NORTHERN PACIFIC RAILWAY COMPANY. LAND DEPARTMENT:

THE NORTHERN PACIFIC RAILROAD COMPANY was chartered by the United States Congress in 1864 and empowered to construct a railroad and telegraph line along a northerly route from Lake Superior to Puget Sound. In return for building the road, the company was granted title to all the odd-numbered sections of land lying within ten miles either side of the line where it was located in states, and within twenty miles either side of the line where it passed through the territories. This grant, estimated to encompass between 47 and 60 million acres, constituted the largest land grant ever awarded by Congress.

The charter outlined the procedures by which the land was to be turned over to the company. After completing its preliminary surveys, the company was to submit a map of the general route of the line to the United States Department of the Interior. Upon receipt of this map, the government would withdraw from public sale, homestead, or pre­ emption all odd-numbered sections of land lying within the limits as defined by the charter. The railroad could not take immediate possession of its lands, however. Only after each 25 miles of completed track had been inspected and approved by the government would the railroad be granted clear title to lands bordering the newly constructed section of track.

During the period between 1864 and 1870 several unsuccessful attempts were made to finance the enterprise. In 1869, negotiations were opened with the renowned banking house of Jay Cooke & Co., and by the beginning of 1870 an agreement was concluded. As the Northern Pacific's financial agent, Jay Cooke & Co. was authorized to sell $100 million worth of 7.3 percent tax-free 30-year bonds. The bonds, which were to be exchangeable at par (later raised to 10 percent over par) for the company's lands, were secured by a first mortgage upon all the “lands and property, real and personal" of the railroad. In May, 1870, Congress passed a joint resolution granting the railroad permission to pledge its as yet unearned lands as security for the first mortgage bonds.

Jay Cooke played a dual role in the enterprise. He and J. Edgar Thomson, a prominent Philadelphia railroad executive, served as trustees for the bondholders. Thus, not only was Jay Cooke & Co. responsible for the sale of the bonds, but Cooke took it upon himself personally to guarantee the interests of the investors.

In many respects the key element in the project was the land grant. Financial success was predicated upon the assumption that the proceeds from the sale of the company's lands would be used to redeem the first mortgage bonds. It was the job of the Land Department to promote and supervise the sale of these lands.

On February 1, 1871, the board of directors of the railroad named a five-member Land Committee, under the chairmanship of Frederick Billings, to organize the Land Department and oversee its operations. The Land Committee served as the link between the Northern Pacific's board of directors and the Land Department. The head of the Land Department, the land commissioner, reported to the committee which in turn reported to the board of directors.

Originally, the Land Committee was to consist of five members: the president of the Northern Pacific and four members of the board of directors. In May, 1871, the number was increased to six with the addition of the Northern Pacific vice president. The committee was abolished on March 6, 1872, but was reactivated on March 13, 1873, at which time the number of members was reduced to three. Billings chaired the committee until October 20, 1875, when he was succeeded by John M. Hutchinson.

Under Billings' direction, office space for the Land Department was rented in New York City; furnishings and supplies were purchased; a clerk, James G. Dudley, was hired; office books were opened; and in March a land commissioner, John S. Loomis, was appointed to head the department. Two other offices were opened: the Minnesota district office in St. Paul and the Pacific district office in Kalama, Washing­ ton Territory. All Land Department business between Lake Superior and the Rocky Mountains was to be handled by the St. Paul office; all business west of the Rockies was to be the responsibility of the Kalama office.

The main duties of the district offices were threefold: first, they were to supervise the examination and platting of the company's lands; second, they were to promote the sale of the lands; and third, they were to handle all the office work necessary to expedite the sales. In addition, the district offices performed a multitude of ancillary services. They answered inquiries regarding the company's lands; helped newly arrived settlers find temporary lodging and pro­ cure supplies, equipment, fuel, and other necessities; escorted excursion groups, land selection committees, influential investors, government officials, and others on tours of the line and the surrounding communities; reported on and attempted to prevent illicit logging in the vicinity of the line; sought to maintain good public relations with the local communities; and kept the New York headquarters informed about conditions and significant events in the districts.

