Trunk Line Railroad Development in Oregon, 1860-1887

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TRUNK LBffi RAILROAD DEVELOPMENT IN OREGON, 1860-1887

by Lee Carrol Johnson

A dissertation submitted In partial fulfillment of the requirements for the Degree of Doctor of I hilosophy in the Department of History In the Graduate College of the State University of Iowa February, 1950

ProQuest Number: 10902174

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uest ProQuest 10902174 Published by ProQuest LLC(2018). C opyright of the Dissertation is held by the Author. All rights reserved. This work is protected against unauthorized copying under Title 17, United States C o d e M icroform Edition © ProQuest LLC. ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 4 8 1 0 6 - 1346

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A CKMOViXEDGilEKTS

It is Impossible to express ray indebtedness to all who have in one way or another aided me in the preparation of this study.

Particular thanks are due

to Dr. H .J . Thornton of the State University of Iowa, whose constant interest and friendly and constructive criticism made its preparation an enjoyable task.

I

am very grateful to Mr* Frank B. Gill of Portland, Oregon* who allowed me full use of his collection of material on Oregon railroads, and to Dr. Dorothy B. Cook of Washington State College who read much of the manuscript and offered many valuable suggestions. Dr. Eoben J • Maaske, president of Eastern Oregon College of Education, has cooperated generously and assisted me in many ways.

For the greatest of

patience and constant encouragement in this work, my thanks are to be given to my wife, Clarice Johnson, % ^ and my sister, Annetta Johnson.

ill-

TABL3S OF CONTENTS Page acknowledgments..................

11

Introduction. . . . . . . . . . . . . . . . . .

vi

Chapter I

II

HI

The Historical and Geographic Background The Historical Aspect* . . . . . . The Geographical Aspect* ........ The Coast Range Province . . * The Willamette Valley Region • The Cascade Plateau Province * The Klamath Mountains Province The Southeastern Lake Province The Columbia-Deschutes Prov­ ince The Blue Mountain Province • . The Snake River Province . . * Oregon’s First R a i l r o a d s ............ Early Navigation . . . . . . . . . The First Railroad Constructed in the Oregon Country .......... The Oregon Portage Railroad and Oregon Steam Navigation Company The Dalles and Celilo Railroad . . Efforts to Break the Oregon Steam Navigation Company Monopoly* . . The Northern Pacific Interests . . Organization of Willamette Talley Lines i"rior to 1369 The Early Proposals. Four Early Companies . . . . . The California I m p e t u s .......... Simon Elliott’s Early Work • • The Entry of Joseph Gaston . . Elliott and Barry Surveys in Oregon .............. The Congressional Land Grant . • . The California and Oregon, and Oregon and California Com­ panies . . . . . . . . . . . .

1 1 5 7 9 11 ll 12 13 14 15 17 17 20 29 43 49 62 76 76 77 79 90 36 87 93 94

-iv

Page The Act of July 25, 1866 - . - • • • • The First Oregon Central RailroadThe Oregon Central, November 17, 1866 * ... . . . . . . . . . . . . The Cook Fiasco. . . . . . . . . Simon Elliott’s Interest. • * . . • The Third Oregon Central Railroad Company (April 22, 1867) » • • • The First Contraot with A. J. Cook Elliott’s Financial Difficulties * . * The A* J. Cook Company Created • • Elliott’s Eastern Mission. . . . . The Second Cook Agreement . . . . Joseph Gaston Moves Against Elliott. . . . . . . . . . . . . Public Opinion in Oregon . . . . . West Side Activities • « • • . • * . • IV

V

Construction in the Willamette Valley 1808-1869. .......... . Breaking Ground. . . . . . . . . . . • Construction and Finance, 1868 . . The Entry of Ben Holla day into Oregon* The Land Grant Problem . . . . . . . . Reversals of the Oregon Legis­ lature. . . . . . . . . . . . .. The Fight Before Congress. • • . • The West Side Decline. . . . . . . Holladay in Full Control • • • • . * • Elliott Removed* . . . . . . . . . The First Twenty Miles Completed . . . The Oregon and California Railroad . . . . The Dissolution of the Oregon Central Railroad Company (East Side) . . . . Organisation of the Oregon and Calif­ ornia Railroad Company . . . . . . . Construction and Operation on the Oregon and California, 1870. . . A H'3w Land Grant for the Oregon Central (West Side). . . . . . . . . Gaston’s Retirement. . . . . . . . Holladay in Full Control . . . . . . . The Willamette Valley Railroad Company Organized. . . . . . . .

95 98 100 106 111 114 118 122 124 125 129 131 133 134 149 149 153 167 173 174 179 182 185 187 194 202 202 206 209 211 215 220 220

-V -

Page Portland Under Pressure • . • • ♦ The Oregon Central (West Side) Revived » * * • * • • • • • • • Holladay’s Financial Moves, 1871-1872 Oregon Central (West Side) Construc­ tion and Operation 1871-1872* * * . Construction and Operation of the Oregon and California 1871-1872 * * Holladay in Difficulty. . . . . . . . VI

VII

Henry Vlllard in the Willamette Valley. . Villard versus Holladay . * . . . • . The Boston Immigration Bureau . . . . The Removal of Holladay . . . . . . . The Oregon Steamship Company. • . . . Vlllard’s West Side Construction* * * Hie nBliad Pool" and the Oregon and Transcontinental. . . . . . . . . . Villard’s East Side Construction. • . The Southern Pacific Entry. . . . . . The

Columbia River Route to the Bast. * . Hie Eudnutt Survey. . . . . . . . . . Hie Oregon Railway and Navigation Company, 1879 . . . . . . . . . . . Construction between Portland and Umatilla. . . . . . . . . . . . . . The Ce1ilo-Umati1la Section . . . Hie Portland-The Dalles Section • Construction from Umatilla to Huntington. » * . . . . . . . . . .

Appendix I. . . . * . * .

**

•»

. » • . . . . *

Appendix II • • « • • • .

. . . . . . . . . . .

Appendix XII. Bibliography. . . . . . . . . . . . . .

.

221 225 226 230 236 242 252 252 259 261 267 271 273 277 283 294 294 299 303 303 309 321 340 341 343

........

Maps• • • • • . * « * • • • • • « • • * . .

344

.Back Cover

IHTRGDtlCTXGH The nineteenth might m i l be described as the century of the railroad in American history.

Vftien this

new mode of transportation was introduced to the American scene in the late 18£0*c, it was looked upon by raany with skepticism and even scorn; a noisy experiment which flaunted the laws of nature and of God.

But, as with

ail things of real value, it proved its worth*

In a

remarkably short time the diminutive locomotives and ears were moving over thousands of miles of primitive track, reaching ever further into new areas, making the movement of goods and persons possible on a scale and with an ease never before imagined by man.

From the

cast to the west railroad construction progressed ever faster, no obstacle of nature in the form of rivers or mountains or deserts preventing its advancement.

Every

state in the union was soon to number its miles of rail­ road as an indication of its growth* As a scene of railroad development Oregon presented certain aspects which set it apart from other states, lying far to the west, beyond vast and desolate plains and lofty mountain ranges, it had contact with California,

-vii

the Mississippi Valley and the eastern states only by travel over the crudest of roads and trails or by the steam and sailing vessels which came up the Columbia from the Pacific,. Railroad connection with California and the east was a dream of the pioneers who first came into Oregon to make their homes, and a goal toward which many of them labored unceasingly. Hot until twenty years after railroad construction began in Oregon was the first of these connections made: with the east In 1882*

And by that time over 500 miles

of railroad were in operation within the state, and the trunk lines were well established* Within Oregon three wlast spike w ceremonies signal­ ized the completion of transcontinental lines*

Those were

the connections at Multnomah Falls in 1882 which joined Oregon with the east by way of the Northern Pacific; at Huntington in 1884, which permitted travel from Portland to the east by the Union Pacific lines; and at Ashland in 1887, which finally gave Oregon the long-desired junction with the California railroad system. Those who conceived and brought Oregon’s trunk line railroads to completion were men of varying qual­ ities and reputation. Visionaries, scoundrels, brave men, strong and weak men - all played a part. their story.

This is

1

Ghapter X THE HISTORICAL A HD GEOGRAPHIC BACKGROUND Tto*

flapeot

The Pacific Northwest was the last great section of the United States to feel the impact of the westward movement *

Oregon, like the rest of the Pacific coast, was

Isolated from Europe long after the Atlantic Coast was dis­ covered and settled, as its location was far removed from regular routes of trade and travel*

The Spanish explorers,

Gatrillo end Ferrelo, had sailed along the Northwest coast and claimed the region for Spain in 1542*

Sir Francis Drake

probably ventured for some distance along the Oregon shores in 1579 in his dramatic incursion Into the Pacific, and so gave England a basis to claim the region*

In the mid­

eighteenth century the Russians traded with the Indians for 1 furs along th© coast ©a far south as California. However, the absence of any market for the observable resources of the Oregon country, except for furs, discouraged permanent settlement for purposes of agriculture and trade* la addition, the coast of Oregon was generally inhospitable in Its nature.

The almost total absence of

good harbors acted as a deterrent to the opening up of the country*

Even the Columbia River, discovered in 1792 by

2 Robert Gray, s Boston merchant and explorer, was difficult to enter because of the treacherous sand hers at its mouth* From 1343 to 1643 the bar was crossed but fifty-four time® 2 by Teasels going in and coming out* By land entry Into Oregon frora the eastern United States was quite as difficult*

Oregon was effectively shut

off from the Mississippi River basin by desert and mountain areas which barred all but the hardiest explorers. Early American interest in Oregon leading indirect­ ly to its settlement probably received its greatest impetus from the Lewi® and Clerk Expedition in 1604-06, and from the activities of John Jacob Astor who, in 1611, set up a furtrading establishment at the mouth of the Columbia River and gave his nemo to the lonely outpost*

The A at or enterprises

were operated under the Pacific Fur Company, organized in Hew York in 1610.

The company sent two expeditions to Ore­

gon, one by the overland route and one by sea ©n the ship Tonquln. which sailed from Hew York in September, 1610, and arrived off the mouth of the Columbia on March 22, 1611* The overland expedition, led by Wilson Price Hunt, left St. Joseph, Missouri, on April 20, 1811.

This group ascended

the Missouri River to a point near the present Berth and South Dakota border, turned west through Wyoming, end con­ tinued in this direction to the Snake River.

From this

point their course to the Pacific was near the Oregon Trail

3 of later days

the route of the present Union Pacific

fiailroad through Oregon* gator's

activities in the Oregon country ended,

following the war of 1812, after a relatively short period of operation* The entire holdings of the Pacific Ibr Company were sold, from fear of British seizure, to the Northwest Company, a British concern, on October 16, 1813*

The Brit-

iah renamed Astoria Fort George .J* In 1821 the Northwest Com­ pany was merged with the Hudson* s Bay Company and the latter exercised the dominant influence In the Oregon country until the 2840*a* By that time America n interest In this far-off territory had risen to great heights, principally because of the activities of missionaries who had gone to Oregon originally at the request of Indian tribes.

First to go

were the Methodists, followed shortly by Congregational and Presbyterian ministers and by Catholic priests*

These mis-

5 sionary activities centered mainly In the Willamette Valley. M b the number of settlers grew, a popular demand arose for the acquisition of the whole Oregon country up to the line of 54 degrees 40 minutes*

So strong did this feel­

ing become that the Democrats in the campaign of 1844 prom­ ised the MBeocaupetioix of Oregon.w

In 1846 Congress passed

a resolution terminating the treaty of joint occupation with Greet Britain which had been in effect since 1818.

In that

4 flam© year a treaty was mad© establishing the forty-ninth parallel, from, the Kooky Mountains to the Straits of Juan d© JPuea, as the northern boundary of American territory* The "Oregon fever" spread after 1640 throughout the western states, with much discussion in newspapers and before Congress as to the merits of the lend*

Societies for

the aid of emigrants ware formed, and an Oregon Convention was held in Cincinnati in July, 1643.

Significant among the

reasons for this interest in Oregon were the depression fol­ lowing the panic of 1637, financial difficulties which had * overtaken some of the states owing to unwise expansion of internal improvements, overproduction of crops in the Miss­ issippi Talley without adequate transportation to market, and perhaps of greatest importance, the hope of securing land without paying the usual government price*

It was also

commonly thought that Oregon was healthier then the Middle West, and that a great market for Oregon products awaited exploitation in the Orient.^ The emigration to Oregon was a most impressive incident In the occupation of the whole vest territory that was to become the United States of America*

The distance

from the settled portions of the Middle West to the Pacific was ffer greater than any previously covered in pioneer move­ ments,

But the will was strong, and the first substantial

company moved overland in 1641* thirty people arriving In

5

the Willamette Valley Iai the fall of that year*

In 1842

this number waa Increased to one hundred, and in the "Great

Migration of 1943” nearly one thousand people arrived from 7 the $ast to make their homes in the Willamette Valley*

The

influx continued until the discovery of gold in California in 1848 diverted emigration from Oregon for several years* But after the gold fever had subsided, the Oregon movement ■was resumed*

By 1S52 the population was estimated at about

15,000, and In I860, one year after Oregon entered the Onion, 8 the new state was credited with a population of 52,565*

Swat

^sgect

The location of transportation routes in the state of Oregon has been determined by the vagaries of nature to s greater degree than In either of the other states bordering on the Pacific Ocean*

The Columbia River, which forms the

boundary between Oregon and Washington for ell but the east­ ern one hundred miles, has been since the period of settle­ ment the chief commercial fresh water artery of the Pacific slope*

The eastern portion of the northern boundary through

the Blue Mountain range between the Columbia and Snake rivers followed the parallel of forty-sir degrees*

To the east,

the northern and major portion of the boundary between Ore­ gon and Idaho Is formed by the rugged and impassable Snake River Canyon south to the confluence of that stream with the

6 Owyhee,

South of that point* the boundary line is defined by

the meridian of 117 degrees 04 minutes nest.

The southern

boundary of Oregon, dividing it from the states of Nevada and California* lies along the 42nd parallel to the Pacific Ocean. The state is roughly rectangular in form.

The dis­

tance between the boundaries east and west ia 395 miles, and north and south it is 295 miles. 96,981 square M i e s ,

In area Oregon encompasses

thus ranking ninth In size among the

states of the Onion. Oregon is unique in that the great Oaacade Mount­ ain range divides the state into two portions which exhibit entirely different climatic and geological attributes.

To

the west of this range the goelogical formations end the climate are marine; east of the divide, the land formation ia terrestrial in nature snd the climate Is continental. This natural division has created within the state a diver­ sity of interests, political, economic and commercial.

To

the east* the vast expanse of arid and semi-arid areas has precluded the growth of a large population,

Economic Inter­

ests in Eastern Oregon are primarily centered in stock raising, dry types of agriculture, and, in the mountain ureas, lumbering. Industrial development has not progressed in any appreciable degree.

Hallways constructed through

this part of Oregon were originally surveyed with the

7 purpose of crossing the state as directly ©s possible to make junction with the transcontInental lines and connect the popu­ lation centere around Portland and in the Willamette Valley with the Seat*

The few independent railroads built east of

the Cascades to connect with the main line© were never pros­ perous and the greater number of them long ©go passed out of existence, or war© absorbed by the long haul carriers. To the west of the Cascades, in the Willamette Val­ ley, excellent soil together with moderate temperatures and plentiful rainfall created a magnet toward which population tended to gravitate.

From the earliest days of settlement

this has been the most heavily populated area within the state, and here the railroads found attractive conditions for their development. Inasmuch as the construction of railroads within the state has been governed to © large extent by the geo­ graphic factor, it is necessary to consider In soma detail each of the physiographic regions therein, to indicate the particular influence exercised by each* The Goa at Bangs Province This region, thirty to fifty miles wide, lies be­ tween the Pacific Oean and the Willamette Valley, the northern boundary being the Columbia Elver and the natural southern boundary the Klamath Mountains.

The middle fork

a of CoQUille liver la the most definite geological break.

The

total area ia about 6,000 square miles, approximately equal to that of Massachusetts*

This province is generally charac­

terised by the preponderance of mountainous areas over plains and plateaus.

The Coast Range extends to the waters of the

ocean, there being almost no coastal plain along the fairly straight coast line.

With the exception of the Columbia

entrance, none of the streams crossing this province from the interior to the sea may be considered navigable, and harbors, few and relatively unimportant, are only shallow inlets*

The

forest cover over the entire ares is very dense, due largely to the extremely heavy rainfall.

The greatest known annual

precipitation of any point in the United States occurs at Glenore in this province, 1>0.87 inches falling in a year. Population is relatively sparse due to the combination of mountains, small coastal plain area, and heavy forest growth. The tier of counties adjacent to the sea has but six to eight10 sen persons per square mile. Railroad construction never developed to any appreciable degree, largely because of the difficulty of pushing road beds ©f easy grade through the mountains.

Other deterrent factors were the small popula­

tion and the absence of suitable harbors for ocean-going vessels,

h few branch lines were built in th© late nine­

teenth century to connect certain aresa to the main line of

9 the Southern Pacific in the Willamette Talley, mainly for the transport at ion of timber a M

timber products to deep

water facilities at Portland. The Wiliamett e Talley Region This area of Oregon is perhaps better known and considered more characteristic of the state by those living outside its boundaries then any other portion.

It is by far

the most important natural province of the state from the standpoint of economic activity and population density.

Its

natural boundaries are the Coast Bangs to the west, the Cas­ cade lava plateau to the eesfct the Columbia River on the north, and the Calapooya Mountains on the south*

The Willam­

ette River, the most important stream wholly within the state, flows northerly through the full length of the valley to its junction with the Columbia near the city of Portland.

The

valley ia approximately 130 miles long and 30 miles wide, end has a marine climate with all-year moderate temperatures 11 and ample rainfall. Owing to the navi,:cable river system formed by the Willamette and Columbia rivers,leading directly frtm the valley to the Pacific, early settlers In the valley found not only desirable places to make their homes, but also the definite advantage of favorable opportunities for contact with the outside world.

True, it was cut off from the

United States by the Cascade Mountains to the east, and from California by the mountains to the south, there being only poor roads, little better than trails,leading west and south*

fhis seeming isolation, however, was not of

great moment In the mid-nineteenth century, as the people to the south and east were so far distant that their relations with the Willamette Valley settlements were of little economic or political importance# f ha diversity of geological conditions in the Willamette Valley produced a great variety of soils, and this, coupled with the favorable climate, made a fortun­ ate combination ambling the settlers to grow a great variety of agricultural products*

Tim necessity and

desire to carry these crops to market very early created movements for better transportation facilities than were afforded by the river system#

It was in this section of

Oregon that the f irst Iong-line railways were projected and constructed#

Juad if one disregards the small portage

railroads at Gelilo and at the Cascades on the Columbia, It may well be said that the first real railroads In Oregon were located here. Certainly It is true that in the Willamette Valley they eventually reached the high­ est stage of their development within the state*

IX The Cascade Plateau Province In g e n i a l the Cascade Plateau region oaa tea des­ cribed as th© mountainous area from fifty to one hundred miles wide extending from the Columbia River south to the California line and from the Willamette Talley on the -west to the Deschutes Telley on the east*

It is heavily for­

ested on the western slopes due to heavy ©rographlo precip­ itation, and arid on the east of the summit , where a defin­ ite rain shadow prevails*

Aside from the cities of Hood

River on the Columbia and Klamath Falls in southern Oregon, the population ia comparatively sparse and there are no other large farming or oommeroial communities*

The Union

Pacific Railroad crosses the Cascade Plateau at Its north­ ern boundary by way of the Columbia Gorge, and the Southern Pacific, leaving the Willamette Talley at Eugene, or os see the range between Eugene and Klamath Falls*

Other than

these crossings, no railroads have been built In the area. The Klamath Mountain Province This area Is in the southwestern corner of Oregon, its southern and western boundaries being formed by Calif­ ornia and the Pacific Oean*

The Cascade Plateau on the

east and to the north the Calapooya Mountains complete Its bounds* Within its approximately 12,000 square miles ia a maze of small valleys and high mountains which presented

12

some of tha most difficult railroad construction problems faced by those building th© line oonnectiag Oregon and Cal­ ifornia.

This road was completed as far south as Roseburg

in 1873 and across the Slakiyous into California in 1887* Certain valleys In this area enjoy moderate clim­ atic conditions* but due to th© extremes in altitude, from sea level to nearly 8,000 feet, there are of course extremes in temperature.

Diversified farming and lumbering are the

main economic activities of the region. Th© Southeastern Lake province This portion, comprlsing about 30,000 square miles, Is located east of the Cascade Plateau province north of the California line, extending northward to th® Blue Mountains and east to the Snake River Province.

It may generally fee

described as a semi-arid high desert, varying in altitude from 4,000 to 10,000 feet.

Geographically, It is very much

handicapped by the high mountains to the west and north ^nd the inhospitable desert conditions at th© ©astern and south­ ern borders*

Precipitation Is generally low, due to th©

location east of the Cascade Range.

Continental conditions

prevail* great extremes of temperature, both In annual and diurnal ranges* feeing normal.

Livestock raising Is th©

principal economic activity, accounting in part for the population density of but one person per square mile*

13 There ha® been no trunk line construction In this region* A si agio track branch line of the Union Pacific was constructed early in th© twentieth century from Ontario on the eastern border of th© state to the city of Burns on the eastern edge of the province* The Columbla -De schu te s Province This region of approximately 17,000 square miles forms a part of the northern boundary of Oregon from the eastern edge ©f the Cascades Plateau are© along the Colum­ bia Elver end th© 26 th per all© 1 to the northern foothills of the Blue Mountains.

The very irregular boundary follows

these mountains southeasterly to a point south of the city of Bend, around the curve in the Deschutes River wher© it one© more joins the Cascades Plateau Province.

It is high,

semi-arid and open country, characterized by ve at plateaus on which precipitation Is only about twelve inches a year. Th© cHiaate Is predominantly continental.

The principal

economic activity is agriculture and the most important crop Is wheat, this being one of the great wheat-produc­ ing areas of the world. The Union Pacific main line follows the northern boundary of this province, paralleling the Columbia River, and numerous feeder branches reach southward into the farm­ ing regions.

T h e Oregon Trunk Railroad operates from Biggs

14 to Bead and Klamath Falls, where direct connection is made with the Western Pacific Railroad in California, thus form­ ing the second north-south railroad ia the state. The Blue Mountain Province Bounded on the east by the Snake liver Talley, on the West by the Deschutes liver, on the Berth by the GoltembiaDecohutes Province, and on the south by the Southeastern Lake or Great Basin Province, this section of Oregon consists mainly of mountain ranges and high valleys, varying in eleva­ tion from. 2,000 to 9,000 feet.

The climate in the summer is

hot and dry, and the winter season is moderately cold. Pre­ cipitation over the greater part varies from ten to twenty Inches annually.

The temperature in the higher elevations,

through which th© Union Pacific Railroad operates, on occas­ ions sinks very low, a reading of minus 41 degrees having Been recorded.

The occasional low temperatures and very

heavy snowfall were factors of no little importance in railway construction and operation, particularly in the 1880*s when the present route was being pushed eastward. The Old Oregon Trail crosses this section of Oregon and the route followed by the pioneers bound overland from the Best for the Willamette Talley is now that of the Union Faclfic Railroad.

A branch line of this system in this area

taps the Wallowa Talley in Oregon’s northeast corner.

The Snake River Province This relatively narrow area extending along th© ©astern boundary of Oregon from Bevada to W&shington com­ prises generally all of th© region dominated by the Snake Eiver in Oregon.

The climate is continental and semi-

arid, having e rainfall of from eight to thirteen inches and great extremes between summer1s heat and winter’s cold This territory is sparsely populated, the general average being only two persons per square mile, practically all of these being centered in the irrigated valleys to the south on the Tale and Owyhee projects.

Farming on these irri­

gated lands and the raising of livestock on the drier and more elevated lends are the main economic activities*

13

Railroad construction In this province has been confined to th© main line of the Union Pacific system and to branch lines north a short distance from Huntington along Snake River, and from Ontario and Yale westerly into th© livestock and farming areas.

The branch from Ontario,

extending to Burns, has long been considered the first section of the railroad which will offer direct connection between the Upper Willamette Talley and the Fast by way of south-central Oregon. However, at the present time there appears little likelihood that such a construction effort will be attempted in. th© near future.

16

FOOTNOTES 1*

Joseph Schafer, 4 History of the Pacific Morthwest, (Hew fork, 1926} p p . 9*10.

2.

Hubert Howe Bancroft, History of Oregon (2 vols., San Francisco, 1888], Vo 1 . I I , p . 16*

3*

Charles H. Carey, History of Oregon (Chicago, 1932), p. 204*

4.

Schafer, op* alt**p. 78

5.

Begins let Q, McGrane, The EconomicDevelopmentof the American Hatton (lew fork,'' I¥42 j, 'p. 238*

6

*

7. 6

*

9*

Otis W. Freeman and Howard H. Martin, M s * , The Pacifia Northwest (Hew York, 1942), p • 238* Schafer, op* alt.* p. 120* Robert S. Farrell, Jr*, comp•,Oregon (Salem, Oregon, 1947), p. 181*

BlueBook 1947*1948

Ibid** p. 220*

10* Oregon State System of Higher Education, PhyaioaI and Economic Geography of Oregon (Salem, Oregon, 1940}, pTsK 11.

Ibid.* p. 32.

12.

Ibid..

13.

Ibid** p. 77*

p. 60.

17

Chapter II OREGONfS FIRST RAILROADS larly g a v ^ a t i ^ As noted previously, many proposals were placed before Congress of the United States in the later 1840*s look­ ing toward the construction of a railroad or railroads from the Mississippi Valley region to the mouth of the Columbia River*

Many were the obstacles, political and economic, which

had to be overcome before those grandiose schemes could achieve reality.

The people of Oregon in the 1850*s v*er© not of such

character as to wait upon the deliberations and action of a Congress about which they knew little, and which, In turn, knew little of the transportation problems of the isolated settlements along the North Pacific coast.

Those living in

Oregon well knew that If Ifaprovement In transportation were to come it must be accomplished by themselves.

So the first

railroads in th© Oregon country, if they can rightly be socalled, were the result of the labors of the pioneers deter­ mined to let no accident of nature prevent the ready movement of their products to market* It is of course understandable that the initial regular method of transportation in Oregon was the steamboat. The first such vessel to operate on the waters of the Columbia

18 Hiver waw the Hudson’s Bay Company’s Beaver which, with hex machinery disconnected, sailed from the Thames, in England, on August 51, 1855, and arrived at Fort Vancouver on the Paeifio Coast after a voyage of 161 days*

She was fitted

up at Vancouver as a steamer, and on June 19, 1836, moved down the Columbia on the first of many trading expeditions to the Indian villages along the Northwest coast*** Being in the exclusive service of the Hudson’s Bay Company, she was probably of relatively little use to the populace she reached, as a means of transporting eith­ er freight or passengers*

Wntil the summer of 1850 pas­

sage between the small settlements and military posts in the area, and the outside world, was to be had only by water-borne conveyances propelled by oars or sails, or by land movement over the primitive roads and trails. The first steamboat built in the Northwest was laid down at Astoria, at the mouth of the Columbia, early in 1850*

On July 3 of that year the appropriately-named

Columbia began her maiden voyage, moving up the river to Portland, where she arrived at mid-afternoon the next day, and on to the rapids of the Willamette at Oregon City, S where she tied up that night* The broad Columbia, once the treacherous bar at its mouth was crossed, offered easy access from the sea to

19 the interior for hundreds of miles*

Near the present site of

the city of Portland, its flood was increased by the heavy flow of the northward-moving Willamette*

The Willamette was

navigable to the Falls at Oregon City, twenty-five miles above Portland*

When the barrier of therapies at that point

was passed by a portage, the passenger of the day could board another boat and continue his journey southward up the stream by steamboat another hundred miles to the settlement at Eugene, the head of navigation* On the Columbia, vessels could operate with safety as far eastward as the famed Cascades of tha t river, 160 miles from the mouth*

Here the stream rushed through a series of

cataracts where the river crossed the heart of the Cascade Mountains*

This is the only natural opening in the mountains

in the states of Oregon and Washington between the sea and the interior*

For nearly five miles it was necessary for

traders ascending the Columbia Valley to make their way along a narrow trail to a point where the river once more was calm and navigable*

The Cascades was a strategic point

in transportation into the interior, and it was soon real­ ized that whoever controlled that point effectively con2 trolled as well the upper river as far as The Dalles. East of the Cascades, free river navigation was possible for sixty miles further, to The Dalles, where an­ other series of falls and cataracts made the operation of

20 steamboats impossible, and once more made necessary the transfer of goods and passengers by land.

Beyond that

portage navigation was accomplished, unhampered by falls and rapids, as far as White Bluffs in ©astern Washington, the head of navigation on the Columbia,

Hear the old Hud­

son9s Bay post at Wallula the Snake Kiver poured its waters into the Columbia, light draught on the

navigation was possible for vessels of Snake Biver for six months of each

year to the site of Lewiston, Idaho, 500 miles from the mouth of the Columbia at Astoria. The First Hailr^d, O^gtructed

the Oregon Country

At the Cascades portage there was built the struc­ ture which may be called the first railroad on tha Pacific Coast.

Located on the north bank of the Columbia Biver in

what is now the state of Washington, it was laid out and 4 constructed by one Francis A* Chenoweth* It bore small resemblance to an ordinary modern conception of a railroad, it is true, but it had rails, ties and motive power, and upon Its short distance a small car carried the persons and belongings of untold numbers of Columbia travelers in the years of its operation.

Freight moving upstream was trans­

ferred at the Lower Cascades to schooners which, being of light draught, moved over the relatively shallow water for two miles to the Middle Cascades, where the railroad began. Freight was then moved by the mule-powered line to the Upper

Cascades, where It was once again transferred to a steam­ boat for transportation to The Dalles and the Gelilo portage. For some time previous to the building of the rail­ road, Chenoweth had engaged in the navigation of the river with the schooner Henry, an old ocean-going sailing vessel which had become unfit for the stormy Pacific.

This boat he

operated at a handsome profit on a weekly schedule between the Gascades and Portland* was twenty dollars per ton*

For movement of freight his rate The steamer James P» Flint was

in operation between the Cascades and the Celilo falls at The Dailes, and in order more easily to transfer the freight between the two vessels, Chenoweth constructed a wooden tramway about a mile and a half in length, with wooden rails, over which a little car laden with freight was dragged by a mule *S When

Chenoweth began his building program, his

project was looked upon with derision by the rivermen of the day*

They dubbed it t*Chenowethts Folly,” a name strongly

reminiscent of the reception given the announcement, years before, of the building of the Erie Canal.

Despite the

deprecatory remarks made by CheaQweth,s contemporaries, the service of his railroad, when completed, was genuinely ap­ preciated by the weary travelers who came that way after the long and arduous journey across the plains to Oregon.

