Driven by a Steam Engine
The Second Industrial Revolution was characterized by the enormous advances in production technology ushered in by the advent of steel and harnessing of electricity. The beneficiary of these advancements were railway manufacturers, who utilized these innovations to move past the cumbersome steam engine railways to electric railways powered by diesel engines and built on cheaper, stronger steel tracks. Railroads became faster, cheaper, and more comfortable, and the rapidly growing industry provided many North Americans with dreams of building the first transcontinental railway that would propel them into generations of prosperity. Two such North Americans were William Mackenzie and James J. Hill, Canadians who made it their lifelong goal to build the first transcontinental railway. Ultimately, Hill succeeded in achieving his dream while Mackenzie’s railway floundered through bankruptcy and shoddy assembly. The difference between Hill’s success and Mackenzie’s failure lay in their approaches to building railway empires. Where Hill was the single-minded perfectionist, relying only on himself in every aspect of his Great Northern Railway, Mackenzie treated his Canadian Northern Railway as one of his many hobbies, giving his attention only to facets of the railway that interested him and frequently relying on others for aid. Mackenzie and Hill’s different attitudes set them apart in their devotion to their dream, attention to detail, and varying levels of independence, and it was Hill’s superiority in all three areas that caused his eventual triumph over Mackenzie.
Both Mackenzie and Hill shared a dream of building a transcontinental railroad, but whether Hill was exceptionally dedicated to his dream or Mackenzie simply wasn’t dedicated enough, it was clear that both railways were greatly influenced by the level of commitment their owners put into the railways’ growth. In 1902, when Mackenzie had just undertaken the enormous task of building a transcontinental railway under his company Mackenzie, Mann and Company Limited, he was still heavily invested in electric street railways in Toronto, Birmingham and Winnipeg along with steam railway construction in Manitoba, Ontario, British Columbia, and the Yukon, all in addition to 30 other companies he was heavily invested in. Despite Mackenzie’s success as an entrepreneur in the past, his decision to continue playing a large role in all those companies as well as in Mackenzie, Mann and Company Limited had clearly negative consequences on the success of the Canadian Northern Railway. Mackenzie was not known as an organized man to start with, having an objective to, “get the job done, make his profit, and begin his next task,” and as a result the management of several companies left him extremely absent-minded, something that cost the Canadian National Railway many contracts when he would mistakenly take important documents with him on his travels, forget to sign cheques or stock certificates, and rely on others to remind him of his errors. The financial repercussions came second to the intense toll on his health that came with his decision to co-manage several companies rather than dedicate himself to one. Mackenzie suffered from a mysterious illness he dubbed “nervous exhaustion”, where he suffered from malaria-like symptoms under periods of extreme duress that came when he was travelling to close deals on his many companies, particularly the Canadian Northern Railway and the Toronto Railway Company. This not only affected his ability to function but affected the contracts of his transcontinental railway, causing his dream to falter considerably. Unlike Mackenzie, Hill decided very early on in his bid for a transcontinental railway that he would not allow his purchase in any other companies deter him from achieving his goal. In 1883, when, as the Canadian Pacific Railway forced him, as one of its construction supervisors, to reduce his shares in the Manitoba line that he wanted to be a part of his transcontinental railway. Rather than tolerate any division of his capital or his labour, Hill resigned from the Canadian Pacific Railroad board, made up of some of his closest friends, in order to dedicate himself to building what would eventually be the Great Northern Railway. Despite managing just one project, Hill put in just as much work as Mackenzie put into 30, as he worked tirelessly for nearly 40 years with the same group of men to finally realize their common dream of a transcontinental railroad, a task that often left him, “physically and mentally drained,” as he worked on the intricacies of integrated rail and water systems. Both Mackenzie and Hill shared an unquenchable thirst for success, but where Mackenzie tried to consolidate practically the entire Canadian railway industry under his power, Hill was content in working to perfect the achievement of his one dream of a transcontinental railway.
