Chapter 5

NORTHERN LINES STRUGGLE FOR POWER

The Duluth, South Shore & Atlantic Ry. until January 1, 1961 was the segment of the present day Soo Line System, extending from Duluth to St. Ignace and to Sault Ste. Marie, Mich. The original section of it was from Marquette to the mines at Negaunee and Ishpeming. Here the first attempt at building a railroad was made in 1855.

In 1879 a group of men in Detroit envisioned a railroad from the straits of Mackinac to Duluth, following the southern shore of Lake Superior, to connect with the Northern Pacific, and by using the already constructed road from Detroit to Mackinaw City, with a car ferry to cross the straits, they foresaw their railroad as a link in a new Trans Continental Line.

The group incorporated the Detroit, Mackinac & Marquette R.R, September 3, 1879 and secured a Land Grant from the State of Michigan. By December 1, 1881, they had a railroad in operation between St. Ignace and Marquette. However, through mergers and new construction, it was 1892 before the road reached Duluth on its own rails.

One thing the Detroit men never envisioned was the battle of wits that engaged powerful determined men from 1888 to 1890, after their "dream-child" passed into other hands. It then became the "dream" of another group to continue the Duluth, South Shore & Atlantic Ry. as a link in a Trans Continental Line, but, this time, between Duluth and Sault Ste. Marie, using the Canadian Pacific Ry. and its connections to and from the east.

Not many people paid attention to the incorporation of the St. Paul, Minneapolis & Manitoba R.R. May 23, 1879 in Minnesota about four months prior to the incorporation of the Detroit, Mackinac & Marquette R.R. in Michigan; or, a year later, to the formation of the syndicate on October 21, 1880, that would operate the Canadian Government's owned Canadian Pacific Ry. and continue its construction. Yet in the play for power between principals of the St.P.M.&M. and the Canadian Pacific, the D.S.S.&A. and the Soo Line could be termed innocent interveners. It was part of the play known as the "Northern Lines" hassle for traffic rights and final determination of who would dominate.

James J. Hall, of St. Paul, watched the old St. Paul & Pacific R.R. go into bankruptcy in the panic of 1873 and waited several years for the right moment to approach the Dutch bondholders. Initially, he sought control of the St. Paul & Pacific in order to extend it to Emerson for a connection with the Canadian Pacific Line extending south from Winnipeg. The Red River Transportation Co., in which he was a partner with Norman W. Kittson, Purchasing and Forwarding Agent of the Hudson's Bay Company, was say the least, undependable for summer transportation and of no account in winter.

Donald A. Smith, General Manager, Hudson's Bay Co., Montreal, a friend of Kittson’s, introduced Mr. Hill to his cousin George Stephen, President of the Bank of Montreal. The event led to a call by Stephen on the Dutch bondholders in Amsterdam. The price was right so a deal was made. The railroad took on a new name, St. Paul, Minneapolis & Manitoba R,R., with George Stephen, President; Richard B. Angus, Vice President; and Mr. Hill, General Manager. Mr. Angus resigned as General Manager of the Bank of Montreal and moved to St. Paul, where he resided for five years. The "Manitoba", as the railroad was known, was a success. The fame Messrs. Stephen, Angus and Hill spread. Suddenly Stephen, who was always considered wealthy, became known as the richest ran in Canada.

Mr. Stephen was persuaded to take over the Government owned Canadian Pacific Ry., and, with his associates, including Angus and Hill, he formed a Syndicate to do the job. The business regarding construction was to be done in St. Paul. It would mean more work for Hill but, on the other hand, construction material for the lines west of Winnipeg would be carried over the "Manitoba". Mr. Hill vigorously executed his end of the work. He sent his General Manager Mr. A. B. Stickney  to Canada to run construction, etc. Before long he wanted a more dynamic manager in Canada and secured William Cornelious Van Horne, Division Superintendent at Lacrosse, Wis.

It soon became evident that Van Horne was the same determined type as Mr. Hill. They clashed severely over the idea of building the railroad over barren land north of Lake Superior. Hill, a native Canadians opposed the idea while Van Horne, an American, approved it. It was said that Hill had ideas of building a branch line from Duluth to Sault Ste. Marie, and in doing so pick up the Marquette, Houghton & Ontonagon R.R. and the Detroit, Mackinac & Marquette R.R., (can’t read hand written addition) to complete his line. Some said his reasoning (can’t read hand written addition) on the all Canadian Line of Road was prompted by a selfish desire to hale his "Manitoba" Line used for traffic between St. Paul and Winnipeg. 

However, in a letter to Mr. Angus, Mr. Hill pointed out the costly construction of a railroad through a blank country north of Lake Superior, lack of local business and worry that through business would not afford it.

