Cover

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Frontispiece, Title Page, Copyright, Dedication

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Contents

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pp. viii-x

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Preface

Alfred D. Chandler, Jr.

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p. xi

The history of this history is a tale of perseverance and patience. The project began more than thirty years ago when John M. Budd, chairman of the Great Northern Railway and Charles W. Moore, the president of the Business History Foundation, signed the agreement to have Professor Ralph Hidy, then of New York University, ...

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Acknowledgments

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p. xii

During this book's long gestation, the writers have enjoyed astonishing support from a great number of persons without which the enterprise surely would have foundered. Among many others at the Great Northern who granted interviews, provided materials, offered encouragement and suggestions, ...

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Introduction

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pp. xiii-xiv

It was a warm summer day when the short train puffed westward out of town. The engine crew waved to happy onlookers, and the melodic report from the locomotive's whistle bounced its call from bluff to bluff across the valley of the Mississippi. On this first trip for revenue in the state of Minnesota, June 28, ...

List of Abbreviations

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pp. xv-xvi

Part I. 1856 to 1916

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1 The First Ten Miles

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pp. 2-5

Soon after the Minnesota Territory was organized in 1849, local entrepreneurs began to promote varied development projects. Petitions to Congress reflected the need for mail routes, improved river courses and roads, and land grants to encourage railroads to provide simple but essential links between navigable waterways. ...

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2 Frustrated by Finance

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pp. 5-11

The St. Paul & Pacific charter gave the company comprehensive construction rights, and in the 1860s amendments expanded its possibilities. To the first authorized routes — the Main Line from Stillwater via the Twin Cities to the present community of Breckenridge, and the Branch Line from St. Anthony to St. Vincent— ...

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3 Growing Pains

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pp. 11-18

Managing Minnesota's first railroad, isolated for several years without connection to other rail lines, was a trying task. Superintendent Francis R. Delano of the First Division was, he said, "responsible to a greater extent (under our system) than any other general officer for the operation management of the lines of this Company." ...

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4 Northern Pacific Interlude

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pp. 18-24

Late in the 1860s, railroad promoters and investors in Minnesota faced a rapidly changing environment. Would local railroads retain their independence or come under control of "outsiders"? Would local companies expand or disappear into the fold of growing giants?1 ...

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5 Legislation and Litigation

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pp. 25-28

People "like to accuse others when a business fails to obtain success," Johan Carp wryly observed in 1873. Carp, a representative of the Dutch bondholders, commented thus on those involved with the St. Paul & Pacific companies. He referred also to the Panic of 1873, a five-year economic depression that seemed especially vicious in the northern heartland. ...

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6 The Associates Gain Control

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pp. 28-36

During the mid-18708, four experienced businessmen, the "associates," as they came to call themselves, resolved to acquire the St. Paul & Pacific Railroad companies in order to establish through rail service from St. Paul to Winnipeg. Three of the four—Donald Alexander Smith, Norman Wolfred Kittson, and James Jerome Hill — ...

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7 The Manitoba

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pp. 36-49

When was organized in 1879, the St. Paul, Minneapolis & Manitoba Railway Company faced an uncertain future. For almost a quarter of a century the railroads that were consolidated under its banner had experienced a checkered history, and their properties remained in generally shaky condition. ...

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8 Consolidations and Adjustments

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pp. 49-54

The years 1883 through 1885 encumbered the new St. Paul, Minneapolis & Manitoba with critical issues that could not be ignored. A general slowdown in economic activity turned into a recession; heavy flows of traffic north to Manitoba and the Canadian West dropped off; Canadian Pacific interests came into direct conflict with those of the Manitoba; ...

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9 From Butte to Buffalo

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pp. 54-66

As the economy shifted in the mid-1880s from recession to recovery, James J. Hill urged directors of the St. Paul, Minneapolis & Manitoba to support a bold expansion plan. The Manitoba, he argued, needed new lines to reduce its dependence on fluctuating wheat shipments from the Red River Valley and to avoid being fenced in by competing railroads' accelerated construction programs. ...

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10 Tensions in Finance

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pp. 66-72

The St. Paul, Minneapolis & Manitoba's rapid expansion in the late 1880s eventually created a crisis in financial management. The officers and directors shared responsibility for raising funds, but the New York experts in money-market intricacies necessarily did the leading. Gradually, tension grew between the ever-optimistic frontier expansionist James J. Hill and the conservative eastern financiers led by John S. Kennedy.1 ...

