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Full text of "The Northern Pacific Railroad and Some of Its History"

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THE NORTHERN PACIFIC RAILROAD AND SOME 
OF ITS HISTORY 

The Act of Congress passed July 2nd, 1864, granted to the North- 
ern Pacific Railroad Company the lands on both sides of its main line 
from Lake Superior to Puget Sound, with a branch line via the Co- 
lumbia River, to the extent of every alternate section (not mineral) 
not to exceed twenty sections to the mile on each side of its located 
line through the territories, and ten sections to the mile through any 
of the states that it might pass — with the right to take timber and 
other material for construction from any unoccupied Government 
lands. A very wise and astute clause was inserted in the Act, as a 
sort of compensation: That the company should not charge the Gov- 
ernment higher rates for transportation and telegraph service than 
they charged individuals. The mineral referred to did not include 
iron and coal. 

The first meeting of the original incorporators was held in the 
city of Boston. 

It ought to be remembered here that for every mile of road con- 
structed in a state they got 12,800 acres of land while in the terri- 
tories they acquired 25,600 acres. In this connection it may be ex- 
plained that the two Dakotas, Montana, Idaho, and Washington were 
not admitted to the Union until the road was completed and the lands 
earned. This also accounts for the original location of the main line, 
that many engineers now find fault with. Mileage in the territories 
was evidently the main object. 

In 1870, about the time of the beginning of construction on the 
Pacific Coast at Kalama, Washington, the maps of the first prelim- 
inary survey were filed and the lands within the forty-mile limit on 
the odd numbered sections, surveyed and unsurveyed, were withdrawn. 
By the way, maps of location were filed via the Columbia River and 
Cascade Mountains. The Columbia River Branch Grant extended 
over into Western Oregon and covered part of the Oregon Central 
Grant secured by Ben Holliday and his associates. This was after- 
wards adjusted amicably by the United States Land Office. 

The Puget Mill Company, Port Gamble Mill Company, — in fact 
all the mills and loggers on Puget Sound were then cutting the timber 
on the shore line of Puget Sound and within the company's grant and 
shipping it to San Francisco and South America. General John W. 
Sprague, then the general agent and direct representative of the com- 

(95) 



96 Hanford W. Fairweather 

pany, attempted to protect the company by collecting stumpage on 
lands thus invaded and within the company's grant. General Hazard 
Stevens was. the company's attorney. 

He seized large rafts of logs and spent a great deal of company 
funds and finally checked these depredations. Hon. Silucius Gar- 
fielde was delegate to Congress and stood in with the mills and was 
unfriendly to General Sprague and his administration of the com- 
pany's affairs. A United States Grand Jury convened at Olympia and 
indicted General Sprague for collecting stumpage in advance ; a "nolle 
proseque" was entered by the United States Government and prosecu- 
tion ceased as well as further depredations on the company's lands. 

The withdrawal by the General Land Office of the odd num- 
bered sections on the Columbia River Route and the Cascade Moun- 
tains covered nearly half the State ( then Territory) of Washington 
and extended into Eastern and Western Oregon. The protection of 
this land grant devolved upon the company's agents and they came 
constantly in conflict with speculators who had selected good points 
for townsites in advance of construction, but these matters were finally 
fairly adjusted. 

After the failure of Jay Cooke & Co. during the "panic of 1878" 
General Geo. W. Cass, then the President of the company, was ap- 
pointed receiver for the road. 

The company had then completed about 500 miles of its road in 
Minnesota and Dakota on its eastern end, and nearly 108 miles in 
Washington, from Kalama to Tacoma. 

General Cass' receivership — the first — lasted six months, ended 
under this arrangement: The company's first mortgage bonds were 
receivable at par and cancelled and retired in exchange for lands — 
thus the great Dalrymple Farm, the Cheney Holdings, the Fargo 
lands in Minnesota and Dakota were obtained. Those of Charle- 
magne Tower in this, state, comprising the best timber in the Sound 
and Columbia River districts, were acquired in the same way. 

