Chapter 1
The Northern Pacific Railroad and Crash of 1873

The bonanza farm story begins with the creation of the Northern Pacific Railroad in 1864. It was charted to build a rail line from the Great Lakes to Puget Sound, and was granted by the government a huge swath of land between the two points. The land grant was in checkerboard pattern: every other mile extending for twenty miles on either side of the track. With this land the railroad hoped to create an economic base to support the railway by selling land parcels to farmers and land developers.

Groundbreaking for the line commenced near the Lake Superior port of Duluth in 1870. To generate money for the construction, the banking house of Jay Cooke and Company was hired to sell Northern Pacific bonds. Jay Cooke became closely involved with the promotion of the rail line and the land in which it traveled through. His name became so attached to the region that many started referring to it as "Cooke's Banana Belt".

Unfortunately for Cooke and the railroad, the Northern Pacific was spending more money than Cooke could raise, and in 1873 construction came to a halt on the banks of the Missouri River in Dakota Territory, well short of its transcontinental goal. Cooke and Company closed its doors, setting off the Panic of '73. The nation plunged into a depression which would last the next 5 years.