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Growth Was His Constant Aim by Alpha Team

They called him the Empire Builder. And his hard work made him the king of construction.

James Hill, (1838-1916) born on a farm in small-town Rockwood, Ontario, died wealthy in the U.S., where he built the Great Northern Railway, precursor to day's transportation giant, the Burlington Northern Santa Fe.

A newspaper reporter asked the elderly Hill what the secret of his success was. "Work, hard work, intelligent work, and then more work," Hill answered.

Hill's self-description was apt, says Don Hofsommer, a history professor at St. Cloud State University, former Southern Pacific Railroad historian and co-author of "The Great Northern Railway: A History."

The New York Times catalogued Hill's achievements in his obituary: He laid more than 6,000 miles of railroad, with gross earnings of $66 million, carrying 15 million tons of freight through six states with 400,000 farms and 65 million acres of improved land worth $5 billion.

"He was not afraid of bigness," Hofsommer said. "Hill was the great American success story. And he did it by his own bootstraps."

The young Hill had nine delightful years at a Quaker school in Rockwood. His father's untimely death forced Hill to leave school at 15 to work as a clerk to support the family.

He'd soaked up plenty in those nine years, excelling at mathematics and English — potent skills in his later, self-made success. "He was not well-educated but he was very bright," Hofsommer said. When he left school he was skilled in geometry, algebra and land surveying.

Adversity — even physical injury — became a challenge, not a stumbling block. Losing the sight in his right eye to an errant arrow, Hill had to relinquish his dream of becoming a doctor.

Yet he kept his good eye peeled for opportunity. When a traveler on horseback stopped one day at the Hill farm, the family fed the wayfarer and Hill decided to care for the tired horse, according to his obituary in the New York Times. His kindness to the animal won praise from the voyager. He gave Hill a U.S. newspaper and some advice.

"Go there, young man," the traveler said. "That country needs youngsters of your spirit."

Inspired, the 18-year-old Hill went to the then-frontier town of St. Paul, Minn., where he used his math skills to land a job as a bookkeeper for a steamboat company.

Examining the books gave him a window into the business, and he began taking a larger role. He soon developed expertise as a freight forwarder, moving goods between rail and water, successfully bidding on supply contracts. He also made headway in the steamboat business and then with coal. His coal company grew 500% in seven years.

Building on his successes, Hill also expanded into banking. He developed a talent for reviving and selling bankrupt businesses.

Quadruple Threat

He had a competitive streak, leadership abilities, a vision of the future and integrity, says Tom Murray, a transportation consultant, editor and publisher of the newsletter, "Rail StockWatch," and author of several books, most recently, "Canadian Pacific Railway."

"He set the standard for the honorable businessman," Murray said. "We see in him not the kind of self-dealing and self-aggrandizement that led to the robber-baron label of some of his contemporaries."

Hill was ever on the lookout for new opportunities. He got into the railway business after several railroads went bankrupt during what was known as the Panic of 1873. The panic was a depression sparked by the failure of a bank that had invested heavily in railroads.

Hill had confidence in the industry. Investing all his savings — $100,000 — he partnered with business colleagues in the U.S. and Canada to buy the bankrupt St. Paul and Pacific in 1879. He immediately began expanding it.

While other railroads in the West had the benefit of land grants and subsidies, Hill's group built what would be the Great Northern entirely with private funds.

In the wake of the Panic of 1873, Hill worried that Washington would try to regulate rates on profitable railroads. His strategy was to reinvest profits into the railway.

Hill didn't follow the model of other railroads that laid track where people had settled. He laid track where people could and would settle. To entice them, he launched agricultural and resource businesses along the way, creating an integrated economy.

Hill used his wealth and power "to improve the climate for businesses" in the Northwest, Murray said. He was even ahead of his time, "preaching better conversation and agricultural methods."

"All his business ventures were motivated and formed by his experiences on the frontier since his arrival at age 18," Murray said. "He had a very Canadian, practical approach."

Hill was a key player in the building of the Canadian Pacific Railway, north of the border. But he later broke with Cornelius Van Horne, the American genius behind Canadian Pacific, and became his competitor.

"The Canadian Pacific and Great Northern were fierce competitors," Hofsommer said, "and the acrimony between Hill and Van Horne became intense."

One of their differences centered on engineering. Van Horne had to build through the roughest terrain in North America to keep the Canadian Pacific inside Canada.

Hill argued for a more pragmatic route, with easier country and milder grades, through the U.S.

Proof Is In The Profit

He proved his point with the Great Northern, Hofsommer says. As the Great Northern grew, Hill "insisted on reducing curvature and grades and on buying the most efficient and powerful locomotives."

The result was efficiency, speed and reliability. As the Great Northern expanded, Hill drove it to lay track westward at a rate of a mile a day, at a cost of just $30,000 a mile.

Where the railway went, people followed, creating farms, resource industries and businesses — and traffic for Great Northern.

Hill had a plan to keep his trains packed with goods. He sent agricultural instructors throughout the Great Northern's territory to teach farmers how to grow more wheat, which he would ship to his grain elevators in Buffalo, N.Y.

He also supplied livestock to Northwest ranchers, Hofsommer says. "He even brought the apple orchards to the Wenatchee Valley, Wash."

The 1,700 miles from St. Paul to Seattle were completed in 1893. The Great Northern was the only giant U.S. railroad never to go bankrupt.

Once his railway reached the West Coast, Hill saw the trading opportunities with Asia. He launched a fleet of steamships to boost commerce with Japan and China.

Even in his personal life he did nothing by half measures. In St. Paul, he fell in love with a waitress. He paid for her education and married her; 10 children followed.

His love of learning kept him seeking self-improvement, Hofsommer says. In 1910, Yale University gave him an honorary degree.

In 1912, stepping down as Great Northern's president, Hill said, "Most men who have really lived have had, in some shape, their great adventure; this railway is mine."

The railway he built named its premier train the Empire Builder, a name preserved by Amtrak today.

BY PETER BENESH

This article was published on Tuesday 26 September, 2006.
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