At the close of the Cass receivership in 1875, Mr. C. B. Wright 
of Philadelphia — the promoter of Tacoma — was elected President, 
and about this time a man named Robert £. Spraul, who was hung a 
few years later at Victoria, B. C, for killing Hommel on Kootenai 
Lake over the Ainsworth Grant to mineral claims, discovered the 
Puyallup coal mines. He was a bridge carpenter, a religious fanatic, 
and in addition a fair geologist. He was staked in his prospecting 
by H. S. Alger and Ed McCall, a locomotive engineer now a resident 
of Spokane. After this discovery, mostly on Northern Pacific Rail- 
road lands, Mr. C. B. Wright sent an expert from Pennsylvania to 



The Northern Pacific Railroad 97 

report on it. That expert stayed three days, went back and made a 
report that was published stating that he found the formation of lime 
and sandstone all right but that no coal existed there. 

General George Stark, then vice-president of the company, ar- 
rived soon after this report and confirmed it. It remained for Captain 
P. B. Cornwall and C. B. Crochet of the Canadian Pacific Railroad, 
old Pacific Coast coal operators, to acquire and develop that great 
coal property. Their manager was the late Robert Wingate of Ta- 
coma, who subsequently acquired fine properties of his own, a Scotch- 
man and a coal miner. 

In 1877 the financial world began to look for investment and 
brokers and bankers turned their attention to the Northern Pacific 
Railroad property. Charles B. Wright was then its president, and 
president and principal stockholder of the Tacoma Land Company, 
also a director of the Oregon Steam Navigation Company, and owner 
of about one-sixth of the stock of that company, and drawing the then 
large salary therefrom of $1,000 a month. 

Efforts were being made constantly to get Congress, to forfeit 
the Northern Pacific Land Grant and it became a political issue in the 
north half of the Union. 

About this time, the late Hon. Frederick Billings of Vermont was 
elected president of the company. He was one of the "Argonauts" 
of California — a good lawyer and very wealthy. He borrowed, soon 
after, $40,000,000 (forty millions) — some loan in those days — and 
telegraphed all over the Northwest that "with this fund anybody 
could build a railroad." He immediately purchased for the Pacific 
end 300 miles of steel rails and track material, ten locomotives and 
ten passenger coaches, and forgings, castings and materials for 300 
cars, with other railroad material and shop machinery in abundance. 
He loaded eight ships and sent them around Cape Horn to Tacoma. 

Construction began at Ainsworth, at the mouth of the Snake 
River in Whitman County; this for two reasons: First, it gave the 
Oregon Steam Navigation Company the carrying of the track ma- 
terials and supplies from Portland, swelling that company's receipts 
and earnings enormously and enabling the Northern Pacific Railroad 
directors, who were its large stockholders, to draw big dividends; 
second, it was then easy and cheap construction, and again its was 
earning 25,600 acres of the best land on earth. Much of this land 
the company sold at from $1.75 to $2.60 per acre. It is now valued at 
from $12.50 to $40.00 per acre. Such has been the development of 
this section in the last twenty years. (This was written about 1893). 



98 Hanford W. Fairwether 

It has been claimed that the construction was expensive, but 
when all the conditions are considered, it must be admitted that these 
gentlemen were not so shortsighted as many supposed. The pros- 
perity of the Inland Empire today is evidence of their good judgment. 

Of all the men interested in Eastern Washington and its. develop- 
ment, the late Dr. D. S. Baker is entitled to the most credit. He 
constructed, operated and acted alone. He had a system of narrow 
gauge railroads that commanded the entire tonnage of Southeastern 
Washington and part of Oregon. Crude and original as it was, for the 
good doctor believed that he had invented it all, no system of trans- 
portation on the American continent was as profitable as his. 

He sold it to the Villard Combine for $1,000,000 and ever after- 
wards deplored that he had not bought their system instead of selling 
his own. 