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11 On to Puget Sound

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pp. 72-85

In 1889, James J. Hill and his associates determined to extend their railroad to the Pacific Coast, a decision requiring substantial courage to say the very least. Builders of western railroads could no longer expect government aid, and transcontinental roads hardly inspired investors by their performance. ...

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12 Creating an Empire

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pp. 85-99

With the Pacific Extension completed in 1893, James J. Hill stated that the Great Northern's construction work was practically at an end, an assessment that proved premature. In the next two decades the GN would grow significantly and Hill's overall railroad interests would expand dramatically. ...

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13 Developing the Northwest

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pp. 99-107

After the Great Northern reached Pacific tidewater in 1893, its great challenge was developing the region through which the new line extended. With only slight exaggeration, Northwest Magazine reported that the new transcontinental ran 1,500 miles through a wild country with only three "important" freight-producing centers — ...

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14 Men and Mallets

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pp. 108-120

To reach corporate maturity, James J. Hill knew, the Great Northern must properly equip and efficiently manage both the transcontinental line and also the company's growing system of branches and feeders. At the same time, Hill insisted that the GN guard its frontiers and devote itself to an energetic policy of attracting freight traffic.1 ...

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15 Locals, Limiteds, and Liners

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pp. 121-130

The quarter of a century beginning in 1890 was the golden age of railway passenger operations. Volume of traffic expanded rapidly; equipment was steadily improved; modal competition was slight; and, until late in the period, public regulation was limited and generally ineffective. ...

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16 Corporate Structure and Finance

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pp. 130-136

The Great Northern's success depended on several factors, not the least of them its efficient formulation and administration of financial policies. This relation was not lost on James J. Hill. His devotion to operational efficiency was now a matter of clear and perfect record. Less well known and appreciated were his relentless efforts to increase the entire property's value by effective financial management.1 ...

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17 "Leading the Band"

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pp. 136-146

At a banquet honoring his seventy-fifth birthday in September 1913, James J. Hill commented that to manage effectively "a great big machine" such as the Great Northern required that "somebody must lead the band." He referred, of course, to his own leadership. "Now, it has not been the easiest thing in the world," he observed on another occasion, "to play first violin in the Great Northern band." ...

Part II. 1916 to 1970

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Introduction

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p. 148

James Jerome Hill had delegated formal titles if not total managerial control to his son Louis W. Hill, but he did not ignore the Great Northern Railway and the many other enterprises and subjects that interested him. He remained outspoken on the need for a continuous capital program for the GN's main line—such as a much longer Cascade Tunnel— ...

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18 World War I and the USRA

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pp. 148-155

World War I, raging in Europe since 1914, drew the United States inexorably into its web three years later. The impact on the country and on its transportation net was both dramatic and long term. For the Great Northern, the "war to end all wars" meant strong increases in the shipment of foodstuffs, iron ore, and war materiel. ...

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19 Of Good News and Bad

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pp. 155-161

Railroad officers across the country looked forward eagerly to resuming private management on March I, 1920. They had accepted federal operation as a matter of patriotic obligation, but few wanted to remain government employees. The Great Northern's managers shared this attitude and, several months before the United States Railroad Administration was scheduled to relinquish control, ...

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20 Polishing the Operation

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pp. 162-172

In a 1928 speech, Ralph Budd observed that two main paths led to successful railroad operation. One, he said, "lies through reduction of costs," which could be achieved only by a company "able to reduce its grades, improve its roadbed, and best equip and maintain its line." The other lay in substantially expanding a company's volume of business. ...

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21 Passenger Business and Change

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pp. 172-182

The Great Northern—and the nation's railroads generally — faced sharply changing conditions in the passenger-carrying trade during the 1920s. Prosperity at mid-decade stimulated long-distance vacation travel, but depressed economic conditions later forcefully reduced this business. ...

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22 Expansion and Development

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pp. 182-191

The Great Northern in the 1920s found it had to reevaluate two traditional ways of generating freight traffic: building lines and selecting programs for economic development. Historically, a prominent corporate railroad strategy was to construct lines as feeders for main arteries, broaden the service area, and protect against competitive encroachment. ...