One

of the earliest settlers in Seattle in after years wrote of

22

Chenoweth^ line as It appeared in 1851: At tJae Cascades w© found the first houses which looked really like civilization. F.A.Chenoweth was building a tram road for the transfer of freight and passengers around the rapids, and at the upper landing were the Bradfords, Bush, with others not long remembered. The naviga­ tion of that day between Portland and the Cas­ cades differed somewhat from the present time. Chenoweth was running an old brig called the Henry, no longer fit to go to sea, between Portland and the Cascades. Our baggage was the first freight to pass over the tram road and was taken over on a ear by hand while we made the tr ip on foot to the lower end of the rapids where we boarded the brig and raade the voyage to Portland by sail and the help of the current• Mrs. Cecelia Adams, who crossed the portage on the railroad in 1852 wrote of it in her diary: Here is a large warehouse and from it proceeds a railroad three miles long, made of scantling and plank without iron. On this runs a small car propelled by a mule attached to it by a long rope for an engine, and a pair of thills between which the engineer stations himself and walks and guides the ear. On this the charge is 75 cents per hundred pounds, but It takes no passengers* At the end of the rail­ road the goods had to be let down perpendi­ cularly some 150 feet to the river, from whence they are taken on a boat to the steam­ boat landing about three miles more. Charge, 75 cents in all.® A third contemporary account is given by Theodore Winthrop who made the journey up the Columbia early in May, 1853, with a large party: Wednesday, May II. The transportation of any­ thing is difficult here, but particularly with go much stuff as we were obliged to have. They

23 commenced about nine o fclock on the railroad and made five trips a distance of one and onequarter miles. The railroad is a simple but convenient affair, a roadway of two boards with a square rail on each side* There was only one small car dragged by two mules, and held back by one man# That the mules used as motive power on the line were not lac Icing in intelligence is indicated in another account of a trip over the line, this time in 1854: .•.the portage of six miles was a rather com­ plicated process. Freight for transportation was first loaded on schooners, which, when the wind blew sufficiently strong, were driven to the landing then known as the middle block­ house. ..where they were loaded onto a tram car. ..and was hauled up a windlass run by a very patient and intelligent mule. When the oar reached the summit of the incline, the mule was unhitched from the windlass attached to the car and started for the upper Cascades alone over the wooden tramway, with a couple of boards in the middle of the track for the "engine” to talk on. Arriving at his destina­ tion, the mule was unhitched, turned around and coupled onto an empty flat car and started on his return trip. A pole was lashed to his side and then to the ear. This acted as a kind of automatic brake to keep the ear from running over the "engine” . Hi is arrangement worked well for a while and saved the services of a conductor, but the mule got onto his job, and when well out of sight would stop...to take good long naps...Eventually a fireman had to be added to the list cf train hands. Chenoweth sold his interests on the river, in­ cluding the portage railroads, to Bradford and Company, a partnership including Daniel and Putnam Bradford and their financial backer, ^T. P. Flint, a San Francisco capitalist.

The Bradford brothers had been running the

24 yes sols James ¥ * Flint and Mary between the Upper Cascades and The Dalles during the time Chenoweth operated the Henry and the portage railroad*

They were apparently more sanguine

in their belief la the future of the Oregon country than was Chenoweth* and they determined to expand their holdings by 11 purchasing his enterprise* At the time the Bradfords .made their purchase they had the small vessel Mary In operation between the Upper Cas­ cades and The Dalles* the dames P* glint having in 1851 been taken over the rough Cascade® in a hazardous operation to the lower river, where there was raore business than on the upper reaches of the Columbia*

Yjith the Mary* the only vessel run­

ning on that section of the stream, they had a monopoly of the carrying trade*

To make their monopoly more complete,

they entered into an agreement with the owners of the steamer Belle, operating below the Cascades, for a Joint through ser­ vice between Portland and The Dalles, utilizing the railroad for the portage*

This arrangement permitted them to shut out

all competition on the river above the Middle Cascades, until 1855*

12

© 1© bulk of the business during the period of com­ bined steamboat-railroad operation under the Bradford domin­ ation consisted in moving westward the goods and persons of the annual migrations from the East which arrived each autumn after the overland Journey, as well as the transportation of

25

military supplies and personne1 eastward to th© several posts # which the War Department maintained in the interior of Oregon* The discovery of gold in eastern Oregon and Washington and western Idaho after 1860 brought about a tremendous increase in the amount of traffic handled* Hie success of the Bradford enterprise aroused a desire among other river operators to share in the profits which the monopoly evidently was enjoying*

Perhaps the best

known of these was Colonel Joseph S* Buokel, who was operat­ ing the steamboat Fa shion on the run between Portland and the Lower Cascades in competition with the Belle of the Bradfords* The Fashion was in no sens© a new vessel on the river, haing been created out of two other craft, her hull being that of the old James P» Flint* and her machinery being taken from the Columbia* the first vessel built in Oregon* Ruekel, in company with a Captain McFarland, and Captain J. 0. Van Bergen, the original commander of the Fashion* made up the new combination to offer competition to the Bradfords*

With Buokel as the leader, on© of their

first acts looking toward gaining a share in the Columbia traffic was the construction of a ship on the river above the Upper Cascades*

This was the Wasco* named after the

Oregon county in which it was built*

A small side-wheeler,

this vessel began operations about August 1, 1955, in the trade between The Dalles and the Upper Cascades, at v^iich

point portag© was mad© on the Oregon side of the river to a point below, where interchange of lading could be effected with the Fashion. This portag© was merely a crude road over which goods were carried by mule-drawn wagons.

An improved

road was built in 1856, probably extending fraa the present town of Cascade Locks to the landing at the Lower Cascades 14 at Bonneville of the present day. Although the Ruckel enterprise did not enjoy the use of a railroad such as that operated by the Bradfords, it ’

parent that the latter group viewed with some alarm

the; unloads being made upon their traffic by the new combina­ tion*

They felt that the answer to the situation would be

the improvement of their railroad to permit more rapid and efficient handling of the freight*

To this end they began

early in 1856 to rebuild and extend the Chenoweth railroad.

15

It was while this work was In progress that the Yakima Indian War broke out.

On March £6, 1856, a band of

Indians attacked the little settlement at the eastern term­ inus, killing several of the workmen on the railroad who were rebuilding bridges, and forcing the settlers to seek refuge in the Bradford brothers* store*

Here they were be-

leagured for two days and nights before help arrived in the shape of United States troops from the Fort at The Dalles. The eventual defeat of the Indians mad© river traffic far safer than it had been, and probably was an important factor

27 la th© phenomenal growth of freight traffic thereafter.

i«

The improved Bradford portage railroad was put in use late in IBS1?*

The Weekly Oregonian of Portland made note

of the completion of the line, stating: A new and substantial railroad has recently been built by the Bradfords and Go* from the Middle Cascades to the steamboat lading at the heart of the Cascades* over which is daily transported a large amountof government freight. Hew and ex­ tensive sawmills* storehouses* dwellings and ©to. have been erected since, the Indian massacre and business is looking up. ' nothing remains to be seen of this railroad today. The lake formed by Bonneville Dam and the spillways built ad­ jacent to it have effectively obliterated all traces*

Until

the dam was constructed* however* it was possible to see the pilings upon which much of the eastern terminal of the line was constructed.

In the early years of the twentieth century

the portage line came to a rather unseemly ©nd.

Its last use

as a railroad was by a salmon cannery at that location* animal power one© more being used to draw the small cars of 18 salmon from the river to the cannery for processing. To prevent unnecessary competition and duplication of services a rather uneasy truce was declared in Movember, 18S7, between the Bradford and Buckel interests.

Under Its

terms, the competitors agreed that all goods were to be moved over the more efficient and convenient Bradford rail­ road, and ©aeh company would withdraw one boat from service

28 on each of th© two stretches of the river on which they 19 operated# Th© arrangement apparently lasted only a few months* however* aw advertisements in the Portland newspapers indicate that in October of 1858 the Oregon portage road was again being utilised in th© movement of freight between EG landings# Farther evidence that the truce was considered only a temporary arrangement was the announcement that Ruekelfs partner Van Bergen had in August of 1858 purchased land and contracted for the clearing of a right of way for 21 a railroad on the Oregon side around the Cascades. Van Bergen shortly thereafter sold his interest in the Oregon line and was never again engaged in railroad enterprises in Oregon* returning to steamboat operations on th© Willamette. At about th© time Van Bergan left the Columbia, Harrison Glmstsad appeared in Oregon* purchasing lands on the Oregon side of the Columbia near the Ruckel holdings at the Cascades#

Apparently a man of seme wealth* he shortly

became a full par the r with Buekel In the portage op era tioas* although he never gained notoriety as a river power compar­ able to that of his associate#

Olmstead was well received

by th© people of Oregon, and on the occasion of his departure from the state in 1865 on a trip to th© Bast, it was said that:

£9 His feeing identified with the best interests of the state in its rapid strides of progression, makes him one of our own with as strong ties of fellow kindred as could connect one to another in the bonds of consanguinity. He is one of those who in an early day were considered as "Californians" come to Oregon to eat up her wealth fey pocketing the revenues of a lucrative trade in the steam navigation of the Columbia river#..But instead of taking away from the old State her wealth, has actually been the agency of building up and rendering valuable her wastes and wilds#33 The^Ciregon Portage Railroad^and the The railroad built fey Buokel and Olmstead was gen* erally known as

th© Oregon Transportation Line, although a

formal organization

under that name was never

effected.The

task of laying out the route for this line was entrusted fey the partners to John W. Brazee, one of the earliest profes* sional engineers to appear in the Oregon region.2^ A sawmill was built at Eagle Greek to supply the necessary ties, rails and timbers for

the many bridges and trestles

along the

rugged shore of

th© river.

line was of

Every part of the

wood, the rails feeing of fir six inches square laid probably to a gauge of five feet. covered with planking.

The space between the rails was First freight over the railroad was

carried some time in late 1858 or early 1859, there being no notice in the newspapers of the exact date operations were commenced#

As on the Washington shore, the motive power was £5 once more the ubiquitous mule.

30 During times of high water the river became so turbulent that light vessels found it impossible to reach the Middle Landing where th© Bradford portage ended* Dur­ ing such times th© Rucfeel and Qlmstead portag© operators found themselves in an enviable position as their railroad, extending to the Lower Cascades, was th© only usable port­ age route, and they enjoyed a complete monopoly of the trade.

Kven in ordinary conditions of traffic the Ruefee1-

Olmstead portage soon gained a favorable position in the eyes of shippers because of their ability to handle th© river portages more rapidly with only two transfers of cargo, from boat to male car, and from mule car to boat at the other end.

gg

The business of th© Ruefeel-Qlmstead line was especially prosperous after the War Department, in October of 1868, rescinded an order of June 29, 1857, which had closed all of th© territory east of the Cascades to settle27 ment* This had been don© because of the danger from Indians and the inability of the army to protect settlers, there being only a relatively small number of troops available 28 for policing such a vast area. On the scene at the Cascades there appeared at this time a man whose influence was to be felt not only at that point, but upon every phase of transportation develop­ ment in Oregon for the next twenty years.

J • C* Ainsworth

had served as a steamboat captain on the Willamette Kiver with signal success and now turned his attention to the lush operations at the Cascades#

To combat the success of

the Oregon Transportation line, the Bradford interests in early 1858 Joined forces with Ainsworth and his associates, who were building a large steamboat, the Carrie Ladd, with engines of sufficient power to make the Middle Landing of the Bradford portage even in times of high water.

By the

use of this powerful vessel, the Bradford interests had an immediate advantage which the Oregon Transportation line would never overcome.

Colonel Ruckel, fully aware of his

disadvantage, proposed a combination of all the steamboat interests on the river below the Middle Cascades to stop unnecessary competition.

This was consummated in Hay, 1858,

under the name of Union Transportation Line.

All freight

was moved over the Bradford portage on the Washington shore, £9 it being some three miles shorter than the Oregon portage. The Union Transportation line, or "association,” as it was popularly called, being a combination of only those interests operating vessels on the river to the Cas­ cades portage, found itself somewhat at the mercy of those running vessels on the river above The Dalles and control­ ling the portage at Celilo*

To remove this difficulty a new

alliance of, transportation interests was formed which was

32 eventually to dominate all traffic on the Oregon rivers and to become th® genesis of the system of Oregon railroads# This was the much-maligned Oregon Steam Navigation Company.*^* The Oregon Steam Navigation Company In its ineeption was a loos© partnership formed by the Ruckel, Ainsworth, and Bradford steamboat interests, together with those oper­ ating vessels on the upper river above Celilo.

On May 1,

I860, twelve steamboats appraised at a value of &172,500 were turned over by the various associate members to begin operations on the Columbia and Willamette rivers.

Ho certi­

ficates of stock were issued, each member instead being credited on th© company books in proportion to the appraised value of the vessels which he turned into the combine. At th© time this company was formed, no corporation laws had been enacted in either Washington Territory or the State of Oregon.

Appeals were made to the legislatures of

the two areas for th© necessary acts.

For some unknown

reason the Oregon legislature did not comply, although it met in session earlier than that of Washington.

However,

the Washington legislative body did act on the request of the partners, and the Oregon Steam Navigation Company was incorporated under a special act of that body on December 16, I860, with a capital of not to exceed $1,000,000.

Gel

Dtcamber 29 the original owners met at Vancouver in Wash­ ington Territory and formally organized by adopting a

33 constitution and by-laws and choosing a board of directors* Although the names of the portage owners do not appear on the lists of those holding stock, they evidently were in­ cluded under some arrangement, as the names of Buokel, Ainsworth and Bradford appeared on the first board of 31 directors* No formal transfer of th© books or property was made at the time the Oregon Steam Navigation Company was organised, the oompany simply continuing in business using the old books of account of th© '‘association** A curious situation developed out of th© combin­ ation of the steamboat operators inasmuch as the portage properties themselves were not involved directly in the combination.

The Huckel-Olmstead and Bradford interests,

while both sitting on the board of directors of the Oregon Steam Navigation Company, ostensibly working to a common end for profit, were at th© same moment regarding each otherfs activities with a cold and jaundiced eye insofar as the operations and improvements at their respective portages were concerned* Borne have maintained that Ainsworth, as the titj

ular head of the Oregon Steam Navigation Company, used his position to play the rival operators of the portages against one another, with the plan in mind that he could in this way gain full control of Columbia River shipping in all phases, land and water*

Others have maintained with as much seeming

34 Justification that the portage operators maintained a stranglehold over all freight movements on the Columbia, and that they used their strategic positions to extort excessive payments from the steamboat operators. 'That this last assertion has force is evidenced by the arrangements for dividing the freight revenues accruing from the through operation,

such division was

made into four parts when the traffic moved by Bradfordfs portage.

The steamboat carrying the goods from Portland

to the lower Cascades received one-fourth; another fourth was paid to the operator of the small vessels which could navigate from the Lower Cascades to the Bradford Middle Landing; Bradford's portage absorbed another fourth; and the balance was paid to th© steamboat operator for carriage from Upper Cascades to Ihe Dalles.

On the Oregon side, th©

Huokel-Olmstead portag© absorbed one-half the total charge for the Portland-The Dalles run, inasmuch as their portage extended the whole distance from th© Lower to the Upper Cascades.

Th© freight rat© was established at thirty

dollars per ton, forty cubic feet of space being considered the basis for such a weight regardless of th© actual weight 34 of the commodity. Hany* stories are told of unusual methods of measuring freight practiced by th© freight receivers so that the advantage might accrue to th© steamboat company. As an example, an ordinary farm wagon is supposed to have

35 been Measured by baking the extreme breadth, the extreme

length with tongue extended, and the extreme height with 35 the tongue raised vertically. Despite such policies, Jlasworth*s enemies, hitter though they were, were forced to admit that the service given by the Oregon Steam Navi­ gation Company was always adequate, and considering th© times and conditions under which operations were carried on, it does not appear that the rates were unduly exorbitant. The Oregon Steam Navigation Company, operating as the "association" under the Washington Territory charter, was prosperous from its inception, th© net income from its activities totaling over #900,000 for the period from May 1, 1860, to November 30, 1862, when the Oregon organization began operations.

In addition to the steamboat routes from

Portland to The Dalles, vessels were operated from Celilo, or Deschutes Landing, to Wailula, Washington, at the mouth of the Snake Elver, and to Lewiston, Idaho, on the latter

stream.3** The company evidently became dissatisfied with its Washington Territory charter, as the principal stockholders on October 18, 1862, signed articles incorporating a new company having the same name under the general incorporation laws of the State of Oregon.

These articles were filed on

October 21, 1862, and the new company was organized on November 25 of that year with a capital of #2,000,000.

On

36 November £9* at a meeting of the board of directors, J.c* Ainsworth was elected president,

Daniel Bradford vice-

president, and Georg© W* Murray secretary Damage to the Oregon portage railroad by the high waters in the Columbia in 1859 necessitated a com­ plete overhaul of that line as far as it was completed* Although th© Bradford portage was used for the transfer of goods under the terms of the '‘association*’ agreement, it was felt that business on the river would increase rapidly to the extent that both Oregon and Vfe shington portages could be operated profitably*

Accordingly, work

progressed in th© repair of th© completed section, and the undamaged portion was rebuilt to accommodate the expected increase in tonnage*

*131© entire railroad, with its land­

ings, was completed in May of 1861*

A news item of th©

time described the railroad briefly as follows: Buokel and Glmstead*© railroad at the Cascades is completed and in a condition to carry freight from the upper to the lower landing* Four cars are now in operation upon the track* A wharfbo^t has been placed at the upper landing for the reception of freight* This road is a val­ uable improvement and if th© travel and shipping to the upper country should prove as extensive as present indications seem to foreshadow, it will prove a mine of wealth to its proprietors. The completed road was four miles in length and could handle a hundred tons of freight daily. estimated at #150,000*

So superior

whs

The cost was

the portag© on the

3? Oregon side that it was used exclusively for the freight movements after its completion, until the new Bradford rail­ road was built on the Washington shore* In October of 1861 it was announced in Portland that plans were afoot in the neighboring Washington Terri­ tory for the construction of an iron railroad from the Upper to the Lower Cascades of the Columbia.

L. A • Cartes was

engaged as a civil engineer to survey and lay out a line with such a grade that operation of a steam locomotive and oars 40 would bo possible. This work w&® done under the supervision of the Cascades Railroad Company, a corporation created by the legislature of the Territory of Washington on January 31, 1859.

This company had been formed to build and operate a

railroad between the points mentioned, a thirty-foot right of way and one acre bordering on the water being granted by the Territory for this purpose.

A railroad of wood was to

be built within three years and it was to be equipped with iron tracks within five years. AT #300,000.

Its capital stock was set at

In May of 1863 the Oregon Steam Navigation Company, sensing that a rival power might in some way gain control of this strategic area, purchased from the Bradfords their existing railroad and the charter, right of way, and report of survey ©f the Cascades Railroad Company.

While the pur­

chase of the Bradford railroad was mad© in 1862, delivery to

38 the Oregon Steam navigation Company was not effected until May 1, 1865, and in the meantime the Bradfords were to re­ ceive a proportion of the earnings of th© portage through the company, even though their railroad was not in operation* Once in possession of th© Cascade Railroad Company, the Oregon steam JJavigation Company began immediately to build the line, which was completed and in operation the following year, th© first trains operating over it on April 21, 1863*

Built to a gauge of five feet, the line was six

miles long, and until the completion of the standard gauge line along the Oregon side of th© Columbia from Portland eastward nearly twenty years later, this railroad on the Washington side handled practically all of the portage traffic* 1/hen in late 1861 it became apparent to the owners of the Oregon portag© railroad that the Bradfords had in some way become involved in the ownership of th© Cascades Railroad Company, Rue he 1 and Qlmstead in a counter move determined to institute the us© of the power of steam for locomotion purposes on thair railroad, instead of the rather unpredictable

mule power which had served them so long*

Accordingly they placed an order with the Vulcan Iron Works of San Francisco for a steam locomotive*

This engine had

the distinction of being the first built on the Pacific Coast and the first to be operated north of California*

39 The locomotive* known as the "Pony", was built on lines far different frost those used by eastern railroad equip­ ment builders of the time.

With two wheels on each side,

and no pony or trailer trucks* it presented an almost lud­ icrous appearance.

We may a ©sum© that it was necessarily

constructed on a small scale and along unorthodox lines so as to be operated on the rather flimsy track without undue wear and tear on the roadbed*

Utility, iot aesthetic

appearance* was the governing factor on the pioneer rail­ roads of the west*^2 The locomotive was dispatched from San Francisco on the steamer Pacific on March 24* 1862* and arrived in 43 Portland on the 31st of that month. It was taken up stream shortly thereafter by barge and was placed in oper­ ation on the lower half of the portage* That it wag most successful in pulling the cars back and forth over the short stretch of track is witnessed by the remarks of an early newspaperman who took a trip over the line shortly after the "Pony” arrived at the Cas­ cades*

In unrestrained enthusiasm he wrote:

On the Oregon side (at the Cascades) a railroad traverses the entire portage* five miles* the lower half being used with a locomotive and cars and the upper with mule curs. Upon th© lower part the ties are four feet apart* the rails are of fir six inches square and covered with bar iron* The road is stanch and smooth, the passage over it of "The Pony* (it should he

40 called “The Pioneer” ) with a train of twenty tons iiiaicing no perceptible jar* The cars run over this safely at the rate of twenty miles an hour* Over this end of the portage we rode twice in a freight oar* It was our first railroad ride on the coast, and it inspired us with animating hopes of the not distant future, when not only through the rocky port­ als of the golden west, but far beyond to the teeming cities of the Mississippi, the iron horse would thunder with its head slaking its thirst in the Shake, Greenwater, Platte and other rivers, and waking the solitudes of the4 4 Rocky Mountains with its shrill neighings*** * The construction efforts of the Oregon Steam navi­ gation Company proceeded rapidly in the summer of 1862. The line there being built was destined to be far superior to that of Ruckels and Olmstead, and its completion would mark the end of the usefulness of the "Pony” in Oregon* But the "Pony” had made its mark - a railroad upon which a steam locomotive operated was an actuality in Oregon. In October of 1862 the Oregonian wrote of the work in progress along the Washington shore: The road***is made in the best manner, com­ paring favorably with railroads in the East­ ern states* A vast deal of work has been done In excavations and fills. The trestle work is strong, well put up, and capable of sustaining ten times the burten placed upon them...The iron for the rails is manifestly of excellent quality and of unusual length. The whole distance from the commencement of the road to its designed terminus is about five miles, four of which are completed.•.The company already have on hand a number of freight cars, built at San Francisco, and they are causing to be built on the ground two passenger ears of the style of Eastern passenger ears, and they promise to be equal in elegance and convenience to any cars

41 found on Eastern roads* And why should this not he the ease? We have as- good workmen and materia 1 as can he had in th® East Upon reading such glowing accounts of the activity of their competitors across th# river, it can well he under­ stood that the partners Rnekel and Olmstead saw the hand­ writing on the wall*

Realizing that they could not hope to

eospete for business when the north hank road was completed and in operation, they took th© obvious step*

If they could

not heat the opposition, they would Join them* la such a manner they presented themselves, as the portag# company, before the board of directors of the Oregon Steam J^vlgation Company in Portland on November 3, 1S62, and offered all of their property in the railroad for the sum of flfb,ODO, of which $135,000 was to be received in cash, and the balance of #40,000 in nine months at ten per cent inter­ est*

This offer was rejected by th# majority of th© board. Considering further that they had everything to

lose should they be forced to cease operation of their port­ age through lack of business, Olmstead and Ruckel presented themselves on the following day before the board, this time offering th© property for #155,000, of which #115,000 was to he received in cash, and the balance again to be paid in nine months with interest at tan per cent*

This offer being more

in line with what the majority of the board consider d a fair value on th# property, it was accepted and the necessary

papers immediately drawn ap.

Thus there passed out of exist

•nee as a separate entity the first railroad operated in 46 Oregon* Being already in possession of the north bank portage line, the Oregon Steam Navigation Company of course had no real use for the Oregon portage once the improved Washington line was in operation.

But they had sealed out

more firmly than ever any hope by anxious competitors in Oregon transportation enterprises that the monopoly might fee breached.

To break the Oregon Steam Navigation Company fs

power on the Columbia a portage was essential,

iknd that,

apparently, w a s never to fee obtained. In the

spring of 1863 the Cascades railroad on

the north began operating, a notice being inserted in th© newspapers that "The Cascade Bailroad Company will open their road to the public on Monday the SGth Inst.

Bate of

freight #5 per ton. $gd. I.C.Ainsworth, Pres. C.R.K.Co., Cascades, W.T." With the opening of this new railroad on that day, the Oregon portag© ©eased operations*

The MPonyM was re­

moved from the rails upon which it had run for such a short time and taken to The Dalles, where it was intended for use on The Dalles portage railroad then just completed.

That

it ever turned a wheel there is open to question, and it apparently rested in a storage yard at that point for over

43 three years*

It was then sold to David Hewes, a San

Franoisco contractor, and returned to the city of its manufacture*

There it was put to use in leveling some

of the streets*

Not until 1905, at the time of the

lewis and Clark Exposition in Portland, was the "Pony” to return to Oregon*

Today it is the property of the

Oregon Historical Society and stands In the plaza of the Union Station In Portland, an appropriate marker denoting the servioe which it rendered to the railroads of Oregon* 3ssJI B n M n i and CeliJU) RajyUgoad Two hundred miles upstream from its mouth the Columbia in a distance of ten miles passes through two successive rock-ribbed channels, together about two and a half miles long and averaging about £00 feet in width* During all seasons of the year the immense cataracts gen­ erated by this accident of nature preclude

free naviga­

tion by any type of craft, large or small, through this seetion* Portage in one form or another has always been necessary* Shipment of freight across The Dalles-Celilo portage was begun on August £, 1811, when some fifteen or twenty packages of trading goods, ninety pounds to the package, belonging to John Jacob Astor’s Pacific Fur

44 Company, were carried around the rapids,

this freight was

an route to Fort Okanagan in what is now the State of Washington, the first American trading post in that area. Nearly three day© were consumed by the voyageurs in pack­ ing the goods and canoes of the party across the six miles of rook and sand which line the Columbia at that point.48 Ho road worthy of the name was in existence around the Fall© until the late 1840*s when the emigrants into the Oregon country by the overland route came that way#

*Bxe route generally followed by the weary travelers

climbed the hills to the west of the crossing of the Des­ chutes River about three miles east of Gelilo, and came to the*Columbia once more near the present city of The Dalles* *I?his road, with minor deviations from the orig­ inal route, was for many year© the most important wagon road in Oregon and was in constant use until the portage railroad was constructed.

Until 1859 the main business

conducted on the road was the movement of supplies bound for the army posts in the interior and for traders lic­ ensed to barter with the Indians.

After that time the

Carriage of general merchandise was more common, parti­ cularly so after the discovery of gold in the mountains

45 to the east*

Wit ft tfte beginning of steamboat operation

on tfte upper river a stage for tfte convenience of passen­ gers was placed in operation on the road*

Tfte individual

controlling the road was one Orlando Hums son, who must have reaped a sizable fortune out of his enterprise, as the rates charged were twenty dollars a ton, or one dollar and a quarter per ton mile, tfte measurement again being forty cubic feet by volume per ton*49 Tfte directors of the Oregon Steam navigation Company recognized tfte value of Humasonfs road in their long view of eventually obtaining control of all phases of transportation in thejColumbia Biver Talley*

On Dec­

ember H, 1861* tfte board of directors of the company resolved to purchase from Tfte Dalles Portage Company all of tfte Humsson holdings, including ail of their "stock, wagons, loads, etc* used by tfte said company for tfte purposes of transportation between Dalles and Des 50 51 Chutes*w Tfte amount paid was about #100,000. iiS tfte movement to tfte gold mining regions picked up momentum in tfte early 1860fs, tfte physical facilities of tfte Celilo portage road were hard put to handle tfte great volume of freight being presented for transfer over their holdings*

Boats from Portland

carried as many as 315 persons per day on voyages up tfte

46 rive*.

This passenger traffic, plus personal baggage,

and all of the necessary freight to supply the miners in their labors, had to pass over the portage road, and an expansion and improvement of facilities was imperative.5E -After r eviewing all the possible methods toward that end, including the possibility of a portage on the Inhospitable north shore of the Columbia, the directors determined to construct a railroad around the Celilo waters. Preliminary surveys indicated that such a railroad would cost about ^00,000 to complete, the length being about thirteen mile s.53 The name given to the railroad was The Dalles and Celilo Railroad company, and early in 1862 active preparations were under way to lay out the final plans. Bails to be used in the construction were obtained in Ban Francisco by 3 . C. Ainsworth in February of that year. He went to San Francisco and there met his old friend W« G-. Ralston whom he had known during his days as a steamboat captain on the Mississippi.

Ralston intro­

duced Ainsworth to the house of W. T. Golemsn & Company, which had on its hands some twenty miles of railroad rail ordered for one of the early projected railroads in Cal­ ifornia.

The consignees were unable to pay the charges

on the rail and the Coleman Company was only too happy to dispose of the material to Ainsworth at a very liberal

48 steamer Tenino for th© journey to the upper Columbia*

57

This, incidentally, was the same day on which operation of the newly-rebuilt Bradford portage at the Cascades was begun*

However, a heavy wind storm prevented the movement

of The Dalles-Gelile train as planned, great drifts of sand completely covering the track at several points* tial trip was not mad© until the following day.

The ini­ The cost of

the road was about #50,000 per mil© when completed and in operation, a figure far in excess of that estimated by Engineer Goss two years previously*

A telegraph line was

installed the following year for the convenience of train operation and in order to have a train available for quick transfer of goods and passengers whenever a boat docked at 58 either end of the line* It was the control of Th© Dalles-Celilo portage which completed the monopoly of the Oregon Steam navigation Company on the Columbia River before the advent of the rail­ road through th© whole length of the Columbia Valley.

J*s

has been noted, two portages could be and were constructed at th© Cascades; but at Celilo the construction of a com­ petitive portage railroad on th© opposite side of the river was a near-impossibility with the construction tools avail­ able at the time, a series of high bluffs lining the river along a good portion of the distance*

Mo attempt to build

49 such a line was made during the life of the Oregon Steam 59 navigation Company* The Balles-C©lilo railroad was in operation from 1863 until 1879, when the Villard interests purchased the Oregon Steam navigation Company and extended the line to Wallula in 1880 and 1881*

For a time the railroad was th©

longest stretch of railroad track between the Pacific Ocean and the Missouri River*

Hot until the Union Pacific*

Central Pacific line was constructed was a longer line in existence * Efforts to Break the Oregon StJ g 'W W I ^ m i W ^ m W E y Monopoly The absolute control enjoyed by the Oregon Steam navigation Company after the completion of The DallesCelilo and Cascade portage railroads in 1863 was a challenge to other enterprising individuals in the Oregon country* Efforts were soon mad© to obtain a share in the stream of wealth which poured into the companyfs treasury in Portland ©aoh month to b© distributed among the relatively snail number of shareholders* One of the earliest of such efforts was that of the People*® Transportation Company, a steamboat line which operated principally on the Willamette, but which did have two vessels on the run to the Cascades from

50 Portland*

on April 30, 1863, it applied to the Circuit

Court of Wasco County for the condemnation of a sixty-foot strip of th© Oregon Steam Navigation Company’s holdings around th© Cascades, for the purpose of constructing a portage road*

In it© suit it made capital of th© point

that the Oregon railroad line owned by the monopoly was evidently to be abandoned with th© completion of the Cascade portage on the Washington side, and claimed that its (plaintiff’s) demand was ^ust and reasonable#

The

amount of land it desired was slightly over sixteen acres* The Oregon Steam Navigation Company of course objected to such a proposal, maintaining in its answer to the suit that the portage operated by the company on the \*hshington side was quite adequate and able to care for all the business that might be offered* Before the case came to trial an agreement was reached by the directors of the two companies Involved, under which the Oregon Steam Navigation Company purchased th© two vessels owned by the People’s Transportation

Com­

pany for operation on the Columbia, and in turn the People’s Transportation Company assumed control of three vessels then being constructed for the Oregon Steam Navigation Company and intended for use on th© Willamette*

The

People’s Transportation Company further agreed to keep

to b« in th© courts of Oregon for nearly two years.64 During the period Chapman bombarded Ainsworth with pro­ posals and offers.

