles were built on each end of the Thun
der Bay division, 199 west of Selkirk, and a begin
ning was made on the other end, in British Columbia.
In aU, between 1871 and 1878, between $2,000,000 and
$3,000,000 were spent, and from 40,000 to 50,000
miles of surveys and observations were completed. Of
course there was as yet no thought of immediate build
ing through the terrible country north of Lake Superior,
in a direct line from Montreal or Toronto northwest to
Winnipeg. The idea, for the present, was to connect
Winnipeg with Lake Superior at Fort William, then
build westward from Winnipeg to the Pacific, and thus
secure an aU-Canada lake and rail route.
The work dragged along, because it was tied up with
politics. Fruitful in scandalous financial transactions
308

BUILDING THE CANADIAN PACIFIC
though some of the earlier railroad enterprises in the
United States were, they could not eclipse the scandals
of the first Canadian Pacific project; for these were
mixed with party politics. The party in power used
it to reward friends, and held out the hope of actually
accomplishing something as a reason for one more lease
of office. Finally, when the government was overthrown
and Sir John Macdonald returned to power in 1879, he
suspended the whole undertaking, and sought some
arrangement with private individuals who would put it
through as a business project, dissociated from the quar
rels of party and the spoils of place. Considering the in
fluence of Mr. Smith and his position of political power and
experience in the railroad world, considering the similar
experience of Mr. Stephen and his position of financial
power and experience in the railroad world, considering
the brilliantly successful connection of them both with
the St. Paul, Minneapolis & Manitoba, whose launch
ing was now the wonder and admiration of aU, expec
tation and hope turned naturally first to them. The
reasons just stated were enough to induce them to take
charge. The plain necessity of gratifying the wishes
of the people of Canada — ^for the continued adhesion
of British Columbia to the Confederation would be
jeopardized if fulfilment of the promises made to her
were much longer delayed — the impatience of the party
now in power to be rid of a white elephant and the
extreme desirability of securing this combination of
309

THE LIFE OF JAMES J. HILL
powerful and skilled men to assume responsibility, en
abled the members of it practically to dictate their own
terms. A syndicate was, therefore, formed, the moving pow
ers of which were Mr. Hill, Mr. Smith, Mr. Stephen, and
Mr. Angus. This was in the summer of 1880, and their
negotiations with the Government were prolonged into
the next year, although the terms were practically settled
when they consented to undertake the work. Mr. HiU
was never given to claiming public credit for his achieve
ments. Neither was it to the interest of the new syndicate
that he, a representative from the United States, should
appear to take precedence in any respect of the members
who were Canadians in both fact and interest. Con
sequently the share that he took in the creation of the
Canadian Pacific was kept in the background at the
time and has never emerged into full daylight. As a
matter of fact, that system owes to his genius a
debt in some respects as great as that of the Great
Northern in its earliest history. He had a better
knowledge of the country through which the line
from Winnipeg to the Pacific Coast must pass than
had his Canadian associates. His policy of gathering
facts from every source — ^from books, from personal
observation, from the reports of engineers and prospect
ors always in the field and reporting to him personaUy,
from replies to letters like that to Mr. Gibson just
quoted — aided by his power of storing facts and recall-
310

BUILDING THE CANADIAN PACIFIC
ing them at need, made him the best-informed man in
either country on ways and means for the new project.
By reason of this familiarity with all essential detaUs,
the location of the new line was turned over to him.
To the burden that he was carrying as the general man
ager of a system now ranking high in this country in both
mileage and business, to the planning and supervision of
construction work now proceeding at a rate hitherto
unknown in American railroad building, was added
primacy in the huge task of locating a new transconti
nental line.
This was the more onerous because he knew per
fectly from the beginning that his interest could be
temporary only. Reasons of policy- required him to
give his services. In a few years other reasons of
policy would oblige him to sever this connection
altogether. The interests of neither system could
be served by a relation that must inevitably soon
lead to jealousy and dissatisfaction on the part of both.
He set to work, nevertheless, and located the Canadian
Pacific with reference to the route most available for
construction and most promising for traffic. He selected
the passes by which it must penetrate those hundreds of
miles of mountain fastnesses that make the Canadian
Pacific line one of the scenic wonders of North America.
At the same time he busied himseff with the details of
the agreement to be made between the syndicate and the
Canadian Government, in order that these new labours 311

THE LIFE OF JAMES J. HILL
might not be without fruit on either side. In a letter
written in September of this year, 1880, by Mr. Angus to
Mr. Stephen, the former, after discussing some of the
financial detaUs, added this witness, very interesting to
day, to the sound judgment of Mr. HiU : " Hill says it will
not be long before people will be astonished at their
stupidity in allowing such a chance to escape them, and
he regards the venture as more promising than that
which the associates are bringing to a successful devel
opment." The drawing up of an agreement which should be
satisfactory to the Government of Canada, publicly
responsible for it, to the Dominion Legislature that
must ratify it, to the people of Canada who would
never forgive a serious mistake in its terms, and to the
men who were actually to build the line and find the
money was no slight affair. The mind of Canada
was fixed on a real transcontinental rail line, con
necting an ocean port on the Atlantic with one
on the Pacific. The idea touched the public imagi
nation there, just as it had years earlier touched
that of the people of the United States. This railroad
was necessary to cohesion. It was the sop that must be
offered to British Columbia. But practical men, who
knew that the dream would sometime be realized,
knew also that to attempt this immediately would
ruin the whole project There was no demand for
and no possibility of providing at this time the direct
312

BUILDING THE CANADIAN PACIFIC
east and west line through the wilderness of forest,
morass, and primeval rocks north of Lake Superior.
Not only for the buUders of the line, but for the Domin
ion itseff, the construction of the western section was the
thing of immediate prime importance As Mr. Hill
tersely put it in a letter about this time, "A mere line
of iron from ocean to ocean would do nobody any good,
whUe the settlement of the country is the great desider
atum." And again, "The success of the whole scheme
depends upon the development of the prairie country
and the opening of communication with the Pacific, and
every effort should first be devoted to that end."
Here, when Mr. Hill was merely giving his advice to
others, when the work in hand was one in which he
could have no lasting interest and with which he knew
that he should not long be connected directly, he was
no more willing than he was in enterprises closer to his
pocket and nearer to his heart to grab for a subsidy,
and drive a profitable bargain regardless of the value of
the work in itself. The desirable plan was to include
in the agreement such provisions for the eastern end
of the line as would satisfy public opinion, without
binding the contractors to conditions that could not
be fulfilled, under penalties that might mean ruin.
How carefully he studied it in all its details and how
sound was his judgment can be understood from
the foUowing letter to Mr. Angus, of July, 1880,
when the framing of the proposition between the 313

THE LIFE OF JAMES J. HILL
Dominion Government and the contractors was under
way. It is so iUustrative of the workings of Mr. HUl's
mental machinery when applied to problems of the
largest scope that it is given here entire :
"I have read your letter of the 2d carefully and think
there is no possible doubt about its being a perfectly
feasible and financially sound operation as far as con
cerns the lines west of Winnipeg, and even the Thunder
Bay line can pay operating expenses during the summer
months; but as regards the Nipissing and Thunder Bay
line I have no actual knowledge upon which to give an
opinion worthy of consideration. My only knowledge
of that country is what I have been able to pick up from
Hudson Bay sources and others who have been there,
and it is most unfavourable for the operation of a rail
way as a financial success. I am not at all sure that
there would be very great difficulty in building the line
as a whole (there must be some very bad ridges to cross
or tunnel) but after the line was completed I cannot see
that it would have any local business whatever for
some time, and the through traffic would not afford it
enough money to meet the payroUs and fuel, saying
nothing of repairs and renewals. During the summer
months it would have to compete with the Lakes via
Thunder Bay and the American lines over our own road,
and in the winter I cannot see how it could get enough
business to justify the running of trains. I ..think it
would not be safe to count the cost per train mile at
314

BUILDING THE CANADIAN PACIFIC
less than $1.80, which would be $1,170 per trip of each
train over the 680 miles, or for a daily train each way,
$2,340. I have made the cost per train mile consider
ably higher than the average and about 50 per cent.
higher than I would estimate on the line west from
Winnipeg, but I think it only safe to make that allow
ance for a country where the actual traffic would be so
Ught. The ratio of reduction in cost per train mile
would be directly controlled by the increased number
of trains to do a heavier business, the fixed expenses
remaining the same. If possible, I think with what
knowledge I now have of the country it would be best
to try and get the Government to postpone the Nipissing
line for the present at least, for the reason that the Gov
ernment, the country, and the proposed company would
aU be much more benefited by the early construction
and completion of the line from Thunder Bay to the
Pacific and the opening up to the markets of the world of
the prairie (grain and stock) country west of Winnipeg
to the Rocky Mountains.
"I have just had our passenger department make
examination, and Mr. Alexander assures me we are
carrying fewer people into Manitoba this year than last,
and many of them are returning to Dakota. I pre
sume it would not be easy to make the Government un
derstand that we would prefer to have the people re
main in Manitoba; but you will readily see how it
reduces our earnings if emigration to Manitoba is
315

THE LIFE OF JAMES J. HILL
stopped or even checked in the older provinces. Our
loss is not confined to the passengers, but extends to
the whole traffic of the country north of the line and the
whole volume of business is reduced. I have noticed
this more during the past five or six weeks, and in strik
ing contrast with stations on our own lines. If the
line was built west from Winnipeg to the Rocky Moun
tains fast enough to meet the line froni the Pacific side
when finished to the Eastern slope, and a very liberal
land policy adopted both by the Government and the
railroad company, I would favour the latter giving a
haff or two thirds of their land grant on terms securing
cultivation which would bring the lands to the settler
at about 50 cents per acre, in order to induce emigration
from abroad and from the older provinces. Establish
live agencies in Great Britain, and try and get parties of
wealth to establish colonies, giving settlers long time to
buy the lands, etc. I write thus at length because I
believe a great deal could be done to settle up the prairie
within a comparatively short time, and every effort
should be turned to that end and prevent the present
limited stream of emigration from being entirely checked.
Again, the line from Thunder Bay to Nipissing will not
be of any service whatever for many years to come.
Would it not be a much better arrangement for the Gov
ernment to have the all-rail line run via the Sault Ste.
Marie where it would have a local timber and mineral
business both sides of the line?
316

BUILDING THE CANADIAN PACIFIC
"As regards the cash subsidy, I think it would be
much better to get the Government, if possible, to
pay the whole amount and retain, say 5,000 or 8,000
acres of land as a guarantee for the completion of the
line, west of the prairie work; but if they deduct any
cash, let it be $2,000 and 4,000 acres of land; i. e., 20
per cent, of the bonus on the first 1,000 miles. The
company should have the location of the line and
should build a good substantial railway, according to
the specifications or equal to the Union Pacific, as
might be agreed upon. All rails and material should
be duty free to the railroad company. You will see by
this hurried note that I am a little afraid of the Nipissing
line, which I believe to be a mistake, if the Government
can be at all induced to take the line via Sault Ste.
Marie instead; at the same time I am not well enough
informed to make my opinion of value except as to
what I believe would be the result of operation of the
road when built. On the other hand, I believe most
fully that the country west could be opened up as
rapidly as were Ilhnois, Iowa, Wisconsin, and Minnesota,
and possibly faster; but bear in mind that the four states
named have been forty years in coming forward from
the condition of the Northwest at present, and fifteen
or twenty with the aid of railways. After there was a
settled belt along the line to the Rocky Mountains, the
best country would begin to open up; and when the
people were in the country and there was some business 317

THE LIFE OF JAMES J, HILL
created, a line east via the North Shore might be con
sidered. "Again in reference to the line west I think that all
energy and capital should be applied to it, and have it
completed as early as possible; then get a good steam
ship company, which I presume could be had from the
Clyde or elsewhere, and connect the Pacific terminus
with San Francisco and coast points and make rates
direct to New York, Chicago, Boston, etc., against
Gould's Union Pacific, and either get the business
or a good share of it or force him into a pool. I am so
anxious to have this go forward by first mail that I
have written somewhat disjointedly, but have tried to
cover the main points as they occurred to me.
"When I see so grand an opportunity for the Domin
ion Government to open up a vast area of good country
that will give them wealth, people, and power, I cannot
refrain from urging a policy that it seems to me can
not help realizing the best results ever attained in any
country; and at the same time I would be very sorry
to have the time and money spent in building a line
that, when completed, would be of no use to anybody
and would be the source of heavy loss to whoever
operated it. The Thunder Bay line will certainly need
all the help the Eastern business will afford it, but to
make it and the proposed Nipissing line live off what
traffic there is east from Winnipeg would be like giving
them a stone when they ask for bread; and in estimating
318

BUILDING THE CANADIAN PACIFIC
the business east from Winnipeg I include the whole
Northwest, not intending that any should come via
St. Paul. If I can be of any service I will be ready at
any time to go East on your telegram."
Read in the light of Mr. HiU's newness to practical
railroading, studied with reference to the fundamental
principles laid down for the relation of the railroad
to the public, and of efficiency and cost of operation to
practical results, this letter is remarkable. To the end he
insisted that the terms of this contract should be such as
would relieve the associates of tasks that they could not
promise to perform with honour or fail to perform
without disaster. The project was hammered into
shape, but it took all the rest of the year 1880; and
not until the tenth of December did the House
of Commons receive the proposed Canadian Pacific
contract, bearing the signatures of Sir Charles Tupper
for the Queen and her Government on one side, and
George Stephen and six others, one of whom of course,
was Mr. Hill, for the syndicate. "Sir Donald Smith's
part in the construction of the Canadian Pacific," said
Mr. HiU in after years, "was mostly to obtain pledges
of funds for the work. The burden of actual financing
fell on Mr. Stephen." That of location and construc
tion rested mainly on Mr. Hill. In brief, this agree
ment, which was not ratified until a couple of months of
bitter debate had dragged along, becoming a law
February 17, 1881, provided that the railroad was to be
319

THE LIFE OF JAMES J. HILL
completed from Montreal to Port Moody within ten
years from its date. The company was to receive a
cash subsidy from the Government of $25,000,000, and
25,000,000 acres of land, in blocks alternating with the
public lands, along its line. It was to receive also,
without cost, all lands required for stations and shops,
together with the substantial gift of all the lines al
ready built and being built, which were now estimated
to be worth some $30,000,000. It was to have the
privilege of importing free of duty all materials used in
constructing its line, and to be exempt from taxation
for twenty years. No competing lines were to be per
mitted for twenty years in the territory between the
Canadian Pacific and the boundary of the United States.
Some other guarantees in the matter of loans were by
no means unimportant. The Canadian Government
pledged itself to the payment of 3 per cent, on the stock
for a term of years, and to 3| per cent, interest
on $15,000,000 of bonds. These seemed extraor
dinarily liberal terms, and as such they were de
nounced furiously by the Opposition Party in the
Dominion. Nevertheless, it is a fact that, before the
line was finished, Mr. Stephen and Mr. Smith were
obliged to pledge their private fortunes to keep the
work from failure. Before this Mr. Hill had withdrawn.
In order to complete the account of this episode in
Mr. HiU's career, it is necessary to anticipate again
slightly the chronological order of events. The syndi-
320

BUILDING THE CANADIAN PACIFIC
cate started construction in 1881. From that time for
ward everything was driven at break-neck speed. Mr.
D. C. Shepard, the principal contractor, noted in a memoir
written at the time the following: "In fifteen months,
commencing May 1, 1882, our firm built 675 miles of the
Canadian Pacific Railway, from Oak Lake to Calgary,
in doing which there were moved ten million cubic
yards of earth; and all the timber and piling used in
building bridges, culverts, and other structures in the
roadbed was hauled ahead from the end of the track and
placed in the work before the track was laid. While
laying the track on this line, six miles and 660 feet of
track were laid in a single day." That was railroad
building as Mr. Hill had conceived it, but as it had
not been realized anywhere in the world before this
time. For two years he gave all the attention and
effort that he could spare from his own system to help
his associates force the Canadian Pacific ahead. By
that time it became apparent that a continuance of the
relation could not be beneficial to either party. Public
opinion on each side of the line was somewhat mysti
fied and not a little apprehensive at the spectacle of the
same set of men building or preparing to build two trans
continental lines under the auspices of two different
flags. Fear of monopoly, and the agitation which led
to the passage of the Interstate Commerce Act a few
years later, were strong. Mr. HiU's own trans
continental scheme was now fully settled upon. In
321

THE LIFE OF JAMES J. HILL
the near future, the companies would become strictly
competitive; and joint control, even though involving
only the individuals and not the investments, would
be unwise to attempt and impossible to maintain. A
crossfire of hostile criticism which it would be foolish to
provoke must destroy it quickly.
So, May 3, 1883, Mr. Hill resigned his membership
in the Canadian Pacific Board of Directors. The
Canadian associates, meantime, though reluctantly
and with regret, came to Mr. HiU's way of think
ing. The two schemes were too great and too diverse to
acknowledge any sort of common control. The people
of Canada, who were subsidizing so largely their new
transcontinental line, were jealous, fearing that it would be
but a tail to the St. Paul, Minneapolis & Manitoba kite.
They might have spared themselves uneasiness, as the
people of the American Northwest later on might have
saved themselves from trepidation on the one side and
injustice on the other, if they could have read the mind
of Mr. Hill. He was not seeking advantage for himself
at the cost of others to whom his loyalty was engaged.
In December, 1881, at a time when he was powerful
in the councils of the Canadian Pacific, he wrote
the following to Mr. Angus. ,-. It shows his capac
ity for seeing the other side, the ,just side, the far-
reaching implication of events: "It seeins to me that
the entire Dominion of Canada, which is paying so large
a bonus for a Canadian Pacific Railway, has a direct
322

BUILDING THE CANADIAN PACIFIC
interest in preventing the business of this new North
west from being diverted to our American lines, to
American markets; or, in other words, after their bonus
has created a new country and a large business, to hand
it over to other lines and other markets. If Canada
does not use its Canadian Pacific Railway to bind
together commerciaUy the older with the new provinces,
they will have made a poor bargain and will have diffi
culty in maintaining a permanent political bond be
tween the sections."
This breadth of view and magnanimity of purpose,
however, could not be known to the rank and file of the
Dominion voters. Political struggles there were then
conducted with a bitterness exceeding that of the none
too courtly engagements of American parties. The
Canadian Pacffic project was, by its very terms, tied
up with the rivalries and the fate of political parties and
leaders in the Dominion. However much to the economic
advantage of both transcontinental systems a common
control might be, the political objections were too many
and too cogent to permit it. The withdrawal of Mr. HiU
from the one could not soothe suspicion or allay opposi
tion, so long as Mr. Smith and Mr. Stephen were promi
nently identified with the others; the new American en
terprise which, as everybody now might see, was headed
also for the Pacific Coast. Therefore, July 12, 1883,
Messrs. Stephen and Angus resigned as directors of the
St. Paul, Minneapolis & Manitoba. It is interest- 323

THE LIFE OF JAMES J. HILL
ing to read the statement of their reasons sent
to Mr. Hill personally, explaining their attitude and
their intended future policy in detail to the man who
had for so long been the head partner in their common
work and whom they so greatly esteemed :
"Neither of us has any intention of materially reduc
ing our holdings in the stock, so long at least as the
policy of the company is not hostile to the Canadian
Pacific Railway, for which we are more immediately re
sponsible. We are of opinion that, while the two proper
ties are and may continue to be entirely independent of
each other, both have much to gain by the maintenance
of an intimate and friendly alliance. Such an alliance it
will be our aim to preserve and extend as far as possible.
"We cannot conceive of any reason why the two
concerns should not be worked in harmony and to their
mutual advantage. As you are aware, it is the inten
tion of the Canadian Pacific Railway Company to push
the construction of its line as rapidly as possible to the
Pacific Ocean. The traffic accruing to the St. Paul,
Minneapolis & Manitoba Railway from that source
and from the development of the Northwest territories
cannot fail to be large, and to much more than com
pensate your company for any loss arising from the
opening of the Thunder Bay and North Superior routes.
So far as we know, the entire railway traffic between the
Canadian Northwest and the United States may be
secured to the St. Paul, Minneapolis & Manitoba RaU-
324

BUILDING THE CANADIAN PACIFIC
way for a long period, while the Canadian Pacific RaU
way will strive to secure as much as possible of the
business which naturally seeks its channel through
Canadian territory.
"Without attempting to prejudge matters in dis
cussion between the executive officers of the two com
panies, we venture to solicit your earnest cooperation
in our efforts toward the preservation of the good
understanding which our withdrawal from your board
is intended to facilitate."
These gentlemen consented, later, to remain on the
directory for a limited time, but the future policy of the
two systems was declared. They remained for years
friendly rivals, with a deep fund of common under
standing and respect, which the competition that the
completion of both lines brought to the surface could
not destroy or seriously impair. In 1883 Mr. Hill
revealed, in a letter to a Canadian friend, the strain
of sentiment that was deep and strong in him, to
gether with an attitude toward wealth, as a personal
attribute, which was as genuine as it was little suspected
by the general public. These are his words : "I have
made up my mind to hold $1,000,000 of my Canadian
Pacific stock, if it is only as one of the bonds that bind
the old party together. I will sell $500,000. I think
you know I am not anxious about the money part of it.
I am sure I have all and more than all I will ever want,
and aU that will be good for those who come after me." 325

THE LIFE OF JAMES J. HILL
From this time the personal interests of the associates
diverged. Only after the greatest difficulties were the
Canadian promoters able to save their work from
financial collapse. But at last, November 7, 1885, six
years ahead of the stipulated date, the last spike in the
Canadian Pacific Railroad was driven by Hon. Donald
A. Smith, near Craigellachie, in British Columbia.
Eight years more were to elapse before the St. Paul,
Minneapolis & Manitoba, by that time become the
Great Northern, was to reach its objective point on
Puget Sound. But the first was a government enter
prise, concentrating on a single through line, whose
purpose was primarily political, and whose value in
developing the intermediate country was to be realized
only slowly through the next twenty-five years. The
second built up the country as it grew, occupied
strategically the whole region through which it passed
and which it expected to serve, following its supreme
purpose as a prime factor in the industrial develop
ment of the American Northwest. The Canadian
Pacffic in 1885 was stiU a mere charcoal sketch in out
line. When the Great Northern Company was formed
in 1890, the system, although many important details
remained to be filled in, was in plan and theory a
finished work. The two present a sharp contrast of
methods and ideals. After 1883 Mr. Hill was free to
finish his own work in his own way, without any "en
tangling aUiances."

CHAPTER SIXTEEN
FOUR YEARS OF FATNESS
ONE must go back a little to take up the story where it
was left at the end of the first year's existence of the
St. Paul, Minneapolis & Manitoba. It requires now a
larger canvas and a wider sweep of the brush. No
longer is it a question of simple projects and acts, how
ever broad their scope or daring their execution, but
of all the complicated interests and possibilities of a
continental field. The formation of the St. Paul,
Minneapolis & Manitoba was but the birth of a chUd
that had to be carried through the perils of infancy,
taught to hold his own against rivals, and helped to
conquer the magnificent kingdom that was, if he could
win and keep it, to be his manhood's inheritance. So
sharply now do the lines diverge, so quickly does the
centre of action pass from one part of the continent to
another, so diverse are the questions to be considered,
and so rapidly does one event tread upon another's
heels that the outlines of the picture for the next few
years will be fluctuating and vague at times.
First, it is to be remembered that there was still no
public conception of what this performance of Mr.
HiU meant, or how it would react upon the future. 327

THE LIFE OF JAMES J. HILL
In fact, the mole-eyed public did not give to it any
future at all. The official report of the Minnesota
Railroad Commissioners in 1881, deploring the outside
ownership of Minnesota's railroads, then regarded as
partly a misfortune and partly a disgrace, said: "The
Manitoba is the only remaining system distinctly our
own. Directly Mr. Hill will be tired of overwork, and
that line will pass into the jaws of the anaconda which is
swallowing the smaller lines as fast as it can digest and
assimilate them." These gentlemen were better in
formed than the general public. Yet they thought that
Mr. Hill would presently weary and loose his hold.
They did not know that at any time after the corpora
tion had got on its feet it could have been sold by
Mr. Hill and his friends at an immense profit. They
had never glimpsed the dreams that lay behind the
accomplished fact. They had no conception of the real
situation at all. Their inability to comprehend is
lightened only by the gleam of unconscious humour
which represents Mr. Hill as "tired of overwork."
Thirty years more of it at the same speed scarcely
caused a slackening of the pace.
Meantime, the four boundaries of the Manitoba
system, as it will hereafter be called for brevity, had
to be looked after. On the north, the Canadian
Pacific pact took sufficient care of the field. On the
south were the Northern Pacific and the western exten
sions of the Chicago trunk lines, carrying trains in many
328

FOUR YEARS OF FATNESS
sections, loaded with immigrants, to the fertile lands of
Dakota. These could be and were dealt with, by nego
tiations, since the opening up of the American North
west created so much business for everybody that there
was little occasion or appetite for fighting. But on the
east some connection must be made for an outlet; and
on the west an immense country must be occupied or
preempted. Beyond aU, the dim shore of the distant
Pacific spread its constant lure. These two needs de
manded immediate provision of new facilities.
The former was satisfied by the acquisition of a joint
interest with other northwestern lines in the St. Paul
& Duluth Railroad, and by the building of a connection
to that line from St. Cloud, under an old charter that
Mr. HiU had picked up for a song. The St. Paul &
Duluth, which was the later name for the old Lake
Superior & Mississippi, had been completed as early
as 1870. It was the all-important railroad link be
tween the head of navigation on the Mississippi and the
head of navigation on the Great Lakes. The Northern
Pacific had its own line westward from the extremity
of Lake Superior. The Manitoba must cap this ad
vantage. The Chicago railroad lines were deeply in
terested in the St. Paul & Duluth because, during the
season of open water, it could make competitive through
lake and rail rates to St. Paul. Therefore, they had
quietly acquired mastery of it. Mr. Hill determined to
secure admittance to a privilege so necessary to him, 329

THE LIFE OF JAMES J. HILL
and succeeded in making satisfactory arrangements.
Here, as everywhere, the earning capacity and splendid
credit of his system gave him an advantage. In these
early days in the Northwest, the ability to put the cash
on the table counted for much. Mr. Hill conducted these
negotiations himself. Nothing of the first importance
was now handled in any other way. In April, 1881, he
was able to write to Mr. Kennedy in these terms : "I have
arranged basis of agreement for joint control of St. Paul
& Duluth Railroad with Porter and Merrill. They have
not a majority of the stock. There are outstanding
$4,700,000 of preferred and $4,000,000 of common.
The preferred has three votes to each share and the
common one vote to each share. In their joint pool
they have 13,052 shares of preferred and 23,843 of com
mon. . . . Our proportion will be $665,960. We
have a preliminary contract being drawn, and a meeting
is to be held about the first of May in New York, when
the details may be agreed upon and the matter closed.
The road earned during the last year something more
than $4,500 per mile. They have about a million and a
half acres of land still unsold, including a thousand mU-
lions of pine lumber and something near $300,000 due
for stumpage from good parties."
This investment was as good as a bank deposit.
The St. Paul & Duluth had and always would have a
profitable business. The interest acquired could be
sold out at any time on good terms to parties who were
330

FOUR YEARS OF FATNESS
always looking for means of entrance to the ports at the
head of the lakes. Mr. Hill had not the remotest idea
of being permanently dependent, or tied up in a deal
with any one else for his eastern outlet. The ultimate
plan for his head-of-the-lakes connection and termin
als was already clear in his own mind. But something
temporary must be provided at once; and this joint
interest, besides proving to other railroad men and to the
public the strength and sagacious management of the new
concern, offered an immediate solution of an immediate
problem. The shortest available route from the wheat
fields served by the Manitoba to the head of the lakes
would tap the line of the road at a point considerably
north of St. Paul. To get authority to build this link,
Mr. Hill purchased the charter of the Minneapolis &
St. Cloud railroad, another paper affair that had been
kicking about. It was worth having, and he certainly
got it cheap. He wrote to Mr. Kennedy in March,
1881: "This Minneapohs & St. Cloud charter has all
the peculiar traits of our charter regarding rates, etc.,
and has the right to build branches and to connect with
any road in the state or consolidate with any road.
Also a grant of ten sections of swamp lands per mile
between St. Cloud and the St. Paul & Duluth (60 mUes)
and four sections per mile from there to the north shore
of Lake Superior. I have just bought the charter and
stock of the company, except the Mankato branch
which was consolidated, price $30,000. I took it to
331

