Expanding the Line

During his planning of the St. Paul, Minneapolis, & Manitoba, Hill was also involved in the construction of the Canadian Pacific Railway. While Donald Smith and George Stephen were leaders behind this transcontinental route, Hill gave advice about selecting routes and construction techniques. But because the Canadian Pacific would soon be in competition with his own planned transcontinental route, Hill resigned from the business and sold all his stock in 1882.

Only a year after his purchase of the St. Paul & Pacific, Hill decided to extend his railroad to the Pacific. Many thought that he could never do it. Never before had someone tried to build a railroad without government land and grants. Railroads like the Union Pacific, Central Pacific, and Northern Pacific were all given millions of acres of government land to build their transcontinental routes. People thought that even if Hill could achieve his dream, he wouldn’t be able to compete with government-funded lines. His quest came to be known as “Hill’s Folly.”

The St. Paul, Minneapolis, & Manitoba reached Minot, North Dakota, in 1886. Because the Northern Pacific had steep grades and high interest charges, and was saddled by high property taxes, the new railroad resulted in a much more profitable route.

A railroad line would obviously help the economy of any town it passed, so Hill was able to get good rights of way. However, one town, Fort Benton, Montana, rejected Hill’s request for a right of way. He decided to cut it off by building around it. Showing his attitude toward those who tried to stand in his way, Hill left Fort Benton one mile from the railroad.

After very quick construction using 8,000 men and 3,300 teams of horses, the St. Paul, Minneapolis, & Manitoba reached Great Falls in October 1887. Hill connected it there with the Montana Central Railroad, which went on to Helena, bringing lots of new business. In 1890 he consolidated his railroad into the Great Northern Railroad Company.

Hill also encouraged settlement along the lines by letting immigrants travel halfway across the country for $10. In addition, he rented cheap freight cars to entire families. These strategies, rarely used by other railroads, encouraged even more business.

In 1893, the St. Paul, Minneapolis, & Manitoba reached Puget Sound at Everett, Washington. However, during the same year, a panic put the Northern Pacific as well as the Santa Fe and Union Pacific into receivership. Hill made an agreement with businessman Edward Tuck and Bank of Montreal associate Lord Mount Stephen to buy the Northern Pacific. A stockholder objected, however, arguing the deal would violate Minnesota law, and the agreement was stopped. But Hill got around this by having his associates help buy Northern Pacific stock as individuals instead of as a company. The Northern Pacific became part of the Great Northern in 1896. The lines came to be widely known as the “Hill Lines.”

Hill realized that the only eastbound traffic for the first few years would be lumber, and this would make the line less profitable than it might be. Wishing to acquire a line to Chicago and St. Louis, where he could deliver the lumber, Hill researched the Chicago, Burlington & Quincy railroad that stretched from the Great Lakes to the Rocky Mountains. This acquisition would also give him a line that could haul cotton to St. Louis and Kansas City and connect to the smelters of Denver and the Black Hills. The trains would be kept full at all times. Working with J.P. Morgan, Hill succeeded in purchasing the Chicago, Burlington & Quincy.

Hill now began to expand his shipping empire internationally via Seattle. He supplied Japan with cotton from the south and shipped New England cotton goods to China. He also shipped northern goods such as Minnesota flour and Colorado metals to Asia.

Hill continued to expand his railroads in the early twentieth century. He bought the Spokane, Portland, & Seattle Railway and added a 165-mile line from Columbia along the Deschutes River to the town of Bend. He also purchased several electric rail lines to compete with the Southern Pacific, and an ocean terminal at the mouth of the Columbia River near Astoria. He had two large steamships that operated between the terminal and San Francisco. This proved to be good competition for the Southern Pacific.