After the great Spike Drive in 1883, when the road was completed 
to the Coast, Mr. Henry Villard made the mistake of inviting all 
Europe and America to attend the ceremony, with all the so-called 
palace and dining cars that could be then had in America. At this 
ceremony, going to and from which they could see from the windows 
an uninhabited wilderness, not knowing that a railroad had to follow 
the lowest grades and streams in its course and that the promised 
land was not often in view from the car windows, his guests became 
alarmed; they could see nothing in the "Godforsaken wilderness" 
through which they traveled to support a railroad. Most of them 
abandoned Villard's special at Portland, Oregon, and immediately 
telegraphed their brokers to sell their stocks and bonds without delay, 
and so brought on the panic that ruined "Old Henry" Villard. 

A receiver was again appointed, being the second receivership 
of the great railroad. The company's affairs were soon adjusted, and 
the property restored again to the stockholders. I think that T. F. 
Oakes and the late Henry C. Paine were the receivers during this 
period. 

In 1 893, during the great financial panic of that year the railroad 
again defaulted and another application for a receiver was made; the 
several United States Courts became at loggerheads and could not 
agree; so three sets of receivers were appointed this time: In Wis- 
consin, Minnesota, Montana and Washington, and the line was han- 
dled practically in four sections. 

Its last reorganization seemed to be complete and permanent, 
when to the astonishment of the public, Jim Hill showed up with his 
"merger" and claimed to control it. 

I know not who controls it now, but I believe it to be the greatest 



The Northern Pacific Railroad 99 

transportation property in the world; having a traffic contributory 
to it in various communities unequaled, and undeveloped resources 
that no carrying corporation in the world today possesses. 

Its kindred corporations, and they have been many, like a lot of 
poor relatives, have always been its ruin. Henry Villard was right 
when he referred to it as a "Benevolent Monopoly." Its first cousin 
was the Lake Superior & Puget Sound Company, which claimed all the 
available townsites from Duluth to Whatcom; it is now deceased. Its 
second cousin was the Northwest Construction Company, which made 
$5,000 a mile in building the Minnesota Division and died in affluent 
old age. Its third cousin, the Tacoma Land Company, is now in bad 
health. Its fourth cousin, the Montana Improvement Company, that 
wanted all the railroad's timber in the inter-mountain district, is now 
on leave of absence — it left nothing but the stumps to show for its 
stay here. Its fifth cousin, the Oregon Improvement Company, got 
its best lands in the Palouse country, and now has designs on its coal 
properties; it is in vigorous health. Its brother-in-law, the Great 
Northern, is doing well. 

Its stepfather was the Oregon Transcontinental Company — 
Oregon Transcontinental Survey — was organized and an army of 
savants was sent through the northern tier of states to report on its 
resources, including everything from a mosquito to Puget Sound sal- 
mon; so much data was collected at a great expense that it could never 
be digested or made of use. Hanford W. Fairweather. 



COMMENT ON MR. FAIRWEATHER'S ARTICLE* 

This is rather a cursory sketch of some incidents that occurred 
in the construction of the Northern Pacific Railroad. The protection 
of the timber on Puget Sound on the odd numbered sections that was 
withdrawn from sale for the ultimate benefit of the company was en- 
trusted to the undersigned during 1870 to 1874 as mentioned in the 
sketch. 

Mr. Fairweather remarks, correctly enough, that "He seized large 
rafts of logs and spent a great deal of company funds and finally 
checked these depredations." 

Mr. Fairweather, however, omits to state the fact that the logs 
thus seized were sold at auction, or redeemed by the loggers, and the 
funds thus derived more than paid the entire cost of protection, being 
in round numbers $10,000. 



•The late General Hazard Stevens was one of the contributing editors of the Washington 
Historical Quarterly. Being mentioned in Mr. Falrweather's article, he was asked to comment 
on the manuscript. — Editor.