THE LIFE OF JAMES J. HILL
prevent its falling into other hands, and to secure the
land grant of 600 sections for line from St. Cloud east,
which we must build to give us a short outlet to Lake
Superior as soon as we conclude the trade with Porter
and Merrill for the St. Paul & Duluth." So these two
deals together provided most satisfactorily for a through
eastern connection, with a favourable rate, until such
time as the Manitoba Company should build its own
independent line into Duluth and Superior. The con
necting link from St. Cloud to Hinckley, laid with steel
rails, was in operation from December 4, 1882.
On the west, two things were to be looked after: the
competition of the Northern Pacific, and the new con
struction by which alone that competition could be met
and the plans of Mr. Hill carried toward their steady
aim. The Northern Pacific was once more on its feet;
and, to those who could not or did not analyze its new
financiering, it seemed to possess a solidity and a prom
ise hitherto unknown. Funds had been secured abroad,
and the great Deutsche Bank, of Berlin, was interested.
The new financial element had placed the system in
charge of Henry Villard, a man of different type from
his predecessors and one not yet familiar with American
railroading. Mr. Villard was himseff something of a
dreamer, as well as a man of action. He was also
among the first to see the possibilities of combination
among the railroad systems of the United States. He
had vision and he had daring. After reorganizing the
332

FOUR YEARS OF FATNESS
Oregon Railway & Navigation Company, in 1879, he
sprang into the limelight through his famous "blind
pool" of 1881, and was elected president of the North
ern Pacific in that year. The fluctuations that marked his
briUiant career indicated a possible indifference to the less
conspicuous but no less necessary qualities of conserva
tive administration and circumstantial knowledge of how
to operate at a profit Big outlines inspired him ; before
detaUs he was embarrassed, cold, sometimes impatifent.
But he was a man of native force, he had financial power
behind him and, for a time, he appealed to the American
imagination as powerfully as Jay Cooke had done.
He found $34,000,000 of proceeds of bond sales in the
railroad's treasury, and proceeded to spend it royally.
Using money and credit somewhat as Harriman did
to build up the Union Pacific, though on a smaller
scale, he pressed events forward at a lively gait. The
through line of the Northern Pacific was completed by
1883, by the driving of the last spike in western Mon
tana. Here was real trans-continental operation, while
as yet the Manitoba was but part way across the country.
Mr. Villard challenged public attention by the con
solidation, in 1882, of the Northern Pacific interests
and those known under the name of the Oregon Railway
& Navigation Company. By this he secured control
of what was then the most powerful concern in the Pa
cific Northwest, eliminated river competition on the
Columbia, whose steamships were included in the deal, 333

THE LIFE OF JAMES J. HILL
and obtained a right of way and an entrance for his sys
tem into Portland, then the only city of importance on
the North Pacffic Coast. The story of transporta
tion development in this section will be told in a
subsequent chapter. Seattle was still only an iso
lated and struggling village; Tacoma did not exist untU
the Northern Pacific created it for terminal purposes;
while Portland was an old city of large wealth, estab
lished business and commercial relations with many
parts of the world. The Northern Pacific, including this
adjunct, was something to be feared. But it had no
terrors for Mr. Hill. He knew its financial condition,
notwithstanding the recent reorganization and appar
ent plethora of cash. Better yet, he knew its operating
conditions. He was in no hurry or fret, because he
knew that every day reduced the power of the Northern
Pacific to carry its own burdens, and hence minimized
the danger of it as a competitor.
He had not long to wait. Three months after the cele
bration connected with the completion of the Northern
Pacific, which filled the newspapers of Europe and Amer
ica with accounts of the elaborate display on that occasion,
the Oregon Railroad & Navigation Company and the Ore
gon & Transcontinental disappeared together in the gulf
of bankruptcy. Mr. Hill knew all the time what his
own line could do when he had finished it to the coast.
At this time, when he was still apparently a novice in
the business, he would take a piece of paper, show ex-
334

FOUR YEARS OF FATNESS
actly what it cost to haul a loaded car over the grades
of the Northern Pacific, what it would cost over his line
with the grades and curves that he had fixed as the
maximum, add up the fixed charges and 'the cost of
operation per mile of the two systems, and ask his lis
tener with a grim smile what he thought was likely to
happen when the fur should begin to fly. Here, as in
his arrangements for buying the St. Paul & Pacific, there
was no gambling element so far as he was concerned.
He had reduced the situation to its simple mathematical
elements, and the future held the certainty of a demon
stration. Of course the rapid growth of the country
helped him. But he foresaw that also, exactly as he
figured a tangent to one of the curves on his line.
Prescience and calculation, combined and carried to a
high point of perfection, will enable a man to do many
things which, to the onlooker, appear sheer wizardry.
They were the two unfailing supports of Mr. Hill in
the royal struggle in which he was now engaged.
Mr. Hill let Mr. Villard have his fill of glory; did not
sulk or protest when he became the talk of two conti
nents; took care not to offend his amour propre, and thus
succeeded very well in maintaining a working under
standing by which the Manitoba company was per
mitted to go its way in peace toward ends and by meth
ods that were clearer and surer in his thought than they
were yet in the minds of the bankers of New York,
Paris, and Berlin. An event whose place is here, al-
335

THE LIFE OF JAMES J. HILL
though it happened years later, is not without interest.
Mr. Villard thought he could make a coup by buying
the Manitoba. By that time, which was after his
fortunes had been reestablished, the Manitoba had
reached Helena, and announcement had been made
that capital was provided to build the extension to
Spokane Falls and Puget Sound. Mr. Hill had
formed an alliance with Charles Francis Adams, then
president of the Union Pacific, that gave him trackage
rights from Spokane to the coast. Practically his road
was already a transcontinental line. Mr. Villard,
who had regained much of his old prestige, saw visions
of another blind pool, and had Mr Hill sounded on a
possible purchase of his stock. The latter, resenting
the implication of such a possibility and even such an
inquiry, gave a non-committal reply. Some third
parties deceived Mr. Villard and summoned him with
out authority to a decisive interview, where nobody
else put in an appearance. Mr. Hill would no more
have thought of selling his railroad interest than of
mortgaging his home.
Advisedly one can speak of it as "his company."
For he represented it in name as well as in fact. In
November, 1881, he had been elected vice president;
and August 21, 1882, he was elevated to the presi
dency, which he was destined to occupy for a quarter
of a century. His had always been the guiding mind,
and his was now the directing hand. His plan was not
336

FOUR YEARS OF FATNESS
that of Napoleon in his mad rush upon Moscow, but
that of Japan in her occupation of Korea and Man
churia. Whenever his cohorts advanced their outposts
one stage, they left behind them a country so perfectly
occupied that there could be no room for a newcomer;
and so thoroughly organized that the railroad's business
would take care of itseff. If its policies should remain
those that governed the work so wisely done in the
first place, it could meet any competitor on his own
ground. That this was no happy chance or accidental outcome
of a cautious temperament, but something deliberately
reasoned, appears from a letter written by Mr. Hill to
Mr. Kennedy in 1883, in which he said: "I think the
time is at hand when railway property generally will
be tested to its capacity to pay net earnings, and we
have some neighbours who will surely have difficulty in
making both ends meet. I think the Northern Pacific
wUl have its greatest trial when its line is built through
and its finances are no longer sustained by sales of
bonds, but all payments must be made from earnings;
then I think they will need help much more than at
present, and should any misfortune overtake them, the
Canadian Pacific will undoubtedly suffer indirectly.
It is at such a time we want to have our house in order
and I think you will find it well advanced in that di
rection." Those who have been wont to regard Mr.
Hill as to some extent the child of happy fortune, who 337

THE LIFE OF JAMES J. HILL
have heard much talk of "Jim HiU's luck," are invited to
compare the date of this letter with the events of the
next dozen years and determine for themselves just
what it was that made his successes so notable and ap
parently so certain. Only one year later, in fact,
Mr. J. A. Wheelock, editor of the St. Paul Pioneer
Press, one of the great journalists of the earlier era in
this country and an intimate and devoted friend of Mr.
HiU as long as he lived, wrote to him from Italy where
he was spending the winter: "I think you just realize
that after all you are in much better, stronger, and more
potent position at the head of one of the most powerful
and flourishing railroad properties in the West, with a
great and secure future before it, than if you were figur
ing among the rival magnates of the speculative enter
prises who are struggling to cut each other's throats
in WaU Street."
In 1882 a new system of agreements had been reached
with the Northern Pacific and officially ratified, which
left little room for future trouble. Mr. Hill could go
his own way without much need for even a wary glance
now and then at the line south of him, that must stiU
labour through weary years under the burdens laid upon
it by many managements less able, less foresighted, less
businesslike, and more given to costly pyrotechnics
than his own. Extension work proceeded without a
hitch in those years of lusty growth, 1881 and 1882.
The Board of Directors fixed the route for a line from
338

FOUR YEARS OF FATNESS
Wahpeton to the Missouri River, a distance of 200
mUes. By construction and purchase, 211 miles had
been acquired. Financial conditions were very satis
factory, so that a readjustment of the company's obli
gations, which was carried through the following year,
could be planned with confidence. The following letter
to Mr. Kennedy in April, 1881, justified the perfect
confidence of Mr. Hill in the future by explaining the
impregnable solidity of the company's affairs: "Since
the present company took charge of the property the
land sales for cash and on time average more than
$100,000 per month, at which rate there would be very
few outstanding mortgage bonds at the end of five years
frpm the present time. The average price of lands sold
is about five dollars per acre, and the company has now
unsold about 2,500,000 acres, or enough lands to pay off
the entire first mortgage and leave from $4,000,000 to
$5,000,000 surplus."
Once more, at what might seem to have been a
breathing place, the student of Mr. HiU's activity is
struck with the amount of daily work he carried. It was
not only physical, but psychological. All through
these critical years, it is true, his letters show immersion
' ' ' in the business of operation, construction, financing,
competition, coal supply, farmers' interests, and a dozen
other things. But quite as noticeable, perhaps even
more potent in many ways, is his constant effort to en
courage his associates and subordinates; to inculcate 339

THE LIFE OF JAMES J. HILL
tenacity of purpose; to hold up weak hands; to breathe
into others something of the tonic force that seemed to
emanate from him like one of the Iffe-giving blasts from
the Northland that was his home. The man who
can inspire others with some of his own courage, con
fidence, and determination is the born leader. The
innumerable letters of Mr. Hill during these years were
sprinkled with such expressions as this: "Be of good
cheer"; "Whatever you do, do not be discouraged or
get despondent." He set a dozen men on their feet
every day, and held them there until they were
steady. Even one who had known him so long and so well as
Mr. Stephen was concerned about this incessant drain
upon body and mind, upon the will as well as upon
intellectual and muscular forces. He wrote to him in
1882 an affectionate protest, closing with this admoni
tion : "Though you are yourself only a little softer than
steel, you, too, will break down." To which Mr.
Hill, who continued all his life to receive and disre
gard such warnings, replied: "I cannot close with
out thanking you for the kind personal interest you
express. Our work is increasing with the ratio of the
development of the railway, and it seems necessary for
us to be always on the alert to any movement that wiU
fortify our position or increase our revenue, and the
familiarity with the situation which is necessary cannot
be gotten except by personal acquaintance. We were
340

FOUR YEARS OF FATNESS
very opportune in getting possession of the Red River
VaUey before other lines got a foothold. It is from
there and Manitoba we draw our earnings. I would
certainly rejoice if I could have more time to rest and
be with our children, who are getting to an age when I
might be of use to them, but our property is nearly all
new, and unlike old roads, whose staff has been doing
the same things at the same places for years. A failure
to take in the whole situation owing to lack of knowl
edge or judgment, and under plea of temporary con
venience or some other cause — matters are given a
wrong direction and in the hurry of increasing business
a precedent is established which is hard to change, or it
is entirely overlooked and a permanent injury is the
result. Every day's observation convinces me that in a
new country a railroad is successful in the proportion
its affairs are vigilantly looked after. There is no sub
stitute for hard work, and the value of a railway is
its capacity to earn money."
In 1883 was begun what might be considered the
permanent financing of the road. Thus far that had
needed little study. From the beginning it had taken
care of the interest on its bonds, and its new lines
were self-supporting. In the fall of 1881 the di
rectors saw their way to declare a dividend of 7 per
cent, on the capital stock, haff payable in February
and haff in August of the following year. Such was
the record of this system but two years after organiza- 341

THE LIFE OF JAMES J. HILL
tion, while expenses of every sort were multiplying.
The capital stock was increased, June 8, 1882, from
$15,000,000 to $20,000,000, the limit permitted by the
charter. In that year the company also guaranteed
$3,000,000 of bonds of the Minneapolis Union Railway
Company, part to furnish new connections in that city
and part to construct a depot and build a stone arch
bridge across the Mississippi River there. It is a
curious thing that this bridge did more to advertise Mr.
HiU's genius to the public of the Northwest than his
great achievements of which the people as a whole still
understood little. Minneapolis was as yet a small city,
but it was growing wonderfully. The railroads east
and west all had to cross the river there or in the
vicinity, and went over on the creaking wooden bridges
so familiar to the Western pioneer. Mr. Hill looked
ahead to the future of traffic, picked out the best place
for a union station, and saw that the line of access
most central and most convenient of operation, both for
himseff and for the city, required a bridge crossing at an
angle just above the Falls of St. Anthony. This he
constructed, at a cost which seemed reckless at the time,
of solid stone, foUowing a curve that still catches the eye
of one accustomed to the straight lines of ordinary
masonry construction.
In responding to the addresses made at a banquet in
Minneapohs in 1905, Mr. Hill said : "The hardest thing
I ever had to do in my life, or the hardest undertaking
342

FOUR YEARS OF FATNESS
I ever had to face, was the building of the stone arch
bridge." This, from a man who was little wont to
dwell upon difficulties of his own, is the best measure of
the enterprise. The bridge itself is a splendid struc
ture of solid stonework, 2,100 feet long, 28 feet wide,
and 82 feet high. Three of its arches are of 40 foot
span, sixteen of 80 foot, and four of 100 foot. It must
be remembered that stone bridges were not the rule in
those days, and that in this section they were un
heard of. The combination of such construction with
the curve which the line to be followed required was
unusual. The foundations ran up against engineering
difficulties, and flaws in the supporting rock threatened
ruin again and again. In fact, this was one more of
those undertakings which were often spoken of as
"HiU's follies." The original purchase of the St. Paul
& Pacific was one, this bridge another, the extension to
the Pacific Coast another, the Cascade Tunnel another.
As the arches of his bridge passed the treacherous
Mississippi, so are the essential parts of his career linked
to one another by these "follies" that became so many
stepping stones to greatness. The mere financing of
such an undertaking, in the new Northwest, by a com
pany only three years old and having to finance itseff,
was a triumph of management. All these obstacles,
accumulated before a young man who had barely won
his spurs in the railroad field, were enough to explain
his statement of more than twenty years later. The 343

THE LIFE OF JAMES J. HILL
stone arch bridge was finished in 1883; and Mr. HUl's
sense of what it meant to him and to his system may
be judged by the fact that a plate upon it carries his
name. It is the only structure, so far as known,
thought by him worthy of this distinction.
Expenses of all sorts were to be faced, of which
this is but one inconsiderable item. Short lines, valu
able as feeders and as skirmish lines thrown out to oc
cupy territory, were built or bought by the parent
company. The purchase of an interest in the St. Paul
& Duluth had to be financed. Regular trains were run
ning as far as Devil's Lake by the summer of 1883. A
year before that the track had been run north from
Grafton to the Canadian boundary line, this time on the
west side of the Red River, giving a second line to
Winnipeg. More building and more borrowing were
to be the rule for a long time to come. But the credit
of the company had become established, the old bonds
could be got out of the way, and funds obtained at lower
rates of interest. The time had obviously come for a
financial reorganization on broad and permanent lines.
The business of the company justified it and encouraged
a financial plan that should provide for the future on a
generous scale. Remarkable as had been the per
formance of the system as a going concern from the first
day, it had now gathered momentum and was beginning
to show what might be expected of it. The following
is from the report of the president for 1883:
344

FOUR YEARS OF FATNESS
"The business of the company during July, August,
and September, 1882, showed an increase of 100 per
cent, over the same months of the year previous,
while the business of the entire year just closed showed
a gain of 38 per cent, over the previous year. The
enormous gain for the first three months was largely
due to the transportation of rails, track material,
timber, etc., for the Canadian Pacific Railway, the
construction of which was being rapidly pushed, and a
large amount of material was accumulated by that
company for this year's work. The opening of the
'Thunder Bay branch' of the Canadian Pacific RaU
way has taken a considerable amount of the freight
traffic going to Manitoba via Lake Superior, which has
hitherto gone via Duluth and our lines. Notwith
standing the large amount of railway material carried
last season, and the opening of the Thunder Bay branch
of the Canadian Pacific Railway, our earnings from the
first of January, 1883, to the first of August, 1883, show
an increase of $40,980 over the corresponding months of
last year. Attention is called to this particularly to
show that the general business of the company is in a
growing condition. Our local business shows a steady
and satisfactory increase, and the rapid settlement of
the country tributary to our lines may be relied upon
to maintain the earnings of the company."
Mr. Hill had said, just before this, in a letter to a
friend: "As a rule I think the most trying time for a
345

THE LIFE OF JAMES J. HILL
new railway is after track is laid and it has to rely solely
on its traffic revenue for the means to meet its expenses,
etc." The St. Paul, Minneapolis & Manitoba had
met this condition. Not only that, but it could com
pare comfortably the various totals to be made up from
its report with those of some of the oldest and most
carefully managed systems in the same part of the
country. The figures for the Manitoba, after four
years of existence, compared with those for three systems
centering in Chicago,* having northwestern connections
and enjoying all the advantage of years of experience,
are a vindication of the scientific method, applied to
railroading by Mr. HiU.
Through these years, again, there is continuous evi
dence of an oversight almost preternaturally specffic
and acute. It is difficult enough to understand how
time was found for the big things; but when one reads
volumes of letters and reports dealing with the lines
almost microscopically, the wonder grows. In these
old letters and diaries nothing escapes notice. There
are "coal stains in the depot at Grand Forks." Here
is a list of a few of the things that Mr. Hill stored in his
memory as he was rushing up and down the line, and
set down in memoranda for his own future guidance,
or to be taken up with the proper parties at the proper
time: location of gravel pits, side tracks, water tanks,
lay of the country with reference to the line, condition
•See Appendix, VIII.
346

FOUR YEARS OF FATNESS
of crops, rough places in the track, condition of track
joints, where cars were standing unloaded and idle,
wasted effort by hauling in gravel when the same
material might have been obtained from the side of
the track, ditches. A note says that everything lying
around but not needed for operation must be picked
up and put away; odd lengths of iron that cannot be
matched and made useful should be gathered up and
sent to market; "platform east end of depot wants one
eighteen-foot plank for repairs." In the same para
graph and line are a memorandum of an important
bond election about to take place and a remark that
the engineer has dumped his fire on the ties and burned
them out in two or three places. "Memo. One car
repairer here, this man smells of whiskey." Spikes,
frogs, and box lids lying about are listed for collection.
Here is a report that a certain engineer has been
kept on his engine too long without sleep, which
ought not to happen; and there the entry, not from a
section man, remember, but from the real boss of the
concern, that "flat 1269 has two broken truss rods and
should be repaired." And scattered through all these
pages are rough drawings of station buildings, round
houses, yards, tracks, switches, that indicate an almost
photographic imprint in the mind of the man who made
them of every accessory of the whole system. Man
kind is still in doubt whether the greatest wonder is
due in nature to the infinitely great or the infinitely 347

THE LIFE OF JAMES J. HILL
minute. In scanning the activities of Mr. Hill, espe
cially through these typical years, one is no less lost in
admiration over the genius for the little things than
over the genius for the great. He showed in both "in
finite capacity for taking pains."

348

CHAPTER SEVENTEEN
FINANCES AND FARMERS
HERETOFORE money had been raised by the issue
of securities or taken out of earnings, as and when it
seemed best. A coherent financial policy was necessary
to a railway company with business and prospects
such as this could show. Therefore a consolidated
bond was issued; and this policy and the circum
stances under which it was put into effect must be dealt
with at greater length and with more emphasis because
they were used, many years later, by the critics of
Mr. Hill as the basis of accusations against his financial
methods, and of a charge that the control which he
and his friends enjoyed had been used to further im
properly their personal fortunes. Inasmuch as the
career of Mr. Hill is absolutely free from weaknesses of
this sort; since he had a sensitive personal pride and a
profound scorn of interested motives ; and since his rail
road system is almost unique in this country by its long
freedom from servitude to individual greed, the charges
that have been made and the facts in the case require
especially careful scrutiny. Baldly stated, the enemies of
Mr. HiU said that he and his friends divided $9,000,000
which they took out of the property by issuing 349

THE LIFE OF JAMES J. HILL
$10,000,000 of bonds which the inside ring of stock
holders were permitted to acquire at ten cents on the
dollar, when they were actually worth their fuU face
value in the market. This incident in the life of Mr.
Hill, which stands alone in having been connected by
hostile critics with the implication of a breach of trust,
should be examined with care. Fortunately the facts
are on record, and they are conclusive.
The time had come to create a form of secur
ity which should take the place of the different
obligations outstanding, and furnish a precedent and
a model for future credit issues. In 1883 the Board
of Directors of the Manitoba formally authorized an
issue of $50,000,000 6 per cent, consolidated bonds.
These were secured by mortgage on all the company's
lines, built or thereafter to be constructed in Minnesota
and Dakota. Of this total, $19,426,000 were reserved
to retire prior bonds, $10,574,000 were to be issued im
mediately, and the remaining $20,000,000 were to be
issued only against future construction, and then at a
rate not to exceed $15,000 per mile, although the cost
per mile often rose as high as $25,000, exclusive of the
large sums paid out for terminal facilities. The use
of the nineteen million odd dollars of securities to re
place the old bonds issued at the organization of the
company in 1879 and in 1880 is a mere refunding opera
tion. The issue of ten millions which the stockholders
were permitted to buy in at ten cents on the doUar has
350

FINANCES AND FARMERS
been attacked. Let the facts speak for the truth, what
ever it may be. The first of them is the official record
of the road, as shown by the minutes of shareholders'
and directors' meetings. Here is the official entry
under date of April 12, 1883, immediately following the
authorization of the total issue of consolidated bonds:
"Whereas, The company has recently acquired
large and valuable properties and lines of railway which
are not covered by its existing mortgages, and has made
extensive improvements and additions to its other
properties, Therefore be it resolved. That for the purpose in
effect of reimbursing to and dividing among the stock
holders the cost and value thereof to the extent of nine
millions of dollars, and of readjusting the securities of
the company, the stockholders of record on the books
of the company at the close of business on the 20th
day of April, 1883, shall have the privilege of acquiring
from the company bonds of the contemplated issue of
May 1, 1883, to the amount of 50 per cent, of the
stock then held by them respectively at the price of
10 per cent, of the par value thereof; said bonds to be
represented by scrip deliverable on the first day of May
next, on the payment therefor at the price aforesaid,
and such scrip to be exchangeable for said bonds at the
office of the company in New York on and after the first
day of July next, upon its presentation in amounts of
$1,000 or any multiple thereof." 351

THE LIFE OF JAMES J. HILL
Here is the main fact, clearly stated. During the
years of very rapid growth and of necessary participa
tion in many allied interests, the money of the stock
holders, which might and ordinarily would have been
distributed among them in the form of dividends, had
been withheld and used for company purposes, to the
amount of not less than $11,000,000. An analysis of
disbursements and the extraordinary reasons for them
supports this statement. It was a forced loan to the com
pany by its stockholders. Now was a convenient and
proper time to repay it. Not all of it was given back. But
$9,000,000 was transferred from the treasury of the com
pany to the pockets where it really belonged, by the issue
of $10,000,000 of bonds to which the stockholders were
privileged to subscribe on the basis of a cash payment
at 10 per cent, of their face value. At this time the
number of stockholders was still small, and there had
been few changes in their personnel. The only extraor
dinary thing about the transaction, in the opinion
of that day, was the fact that this distribution of prof
its had been delayed until 1883. The policy of almost
any other railroad company then in existence would
have been to issue new stock or bonds annually as
emergencies arose, and at the same time either increase
the dividend rate or make successive issues of stock, as
bonus to the holders, in amounts sufficient to absorb all
the cash surplus as fast as it accumulated. The art
of trimming treasuries was well advanced at this date.
352

FINANCES AND FARMERS
The very policy which was afterward brought forward
as a reproach to Mr. HiU marks the advance that he
had made upon the financiering of the day. The divi
dends of the company had been raised only to 2 per
cent, quarterly. This was preposterously smaU in
comparison with the rates of profit common at the time,
and with the earnings of the company. The following
table, tracing the growth of the St. Paul, Minneapolis &
Manitoba system to this date, shows the growth of
trackage and resources, the basis of all credits :
1878 1880 1881 1882 1883 1881
Mileage 407 656 702 926 1,203 1,378
Net Earnings $473,977 $1,584,817 $1,906,756 $3,308,917 $4,689,779 $4,449,251
Capital Stock 15,000,000 15,000,000 15,000,000 20,000,000 20,000,000
Bonded Debt 16,324,900 18,107,700 18,646,000 20,791,720 31,368,000
It will be seen that in the period between 1880 and
1883 the mileage of the system was nearly doubled
by construction and purchase. In addition, all the
old lines were practically rebuilt by the substitution
of steel rails for iron. Equipment was quadrupled.
And there were immense subsidiary enterprises, like
the interest in the St. Anthony Falls Water Power Com
pany, the building of the stone arch bridge and union
depot, the interest purchased in the St. Paul & Duluth,
the building of the new shops at a cost of half a million
dollars, and a dozen other things for which the cash
and credit of the company had been used. This was
cash belonging to the stockholders. A surplus of
$5,671,976 had been accumulated, in pursuance of
353

THE LIFE OF JAMES J. HILL
Mr. HiU's consistent policy never to be without this
anchor against any possible mischance. In those three
years only a little more than $4,000,000 had been added
to the bonded debt, and $5,000,000 to capital stock.
The sums put into the property were more than
double the total of the two. Instead of borrowing
this difference from outsiders, the management bor
rowed it, without interest, from insiders — that is, from
the treasury of the company — and put it back into
the road. That is the whole transaction. It was not
usual; but it was morally unassailable, just as it was an
economical policy for the railroad company. The gist
of it was stated by Mr. Hill himself, once for all, in the
letter summing up the story of his connection with the
railroad which he addressed to the stockholders on re
tiring from the chairmanship of the Board of Directors
in 1912:
"During 1878, before the road was organized, 112
miles of track were built, and more than that the year
following. A large amount of equipment was bought.
To cover this outlay a part of the proceeds of the second
mortgage issue of $8,000,000 was used. There was
originally a limit of bond issues to $12,000 per mile of
single-track road; which was found to be insufficient
even for work mostly on prairie. In 1880 the Dakota
Extension mortgage was authorized, of which $5,676,000
of 6 per cent, bonds were issued from time to time,
and this total of less than $22,000,000 covered the whole
354

FINANCES AND FARMERS
bonded indebtedness of the company down to 1883.
But it by no means covered the actual expenditures for
which bonds might legitimately be issued.
"The period from 1879 to 1883, when the raUroad was
still an experiment in the minds of most eastern capi
talists, was not a time to enlarge the volume of securi
ties or ask outside capital to bid for them. AU that
this could have secured would have been some sales at
much below par, and an impaired credit. Yet money
must be had to keep going the extension which was
creating a new Northwest; and, through that, a profit
able and assured future for the company. So another
method was adopted. The company diverted to these
uses the money which might have been divided as
profits among the stockholders. At one time 210 miles
of road were built and $1,700,000 were spent on equip
ment without a bond issue. The company became its
own banker while waiting for a favourable market to be
created. The stockholders temporarily renounced their
profits in order to leave their money in the enterprise.
But it remained their money, and their title to it was
indisputable. It was costing now very much more
than $12,000 a mile to build a substantial track. In
aU, about $11,000,000 of profits were put into new con
struction and betterments. The stockholder of that
day expected these profits to be distributed. His right
to them was sanctioned by public opinion as well as by
custom and law. It was recognized in 1883." 355

THE LIFE OF JAMES J. HILL
Nor is this an afterthought, or a case made out in
answer to an indictment at a. later day. On the con
trary, Mr. HiU's statement in 1912 is exactly what he
had said thirty years earlier, except that the claims of
the stockholders were then estimated at an even higher
figure than they were later. The following, which he
never expected to reach any eye but that of the person
to whom it was addressed, is from a personal letter of
Mr. HiU dated July 26, 1883:
"When it was concluded to issue a consolidated bond,
which would eventually absorb the existing bonds and
leave but one security on the property, it was found the
company owned the entire stock to four other railways
with 210 miles of road equipped and in operation, also
stock in other companies and other very valuable prop
erty amounting to more than $13,000,000 which was not
represented in the bonded debt of the company, and
which had been acquired with money that would other
wise be available for division between the, stockholders.
The Directors decided to consolidate these lines with
this company and to reimburse the stockholders pro
rata to the extent of $9,000,000 of the $13,000,000, by
allowing them to buy the consolidated bonds to the
extent of $10,000,000 by paying the additional $1,000,000
pro rata according to the shares held by each. This
made the total bonded debt of the road a little less than
$22,680 per mUe, secured by 2,5j90,000 acres of land
which is selling at an average of about $6 per acre,
356

