Anybody who had ever heard of a railroad and had ever seen a map of Minnesota must have perceived the necessity of a line to the head of the lakes. The first travelers who had any conception of Minnesota as a civilized state indulged in speculation as to which was the most feasible connection between the lake and the Mississippi. The first daring project for the Northern Pacific, when it had not a leg to stand on at either end, nor any substance between, posted the head of Lake Superior as one terminus.
The road from St. Paul to what was to be Duluth was one of the first projects of the territory. One yearning that gave great impetus to statehood before the territory was ten years established was for power to grant aid to railroads. When the state received a dower from the general government of all the swamp lands within its bounds for the purpose of aiding internal improvements, it seemed a happy thought to give them to the railroads.
And in the outburst of generosity that strapped the territory and nearly bankrupted the state, no enterprise had more cordial support than the way from the lakes to the river.
There was a whole rack of those companies that never got very far. W. G. LeDuc, who had a townsite project here in 1852, in which both Ramsey and Rice were interested, introduced the first charter in the territorial legislature in 1852. And Rice, without whom nothing was done in those days, presented the project to his friends in congress-he was a delegate then from Minnesota-so effectively that a land grant of ten sections to the mile was voted. In those days this country was valuable only as a waste from which land grants might be carved, just as 97 careless kings gave charters for empires that meant nothing to them but expanses on the map.
But between the passage and enrollment of this bill, June 29, 1854, it was charged that the bill had been juggled and considerable scandal was made of it, so much so that the grant was repealed in August of the same year, a most extraordinary step for a careless congress.
The Minnesota and Northwestern, chartered by the territorial legislature March 4, 1854, claimed the land nevertheless, on the ground that the title was vested in it when congress passed the bill, and that it could not be revoked. The Minnesota and Northwestern was projected from Lake Superior to St. Paul and thence toward the Iowa line, with Dubuque in view and the land grant as its goal. To bring its claim to a head, the company cut down a tree in Goodhue county on land that was its own if the grant held good, and was prosecuted for trespass.
The local courts found that the company was in the right. On the strength of this land grant the company had assumed obligations of $500, 000 and the congress could not recall what it had given for keeps. On appeal to the supreme court, Caleb Cushing, attorney general, came into the case, found there were other considerations to be urged and asked for a new start, which the court granted. But Cushing was pretty busy and never started the case over. The interior department held that the last they heard of the case the company was beaten; the attorney general’s department maintained that it was not in its province to start a proceeding of this sort, and R. W. Lowber, the acting president of the company, who appealed to President Pierce as the only man who could start something, to please order him to be sued, could get no satisfaction.
But H. M. Rice, with Stephen A. Douglas, who was invariably the friend of any Minnesota project, and two other senators, did get from the President a promise to have the case tested unless the promoters could coax from congress another land grant, which looked to him the simpler way. In May, ’57, the promoters were still complaining that nothing had been done, the administration went out without bringing the test case, and after that land grants were not popular for a while, nor was it a good time for building railroads in a wilderness in the years just following the panic of ’57. But in spite of every discouragement and the purchase of many gold bricks, Minnesota never gave up its faith in railroad development.
The Lake Superior and Nebraska, with its other terminus at what should be Omaha, was another shadowy project that faded away. But it had a territorial charter, granted in 1857, which became the basis of the Lake Superior and Mississippi, the project that finally materialized.
The Lake Superior and Mississippi was incorporated by the legislature March 8, 1861, as an amendment of the Lake Superior and Nebraska act. It had ample influence in its list of incorporators- Lyman Dayton, Governor Swift, John McKusick, Richard Chute, Dwight Woodbury, C. T. Stearns, Thomas Clark, Levi Butler, Sidney Luce, the one Duluth representative, E. O.
HIamlin, and A. F. HI’wley, of Minnesota; Anson Blake, Erastus Corning and Orville Clark, of New York; Eben B. Ward and A. II. Hanchett, of Michigan.
Five million dollars capital was authorized and as much debt as might be necessary. It was a very friendly sort of a charter.
The state gave swamp lands to the amount of seven sections to the mile, and promised to make up the deficiency if they did not find enough in the strip. The state gave right of way through any of its own land, and the general government afterwards gave right of way through its public lands. And there was precious little land to cross then that did not belong either to the state or the national domain. Help yourself, said the state to the company. It could cross roads anywhere. It could appropriate to its use 200 feet of right of way the entire length, and as much more as the engineer might find necessary for turnouts or gravel pits or anything like that. If the engineer saw anything he wanted he was to take it, “any land, streams, timber and materials of any kind.” Except that school land must be paid for at not less than $1.25 an acre. And when a highway was crossed or a water course, the company must put it back in shape.
This company was instructed to commence at some convenient point or place within the state of Minnesota at the west end of Lake Superior, and running thence by the most feasible route within this state, to some point on the Mississippi. “It shall commence the grading and construction thereof at (Lake) Superior and continue the construction thereof toward the Mississippi.” A branch to the St. Croix was authorized, an extension to the Minnesota river was ordained, and the privilege of consolidating with any other project was blandly given.
There were other conditions that were not specially onerous, such as that conductors and brakemen must wear badges, and that every locomotive must be equipped with an alarm bell those presumably to satisfy some Reuben that the measure adequately protected public interests.
And evidently under the impression that a railroad was a public highway, especially when it received a public land grant and a special charter, the following provision was put in: “This company shall have the power to enter upon and pass over the railroad of any other company whose railroad connects with that of this company, with their cars and engines; and any other company whose railroad connects with that of this company shall have like power to enter upon the railroad and pass over the same with their cars and engines, and such reciprocal use of said roads shall be upon such terms and conditions as shall be agreed upon by the officers of said respective companies, and in case the two companies cannot agree upon terms, then either party may apply to the supreme court of this state, whose duty it shall be to fix such terms for the respective parties as may be equitable. ” The act was declared a public act to be amended at any time so long as its vested rights were not impaired or destroyed.
The company was required to be organized within a year and have its line located; to grade twenty miles in two years, and to have a complete and first class road with cars running the entire length in five years. Within ten years it must have its extension complete to the Minnesota river. Its lands were to be tax free until they were sold, but they must be sold in ten years. If the swamp lands did not make seven full sections to the mile within seven miles of the track on either side, it was to be made up to the company from the triangle between the Mississippi, Lake Superior and Rainy river.
The project did not, however, come on as fast as the authors hoped, and two years later the legislature kindly extended the time. The amendment of March 6, 1863, gave three years in which to grade the first twenty miles from Lake Superior, and ten years more to complete the road with trains running over it.
There was reason enough for the delay. The charter was given just one month before the attack on Sumter. And in those years, when Minnesota was giving itself almost bodily to fight the rebellion, and when the remnant at home were fighting, even to old men and young boys, against the Indian uprising, the wonder is that any had the faith or courage to revive a railroad project.
But in those days every man was a prophet, and no destruction was so terrible but he emerged from it with a wider view and grander prospect.
Meanwhile, repeated attempts had been made to interest the Federal government. Memorials were adopted by the legislature urging a land grant of at least a million acres and a bounty of not less than $500, 000. It was ingeniously argued that in case of war with Great Britain-and in February, 1862, that was not a wild vision-a road to the head of Lake Superior would be absolutely indispensable. At the same time it was shown that the settlement of this country would amply repay the outlay; that the extension to Sioux City would compel the completion of the Union Pacific to that point.
Memorials by the St. Paul common council were addressed to the legislature in language that forty years of acquaintance with the vernacular of enthusiasm cannot improve upon. Governor Swift in his message of January, 1864, dwelt at some length on the project. On this topic he said: “A single road 140 miles long from this focal point (not to hurt St. Anthony’s feelings) to Lake Superior would furnish an outlet for our whole system of natural and artificial communication upon lake navigation.” Such a road at that time, it was reckoned, would save on wheat alone $663,000 a year. Its traffic was indicated by the fact that St. Paul was paying $285,000 a year on freight from Chicago and Milwaukee.
