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James J. Hill was a 19th-century railroad entrepreneur. Hill was an integrated thinker who broke out of a restricted, one-country mode and began pushing into a worldwide mode. Unfortunately, just as Hill achieved great success in the American railroad industry and began spearheading an international expansion, his worldwide growth was snuffed out by glory-seeking politicians. The story of James J. Hill is documented in the book The Myth of the Robber Barons by Burton W. Folsom, Jr.
In that book, Folsom identifies how throughout history there have been two distinct types of entrepreneurs: political entrepreneurs and market entrepreneurs. Political entrepreneurs seek profits by working with the government to get subsidies, grants, and special privileges. In other words, political entrepreneurs seek success through political pull. In contrast, market entrepreneurs seek success by producing increasingly improved products and services at increasingly lower costs.
The building of America's transcontinental railroads provides a dramatic example of political entrepreneurs versus market entrepreneurs. In the 1860s railroads began expanding rapidly throughout America. Thus, political entrepreneurs seeking easy dollars teamed up with Congressmen seeking self-glory. Those political entrepreneurs and Congressmen lobbied the federal government to subsidize the building of America's first transcontinental railroad.
That situation presented a perfect combination for the parasitical-elite class. (See The Neo-Tech Discovery for a definitive analysis of the parasitical-elite class.) White-collar-hoax political entrepreneurs could line their pockets with lavish government subsidies while the Congressmen handing out those subsidies could garner self-glory and justify their jobs. "Look how beneficial we are to the American people," those Congressmen proclaimed. "We are financing America's first transcontinental railroad." Thus, a criminal-mind deception was woven by that parasitical-elite class. The deception was that only the government could finance an undertaking as large and expensive as the building of a transcontinental railroad. That deception is still promoted in history books to this day.
With great fanfare, enormous subsidies were granted to the Union Pacific and the California Pacific to build the first transcontinental railroad across America. Thus, hordes of political entrepreneurs seeking easy dollars rushed to the scene. The California Pacific started building track from the west coast, the Union Pacific from the east coast. Those companies were paid by the government according to how many miles of track each laid. So, instead of carefully studying routes and then building track along the shortest, most efficient routes, both companies built along the longest, most out-of-the-way routes they could justify. That way, each could collect the maximum amount of government money.
Congressmen, who were spending money they controlled but did not earn, were quick to claim credit for the financing of America's first transcontinental railroad. But, unlike essence-building businessmen spending their own money, those Congressmen were not about to exert the nitty-gritty effort required to make sure that good value was received for each dollar spent. Thus, the building of that government-financed transcontinental railroad turned into an orgy of parasitical-elite fraud.
Instead of carefully laying railroad track to achieve high quality and good efficiency, such as searching out routes to build over that contained the lowest grades of hills, buying top-quality material, closely supervising workmanship, and so on, the California Pacific and the Union Pacific merely laid railroad track as fast as they could. Each builder ignored quality and economy in order to get the most track laid before the other in a race to collect the most government subsidies.
As a result, after that first transcontinental railroad was built, subsequently called the Union Pacific, it had enormously high operating costs. Because extra long routes had been built on purpose, because time had not been taken to locate and build over routes containing the lowest grades of hills, it took an extra long time for each train to complete its journey. Thus, more fuel had to be burned, more wages had to be paid, and more equipment was tied up. In addition, because the railroad track had been laid so hastily, thousands of miles of shoddy track had to be pulled up and re-laid before the first train could even be run over it. Right from the start the Union Pacific could not make a profit. The federal government had to continue doling out subsidies to the Union Pacific just to enable it to operate after the line had been completed.
Soon after the Union Pacific had been financed by the federal government, other political entrepreneurs ganged up with local politicians to demand that the federal government finance transcontinental railroads in their area of the country. Thus, the federal government next financed a transcontinental railroad in the North, the Northern Pacific, and a transcontinental railroad in the South, the Santa Fe. The building of those two government-financed railroads followed the same course as the building of the Union Pacific. The lines were poorly constructed. Builders had focussed on obtaining maximum government subsidies, not on achieving quality and economy. After the Northern Pacific and Santa Fe transcontinental railroads had been completed, they too had unnecessarily high operating costs. Both lost money right from the start. Both had to continue receiving government subsidies just to operate.