Preparations to open the Minnesota district office were begun late in the spring of 1871. George B. Wright, who was hired in May to manage the office, sent out twelve teams of land examiners to begin inspecting and assessing the company's future lands. Most of the efforts of the St. Paul office during this first year were directed toward examining and mapping the lands in preparation for putting them on the market. In the spring of 1872, four local Land Department agents were hired to handle all sales in the vicinities of Duluth, Wadena, Audubon, and Glyndon, Minnesota. At the height of its activities, in the summer of 1872, the St. Paul office employed over forty persons with a monthly payroll of nearly $3,000. In addition to Wright and the local agents, there were five clerks, four draftsmen, two attorneys and their three assistants, and four field teams consisting of five to six men each.

Activity remained high throughout that summer. Several immigrant reception houses were opened along the line to provide temporary lodging for newly arrived immigrants who intended to purchase lands from the railroad. Colonists arrived regularly at the two recently established colonies near Hawley and Glyndon, Minnesota--the Detroit Lake and Red River colonies, respectively. Numerous persons traveled along the line in search of lands for themselves or for future colonies. In the late summer and early autumn, the St. Paul office was busy collecting agricultural and mineral specimens for display at fairs and exhibitions in the United States and abroad.

Despite the elaborate preparations and fevered activity, relatively few of the company’s lands were sold in 1872. The first sales contract was not signed until the end of May, 1872, a full year after the St. Paul office was opened. Sales during that summer were greatly hampered by delays in getting the company's European operations and promotional activities underway. In November, Wright reported to Billings that of the more than 1,500,000 acres of company lands that had been examined in the Minnesota district over the last year-and-a-half, only 18,000 acres (about 1 percent) had been sold as of the first of that month. The poor sales of the 1872 season, coupled with the general financial malaise of the company, prompted Billings to order district operations cut back severely. Wright was forced to dismiss the local land agents and reduce his office staff. The following spring, Wright resigned and his duties were assumed by the chief clerk of the St. Paul office, James Buel Power.

In spite of optimistic projections, sales in 1873 were not much better than they had been in 1872. New colonies were founded in western Minnesota--the Yeovil Colony near Hawley and the Furness Colony near Wadena--but sales as a whole continued to fall well below Land Department projections. With the failure of Jay Cooke & Co. in September, nearly all Land Department activities in the Minnesota district came to a halt. The field operations were abandoned and only a skeletal office staff was retained. Expenses were further reduced by moving the district headquarters to Brainerd where other company offices were located. Thenceforth, the Minnesota office restricted its activities solely to performing whatever office work was necessary to expedite the company's land sales.

Ironically, the collapse of Jay Cooke & Co. achieved for the Land Department what no amount of labor had theretofore been able to accomplish. Land sales in Minnesota and eastern Dakota Territory mushroomed as settlers and investors from all over the country rushed forward to exchange their nearly worthless bonds for the company1 s valuable lands. By September, 1873, the Land Department had been able to sell only about 41,000 acres of land in the Minnesota district; by the end of the year, another 22,000 acres had been disposed of. In 1874, the company sold nearly 190,000 acres in Minnesota and Dakota Territory, over three times as much land as it had sold during the entire first three years of operation. In 1875, sales more than doubled again when the company sold in excess of 475,000 acres. By January, 1876, the company had sold a total of 728,000 acres in its Minnesota district.

The Land Department's operations were far less extensive on the West Coast than they were in the Minnesota district. Early on, the decision had been made to concentrate the resources of the Land Department upon opening the company's more accessible Midwestern prairie lands to settlement as rapidly as possible. Therefore, it was expected that the West Coast office would function initially in somewhat of a caretaker capacity, watching over and protecting the company's lands until conditions were more favorable for their settlement. In March, 1871, the board of directors appointed John W. Sprague as general agent for the company's Pacific district and put him in charge of all company business (exclusive of engineering and construction matters) on the West Coast. As one of his multiple duties, Sprague managed the Land Department office that was opened at Kalama, Washington Territory, in June of 1871. Aside from putting several land examination teams in the field, most of the work of the Kalama office consisted of protecting the company's vast West Coast timber resources. Stumpage agree­ments were reached with some loggers specifying the amount they were to pay the company in return for harvesting the timber in a specific area. In order to discourage unauthorized logging, agents were hired to police the region and seize any logs cut illegally. This was a rather futile endeavor, as illicit logging was common in the Pacific Northwest at that time.

It was anticipated that in time the work of the office would in­ crease to the point where it would require the services of a full-time manager. Sprague was unable to make such a commitment due to his other duties and political activities. In the spring of 1873, Nathaniel P. Jacobs was appointed assistant land commissioner and directed to take charge of the office at Kalama. Jacobs' tenure there was short. He quickly came into conflict with Sprague and the company's managing director on the Pacific coast, John C. Ainsworth, Early in 1874, Jacobs was recalled and George B. Hibbard, superintendent of emigration in the New York office of the Land Department, was named to replace him.