He actempted to interest the Northern

Pacific Railroad Company, then building toward the Pac­ ific Coast, in buying his charter.

When the president at

the Northern Pacific queried Ainsworth relative to the letter’s opinion of Chapman, Ainsworth replied, in part: This man Chapman Is a man without means or reputation, and has long been trying to black­ mail to O.S.N.Co* He has neither friends nor credi^T" I don’t believe he could borrow fifty dollars in Portland without giving security.#.. I understand that his homestead (the only prop­ erty he ha© left) is mortgaged for about as much as It is worth....I am thus particular in describing the man and his standing because 1 know he is a very plausable talker, and well calculated to deceive. ""His railroad is worth nothing, no intelligent capital can ever be induced to take hold of it*...He of course will try to annoy us, but he can do nothing, and we do not fear him...* ® Despite hi© protestations to the contrary, it is evident that an effort

Ainsworth

to forestall

did have some fear of Chapman.In any xaoves which Chapman mightmake

to set up a railroad in opposition, Ainsworth caused to be organised on ^une 26, 1873, the Cascades rortage Railway Company, with a capital of 1240,000.

This corporation was

evidently kept secret, as a letter from the attorney for the Oregon Steam Navigation Company, G. v*. Strong, to Ainsworth, would seem to indicate.

Speaking of the

51 Its vessels off the Columbia and the Oregon steam Naviga­ tion Company, agreed to refrain from any competitive oper­ ations on the Willamette.

By this arrangement, Oregon was

in effect saddled with two monopolies instead of the one 60 that had existed theretofore* A far more persistent opponent of the Oregon Steam Navigation Company was W. W. Chapman, a lawyer of Portland, who seems to have taken particular delight in trying to make uneasy the position held by J. G. Ainsworth as the titular head of the Oregon Steam Navigation Company* Chapman was one of the original settlers in the Portland area, holding the first land claim to the present site of the city*

He cam© to Oregon from Iowa where he had been

the first state surveyor-general, its first territorial delegate to Congress, and one of the first presidential ■, * 61 electors* The first company organized by Chapman and his associates was the Oregon Cascade Railroad Company, in­ corporated December 18, 1866*

Over a three-year period

the company tried unsuccessfully to obtain a condemnation order from the Multnomah County Court in Portland to per­ mit it to use the portage line, by then abandoned*

Not

being on© to give in easily, Chapman next, in March, 1871, organised a new corporation. The Portland, Dalles and

52 62 Salt lake Bailroad Company, with a capital of #20,000,000. To secure the necessary funds and to acquaint eastern cap­ italists with his plans, Chapman made an extensive trip to Omaha, Philadelphia, St. Louis and Washington*

It was his

intention to huild the railroad east* from Portland through eastern Oregon and southern Idaho to a junction with the recently completed Union Pacific-Central Pacific line at some convenient point in Utah*.

This route was open for

the entire distance to final survey and construction, except for the area at the Cascades portage. By August of 1871 Chapman was able to report that the survey of the proposed railroad was complete over the short distance to the Cascades from Portland* For the necessary right of way through the land at the Cascades, which he described in his complaint as contain­ ing no improvements except a small orchard and a small amount of garden land, he offered to buy a portion from Ainsworth. latter*

This proposal was of course refused by the

Chapman persisted, however, and shortly there­

after sent an agent to the offices of the Oregon Steam Navigation Company with #500 in gold coin and a deed to the property ready for Ainsworth*s signature.

This, too,

was refused, and suit was iramedlately filed for purposes of condemnation of the Cascades property.

This suit was

to be in the courts of Oregon for nearly two years.

GA

During the period Chapman bombarded Ainsworth with pro­ posals and offers.

He attempted to interest the Northern

Pacific Railroad Company, then building toward the Pac­ ific Coast, in buying his charter.

Vlhen the president of

th© Northern Pacific queried Ainsworth relative to the latter*© opinion of Chapman, Ainsworth replied, in parts This man Chapman is a man without means or reputation, and has long been trying to black­ mail to O.S.N.Co. He has neither friends nor credit• I don*t believe he could borrow fifty dollars in Portland without giving security..*. I understand that his homestead (the only prop­ erty he has left) is mortgaged for about as much as It Is worth..*.I am thus particular in describing the man and his standing because I know he is a very plausable talker, and well calculated to deceive. ~HIs railroad is worth nothing, no intelligent capital can ever b© induced to take hold of it. ••.He of course will try to annoy us, but he can do nothing, and we do not fear him.... & Despite his protestations to the contrary, it is evident that an effort

Ainsworth

to forestall

did have some fear of Chapman.

In

any moves whieh Chapman might make

to set up a railroad in opposition, Ainsworth caused to be organized on June 26, 1873, the Cascades I ortage Railway Company, with a capital of |240,000.

This corporation was

evidently kept secret, as a letter from the attorney for the Oregon Steam Navigation Company, G. w. Strong, to Ainsworth, would seem to Indicate.

Speaking of the

54

arrangement by which the Oregon steam Navigation Company would deed certain properties at the Cascades to the new organization, the attorney said: It may be possible that the termini of the road contemplated will have to be changed; and that new deeds will be required - but to prevent the possibility of interlopers stepping in, these deeds had better be executed and delivered to Mr • lygant to hold as the deeds of the C. P. R. Co., but not to be recorded until the mutual contract is drawn and we see that they are ex­ actly what is wanted. If we do want to change them we can surrender them and make what we want; but if anybody attacks the south side road before this is done we have the deeds to show that it is appropriated to the C.P.R# Co. Chapman will find out the existence of the new corporation from Salem very soon now....66 This arrangement was evidently never carried out to completion, having been planned only as a means of har­ assing and embarrassing Chapman or others who might make new efforts to gain control of part of the Oregon portage lands. On June 19, 1873, the newspapers carried the report that ”4t a late hour last night the Jury in the case of the Portland, Dalles and Salt Lake Railroad Com­ pany vs.

The Oregon Steam Navigation Company returned

a verdict In favor of the defendant, assessing damages for a right of way through the defendantfs premises at 67 the Cascades at #10,000.” A motion for a new trial was refused on July 15*

Chapman was given until July 19 to

pay the money due the Oregon steam Navigation Company should he desire the right of way at the price stipulated 63 by th© court. This Chapman was unable to do. Ainsworth on hearing this news, wrote to the president of the North­ ern Pacific Railroad Company in a jubilant tone as follows I have the pleasure to report that the suit for right of way for Portland, Dalles and. Salt Lake RR. over company lands on the south side of the Columbia Rivor at the Cascades was this day dis­ missed by order of the court • I will not go into details of management, but enough to say that Col. Ghapman failed to pay the$10,000 as we knew he would {he could not raise as many cents) and leaving no points on which he could appeal, having all of our motions overruled,and not ob­ jecting to any of his, there was nothing left but to dismiss the suit at his cost. 1 have ordered execution for costs and will make it as rough for him as I can because he has given no little trouble*•..vVe have already taken steps to guard against any annoyance of the kind in th© future...* The reference above to Msteps to guard against any annoyance” evidently neant the Cascades - ortage Rail­ road company, which was a convenient instrument upon which the Oregon Steam Navigation Company might depend in case of an ” interloper.” When Chapman was apprised of the decision of the court he immediately hurried to the public through the columns of the Portland Bulletin with an explanation of his motives and a denunciation of the principles and prac­ tices of th© Oregon Steam Navigation Company.

In part

56

he saids Immediately upon*.-organissatioa in 1871, a surrey and location was made at the Cascades portage of four and on© half miles of road, and suit Instituted to eonde/Hm the land 60 feet wide for a roadway, which was not pressed for trial as arrangements for its immediate use had not been made* But having this Spring made contracts for the construction of the two portages to be commenced immediately upon obtaining the right of way at the Cas­ cades, the counsel of the Oregon Steam Navi­ gation Company was notified in advance that the suit would be pressed for trial••••In the winter of 1871-72 the Northern Pacific Railroad Company became the owner of three fourths of the stock of the Oregon Steam Navigation Company., .so that the contest by our company and the people of this country for competition and reduction of the cost of transportation on the Columbia River is sub­ stantially with the Northern Pacific Railroad Company in the name of the Oregon Steam Nav­ igation Company•*.*on its being reported that work would shortly b© commenced on our port­ age roads, a display is made of improvements and repairs upon a dilapidated horse-railroad which a mule has grown old in holding against competition while business is being done on a first class railroad on the opposite side of the river.**.As land (the portage) it is of no value, but as the gateway upon the Oregon side, barring the navigation of the Columbia River against rival enterprise, the right of way secured at that Bglat is beyond computa­ tion to the country.70 Chapman desisted in his efforts to secure a portage right of way thereafter, but there were others as eager as he to try to wrest the valuable property from the Ainsworth control*

That Ainsworth was well aware of

these moves is evidenced in one of his letters to Jay

57 Cooket X think the company ©an earn next year clear of expenses a quarter of a million in gold. Pos­ sibly some portion of this will have to be ex­ pended in building an iron railroad on the Oregon side of the Columbia river where we now have d wooden road* This expenditure will be necessary to secure from possibility of attack from any competing line and will secure th© property as an impregnable monopoly of the Columbia River....7i Another group which threatened for a time to break the stranglehold at the Cascades held by the Oregon Steam navigation Company was a corporation known as the Oregon Pacific Railroad Company.

Incorporated In Oregon

on September 22, 1874, its stated purpose was to build up the Columbia River Talley through Idaho and Utah to con­ nect with the transcontinental railroads.

It also was

granted the right to build and operate portage railroads and to operate steamboats on the Columbia until the entire railroad was completed.

The incorporators of this line

were listed as I. X.* Hallett, Hamilton Boyd* R. B. Wilson, A. I. Bufur, and Hans Thielsen.

The presence of the last

named individual in the company would seem to give the organization one man who knew the intricacies of railroad construct ion and the problems to be faced in the enter-

The Oregon Pacific Railroad Company was probably organized for the purpose of taking up the prior claims

58

of the Portland, Dalles and Salt lake Ha lira ad of W. w* Chapman should It become apparent that the latter would be unable to carry out its announced plan of building a 73 line over the same territory. Ho construction was ever attempted in the name of the company* At several times proposals were made for the construction of wagon roads and canal looks around the Cascades on the Oregon side#

Notable among these was

the Cascade Canal & lock Company, later to become the ftA Columbia River Improvement Company* That these pro­ posals were ever instituted with a genuine Idea of ulti­ mate construction and operation would appear doubtful* An item in the Oregonian in November, 1875, said that: We learn that in the circuit court at the Dalles in the case of the Columbia River Improvement Company vs* the Oregon Steam Navigation Company the plaintiffs have recovered judgment giving them the Right of Way for a canal and locks at the Cascades****”5 With reference to the above notice Ainsworth was to write to the trustee of th© bankrupt 3ay Gooke firm in the following vein: Fearing that you might see th© enclosed para­ graph and attach undue importance to It, I drop this line to say that I do not think the proposed canal can very materially affect the interests of our company if it is built, parti­ cularly if we complete the Railrcad now in course of construction by our Co***.I think th© move more political than business, and is

59

intended for the purpose of asking Congres­ sional aid with a view to employing a large number of men to the end that Eastern Oregon (the present balance of political power) may becontrolled in the next senatorial election*...76 On May £?, 1873, a special meeting of the board of directors of the Oregon Steam Navigation Company met and resolved once more to set in repair the railroad at the Cascades on the Oregon side* Again, It must be presumed that this was done as a part of Its effort to keep any other group from having cause to go before the courts to obtain rights over the unused lands*

By the resolution

adopted that day it was agreed that iron rails should be put down at the standard gauge of four feet, eight and onehalf inches, and that the rolling stock should be changed accordingly*

l&h©never necessary the line was to be changed

and any improvements which were "requisite for a first 77 class road” were to b© made. Surveys were made during th© summer and work on the i- provements was commenced in August of that year. In the annual report for the year 1873 Ainsworth stated: In compliance with the Besolution of the Board, X commenced th© grading j.bout the 1st of Sept* and continued the work up to the 1st of Bee*, at which time X suspended operations for the winter. X have borrowed iron sufficient of th© N. P. ER to complete the first section of th© road*.. The road will^form a link to the Northern Pac­ ific B. R.**.

60

Th© following year Ainsworth stated. In ills report that We have also expended during the year #16645*75 for building bridges and grading on th© new Railroad, on th© south bank of the Columbia River at the Cascades. Th© early completion of this road I regard as of vital importance to the interests of the Co.**.The work when completed will be six miles long and as some of the grading will be in he^vy rock outs, its construction will necessarily be expensive, yet I estimate that #150,000 in addition to what has already been expended will finish and stock the road and build necessary depots* This seems like a large sum to expend on on© of the Portages in one year, yet its import­ ance is of such character that I cannot too urgently recommend it...*”9 In his report to the stockholders of the company for the year 1875, Ainsworth made reference to the situa­ tion on the Oregon side at the Cascades as follows: In my last annual report X recommended th© early completion of the railroad on the south bank of the Columbia at th© Cascades. The directors are of on© mind as to the import­ ance of this improvement, but for various reasons have allowed the year to pass by with­ out doing anything towards the accomplishment of this very important improvement. The com­ pany have been, as it were, sleeping on its rights, and sailing very close to the wind, legally, in its efforts to hold this impoi’tant railroad franchise* Nothing is yet jeop­ ardized, but another year cannot pass by in safety without resuming work in a vigorous manner....A company has recently been formed for the purpose of building a canal and locks at this point, and have obtained judgment against our company for a right of way. Our railroad grade should be made before they should, by work, interfere with our plans.

61 The importance of occupying this portage can­ not toe overestimated, and it can only b© ac­ complished by_finishing the railroad already ooxamenced * Ho new construction work was completed during the year 1876 on the Oregon aide of the Cascades*

Curing

June, 1876, ther© was a considerable flood on the Columbia and much of the roadway previously constructed was serious­ ly damaged, to the extent that th© construction crews were engaged in necessary repair work*

Nevertheless the direct­

ors of the company had not given up the plan to complete the work of the whole road as rapidly as possible, a reso­ lution to that effect toeing passed toy the board on the 17th of November, 1876* In his annual report Ainsworth made reference to the fact that the Oregon Steam Navigation Company was hampered In its efforts to complete the rebuilding on the Oregon side toy the financial difficulties which had worked adversely to the companyfs best interests in the years following 1873*

Commenting on the future of the Oregon

portage work, he said: The importance of constructing the railroa< on th© south side of the Columbia at the Cascades has been stated In my annual report for sev­ eral years past, tout owing to the uncertainty of the policy which might toe pursued toy the majority stock owned as it has been toy non­ residents of the state, the board have felt timid about engaging vigorously in this

62

important work* Mow that it may be safely said that the company have a policy, there is no good reason why the road should be longer delayed#*..SA In the report above an item was included for the expenditure of #175,000 to complete the railroad, this amount being exclusive of #25,000 already expended for rail, spikes and fish plates ordered and ready to be shipped to Oregon from New York* The Northern ttHBME89MBSSBB8B Pacific ®5d!SOBBHjBHBiSBS®3BSff Interests

- ■ ■ M i SSBBBBSBBBBSBGBBSE

Early in March of 1872 3 . c. Rinsworth and other stockholders in the Oregon Steam Navigation Company were authorised by the board of directors to proceed to New York on business of the company*

This brief entry in the

minutes Is the first indication of the movement afoot to sell the controlling interest in th© Oregon steam Naviga82 tion Company to the Northern Pacifie Railroad Company* In 1864 Congress had granted a charter to the Northern Pacific Railroad to build a line from Lake Superior to Portland.

In accord with federal policy at

the time, forty alternate section© of land within th© territories

and twenty in the states to be crossed by

the line were given for every mile of track constructed. However, Congress provided for no direct cash loans and almost from the beginning the Northern Pacific was in

63 financial aifflenities*

In 1869, before a single mile of

track was laid, tbs officials of the company persuaded lay Cooke and Company, then the nation's leading financial house, to act as its agent in securing funds.

This firm

was most successful in disposing of Northern Pacific se­ curities and by 1872 the railroad was in a fortunate financial condition*

Money in great amounts was pouring

into its treasury from the sale of nearly $30,000,000 of its bonds.

The management was eager to use these funds

to insure that trie line would reach the North Pacific coast as rapidly as possible*

The Oregon Steam Naviga­

tion Company had control of the only water level route through the Cascades and it is therefore not surprising that overtures were made to its directors by the Northern Pacific to ascertain their attitude toward selling the 83 enterpr ise. As finally arranged, three-fourths of the stock of the Oregon Steam Navigation Company was transferred to

the Northern Pacific Bailroad*

This amounted to $1,500,000

of the 12, 000,000 capitalization.

One—half of the payment

was received in bonds of the Northern Pacific at ninety cents, or #825,000 In bonds, and the balance in payments as follows:

$100,000 on May 1, July 1, September I,

November 1 and January 1, 1873*

The balance of $250,000

was to be paid out of the dividends anticipated from the 84 ownership of the stock. During the financial upheave! of 1873 the firm of Jay Cooke and Company, the banking house which had handled the bond sales for the Northern Pacific Company, closed its doors*

As a result of this and the panic that

followed the Northern Pacific was forced into bankruptcy in 1S7§*

Edwin M. Lewis was appointed the trustee, and

he distributed the stoek of the Oregon Steam Navigation Company to the widely scattered creditors in part settle­ ment of the value of their claims. The Oregon Steam Navigation Company being rela­ tively unknown outside the Pacific Coast area, creditors given the stock were for tbs most part anxious to dispose of their holdings as rapidly as possible.

The market

price for the Oregon Steam Navigation Company stock was low, in common with so many other securities of the time, and little hope was generally held that its par value would ever be realized* However, in spite of the depression which gripped th© nation at th© time, the Oregon Steam Navi­ gation Company was still yielding dividends to its stock­ holders*

The directors saw in the wish of so many of the

stockholders to dispose of their securities a golden

65

opportunity to buy back th© full control of the company at a ridiculously low price, and this they did, at about half the amount for which it had been sold*

Ainsworth

wrote to Cooke in 1875, relative to the stock, "As soon

as you get through with distribution and your interest cannot be affected by anything I may do, 1 may possibly 85 buy some myself•* Two years later he stated in a letter to one of the inner circle of stockholders that "••♦the 0* S. H. Stock is all right*

I wish we owned it all.*.*"

In spite of depression, bankruptcies, and gen­ eral uneasiness in the eastern United States, th© Oregon country continued to go ahead in its development, and the business of th© Columbia Hiver area grew ever larger. Anticipating that the traffic would reach such proportions that the Washington side road would be unable to handle all that might be offered, the board of directors ordered the resumption of the rebuilding of the Oregon road, early in 87 1877. However, construction difficulties of unprecedented magnitude presented themselves, and in May the work was halted temporarily.

*f• W# Bra zee, the chief engineer in

the construction work, reported that for a two-mile distance over which the road was being built a series of slides made the further expenditure of company funds unwise at the time, as the whole effort might go for naught unless some way of

66

controlling th© sliding mountain was devised*

At that

time the federal government was planning to cons true t a sea wall near the edge of the river in connection with a canal around the Cascades, and it was felt that this might aid in preventing further slides.88 Business increased to such an extent, however, that the directors felt they could no longer delay in fitting up the Oregon portage to handle a part of the traffic moving over the Washington portage.

Accordingly,

it was decided to contact the government engineer at the Cascades, and if the contemplated sea wall was not to be begun shortly, the Oregon Steam Navigation Company would commence reconstruction work once more and bring the pro­ ject to completion as soon as possible*

Authority was

given for the purchase of an additional five miles of railroad iron, in addition to the two miles previously 39 acquired* The work of finishing the road bed was entrusted at this time to I. M. McCartney as chief engineer.

In

January of 1878 h© left his work of surveying a route for the Blue Mountain and Columbia River railroad in eastern Oregon and came to the Cascades*

Tbe original plan of

laying a standard gauge line over this section was abandoned by the directors, and instead, construction

67 was based on the Idea of a three-foot line*

This appar­

ently bears out the contention of many who faaintaiaed that the work on the Oregon side was simply a convenient method of keeping any competition from gaining a foothold and destroying the Oregon Steam Navigation at this point.

Company's monopoly

The grading and brid.es on this line were

completed during the year, but no ties or rails were ever laid down, and it is probable that the approaches to the inclines and trestles were never built* Writing in 1915 of his work for the Oregon Steam navigation Company, McCartney stated that "railroad politics was the primary reason for th© Oregon work. ...The Oregon Portage was re-graded so as to hold the ground and be ready to lay the track at a day's notice....The rails would cer­ tainly have been laid if the Tlllard deal for the purchase 90 of the whole Q£N Co. had not com© to a focus in 1879." McCartney had difficulty, as had Braze© before him, with the very unstable ground over which the railroad was to be built.

In February of 187© he wrote Ainsworth

that "For two miles along the side hill the whole country seems to be moving toward the river like a glacier.

It is

all broken and full of fissures, ana unstable looking to the last degree, and from what Mr* Braze© tells me, it is . « 91 even worse than it looks."

68

1!he work accomplished under McCartney fs direction was the last done under the auspices of the Oregon Steam navigation Company* as the company passed out of the hands of the Ainsworth interests and into the control of Henry Yillard on May 23, 1879.

Shortly it was to be reorganized

and appear under a new and broader corporate structure, as the Oregon Hallway and Navigation Company*

FOOTHQTKS Randall V. Mills, Stern Wheelers Up Columbia (Palo Alto, Cal., 19T7T , p -’3. Frank B. Gill, Unfinished History of Transportation in the Northwest , ME-•, p. S. THereinafter referred to as Gill, Unfinished History) Mills, ©£* alt*, P* 29 Mrs. J* Dm Wells to Frank B. Gill, April 9, 1926, Mrs. Wells wti& the last surviving daughter of Francis Chenoweth. Chenoweth was one of the earliest settlers in Washington territory, serving on the Territorial Council in 1852. Later he moved to Corvallis, Oregon, where he served as Circuit Judge and as a member of the legislature in 1866. The exact length of the Ohenoweth portage cannot be determined. Some travelers evidently gave the whole distance from the Upper to the Lower Cascades as the length. John H. Williams, who edited the Journals of Theodore Winthrop, says it was four miles long, but this must be in error. The railroad extended only from the Middle to the Upper Cascades, a distance of not over two miles at the maximum. Mrs. J. D. Wells to Frank B. Gill, April 30, 1926. Arthur A. Benny, Pioneer Bays on Puget Sound, Alice Harrimsn, ©ditor Tseattle, 1*13), pp.25-26. Diary. Mr®, Cecelia E-. McMillan Adams, Sunday, October 24, 1851, in Proceedings. 32nd Annual Reunion of Oregon Pioneer Association (1904), pp. 328-29. Mrs. Adams is also in error as giving the length of the railroad as three miles. See note 5. Theodore Winthrop, The Canoe and the Saddle (Tacoma, Washing!Son, 19l3TTp. 270.

70

10

.

Clipping, unsigned, Hood. Kiver (Oregon) Glacier. February 7, 1913. In Gill, Clipping"”Book n .

XI*

Mrs.

Is*

Mills,

13.

Ibid.. p. 28.

14*

Frank B. Gill, "Oregon’s First Bailroad," Oregon Historical Quarterly. Vol. XXV, No. 3, September, 1924, p. 178•

15.

Mrs* I. D. Wells to Frank B. Gill, April 9, 1926. Gill Collection. 1926.

13*

Joseph Gaston, Centennial History of Oregon {3 vols., Chicago, 1912), Vol. I, pp. 409-14.

17*

Portland Weekly Oregonian. November 21, 1857.

18.

Gill, Unfinished History, p. 10*

19.

Portland Weekly Oregonian* November 21, 1857.

50.

Ibid.. October 2, 1868*

51.

Ibid*, August 28, 1858.

ss.

Gill, "Oregon’s First Bailroad," p. 184; Hubert Howe Bancroft, History of Oregon (2 vols*, San Francisco, 1888), Vol. I, p* 480, Bancroft states that Van Bergen in 1838 began the first railroad on the Oregon side at the Car cades and that Glmstead and Buckel purchased it from him. There is no evidence, however, of any actual construction accomplished by Van Bergen.

S3*

The Oregoniar * April 17, 1865*

24.

Brazee came to Oregon in 1858 from California. His first work was laying out a pack trail between Fort Vancouver and Fort Simcoe, across the Cascades, a great achievement of the time, as army engineers, notably McClellan, had pro­ nounced it impossible# Brazee was the

D. Wells to Frank B. Gill, April 9. 1926. Gill Collection. 1926. P* 28.

Gill Gollection.

71

superintendent of the Oregon Steam Navigation Company's portages at the Cascades and at Oelilo until that company sold Its property to Henry Vlllard In 1879* 25*

Gill, Unfinished History* p* 6,

Gill Collection*

26*

H. B* Ainsworth to fra ate B* Gill, llarch 6, 1924* Gill Collection, 1924*

27*

Portland Weekly Oregonian. July 18, 1857.

28 *

Ibid*. November 20, 1858*

29*

Ibid*. April 23, 1059.

30.

Valuation File 3| 66, Oregon Steam Navigation Company of WasEIngToii Territory, p. 1

31*

Ibid.. p* 2. On the board of directors were J. C. Ainsworth, J . S* Eucteel, L. W. Coe, &* g . Reed and D. F. Bradford*

52*

F. W. Gillette, ”A Brief History of t he Oregon Steam Navigation Company,” Oregon Historical Quarterly. Vox* V, Ho* 2, June, 1904, pp. 120-132; tT C. Elliott, ”Th© Balles-Celilo Portage; Its History and Influence,” Oregon HistoricaI Quarterly. Vol. XVI, Mo* 2, June, 19IS, ^ * 1 3 3 - 1 7 4 , offer two viewpoints of the Oregon Steam Navigation Com­ pany's services to Oregon. Gillette's remarks are most unfriendly and largely unfair. Elliott maintains that generally the owners of the com­ pany were astute business men making good use of the opportunities before them and not, as Gillette infers, insensible to the needs of the people of Oregon•

33.

Irene Poppleton, "Oregon's First Monopoly," Oregon Historical Quarterly, Vol. VIII, Ho, 3, September, 1908, p. 279.

34.

Ibid*, p. 278*

35*

Glenn C. Qulett, They Built the West, (Hew York, 1930), p. 348.

3d*

Valuation File E 66, Oregon Steam Navigation Company of Washington Territory, p. 2.

72 37.

Valuation File J! 66, Oregon Steam Navigation Company of Oregon, p. 2.

38#

Pacific Christian Advocate. May 11, 1861.

33*

The OregonIan, May 28, 29, 1861. Indicative of the amount of freight being handled over the portage railroad is the report of gross earnings for the first eight months of 1861: Washington sides January February March April May 1 to 17 inclusive Oregon side: May 20 to 31 inclusive June July August Total

# 834.75 2196.67 2508.96 3383.58 1843.48 2078.00 5296.65 6203.00 4011.57 #28356.76

4$*

Faolfio Christian Advocate.

October 12, 1361.

41.

GUI, Unfinished History, p. 9. Qjxi Collection,

42.

8111, R0regonfs First Railroad,” .p. 200.

43.

The Oregonian for April 2, 1862, contains the follow­ ing item: MThe Steamer Pacific brought up from San Francisco a fine new steam engine for the railroaa in course of construction betweeii The Dalles and Des Chutes. The Engine is called the ♦Pony* and will no doubt startle the Cayuses who roam in that neighborhood.**.God speed the Iron horse.” The reporter who gathered the item for the above was in error in ascribing the "Pony” to use on tne line around Celilo Falls. Two locomotives were ordered from the Vulcan Iron Works subsequent to the order for the "Pony” for us© on the Celilo line, and the reporter evidently confused the arrival.

44.

Pacific Christian Advocate. May 24, 1862*

45♦

The Oregonian. October 13, 1862

73 **•

Mlaatoe of Board of Directors. 0. s. H. Co., November 3 , 4 , 1 8 6 2 . Sill Collection. 1862.

47.

The Oregonian. April 20, 1863.

40* 49*

JkSJL* Jm ^LSL** P * 14&« Ibid** p. 184*

50*

Minutes of Board ef Directors, 0* ¥.H* Co ., Dec eraser £t 1S517 feill Collect ion * 1861.

51*

Irene Poppleton, loo * clt*. p. 283*

52.

Gill, Unfinished History* p. 17. Gill Collection.

53*

Report of Survey* George Goss to J .C* Ainsworth, Di‘c ~ 2 4 > l861 * Gill Collection. 1861*

§4.

H* B. Ainsworth to Frank B.Gill, Gill Collection* 1924*

larch 6, 1924.

55*

The Oregonian. March 25, 1862.

56*

Ibid.. April 25, June 5, 1862.

3?*

Ibid.* April 21, 1863.

58.

Ibid*. June 23, 1864.

59*

llliott, loo * clt*. p* 165*

60*

Gill, unfinished History* p* 23.

61*

Bancroft, o^. clt*. Vol-II, p. 70®.

Gill Collection.

Oregonian* March 13, 1871. Ibid.,

m y 25, 1871.

64.

Ibid*. August 12, 1871.

65.

J. C. Ainsworth to G* Cass, February 17, 1873. Gill Collection* 1873*

66.

G. ¥. Strong to J. C. Ainsworth, July 22, 1873. Gill Oolleotion* 1873.

74

67*

The Oregonian. June 19, 1873*

68 *

Ibid*. Inly 15, 1873.

69*

I. C* Ainsworth to G* W. Co b s , July 19, 1873. Collection. 1873.

70*

Portland Daily bulletin. June 23, 1873.

71.

I* 0* Ainsworth to Jay Cook©, October 8, 1873. Collection. 1873.

72.

She Oregonian. September 23, 25, 1874*

73*

Ibid*. October 9, 1874*

74*

Gill, "Oregonfs First Bailroad," p. 226.

75*

The Oregonian. November 19,1875.

76*

J * C. Ainsworth to E.M. Lewis, November 20, 1875. Gill Oolleotion. 1875*

77*

Minutes o f .Board of directors. 0. s. u. Co., May 27, 1873* Sill Collection, 1873*

78*

Annual Beport to Stockholders. 0. G i l l '' O o i l W t l o h l 'T W g * '""'

79*

Ibid.. 1874.. G U I

so.

Ibid.. 1875.

Gill Collection. 1875.

81.

Ibid.. 1876.

Gill Collection. 1876.

82*

Minutes of Board of Directors, 0. s. N. Co., March 6, 1872. 'ciil Collection. 1872.

83*

Eugene V. Galley, History of Northern Pacific Eailroad (Mew York, 18831, p .187. ee also B. C.MoGrane, The Bconoi ilc Development of the American Ma tion Tlew ^ork, 1942) , p . 329.

84.

J. G* Ainsworth to A. Hayward, May 3, 1872. ColleetIon.

Gill

85.

J. C. Ainsworth to Jay Cooke, July 4, 1875. Collection.

Gill

s.

Gill

Gill

H . Co., 1873.

Collection. 1874.

75

86 *

J* C* ivlnffworfch to C. E, Hilton, August I, 1877. Gill Collection.