A parasitical-elite class consisting of white-collar-hoax political entrepreneurs, job-justifying politicians, and government-salaried university professors has propagandized to this very day that only the federal government could have financed the building of America's first transcontinental railroads. The story of James J. Hill is ignored.
James J. Hill was a market entrepreneur. He was an integrated-thinking, forward-essence mover. (See Eric Savage's book Global Wealth Power! to learn how to apply integrated thinking and forward-essence movement to get rich.) Hill was born in a log cabin to a working class family in Ontario, Canada. Hill got a job with a railroad when he was a teenager. He loved railroads and integrated his life with them. Hill moved up quickly. He soon became involved in the building of local railroads. In 1880, Hill decided to build a transcontinental railroad privately, without any government subsidies. He would call his line the Great Northern.
Hill's plan to build a transcontinental railroad across the northern border of America was labelled "Hill's folly." Why? First of all, Hill was building a railroad way up north in unsettled wilderness. Where would his business come from? Secondly, Hill would have to compete with three transcontinental railroads to the south: the Northern Pacific, the Union Pacific, and the Santa Fe. All three of those railroads had been financed by the federal government. How could a private railroad compete with three other railroads that had their expenses paid for by the government?
But, James J. Hill was forced to meet the disciplines of a bottom line. He had to stay within red-to-black business dynamics. Instead of "rushing into the wilderness to collect government subsidies," as had happened with the construction of the three government-subsidized transcontinentals, Hill built his railroad westward into the northern wilderness one extension at a time. Hill would build an extension westward a few hundred miles, then move in farmers from the East free of charge in order to settle the land along his railroad. Those farmers would then start using Hill's railroad to ship their produce back East to market. Because Hill received no government money, each extension constructed westward would have to build up red-to-black business before another westward extension could be built. Within ten years Hill completed his transcontinental railroad, the Great Northern, without receiving one cent of government money.
Hill exerted detailed planning before building each westward extension. He personally mapped out and built along the shortest, most direct routes. Hill also carefully surveyed land to find routes that would contain the lowest grades of hills over which to build. Thus, Hill's Great Northern was able to run with minimum operating costs once it was completed. And, with Hill spending hard-earned private money, the highest standards of workmanship and materials were insisted upon.
It is easy to see why people initially labelled Hill's undertaking as folly. The three government-financed transcontinental railroads south of Hill's Great Northern were in the heart of the country, and none of them could earn a profit. All three government-financed transcontinentals had been forced into bankruptcy and required government bail-out money to continue running. Yet, what actually happened once Hill's privately-financed railroad reached the Pacific? That railroad flourished from its very start. The Great Northern produced a profit, even during recession years. In complete contrast, the three government-financed trans-continental railroads had such high operating costs and poor quality workmanship that they could not compete with Hill's Great Northern line.
Because the federal government had to continue subsidizing the money-losing, government-financed transcontinentals, each of those railroads had to obtain government approval to build any new extensions. On the other hand, once James J. Hill's transcontinental railroad was running, he built up business with extensions called feeder lines. For example, if coal was discovered a hundred miles to the north of Hill's line, he built a feeder line to service that mine. If good trees were available for lumber on a nearby mountain, Hill would build a feeder line to that mountain so that a lumber company could move in and use Hill's railroad to ship its lumber to market. If a suitable valley for cattle-ranching existed a few miles to the south, Hill would build a feeder line to service that valley. Railroads discovered that feeder lines were crucial to their profitability. But, whenever one of the government-subsidized transcontinental railroads wanted to build a feeder line, it had to get Congress' approval since Congress was providing the financing.