They went so far as to run a preliminary survey in 1864, which set out in May under Gates A. Johnson and ran a sketch line by way of Phalen, White Bear, Forest Lake and Wyoming, just about the line that was afterwards adopted. A grading contract which was perhaps principally for exhibition purposes, was let for the first thirty miles to Wyoming, and the contractor was on the job before the end of June. The survey party hacked its way through to the lake, where the assistance of Sidney Luce, Luke Marvin and H. F. Ely, of Oneota, was acknowledged. The 101 engineer thought they might as well grade from St. Paul and finish the way before they laid the iron, because until they had a through line they did not have much of anything. Then they could draw their iron from Duluth. The temporary terminus might be Fond du Lac, while they finished the line to Duluth, the last seventeen miles. Fond du Lac was every bit as good a harbor as Superior. But, describing at length the natural breakwater and the deep water off Portland as compared with the shallows at the mouth of Superior, he reckoned an outside breakwater would make the best harbor.
It was just as his party was starting on its exuberant expedition that congress granted the land bounty by act of May 5, 1864-five sections per mile either side of the road, lieu lands within a twenty-mile fringe where grants overlapped so that there was a deficiency, two hundred feet right of way on all government land, the patents to be issued as each twenty-mile stretch was completed on certificate of the governor, the grant to be forfeited if the road was not completed in eight years.
Like the state bounty, the Federal grant stipulated that the road should be common property. Any other road should have right to connect at any point on the bay of Superior and should have the privilege to transport or have transported any of its cars and engines over the road for which this grant was made.
This congressional grant was, by the state legislature, February 23, 1865, confirmed to the Lake Superior and Mississippi as the company should qualify for it. The state at that time made its gross earnings provision, three per cent in lieu of all taxes, but the railroad lands to be taxed after five years. The company was required to build twenty miles within three years of July 4, 1865, and have the whole road done in five years.
To make it an object to build the entire line it was further provided that the company should get nothing of its grant for the last seventy miles till it had a line running ten miles out of Duluth. The state had seen too many projects started ambitiously for the Pacific or the Missouri and topple over as soon as they got outside the city limits. This was to go to the lakes or not at all.
Two other acts of grace were extended by the state.
Authority was given in February, 1866, for a branch to the Vermilion range where the gold was, and at the same time St. Louis county was authorized to vote bonds in aid of the road, not more than $40, 000 for each five miles, nor more than $150, 000 in all.
It looked more hopeful. The land offices at Duluth and Taylor’s Falls had been notified since 1864 to save everything in the strip that the road might want. The state of Minnesota stood ready to do anything reasonable for the road. The war was over, and its speculative spirit ranged into all manner of new ventures. Minnesota was one of the hopefullest countries that ever lay outdoors. And the Lake Superior and Mississippi had a live organization.
W. L. Banning had become identified with the project, had done most of the pushing the last five years, and was a doer all along the line. The directors included R. P. Lewis, secretary; Parker Paine, treasurer; Gates A. Johnson, chief engineer; James Smith, Jr., counsel; William Branch, who built the road; J. H. Stewart and R. A. Smith, St. Paul’s immemorial mayor.
The president’s report says they have the line laid out to Fond du Lac and proposes that it shall be continued to Oneota and Duluth. The same report, apparently as a new suggestion, favors a canal through Minnesota Point to take advantage of the excellent inner harbor at Duluth.
Then the report indulges in a little prospective arithmetic.
There is 1,632,000 acres at $5 an acre, makes $8,160,000. There are the St. Paul city bonds, $250, 00. The terminals are worth $100,000. The St. Louis county bonds not yet voted were not included. But the figures quoted made a total of $8,510,000, or about $55,000 a mile. And everybody knew that the road could be built for $15,000 a mile, and in some places for $12 000.
But the endowment was not a patch to the business in sight.
The first year’s income was all figured out in the prospectus and read as follows: 7,000,000 bushels of wheat at 15 cents ……………. $1,050,000 30,000 barrels of salt meat at $1.50 ……………… 45,000 7,000 head of cattle at $4 ……………………… 28,000 120,000 barrels of flour at $1 …………………… 120,000 400,000 bushels corn and oats at 27 cents ………….. 108,000 250 passengers daily at $8 …………….. 6.6..2..6. , 000 80,000,000 feet of lumber at $4 per thousand………. 320,000 20,000 cords of wood at $2.50 ………………….. 50,000 Merchandise from the East …………………… 200,000 Slate, fish, etc ………………………………. 100,000 Income first year ………………………….. $2,587,000 Operating expenses, 33 1/3 …………………… 862,333 Net earnings ………………………….. … $1,724,667 Sale of stumpage ……………………….. .. 120,000 Net income e ………………………………… $1,844, 67 And Banning believed it.
Nevertheless, land grants, however liberal, do not of themselves make a railroad, and prospective earnings lay no rails.
Banning had an all day job to find the backing for his railroad.
Edgar Thomson, then president of the Pennsylvania railroad, was the man who finally gave him his first lift. He was Scotch and could reckon profits; he was a railroad man and knew what a railroad could do. And Banning clung to him like a burr till at last he told the president of the Lake Superior and Mississippi to draw on him for $40,000 as soon as he pleased. Banning took the next train from Philadelphia to New York and proved to Jay Cooke that one real railroad man had faith in his venture, and that satisfied Jay Cooke to give the project his backing and that financial prestige which was a little higher in that day than the government’s. It was the Lake Superior and Mississippi, by the way, that led Jay Cooke into Northern Pacific.
Building the road after that was comparatively easy.
From the first days of occupation there was an obstacle race to reach the head of the lakes between a Wisconsin and a Minnesota railroad project. Wisconsin got the first start, but Minnesota won out.
St. Croix and Lake Superior, to run from Hudson, Wis., to Superior, was the Wisconsin project, which dates back to 1850 and had a preliminary survey crew in the field as early as the summer of ’54. Eventually it built the line, which is now part of the Chicago, St. Paul, Minneapolis and Omaha.
Robert Patton, chief engineer of the project, set out from Hudson in May, 1854, to find the mouth of Left Hand river, known to us by its Indian name Nemadji, for Superior City had not then sufficient eminence to attract his attention. That was the fact of both Superior and Duluth. To Louisville or to Philadelphia they were strategic points on the map; but the settlements of Wisconsin and Minnesota did not know anything about them and were trying simply to reach the head of the lake, which they knew scarcely better than we do the northwest passage.
Every project to this terminus was a leap through a wilderness with the eyes shut. When Patton started on this expedition the best map he had was one made by J. M. Nicolet in 1842.
He aimed for St. Croix Falls, and beyond that his provisional map was a blank. He made a course up the Eninandigo and down Black river, which flows into Nemadji, gaining an easy divide. His party reached Superior in August, only three months on the road, and there found Newton and Clark laying out a town, surveying the harbor, erecting docks and warehouses.
Even in 1854 the road was surely profitable if it could be built. It cost $26.50 a ton to bring freight from New York to Hudson and St. Paul by way of Chicago, the road to Galena and boat up river. It need cost only $8 a ton to Superior and $5 a ton by his road, cutting the bill in half.
Congress in 1853 had given the project a grant of six sections to the mile, reckoned at 153,000 acres, and prospects most magnificent.
But for some years that was as far as it got.
In 1860, with a new president and board of directors, a prospectus was issued offering its bonds. By that time Minnesota had an annual surplus of 4,000,000 to 5,000,000 bushels of wheat, which should come that way at not less than 10 cents a bushel.- Not less than 6,000 tons of merchandise passed the Soo west bound the preceding year, which showed the possibilities in that direction. And look at all the iron and copper in that region, probably unsurpassed in richness. A map that accompanies the prospectus, which shows the line of the road substantially as now built, exhibits a broad, well fringed protuberance covering the well known south range and a lot more, and extending generously into Minnesota, all studded with copper.
This prospectus figured out earnings of $840, 000 a year and net earnings of $336, 000, or 12 per cent on $20, 000 a mile.
Whereas they could build for $12, 400 a mile, even with iron at $60 a ton.
Equipped with the St. Paul and Duluth to the south and Northern Pacific westward, Duluth men, to whom all things were possible, conceived a railroad project to the northwest, laughing at the artificial barrier of the boundary, aiming for Winnipeg, thirty years in advance of fulfillment. The project was mooted in ’77, a land grant was obtained from the state in ’78, a corporation was formed, preliminary surveys were made and actual construction was begun by the Union Improvement and Construction Company, which spent $450, 000 clearing the way and received $500, 000 in common stock of the railroad in return.
Obviously such simple methods of finance would never see a railrroad through a wilderness, and not even a land grant from the state was enough for completion.
