USA > North Dakota > Early history of North Dakota: essential outlines of American history > Part 43
Note: The text from this book was generated using artificial intelligence so there may be some errors. The full pages can be found on Archive.org (link on the Part 1 page).
Part 1 | Part 2 | Part 3 | Part 4 | Part 5 | Part 6 | Part 7 | Part 8 | Part 9 | Part 10 | Part 11 | Part 12 | Part 13 | Part 14 | Part 15 | Part 16 | Part 17 | Part 18 | Part 19 | Part 20 | Part 21 | Part 22 | Part 23 | Part 24 | Part 25 | Part 26 | Part 27 | Part 28 | Part 29 | Part 30 | Part 31 | Part 32 | Part 33 | Part 34 | Part 35 | Part 36 | Part 37 | Part 38 | Part 39 | Part 40 | Part 41 | Part 42 | Part 43 | Part 44 | Part 45 | Part 46 | Part 47 | Part 48 | Part 49 | Part 50 | Part 51 | Part 52 | Part 53 | Part 54 | Part 55 | Part 56 | Part 57 | Part 58 | Part 59 | Part 60 | Part 61 | Part 62 | Part 63 | Part 64 | Part 65 | Part 66 | Part 67 | Part 68 | Part 69 | Part 70 | Part 71 | Part 72 | Part 73 | Part 74 | Part 75 | Part 76 | Part 77 | Part 78 | Part 79 | Part 80
"In that year the credit foundation of the company was broadened and its methods systematized by the authorization of $50,000,000 consolidated mort- gage bonds. Of this amount, $19,426,000 were reserved to retire prior bonds, $10,574,000 were to be issued immediately and the remaining $20,000,000 were to be issued only on the construction thereafter of additional track at the rate of not to exceed $15,000 per mile, although the cost per mile was often as high as $25,000, and the cost of terminals added largely to this sum. Of the $10,574,000 bonds issued on execution of the mortgage, $10,000,000 were sold to the stock- holders at par, payable 10 per cent in cash and 90 per cent in the property that had been constructed or acquired with the stockholders' money, thus returning to them $9,000,000 of the forced loans taken from them by sequestration of $11,000,000 of their profits during the previous years. To the stockholders the only difference was they received a portion of the legitimate earnings of the company in the shape of bonds instead of cash, and were deprived of the per- sonal use of it during the time that it had been used by the company. The differ- ence to the company was $2,000,000, or more, as it sold to its stockholders at par bonds which if placed on the market three years before could have been sold only at a heavy discount ; besides it was an indispensable aid to immediate growth and a conservation and building up of credit. The difference to the public was not a penny either way.
"As branch lines were built or acquired their bonds · were guaranteed. In 1887 an issue of $25,000,000 on lines in Montana was authorized. Some improve- ment bonds were issued. The extension to the Pacific Coast was financed by the issue of £6,000,000 of mortgage bonds against the extension lines by the Mani- toba company. In 1889 the bonded debt had become $60,985,000. The Great Northern, which now took the place of other companies, issued collateral trust bonds, which were afterward retired from the proceeds of stock issues in 1898. It assumed the payment of bonds, principal and interest, of the companies taken into the system; and its bonded debt thus became $125,975,909 in 1908, of which over $28,000,000 were held as free assets in the company's treasury. Last year the total bonds on the property outstanding in the hands of the public amounted to $144,331,909.
"Of this total, $35,000,000 were part of the issue of first and refunding mort- gage gold bonds authorized in 1911; which brings us to the final standardization of the company's securities and the act by which it provided against future con- tingencies. This issue, of $600,000,000 in all, stands to the big systems of today as the $50,000,000 issue of consolidated bonds did to the small system of twenty- eight years before. It creates a financial clearing house through which its sev- eral outstanding securities may be converted into one of standard form and value; and it forms in addition a reservoir of authorized credit so carefully guarded by the conditions of the mortgage that it cannot be abused or dissipated, yet so ample that it will supply all needs for probably fifty years to come. No
349
EARLY HISTORY OF NORTH DAKOTA
private estate in this country is more carefully provided against the future than is the property of the Great Northern Railway Company. All prior mortgages become closed, and more than one-half of the total $600,000,000 is to be used to redeem bonds issued under them and those issued to buy the company's inter- est in the Burlington. Nearly $123,000,000 may be used to cover the cost of other properties acquired or to be acquired ; while $100,000,000 may be issued, at not to exceed $3,000,000 per annum, to cover the cost of future construction, acquisition and betterments.