Well, everyone knows what happens when politicians run things. A simple business decision can get hung up for months, even years, before receiving approval. Thus, the government-subsidized railroads could not operate effectively. They could not compete with Hill's Great Northern railroad. What had initially been labelled "Hill's folly" by the establishment ran circles around the government-subsidized, white-collar-hoax managed railroads. (See Mark Hamilton's book Neo-Tech Business Control for examples of how the white-collar hoax has penetrated large segments of American industry today.)
Over time, the corruption that was inherent in the government-financed transcontinental railroads began unraveling. Unlike James J. Hill's privately-financed transcontinental railroad, the government-financed trans-continental railroads were not operating by the disciplines of a bottom line. Thus, white-collar-hoax political entrepreneurs did not exert the discipline required to closely supervise the construction of their railroads for quality and efficiency. The survival of those political entrepreneurs did not depend upon that. Their survival, instead, depended upon exerting political pull. Consequently, the government-financed railroads were left wide open to fraud. Managers often formed their own supply companies in order to sell substandard materials at inflated costs to the very railroads they worked for. Payoffs and sellouts were rampant.
As those fraudulent practices began surfacing the public got fed up with that situation. Thus, glory-seeking politicians in Washington once again rushed in to grab attention. A new deception was woven. Congressmen now claimed that they were going to be the defenders of the American people by exposing the corruption in the government-subsidized transcontinental railroads. Glory-seeking Congressmen began conducting investigations into the nation's railroad business. In reality, those glory-seeking politicians were the root cause of that corruption.
Meanwhile, consider what James J. Hill, the market entrepreneur, was accomplishing. After completing his profitable transcontinental railroad, Hill continued his integrated thinking and forward-essence movement. Hill promoted entire new industries in the Northwest, such as lumber companies in Oregon, apple farms in Washington, mining industries in Montana, cattle ranches in the plains. Hill would help a business move to the Northwest and then give that business special rates to ship its products back East until it became established. That policy quickly built up business along Hill's railroad.
Next, Hill began thinking about business beyond America. Hill started exploring opportunities in the Orient. Hill calculated that if the Chinese of a single major province substituted one ounce of rice a day in their diets for American wheat this could result in 50,000,000 bushels or more of wheat a year being sold and transported to China. Hill began doing wide-scope integrated thinking. He began moving beyond the boundaries of a restricted, single-nation mode and into a worldwide, heliocentric-like mode. (See Global Wealth Power! for techniques on how to break out into a worldwide business mode.)
James J. Hill decided that he was going to promote American trade in Asia, just as he had promoted trade in the Northwest. So, Hill bought cargo ships and formed his own steamship company to ship American goods to China and Japan. He then sent agents abroad to promote American goods to Asians.
While the white-collar-hoax political entrepreneurs were trying to figure out how to get more subsidies from the federal government, James J. Hill was turning his attention toward world business. Hill was figuring out how to deliver increasing values to the world. He realized that the key to tapping the vast markets of Asia was to build up trade by offering to ship American products for free on his railroad and steamships until trade could become established. Hill began racing his steamships back and forth between Japan, China, and America.
James J. Hill was a real forward-essence mover. Hill offered a group of Japanese industrialists low-cost American cotton in place of the cotton that the Japanese traditionally imported from India. If the Japanese did not like the American cotton, Hill offered to let them keep it free of charge. This worked. Soon Hill's boxcars were filled with cotton bales heading to Japan. Utilizing this same technique, Hill got both the Japanese and the Chinese to start buying American textiles from New England.
In 1896 American exports to Japan totalled 7.7 million dollars a year. Nine years later James J. Hill had pushed that figure to 51.7 million dollars a year. Hill was spearheading an American dominance of Asian trade -- nearly one-hundred years ago!
James J. Hill diligently promoted American goods in Asia. For example, starting around 1900, Japan began a railroad building boom. England and Belgium were the traditional suppliers of rail. American rail-makers were still fledgling in the Pittsburgh area. Hill recognized the importance of the Asian market for steel and rails. So, Hill personally underbid the Europeans to capture Japanese orders for American rail-makers.
