- Historic Sites
The Legend Of Jim Hill
The steamship clerk of Pig’s Eye, Minnesota, built a railroad empire from the Great Lakes to Puget Sound
June 1958 | Volume 9, Issue 4
The Hudson’s Bay Company was operating what it considered a monopoly steamboat line on the Red River, which flowed north out of Dakota to the Bay Company’s post at Fort Carry (Winnipeg). Hill put a boat of his own on the Red. He added another. He had taken care to bond his steamers, thus complying with a United States customs law which, until then, had been a dead letter. The Bay Company’s vessels were suddenly barred from carrying freight; and until the Canadian firm could comply with the forgotten law, the Hill boats enjoyed a lucrative monopoly. When Donald A. Smith, governor of the Bay Company, learned of the coup, he remarked of Hill that “he must be a very able man.”
Hill promptly began a rate war against the Bay Company boats so effective as to cause Donald Smith to visit St. Paul. The outcome was a coalition. What the public saw was that Norman Kittson, the Hudson’s Bay agent at St. Paul, organized the Red River Transportation Company, in which Hill was a secret partner. Shipping rates on the Red went high and stayed high. It is of interest to know what “high” means during its first season the Kittson-Hill combine returned a net profit of 80 per cent.
Yet Hill was not content. While engaged in his now numerous activities he watched the steady decay of the St. Paul & Pacific Railroad. If they could lay hands on that streak of rust and corruption, lie told Kittson, it could be made into a profitable enterprise. Soon came the Panic of 1873 to add the ripening touch. The railroad promptly went into receivership.
Hill and Kittson together could muster a few thousand dollars. To get a firm hold on the St. Paul & Pacific called for infinitely more money. Through Donald Smith and Smith’s cousin, George Stephen, head of the Bank of Montreal, $6,000,000 was raised. Hill and Kittson then borrowed and mortgaged and added $780,000 to the syndicate. The four men took over the bankrupt company and reorganized it as the St. Paul, Minneapolis & Manitoba Railroad.
To get it so cheaply, Hill had guided a bondholders’ committee over the road—or, as legend has it, over the most worthless stretches of it and in the most decrepit rolling stock Hill could find. While so engaged, he gently admonished them to behold their folly.
Even at $6,780,000, the bondholders’ folly was something oi a bargain. The new owners promptly sold the major part of the company’s land grant for $ 13,068,887. They still owned the railroad, such as it was. Of the !bur partners, Smith was soon to become Lord Strathcona, Stephen was to be made Lord Mount Stephen. The others were to remain Kittson and Hill. Hill took charge of building the Manitoba, as the line was commonly known, into a railroad that would pay its way wherever it went.
Hill was just forty when he set out to make something from the dismal remains of the bankrupt line. Directing the job in person, lie drove his construction crews at a furious rate. Across Minnesota went the rails, then north to the border to meet the Canadian Pacific, which built a line south from Winnipeg, a “happy conjunction” made |X)ssiblc by the fact that Hill’s Canadian partners were heavy stockholders and leading spirits in Canada s first transcontinental line.
Two thumping wheat harvests followed completion of the first Hill railroad; the freight traffic grew immense. What had been a trickle of immigrants from Norway and Sweden turned to flood, and not without reason: Hill’s agents had been in Scandinavia singing the glories of the Red River of the North. Homesteads could be had free, or Hill would sell them some of the land still in possession of the Manitoba railroad at $2.50 an acre.
Jim Hill’s idea of a railroad was not a piece of track to connect the Twin Cities and Winnipeg. As early as 1879 he told his directors he meant to push the line across the continent to Puget Sound. Some of his colleagues were alarmed. No other concern had attempted to build a transcontinental railroad without a subsidy from the government in lands and often in loans. Hill could get no land grant other than the one the road already had in Minnesota, and that would be of no aid in building across Dakota, Montana, Idaho, and Washington. Even if by some quirk he did manage to lay rails to Puget Sound, how then could he hope to compete with the old subsidized lines, the Northern Pacific and the Union Pacific? When Hill’s presumptuous plan became public, his railway inevitably was labeled “Hill’s Folly.”
Hill’s Folly moved westward with speed, though not so fast as to preclude short feeder lines being built as the main rails went forward, heading for the northwest shore. Hill seemed to know just where a branch would become a profitable feeder almost as soon as it was laid. Soon the main line started the long haul across Montana, running well north of the Northern Pacific, which Hill pretended to ignore, except to set his freight and passenger rates very low in territory where he could compete with the older road.
Hill was ruthless. Near Great Falls, Montana, which Hill’s Folly reached in 1887, he showed what he could do to a stubborn community. He laid his rails in a graceful arc clean around Fort Benton, whose shortsighted townsmen had rejected his demand for a right of way free of charge, and left the settlement a good mile from the tracks. Great Falls had been debating how much to charge Hill for a strip through the city, but observing what had occurred at Fort Benton, it decided to be openhanded, and presented him with a dandy right of way through the center of its city park.