er boats were frozen up in the winter
and the service on the St. Paul and Pacific, under the receiver, was
impossible. So Smith listened with favor to Hill's project of getting
hold of the St. Paul and Pacific and making a real railroad out of it.
And whenever Smith went to Montreal he talked the matter over with his
cousin George Stephen--later Lord Mount Stephen--who was the head of
the Bank of Montreal. In 1877 Stephen and Richard B. Angus, the general
manager of the Bank, went to Chicago on business. While there, they had
two weeks' time on their hands, and tossed a penny to decide whether
to run down to St. Louis or up to St. Paul. The penny sent them to St.
Paul. "I am glad of that," said Stephen; "it will give us a chance
to see the prairies and look over that St. Paul and Pacific road that
Donald Smith is always talking about."

When they arrived in St. Paul, James J. Hill took them over the line
to Breckenridge. The country had been scoured by the grasshoppers and
looked like the top of an old rusty stove. But Stephen was a broadminded
man, wise enough to know that the pest of grasshoppers could not last
forever. He was greatly impressed with the ultimate possibilities of the
soil and, under the hypnotic influence of Hill's eloquence, became quite
enthusiastic over the scheme for getting hold of the railroad; but, as
it would evidently involve millions, he didn't see how it could be done.

The road had originally been financed by bonds sold largely in Holland,
and to do anything at all it was necessary to get in touch with these
Dutch bondholders. In 1877 Stephen went over to Amsterdam and secured an
option on the bonds at thirty cents on the dollar--less than the accrued
interest which was due and unpaid on them. He then came back to America,
conferred with John S. Kennedy at New York, who represented both Dutch
and American bondholders, and brought Kennedy into the combination.

In the spring of 1878 the St. Paul and Pacific was taken over. People
still smiled at Hill and wondered how he had induced a hard-headed bank
president like Stephen to put up the money. Nobody in St. Paul believed
in the future of the road. Even the syndicate's attorneys, when offered
a choice between taking $25,000 in cash or $500,000 of the new road's
stock for their services, preferred the cash. Had they taken the stock
and held it for thirty years, they would have had, in principal and
interest, some $30,000,000.

To the surpri