The Empire Builder

NEIL REYNOLDS at the Globe recounts the legend of James Jerome Hill (1838-1916), the Canadian who built an American transcontinental railroad, without government subsidies.

The reason for massive railway subsidies appeared self-evident. No company, no consortium of companies, could build a transcontinental railway by itself. Yet these railways were essential to national survival. Therefore, national governments were compelled to build them, whether by hook or by crook - most often by crook. Yes, the consequences were nasty - all of these transcontinental railways, notwithstanding the vast subsidies, went bankrupt, or almost went bankrupt, several times. Bailout followed bailout. Once honoured as heroes, the railway executives slipped into historical obscurity as scoundrels and criminal racketeers.

In fact, though, these conventional assumptions are as wrong now as they were in the dawning of the Age of Rail. It was a remarkable Canadian who proved it: James Jerome Hill, builder of the Great Northern Railway, the only great railway builder of the 19th century who never took a penny in government subsidy or a free acre of land. Though he lived his adult life in the United States, Mr. Hill was and remains an authentic Canadian hero, an enduring example for our times. (Ironically, it was a heroic American - William Cornelius Van Horne - who built the CPR.) Mr. Hill was born in a log cabin in Ontario (near Guelph) in 1838. He quit school at age 14, when his father died, to help support his family - but he already had a good grasp of algebra, geometry, surveying and English literature. In his first job, in a grocery store, he earned $4 a month. (Wounded as a child by an errant arrow, Mr. Hill was blind in one eye.) At 17, he headed for Asia but got only as far as St. Paul, Minn., where he got a job with a shipping company and where he lived for the rest of his life. He gradually built a career in bankrupt companies - buying them cheaply, turning them around. In 1878, age 40, he and Canadian associates bought the bankrupt St. Paul and Pacific Railroad - an asset valued at $725,000 (U.S.). By 1885, it was worth $25-million.

Mr. Hill took this relic of a railroad (with 16 kilometres of track) and transformed it into a transcontinental railway, moving westward from St. Paul along the Canadian border. Unlike other railway magnates, who managed from mansions in New York, Mr. Hill knew his environment and lived it. ("I find it pays," he said, "to be where the money is spent.") He had worked the docks. He had piloted steamboats on the Red River. He had travelled on snowshoes in North Dakota. He built his railway slowly, making sure that it served a community of some kind before moving West. He bought 7,000 cows at his own expense and gave them free to immigrants. He established his own experimental farms. He promoted crop rotation and the use of fertilizers.

Hill also played a key role, until Sir John A Macdonald and his business allies at the Bank of Montreal muscled him out, in the early history of the CPR.  He pushed for the appointment of Van Horne as General Manager of the CPR and argued, correctly, that the road's route was economic nonsense.  For political reasons the transcontinental route was built through northern Ontario - this long before any significant natural resources had been discovered in the region.  The more commercially viable route would have taken the road through Chicago and St Paul, thereby picking up traffic for the Pacific ports of Seattle and Vancouver.  Eventually the CPR was forced to purchase the SOO Line to tap into the Chicago and St Paul markets.  Michael P Malone's James J. Hill: Empire Builder of the Northwest is a fine introduction to the life and career of one of the greatest of the so-called "Robber Barons."  As the Amazon commenter notes, Malone conflates government land grants with government subsidies, the former were "gifts" of unowned land to a productive enterprise for helping to develop a region, the latter wealth forcible taken from taxpayers.  Hill's record as a "self-made man" essentially stands.