"The financial outlook of this company is as well assured as that of most governments. It has a provision made now, deliberately and not under any pressure of necessity, for the work of years to come. That provision may be utilized in lean years and held in suspense in fat years, so as always to realize the best prices for securities and to keep the credit of the company unimpaired. No emergency can surprise it. It is financed for a period beyond which it would be fanciful to attempt to provide. And the development of its business throughout every part of the practically half a continent which it serves makes the payment of dividends on the stock as certain as that of its bond coupons. There has never been a default in either. There has never been a dollar's worth of stock or bonds issued that was not paid for in cash, property or services at its actual cash value at the time. The stock has paid a dividend ever since 1882, and since 1900 the rate has remained steadily at 7 per cent.
"The occasion permits no more than this condensed statement, passing in hasty review the fortunes of the railroad enterprise for more than thirty-five years. The first phase of the Great Northern Railway System is ended. The value of the property is founded on the resources of the country it traverses. From the head of the lakes to Puget Sound this is rich agricultural land. From fifty to one hundred miles of the line run through mountain valleys, but even these are susceptible of cultivation. Barring only the actual summits of the mountain passes, the country is capable, under the best modern agricultural treat- ment, of multiplying its wealth indefinitely and furnishing increasing and profit- able tonnage for years to come. The Great Northern is now wrought so firmly into the economic as well as the corporate body of the land as to have fitted itself permanently into the natural frame of things. So far as any creation of human effort can be made, it will be proof against the attacks of time."
The two great constructive forces in the development of North Dakota were the Great Northern and Northern Pacific railroads. They were largely St. Paul enterprises, and Minneapolis men and resources have been rivals almost from the beginning; so Minneapolis capital built the Minneapolis & St. Louis to rival St. Paul's St. Paul & Sioux City ; it reached the lakes at Sault Ste. Marie, and it extended its lines to remote corners of North Dakota in competition with the St. Paul lines, and also became a factor in the rapid development of North Dakota.
The Chicago and Milwaukee lines also performed their part, but more par- ticularly as to South Dakota. The "Soo" had no land grant; the Milwaukee and Chicago lines had none in Dakota.
JAMES J. HILL
James J. Hill, born at Rockwood, Canada, in 1836, reached St. Paul in 1856, where he was employed on the levee. When the first railroad started in St. Paul,
350
EARLY HISTORY OF NORTH DAKOTA
the old St. Paul & Pacific, Mr. Hill became the station agent for the road, but not in an ordinary way with a monthly salary stipendiary, but under a contract to handle all the traffic at so much per ton. In those days wood was the only fuel. Hard coal could only be secured by the long river route from Pittsburgh, and very little came to the city, save for the use of the gas company. The public and business buildings, as well as private houses, were supplied with wood fires. One of his first strokes of business, the foundation for his fortune, was when the St. Paul & Pacific Railroad was extended into what is still called the Big Woods Region of Minnesota, some fifty or sixty miles from St. Paul. He was able to make an exclusive contract with the railroad, whereby he alone could bring wood into the city at a given rate per cord, and consequently the entire fuel business of the city was at his command. It is to his credit to say that he did not use this power to extort unfair prices from the people. A moderate supply of fuel was brought in by teams and sold upon the public wood market, but Mr. Hill prac- tically regulated their prices by making his own prices as moderate as the cost of cutting and transportation would permit. The business, nevertheless, was undoubtedly very lucrative.
His familiarity with the river business on the Mississippi led him to engage in traffic for himself on the Red River of the North, through which he not only grasped the trade of Northern Minnesota with its sparse population, but also tapped that of Winnipeg and Northern Canada. Starting with one steamer, he made such success that in 1872 he consolidated his Red River interests with those of the late Norman W. Kittson, who represented the great Hudson's Bay Con- pany, and formed the Red River Transportation Company, and before the rail- roads relegated navigation on the Red River of the North to the past, he liad no less than seven steamers and fifteen barges in his fleet. He was the manager and moving spirit in the Red River Transportation Company until the business was abandoned owing to the building of the railroads.
Like most new enterprises in a new country, the original capitalists and pro- moters of the St. Paul & Pacific Railroad did not profit by the germ which has since developed into the magnificent and profitable Great Northern system. The local people used the munificent land grant in Minnesota as a basis of credit, and . obtained in Holland a good many million dollars, for which bonds were issued. The business of the road was very moderate because the population was too small to furnish business, St. Paul and Minneapolis being hamlets rather than cities in those days, and the entire population of the state was less than two hundred thou- sand people. The rails and equipment were so cheaply constructed that they would not be thought of today by any road, however small. Bridges were wooden, and culverts were cheaply built, and the bill for repairs and renewals was a draft upon the resources of the railroad far beyond its ability to meet from its operating income. In fact, its operating income was required to meet its operating expenses without providing means for betterments. The value of the land was a long look ahead, and the Dutch bondholders in Amsterdam became weary of and disgusted with their investment. They were willing and anxious to dispose of their bonds at almost any price they could get, and under these circumstances it is not sur- prising that their values fell to 10 cents on a dollar.
