The November/December 2008 issue of the The History Channel Magazine has an article on James J. Hill, The Empire Builder. It tells how he bought the St. Paul, Minneapolis & Manitoba Railroad for a fraction of its cost during the panic of 1873 when railroads lost a lot of value due to speculation. Kind of like todays speculation in the housing market caused houses drop in value creating a bargain for those with money to buy them. The article goes on to tell how he built his empire from that purchase, but none of what follows is in the article except for the note.
In the early 1890's James J. Hill came to Spokane, looking for a route for his transcontinental railroad, it would be the northern most transcontinental railroad, and Hill financed and built it all by himself, not like the Union Pacific or the Northern Pacific. Both of these railroads received land from the federal government one mile square for each mile of track they laid, and they could sell the land to pay for the cost of the construction. The Northern Pacific came to Spokane in 1881 and finished their transcontinental line in Montana in 1883.
James Hill came to Spokane and asked the city fathers for free land in the Spokane area for his railroad. The Northern Pacific had a monopoly on train transportation in Spokane then and were able to charge any price they wanted for freight from Spokane. They charged more for shipping the same package from Spokane to Chicago, than they charged for shipping from Seattle to Chicago, 300 miles further. James Hill told the city fathers that competition would drive down the freight rates, and he would build his railroad through Spokane if they gave him the land he wanted, but if not he would go to a neighboring town with his railroad. Within a few days the city fathers had gotten the land owners of about two thirds of the land James Hill wanted to donate their land for the building of the railroad. The last section was owned by David Jenkins, and he was in bed sick, and refused to donate any land for the railroad, so the city fathers took up a collection and bought the last parcel for $10,000.00.
A couple of years later David Jenkins did donate some of his land, for the Spokane County Courthouse, and the wonderful concrete and brick courthouse is still being used. He also donated land for a college a block south of the courthouse which closed before 1900 and has not survived to today. So he did donate land for what he thought was a good use. There was speculation on whether him being sick or whether he saw through the fancy talk of James Hill. Maybe he knew that James Hill had to go through Spokane. The topography of this area funnels through a valley heading west from Spokane and so to go to any neighboring city would mean climbing fairly steep hills or if he went quite a bit further north some fairly high mountains, and 1890s construction tried to build in the valleys instead of crossing hills or mountains that ran in the direction you were heading.
Since he got the land through the city and in the county north east of Spokane James Hill built the largest railroad yard west of Chicago just north east of Spokane, it had repair shops, and they even built steam engines there for a while. The yard employed about 6,000 men at the height of employment. The area around his yard incorporated, and they called the town Hill's Yard, but it was later shortened to Hillyard. Hillyard had its own water system, city council, jail, schools, and just about everything else necessary for the men working there. In 1925 Hillyard was annexed by Spokane, and today is one of several neighborhoods in Spokane, but then it housed mostly railroad and other working men.
Today the railroad yard is is all gone, it left soon after the Burlington Northern railroad was formed, because the route James Hill picked north east of Spokane was a poor route, lots of hills, curves and so they abandoned it in favor of the Northern Pacific line that ran through the valley heading north east from Spokane. There is one track through Hillyard heading to Canada, but not east to Sandpoint any more. The article had an interesting note about how James Hill tried to combine the Northern Pacific, Great Northern and Santa Fe railroads in 1904, but Teddy Roosevelt's trust busters nixed the plan. Today those railroads are combined as the Burlington Northern Santa Fe or BNSF.
In 1910 the third and last transcontinental railroad came to Spokane, the Chicago, Milwaukee and Puget Sound Railroad. Spokane also had many short line railroads and a branch line to the Union Pacific railroad down in Utah. In 1918 my grandfather, grandmother and my mother came from Missouri and my grandfather went to work in the Great Northern railway yard at Hillyard. In 1924 he bought a house in Spokane right on the city limits between Spokane and Hillyard. His house was on the Spokane side of the street and the other side of the street was in Hillyard. He died thirty years later and grandma survived him another thirty years and then I inherited that house. It is listed in the book Historic Houses of Hillyard done by the city and the local historical society.
Oh yes, did two or even three railroads lower the freight rates in Spokane, no, they did not get lowered till the Interstate Commerce Commission started controlling railroad rates, and the city fathers of Spokane (except David Jenkins) were always mad at James J. Hill the Empire Builder.