87*

The Oregonian* March ZZ , 1877.

88 *

Minutes of Board ofjaforeotor& , o. s. N. Co*. May 5. 18^7 « c K S T Collect Ion. 1877.

89*

Ibid.» Bee* E6, 1877*

90*

H. M. McCartney to Frank B* Gill, July 4, 1915. Gill Collection. 1915.

91*

H* M* McCartney to J* W. Sprague, Febru&r y 10, 1878* Gill Collootloa* 1878.

8111 Collection. 1877.

76

Chapter III ORGANIZATION OF WILLAMETTE VALLEY LINES PRIOR TO 1869

The early development of railroads in Oregon followed much the same pattern as that of the canal and turnpike interests in the eastern states thirty years previously* lack new townsite laid out in the wilderness - and there were m a y of them - had its oh amp ions who saw therein the beginnings of a new metropolis destined to overshadow all others for the coveted position as the center of trade and commerce over a wide area*

All that was lacking* in the

eyes of these enthusiasts* was a system of easy communica­ tion*

And this, of course, could best be brought about

through the building of a railroad* Rather surprisingly, there were few proposals made in Oregon for the building of railroads before the survey* lag of a railroad route was actually commenced*

Ihose first

mentioned were apparently the outgrowth of the railroad fever felt In all parts of the west during the period when the transcontinental line was being considered in the Congress ©f the United States*

As early as 1850 there was

discussed in Oregon the possibility of constructing a railread from the Columbia Biver settlement of St. Helens,

77 about midway between Portland and the mouth of the river, to the town of LaFayett© in Yamhill County 3 0 Uthv*@st of 1 Portland* This first suggestion apparently died a-horning, as no further reference to it is to b© found. la 1853 General Isaac I. Stevens was in the Oregon country, under the orders of the War Department, to Investi­ gate a possible northern route for the Pacific Railroad which th© government planned to construct if a route acceptable to both the northern and southern factions could be found.

The

Oregon Territorial Legislature apparently became Imbued with the railroad enthusiasm engendered by Stevens* visit and passed resolutions urging the Congress to give all possible aid to a railroad which would terminate at the mouth of the Columbia River Four Early Companies In that same session of 1853-1854, four charters were granted to local companies planning to build lines in the Oregon territory.

These were as follows:

The Willamette Valley Railroad Company.

This

group proposed to build from Portland south on the west side of the Willamette River to Corvallis, and from that point by way of the Umpqua and Rogue River areas to the northern boundary of California,

Capitalized at |1,000,000 with the

provision that the capitalization might be doubled if

78

necessary, the company held several meetings of the incorporators and opened books for subscriptions of stock*,* Beyond these preliminaries no further action seems to have been taken to carry out the announced plans of the company, although the Oregonian felt that "there is sufficient cap­ ital lying idle in the country to build it, notwithstanding the croaking about hard times, scarcity of money, etc*, 4 which are always heard from the Jeremiahs of the land*” The Oregon and California Kallroa d Company *

On

January 30, 1854, this company was chartered by the Oregon Territorial Legislature for the purpose of building a rail­ road line from the settlement at Eugene City, near the head of navigation on the Willamette Kiver, down that stream on the east side to an indefinite point between Or eg cm City and Portland, or to the Columbia River*

Capital stock of

this enterprise was limited to #4,000,000*

Beyond the

assembling of an impressive number of commissioners comprising the most important individuals in the territory at the time, nothing more was done toward the building of the railroad*

The name, Oregon and California Railroad

Company, was to be used by a corporation subsequently formed, but the latter organization had no connection whatever with the original corporation* s-

ms. Cincinnati Hallroad Company*

Cincinnati

was a small settlement in Polk County,now known as Eola *

79

file purpose of the railroad was to connect that village with the "stone coal bank lately discovered on the H. 13. v. Holmes land claim*"

Beyond the granting of the charter, no

steps were ever taken to secure funds for the building of the line* Clackamas Railroad Company. This organisa­ tion was formed in 1854 as a portage railroad to be built around the Falls of the Willamette at Oregon City,

But,

as with the other lines, nothing came of the movement at 5 that time* The California Impetug The desire for railroad communication in Oregon was strong, but the thin financial resources of the sparsely populated territory precluded the possibility of building a line to the state borders, and beyond, without outside aid* The initial impetus which was eventually to result in actual railroad construction in Oregon came from the neighboring state of California*

There the financial interests, strong

through the gold mining activities, were engaged in the early 186G’s in the building of several so-called "bonanza” railroads connecting the mining regions with the San Francisco Bay area, and were also attempting to extend the railroad net north and south of that city. One such aggregation of enterprising Californians

80 received assistance from the legislature of that state by an act of April 6, 1863, which granted the right to con­ struct a railroad line from the settlement at Marysville north to the Oregon line, the intent being that the road would be continued on through Oregon to the city of Port­ land.

A right of way through public lands of California

was granted, together with certain other privileges, all of which were to be of no value unless the organization was incorporated by July 1, 1865* Simon Elliottfs Early Work Probably the most influential man within this California group was Simon G. Elliott*

A self-styled civil

engineer by profession, Elliott was reputed to have been associated with

fheodore Judah in surveying the route

eventually used by the Central Pacific Kailroad in cross­ ing the Sierra Nevada and had been active in mining activities in California in the 1850fs*

Described as a

man of vision, energy and unusual ambition by some, and an unmitigated scoundrel by others, Elliott came to Oregon in April, 1863, to interest the people of that state in giving support to the railroad to be built from ? California* On his journey northward through the southern Oregon area he talked with the residents and secured as

81 many subscriptions as possible to help pay for the survey which was the necessary first step*

It was only in this

part of Oregon that he received the support for the project which he had expected to find throughout the whole distance from California to Portland* Late in .April a public meeting was held in Portland, with Elliott in attendance, the purpose of the gathering being to discuss the importance of building a railroad through Oregon to the California border and to discuss vss ys and means of raising funds to make a preliminary examineQ tion of the country over which such a line would pass. Only a small minority of the citizens of Portland, however, looked with favor on the Elliott idea*

There seems to have

been even at that day a mistrust of anything originating in California.

The citizens looked with suspicion on the rail­

road plan of the California interests, deeming it a dark plot devised to further the growth of San Fran cisco at the expense of the port city to the north.

They foresaw that the build­

ing of a railroad connecting Portland and San Francisco would conceivably make Portland only the terminus of a branch line railroad.

Or worse, should the line be extended north­

ward to Puget Sound, Portland might well find itself little more than a way station. The bustling river port of Portland by the early 1860fs was well on its way to becoming the industrial and

cultural heart of the new state of Oregon.

There was hound-

less enthusiasm among the more progressive portion of its citizenry for the good things which the future held for them. Was it not reasonable to assume that their city, lying near the function of the two largest rivers in the state, and in the natural gateway formed by the Columbia Eiver to the en­ tire inland Northwest, would some day become the greatest metropolis on the Pacific Coast?

True, San Francisco had

grown mightily with the discovery of gold, but gold was a transient thing and once it was all mined the city by the Golden Gate would sink into minor importance.

Oregon and

the whole Pacific Northwest, with its wealth in forests, mines, and the finest farm lands on the coast, would event­ ually come into its own, and Portland stood to reap the full benefit of the development# With such ideas prevalent it is not surprising that there was no such boundless enthusiasm for Elliottfs pro­ ject as he had hoped to find in Portland.

Nevertheless,

lists were opened to the public early in May for those who wished to subscribe funds to assist in defraying the cost of a preliminary survey for a "Portland and California" railroad route between Portland and Yreka in California. The amount subscribed was to be paid in four installments, one quarter on signing, and one quarter on the first day

83

©f ©a ah of the three following months .

The committee for

receiving the subscription© was composed of A. C . Gibbs, Aroory Holbrook, H. H. Mitchell ana E. J". Ladd, all prom­ inent business men of rortland •

Iversons who contributed

ten dollars or more were entitled to have their names in­ corporated in the bill passed by the California legislature protecting the survey.

When the road was fully organized,

such subscribers would be entitled to one full share in the company for each ten dollars paid in. In order that the mineral wealth of Oregon, then supposed to be very great along the route of the proposed railroad, might be advertised and constitute a factor in inducing foreign capital to invest in the enterprise, Elliott requested citizens possessing geological specimens indicative of the minerals to be found in Oregon to leave 9 them at the Oregonian office in Portland for his use. Mill© in Oregon Elliott made the acquaintance of Colonel George H. Belden, who for several years had been xJhief clerk in the office of the Surveyor-General of th© state. A xoan of broad experience and well acquainted with Oregon topography, Belden agreed to join with Elliott in making the survey*

This was a fortunate move on Elliott's

part, as it created a better feeling among Oregon residents toward the whole enterprise.

Speaking of the choice of

84

Belden, the Oregonian stated that It w^s "glad that so wise a selection has been made a® his experience and. knowledge abundantly qualify him for faithful performance#«*snd will tend to inspire more confidence in the minds of the citizens*•. 10 In his project#* Elliott left Portland in May and proceeded at once to Marysville to make preparations for the survey through the Sacramento Valley toward Oregon#

hs finally organised*

the surveying party was composed of Colonel Charles Barry, acting as general superintendent of the survey, and thirteen men#

The group started north in July and met Belden at

Red Bluff in the following month, from which point the survey was conducted, under the joint leadership of Elliott and Belden, northward over the Siskiyou Mountains#

The

party examined several passes through the rugged country and finally arrived at Jacksonville in southern Oregon in 11 late October# The residents of southern Oregon were vitally inter­ ested in having a railroad connection with either San Francisco or Portland#

Jacksonville, the county seat of

Jackson County, was the principal settlement in the Rogue River Valley, a region rich in agricultural and mineral resources#

In a sense the settlers felt their isolation

more strongly than any other community In Oregon, since

85

they were 300 miles from a seaport and a metropolitan mar­ ket*

North from San Francisco it was possible for goods

to be transported inland up the Sacramento River by boat for nearly 150 miles*

South from Portland, steamers

plied the Willamette for 1S5 miles, as far up as Spring­ field and Eugene, then called Eugene City.

Consequently

the town of Jacksonville and its environs, between these river termini, had to

depend on primitive pack trains,

stage coaches, and freighting teams to carry from the mountain valleys the products of far i, mine and forest. Hence it is understandable that the farmers and merchants in that region resolved to make every effort to bring a railroad through the area* Not all the residents, however, looked with favor upon Elliott’s plan, fhe charge was satirically made that the idea of a railroad through such a wilderness as that between lortland and San Francisco was nonsense, and that if one should be built the first train would carry all the freight, the second all the passengers, and the third would pull up the track behind it and carry off the road itself.12 After the arrival of the surveying party at Jacksonville, disaffection arose between Elliott and Belden as to which should lead the

survey through

36

Oregon to Portland•

Belden claimed that under the agree­

ment made with Elliott giving Belden the responsibility for the Oregon section he was the logical man to act as chief*

Elliott, on the other hand, maintained that as

the originator of the venture he should have that position* As a result of this disagreement both Belden and Elliott retired from control of the survey at Jacksonville, leav­ ing the members of the party stranded at that point with 13 their pay six months in arrears* The Entry of Joseph Gaston It was at this time that Joseph Gaston, an attorney of Jacksonville, entered the field of Oregon railroad enterprise, where his influence was to Se felt for over twenty years*

Gaston had been in correspondence with

Elliott and Belden before the surveying party arrived at Jacksonville, and had been asked by the party leaders to gather as many subscriptions as jjossible to aid in the work.^ To carry on the task of gathering funds for the survey Gaston had organized, on October 15, 1863, the California and Columbia Biver hailroad Company.

Gaston,

J* E. Moores and b. G. Elliott were listed as the in­ corporators*

A subscription list was circulated through­

out southern Oregon and some sixty persons agreed to pay

87

fro® two to ton dollars in ©ash, or notes for the delivery of from five to fifty bushels of wheat from warehouses on the demand of Gaston or Elliott#

It was stipulated that

oh the final organization of the company the subscribers should have the option of becoming stockholders to the amount subscribed at the rate of ten dollars per share, or of receiving back their investment without interest as 15 soon as the company was able to pay# Formal organization of the California and Columbia River Railroad Company was effected at a meeting held in Jacksonville on November 7, when Amory Holbrook of Portland was chosen as president, J# C# Tolman of Ashland, vice-president, and James 1?# Glenn of Jacksonville, treasurer#

Joseph Gaston retained

the post of secretary which he had held under the prelim­ inary organization and S* G. Elliott continued as chief

engineer#^ Gaston regarded this movement toward the con­ struction of a trunk line railroad In Oregon as the first such project sponsored exclusively by Oregon interests and the first which resulted in anything but "talk not worth 17 recording#” The Elliott and Barrjr S u r v e y in Oregon Curing the winter of 1863-64 the members of the Elliott-Belden survey passed their time in Jacksonville,

88

subsisting at least In part on moneys gathered In by Gaston from those in the region sufficiently interested In the railroad proposition to make contribution in money or in warehouse receipts*

Farmers in the vicinity housed

and entertained the stranded surveyors until the weather permitted the continuation of surveying activities in the spring of 1864.

The work was then placed under the direc­

tion of Colonel Charles Barry, the general superintendent of the original Belden-Klliott party.

Barry made a recon­

naissance of the entire distance between Jacksonvllle and Portland, interviewing settlers and endeavoring to determine which of the various possible routes offered not only the greatest immediate aid to the enterprise, but also gave promise of the greatest potential traffic in the future*

18

In March Barry was in the upper Willamette Talley near Salem, and there was much speculation as to which side of the valley would be chosen for the route*

according to

one newspaper articlei Mr* Barry has been spending some time ^mong the people on the west side of the river and in look­ ing over the country between Corvallis and Port­ land for an available railroad route. The result of his observations is the conclusion that almost a direct line between these two points can be located with very light grades and only a very few bridges to construct* He will soon organise a party for the pur ose of making an accurate survey. We learn that the people on that side of the river offer much more liberal inducements to the work than could be obtained on the east

89 side* The distance from Corvallis to Port­ land by way of the newly proposed route is much less than that by way of Salem and Oregon City. It is not impossible that if stock be freely taken on that side as we hear it will be the location will be made there and thus by their illiberality the people of Linn, Marion and Clackamas will lose for themselves the main benefits of the road. Sometime or other a road will be built from Portland to at least the head of the valley and its eventual location will depend more or less upon the present action of the parties connected with the survey of the Celifornia and Columbia Elver road. The people of the east side of the river if they would consult their own interest should not permit the location to go by default elsewhere*19 Summarizing the report of his survey, Barry stated that the advantages of a railroad to the Central Pacific from Portland would be, as he believed, as follows: 1* It runs through and connects with each other and with the Pacific Ocean at either end, all the great valleys and grain grow­ ing districts on the Pacific Coast. Z* It is loeated on the direct line ox* the great coast-wise trade and travel that is now rapidly springing into existence. 3* It will be the only internal, mountaindefended military road safe from the raids of an enemy, on which the nation and the American communities on the Pacific Coast could rely for the speedy transportation of troops and munitions of war, in case of an invasion by foreign nations. 4. When constructed, it would connect the states of Oregon, Idaho, Washington and British Columbia and Vancouver Island on

the north, with the states of California, Nevada, and the Atlantic States on the south, and transport all of the- travel and the great majority of the freight between those states* 5* It would be the only line running through the only country in the world combining the three great resources of wealth - great agricultural resources, unlimited water power for manufactures, and great forests of good timber with inexhaustible mines of the use­ ful and precious metals. 6. In all these advantages, this enterprise, from the nature of the country, could never have a rival line competing for lie Business* There was published in 1864 a "Eeport on the Preliminary Survey of the California and Oregon Bailroad by the Chief Engineer.”

This was prepared by Simon G.

Elliott and was a complete report of the territory covered by Elliott and Belden from Marysville to Jack­ sonville*

The section relating to Oregon north of the

latter point, however, was "a simple cursory examinetion” and was only casually done.

Elliott remarked that

"Through Oregon the level was applied at all points where it was deemed that the construction of the road would be difficult.”

Much of Elliottfs Information on

the more mountainous sections south of Eugene City was secured from the report made some years earlier by Lieu­ tenant Abbott of the U. P. Engineers who examined the #31 country as a possible route for a railroad. Elliott*s survey generally followed that of

91 Barry to the head of the Willamette Valley at Eugene. Here Elliott planned to have the line pass through Corvallis where it would cross the Willamette to the east side and follow the valley north through Albany and Salem to Oregon City, where a crossing of the Willamette was to be made to the west side, the road then to follow through the Tualatin 22 Plains to Portland or some point on the Columbia River* Elliott estimated that by his route it would not be necessary to use a grade greater than 100 feet to the mile, that the maximum curvature would not exceed ten de­ grees, and that eighty per cent of the road would be 23 straIght line • Early in June of 1864 Barry left Jacksonville once more, this time leading a party of eight men for a final survey of the line northward to the Columbia River* This work was accomplished during the summer, Portland being reached on September 1, and Barry*s report was pre24 seated to the legislature in that autumn by Joseph Gaston. The Barry survey provided for the main line to go directly to the Columbia River by the shortest possible route and in so doing the city of Portland was by-passed. The lethargy of the Portland people in refusing to support the cost of the survey was decried by the Oregonian, whi ch felt that this attitude had led Barry to run the line as

92 he did.

The newspaper urged that the citizens contribute

a few. hundred dollars to assist Barry in completing a sec­ ondary survey from the city of Dayton to Portland.

A few

weeks later another appeal was made for Barry's work. This time the basis for the appeal was that any amounts subscribed would not be due for payment until the field notes of the survey were in the hands of the Ladd & Tilton banking interests in Portland.

Those subscribing would

25 become stockholders in the company to the suxa subscribed. By early September the survey to St. Helens was completed and a preliminary survey had been run from Portland to a point in Polk County near Dayton, about thirty-seven miles south, where connection would be made 26 with the St. Helens line. On the 15th of that month a lengthy account of the route to be followed was published. To build the railroad t; rough Oregon to the California line would cosst an average of $45,000 per mile through the mountainous regions and $30,000 to $35*000 a mile through the more level sections.

The total cost of the 27 railroad would be about $4,954,491. The Oregon legislature assembled in September of 1364 and the governor in his message on the 14th of that month presented the Barry survey report and voiced an urgent plea that the Legislature support the con­ struction of a railroad through the Willamette Yalley

93 froM Portland to Eugene City to make the farm lands more valuable and insure the continued prosperity of the state* To this end there was introduced on October 17 a bill providing for the construction of a railroad through the Willamette, Umpqua and Rogue River valleys.

Funds for

the construction were to be derived from the sale of a half million acres of land granted to Oregon by the federal gov­ ernment for internal improvements.

As finally passed, the

bill provided for a tax of one mill on the dollar on all taxable property in the state, the proceeds to be used to pay interest on the bonds of a company which would build the road.

28 The provisions of this law were never utilized.

The £2lffi.SiiiSS»w

m m b m k

From the beginning of railroad efforts in Oregon there was ever present the idea of obtaining assistance from the federal government in the form of land grants, at that time being rather lavishly dispensed by the Congress. Following the presentation of the report of his survey to the Oregon legislature, Colonel Barry went to Washington, B.C., in December of 1864, for the purpose of acquainting the members of the Congressional Committee on Railroads with the necessity for federal aid if a line were to be built from 29 the Central Pacific north to the Columbia River. The association organized in California in 1863 to build from

Marysville north to the Columbia River agitated for fed­ eral aid almost from the moment ©f the inception of the plan*

A bill along this line was introduced by Represent­

ative Cole of California in the Congressional session of 1863-64*

When the measure reached the Senate,how ever, it

was defeated.

This was due, in all probability, to the

personal rivalry between Senator Conness of California and Representative Cole* Failure of this bill to become law was most disappointing to the Californians, and newspapers of that state moralized that it was not creditable in a senator representing an entire state to allow his personal 30 feelings and jealousies to interfere with his duties* The California and Qre&on* and Oregon and California Companies The California and Oregon Railroad Company was 31 formally organized on June 29, 1863, and the articles of incorporation were signed on that date, one day in adeanee of the time limit stipulated in the act of the Cal­ ifornia legislature of April 6,1863.

On July 1 the papers

were executed in San Francisco, signed by Alpheus Bull and S* G. Elliott among others*

Shortly after, on July 13,

1865, the Oregon and California Railroad Company filed articles of incorporation with the secretary of state at Salem, Oregon, S. G. Elliott having brought them from

95

California*

These articles provided for a cor oration

with a capital stock of$16,000,000 with principal offices located at Jacksonville, Oregon.

The stated purpose of

the company was to build a railroad from some point on the state line between California and Oregon to some point on 3£ the navigable waters of the Columbia Elver* The obvious purpose was,of course, to obtain the Oregon portion ©f the land grant anticipated from the federal government through the bill then before Congress.

The Oregon and

California Railroad, however, was not named In the law as it eventually passed Congress the next year, and that company never became an active organization under the above incorporation.

The name was later to be adopted by another

Oregon railroad enterprise, in 1870. The Act of July £5, 1866 The bill before C o n g re s s since 1863 to grant land for the projected railroad from a connection with the Cen~ trsl Pacific to the Columbia River finally became law on 35 July £5, 1366. According to its terms the line to be built in Oregon was to commence at the city of Portland and run thene© in a southerly direction through the Willamette, Umpqua and Bogus River valleys to the Cali­ fornia line.

96

Section six of the lew provided that in order to avail themselves of its provisions the companies must file their assent thereto within one year after its final passage, and must complete the first section of the road, twenty miles in length, within two years, and at least twenty miles each succeeding year.

The whole

line was to be completed on or before the first day of July, 1875*

Further provisions stated that should one

company arrive at the southern border of Oregon before the other, the company which arrived first should have the right to continue construction farther, with the consent of the state into which it built*

Free us© of

the railroad was to be granted the federal government for transporting government property and troops.

In

addition to the grant of land, consisting of every alternate section of land for ten miles on each side of the projected railroad, a right of way of 200 feet was given. Mineral-bearing lands were not included in the grants.

If the sections along the route were

already taken up by settlers, the companies were to have the privilege of selecting others in lieu thereof, 34 within ten miles of the limit'of the grant. Inasmuch as no company was named in the act to receive the grant of land in Oregon, it was left to the

97

Oregon legislature to determine the recipient*

It was ex­

pected that this would b© done at the 1866 session, which was to convene in September of that year in Salem.

As

might have been expected, there was immediately a jockeying of the various interest;

in Oregon and in California to

receive the blessing of the legislature as the recipient of the grant* Humors of activity among San Francisco financiers toward that end reached the ears of Joseph Gaston shortly after th© land grant act became law, and he immediately set about to secure the grant of land for an organization com­ posed entirely of Oregonians. £s has been noted, there was constantly present in the mind© of Oregon business men a deep-seated distrust of any proposal or activity sponsored or directed by California enterprise.

The state legisla­

ture assembled on September 10 and Gaston worked feverishly during that month to bring to fruition his plan for a new company, anxious lest some other group assume the initia­ tive, gain the favor of the lawmakers, and be awarded the 35 grant* By early October the necessary groundwork was completed and articles of incorporation wire prepared for the Oregon Central Railroad Company.

98

fhe First Oregon Central Railroad On October 6 Gaston appeared at th© office of the secretary of state, Samuel 22* May, with the papers for Incorporating his new company#

Among the signatures

which Gaston had at this time were those of Congressman J* S. Smith, Assistant Secretary of State I* R* Moores, J* H# Mitchell, later a United States Senator from Oregon, Judge E*B* ShattUGk, Jesse Applegate, F*i*. Chenoweth, General Joel Palmer, and United States Senator J* W. Corbett*

All of these men were prominent Oregonians and

certainly gave a tone of stability to the organization* Gaston on the date of filing desired to use the Incorporation papers to secure additional subscribers to the stock of the company*

He also wished to present them

before a legislative committee meeting that day to show that he had succeeded In his efforts to organize a stable company.

The legislative committee was meeting to con*

sider a bill prepared by Gaston by which the state would obligate itself to pay interest on the companyfs bonds. When Gaston advised the secretary of state of his desire to retain the papers of incorporation, that Official, evidently a man willing to overlook the pro* prieties of legal procedure in order to grant a favor, told Gaston that h© would be happy to accommodate him

by making the necessary filing notation record and then would return the papers for Gaston’s use.

In Gaston’s

words, he was told by Secretary ivlay: "Well, I will just file these in pencil and give them back to you, to use 37 as you wish •" The committee was evidently satisfied that Gaston had taken all the necessary steps and that the filing pro­ cedure was entirely proper, as on that same day, October 8# there was introduced House Joint Resolution 13, which provided that the Oregon Central Railroad Company should be designated to receive the lands and ail of the benefits granted under the Act of Congress of July 25, 1886, inso­ far a© the land grant provision applied to the state of Oregon.

To hasten the bill through legislative channels,

Governor George I.* Woods on October 8 prepared, probably with Gaston’s assistance, a special message urging im­ mediate action in order

to avoid unnecessary delay in

©omsLencing railroad construction in the state.

The

legislature heeded his plea and on October 10 House Joint 3Q Resolution 13 became a law. Further evidence that th© Legislature was willing to go to extremes to aid the Gaston enterprise is evident in a bill adopted on October 24 which obligated the state of Oregon to pay seven per cent Interest on one million

100

dollars of th© beads of the Oregon Central Railroad Company*

The interest was to be paid on #800,000 of the

bonds for every twenty miles of road completed and accepted by the federal government up to the total amount authorized*

In return, the railroad company was obli­

gated to transport state officials, and all articles to be exhibited at the annual state fair, free of charge* Telegraph service was also to be rendered gratuitously 39 to the state* This act was obviously in clear viola­ tion of the state constitution and no effort was ever made to secure assistance under its provisions.

It was re40 pealed by act of the legislature on October 28, 1868* Up to this point all outward Indications pointed to a complete unanimity of purpose among th© incorporators of the Oregon Central Railroad Company and it appeared that Gaston was In complete control of the enterprise* Hovvever, this halcyon time was not to endure.

Gaston,

as has been noted, was intent on building the railroad down the west side of the Willamette Valley, following generally the route surveyed by Barry in 1864*

H© also

favored the issuance of stock to those who had contributed to th© support of the Barry survey, as originally promised. But In these ideas he met determined opposition from two of the original incorporators, I- R* Moores and. J . 1- Smith,

101

both of Salem*

Moores was assistant secretary of state and

private secretary to the governor, and owner of much prop­

erty in th© city*

Smith held a large interest in a Salem

woolen mill. The capital city of Salem was situated on the east bank of the Willamette river and it was natural that those holding commercial interests there would not give whole-hearted support to a railroad line which by-passed their community*

Further dissatisfaction arose from the

fact that Gaston seemed intent on recruiting support for the company principally from Portland financiers, among them £• G. Heed, J. G Ainsworth and R* R. Thompson*

In

this he had the assistance of H* W. Corbett, probably th© most influential resident of Portland at the time* The Salem group felt that eventually the control of the Oregon Central Railroad would center in the lai*g©r city, 41 a situation which would work to their disadvantage* These disaffactions became painfully apparent at a meeting in the governor’s office in Salem on Nov­ ember 10, only a month after the company had been formed. At this time Smith and Moores attempted to convince Gaston that to allow the controlling interest in the cor­ poration to pass into the hands of clever Portland fin­ anciers would be unwise and would eventually result in

102 their losing control of the corporation they had created. Bat their appeals were to no avail.

Following the meet­

ing, Gaston immediately returned to Portland to continue his labors in securing more capital from wealthy Portland 42 citizens. Vfliile Gaston had been busy in th© initial efforts to set up the Oregon Central Railroad Company and in con­ vincing th© legislature that his organization was the proper one to receive the land grant from the federal government, another scheme was brewing.

This plan eventually brought

about the complete break between Gaston and his Portland group, who favored a west side route, and those whose interests were centered in Salem and desired the railroad to follow down the east side of the valley*

On September

5, Alpheus Bull,president of the California and Oregon Railroad Company, and other Californians associated with him in the corporation which was? to build north through California to the Oregon border,addressed a fetching proposal to S.

a

. Clarice, &• K. Cooke, 1*. £* Smith and

others in Oregon interested in the Oregon railroad enter­ prises.

The Californians offered to construct that part

of the Oregon railroad extending from Portland south to Eugene City, under the guidance of a corporation to be formed under Oregon laws.

As a consideration, a bonus

103

Of $2 ,000,000 of preferred stools: was to be given to the

California group, and #35,000 paid for ©very mile of equipped and completed road turned over for operation. The proposal was predicated on the assumption that the necessary legislative action could be obtained in Oregon to permit the amendment of th© General Incorporation ,Act of the state so that #16,000,000 of capital stock could be issued, corporate existence for fifty years granted, and other financial aid and favors obtained from the legislature.^ illong with this proposal there was sent a confidential memorandum by which it was agreed that #1,000,000 of the $^9000t000 of preferred stock to be granted to the company suggested by Bull and his assoc­ iates would be returned to the promoters of the company residing in Oregon to reimburse theia for expenses to be incurred in obtaining the necessary legislation to make th© agreement effective.^

if&ig secret offer was un­

doubtedly only a disguised bribing proposal that the Oregon promoters use the bonus stock as they saw fit in influencing the members of the Oregon legislature to vote favorably on the plan. To this latter proposal Gaston was understand­ ably opposed, as he was firm in his conviction that a railroad built and managed entirely by Oregon interests

104 would be th© moot practical answer to the Oregon trans­ portation problem.

To protect his interest in his com­

pany he blocked the plans of Moores and of Clarke to open stock books of th© new company, their idea of course being to avail themselves of the secret proposal of the 45 California company* Gaston, however* was not averse to making agreements which were secret in nature.

In Portland,

after the meeting on Hovember 10, he was successful in obtaining the signatures, as incorporators of the Oregon railroad, of R* R. Thompson, I. C. Ainsworth, S. G. McCracken and C. H. Lewis, all men of wealth, most of whom were connected with the operation of steamboats on the Willamette and. Columbia rivers*

A secret understanding

was reached between Gaston and these men, by which they were obligated to advance a large amount of money to enable the company to begin construction the next year, and in return they were to have managing control of the entire investment. Gaston thought it would be wise to keep this side agreement secret from the other incorporators, particularly from Moores and Clarke, who were obsessed with th© thought of obtaining the million dollars of un45 assessable stock offered by the California group. Gaston erred, however, in writing a confidential letter to Governor Woods in which he told of his success

105

in securing financial support from the Portland capital­ ists*

Wood showed the letter to Moores, who was naturally

displeased, and as a result the way was open for a complete 47 break between the two factions. ■As has been noted, Gaston on October 6 had filed with the secretary of state the original incorporation papers for the Oregon Central Railroad and, after a pencil notation of filing was placed thereon, had been permitted to take them with him.

About the middle of November, J. C.

Smith went to the office of the secretary of state and asked to see the articles of incorporation.

When they

were not found in the usual files, May recalled the cir­ cumstances and advised Smith that they were still in the possession of Joseph Gaston, this was looked upon by the faction opposed to Gaston as an attempt on his part to deceive them, and they Immediately set about the organi­ sation of another company.

Gaston, however, declared

later that this was not the true reason for the formation of th© new corporation*

He alleged with Moores was pres­

ent with him in the office of the secretary of state on October 6 and heard the conversation with May and knew that Gaston had not left the papers for filing.

