RAILROADS BUILD THE
RED RIVER VALLEY

TEACHERS -- For an excellent LESSON PLAN (suitable for grades 6-12) see "The Transcontinental Railroad" at the PBS website.  The lessons in this plan meet the academic standards for social studies and American history education, in Minnesota, North Dakota, and South Dakota.

Special thanks to the following MSUM students, whose research and assistance made this site possible -- Corrine Edgerton, Josh Gates, Seth Goddeyne, Maureen Hukill, Bradley Madsen.  Extra special thanks to Korella Selzler, at the MSUM University Archives.

Background
Railroad influence in the Red River Valley began in 1864, when the Northern Pacific Railway (NPR) Company received a charter from the U.S.  Congress.  The NPR goal was established by a group of northeastern and Chicago investors who aimed to build a line that would link the Great Lakes region to Puget Sound in the American northwest.  It took some six years for the investors to raise enough capital to begin real work on the line. During that time, company engineers surveyed sections of Minnesota over which they planned to lay out the route.  Significant construction began in early 1870 when the first rails were laid at the village of Thompson Junction, about 20 miles west of Duluth. 

A railroad line could only be constructed with ample amounts of three resources:

1.   Land over which the line could be built.

2.   The physical resources for the rail construction -- wooden ties and steel rails, machinery for leveling the track bed, labor, and so forth.

3.   Sufficient money to pay for necessary land, the rails ties, and the labor and equipment to build and run the line.

Railroad construction was expensive, and the technical challenges of building a successful line meant that the construction engineers had to know their business.  As one American authority on rail lines put it in 1857, an engineer in charge of a line's construction had to know everything necessary to "grade and lay tracks, correctly proportion bridges of wood, stone and iron, build abutments, piers and retaining walls, and maintain superstructure and locomotives." In short "any description of work occurring on railroads" had to be understood for any hope of success. (Vose).

The costs of building a line were very high and maintenance costs were equally steep -- the same authority warned that a typical railroad had to spend about 40-51 cents of each dollar it made to keep the railroad in proper operation. (Vose). Because of these high operating costs, few early railroads succeeded without some government assistance, usually in the form of government-owned lands granted to the railroad company.

The Pacific Railroad Act of 1862 set the pattern for this type of assistance. The act granted substantial public lands to the two railroad companies that were building a line from the Missouri River to the Pacific (which they called the "Pacific railroad" or the "Transcontinental railroad").  Under the provisions of this legislation the railroad companies building the line were given a right of way on the lands along the line and also 10 square miles of land for each mile of line built (excluding this grant when the line went through a community or crossed a river).  The legislation further noted that when possible the land given would be in the form of "alternate sections per mile on each side of said railroad."  This provision is what gave the maps showing railroad lands the characteristic "checkerboard" pattern (see below). 

Map of lands granted for railroad construction Both the Federal and state governments gave land to railroad companies.  The government profited from land grants in two ways -- 1) because the land was given in alternate sections, both the railroad and the government would be able to sell the land along the line for higher prices; 2) government generally received rights to transport employees and vital shipments for free or for discounted prices.

The Northern Pacific Line Reaches the Valley
Although chartered by the Federal government in 1864, and receiving a 47 million acre grant of Federal lands similar to that given to the Transcontinental endeavor, the company could not begin construction until difficulties in financing were overcome.  Even then, the engineers faced major problems in building a line that could operate in the harsher climate of the northern plains; the line would require substantially more snow fences, sheds and locomotive-plows than those used by the railroads further south.

Once financing was finally in place, construction began west of Duluth in February 1870.  Soon after, the western branch of the line began to build eastward from the Columbia River and Puget Sound.  While rails were being laid steadily, the Northern Pacific had a long way to go before they could create a profitable, running line.  As had happened further south, the Northern was out ahead of its potential base of customers: the lands that led across western Minnesota and Dakota Territory were sparsely populated; there were as yet few farmers or towns that would pay to use the rails being laid.

Artist's illustration from Harper's Weekly, of track workers laying rails.

There were also significant geographic obstacles to overcome.  One of the greatest of these was the Red River Valley, where the land dropped steeply into the basin of long-disappeared glacial Lake Agassiz. Building a line into this basin and across the Red River would require the best efforts of the engineers supervising the construction.