Mr. Van Horne split up the tonnage of construction material moving to Canada with several Lines and routes, rather than all of it moving over the "Manitoba" Road. That, and the collapse of the Winnipeg boom, plus the realization that Mr. Van Horne convinced Mr. Stephen and his associates and the Canadian Government Ministry that he could and they should spend the necessary money to build an all Canadian Line, convinced Mr. Hill it was time for him to pull out of the Syndicate. He did so May 3, 1883.

The period between 1883 and 1888 saw many advances in all directions of the Northwest and also Canada. Mr. Hill was busy expanding the St. Paul, Minneapolis & Manitoba Ry. Its rails now reached into Montana. The Northern Pacific had been extended to the Pacific Coast. The Canadian Pacific Ry. completed its railroad to Vancouver January 1, 1888.

The Duluth, South Shore & Atlantic Ry., by use of 43 miles of track of the Northern Pacific from Iron River, Wis., to Duluth, was open in June 1888.

The Minneapolis, Sault Ste. Marie & Atlantic Ry. (Soo Line) had trains operating in January 1888 Iron Minneapolis and St. Paul to Sault Ste. Marie and west from Minneapolis to Boynton, Dakota Territory, and began a series of rate reductions to the east. The same rates were put in effect west bound by favorable connections. At this time, June 11, 1888, the Canadian Pacific Ry. purchased the D.S.S.&A. and secured control of the Soo Line.

With the addition of the D.S.S.&A. and Soo Line to the Canadian Pacific family of roads, official attention was emphasized on the new route as possessing the shortest mileage to the eastern seaboard from the U.S. North Pacific Coast, and traffic agreements were suggested that would control the flow of traffic to the northern routes via Sault Ste. Marie as against the route via Chicago. A rumor appeared that such an agreement was imminent just as Mr. Van Horne began by courting Mr. Hill of the St. Paul, Minneapolis &. Manitoba Ry. From New York came the report that through the deal the Canadian Pacific had consummated it had also inflicted a staggering blow to that great railroad corporation of the Dominion, the Grand Truck. 

To complicate matters, Mr. Hill, when in Chicago, was quoted by the Chicago Herald of July 2 as having said, "I don't give a continental for Chicago or Chicago Roads. The bulk of the traffic of the northwest belongs to Duluth and the roads tributary to the Northern Lake Ports. We have begun this fight against the Chicago Lines to freeze them out of the business which rightfully belongs to Duluth and St. Paul, and there will be no change of policy toward the Chicago roads." There is no doubt that Mr. Hill’s remarks gave a ray of hope to Mr. Van Horne, but they also added plenty of heat to the subject of Canadian roads dominating United States traffic at the expense of United States roads.

The following financial report from Washington July 25, 1888 indicated a determination on the part of some United States Legislators to ask Congress to place restrictions upon the Canadian Pacific Ry,:

"The purchase of the Soo and the Duluth, South Shore Railways by the Canadian Pacific causes competing companies considerable uneasiness as it will virtually give the Canadian Company control of the traffic in the northern part of the United States from ocean to ocean. An effort is being made in Congress to prevent this, and Senator Cullom  appeared today as the champion of the American Railways. Mr. Cullom offered a preamble and resolution reciting the published statements that the Minneapolis, Sault Ste. Marie & Atlantic R.R. Co. has passed into control of the Canadian Pacific R.R. Co.; that these two railways control all the approaches to the bridge over the St. Marys River on the boundary line between the United States and Canada; that the ownership of the bridge is also Canadian Pacific; and that by virtue of this monopoly the Canadian Pacific Railroad Company operated in the interest of a foreign government is able to ignore and defeat the operation of the Interstate Commerce Bill and direct the Committee on Interstate Commerce to inquire into the matter."

The resolution offered by Senator Cullom instructing the committee on Interstate Commerce to ascertain and report whether any United States Railroad Lines are owned or operated by the Grand Trunk or Canadian Pacific, or any other Canadian Railway Companies, was adopted.

Almost immediately a ground swell of protect arose against Canadian Railroads, which brought newspaper headlines reading "Call a Halt", "Canadian Roads must remain home", “Congress will interfere". This sudden antagonism toward Canadian Roads could only be traced only to the purchase of the D. S. S. & A. Ry. and control of the Soo Line; activity of the Canadian Pacific to divert Northern Lines eastbound freight traffic away from Chicago and the eastern United States Railroads; inequalities brought about by Interstate Commerce Commission regulations in the United States with no such comparable body or regulations in Canada; the constant internal Canadian squabble between the Canadian Pacific and the Grand Trunk for territory position, etc., that spread to the United States with a tie between the Grand Trunk and the Northern Pacific.

