Railroads & Clearcuts
More detailed profiles:
Plum Creek Timber
Sierra Pacific Industries
Millions of acres of the 19th-century railroad land grants were not sold to settlers as the U.S. Congress intended. More than a century later, this land is controlled by dozens of corporations -- and some of the largest holdings of coal, oil and gas, gold, and real estate in the country are based on these illegal transfers of public land grants. Click here to see a history of the railroad land grants.
What follows is a preliminary list showing the scope and diversity of the unintended empires which have been carved from the railroad land grants. More entries will be added, and links to more detailed corporate profiles are coming.
BlixsethTim Blixseth is another in a long line of profiteers from the Northern Pacific land grant. Click here for tales about his land swaps and resorts for millionaires.
Boise Cascade. Boise Cascade has its origins in the Weyerhaeuser empire. Click here for a detailed profile of Boise Cascade, and click here for a description of Boise Cascade's mill closures and overseas ventures.
Burlington Northern Railroadwas created in 1970 from the merger of the Northern Pacific, the Great Northern, and the Chicago Burlington & Quincy Railroads. In 1904, the U.S. Supreme Court had outlawed this merger of J.P. Morgan and Jim Hill, in a famous anti-trust case called Northern Securities. The BN still controlled millions of acres of 19th century land grants, chock full of coal, oil, and timber. When J.P. Morgan's mortgage bonds were paid off in 1988, the land was spun off as Burlington Resources. Burlington Northern acquired Santa Fe Railroad in 1996. Headquartered in Ft. Worth, Texas.
Burlington Resourceswas the 1988 spin-off of land grant resources from the Burlington Northern Railroad. The railroad transferred 1.8 million acres of timber, oil, natural gas, and coal in Minnesota, North Dakota, Montana, Wyoming, Idaho, Washington, and Oregon to BR. BR's subsidiaries and spin-offs have included Glacier Park Real Estate, Meridian Minerals, Meridian Oil, El Paso Natural Gas, and Plum Creek Timber, Burlington Environmental, Chempro, ECOS, New Mexico & Arizona Land Company, and Southland Royalty. As the railroad CEO Gerald Grinstein told Forbes magazine after the spin-off, "the standing joke was that they [Burlington Resources] got the gold and we [the railroad] got the shaft." Hundreds of thousands of acres of prime industrial and commercial real estate were to Trillium and other corporations. A joint venture to develop Meridian Mineral's Bull Mountains coal reserves in Montana was set up between Arch Mineral (Ashland Oil and Hunt Industries), Sumitomo, Mitsui and Meridian. More coal in Montana, North Dakota, and Washington was sold to Great Northern Properties LP, including reserves committed to Western Energy's Rosebud mine and Peabody's Big Sky mine. BR merged with Louisiana Land & Exploration in 1997, acquired several Canadian companies, produces natural gas in Argentina, Ecuador, and elsewhere in South America, the East Irish Sea, Algeria, and offshore China. Headquartered in Houston Texas.
"Since its acquisition of Burlington Resources in 2006, ConocoPhillips has been an increasingly significant player in efforts to develop oil and gas resources in the Amazon Basin. ConocoPhillips currently holds exploration and drilling rights to five concessions covering over 10.5 million acres of tropical rainforests in Peru, a larger territory than that occupied by any other U.S. oil company in the Amazon Basin. ConocoPhillip’s holdings in Peru comprise what could be considered a "mega-concession" of five interconnected blocks stretching from the Peru-Ecuador border, southeasterly into the Loreto region...
Canyon Resources Corporationholds the mineral rights to 900,000 acres of Northern Pacific Railroad grant land in western Montana. The surface rights of nearly three-quarters of that land is owned by Plum Creek Timber, with the rest scattered among the US Forest Service, Montana state, and private owners. In 1907, Northern Pacific Railroad sold 967,309 acres to Amalgamated (Anaconda) Copper for 50 cents per acre and 50 cents per thousand board feet of timber. In the 1970s, Atlantic Richfield Company (ARCO) bought Anaconda. ARCO kept the oil and gas rights, but sold the surface rights (the timber) to 670,000 acres to Champion International. In 1984, ARCO sold the mineral rights to Western Energy Company, the mineral arm of Montana Power Company. Western Energy sold to Addwest Minerals, predecessor to Canyon Resources, which completed the purchase of the mineral rights (sans the oil and gas) in 1992. In 1993, Champion sold its Montana timber operations to Plum Creek Timber (which had been spun off from Burlington Northern Railroad, Northern Pacific's successor, in 1988-89). Canyon Resources has tried to sell the mineral rights to Montana State and to Plum Creek, the surface owner, but they declined. In 2002, Canyon Resources threatened to sell the mineral rights at public auction unless the property owners bought them out first. For a profile of Canyon Resources and more coverage of the mineral rights controversy, click here.