The collapse of Jay Cooke & Co. in September, 1873, cut short whatever plans there were to expand the West Coast operations of the Land Department. The Kalama office, like its Minnesota counterpart, was forced to curtail its activities and lay off most of its personnel. In October, 1874, the decision was made to move the Pacific district office to Tacoma, the western terminus of the line. Office space and personnel were to be shared with the Tacoma Land Company, a townsite development company headed by Ainsworth. Hibbard was dismissed from his post in October of 1875 and Sprague was once again put in charge of Land Department affairs in the Pacific district.

Very few lands were sold in the Pacific district prior to 1874. The first sales contract was not signed until November, 1872, and only a little more than 6,000 acres had been sold by September, 1873. But the collapse of Jay Cooke & Co. had the same effect on land sales in the Pacific district as it did in Minnesota and Dakota Territory. Land sales on the West Coast tripled in 1874; by the end of that year, 17,000 additional acres had been sold. According to the Land Committee report of June 21, 1876, sales increased eightfold in 1875 when more than 144,000 acres were sold. By January, 1876, the company had sold a total of nearly 168,000 acres on the West Coast.

As originally envisioned, the Land Department was not only to be responsible for managing the company's lands, it was also supposed to help stimulate demand for them. Billings submitted a general plan for the organization of the Land Department to the board of directors in March, 1871, in which he wrote: "Directly connected with ... [the work of preparing the lands for sale] …comes the work of emigration, and this is really the great work of the Land Department."

In order to undertake this "great work," the department needed a European representative. Throughout 1871, the Land Department's affairs in Europe were handled by George Sheppard, working out of the offices of Jay Cooke's London affiliate, Jay Cooke, McCulloch & Co. Sheppard familiarized himself with all aspects of the emigration business, established contacts with groups of potential emigrants, and organized a publicity campaign to promote the Northern Pacific and its lands. He reported regularly to Billings and to officials of Jay Cooke & Co. about affairs in Europe--especially insofar as they affected emigration. Plans for the creation of a network of local agencies in Great Britain and on the continent evolved during the fall and winter of 1871.

In March, 1872, Sheppard opened a Northern Pacific Land Department office in London and shortly thereafter appointed several agents to work in the agriculturally depressed areas of southwest England and Wales. In June another office was opened in Liverpool. After touring several northern European cities making contacts and assessing emigration prospects, Sheppard appointed Land Department agents in Paris, Rotterdam, Dusseldorf, Geneva, Gothenburg, and Christiania (Oslo), and hired a publicist to work in Berlin.

European emigration to Northern Pacific lands was relatively light in 1872, as the Land Department's European network was not in place until well after the peak of the emigration season had passed. In England, the leaders of several prospective colonies were contacted and plans were made to establish the Yeovil and Furness colonies along the line of the Northern Pacific in western Minnesota. The news of a particularly severe winter storm in the Midwestern United States and uncertainty about the financial stability of the Northern Pacific enterprise helped hold emigration down in 1873. In July, after conferring with Sheppard, the board of directors reduced the budget for the European activities significantly. With the collapse of Jay Cooke & Co. a few months later, the entire European operation came to a halt. Most of the agents were dismissed immediately. For a few months, talks continued with the promoters of a proposed Dutch colony, but shortly after these negotiations failed, the remaining offices were closed.

The hub of all Land Department activities was the New York office. Its primary function was to direct and coordinate the district and foreign operations. In addition, the office worked closely with officials of Jay Cooke & Co.--most notably Alvred Bayard Nettleton, agent for the trustees--to plan and conduct the massive publicity campaign that was being launched to promote the sale of the company's bonds and lands. The office staff was relatively small, consisting of the land commissioner, the commissioner (later superintendent) of emigration, and several clerks. Theoretically, the Land Committee functioned in an oversight capacity while the actual head of the Land Department was the land commissioner. In reality, however, certain persons--Sheppard, for example--tended to report directly to Billings (as chairman of the Land Committee) instead of to the land commissioner.

