Economic Colonialism
Since territorial days, North Dakota struggled against the corruption of boss-controlled government and exploitation by the economic triumvirate of the railroads, the moneylenders, and the grain trade.
By the turn of the century, North Dakota's economy was controlled by a cartel of Minnesota grain brokers, bankers, and railroads. The state's financial future was based on a single industry – agriculture – and a single crop – wheat. Despite repeated efforts by some state leaders to break free, the cartel's control of shipping, marketing and financing kept the state in the unenviable position of being little more than a Minnesota colony.
To encourage the building of railroads in Dakota Territory, the U.S. government had granted one out of every four sections of land to the railroads. By the mid 1800s, railroads held title to 24% of all lands in the Territory. They built an extensive railroad network across the state and began a massive advertising campaign to entice homesteaders to settle in the region. This was not a charitable enterprise. The railroads needed to build traffic with passengers and freight shipments to recoup the cost of construction and provide an ongoing source of income. They needed to turn a profit. They needed farmers and they needed farmers shipping their products out of state.
As farmers flooded into the newly settled Red River Valley, the large Minneapolis grain millers formed an association to eliminate competition among themselves for Dakota grown wheat. The association owned the elevators that bought wheat from North Dakota farmers keeping the prices far lower than the rest of the country. The railroads were allied with the Minneapolis grain millers as well, setting freight prices high but giving rebates to association members to drive independent brokers out of business.
Photographs from the collection of Institute of Regional Studies, North Dakota State University