FreightWaves Classics/Fallen Flags: Northern Pacific Railway enters service

September 8, 2022

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On September 8, 1883, the Northern Pacific (NP) Railroad, which was the first of the transcontinental railroads that ran through the northern tier states, was officially completed. An extravagant ceremony was held that day near Gold Creek in the southwestern portion of Montana Territory (now the state of Montana). The North Pacific stretched between St. Paul, Minnesota, and Seattle, Washington, opening a key route that connected the Great Lakes region to the Pacific coast.

Four trains carried 300 officials and dignitaries representing the United States, England, and the German Empire to the ceremony. Among those who helped drive the final peak was Ulysses S. Grant, who was the 18th President of the United States when construction of the line began in 1870.

Driving the last spike on the Northern Pacific Railroad on September 8, 1883, at Gold Creek, Montana.  Former US President US Grant is pictured with a spiked maul and to his left is Henry Villard, then President of the North Pacific.  (Photo of the painting: digitalcollections.lib.washington.edu)
Driving the last spike on the Northern Pacific Railroad on September 8, 1883, at Gold Creek, Montana. Former US President US Grant is pictured with a spiked maul and to his left is Henry Villard, then President of the North Pacific.
(Photo of the painting: digitalcollections.lib.washington.edu)

Early History of the Railroad

The Northern Pacific was chartered by Congress in 1864 to build a railroad from Lake Superior west to a port on the Pacific coast. To do this, he received a land grant of 40 million acres. Despite the huge land grant, he encountered problems finding financial support for his venture in what was then a mostly unstable wilderness. Then Philadelphia banker Jay Cooke sought to raise $100 million to fund the railroad (over $1.87 billion today). By 1873, the rail line had been built almost to Bismarck in Dakota Territory (now North Dakota).

The North Pacific has been one of the keys to the economic growth of the Dakota Territory. The climate, although very cold, was favorable to wheat, which was in great demand in the United States and Europe. Most of the settlers in the Dakotas were German and Scandinavian immigrants who bought cheap farmland and raised large families. Territory farmers shipped huge amounts of wheat to Minneapolis (the center of the milling industry), while purchasing a variety of household equipment and supplies to ship by rail.

Unfortunately, Cooke’s bank collapsed due to the Financial Panic of 1873, a financial crisis that triggered an economic depression in Europe and North America that lasted from 1873 to 1877 in the United States.

A map of the Northern Pacific Railroad.  (Image: projects.leadr.msu.edu)
A map of the Northern Pacific Railroad. (Image: projects.leadr.msu.edu)

The panic forced the Northern Pacific Railway into receivership; its construction was halted for six years. In 1878, the railway was acquired by Henry Villard, an American journalist and financier. After disagreements with former railroad executives, Villard was elected chairman of a reorganized board of directors on September 15, 1881.

Henry Villard.  (Photo: mrlincolnandfriends.org)
Henry Villard.
(Photo: mrlincolnandfriends.org)

Under Villard, the railroad was built west to Helena in Montana Territory, where it connected with the Oregon Railroad from Villard to Seattle in Washington Territory in 1883. C It was then that the ceremony took place near Gold Creek in the Montana Territory.

At that time, the North Pacific had approximately 6,800 miles of track. It served a wide area, including extensive lanes in the states of Idaho, Minnesota, Montana, North Dakota, Oregon, Washington, and Wisconsin. Additionally, the NP had a branch that served Winnipeg, Manitoba, Canada. The main freight carried by the railroad was the bountiful wheat and other grains, cattle, timber, and minerals. The NP also transported consumer goods and farmers (many of whom purchased farmland from the railroad) through the fertile Red River Valley along the Minnesota-North Dakota border.