What followed is told in the language of Mr. Hill in the letter to the stock- holders above printed. It is a part of the history of the Red River Valley and of the Dakotas.
351
EARLY HISTORY OF NORTH DAKOTA
Mr. Hill believed in the Northwest, and believed it had a great future before it, and consequently he was enabled to enlist capital, and purchased bonds. The road had been thrown into the hands of a receiver, but the bonds were being purchased just the same by Mr. Hill and the capitalists who associated with him. His relations with Mr. Kittson, who had been associated with him in the Red River Transportation Company, proved of immense value. Mr. Kittson was a personal friend of Donald A. Smith, of Winnipeg, later a member of the House of Lords in England and Canadian Commissioner to the home government. Mr. Smith's influence brought in connection with the party Mr. George Stephen, also a member of the House of Lords in England. At that time he was president of the Bank of Montreal, one of the strongest financial institutions on the con- tinent. The result was that the property and land grant of the old St. Paul & Pacific were foreclosed upon and the purchasers of the bonds in Amsterdam were the purchasers of the entire system under the foreclosure. The road passed from the hands of the receiver into the hands of the new company. They obtained in this manner 437 miles of railroad, to which they promptly added 220 more, as well as rebuilt much of the old line, substituting iron bridges for wooden, lowering grades and cutting out vexatious curves, and in every way improved the system so that the expense for operating produced greatly increased earnings. This is the theory upon which Mr. Hill always acted, and in a large measure is the cause of his success in railroad construction and operating.
It was in 1879 that the St. Paul, Minneapolis & Manitoba Railroad Company was organized by the syndicate which Messrs. Hill and Kittson had formed. Mr. Hill was the first general manager of the company and devoted his wonderful energies and vitality to the direct operating affairs of the railroad. He threw all the energies of his nature into this work, and no detail of the system escaped his personal attention. He knew what the cost of every item should be. From a spike to a steel rail or a locomotive, he could tell in an instant what the com- pany should pay for it.
Of the first tract of land in North Dakota to which title was acquired from the Government, Mr. Hill purchased five acres for use in his Red River trade, and this was the first transfer of land in North Dakota. For nearly fifty years his was the influence overshadowing all others for the upbuilding of North Dakota.
James J. Hill died May 25, 1916. At the hour of his funeral business stood still and every head in North Dakota and Minnesota bowed in silence or in prayer out of regard for this truly great man. Business houses closed, railroad trains stopped wherever they happened to be; teams stopped on the highway; plows ceased to move in the furrow and the hand of the seeder was stayed while all hearts went out and up for him who had been their friend, and who was now gone from earth's activities.
THE RED RIVER VALLEY
The following sketch of the opening of the Red River trade belongs to this story of Mr. Hill. It is from the pen of Capt. Russell Blakely, the head of the great transportation interests, the immediate predecessors of the railroads:
May, 1857, the English House of Commons took the initial steps toward
352
EARLY HISTORY OF NORTH DAKOTA
opening the British Possessions in North America, then in the control of the Hudson's Bay Company to civilization and unrestricted commerce. The committee having the matter in charge reported in favor of termination of the control of the Hudson's Bay Company at the end of their then twenty-first year term expir- ing in 1869.
In 1857 the Hudson's Bay Company completed arrangements with the secre- tary of the treasury of the United States whereby goods for that company could be carried in bond through the United States, thus practically doing away with their Hudson's Bay Station known as York Factory, to which goods were then being shipped, vessels arriving and departing once a year. In the summer of 1858 two or three shipments of goods were so made leaving the Mississippi River at St. Paul and conveyed thence by Hudson's Bay carts under the direction of James McKay.
In October, 1858, Capt. Russell Blakely of St. Paul, accompanied by John R. Irvine, visited the Red River Valley via St. Peter, Fort Ridgeley, Yellow Medi- cine, Lac qui Parle, and the Kittson Trail to Fort Abercrombie. Capt. Nelson H. Davis and Lieut. P. Hawkins of the Second United States Infantry, with their company were then stationed there. Jesse M. Stone was sutler. The fort had been hastily built and consisted of a few log cabins on the low lands. "Burling- ton" and "Sintominie," prospective Red River cities were passed and "La- fayette," opposite the mouth of the Sheyenne, about three miles from Georgetown was reached, from which point Mr. Blakely made his observations as to the possibilities of Red River navigation.