Catellusis a real estate spin-off of the combined land grants of the Atchison Topeka & Santa Fe Railroad and the Southern Pacific Railroad. Click here for a detailed profile of Catellus. The Catellus saga is a fine example of the convoluted deals that have emerged from the 19th-century railroad land grant subsidy. Here is a simplified version. The 1983 merger of the Santa Fe and the Southern Pacific was broken by the U.S. government in 1987, but lots of real estate had been rearranged by then. In 1989, Santa Fe sold 20 percent of its Santa Fe Realty to a partnership made up of JMB Realty and the California Public Employees Retirement System. In 1990, as Catellus was spun off to Santa Fe shareholders, it owned two million acres of land in 13 states. The Reichmann family's Canadian and U.S. real estate and natural resource conglomerate Olympia & York, which owned 20 percent of Santa Fe, went bankrupt. Some of the Catellus land was sold. By the end of 1996, the largest single shareholder was the California Public Employees' Retirement System (CALPERS), with 42 percent of the common stock. The Catellus portfolio included 837,000 acres of land, 16 million square feet of income-producing office properties, 5,300 acres of land leases, and interests in various joint ventures, mostly located in California (Anaheim, City of Industry, Emeryville and Oakland East Baybridge Center, Fremont, La Mirada, Ontario, Rancho Cucamonga, Richmond, San Francisco Mission Bay, San Jose South Bay Center, and Santa Fe Springs), with the balance concentrated in Oklahoma, Dallas, Phoenix, and Chicago. Catellus is one of the many land grant-based corporations which continues to benefit from public subsidy -- in this case by arranging a deal to sell 430,000 acres of its 790,000 acres of desert land back to the federal government (for $36 million) and the Wildlands Conservancy (for $16 million). The deal would include 86,000 acres within the Mojave National Preserve and 40,000 acres within Joshua Tree National Park. The Conservancy had already paid Catellus $3.2 million for 25,000 acres in Joshua Tree, and in 1998, with Catellus threatening to sell land it owned inside the Mojave Preserve, the next deal was pursued. As Conservancy head David Myers boasted (no doubt with Catellus approval) to the LA Times (Dec. 2, 1998), "we're going to get the government support we need. We're good at this." In January 2000, 225,000 acres of the deal were transferred to the U.S. BLM. Catellus is headquartered in San Francisco.
In May 2000, it was announced that Catellus would receive another $20 million for another 180,605 acres in the Mojave Desert. About $15 million was from private donations from the Wildlands Conservancy and $5 million were federal funds. The acquisition completes the largest purchase of private land in California history and the largest acquisition from one seller by the BLM. Vice President Al Gore said, "These stunning California desert lands are being preserved for future generations through a true public-private team effort that could serve as a model in other areas." Altogether, the Wildlands Conservancy and federal government have spent $45 million to acquire 405,000 acres from Catellus Development. U.S. Representative Jerry Lewis (R-CA), whose district includes much of the land, has sought to tie the purchase to expansion of the Ft. Irwin Army base, a move environmentalists say could damage desert tortoise habitat (Greenwire, May 19, 2000, citing AP/San Jose Mercury News, May 19, White House release, May 18, and Richard Simon, Los Angeles Times, May 19).
"Catellus Development Corp., one of California's largest private landowners thanks to a lineage that dates to the earliest days of railroads in the West, has agreed to be sold for $3.6 billion in cash and stock to warehouse and distribution giant ProLogis.