A second start was made in 1888, when the Wright & Davis interests had timber to be handled in St. Louis and Itasca counties, for which a railroad was convenient. They built their own logging road from Swan river on the Mississippi and furnished backing for the Duluth and Winnipeg project.
A. W. Wright was president of the company and was associated with T. B. Casey, who had become interested in Duluth through Roger S. Munger, as trustees of the Duluth and Winnipeg syndicate, which evolved into the North Star Construction Company. This company was more modern in its financial plans, earning $20,000 a mile in bonds, $15,000 a mile in common stock and $10, 00 a mile in preferred stock. By 1892 the company had constructed 100 miles of road to Grand Rapids, had organized a terminal company in Superior, and had valuable logging contracts and a still more profitable ore traffic from the new Mesaba range, furnishing the terminals for the Mesaba railroad.
It looked so well that W. C. Van Home bought a half interest in the North Star Company for $540,000, and held out hopes that through his Canadian Pacific connection he could bring all the capital that was needed for completing the line to Winnipeg.
But about that time things happened adversely. The panic of ’93 spoiled earnings from the logging business, passenger travel was nil, and the Merritts insisted on Duluth terminals for their Mesaba railroad. They carried their point at high cost, putting their property in the power of the Rockefellers to raise the last loan of $1,000,000, through which eventually the control of all their interests in the range project passed to the Standard Oil group. For the Duluth and Winnipeg the loss of this traffic in a year of distress meant the shipwreck of a railroad running through the wilderness and ending nowhere. In December, 1894, the Duluth and Winnipeg went into the hands of a receiver.
A long fight in the courts followed. W. H. Fisher, general manager of the railroad and construction company, who was superseded by W. F. Fitch as receiver, was convinced that Van Horne had willfully entrapped the company. Had he not told them he would find them all the money they needed? And did he not turn round and refuse to help? It was a manifest conspiracy to wreck the property.
Complicated litigation followed. Some of the original holders of common stock intervened to forbid the sale by foreclosure.
They pointed to the net earnings of the four years before the panic and to the traffic in sight for the future. They did not realize and refused to recognize the extent of the financial disaster, and believed Van Horne had taken advantage of a temporary flurry to despoil them. Even during ’93 and ’94, up to the very minute of the receivership, the Soo Railroad Company at Van Horne’s request was lending survey parties, for which the receiver was permitted to pay a bill of $4, 500.
Also came the Foley brothers and Guthrie, as members of the North Star Construction Company, claiming that they were being frozen out by this sale, and repeating that Van Horne had agreed to guarantee the interest which was in default, and that there was no other delinquent debt.
C. K. Davis, then a member of the United States senate, who had been interested in the company since the land grant was given in 1878, was one of the fighting stockholders, and his partners, Kellogg and Severance, manned the case for them.
Van Home was grieved by the accusation and his replies fully exonerated him. He had hoped to bring the project through; his letters in the early days of the panic showed that he realized the seriousness of the situation; he warned his associates that it was impossible to raise money anywhere, and reminded them that traffic was all shot to pieces and gave positive orders for cutting expenses to the bone. “Make two men do the work of three; stave off repairs, the roadbed is new, ” he had written.
For a year and a half the litigation dragged through the courts, resulting in plenary vindication for Van Horne and the dismissal of the objections to the sale. In July, 1896, the Duluth and Winnipeg went under the hammer for $2,373, 000 to satisfy 107 the claim of $2,000,000 in bonds. It had been an expensive case.
Munn, Boyeson & Thygeson, the solicitors who so ably conducted the case for the receiver, received an allowance of $23,000, other attorneys who assisted them in minor phases drew an allowance of $8,500, the trust company’s fee was $4,300 for protecting the bondholders, the receiver’s modest compensation for a year and a half was $6,000. Corporation receivers have learned something since then, and the special master who took parts of the evidence was entitled to emoluments of $4, 000. Shipwreck is always an expensive luxury.
The Duluth and Winnipeg nevertheless played an important part in the development of the country. Purchased by a committee, it very soon after turned out that the property was acquired by the Great Northern, and very soon after the line to Grand Rapids was made a link in the main line from Duluth to Grand Forks. Diverted from its original purposes, the road nevertheless aided in giving Duluth a main thoroughfare. As for the land grant that was subsequently declared forfeited.
One sequence was regarded by the Duluth people as rather shabby. The Great Northern abandoned the part of the Duluth and Winnipeg that reached into Duluth, and one Saturday night a crew was sent, unostentatiously that there might be no injunctions to annoy, picked up the rails and left the last fifteen miles a naked and abandoned right of way. It was a bitter reflection for the Duluth people who had stood by the project in its teething and measles stage that it should be made a Superior road.
In 1870 the state of Minnesota felt quite cocky about its railroads.
The Lake Superior and Mississippi was just finished.
The Northern Pacific was a promising project. The Southern Minnesota was built ninety miles westward from La Crescent; the Winona and St. Peter 116 miles, as far as Janesville; the Hastings and Dakota thirty miles; the St. Paul and Chicago (C., M. & St. P. twenty miles, to Hastings; the St. Paul and Sioux City 100 miles, to reach the Union Pacific; the St. Paul and Pacific eighty-four miles, to Sauk Rapids, and 115 miles to Willmar, and the Minnesota Central 146 miles, to the Iowa line.
The people running the Lake Superior and Mississippi had the right idea of this country. A prospectus issued in 1870, offering railroad lands at $4 to $8 an acre, payments running over eight years for forty acres or more, has an account of the country that can hardly be improved upon today. The falls at Thomson were easily the most valuable water power in the Northwest.
At no distant day the lines traversing the great belt of the continent were to unload here the grain to be made into flour. Here would be the seat of manufacture of woolen goods, iron, paper, machinery, and so forth.
As for the agricultural prospects, the lands in Carlton county were equal to the best in Illinois in amount and value of the product. Winter wheat, timothy and clover had grown there for years. In no portion of the state will the farmer receive larger returns.
Fond du Lac had then maybe 300 population and Oneota as many as 500, with two sawmills, a store, a hotel, a furniture factory and a church.
But Duluth, population 1,200 and growing fast-Duluth was seen in the true prophetic light. “The city will need an area of twenty square miles for a population of 500,000”—pretty good guess for 1870, by a cold-blooded railroad agency. “No city, except perhaps New York, can control the trade of so vast a region. New York, Philadelphia, Boston, St. Louis, Chicago and other cities struggled for the trade of 40, 000, 000 people and pulled each other down frequently in the fight. But as large a population would some day occupy the territory of which Duluth was the gateway. In twenty-five years this region would have 20, 000, 000 population and produce 300, 000, 000 bushels of wheat.
Duluth’s trade would include all the Canadian northwest and would be ocean going through canals to the sea. By 1900 the United States must have 100, 000, 000 population, of which 30, 000, 000 must be in this territory.” The guess on the wheat crop was not far out, but the population did not keep up with production. The prophet did not allow enough for the development of farm machinery, nor for the standpatters in the congresses of later years.
The prophet of that day counted the hours to Puget sound, five days, to Liverpool fifteen days, to Canton twenty days, when as yet there was no way to Puget sound nor to Liverpool nor even over the plains to reach the foot of the mountains before one starts on the journey to Canton. Thirty years later J. J. Hill saw with the eyes of prophecy the same vision of traffic over plains and mountains and seas to China, and made the vision real. It has been possible for later comers to attain more. Where they saw gold and silver the next generation 109 found iron. But as pure original seers of visions nobody in later times has anything on the prophets of 1870.
In 1871 an exhibit from lands of the Lake Superior and Mississippi at the American Institute fair in New York took a diploma for corn, oats, peas, beans and a full assortment of vegetables of enormous growth.
At one time the promoters of the Lake Superior and Mississippi almost floated a British loan, and a deed of trust was executed to Henry G. Marquand and John A. Stewart, of New York, to cover an issue of £900,000 sterling, January 1, 1866.
The bonds finally were placed in American denominations.
The coming of the Lake Superior and Mississippi railroad only acted as an incentive to the people of Duluth. It was the first tangible evidence that the importance of the town had been recognized, and while it was appreciated, it only spurred them on to further endeavors. The ambition of those early boomers had for years been set on a railroad connection with the Pacific coast-a road that would not only tap the great commerce of that rapidly growing country and make Duluth an important point in the commerce between the Atlantic and Pacific coast states, but would also bring the commerce of the Orient to Duluth, and develop the vast territory that then stretched, unpeopled and unproductive, between the lakes and the coast.