Shortly after being named land commissioner in March, 1871, John Loomis departed for Minnesota to begin inspecting the company's lands and to inaugurate district operations. Except for a brief visit to New York, Loomis remained in Minnesota through the end of 1871. During his absence, the affairs of the New York office were handled by its chief clerk, James G. Dudley. While in Minnesota, Loomis escorted several excursion parties on tours of the Northern Pacific lands, and met with prospective investors and colony organizers. At the same time, he helped set up the Minnesota district operations and developed procedures for putting the lands on the market. These procedures called for the St. Paul office to prepare detailed plats of each section of company land from the examination teams' field notes. This plan, while ambitious, was extremely impractical, and it soon became apparent that the office staff could not keep up with the amount of work required to implement it.

In March, 1872, the board of directors ordered a total reorganization of the administrative structure of the company. As a result, both the Land Committee and the office of the land commissioner were temporarily abolished. Frederick Billings was appointed managing director of the Land Department and took personal charge of its affairs.

Billings' main concern was to end the delays and get the primary work of the department--selling land--underway as soon as possible. One of his first actions as managing director was to abandon Loomis' elaborate platting program and replace it with a far simpler one; thenceforth, only rough township plats were to be prepared. Another major obstacle was removed when Billings granted Sheppard the authority to commence full-scale operations in Europe.

Satisfied that the work would now proceed quickly, Billings began looking for a new land commissioner to take charge of the department, and in November, 1872, William Alanson Howard was appointed to this position. Howard assumed his duties as land commissioner in March, 1873, whereupon Billings stepped down as head of the Land Department and was reappointed chairman of the resurrected Land Committee.

Much of the energy of the land commissioner and the Land Committee chairman was directed toward influencing legislation and procuring favorable administrative rulings in Washington, D.C. Billings and Howard were in constant contact with the company's attorney and chief lobbyist in Washington, former president pro tempore of the Senate, Benjamin F. Wade. Most of the issues that were of interest to the Land Department concerned, in one way or another, the removal of what the railroad considered to be adverse claims to its lands. The company lobbied vigorously in favor of legislation to extinguish Native American claims, particularly those of the Sisseton-Wahpeton in Dakota Territory. In order to set aside numerous private claims (and several put forth by other railroads as well), the company sought favorable rulings from the Department of the Interior specifying the exact dates upon which its land withdrawals became effective.

As noted earlier, one of the primary responsibilities of the Land Department was to stimulate demand for the company's lands. Both the promotional campaign and the European operations were directed toward this end, as were the activities of the commissioner of emigration for soldiers' colonies, George B. Hibbard. As his title implies, Hibbard1s primary responsibility was to encourage the establishment of veterans' colonies along the line of the Northern Pacific. In the course of his official duties, Hibbard cultivated contacts with numerous veterans' organizations and incipient colony associations, provided information on the nature and availability of government and company land, helped negotiate land purchase agreements, and arranged reduced transportation rates for colonists and settlers intending to settle along the line. He also took a leading role in efforts to convince Congress to extend additional homestead and preemption benefits to Civil War veterans and their families.

In April, 1872, Hibbard was promoted to superintendent of emigration and given responsibility for supervising all of the company's domestic operations connected with immigration. In large part his new duties consisted of helping plan the itineraries and making the necessary travel arrangements for representatives of European colony associations or for influential European investors visiting the United States to inspect Northern Pacific lands. He was also responsible for super­ vising the construction and maintenance of the company's three immigrant reception houses in Minnesota. The following spring, anticipating the arrival of large numbers of European settlers and colonists, the Land Department opened an immigration office near the New York immigrant reception facility at Castle Garden. Sheppard and his agents kept Hibbard apprised of the departures of groups of emigrants intending to settle on lands bordering the Northern Pacific line. Hibbard arranged to have someone meet the immigrants upon their arrival in this country, made preparations for their safe passage to Minnesota (where virtually all of these immigrants were expected to settle), and helped them deal with any difficulties they encountered after their arrival.

The collapse of Jay Cooke & Co, forced the closing of the immigration office and the suspension of Hibbard's immigration work. The entire promotional campaign also had to be discontinued and the New York office staff was reduced to the absolute minimum needed to handle cor­respondence and expedite sales contracts and transfers of deeds.