FINANCES AND FARMERS
about $1,000,000 of land contracts bearing 7 per
cent., and the entire property, terminals, and equipment
of 1,325 miles of raUway, and securities and stocks of
other companies, the market value of which is more
than $2,000,000."
None but the ignorant or the malicious have ever
attempted to make this incident throw discredit upon
a man whose sense of financial honour was peculiarly
delicate and fine; and who never saw a time during the
years of his railroad management when he would not
have given up every dollar of his personal fortune rather
than permit the property under his care to repudiate
an obligation. The judgment of the time is reflected
conclusively in the market records. After a great coup,
out of which millions have been made privately and
unjustifiably by individuals in a position to take
advantage of a trust, the reaction in prices is certain
and severe. One has but to look back upon question
able dealings in any one of haff a dozen big railroad
systems at different times in their history, and
consult subsequent stock quotations, to understand
that personal abuse of trust by the head of a rail
road destroys public confidence, and stock values
along with it. This bond issue, materialized on
the first day of July, 1883. In October, 1880, the
Manitoba stock was quoted at 67. In August, 1882,
it stood at 146. Ascthe news of the scrip dividend was
circulated, the price rose to 1 67. The actual issue of this 357

THE LIFE OF JAMES J. HILL
dividend caused a decline of but twenty -two points in
the stock. After the new bonds were delivered, and it
was known that there were no other deferred profits, and
that the value of the stock rested solely on the earning
power of the system and the ability and honesty of the
management, the lowest price reached was 123. The
judgment recorded by the public in these quotations
is that full values were behind the securities, that future
earnings were sure, and that the control of the property
was in strong and clean hands. It was justified by
the event. The history of this bond issue, instead of
casting even a shade on the integrity of Mr. HiU's
management or the sources of his personal fortune,
shows his singularly keen judgment in adopting a
method of financing so advantageous to the company's
interest, and the extraordinary but admirable confidence
with which his stockholders consented, with him, to
forego for years the immediate use of their private
profits, for the future good of the enterprise in which
they had enlisted together.
It is time to glance at some of the other interests
that crowded this busy life. It goes without saying
that the future extensions of the railroad system were
as carefully thought out at this time as was its present
operation. There are many volumes of detailed corres
pondence with engineers in the field, in which proposed
locations of lines yet to be built are considered, cor
rected, changed, with the utmost fidelity to what
358

FINANCES AND FARMERS
topographical conditions required. Mr. Hill knew the
country about as well as the men outside, and one
prevaihng principle governed throughout his placing of
lines and his instructions to subordinates. In no case
was money to be saved by choosing a route less difficult,
from the engineering point of view, if this would entaU
greater cost in operation. The cost of one method is
paid for at first, once for all. The second is a continual
annual charge on operation. To minimize the latter
was the keynote of Mr. HiU's policy as a railroad man.
He wrote, a little later, to Mr. Stephen: "We are now
reducing our grades so that we can haul 700 to 800 tons
with one locomotive. . . Of course, this all costs money
and plenty of it; but I think it the very best way to
protect the property." And this limit of achievement
was raised again and again and again, unceasingly, as
the years went by.
These days saw also the beginning of the satisfaction
of that artistic taste which had been for so long de
nied. He was endowed with it by nature. It will
be remembered that one of the stories of his earliest
days in St. Paul tells how he used to dabble with
paints. He loved pictures, studied them, understood
them. One of his uses of personal wealth was to begin
that collection of masterpieces of great artists whose
acquisition gave him a delight as keen as did his ma
terial success. Born with the artist's .eye and the
artist's discrimination, no long apprenticeship was 359

THE LIFE OF JAMES J. HILL
needed for him to become a connoisseur. He was al
ways in the market for something really good. His
leaning was toward the modern French school, and
Corot and Millet appealed to him from the first. He
bought slowly, but with knowledge and keen and just
appraisement. His gallery of specimens of the Barbi-
zon school was said to be superior to any in Europe or
the United States. Although the ardour of his pur
suit lessened with the passage of years, the boundaries
of his artistic information enlarged, and his taste and
judgment became more accurate and exacting. To the
end of his life no dealer who had anything choice found
him uninterested. He might not buy; he certainly
would not unless the picture had something special
and significant to recommend it; but he would always
examine, criticise, enjoy. His gallery in St. Paul be
came more complete. In his New York house he
garnered other treasures. He made gffts of valuable
paintings to galleries and art institutes. He cared for
nothing but the best. The very considerable fortune
represented by the value of his relatively small collec
tions is one evidence of his critical acumen. The soft
ening of the aesthetic mood was upon him one evening
when, in his gallery, he said to a friend: "Ah, it was a
great pleasure to get those pictures together, one of the
greatest of my life. But it's all over now." What he
meant was that the first ardour of developing taste and
the fine flavour of the hunt had gone with ripening
360

FINANCES AND FARMERS
powers, possession, and the passage of the years. But
always he remained a keen and interested critic, an apt
judge, and a discriminating coUector. This was an in
terest that only relatively declined, and did not pall.
Another interest, away at the opposite end of the
scale, which found its first practical expression at about
this time, struck its roots deep into all his after life
and work. His proposition that the tUling of the soil
is the basis of every human achievement, the corner
stone of governments as well as the foundation of all
wealth, goes back to the beginning of his conscious
thought as applied to human action. The primacy of
agriculture had for him the force of a first principle.
It coloured everything he saw and inspired a great part
of what he did. It will be remembered that he was
first convinced of the feasibility of building up a great
railroad system in the Northwest because he saw how
rank the grass grew where the gophers and the wheels
of the Red River carts had loosened and upturned the
soU. He knew always that a raUroad must depend on
the farmers along its line. It was not enough, as other
managers thought it was, to coax immigration into the
country since, once there, the settler could not get away.
Just as he saw cost of operation beyond cost of con
struction, Mr. Hill saw the continuing annual contri
bution of this settler to the freight traffic of his railroad
as something infinitely more important than the busi
ness of the first few years. It was an axiom with him 361

THE LIFE OF JAMES J. HILL
that the carrier would grow rich or poor in company
with the farmers who cultivated the fields along its
tracks; that nothing could separate their interests and
their destinies. About this time something happened
to bring the matter home.
In 1883 there was a dry spring, and the farmers got
only a partial crop of wheat. In the southern part of
the state the grasshopper invasions should have given
them a lesson some years before. But everywhere
along the new railways the immigrants foUowed one
unvarying policy. It was almost a religion with them.
They took up virgin soil, broke it, planted it to wheat,
and continued to raise that one crop year after year
until the yield became so poor that they had to move
j away. Meantime, a single bad season for wheat reduced
! them to misery and actual want. Fortunately the Red
River Valley was too rich to be exhausted or to know
crop failure, and many other soils in the Northwest
could stand the drain for a good many years. But the
end was sure. In unfavourable crop years there would
be little or nothing to carry out of the country, and the
farmers would not be in a position to buy anything to
carry in. Every year the output of each cultivated
field was bound to become less on the average. Mr.
! Hill knew the history of agriculture, back to Varro,
; and back of him to Old China. He saw that agriculture
'i
: in the Northwest must be diversified. At that time
people believed that fruit could not be raised there in
362

FINANCES AND FARMERS
paying quantity and quality; thought corn raising
dangerous in latitudes where splendid crops are now
gathered. But there was one thing which experience
in many northern climes had shown could be done in
Minnesota. This was the raising of live stock. It
would provide a new source of revenue, be a resource
against grain failure, help maintain soil fertility, build
up the dairy interest for which Minnesota is so espe
cially fitted, and eventually enrich the farming interest
by untold miUions.
Of course, there were already cattle on the farms;
but they were such as the average settler picks up as
cheaply as possible in the neighbourhood where he takes
up a claim; scrubs, poor milkers, barely worth the
trouble of feed and care. For beef purposes they were
just as inferior. The farmers had not the knowledge or
the money needed to help themselves. So Mr. Hill
determined to come to their aid. It was a conspicuous
instance of that enlightened self interest which was
mixed in him with pure business instinct and pure
natural generosity. He believed that, by introducing
the best strains of cattle generally throughout the
Northwest, and breeding from them year after year,
this section would, in a short time, have none but high-
grade cattle; that the milk and butter product would
add vastly to general prosperity; that better beef and
more of it would swell the farmers' receipts; that the
interest awakened would serve to extend cattle raising

363

THE LIFE OF JAMES J. HILL
as an independent occupation; that, as a consequence,
agriculture itself would take on a new and more thriving
complexion; and that, above all, exclusive grain grow
ling, exclusive wheat growing among grains, and tiie
! whole one-crop system would die a natural death. It
I was not his fault that his plan took a generation, instead
t of a few years, to work itseff out. That was because it
/ had to become concrete through the labours of immi
grants gathered for the most part from the peasantry of
I European countries where conservatism in methods is a
\ cult, and the idea that there could be any improvement
I in the accepted system of farming could not penetrate.
Worse, even, it had to make way against the glittering
promise of those first few years on the farm, when the new
ground produced more money in wheat than the cultiva
tor had ever dreamed of possessing.
Mr. Hill said, later, in referring to this scheme: "I
thought then that if I was spared, I would undertake
to help the farmers to do something besides cultivating
I a single crop. They were carrying all their eggs in one
1 basket." He was personally interested already in good
j horses, cattle, sheep, hogs, birds, everything that is
i useful to man on the earth and has a strain that can be
(improved. To gratify this taste and to experiment
with breeds he established his first stock farm at Crystal
Bay, Lake Minnetonka. In 1881 and 1882 he was
busy acquiring the land and putting up the necessary
buildings. That the place of cattle raising in the
364

FINANCES AND FARMERS
general scheme of agriculture was already in his mind
is shown by his experiments there in the breeding and
raising of shorthorns. Then the plan broadened and
grew definite. He bought a big farm on the outskirts of
St. Paul where he experimented scientifically with all sorts
of creatures, and kept exact records of accomplishment. |
Here is his own story about it : "I thought then that the
man who played the fiddle on one string didn't make
much music, and I thought that I would help them get
another string to their bow. It sort of took possession of
me and I thought : Well, I will buy a farm out here (and
I bought North Oaks) and I will get the best cattle in the
world and I will raise a lot of them and I will distribute
them. That seemed slow. Now, ff you are going to
do anything, you might as well do it with a broad and
strong hand, so I brought out within three years from
the best herds I could find in Great Britain about 800
thoroughbred bulls. Shorthorn and Polled Angus, and
scattered them, gave them to the farmers. I distrib
uted up to this time somewhere between 6,000 and
7,000 cattle and hogs. I was trying to put the people
of Minnesota ten or twenty or twenty -five years ahead
of their neighbours in Iowa who got tired or didn't
find it was profitable to raise Amber Iowa because
they exhausted the fertility of the soil."
He made an examination of the finest herds of cattle
in Great Britain. Thirty-five of them were visited.
Strains were looked into with a view to both dairy 365

THE LIFE OF JAMES J. HILL
and beef purposes, but above all as to their prob
able acclimatization. It would not do to bring in
any delicate breeds to brave the rigours of Minnesota
winters. So Mr. HiU's first favours went to the hardy
Scotch varieties, especially the Polled Angus. The first
lot of cattle came from Europe in 1882. He paid as
high as $5,000 for a single bull. That was for an object
lesson. But he intended to take the farmers with him.
He wrote to one of them — ^for he was as impetuous here
as elsewhere when he once became absorbed in a topic,
and campaigned vigorously — his proposed plan in 1883:
" For some years I have felt thatour farmers depended
too much on the cultivation of grain, which in a short
time must impoverish their land. I think it is a safe
estimate to say that every year there is destroyed in our
state by fire, or otherwise not used, an amount of grass
and fodder that would produce beef and dairy yield
equal in value to the entire wheat crop of the state.
What we want is a stock of cattle good for both dairy
and beef; and to induce our farmers to take a more ac
tive interest in the matter I propose to offer a certain
number of young bulls and rams annually as premiums
; for best progress made in cattle raising." He did much
more than this. In 1885 and 1886, blooded buUs
bought abroad were placed in each of thirty selected
counties in Minnesota and Dakota; five to a county
on the average. These animals were sent to respon
sible farmers, who were to look after them, permit
366

FINANCES AND FARMERS
all other farmers in the county to breed their cows to
them without charge, and at the end of a term of years
become the owners of the animals thus left with them.
Summing up and explaining this work later on, he said:
"I distributed in different counties about 550 Shorthorn
bulls and about 350 Polled Angus. It cost me, for
cattle and hogs that I gave away, somewhere in the
neighbourhood of $150,000. It wasn't a railroad matter.
It was my own effort to help them."
The reasoning of Mr. Hill was simple and cogent.
The farmer who could get a fine calf from a mediocre
cow, without any cost to himself, and thus possess him
seff of a more valuable animal, would do so and continue
to do so. Keep the process going a few years, let it
spread with the volume and violence of a geometrical
progression, and the stock average of the whole North
west would be raised by many points and by millions of
dollars. In the very process the farmer would become
educated, and would go on endeavouring to increase
still further his herds and to improve strains on his own
initiative. The argument is without a flaw. All it
seemed to require was the original impulse, which Mr.
Hill gave by his own effort and out of his own pocket.
He did not doubt that practical experience would con
vince the farmer that the limitations set by this
northern climate were vastly exaggerated and mis
understood. All northern Europe could testify to that.
In a letter replying to a request for permission for a
367

THE LIFE OF JAMES J. HILL
party of farmers to visit his. stock farm, he said: "If
the visit will be of any service or encouragement to
you, it will fill the principal object I have in maintaining
it; which is to demonstrate in a practical way that live
stock can be raised in Minnesota as well as or better
than in any of the Western states."
He tried to hammer home another practical point:
"When wheat was seUing at 55 cents in Minne
sota I thought I would try what wheat would do
to feed steers. I fed a lot of steers one winter, ten mUes
from where we now are, and found that I got 82 cents a
|3ushel for the wheat I fed to them. That is a lot better
than seUing it for 55 cents. When a man raises forty
or fifty bushels of corn to the acre and has got to pay
, freight on each bushel of corn, which would be some-
! thing more than seventeen hundred pounds, and if he
had got a good steer to build on, that will give him from
j three hundred and fifty to four hundred poxmds addi-
1 tional weight to the steer. Now he sends that corn to
! market under entirely different conditions, and he keeps
at home one third of the value of all that he feeds the
steer in the way of fertilization. Three years ago I
bought seventy steers at about $40 apiece. I charged
my wild hay up at $6 a ton, charged my oats at 35
cents and my barley at 48 cents, whatever the mar
ket price was, whatever I could have sold it for iii St.
Paul, I charged for it out at North Oaks. I sold those
steers and they brought me a profit over and above what
368

"COMMODORE" NORMAN W. KITTSON
Mr. Hill's partner in the steamboat business on the Red River and one of the "four
associates" with whose financial aid he launched his career as railroad builder

FINANCES AND FARMERS
I got from my grain and hay, fed to them at the market
price, of a little more than $30 apiece. A man ought to
be satisfied when he can get a profit of $30 after selling
his crop at the market price."
A record exists to show how mature were Mr. HiU's
ideas and how complete his plan for the improvement of
farm industry at this early day. The writer of these
volumes spent a day with Mr. Hill at North Oaks in 1885
for the purpose of getting information about the intro
duction of high-grade live stock into the Northwest. The
results were published, with Mr. HiU's approval, in
Bradstreet's Journal for November 14 of that year. The
foUowing extracts from that article wiU show Mr. HiU's
work to have been substantially the same in principle and
method as that on which he was engaged at the time
of his death:
The history of the stimulation of interest in cattle raising in
the Northwest is the history of extraordinary foresight and patient
and helpful instruction. The progress made is due, more than to
any other influence, to the plans of Mr. J. J. Hill, president of the
St. Paul, Minneapolis & Manitoba Railroad. After some years
of experiment and an outlay of hundreds of thousands of dollars,
he has brought it about that the Northwest has to-day a more
magnificent start in the industry of raising the finest breeds of
cattle than was ever possessed by any other community in the
United States in its earlier history.
Ten miles north of St. Paul lies the great stock farm of Mr. Hill,
known as North Oaks. To this establishment, a few years ago,
after he had definitely determined to broaden the raising of blooded
cattle from a private gratification to a public beneficence, he
removed his stock possessions and headquarters. A careful study 369

THE LIFE OF JAMES J. HILL
of the herd books and of the authorized catalogues of Mr. Hill's
collection justifies the deliberate statement that there is no better
herd than this in all Great Britain. There are altogether 228
thoroughbred animals, imported at prices reaching, in some cases,
as high as $6,000. Even one unversed in the technical charac
teristics by which cattlemen detect the presence of good blood
cannot look over this magnificent collection without enthusiasm.
And the significant fact, the one which gives force to the practical
value of this great stock farm as something difl'erent from the
gratification of an individual taste, is that, although Mr. Hill's
agents have purchased abroad many noted animals, prize-winners
in all England and Scotland, and now to be seen here, there can be
found side by side with them descendants bred at North Oaks
which are in no respect whatever inferior. On the contrary,
some of the full bloods that have grown up in the Northwest give
even greater promise than those of which they are the offspring.
It is a matter-of-fact demonstration that the Northwestern climate
is eminently favourable to the development of the best quality of
cattle. The practical feature of all this exhibit is this. Mr. HUl has
established here not merely a private collection for his own satis
faction, but a live-stock nursery for the whole Northwest. From
the stables at North Oaks have gone and are now going out animals
that will diffuse the blood of the thoroughbreds through all northern
Minnesota and Dakota. He has simply placed a premium upon
attention to cattle culture, and provided that this culture shall he
devoted to the production of the best. In the last two years 156
bulls have been thus placed by Mr. Hill in thirty counties in Minne
sota and Dakota. Let any one versed in cattle raising compute the
effect upon the character of stock. There is not another com
munity in the country which started in the business of stock raising
with anything like 150 blooded bulls to propagate from. And in
this instance the animals are not, as is usual, collected in some
famous stables, but are scattered over a score and a half of our
enormous Western counties.
The obvious complement of the wheat field is the stock-yard.
It is in the Northwest and has come to stay. How great the prog-
370

FINANCES AND FARMERS
ress already made only those who know the genuine interest now
taken as compared with the indifference of a few years ago can
appreciate. The improvement of stock has reached such propor
tions as to call for comment in the last report of the Governor of
Dakota, who refers to the value of the work to which Mr. Hill has
given an irresistible impetus. It will be rare good fortune for the
Northwest if its industry shall be diversified without the cruel
pressure of failure and loss which have wrought the same consum
mation in sections that have passed through a similar experience.
We have many railroad magnates in this country who might be
the authors of unspeakable benefits to the communities dependent
upon them if they chose. They have not been remarkable for a
keen perception of the truth that their interests and those of the
constituencies which they serve are inseparably connected.
When a man of great wealth leans to such true philosophy, and
devotes time, study, personal supervision of a great estate and
immense resources to an end that seeks the public good, he deserves
all the more credit perhaps for being large enough in mind to see
that it is his own good as well. Stock raising in the Northwest
wUl be heard from in the future. It is a chief ingredient and
guarantee of steady, prosperous development. Mr. Hill has done
most to accelerate its establishment by at least one generation.
The wildest imagination could scarcely have fore
shadowed the immediate result, unless it could have
entered into the slow and suspicious thought of the
people who at that time constituted the bulk of the
tillers of the soil in the Northwest. These people
shared the dull but bitter antipathy of every frontier
community for the railroad by which it must ship every
thing in and out. With or without reason, all sins were
laid on the scapegoat carrier. Bad weather, bad farm-!
ing, bad markets, individual shfftlessness or misfortune
— the consequences of all were assigned to railroad 371

THE LIFE OF JAMES J. HILL
malevolence. The farmers to whom this proposition for
stock improvement was made did not know just where
I the cloven hoof was hid, but they were obstinately
convinced of the existence of some scheme for their
; undoing Many of them refused to have anything
to do with the new-fangled plan. They were encour
aged and confirmed in this attitude by the politicians
and demagogues who, for many years, were to find their
chief stock in trade in denunciation of railroads for
any and every sin, real or imaginary Minnesota had
become known all over the world by this time as the
home of hard spring wheat, and the greatest flour pro
ducer of the world. This reputation, said the orators,
Mr. Hill had set himself to destroy by his infamous
attempt to undermine a great industry and an estab
lished reputation.
They did not stop to ask why he should wish to do
this; what possible interest he could have in stock rais
ing as against grain raising; why he should plot to dam
age the country along his lines, when the only result
he could expect would be the certain decrease of the
tonnage and freight receipts of his railroad and the divi
dends paid to him and the other stockholders. The
bucolic brain refused to rise to such flights of logic. It
did, indeed, assimilate one idea. It found that the
calves sired by these imported bulls if sold for slaugh
ter would bring from five to ten dollars a head more in
the market than the ordinary yearling. Sold for meat
372

FINANCES AND FARMERS
they were; and the cheaper stuff was kept for breeding
purposes, as of old. But the experiment and the idea
were, by reason of their originality, widely exploited.
Here, as everywhere, Mr. HiU's first step was to
inform himself thoroughly. He wrote a letter to the
Stockman, reciting in minutest detail the best meth
ods of raising root crops as a food for cattle. Volume
after volume of his letter files at this time is full of cor
respondence from all over the United States, England,
and Scotland on thoroughbred cattle, horses, hogs, and
sheep. Here are collected herd books, copies of agri
cultural papers, notices of exhibitions, lists of prizes,
and literally thousands of letters from interested persons
who wrote to him for more information and a complete
statement of his plan. Even his railroad operations
up to this time had scarcely made Mr. Hill known to a
wider public than was now attracted by the novelty
and held by the soundness of his practical views on the
conduct of a great industry. His cattle took prizes
everywhere, and his ideas were indorsed by the intelli
gent. "Against stupidity, the gods fight in vain." For the
moment the experiment must be only partially successful
and the scheme postponed. A few good herds, here and
there, produced from this original imported stock, testi
fied to what might have been done if far-sightedness and
generosity on one side had not collided with lack of un
derstanding on the other. For a time no more cattle 373

THE LIFE OF JAMES J. HILL
were brought in, and the offers made were not renewed.
But Mr. Hill could never shake off the grip of an idea
when he was convinced that it was grounded in fact. He
kept up a zealous study of agricultural conditions, with a
view to their improvement. In 1885 he made an ad
dress before the Minnesota House of Representa
tives, in which he covered the subject at length.
At that early date he had thought out the whole
question of the farmers' real interests. He said:
"We must have better farming. We must have more
intelligent methods. Our farmers, in place of re
lying on one crop as people of the South did in cotton,
until they and their lands were impoverished, must diver
sify their industry. Experience has shown that there is no
way in which they can do this so well as by raising cattle,
pigs, and horses, and dairying." He said that at that time
the farmers were raising wheat, working only four to four
and one half months a year, buying the meat and butter
that they consumed, without granaries and subject to aU
kinds of injustice through dockage at elevators for
dirt and weed seeds, as well as quality. He gave a
complete outline of a state inspection system, which
was later adopted by the wheat-growing states of the
Northwest. He showed that only by the issue of
wheat receipts calling for a definite quality could a free
and open market be obtained. The detail with which
this scheme was marked out at that time, and the wealth
of statistical facts by which it was maintained are both
374

fe^jancf:s and farmers
remarkable. This was another instance in which Mr.
HiU looked ahead of his time, and was able to prescribe
proper regulations for the future conduct of industry and
the weU-being of the people. He warned, suggested,
persuaded the farmer, in season and out of season. He
forced ideas into thick heads by incessant pressure. He
converted skeptics. The logic of his facts confuted and
sUenced the barkers outside political tents. Thirty
years later, as will be seen when the story reaches that
date, he was receiving national recognition and hon
ours for the services he had rendered to agriculture.
A generation educated in the American public school,
believing in the possibility of progress and anxious
to learn its processes, was his new audience. This
time he had many new lessons to give, but he did not
drop the old one, and he no longer spoke to stopped ears
and unbelieving minds. This time he was able to work
almost a revolution. And in 1913, 1914, and 1915 he
completed successfully the work of increasing the quan
tity and raising the quality of the live stock product of
the Northwest: by means of precepts incessantly re
peated, by example in the shape of new importations
of blooded stock and by furnishing young buUs to farm
ers at prices they could afford to pay. He employed
for many years Prof. Thomas Shaw, an expert in animal
husbandry, to advance this interest and instruct farm
ers in it. He believed that great progress could be made
by selecting and building up "dual purpose" strains of
375

THE LIFE OF JAMES J. HILL
cattle. In 1914 Professor Shaw purchased in England
for Mr. Hill more than one hundred head of dual purpose
shorthorn bulls, which were given to a selected list of
farmers. He held fast to his original idea, his purpose,
and his method; adding to it the plan to secure still better
results by providing the average farmer with herds that
would be high producers of both milk and beef, no matter
if theorists declared it impracticable. He did an even
greater work for general agriculture, which must have
a chapter for itself. The whole story will reveal the
main characteristics of the man : economic clairvoyance,
economic breadth of view, public spirit, invincible
determination that challenges time itself, if need be,
for vindication. Into these side issues and interests
Mr. HiU entered with the intensity of his nature. Un
doubtedly they helped to vary the monotony— if it had
been possible for him to find monotonous anything in
which he was interested — of those years of the growth
of his railroad system toward its still uncompleted
destiny.

