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Opinion

A Lesson from Railroad History


  • By The Newnan Times-Herald
  • |
  • Feb. 01, 2022 - 2:52 PM

A Lesson from Railroad History

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

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.

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 Weyerhäuser, 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.

Author Daniel Oliver notes that the unsubsidized Hill “encouraged settlement along the lines by letting immigrants travel halfway 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 reporter asked Hill to explain the reason for his success. He replied simply that it was due to hard work. His hard work earned him the title “the Empire Builder,” and at the 1915 Panama-Pacific Exposition in San Francisco, he was named Minnesota’s greatest living citizen.

Thirty years ago, one of the papers that published an article of mine on Hill was in Havre, Montana, close to the Canadian border. 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” to Whitefish. I’ll never forget it.

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

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