Nothing further seems to have come from the resolution presented to Congress.

Mr. Van Horne was determined, and through various means pressure was kept up from several directions to get the Northern Lines to recognize the route through Sault Ste. Marie, but an obstacle loomed when overtures made by the Northern Pacific to the Wisconsin Central Ry. for a lease of that line, seemed imminent.   Foreseeing the possibility of a terminal of the Northern Pacific in Chicago there remained only the St. Paul, Minneapolis & Manitoba Ry. To coax into an agreement.

The first part of May another rumor circulated that a traffic alliance had been made between the two roads; also, it was said that James J. Hill, President of the Manitoba Road, would be made a director of the Canadian Pacific Ry. at a meeting scheduled for May 9th. Both rumors were wrong. But at that meeting Mr. George Stephen resigned as President and Mr. Van Horne was elected to succeed him. It was commonly said that the reason for the change in the Canadian Pacific presidency was a desire to lessen the force of the agitation against the railroad. There was no question but that the whole matter was stirred up by the railroad interests in the United States. It was surmised that with an American President less prejudice would be felt against the corporation.

May 25, 1889 a Special Train front Montreal arrived at Sault Ste. Marie with Mr. Van Horne, now President of the Canadian Pacific, accompanied by Sr. George Stephen, Sir Donald Smith and Company Directors J. W. Sterling, of New York, and Thomas Skinner, of London. They were met by General Manager Fitch, of the D.S.S.& A., and General Manager Underwood, of the Soo Line. They left in a special train of five cars for St. Paul. At Gladstone, Mich., 150 miles west of the Sault, James J. Hill joined the party, returning to St. Paul with them. It was said that the object of the Canadian Pacific official trip to St. Paul was to confer with President Hill, of the Manitoba Road ,about a traffic agreement; but there were several other reasons that could have required some of their time -- such as, the feeling that the Northern Pacific was crowding the Manitoba Road here and there, and always a threat to push into Canadian Pacific territory by way of a deal with the Grand Trunk, and the pending deal with the Wisconsin Central Ry. That would put the Northern Pacific into Chicago.

Apparently nothing was settled at this meetings so another try was made the following month. Mr. Van Horne, along with Thomas Skinner, of London, and I. Smith, Managing Partner of the Allen Steamship Line, were in Vancouver. They returned through Helena, Mont., about June 20th, where they met Mr. Hill; Col. C. A. Broadwater, President of the Montana Central, and Thomas Lowry, Vice President of the Soo Line. The entire party returned over the Manitoba Line to St. Paul. The trip of the Canadian Pacific Personnel was significant in that it seemed unlikely that Mr. Van Horne would take a trip over the Manitoba Road just for pleasure. Again there was considerable feeling that within a few months the traffic agreement would be in effect. The game of railroad chess was becoming an interesting one.

At the annual meeting of the St. Paul, Minneapolis & Manitoba Ry., September 14, all stops were pulled out and pressure was relentlessly applied as Sir George Stephen and Sir Donald A. Smith went back on the Board of Directors, along with another Canadian Pacific man John W. Sterling. In addition, Smith was elected First Vice President. Both Stephen and Smith had been off the Board for two years. On September l7th Mr. Hill left St. Paul over the Soo Line for Montreal. Again it was thought a deal was to be made, but nothing came of it.

Mr. Hill proved to be as wary of a deal with Mr. Van Horne a fox with a piece of bait having the taint of human touch. He kept sidestepping any commitment and postponing every effort to be tied down. But on the side, he was giving lip service and encouragement to the idea of a traffic alliance. All the while he had his eye on the Chicago, Burlington & Northern Ry. (C,B,&Q) that reached St. Paul November 1, 1886.

When the Canadian Pacific Officials realized that they were not going to get cooperation from Mr. Hill, they put more and more effort into building up the Soo Line. The growing opposition between the opposing forces "made it necessary for them (The Canadian Pacific Men) to find another connection between St. Paul and the western lines of the Canadian Pacific” 

In 1891 Mr. Van Horne wrote to Stephen who, as Lord Mount Stephen, was living in London, saying that he had lost faith in Mr. Hill regardless of how he (Stephen) and Sir Donald Smith night feel about him. He was positive that Mr. Hill's influence was "dead against us at Washington" and that he further concealed "his poison in friendly words". He listed Mr. Hill as "the most dangerous enemy of the Canadian Pacific", and while he would do the best he could to remain on friendly terms with him, "I can't trust him again".

In 1894, Lord Mount Stephen "paid a farewell visit to Canada and the United States, partly in the endeavor to create more amicable relations between Hill and Van Horne. This was as easy as mixing vinegar and oil.

And so the battle of the Giants seemed to end.