by William Stimson

River Park Square is undoubtedly the biggest civic controversy in Spokane history. But there is a close second -- a dispute more than a century ago between the citizens of Spokane and James J. Hill, the railroad magnate for whom Hillyard is named.

That long-ago clash has some interesting parallels with the modern one. It began with a public-private partnership designed to rescue the local economy, and wound up in rancorous accusations, appeals to higher governments for relief and endless lawsuits. Then, as now, the Cowles name was in the middle of the controversy. In the 1892 case, though, a Cowles was on the side of those who accused business of taking advantage of the city.

Here's what happened: In the 1890s, citizens of Spokane were worried the city's economy was eroding. A major problem was that it had to pay more for railroad shipping than other cities. When railroads delivered goods from the eastern United States to Seattle, Tacoma or Portland, the rates they charged had to compete with ocean-borne shipping. In Spokane and other inland cities, though, there was no competition from ships. Consequently, railroads charged inland cities whatever rate they wanted. Because of this higher transportation cost, a keg of nails or bolt of cloth might cost a wholesaler twice as much in Spokane as in Seattle or Portland. That put the Spokane merchant at a disadvantage in reselling to towns that fell within the reach of salesmen from both sides of the state.

The civic leadership of Spokane, therefore, was determined on getting "terminal rates" -- that is, to pay the same for shipping from back east as did Seattle or Portland -- as the best way to secure the city's economic future.

In 1892, it looked like this aim was finally on the horizon, quite literally. A new transcontinental railroad, the Great Northern, was under construction and moving rapidly toward Spokane. Its builder, James J. Hill, was a heroic figure in an era when railroads were already falling into disrepute among Americans. Hill was seen as a regular, hard-working fellow who happened to get control of some railroads. Now he was going to demonstrate how railroads should behave toward the common people who were so dependent upon them.

Hill had suggested that if his road came through Spokane, he would force railroad rates down. So through 1891, Spokane anxiously looked forward to Hill's approach as he led his army of tracklayers and bridge builders across Montana and Idaho and toward Spokane, like a general leading an army to the rescue of a besieged city.

Thunderous Applause

In February 1892, Hill arrived in Spokane to meet with its leaders. At the great man's request, the city's business and civic elite gathered in the recently completed Auditorium Theater. Standing in the middle of the theater's wide stage, he wasn't much to look at: short, 54, paunchy and bald, with great, gray bunches of beard and sideburns framing his face, like a lion's mane. Yet those who had met him were always impressed. He had a lion's sense of power in repose, underlined by eyes that locked on to a person and let nothing flow back in. A Spokane reporter who interviewed him a few months earlier described Hill as a methodical and emphatic speaker who ended each sentence with a quick little smile, as if to ask, "Do you see what I mean?" He could make himself understood when he wanted to.

Hill informed Spokane's assembled leaders that the most direct route for his railroad would bypass Spokane to the north. But he didn't want to do that because he saw a great commercial future for Spokane. As for shipping rates, which he knew were a problem for Spokane, "We shall not feel that we are doing ourselves justice if we cannot bring goods here to sell at a competing point less than any city west or south of here." This brought forth cheers from the packed theater.

However, Hill continued, there was one serious problem. The rights-of-way to bring his railroad through Spokane would cost him $1 million, and he did not want to pay it. "What we ask of Spokane," Hill said, "is that from the time we come to the city limits until we go out, that the right-of-way shall not cost us anything."

Hill added there was no time to lose. His crews were approaching the point where they had to either build straight west from Sandpoint, Idaho, or veer south and include Spokane. He said he had to leave for Seattle the next day, but that would return to Spokane in exactly one week. If the Great Northern was to come to Spokane, he would need the right-of-way deeds at that time.

This tight deadline was a sobering request. Hill wanted a swath through a booming city delivered to him, free, in a week. But apparently the audience had been prepared for the challenge, for they burst into cheers as Hill returned to his seat on the stage.