Resulting from the report of Mr. Blakely, the St. Paul Chamber of Commerce paid a bonus of $2,000 for the first steamboat to be placed on the Red River. Anson Northrup had bought the old "North Star" at Minneapolis and took it up the river over Sauk Rapids and Little Falls, running up as far as Grand Rapids. This boat was laid up at Crow Wing that fall, where lumber for the new boat was sawed and taken over the country, together with the machinery of the "North Star," which had originally been brought from Maine and in 1851 was placed in the "Governor Ramsey" and later in the "North Star," to Lafayette, where the "Anson Northrup" was built, and launched in 1859. Thirty-four teams were used in taking the boat and its furnishings from Crow Wing to Lafayette.
Having run up to Fort Abercrombie the boat left that point for Fort Garry, now Winnipeg, May 17th, arriving at Fort Garry, June 5, 1859. She returned to Fort Abercrombie with twenty passengers, where she was tied up, and when Cap- tain Blakely and others desired her further services they were informed that they would have to buy her if they wanted to run her. Later she was purchased by J. C. Burbank.
Resulting from the mail lettings of 1858 the Minnesota Stage Company was organized by J. C. Burbank, Russell Blakely and Alvaren Allen, Allen being asso- ciated with Mr. Chase, and they had the contracts from St. Paul to Abercrombie and other northwestern points. The road to be fitted up for the stages on the routes it was proposed to put on ran from St. Cloud via Cold Springs, New Munich, Melrose, Winnebago Crossing, Sauk Rapids, Kandota, Osakis, Alex- andria, Dayton and Breckenridge to Abercrombie. The party left St. Cloud in June, 1859, for the opening of this route. Accompanying the expedition, aside from the teamsters, bridge builders, station keepers, etc., were the Misses Ellenora
353
EARLY HISTORY OF NORTH DAKOTA
and Christiana Sterling from Scotland, Sir Francis Sykes of England, and servants together with J. W. Taylor, so long consul at Winnipeg. Northrup having refused to operate his boat, this party built a flat boat at Abercrombie and went down the river to Fort Garry, and the ladies went on to Lake Atha- basca, where they arrived just as winter set in. They were twenty-two days going down the river from Abercrombie to Garry, and their craft was the first boat on the Red River. Pelican Lake was named Ellenora for one of these ladies and the one just east of it Christiana for the other. George W. Northrup was captain of this boat.
On his way to St. Paul on his return trip Captain Blakely learned of the purchase of the boat by Mr. Burbank. He notes the following members of the crew en route to put her to work: Edwin Bell, captain; Dudley Kelly, clerk ; J. B. Young, pilot; A. R. Young, engineer. The point chosen for the head of navigation was below the mouth of the Buffalo River, about three miles from Lafayette, where the boat had been built. The boat unloaded at Goose Rapids, and Mckay was about to take its cargo via carts to Garry when the timely arrival of Captain Blakely resulted in the construction of wing dams, which carried the boat safely over the rapids, and its tonnage landed all right at Garry. The crew returned via carts to St. Paul.
In the spring of 1860 Captain Blakely and associates completed a contract with Sir George Simpson for the transportation of 500 tons annually from St. Paul to Fort Garry for a period of five years.
The "Anson Northrup" was repaired in the spring of 1860 and became the "Pioneer" and was commanded that summer by Capt. Sam Painter, with Alden Bryant, clerk. The mail was extended from Abercrombie to Pembina and Wil- liam Tarbell and George W. Northrup were employed as carriers, using carts in summer and dog train in winter.
In 1860 Capt. John B. Davis undertook to take his steamboat "The Freighter," up the Minnesota River, and cross it over into the Red River. The boat left St. Paul in high water and got within about eight miles of Big Stone Lake, but had to give it up. "The Freighter" was sold to Burbank & Co., and C. P. V. Lull took out the machinery and hauled it over to Georgetown, where the boat was rebuilt and became the "International." A. W. Kelly, later of Jamestown, sawed the lumber for this boat. The engines were put in by Edwin R. Abell. The "International" measured 137 feet in length by 26 feet beam and was rated at 133 tons. C. P. V. Lull ran her for a trip or two when N. W. Kittson took charge of her, on account of his ability to talk with the Indians.