... [T]he company's roots and gigantic land holdings date to the 1850s, when civil engineer Theodore D. Judah built a 23-mile line called the Sacramento Valley Railroad. It later became the Central Pacific Railroad, the first to conquer the Sierra Nevada. In 1869, the line linked up with the Union Pacific, coming from the East, with the driving of the famed golden spike at Promontory Point, Utah.
As part of its mandate for a transcontinental railway, the federal government gave the railroad builders vast tracts of land as an incentive to complete the historic rail linkage.
Later, with its name changed again, this time to Southern Pacific, the railroad heavily promoted its territory in the West to attract residents and businesses and became one of the most powerful players on the economic scene in 19th century California.
Land once held by such legendary railroad barons as Leland Stanford, Charles Crocker, Mark Hopkins and Collis P. Huntington became the foundation of the Catellus empire...
Those land holdings grew with the 1983 merger of Southern Pacific and rival Santa Fe, which had long battled SP for control of rail transportation in the West. The combined companies formed [Catellus,] a separate real estate division in 1984...
Santa Fe Pacific Corp. spun off Catellus to shareholders in 1990. (Catellus to Be Bought by ProLogis. By Roger Vincent, Los Angeles Times, June 7, 2005).
Glacier Park Real Estate. In 1910, Glacier National Park was created with the assistance of the Great Northern Railroad's head James J. Hill. The railroad's Glacier Park subsidiary built the park's hotels and ran the park concession until 1961. As part of the Great Northern Railroad, Glacier Park was merged into Burlington Northern Railroad, and then spun off as part of Burlington Resources in 1988. At that time, Glacier Park Real Estate controlled 925,000 acres in 23 states, Alberta, and British Columbia, much of it agricultural land leased for grazing and crops, but also prime commercial and industrial real estate along more than 20,000 of miles of Burlington Northern Railroad tracks. Much of this real estate was sold in the early 1990s, to developers such as Trillium Corporation.
Great Northern Properties LP. Houston-based Great Northern Properties LP is a privately owned land management company with its lands and minerals largely concentrated in Montana and North Dakota. Formed in 1991 by the Robertson family and American Bailey Mining Limited Partnership to acquire these lands from Burlington Northern Railroad. With about 20 billion tons, GNP is the largest private owner of coal reserves in the United States.
In 2009, Arch Coal and Great Northern Properties announced a coal lease comprising all of GNP's coal resources in the Otter Creek Tracts located in southeastern Montana. The coal lease will give Arch the right to mine 731 million tons of coal on 9,600 acres. Montana state owns 600 million tons of coal spread over 9,500 acres in Otter Creek Valley. The corporate and state coal is intermingled in square-mile railroad land grant checkerboards.
Nevada Land and Resource Company LLC"owns in excess of 1.3 million acres making it the largest private landowner in Nevada. The land was acquired from the Atchison, Topeka and Santa Fe Railway Company in 1995, successors to the old Central Pacific-Southern Pacific Railway. The Central Pacific and Southern Pacific Railroad Companies were the original recipient of 24 million acres of land from the U.S. government under the Railroad Land Grant Act of Congress of 1862... Over the years the Central Pacific and Southern Pacific railroad companies developed, traded and sold off millions of acres. Today, the current railroad company operating in the original railroad right-of-way is Union Pacific Railroad Company which still owns original grant lands in the western U.S."
Plum Creek Timberis a quaint name for the Northern Pacific Railroad timberlands which weren't sold to Weyerhaeuser. They were spun off from Burlington Northern Railroad as part of Burlington Resources, and then spun off again as an independent corporation in 1989. As a limited partnership type of corporation which derives more than 90 percent of its revenues from natural resource extraction, Plum Creek pays no corporate income tax. The plan to convert to a Real Estate Investment Trust (REIT) to attract more capital would not change the tax-free status. Since 1989, Plum Creek has been busily liquidating its old growth forest holdings in Montana (1,600,000 acres), Idaho (100,000 acres, sold in 1993), and Washington State (300,000 acres). Plum Creek has taken its ill-gotten profits and acquired land in Louisiana and Texas (538,000 acres) and Maine (900,000 acres). Headquartered in Seattle. Click here for more information on Plum Creek.
Potlatch. See Weyerhaeuser.