Of the possibilities of this territory but little was positively known, but that little was favorable. Its settlement had been retarded by the lack of means of transportation, but with this furnished there was a confident belief that it would be quickly peopled.
The Northern Pacific railroad at this time did not exist, except on paper, but it had been awaited for years and the time seemed about ripe for it to take a tangible form. Before the War of the Rebellion there had been considerable agitation in congress looking to the construction of railroads to the Pacific coast, and as early as 1853, when Jefferson Davis was secretary of war, an appropriation of $25,000 had been tacked on to one of the army appropriation bills for a survey of different routes for a transcontinental road.
There was a general sentiment that a transcontinental road would soon have to be built and that the government would have to aid its construction. If there was any dissent from this proposition it was from its last clause, and it came from the strict constructionists of the constitution, who held that the Federal government had very little power beyond carrying the mails, fighting Indians and coining money. But the state rights men of the South, who were then in control in congress, were ready to waive this objection provided the eastern terminus of a transcontinental road were in their section. The North wanted a line connecting with roads reaching the seaboard at New York, Philadelphia and Boston; the South insisted that the proper eastern termini were New Orleans and Memphis, and that the traffic to be opened should flow to the ports of the Gulf of Mexico and the south Atlantic ports.
The whole matter was placed in the hands of the secretary of war, who was empowered to make surveys for the most practicable and economical route for a railroad from the Mississippi river to the Pacific ocean. Mr. Davis that same year put five different expeditions in the field to explore as many different belts of country. These expeditions were directed to operate as follows: One near the 32d parallel; one near the 35th parallel; one near the 38th and 39th parallels; one near the 41st and 42d parallels, and the last near the 47th and 49th parallels. The reports of these parties were submitted to congress in 1855 with a recommendation from Mr. Davis in favor of the 32d parallel route, which would bring the eastern terminus of the proposed road no further north than Vicksburg.
The survey for the most northern route was placed in charge of Isaac I. Stevens, an experienced army officer, who had served in the Mexican War and in the Coast Survey, and who late was appointed governor of Washington territory. He did his work so thoroughly that there was little necessity for further preliminary surveys to ascertain the practicability of the northern route to the Pacific when, ten years later, the project for a railroad assumed business-like shape. Stevens divided his force into two divisions, one to operate westward from the Mississippi river and the other eastward from Puget sound. Stevens took personal charge of the eastern division, which started from St.
Paul, and the western division he placed in charge of Captain McClellan, who later became commander-in-chief of the Army of the Potomac during the Civil War and later the Democratic candidate for President. The two parties met near Coeur d’Alene lake in October of the same year.
The general results of Stevens’ explorations were to show that 111 there was an easy route for a railroad from St. Paul to the Rocky Mountains, either by the valley of the Missouri or that of the Yellowstone; that the main range of the Rockies offered no obstacle that could not be overcome by a tunnel and ordinary mountain grades; that there were several practicable passes in the Cascade range, and that the valley of the Columbia offered a favorable though expensive route. In a word, Stevens showed that the northern route to the Pacific was not only a practicable but a very favorable one, following valleys or traversing plains for nearly its whole length, and crossing the mountain backbone of the continent at comparatively low elevations. Iis report served afterward as the solid foundation upon which the Northern Pacific enterprise as a business project rested. When he came east he wrote pamphlets and delivered addresses on the resources of the Pacific northwest and the advantages for a railroad of the route which he had surveyed. He showed that there was a difference in distance in favor of the northern over the other routes surveyed, and also an advantage in the sum of ascents and descents. In a letter which he wrote to a railroad convention in Washington territory in 1860, and which was afterward printed in pamphlet form and widely circulated through the country by the advocates of the northern route, he said: “Nearly the whole country on the northern route is susceptible of continuous occupancy by our people. There is no such thing as a desert, properly so speaking, on the entire route.
There are gaps or intervals where it is only a grazing country; there are portions of the country occupied by mountain ranges which would not admit of profitable cultivation; but as a whole the country is fitted for settlement and occupation, and must be settled and occupied at an early day.” In this letter Stevens gave a table of distances from the principal cities of the East to Seattle, on Puget sound, and Benecia, on the bay of San Francisco, showing that the difference in favor of the northern route to the Pacific was as follows: From Chicago, 317 miles; from Portland, Me., 582 miles; from Boston, 344 miles; from New York, 420 miles; from Philadelphia, 466 miles; from Baltimore, 389 miles; from Washington, Charleston, Savannah, Mobile and New Orleans, 117 miles.
These figures were afterward employed with great effect in enlisting support in congress and in the country for the Northern Pacific enterprise.
The first legislation by congress for Pacific railroads was passed by both houses in 1855. This measure proposed that three lines should be chartered, one from the western border of Texas to California, one from the western border of Missouri or Iowa to California, and one from the western border of Wisconsin to the bay of San Francisco or to the Pacific ocean in Oregon or Washington. No subsidy in money was provided for either line, but each was given a land grant of twelve alternate sections on each side of the track, and a contract for carrying the mails at $300 per mile per annum. The house afterward reconsidered its action, recommitted the bill to the committee, and there it died.
Sporadic attempts were made at every session after this to pass a Pacific railroad bill, but all failed owing to opposition in one house or the other. It was not until 1860 that a Pacific railroad measure was passed, and in it the claims of the northern route were contemptuously passed over. The bill as it passed the house and went to the senate provided for a land grant and subsidy to the Central and Southern Pacific routes. It gave a subsidy of $60, 000, 000 in bonds to the Central route, and $36, 000, – 000 to the Southern. The senators from Wisconsin, Minnesota and Oregon did not approve of this measure, and being backed up by the New England senators, they were able to put in an amendment to the bill, giving a subsidy of $25, 000 for a railroad from Lake Superior to Puget sound. A land grant was also provided for. Here for the first time the name of the Northern Pacific Railroad appears in congressional legislation. The amendment empowered Charles D. Gilfillan, of Minnesota, Nathaniel P. Banks, of Wisconsin, and Isaac I. Stevens, of Washington territory, to act as a board of commissioners to organize a company. The amendment was adopted by the senate and then sent back to the house for concurrence, but it was never possible to obtain the necessary two-thirds vote to take it.from the speaker’s table, and as the session was almost at an end the bill died there.
In 1861 the war broke out and congress had neither the time nor money to bother itself about transcontinental roads. But in 1862 political considerations prompted congress to take action.
There had been a large influx of southern men into California during the days of the gold excitement, and there was some fear of the loyalty of the state. There was considerable talk at the time of the union of California and Oregon and the creation of a western empire. The loyal people of California urged action by congress in favor of a transcontinental road as the best method of combatting this treasonable sentiment, and so congress passed the Union Pacific and Central Pacific bills, with land grants and subsidies substantially the same as those embodied in the rejected bill of 1860. Senator Doolittle of Wisconsin tried to amend this bill when it reached the senate by a provision for the northern route, but his amendment was defeated and the bill passed as it came from the house.
The friends of the northern route were not discouraged, however, nor did they remain idle. They kept pressing its advantages upon congress, apparently without much effect. In 1864, however, the Union and Central Pacific companies again came before congress for an amendment to their charters, and here the senators from Wisconsin, Minnesota and the New England states saw their opportunity. They tacked on to this bill an amendment granting a charter and a land grant to the Northern Pacific railroad. They did not venture to ask for any money, and as congress was in a most complaisant mood about this time when it came to giving away western lands, which were anyway supposed to be of no value, the amendment passed and was accepted by the house. As a matter of fact, congress was afraid to reject it, as without the aid of the friends of the Northern Pacific it would never have been able to pass the proposed legislation for the Union and Central Pacific routes.
The bill creating the Northern Pacific Railroad Company was signed by President Lincoln July 2, 1864. It created a company by direct charter to “build a railroad and telegraph line from Lake Superior to Puget Sound, on the Pacific coast, by the northern route.”? Among the men named as corporators were eminent capitalists, railroad men and politicians living in different parts of the country, such as John C. Fremnont, George Opdyke and Chauncey Vibbard, of New York; R. D. Rice and A. P. Morrill, of Maine; George W. Cass and J. Edgar Thompson, of Pennsylvania; Onslow Stearns and William E. Chandler, of New Hampshire; Cyrus Aldrich, of MIinnesota; John Gregory Smith, of Vermont; U. S. Grant and William B. Ogden, of Illinois, ; W. Prescott Smith and John H. B. Latrobe, of Maryland; John A. Bingham and Philo Chamberlain, of Ohio, and Alexander Mitchell, of Wisconsin. The charter bound the company to commence work within two years, to complete not less than fifty miles a year after the second year, and to finish the entire road by July 4, 1876.