The

filing of th© original set of papers was further com­ plicated by the fact that Gaston had filed the original

106

get with the county clerk of Multnomah County on 3&>v~ emher 23 instead of filing a duplicate copy as should have been done*

therefor© , when Gaston completed the

formal filing of the papers on November 21 the set turned over to the secretary of state did not have th© pencilled notation of October 6 thereon.^6 The Oregon Central (November 17. 1866} The second Oregon Central Railroad Company, as organized by Moores, Smith and Cooke, was incorporated under the laws of Oregon on November 17, 1866, four days before Gaston completed the filing of the paper© of the 49 original company. It is probable that the second Oregon Central Railroad Company was established more for its nuisance value than with any real intent to engage in the construction and operation of a railroad, a© it was cap­ italized at only $500,000. Gaston was in ignorance of the creation of the second corporation until after the papers were filed In the office of the secretary of state.

When he learned of

the perfidy of Governor Woods in exhibiting the confiden­ tial letters to Moores and of the activities of his part­ ners, he demanded explanation*

The reply given was that

the new organisation was formed because they had been informed that he had destroyed th© original articles of

107 incorporation In Portland and they had drafted new ones in order to preserve the rights of the company. On December 18f 1866, a meeting of the incorporate ors of both the old and new companies was held at Salem, X.B. Moores, Samuel Clarke, J * s. Smith, £• N* Cook© and Joseph Gaston were In attendance, Carton holding the proxies of the Portland Incorporators.

Gaston felt that it was im­

possible to get the Salem men to do anything toward moving into actual construction and he therefore proposed to open th© stock books and begin the canvassing of th© Willamette Talley to secure subscriptions*

Fourteen of th© incor­

porators of the first Oregon Central Bailrca a Company §1 authorized Gaston to d© this* The breach between th© Gaston-Ainsworth faction, which desired the west side route along the line of the

Barry survey with the railroad line controlled exclusively by Oregonians, and the Moorss-Glarke element which wished to follow the Blliobt survey, was a permanent one* However, at the close of the year 1866 it would appear that Gaston and hi© group were firmly in control of the situation as the second Oregon Central enterprise came to naught*

108

H a s : Isas &

l^ggg.

Simon G* Elliott, who had made on® of the orig­ inal surveys through Oregon for a railroad,on returning to California from th© east by way of Panama in the spring ©f 1867, asserted that ha had as a fellow passenger on the voyage a certain Albert I* Cook. This, at least, was the basis tor the introduction of this individual into the field of Oregon railroad construction*

The mystery of

Just who Albert X* Cook was, or if he ever existed outside the fertile mind of S. G. Elliott, has never been satis­ factorily solved, as there is no record that he was ever seen by any other person*

According to Elliott, he first

met Cook in New York, although he had known of him in the 1850*s in Sacramento, at which time Cook was op ©rating a 58 saloon in the California city* Cook, it was reported, had been on a visit with friends in the east at the time of this chance meeting with Elliott, and finding them­ selves congenial they had taken a cabin together on the steamer on both sides of the Isthmus* Gpon arriving in San Franc iso o, Cook (sup­ posedly) and Elliott took a room at the Lick House* Shortly after arriving, Elliott met I. £* Smith, one of the incorporators of th© Oregon Central Kail road (East Side) in opposition to Gaston*

Smith told Elliott

109

that he was anxious that some action be taken immediately to build the railroad in Oregon from Portland south, and suggested that Elliott make a journey to Oregon to investi­ gate conditions there with the idea of taking over the construction* Elliott, however, was reluctant to assent to this Idea, as he feared that nothing could be accomplished in Oregon until a strong organization was established* Smith assured him,however, that there would not now be any difficulty in making a contract to correspond with the California proposition which had been made to the Oregon group some two years before but which had been refused 53 by Gaston. Elliott, upon determining to go to Oregon, explained to Cook that he intended to put a railroad in operation there and asked Cook if he had any objection to granting a power of attorney to Elliott so that a contract might be obtained in Cookes name*

Cook, according to

Elliott, was quite agreeable to the suggestion, there being no argument, no consideration paid, or any sug­ gestion or proposition of any kind,and Cook immediately 34 signed the power of attorney as follows: I hereby appoint and constitute G. Elliott my attorney in fact, in my name, place and Stead, to make all necessary arrangements with certain parties in Oregon for the con­ struction of a railroad from Portland, Oregon south through the Willamette valley

110 a distance of 150 miles, and assign any contract as wall as to make all necessary arrangements for the early commencement of the work on the same, with full power to tlte said S* .$* Elliott as my attorney to do everything I could in the premises if personally present* Witness my hand and seal this 20th day of March, 1867* Albert J* Cook (Seal) Witnesss J* H* Parker 'throughout financial circles in California and Oregon It was intimated that Cook was a wealthy railroad contractor

residing in Massachusetts and also the report

was current that he was the brother of the prominent Philadelphia financier* Jay Cooke*

In litigation in later

years Elliott was forced to admit that these statements were untrue, but he steadfastly denied that he had been 59 responsible for their circulation* Elliott was never able to prove Gook*s existence and suspicion exists that it was but a part of one of the greatest swindling schemes in Oregon history* While Elliott was engaged in San Francisco in preparing for his entry into the Oregon railroad scheme, Gaston was busy in Oregon laying out th© strategy for his campaign of th© spring °3t 1867 to induce residents of the Willamette Talley to subscribe for stock in the Oregon Central Bailroad*

H© had printed a great number of posters

announcing the opening of books for subscriptions and he

Ill

let it fee known that the railroad would follow a route through Tftfeatever part of the valley gave the greatest sup­ port to the subscription drive. I. K. Moores, when apprised of Gaston*® plan* went to him and in strong language urged him to desist.

Failing in his effort to convince Gaston of

the inpropriety of such a course, Moores threatened to ex­ pose him*

Gaston paid little heed to these threats, and

Moores, good as his word, caused to be circulated through­ out the valley the story that Gaston was simply carrying on a gigantic swindle* Gaston, however,*having the financial support of some of the wealthiest men in Portland, was not 56 to b« deterred from his efforts* Simon Elliott*s Interest On April 16, &* G. Elliott and Thaddeus R* Brooks, a civil engineer whom he had chosen to serve as his chief engineer of the construction company which he planned to organize to carry on the work in Oregon, arrived in Port67 land* Expense® of this journey from San Francisco to Portland were paid in the amount of $200 by 0. Temple Emmet, a politician of some importance- in California who had long been interested in Oregon in connection with ra 11road activities.55 It seems strange that Elliott should hav e had to appeal to Emmet for these funds if Cook m s

the man

of wealth and influence he was portrayed to be by Elliott.

112

Elliott immediately proceeded to Salem where he met I* B* Moores, J* H* Parker, John H. Moores, S. A, Clarke, 0eorge L.Woods, the governor of the state, and many others*

To all of them he painted in glorious

colors the high standing of the Cook company as rail­ road contractors and its high f ix ancial standing, and exhibited the power of attorney which he allegedly had «q received from Cook earlier in San Francisco* Elliott likewise represented himself as a rail­ road engineer of wide experience, but in truth his engineering training was extremely limited, being confined t© knowledge that h© had picked up through reading two or three books on engineering and through practical exper­ ience in surveying for roads and ditches*

He was incap­

able of running curves and seams to have been ignorant of the more common engineering problems*

His experience

was limited to six years* service as the county surveyor of Placer County, California, and in conducting the pre­ liminary surveys of the railroad through Oregon, as fflen** 60 tioned previously* Despite his shortcomings in the more technical aspects of railroad construction, Elliott appears to have had an unusual gift for convincing others of hi© abilities. By a most impressive manner he succeeded in persuading

113 f the Oregonians that h© was the logical man to build the Oregon railroad and that it would surely be built if he could have the terms he desired*

& most potent item

which he advanced for their consideration, and on© which probably had a great deal to do with their capitulation i,to his arguments, was th© renewal of the offer to give bach to the Oregon corporation one-half of the demanded T #2*000,GG0 bonus in the form of unasaessable preferred Stocks

The Oregonians were admittedly without knowledge

of th© .intricacies of organizing, financing and building Railroads, but they did comprehend th© immense power whieh would be theirs with #1,000,000 in such stock to distribute where it would do the most good.

It is prob­

able, too, that they were influenced by the desire of population residing along the east side of th© Willamette for a railroad. *■

It was apparent to all, by

: \

that time, that

Gaston

was obligated to run the line

if

'down the west -side of th© river because of his financial ties with *the Portland capitalists*

Plans were immedi*-

*ately set afoot for th© incorporation of a new company* P Wheh this intelligence reached Gaston he was |r ^dlarmed, and immediately went to Moores, urging him to ■■

j*

/defeist from such a rash move until th© incorporators of the original Oregon Central Hailroad should consent to

1X4

th© abandonment of that company*

Gaston also told Moores

that if the other Inc orp ora tors would agree* Elliott could use the original company for his purposes.

This,

he said* would prevent the strife* litigation and injury t© the state which would surely result if another company were formed using the same name and building over the same general route as the original. To Gaston’s arguments Elliott countered with the proposal that Gaston would be welcomed Into the new enter­ prise if he would throw away the papers of th© original company.

This, of course* Gaston refused to do without

the consent ©f the other incorporators.

With this, the

negotiations came to an end and the way was opened for the creation of yet another railroad company in Oregon. ^2. 2 M i d Oregon Central Railroad Company {April 33, 186?) The third company to bear the name of Oregon Central

Railroad was incorporated in th© stat.® of Oregon

©a April 33* 1867, with George L.Woods, I. R. Moores, S. A . Clarke, John A. Moores, J * S. Smith and E. N. Cooke 65 as the incorporators. Each of these men subscribed for one share in the amount of one hundred dollars* or six hundred dollars in all.

On the motion of I. F* Moores

it was resolved that the chairman of the meeting should

115

be instructed to subscribe seventy thousand shares out of th© total capital stock of #7,250,000 "for the use and disposal of the corporation.”

The Oregon laws required

that ©a©*half of the capital stock in any corporation should be subscribed before an election of directors be held* but this condition was either unknown to the in* corpora tors or was purposely Ignored if known.

Gaston

Implied that the whole scheme was one of pure conspiracy, originated by three men who seceded from the original Oregon Centra 1 Ha 11 road Company and succeeded in drawing In three other outsiders for the sole purpose of private and illegal gain*

Gaston criticised with particular

vehemence the whole procedure of having the chairman of the incorporators subscribe to #7,000,000 of the stock in the name of the company itself#

This, Gaston said,

was but ^authorizing a man to lift himself by his own 65 bootstraps.” After issuing the stock as outlined above, the incorporators proceeded to the business of choosing a board of directors, and very conveniently elected themselves to 66 those positions# On the next day, April 23, the board of directors met and proceeded to elect George L. Woods, the governor of Oregon, as president of th© corporation, and 1* H. Moores

116

was chosen vice-president.

Other officials selected in­

cluded $• H. Moores, treasurer, S. & m Clarice, secretary, ft*7 and Thaddeus R. Brooks, engineer. The office of the company was established by the by-laws at Salem, Oregon.

For this reason th© company is

often referred to as the Oregon Central Railroad Company of Salem (or last Side line) to distinguish it from the West Side line, or Oregon Central Railroad Company of Portland,which was the Gaston organization. fhe first item of business to be taken up by th© directors was the awarding of the construct ion con­ tract, a matter which apparently brought forth no dis­ cussion, it being fully understood by the entire board of directors that It was to b© awarded to A. f. Cook. 53ae minutes relative to this matter read: ...that the President and Secretary are in­ structed on the part of the Oregon Central Railroad Company to execute a contract with Albert 3f. Cook, ©f the state of Massachusetts, for the building, completing and equipping of a railroad, according to propositions now sub­ mitted and before the Board, from Portland, Oregon, southerly, through the Willamette Talley, one hundred and fifty miles in div­ isions as specified, and report the same back for approval when duly executed. A further resolution was adopted by the board of directors which stated:

117

•«.that the pr©sident and Secretary are hereby instructed to execute two millions of non-assessable preferred stock of Th© Oregon Centra 1 Railroad Company in far or of Albert «T• Cook, the said proposed contractor, to be delivered t© him on the final execution and acceptance of the contract authorised to be made, as part payment for the construction of the road, and as col­ lateral security for monies to be advanced by said contractors as working capital. Said stock to bear interest at the rate of 7 per cent, per annum, payable in gold, and there is hereby set apart a sufficient amount out of th© first net earnings of the road to pay the same.69 Th© use of th© name "Oregon Central Railroad Company" was in itself a very brasaen step on the part of the promoters*

It is obvious that this name was selected

with but one purpose in mind, that of influencing the leg­ islature of th© state of Oregon to rescind the act of October 10, 1366, by which Gaston’s Oregon Central Rail­ road had been named the recipient of the franchise and land grant*

It may a l s o have been in the minds of the

Salem group that Gaston would be unable to comply with th© terms of the land grant as extended by Congress, and in such case it would be unnecessary to go to the leg­ islature for a new designation of recipient, as the Bast Side Company would pick it up immediately under the same name*

Whatever th© strategy may have been, it was not

successful, and brought only a great deal of litigation and difficulty to the Salem company.

118 SSa. lisal. Contract with A* £* Oook Lobs than twenty-four hours after the articles of Ineorporation were filed with the secretary of state, the executive officers of the company entered into a con­ tract with A. J . Cook through S. G. Elliott, his "attorney 70 in fact#" In the contract the company claimed the "right, privilege and franehlse,, to construct, equip and run a railroad from Portland south to the California line, there was no mention in the contract of the right of the company to the grant of land under the Act of Congress of July 25, i©66. The agreement with Cook provided that he would build and equip 150 mile® of the railroad south from Port­ land with all of the necessary rolling stock#

For this he

was to receive the sum of #5*250,000 in gold, or if paid in national currency, at the rate for which such currency was redeemable in gold* By the contract the road was to be built on a uniform gauge of four feet, eight and one-half inches, with a maximum grade of not to exceed eighty feet per mile and a maximum curvature of ten degrees*

The road bed was

to be eleven feet on the surface; the iron used in the rails was to be of the best quality, known as MT" rail.

1X9

to weigh at least forty-five pounds per yard.

Ties were

to he of the best wood, six inches by eight inches, eight feet long, and laid at the rate of 2640 per mile. By standards of railroad construction then in effect in the ©astern United States It would appear that the terms of the contract in this respect should have pro­ duced a very solid and substantial track for the operation of trains through the Willamette Talley. Bather unusual were the provisions In the contract respecting the equipping of the line with rolling stock, as minimum standards were not specified as definitely as in that portion relating to the track construction, and it would have been possible under the contract to provide rather inadequate and unsatisfactory equipment for the road* For the first section of the road, to extend from Portland to French Prairie, a distance of about twenty-five miles, two locomotives, designated as first class, and weighing sixteen tons, were to be provided. Also t© be furnished were two first class passenger cars, and two baggage and express oars.

Ho mention is made of

freight cars for this section of the railroad, and this would seem to indicate a rather loose comprehension of railroad operation on th© part of the directors.

It is

120 certainly difficult to conceive that they intended to operate this portion of the line* the first constructed, and depend solely on passenger and express revenues for income * E©r the second division, from French Prairie t© Salem, an additional locomotive of sixteen tons* two passenger cars, one baggage car, twelve freight cars and two platform cars were to b© furnished; for the next div­ ision, to Albany, a larger locomotive, one of twenty-six tons, two passenger cars, one baggage car, twelve box cars and twelve platform ears were to be added to the roster of equipment*

The fourth section of track, from Albany to

OorvalXis, called for a twenty-six ton locomotive, two pas­ senger cars and two box cars*

To Eugene City* about thirty

miles further, it was required that a thirty ton locomotive, three passenger ears,one baggage car, ten box cars and ten platform cars be furnished*

And for the last division of

thirty-six miles, two thirty-six ton locomotives, four passenger cars, twenty box cars and six platform cars were to be provided* Suitable freight and passenger buildings were to be erected in all of the division towns and sidings were to be constructed at points to be designated, by the company at the rate of one for each ten miles of track*

The

121 contract also required water tanks at twenty-mile intervals, and engine houses and a repair shop were to be constructed at suitable points* Payment of the amounts due Cook for construe ting and equipping the line was to be made in first mortgage bonds of the company payable in twenty years at seven per cent interest per annum, secured by a first or wbottom” mortgage on the road and rolling stock, and by such amounts of specie as the company might provide#

The company fur­

ther agreed to deposit in a Hew York bank #15,000 of bonds per mile, to be delivered to the contractors in payment for iron and rolling stock accepted by the Engineer. Monthly payments were to be made on the work, except that twenty per cent was to be held by the company until each division was completed and accepted by the company# The company further agreed that it would us© every means in its power to obtain as much cash and assist­ ance as possible from the people of Oregon for the purpose of furthering the construction of the railroad.

Construc­

tion was to be commenced within on© year after the signing of the contract and the whole distance of 150 miles was to be completed within five years* Also as a part of the contract a provision was inserted relative to the payment of the #2,000,000 in

1ZZ

non^assessable preferred stock to ^ * X. Cook. stock of the Oregon Central

Common

Bailroad Company was to be

offered for sale to the people of Oregon at ten oents on the dollar* but after six months had elapsed from the commencement of construction, subscriptions were to be received at the same rate from, any person regardless of 71 residence for any amounts then remaining unsold* Elliott*s Financial difficulties Elliott remained in Oregon for a week or ten days after receiving the contract, during win. eh time he endeav­ ored to convince the directors of the company that it would be best if the terms of the contract were not made public. S. A, Clarke* the secretary, immediately upon th© signing of the contract had prepared a statement for the newspapers which was to be used to influence subscriptions, but Elliott stated that he thought it would not be politic. Elliott evidently anticipated difficulty in purchasing materials in the east with the bonds of th© company issued as they were, the whole financial structure being flimsy. He later said that "I stated to them distinctly several times that unless they heard from me in the East it would not be policy to make any demonstration or notice of it.... I stated what X believed to be true that there would be

123

no difficulties In procuring the necessary means if there were mistakes made in Oregon by premature publication."7^ With apparently very little cash in his pocket, but with a million dollars worth of the preferred stock certificates, Elliott returned to San Eranciuco and early in May once more "contacted” Cook, at which time, accord­ ing to Elliott, Cook assigned over to Elliott all of his rights to the contract drawn in his name.

Elliott later

explained that the only reason he preferred tc use Cook’s name wjs to put the contract in such shape that it might b© passed to parties who might conclude to assume it; and further, that he had explained to the directors at Salem,

at the time the contract was being drawn, that "it was a vehicle of convenience by which w© proposed to be able to 73 convey it to other parties.” Elliott asserted that he 74 never intended to assume the contract himself. With the assignment of the contract to Elliott, Oook as an individual, if he ever existed, passed out of

the picture of railroad history in Oregon.

Elliott stated

that he never saw him again after the morning following the assignment of the contract, when he saw him on the steamer going east.

Cook was returning to Massachusetts,

Elliott explained, "the condition of his marriage (being) 75 that he go back there to live.” No further explanation

124 was offered for this rather abrupt departure.

It would

seem strange that Elliott's good friend Cook did not wait a few days to accompany him, as Elliott was bound for the east himself* The iu

Cook Company Created Just what disposition Elliott made of the mil­

lion dollars in stock held by him is not made clear by the testimony which-he later offered, but it is quite evident that he received only slight monetary return from it.

For the #200 in cash which had been advanced

to Elliott to make the trip to Oregon in npril, C. T. ©nmet received #100,000 in stock from the promoter, Elliott remarking us on the transaction that MI considered 76 he was well paid for his part in it.” About May 20, 1867, Elliott formed in California a copartnership under the name of A . J. Cook and Company, the other members of the firm being N. P . Perrine, T. R. Brooks and James P. Flint. On May 20 Perrin© was given a thousand shares and a half of seven-tenths interest in the construction con­ tract, for 3^5,000 cash.

James P. Flint was given a one-

tenth Interest in the construction contract given to Elliott.

From Br. £. F. Elliott and J. 1. Memory, two

shadowy characters who do not appear elsewhere, Elliott received #2,300 or #2,400 and each was given 100,000

125

shares of the preferred stock,

77

T. H* Brooks, the chief

engineer of the Oregon Central Railroad, had no funds and put no money into the firm, but he was given 100,000 shares of the stock and was to

receive $£50 a month 76 for his services to the company. In all, in return for

a total of §730,000 of the stock which he distributed, it appears that Elliott could not have received more than about

Is, 000

in cash*

Elliott*s Eastern Mission Elliott left San Francisco in May of 1867 for Hew York shortly after disposing of a part of the stock, and spent nine months on the Atlantic Coast*

During that

period he endeavored to purchase motive power, rails, rolling stock, machinery and other materials necessary to begin construction of the railroad.

Early ih July,

1867, he made an arrangement with George T* M. Davis of Hew York City by which some 4,000 tons of rails in San Francisco, delivered there for the use of the Yallejo Railroad but for which they were unable to pay, would be 79 transferred over to the Oregon Central Railroad. On July 9 he wrote to S* A. Clarke in Salem that rtth© loco­ motives, two of them, are bought and ready to ship. Also most of the iron - all that is in the market of the size wo use (about 18 miles).

The remaining 8 miles will be

126

forwarded after the fix'at shipment.. .

At the time

this letter was written Elliott had not mad© a written contract with Davis, however, and the negotiations shortly came to a close because of Elliott’s inability to furnish th© bonds to complete the transaction as he had planned. Th© question of the validity of the bones issued by the Oregon Central Railroad Company waa to plague Elliott throughout the whole time he spent in the east in 186?.

Before leaving Cregon in April he had directed his

chief engineer, Thaddeus Brooks, to write to the Ilew York banking firm of Jay Cooke and Company designating that financial house as the banker to receive the bonds of the Oregon Central Railroad to be deposited according to the 81 contract. The board of directors of the Oregon Central Railroad (East Side) on that same day authorised the pres­ ident and secretary to execute 3*75 of such bonds and send them to Jay Cooke and Company with a letter of instructions authorising them ”to deliver the same, from time to time, in amounts corresponding to the value of iron and material shipped by said contractor for the use of the Oregon Cen82 tral Railroad.” The banking firm, however, was loath to accede to Brooksf rather improper and informal notice, in which he stated merely that "I wish you to act for m© in this

127

matter," and declined th© request*

Of this denial,

8 however, Elliott failed to advise the directors in Oregon. There had been considerable trouble in getting th© bonds printed and ready for issue*

On the bonds as

originally printed the company had inserted the names of William S. Ladd and ex-Governor A. C. Gibbs as trustees of the corporation.

This was done without the knowledge

or consent of th© parties concerned, and as soon as they learned of it they formally entered protest and their names were ©rased*

Elliott also stated that there were

errors in the dates on the coupons.

When he was advised

by S. A. Clarke, th© secretary, of th© difficulties in getting the bonds ready,

Elliott wrote to Clarke to

insert In the bonds in th© place of Gibbs and Ladd th© name of Pitt Cooke, the brother of Jay Cooke, whom Elliott had seen in Hew York and from whom he had supposedly obtaihed permission to use his name. However, in these arrangements it appears that there must have been some error.

When the bonds arrived

in Hew York in October of 1867, the officials of Jay Cooke and Company refused to have the bonds used for any purpose as long as their partner, Pitt Cooke, figured as a payee in them.

Writing to S. A. Clarke, the secretary of the

dragon Central, on October 12, 1867, they said:

Your favor of September 5th has been received together with a sealed box therein referred to, and said to contain bonds of the Oregon Central Railroad Co* Xt is and has been altogether foreign to our line of business to engage in railroad operations of any kind, and if for no other reason, this alone would compel us to refuse any cooperation in your enterprise. Furthermore, the instructions received are so inadequate and conflicting that we do not re­ gard it safe to accept them as a basis of action* Th© telegram from the Chief Engineer direct­ ing us to deliver to Mr* Elliott on© hundred twenty five bonds does not carry with it suf­ ficient authority and in no ©vent could vs?© act upon it as it conflicts with instructions received fromfyou as secretary. Again th© bonds received are said to bear the name of our Mr .Pitt Cooke, payee. Such a use of his name 'he has never consented to and the bonds, whether in our possession or elsewhere, so filled out cannot with his consent be used* At th© suggestion of Mr* Elliott and with the most amicable understanding between ourselves and the interested parties here, we return by express the box unopened and said to contain the bonds. 85 On the same day, Elliott was to

write to Gov

ernor Woods from North Weymouth, Massachusetts, stating X have Just returned from New York. The bonds will not do. It was a great mistake that the Trustees had not been secured before printing. Yesterday Jay Gooke and Co. received a telegram from Mr. Brooks requesting them to deliver 125 bonds, but on referring to Hr. Clark’s letter of instructions, it was found impossible to nake any delivery without a written order under seal from the Gompany* That fact in connection with the bad appearance of the bonds caused the parties here to request Jay Cooke to return the

129

bonds to your Company which they will do by next steamer....It is thought best that I should return to Oregon to assist in putting matters in a more practical shape..,.®® It would appear from these two letters that Elliott was guilty of deception in writing Wood that it was a difference between the instructions of Secretary Clarke which accompanied the bonds, and the instructions sent to Jay Cooke and Company by the chief engineer, which made the firm refuse to handle the securities. Elliott later was to say that it was not the use of Pitt Cooked name unauthorised that prompted the refusal of Jay Cooke and Company, but rather that he had stated to Mr .Pitt Cook© himself that he did not think it proper for him to remain in th© position of trustee after the un­ favorable publicity which the 87 then receiving.

Oregon Central bonds were

The Second Cook Agreement Thug handicapped in his negotiations in the east, Elliott wrote to Perrin© to go to Salem and see what he could do toward getting new bonds issued, and make a supplementary agreement to the construction con­ tract.

In this activity Perrin© was successful.

On

November 27, 1867, the board of directors prepared an agreement in which it was asserted that A* J. Cook and

130

Company had expended large sums of material and equipment for the Oregon Central Railroad Company’s line, much of which was at that time ©nroute to San Francisco. There is also mentioned the fact that the company failed to present the hands described in the original contract in a satis­ factory for® and maimer, and that the amount of material now purchased amounted to about three-fourths of the amount required for th® first division of the railroad* The company thereupon agreed to issue to A. y. Cook and Company #775,000 of first mortgage bonds with C. N. Terry 88 and «T* L* Parrish as the trustees. With these bonds, Elliott once more endeavored to purchase necessary materials in the east.

He was now

able to buy two mare locomotives from th© Globe Locomotive Works in Boston.

The first two procured from this firm in

155

stock."

Moores was to reply to this on March 13 by

stating that "We are all willing to settle the Gaston affair in the manner indicated in your letter and if they will talk to us like men, we can get that trouble out of the way in a few minutes."

Such efforts, 14 ever made, of course came to naught.

if they were

The directors of the company, at the April meet­ ing, elected I. H. Moores as president, iW M. Loryea, vicepresident, E. N. Cooke, treasurer , and S. A. Clark to be secretary.

James 1. Flint and Elliott later addressed the

board of directors, the former praising Elliott for M s evident success in securing aid from capitalist© in the east.

This was undoubtedly in reference to "A.J* Cook

and Company."

Inasmuch as Flint was interested in the

concern along with Elliott and Perrine, it is impossible to believe that he did not

now that "a. J* Gook and Com­

pany" was a pure fabrication, created by Elliott to con­ trol stock of the railroad company, and by making such assertions of loyalty to Elliott, Flint appears as a man of the same stripe.

Elliott in his address told of his

activities in the east during the past year, reported on the ©mount of material purchased, financial aid secured, and finally presented a proposition for an extension of the railroad through southern Oregon.

This last las the

156

entering wedge for another of his efforts, all seemingly successful, to persuade the directors to grant WA« J. 15 Oook and Company” further stock. On April 29 the directors, in line with Elliott's desires, entered into a second contract with and Company.n

• J* Cook

^Phis contract was dated May 13, 1868, and

it was agreed that the construction company was to com­ mence the building of an additional 210 miles of railroad from the terminus of the 150 miles then just being started. For this work the contractors were to be paid #12,123,000 in gold. First mortgage bonds bearing seven per cent in­ terest were to be issued on the 210 miles of road and equip­ ment at the rate of #32,000 per mile, and second mortgage bonds were to be issued at #25,752 per mile,

^he company

agreed further to execute the first mortgage bonds at the rate of #25,000 per mile and to deliver #1,000,000 of the same to the contractors whenever they should report their readiness to commence construction and exhibit evidence that they had purchased rolling stock and material of equal value. The railroad company agreed to advance bonds at the rate of #25,000 per mile for a distance of fifty miles on request of the contractor when he should give evidence of similar expenditures for work performed cr material purchased.

Monthly settlements were to be made

157

witch the contractors, one—tenth or the amount earned feeing reserved until twenty miles were completed, when the company would pay them the full amount of $57,752 la first and second mortgage bonds per mile*

The contract

was to be la effect whenever the first 150 miles was com­ pleted and the extension was to be ready for operation within five years from that time.

The company further

agreed that the capital stock would be increased to #11 ,000,000, and that #3,000,000 of preferred non­ assessable stock was to be issued to the contractors as ^part payment for the construction of the road, and as collateral security for moneys advanced by them as work­ ing capital*"

The company also agreed to get all possible

assistance from the state to aid in the construction. Specifications for the line were the same as in the first contract made with " i i . J . Gook,tt except that the grades for the twelve miles throu#ith© canyon were to be 100 feet per mile and rails were to weigh fifty pounds per yard*

Motive power and rolling stock to b© furnished in­

cluded ten twenty-five ton locomotives, twenty-five pas­ senger cars, four baggage ears, forty box cars and twenty 16 platform cars* One is at a loss to understand why the directors felt obligated to make another contract with "A. 3“• Cook

158

and Company” for additional mileage when not a single mile of line of that originally contracted for had been built.

Further, no survey had been made of the region

sooth of Eugene City beyond the preliminary act ivities of of 1853 tn& 1864.

It was therefore impossible to make an

accurate estimate of the cost of such construction.

It

would appear that the allowances for building were simply the absolute limits to which Elliott felt he could carry his plundering.

Assuming that the directors of the com­

pany were men of honesty and integrity, it can only be supposed that they were victims of a very clever confid­ ence operator.

There was, of course, nothing for Elliott

to gain immediately from this contract, but it did seem to strengthen his position with the East Side company at a time when h© might have desired some evidence of con­ fidence from the directors. -

Elliott was at this time somewhat involved In another financial arrangement in San Francisco which had potentialities for giving him much embarrassment.

This

1 involved the sale of the interest of nA. J. Cook and Co.” in the Oregon Central Company owned by N. i . Perrin© which Elliott had sold to him in IS67.

This interest

Elliott* without Perrin®fs knowledge or permission, dis­ posed of to on® Bernard Goldsmith.

According to Elliott,

1S9

Perrine had requested him to find some party to take over his interest in the contract and the matter had been pre­ sented to Goldsmith, who agreed to take it over for between #13,000 and $14,000«

later Goldsmith wanted his money

back, without interest, but Elliott was evidently unable to comply with this request.

The funds, he stated, had been

usually drawn down and paid out the same day in payment 17 of bills or wages* Elliott, in an effort to cover up his Goldsmith deal, endeavored to force Perrine into a sacrifice sale of his interest by demanding of him the payment of a propor­ tionate share of the expenses thus far Incurred by nA* J. Cook and

Co*w and threatened a suit against

him shouldhe

refuse*

On this subject C* T* Emmett wrote

Elliott on

July 31,

1868, stating that he had heard of

Elliottfs

Intention to sue Perrine for a

total of #31,132*92, and

urging him to desist, as it would be "madness to involve yourself in any litigation with Perrin© or anybody else in the present state of your enterprise."