376

CHAPTER EIGHTEEN
WESTWARD HO!
FOR years after 1884, even after 1887, there were
wide differences in public opinion about the ultimate
purposes of Mr. Hill and his railroad. At the
earlier date, which this story has now reached,
comparatively few believed in his transcontinental
ambition; and those who did were regarded as vision
aries rather than practical men. Average intelligences
could see nothing but failure in the plan that was
being discussed as a possibility. Here, they said, is the
Northern Pacific to the south, already finished and
always financially in hot water. Here is the Canadian
Pacific to the north, nearing completion and limiting
the field in that direction. One of these systems is
supported by bond sales, the other by favours re
ceived or hoped for from a helping government. Their
through business has not been found adequate to sup
port either of them. Their local business must cer
tainly be as great as that of a third line, to be built
through country still mostly unoccupied. No sane
man could think of paralleling these lines through to
the Pacific without inviting bankruptcy. The property
over which Mr. Hill presided was making handsome 377

THE LIFE OF JAMES J. HILL
profits. It could do this because it ran through a fer
tile land, where population and wealth were constantly
growing. But what could save it if it tempted the
mountain passes of the continental divide and the
Cascades, where local traffic would be practically noth
ing, and both construction and operation enormously
expensive? For the most part, business men reasoned
this way; and did not believe that Mr. Hill intended to
carry his system farther than the Missouri River or,
at the utmost stretch of fancy, to some point in Mon
tana where he could make advantageous traffic connec
tions. Montana, by this time, had attracted public interest
and was increasing rapidly in population. It was a
spacious territory, where fortunes were made from range
cattle, where immense mineral wealth was known to be
stored in the mountains, where river valleys in great
number and fertility promised well to agriculture.
Sufficient resources were in sight to appeal to en
terprise and capital. The great copper deposits in
the vicinity of Butte were beginning to astonish the
world. The area and high quality of the territory's
coal deposits were beginning to be appreciated; no
slight resource after a thousand miles of plain, where
nothing better than lignite could be found. Here was
an original source of much tonnage; a country short of
which no railway once headed for it would be likely to
stop.378

WESTWARD HO!
It was also regarded as strategically valuable ground.
From the Mississippi River westward to the mountains
aU important railway construction was on east and
west lines. Some feeders, and occasionally a little
connecting link ran north and south between the
"zones of influence" of the transcontinentals. There
was no north and south trunk line, for it would have
no terminals at either end, and therefore no excuse
for being. Up and down the Missouri Valley there
was as yet no reason why a line should run. When
the great mountain ranges were reached, conditions
changed. Here was the place for lateral connections.
All the big systems within reach were at least planning
an invasion of Montana. The Northern Pacific had
the advantage of crossing the territory with its main
line, which passed through Helena. The Union Pacific
had not been idle. The Utah & Northern, under its
control, was in operation from Ogden, Utah, to Butte
and Garrison in Montana. The people of Helena,
already restive under non-competitive railroad condi
tions, had invited the Canadian Pacffic to send an
engineer to look into^the possibility of building to that
city. If there were rooi^^or another railroad through
Montana, no time should be lost in securing suitable
rights of way. For here was no stretch of prairie, where
a dozen roads might build, if they cared to, without
interfering topographically with one another, but a
country of mountain ranges, with only a limited number 379

THE LIFE OF JAMES J. HILL
of routes available for construction at a reasonable cost.
These once occupied, railroad building could proceed
only by difficult feats of engineering and at almost
prohibitive expense. It was important not to warn
competitors of their danger; equally important not to
frighten investors, already associated with the Manitoba
system, with the prospect of an undertaking that many
thought to be rash or doubtful, and most believed could
never pay a satisfactory return.
Therefore, Mr. Hill did not trumpet abroad his long-
settled transcontinental plan. His friends ought not
to have been under any illusion. Chance statements in
his letters already quoted disclosed his fixed determina
tion. But it was not openly confessed. If need be, some
discredit could be thrown upon it for the sake of blinding
the public until some all-important preliminaries had been
arranged . The following letter was written to a Montana
man who had sent to Mr. Hill an urgent request for the
immediate extension of his railroad to that territory.
It is dated September 25, 1883: "I note all you say
in regard to the Milk River Valley and the northern
part of Montana, but that country is now served by the
Northern Pacific Railway and there is not business
enough to warrant this company in undertaking the
construction of another line." Contrast with it the
flowery and possibly apocryphal account printed in the
St. Paul Pioneer Press in 1893, which nevertheless has
some colour of fact beneath its obvious frescoing
380

WESTWARD HO!
of the picturesque: "Early in June, 1884, a little
party pitched their tent where now is the eastern ap
proach to the railroad bridge across the Missouri at
Great Falls. One evening while the party were enjoy
ing a smoke after a supper of mountain trout caught
from the Giant Spring, two of them strolled down the
river bank chatting on what they had seen. The older,
a man of medium build, with dark eyes and hair, and a
beard slightly tinged with gray, grew unusually collo
quial for him. He declared that in three years the
Manitoba road would be built into Montana. With a
prophetic look he pointed to the distant Rocky Moun
tains then growing golden, and said, 'the Manitoba
will even cross those great piles of rock and earth and
press on to the Pacific Ocean until Seattle, Tacoma, and
Portland are connected with the East by the best-
constructed transcontinental road in America.' The
speaker was James J. Hill. The railroad reached Great
Falls in 1887, just the year he said it would." No one
who knew Mr. Hill could believe that he used exactly
those words; but nobody could doubt that he had the
thought. He made no secret of it in expansive moments .
There is, indeed, evidence that his plan was con
sciously framed and definitely formulated earlier
than this. Hon. Paris Gibson, later United States
Senator from Montana, became acquainted with Mr.
HiU shortly after the latter arrived in St. Paul. Mr.
Gibson went west and, in 1882, was interested in fixing 381

THE LIFE OF JAMES J. HILL
a site for a city at the falls of the Missouri River, near
the base of the Rocky Mountains. He furnishes the
following account, written after the death of Mr. HiU,
of the latter's purpose and remarkable grasp of the
situation, only three years after the organization of the
Manitoba Company: "I at once opened communica
tions with Mr. Hill with a view of interesting him in the
enterprise, and in November of that year went to St.
Paul and placed before him such information as I had
been able to collect, bearing upon this region and the
founding of a city here. I was at once impressed with
the rapidity with which he grasped the whole subject
at that interview, as scarcely an hour elapsed before
we had concluded a plan for locating a city at the head
of the Falls of the Missouri River. A year and a haK
subsequent to this meeting Mr. Hill came to Montana
for the first time and spent a day with me looking over
the townsite, the water power, and the adjacent coal
fields. As night came on, and just before leaving for
Helena, one hundred miles away, where he was to take
a Northern Pacific train for St. Paul, he stood on the
river bank and outlined to me a plan for extending his
railway line westward from the Red River Valley to the
Falls of the Missouri; assuring me that he would build
the proposed road in a shorter time than any road of
equal length had been built on this continent. This
plan, as I have reason to believe, came full fledged from
the brain of this remarkable man and was the result
382

WESTWARD HO!
of what he had seen during that one memorable day.
I can bear testimony to the fact that the plan outlined
to me on that occasion was carried out almost to the
letter. It has ever been my belief since that eventful
day when Mr. Hill saw for the first time the Falls of
the Missouri River and their immediate surroundings,
that no other capitalist and railway builder in the
world could have comprehended at a glance, the resour
ces and the possibilities of this great Rocky Mountain
region; would have dared at this early date in the history
of the Far West to build a railway line through a track
less wilderness then composed largely of Indian reserva
tions. Let it also be understood that, in extending his
road into this unsettled country, he was paralleling
the Northern Pacffic Railway that had been heavily
endowed by the National Government, while his pro
jected line was to be built without the aid of a dollar
from that source. Among the great achievements of
our country, in railway building, this extension of the
Great Northern Railway system from the Red River
VaUey to the FaUs of the Missouri in central Montana
easily stands as the first."
The watchword of the railroad whose destiny Mr. Hill
had planned was "Westward, ho!" Not only was it
policy to conceal this, but a real obstacle had called
a halt. Right across the path were Indian and military
reservations, beginning in northwestern Dakota and
covering most of the country from a little west of Minot 383

THE LIFE OF JAMES J. HILL
to the summit of the Rocky Mountains. Not a foot
of road could be built within this sacred area without
federal permission. The enemies and rivals of the
road succeeded for some time in blocking action by
Congress. Means for the bold dash to Helena had to
be raised and preparation for construction made, while
as yet permission to enter the country was withheld.
In 1886 an Indian reservation extended from a point
not far west of Minot to the White Earth River. The
country from that stream to Fort Buford military res
ervation was public land. From the western limit of
this military reservation to the Marias River ^extended
territory belonging to the Indians, unbroken except
by the reservations of Fort Buford and Fort Assini-
boine. The first legislation to permit the St. Paul,
Minneapolis & Manitoba to cross this country was vetoed
by President Cleveland in 1886, because its terms and the
necessities of the situation were not clearly understood.
But Congress, yielding to the pressure of public opinion
and interest, passed another bill, approved February 15,
1887, by President Cleveland, granting a right of way
through the Indian and military reservations in north
western Dakota and northern Montana.
The right of way granted was seventy-five feet on
each side of the railway track, and included the right
to take materials for the construction of the road from
adjacent lands, and also additional lands for station
purposes, 3,000 feet long and 300 wide, but not to
384

WESTWARD HO!
exceed a grant for one station for each continuous
length of ten miles of road. It provided for appraising
the lands taken and making payment for the same to
the Department of the Interior for the benefit of the
Indians. The damages were assessed by appraisers
selected by the Secretary of the Interior. The amounts
awarded were approved at different times during 1887,
and the money was paid in. A map of the definite
location of the line was adapted and the company
was authorized to proceed with construction. Between
Minot and the east line of the Indian reservation, be
tween the White Earth River and Fort Buford military
reservation, and between the Marias River and Great
Falls the country was public land and was covered by
the general right of way act of March 3, 1875, granting
to railroads a right of way through public lands. The
price paid throughout averaged practically fifty cents
per acre, with some additions where small improve
ments had been made. The country through which the
line would run from Minot to Fort Benton was almost
entirely an unsettled wilderness. Mr. Hill said of it,
many years later: "When we built into northern
Montana, and I want to tell you that it took faith to do
it, from the eastern boundary of the state to Fort
Benton was unceded Indian land; no white man had a
right to put two logs one on top of the other. If he
undertook to remain too long in passing through the
country, he was told to move on. Even when cattle 385

THE LIFE OF JAMES J. HILL
crossed the Missouri River during the first years to
come to our trains, the Indians asked $50 a head for
walking across the land a distance of three miles, and
they wanted an additional amount per head, I don't
remember what it was, for the water they drank in
crossing the Missouri."
To make an end here of the record of obstacles, it
may be added that when the Pacific Extension came to
be constructed from Pacific Junction, the Blackfeet
reservation began at Cut Bank Creek and extended to
the summit of the Rocky Mountains. The greater
part of this lying north of the Marias River was ex
tinguished in May, 1888; excepting Fort Peck, Fort
Belknap, and the present Blackfeet reservation. The
act ratifying this cession authorized the Secretary of
the Interior to grant rights of way over the unceded
parts of the reservation. Under this provision the
right of way for the Pacific Extension over the Black
feet reservation was secured. On March 2, 1899, a
general act was passed granting rights of way for rail
roads through Indian reservations and Indian lands,
after due compensation to the tribes or individual
Indians affected. Mr. Hill said, many years afterward:
"It was hard work to get across the reservation when
we got west of Minot. We had to buy the right of way
from the Government. Other railroads had land grants
and money, but we had to pay for our right of way from
the east side of the Berthold reservation, as it used to be,
386

WESTWARD HO!
up to Havre. But we get through all right." The
appearance of a reservation as an obstacle to railroad
construction seems now to belong to a past so distant
that it is hard to realize what delay, uncertainty, and
expense, in the earlier opening of the country, were
attributable to this cause, and how great enterprises
could be hung up for years at the boundary of a desolate
and unused Indian preserve. When connections should
be established with the cities of Montana and the rail
road construction under way there, it would be but one
stride across the backbone of the continent, and another
over the Cascades and on to the Pacific. But the public
did not believe it was going to be done.
The preliminaries of the westward movement were as
carefully arranged as those of a great battle. Mr. Hill
knew the country well and kept constantly adding to
his stores of information. Volumes of letters in his old
files are bursting with it. He had already arranged for
a strategic occupation of the ground. He said: "I
visited and made personal inspection of various lines on
the ground, examined the country and the soil, water
and climate, and the company spent a very large sum of
money in examining the various locations; practically
made examinations enough, from the international
boundary line south to the Big Hole River, to enable us
to make a model of the Rocky Mountains. We spent,
I think, over eight hundred thousand doUars in surveys
before we did any work at all." 387

THE LIFE OF JAMES J. HILL
The time was not ripe to disclose anything to
either his railroad rivals or his own stockholders.
Therefore he had long before gone quietly to work,
with and through a small number of personal friends,
to lay a foundation. In January, 1886, the Mon
tana Central Railroad Company was organized,
ostensibly to connect the new town of Great Falls
with Helena, Butte, and any other points in the
territory that it might elect. It issued $5,000,000 of
stock and in May, 1887, the issue of $10,000,000 bonds
was authorized. At the same meeting the directors
entered into an agreement with Mr. Hill "to evidence
in the main and to supersede a verbal contract between
the parties long since made and partly executed," by
which he was to furnish, in addition to past advances,
the money necessary to construct and equip the line,
and was to receive the stock and bonds of the com
pany in exchange. The Montana Central was, to
all intents and purposes, James J. Hill. It was organ
ized to occupy the Montana field until the Manitoba
should be ready for the rush westward from Minot,
which was to break the world's record for railroad
building. When Mr. Hill should be ready for that per
formance, from which the.Indian reservation still barred
him, he proposed to fall into friendly hands at the
Montana end. So he arranged that those hands should
be his own. But let it be perfectly understood that in
this he was not acting for his personal interest or profit.
388

WESTWARD HO!
He was acting, in the fashion that seemed most prudent,
for the railroad; and by August of the same year the
Manitoba Company had taken over and assumed the
agreement that he had entered into with the Montana
Central. Neither did he leave any loose ends behind him.
The old lines of the Manitoba had been revolutionized.
The whole system was being made to conform to that
definite standard of construction which was dictated
to Mr. Hill's mind by relative cost of operation. The
following, from a letter dated April 9, 1884, described
what was being done: "During the last two years we
have spent a great deal of money for steel rails, bal
lasting track, transfer yards, terminal facilities, new
equipment, new shops, and in fact have put the road in
better condition than any railway similarly situated
that I know of in the West, and consequently are to
day enabled to operate our road at a lower rate of ex
pense. We have now more than one thousand miles
with a 26-foot maximum grade and only 220 miles
with more than a 30-foot maximum grade. The latter
we expect to r^uce to 26- and 30-foot maximum within
the next two years. When this is done no railway in
the world of one thousand miles or more will have the
same low gradients." One cannot recur too often to
this principle of construction, or emphasize it too
strongly; because, while it was the keystone of Mr. HiU's
policy as railroad buUder and manager, and is univer- 389

THE LIFE OF JAMES J. HILL
sally accepted to-day, it was neither commonly recog
nized nor followed at the date which this story has
reached. Railroads in the Far West were built more or
less at haphazard, between points where there seemed
to be a good opportunity to get business. The line
once determined, first construction was left mostly
to contractors or construction companies, who looked
after their own interests. Operation was a matter of
mechanical routine. The relation of construction to
competition, to future rate policies and to economic
development seemed too remote and technical to
bother the brains of financiers and "magnates," as they
were beginning to be called. But these were pivotal
facts for Mr. HiU.
He wrote, about this time, to Mr. Kennedy: "I
think our policy should be to build only such branches
or new lines as we are sure will prove good; and by cut
ting down our grades, etc., put the whole road in con
dition to give such low rates that opposition enterprises
must be bankrupted. We are now assuming this
position; and that while, I believe, materially bettering
and strengthening the property." And to Marcus
Daly, at Butte, near the same date: "When our lines
are completed through to your place we hope to be able
to furnish you all the transportation you want, both
through and local, at such rates as will enable you to
largely increase your business. What we want over our
low grades is a heavy tonnage; and the heavier it is,
390

WESTWARD HO!
the lower we can make the rates." Here is the exposi
tion, from both points of view — that of owner and
operator and that of customer — of the principle on
which he relied to make railroads, settlers, and business
enterprises cooperate in buUding up the country and
bringing steady and increasing prosperity to all. If
every management had been guided by this principle —
the lower the rate that can be made with justice to the
property, the greater will be the final profits of the
owners — not only the railroad history but the political
history of this country would have been profoundly
changed. Controversies might have been avoided
which materially affected public life for more than
a generation, and lessened that belief in individual re
sponsibility and that fear of paternalistic government
so strongly present to the minds of the founders of
this republic, and intended by them to be permanently
incorporated in their work.
These major operations no more interfered with a
careful survey of the field already covered and its needs
than an engagement in front prevents a good general
from guarding his flanks and keeping his lines of com
munication open. In 1883 Mr. Hill had taken steps
to provide, at a point between St. Paul and Min
neapolis, for the interchange of freight between East
and Northwest. Long afterward he said that a rail
road without adequate terminals is like a man without
arms or legs. A few years before the end of his life 391

THE LIFE OF JAMES J. HILL
he made an elaborate study of the terminal problem
on the Atlantic seaboard, and made suggestions and
recommendations whose wisdom the years will justify.
One of the most attractive features to him of the old
St. Paul & Pacific was the ample terminal facihties
belonging to it in St. Paul, and he was willing to share
them so long as he felt that he retained a liberal pro
vision against future needs. The St. Paul Union Depot
Company was incorporated in 1879, the Minneapohs
Union RaUway Company in 1881. For the former Mr.
Hill was helping, at the time of his death, to plan a
modern passenger station on an elaborate scale. At
Minneapolis the "Manitoba" passenger depot was
completed in 1885, and used until 1914, when the
new Great Northern depot was put in operation.
He foresaw a congestion of freight in what were long
afterward called the Twin Cities, when half a dozen lines
between" them and Chicago and four transcontinentals
should have to break up and re-form their freight trains
at this point. Therefore, he promoted the organization
of what was nothing but a great clearing house for the
exchange of freight cars . This was the Minnesota Trans
fer, located midway between the two cities. It was in
corporated March 22, 1883, and became later the
property of nine railway systems. Without it,
there would be chronic and deadly congestion of
traffic at this centre. It owed its origin to the
vision and energy of Mr. HiU. Looking back upon
392

WESTWARD HO!
this work in 1907, he said, "I started the Minne
sota Transfer years ago. People found fault with me.
Both St. Paul people and Minneapolis people said that
it was going out of the city to establish something out
side. I bought the property and carried it for about a
year; bought it at $175 to $250 an acre. Some real
estate men thought that it was going to be everything,
that the railroad was going to move out there, and they
got prices up to $700 or $800 an acre. Then the other
roads thought it was a good thing to come in, and I
turned it over to them at what it cost, with 6 per cent.
interest, and that made the Minnesota Transfer. That
was a cheap place, and to-day it is a railroad clearing
house; and it saves immense amounts of money, because
the transfers are made out there and it is done on ground
that is not too expensive. You couldn't come into the
cities and do it, for you couldn't find a level place where
all the roads could get together." In 1916 more than
700,000 cars of merchandise were handled in these
transfer yards. This is one of the most telling of all
the vindications time has given to the foresight and
prudent care for the future that were so characteristic
of Mr. HiU. In 1885 and 1886 were organized the
WiUmar & Sioux Falls RaUway Company and the
Duluth, Watertown & Pacffic; the latter incorporated
ambitiously to build from Duluth to Cheyenne, Wyom
ing, which were later gathered into the fold of the
"Manitoba" and the Great Northern. 393

THE LIFE OF JAMES J. HILL
Now foUowed the wild flight of the Manitoba sys
tem, so soon as the Indian reservation bars were let
down, to a connection with the Montana Central,
which was to bring it more prominently to the front
than ever as a model of energy and daring, and to con
firm in the public eye its transcontinental purpose.
Financial and other details, which would embarrass
the story at this point, will be reserved for a succeeding
chapter. The word, "Westward, ho!" was passed
along. Small lines were being bought and branches
built every year to round out the system at its base
in Minnesota and Dakota. Out as far as Minot the
main line streaked the lonely prairie. In August,
1886, official notice was taken of the mooted prog
ramme in the adoption by the stockholders of the
following: "Whereas, the president has called the attention of
the meeting to the rapid settlement and increase of busi
ness in the Territory of Montana which appears to be
of great interest to this company;
" Resolved, That the Board of Directors be and hereby
are directed to take such steps as they may be advised
with a view to ascertaining the volume and probable
value of the business liable to originate on the Montana
Central Railway and the territory tributary thereto,
and whether it would be expedient for this company
to secure a connection with the said Montana Central
Railway with the view of securing said business and to
394

WESTWARD HO!
take such action as they may deem best for the interests
of this company."
By the middle of December the committee appointed
under this resolution was ready to report that, " taking
the Montana Central as a whole, we consider it won
derfully well conceived, and it has secured what
appears to us the only available route between Helena
and the navigable waters of the Missouri River." The
occupying of that route had been the result of a silent
battle between the scouts of the three great railroad
systems interested in this region, as real and grim as
encounters between outposts of hostile armies. The
strategy and the movement had both been directed by
Mr. Hill from his stronghold in St. Paul and on re
peated visits through the wild country to the front.
The committee recommended, of course, in the strong
est terms, the extensions of the Manitoba to a con
nection with the Montana Central, and the purchase of
the latter "if it can be brought about"; a whim
sical condition when it is remembered that the same
person who dictated the resolution had the poten
tial control of the Montana Central tucked away him
self. To its many good and sufficient reasons the com
mittee added the following statement: "It was stated
to us as a fact, the truth of which we have no reason to
question, that for some years the Union Pacific Railroad
Company has paid the Northern Pacific the enormous
bonus of $500,000 per annum in cash, in order to prevent 395

THE LIFE OF JAMES J. HILL
it from building a branch line to Butte, and thus enable
it to retain a monopoly of that region via its Utah
Northern Branch. That is the interest on $10,000,000
at 5 per cent, per annum, and that one fact alone shows
the value of a railroad connection with that city."
The die was now cast, the policy settled and con
fessed, the way prepared. But the actual achievement
of closing the gap which still existed between the
terminus of the Manitoba on the plains in 1886 and the
cities of Helena and Great Falls was to write a new
chapter in the history of railroad construction. The
Montana Central itseK had set no poor example. To
forestall the Northern Pacific, the company commenced
active operations from the moment it was incor
porated. During the coldest weather and through
the deepest snows of winter, the line was surveyed;
and as soon as the surveys were run, building com
menced. The line of the Manitoba in 1886 had
reached Minot, 530 miles from St. Paul. The work
cut out for it the following season was to grade over
550 miles of railroad to reach Great Falls, to put in the
bridging and mechanical structures, to haul ahead of the
track by teams all material brought up by rail, so as not
to delay progress, and to lay and put down in good con
dition the rails continuously and from one end only.
The same contractors who had made a record in the
building of the Canadian Pacific were employed here.
Mr. Hill knew what could be done, and he exacted it
396

WESTWARD HO!
mercilessly. The contractors, with experience to guide
them, knew just what to do, and could improve on their
own past. Grading and bridging having been done in ad
vance, the rails could be shot out and spiked down with
amazing rapidity. Mr. D. C. Shepard, the chief con
tractor, has preserved in a memoir a concise description
of this performance as an engineering feat : "In the year
1887 our firm constructed 1,175 miles of railroad, of which
the remarkably rapid construction of the St. Paul, Min
neapolis & Manitoba Railway from Minot to Helena
formed a part. The track laying on this great work was
commenced five miles west of Minot, April 1, and was
completed to Helena November 18, 1887, a distance of
643 miles and at an average rate for each working day of 3 j
mUes. Five hundred miles of this distance remained on
April 1, 1887, to be graded and bridged ahead of the track
layers, and this work was completed September 1, 1887,
at the average rate of one hundred miles per month.
From the mouth of Milk River to Great FaUs (200
miles) the grading progressed at the rate of seven mUes
per day. In preparing this roadbed for the track there
were moved 9,700,000 cubic yards of earth, 15,000
cubic yards of loose rock, and 17,500 cubic yards of
solid rock. Nine million feet, board measure, of timber
and 300,000 lineal feet of piling were hauled ahead of
the track and placed in the work. The force employed
on the grading was 3,300 teams and 8,000 men, and on
the track laying and timber work 225 teams and 650 397

THE LIFE OF JAMES J. HILL
men. On July 16, 7 miles and 1,040 feet, and on
August 8, 8 mUes and 60 feet of track were laid by
the regular gang, without increase in number. An
iron car axle broke at 4 p. M. on the last date, causing
a delay sufficient to have laid one haff to one mile more
track had it not occurred. It is true that no railroad
has yet been constructed as rapidly as this where the
work could be reached and carried on only from one
end, and it is very doubtful whether 643 continuous
miles of track will ever be laid again in seven and one
half months at the average of 3J miles per day for each
working day and by one gang. The record of progress
by months is as follows, the distances given being those
west of Minot: April 2, 2 miles; May 1, 35.1; June
1, 111.1; July 1, 191.7; August 1, 292.3; September
1, 407.5; October 1, 509.3; October 15, 549.75. The
largest month's record was in August, and the
largest week of any seven days was from August 6
to 13 inclusive, 32.5 miles being laid. The largest
individual day's work was that gigantic record of August
11, when 42,400 feet were laid between daybreak and
dark, the end of the track being 325.6 miles from Minot
in the morning and 333.8 miles from Minot at night."
Mr. HiU himself said: "It was a long and hard sum
mer's work. A great many people called it my folly.
It was a burden at that time to be even criticised with a
small degree of hospitality. Money was not so plenti
ful. Our country was newer, our ability to handle our
398

WESTWARD HO!
enterprise greatly limited to what it has become since
then. After the road was finished to Helena it was
five years before it earned a dollar toward paying
returns on the capital invested. A railroad to be suc
cessful must have tons of freight to move. At that time
wheat was the chief tonnage. I remember an unfriendly
critic writing for a magazine in the East said the only
thing the country produced was buffalo bones, and when
they were all hauled out of the country there would be
nothing left to haul and it would go back to the Indian."
A year later he reported upon the performance of
the completed work. As always, the method of build
ing, with relation to operation, came first in his
thought. "Reference has heretofore been made to the
exceptional character of this line as to grades and
curvature. With the exception of 18 miles of tem
porary line the maximum is 31.7 feet to the mile,
and on about 400 miles of the 550 from Minot to Great
Falls the maximum is only 21 feet to the mile."
In like manner he noted that the line from Helena to
Butte "is laid with steel rails of seventy-five pounds
per yard section, and white oak ties have been laid on
all the curves." He built for permanence, but he built
also to carry business. A branch line of the Montana
Central had been extended to Sand Coulee, where there
were mines of coal excellent for both steam and domes
tic uses. "When these mines are sufficiently developed
to meet the present demand of the public, they will 399

THE LIFE OF JAMES J. HILL
afford a large traffic for both companies, and effect a
large saving in the fuel required for their own engines,
for depots, and other purposes." Early in 1888, as
noted elsewhere, the Manitoba Company acquired the
entire capital stock of the Montana Central Company,
and $2,500,000 of its first mortgage bonds, upon the
basis of the actual cost of the property.
This is the old story of some apparently chimerical
enterprise completed by Mr. Hill and almost instantly
blooming as if by magic into a highly prosperous and
profitable affair. To those who had hooted at the Far
Western venture he could now say, almost at the moment
of first trial: "The great value to the company of its
Montana lines has received prompt demonstration in
the traffic already developing along the line of the
Montana extensions. With the development of the
industries which the stimulating effect of these new
lines is sure to bring about within the next year or two,
the company's traffic will rest upon a solid basis, not
to be materially affected by the fate of any one grain
crop." Only one year later Montana coal was finding
a market 600 miles eastward on the company's line
and furnishing more than 40 per cent, of the coal used by
it. These developments were a revelation at that time
to people who knew little about that portion of the coun
try, who scoffed at the idea of building up business
through it, and who still held tenaciously to the fittingly
aboriginal theory of a traffic limited to buffalo bones.
400

WESTWARD HO!
The dominating idea of the work was now revealed
to all who cared to look, and the greater part of it had
been accomplished. A year before Mr. Kennedy had
written, " People all seem to be waking up to the idea
that sooner or later we will become a transcontinental
line." A long stride toward it had been taken. But
faith was even now more easily instilled and firmly held
at the East than at the West. Out in his own country
people still thought Mr. HiU's transcontinental plan
visionary; still believed, as they did when the deal was
made with the Dutch Committee for those old bonds,
that his enthusiasm ran away with his judgment. But
none of them, with his line at Helena and Great Falls,
ought to have doubted any longer what he had in mind.
Whatever might be the folly of building through to the
Coast, it would not compare with the folly of building
into the mountains and leaving the line up there in the
air, a thousand miles from anywhere. The gap remain
ing would certainly be crossed. But how about the
base of supplies? What was by this time the financial
condition of a system which had been obliged to pour
out money like water for new lines and old? Records
are not broken without paying for the distinction.
And what else was happening in the life of Mr. Hill
in these years besides the daily drudgery and daily
enthusiasms — ^hardly distinguishable in his mind from
each other — of his work on and for the railroad?