The failure of Jay Cooke & Co. was the pivotal event in the early history of the railroad. "The great thoroughfare of the northwest" was discredited in the eyes of the public; it was blamed by many for causing the downfall of the highly respected banking house. This view was not entirely inaccurate, for while the railroad was not solely responsible for Jay Cooke's difficulties, it was undoubtedly one of the main factors contributing to the collapse of the firm. The loss of public confidence and the depressed economy made it difficult for the railroad to raise the funds needed to continue operations. Although land sales were up considerably, nearly all purchases were made with bonds, so that these sales, while reducing the company's bonded indebtedness, provided little in the way of operating capital. Despite at­ tempts to raise money (by selling off investments or leasing or selling surplus rolling stock, for example) and to implement stringent cost­ cutting measures (dismissing staff, cutting back operations and rail service, and halting construction), the company was able to stave off bankruptcy only until 1875. In April of that year, a federal judge ordered the company into receivership. Frederick Billings devised a bold plan for reorganization whereby the company could retire most of its outstanding debt and obtain the additional financing it needed to proceed. The reorganization, completed in September, 1875, enabled the Northern Pacific Railroad Company to embark cautiously on a new beginning.

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Contains selection lists, contested selection legal dockets, survey field books, and land examination files reflect the acquisition and initial control of the Northern Pacific land grant. Extensive contract files and related records document the purchase of company land parcels and the settlement of large areas of the northwestern states. Lease records evidence the exploitation of the land’s timber, mineral, and grazing resources. Substantial correspondence and subject files document the topics noted above, as well as all other aspects of the ongoing management of the land holdings over a hundred year period. They include information on townsite development and settlement activity; on taxes, land ownership disputes, and other relations with federal, state, and local governmental units; on the value of the natural resources contained in the land grant; on fire prevention and other conservation efforts; on the development of irrigation policies and systems; and on the continual development of the land as an economic policies and systems; and on the continual development of the land as an economic resource. Accounting records document the financial transactions relating to land sale and management.

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These documents are organized into the following sections:

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Access Restrictions:

Originals for the microfilmed Letters Sent, Letters Received and Related Records, and Printed Materials are closed to general use.

Microfilmed originals of the Land Examination Field Books: Washington are closed to general use.

Preferred Citation:

[Indicate the cited item and/or series here]. Land Department records. Northern Pacific Railway Company records. Minnesota Historical Society.

See the Chicago Manual of Style for additional examples.

Microfilm Production:

M446: Letters Received and Related Records; Letters Sent; Printer Material; Land Committee Minutes. St. Paul, MN: Minnesota Historical Society, 1983. 38 microfilm reels.

M505: Land Examination field Books: Washington. Saint Paul : Minnesota Historical Society, 1986. 24 microfilm reels.

M578: Land Grant Contest Cards. Bloomington, MN: Integrated Imaging Systems, 1994. 39 microfilm reels.

Microfilm produced by the Minnesota Historical Society is available for sale or interlibrary loan from the Minnesota Historical Society.

Location of Originals:

The originals (53 cubic feet) of the land grant contest cards (M578) were disposed after microfilming.

Accession Information:

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11,617; 11,618; 11,619; 11,620; 11,621; 11,622; 11,623; 11,624; 11,625; 11,626; 11,627; 11,628; 11,629; 11,630; 11,631; 11,632; 11,633; 11,634; 11,635; 11,657; 11,665; 11,671; 11,672; 11,677; 11,678; 11,680; 11,684; 11,686; 11,687; 11,688; 11,689; 11,690; 11,691; 11,692; 11,693; 11,694; 11,695; 11,696; 11,697; 11,698; 11,730; 11,838; 16,926; 17,161

Processing Information:

Catalog ID numbers: 990017199140104294; 990066167440104294 (Land Department Records, Microfilm M446); 990017156730104292 (Land Examination Field Books: Washington, Microfilm M505); 990029079630104294 (Land Grant Contest Cards, Microfilm M578)

Work on the Northern Pacific Railway Company records was supported with funds granted by the Northwest Area Foundation, the Grotto Foundation, and the Jerome Foundation.

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Minnesota town lots, 1880-1899

North Dakota town lots, 1874-1901

Montana town lots, 1881-1929

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Yellowstone Division, 1882-1884

St. Paul, Minneapolis and Manitoba Railway Company, 1889-1897

St. Paul and Duluth Railroad Company, 1878-1900

St. Paul and Duluth Division (NWI), 1900-1947

St. Paul and Duluth Division (NWI), 1900-1951

Missouri Division (NWI), 1879-1952

Missouri Division (NWI), 1897-1954

Washington (NWI) contracts, 1900-1957

Little Falls and Dakota Railroad Company, 1886-1929

Little Falls and Dakota, 1900-1958

Minnesota and Dakota Division, 1872-1952

Minnesota and Dakota Division, 1896-1964

St. Paul and Northern Pacific, circa 1906-1915

Montana Division, 1882-1963

Montana Division, undated