 
How much power did railroads have over the communities they helped to build?
In early 1871, at an important meeting of the directors of the Northern Pacific railroad, Thomas Hawley Canfield, one of the company’s major developers, predicted “that wherever the N.P. should cross the Red River, there would rise the next great city west of St. Paul and Minneapolis.  Canfield knew what he was talking about: railroads were creating new communities across the North American continent; and in the early years of these new towns, the railroads generally exercised enormous power over the lives of their inhabitants.

The most striking illustration of that power in the newly established Fargo came in 1872, when the company discovered that, because of a survey error, some Fargo homes were resting on land that was part of  Indian Reservation belonging to the Wahpeton-Sisseton Dakotas. It took some quick negotiations, supported by Federal government pressure on the Dakota leaders, to get an agreement that ceded the necessary acreage to the Northern Pacific. The agreement was signed in September1872. The tribes gave their land in exchange for $80,000 in 10 yearly installments of $8,000 each, payable not in cash but in provisions and goods. Congress then ratified the amended agreement on June 22, 1874. Fargo then slowly grew into the largest community in Dakota Territory.^[1]

The railroads opened the frontier to Americans and immigrants who wanted to start a new life for themselves and their families. The railroad connected new lands, increased settlement, and gave birth to new industries and businesses which created wealth. At first glance, settlers and railroad agents alike won when railroads opened the way to new lands in the west. But the full benefits to settlers would not be clear for several decades, and as a result those living in the new towns and on the new farms frequently thought of the railroads as little more than greedy corporations that took advantage of their difficulties.

Here grain sacks are being loaded by hand, c. 1880. "This region will compare favorably to other sections of the country in the production of wheat, oats, barley, buckwheat and potatoes," declared a Northern Pacific land brochure. (Photograph courtesy of Historical and Cultural Society of Clay County.)

The railroad company could gain more land from government grants as they built their railway lines, and settlers sometimes charged that the railroad investors obtained the best lands.  Railroads also had advantages in what they could charge settlers as customers shipping their crops to market and as consumers paying the railroads to ship their needed purchases from the cities. On the other hand, without the railroads to provide settlers transportation for emigration, for transportation of crops to market, and transportation of equipment and supplies needed to support the farming communities, the new communities could not exist.  However much they disagreed, the railroads and settlers mutually needed one another.^[2]

In order to sell its lands and gain settlers-customers, the Northern Pacific Railroad needed to promote settlement and did so with the help of James B. Power. As the Federal government’s general land agent, Power distributed brochures and flyers that advertised how the N.P. aided farmers by establishing a large tree nursery, bringing in rye seed for adaptation, and providing reasonable land rates with 7-year credit. Even during the grasshopper plagues in which the farmers lost a majority of their crop and profit, Power extended notes of the settlers and helped to pay some of the taxes.^[3]

The agents of the N.P. believed that successful examples of farming in the Red River Valley would help to promote more settlement. Therefore, James Power began to hand pick which land would be given to non-resident bond holders. So those who wanted to farm got the land near the rail line. He then advertised successful commercial farming by focusing on 1,280 acres of land broken on the Cass-Cheney tract. With the aid of Oliver Dalrymple, an experienced wheat farmer, the methods of bonanza farming developed. The success of the Cass-Cheney-Dalrymple farm gave way to a huge migration of people who thought prosperity could be reached by raising one-dollar wheat.[4] Due to the increased settlement, the railroad company was able to build extensions of rail lines which in turn increased their profit. All in all, the settlement and growth of agriculture of the Red River Valley was largely influenced by the hard work of the Northern Pacific land department.

The railroad continued to flex its financial muscle in the Red River Valley with the help of James J. Hill. Owner of the St. Paul, Minneapolis & Manitoba Railway Company, Hill hired James B. Power as the land commissioner. During 1879, Power and Hill created a program to drain some of the swampy ground in the Valley. Hill worked with the government and gave $30,000 of his own money so that the program assisted in developing the Valley. The St. Paul, Minneapolis & Manitoba railroad also took action to provide farmers with information to improve their crops -- providing advice and information on such matters as crop rotation, the cost of dairy farming and cattle breeding. It was by these efforts that the number of livestock doubled from 1880-1890. [5]