Santa Fe RailroadThe Atchison, Topeka & Santa Fe Railway's 2,929,348 acre public land grant was parlayed into a 14,000,000 acre holding by the 1970s. The empire included 1.3 million acres desert lands in Nevada and Utah, managed by subsidiary Catellus (by the time Catellus was spun off in the early 1990s, Catellus had more than two million acres in 13 states). Santa Fe owned or controlled another 7,600,000 acres in Arizona, California, Colorado, Kansas, New Mexico, Oklahoma, and Utah. There were the Lone Tree and Rabbit Creek gold mines near Winnemucca Nevada, stone quarries in five states, 700 million tons of gold, and 250 million barrels of oil and natural gas. And mineral concessions in Paraguay. Santa Fe Energy Resources was spun off in 1990. Santa Fe Pacific Pipeline Partners runs 3,300 miles of pipeline and 14 truck terminals serving the Southwestern U.S. Santa Fe's 1983 merger with Southern Pacific was broken by the U.S. ICC in 1987, but in 1995, the merger of Burlington Northern and Santa Fe Pacific Railroads was approved.
Sierra Pacific Industriesis a the largest privately-held timberland owner in the country, with more than a million acres of timberland in California. About half of this was purchased from the Santa Fe Southern Pacific Railroad in 1987. SPI's Emmerson family has used its wealth and power to set itself up as the main beneficiary of the 1998 Quincy Library legislation, which will increase timber cutting in the Lassen, Plumas, and Tahoe National Forests. As the largest contractor on the national forests in California, SPI is also one of the largest beneficiaries of the U.S. Forest Service's road construction subsidies. Headquartered in Anderson, California. Click here for a profile of Sierra Pacific Industries. Click here for a map of SPI's land ownership.
Southern Pacific Railroadcoming soon
St Joe Companyas of 2005 owned 850,000 acres of land (two percent of Florida) concentrated primarily in Northwest Florida, with 346,000 acres within ten miles of the coast of the Gulf of Mexico. The company is controlled by the Alfred I. duPont Testamentary Trust, whose assets included shares of duPont, seven Florida national banks, and thousands of acres of land in Northwest Florida. In 1938 the duPont Trustees created the St. Joe Paper Company, which continued to acquire land in Northwest Florida and corrugated box plants from New Jersey to Texas to Ireland. In 1960 the Florida East Coast Railway Company founded by Henry Flagler was acquired. In 1972 St. Joe Paper acquired the Talisman Sugar Company. In 1997 Walt Disney executive Peter Rummell was hired to transform St. Joe and its million acres of Florida land into a real estate enterprise. St. Joe Towns & Resort develops residential and leisure properties. St. Joe Land Company markets parcels up to 5,000 acres in northwest Florida and southwest Georgia for home sites, farmsteads, ranches, weekend getaways, hunting and fishing camps and other recreational uses. RiverCamps are planned settlements in rustic settings. St. Joe Commercial has developed nearly four million square feet of retail, office and commercial space. St. Joe Timberland Company manages and cuts timber and sell tracts.
Union Pacific Railroadcoming soon
Weyerhaeuser(Frederick) was railroad empire builder Jim Hill's next door neighbor in St. Paul. They served on each other boards, and cut many a legal and illegal deal. Weyerhaeuser began his career by deforesting the upper Mississippi River pine forests of Wisconsin and Minnesota, buying up or destroying its competitors along the way (we've traced more than 200 subsidiary corporations, many of them abandoned after the trees are cut). Weyerhaeuser timber holdings are based on huge purchases from Hill's Northern Pacific Railroad land grant, including 300,000 acres in Wisconsin and Minnesota, 1,500,000 acres in Washington, and 500,000 acres in Oregon (cut and then sold in the 1990s). In the early 1900s, Weyerhaeuser incorporated Boise (Payette) Cascade to take Northern Pacific grant lands in central Idaho, and created Potlatch to exploit the pines in northern Idaho and Minnesota. Weyerhaeuser has used its profits to diversify into Asia (2,000,000 acres clearcut in the Philippines and Indonesia), Australia, New Zealand, Uruguay, and elsewhere. Headquartered in Federal Way, Washington. Click here for more information on Weyerhaeuser.
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