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Although the bonanza farms of North Dakota were largely created by the Northern Pacific in the 1870s, the St. Paul, Minneapolis, and Manitoba Railway (StPM&M) had taken over the bulk of the wheat trade by the 1890s. The StPM&M operated almost a thousand miles of track in North Dakota, carefully planned to serve the needs of wheat growers in the Red River Valley. In 1894, the railroad, renamed the Great Northern in 1890, carried 20.7 million bushels of wheat. Only about 6 million bushels were shipped over the Northern Pacific.

The StPM&M was the creation of James J. Hill. Born in Ontario, Canada, in 1838, Hill immigrated to St. Paul, Minnesota, at the age of 17. St. Paul was the northern terminus of the riverboat trade on the Mississippi River. Hill quickly found work as an agent for a steamship. After 20 years working in the shipping business on the Mississippi and Red rivers, Hill and three other investors purchased the nearly bankrupt St. Paul and Pacific Railroad in 1878, renaming it the St. Paul, Minneapolis and Manitoba Railway Company the following year. As president of the new company, Hill soon began to "branch out generally" into Minnesota, Dakota, and Manitoba.¹ The generally north-south running routes of Hill's railroad soon dominated the trade of the Red River Valley. The StPM&M began calling itself the "Red River Valley Line."² Wheat accounted for 20 percent of the railroad's total freight in the early 1880s.

In the late 1880s, the Minneapolis millers were looking for better rail connections with the wheat growing areas in the west. In 1880, agreement was reached that Hill would build new facilities in Minneapolis, including a new passenger station, and share them with all the railroads serving the city. The new Minneapolis Union Railway, with Hill serving as president, built a new stone arch bridge across the Mississippi. The bridge led both to the new terminal and to the tracks serving the mills on the west side of the river.

In 1882, Hill also built a complex of fine new railroad shops in St. Paul, the headquarters of the St. Paul, Minneapolis, and Manitoba. At the shops technicians built and serviced locomotives, passenger cars, and freight cars. The shops also housed the purchasing department and served as the storehouse for the entire railroad. In the 1880s, one fourth of St. Paul's work force was employed in railroad-related jobs.

The Manitoba continued to expand its lines to serve the agricultural areas of the upper Mississippi and Red River valleys, but Hill began to be concerned about its heavy reliance on highly seasonal wheat shipments and about increasing competition from other railroads, including the Northern Pacific. In 1889, he resolved to extend his railroad to the Pacific. The Great Northern Railway, the last of the great transcontinental railroads and once known as "Hill's Folly," reached Puget Sound in 1892. Hill was well aware that the success of the new railroad still depended on the success of the farmers along its route. As he expanded into new territory, Hill became a leading advocate of diversified farming, far different from the single-crops of the bonanza farms.

Often called high-handed, tight-fisted, and cantankerous, James J. Hill continued to bring change to the railroad business. In order to reduce competition, he eventually acquired control of his old rival, the Northern Pacific. It took a landmark Supreme Court decision to dissolve the Northern Securities Corporation, a national railroad holding company that Hill helped create. Hill was so powerful that both the man and his railroad became known as the "Empire Builder." When he died in 1916, he left behind a great railroad system, depots, shops, yards, and the great stone arch bridge across the Mississippi River in Minneapolis as his monuments.

Questions for Reading 3

1. How did Hill get started in transportation?

2. How important was wheat shipping to the St. Paul, Minneapolis, and Manitoba? Why do you think Hill was concerned about his railroad's dependence on wheat shipments?

3. Why do you think Hill worked hard to reduce competition in the railroad business?

4. Explain, in your own words, how the flour mills, bonanza farms, and railroads depended on each other. Do you think most businesses function on this same web of interdependence today? Why or why not?

Reading 3 was compiled from John D. Mecum, "St. Paul, Minneapolis, & Manitoba Railway Company Shops Historic District" (Ramsey County, Minnesota) National Register of Historic Places Registration Form, Washington, D.C.: U.S. Department of the Interior, National Park Service, 1986; and from Ralph W. Hidy, Muriel E. Hidy, and Roy Scott, with Don L. Hofsommer, The Great Northern Railway: A History (Boston: Harvard Business School Press, 1988).

¹Minneapolis Tribune, Dec. 13, 1880; cited in Ralph W. Hidy, Muriel E. Hidy, and Roy Scott, with Don L. Hofsommer, The Great Northern Railway: A History (Boston: Harvard Business School Press, 1988), 40.
²Hidy, et al., Great Northern Railway, 45.