401

CHAPTER NINETEEN
A PEAK IN DARIEN
AS FROM his peak in Darien the explorer saw the re
ward of his life's efforts, so Mr. Hill could now rest for a
moment on the mountain peak that his railroad had
surmounted and realize the sure achievement of his
long ambition. Plans were already under way for
building on to the Pacific. This must needs be more
leisurely, for construction through the mountain coun
try would be difficult and costly. On the other hand,
mystery and haste might both be dismissed, because
there were no longer any lions in the path. The opposi
tion which had hoped to exclude a rival from the
traffic-producing centres of Montana could not inter
pose between Great Falls and the shore of Puget Sound.
Already the mountain passes to be followed had been ex
amined and selected, though where they lay was hidden
in Mr. HiU's secret counsels. There were plenty of avail
able Pacific terminal points ready not merely to wel
come the new railroad but to offer it substantial induce
ments. The march of conquest was over. The coun
try was open for occupation. The time had come to
compact old interests; to create or foster new ones that,
though highly important, had been secondary up to this
402

A PEAK IN DARIEN
point to the main railroad theme; and to prepare an
organization adequate to the future of a transcontinen
tal system which was to be not merely a connecting link
between the Great Lakes and the Pacific Ocean, but
the creator of a new zone of production for which it
would supply at either end a sufficient outlet. Other
vast plans, affecting the commerce of the world, as
yet perhaps mere adumbrations of the future rather
than definitely shaped, could be seen dimly against
the distant skyline. It will be weU to rest a moment
on the Montana heights, till the light grows stronger,
and see what else of interest in this life took place in the
years between 1883 and 1888.
The most important thing next to operation and
construction, the thing, indeed, without which the
latter would have had to pause, irresolute, was the
financing of the system. Mr. Hill had worked thus
far on a plan which involved enormous care of detail,
but was correspondingly secure against the shock of any
widespread single disturbance. So far as possible,
the subsidiary lines whose ownership or control seemed
desirable were obtained by a guarantee of bonds, which
usually carried with it control of capital stock, or made
it obtainable on very easy terms. Out of these bond
proceeds the little lines were built. Then those who
held the stock began to look about them for a purchaser.
In that transaction they would make their profit. In
those times finance flew low, so far as totals were con- 403

THE LIFE OF JAMES J. HILL
cerned. Mr. Hill was always a good trader. He
watched his field and bided his time. When a line was
in difficulties, he gathered it in. When a competitor
could have used it, those in control and possession hap
pened astonishingly often to be friendly to the St. Paul,
Minneapolis & Manitoba. As in the case of the Mon
tana Central, unsuspected third parties, wearing no
badges, organized a new company somewhere, apparently
to build a bit of road locally desirable. Later on it
would be brought into the fold. In this way the old
Manitoba Company, with all its limitations, had carried
its continually growing burden up to this date; but it
called for careful and intelligent financing.
Of the $50,000,000 consolidated bonds authorized in
1883, it will be remembered that $20,000,000 were
available, after clearing off all funded and floating debt,
for future construction and were to be issued as needed.
A comparatively small amount would suffice; because
these unacknowledged subsidiary companies put out
their own securities. When they were taken over
formally, only a guarantee of their bonds, which re
mained outstanding, was called for. This was an
extremely convenient fiscal scheme for a growing sys
tem that needed plenty of cash and could not yet
estimate its total requirements or cast its future into
rigid form. The Dakota extensions had carried their
own mortgages. So did the Montana Central. So did
the company organized on the same plan to prosecute
404

A PEAK IN DARIEN
operations from Everett and Seattle. The parent com
pany could wear light armour if it desired. But Mr.
HiU never scamped the margin of financial safety or
neglected an undefended point. Indeed, the student of
either his earlier or his later career is often undetermined
whether to give the palm to his work as a railroad
builder and traffic director, or to assign it to his finan
cial previsions and triumphs. For these latter were not
born of dealing with huge sums in cash and credits
after his enterprise had succeeded. They run back to
early origins. How he handled the Dutch Committee,
how he valued and scheduled every item of the pur
chase, how he framed the original financial plan and
guarded the credit of the company as another man
would watch over his private cash box, how he dis
couraged speculators from going gunning after Mani
toba stock in Wall Street, has been told. Now, in
order that the company might be provided against any
contingencies, that it might not again have to hold
back the profits of its stockholders and use them for
current expense, he established the reserve fund which
became, for the time, to the Manitoba what the balance
wheel is to the engine or a reservoir to a city water
supply. He recommended this in his report of June, 1884:
"In view of the large expenditures that require to be
made from time to time for replacement of iron with
steel, purchases of equipment, and other permanent 405

THE LIFE OF JAMES J. HILL
improvements, it has been deemed wise by the directors
to set aside a fund to specially provide for these extraor
dinary expenses when they occur, and it is their inten
tion in the future to set apart therein each year such
sum as the earnings of the road will justify, until this is
ample for any contingency." In December of the same
year this was carried formally into effect by the director
ate. After providing for fixed charges and a dividend
of 6 per cent, on capital, all surplus income was
to be placed to the credit of a "Reserve Guarantee
Fund," until the total should amount to two and a
half million dollars. This amount was held perpetually
at command; one million being in bonds of the company,
and the remainder in cash or securities at the option of
the board. It was a dreadnaught of immense of
fensive and defensive power in a time when raihoad
managements generally were willing to live from hand
to mouth; little able to resist the temptation to distrib
ute all surplus revenue immediately, and hence almost
unprotected against a surprise attack.
Many men of wealth and position in different parts
of the world were stockholders in the St. Paul, Minne
apolis & Manitoba. Many others were being attracted
toward it as investors. The connection with the Bank
of Montreal and, through that, with high finan
cial authorities in London, had brought it to Enghsh
notice and secured for it the confidence of an important
circle of English capitalists. The Dutch bankers, who
406

A PEAK IN DARIEN
had got their money, foUowed with a regretful and con
fiding eye the property which they had sold. German
capital was now pouring into New York through houses
with German affiliations that founded some of the great
est American financial concerns of to-day. / They had
taken a hand in Northern Pacific. They were astute
enough to see a still better investment in this new line,
which had the Northern Pacific beaten in advance from
an operating standpoint, and whose financial record
was so much more promising. Mr. Hill personally
had made himself and his plans known during some hur
ried visits to Europe. Among people of wealth and in
fluence his achievements distinguished him, and his pow
erful personality drew and held men. From this time
date real friendships with investors and others,not merely
among the big monetary concerns, but with individuals
important officially, personally, and through business or
family connections in high financial circles. His project
was alluring and looked sound. This man, with his big
brain, his prophetic gift, his Napoleonic eye, inspired at the
same time business confidence and personal attachment.
The colonization of the stock of a new enterprise,
in the eighties, when there were not such agencies for
distributing securities as exist to-day, and when much
of the investing public was old-fashioned, distrustful,
and ignorant of important developments, was as big
a task as the colonization of the land through which
it ran its line. Like the land, it had to be advertised 407

THE LIFE OF JAMES J. HILL
until its merits were known. Like that, it had to be
broken up into small parcels and scattered among small
investors as a permanent possession. Big money
would be necessary to carry out the plans of Mr. Hill
from this time forward. He proposed a reversal of the
order of procedure hitherto followed in their financing.
In a letter to Mr. Kennedy in October, 1886, with refer
ence to plans for a coming bond issue, he said : "All our
rivals that are building new lines provided their money
first and did the work afterward. We have done our
work first and provided the money afterward; and the
result is that our rivals have done better than we. Do
not let us repeat the mistake." At about the same
time, in these counsels for the future, Mr. Kennedy
wrote to Mr. Hill: "My confidence in your judgment
and integrity is such that I am ready to the extent of my
ability to go into anything which you ask me to, in
which you are yourself interested, and of which you
have the controlling direction." It would be difficult
to frame a higher tribute. But one must have known
Mr. Kennedy, rigid, punctilious to the limit in matters
of financial honour, exacting and rigorous as only the
canniest of Scotch Presbyterians can be, to measure
the full force of this compliment to a man with whom
he had now been in close business association for nearly
ten years, in affairs of infinite opportunities for slack
ness in management, and endless openings, difficult
of detection, for turning the common interest to private
408

A PEAK IN DARIEN
advantage. Twenty-five years more of such associa
tion were only to cement the relation more closely.
The public advertisement of an issue of $5,100,000 gold
4| percent, bonds offered in 1886 carried this information
as to the value of the property and its assets: "The St.
Paul, Minneapolis & Manitoba Railway Company has a
system of 1,509 miles of completed road, with 340 miles
additional under construction and about finished.
Capital $20,000,000, funded debt of $32,636,000 and no
floating debt. Consolidated mortgage is limited to
$50,000,000 and all future issues under it are in exchange
for bonds already outstanding or for construction or
acquirement of additional track at the rate of $15,000
per mUe for each mile of single or $27,000 of double track.
These bonds have the further security of the land grant,
amounting to about 2,289,000 acres, subject only to the
first mortgage bonds of which there remain outstanding
$5,250,000. Land sales during last fiscal year averaged
$5.30 per acre. Consolidated bonds so far issued bear
6 per cent, interest, but this issue bear 4| per cent."
These bonds were to provide for new mileage; and sub
scriptions were called for at 98f per cent, and accrued
interest to date of delivery. A loan at this high price
and low rate of interest might well be offered with some
misgivings. No wonder that Mr. Kennedy was jubilant
next day when he could write, "I have just learned that
the loan has met with great success, and at this writing
— 1 :30 p. M.' — two and a half millions of the bonds have 409

THE LIFE OF .lAMES J. HILL
actually been sold in New York at the price named in
the advertisement." And four days later, "Just a line to
say that Mr. Schiff, of Kuhn, Loeb & Co., called on me
a little while ago to say that he had received cable ad
vices from Berlin this morning that the haff of the
$5,100,000 of 4J per cent, bonds set aside for Europe
had been applied for there five or six times over and his
correspondents were puzzled what to do about it."
The credit of the new company was now fixed beyond
peradventure in all the great financial centres of the
world. Not a bad seven years' work; and a base of
operations not to be despised in the big financial re
organizations that Mr. Hill could see stretching out be
fore him in ever- widening circles through years to come.
Montana construction was financed as that of the
Dakotas had been. On March 15, 1887, a bond issue of
$25,000,000 was authorized on the lines built in the
former territory, not to exceed $25,000 per mile of
single or $40,000 of double track. Of this, $7,000,000
were to be issued at once and offered to Manitoba
stockholders at 80 per cent. flat. The scrupulous
care with which Mr. Hill conducted this transaction
appears wherever his personal interest and that of the
company were in any way involved together. He
could not, while the preliminary work was going on,
trust any one else with control of an enterprise essen
tial to his own. He had to be the Montana Central
himself, just as it had later to be incorporated with the
410

A PEAK IN DARIEN
Manitoba. Now that the transfer must be made, he
wanted no misunderstandings. In a circular sent by
him to the stockholders in advance of the meeting of
August, 1887, where the purchase of the Montana Cen
tral was to be ratified, Mr. HiU spoke very plainly his
conviction: "The question of the acquisition by the
company of an interest in the Montana Central Rail
way Company, its capital stock or securities, and the
terms thereof, will be brought before the meeting for
its action. As the capital stock and securities of the
Montana Central Railway Company are at present
owned by me individually, and as the representative
of other parties associated with me in the enterprise
(some of whom are also officers and stockholders of the
company), and I must consequently be a party to the
transaction, if made, and personally interested in it
for myself and my associates, a full representation of
the stockholders of this company at the meeting, and
their intelligent action upon the matter is especially
desired." Of course the purchase was made; and the
man who had signed, in fear and trembling, with three
associates, nine years before, a note for $280,000 now
turned over to the company which assumed his obliga
tions and guaranteed the bonds, 40,000 shares of the
Montana Central, $2,500,000 of its 6 per cent, bonds,
and all the remainder of its capital stock that he did not
require to discharge obligations already entered into.
Although the purchase of small lines that might be
411

THE LIFE OF JAMES J. HILL
useful to the system or dangerous in the hands of an
enemy, and the building of feeders went on, their
finances were easily handled. Except for the issue of
$8,000,000 of coUateral trust bonds in the same year,
this was the last considerable financial transaction m
which the St. Paulj Minneapolis & Manitoba Company
engaged. The Great Northern was about to fiU a
larger place and furnish a base for responsibilities cor
respondingly enlarged. From this year also the inter
est on all consolidated bonds remained at 4 J per cent.,
the extraordinarily low rate to which the security and
prosperity of the system now entitled it, as experience
had proved, in the esteem of investors.
That prosperity and security were matters of official
record. The record deserves a place here, because it
really embodies the achievements of one man. Helped
though he was by able assistants, the planning and
the execution, in all but unessential details, were
the work of James J. HiU. The official record for
the fiscal year 1887 sums up tremendous operations:
"The new mileage under construction within the
period covered by the fiscal year ending June 30,
and the residue of the calendar year 1887, including
both what has been and what will be graded, but not
supplied with superstructure within that period,
amounts to the relatively large quantity of 1,443.97
miles, or 95.5 per cent, of the mileage under operation
at the beginning of the same fiscal year." The fol-
412

A PEAK IN DARIEN
lowing statement, made by Mr. Hill in November of this
year to Mr. Kennedy, to be read by members of the
board as an explanation of how the large sums of money
raised within the last two years had been disposed of,
sums up the financing of this time of record-breaking
construction :
We had. May, 1, 1886, in cash from proceeds of con
solidated bonds  $1,400,000
Consols sold, including options $12,100,000 at 91§ . . . . 11,555,500
Minneapolis Depot Bonds  500,000
Montana Extension Bonds, $7,000,000 at 80 . . . 5,600,000
Surplus earnings, say  750,000
Total  $19,805,500
Out of this we have bought and paid for a number of properties,
which, while they are most valuable to the company, are not a part
of the new lines or even in some cases of the old, as follows :
Land Contracts  $500,000
Minneapolis Union Depot property  320,000
New ground for elevators at Minneapolis and near
right of way, and new depot grounds at St. Paul,
Minneapolis and St. Cloud  200,000
New General Office, land and building  225,000
Lake Superior & Southwestern Ry., elevator, docks
and land  520,000
New Equipment  1,780,000
Montana Central  1,350,000
Grading completed this fall  1,150,000
New work, cuttings, grades, etc  650,000
Total  $6,695,000
Total received  $19,805,500
Less above  6,695,000
Cost of road  $13,110,500 413

THE LIFE OF JAMES J. HILL
Eight hundred and eight miles of consolidated lines con
structed, plus 410 miles of Montana Central, or 1,218 miles at
$10,760 per mile, equals $13,105,680. The above figures are in
round numbers, and a correct detailed statement would add fully
$200,000 more to the purchase and reduce the cost of all new lines
to about $10,500 per mile. All of the above properties are worth
much more than they cost, and the Montana Central and Lake
Superior properties will very soon add several millions to the values
of the company's property. This will give the board some idea
of the disposition of the large sums of money raised by the com
pany during the last two seasons.
As indicated by one of these items, the Manitoba had
freed itseff from the necessity temporarily assumed of
participating in the ownership of the St. Paul & Duluth.
It had established its own connection with the head of
the lakes. This part of the plan had always seemed of
vital importance to Mr. Hill. The link from St. Cloud
to Hinckley having been completed, as noted in a
previous chapter, it was necessary to get from Hinckley
to the head of Lake Superior over a line of his own.
Other companies were trying or pretending to try to
get into Duluth from the southwest, and so occupy or tie
up facilities for entrance and terminals. Mr. Hill kept
a jealous eye on this position. Referring to these
outside schemes, he wrote to Mr. Kennedy, with a
characteristic grim jocularity: "Of course, you wiU
understand that we are watching all these enterprises
closely; and, while we give them no encouragement, we
keep our place. So that, if anything should occur to
give them the breath of life, we will be around at the
414

A PEAK IN DARIEN
christening." The Lake Superior & Southwestern was
one of the old charters which had been granted freely
in the days when the people were mad for railroads.
Nobody now knew when and where one might turn up.
It had been acquired by Mr. Hill for the Manitoba,
and included elevator and terminal facilities at West
Superior, across the bay from Duluth, and really
one with it in commercial importance and value. In
1886 contracts were let for the building of a dock and
slip at West Superior, in connection with an elevator
of 1,800,000 bushels capacity. From this grew up in
later years the magnificent terminal facilities of the Great
Northern at the head of the lakes which, for efficient
operation, have no superior in the world. Then, in
1887, the Eastern Railway of Minnesota was organized,
just as the other subsidiaries had been, to take over
this property, and to build from Hinckley to a point
near the mouth of the St. Louis River. The Mani
toba had now its own direct connection, both from the
principal cities of Minnesota and from its whole western
territory, over its own lines, with the head of navigation
on the Great Lakes. This Eastern Railway Company
of Minnesota remained one of the most important
subordinate agencies for helping along other projects.
From time to time it acquired and held properties in
the region at the head of the lakes that were profitable
in themselves, or necessary to the future of the Mani
toba Company, or both. In 1898 it issued $15,000,000 415

THE LIFE OF JAMES J. HILL
bonds to build to Fosston, making the direct north
western line that was to serve the interests of the
future Great Northern. By its own steamships, to be
mentioned presently, the Manitoba could carry its
own freight as far as Buffalo and benefit by competitive
rates to tidewater. It was no longer at anybody's
mercy. The following record of this last transaction,
of the utmost importance as adding virtually the lake
waterway and the Erie Canal to the facilities of the
Great Northern, is from the annual report of the St.
Paul, Minneapolis & Manitoba for 1888:
"There was organized last year the Eastern Railway
Company of Minnesota, which, in January last, ab
sorbed by consolidation all the property and capital
stock of the Lake Superior and Southwestern Railway
Company, of Wisconsin, till then owned by this com
pany. The Eastern has constructed and put in opera
tion a line of railway from Hinckley, Minnesota, to
West Superior, Wisconsin, 69 miles, with steel rails
weighing 75 pounds per yard. Its terminals in West
Superior cover 275 acres of land, with nearly 1,500
feet frontage on the dock line, and running two
and a half miles back. It has one filled dock,
averaging 1,800 feet long and 265 feet wide; also
a pile dock 96 feet wide by 1,500 feet long, on
which are four warehouses, each 48 feet wide
and aggregating a quarter of a mile in length. The
Eastern owns the Great Northern elevator, so-called,
416

A PEAK IN DARIEN
with capacity for 1,800,000 bushels of grain, and is
completing a second elevator with capacity for
1,500,000 bushels. This company owns the capital
stock of the Eastern company."
The failure of Mr. HiU's rivals and competitors, even
the ablest, through all these years to appreciate his plans
and measure his capacity proved and paid tribute to
his greatness . It was excusable to mistake him, when he
first appeared in chase of the St. Paul & Pacific, for one
of those adventurers common in the railroad schemes of
the time. It would scarcely be reasonable to blame
others for not gauging accurately qualities which had
not yet fully revealed themselves. But those who had
run up against him in business should have learned some
thing about him by this time. Ten years had passed
since the purchase from the Dutch Committee. Events
whose relation still has power to stir the blood had
happened in the meantime. Yet most of his contem
poraries, even those whose interest it was to form keen
and accurate judgments, buzzed about his plans like
flies trying to get through a window pane. They had
said that the St. Paul & Pacific was worthless; and saw
it develop into a paying property with a credit basis
sufiicient for any expansion desired. They had said that
Mr. Hill was building through a country fit for nothing
but the Indian; and saw immigration pouring into it and
wealth increasing there as if by magic. They had said
that the Pacific extension of the line was an impossible 417

THE LIFE OF JAMES J. HILL
dream; and saw it about to be realized. They had said
there was little to fear from a line ending at St. Paul
and Minneapolis. This was, indeed, for a time, the
worst bugbear in the popular imagination . Chicago was
more than four hundred miles distant; while two systems
operating in western territory, the Chicago & Northwest
ern and the Chicago, Milwaukee & St. Paul, had their
own through lines to that city. Lake Superior was a long
way off; and, when one got there, he must take his
chances with a water connection inadequate at the
time to handle the business. In fact, the other people
whose interests were threatened by the growing power of
the Manitoba thought they had it bottled up. They
smiled blandly and slept well.
Mr. Hill had made his plans for eastern connec
tions just as carefully as for a western extension. He
did not intend to take such terms as his rivals might
graciously concede to him for the carriage of busi
ness between St. Paul and Chicago, or to be at
the mercy of the trunk lines between Chicago and New
York. He had been busy in the whole eastern field.
In 1886 three trunk lines were completed between
Chicago and St. Paul. Capital had awakened to the
magnitude of the business of the Northwest. These
railroads must, of course, reach Minneapolis also; and
the splendid track and stone bridge of the Mani
toba gave them opportunity. A year later, so great
had the pressure become upon its interurban facilities,
418

A PEAK IN DARIEN
four tracks took the place of two. But the interesting
thing now is that one of these new lines running up
from Chicago, quietly encouraged by Mr. Hill, was the
Chicago, Burlington & Northern, operating as a part
of the Chicago, Burlington & Quincy system. That
system, already the most powerful in the Middle West,
deemed it wise to be ready to receive business at the
Minnesota transfer point, lest the amount turned over
to it when the stuff reached Chicago might become
negligible. It was an enterprise undertaken to a large
extent under the advice and with the friendly interest
of Mr. Hill. There was an understanding between him
and the Burlington management. He would at least
give this line a helping hand as to merchandise billed
through to Chicago and the interior West over the
Manitoba from far western shipping points, and not
ordered forwarded by any special route beyond St.
Paul. The Burlington & Northern made an agreement
officially with the Manitoba for the use not only of its
tracks to Minneapolis, but of its railroad yards also.
It was an alliance practically equal to an extension of
the Manitoba from St. Paul to Chicago, since one good
turn would deserve another. But the man who should
have said then that the new and small system would one
day absorb the big one, among the oldest, solidest, and
most profitable railroad companies in the United States,
would have been thought mad. If Mr. Hill, even then,
had any vision of that far future, he gave no hint of it. 419

THE LIFE OF JAMES J. HILL
This settled the question of an outlet to Chicago.
The buUding of the line from St. Cloud to Hinckley and
the organization and construction of the Eastern Railway
of Minnesota admitted the Manitoba, with ample water
frontage and fine shipping facilities, to the head of the
lakes. Even the Northern Pacific, so much earlier on the
ground, was never able to equal the Manitoba's termi
nals there. In 1888 the company owned at West
Superior a grain elevator of 2,000,000 bushels capacity, a
dock, a railroad yard, and 400 acres of land suitable for
yard and dock purposes. The lake and rail line was
established, but Mr. Hill did not stop at that. Al
ready combinations were in existence which put the
shipper and the farmer much at the mercy of the
Chicago trunk lines. They bought up vessels and con
trolled rates; and as the shipping on the lakes at this
time was unable to handle increased tonnage, terminal
facilities might come to be worth as little to a railroad
as a permit to a locomotive to go in swimming. The
reader must anticipate a little to understand how all of
Mr. HiU's plans and activities dovetailed into one an
other. While he was stealing a march on his competi
tors in Montana, he was doing the same thing between
St. Paul and Chicago, and between the head of the lakes
and the Atlantic Ocean. He had studied water-borne
traffic as carefully as he had land transportation. He
looked at them both from the same angle of vision —
cost of operation. Just as he saw that high grades
420

A PEAK IN DARIEN
and sharp curves must be avoided, so he saw the waste
in small ships, filling their peddlers' packs with grain
at Duluth and Superior, taking almost as large a crew
to handle them as would boats several times their size,
wasting fuel, wasting time, wasting everything. He
prepared to run his own steamships on the Great Lakes;
and by 1889, when his railroad was completed to the
terminals and docks there, the ships were ready for
them. The Northern Steamship Company was formed, in
June, 1888, as an adjunct of the railroad company.
Its boats, which began to run in 1888 and 1889, estab
lished a new standard of size and efficiency in lake trans
portation. The Manitoba Company assigned to it its
interest in six steam freight vessels for which it had con
tracted. The latest improvements were adopted in
machinery for loading and unloading. New records
were made in the dispatch of grain and flour from the
head of the lakes to Buffalo and other lake ports. Mr.
HiU himseff has described, in his "Highways of Prog
ress," the revolution wrought in lake traffic: "A vessel
that carries only 1,000 tons cannot compete with a box
car. With a steamer carrying 10,000 tons you have it
beaten. This is the key to the only growth that has
taken place in our interior commerce. Twenty years
ago the largest carriers on the lakes that could pass
through the old 'Soo' canal, with its fourteen-foot
locks, were of about 3,000 tons. The canal was deep- 421

THE LIFE OF JAMES J. HILL
ened to twenty-one feet, and now an ordinary load is
from 10,000 to 12,000 tons. This explains the wonder
ful growth of lake commerce referred to. The differ
ence in cost between the operation of a boat of 3,000
and one of 12,000 tons is only so much as will cover the
employment of two extra firemen, two more deck hands,
and the purchase of about ten tons of coal additional
per day; in all, some $28. At this slight extra expense
the carrying power is quadrupled. Hence the phenom
enal expansion of lake commerce within the last twenty
years, while this change in its carrying machinery took
place." That theory he put in practice in the boats
that he caused to be constructed for business on the
lakes. The Northern Steamship Company's six steam
ships were 310 feet long, 40 feet beam, 26 feet depth.
In 1888 they carried 939,162 bushels of wheat, and
1,214,519 in 1890. Channels were improved, ships
were enlarged, and the tonnage grew until Duluth-
Superior became one of the world's great shipping
points. So it came about that, after twenty years,
Duluth and Superior were able to handle in seven and
a half months of open navigation more business than
any other port in the world handled in twelve, and to do
it more satisfactorily.
The railroad became independent of other carriers
on the lakes. When they tried to head off this dan
gerous adversary by pooling the Buffalo wheat ele
vators and raising charges so as to grab the profit away
422

A PEAK IN DARIEN
from railroad and farmer alike, Mr. Hill put his mind
on the job, invented a new steel elevator which was a
marvel of cheapness and efficiency in operation, built
one at Buffalo just to show what he could do, gave
warning that he would have fair treatment or build
enough elevators to handle the whole wheat transfer
business at that point, and remained master of the
situation. From that time there was never a question
of the ability of the railroad to get its consignments to
markets outside of its own territory qui(;kly and
cheaply; or of the protection of its patrons against be
ing gouged by connecting lines or deprived of the ad
vantage of local rate reductions. Mr. Hill, like a feudal
chief, had not only made his railroad respected and
feared everywhere, but he had insured against injustice
or punishment those who wished to have friendly
business relations with it. When his line should
actually reach the Pacific Ocean, it would have an
unobstructed way behind it through to the Atlantic.
Low mountain grades at one end would be comple
mented by swift and cheap water carriers at the other.
Something more had been done than to build a new
transcontinental railroad. A new system of transpor
tation, based on new methods, dominated by new ideas,
had been created. However significant in this may
have been the work of individual genius, it should not
blind the student of human progress to the more im
portant constructive result of that work for a nation 423

THE LIFE OF JAMES J. HILL
and an era. The model here set up was copied later
in all parts of the world. From the operating depart
ment presided over by Mr. Hill, and the school of prac
tical railroading that he may be said to have founded,
spread, as from a centre of influence and force, many of
the methods widely known in the business world under
the general name of "efficiency."
Without some chronological notice of interests and
activities outside the main business functioning of a Iffe,
a biography is no more a record of personality than is
a library catalogue or a list of the world's great battles.
Many other things were happening at this time to and
within Mr. Hill. Among other matters, he had de
veloped a strong interest in politics. As a young man,
as aheady told, he had a taste for it. Even before he con
trolled an inch of railroad, it had become necessary for him
to dip into political struggles, to save something for the
road he hoped to own. Every step since then had been
a fight against hostile corporate or private interests in
state or territorial legislatures, and at Washington, to
procure, not the subsidies which he always scorned, but
the right to go ahead. One of his bitterest contests, one
that threatened for a time to hold up indefinitely his
transcontinental line, was to secure permission to cross
that Indian reservation in Montana. There was not one
reason against it, except that a refusal would help his rail
road competitors. It was inevitable that such a man, so
placed, should become a personage to be reckoned within
424

A PEAK IN DARIEN
political contests. Naturally, he was tremendously an
individualist. All his thinking put him in sympathy with
the political ideas then more nearly represented by the
Democratic party than by any other. He would have
laughed, as he did many a time, at the suggestion of
taking office; but he was consulted by the highest
authorities, he helped liberally in every campaign, and
more than once he felt that vital national interests were
Evolved in the success of his party.
In the summer of 1884 Mr. Hill had been sizing up
the situation in his part of the country. He had written
earlier in the year to a political friend, "Most of the
Dakota crowd are after the loaves and fishes, regardless
of sentiment; but if we are going to get the Territory
into the Democratic column, it will be by having good
men in responsible places, and none others." That was
and remained in a nutshell his creed as to office-holding.
He was by this time not merely influential in the
Northwest but, because of that and of his political sa
gacity, was consulted eagerly and with not a little defer
ence in the East. The time was critical. Mr. Blaine
was to be the candidate of a party that his nomination
divided between wild enthusiasm and stern disapproval;
and no one could tell how far the disaffection might go.
It behooved the Democrats to go softly. Mr. Cleve
land's name was in the air. Nobody knew very much
about him except that he was reputed to be honest and
that Tammany Hall had all its knives out against him. 425

THE LIFE OF JAMES J. HILL
Up in the Northwest there was plenty of friendly feel
ing for John Kelly, then the Tammany boss and a
power in the convention. It was being used to organize
that section for the candidate, whoever he might be, to
whom Mr. Kelly should toss the handkerchief. But Mr.
Hill was far from satisfied. He went to New York and
talked with Mr. Tilden, whom he knew well. They had
great esteem for each other, and the Sage of Grammercy
Park stood then to his party for what the Sage of
Monticello had stood in an earlier day.
"What about this man Cleveland?" was the question
Mr. Hill had to ask.
" He is aU right," said Mr. TUden. " He is absolutely
honest, is not afraid of anything."
"But has he backbone?"
" Backbone ! He has so much that it makes his stom
ach stick out in front."
Mr. HiU's doubts were resolved, he hurried away
to talk with Henry C. Whitney and Dan Manning, the
Democratic giants of those days, assured them that the
Northwest would come into line, and then telegraphed
his friends in the Northwest to get busy for Cleveland.
His support contributed no little to that nomination
and election; and Mr. Hill and Mr. Cleveland later be
came close personal friends. To the end of Mr. HiU's
life there was no name that had greater power to stir a
memory of interest and admiration; no man out of all
his wide circle of acquaintanceship to whom he gave
426