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23 An Attempted Merger

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pp. 191-195

"The trouble with the Northwestern carriers," Ralph Budd wrote in 1925, "is that there are too many." This unpleasant circumstance had come about when the third and last northern trunk line in the United States — the Chicago, Milwaukee & St. Paul Railway (later reorganized as the Chicago, Milwaukee, St. Paul & Pacific Railroad) — was built after the turn of the century in an "abiding faith that the Northwest would continue to develop for many years." ...

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24 Corporate Health

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pp. 195-199

No railroader knew better than Ralph Budd that profits depended on efficient operation, an adequate traffic base, and sound financial management. Under Budd's effective leadership, the Great Northern steadily upgraded equipment, roadbed, and structures, completed line extensions, and prosecuted development campaigns. ...

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25 The Tangled Ways of Finance

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pp. 199-207

When Great Northern directors met to elect a successor to Ralph Budd the depression was nearing its depths. The man chosen for the president's office would have to be a talented manager, capable of holding expenses to an absolute minimum while attracting traffic under the most adverse conditions. Simultaneously, he would have to be adept in financial management, ...

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26 Traffic and Profits in Adversity

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pp. 207-215

Cost reduction and strong financial programs were two essential elements in Great Northern management during the Great Depression; an almost desperate try to attract and hold business was another.1 ...

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27 The Pressures of War—Again

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pp. 216-230

During the years 1939 through 1945, the Great Northern functioned under conditions markedly different from those in the preceding decade. Instead of serving a public restrained by a long depression, the GN now struggled to keep pace with demands set by a booming economy driven by a massive world conflict.1 ...

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28 Labor-Management Relations in Depression and War

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pp. 230-238

Presidents William P. Kenney and Frank J. Gavin had very different experiences in relations with employees. Depression and then prosperity were the major variables, and issues were settled according to those conditions, often with little thought to future effects.1 ...

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29 Prosperity Under Stress

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pp. 238-248

With World War II over, the Great Northern's management looked ahead, balancing confidence and apprehension. The company was much stronger than it had been a half dozen years earlier, but President Frank Gavin and his associates knew that postwar adjustments would require major changes in company policies. ...

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30 John Budd and a Changing Environment

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pp. 248-255

In 1951, Frank J. Gavin, having headed the Great Northern Railway through twelve years of war and prosperity, retired from the presidency. As his successor, the directors chose John M. Budd, whose administration would span almost two decades of meteoric change in American railroading.1 ...

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31 Labor Tensions and Personnel Policies

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pp. 256-261

In addition to political constraints and regulatory shackles, John Budd and other railroad officers of his time had to contend with inflexibilities in the labor force. Budd understood that if the Great Northern was to continue to provide adequate service levels and to earn a satisfactory return on investment, the upward trend in costs had to be blunted and the productivity of workers significantly improved. ...

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32 Economic Development Programs

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pp. 261-266

The Great Northern's senior management was not occupied solely with problems of labor, regulation, and finance. Company officers constantly looked with energy and optimism for ways to increase business. It required a team effort. To this end, John Budd assigned numerous subordinates the task of encouraging long-term development of agriculture, mining, and industry; ...

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33 SD45s and Univac III

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pp. 267-278

When John M. Budd became president of the Great Northern in 1951, the United States was well into an era of technological innovation that some called the second industrial revolution. During and after World War II many scientific and technological breakthroughs altered life and work for most Americans. ...

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34 "No Sacred Cows—or Goats"

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pp. 278-294

During John Budd's administration the Great Northern Railway faced change, yet many circumstances stubbornly stayed the same. Customers had to be satisfied, competition had to be met, and, as always, innovative approaches had to be found and unprofitable operations had to be modified or dropped.1 ...

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35 The Last Spike is Never Driven

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pp. 294-304

The Great Northern Railway's performance during the 1950s was modestly satisfactory, but as they looked to the future, senior officers came to believe that the Great Northern, the Northern Pacific, and the properties they owned cooperatively must be unified if all were to prosper. The idea, of course, was not new. ...

Notes

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pp. 305-317

Appendix A: Original Track-laying Record

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pp. 318-325

Appendix B: Track Removals

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pp. 325-327

Appendix C: Great Northern Railway: Ruling Grades on Main Freight Routes

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p. 328

Appendix D: Northern Pacific: Main Line Ruling Grades Minneapolis—Seattle

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p. 328

Bibliography and Notes on Sources

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pp. 329-352

Index

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pp. 353-360