This impressive economic growth cemented the railroads' premier place in the region with the inhabitants they most needed for support -- the merchants and their representatives in the governments of Fargo and Moorhead.  Fargo quickly boomed, its commercial district extending from the Northern Pacific depot at Front Street over to Second Avenue and up Broadway.  In that fast-growing section the traveler could find nearly two dozen hotels by 1901. They could transact business at four banks, place ads in three newspapers, eat a meal at any of twelve restaurants, shop at sixteen grocers or make wholesale deals with dozens of hardware, furniture, or dry goods merchants.  For a rest they could go to the Opera House for music or a drama, or across the river for a mug of beer.  Moorhead grew into a smaller market town, but because Dakota was created as a "dry" territory, Moorhead's merchants could add the benefit of liquor sales to their line of goods.  There were so many saloons in Moorhead by the mid-1880s that their owners hired special carriages to carry Fargo dwellers over the Red to enjoy their hospitality.

The merchants were all making good money.  The centerpiece of all the business was selling supplies and equipment to the farmers in eastern Dakota territory and western Minnesota.

The Railroads and the People

The Valley's new settlers developed a love-hate relationship with the railroads.  For a few years, the primary transportation in the Valley was by flatboats on the Red and its tributary rivers.  Small in size and limited in what they could carry (see illustration of an early boat at left), the boats did a trade up the river into Canada with stops at the major river towns.  Such river trade declined as the railroads built additional line running north and south.  When the U.S. Army Corps of Engineers ceased to dredge the river in the early 20th century, the river trade essentially ended.  The railroads held a virtual monopoly on long-distance hauling thereafter. 

The railroads had great power, and their directors did not hesitate to use it.  Having already taken possession of much of the choicest lands along the Red River, the Northern Pacific used its hauling capacity to charge significant fees for their services.  The farmers were wholly dependent on them for shipping in the goods and supplies that the towns and farms required.  The merchants often paid the same railroad for every item shipped in from Chicago or St. Paul or anywhere else.  The farmers paid the railroad a fee to store their grain in an elevator and, when the fees for storage and shipment exceeded the price of grain, they often sold it at a price that failed to cover their costs.  Not surprisingly, many of them came to resent the railroads.

Left item -- Shipping rates of the Northern Pacific Railroad, 1893.  Right item -- Land, in acres, held by the Northern Pacific, 1896.  (Northern Pacific Railway Pamphlet Collection)

But slowly the land was cleared, crops were planted, towns developed.  Several farmers’ organizations sprang up to demand a better deal at the market.  Many farmers in Clay County, Minnesota joined the Minnesota Farmers Alliance.  Founded in 1890, by early Valley settler Randolph Probstfield among others, the Alliance fought to regulate the prices paid for grain and curb the power of the railroads and urban grain companies.  It was strong enough to send Probstfield and other members to the State Legislature, but they lacked the numbers to push through significant legislation to better the lot of most rural folk.  Other farmers established cooperative-owned elevators and arranged for their own shipping.  In these undertakings they were partly successful.  But because no serious attempts were made to attack the problem of overproduction of grain; as a result the farmer's situation only slightly improved.  Farmers over the whole of the plains tried to increase profits with ever-larger plantings of wheat and oats, but this depleted the soil.

The people called for greater regulation of railroads in a variety of ways.  In 1871, after intense lobbying from farmers and the Minnesota Grangers farmers' organization, the state legislature authorized the creation of a Railroad Commission, an innovation that other states quickly copied.  Over time, the Minnesota Railroad Commission was given increasing power to inspect railway property for safety, establish reasonable rates for shipping costs, regulate warehouse and grain handling facilities owned by railroads, and prosecute cases against the railways.  Progress came only slowly, largely because the Interstate Commerce Commission itself lacked formidable powers until the early 20th century.

By the late 1880s, drought conditions were hurting the farmers.  Burdened with debts, many gave up their land. Others struggled on, but resented - and envied - the influence that "corporations" had over their economic futures, blaming the railroads and banks for a seemingly endless series of financial crises. In the words of one historian they believed that “every boom has a bust, every silver lining a cloud.”  For three straight presidential elections, they beat the drum for William Jennings Bryan, the Nebraska born champion of the "Populist movement." Bryan won the majority of the votes in rural and small town America, but he could not defeat the Republican candidates put up by city machines and winning the votes of the most urban dwellers.