Perrine,

according to Emmett, was unable to make the payments and in looking for someone to assume his interest in the company, approached Ben Holla day.

This was evidently

the first time Holla day had come in contact with Oregon railway enterprises.

Perrine was disposed to sell only

160

about half of bis holdings* however* and this was not suf­ ficient for Koliada y ’s purposes.

Perrine asked Elliott if

he would consider parting with two-tenths of his interest and stated that if he would, it would undoubtedly be pos­ sible *t© bring into the project parties who would place IB the success of the undertaking beyond all peradventure.” (ha August 11, 1868, Barnett wrote to Blllott once more, again warning him against pursuing his threatened suit against Perrine, as, If such course were followed, Perrine would be entitled to receive a full account of all of the 19 transactions under the partnership. Fortunately for Blllott, Perrine disposed of this matter by selling his entire holdings to Holladay and Blllott eventually per­ suaded (toldsmith to sell back the interest in Perrine’s holdings.

Inasmuch as Elliott was unable to pay the

000 in full, the balance

Goldsmith agreed to treat

as a loan to the construction company* Following the formal com roencement of construction of the East Side line the preparation of the railroad grade went ahead at the rate of about two miles per week.

The

contractors at the outset had about forty Chinese employed qs laborers and were expecting to add about half that many 21 in addition at the end of April. Both railroad companies were harassed by labor shortages during the summer, as most

161

of the available man ware working in the harvest fields, and until that time the maximum number of laborers on the East side line never exceeded 150 and on the West EE Side line the greatest number was about ISO* Late in iTuly, however, the labor supply of the East Side line was augmented by the arrival of about 300

Chines®,

evidently brought up from San Franeiseo by steamer. In commenting on their arrival the Oregonian stated: A more squalid filthy looking set of creatures than they were it i ever has been our lot to witness. The time will come, and w® believe soon, when the community will demand their rights in regard to this wholesale importa­ tion of pestiferous wretches who add nothing to the material Interests or prosperity of the country. 3 Throughout the summer of 1868 the East Side line progressed rather rapidly through the flat country on the east side of the river south from Portland.

With

the additional supply of Chinese laborers, Engineer Brooks was able to scatter his men at several points, leaving whatever heavy filling and trestling there was to be done for some later date, and by the raiddle of August the grade had been practically completed for the twelve miles to the Clackamas River.

A machine shop had

been built for the erection of construction ears and other machinery necessary to track-laying. This shop was # located in the Brooklyn district in Portland, near the

162

place where ground had been broken in April.

Four

construetion cars were complete# there by August and two passenger cars were In the process of completion. Nearby a sawmill and planing mill were in operation and sufficient ties were out by that time to put down for three miles of track. Grading on the Bast Side line was continued by Ben Holladay and Company through the fall, until

December

of 1868, when winter weather prevented continuation. Activities at the car shops and sawmills went ahead, how* ever*

During the winter 60,000 ties were sawed, a great

amount of bridge timbers shaped, and several passenger and construction cars were near completion by the close of February, 1869.^ Hie first construction of the West Side line did not go as smoothly, inasmuch as the character of the ter­ rain over which the line was to run necessitated a great deal of heavy earth movement end trestling. most difficult part of the route*

This was the

Rainy weather further

handicapped Gaston*s line, and by the middle of July grading had been completed only partially over a distance 26 of about five miles. The contract for the construction of the heavy bridging on the first five miles of the road was let to Stephen Coffin on August 26 and a large force

163 O ff

of choppers and hewers was Immediately set to work. As has been noted, the West Side company was successful in obtaining financial aid from communities through which the line was to pass and from the more in­ fluential Portland business men.

The Bast Side group

attempted to duplicate this success and to fulfill their agreement to obtain all possible aid by soliciting a guar­ antee of interest on #250,000 from Portland, on #50,000 from Oregon City, on #100,000 from Salem, and on #20,000 from Kugene City* expected support.

In no case did they receive any of th© 28

On July 14, 1868, evidently with the

Idea of forcing cash subsidies out of the residents of the valley towns, the directors of the Bast Side line resolved that "it shall be a substantial compliance with the existing contract with A* J. Cook and Go.** to locate the line not more than three miles east of Salem and not more than four miles east of Albany*

A further resolu­

tion provided that "the town or point on the line of the road whose citizens shall raise the largest sum in addi­ tion to ordinary subscription to aid the road, to be at least ten thousand dollars, shall be selected as the location for the machine shops for the company.**

The

resolution relative to locating the line not more than three miles east of Salem was rescinded on January 12,

164

1869, as ^••♦th© citizens of Salem have since that time subscribed with some degree of liberality to said road 30 on condition said road is run t© Salem. ...M Citizens ©f the Albany area, vfoile having responded by "raising a considerable amount of money and. lands for the encour­ agement of said road,M had evidently not done so to an amount satisfactory to the directors, as it was resolved that when the people of that town had raised f30,00Q the resolution of July 14, 1868, relative to the location of 31 the line near their town would be rescinded# •The arrival of two of the locomotives ...Elliott had bought in the east in 1867 was announced in San Francisco in April of 1868 and two others arrived shortly thereafter.

As they did not appear at Portland, the com­

pany announced to interested persons that it was waiting for the city council to designate the location of the Willamette River bridge to be built by the company in order that a wharf might be constructed to receive the locomotives.

This was a plausible explanation, but

probably the truth was that no rails were available for them to operate on.

Neither did Elliott have the cash

available to pay for the first two locomotives ordered on these terms of payment.

On July 84, 1868, Elliott

received a telegram from Charles Crocker asking for a

135

price on the engines.

At that time the Central Pacific

Railroad Company was pressed for motive power, and had just previously offered Booth and Company, a Ban Francisco foundry, §£0,G00 apiece for four locomotives, but that company was unable to accommodate the railroad.

Conse­

quently, when Elliott offered the four engines on his hands at $63,000, plus freight charges, for the lot, Crocker accepted on that same day.

jjg

Holla day told

Elliott later that he could have gotten $80,000 for the engines, as the Central iacifie wanted locomotives to facilitate track-laying in its race with the Union Pacific in building the transcontinental line.

The proceeds

from this transaction properly belonged to the Oregon Central Railroad Company*

Elliott stated that he applied

this money, after payment of necessary expenses in San Francisco, to work on the road.

/

The Wash Side line had pledges of financial sup­ port, but such funds were not available until specified amounts of work on the railroad had been completed..

The

cash subscriptions were quickly expended in the surveying and grading efforts, and more money was badly needed by mid-summer of 1868.

To obtain it, the West side company

in *Tune executed #£,000,000 in first mortgage bonds, and Edwin Russell, manager of the Bank of British Columbia,

166 fanning to depart on a trip to Europe, was authorised to sell $500,000 worth of the securities abroad if he could do so*

From London Bussell wrote Gaston on

September 9 that h© would be able to dispose of the bonds at sixty cents on the dollar*

In mid-October

he wired Gaston stating that he had an offer of 3,000 tons of rail and 25,000 pounds in cash for the entire lot of bonds*

Gaston inmiedlately took this offer to

JT* G. Ainsworth, probably the most influential of the company*s directors.

Ainsworth recommended against it,

the reason undoubtedly being that there was then afoot a plan for the organization of a construction company to build the right of way for the West Side line in which Aitmsworth was heavily interested.

Ainsworth, Heed and

Thompson had taken preliminary steps toward organizing a fiim called &* G * Bead and Company, which took a con­ tract on October 31, 1S68, to build 150 miles of th© West Sid© line for #30,000 per mile in gold*

Work under

this contract was commenced in Movember of that year, but 55 very little was ever don©* The failure of the West Side company to accept the offer which Bussell sent from London was probably, in the light of later events, a mistake, as It would have provided Gaston’s company with sufficient funds to compete

167

More sueoessfully with the East Side group. Another misfortune to the finanela 1 prospects for the

Oregon Central (West Side) came on December 12,

1868, when Judge Deady of the Circuit Court ;Ln Multnomah County rave a decision that an act of the City of Portland in passing an ordinance, on February 4, 1868, by which it guaranteed the payment of seven per cent interest for twenty years on $250,000 of the bonds of the West Side 36 Company, was invalid. This was an unexpected blow, and Ainsworth immediately reduced the number of men employed on the railroad to thirty, just enough to keep the organ37 iaation intact until spring. The Entry of Ben Holla day into Oregon

summa mesxmsssst asse ■xrifr gaMawutuitfiffrtsi i' , wi aiiw'ifflffl taondneaai

When Elliott suddenly found himself in a precar­ ious position due to his rnachinations in disposing of Perrine’s stock in the A . J. Cook and Company contract to Bernard Goldsmith, he unwittingly brought into the Oregon -railroad situation one of the most colorful and unique figures in Oregon history.

Ben Holladay was probably all

that he has been pictured by his detractors, a man who was selfish, dishonest, of poor moral character, and who, because of his immense wealth, gained at least in part by Irregular means, was able to make himself dictator of the political fortunes of the state.

Yet it was through

168

his operations that the first railroads, other than the portage lines, were pushed through to operation status in the state*

Holladay, unlike Yillard, who was to suc­

ceed him as railroad osar of the Northwest, did not consciously work for the best interests of the region* He was interested only in furthering his own power and wealth*

But in striving toward that end he brought some

order out of the chaos which existed in Oregon railroad circles at the time of his entrance into the state. Ben Holladay had had a picturesque career in several western transportation enterprises before coming to Oregon.

Born in Kentucky in 1808, in early life he

moved first to Missouri, and then to Kansas, where he managed a general store and engaged in trade with the Indians.

Through a fortunate meeting with Brigham Young

he initiated a freighting service in Utah and traded in livestock.

With the profits gained fro:i these activities

he advanced a large amount of money to Russell, Majors and Waddell, a concern which dominated wagon freighting on the Great Plains for several years after 1858.

On

the failure of this firm in 186B, Holladay purchased their Central, Overland, California and Pike,s Peak Express Company for §8.00,000*

Under Holladayts direction

the overland stagecoach service reached its greatest heights.

169 However, he wisely disposed of the line to Wells Fargo and Company in 1866 when he foresaw the doom of the stage­ coach as a result of the coming of the railroad*

With the

proceeds from this sale he formed the Horth Pacific Trans­ portation Company and operated a line of steamships along the Pacific coast from Mexico to Alaska. engaged that he became Interested in

It was while so

Oregon railroads*

In the fall of 1868 the Hast Side Oregon Central Bailroad Company, controlled as it was by a group of impoverished politicans, for such they seem to have been, and under the influence of the glib-tongued Elliott, was far from realizing its dream of a railroad operating fro© Portland to California*

And when Holladay saw the

opportunity to enter into the control of railroad affairs in Oregon he let nothing stand in his way. Upon hearing that C. Temple Emmett was interested financially in Oregon railroads through Elliott, Holladay suggested that they join In controlling the Oregon enter­ prise*

Holladay was Interested primarily in the Congres­

sional franchise and land grant aspects of the railroads, and felt that it was possible yet to

obtain government aid

In money for the East Side road. In his efforts to obtain a portion of the Elliott interest in the contract, Holladay took passage with Emmet from San Francisco on the ship Or if lamme. and arrived in

170

Portland on September 4, 1868«

Emmet and Elliott talked

privately on board the vessel after its arrival and Emmet endeavored to persuade Elliott to part with the control of the company*

When Holladay appeared, Emmet told

Elliott ©f Holladay’s intense interest in the Oregon situation and that he would not find him as bad a man as Elliott had evidently surmised*

During this first inter­

view* according to Elliott, nothing was said about going into partnership with Holladay, but Holladay expressed great surprise at the amount of work which Elliott had 159 been able to accomplish on such a limited amount of funds* The proposition of a partnership was first broached to Elliott on September IE.

Emmet, at the inter­

view when he and Holladay first came to Portland, had told Elliott that it would be necessary to get the board of directors to surrender the preferred stock which they held under the agreement of April, 1867.

But he stated, once

this was accomplished, strong and financially powerful men from

Baa Francisco would furnish sufficient means to subdue

the *%st Side interests*

On the way to Salem to contact

the directors Emmet spoke further in this vein and urged Elliott to give his consent to control by Holladay and Unmet, as he was sure once the arrangements were made the Ralston interests in Ban Francisco and other large California

171

financiers would invest heavily*

"The question," Emmet

said, "is not who shall come in, but who we shall keep 40 out*" Elliott shortly agreed to the proposal, and there(after secured the return of the preferred stock from the directors*

On September IB, 1868, the articles of co­

partnership under the name of Ben Holladay and Company were prepared and signed.

Terms of the agreement among

Emmet, Holladay and Elliott were to be in effect for five years, and Elliott was to retain approximately one-tenth of the interest in the concern, his brother vn*s to have a one-fortieth share, and Brooks a like amount.

Elliott

was also to be made the superintendent of the company at 41 a salary of $500 per month* The construction contracts of A* J. Cook and Company were to be transferred to the new firm, and this was done by the board of directors, 4£ meeting on September 16. Elliott was to be reimbursed for the money which he claimed to have advanced to A * 1. Cook and Company, amounting to about $81,000*

For this Elliott

agreed to surrender as much of the $1,000,000 stock as he had received, less, of course, the $90,000 turned over by Perrine to Holladay and the $100,000 held by Emmet* Elliott also was to turn over the $775,000 of first mortgage bonds except the $39,400 which he had used.

172 The hooks of A. *f* Cook and Company were found to show ✓

that at the time of the agreement between #64,000 and #65,000 had been expended, including the #39,400 in bonds? t£il® Oregonian on September 14, 1868, carried a notice as follows: Notice The Undersigned have this day formed a Copartnership for the Construction of Bailroads in the State of Oregon and Adjoining States and Territories, under the name and style of Ben Holladay & Co. Ben Holladay C.Temple Emmet S -C.Elliott Portland, September 12, 1868 Oregonian was well pleased with the advent of the California capitalist into the field of Oregon railroad transportation.

It was felt that for too long

Oregoa#s potentialities for great wealth had gone un­ appreciated by outside investors, and that Holla day *s decision to invest heavily in the Oregon Central

Bailro d

was the first indication of the new day which was dawning for the state*

Surely others would follow in his steps*

Speaking of the creation of the new corporation, the Oregonian said: Matters pretaining to railroads will receive a great impetus from this important transaction and.••will be of incalculable benefit in direct­ ing the attention of others to our state and inducing them to invest some of their capital in the development of the great resources of

173

Oregon* Mr, Holladay i® thoroughly posted in regard to the value of such enterprises and of the importance of securing an early foothold in a new and rapidly growing country Itfce this*••there is no reason why Oregon will not make astonishing strides toward a position of wealth, influence and great importance among the states of this Union*45 The hand Grant Problem Holladay lost no time in assuming full control of the affairs of the new firm and of the hast side Ore­ gon Central Railroad as well*

The first and most pressing

business was the obtaining for the hast Side company of the right to the government land grant, which the company had thus far made no effort to acquire.

Holladay was

bothered not a whit by the fact that it was the general consensus that the legislature of 1866 had designated the West Side company as the one to which the land grant should be given*

neither was he perturbed over the

action of the Secretary of the Interior in acknowledging the acceptance by Gaston’s enterprise of the provisions of the Act of £ulyt 1866 . Holladay held to the contention that the Sast Side Central Oregon Railroad Company was as much entitled to the land grant as the West Side company.

The line of

his reasoning was that the West Side company had not been formally organized until May of 1867 and that actually

174

there was no Oregon Central Railroad Company in existence when the legislature designated that company to receive the land grant, on October 10, 1666.

The East Side com­

pany, on the other hand, had been incorporated on hpril SS, 1867, and formal organization was completed on the following day*

Therefore, he argued, the latter company,

having been the first to complete its formal organization, was in reality more entitled to the grant of land.

The

board of directors of the East Side company had passed a resolution on June 9, 1868, to this end, stating that n **.the Oregon Central Railroad Company hereby accepts any grant of land which may have been made, or may be ex46 tended to said company by Congress.” This move, however, was to prove of no advantage, as the Secretary of the Interior, on July 17, 1868, decided not to accept this assent for the reason that the year provided in the original act for filing such an assent had already 47 elapsed* Reversal of the Oregon Legislature The state legislature of Oregon met in session on September 14, 1868, and the railroad question early became the major issue.

This was axparen^ evidently on

the first day, as the Oregonian was to state, in reporting on the opening of the legislature, that

175

Bailroad Interests already promise to mix them­ selves with almost all other schemes though there i® an apparent effort on the part of the true friends of railroad enterprise to prevent this disastrous tendency* It cannot be helped, however; everybody has got railroad on the brain; everybody is a little jealous and a little afraid of everybody else and every meas­ ure will be suspected of having in it a rail­ road nigger in the fence* *.greatly fear that the result will be to cast suspicion upon and to damage every railroad interest in the country both past and present*48 In order that he might be always on the scene to direct strategy, Holladay dispatched Elliott, immediately after they became partners, to Salem to make arrangements about a boarding house for the Holladay party "that de49 sired to go there to look after the legislature*" Holladay himself arrived after the opening of the session, there to remain until his demands were met. One of the most important railroad measures of the session, Senate Joint Resolution 14, was called up on October 7.

This was introduced by Gaston, and asked that

the legislature reaffirm its decision of October 10, 1866, in awarding the land grant to the West Side Oregon Central Railroad Company.

The arguments were carried on both

within and without the legislative halls of the state* On the floor of the senate J* H* Mitchell, the attorney for the East Side company, opened the official attack on the resolution by repeating the oft-made claim that the

176

West Side company was not in existence when the 1866 legis­ lature decreed that it should have the land grant.

The

opposition countered by stating that the i^st side eaapany was not organized in conformity with the corporation laws of the state, since the original subscribers had attempted to limit their liability to the trival sum of $100 apiece and had authorized the governor as president of the com­ pany to subscribe for #7,000,000 in stock in the name of the company.

It was further declared that iw I. Cook was

a fictitious character, and that the whole East Side organization was a vicious scheme by which the promoters hoped to benefit themselves by manipulating the land grant* It appears, however, that Holladay had more faith in his ability to gain legislative favor by distrib­ uting funds and entertainment to the members than In cogent arguments on the floor of the house and senate.

Gaston

was to say In later years that Holladay "distributed i&oney with a lavish hand, subsidized newspapers, hired lawyers, 50 and purchased politicians right and left." The head­ quarters of the East Side Oregon Central Railroad in Salem was evidently a sort of combined business office and bar room where Holladay kept "open house” to all comers and showed particular favor to legislators who could be per­ suaded to enter.

And the portion of the legislature who

177

could be so persuaded was evidently a majority# Such activities a® these, despicable though they were, attained the desired ends.

On October 17 the

senate resolution designating the Bast Side company as the one to receive the land grant was adopted by the senate and the Gaston resolution to reaffirm the action of the legislature of 1866 was withdrawn.

On October 20 the 51 house of representatives took similar action. Holladay had won his fight, even though at great cost, and the Oregon legislature of 1868 had proved itself an assembly of which the people of Oregon could be anything but proud. Nine members who opposed the resolution as passed felt very strongly about the actions of their associates and caused to be printed in a Portland news­ paper a rather unusual statement which deplored the action of the legislature and stated the reasons why they felt the vote of the senate was unwarranted*

The

resolution was called * illegal, revolutionary, and void,” and was alleged to misrepresent the facts relative to the history of the Oregon Central Bailroad.

It further was

said to be against public policy and the best interests of the state, and likely to give the land to a corpora­ tion which had no legal organization or existence. For these reasons the senators who voted against its passage

178

appealed "to the justice and good sense of the people of Oregon and our delegation in Congress•" J# C. Ainsworth, aiding Gaston in the defense of the West Side interests in the legislature, had heen confident that the Holladay efforts would not succeed# Writing to J . V/, Ladd on October 14 he stated that he had been at Salem for some time "looking after the railroad interests and trying to head off Ben Holladay.

Heed and

myself will*..I trust succeed in bringing things to a satisfactory result. Ben is working hard and is bleeding 53 freely#" This last was evidently a reference to the manner in which Holladay was spreading #35,000 with a free hand among the legislators with the purpose, according to 54 Gaston, of buying their support# Notwithstanding the rebuff handed the West Side interests by the legislature, Ainsworth was still hopeful of saving the land grant.

The grant was a gift from the

federal government and not from the state and the govern­ ment had already shown that it was not disposed to favor the East Sid© line under the assertion made by that com­ pany that the West Side line had been non-existent in 1865. Before that subject could be re-opened for the benefit of the last Side line it was apparent that Congress would have to take action.

Otherwise, all

of the benefits of

the Act of 1S66 would be lost to the state •

179

This Ainsworth had hoped to prevent. Writing to Ladd on October 26 he said: Well, Ben Holladay has carried the legislature, but he has won a bootless victory. The Reso­ lution will not and cannot give him the land grant, and our Senators will see that he does not get Congressional action to make good the acts of the legislature,55 £b& Fight Bafore Congress The chief representative of the East Side inter­ ests in the hearings early in 1869 before the Congressional Committee on Public Lands on the subject of the land grant was John H* Mitchell,

He was assisted in his efforts by

S. G-. Elliott and C . T. Emmet, and had the nominal support of Oregon’s senator, George K. Williams*

The West Side

interests were represented by S, G* Reed and the other member of the Oregon senatorial delegation, Henry W. 56 Corbett, was aligned with him. In January of 1869 Senator Williams wrote to the Secretary of the Interior, 0* H • Browning, outlining something of the difficulties with respect to the Oregon Central land grant and requesting an opinion of that office as a guide for future Congressional action on the 57 matter. On the following day Browning replied that the Bepartment of the Interior considered that the part of the grant which applied to Oregon had lapsed and that seme action by Congress would be necessary to revive it.

180 He further stated that the proposed bill sponsor©d by Senator Williams to extend the time for the assent to one year from the time of passage would be quite ade­ quate to accomplish that purpose*

Browning stated that

he had earlier in the month refused to accept the snaps prepared by the West Side Oregon Central Railroad Company 58 as the grant had lapsed* To acquaint members of Congress with the condi­ tion of affairs in Oregon, Gaston had written and distrib­ uted a pamphlet entitled The Inside History of the Oregon Central Railroad Company with the Reasons Showing the Portland (or West Side) Company to be Entitled to the 2* Sa. land Grant* In it he asserted that a prime reason for not awarding the grant to the East Side Company was the fact that it commenced at East Portland and not at Portland as required by the original Act of Congress* To reach Portland by the East Side line would require a bridge over the Willamette River for which Congress would have to grant approval*

Such a structure would,

according to Gaston, constitute a menace to navigation "of a magnificent river, in the very harbor of the City of Portland, the only commercial depot in the state, a result Congress never intended to bring about by tie act 59 of July 25, 1866, granting the land*" It would seem that the question of which

181

company should receive the land grant was one at this stage not proper for Congressional determination and was rather a question which should have been placed before the courts* For Congress to declare in favor of the East Side company would be unfair, because court inquiry might prove that the West Side company was legally constituted to receive the benefit of the grant of October, 1866*

On the other

hand, had it legislated for the benefit of the Vest Side company, that might be improper, should the courts decide that the East Side company was organized expressly on the ground that the other company m s

never legally designated*

With relatively brief discussion, Congress on ^pril 10, 1869, the closing day of the session, passed the bill amending the ^ct of July £5, 1B66, to allow "any railroad company heretofore designated by the Legislature of the State of Oregon,” to file its assent to the pro­ visions of the act within one year, and the bill was signed by President Grant*

.The bill further contained a provision

that "nothing herein shall impair any rights heretofore acquired by any railroad company" and that the amendment should be construed in such a manner that more than one 60 company could be entitled to a land grant*

182

The West Side Decline It would appear that Congress had foreseen the difficulty which might arise had it designated either on© company or the other to receive the land grant and had, by the phrase "any railroad company heretofore designated by the legislature,"

placed the last and West Side com­

panies on an equal footing, thus allowing the courts to make the final decision.

However, Ainsworth, Heed,and

the other Portland men interested in the contracting firm of S. G. Reed and Company interpreted the amendment to be at least a partial victory for the Kast Side company, and rather than carry on with what might prove to be a lost cause, abandoned their construction contract on May 25, 61 1869. It is probable that Ainsworth and M s associates were not unhappy to find a convenient means of slipping out from under the hest Side line, which was apparently doomed.

In addition to losing Its right to earn the land

grant, it had found some difficulty In disposing of its bonds, investors being somewhat indisposed to accept any securities which bore the name "Oregon Central Company."

Railroad

Above all, Ainsworth and his associates in

the Oregon Steam navigation Company were hoping to dis­ pose of that enterprise to the Northern pacific Railroad

183 Company and were not anxious to work further on a pro­ ject of uncertain future when they stood to make a heavy profit by selling their property to a corporation they considered likely to dominate ail Oregon transportation. To compensate

G. Heed and Company for the work which

had been completed, being scattered sections of temporary grade, about twenty miles in all, the West Side line deeded to them certain properties in the city of Portland valued at about $100,000, together with $77,000 in bonds of the railroad valued at fifty-eight cents on the dollar* Ainsworth was jubilant over the transaction, and wrote to Ladd on tfareh 24 that "Holladay is badly hurt while we by taking lands, lots, etc* belonging to the railroad c ompany 62 will be out but little*" The abandonment of the Pest Bide line by the Portland capitalists w s quite understandably a great blow to Joseph Gaston, as he had pinned greet faith on their ability to carry the line until it was completed and in operation. Nevertheless he determined to carry on to the best of the limited resources available to him, nainly the interest being paid on $50,000 of the bonds by the county commissioners of Washington County and interest on $75,000 63 paid by Yamhill County* Grading was recommenc-ed with a limited force on July 26 and the grade was completed from

184

a point five miles outside Portland to the town of Hillsboro by November 10*

No attempt was made to lay

track on the line* however* no money being available for 64 rails and equipment* The West Side line did win a rather futile and ineffective victory over the East Side interests in the Oregon courts in 1869*

On February 9 of that year a suit

was filed in the United States Circuit Court in Portland in the interest

of the West Side company by James B*

Newby* a holder of bonds in that company*

The grounds

for the suit were that the East Side company* in incor­ porating under the same name as the West Side Oregon Central Railroad Company* had depreciated the value of the bonds held by the plaintiff.

After much legal maneuvering,

Judge Beady ruled on August 3* 1869* that no subsequent corporation could lawfully use the name cf another corpora­ tion, and the decision was unchanged when the final ruling 65 was made on March 8* 1870* But the decision was barren, coming as it did after the land grant had apparently been lost, and at a time when Holladay was already taking steps to organize a new company which would not use the name of Oregon Central Railroad Company*

185

Holladay in Full Control The year 1869 was crucial for railway enter­ prises la Oregon*

Although, Congress had by the Act of

1869 extended the time for filing assent to the terras of the land grant Act of 1866, no provision had been made

for extending the time beyond Be camber 25, 1869, for the completion of the first twenty miles of the road, and if that were not done, the whole land grant would be ir­ revocably lost*

To this end the East Side company in

July and August put a large force of Chinese at work constructing grades and building trestles on the unfin­ ished portions of the first twenty miles. Holladay pressed his advantage over the directors o f the JSast Bide line early in September of 1869 when he presented to them a communication in which he stated that owing to the continual opposition of the West Side company and the failure to negotiate any of the bonds, the contracting firm of Ben Holladay and Company had "concluded it would be suicidal in the extreme upon their part to continue any further expenditure of money under their contract...unless some arrangements satis­ factory to all parties concerned could be affected whereby all the stock and bonds of the Company could be placed under the ownership and control of the undersigned*.**”

186

The failure of the company to dispose of the bonds of the Oregon Central Railroad Company in the east was blamed by Holladay on the fact that the securities were under the control and management of Oregonians who were unknown in th© financial circles of the country.

Holladay also

stated that the contractors would rather lose all that they had put into the work thus far than to continue under the existing arrangement*

However, if the desired

transfer of control could b© affected they would pledge themselves to construct the first twenty miles and com­ plete that section before the time limit expired*

‘They

would also assume all reasonable debts against the company and protect the stockholders and directors against all claims*

Further, during the next year they would continue

the line to Salem and thereafter build southivard as rapidly as possible. The directors of the company, being without funds to carry on the work independently, and with time running short for the completion of the line, had no alternative but to submit to Holladay*s demands, and at a special meeting of the directors in the evening of September 7, 1869, an agreement was reached by which 39,300 shares remaining of the 70,000 originally sub­ scribed for by Cr©orge 1* Woods in the name of the

company were turned over to Ben Holladay and Company in return for his assumption of the debts of the company. The directors surrendered all of their stock to the corporation except for one share reserved by each as a qualification to serve on the board of directors.

For

their stock the directors received promises of payment of certain sums of money, in most cases less than #1,000 in one year frora the date of the contract.

By these ar­

rangements Holladay was left in full control of all the railroad activities in Oregon, except for Joseph Gaston, still making rather ineffectual efforts to complete his 67 West Side line. Elliott Removed Burlag the spring and summer of 1869 S. G. Elliott was rapidly failing into disfavor with Holladay. In the fall of 1869 he had gone to Washington, at the request of Holladay, to work with other representatives of the East Side line in the fight for the extension of the time for filing assent to the land grant.

From ther

he went to Hew York, evidently in company with C* T. Emmet, where he endeavored unsuccessfully to sell the bonds of the Oregon Central Railroad Company.

While in

Hew York he became short of funds,and in spite of his telegraphic appeals to the West Coast and a personal

188

application to Emmet, was denied, any amount of his ex­ penses for the journey*

He finally resorted to friends

in Boston from whom he borrowed $1,200,, and returned to California, arriving there in the latter part of June, 68 1869* In San Francisco Elliott asked Holladay for funds but was met with a refusal, Holladay saying, nMr. Elliott, I could not raise a thousand dollars to save my soul*”

Elliott finally succeeded in borrowing |J700 from

Alpheus Bull, with whom he had been associated in the California and Oregon Railroad Company* and with this money he came on to Oregon and resumed his position as 69 genera1 sup er int en dent• Elliott was aware of the uneasy position which he occupied as the minority stockholder in Ben Holladay and Company, as early as January of 1869, when J . H. Mitchell told him in Washington that he "had heard it suggested in Oregon that Holladay would kick me out in the spring*”

When he returned to Oregon in the latter

part of June he felt that "Holladay and Barnet intended 70 to swindle me*” It is probable that the refusal to grant any funds to Elliott was a part of Holladayfs scheme to get rid of his superintendent.

Holladay had become aware of

Elliottfs shortcomings as an engineer, and had probably

189

learned of hie earlier deceptions in connection with A. J . Cook and Company. Mien Elliott returned to Oregon he was accom­ panied on the steamer by Kobert L. Harris* a well known railroad engineer sent by Holladay to examine and report upon the construction of the road thus far and to make an estimate of the amount necessary to complete the first 71 twenty-five miles of the line, to the town of Aurora. Holladay was not satisfied with the report Elliott had made at the time Holladay took over the contract, to the 72 effect that the grading could be done for #40,000. He was further dissatisfied with the activities of Engineer Brooks, whom Elliott had employed, having found him ad73 dieted to drink and generally incompetent. In the report which Harris tendered to Holladay on June 28 he criticized very harshly nearly every part of the work which had been done under Elliott fs direction. H© estimated that to complete the grade to Aurora would cost not less than $54,000 and that additional work to make the road ready for laying rails would cost another $76,000*

This report gave Holladay sufficient cause to

consider seriously the discharge of Elliott, but he did retain him until October.