The moving spirit in the enterprise at this time was Josiah Perham, a native of Maine. Perham was not a man of large means, but he had the gift of boundless optimism and indefatigable industry. He had for many years been interested in the project of a railroad to the Pacific, and as the head of what was known as the People’s Pacific Railroad Company, had for years been an annual suppliant before congress for aid. In his many years of work he had built up a large following and was able to command considerable resources. It had only been after repeated rebuffs by congress that he became an advocate of the northern route and had joined forces with the latter’s advocates.
Most of the corporators and the 135 commissioners named to organize the company had little knowledge of the project, and their names were simply inserted in the list as a compliment.
When the commissioners held their first meeting in Boston on September 1, 1864, Mr. Perham was elected president.
Mr. Perham made a speech after his election, parts of which are worth quoting, as showing his entire familiarity with the country which it was proposed to traverse, and also as showing his reliability as a prophet. His hearers were disposed to smile at what they considered his extravagance, but time has since shown that he was entirely within the mark in all his predictions. He said: “The northern route is the shortest to the Pacific. Nature has made it so. Puget Sound is directly west of Lake Superior, and at the very point where the coast bends inland and carries the Pacific’s waters farthest east. It is also the most central route, as anyone may see by looking on the map. It is also the most practicable route, for the mountain ranges, the great obstacles to any Pacific railroad, were here the most depressed and the most easily overcome. There are no deserts along this route -no want of water, or timber, or stone. There is required but little heavy grading, tunneling or trestle work, and no formidable bridging.
“For farming, grazing and mining purposes, there is no parallel zone that equals that through which this road will pass.
Almost every acre is rich in soil, or still richer in mineral wealth. There is every variety of surface and scenery that can give pleasure to the eye and usefulness to the diversified employments of man. There are rich bottoms and valleys, undulating plains, solitary hills and peaks, mountain spurs and ranges.
There are innumerable lakes of every size and form, of the purest water. Also countless streams and majestic rivers, with rapids, cascades and falls. Forest and prairie alternate throughout, rendering the opening of farms easy and cheap. Domestic animals can be introduced and multiplied to any desirable extent.
The climate is singularly adapted to health, activity and length of years. Free from the extremes of moisture and drouth, of torrid heat and arctic cold, it is exempt from the malarial diseases that so often in other regions postrate strength and shorten life, or render it miserable.
“To a country possessing such natural advantages the railroad would not only, with astonishing rapidity, add population and wealth, but from it will receive its best income and profits. The facilities for travel will cause its corn fields and gold fields to swarm with agricultural and mining labor, while this very labor will in return fill the successive trains as they pass along. Thus the local business will grow with the road, and undoubtedly support every section of it as fast as finished.
But as a medium for a more extended internal and foreign commerce, this road will command the highest consideration.
From Lake Superior westward it will transport the trade of the Red river of the North, of the Hudson Bay Company, and its dependencies, including the broad valleys of the Saskatchewan and its tributaries, and of all the regions of the Upper Missouri and Columbia. From the same points east and southward it is already connected by water or rail with all the great cities of Canada and the United States-and through the Atlantic and gulf seaports, by steam and sail, with all the trans-Atlantic, West Indian and South American ports. From Puget Sound, its western terminus, through the deep waters of Admiralty Inlet and Fuca Straits, is the direct and nearest route to the great Pacific emporiums of Russia, China and Japan. Hence, the Northern Pacific railroad will be on the direct line of the shortest and most practicable route between Europe and the great silk and tea producing countries of Asia, as well as of the great wheat producing regions of America.” They put Perham down as a dreamer of dreams in those days, but the United States has since had cause to admire the clarity of his vision.
Mr. Perham further told the commissioners that he estimated the entire cost of the road at $120,000,000, and that the proceeds from the sale of the land grant, which would average $10 per acre, would bring in the sum of $473, 600, 000. In this Mr. Perham far overshot the mark, as the average price of lands sold by the Northern Pacific Company has fallen away below $10 an acre.
It was necessary that 20, 000 shares of stock should be subscribed for and 10 per cent of the subscriptions paid in before the first board of directors could be elected. This was finally effected and on December 6, 1864, the first board was elected and the commissioners went out of existence. The following men composed the first board of directors: Josiah Perham, I. S. Withington, A. W. Banfield, Philander Reed, Ogden Hall, Kiah B. Sewall, Willard Sears, Abiel Abbott, Nathaniel Greene, Jr., P. J. Forristall, John A. Bass, James M. Beckett and Oliver Frost. The directors next day elected Josiah Perham, president; Philander Reed, vice-president; Charles S. Perham, secretary, and Increase S. Withington, treasurer. Nominally the company had $200, 750 in its treasury from the 10 per cent payment on the stock which it had sold.
Perham’s idea was to raise funds for the construction of the road by selling interest bearing stock to the public. He was convinced in his own mind that there was such a general interest in the road that there would not be the slightest difficulty in disposing of the stock. It was impossible to sell bonds in a Pacific railroad project unless they had the government guarantee, and even these were not sought with any avidity by investors. In the latter part of 1865 he met his directors in Boston and told them that his plan had proved a dead failure.
He was disheartened and nervously exhausted and felt that he must give up the struggle. In December of the same year Mr. Perham resigned as a director and president of the road, and John Gregory Smith, of Vermont, was elected to succeed him. A number of the directors also resigned with Perham in order to allow the entrance of new interests into the direction of the company.
Two important and pressing matters called for immediate 117 action by the new president and the board of directors. The first was for an extension of the time in which work on the road was to begin, which time had now almost expired; the second was to secure financial aid from congress. Both were difficult, but the latter was almost an impossibility. By the good offices of Thaddeus Stevens, of Pennsylvania, who was then the most powerful figure in congress and who himself introduced the resolution, the company was granted an extension of two years’ time for beginning work. The effort to obtain financial aid for the road was defeated in April, 1866, after a debate in the house that had lasted three days, and in which Thaddeus Stevens and William Windom, of Minnesota, were the staunch friends of the company.
From 1866 to 1869 the operations of the company were devoted to efforts to obtain financial aid from the government, efforts which always proved futile. The only favor which it obtained from the government during that time was another extension of the time for beginning operations. This was granted in 1868 and gave the company two years more. The directors by this time were about convinced that congress would not help them, and they began to consider the building of the road as a business enterprise. They secured the passage of an act in 1869 allowing them to issue bonds on their road and telegraph lines, an act which afterward proved defective because it did not include the power to include the land grant in the mortgage.
Just here is where Jay Cooke became identified with the enterprise.
He was then the head of the greatest banking house in the country, and enjoyed a tremendous prestige because of the success with which he had placed the great war loans of the government. The main office of the firm of Jay Cooke & Co.
was in Philadelphia, but it maintained branches in New York and London, and was the owner of the First National Bank of Washington. The directors of the Northern Pacific were desirous of securing the services of this great banking house to place their bonds, but the negotiations had proceeded for a year before Mr. Cooke agreed to undertake the flotation. While he had been considering the matter he had sent agents over the entire proposed line of the road to examine into its possibilities and report to him, and these reports were so favorable that they decided Mr. Cooke’s action. He was practically the only member of his firm who believed in the success of the road, however, all his partners being opposed to it.
When Mr. Cooke finally undertook the placing of the bonds, after having made a contract with the company, he did so with the understanding that the general mortgage should be made applicable to the lands of the company as well as to its line.
To do this required another act of congress, and it was understood that legislation for this purpose should be obtained as soon as possible. His contract also called for an issue of $100, 000, 000 in bonds by the company, and Mr. Cooke insisted that the bonds should bear 7 3-10 per cent interest. He was to pay the company 88 cents on the dollar for the bonds he sold, and was to receive a bonus of $200 in stock for every $1, 000 bond sold, and in addition one-half of the remainder of the $100, 000, 000 of stock authorized by the charter. On the part of his firm Mr. Cooke agreed to raise $5, 000, 000 within thirty days from January 2, 1870, with which the company was immediately to begin building the road. Jay Cooke & Co. raised the $5, 000, 000 required to be raised in thirty days by forming a pool in Philadelphia which took the bonds at par, and in the winter of 1870 congress authorized the issue of bonds covering the land grant of the company.