An advertisement for the Northern Pacific Railway.  (Image: North Dakota State Historical Society)
An advertisement for the Northern Pacific Railway. (Image: North Dakota State Historical Society)

another panic

About 10 years after the railway was completed, another financial crisis hit. The Panic of 1893 was a national economic depression triggered by the collapse of two of the nation’s largest employers – the Philadelphia and Reading Railroad and the National Cordage Company. Following the bankruptcy of these companies, a panic broke out on the stock market. Hundreds of businesses have been overstretched, having borrowed money to expand their operations. When the financial crisis hit, banks and investment companies asked for loans, causing hundreds of business failures across the country. In particular, banks, railways and steel mills went bankrupt. Over 15,000 businesses closed during the Panic of 1893, which did not end until 1897. The unemployment rate in the United States soared to 20%-25%; and homelessness soared as workers were laid off and couldn’t pay their rent or mortgage. The panic also led to the political realignment of 1896 and the presidency of Republican William McKinley.

James J. Hill.  (Photo: mnhs.org)
James J. Hill. (Photo: mnhs.org)

Because of the Panic of 1893, the North Pacific encountered new financial difficulties. It was reorganized by JP Morgan, who shared control of the railway with James J. Hill, whose Great Northern Railway Company was a competitor to the Northern Pacific.

Hill sought to combine the Great Northern Railway and the Northern Pacific Railway with his Chicago, Burlington and Quincy Railroad Company through the Northern Securities Company, with Hill as chairman. (For more in FreightWaves Classics about James J. Hill and the Great Northern Railway, follow this link for Part 1 and this link for Part 2.)

20th century developments

However, President Theodore Roosevelt (who had ascended to the presidency after the assassination of President McKinley) opposed Hill’s railroad combination. Then, in 1904, the United States Supreme Court declared the Northern Securities Company in violation of the Sherman Antitrust Act and ordered the company dissolved in 1904.

The logo of the Northern Pacific Railroad.  (Image: Adam Burns/American-Rails.com)
The logo of the Northern Pacific Railroad.
(Image: Adam Burns/American-Rails.com)

While the Great Northern and Northern Pacific were linked to the Chicago, Burlington and Quincy Railroad, both railroads gained extremely important access to Chicago, the nation’s largest rail hub. They also gained access to the central Midwest and Texas, as well as the Spokane, Portland, and Seattle railroad lines, a major route through eastern and southern Washington.

In addition, money was reinvested in the North Pacific; Its physical plant has been upgraded, including dual track in key areas and automatic block signaling along its entire main line.

The Northern Pacific has also maintained and improved its equipment and services. It was among the first U.S. railroads to adopt diesel power (beginning in 1944), although due to its Wyoming-based coal reserves, NP was among the last U.S. railroads to complete dieselization (in 1960).

A North Pacific freight train.  (Photo: trains.com)
A North Pacific freight train. (Photo: trains.com)

By 1900, most of the remaining railroad land grants were located west of Montana. As further east, railroad management hoped to sell the majority of this land. Land sales would provide operating funds and help populate the area, providing new markets for the railroad. However, almost all of the good farmland had been sold before, even though the timberland was of high quality. Much of the timber land was sold to Frederick Weyerhaeuser.

A North Pacific freight train.  (Photo: pnwr.qstation.org)
A North Pacific freight train. (Photo: pnwr.qstation.org)

Railway consolidation

Despite the Supreme Court ruling, the three railroads continued to be financially tied. In 1970 they were allowed to merge, creating the Burlington Northern, Inc. Then Burlington Northern acquired the St. Louis-San Francisco Railway Company in 1980 and the Santa Fe Pacific Corporation in 1995. The railroad became the Burlington Northern Santa Fe, or BNSF, one of the last Class I railroads.

Photograph of a train crossing a desert.
A BNSF train heads for its next destination. (Photo: Jim Allen/FreightWaves)

FreightWaves Classics thanks american-rails.com, Burlington Northern Tribute, BNSF, McGill University, North Dakota Historical Society, and ndstudies.org for information and images that contributed to this article.

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