Hill entered the rail industry picking up the insolvent St. Paul & Pacific Railroad in 1878. He built that line up from a road worth $728,000 in 1880 to over $25,000,000 five years later. Hill was a hand on manager who was not unknown for surveying rail routes on his own. He was helped by extensive land grants given by the Territory of Minnesota to the predecessor of the St. Paul & Pacific, the Minnesota and St. Cloud Railroad in 1857 – almost 2,460,000 acres – NP’s land grants, by comparison, came to over 70 million acres. Hill used the earlier land grants as collateral to attract capital.
Interestingly, the NP briefly bought the M & St. Cloud in 1870, but like with the OSN, the M & St. Cloud regained independence with the NP bankruptcy of 1873.
In 1889, Hill melded the St. Paul & Pacific – renamed the St. Paul, Minneapolis & Manitoba Railroad – with other lines he owned like the Montana Central, forming the Great Northern Railroad. He also gained title to land grants along the Red River valley, land already taken up by the time the St.P, M&M finished its line to Winnipeg. Instead of upsetting potential customers by uprooting them from their lands in court, Hill relinquished claims in this area. In return, his new GN line gained equal areas of land in any of the States in traversed, from Minnesota to the Puget Sound.
The Great Northern line’s establishment went easier than that of the NP. GN strongly advertised and attracted settlement along its rails. NP had been forced to build rails as fast as it could to gain land needed to solidify shaky finances, rails which necessarily did not support traffic. GN, being mostly landless, waited until lands were settled ensuring traffic on its lines.
Hill would later connect the two transcontinental lines he owned or had significant interest in through the Spokane, Portland and Seattle Railway in 1909. That railway acquired the Oregon Electric railway in 1910 from Hill’s Great Northern. Next added, the Oregon Traction Company which owned a route from Portland to Astoria and on to Seaside. The whole NP, GN and SP&S empire eventually became part of the Burlington Northern network, further morphing into today’s Burlington Northern Santa Fe line – BNSF.