Anthony Cannon, that ever-enthusiastic city founder and plunger into challenges, leapt to his feet and announced that, in fact, Mayor David Fotheringham had already assembled a committee to begin collecting deeds. "For myself," proclaimed the rheumy-eyed, gray-bearded pioneer, "I can say that if I have anything he wants, he can have it free, and I am ready to give him a deed for it anytime." More cheers, and the citizens of Spokane left the theater looking past the immediate challenge to a prosperous future.

Land Office Business

The right-of-way committee announced by Cannon was made up of Spokane's most eminent citizens, including Cannon himself, James Glover, J. J. Browne, James Monaghan, Dan Drumheller and half a dozen others.

At first they thought they faced a fairly simple task. Hill wanted a road through the city, and Spokane had a great deal of empty land. When they traced Hill's selected route, though, they found it passed across choice holdings along Spokane's river, through homes occupied at the moment, and even through Spokane's only hospital. The Great Northern route approached the city from the north at Mead, went through what would become the repair yard at "Hillyard," continued south to the river, then turned west to travel through the city. It followed the south bank until it could cross over to Havermale Island and went the length of the Island (where the Great Northern tower still marks the location of the terminal), crossed off the island next to the Post Street Bridge, and continued west out of town along the ridge on the north side of the river. This involved hundreds of parcels of valuable land.

Undaunted, the committee set up a headquarters in the Rookery Building at the corner of Riverside and Howard. More than 100 Spokane businessmen abandoned their own enterprises and worked unpaid 15-hour days tracking down and negotiating with property owners. Tables scattered through the room were covered by maps and surrounded by pensive men.

A reporter for a morning paper, the Spokesman, described the scene: "The white beard of Mr. Cannon and the black moustache of Mr. Dillman were visible first in this part of the room and then in that, holding conferences with some property holder or railroad official. Mayor Fotheringham quiet, but industrious; ex-Mayor Clough exerting his persuasive eloquence on A.K. McBroom, who adjusted his eyeglasses and yielded each point only after having held tenaciously to the last minute." J.J. Browne was "reserved, dignified, but earnest." By the intensity of the discussions one would have thought they were "trying to convert Dutch Jake... to the prohibitionist party."

One group of negotiators hit a snag over a site east of Division when a Mr. Dennis said his land was worth $25,000 and he would not benefit from the railroad. Negotiators urged him to follow the example of another man, who had been in the same situation and gave the land nevertheless for the good of the community. "Quite a little cross-firing" ensued, according to the Review, another local paper (this was before the two merged to become the Spokesman-Review) and finally the team adjourned to lunch. They came back with a deal. Mr. Dennis was anxious to have a bridge connecting his land with the north bank of the river. Mayor Fotheringham pledged the city's desire to have a bridge at that point. Thus the Division Street Bridge was born.

The good sisters of Sacred Heart Hospital agreed to give up their hospital on the bank of the river (where a statue now marks it) for another parcel donated on the South Hill. A spokesman for Rev. Havermale pledged land on his island. Real estate agent Arthur D. Jones said his clients would happily take land in exchange for the next parcels. The Washington Water Power Company gave up an easement next, and that brought the effort to the north bank property of Col. David Jenkins, which was a problem.

Jenkins had recently donated land for the new County Courthouse, and he was still unhappy about some of the details of the agreement. Besides, he was sick. A committee consisting of Glover, Browne and Cannon went to his home to bargain. Jenkins said he would take $10,000 for his property on the north bank. An appeal went out for cash donors. A group of prominent ladies pledged from $10 to $25 each. The Echo Flour Mill donated 100 barrels of flour, and the New York Brewery sent word it was increasing its donation from $500 to $800. Jenkins' land was secured.

Second Guessing

Amid all of this earnest citizenship, there was but one, brief cautionary. The Review, the older of the town's morning papers, printed a little editorial note, tucked away in an editorial column headlined "Topics of the Day," suggesting that the town watch out, because James J. Hill was notorious for "saying one thing and conveying another."