Mackenzie and Hill’s contrasting levels of dedication was reflected by their employees’ attitudes, and in an environment where everyone has the same level of dedication, a company is either far more likely to notice every minute detail of its operations, or far more likely to details slip through the cracks. Where Mackenzie’s lackluster dedication caused him to pass off many of his duties to overworked individuals that allowed details of the Canadian Northern Railway to slip through the cracks, Hill’s iron fist was felt in all facets of the Great Northern Railway and forced even the most insignificant parts of the company to be as detail-oriented and efficient as the top management. Mackenzie’s complete dismissal of the details of his contracts is one of the few well-documented aspects of his life, because it was completely self-professed. Despite his eloquence and negotiating prowess, he always left it upon his lawyer, Zebulon Aiton Lash, to put those agreements into legally binding contracts, along with managing the company’s financial records. Despite providing Mackenzie a great convenience, Lash’s workload was consequently enormous, especially since he was a prestigious lawyer in his own right, and as a result, he was unable to recognize the Canadian Northern Railway’s financial records’ warnings of an economic decline. Had Mackenzie paid any attention to his company’s financial records himself, he may have been able to prepare himself for the economic turmoil that eventually drove his company into bankruptcy. Mackenzie was occupied with the broader goals of his railway at the cost of its equally-important intricacies, and it often seemed like he ran his company intuitively. One of his close associates even described him as, “a man directed more by chance than by design,” and such an owner is not one concerned with details, despite how important they may be. As a result, despite his railway’s rapid expansion, the railway encountered many problems with quality and poor track maintenance that could’ve been avoided had Mackenzie slowed down construction near the end of the company’s run, rather than make a last-ditch effort to make the railway transcontinental. In contrast to Mackenzie’s flawed management, Hill’s leadership was built upon attention to detail and constant vigilance for the challenges and opportunities the future may present. It was paramount for Hill to know the exact finances of his company, down to the expenses of each one of his employees. He was constantly looking to improve the efficiencies and costs of building his railway to ensure it was the best. He worked with the railway designers to plan the exact routes of the tracks, and would then analyze grades and curves by himself, making recommendations to engineers where he felt necessary. As a result, the Great Northern Railway grew to have a reputation as one of the best railway networks on the continent. Hill’s penchant for perfection extended to his railway’s future as well. His vigilance for future opportunities and threats was so intense that he, “anticipated difficulties which sometimes never materialized.” His vision allowed Hill to both recognize the Depression of 1893 in advance and to capitalize on it by buying out competitor Northern Pacific. Mackenzie’s attention to the broader vision of Canadian Northern Railway allowed the company to expand at an unprecedented rate, but spread its resources dangerously thin because, unlike Hill, Mackenzie paid no attention to establishing a standard of quality in his railroad that could only come from an acute attention to detail.
Despite Mackenzie’s ability to temporarily overcome his lacking commitment and attention to detail, ultimately what separated Mackenzie’s failure from Hill’s success was their drastically different levels of independence. Although the Canadian Northern Railway was contracted out and earned profit for Mackenzie, Mann and Company Limited, the railway would never have existed without immense support from investors, Canada’s federal and provincial governments and frequent bail-outs from many of his peers. His dependency became most prominent during the railway’s decline and eventual collapse during World War I. Although many blamed the war for the collapse of the Canadian Northern Railway, the truth was that the railway was extremely unlikely to pay its loans back to investors before the war even began. Mackenzie’s plan for this was what it had been every time before: beg the government to bail him out yet again. His dependency on the government was so great, that he had only finished 2400 km of track, expecting the government to fund the remaining 2712. However, because he had failed to diagnose the economic decline triggered by the war, Mackenzie failed to realize that he would not get the support he had become used to, and this time, he was forced to see his dream wrested from him as the Canadian Northern company was nationalized. By constantly relying on others to finance and bail out his railway, Mackenzie eventually lost his company completely. Unsurprisingly, Hill operated his company in an entirely different fashion. All the land, resources, and companies that Hill bought were either bought through his company or in association with Hill’s close associate J.P. Morgan. Hill was so successful at financing his dream of a transcontinental railway without outside investors or public aid, that his railroad became, “the first privately funded transcontinental railroad in United States history.” This self-sufficiency allowed the railway to become strong and practically “depression-proof”. As a result, the Great Northern Railway thrived in the Depression of 1893 and World War I, while other lesser railroads experienced huge construction slowdowns. Once again, the difference between Mackenzie’s failure and Hill’s success was in their difference of standards. Mackenzie lived frivolously, relying on others around him to pick up the slack and fund his railway, whereas Hill consolidated his assets until his vision of perfection could definitively be realized thanks to nothing but his own hard work.