In the intervening period

Holladay interposed himself into matters pertaining to

100

the actual construction of the line, much to Elliott*® 74 discomfiture. On October 4 Elliott received a notice from Holladay that he was being removed as general super­ intendent, to be replaced by John F. Kidder. Elliott countered by replying that he did not recognize Holladay*® authority for such discharge,and also sent a notice to Kidder that his services as superintendent would not be 75 required. This dispute over Elliott*s discharge w^s brought before the public in a series of newspaper advertisements, 76 the first of which was printed on October 10: NOTICE* All persons interested are hereby noti­ fied that S. G. Elliott is no longer authorized to act as General Superintendent of construction on the Oregon Central Railroad,nor is he author­ ized to make any contracts in relation to the same,on the part of the undersigned contractors. BEN HOLLA BAY AMI) CO. Two days later Elliott, assuming to speak in the name of Ben Holladay and Co., caused the following to be published: NOTICE: All persons interested are hereby noti­ fied that S. G.Elliott IB authorized to act as General Superintendent of the work of construct­ ing, equipping and operating the Oregon Central Railroad/and he is authorized to make any contracts in relation to the same on the part of the undersigned contractors. BEN HOLXATv.Y & CO. For a brief time Elliott endeavored to exercise his position as superintendent in giving directions to the

191

working parties and in his communications with the foremen, Elliott endeavored to secure the services of J. H, Mitchell in a suit against Holladay and Emmet to protect the sixfortieths interest which he held in Ben Holladay and Company'^hut Mitchell refused, much to Elliott; *s chagrin, as he was already employed by Bella day.

Elliott secured

other counsel, however, and began the suit. dismissed on Elliott’s own motion.

It was later

Shortly after Elliott

instituted his suit, Holladay countered with one charging Elliott with having induced Holladay to enter into the partnership by fraudulent misrepresentations concerning A. I. Cook and Company, its assets, the construction con­ tracts, and the condition and cost of the work accomplished at that time. The threat of prosecution for fraud gave Elliott much concern, and in late October in great haste he dis­ posed of all his Oregon property, including the furniture in his home and his splendid horses and carriage, which were among the finest on the coast at that time.

He sent

his family by boat to Astoria, where they were to take a steamer to San Francisco, while he determined to go secretly by land to that same city. Hov;ever,he was able to travel south only as far as Albany, where muddy roads forced him to return to Portland.

He then went on to

192

Astoria where* for the sake of confusing pursuers* he stayed In a hotel while his wife remained on board the steamer which was to take the family to San Francisco. Fearful that he might be arrested on board the vessel* Elliott took passage on a river steamer to Umatilla and from that point went by stage to Kelton, Utah* where he 79 took rail passage to the east coast# There was probably little reason for these melo­ dramatic movements on the part of Elliott, as Holladay was apparently quite satisfied to have him out of the position of superintendent

of the railroad*

Elliott

a later date that

he left Oregon because

maintainedat he

had been ad­

vised that it was impossible for him to obtain justice in the Oregon courts he wished to take

in his suit against

up residence elsewhere

Holladay and in

the matter might b© placed before a federal court*

order that 80

In the resulting litigation little was accom­ plished to the credit of either Holladay or Elliott, and after dragging through the courts for a number of years the partnership was finally legally dissolved, the Sup­ reme Court of Oregon ordering Koliaday to pay Elliott 81 #20*633* and Emmet was to pay #@,596. Elliott W caS thus removed from all influence In ih© Oregon railroad scene, but this did not greatly improve

193 Holladay fs situation.

There remained a scent two months

in which to lay the rails and complete the railroad, and to this task: Holladay now bent every effort.

To comply

with all the provision© of the Congressional hct it was only necessary to finish the first twenty miles and have them in operation on Christmas Day.

Holladay had nearly

exhausted his credit and available cash in the work thus far and it would require daring financial risks to obtain the necessary funds.

Ben Holladay did not shrink from

this, and he managed in the fall of 1869 to borrow about #500,000 on his personal promissory notes with his owner­ ship of the North Pacific Transportation Line and the bonds of the Oregon Central (West Side) as security. This loan was negotiated from the French Savings and Loan Sooiety of San Francisco.

Whether Holladay used

all of this money in the construction of the railroad was never definitely established* Elliott maintained that much of it was appropriated b y Holladay for his personal use and was mingled with the funds of the North Iacific Transportation Line*

Whatever its disposition,

Holladay was once more solvent and he pushed toward his ^ 82 goal of obtaining the land grant.

194

win

w £ § m & mnkmm

Q» October 2©, 1869, the following announcement in the Oregonian was read with much interest by the citizens of Portlands We are authorized to announce that the first spike on the Oregon Central Bailroad will be driven at last Portland at 1 o ’clock this afternoon*”3 At this occasion, which was indeed a happy one for the residents of the state who had waited so long for such an event and had seen their hopes rise and fall so many times, there was the usual accompaniment of highflown oratory and declamation*

Before the actual spike-

driving ceremony took place, Senator George H. Williams addressed the assemblage of several hundred persons, as did John H. Mitchell and sundry ether prominent id&ividuals*

Immediately after the driving of the first spike

the track-laying force under Engineer Kidder’s direction began the work of putting down the rails.

"Thus under

the most encouraging circumstances the long-looked for enterprise of an Oregon Bailroad was begun attended by the earnest wishes of the whole people for its early 84 completion and the success of the builder*w The first locomotive for the East Side line was the ”J* B* Stephens,” named after the corner of the East Portland townsits*

This locomotive, which weighed

195 about 44,000 pounds, was obtained by Holladay from the Michigan Central railroad, and while a second-band engine, was w la st year reconstructed and was practically a new 4ngine*ff The citizens, many of whom had never before seen such a wonder, gazed in awe as she was landed off the bark Wgbfjoot.

Steam was raised on November 9, and on November

10 a trial trip was taken over the track as far as laid, 85 about two and a half miles# ftork was pushed ahead rapidly on the Hast Side line once the laying of rail was comuenced*

The largest

single construction effort was the building of a bridge 370 feet long across the Clackamas Elver some ten miles from East Portland, on which work had been commenced on September 20#

Two months later high water washed away

the partially completed trusses and seriously damaged the piers and masonry work*

This unfortunate occurrence

almost brought disaster to the company*& plans to have the road completed and in operation by Christmas Day* However, by herculean effort, a new bridge was built by the limiting date.

For the last few weeks men labored

both by day and by night in laying down the rails, and on December 23 the last spike was driven#

Late in the

afternoon of December 24 the locomotive WJ. 3. Stephens” crossed the rebuilt Clackamas bridge,and the road was complete*

196 On Christmas Day a special train carried Ben Holladay and other officials over the full length of the line and on December 30 the govern&ent commissioners, Thomas A* Savier, James H* Fisk and E. £• Geary, made their trip of inspection and formally approved of its construction.

The twenty miles were accepted by the 8? government on January 26, 1870* Thus was completed the first twenty miles of railroad trunk line in Oregon.

By present day standards

it was of course poorly built.

Tracks had been hurriedly

laid, ballasting was poor or non-existent, and the cuts were narrow.

Nevertheless, it represented a remarkable

railroad accomplishment.

Mo longer would Oregonians have

to depend solely upon steamboats and wagons for transport' ation. dawned.

A new day in Oregon travel and transportation had

197 FOOTNOTE'S 1*

The Oregonian* April 9,1868*

&+

Ibid*. April 14, 1868*

5*

Ibid... April 15, 1868.

4*

April 16, 1868*

5.

Ibid..April 17,1868.

6*

Transcript of Record, Oregon and California Rail­ road Company vs. The' united Spates of America. 9th Cirou.lt. Court of Appeal's 'TO' vols.. n. p., n. d ., £X915?/), VoTT X, p • 4976. Citation hereafter referred to as Transcript of He cord.

7*

The Oregonian. Aprn

8.

Transcript of Record.Vol. X, p. 4928,

9*

Ibid.. Vol. X, p.

4937.

10*

Ibid.. Vol. X, p.

4930.

11.

Ibid., ’Vol. X, p.

4935.

12.

Joseph Gaston, The Inside History of the Oregon Central Bailroad feapanles with the Reasons Showing the '^orTlIjST Icr vvest Side Company) b° be Entitle d to the TTT c . Land Grant ITorliand, Oregon, "1869), p . 17. Citation hereafter referred to as Gaston, Inside History.

13.

H. P. I errine to I. R. Moores, February 8, 1Q68. Exhibit in Deposit ion of Simon G. Elliott, In the Circuit Court Gf ’the State of Oregon for W e County of ilultnomh.HSeh Ifolladay and JC. Temp le Emmet» Plaint if fs, vs .S'moh G»" Elliott et a l D e f e n d a n t s (Portland, bregon. 5.871), p. 508• Cltation hereafter referred to as Elllotfa Deposition.

14.

I. K. Moores to N. P. Perrine, :toeh 13, 1868, Exhibit **S*f in ElliottTs Deposition, p. 511.

i$# 1868.

198

15#

Transcript of Record. Vol. x , p. 4937.

16.

Ibid*, Vol* X, pp. 4989-96* Villard errs in putting the date of the contract at May 12, 1867, one year earlier than the actual date. See Henry Villard, The Early History of Transportation Jy| Oregon* Oswald Garrison Wllard, editor (Eugene, Oregon, 1944}, p 7. .

17.

Elliottys Deposition, p. 309.

1®*

Ibid.. pp. 484, 485.

I9•

Ibid.* pp. 486, 487.

SO.

Villard, op. cit., p. 18.

21.

The Oregonian, April 24, 1868.

22.

Ibid.. July 29, 1865.

23.

Ibid. , July 28, 1868.

24•

Ibid., Auguct 17,1868.

25.

Ibid. , February 24,1869.

26.

Ibid., July 22, 1868.

27.

Ibid., August 27, 1868.

28.

Ibid.. June 13, 18, 1868; Villard, op. cit.. p. 18.

29.

Transcript of Record. Vol. X, pp. 5008, 5009.

3°.

Ibid.. Vol. X, p. 5031.

31.

Ibid.. Vol. X, p. 5034.

32•

Elliott ys Deposit!on. p • 142•

33.

Xb id.. p. 9.

199

34.

Ibid., pp. 145f 398. Villard doe© not agree v\?ith Elliott*s statements on this point. See Villard, o£. oit.. p. 14, In which he says: seds# of course, belonged of right proceeds# to the Oregon Central Company. *.but he treated them as at his personal disposal.”

35.

Transcript of Record. Vol. XX, p. 4394.

36.

Joseph Gaston, nThe Oregon Central Railroad," Oregon Historical Quarterly. Vol. Ill, Mo. 4, Dec emb er , 1 9 OB# p . 3&4.

37.

The Oregonian. December 14, 1868.

38.

Le Roy R. Hafer, "Ben Holladay#" The Blotionary of American Biography (80 vols«, Mew'York#' 1932), Vol. Sc# pp . 141-48.

39.

Hl liotfs Deposition, p. 10*

40.

Ibid.. p. 11.

41.

Ibid.. p. 18.

48.

Transcript of Record, Vol. X# p. 5017*

43.

Villard, ©£. cit*. p. 16.

44.

The Oregonian. September 14, 1868.

45.

Ibid., September IS# 1868.

46.

Transcript of Record. Vol. X, p. 5003.

47.

Villard#

48.

The Oregonian. September 15#1869.

49.

Blliott*a Deposition, p. 36.

50.

Gaston, "The Oregon Central

51.

Transcript of Record. Vol. XIII, p. 7058.

op.

cit*. p. 18.

Railroad," p. 321.

200

52*

Portland Daily Herald* November 8* 1866. in Gill Collection*

53*

J. C. Ainsworth to 5. G. Heed, October 14, 1868. Gill Collection* 1868.

54*

Gaston, "The Oregon Central Railroad," p. 321.

55*

J. 0. Ainsworth to J. V-/. Ladd, October 26, 1888. Gill Collection* 1868.

56.

The Oregonian, January 30, April 8, 1869; Transcript of Record, Vol. IV, p. 1778.

57*

Transcript of Record. Vol. IV, xp. 1910-12.

58.

Ibid*, pp. 1912-14# The Oregonian* April 15, 1869.

59.

Gaston, Inside History* p. 17.

60.

The Statutes ct Large. Treaties* and Proclamations of the ITnXted States of America (Hosion, 1871), Vol. XV1, p.' 47. Formal acceptance of the land grant was made at a directors* meeting of the Oregon Central Railroad Company (Last Side) on June 8, 1869. Gill Collection* 1869.

61*

The Oregonian, April 5, I860.

62.

J. C. Ainsworth to J. V/. Ladd, March 24, 1869. Gill Collection. 1869.

63.

The Oregonian. February 10, 1869.

64 *

Ibid.» November 10, 1869.

65.

Ibid.* March 10, 187C.

66

.

Clipping

Minutes of Board of Directors* Oregon and California Railroad Com any, September 7, 1869; first meeting. Gill Collection* 1869.

67.

Ibid*« September 7,1869; second meeting. Collection, 1869.

88 *

SI H o t t *s Deposition , p. 38.

69.

Xbjd., p. 40*

Gill

ibid.. p.

439.

Ibid.» p. 40* ibid.. p. 19. JPm Lw L*-* P'* 3 0 4 .

Ibid*, p. 43. Ibid *. p. 44. The Oregonian.« October 10, 1869. Ibid.* October 12, 1869* Elliottfs deposition, p. 52. Ib id »» p* 56* Ibid*, p. 53. Reports off Oases decided in the Supreme Court off tae State off OyefcoxT"(Ban Francisco, 1888), vol. Till, p. 100. BlllotVg Deposition, pp. 375, 376. Ibe Oregonian * October 28, 1389. Ibid.. October 29, 1889. Ibid*. November 11, 1869. Ibid.. December 25, 1869. Ibid.. January 31, 1870.

ZQZ

Chapter V THE OREGON AND CALIFORNIA RAILROAD The Dissolution off the Oregon Central Rail-

road~TKas7 Sl'ja)

1 1 —

At the time off the Completion off the first twenty miles off the last Side Oregon Central Railroad late in 1669, about #800,000 had been invested in the enterprise in the form off construction costs, ties, rails, equipment and grading beyond the end off the track.

To

complete the line on to Eugene City would require a vast amount off money and this Holladay.did not have.

He did

possess, however, securities off the Oregon Central Rail­ road totaling well over #2,000,000 and it was his desire to dispose off these.

To this ©ad he departed from Oregon

on January 1, 1870, for New York by way off San Francisco. On his arrival in the latter city he discussed his problem with Milton S* Latham, the president off the London and San Francisco Bank, and almost immediately they came to an understanding respecting the placing off Holladay fs securities.1 Latham was a prominent figure in early Cal­ ifornia, having been governor of the state and a United

£03

States senator.

Due to his sympathies for the South

during the Civil foar he had become very unpopular in California, prejudice against him running so high that he had gone abroad for an extended stay.

While in

London he had become closely associated with English financiers and had b een Instrumental in forming the London and San Francisco Bank in California after his return.

He had, before meeting Holladay, suacessfully

handled the investment of European funds, particularly British and German, in the California Pacific Company, -which controlled the railroad and a ferry line from San g Francisco to Sacramento. Returns from these investments were very high and the investors were eager to venture 3 more capital under Lathornvs direction. The East Side Oregon Central Railroad Company, however, at the beginning of 1870 still maintained a somewhat insecure legal existence, and the validity of its securities was rather a moot question!

The company

had undoubtedly been illegally organised in the beginning, when Governor Woods had subscribed for the majority of the stock in the name of the company.

The matter of the

non*~assessable preferred stock was likewise a complicated and perhaps unlawful maneuver which might rise up to plague future investors.

There was then also pending

in the courts the final decision on the ruling made by

Z 04

Judge Deudy In August of 1869 to th© effect that no sub­

sequent corporation could legally us© the name of another eorporation.

This was not to he decided until March of

1870 when D©ady*s original ruling was upheld.^* Holladay*© prime interest was, of course, the right to retain the land grant, and in view of the finan­ cial status of the company at the time, this gave him a great deal of worry.

To obtain the test legal talent

available Holladay engaged William M. Kvarts, a noted Hew York attorney, to review the situation and advise him if it would be possible to transfer the land grant.

In

March Svarts expressed the opinion that the franchise to exercise corporate rights was a grant of the state and that therefore only the state could raise any question on the matter.

The same reasoning, he s&id, applied to

the land grant which was a conditional gift from the federal government.

Therefor©, inasmuch as there had

been no question from either governmental agency and the company had complied with the terms of the act of 1866 by building the line within the time limit set, there could b© no objection to the transfer of the land grant and all other rights, privileges and property which the company controlled. a fee of #25,000.5

For this advice Holladay paid JSvarts

205

T$hen Holladay explained th© complex corporate situation to Latham, the latter was of the opinion that it would be useless to attempt to place the bonds under those circumstances.

He advised Holladay to call in all

the outstanding securities of the Oregon Central Railroad (last Side), cancel them, dissolve th© corporation, and organize another under a different name.

He further

thought it would be well if Holladay came to satisfactory terms with the Vfest Side Company in order that it should

create no more difficulty*

Latham felt that if these

things were don© it would be possible to place a single mortgage on the new road at seven per cent interest on the bonds at the rate of #30,000 a mile* Holladay went on to Hew Iforlc, and while there, in the latter part of February, 1©?0, was advised by Latham that the latter would be able to accept the bonds at 60, the same price for which he had sold the California Pacific Company bonds for the syndicate of investors*

Holladay

was eager for money to continue building the railroad extension, and so did not quibble over the price of the 6 bonds, but accepted Immediately.

206

Organization of the Oregon and California Railroad

■ B- ..— .... B B f e —

.... "-----

Cfci March 17, 1870, th© article© of incorporation of the "Oregon and California Railroad Company" were filed in Salem with Ben Holladay, Cicero H« Lewis, X* R* Moores, X. C* Hawthorne, and Medorem Crawford as the incorporators • The capital was fixed at $20,000,000, of which Holladay subscribed for $13,499,000, Emmet for $5,000,000, and William L* Halsey and George W. Weidler for #500,000 each* Th© few remaining ^shares were distributed among the other incorporators* The first board of directors met on the same day, being the same persons as the incorporators with the addition of W. L* Halsey and George W. Weidler.

Ben

Holladay was chosen president of the company, Halsey vice7 president and h 1). Cunningham secretary* Negotiations were immediately begun with the directors of the Oregon Central Railroad Company of Salem and by March 28 all necessary steps had been taken to dis­ solve that company*

By the terms of the agreement reached,

the Oregon and California Railroad Company agreed to assume all indebtedness of the Oregon Central Railroad Company of Salem, or East Bide line, which at the time amounted to 8 about $8,000,000. The construction contracts with J. Cook and Company and Ben Holladay and Company were delivered up and cancelled, as were all of the securities, and all

207

property and rights were transferred# Ho11aday's next move was to obtain funds from the sale of the bonds of the new company.

Some steps

In this direction must have been taken even prior to the formal filing of the company's first mortgage indenture on April 15, 1870, as the

declared on April 5 that

The negotiation, in Germany, of bonds of the Oregon and California to the amount of #5 ,000,000 is highly favorable to rapid progress of railroad work in Oregon. It assures beyond question, means for the rapid prosecution of this enterprise....By chang­ ing its name and organizing on a new basis, the Oregon and California railroad has shaken off the embarrassments which have heretofore beset it, and started upon a new career. Standing on its own userits and con­ sidered with a view to its great prospective importance to theQ state, it deserves well of the whole people*. The indenture authorized the issue of #10,950,000 of gold bonds at seven per cent at th© estimated rate of $30, 000 a mile for the approximate total of 365 miles to the California state line*

Milton S. Latham and Faxon D.

Atherton, two prominent San Francisco financiers, were named trustees, and in case of default in the payment of interest the trustees were empowered to take possession of the road at the end of three months and operate it or sell It at auction for the benefit of the bondholders. The Congressional land grant was not included in this

208

; mortgage, bat m s :

conveyed to Latham, Atherton and William

Morris as trustees for the benefit of the holders of the 10 bonds against the road* The mortgage appears to have been so worded that the full issue of the bonds could be marketed without regard to the completion of the railroad*

This feature

m s of course of definite advantage to Holladay, as it placed at his disposal a huge amount of money without safeguarding the interests of the buyers of the bonds* Through the efforts of Latham, the Oregon and California bonds were sold in 1870 and 1871 largely to German investors at or near l'rankfort-on-the-Ma in through Aulsbaeh Brothers of that city, at 72§ and 75 cents on the dollar*

The total issue of bonds, nearly $11,000,000, 11 brought to the company about #6,500,000* Immediately on obtaining funds, Holladay set to work to push the road southward toward California.

She

"first day's vigorous work on the Oregon Central In 1870 was yesterday,” reported the Oregonian on the 8th of March*

Ik> regular trains were in operation as yet, how­

ever, and would not be until the fall of the year, and such freight as was offered for transit was handled on 12 the construction trains running down the line*

209

Construction and Operation on the Oregon and California, Before the Oregon Central Bailroad became the Oregon and California line, two additional locomotives were brought to Portland, the "Oregon” on February 15, and the "Portland" on March 29*

These locomotives weighed

avout thirty-six tons each and were described as large# 13 first class, and "elegant pieces of workmanship.” Three other locomotives arrived during that year# the "Clackamas” on August 18, the "Albany,” of forty-seven 14 tons, and the Salem” of thirty tons, on August 30. With such equipment, it is apparent that Holladay was staffing the railroad with sufficient motive power to push construction ahead very rapidly.

In this work he

had an able director in the person of Hans Thielsen# who# as chief engineer, succeeded Elliott fs appointee Thaddeus B. Brooks.

Thielsen had been the chief en­

gineer of the Burlington and Missouri Elver Railroad Company, and the Oregonian was pleased with Holladayfs choice, stating in the announcement of his appointment that it was "informed that he comes with a reputation of muoh experience as well as personal energy in 15 railroad matters.” First rails for the continuation from the twenty-mile post on the Oregon and California line

arrived in Portland on ing

17 1

and fey that time grad—

been completed beyond Salem, fifty miles south of

Portland*

A succession of sailing ships, thirteen in num

her, arrived within a few weeks carrying an aggregate of 0*000 tons of rails.

Bail-laying commenced on August BO

and fey early September was far enough advanced to cause Holladay to order the operation of regular trains. It is rather surprising that more attention was not paid to the commencement of scheduled train ser­ vice in Oregon, but the only account of the event was a brief notice in the Oregonian stating:; look Out for the Cars! Today the passenger trains on the Oregon & California Hailroad will commence running - two trips a day between East Portland and Waeon&a, connect­ ing at that place with the stages. Th© ©ra^g of railroad travel is now opened in Oregon. As fast as the rails were laid down and a temporary surfacing given the track the trains extended their runs further.

By September 9 they were running to

Aurora and by the 18th passenger service was offered as far as the state fair grounds at Salem.

Track-laying

was suspended at that point until early in October, when 19 rails were laid into the city of Salem. Grading was completed to the hundredth mile post between Halsey and Harrisburg on Hovember 3, at which time all workmen were discharged for the winter, it being impractical to go

£11

further because of lack of ties.

£0

Track-lay lag continued,

ho&ever, and at 8 ^*M. on December 8, 1870, a special excursion train with 800 of the more prominent Portland citizens left Portland to journey to Albany, where a great celebration was held.

The usual speeches were made, the

most noteworthy being one by O'. H. Mitchell in which he praised Holladay very highly for his interest in bringing railroads to the people of Oregon*

Ke also alluded to

S* G. Elliott, his erstwhile friend, stating that Elliott

had "recently come to the state and imposing on the credulity of our people had induced many - myself among the number - to believe that he controlled sufficient capital to build the railroad.*

The travelers were

returned to Portland late that night after th© longest £1 day's travel any of them had ever enjoyed in Oregon* Regular train service from last Portland to Albany was 3£ commenced on December £5, 1870. A New land Grant for the Oregon Central (West Side) While Holladay had been active in obtaining funds and pushing th© construction of the Oregon and California line, th© directors of th© West Side Oregon Central Railroad had not been inactive, although their efforts were turned in directions other than construction* On November 18, 1869, th© directors made arrangements to

212

borrow from th© Oregon Steam Navigation Company, which they controlled, $1,000 for the purpose of sending Joseph Gaston to the east to endeavor to secure funds for the completion of the west side line and to try for another 23 land grant* at a meeting on January 12, 1870, a plan was adopted, apparently independent of the effort being sad© by Gaston in the east, whereby $300,000 of first mortgage bonds should be offered at 58, the proceeds to be applied to the completion of the first twenty miles of the railroad.

The bondholders were to select a com­

mittee of three to direct and approve of the disbursement of the funds and ware to retain possession of the rail­ road for two years after its operation began.

No interest

was to be paid on the bonds, but the net profits were to 24 b© divided among the bondholders. Nearly all of the necessary subscriptions were received, but not the entire $300,000 which was necessary to carry the plan to com­ pletion . While the above arrangements were being carried out, there was a coalition made with interests from th© town of Astoria dt the mouth of the Columbia which placed an entirely different light on the future of the West Sid© Oregon Central line.

Astoria had long wanted a

railroad connection with the Willamette Yalley, and

213

following an ehtfcuslastle meeting there on January 12, steps ware taken to organise a railroad company to build 25 such a line* The Astoria and Salem Railroad Company was incorporated at Salem on January 22 with a capital 26 stock of #3,000,000. The Astorians had previously sent Judge Olney to Washington to work there for a land grant for such a railroad from Astoria to the Willamette Valley, but he had been unsuccessful. with Gaston,

In early 1870 he Joined forces

then in Washington in th© interest of the

West Side Company, and they agreed to ask jointly for a land grant to extend from Portland to Astoria by way of McMinnville and from the latter point up the Willamette 27 Valley* A bill embracing this plan was introduced In 28 Congress by Senator George H* Williams. In so doing there was a tacit agreement reached with Ben Holladay on the matter, as Holladay was not on© to look favorably on any proposal which might interfere with his control of Willamette Valley transportation, a sphere which he con­ sidered his own.

Realizing this, Gaston acceded to th©

demand made by Senator Williams that the grant of land should extend no further south than McMinnville*

Gaston

agreed further to make no further claim to the land 29 grant of 1866*

314

Th© bill creating the land grant, signed by th© President on

'arch 4, 1870, was th© only land grant

bill to pass that session of Congress, as that body was beginning to evidence a reluctance to make any further gifts of land, public sentiment toward such largess being what it wa®.

It was particularly stipulated that the

lands must be disposed of to actual settlers and not to land speculators*

A right of way through the public

lands, station grounds, and 12,800 acres per mile in alternate sections for ten sections on each side, ex­ clusive of existing homestead settlements, were granted by the act*

The total length of the line was assumed to

be about 146 miles and th© land grant totaled about 2,000,000 acres*

Twenty miles of line m s

to be com­

pleted within two years and the entire line within six years after the passage of the act* Holladay was able to have inserted in th© bill a rather curious provision to the effect that the proceeds from the sal© of lands under the grant were to be made a separate trust, the money to be invested in United States bonds "or other safe and more productive securities" for the purchase and redemption at maturity of the first 31 mortgage construction bonds of the company* This was the identical scheme used by the Oregon and California

215

Company in issuing its bonds.

By this provision in the

act of May, 1870, the Oregon and California Railroad had a distinct advantage in promoting the sale of its bonds as it was able to assure th© purchasers that the company was under government control and supervision, through the investment in United States bonds. Gaston ys Retirement During his eastern trip Joseph Gaston conferred with a firm of Philadelphia railroad contractors regarding the building of the railroad between Portland, Astoria and McMinnville.

He also bought iron and rolling stock for

th© line, and when the land grant bill became law the 32 contract was closed, on May £• By its terms the Phila­ delphians were to receive five-sixths of the stock and bonds for completing the railroad after the Oregonians had finished th© grading, bridging and placing of ties. After his return to Oregon on May 24 he announced that h© expected the line to be in operation by January 1, 1871.

A corps of engineers was immediately employed to

Axamine and report on the road.

It was estimated, as a

result of this survey, that §50,000 would be required to complete that portion of the work required of the company under the contract.

216

At this point, unfortunately, Gaston was plagued with more troubles in his new effort to build a railroad in Oregon,

The people of Portland did not

respond as he had hoped to his pleas for the relatively small amount of money necessary to carry out the con­ tract.

One theory advanced for this reluctance was that

Portland capitalists were not inclined to invest in any

34 enterprise in which Gaston held the controlling interest. He was not, it appears, a capable executive, and he apparently knew little of finance and railroad construc­ tion; but whatever he lacked in these qualities, it would seem he made up in enthusiasm and energy*

He probably

did more, short of the expenditure of cash, which he lacked, than any other person to secure railroad facilities for Oregon# Gaston stated that he wanted the capitalists of Portland to "secure to themselves and to this city a railroad of their own and under their own control»" and to show that he was interested solely in the benefit of the people of the state he agreed to remove himself from the enterprise*

As he stated it:

To leave no excuse to anyone to aid in this matter, I cheerfully accepted this "stab in the house of my friends" and formally proposed and agreed to transfer my stock to any Port­ land capitalists and retire from the Company on the sole condition that they w>uld raise

£17

this money to commence the work and carry on to success this enterprise under its present name which I had inaugurated without means and for so many years had laborer;! through untold trials to keep alive* Although the Portland capitalists undoubtedly did object in some degree to Gaston's control, he being considered incapable of handling such an enterprise, a more likely reason for their reluctance to furnish funds was that control of the company would not lie with them but with the Philadelphia concern, which would hold five-sixths of the capital stock.

There may also have

been some objection to putting money into a railroad of such limited length of line and which had no real assur­ ance of ever being extended further than to McMinnville and Astoria,

The conservatism and self-interest which

they exhibited at this time, as in the past, permitted opportunities to slip through their fingers to the ultimate benefit of persons far removed from the Oregon scene. After making his magnanimous offer to remove himself from the company Gaston waited two weeks for the necessary funds to be raised.

The newspapers published

almost daily appeals to the civic pride and self-interest of the Portland financiers who had originally supported the West Side line*

At the beginning of this campaign

218 the editorials were modest, but they eventually became stinging rebukes, and the personal note was finally interjected when it was asked: "Messrs# Ladd, .Ainsworth, Thompson, Carter and others, will you push ahead?"36 But all to no avail#

No money was forthcoming#

Gaston stated that "It was necessary that something be done and done quickly as judgments had been recovered against the company on its debts and

wq

were lia ble to

and threatened with bankruptcy every day#"

Under such

conditions it is not surprising that he listened with interest when approached by Ben Holla day with a proposi­ tion which would give to the leader of the last Side interests control over the West Side as well*

Gaston

states that "Under those circumstances I made up my mind that my duty to the interests of the enterprise and to the people of the West Side counties required that I should place the roacl in the hands of a man able and 37 willing to push it through to success#" On Pune 26, 1870, the Oregonian published an open letter to the citizens of Portland from Dr# A. M. Loryea, a resident of Last Portland who had originally been interested in the Bast Side line#

Loryea agreed

to build the West Side railroad if the Portlanders would agree with him on the details of the organization,

219

stating that arrangements had been made with capitalists in Europe to obtain money for all legitimate railroad no

enterprises in Oregon.