Mr. Cooke’s first idea was to place the greater part of the bonds abroad, and one of his partners had gone to Europe in 1869 with a view of enlisting the aid of the Rothschilds in the enterprise. The prospectus which he submitted to the Rothsehilds showed that there would be about $80, 000, 000 of profit to be divided between Jay Cooke & Co. and the Rothschilds if the latter would furnish the funds to build the road. The Rothschilds declined the proposal to participate, but in the spring of 1870 Mr. Cooke had enlisted the support of Amsterdam and Berlin capital, and was on the point of closing a combination of foreign capitalists to take $50, 000, 000 of the bonds when the war between France and Prussia broke out and the deal fell through. It was useless at this time to look to Europe for funds, and Mr. Cooke was compelled to fall back upon the American market.
He employed the same methods to place the bonds which he had used in selling the government’s issues of bonds during the war. He prepared scores of attractive prospectuses, used the press freely, both for advertisement and for articles descriptive of the wonderful country through which the road was to run, and so favorably was his firm regarded that money poured in to him. Money was plentiful in the country and new investments which promised large returns were eagerly sought. The small savings of mechanics, farmers and tradesmen as well as the hoards of large capitalists sought investment in these securities.
In less than two years’ time nearly $30, 000, 000 was received. Then the panic of 1873 came, and Jay Cooke & Co. went into bankruptcy. This ended work for some years on the Northern Pacific.
During all these years of negotiation the people of Duluth had kept close track of the progress of affairs, and when Jay Cooke & Co. took hold of the placing of the bonds there was general rejoicing in the city. Jay Cooke was well known in the city. He had considerable interests there already, and, besides, he was one of the owners of the Lake Superior and Mississippi railroad. It was generally assumed that he would make Duluth the eastern terminus of the road, instead of Superior, which made strong efforts to get it, but Duluth was chosen by the engineers of the road.
The actual breaking of ground for the road took place on February 15, 1870, on the Dalles of the St. Louis river, about sixteen miles from Duluth. From there the entrance into the city was to be made over the tracks of the Lake Superior and Mississippi railroad. The news of the beginning of actual work had been carried to Duluth and Superior, and a large delegation from both cities drove out through the woods the night before in order that the great event might have a fitting celebration.
J. B. Culver, of Duluth, and Hiram Hayes, of Superior, were chosen to inaugurate the work. Mr. Culver took a pick and shovel and filled a wheelbarrow, and Mr. Hayes wheeled the load a few steps and dumped it, amid continued cheering. In all, including the delegations from Duluth, Superior and Fond du Lac, there were about seventy-five persons present. A fire of logs had been built the day before to melt the snow and thaw out the frozen earth.
Until the time of Jay Cooke’s failure the work of building the road had been vigorously pushed from both ends of the line.
Those were great days for Duluth and it grew like a weed.
As the line progressed westward new settlers began to come in, and most of them came by the way of Duluth. In addition, all the vast stores of material that were used in the building of the road were first brought to Duluth by way of the lakes, and this made its harbor one of the busiest spots on the lakes for those days. The people of the city already began to figure out how many days it would be before the Northern Pacific would be completed and the commerce of the great northwest and of the Orient would be passing through their portals. So great was the prestige of Jay Cooke’s name that a mere doubt of his ability to carry through the enterprise to a successful completion would have been looked upon as almost high treason.
Hence when the crash of 1873 came it came with a stunning shock to Duluth. For awhile its citizens could not credit the news; after they had accepted it they were strongly confident that Mr. Cooke would rearrange his affairs shortly and resume his interrupted work. But Mr. Cooke never did, and a dreary period of several years passed before Duluth was to witness the realizations of its hopes for a transcontinental road. To those on the inside the Cooke failure was not altogether a surprise.
In the latter part of 1872 the sale of bonds had almost ceased and the Northern Pacific Company was experiencing financial difficulties. The vast sums of money it had obtained had been all spent, and this led to dissatisfaction with President Smith, who was accused by the directors of extravagance and of not devoting the time to the affairs of the company, which he should have done. This feeling was so strong that President Smith resigned on October 1, 1872. His successor was General G. W. Cass, a member of the board of directors and president of the Pittsburg, Fort Wayne and Chicago railroad.
At the time of the Cooke failure the eastern division of the railroad had been built as far as Bismarck, 450 miles west of Duluth, while on the Pacific division 120 miles had been constructed.
This reached from Kalama, on the Columbia river to Tacoma. Retrenchment and economy were the order of the day.
Bonds could not be sold at any price, and there was a general disposition manifested throughout the country to ridicule the Northern Pacific project as a wild and visionary scheme, for which Jay Cooke was severely blamed. There was little traffic on either of the divisions of the road, and it was with difficulty that even the running expenses could be earned. The company kept going, however, until 1875, when it went into bankruptcy.
General Cass was appointed receiver. General Cass had resigned the presidency of the company in 1874 and Charles B. Wright of Philadelphia had been elected in his place. A scheme of reorganization formulated by the friends of the company had been perfected, and in August, 1875, the property of the company was bought in by a bondholders’ committee. The existing lines were economically managed and by 1876 they were not only paying running expenses, but a little over, and the earnings increased each year. In 1879 Mr. Wright resigned the presidency and Frederick Billings, of Vermont, was elected in his place.
The credit of the company was looking up, and under Mr. Billings’ management the company was able to make an arrangement in 1880 with the banking firms of Winslow, Lanier & Co., August Belmont & Co., and Drexel, Morgan & Co. to float an issue of $40,000,000 of bonds and resume the work of construction.
About this time Henry Villard, president of the Oregon Railway & Navigation Company, began to take an interest in the road. Mr. Villard was the head of one of the greatest money makers in the West, and as the plans of the Northern Pacific contemplated the paralleling of some of his lines, he was anxious to forestall such action and combine his company with the Northern Pacific. By 1881 Sir. Villard had quietly obtained a controlling interest in the Northern Pacific, and in June of that year Mr. Billings resigned the presidency and was succeeded by A. H. Barney, who had been long a director of the road. At the time of Mr. Billings’ retirement the preferred stock of the company, which had once sold as low as $8 a share, was selling at $80, and the common stock, which had been sold at $1.50 was quoted at $50.
September 15, 1881, Mr. Barney was succeeded as president by Henry Villard. At the time of Mr. Villard’s election there still remained a stretch of about 1, 000 miles of country to be built over before the Pacific and eastern divisions of the road could meet. Villard had high credit in Wall street and abroad and was easily able to raise the necessary funds, and in the latter part of 1883, so vigorously had the work of construction been pushed, the advancing lines of rail met near the summit ridge of the Rocky Mountains, and the rails of the Northern Pacific spanned the continent from Lake Superior to the Pacific.
The subsequent reverses that overtook Mr. Villard and that injuriously affected the Northern Pacific railroad have no part in this narrative. Today it is one of the most prosperous roads in the country, and the claims of its early promoters, once viewed as fantastic and visionary, have been more than justified. The completion of the road was a great thing for Duluth. It put it on the map as the eastern terminus of a great transcontinental railroad and has been an important factor in the upbuilding of the city. The importance of the subject justifies the extended space that is given to it in this narrative, and for much of the data contained in it credit must be given to the admirable work of Eugene V. Smalley, “The History of the Northern Pacific Railroad.” The Chicago, St. Paul, Minneapolis and Omaha Railroad, commonly known as the “Omaha” road, was the next great railway system to reach Duluth after the Northern Pacific. This did not take place, however, until 1886. The system had reached Superior in 1882-83, but there it was halted, owing to the lack of bridge facilities across the St. Louis river. It was not until 1886 that this obstacle was surmounted, and then the entrance to Duluth was effected over the bridge of the Northern Pacific, which had been erected by the permission of the secretary of war. The first railroad train that passed over the bridge after its completion was a train of the Omaha road, and this took place in July, 1886.
The coming of the Omaha road meant a great deal to the prosperity of Duluth, and. it has since its advent played an important part in the growth of the city. The road traverses one of the greatest agricultural belts in the union, and one which at that time was much more densely settled than the country along the Northern Pacific’s lines. The agricultural wealth of this stretch of country, its wheat, corn and other products, naturally sought an outlet to the East by way of the Great Lakes, while the products of the East took advantage of the lower freight rates that obtained by way of the lakes to reach a western market. The result was a vast stimulus to the commerce of the city and a corresponding prosperity for the railway.