What defines the success of any entrepreneur from any time period is not their grandiose vision or fearlessness of risk, but whether they are willing to completely immerse themselves in the dreams they have. Both William Mackenzie and James J. Hill were great visionaries with the same dream and affinity for risk-taking, and yet Mackenzie was left in the dust by Hill’s unceasing perfectionism. Both men highlighted the importance of entrepreneurial qualities like dedication to a goal, attention to detail and independence, qualities that are often overlooked for flashier ones. Ultimately, the Second Industrial Revolution itself was driven by entrepreneurs like Hill, men and women who believed that they could lift themselves above the masses by using their determination to create the best goods in already-innovative markets. Mass innovation powered by the chase for perfection lifted the entire global economy to levels of prosperity never heard of before. This relentless chase of perfection was put eloquently by one of Mackenzie’s closest friends when he described Mackenzie as, “like the railway, driven by a steam engine,” although in the end, it was Hill who drove over Mackenzie’s dream.

Works Cited:

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Fleming , Rae Bruce. The Railway King of Canada: Sir William Mackenzie, 1849-1923. Vancouver: UBC Press, 1991.
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[ 1 ]. Joel Mokyr, The Second Industrial Revolution, 1870-1914. (PhD diss., Northwestern University, 1998): 4, http://faculty.wcas.northwestern.edu/~jmokyr/castronovo.pdf.
[ 2 ]. Mokyr, The Second Industrial Revolution, 3,7
[ 3 ]. Rae Bruce Fleming , The Railway King of Canada: Sir William Mackenzie, 1849-1923, (Vancouver: UBC Press, 1991), 86.
[ 4 ]. Fleming, The Railway King of Canada, 26
[ 5 ]. Ibid., 86
[ 6 ]. Ibid., 60
[ 7 ]. David G. Burley, “HILL, JAMES JEROME,” in Dictionary of Canadian Biography, vol. 14, University of Toronto/Université Laval, 2003–, accessed October 14, 2013, http://www.biographi.ca/en/bio/hill_james_jerome_14E.html.
[ 8 ]. Burley, “Hill, James Jerome”
[ 9 ]. Fleming, The Railway King of Canada, 31
[ 10 ]. Theodore D. Regehr, “MACKENZIE, Sir WILLIAM,” in Dictionary of Canadian Biography, vol. 15, University of Toronto/Université Laval, 2003–, accessed October 14, 2013, http://www.biographi.ca/en/bio/mackenzie_william_15E.html.
[ 11 ]. Fleming, The Railway King of Canada, 31
[ 12 ]. Burley, “Hill, James Jerome”
[ 13 ]. Christopher Muller, “James J. Hill”, Rail Serve, 1998, accessed October 14, 2013 http://www.railserve.com/JJHill.html.
[ 14 ]. Albro Martin, James J. Hill and the Opening of the Northwest, (New York: Oxford University Press, 1976), 240.
[ 15 ]. Burley, “Hill, James Jerome”
[ 16 ]. Martin, James J. Hill and the Opening of the Northwest, 376
[ 17 ]. Fleming, “The Railway King of Canada”, 187
[ 18 ]. Ibid., 188
[ 19 ]. Regehr, “Mackenzie, Sir William”
[ 20 ]. Muller, “James J. Hill”
[ 21 ]. Shem Hanks and Tyler Robbins, “Great Northern Railway Depot in Harrington”, Spokane Historical, Accessed October 14, 2013, http://spokanehistorical.org/items/show/307
[ 22 ]. Martin, “James J. Hill and the Opening of the Northwest”, 462
[ 23 ]. Naomi R. Lamoreaux, Entrepreneurship in the United States, 1865-1920. (PhD diss., University of California, ), UCLA Economics, http://www.econ.ucla.edu/people/papers/Lamoreaux/Lamoreaux470.pdf.
[ 24 ]. Regehr, “Mackenzie, Sir William”