Monthly Archives: October 2008

In the Antiplanner’s not-so-humble opinion, Fortune magazine made a mistake in declaring Henry Ford to be the businessman of the twentieth century. True, Henry Ford made a lot of cars. But Henry Kaiser built roads, dams, houses, hotels, ships, and planes. He made cement, steel, magnesium, aluminum, and a variety of other chemicals and building materials. He funded and built the first and still the greatest health maintenance organization in the world.

Plus, he also made cars. Chances are, you see a car made by one of his former companies just about every time you go out on the street.

To show that Kaiser was the epitome of an entrepreneur, I’ll present Kaiser’s story in four segments: through 1939, the war years, the post-war years, and Kaiser’s Hawaii ventures, with a wrap-up segment about his legacy.

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For parts I, II, and III, see James J. Hill, Entrepreneur, James J. Hill, Empire Builder, and James J. Hill, Conservationist.

In 1912, at the age of 74, James J. Hill retired as chairman of the board of the Great Northern Railway. “Most men who have really lived have had, in some shape, their great adventure,” he wrote in a letter to his friends and employees. “This railway is mine.”

James and son Louis Hill at a Minnesota State Fair. Hill often offered prizes for the best livestock and produce shown at state fairs.

Hill and his wife Mary had nine children including three sons. James was nominally a Presbyterian but Mary was Catholic, and when their eldest son, James N., married a divorced woman, she banished him from the household. That left the second son, Louis, as the heir apparent. (James N. moved to Texas and earned millions investing in the Texas Oil Company.)

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For parts I and II, see James J. Hill, Entrepreneur and James J. Hill, Empire Builder.

James J. Hill was acutely aware that most of the products shipped on the Great Northern Railway were agricultural, and he worried that traditional farm practices were degrading the soil. “I know that in the first instance my great interest in the agricultural growth of the Northwest was purely selfish,” he said in a speech. “If the farmer was not prosperous, we were poor, and I know what it is to be poor.”

Hill lecturing farmers about soil conservation at the Stearns County (MN) Fair in 1914.

In order to promote what we would now call sustainable farming, Hill encouraged crop rotation and raising of livestock whose manure could fertilize the soil. Between 1884 and 1910, he purchased thousands of prize bulls, hogs, and rams in Europe and gave them to farmers on the condition that they make them available to their neighbors for breeding purposes.

His soil theories were not always correct, but he hired expert agronomists to start a Great Northern Extension Service to train farmers with the latest techniques. Among other things, for demonstration purposes, his extension agents actually paid farmers to follow their recommended practices to show how much greater yields they could attain.

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For part I, see James J. Hill, Entrepreneur

By 1900, James J. Hill was recognized as a miracle man who would soon be known far and wide as “the Empire Builder.” He helped J.P. Morgan reorganize the Northern Pacific, something he could have done without Morgan’s help except for a Minnesota anti-monopoly law forbidding one railroad from taking over a competitor. He then negotiated the purchase of the Chicago, Burlington & Quincy, which connected the GN and NP with Chicago and also extended to Denver, Kansas City, and St. Louis. A fleet of steamships extended his reach west to Tokyo, south to San Francisco, and east to Buffalo.

Probably the most famous photo of Hill, circa 1902. Could that be a Thoreau pencil in his hand?

In 1901, Hill had the fight of his life when Wall Street financier Edward Harriman, who had reorganized the bankrupt Union Pacific and purchased the Southern Pacific, tried to take control of the Northern Pacific. Harriman’s real objective was the Chicago, Burlington & Quincy, which would provide the UP and SP with access to Chicago. However, he had been unwilling to pay the $200 per share demanded by the company’s president, Charles Perkins. When Hill paid Perkins’ price, Harriman tried to get a share by taking over the NP.

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In a misguided attempt to find a climate that would help him recover from the tuberculosis that would kill him the following year, Henry David Thoreau visited St. Paul, Minnesota, in 1861. It would not be surprising if, while in St. Paul, Henry encountered an earnest young man working in the shipping business.

James J. Hill in 1864.

Born in 1838 in what was then called Upper Canada about 50 miles from Toronto, James Hill (he himself added the middle name, Jerome) “took a notion to go” to St. Paul in 1857. Though his schooling had ended at age 14 when his father died, he quickly advanced in the shipping business as a clerk, bookkeeper, and manager.

Due to the waterfalls of St. Anthony, St. Paul was the head of navigation on the Mississippi River, so freight had to be transfered between steamboats and wagons and, later, trains. In 1866, Hill built a warehouse on the Mississippi that greatly eased such transfers. By 1872, he was a partner to Norman Kittson–his elder by 24 years–in a steamboat monopoly on the upper Mississippi and also had a local monopoly in the anthracite coal business.

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