A PEAK IN DARIEN
more unqualified and whole-hearted praise. He was
a political adviser worth having. After Mr. Cleve
land's election the patronage of the Northwest was
turned over substantially to two men in St. Paul who
were staunch Democrats and good friends of Mr. Hill.
One of them was the man who, ten years earlier,
when Mr. HiU's railroad scheme was almost a jest, on
being asked how he was one morning, answered: "I had
no sleep last night at all. That Hill talked railways at
me all night." He did not mince matters with them.
Here is what he wrote to one of them in 1885. This was
no interview, not for publication in any way, but private
advice which had to be sincere because, under the circum
stances, Mr. Hill could be quite sure that it would be
followed: "I find any number of men going to Washing
ton from Dakota with long petitions for places'. Most of
them are purely on the hunt for office. I think the only
way to avoid mistakes and to finally control the political
majority will be through the appointment of good and
reliable men. I have been overrun with petitions, but
have refused to sign for the simple reason that up to this
time not one of the parties should have the support of
any honest man."
There are continual flashes through these years of
iUuminating ideas about the railroad and its conduct.
A first principle of Mr. HiU had been to keep out of the
stock market. He let others do the speculating, and
was content that his interest in the property should 427

THE LIFE OF JAMES J. HILL
take care of itseff. But as knowledge of this attitude
leaked out, it encouraged some of the free lances.
The Manitoba Company was like an unwalled city in the
Middle Ages. Speculators began to look at it and at
one another and say, with the gray wolf, "good
hunting." By the middle of 1887 it had 581 stock
holders. In the fall there was a depressed market
for all securities, and severe attacks were made on
the stock. Then Mr. Hill receded from his first position
enough to say to Mr. Kennedy, "While we have both
always considered it was not our duty to keep the price
of the stock in the market at or near any particular
figure, I feel that the stock is worth more money, and
that if we can stop the raiders from selling down so low
as to make some of the more recent purchasers afraid
to hold it, the effort will be worth making." This
continued to be the policy, enforced by a few painful
lessons to those who thought Manitoba a good stock
to play ball with. In time of panic as well as in the
flush of prosperity, quotations of this security always
seemed to have written after them in invisible ink the
familiar legend, " cave canem."
Two letters of Mr. Hill in this period express in his
emphatic way his idea of the sort of responsibility a
man assumes when he sits on a board of directors.
Many years later, when the country was convulsed
with corporate scandals of which the directors of the
guilty companies professed ignorance, one might look
428

A PEAK IN DARIEN
back through the medium of these letters to the solid
principles which were as great constructive forces in
this man's life as his daring imagination and his ceaseless
activity. Mr. Kennedy had suggested the name of a
prominent New Yorker as one that would be valuable
to add to the list of directors of the Manitoba. Mr.
Hill took the matter up with Mr. Stephen in this em
phatic way: "I told Mr. Kennedy plainly that unless
Mr.  would agree to spend two weeks at least in
every year on the property and would undertake to
know its wants I would vote against him; and, further,
that I would not again vote for any one as director who
did not once a year examine the property and its af
fairs so that his opinion would be of some value in its
counsels. This may seem almost unreasonable, but
I know that our greatest weakness has been a want of
knowledge on the part of the Board of the property in
its relative position to other lines and the reasons that
should guide its business policy. I am, as you know,
not ambitious, and I assure you that unless the stock
holders elect directors who will give the company's
affairs time enough to understand them, they must get
some one else to take the responsibility besides me."
This from the man who passed for and, in many ways,
was the greatest railroad autocrat of his time. But
it was dictated by a sense of what the stockholders had
a right to expect, it was a point of honour, and he held
to it firmly. 429

THE LIFE OF JAMES J. HILL
From another angle one can see that the business con
science of the man as to a director's duties did not
change when he himseff was acting as director instead of
president. To a high official of the St. Paul & Duluth
Railroad, which was proposing to do a little "high finan
cing" for the benefit of the several systems interested,
Mr. HiU sent, in 1886, this vigorous reply: "A sound,
careful business policy has brought the road out of
its difficulties to a position where it has made some
money for its stockholders, and if this policy is con
tinued the time does not seem to be far distant when it
will be able to pay a dividend to both common and pre
ferred; but if a majority of the stockholders, who are the
real parties in interest, owning the property, desire to
get something for nothing, there is nothing to compel
me to sit on their Board of Directors and I will certainly
refuse to have any further connection with any plan
looking to the injection of more fictitious capital into a
company that already has $20,000 a mile more than it
ought to have." The significance of these expressions
of opinion is that they reflect the mind of a man in a
position to make them good; who is speaking in the
utmost confidence and without an idea that his words
will ever be given to the public. These two conditions
guarantee his sincerity. He set his face like flint
against any attempt to make private profit from the
railroad in any way. A contractor on one of the new
lines sent him, as if it were a matter of course, a de-
430

A PEAK IN DARIEN
scription of the pieces of ground that would be platted
at several of the new stations, so that they might all get
in on the ground floor. Mr. HiU sternly set him right
by telling him that all profits belonged to the company,
and that "nothing can be owned by any one separate
from all the others in the proportion of their respective
shares." On the other hand, when he learned that a
new line would run through the little farm owned by
the son of a good old friend who had fallen on evil days
in his decline of life, orders were given to put the station
and townsite on that particular piece of ground.
In connection with his interest in agriculture, his
great passion next after railroading, he gave the first
impulse to a system of drainage in the Northwest that
has added millions of acres of the most productive land
to its tilled area. The Red River VaUey is a well-
watered land, with almost imperceptible slope toward
the watercourse. A slight excess of rainfall may drown
out a crop. Around and between the ten thousand
lakes that the state contains are millions of acres of
swamp lands, as rich as any in the world, when the
surplus water can be removed. In 1879-80 Mr. Hill
had forty miles of ditches at work in the valley. In
his "Highways of Progress" he tells his part in the
drainage movement: "More than twenty years ago
the St. Paul, Minneapolis & Manitoba Railroad Com
pany, of which the Great Northern is the successor,
took up and urged the work of drainage in the North- 431

THE LIFE OF JAMES J. HILL
west, and bore a large part of the expense as well. In
1886 a drainage convention was called to meet at
Crookston, Minnesota, in the interest of the Red River
Valley lands. The railroad proposed to pay haff the
cost of a survey of the valley if the counties interested
would pay the rest, so that there might be definite in
formation to go upon. The plan was agreed to; and
when the convention met in December of that year,
the engineer employed by the railroad company made
his report, and the counties affected asked the legisla
ture for permission to issue bonds for drainage pur
poses. The 250,000 acres of land originally granted by
Congress for this purpose had been diverted to other
uses. At first the legislature refused; but seven years
later the state made an appropriation, and the railroad
gave $25,000 to aid the work. One of the conditions
of this subscription was that the chief engineer of the
railroad company should be a member of the Drainage
Commission until the work should be fairly started.
By this means the cost of the work was held down to
from 10 to 12 cents per cubic yard, which is lower than
the work solely under government charge is usually 
done. This was the beginning of state drainage in
Minnesota." A summary of such intense and varied activities
cannot close better than with what time seemed to turn
into a pleasantry, although it originated in perfect good
faith. One of Mr. HiU's youthful notions, as stated,
432

A PEAK IN DARIEN
had been that he would work until he had amassed
$100,000 and then quit; that sum being enough to
provide for the necessities of any man, and life having
other things to offer. When that modest fortune had
accumulated, his tremendous activity had been coupled
so closely to the life about him that they could not be
disengaged. The money, which was to him a mere
by-product of the work, was really indifferent to him
except as it was a power contributing to the further
perfecting of the great enterprises that he had in mind.
So he dropped out that item of his early scheme of life.
Another entry in it had been the resolution to lay aside
the heavy burden of business before it was too late,
and devote the afternoon of life to other things. As
if it were a matter as well settled as the operation of the
railroad, Mr. Kennedy wrote to him in 1887: "I know
your views about yourself, that you are determined not
to continue in your present position after you have
attained your fiftieth year, and I think you are right."
That would have brought his retirement from the
presidency in 1888, the following year. With his ideas
not yet half realized, it was the wildest impossibility.
Circumstances would not permit it. The man's nature
would not permit it. Ever-expanding conceptions of
his work pressed him relentlessly on. Twenty years
longer he was to stand on the bridge. Twenty-five
years later, though officially on the retired list, he was
to be as active as ever in the practical affairs with which 433

THE LIFE OF JAMES J. HILL
his life was inextricably interwoven. Always he plan
ned for leisure, recreation, travel, to an extent that
the ardours of his undertaking had not permitted.
Always these were postponed because some new idea
that none other could shape so well to the frame
work of the time sprang up within him. Unprecedent-
edly successful in the undertakings of a Iffe, he could
not realize the simple content of that life as he had
originally planned it. He would not have been happy,
he could not have tolerated the life if he had done so.
So much mightier is mere being than the mightiest.

434

CHAPTER TWENTY
THE GREAT NORTHERN
THE St. Paul, Minneapolis & Manitoba Railroad Com
pany has fulfilled its destiny. It stands now, upon its
peak in Darien, with developing territory behind it,
a resource whose solidity increases with each year,
waiting for the order that shall speed it to the long-
sought western ocean. Two policies are possible.
Each has obvious advantages. Mr. Hill and his as
sociates have now to decide whether their system shaU
take the final plunge and emerge a full-fledged trans
continental, with all the labours and risks which this
involves, or whether it shall, by purchase or some
form of alliance, merge with one of the other systems
already having access to the Pacific Coast. The deci
sion is a momentous one. The absolute faith in Mr.
Hill of those who have' gone with him thus far with
out a single disappointment, and of the controllers of
capital from whom the necessary support must be
sought in either case, leaves the main responsibility on
his shoulders.
Many things give him just confidence. The work
done thus far has been well done. The machine is
functioning perfectly. The completion of the Eastern 435

THE LIFE OF JAMES J. HILL
Minnesota and the establishment of a line of lake
steamers have been mentioned. Already the new ele
vator at West Superior is handling as many cars daily
as all the elevators on the Duluth side combined.
The main line west, in spite of rapid construction, and
the Minnesota and Dakota feeders are in good working
condition. Eveiy year small outside railroad proper
ties in the Northwest have been purchased, where they
were serviceable to the general plan; territory has been
mapped out and studied as carefully as it would have
been by a military chief of staff, and either immediately
occupied or guarded watchfuUy against possible in
vasion. From the Great Lakes to Minot and as far
south as the lower fringe of Dakota, the company has
its territory and its business well in hand. The Mon
tana Central, with its more than 200 miles of line, is
finished. Nor did it end in a cul-de-sac. By the
latter part of 1888 Mr. Hill could write to Mr. John M.
Forbes, "We have just put on through passenger trains
to Butte, and have arranged with the Union Pacific
for direct connection, both freight and passenger, with
their lines, by way of Ogden to San Francisco and by
way of Pocatello and the Oregon Short Line to all
points in Oregon." Whether it decide to remain in its
watch tower for a time or to go on expanding, the
Manitoba system is provided with satisfactory outlets
from ocean to ocean; and from Buffalo to Butte it con
trols its own machinery of transportation.
436

THE GREAT NORTHERN
The practical question now was, "buy or build?"
The most independent course would be to finish the line
to the coast under one ownership and control. Besides,
no other line had been built or was likely to be built to
suit Mr. Hill. He insisted, with a determination which
it was not safe to disappoint, on honest and sub
stantial work; low capitalization; contracts carrying
no more than a fair margin of profit; and grades and
curves lower than those of any other system, to assure
economy in operation. They did not often build rail
roads in the West on such principles in those days.
On the other hand, it had to be considered that the
West was full of railroads bankrupt or about to go into
the hands of receivers, whose troubles the public only
dimly suspected as yet, but which were coyly looking
for a place to unload. Purchase or consolidation on
terms carrying with it full control would not only
provide an outlet to the Pacific, but it would remove
permanently the system bought from the list of future
competitors. To buy might be easier than to build,
in those trying financial times, and in the still more dis
tressful days to come. Capitalists are more readily
interested in a property already in place and with a
going business than in one yet to be created. The
joint security of two properties would generally be held
better than that of either separately. So it is true that,
while Mr. HiU's personal preference in favour of com
pleting his own line to the coast, and thus carrying out 437

THE LIFE OF JAMES J. HILL
his own original idea in his own way, never varied;
while, in fact, his decision was practically made at the
back of his mind, he nevertheless did, during those
years, endeavour to keep that mind open, and gave
serious consideration to the several projects for con
solidation or purchase that were presented to him.
He also sought the counsel of those who had been and
still were interested in the creation of a great railway
system that should embody his central thought.
To begin with, both the idea of consolidation and
the idea of a possible friendly understanding be
tween rival railroads had made progress. Constant
war between the railroads and the state legislatures
for twenty years had led up to the passage by Congress
in 1887 of the Interstate Commerce Law. It was
suspected that, later on, it might be found to have real
teeth. Everybody knows now that the law, one of
whose professed objects was to prevent railway com
binations, became an irresistible force driving them
first into agreements on matters of common interest,
and later into mixed ownership and control. The
history of Pacific railroads displayed the constant drift
toward combination. Mr. Villard's venture with North
ern Pacific and Oregon & Transcontinental had, indeed,
come to grief; but the time rather than the man or
the principle was to blame. So while, on the one hand,
Mr. HiU's agents, under his vigorous personal direction,
were following every movement of the other transconti-
438

THE GREAT NORTHERN
nental powers in Montana and elsewhere, and preparing a
checkmate ; while a sharp watch was kept on every system,
no matter whether directed by friend or foe, in contiguous
territory, there was nevertheless a disposition to get
together in an effort for peace, however suspicious
and precarious this might be, as preliminary to that
common action which the wise already saw would soon
be necessary against a common danger. Harper s
Weekly, of December 27, 1890, contained the fol
lowing then unique and important announcement:
"On Dec. 15, 1890, the presidents of sixteen of the most
important railways west of Chicago and St. Louis met
by invitation of J. Pierpont Morgan at his private
residence to endeavour to arrange a plan whereby
departure from fixed rates to secure traffic by the agents
of the respective companies would be prevented and the
economical management of the properties otherwise
furthered." Mr. Hill was present at that meeting, which
hoisted one of the first distress signals of a troubled
time. It ushered in the famous but disappointing era
of the "gentlemen's agreement." If Mr. HiU ever
believed in that policy as applied to the railway condi
tions and managements of the time, which may be
doubted, he quickly determined to abandon an empty
form. Writing to the president of the Burlington,
less than eighteen months later, he said: "While our
company never had much at stake in the Association,
and only joined it for the sake of unanimity, reserving 439

THE LIFE OF JAMES J. HILL
to ourselves, in the resolution adopted by the Board,
the sole right to control our rates, the action of the
commissioners has been such that for some time my
mind has been made up to withdraw from the Associa
tion and I think from all other Associations, during the
next month, or when our line is completed."
Many of the people influential in the railways
west of the Mississippi River made advances, tentative
or earnest, to Mr. Hill for consolidation by purchase,
lease, or some other form of control. While the cyclone
which was to break in fury in 1893 was yet no more than
a cloud on the horizon, the well-advised foresaw or
feared its coming. The inside affairs of the large
railroad concerns of the West, especially the trans
continentals, were well enough known to a good many
people to create anxiety. It will be necessary to re
member some things that happened in 1894 and 1895,
when the wreckage of the panic was being cleared away,
to understand the eagerness of those wise mariners who
were intent on shortening sail or getting a tow into port
several years earlier. Coming bankruptcies were cast
ing their shadows before. By 1893 the Union Pacffic,
in spite of grants and guarantees of credit from the
Government, was to pass into the hands of receivers.
Mr. J. P. Davis, in a monograph written at the time,
said of the Union Pacific what might, except as to
money owed to the Government, have been applied to
many a railroad enterprise in this territory where Mr.
440

THE GREAT NORTHERN
HiU was interested: "The Union Pacific system, under
foreclosure sale, could not be sold for enough to satisfy
the debt to the Government and the first mortgage debt
superior to it." And again: "While the Union Pacific
system is an admirable property and fully capable of
earning an ample return on an unwatered valuation, it
wiU hardly be abler in the future than in the past to
yield dividends and interest on watered stocks, bonds,
and guaranteed obligations five times the actual value
of its assets; it is now in the hands of receivers not
because it is incapable of sustaining itself on its legiti
mate traffic, but because, like the great majority of
American railways, it has been burdened with obligations
in such outrageous excess of its earning power that it is
unable to carry them in a season of general depression."
Combination with the Union Pacific would have given
to Mr. HiU's line a permanent right to the western out
let that it now had only by virtue of a limited traffic
agreement. It would have put the Northern Pacific
between two fires. The matter was put straight up to
him; and he also in fairness put it up to others. In a
letter to a man powerful in New York financial circles,
dated August 13, 1891, he said:
"I suppose you have heard the many stories afloat
in connection with the Union Pacific and I thought I
would post you as to what there is in it. Friends of the
Union Pacific came to us last week and asked whether
we would undertake to arrange the company's floating 441

THE LIFE OF JAMEfe J. HILL
debt. This debt, it is stated to us, amounts to
$18,000,000, against which the company holds securities
worth $39,000,000 at present nominal values. It was
suggested to us that the company would be willing to
pay a considerable commission if we would undertake
the management of a syndicate in which all the holders
of its floating debt were to be induced to join, but we
declined, as we are unwilling to risk our reputation in so
large a transaction of which the success will necessarily
be, to say the least, doubtful.
"I doubt whether the company has thus far made
any progress, but I believe that some kind of an arrange
ment to take care of the floating debt will finaUy be
made, as the large holders of the debt must, for their
own protection, make some sort of a combination to
avoid a breakdown. It is claimed that the earnings of
the company are now, and will continue to be, very
large, and that except for its troublesome floating debt
its condition is very satisfactory, its income being
largely in excess of its fixed charges. Would it be of
any advantage to you to get a controlling influence
in the Union Pacific Company? For I believe it to be
among the possibilities that you could, if you desired,
gain control of the company. I believe the parties at
present in control would be only too glad to join hands
with any strong combination which will aid them to
handle the floating debt, and if you think considerable
advantage could be made to accrue to your company by
442

THE GREAT NORTHERN
such a combination, we should feel induced, if you de
sired it, to consider with more favour than we do now
the propositions which have been made to us by the
friends of the Union Pacific Company."
A very proper, open, and temperate letter. But also
as canny as could be written, although there was no
intent to deceive. For when the person addressed came
back with a request for Mr. HiU's personal opinion,
he replied, just eight days later: "I think it doubtful
if any one can get either honour or profit out of their
(Union Pacific) affairs." The matter continued to be
urged from one quarter or another, and the glittering
advantage of so great a consolidation of interest to be
dangled before his eyes. He gave it its quietus in
another letter to Mr. Forbes, two years later: "Now
as to the Union Pacific matter, I feel much less inclined
to take any interest in it than when I saw you in
Chicago. The Union Pacific country is so largely
dependent upon the mining interest that at present I see
no daylight for it anywhere. The repeal of the pur
chasing clause of the Sherman Law will only make the
present condition of Union Pacific more permanent.
Do not think of me entirely as seeing no good any
where, but the fact is I think the best way is to save
every dollar we can both from a railway, a national,
and an individual standpoint. The country has had
some very hard falls, and I think it will take some time
to recover its usual activity, even should we feel at once 443

THE LIFE OF JAMES J. HILL
the great relief looked for from congressional action.
The new agricultural portions of the West where the
farms have not been long enough under cultivation to
lose their fertility will, I think, be the first to recover,
and the manufacturing, iron, coal, and coke the
last." The Northern Pacific was a scarcely more attractive
proposition. It, too, went again to the wall in that
year of fate, 1893. German investors were not quite so
submissive to fate as American. They wanted somebody
to "show them"; and two reports were made on the
condition of this property. Mr. Hill was not ignorant
of these documents; but years before he had known the
facts they contain, and predicted the consequences.
Mr. G. Siemens, in his report to the German stockhold
ers, said that the acute financial depression and conse
quent reduced earnings of the system in 1893 had very
little to do with the failure of the company. They gave
the tree a shake; but the fruit which fell was already
over-ripe. A lease of the Wisconsin Central property
brought in a million dollars net loss each year. The
Chicago & Northern Pacific property was causing an
annual deficit of nearly the same amount. The whole
structure was undermined and must collapse. About
the same time Mr. T. Barth made another report on
the causes of the failure of the Northern Pacific, and
reached the same conclusion. This document has more
interest here because it lists, among the reasons of
444

THE GREAT NORTHERN
disaster, the bumping up of the management of the
Northern Pacific against Mr. Hill :
Regarding the rate war with the Great Northern, the character
of the manager and principal party in interest of this road, Mr.
James J. Hill, has to be rekoned with. People who know him
thoroughly assert that it needs only an energetic decision to defeat
him with his own weapons. The most important territory of the
Great Northern is the wheat district of the Red River Valley, in
which Hill is the successful competitor of the Northern Pacific.
If the rate war could be carried to such a point that by a special
reduction of freight rates in the Red River Valley the best business
of the Great Northern would be threatened, peace could be quicldy
gained under a general restoration of freight rates. The very fact
that the Great Northern traverses an immense territory — some
1,500 miles — which has so far hardly been taken hold of by settlers,
makes this system especially vulnerable at those points from which
it gains its actual vitality.
At any event, it seems essential to work with greater energy than
heretofore for a restoration of adequate freight rates, either through
a more vigorous tariff war or through amicable agreement. The
Great Northern has no favourable strategic position in this fight.
A road which has suspended payment is a particularly dangerous
enemy in a tariff war. The Canadian Pacific, The Union Pacific,
and other great systems are, moreover, just as unfortunately im
pressed by Mr. HiU's mode of procedure as the Northern Pacific,
and Mr. Hill therefore runs the risk of a general tariff war if he
persists in his ruinous tariff policy. But HiU is described as a man
who is too wise to be stubborn, as soon as he sees that people have
made up their minds to fight him resolutely.
Mr. Barth also pointed out that the Northern Pacific
had wasted its war resources by building or acquiring
competitive branch lines in Montana and western
Washington which could hurt nobody but their owner,
because they must be run at a loss, while it had neg- 445

THE LIFE OF JAMES J. HILL
lected to cover the Red River Valley, where the Great
Northern, "by a constant extension of its system, had
clearly demonstrated how much was to be gained just
in this rich wheat district." It is as impossible to fix
responsibility for the breaking out of a railroad war as
to decide who is the real aggressor in a war between
nations. But this fracas and the comments of Mr.
Barth bring out the two facts that most concerned the
work and plans of Mr. Hill at this time : the effect upon
a solvent line of general bankruptcy among its com
petitors; and the effect upon competition itseff of his
principle of keeping capitalization and cost of operation
so low that whoever sought a fight would be ruined.
The report of the Interstate Commerce Commission
for 1894 said: "Never in the history of transportation
in the United States has such a large percentage of rail
way mileage been under the control of receiverships as
on June 30, 1894. There were on that date 192 rail
ways in the hands of receivers, of which 126 had been
consigned to receiverships during the previous twelve
months, and 35 during the year ending June 30, 1893.
The mileage of line operated by these defaulting com
panies was 40,818 miles. The total capitalization of
roads in the hands of receivers was about $2,500,000,000,
that is to say, one fourth of the total railway capitaliza
tion of the country. This, as a record of insolvency,
is without a parallel in the previous history of American
railways, except it be in the period from 1838 to 1842."
446

THE GREAT NORTHERN
The receiverships included one fourth of the total mile
age as well as of the capitalization. Among the dere
licts of this period were the American competitors
of Mr. HiU's enterprise. Land grants, loans and
pledges of credit, which he had neither received nor
asked, could not save them from the penalties of
over-capitalization and inefficient management. But
a railroad at which you can snap your fingers while
it is trying to remain solvent, becomes a floating mine
as soon as a receivership has relieved it of the necessity
of paying a profit, or even of meeting its running ex
penses. It has nothing more to lose. It can cut rates
to the bone and right through it. On the other hand,
there is a limit to the boldness of belligerent receivers
and the patience of courts. Against everything but
the competition of permanent bankrupts Mr. Hill had
made himself secure.
Many people thought that ambition or vain glory,
the unregulated eagerness of a man distinguished in his
specialty, had made the project of a transcontinental
line a mania with him. They still judged him as
they did when he was talking "St. Paul & Pacific" to
anybody who would listen. His plan, in fact, was the
product of a logic as hard and cold as the steel of his
railroad's track. He knew how much the other trans
continentals must pay out each year in fixed charges,
and what it would cost them per ton per mile to haul
freight over their grades and around their curves. He 447

THE LIFE OF JAMES J. HILL
proposed to build, and had buUt thus far across the
continent, a railroad so modestly capitalized that its
interest charge was greatly below that of any competi
tor; and with grades and curves so moderate that the
cost of movement could always be less than theirs.
In short, the new system was prepared, if need be, to
take business at a rate below the actual cost for any of
the other lines, and to make money while doing so.
There is as much possibility of beating such an oppon
ent as there is of winning a battle where the guns of the
enemy can fire twice as often and at double the range of
your own. There never was a time when the Great
Northern could not have driven its adversaries from the
field with this tremendous weapon if it had wished to.
Its interest did not dictate such a policy ; but it was not
averse to a little rate controversy once in a while, just
to give the adversary a taste of the gaff. Mr. Hill
had made his calculations from the beginning, and
felt his position to be impregnable. Here is his
general order to his chief engineer in this summer of
1890: "We do not care enough for Rocky Mountain
scenery to spend a large sum of money in developing
it either on the Spokane or elsewhere. What we want
is the best possible line, shortest distance, lowest
grades, and least curvature that we can build between
the points to be covered. This, of course, will need close
examination on the part of your men; and I trust you
will not limit the number of your parties to exhaust the
448

THE GREAT NORTHERN
question fully, and obtain all the information that may
be possible. It would be unfortunate to find out after
ward — as so many companies have — that we have left
the best places unoccupied on some part of our line."
It is safe to assert positively that there never was a
time, from the day when the agreement for the purchase
of the St. Paul & Pacific's defaulted bonds was signed
with the Dutch Committee to the day of his death, when
Mr. Hill seriously considered either a sale of his own
property or the purchase of any other property as a sub
stitute for the building of his own line through to the
coast. To acquire control of one or more of these,
however, not so much as a link or an outlet as a re
straint on ruinous competition, might be a different
matter. The era of combination and consolidation
was already well advanced. The Sherman anti-trust
law, forbidding combinations in restraint of trade, was
passed in 1890. The combining process had already
gone far enough to secure radical congressional action.
True, as yet neither the courts nor public opinion applied
that law to railroads, unless they were " parallel and com
peting." But Mr. Hill read the signs of the times. He
was not ignorant of the scope and meaning of com
bination in the railroad world. If control of some
other transcontinental could be obtained, without
endangering his own, it would solve many problems.
He had determined upon two things: to complete his
line at any haz£<,rd ; and to watch for a favourable oppor- 449

THE LIFE OF JAMES J. HILL
tunity to acquire influence in the counsels of a com
petitor, and increase that influence just so far as
circumstances might show to be practicable and desir
able. Undoubtedly his choice and his ultimate hope
looked toward the Northern Pacific, his earliest and
bitterest rival, the system with the largest total possi
bilities as an ally. But not in order to secure it out
right would he jeopardize by ever so little the fortune
or the future of the system that he himself had created.
These policies illumine his course through the years
down to 1895. In May, 1889, he wrote to Lord
Mount Stephen, ever the recipient of his most intimate
confidences, as follows:
"The Northern Pacific and the Oregon & Transcon
tinental have given me much concern, as through the
latter the first can be controlled for a very little money
comparatively.  realizes the great value of our
proposed new company of ultimate control of Northern
Pacific, as the removal of building contests, rate wars,
etc., would be very attractive to investors. . . .
You may think I am going pretty fast in Northern
Pacific matters, but I am very sure that if we get what
we want there the results will be more than ever con
sidered in another place. This cannot fail to be so,
as the entire property controlled by the new company
would have an earning capacity of about $3,000,000 a
month. And this, with the advantage of removing all
expensive rivalry and competition, would alone save
'45S)

THE GREAT NORTHERN
5 per cent., which is $1,000,000 per annum." A month
later he wrote again:
"The more I think it over the more I am convinced
that the thing for us to do is to 'take the bull by the
horns' and get control of the Northern Pacffic, and by
one stroke settle all questions at once. This will cost
less money and will bring the best results in the least
time. Looking over the ground we find the Northern
Pacific is the only interest of any magnitude in the
entire territory we want to control. It is pursuing a
very aggressive course almost regardless of permanent
cost and business judgment, at the same time it is doing
both the 'Manitoba' and the Canadian Pacific Railroad
great damage and in such a way as to compel both to
spend large sums of money to no good end. They are
cutting rates in Manitoba to an extent that cannot fail
to greatly reduce the revenues of all concerned from that
province; and the facts as stated in your letter that their
lines in Manitoba will not pay anything for six years
(and I think it will be ten) is a permanent reason why
they cannot hold to any agreement. A starving man
will usually get bread ff it is to be had, and a starving
railway will not maintain rates. Whenever I take up
this question, I want to go right at the work of getting
control of that company, and when we look at both
sides and the large sums at stake all around, on the
one side, and at the strong, peaceful solution of the
questions on the other, I am more anxious than ever 451