The Omaha road is a part of the Northwestern system, which owns a controlling stock interest, but its corporate individuality has never been obscured and it is still today operated as a distinct system.
At the time the road entered Duluth its traffic was not very heavy, at least as far as the passenger traffic was concerned. The road then operated one passenger train each way a day by way of Eau Claire, and connections were made at Spooner for Ashland and St. Paul. Today the road is operating four passenger trains each way a day, and its equipment will rank with that of any other road in the country. Its freight traffic, which was always heavy, has grown to enormous proportions. The opening of the iron range in Minnesota and the great development of that section have contributed materially to the prosperity of the Omaha lines. Much of the heavy machinery used in mining operations is made in Chicago and Milwaukee, and this, with the countless tons of other supplies, has given the road a heavy and lucrative freight traffic. It also has great elevator facilities at the head of the lakes and extensive terminals.
The Duluth and Iron Range Railroad. July 30, 1884, the first load of iron ore to go out from Minnesota was hauled by the Duluth and Iron Range railroad from the Vermilion range mines to the newly established port at Two Harbors. Up to the moment that the ore was loaded on the cars the matter of developing the Vermilion range mines was an experiment that was rather speculative and that was realized only through the profound beliefs of Charlemagne Tower, George C. Stone, and their associates in the commercial riches of the range. They knew that the ore of the Vermilion was merchantable hematite, but it was not an easy matter to find money for the building of a railroad to bring that ore within reach of the shipping. In those days the great railroad development of the West was getting under way, but it was one thing to get the funds to build a railroad through a grain-producing country where construction was inexpensive, and quite another affair to get the means for putting a road through a rough country for the purpose of making a mining proposition profitable. There was no other excuse for the building of the Iron Range road than to bring down the ore from the Vermilion range. There was no incidental traffic and, at that time, no well-founded hope of any. But the money was found, the road built, and the first ore train run down to the docks twenty-six years ago. The facts tell the whole story of how the event justified the faith of the projectors and builders of the Iron Range road.
In the twenty-six years that have elapsed since the first train was put into service on the Iron Range the Mesaba range has been developed, the traffic of the railroad has increased to such immense proportions that it is not easily conceived of, and the railroad has developed physically until it has a magnificent ore carrying equipment and has a passenger equipment that permits comparison with the finest of the great railroads of the country.
No more impressive demonstration of the demands made upon human ingenuity to devise means to meet conditions almost absolutely new could be given than is shown in the development of methods for handling ore on the Iron Range road and dock system. The rolling stock and docks in the first year of the installation of the system were adapted to the requirements of a traffic that called for the handling of a few thousand tons of ore-the shipments the first season amounted to but 62,000 tons.
The docks were up-to-date for their time, but they would be considered primitive now. The cars were small and had no special equipment for ore carrying. The docks were low in structure and fitted only to meet the necessity of loading ore into vessels of draught and tonnage that would be reckoned insignificant in these days. A 10,000-ton ship now is loaded in from one and a half to two hours, while to load a 1,000-ton vessel twenty-six years ago would have been a good day’s work. But from the first the methods and means of handling the ore were improved and, in these latter days-with the vastly increased output of the ranges and the demand for cheap steel and a tremendous amount of it-the progress of development has been very rapid.
The equipment of the early days was retired as it became inefficient, and it was wholly replaced long ago, or improved out of recognition. The few miles of road that constituted the first construction has expanded until the road has a fraction less than 446 miles of track. This includes a main line of 168.445 miles; branches and spurs, 63.023 miles; trackage rights, .800 miles; second track, 70.083 miles, and sidings, 142.768 miles. The trifling locomotive power has been increased until there are now in use 94 engines of the best type and great power. The ear equipment has been developed until the company has now in operation 5,413 cars, of which 28 are passenger. The ore cars are of the pressed steel hopper type of 50 tons capacity. The passenger equipment has been a point of pride with the managers of the road, and the service and appointments are perfect and according to the best standards. The entire system is practically 125 all double tracked and the roadbed and steel the best that can be provided by the liberal use of money.
The dock equipment has kept pace with the improvement of the road. From the one insignificant little dock that was used in 1884, it has been expanded both in frontage and in height until it is now extensive enough to accommodate many ships and to permit the loading of the biggest carriers on the lakes. There are six of these docks, having a total length of about 10,000 feet, with 1,064 ore pockets and a storage capacity of 225,000 tons.
The field of the Iron Range railroad’s usefulness in the largest sense was opened up when, in the early ’90s, the discoveries of the Mesaba range were made and the crying need of the new range was for rail transportation to the docks. The Duluth and Iron Range road went speedily into the business of extending its lines into the Mesaba field. The mileage that must be built to reach mines of vast extent was comparatively insignificant. As a business proposition it would have been worth while to build a road across a continent to reach the traffic that was to come out of these mines. So that it was to be expected that the Iron Range road would become a source of great profit to its stockholders and the object of solicitous attention on the part of the men who foresaw the possibilities for money making in the business of transporting ore. Reaching out, it touched Aurora, Biwabik, McKinley, Pettit, Sparta, Eveleth, Gilbert and Virginia on the Mesaba range, and went with spirit into the development of these places commercially. On the Vermilion range is fostered the towns of Ely and Tower, and its policy in the handling of package freight and passengers has been calculated at all times to inure to the benefit of the range communities. The wisdom of this policy has been demonstrated in the growth of a freight and passenger business, aside from the ore traffic and its incidentals, that has now assumed proportions that are altogether satisfactory and out of all measure beyond what might have been looked for when the road was first laid out in the untracked wilderness.
The total ore tonnage hauled by the Duluth and Iron Range railroad in 1909 was 9, 192, 128 gross tons. Its earnings from operation were $8,650,081.28, and it paid the state of Minnesota in taxes $346,566.79. The principal mines from which it derives its ore traffic are the Minnesota, Pioneer, Zenith, Sibley, Gilbert, Fayal, Adams, Spruce, Mohawk, Elba, Corsica, Minorca, Bessemer, Victoria, Miller, Biwabik, Adriatic and Kellogg.
The Duluth and Iron Range railroad has experienced few, if any, of the vicissitudes that generally fall to the lot of a railroad at some stage of its existence. Being built for the specific purpose of moving the ore from the Vermilion range and finding for some years no other outlet for its activities but to take care of and develop that traffic, its projectors were not disappointed nor were there any losses incurred in speculative building. The road passed from the hands of its original owners when Charlemagne Tower and his associates got their price for their property, and it then became a part of the property controlled by the Minnesota Iron Company. When the development came on the gMesaba range the road was ready to take care of it, and projected extensions were followed by realization and an immediate expansion of business-all this so fast that the road, as a railroad, never had any difficulties. The troublous days of 1893 was a time of expansion for the Iron Range road, and there were some men in control in those days whose faith in the range might have carried a weaker vessel than the railroad through without fear of breaking. The great difficulty for the road then was to secure equipment fast enough to supply the demand made for it by the increasing output. Upon the organization of the United States Steel Corporation it passed under that control and, like the other properties in that ownership, it has since developed enormously in capacity, traffic and earnings.
As before stated, it is not in the ore-carrying trade alone that the Iron Range road has exercised its activities. It has fostered local trade and has perfected its roadbed, rails and rolling stock until it is one of the prize roads of the country in every form of equipment and administration. It has also done much to develop the lumber industry and is every year hauling into Duluth to be sawed more than 125, 000, 000 feet of pine. It brings in from Knife river all of the traffic of the Duluth and Northern Minnesota railroad. At Two Harbors, where its ore docks are located, it has been almost the sole factor in the building of the town, which has become one of the great ports of the lakes in point of tonnage shipped.
The officers of the Duluth and Iron Range railroad are: F. E. House, president; J. H. McLean, first vice-president; J. H. Hearding, second vice-president; H. Johnson, secretary, auditor, general freight agent and passenger agent; F. C. Marshall, treasurer; Thomas Murray, assistant secretary and treasurer; Thomas Owens, superintendent.
