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Transcontinental Railroad Definition: US History

Many people have supposed that the railroads could never have been built without government largesse. But this is untrue. For one thing, the entire English railway system was built with private funds. Second, the history of the Great Northern Railroad provides an outstanding example of a businessman who prospered without any government help: railroad magnate James J. Hill.


Hill was the entrepreneurial genius behind the Great Northern, which stretched from St. Paul to Seattle—the same market in which Henry Villard, equipped with the help of the federal government, would fail with his Northern Pacific railroad. Hill, who came from a very modest background, eventually joined a group of friends in purchasing the bankrupt line.

Hill prospered. When most of the transcontinental went bankrupt in the economic downturn of 1893, Hill both reduced his rates and turned a sizable profit. He went on to build steamships to carry American products to markets in Asia. It was a tremendous success at first, until it ran into the stupidity and destructiveness of the Hepburn Act of 1906, which regulated rail rates and gave teeth to the Interstate Commerce Commission.

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