Monday, December 21, 2009

Part of a Letter From JJ Hill to JP Morgan About the Northern Pacific

St. Paul, Minnesota
November 8, 1898

Messrs. J.P. Morgan and Company
Number 23, Wall Street, New York City, N.Y.

...It was considered by your legal advisers the part of wisdom to get all claims for rental and leased lines against the old Northern Pacific out of the way. This applied to the Seattle and International and to the Washington Central as well. Earlier action in regard to the Seattle and International would certainly have saved the Northern Pacific a large sum of money. When your house advised me as to the plan of the Canadian Pacific for buying it, I wired at once advising its purchase and offering, if necessary, to join the Northern Pacific in such purchase.

The Central of Washington, being leased to the old company, the same conditions apply to it as to the Seattle and International, and it rightly came under the lines covered by the London Agreement which we were to discourage, etc.

As regards the Washington and Columbia, I think it was unfortunate that Mr. [Edward Dean] Adams [interim president, Northern Pacific], or whoever was to notify the Navigation as to the Northern Pacific’s desire to purchase it, did not do so in a manner to avoid any cause for complaint of not fairly carrying out the terms of the protocol, which has unfortunately existed from that time to the present. The business of the Washington and Columbia was always turned over to the Northern Pacific at the junction, and Mr. [A.L.] Mohler [of Navigation] assured me more than once that he did not intend or expect to disturb the relations in that regard. On the whole, I am sure that the Northern Pacific has suffered much more loss than it gained, because of the uneasy feeling of distrust and want of confidence created in the minds of the [Navigation] and Union Pacific people. I have always endeavored to heal this breach, as I felt sure that unless an agreement was reached, both lines would suffer, and, in the end, it might result in our being compelled to build both into the Palouse Country and to Portland, where there was already enough lines to do the business and more railroad capital invested than can be maintained in such an event as I have described. As to my advice to Mr. Coster to acquire control of the Washington and Columbia, kindly bear in mind that this was before the date of the protocol under which certain agreements were made as to that property.

The object of the Great Northern and Northern Pacific joining in the purchase of the [Navigation] Preferred share was to secure harmony and avoid building unnecessary lines in that territory. The Great Northern, after building to Spokane, has no lines of its own into the Palouse, Snake River, and Walla Walla territory, and in giving up the construction of such lines, made, as I view it, the greatest concession, as it left the Northern Pacific and Union Pacific in peaceable possession of that territory, and, at the same time, gave all its traffic to the [Navigation] at Spokane, thus securing to it a large revenue. Mr. Mellen has repeatedly proposed that both the Northern Pacific and Great Northern should sell their respective holdings in [the Navigation], and build from the mouth of the Snake River, on the north side of the Columbia, to Portland, and this wile both our companies were a party to an agreement to do otherwise. As to Mr. [Charles] B. Wright’s connection with the Washington and Columbia - - he furnished a sum of money to a local party named [George Washington] Hunt to build the road and sell it to the Northern Pacific at a profit. While we were selecting a line over the Rocky Mountains, we considered a line by way of the Lo Lo Pass and the valley of the Clearwater to Lewiston; thence down the Snake River, and, pending the survey, I had an option on the Washington and Columbia at a lower price than was paid for it by the Northern Pacific. When we decided to adopt our present line, Hunt asked me to help him to sell it to the Northern Pacific by not making public our intention of going north. He expressed great fear that Wright would squeeze him out and sell the property to the Northern Pacific, making the money for himself, and this seems to have been the course actually pursued, both as to Hunt and the sale to the Northern Pacific...

...The extension of the line of the Central Washington.
I have already written in regard to this quite fully, both from the standpoint of the Northern Pacific and the Great Northern, and I trust my statement of the situation was such as to dispose of any further extension of that line in any direction. In order to help the Northern Pacific on any grain or other commodity it wishes to ship from that line to the Pacific Coast we will, if desired, join in giving it a connection about thirty miles west of Spokane, and vive it a division of the through rate, which will allow the Northern Pacific more profit on the business that it can make by hauling it over its main line, or by any extension...

...But a few days ago, Judge [Wiliam D.] Cornish, of the [Vice-President] Oregon Short Line, told me that Mr. Mellen had made strong efforts to get control of the Union Depot property at Spokane, which is now used by our company and the [Navigation], giving as his reason for desiring such control, that while the "Northern Pacific did not want the property, he knew that we did want it, and he was going to make it cost us the highest price he could." I do not usually pay much attention to such statements, but Judge Cornish is a man of undoubted character and veracity, and Mr. Mellen’s statement to him certainly was unwise; and not such as our relations to the Northern Pacific entitle us to expect. The attempt to overreach us in the matter of our land at Seattle was shortsighted, the only effect of which, as far as we are concerned, was to destroy any reliance with might place in his professions of friendship, or wish to preserve good feeling and harmony with our company.

J.J. Hill

Thanks to John Phillips III for filling in the names.

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