"A great many people who heard him speak Thursday night," read the editorial, "went away with the impression that he promised Spokane terminal rates. He did nothing of the sort. He promised... giving the merchants rates at which they can compete... There are degrees of competition. It would be interesting to know what degree Mr. Hill had in mind when he made his speech at the Auditorium. It is well to call attention to these matters in time, so that there may be no disappointment and bitterness if Mr. Hill should fail to give us terminal rates. One thing, though, may be depended upon. If he finds it to the interest of his road to give Spokane terminal rates, we shall get them; otherwise not."

This was an odd, discordant note suddenly dropped into the overwhelming unity of the property gathering. The competing newspaper, the Spokesman, was scandalized by the slur on Hill, and guessed that it was written by the paper's absentee owners in Portland, which was a rival city to Spokane. Since it popped up seemingly out of nowhere, expressing a doubting opinion that did not appear in the paper before or since, the idea that it was forwarded from dispassionate editors in far-away Portland was probably a good guess.

"While Mr. Hill has made no pledges" on tariffs, the Spokesman countered, "he has said enough to individuals on the subject to convince any man of brains."

Before he left town, Hill himself gave the Review an interview to answer the doubts: "As to our position in regard to terminal rates and what I meant when I said you can compete with any city west or south, you could not do it if you had to pay more for service than they had to pay." Hill, the once skeptical Review reported, "intimated" that he "would be glad" to haul nails "at a much lower rate" than was offered now.

So the Review declared itself fully satisfied. "Whatever doubts were entertained respecting the policy and intentions of Mr. Hill will disappear when the public has read his intensely interesting interview in another part of this paper," it said in an editorial. The editorial concluded that "the Great Northern is knocking at the gates of the city. The future would not be altogether pleasant for the man who should attempt to bar its entrance. There are some things far better than money. Of these is the respect of community in which one dwells."

The other paper, the Spokesman, never raised any questions about Hill and was among the most enthusiastic participants in the GN campaign. It published a daily list of acquisitions and threatened to publish the names of holdouts. "When the Spokesman gives the public the names of these selfish citizens, the community will be able to judge the difference between some men's professions and their deeds. In the hour of supreme importance to the commercial interests of the city, it is well to know who are inimical to the development of the city."

Baited and Switched

In the last few days of the campaign, there were snags and crises enough to quell the intoxicating exuberance with which the campaign had begun. Hill was asked to delay his return appearance by a day.

But then, just a week after Hill's initial speech, the tables in the headquarters in the Rookery Block were pushed aside for an impromptu ceremony. James Hill arrived and officially took possession of $50,000 in property deeds and $70,000 in cash that would cover the cost of the remainder. "As I have said before, from this day, we are partners," he told the ecstatic, if exhausted, volunteers.

Three days later, the two primary figures of this effort, Anthony Cannon and John J. Browne, brought the effort to a close at another gathering in the Auditorium. Cannon went before the crowd first. Characteristically grandiloquent and dramatic, Cannon said that when they all "shake off this mortal coil" their descendents would say of them, "Thou good and faithful servant, you have left a record behind you which our children and our children's children and generations to come may be proud of." Browne, more prosaic, followed him to the podium to add that "In Spokane, like other cities, we have our local difficulties and fights, but when our interests are at stake, Spokane is as one man."

Great Northern crews were in the city within weeks and the beautiful, marbled Great Northern station began to take shape. Eleven months later, the Great Northern line was completed to Seattle on the West Side, and Spokane was a link in a third coast-to-coast railroad.

But when the GN trains started rolling through the city, Spokanites were shocked to find that the Great Northern freight rates were about the same as Northern Pacific and Union Pacific. When Hill next came through the city, an outraged Chamber of Commerce demanded terminal rates, as they were promised. "I never made any such promise, nor did I intend that anyone should put such a construction on my words," Hill replied.