Lawsuits against railroads also acted as a brake on the powers of the corporation. In 1897, the city of Chicago won a case argued in the U.S. Supreme Court against the Chicago, Burlington & Quincy Railway (a corporation largely controlled by the Great Northern board of directors).  The court ruled in the case that railroads could preempt land for expansion, but only if "adequate compensation were given: a state "legislature may prescribe a form of procedure to be observed in the taking of private property for public use, but it is not due process of law if provision be not made for compensation. . . . land taken for public use without compensation would be a mockery of justice." (Chicago, Burlington & Quincy Railroad Co. v. City of Chicago, 166 U.S. 226).

In that same year, Eugene Debs, president of the American Railway (Workers) Union, gave a landmark speech in Fargo where he called for legislation to protect the rights of both railroad laborers and the customers of the railroad corporations.  "Workingmen, all men must hew out their own way to emancipation," he noted. "If the workingmen would be free, they themselves must strike the blow, and every man must free himself. You cannot be freed by proxy."

Then after 1910 the Non-partisan League movement swept through North Dakota.  Many farmers were readily converted to its tenets.  In the pages of the Non-Partisan Leader, the League's newspaper, published in Fargo, readers read that ten businessmen in Chicago "possess a power little short of life and death over the people of the United States."  They read ads for books that exposed the railroads, attacked the cities, and proposed redistributions of property.  Most important, they found confirmation that they were doing most of the work while getting a raw deal.  An article called the League’s leaders men who were “among the real pioneers of the state . . . They are among the class who braved the difficulties of the new country, who tamed its wilderness, who waved the magic wand of toil over its broad prairies and made them fit for habitation." Some of the criticism was fair, some of it exaggerated.  Either way, as the farmers extended their political power, and as they gained more allies from the towns' merchants, they began to gain greater influence over the railroads and their policies.

In 1904, in another landmark U.S. Supreme Court decision, brought by suit of the U.S. Attorney General, the court ordered the giant Hill-managed Northern Securities Company of railroads to be dissolved as "an illegal combination in restraint of interstate commerce" that "deprived the public of the advantages that flow from free competition."(Northern Securities Co. v. United States, 193 U.S. 197).

A decade later, the Non-partisan movement sprang up in North Dakota and rapidly spread across the Midwest.  Advocating that farmers and workers should recognize that neither the Republican nor the Democratic Party represented their best interests, the League called on voters to select representatives in government who would reject "special interests," and pass legislation for "state control of mills, grain elevators, banks and other farm-related industries in order to reduce the power of corporate political interests."  The League would exercise great influence in the politics of both North Dakota and Minnesota (indeed its adherents would give birth to the Farmer-Labor Party in Minnesota).

Over a span of forty years, the railroads had sparked the settlement of the Valley and helped create the infrastructure of the Valley's economy.  They also drew criticism and in so doing influenced the political and social fabric as well.  But, whatever their limits and faults, they had made possible the full development of the Valley region.

Left: Cartoon from the Non-Partisan Leader, published in Fargo North Dakota, 1912.  Right: Cartoon from Harper's Weekly, 1906.

Major Sources Used

"Articles of Incorporation of the Minnesota Grain Growers Alliance," September, 1891, in Randolph Probstfield Papers, Northwest Minnesota Historical Center-Minnesota State University Moorhead.

David Danbom, "North Dakota: the Most Midwestern State," in James H. Madison, ed., Heart Land: Comparative Histories of the Midwestern States, (Bloomington: University of Indiana Press, 1988).

Carroll Engelhardt, Gateway to the Northern Plains: Railroads and the Birth of Fargo and Moorhead (Minneapolis: University of Minnesota Press, 2007).

John D. Hicks, "The Origin and Early History of the Farmers Alliance in Minnesota," Mississippi Valley Historical Review, vol. 9, (1923), pp. 203-226.

Maureen Hukill, "Eugene V. Debs' Crusade For Labor," (paper delivered at the Northern Great Plains History Conference, Fargo, ND, October, 2012).

Roy Johnson, Red River Valley (Moorhead: Red River Valley Historical Society, 1982).

Northern Pacific Railway Pamphlet Collection, Northwest Minnesota Historical Center-Minnesota State University Moorhead.

"Ten Men Who Dominate the Human Race," and "These are the Men Who Back the Big League," both in Nonpartisan Leader, September 15, 1915.

George L. Vose, Handbook of Railroad Construction for the Use of American Engineers (Boston: Munroe and Co., 1857).