Hill also promoted in Asia lumber from the Northwest, wheat from the Midwest, copper from Montana, apples from Washington, and so on. While the white-collar-hoax political entrepreneurs of the government-subsidized railroads were being closed in upon, Hill was blossoming into an international dynamo.
So what happened next? Attention-seeking politicians began parading the corrupt political entrepreneurs infesting government-subsidized railroads before the public through Senate investigation hearings. Yet, it was Congress that created that corruption in the first place by self-righteously giving away money it controlled but did not earn. Instead of identifying and eliminating that root cause, Congress began clamoring for strict regulation of the railroad industry. Thus, Congress could now come in with a strong-arm approach and proclaim to the public how they were earning their jobs by protecting the American public from greedy and corrupt railroad executives.
Congress proposed creating the Interstate Commerce Commission to regulate and control the railroads and the Sherman Antitrust Act designed to threaten and punish the railroad industry. Well, James J. Hill realized what was occurring. He travelled to Washington to testify before Congress. Hill meticulously explained what had happened with the government-subsidized railroads versus his privately-financed railroad and how the solution was for the government to get out of the railroad business altogether.
But Hill was ignored. Politicians and bureaucrats could not increase their power nor garner self-glory if they admitted that the root of the railroad problem was caused by the government getting into the railroad business in the first place -- a place the government never belonged.
Congress ignored James J. Hill and went ahead to create the Interstate Commerce Commission (ICC) and pass the Sherman Antitrust Act that heavily regulated and punished the railroad industry. Thus, the techniques Hill had used to build up trade in the Northwest and was now using to build up American trade to Asia became illegal. The ICC and antitrust laws forbid giving any special deals to customers. As a direct result of that legislation, James J. Hill had to give up pursuing the Asian market altogether. One year after Congress created the Interstate Commerce Commission and passed the Sherman Antitrust Act, Hill sold his steamship line. Hill's foresighted, integrated methods could no longer work. America's trade to Japan and China dropped forty percent within two years.
What happened in Congress was not a case of ignorance. James J. Hill actually set up residence in Washington and lobbied Congress and its investigative committees intensively. Hill made sure those Congressmen knew what had really happened in the railroad industry and why. Hill even wrote a book about the situation and published that book himself. Still, Hill's arguments were ignored. Congress could garner more support and more money by attacking and regulating the railroad industry than by admitting that they were the root cause of that railroad corruption.
What are the implications of that event that occurred nearly one-hundred years ago? Today, America's great economic weakness is foreign trade -- particularly trade with Asia. The President makes speeches about and creates commissions to study this problem. The heads of America's Corporate 500 companies, top economists, professors, even management gurus issue grave warnings about America's waning international competitiveness and its trade imbalance with Asia. Everyone then points to certain mistakes made along the way since World War II -- management laziness, excessive union demands, burdensome government regulations, and so on.
But, how many people today have the slightest idea about what was happening one hundred years ago with James J. Hill? How many people today know what was started by a single integrated thinking, forward-essence mover? How many people today know that James J. Hill was spearheading an American dominance of trade in Asia nearly one hundred years ago!
All of that incredible forward-essence movement was cut off in the bud because a handful of politicians, seeking to advance their own careers, stopped James J. Hill and his push into Asia through malicious regulation of the railroads and interstate commerce. Hill's master plan was destroyed by a handful of pip-squeaks and clowns in Congress. And those Congressmen knew what they were doing. Hill diligently informed them of the real situation, what he had done with his privately-financed railroad, whose fault it was for the corruption that occurred within the government-financed railroads, and what his railroad was doing for America's international trade by its freedom to act independently and nurture new business. Yet, those smart, college-educated Congressmen proceeded to pass their self-serving laws in order to protect and enhance their own bogus-job empires.
Let's examine this situation even closer. Just what was smashed in the bud by the parasitical-elite class in Washington?
James J. Hill was not only spearheading an American dominance of trade in Asia a hundred years ago; Hill was spearheading the industrialization of Asia. Hill was pushing American business into Asia, causing railroads to be built, causing factories to be built, causing new businesses to be created. Hill nurtured American business in Asia, and that business was beginning to follow its natural course of flooding in and dominating trade. That, in turn, would have led to a rapid industrialization of Asia.