The railroad is not only adequately administering to the needs of a fast-growing section of the state, but is every year bringing in an increasing throng of sightseers and hunting or fishing parties. Lake Vermilion is one of the most considerable bodies of water in a state that is noted for the abundance of its lakes, and the time will come before long when its manifold beauties will establish it as a great summer resort. North of the range stretches the almost unbroken wilderness, which, despite the operations of the great lumbering companies, will remain for many years one of the finest hunting grounds remaining to the American sportsman.
The Duluth, Missabe and Northern Railroad Company brought to Duluth during the past year (1909) 13, 470, 503 tons of iron ore. It is probable that for its mileage it is the heaviest freight traffic road in the world. For the season’s work last year it moved enough ore alone to fill above 269, 410 cars, figuring fifty tons of ore as the average car load. If these cars were placed in one line they would make a train long enough to cover the whole trackage of the system several times over.
The position of the Missabe road is unique among railroads of the country by reason of the immense tonnage of freight produced in the country in which it operates. Built primarily for the purpose of bringing the ore down from the Mesaba range to the docks, it has been extended only upon lines justified by the opening up of new mines, and its equipment has been added to proportionately. There has been nothing speculative about it or its development. It was not built with a view of supplying transportation for future development, but found immediate demand for its equipment as soon as it was installed. The one thing that the road has had to reckon with has been to so adjust its administration that it would have the means of handling the freight which has increased in such huge proportions from year to year. And the operation of the railroad has not been the most important concern of its chiefs, for a part of its terminal equipment are the great Missabe ore docks-the largest in the world, with storage capacity for over 300, 000 tons of ore.
The rapidity with which the development of the Missabe equipment has been forced to its present tremendous capacity may be indicated by the fact that it was only some half dozen years or so ago when it was said that there was a prospect that within a year or two the road would be able to take care of 6, 000, 000 tons of ore. That same season that record was reached and in 1905 the road was able to handle 8, 000, 000 tons, and now there are none so daring as to put a limit on the possibilities of further development. It can only be said that it will certainly be proportionate to the demand made on the resources of the railroad and its docks by the development of the new mines that are being opened up in the country into which the lines have been extended the past few years, and which contains magnificent potentialities in mines of known and unknown magnitude.
The Duluth, Missabe and Northern road came into being during the first year of shipping operations on the Mesaba range.
The Merritts had found ore and they wanted to get it to market.
There was no railroad to permit of its transportation to Duluth, and they built the first installment of the Missabe road. That was seventeen years ago, and the first shipment was the famous 4,000 tons which was taken down to the Allouez bay docks and shipped east-and which came very near putting the range out of business temporarily, because the iron masters did not know how to handle the ore. The difficulty which overtook the Merritts in their extensive operations did not interfere with the development of the road in other hands. The present Missabe ore docks were started to handle ore from the railroad, and the entire plant fell into the hands of the Rockefeller interests when John D.
Rockefeller came into the field. Since that time there has been no halt made in the progressive development of the road in its extension, equipment and terminal docks. The Rockefeller interests, which were represented in the handling of the properties by W. J. Olcott-who was one of the first to recognize the magnificent possibilities of the range as a feeder to the transportation company-found that the way to make the property pay was to develop the mines as fast as possible. But, though the mining interests of the company were extensive, the owners were more ambitious of carrying ore than of mining it. Closely allied to the Missabe was the Bessemer Steamship Company, then controlled by Rockefeller, and it was with a view of the development to the uttermost of this transportation system that the Consolidated Mines Company turned over its mining interests and left its representatives free to devote their time to the rail- 129 road administration. In 1900 the road, with its docks and equipment, passed under the control of the United States Steel Corporation and became one of the operating companies of the corporation.
Since the first ore dock of the Missabe was built in 1893 an immense amount of money has been spent upon dock construction and equipment. Always the consideration in view by the engineers and managers of the company was the installation of equipment that would save time in the handling of cars on the docks and in putting the ore into the vessels. Always there has been the pressure of the ore and the need of improving the capacity of the company for getting it to market. And upon the building and equipment of the docks the energy and resources of the road were expended freely. It was no great matter to get rolling stock for the road, to improve grades and provide trackage, if the terminals could be made to handle the traffic. And, by the concentration of energy, ingenuity and intelligence, and the expenditure of great sums of money in perfecting machinery for the speedy handling of the traffic at the docks, the great shipping plant has now been brought to a state of efficiency where it may be fairly said to be able to cope with the stream of ore that it poured through it, from the cars of the company into the ships that are to convey it to the lower lake ports.
The first of the ore docks at the foot of Thirty-fourth avenue west was built in 1893 to meet a condition brought about by the impossibility of carrying out the original plan for shipping the ore through the Allouez Bay docks, on account of the failure of the old Duluth and Winnipeg road to finance its undertakings.
The first dock built was well enough for the times, but its equipment was primitive compared to the present plant. It has been enlarged and greatly improved, and where there was but one dock there are now three. In these docks there are 1, 152 ore pockets, and the length of each is close to 2, 500 feet.
The Duluth, Missabe and Northern has 526.86 miles of track in main line and branches. It owns and operates 92 locomotives of the most powerful capacity, and 7, 119 cars. It has a superb passenger equipment, being in this respect as well furnished as most of the great lines in the country. There is no sacrifice of the general function of a well-managed railroad in the pursuit of the prime business of the company in carrying ore. The package freight business developed by the building up of the numerous 130 COMING OF THE RAILROADS towns that now mark the path which the Missabe blazed into the wilderness, and which has now attained respectable proportions and is increasing in measurable proportions to the increase of the ore coming from new mines.
But the equipment of the road and its administration are devoted to facilitating the handling of ore. And speed in the transportation of this freight is carried to such an extent that the ore is weighed on scales, automatically, without stopping the trains. The shops of the company are at Proctor, where it carries on the work of building and repairing its equipment.
The most important recent development of the road is the extension of the line to Coleraine, which brings to the road the production of some great mines in that district. In this extension new towns have been built and an extremely valuable section of the range opened up. Some of the great mines which furnish ore to the road are the Burt, Sellers, Morris, Hull, Clark, Chisholm, Mountain Iron, Norman, Shenango and Susquehanna. In the Coleraine district the principal mines are the Canisteo, IIolman and Hill-Walker. The principal range towns reached are Hibbing, Virginia. Mountain Iron, Eveleth, Biwabik, Coleraile, Chisholm and Marble.
The Duluth, Missabe and Northern Railroad Company is a Minnesota corporation. The officers of the company are: W. A. McGonagle, president; W. J. Olcott, first vice-president; Pentecost Mitchell, second vice-president; F. D. Adams, general solicitor; E. B. Ryan, Jr., secretary; C. D. Fraser, assistant secretary; E. S. Kempton, treasurer and auditor; J. B. IIanson, general freight and passenger agent; J. W. Kreitter, superintendent; A. J. Wielde, car accountant; C. W. Seddon, superintendent motive power and cars; H. L. Dresser, chief engineer; S. F. McLeod, purchasing agent; C. W. Kieswetter, general agent.
The Duluth, South Shore and Atlantic Railway is one of the most potent and interesting of the railways entering Duluth. The road was opened for traffic at Duluth September 18, 1888, and the situation commanded by the line was so significant as to earn for it the appellation of Duluth’s Declaration of Independence.” This line follows the south shore of Lake Superior to Sault Ste. Marie, there connecting with the Canadian Pacific, by which it is controlled, and gives to Duluth a direct and independent line to New York, Boston and all eastern points, and affords it the full benefit of equitable rates from the Atlantic coast both in winter and in summer. At St. Paul and Minneapolis it connects with the Wisconsin Central, which is also owned by the Canadian Pacific, thus giving Duluth another direct line to Chicago. The road practically duplicates in the winter many of the advantages that the Northwest receives from Lake Superior itself during the season of navigation, and being the short line to the east, assures Duluth shippers and travelers low rates and quick service for both freight and passenger traffic all the year round. So long as political and commercial relations are intimate and friendly with Canada, this road, and its connections with the powerful Canadian Pacific Railway Company, must continue to hold its strong strategical position as the arbiter of both freight and passenger rates between the Northwest and the Atlantic seaboard cities. The line continues to grow in popularity and has greatly improved its service since its extension to Duluth. Its road bed and equipment have been wonderfully improved and will rank with those of any of the great American systems. It is just completing a new depot at West Sixth and Superior streets, which will greatly increase its facilities and which forms a decided addition to the architectural features of the city.