A lesson in railroad history

Newnan resident Lawrence W. Reed is Chairman Emeritus of the Foundation for Economic Education. His most recent book is “Was Jesus a Socialist?” He can be contacted at lreed@fee.org.

When Canadian-born James J. Hill died in 1916 at the age of 77, he left behind a monumental legacy of achievement.

Builder of the Great Northern Railroad (now the Burlington Northern), he opened up the sparsely populated American West from St. Paul to Seattle. And he did it at his expense.

The history of the five transcontinental railroads built in 1900 often overlooks some remarkable lessons about private initiative and government subsidy. Four of the five transcontinentals received huge “donations” from Washington in the form of land grants and taxpayer money. Hill’s Great Northern was the only one that accepted neither, and the only one that never went bankrupt.

Hill was different from Leland Stanford, who used his political connections to get the California legislature to ban competition with his Central Pacific Railroad. Hill was happy to compete without political favors because he knew he could. He offered incentives for people to move west and help him develop the area in exchange for transporting their goods. One such person was Friedrich Weyerhäuser, who built his timber fortune in the North West in partnership with the Hill Railroad.

The lure of subsidies created powerful incentives for other railroads to lay tracks just to get the government handouts. This is why hundreds of kilometers of tracks had to be replaced later before a train could use them. Historian Burton Folsom, author of the classic book, “The Myth of the Robber Barons”, reveals that before the Union Pacific and Central Pacific lines met where the famous Golden Spike connected them, the teams of the two railroads blew themselves up. track to claim more land and money in Washington. Congress stopped him, eventually requiring that they meet in Promontory Point, Utah.

Author Daniel Oliver notes that the unsubsidized hill “encouraged settlement along the lines by allowing immigrants to travel 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.

At the end of his life, a journalist asked Hill to explain the reason for his success. He simply replied that it was due to hard work. His hard work earned him the title “Builder of Empire,” and at the 1915 Panama-Pacific Exposition in San Francisco, he was named Minnesota’s greatest living citizen.

Thirty years ago, one of the newspapers that published an article on Hill of mine was in Le Havre, Montana, near the Canadian border. Havre was the seat of the western division of the Burlington Northern, the successor railway to the Hill’s Great Northern. The division president invited me to give a few speeches around town. He promised to put me in a restored old executive car that Hill had built himself.

For two nights, I stayed on the rails in this beautiful carriage, marveling at its 19th century facilities. After my speeches, Burlington Northern workers hitched the car to a locomotive. I then had one of the most memorable hikes of my life – west on the “Hi-Line” to Whitefish. I will never forget him.

At the 1915 Panama-Pacific Exposition in San Francisco, James J. Hill was named Minnesota’s tallest living citizen. He deserved this honor.

Newnan resident Lawrence W. Reed is Chairman Emeritus of the Foundation for Economic Education. His most recent book is “Was Jesus a Socialist?” He can be reached at lreed@fee.org.