A Real Entrepreneurial Lesson From Montana Railroad History
By Lawrence W. Reed
“Montanans can be rightfully proud of the state’s direct connection to James J. Hill, one of American history’s greatest entrepreneurs.”
When Canadian-born James J. Hill died in 1916 at the age of 77, he left 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 on his own dime.
Residents of Glasgow in Valley County will vouch for Hill’s local influence. The town’s very name derives from the moment that Hill spun a globe and landed his finger on Glasgow, Scotland. At least two other Montana towns materialized on our maps in similar fashion, whether by Hill’s finger or that of another Great Northern official—Malta in Phillips County and Harlem in Blaine County.
The story of the five transcontinental railroads built by 1900 often overlooks some remarkable lessons about private initiative and government subsidies. Four of the five transcontinentals received huge “donations” from Washington in the form of land grants and taxpayer cash. Hill’s Great Northern was the only one that accepted neither and the only one that never went bankrupt.
Hill was unlike 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 to people to move west and help him develop the area in exchange for hauling their goods. One of those people was Friedrich Weyerhauser, who built his timber fortune in the Northwest in partnership with Hill’s railroad.
The lure of subsidies created powerful incentives for the other railroads to throw down tracks just to get the government goodies. That’s why hundreds of miles of track had to be replaced later before any train could ride them. Historian Burton Folsom, author of the classic book, “The Myth of the Robber Barons,” reveals that before the lines of the Union Pacific and the Central Pacific met where the famous Golden Spike connected them, teams from the two railroads blew up each other’s track to claim more land and cash from Washington. Congress stopped it by finally demanding they meet at Promontory Point, Utah.
Thirty years ago, I wrote a newspaper column about Hill. One of the papers that published it was the Havre Daily News. Havre was the headquarters of the western division of the Burlington Northern, the successor railroad to Hill’s Great Northern. The division’s president invited me to give a couple of speeches in town. He promised to put me up in an old but restored executive rail car that Hill had built himself.
For two nights, I lodged on the tracks in that beautiful car, marveling at its 19th-century fixtures. After my speeches, Burlington Northern workers hooked the car to a locomotive. I then experienced one of the most memorable rides of my life—west on the “Hi-Line” through the Marias Pass that Hill himself chose as the best route for his tracks, ultimately arriving and disembarking at Whitefish.
Montanans can be rightfully proud of the state’s direct connection to James J. Hill, one of American history’s greatest entrepreneurs.
Lawrence W. Reed writes a monthly column for the Frontier Institute in Helena, on whose board he serves. He is president emeritus of the Foundation for Economic Education and blogs at www.lawrencewreed.com.