FreightWaves Classics/Fallen Flags: James Hill built the Great Northern Railway into a powerhouse (Part 1)

There are many people interested in former transportation companies, whether they were trucking companies, railroads, airlines or ocean lines. These companies are called “fallen flags,” and the term describes companies whose corporate names have been dissolved through merger, bankruptcy or liquidation.

The Great Northern Railway (GN) employed thousands of people, but it was really the product of one man – James Jerome Hill. Known as the “Empire Builder,” over nearly 40 years Hill put together “one of America’s great transportation companies.” Hill was described as “methodical, driven and an excellent railroader.” He was so good at planning and execution that other railroad executives often hired him as a consultant. 

Hill began with the small St. Paul & Pacific Railroad and, by the time he died in 1917, the GN was a transcontinental carrier with more than 8,000 miles of rail lines. Under Hill the GN was very well managed, and it remained so after his death until its corporate life ended.

Hill’s background

Hill was born in Guelph, Ontario on September 16, 1838. He quit school at 15 after his father’s death. At 17 he left home and ended up in St. Paul, Minnesota in July 1856. Hill became a shipping clerk, learning the freight forwarding business. He worked as an agent for several companies in the business and dealt repeatedly with various railroads.

He became quite successful and was also well respected by his peers. Hill founded J.J. Hill & Company. Then with a few associates, Hill formed Hill, Griggs & Company in the late 1860s.

The company expanded into the steamboat business and their first steamer went into service along the Red River in 1871. Following that, Hill sought to buy a railroad. 

The St. Paul & Pacific Railroad

Hill and three associates signed an agreement to purchase control of the St. Paul & Pacific Railroad (StP&P) on March 13, 1878.

At that time the StP&P operated a 214-mile extension from St. Paul to Breckenridge along with a branch to Melrose, which split from Minneapolis. The latter also included a 100-mile disconnected segment linking Glyndon with Crookston, planned as a continuous line that would reach the Canadian border at St. Vincent. However, the railroad’s financial difficulties stemming from the Panic of 1873 meant the line had not been completed.  

After Hill and his partners took control of the StP&P they began to finish this extension because the Minnesota state legislature set a requirement of their ownership to finish the line before December 31, 1878. 

Work on the line was done quickly; the StP&P sent its first train from St. Vincent to St. Paul on November 10, 1878. Less than a month later (December 2, 1878), the route was completed to Winnipeg, Manitoba, which allowed through traffic to flow out of Canada. 

Expanding beyond the StP&P

Hill set out to form a system that would acquire StP&P’s assets. He established the St. Paul, Minnesota & Manitoba Railway (StPM&M) on May 23, 1879. Then Hill opened a more direct connection into St. Paul; this entailed finishing a 70-mile gap between Alexandria and Barnesville, which was completed late in 1879. After this accomplishment, Hill added hundreds of miles of branch lines to haul agricultural products from farms near the Red River. 

Hill’s moves generated money; net income rose from $556,000 to $1.069 million during that period. His next project was to improve the railroad’s facilities in and around Minneapolis/St. Paul. A stone-arch bridge was built to span the Mississippi River; it crossed the Falls of St. Anthony at an angle. The bridge’s deck supported two tracks and the first train crossed it on April 16, 1884. The Railroad Gazette stated that the bridge was “one of the greatest specimens of engineering skill in the country.” It linked St. Paul with a new passenger terminal that was built along the waterfront in downtown Minneapolis. 

Westward expansion

The Midwest had quite a few railroads competing for business, so Hill sought to expand towards the West Coast. Montana had agricultural, timber and natural ore commodities that could keep a railroad’s freight system busy. Hill acquired a portion of the Montana Central Railway in 1885. The railroad was chartered to link Great Falls and Butte, Montana, although construction had not yet begun.  

In 1886, Hill ordered the StPM&M to begin laying track westward from its current end of track at Devil’s Lake in the Dakota Territory. Hill planned to connect with the Montana Central (which had begun construction) at Great Falls. The StPM&M’s rails reached Great Falls on October 16, 1887 and service began on October 31. The railroad’s construction crews began to lay rails in a southwesterly direction toward Butte. However, winter weather stopped construction until 1888. The railroad reached Butte on November 10, 1888.

Hill had built the StPM&M into a major railroad in the upper Midwest by the late 1880s. Its network spanned more than 1,000 miles of track. And although Hill was expanding westward, he also continued to focus on Minnesota. With the Chicago, Milwaukee & St. Paul (Milwaukee Road) and the Chicago, St. Paul, Minneapolis & Omaha (“The Omaha Road”) Hill had acquired part ownership of the St. Paul & Duluth (StP&D) Railroad. The StP&D provided all three railroads a key connection into Duluth and Superior, which were key Lake Superior ports.

However, Hill did not like sharing the StP&D rail line and sought his own route into  the two Lake Superior ports. The StPM&M sold its share of the StP&D; then Hill began the Eastern Railway Company of Minnesota in August 1887. Construction of the railroad’s 68-mile line went quickly and it opened for business on September 23, 1888.  

In addition, Hill got back into the steamboat business. He founded the Northern Steamship Company on June 12, 1888 to handle freight on the Great Lakes from Buffalo, New York. 

Ever westward

While Montana had brought profitable new business opportunities for the StPM&M, Hill decided the railroad must be built to Puget Sound on Washington’s Pacific Coast to generate maximum revenue.

Author’s note: This article would not have been possible without the resources made available by Adam Burns of American-Rails.com. Those interested in learning more about the railroads operating in North America – and those that are now “fallen flags” – should explore the American-Rails site.