That began a 25-year running feud between Hill and the city of Spokane. They sued, they petitioned Congress and presidents, and they carried on a constant campaign against the GN, as well as the other railroads. The campaign's most implacable campaigner was William Cowles, the junior reporter who had just arrived in Spokane in time to see the great campaign of 1892. As publisher of the Spokesman-Review, he never let people forget that James Hill had broken his promises.

There's little doubt Hill deceived Spokane's citizens -- or at least knowingly let them deceive themselves. The question of "terminal rates" came up constantly, and if Hill had no intention of delivering them, he could have clarified his stand.

But perhaps it was not that simple, either. Hill may have thought something like terminal rates was possible. In any case, submerged in the task of building a railway across the country, he probably gave very little thought to what would happen to rates in Spokane when that enormous task was over. The truth about James Hill was that he was resolved to keep only one promise, and that was to finish his railroad route to Seattle -- which meant that he must remain flexible in all other matters because they would always remain on an "if possible" basis.

In most historic accounts, Hill comes off as a hero. He had accomplished a minor miracle of Western development with his new road. Builders of the other coast-to-coast railroads were supported by huge federal subsidies, and they still went broke. Hill, on the other hand, never had a subsidy, and his railroad never went bankrupt. His tracks were flatter, stronger and more efficient than the other coast-to-coast rails. Nor could Hill could be accused of not caring about those along his route. As populist historian Page Smith has written, Hill, almost alone among railroad builders, did what he could to ensure that burgeoning towns along his line developed roads, schools and local economies.

Was it, in the final analysis, really his job to say things that would dissuade Spokane from joining him in the enormous project? Hill probably justified his slippery language to himself with the knowledge that the biggest promise he was making -- that Spokane would prosper by helping the Great Northern -- was true. Spokane was enormously better off because the GN was successfully completed. The very years Spokanites protested the ruinous nature of rail rates, 1890-1918, were the most prosperous in the city's history.

Perhaps the leaders of Spokane were partially to blame for their own disappointment. If terminal rates were its bottom line, why did it not get it in writing? The only document they asked Hill to sign was a brief guarantee that he would build the road on the donated right-of-way and that he would build a railroad repair facility in the city -- both of which he did.

A Perpetual Grudge

The response to the lone warning published by the Review -- which turned out to be exactly correct -- suggests the answer. Spokane appeared to see the connection with Hill, not legalistically, but as he said several times, as a "partnership." One of the great names of American business was coming to rescue Spokane from the clutches of other greedy railroads. Under such circumstances, it was boorish to talk about legal documents; it would be like asking a lover for a prenuptial agreement.

There was another more selfish reason Spokane citizens were willing to leave the transaction vague. The whole incredible campaign was built on a certain ambiguity about who gave what and who gained what. Being too particular with Hill's obligations would have been out of tune with the general feeling that all must give selflessly. If everyone began penciling out the costs and benefits too carefully, the deal never would have gone through. The ambiguity that surrounded Hill's obligations was an extension of the boosterish feeling that surrounded the whole effort.

No doubt this is what made Hill's reneging so hard to take. The whole thing had been done in a swell of good feeling and trust -- don't let your community down! And then Hill let them down.

The business problem disappeared in 1918, when the Interstate Commerce Commission finally sided with Spokane and other land-locked cities and ordered railroads to give them the same "terminal rates" they gave coastal cities. But that didn't end Spokane's complaint against James Hill. In 1952, six decades after Hill first arrived in Spokane to sell his "partnership," the official written history of the Spokesman-Review made this its final word on the episode: "Spokane businessmen generally believed that Jim Hill had played them for suckers. His shrewd deal, although it brought him a free right of way through the city, also brought him hostility and suspicion for the rest of his life, in place of friendship and confidence."

William Stimson is a professor of journalism at Eastern Washington University and author of Spokane: A View of the Falls.

Publication date: 08/26/04

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