The Indians had protested against the use of the river for steamboats, com- plaining that the boats drove away the game and killed the fish, while the whistle made such an unearthly noise that it disturbed the spirits of their dead and their fathers could not rest in their graves. They demanded four kegs of yellow money to quiet the spirits of their fathers or that the boats be stopped. At this time Clark W. Thompson, superintendent of Indian affairs and Indian Commis- sioner Dole, were en route to the mouth of the Red Lake River, opposite Grand Forks, to hold a treaty with the Indians. They were turned back by the opening of Indian hostilities. August 22, 1861, the Indians appeared at Dayton and Old Crossing, killing all the settlers they could find. At Breckenridge they killed all of the persons in the hotel and burned the house. They overtook the stage driver Vol. I-23
354
EARLY HISTORY OF NORTH DAKOTA
whom they killed, taking 2,500 pounds of express.freight. They also plundered the train of wagons loaded with merchandise on its arrival on the treaty grounds, claiming that their wives and children were starving.
Hostilities continued till 1863, when, in October of that year, Governor Alexander Ramsey made a treaty with the Indians which ended the trouble with them in the Red River Valley. In March, 1862, Congress provided for twice a week service on the mail route to Abercrombie. Stockades were built at Sauk Center, Alexandria, and Pomme de Terre, and the route was guarded by troops. The "International," abandoned in 1861, on the outbreak of hostilities, was brought to Abercrombie in 1863, by Captain Barret, and in 1864, was sold to the Hudson's Bay Company, it having become apparent that the country could not be opened up against the interest of that powerful organization. They did not want immi- gration and trade, nor mails or other appliances of civilization. The boat made one trip that year. The cart brigades again put in an appearance and the coun- try became devastated by grasshoppers.
In March, 1869, the Earl of Granville succeeded in terminating the Hudson's Bay contracts and that company surrendered possession of the country, thus ending a twelve-year contest on the part of the Imperial government for the opening of the country.
The organization of the Manitoba government was provided for in 1870, and August 23d of that year Colonel Wolsey, at the head of the Sixtieth Canadian Rifles, entered Fort Garry and September 2d Lieutenant Governor Archibald arrived and the colony was duly organized. James W. Taylor, the American consul, arrived in November.
In December, 1870, the United States land office was opened at Pembina, and then the first public land was entered in North Dakota. There was then no regular mail to Fort Garry, and no recognized means of communication between Manitoba and the outside world. The cost of shipping freight from St. Cloud, the end of the railroad, to Fort Garry was $4 per hundred pounds.
In the spring of 1871 Messrs. Hill and Griggs, of St. Paul, built the "Selkirk," which was put on the Red River that season, with Capt. Alex Griggs, the founder of Grand Forks, master. This boat arrived at Winnipeg April 19th, and having arranged to carry goods in bond, a wonderful trade was immediately opened with the Northwest. The success of the "Selkirk" forced the "International" into gen- eral trade.
In 1871, the stage route was extended from Georgetown to Winnipeg, Cap- tain Blakely having contracted with the Dominion government to carry the mail from Pembina to Winnipeg. The first stage arrived in Winnipeg September II, 1871.
During the winter of 1871, all of the boats running on the Red River passed under control of Commodore Kittson. In 1872, an extensive business in flat boat- ing developed. Scores of flat boats were built in 1872, and engaged in trading with down river points, the boats being sold at their destination and used for lumber. Logs were also run down the Red Lake River and used for lumber.
In 1874. an opposition line of steamers was put on the Red River by Manitoba and St. Paul parties, known as the Merchants Line. The boats were the "Minne- sota" and "Manitoba." The latter was sunk by the "International" in a collision. These boats finally passed into the hands of Mr. Kittson in 1876.
355
EARLY HISTORY OF NORTH DAKOTA
The Kittson Line was organized about 1876, and was called the Red River Transportation Company. The principal boats were the "International," Captain Painter; the "Minnesota," Captain Timmens ; the "Manitoba," Capt. Alex. Griggs ; the "Dakota," Captain Seigers; the "Selkirk," Capt. John Griggs; and the "Alphia," Captain Russell.
The railroad was extended to Fisher's Landing in 1877, and December 2, 1878, . the track layers joined the rails of the Canadian Pacific, and what is now the Great Northern at the international boundary, and the development of the Red River Valley was commenced in earnest.
The stage company transferred its business to the Black Hills and the steam- boats gave way to the railroads, little business having been done on the river since that time.
Need help finding more records? Try our genealogical records directory which has more than 1 million sources to help you more easily locate the available records.