THE LIFE OF JAMES J. HILL
to carry out the plan." Ten days after this was writ
ten, the careful and perhaps less convinced Mount
Stephen replied :
"I am not clear in my own mind as to our ability to
capture the control of the Northern Pacific. That is,
I do not see so clearly how it is to be done as I do our
ability to build a new line of our own. Of that I have
no doubt, and think I can see my way to finance an ex
tension to the Coast on very economical terms so far as
the finding of the money is concerned. It may be,
when I see you, that the difficulties in the way of cap
turing the Northern Pacific may disappear. I am very
much impressed by what you say as to the advantages
of our getting to the Coast by a control of the Northern
Pacific rather than by building a new line if it can be
done. I have so much confidence in the soundiiess of your
judgment in such matters that my inclination is always
to accept your views, largely because they are your views.
The advantages to the St. Paul, Minneapolis & Manitoba
and to the Canadian Pacific Railroad as well, of our
getting control of the Northern Pacific are very clear,
and I think when you come down we must try to come
to some definite conclusion as to the course to be pur
sued and follow it up vigorously. If we decide that a
control of the Northern Pacific is out of reach, then I
suppose we ought to go vigorously and promptly to
work on a new line."
The difficulties in the way, and growing financial ap-
452

THE GREAT NORTHERN
prehension and distress precluded the "vigorous" meas
ures that had been debated. The plan must wait some
years yet, and take a different form , before it could become
substantial. But the inherent desirability of an infiu-
ence, perhaps a decisive one, in the Northern Pacific was
from this time a fixed postulate of the railroad situation in
the Northwest. Next after the building of his own line
through to the Pacific, it influenced most strangely Mr.
HiU's thoughts and plans. What was the idea in his mind,
in this time of anti-railroad agitation and disturbance of
pubUc thought, about the future of the railroad situation
in general and the particular relation of his own system
to that future readjustment? The first question he
answered frankly in a letter of this period to a corres
pondent who asked his views. The same statement in
substance was afterward incorporated in his testimony
before committees appointed to investigate the general
railroad problem :
"I do not think that the time has come, or that it
ever will come, when a general trust can be formed to
include the chief lines throughout the country. The
grouping of interests, the advantages of each being
determined by the same controlling influences, which
will divide the country west of Chicago, between the
Canadian border and the Gulf of Mexico, we will say
for purposes of illustration, into three or four groups,
might be brought about with excellent results. If
something of this kind is not done, the natural theory of
453

THE LIFE OF JAMES J. HILL
the survival of the fittest must apply, and some such
harmonizing of interests will be the result through the
bankruptcy of the weaker lines and their final absorp
tion by the stronger ones."
Did that mean uncontrolled monopoly and the
death of competition ? Not at all, to his mind. He car
ried the thought a little further in an article that he
published about this time, and insisted upon it many
times after: "There is, however, a competition between
the railways which will continue to exist as long as the
railways are run, and that is the competition of markets;
the necessity of building up the various interests of the
country served by the respective railway lines. In this
the competition lies between the producer and the rail
way in one locality, acting together, against the pro
ducer and the railway in another locality, competing
for the business." Finally, his conception of the value
and limits of railway competition, matured and ex
pressed in his forceful way, a conception which neither
physical facts nor laws and courts have prevented from
being actualized to a great extent, was stated fifteen
years later before a committee of the United States
Senate in these words :
"I am a firm believer in all natural laws where we
have demonstrated that they are laws, and the law of
the survival of the fittest is a natural law that we can
safely adopt. I think I would let a railway company
consider the investment; I would protect the property
454

THE GREAT NORTHERN
as I would any other property, and I would hold them
for their good behaviour, as I would everybody else.
If the railway company can make the rate and can
do it profitably, give them the opportunity to do it.
Do not say, 'You must make good this man's mistakes.'
If I build a factory to-day, or buy one that is out of
date, with machinery twenty-five or thirty years old,
and my neighbour comes in and builds a factory with
modern machinery and he can produce the cloth for 10
or 15 per cent, less than I can produce it for, would
I not look strange to go and ask him to divide his profit
with me? This is what a great many railroads ask,
and a great many people think it would be an advantage
to the country to allow the railways to make pools.
My theory is, hold them to a strict observance of the
law and enforce it, and let them have room according
to their heft. Let them have room to see what they
can do; nothing else ever brought our rates down."
Mr. Hill lived according to his doctrine. He built
his line exactly as he supposed a man to have come
in and built a new factory. He believed that thel
survival of the fittest among railroads would be a good ]
thing for the country as well as for the fittest railroad.
He was never carried off his feet by any scheme for con
trol just for the sake of control. He believed in the
principle of a sectional aggregation, on the analogy of
natural selection. He trusted to the merit of his sys
tem, as he was building and handling it, to maintain a^
455 .

THE LIFE OF JAMES J. HILL
hegemony that financial control could scarcely strengthen
and that the absence of it could scarcely impair. Be
hind it all there was less thirst for power than desire
for that economical operation of the railroad, good for
public and stockholder alike, which was with him not
only a principle of management but almost a passion
of duty.
Now that he was ready, regardless of what happened
in Northern Pacffic, to go ahead with his own work,
he gave reasons for his confidence in it, in letters to two
trusted friends. The extension to the Pacific Coast was
under way, and he said to one of the men who remained
a faithful helper for a Iffe time: "I am more than ever
impressed with the capacity of our property to give a
good account of its future. After seeing the long
stretch of entirely worthless country on the other Pacific
roads and comparing their grades and necessary expenses
with our own, I feel that we have so great an apparent
advantage over all others that they are really not com
petitors." There had been, during these years, nibbles
from the small fry as well as bites from the big fish.
In 1892 Mr. Hill was canvassing with Mr. Perkins,
then president of the Burlington, the value of the Ore
gon Railway & Navigation property. He said: "The
lines are located in a good country, some of it rich, and
producing a large tonnage; but the capitalization of the
company is far ahead of what it should be for what
there is to show, and the selection of the route and grades
456

THE GREAT NORTHERN
is abominable. Practically it would have to be built
over." When the wave of influence broke on a farther
shore, he sent this brief answer to one of the influential
personages of a financial publication in London, who
had sounded him on another project : "Your letter in re
gard to the Grand Trunk matter duly received. It would
be impossible for me to assume any responsibility or care
beyond what I have at present. The successful man
agement of all railway properties in this country depends
almost entirely upon the supervision and I find the care
of our own occupies all the time I have."
Enough of these solicitations and negotiations.
Mostly originating outside of Mr. HiU, they were con
sidered by him thoroughly, scientifically, and dis
passionately, in order that no implication or reflection
upon the future of his own project might escape him.
That project itself now went forward rapidly. Prep
arations, as usual, had been thorough: "For more
than three years, fifty engineers with an army of
foUowers were engaged locating and surveying the
route of the 838 miles: 430 of which is through heavy
timber. Along no portion of the line was there any
thing approaching a wagon road, and for more than two
hundred miles there was not even the semblance of a trail.
In several stretches of the primeval forest the accumula
tion of fallen timber made travelling very difficult;
five miles a day through some of this was all an ener
getic man could travel. The chief engineer's report 457

THE LIFE OF JAMES J. HILL
mentions the experience of one of his assistants who
was instructed to make a reconnaissance near the
summit of the Rockies over a distance of about thirty-
five miles. Starting out with his blankets and six
days' provisions on his back, he was yet four days with
out food when he reached a cabin on the other side.
After regaining his strength he started back, and after
almost unendurable hardships returned, being thirty
days in making the round trip of seventy miles. All
the supplies and requirements of the engineers had to
be packed in, either by men or on horseback."
Helena and Butte and Great Falls were scarcely breath
ing places. Just as the Montana Central Company had
been formed, to take the field in advance and skirmish
with the enemy where the whole body, horse, foot,
and dragoons, of the Manitoba organization would
have been at a disadvantage, so the Seattle & Montana
Company came into existence to open a way to the
Pacific. By working through companies locally organ
ized, terminals and traffic facilities for the new lines
could be secured at a much lower price than ff the
parent company had gone into the market after them,
with the necessary flourish of trumpets; and the true
purpose would be concealed much longer from rivals,
who could not be certain what was behind projects
apparently of a purely local organization and interest.
The Seattle & Montana Railway Company had been
organized in 1889 under the laws of the state of Wash-
458

THE GREAT NORTHERN
ington. Seattle was selected for the chief terminus on
the Pacific Coast, and it was decided that a line skirting
the shore from there north to the Frazer River should
be buUt or acquired. The New Westminster Southern
Railway Company was incorporated in April, 1887, to
buUd from the international boundary to New West
minster. With the Fairhaven & Southern Railroad
Company, this would cover the field, north and south.
Control of both companies was secured. So, by
purchase and construction, a through rail line about
150 miles long was built up, from Seattle to New West
minster, in British Columbia.
Construction began also on the heavy work which
would penetrate the maze of lower ridges, and zigzag
across the summit of the Cascade Mountains. Mr.
Hill closed a deal with the Union Pacific in 1891 for a
joint ownership of the line from Seattle to Portland,
and paid a million doUars toward the uncompleted work
which it would require four miUions to finish. At
this time "money talked," and he had the money;
for the reason, among others, that he had built a
commercially profitable machine. He wrote, in this
connection: "I am more than ever convinced of
the soundness of our policy of creating a good rail
road with which to earn money, by developing in
their best form all the local interests along our lines.
To do this successfully we must be able to handle the
natural products of the country at rates which will 459

THE LIFE OF JAMES J. HILL
enable those handling or manufacturing those products
to do so at a profit. Our greatest profit will come in the
enlargement of the business interests thereafter."
This policy of "live and let live" he had pursued, it
must be remembered, for nearly fifteen years now in all
the country first covered: the immensely rich and
productive area of northern Minnesota, the Red River
Valley, the Dakotas. It had brought people there,
built up business, induced all kinds of prosperity. It
was paying dividends, creating a surplus, and laying
the foundations of a credit never to be impaired.
Before the line to the coast was built, one important
transformation must be effected. This was the perfect
ing of a general organization adequate to the demands
of the future. The old St. Paul, Minneapolis & Mani
toba Company had been a serviceable tool. It had
done its work. But, as Mr. HUl put it, the company
"had outgrown its clothes." The title itseff, exactly
fitting the original plan, was already a misnomer, and
would be more so as applied to a transcontinental
system. The original limitation of capital stock to
$20,000,000 was a strait jacket for a system that must
assimilate the capitalization of the many separate
companies under which construction in the West had
been carried forward. Mr. Hill desired to build new
lines from stock proceeds rather than bond sales, giving
him a clear property and a basis for future credit issues
ff that became desirable or necessary. He intended
460

THE GREAT NORTHERN
that capital stock should mean actual money put into
the property. The needs of the new day demanded an
instrument more flexible and of wider reach. So the
Great Northern Railway Company was organized in
1889. A meeting of the stockholders of the Minneapolis
& St. Cloud Company, whose charter has been men
tioned in the early part of this history as one favourable
for an organization with liberal powers, changed its
name, September 16, 1889, to the Great Northern Rail
way Company. On November 11, in the same year,
the new company accepted the terms proposed by the
Manitoba Company for the transfer of its property.
The stock was made $40,000,000, half common and half
preferred. The property of the Manitoba Company
was leased for 999 years on an agreement to pay interest
on all bonds outstanding and such as might be issued,
6 per cent, dividends on the old $20,000,000 capital
stock, and taxes and assessments. At midnight,
January 31, 1890, the Great Northern became the
controlling power. Under this lease were transferred
2,770 mUes of road, with all the appertaining properties
incidental to operation. In the tale of American rail
roads of the time it would be hard to match this low
capitalization per mile.
On June 9, 1890, the Great Northern "requested"
the Manitoba to extend its lines westwardly from some
suitable point in Montana to Puget Sound, and the
request was formally approved by the latter two weeks 461

THE LIFE OF JAMES J. HILL
later. The financing of the enlarged enterprise and the
market conditions under which it had to be done will
be considered in the next chapter. The first annual
report of the Great Northern, for the five months end
ing June 30, 1890, showed net earnings of more than a
million and a haff. Two extracts from that report
set out vividly the business policy of the management,
and the operating ideas on which it was based :
When the Pacific extension has been completed, your company
wiU have a continuous rail line from Lake Superior, St. Paul, and
Minneapolis to the Pacific Coast, shorter than any existing trans
continental railway and with lower grades and less curvatures.
Its cost and capitalization will also be much less than those of any
other line to the Coast. It is expected that, with the foregoing
favourable conditions, the heavier products of the Pacific Coast
region, which up to this time could seek markets only by ocean
routes, can be moved eastward to the older sections of the coimtry.
The policy of improving the property , which has given such good
results in the past, is still being followed. The steel rails of 56
pounds section, originally laid on the line between St. Cloud and
Hinckley, although comparatively little worn, are being replaced
by raUs of 75 pounds section, of uniform pattern with the rails of
like weight already down upon other portions of your railways.
With the completion of these replacements, the 75-pound raU wiU
be continuous from BarnesviUe to Lake Superior, as weU as to St.
Paul, permitting the use of locomotive engines of maximum weight
and power without excessive track wear.
Active work on the Pacific extension commenced in
August, 1890, and went ahead without intermission.
The decision once definitely announced, the track was
pushed forward with as much energy, though of course
not with the same breathless speed, through the passes
462

THE GREAT NORTHERN
and over the crests of the mountains as it had been
across the prairies. The digging of the tunnel, more
than two and a haff miles long, under the Cascades,
was not to be completed until ten years later. Logically,
a word about this great engineering enterprise belongs
here; chronologically, too, in a sense, for the original
preliminary surveys were made in 1892. Actual excava
tion for the tunnel commenced in September, 1897, and
the two headings met in September, 1900. By Decem
ber 20 of that year the track was laid and the tunnel
was opened for operation. Its total length, 13,813
feet, makes it rank with the famous constructions of its
kind in the world. The work was carried through by
the railway company, without any contractor, and when
the headings met the error in alignment and in grade
was found to be one quarter of an inch each. It cost
$2,532,118. So another "folly" justified itseff. For
the present the heights were scaled by a switchback.
For twenty-eight months, excepting three months of
heavy snowfall in the mountains, track-laying pro
ceeded uninterruptedly. Considering the nature of the
country traversed, the construction record is scarcely
less remarkable than that in the flight across the
plains. One hundred miles were built in 1890; 162 in
1891; and 554 in 1892. The last raU of the 834-mile
stretch, from Pacific Junction, four miles west of Havre,
once Fort Assiniboine, in Montana, to Everett on Puget
Sound in Washington, was in place January 5, 1893. 463

THE LIFE OF JAMES J. HILL
While these things were being done in the West,
the East was not neglected. There, too, the territory
both to the north and to the south of the main trans
continental belt was watched carefully, and occupied
as fast as circumstances seemed to permit or require.
The old main line west from Lake Superior curved
away south to St. Cloud and back again, in the arc of
an enormous circle, to the crossing of the Red River at
Grand Forks. Some day a line would be built on the
chord of that arc, and save a long haul between the Red
River and Duluth. Mr. Hill had kept his eye upon this
from the first. He built one link of this direct line as
early as 1888, and allowed the remainder to wait untU
more pressing claims were disposed of. In 1892 he
saw his opportunity, and wrote to a confidential friend
in New York: "You will remember the Duluth &
Winnipeg scheme, to build from Duluth to Grand
Forks by way of the north shore of Leech Lake. This
line would be about 110 miles shorter than our line via
St. Cloud and Hinckley, and would give us a great
deal of trouble by reducing rates as well as dividing
the business. They have built about 95 miles to Leech
Lake and have another line about 65 miles built to the
Misaba iron mines, where the iron ore can be put on the
cars for 25 cents per ton without any more mining than
is done with a steam shovel to load it. I have carefully
watched this enterprise with the intention of getting
hold of it for our company, and now think we wiU
464

THE GREAT NORTHERN
succeed in getting control of it through its floating debt.
They have put $1,000,000 into the stock, have sold
$800,000 bonds and have borrowed another $1,000,000
on the security of its bonds. The annual election
comes on the fifth of October, when my friends will, I
think, be elected into a majority of the board and the
president, secretary, and treasurer will be of our naming.
We will furnish them the money to take up the loans on
the bonds as they mature, and with this and several
other matters I hope to get control of the property, and
unless the stockholders put up the money, which they
either cannot or will not do, as they are quarrelling
among themselves, we should be in control by July
or August next, and finally get a property for about
$2,000,000 which is practically as much as the Duluth
& Iron Range and the Minnesota Iron Company to
gether, and which is capitalized, I think, at about
$18,000,000." The Duluth & Winnipeg had built to
Deer River. Anticipating a few years, to complete the
tale of construction and control in this section, the
Duluth, Superior & Western Company was incorporated
in September, 1896, to take over the property and fran
chises of the Duluth & Winnipeg; and this, in turn, was
sold to the Eastern Minnesota in 1898. The building of
the track to Fosston completed the short through line
from the head of the lakes to the Red River Valley and
the West. Some other companies in northern Minnesota
were annexed in 1899, giving the Great Northern ample 465

THE LIFE OF JAMES J. HILL
means of access to all the famous iron-producing region.
The acquisition and development of ore lands there, and
the disposition of them, will receive elsewhere the sepa
rate treatment that the subject demands.
To the south events went much the same way. In
1888, locally organized companies constructed lines
from connections with the Manitoba system to Sioux
Falls, South Dakota, and afterward extended them to
Yankton. Parties independent of them had begun,
in 1888 also, to build a road northward from Sioux
City, Iowa. Five years later this latter was ready to be
gathered in, as Mr. Hill explained to Sir Donald Smith in
1893. " Our business over the line from W^illmar south
west to Sioux Falls and Sioux City is showing a large
and steady increase. Our company owns one quarter
of the stock of the Sioux City & Northern and Sioux
City terminal companies — the latter company owning
the largest, most convenient, and in every way decidedly
the best terminals in Sioux City. Our company holds
one third of a loan of $1,500,000 to Sioux City parties,
secured by the stock of the Sioux City and Northern
and Terminal Companies, amounting to $2,400,000,
which cost $1,440,000; also $2,340,000 of the first mort
gage bonds on 130 miles of railroad in Nebraska. We
do not desire nor expect to cross the Missouri River
into Nebraska; but in adjusting the loan, which I think
will not be paid at maturity, we will secure the stock
in both companies, certainly without further investment
466

THE GREAT NORTHERN
on our part, and we may be able to do better than this.
Reference to the map wiU show you that the possession
of this line wUl give us the shortest and practically the
only direct line from the large pine forests of Minnesota
— the largest left standing east of the Rocky Mountains
— to a connection with all the east and west lines cross
ing southern Minnesota and northern Iowa, and direct
connection with the Nebraska, Kansas, and Southwest
ern lines at Sioux City." On the south as well as
on the north, the eastern territory of the Great North
ern was guarded. Nor is it unreasonable to believe
that, in providing so amply for connections and outlets
on the southwest, Mr. HiU had already in mind the possi
ble consolidation with one of the great railroad systems
of that section, which he carried through years later by
the purchase of the Burlington.
For most men the completion of the transcontinental
system would have signified the satisfaction of ambition
and the resting-place of effort. It only finished one
more stage of the victor's progress. This story may
well pause here for a moment on a true incident so char
acteristic of Mr. Hill, of his antipathy to ostentation,
his real solicitude for the public interest, his regard for
the people of St. Paul, who were his townspeople, that it
is worth a volume of psychological analysis. These St.
Paul people were now fully alive to the quality of the
man who had moved among them for so many years, and
whose visions they had once regarded with a species of
467

THE LIFE OF JAMES J. HILL
amused tolerance as the eccentricities or extravagances
of a dreamer. In the midst of financial calamity that
shook the country like an earthquake, they saw him re
turn, strong and conquering, from the adventure on which
he had set forth so daringly fifteen years before. They
prepared to do him worthy honour. The town must
hold high holiday, arches span the streets, processions
grace the day, and a civic banquet crown all, at which
he should be the guest of honour and receive the tributes
that were his due from men eminent in all walks of life.
In order to consult his wishes and conform to his con
venience, it was necessary to advise him of what was on
foot and agree upon times and seasons.
Mr. Hill listened to the committee, and when he
came to answer their questions said: "Gentlemen, I
am not insensible to the honour you propose. I ap
preciate it and am deeply grateful to you for the good
will by which it is inspired. But it will take a good deal
of money to pay for these things, will it not?" The
committee hastened to say that the sum, some $50,000,
a very considerable one at that time, had been
easily obtained and willingly subscribed. "Then,"
said Mr. HiU, "let me take the will for the deed. St.
Paul needs a public library building, and the city does
not feel that it can afford to provide one. If you will
appropriate this sum to that purpose, instead of the
celebration, and call that off, or if you can double it, I
will add twice as much more, and a good library build-
468

THE GREAT NORTHERN
ing can be put up at once. I shall be just as sensible
of your kindness, and the people will be richer instead
of poorer for it." His proposal was not accepted. St.
Paul made merry and paid its tribute, and deserves
praise for that. Mr. Hill was really disappointed at
the rejection of his plan for one that, as he said, "did no
body any good," when it might have been made of such
great advantage to the city. However, he bore his
honours modestly, with a little of that shrinking which
he never outwore when his personal qualities or per
formances were touched upon in his presence. In
this protest and this proposition were expressed a side
of the man as genuine and as characteristic as that
other side which expected and required prosecution
of his railroad's work under all difficulties, and the sys
tem of iron efficiency under which it was operated from
the time that a train bent on the world's business first
rolled over its track.

469

CHAPTER TWENTY-ONE
CAPITAL AND CHEAP MONEY
FROM the panic of 1873 was born the opportunity to
get control of the St. Paul & Pacific. Another and
more dangerous disturbance was approaching at the
moment when the order was given to build through to
the coast. Every man of intelligence and foresight
knew that it could not be averted. Upon the measures
to which it might give birth in an impassioned and
financially uninstructed democracy would depend
whether the large interests of thecountry should weather
the storm or go down before it. This derangement
of the money market, this enormous contraction of
credit, was not local or national; it was world-wide.
Not since the days of John Law had the world re
ceived such a shock as the collapse of Baring Brothers
gave it in 1890. These were the great international
bankers. If money intrusted to them was not safe,
what other custodian could coax a dollar from cau
tious investors? This was the worst possible time for
financing a new undertaking, calling for the investment
of many millions, in a quarter where railroad enter
prises were already tumbling over one another to ruin
at the mere touch of a breath of the advancing storm.
470

CAPITAL AND CHEAP MONEY
Fortunately, Mr. Hill was a few jumps ahead of the
cyclone. When his most important arrangements were
made it was muttering, but had not yet caught things
in its deadly core. Fortunately, too, both he and his
enterprise were now well known to every large holder
or investor of capital in Europe and America. He had
gained the reputation of a bold and able man, who set
money to make more money, and would have nothing
to do with merely speculative enterprises. His prop
erty was earning profits for all interested in it, and prom
ised to earn more. By this time, too, his associates
had risen to greater influence. Sir George Stephen,
in particular, could command large amounts of cash
and credit. Mr. Hill was no longer the mad adven
turer, looking for someone to grubstake him. He was
a notable figure, with the halo of a great success about
him. He had done for all investors who trusted him
more than he had promised. They were ready to
trust him again.
The Manitoba's stocK and bonds had become a well-
known and favourite investment among careful people.
It had secured a financial foothold in the territory
from which every large undertaking of the time sought
support — the thrifty " Down East. ' ' In 1887, people in
Boston and other parts of New England held between five
and six millions of the company's stock, and had reason
to feel pleased with their investment. Mr. Hill had fol
lowed consistently the policy which was with him both a
471

THE LIFE OF JAMES J. HILL
matter of business pride and a point of personal honour.
He handled the operations in which he was engaged for
the benefit of his stockholders, and never for private ad
vantage any further than as a pro-rata sharer with others
in the profits. He declared that he would be sufficiently
remunerated by the growth in value of his interest in the
property for the labour of directing it. That particular
kind of confidence breeds confidence in others. He had
unequalled opportunities now — ^with everything, con
struction, financing, operation, in his hands — to take mil
lions of profits. What he did was the sort of thing that
made it easy for him to raise more money when he needed
it. He handled these different parts of his undertaking
just as he did later the immensely valuable ore proper
ties in northern Minnesota. He turned them all over,
when he had brought them where they would realize
their highest value, to the stockholders of the railroad.
His policy is crystallized in a single sentence from a
letter written later to Lord Mount Stephen: "My own
present idea is that the property doing so well under the
conditions of an unsettled new country, not made pro
ductive to one tenth of its capacity, has a large margin
in the future; and that we will get the best results by
developing and creating a capacity to earn net money
for our shareholders and capitalizing as we find our
margins fully realized."
There was opportunity, in turning over the Montana
Central, to squeeze out a large profit or commission;
472

CAPITAL AND CHEAP MONEY
a business transaction universally approved by firms
of the highest integrity then. ^ What Mr. HiU pro
posed, and what he scrupulously carried out, was
stated in a letter of July 23, 1887, to Lee, Higginson &
Co., of Boston: "I hope to be able to settle with
all subscribers for $3,000,000 of the Montana Central
bonds, in which case I will turn over my contract
with the Montana Central, or rather will close it
up for the Manitoba account, paying the balance
necessary to finish the road, which will be from
$2,000,000 to $2,250,000. . . . This, you see, wiU
give the Manitoba the property, or at least the owner
ship of it. The stock will, I think, pay a dividend from
the start, and is certainly worth $3,000,000. You can
assure all your Manitoba stockholding friends that
their interests are being fully and faithfully looked after.
In fact, the Montana Central subscribers are, on my
personal request, giving up a piece of property that
would be of great value under any and all circum
stances." No one familiar with the usual history of
enterprises subsidiary to the development of large rail
road systems in this country will be surprised that a man
who treated his investors in this spirit was able to ob
tain what money he needed, whenever he had need of it,
in any of the world's financial centres; and to raise it
in times when other borrowers were compelled to liqui
date or heavily contract their loans.
Real business solidity as well as a nice sense of fin- 473

THE LIFE OF JAMES J. HILL
ancial honour and responsibility lay behind the under
taking. The facts were explained succinctly in a letter
written by Mr. Hill in the spring of 1889 to a bank
ing firm in Amsterdam, as a practical statement of
credit resources: "For the year ending June 30, 1888,
our company carried about 37,400,000 bushels of wheat.
Our best estimate for the year ending June 30, 1889,
is 21,500,000, or about 16,000,000 bushels less than last
year. The loss is fully equal to ten cents per bushel,
or $1,600,000. Adding to this the loss of business con
sequent on the withdrawal of the proceeds of this
amount of wheat, equal to, say, $12,000,000, would
leave us a shortage from the wheat districts of from
two to two and a haff millions. This has been, how
ever, almost entirely made good from the earnings of
the extensions, particularly the extension to Montana.
The increase for the past month on the Montana Divi
sion over April a year ago is more than $80,000. The
loss of 16,000,000 bushels of wheat in one season by one
road is greater than has occurred on any western road
that I know of. The amount itseff, sixteen million
bushels, is about equal to all the wheat hauled into
Chicago by all the roads running to that point during
the year. Notwithstanding so great a loss on our local
lines in Minnesota and Dakota, the fact that the prop
erty has carried itseff so well, and made good from other
sources this great deficiency, gives me greater confidence
in its future than I have ever had before. During the
474

CAPITAL AND CHEAP MONEY
last year we have made heavy permanent improvements
and added to the equipment so largely that our expenses
have been relatively greatly reduced, and this reduc
tion, I am glad to say, will continue." In another let
ter of the same year, 1889, it was stated that the cost of
these improvements, including the substitution of 75
for 56 pound rails, would be fully $2,000,000. Mr. HiU
added: "This should at, least be represented to the
stockholders by stock or bonds, and if we use their
money to that extent, and then reduce their dividend,
I think they would complain with good reason." There
fore the usual dividend was paid, and before the end of
the year the company's business justified it.
The issue of $50,000,000 consolidated 6 per cent.
bonds in 1883, related in its place, had straightened
out the finances of the Manitoba system and retired
the old bonds dating from the organization of the
company. In 1887 an issue of $25,000,000 bonds on
the lines in Montana was authorized, and $7,000,000 of
them were issued immediately and offered to stock
holders of the road at the market, 80 per cent. flat.
In 1888 there was an issue of $8,000,000 of collateral
trust bonds, bearing 6 per cent. The Eastern Minne
sota, the Montana Central, and the Seattle & Montana
were financed independently. It was not difficult to
place their securities among those who knew the value
and assured business future of the properties, and
could anticipate that they would soon become parts 475