What are the implications of that? Consider the spread of communism in Asia. Communism cannot take over an affluent, industrialized nation. Communism only takes over poor, nonindustrialized nations.
James J. Hill's spearheading of American trade with Asia was sparking industrialization in Asia one hundred years ago. But, because Hill was cut off by Congress, that expansion was halted. Thus, forty-five years later, China, the largest Asian country, was still a poor, nonindustrialized, peasant country.
So what happened? Communism swept through China and killed 30 million people! Communism spread into Korea and Vietnam. One hundred and ten thousand Americans died attempting to stop that spread. Why? Because a hundred years ago a few pip-squeaks and clowns in Congress, trying to fake their own importance, cut off something magnificent in the bud. They smashed down an integrated thinker who was sparking the industrialization of China. Through the efforts of one integrated-thinking, forward-essence mover, the deaths of 30 million Chinese and one hundred and ten thousand Americans could have been prevented.
The full tragedy will never be known. For instance, imagine the business dynamics that were cut off. Today, nearly a hundred years later, China is a nation of one billion people -- a quarter of the world's population. Yet, until recently, China contributed almost nothing to the advancement of the world economy, technology, industry, science. The Chinese have been completely stagnated and smashed down by communism.
If James J. Hill had been left free to continue spearheading an industrialization of China a hundred years ago, the world would be far different today. What kind of creative energies would have been released if China had industrialized a hundred years ago?
A sense of what could have been can be obtained by examining the "little dragon" countries of Asia today. They are the small countries around China that did not get swept away by communism -- South Korea, Taiwan, Singapore, Hong Kong. Those little, fragmented countries have races and cultures similar to China. But, those countries managed to escape communism. They industrialized after World War II, and they have made major contributions to the world economy, to industry, to technology, to science. Yet, those tiny countries contain just a few million people. China contains one billion people! China dwarfs those "little dragon" countries in every aspect.
Consider Japan. Japan also has a culture and history similar to the Chinese. Japan escaped communism, industrialized, and then boomed after World War II. Japan is a world leader today. Japan makes mighty contributions to the world economy, to industry, to technology, to science, to art, to culture. Yet, Japan is dwarfed by China. China is seven times larger than Japan. Just imagine the potential of China if it had industrialized one hundred years ago.
What if James J. Hill had not been smashed down? What if James J. Hill had sparked an industrialization of China -- a country of one billion people? Where would civilization be today? Would we have cures for cancer, heart disease, AIDS? Would we be building cities in the oceans and on the moon? The contributions that the Chinese could have made to science, to technology, to the world economy are mind-boggling. But no. All of that potential was smashed down. All because a handful of pip-squeaks and clowns in Congress one hundred years ago wanted to exercise power!
A hundred years ago one man learned how to integrate. He started moving up. He learned how business worked; he learned how the American economy worked. Then, he learned how the world economy worked. He began learning how the whole up-rising of civilization worked. One man, a hundred years ago, learned how to integrate. He began pushing the lid up on society. If that man had been left alone, if he had not been cut off, he would have swung open that lid, China would have industrialized, all of Asia would have industrialized, the whole world would have risen up, and America would have been sitting on the top of it all.
A jack-in-the-box like springing up of value creation would have occurred, and that would have taken everyone up with it! It would have cured all the major problems of today. Good-bye to thousands of Americans losing their jobs, good-bye to poverty, good-bye to communism in Asia, good-bye to the Korean war, good-bye to the Vietnam war, good-bye to starving people in the third world! Everyone would have been pushed up. And it all would have started because one man learned how to integrate a hundred years ago.
But what happened instead? James J. Hill was smashed down. The parasitical-elite class consisting of politicians, bureaucrats, and political entrepreneurs will eventually smash down whatever threatens their nonproductive livelihoods. As Mark Hamilton, author of Neo-Tech Business Control, stated, "We, the productive working class, are being used and used up!"
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