THE LIFE OF JAMES J. HILL
of a consolidated system . Then the Great Northern was
organized in 1889, with $20,000,000 of preferred and the
same amount of common stock. The old stockholders
had the option of taking the preferred at fifty cents
cash, the other fifty cents of value being paid for by the
property transferred by the old company to the new.
In 1890, when the Pacific Extension was determined
upon, bonds were issued against the line for six million
pounds sterling. British investors were hungry for a
chance to lend to any enterprise backed by Mr. Hill. The
records of the company, show that immediately following
the authorization of this loan, and at the same meeting,
a resolution was adopted "ratifying the action of the
president in securing a subscription of two million
pounds sterling." Little had been left to chance by his
far-sighted and prudent financing.
The consolidated mortgage contained a clause giving
authority to issue new bonds in exchange for old bonds
of the St. Paul, Minneapolis & Manitoba, as these were
retired and cancelled. This authority was exercised
from time to time; and bonds were also issued, as neces
sary, to repay the Great Northern for moneys advanced
for new construction and for the permanent improve
ment of the property. In 1892 fifteen million dollars
of collateral trust bonds were put out, and three mU-
lion pounds sterling of the Pacific Extension bonds
had been negotiated, sold, or pledged. At this time
costly construction was going forward. In the same
476

CAPITAL AND CHEAP MONEY
year the preferred stock was raised to $25,000,000,
making the total capital stock of the Great Northern
$45,000,000. In 1898 the volume of the preferred stock
was doubled. The added $25,000,000 was used to pur
chase $15,000,000 Pacific Extension bonds and cancel
the $15,000,000 collateral trust bonds just mentioned,
which were held as security; and also to buy in, at a
price not more than $10,000,000, the stock of the Seattle
& Montana.
After the line was finished to the Pacific Ocean, Mr.
Hill cabled to Lord Mount Stephen in London, May 5,
1893, the following summary of the company's financial
condition: "The through line is completed and paid
for. The company owns the Coast Line, 183 miles, with
large terminals at all important points, costing
$5,300,000, upon which there is no mortgage or bonds;
also an interest of $1,100,000 in the line to Portland,
owned jointly with the Union Pacific; $600,000 in coal
and other properties on the coast; about $2,300,000 in
bonds, and $2,000,000 in biUs receivable, $1,500,000 of
which will come into the treasury as bonds on connect
ing and proprietary lines. Our company has no float
ing debt." Carrying the record of stock issues down to
the end of the century, the report of the president for
the year ending June 30, 1899, stated that the capital
stock had been increased during the year by $65,000,000.
The disposition of $25,000,000 of this total has just
been explained. Another $25,000,000 was assigned to
477

THE LIFE OF JAMES J. HILL
the purchase outright of the outstanding stock of the
St. Paul, Minneapolis & Manitoba. The remaining
$15,000,000 was used to pay for an increase in the
stock of the Eastern Minnesota and to buy the Spokane
& Northern property. The latter was a line from
Spokane to the international boundary, built by D. C.
Corbin for his company, incorporated in 1888. It
served traffic territory desirable to control. So was
completed the financial expansion of the St. Paul,
Minneapolis & Manitoba into the Great Northern.
Together with the eariier bond issue of $10,000,000,
the motive and justification of which have been set forth
in a previous chapter, this completes the bonding record
down to 1900. A steady concentration of securities was
preparing the way for a closer corporate consolidation.
For this reason, forming a connected series as they do,
financial measures have been grouped here, at the expense
of advancing somewhat beyond the strict chronological
line that the story would otherwise follow. Taken as a
whole, they suggest two principles then distinctive in
American finance.
First, as already mentioned, Mr. Hill believed in re
course, so far as possible, to the sale of stock rather than
of bonds. Where bonds are issued first and a railroad is
built from the proceeds, much or all of the stock usually
goes with them as a bonus. Mr. Hill declared re
peatedly that every dollar of securities, stock as well as
bonds, should have behind it a dollar in cash, material or
478

CAPITAL AND CHEAP MONEY
services rendered. He observed this rule himseff. He
would have liked to hold everybody to it. At the
time when combination in all kinds of business was
proceeding most rapidly and creating most alarm, he
stated publicly that if the law would compel every cor
poration to put dollar for dollar of cash or property
behind its outstanding paper, and make it pay assess
ments for that purpose or retire the securities which
could not show their title clear, it would need to do little
else. Second, he believed in expanding the railroad
system, whenever it was possible, by employing cash in
hand; using the proceeds of his splendidly prosperous
property, and taking up the debt with securities after
ward. On some occasions he was blamed for this by
those who could not or did not wish to understand.
But no one with the slightest conception of right meth
ods of financing will underestimate the economy and
safety of the method. When Great Northern stock or
bonds were put on sale, there was a market for them
at good prices. No investor thought that sluice gates
had been opened to let out a little more water. Every
body knew that these bits of paper represented value;
often, value already contributed in cash by the prop
erty itseff.
Mr. Hill and his associates acted, to a great extent,
as their own financial agents. They were not indepen
dent of the New York and London banking houses.
Nobody engaged in enterprises of this magnitude could 479

THE LIFE OF JAMES J. HILL
be. But as Mount Stephen and Strathcona were
names of weight in Montreal and London, so the name
of Mr. HUl became a synonym for financial probity, as
well as for exceptional skill in railroad management,
in all the money centres of the world. Wisely he
broadened the base of the pyramid of investment
in his railroad. He counted personal friends and
staunch believers in every country in Europe. He
spent the early part of 1891 abroad, after the push to
the coast began; strengthening his alliances every
where. The sight of the strong man, with absolute
confidence in himseff and his plans, and established
facts to back it, brought him both financial helpers and
personal friends. To the end of his life his private
correspondence was rich in kindly reminders from the
many persons abroad, from the lower ranks to the high
est of all, who had not only profited by his undertakings
but were delighted to have known him and who valued
him at his intrinsic worth.
Therefore, when the St. Paul, Minneapolis & Mani
toba or the Great Northern came forward asking for a
tidy bit of cash, it was generally found that ground had
been broken and that resources were already prepared
which precluded any possibility of failure, and assured a
subscription of the remainder on favourable terms. This
concern paid no big commissions and made no scanda
lous payments to underwriting syndicates. Its head was
working for his stockholders all the time. Five years
480

CAPITAL AND CHEAP MONEY
before, in a letter to Mr. Kennedy, after discussing and
reaching a conclusion on some matters of policy, he
chnched it by saying : "at the same time, we are in a posi
tion to do the best for the interests we represent, i.e. all
the stockholders." The widow of an investor in Paris,
who had received as her whole fortune some stock in the
Great Northern, sent for a friend and suggested chang
ing to something about which she knew more. "What
sort of man," she asked, "is this Hill? " The friend, an
American, replied: "He is the sort of man to whom a
single share of stock, owned by a widow, would be just
as sacred as the possessions of the greatest millionaire
stockholder in his system." The investment was left
untouched, and the tribute was never belied by the
fact. The railroad had paid dividends from the beginning.
It kept on paying them, notwithstanding the immense
expenses incident to growth. When an extension
was ready for traffic, it began to help fill the strong
box. When some weak property, the owners of which
thought that they had shrewdly unloaded some
thing on Mr. Hill, but which he bought only when he
found its value as a part of his plan, came under his
control, there was a mighty stirring among the dry
bones. New men, new methods were installed; and
presently the failure was contributing to dividends
and surplus. A fitting conclusion to the story of
capitalization is a voluntary tribute paid by another 481

THE LIFE OF JAMES J. HILL
pioneer railroad builder who, as he said, had by no
means always agreed with Mr. Hill and had sometimes
run up against him to his own cost. In 1907 an article
containing unfavourable reflections on Mr. HiU's finan
cial methods appeared in the Outlook. Of his own
motion and without Mr. HiU's knowledge, Mr. A. B.
Stickney, all his life a builder and manager of railroads
and a student of their problems, published a reply in a
later number of the same magazine. Here is the con
clusion reached by this competent and certainly un
prejudiced authority:
In 1890, when the total bond and stock capitalization of the
Great Northern was $105,735,000, its 3,006 miles of railway were
prairie lines in Minnesota and North Dakota. During the sixteen
years between 1890 and 1905, in which its total capitaUzation in
creased $119,490,126, it has constructed 3,104 miles, including the
expensive lines over the Rocky and Coast ranges of mountains to
the Pacific Coast, and expensive lines in the mountains, and has
expended large sums of money in improving its former prairie lines
and in enlarging and improving its terminals. It has buUt steam
ships which sail on the Great Lakes and on the Pacific Ocean.
Its terminals at Minneapolis-St. Paul, at Duluth-Superior, and at
Seattle are superior to all others. At Duluth-Superior, in my
judgment, its facilities for handling grain, including its elevators,
are superior to the facilities of aU the railways in the cities of Balti
more, New York, and Boston combined.
That Mr. HUl had the genius to build a line across the unsettled
plains and the mountains to the Pacific in 1890-1893, without a land
grant or other Government aid — a feat never before accompUshed
— and to build in sixteen years over three thousand miles, and made
the improvements specified by only doubling the capitalization,
seems to the people of the West a wonderful exhibition of economic
achievement.

CAPITAL AND CHEAP MONEY
To understand the difficulty at that time of find
ing money to buUd a transcontinental line, and of
maintaining its credit, one has to remember that, to
the particular financial problem was added a general
financial apprehension now passing into its acutest stage.
Nor was this a mere temporary depression or panic re
sulting from speculation or over-expansion. The fi
nancial foundations of the country trembled. This
trouble, that came near to paralyzing all effort, and
threatened the future as well as the present, was due
to agitation for the free coinage of silver, and the
well-grounded fear that the advocates of this policy
might carry the day. So long as there was any proba
bility of this, capital could not be enticed by any bribes
from its hiding places.
The United States furnished a soil peculiarly adapted
to the growth of the cheap money fallacy. The people
of the country had never made a study of finance. To
ninety -nine out of every hundred of them, it was as unin-
teUigible as the higher mathematics. They had become
accustomed to the use of irredeemable paper money
during the Civil War. The resumption of specie pay
ments, in 1879, was carried with difficulty; and then
the law fixed permanently at $346,000,000, neither more
nor less, the volume of the "Greenbacks," as these legal
tender notes were called, to be left and kept in circula
tion. Inflation, the boon of the demagogue and the
dream of the great debtor class in this new country, 483

THE LIFE OF JAMES J. HILL
must find some other medium. This was found in the
movement for the free coinage of silver into legal tender
dollars at an arbitrary ratio fixed by law below the mar
ket ratio of the two metals. The silver dollar had not
been in actual circulation since 1853. In 1873 it was
dropped from the list of United States coins. This
was merely a legal recognition of an existing fact. There
was no subterfuge, no concealment, no chicanery and no
"British gold" about the matter. AU that was in
vented later, when "the crime of '73" was needed for a
rallying cry. The law was passed just as most other
laws are. The intelligent minority that was interested
in it knew it to be wise and proper. The others neither
understood nor cared anything about it. The word
"bimetallism" meant about as much to the average
voter of that day as "anthropomorphism."
Fifteen to twenty years later the situation had
changed. The debtor class, increased now by the open
ing up of the West on borrowed capital, welcomed any
measure that might give them a specious justification
for discharging their obligations with something worth
less than what they had promised to pay. The
silver production of the Western States had gone on
increasing. It was swelled by Colorado, Nevada, the
Coeur d'Aldnes, the Black Hills, Montana. Therefore,
silver, as measured by other things, continued to fall.
A purchaser at an artificial price must be found if the
silver mining industry in the West was not to collapse.
484

CAPITAL AND CHEAP MONEY
Only one such purchaser was possible — the Government.
Hence grew up a formidable coalition between mine
owners, debtors unable or unwilling to pay, ambitious
pohticians, honest theorists led captive by barren and
unpractical abstractions, and a host of men too ignorant
to inform themselves, too impassioned by what they
heard to wish even to know the truth. The issue of the
free coinage of silver soon became a dividing line of par
ties and a test of the economic and moral worth of the
American people.
As always happens, there was a preliminary period of
temporizing; and this coincided with the period just
before and just after the creation of the Great Northern.
Political leaders sought to frame a measure of assistance
which would pull the mine owner out of one hole without
dropping the country into another. The practical
fruit of this opportunism was the passage, in 1890, of a
federal law requiring the United States treasury to
purchase not less than 4,500,000 ounces of silver each
month, and to pay for the same at the market rate in
treasury notes, which were legal tender and redeemable
in either gold or silver at the Government's option.
This law destroyed instead of restoring confidence.
It was accepted everywhere as the first step toward the
silver basis. Everybody began to hoard gold. Debts
abroad could be discharged only in the mbre precious
metal. Money could be obtained or credit extended
anywhere in Europe only by contracting specifically to
485

THE LIFE OF JAMES J. HILL
repay "in gold coin of the present weight and fineness."
Gold exports became enormous. The value of the bul
lion in a silver dollar declined until it was less than half
its face. The legal tenders, which a man could get in
exchange for silver doUars and which the law required
to be redeemed in gold and to be reissued immediately,
constituted the "endless chain" that exhausted the
treasury gold faster than it could be replenished. The
day was in sight when the honour and the prosperity of
the United States would vanish together in the abyss.
Only the winning of two great battles could avert these
calamities. The advanced trench to be taken was the
repeal of -the compulsory purchase clause of the act of
1890. This would give the country time to breathe and
think. The pitched battle to be won was the defeat of
the combination, sprung from both the great political
parties, which was now ready to formulate its demand
for the free and unlimited coinage of silver at the ratio of
sixteen to one. The rest of the world looked upon the
United States as already financially lost.
The financing of the Great Northern was completed
while these convulsions and uncertainties distracted the
country. They broke all the other big roads in the
West, and many of those in the East. In the worst
panic year, but one large system in the United States
besides the Great Northern paid a dividend. The lat
ter did not have to put up a big fight to do so. On
the contrary, it declined to punish its groggy advers-
486

CAPITAL AND CHEAP MONEY
aries. It stayed its hand in pity and for wise reasons.
Quoting the rates of a general freight tariff just put into
effect, Mr. HiU wrote, February 13, 1893: "This to
our company is a higher rate than we would probably
make if our line was alone in the business, as I believe
the development and increased business from the growth
of the country would give us a better revenue at a
lower rate. At the same time we thought better to
keep the other companies on their feet at this time,
although it seems certain to me that in the future they
will be compelled to level down the great differences in
their requirements over what the service can be per
formed for by a well-constructed road." But to the
observer abroad American affairs looked almost desper
ate. English and German and French capital was
withdrawing from every American enterprise about
which there was the least note of uncertainty. All
through these years Mr. HiU's correspondence tells of
this growing embarrassment. It was easy to make all
promises to pay in terms of gold. But the investor must
also believe that the borrower would continue to pay
in gold even if the Government should, as the silver
party threatened, pass laws invalidating contracts
made in terms of gold exclusively. Mr. Hill looked the
facts in the face and dealt with them in the double
capacity of a customer for large grants of capital and
credit and a citizen with a patriotic interest in the
welfare and future of his country. He obtained what 487

THE LIFE OF JAMES J. HILL
he wanted, because of his record and the faith it had
instilled. But the feat was not easy.
In March, 1889, when the situation was not so acute
as it became after the passage of the silver purchase act,
he wrote to a friend in the Northwest: "I think that
the conditions setting in now are worse in many respects
than in 1873; because larger amounts are involved, and
the entire country is suffering. Gold is being shipped
rapidly to Europe, and, at the rate at which it has been
going for the past ten weeks, less than six months would
put gold at a premium. ... I do not want to un
necessarily alarm you, but, as an old acquaintance, I
desire to tell you that this part of the country has to ' go
through the fire' before it will start a new era of pros
perity." As to the bearing of the times on the for
tunes of his own enterprise, he added: "As matters
stand at present it will be impossible to obtain money
to build more railroad lines in either Minnesota or
Dakota. The public — even the bankers and merchants
— have no idea of the want of confidence that exists
on the part of the people who have heretofore in
vested their money in the West." Each year that
brought the crisis nearer increased his caution. But
his great anchor to windward, now as always, was the
earning capacity of his system. It had always a good
balance on the credit side.
The public little understood how much that credit bal
ance was worth to the whole Northwest. For instance,
488

CAPITAL AND CHEAP MONEY
the country elevators were accustomed to receive the
wheat of the farmer and carry it until marketed ; giving
him cash which they, in turn, had procured, on the se
curity of the grain, by loans placed in financial centres.
Such loans were now hard to obtain. What must be the
consequences? like a row of bricks, aU the important
interests of the section would go tumbling, one after the
other. If the farmer's wheat could not be moved, there
would be no business for anybody, and nothing for the
railroad to carry. Presently there would be nobody left
in the country. The railroad stood ready to help; and
when it could go no further, Mr. Hill stepped into the
breach and carried the load by means of his individual
resources. He wrote to Lord Mount Stephen in the
latter part of 1890, after the crop had been moved : " We
advanced on wheat in our elevators at St. Paul and
Superior 80 per cent, of the cost of the wheat, which
has been kept margined on that basis up to the present
time. We have advanced in this way something over
two million dollars. This has given us the benefit of
the traffic and had a good effect on the business of the
merchants on all our lines." A year later, when the
same situation recurred, he raised $800,000 himself
to help move the crop. Such a policy was not, at that
time, thought of elsewhere. Nor had others the means
to put it into effect. Probably Mr. Hill, certainly his
competitors, would have greeted the statement with
astonishment and hilarity ff someone had said, at this 489

THE LIFE OF JAMES J. HILL
time when he was fighting for supremacy in the North
west, that his policy was "the apphcation of the golden
rule to business." The phrase had yet to be coined,
to describe something that it fitted perhaps less per
fectly. Yet, at this distance, what he did looks very like
it. But his action was dictated not by abstract altruism,
but by enlightened and far-seeing self-interest.
By 1893 financial distress came in like a flood. Mr.
Hill was ready for it. He gave checks amounting to
$2,000,000 to save commercial undertakings in St. Paul,
Minneapolis and the Northwest from failure on
account of inability to obtain credit, even on good
collateral ; and to keep hundreds of individuals, rich and
poor, from ruin. Anxious people thronged not only his
business office but the hall of his home from early morn
ing till late at night, beseeching the financial aid which
alone could prevent the sweeping away of the savings of
years of labour. He kept the position of the railroad
company impregnable. He said, in a letter to Mr.
Forbes: "In view of the general wide difference which
has to be overcome between our representatives in Con
gress on financial questions, which may take more time
than is generally supposed, our board of directors have
considered that, in order to make the company partic
ularly strong it should carry a liberal cash working capital.
We could probably provide everything we want from
surplus earnings, as we have done heretofore, or could
sell some of the treasury securities." About the same
490

CAPITAL AND CHEAP MONEY
time, in a full statement of the company's position
to Lord Mount Stephen, he declared : " Under ordinary
conditions it would be safe to depend upon sales of
treasury securities, and surplus earnings; but the uncer
tainty of the Government's silver policy disturbs aU fi
nance and might in an emergency compel us to sell securi
ties so much below value as to affect the general standing
of securities previously sold, reacting on the company's
credit, or forego doing what might be greatly to the
company's advantage. The sole object of the present
issue is to furnish the company with five mUlions of
cash working capital, avoiding any sudden necessity
for using its credit, leaving it very strong under all
conditions that may arise."
Of course, the personal experience of every man en
gaged in large business at this time, unless he happened
to be operating silver mines, impressed him with the
danger of the persistent agitation for cheap money.
But Mr. Hill had also read and studied widely. Econo
mic subjects had always for him a peculiar attraction.
He was grounded in their principles, from Adam Smith
to John Stuart Mill and Fawcett, to Cairnes and Sum
ner. The Bullion Report was gospel to him. To the
earnestness of the working financier, under the fierce
pressure of evil market conditions, was added the zeal
of the citizen who fights for what he regards both a con
dition of public safety and a point of national honour.
He had followed with growing approval the policies of
491

THE LIFE OF JAMES J. HILL
President Cleveland. The latter's bold declaration
againstfree silver at a moment when all fences werefringed
with the coat tails of politicians clinging to the topmost
rail, riveted fast both friendship and faith. Here was, in
deed, a man after his own heart; a man absolutely fear
less, stubbornly honest, loyal to his lightest word, and,
like Luther and like Lincoln, ready to do the right as
God gave him to see the right, with a fine scorn of
consequences. In the campaign of 1892 Mr. Cleveland
had few more ardent supporters. In the great fight
upon which he now entered within his own party for
honest money, he had no sincerer or more helpful friend.
The monetary conditions of the country had become
desperate. The silver purchase act depreciated the
currency monthly and gave promise of worse to come.
Public distrust, acting through the "endless chain,"
drew gold steadily from the treasury and sent it abroad.
The money of the country kept its parity with gold
only through sales of bonds for treasury account.
This could not go on for ever. Everybody felt the blight
of distrust and foreboding. Mr. HiU wrote to Mr. Per
kins in June, 1893: "The general condition of the
country, and particularly our part of it out here, seems
to be fully as good as usual, with the exception, of
course, of the widespread feeling of distrust and the
want of credit. If it was firmly settled so that the
world would understand that our Government would
maintain the parity between gold and silver under all

CAPITAL AND CHEAP MONEY
circumstances, foreign capital would, in my judgment,
be invested in this country more freely than ever, and,
I think, on more favourable rates to the borrower.
There seems to be no other place in the world where
capital can be as safely and well invested as in the
United States, provided that the danger of repayment in
silver is removed."
President Cleveland had by this time made up his
mind. No matter what the effect might be upon his
personal fortune or upon his party's future, the coun
try's safety took precedence. He determined to use
not only the full strength of his individual relations with
public men, but the whole power of his office to force
through a repeal of the law compelling monthly pur
chases of silver bullion. He did not underrate the
cost. He was averse to disrupting his party, he hated
the thought of executive intervention in a legislative
affair, he loathed the use of patronage to influence votes.
All these feelings he thrust into the background to save
the country from swiftly advancing ruin. In a letter
to him dated July 4, 1893, Mr. HiU employed the
national anniversary to express warm approval of his
course :
"Your proclamation calling Congress together on
the 7th August, and the reasons given therefor, have
met with the most unanimous and hearty approval on
the part of the people throughout this section. Nothing
could have been more timely. The people feel so

THE LIFE OF JAMES J. HILL
strongly in this matter that they are ready, if it will do
any good, to send delegations from the different locali
ties to Washington, or to flood Congress with petitions,
so as to impress upon the members of both houses the
absolute necessity of removing the legislative burden
that has been placed upon the business of the country
from -one end to the other. The amount of money —
mainly gold and greenbacks — that has been taken out
of circulation and hoarded is, of itseff, enough to bring
about the conditions that have existed as regards
scarcity of cash. This of course is due to the wide
feeling of distrust on the part of the masses. When the
present condition commenced on the first of May, it
affected mainly the wealthy classes; but as soon as
liquidation in stocks, bonds and securities was over, it
began at once to affect manufacturers and every
employer of labour throughout the country. The re
sult is that within sixty days a very large number of
people are out of employment, unable to earn summer
wages with which to protect their families during the
winter, and without any prospect of re-employment
in present view. In St. Paul and Minneapolis, which
are not considered manufacturing cities, the unemployed
number not less than eight or ten thousand."
Mr. Hill believed, theoretically, in bimetallism.
A permanent ratio between the metals, fixed by
any one country's law, he knew to be an im
possibility. He was always, in the ten years of
494

CAPITAL AND CHEAP MONEY
struggle with the free silver "ghost dancers," as he
called them, and throughout the whole period of in
quiry and discussion leading up to the establishment of
the Federal Reserve Banking system, an active and
consistent friend of sound money. He stated fully and
plainly his platform on the money question in a letter
written, in the summer of 1893, to a public man who was
wavering between his duty to his country and the de
mands of his constituents who had been swept away by
the tide of Populism: "The silver interests of the
United States are greater than those of any other
country except Mexico, and I certainly would be glad
to see silver used to the fullest extent as money all over
the world; but the United States cannot buy the silver
product, simply to benefit those who produce it, any
more than they can buy the coal, or wheat or any other
product of the country; and any attempt to do so will
result in disaster, not only to the silver interests, but
to all other interests in the land. For more than a year
past we have heard the silver men say, ' Let the gold go,
and silver will take its place.' The recent action of the
British Government in India has shown the utter
fallacy of such ideas; and whenever the United States
Government ceases to maintain the parity between its
gold and silver in circulation, a silver dollar will pass for
fifty cents, and no more; while the wheat, corn, oats,
meats, cotton, and other articles that furnish the bulk
of our exports will still be sold on a gold basis, and will 495

THE LIFE OF JAMES J. HILL
bring no more than they do now. There can be no
improvement in the condition of silver until the United
States is on a gold basis with the other nations, and
declares to the world that it has the ability to provide
itself with sufficient gold to maintain its position."
During the whole of this period Mr. HiU's views of men
and measures were influenced materially by this issue,
which had come to represent to him not only an economic
but a moral test. He stood by Mr. Cleveland to the end.
He deplored the apostasy of the party to which custom
and natural disposition had attached him. He scorned
the man who, in 1896, by securing the Democrat nomi
nation for the presidency on a free silver platform, broke
the last tie between that party and its ancient faith. He
fought that candidacy with all the means at his com
mand. He made common cause with the enemies of the
free silver propaganda, regardless of party affiliations.
Fired with indignation and full of purpose, he wrote to
Mr. J. P. Morgan, as follows, so soon as the die was cast,
July 15, 1896: "On my way home and since my return I
have taken every step to try and get the actual situation
as between the sound money men of the country and those
who are likely to support the action taken at Chicago
last week. I am not disposed to overestimate the
strength of the silver people or to admit that they will
succeed, but I feel it is very important that the sound
money men shall not waste a single day in getting at
work. There is an epidemic craze among the farmers
496

CAPITAL AND CHEAP MONEY
and to some extent among those who receive wages or
salaries, and people go about even in the cities from
house to house talking up their views in favour of free
coinage. I take the liberty of writing you my own opin
ion, hoping that you will urge those who are to manage
the McKinley campaign that they should get to work at
once and open the fight in St. Louis, Chicago and all the
leading Western cities and drive back the wave that is
rising- over the doubtful states. I will do anything or
everything in my power to further the end we all have
in view, but I think all action should be well handled
and on lines that will be in unison with those taken by
the general campaign. Surely it is important that we
should not only beat them but that the victory should
not leave any room for doubt as to the future position
of this country on the money question." He remained
a convinced democrat at heart, but spelled the word
with a small letter as often as with a capital. Until
the last chaff of the cheap money pretension had been
threshed out of the party by the flail of repeated politi
cal defeats, he had little sympathy for it. He spoke, he
wrote, he contributed funds liberally for education in
sound money principles everywhere, but especially
throughout the, at that time, wild-eyed and wild-idead
communities of the Northwest.
Of course all this drew closer the bonds between him
and President Cleveland, now undergoing his martyr
dom. A dozen years later the latter said: "Mr. Hill 497

THE LIFE OF JAMES J. HILL
is one of the most remarkable men I have seen, es
pecially in his wide knowledge of a great variety of
questions, and his farsight into industrial conditions.
I am perfectly sure that I have never known a man who
was at once so familiar with so many big things, and
who also had the gift of carrying about and remember
ing what most men in his position would deem too small
for their attention." On the other hand, Mr. HiU's
appreciation of Mr. Cleveland's great qualities was
quickened by sympathy for a leader at this time the
victim of truculent abuse, but splendidly vindicated
by history. At any time the mention of the ex-presi
dent's name would stir Mr. Hill and send him off on a
train of musing but enthusiastic eulogy. As long as
Mr. Cleveland lived they saw much of each other. At
Mr. HiU's salmon preserve in Labrador, a spot to which
he loved to carry off a man so congenial in mind and
temperament, appreciation grew into intimacy. No
one could be more keenly unsparing in his judgment
of others than Mr. Hill. Even when he admired a man
genuinely, and said so frankly, he often added a mordant
sentence in which a pet weakness was set off to the Iffe.
This man was exempt. Mr. Hill was no hero-worshipper.
But if any one of his own generation came near to a place
beyond criticism in his mind and heart, it was G rover
Cleveland. END OF VOL. I

THE COTTNTRY LIFE PRESS
GARDEN CITY, N. Y.

9002 00956 6804