This letter had undoubtedly

been inserted at the behest of Holladay and was the opening move on his part to gain control of the West Side interests* A few days later Holladay induced Gaston to part with the majority of the stock of the West Side 39 lines* In consideration for this transfer Holladay agreed to pay the debts which Gaston had incurred in the interest of the company, about $40,000, and agreed 40 to keep Gaston in his employ* Gaston's action in disposing of his stock to Holladay was apparently unknown to the directors until the meeting of July 2*

At that time the company accepted

the provisions of the Act of Congress granting lands to the railroad,

and adopted a resolution to call a stock­

holders* meeting on July 9 for the purpose of consider42 ing the dissolution of the company* To this latter, J* G* Ainsworth objected violently but futilely.

The

West Side line had become, apparently, a very desirable piece of property to the Portland capitalists once it was learned that Ben Holladay had an interest in it*

220

Holladaj in Full Control That the exercise of control over the West side line by Holladay would result in a subservience of that line to the interests of the East Side railroad was an immediate fear in Portland* apprehensions of the Oregonian went even further*

That newspaper expressed

concern that Holladay# now holding a virtual monopoly on Oregon railroads, would extend the East Side line no further than Eugene City and Oregon would be frustrated in its desire for direct rail communication with Cal43 iforaia and the east* Holladay responded by writing to the editor of the paper that it was his intention to continue building to the lQ0~mile post that year# and thereafter as rapidly as possible to the head of the 44 Willamette Talley* From that point on, construction would of necessity be governed by whatever action was taken by Congress in granting aid to railroads pro­ jected by Central Pacific interests northward from Nevada.

The West Sid© line would be completed to a

junction with the East Side line at some point near the head of the Willamette Valley. The Willamette Valley Baliroad Company Organized, On July 9# less than two weeks after Holladay had obtained control of the Oregon Central (West Side),

2£1

articles of incorporation of the Willamette Valley Rail­ road Company were filed with the secretary of state* Holladay, G» H* Lewis and !'• Savier were the incorpor— 45 ators. George H. Belden, who had worked with Simon G. Slliott on the original surveys for a railroad north from California to Oregon in 1863, was employed by Holladay to commence the survey from Portland to Astoria and McMinn­ ville, and to examine other routes proposed by the Willamette Valley Railroad Company.

One of these latter

was to begin at some point on the Oregon and California line south of Last Portland, cross the river near Oswego, and from there proceed to Hillsboro, Forest Grove, and McMinnville, by way of the Tualatin River valley* Portland Under Pressure This latter proposal would, of course, entirely cut out Portland, which lay on the west side, as the term­ inus of the West Side line, and it is probable that it was a plan on the part of Holladay to force Portland citizens to contribute toward building the rai road from a terminus on the west side of the river.

The Oregonian felt that it

would be a desirable thing for the people of Portland to make up the difference in the cost of building by way of Oswego, crossing the river at that point as the company evidently planned to do, and buixding wholly on the west

222

4,7

side of the river, which would be somewhat more expensive* The first twenty miles of the Willamette Valley

Railroad were located beginning at Beaverton and terminat­ ing four miles south of Forest Grove. According to Holladay, the location was begun at Beaverton until suoh time as the citizens of Portland should decide whether or not they would contribute to bring the line from that point to Portland by 48 the west side of the river* An effort was made by interested persons in Portland to havs the city charter so amended that the city could grant to the Willamette Valley Railroad, or any other line which would build a terminus on the west side of the river, a subsidy in the amount of f30$,000.

A bill to this

end was introduced in the legislature, providing that the city would pay |75,000 in seven per cent bonds payable in twenty years for each five exiles of road constructed until twenty miles should be built*

After passing both houses

of the legislature, the bill was vetoed by the governor on , 49

the ground that it was unconstitutional.

This, however, did not deter Holladay in his determination to get financial aid from Portland, and in December he published an open letter to the citizens of that city in which he stated that he desired to commence the construction of a railroad up the west shore of the

223

Willamette provided he could effect arrangements with the creditor a of the West Side line which would give him the roadbed and enable him to complete the road without em­ barrassment.

Holladay estimated that to cancel out the

bonded and floating indebtedness would require $100*000* and this sum was to be paid to him when twenty miles were completed* Sixty days were allowed from December 13, 1870, 50 for the money to be subscribed* Public meetings were held in the interest of securing the needed funds and much favorable publicity was given to the proposition by the Portland newspapers. typical of newspaper comment was this from the Oregonian; It is possible - nay* probable - that the cit­ izens of Portland now have an opportunity which* if neglected* will never offer itself again. There is wisdom in knowing - indeed, the highest wisdom consist© in knowing - how to make use of opportunities. The importance of the west side railroad to this city*with the assurance that its terminal depot will be located within the present city limits, must be obvious enough to everyone. Such an opportunity should not go unconsidered. The acceptance of this proposition should not be looked on in the light of a favor to the •e Nehalem Riv er, a very tortuous route* The Oregon Central (West Side) Revived After the difficulties which he had experienced in taking over the Oregon Central East Side line, Holladay was wary of any move which might destroy the effectiveness of the organization created under the name of Willamette Valley Railway.

He had converted the East Side Oregon

Central Railroad into the California and Oregon Railroad without objection from the federal government so far as the land grant was concerned, and he felt secure in fol­ lowing the same procedure in transferring the land grant accepted by the West Side line over to the Willamette 55 Valley Railway* But by this action he was soon to find himself in difficulties.

On February 20 the United States

Attorney General, A* 1. Akerman, expressed the opinion that the Oregon Central Railroad Company could not assign its rights under the land grant act of May 4, 1870, because 56 there was no provision in the bill for such action. In view of this unfavorable situation there was but one thing for Holladay to do and that was to return to building under the charter of the Oregon Central Railroad Company (West Side).

By action of the board of directors

on June 5, 1871, formal transfer of all of the grants,

226 land and property originally conveyed to the Willamette Valley Ball road on August 15, 1870t was made to the Oregon 57 Central Railroad Company. The maps originally filed in February with th© secretary of state under the Willamette Valley Railroad Company’s name were re-filed on April 19 RO under the name of the Oregon Central Railroad Company. Holladay’s Financial Moves, 1871-1872 To secure funds for the construction of the West Side line Holladay once more was faced with a financial problem.

Again he turned to Milton Latham in San Francisco

for help in disposing of the Oregon Central {West Side) securities which he held.

But he found that the Californ­

ian was not responsive to his desires.

Latham foresaw

difficulty in persuading his foreign clients to purchase more Oregon securities before the Oregon and California bond issue of 1870 had been sold.

Moreover* it would be

hard to convince possible buyers that the two railroads were necessary in the relatively narrow confines of the Willamette Valley, which was only sparsely populated.

For

these reasons Latham, turned a deaf ear to Holladayfs , 59 proposals• Holladay could not lone afford to borrow funds from his other enterprises, notably his steamship line, the North Pacific Transportation Company, to carry on

£27

the building of the West Side railroad.

On July 11 the

directors of the West Side line resolve'

to issue bonds in

the total amount of #4,395,000, which was the sum deemed necessary to construct the railroad then being built from Portland to Astoria and from the junction point near Forest Grove to McMinnville, a distance in all of 146J miles. These "first mortgage construction bonds” , to b© dated July 15, 1871, were payable in twenty years, issued in denominations of §1000 and §500, one-half of the total in each denomination, and were to bear seven per cent interest.

The mortgage or deed of trust on the property

of the company securing the bonds was to be executed to 60 Milton 5. La than and Faxon D. Atherton as trustees* These bonds could not be sold readily, but in 1872 Latham was finally able to secure for Holladay an advance of §1,000,000 bearing ten per cent interest and secured by the pledge of the whole §4,395,000 of the issue*

The

bankers likewise exacted an option to take the whole issue at the same price as those of the Oregon and California Company.

With the money received as a result

of this loan from Latham, Holladay was able to continue with the construction of the first fifty miles of the 61 line. The fact that bonds were issued to cover only

228 the distance from Portland as far south as McMinnville would seem to indicate that Holladay had no intention of building any further In that direction.

It may have

been that his inability to dispose of the bonds which he had obtained from Gaston at the time he assumed control

of the Vfest Side line had convinced him that he would be unable to go further.

It is In contrast to the glowing

promises he had given to the people of Oregon in the

summer of 1870 when he assured them that both lines would be built through the length of the Willamette Valley* Holladay, as noted previously, had obtained ranch

of the money used in the construction of the first twenty miles of the Oregon and California line from the earnings

of his steamship line, the North Pacific Transportation Company, which operated principally between San Francisco and Portland.

This enterprise was very profitable, show­

ing annual earnings of between $200,000 and $3000,00 after all expenses were paid.

By 1872, however, its vessels

were in a deplorable condition, being old wooden steamers fitted with antiquated machinery, and having Inadequate passenger and freight accommodations for the traffic offered. Holiday now determined to use the North Pacific Transportation CompanyTs properties to secure further

229

funds, by a rather curious financial maneuver*

There

was created a new corporation, the Oregon Steamship Company, capitalized at $3,000,000,'which was to buy the steamers owned by the North Pacific Transportation Com­ pany and nine river boats operating on the Willamette* The operation was so managed that Holladay received all of the stock, except minor qualifying shares held by the directors, without payment of any money*

The funds to

pay the North Pacific Transportation Company for its properties and to reimburse it for previous loans to him would be provided by the issuance of $2,000,000 of seven per cent gold bonds to be secured by a mortgage on the old craft and on two new steamers. Articles of incorporation for the new enterprise were filed on May 22, 1872, and on July 1 of the same year the board authorized the mortgage 62 on the floating property. Latham, the San Francisco financier, attempted to place these bonds, and partially succeeded. Foreign in­ vestors were persuaded to lend ^800,000 for one year at ten per cent interest against a pledge of all of the Oregon Steamship stock and bonds and a provision that the creditors of the Oregon Central Railroad should have a second lien on the securities of the Oregon Steamship Company.

The net result of this transaction was that the North Pacific Transportation Company received payment for its obsolete ocean steamers and for the moneys loaned to Holladay.

The Oregon steamship Company paid for the

river boats and had a coiiifor table balance in its treasury. None

of th© money was used in the purchase of new steamers

and Holladay found himself in absolute control of a new corporation without the expenditure of any of his own funds This financial stratagem was to have important implications for the future.

The complicated intertwining

of the railroad and steamship companies by the several guarantees and pledges of the various securities involved many groups of creditors.

It was to make most difficult

the settlement of these interests in the day when the Holladay empire was to totter and fall. Oregon Central (West Side) ^ n s t r u c i j ^ ang uperatTon1. I&VI-1872 Construction on the West Side railroad was com* menced nearly three years after Gaston had given up the effort.

In June of 187$. a contract was let to M. s.

Hart Company for the grading of the first twenty miles, most of which would follow the old partially completed 64 roadbed. The first days of July saw the work progres­ sing very rapidly froia. what is now downtown Portland.

231 Graders, tie and timber contractors, and bridge builders were scattered over the route between Portland and Hills* boro and the work was pushed ahead rapidly. of track was commenced on July 27.

The laying

Construction of a

wharf for the receipt of rail and rolling stock was com­ menced during July also, and early in .August the pile driver could be heard all over Portland, working night and day in order that the wharf might be completed in time to receive the first locomotive, then on the way 66 from San Francisco. This engine arrived in Portland on the bark Webfoot on August 18, and over a week was required to raise it the necessary twenty feet above the deck of the ship to the wharf floor.

The discerning

reporter on the Oregonian presented to his public a lesson in elementary engineering in his description of the locomotive as he saw it: This locomotive differs from those in use on the east side in the essential regard of hav­ ing three small steel-rimmed drivers instead of two* On the principle of natural mechanics that what is lost in velocity is acquired in power, these locomotives cannot travel so rapidly as those having large drivers, yet are calculated to move with much greater power and climb with comparative ease and safety steeper grades.. *.This locomotive has been used before*..and appears far from being new* Xt is very massively constructed and with proper use bids fair for years of activity* It is numbered 76, is nameless - a defect easily remedied when burnished and repainted was cast at the iron works of Whitney and ^ Son, Philadelphia, and weighs about 35 tons*

232

On September 16 the locomotive, to which the name "John H. Couch” had been given, evidently In honor of one of th© first citizens of Portland, was fired up and made the first trip over the line.

In describing

the scene a® the locomotive chuffed through the streets of Portland , th© Oregonian said: The occurrence brought out swarms of our cit­ izens and the street for sixteen blocks pre­ sented an appearance of life and animation surpassed only by our great gala days. The loomotiv© had attached only its tender; in this were Messrs. Holladay, ’//©idler, and two or three others. The passage of the locomot­ ive was the realization of the dreams, proph­ esies and prayers of our people for twenty years, the event which we had been told a thousand times would mark the opening of a new epoch in the progress and prosperity of our city. "It seams like a dream," was a remark heard on all sides, and the general feeling was one of "joy and gladness.” In a few day® the locomotive will pass and repass on schedule time, dragging trains laden with the wealth of our beautiful valley; the Tualatin Plains will be our next door neighbor and cur city will have extended its suburbs over and beyond the mountains - "The good time coming is almost here." 88 On the 20th the locomotive was once more run out, this time to the end of the track, which was being laid rapidly as a supply of rails had recently been landed from a newly-arrived ship.

The track reached the suramit at

Bertha Station about seven rolles outside Portland by midOctober, and by the last week in .November fifteen miles

233

of the track had been laid*

70

Ha view of the fact that

the grade had been completed as far as Hillsboro, this was a rather slow pace for putting down the rails.

The

company gave as a reason for the delay the fact that the ground was so muddy it was difficult to speed up the work, and also that there was a shortage of materials.

71

By December 12 the line was within two miles of Hills72 boro. Hails in sufficient amount to complete th© first twenty miles arrived in Portland from San Hranciseo on the bark Webfoot on December 13, together with another locomotive, the "Dallas.”

This engine was given a trial

trip on December 17, and was reported to be able to climb the steepest grade on the line "without apparent diffic73 ulty*” On the 16th the track was at th© twenty-mile post, which indicated the end of the first section of 74 the road* Work was continued for a short distance further, through Hillsboro to Dairy Creek, where oper­ ations were temporarily suspended on account of the inclement weather.

Hails were down to Cornelius by

75 the end of January. When the railroad arrived at Hillsboro the populace was in a s-ate of some anxiety, as th© engineers built through the town without setting up a station build­ ing or siding and the citizens were fearful that the town

234 would have none of the appurtenances normally associated with a railroad stopping point*

For some time, appar­

ently, the trains did not stop there*

The Herald

recorded that #**a respectable citizen of Hillsboro enters a service complaint against the management of th© West Side railroad. He says under date of the 5th inst. that the people of that community were quite taken by surprise and a good deal annoyed that the cars in­ stead of stopping at th© warehouse to let passengers off at or opposite the town passed by and took them on to a point called Dairy Creek Station about a mile away* The so-called station is situated in a wheatftfield recently plowed and sowed to wheat# Just what prompted the railroad company to refuse to permit Hillsboro residents to debark from the cars near their homes cannot be determined, but the practice was evidently not followed for long* 77 freight depot was built, however.

Ho

although passenger and freight trains ran to the end of the track almost as soon as the rails were fastened down, there was no definite schedule of rail­ road operation posted until eax-ly in January, when it was announced that daily service between Portland and Dairy Creek wouatd be inaugurated, the train to leave 78 Fourth and Stark Streets in Portland at 9 ji*M« daily* On January 4 the commissioners charged with

235

inspecting the railroad to determine if the terms of the land grant had been satisfactorily met in that respect, made a journey over the road in company with Holladay* These men, K* R* Geary, T* A * Savier, and James Fisk, pronounced the road satisfactory by their standards and 79 so reported to the federal government* During the year 1872 work on the road was accom­ plished only at a relatively slow rate, due in part to a lack of materials*

Rail for the line had been ordered in

December of the previous year,

but did not arrive until

late spring.

Grading was pushed ahead twenty-six miles 81 beyond Cornelius by early July and track was down to Gaston 82 by the latter part of September* Th© final construction on the West Side line under Holladay*s leadership was completed late in 1872 when the rails were laid to the little settlement of St* 83 Joseph on November 3. As previously noted, it had been the Holladay plan to continue with the West Side line south through the valley by way of Corvallis, and the preliminary surveys had been carried out throughout 84 that distance* In May of 1872 the board of directors of th© Oregon Central had determined upon Junction City as the point of meeting of the East Side, or Oregon and California Company, and the West Side, or Oregon Central

330

Company*

Th® announcement of this plan had heen made

in .August of the year previous, stating that the point had heen chosen by the officials as the most logical meeting place for the two lines and that the complete shops of the company would be located there not later 85 than the close of the year 1873* The designation of this point was made official by the board of directors 86 in May of 1873* This plan, however, was never carried out, and although a small hamlet still is to be found at that location bearing the name of Junction City, it is only a way station on the Southern laclfic lines on the East Side route* Construction *JBL~0reRO&' aftff As has been noted, the Oregon and California Company pushed its tracic into .Albany late in December of 1870 with much rejoicing on the part of the population and with an intense desire being expressed by residents further up the valley that the railroad be brought to them with all haste.

In the spring of 1871 Holladay

began to lay trade as rapidly as possible, but was handicapped In the early summer by the failure of rails to arrive from England in sufficient time.

By May 4 the

trade was down ninety-eight miles from Portland, which

237 was about on© mile south of th© town of Halsey, to which regular trains were being operated during that 87 month, At that point stages of the Oregon and Cal­ ifornia Stage Company picked up California-bound passengers and carried them south to the end of track 88 of the railroad being pushed north In California, By «Tune 24 trains were moving Into Harrisburg, to which 89 point grading had been completed earlier that month, At Harrisburg construction southward was halted for nearly three months while a bridge was constructed across the Willamette Blver near that point, As originally surveyed, the East Side Company, as its name implied, had planned to follow the east shore of the river from Springfield north to Portland in as direct a route as possible,

This would have left

the settlements at Harrisburg and at Eugene removed from th© railroad, and th© citizens of those towns had come to realize that their communities would wither and die In a short time were the railroad to pass them by*

They

took action to induce Holladay to re-survey his rout© In order that they might be convenieneed. In a proposition presented to the citizens of these towns Holladay stated that to build the road as they desired would involve building a bridge at a

238

point between Harrisburg and Eugene, where the Willamette was much wider than at the place where he had planned to construct a crossing at Springfield,

Further, to run

such a route by way of Harrisburg and Eugene would in­ volve construction of over five miles more track than called for by the original survey.

The route would be

changed, however, and the necessary structures, including depots in both cities, would be built, if a payment of #60,000 in gold or the equivalent in lands were given, 90 together with a right of way through the towns. Im­ mediately #20,000 was subscribed in Eugene for this purpose, and by May 6 Harrisburg had pledged a similar sum.

91

By May 9 all of the money had been raised, with a surplus 92 of $2,000. Plans were immediately drawn and contracts let for the construction of the bridge, which was the longest such structure built in Oregon to that time.

Considering

the size of the construction effort, it was completed in a remarkably short time, the entire period of building cover­ ing only slightly over three months from the time the first piles were driven*

On October 3 the first locomotive

crossed the bridge, this being the "I. B* Stephens,” which brought over ten flat cars loaded with rails.

The bridge

consisted of two Howe truss spans, each 215 feet long,

239 with a drawbridge section in the center 240 feet in length.

The total distance across the bridge was 770

feet, there being two string beam approaches fifty feet 93 in length at each end* While the bridge was being constructed, grading activities continued southward, the grade being completed into Eugene on iTuly 1* Track-laying was continued as soon as the Harrisburg bridge was opened and rails were put down in front of the depot in Eugene on Sunday » October 8* at about one o ’clock in the afternoon.

On the Saturday

previous something of a record for laying track was ac­ complished, when slightly over five miles was put down in one day*

Eight men were employed in carrying the rail

from the car into position, eighteen did the spiking, and the remainder of the crew of seventy-two were employed in distributing ties, tie plates and spikes.

On Sunday morn­

ing work was begun as soon as it was light enough to see. The haste to complete the track was occasioned by the plan of Holladay to visit the end of track on that clay, and it was the desire of the contractor to make it possible for 94 his train to come into Eugene. Regular train service to Eugene from East Portland was instituted in October 15, 95 seven hours being required for th© trip of 123 miles. With the railroad in operation for that distance,

240

it was deemed so longer necessary to maintain offices of the Oregon and California Stage Company in Portland, and 96 they were closed and moved to Eugene on October 31. The relatively rapid progress which had been made during the summer of 1871 in grading and laying track through the Willamette Valley was considerably slowed during the fall and winter# After building th© line to Springfield, a few miles south of Eugene, the character of th© land over which the railroad was to pass changed abruptly.

No longer were

there vast level stretches over which the line could be put down without a curve and without consideration for th© rate of climb.

Instead there ware rugged narrow canyons

through which th© railroad had to thread its way, with many bridges necessary to cross the rushing mountain streams#

In order that there should be no grades too

steep for th© small locomotives to negotiate, it was nec­ essary to direct the rout© in a circuitous fashion. By mid-November the railroad construction being carried on from Sacramento, California, had reached th© town of Tehama.

Here stages took passengers and mail through

northern California and southern Oregon to th© end of track In Oregon, a distance of 345 miles. commented that

The Oregonian

.the time made between th© railroad

241

points had been four days and a half* but, with th© setting in of the rains, it is now, and probably will remain through the winter, five days and a half,"97 South from Eugene th© work went ahead during the fall of 1871 rather slowly.

On October 24, construction

trains were operating six miles beyond that city, and on Nov ember 14 had progressed another similar distance to the town of Creswell, where operations halted because of lack 98 of rail* By the end of the year grading had been finished 99 to Oakland, Oregon. The year 1872 saw the line being built as rapidly as finances and the availability of materials would permit. Commencing early in the spring, grading was done from Oak­ land to Roseburg through on© of the most difficult sections of the entire route.

The country was very rough and much

filling and cutting were necessary*

By iipril 10, con­

struction trains were carrying mail and passengers twenty100 eight miles beyond Eugene, and this service was instituted 101 for an additional twelve miles a month later* Passenger servic© on regular schedule was begun to Oakland on July 7, and on October 20 the first construction train reached 102 Hoseburg. Regular service to the latter point, 198 miles from East Portland, was instituted on December 3, trains 103 requiring nine hours to make the journey between terminals.

242 Holladay in Difficulty With th© completion of the Oregon Central Railroad (West Hide) to &t. Joseph, and the Oregon and California to Roseburg, both in Hovember of 1872, rail­ road building in Oregon came to an almost complete halt for about ten years,

Ben HolladayTs shaky financial

empire was about to crash around him, and it was no longer possible for him and his agents to keep investors., and particularly those abroad, unaware of the disastrous conditions in Oregon.

The bondholders in Germany had been

grievously misinformed as to the population, resources and general conditions in Oregon, and in particular they had been misled as to the manner in which the Holladay busi104 ness enterprises were conducted. The bonds, amounting to nearly $11,000,000, which had been disposed of at 75 in Germany, had netted Holladay only about 48 cents on the dollar after the payment of commissions and the first 105 year*© interest. By April of 1873 the bonds of the Oregon and California Railroad were quoted on the Berlin raarket at 33 1/3, and there was eonsternation among those who had invested heavily in the Oregon securities.

At a meeting

in Frankfort on March 5 they appointed a committee repre­ senting the bondholders to make an investigation of the

243

Oregon situation and. determine if there was any hope of 106 salvaging their investment. The committee was empowered to take all legal measures for the enforcement of the claim of the bondholders against the company and, if necessary, to foreclose on it. This committee of six chose Dr. Eeinganum and Hermann Koehler to represent them in Oregon, and these individuals, accompanied by M. s. Latham and other 107 financiers, reached Portland on May 28, 1873. These men spent some time in Oregon examining the physical and financial aspects of the Oregon and California Kailroad before returning in August to Germany, where they made their report to the bondholdersf committee*

In this

report it was stated that there was little fault to be found with the railroad as far as it had been built or with the equipment then being operated on it.

The rumor,

which had gained wide circulation in Germany, that the road had not been built at all, but that the funds fur­ nished Bolladay by German investors had been squandered and stolen, was put at rest.

This was the only redeem­

ing feature of the intelligence brought back to Germany. The financial status of the Holladay enterprises appeared to the investigators to be almost hopeless. grants were declared to be unsaleable.

The land

Almost ^80,000

844

had bean spent by the corporation orgaiiized by Koliaday to dispose of the lands, the Kuropean and Oregon i.abd „ . „ 108 Company, in selling #15,000 worth* The lands granted to the company were all at quite a distance from the railroad, as the route followed by the line was for the most part quite heavily settled by the tine it was put through.

The granted lands were described as "the spurs

and knobs of two ranges of mountains**.not worth any ,4109 price on the market*” Keinganum was unable to make any progress in his negotiations with Holladay, but an arrangement was made by which an agent of the Oregon and California Railroad Company would go to Hurope with power to act as its agent or attorney*

It was in September of 1875

110 that William Horris of San Francisco was so commissioned* Harris's appearance before the committee apparently brought no change In the situation, as he cane without any proposal or suggestion from Holladay for modifying or extending the indebtedness* The final blow for the Gorman bondholders came in October of 1873 when the company found Itself unable to pay the semi-annual interest falling due on the first 111 of that month on its outstanding bonds. Immediately the German committee began vigorous action to salvage

245

everythin possible from their unwise investment, and to assist them in this they called upon the man who was to have a more direct influence than any other person upon the course of transportation in Oregon for the next ten years*

This man was Henry Villard*

246

FOOTNOTES 1,

Henry Villard, The Early History of Transportation in Oregon, Oswald GarrTson Villard r editor TIugene, Oregon, 1944), p. 23.

2.

Hubert Howe Bancroft, History of California (San Francisco, 1888), VoTT VII, p. 251.

3#

Villard, op. oit., p. 24.

4.

Joseph Gaston, "Th© Genesis of theOregon Hallway System,” Oregon Historical Quarterly. Vol. VII. No. 2, June, 190&, p. 11*.

5.

Joseph Gaston, ”The Oregon Central Railroad,” Oregon Historical Quarterly. Vol. Ill, Mo. 4, December, 1902, p. 323.

6.

Villard, op . clt., p. 24.

7.

Minutes, Board of Directors. Oregon andCalifornia Railroad, UTrch 17, 1870. Gill Collection, 1870. Minutes, Board of Directors, Oregon and California Railroad, Marck' 28, 1870. Gill Collection, 1870. The Qregonian.April 5, 1870.

10.

Minutes, Board of Director s. Oregon and California Railroad, April 14, 1^70. Gill Collection, 1870.

11.

Villard, op. cit.. p. 28.

12.

The Oregonian, March 8, 1870. The Oregonian, February 16, March 29, 1870. Ibid.. August 19, 30, 1870.

15-

Ibid.. April 8, 1870.

16 *

Ibid., August 17, 1870.

247

17.

1616.. August 20, 1870.

16.

1616.. September 5, 1870.

19.

Ibid.. October 10, 1870.

SO »

Xbl6.. November 4, 1870.

. 22 .

21

Ibid.. December 9, 1870. Ibid.. December 26, 1870.

23.

Minutes. Board of Directors. Oregon Central (West SideT. November 18. 1669. Oill Collection. 1869.

24.

Minutes, Board of Directors, Oregon Central (West Side), January 12. 1870. Gill Collection. 1870.

25.

The Oregonian. January IS, 1870.

26.

Ibid.» January 24, 1870.

27.

Ibid., February 7, 1870.

28.

Transcript of Record. Oregon and California Railroad Company vs'. The United States of America. 9th Circuit. dourt of Appeals. (18 vols., n.p., n.d., /1915V7), Vol. IV, p. 1780. Citation hereinafter referred to as nnscript of Record.

29.

Ibid.. IV, p. 1782.

30.

The Oregonian, May 17, 1870.

31.

The Statutes at Large. Treaties and Proclamations of The United States of America, from December, 1869, to Miarob. 1871 (Boston, 1871), Vol. XVI, pp. 94-95.

32.

The Oregonian, May 12, 1870.

33.

Ibid., June 25, 1870.

34.

Ibid., JEuly 8, 1870*

248

55*

1514*, August 17, 1870*

56*

Ibid* * Inn© 27, 1870*

57*

Ibid.. August 17, 1870.

38.

Ibid.

39.

Ibid.* July 4, 1870*

40*

Transcript of Record. Vol. IV, P

41*

Ibid., Vol. 33C, p. 4414.

48*

Ibid., Vol. IX, p. 4416*

43*

The Oregonian. Julv 4. 187G

44*

3b Id*. July 6, 1870*

45*

Ibid., July 11, 1870*

46 *

Ibid*. July 19, 1870.

47.

Ibid** September 26, 1870.

48*

Ibid*. October 3, 1870*

49*

Ibid*» October 29, 1870.

50.

Ibid*. Decexab er 12, 1870.

51*

Ibid.» December 13, 1870*

52.

Ibid*, January 5, 1871.

53*

Ibid*. February 10, 1871*

54.

Ibid*. February 11, 1871*

55.

Transdript of Record* Vol. IX, p

56 *

331© Oregonian* February 88* 1871

57*

Transcript or Record. Vol. IX, P

58*

The Oregonian. *pril 81. 1871.

*

June 25, 1870.

1787 •

,

4450.

4456 •

249

59*

Villard, o p * oit., p. 50*

60.

Transcript of Record. Vol. IX,

61*

Villard, op * oit*. pp. 30, 31.

62 «

Xbli « , p • 31 •

63*

. eit.. p. 82.

19.

.Ibid •f p» 84*

80.

Xbia.. p.

21 #

It id*, p. 84; lames B. Hedges, Henry Villard and the Railways of the Northwest (Newmnren, 1930TT" pp. 57, 58.

22 *

The Oregonian. February 9, liaroh 1, 1880.

23#

Frank B. Gill, Construction Bata. A mss. note* book of facts and figures compiled for use by the Valuation Department of the Union Pacific Railroad Company, Umatilla-Celilo section, unpaged. Gill Collection.

24#

The Oregonian. March 1, 1880.

25.

Ibid.. mareh 22, 1880*

26.

Ibid*, inly 1, 1880.

27#

The Dalles, Oregon, Times, ^prll 27, 1880, quoted The Oregonian, April 29, 1880.

28.

Gill, Construction Data (Gelilo-tJmatllla), Gill Collection % The Oregonian . March 30, 18881

29#

The Oregonian. July 22, 1880.

30*

S. G. Reed to Henry Villard, August 6, 1880. Gill Collection. 1880* Reed was the vice-president and general manager of the Oregon Railway & Navigation Company until September 1, 1880, being succeeded in that position by T. F* Oakes.

81.

Henry N i e l s e n to J. I. McDermitt, September 29, 1880. Gill Collection. 1880.

83

.

334

Order» Superintendentfs Office, Oregon Railway & Navigation Company, September 23. 1880. Gill Collection. 1880•

33.

The Oregonian. November 23, 1880•

34.

Ibid.. December 13, 1880.

35.

This gap extended from Blalock to the station at Stokes. The latter point was seven miles west of Uniatill a.

36.

Henry Villard to Henry Thielsen, December 30, 1880. Gill Collection. 1880.

37.

T. P. Oakes to Henry Villard, February 23, 1881. Gill Collection. 1881.

38.

T. P. Cakes to Henry Villard, March 25, 1881. Grl.ll Collection. 1881.

39.

The Oregonian. April 8, 1881.

40.

Ibid.. April 18, 1881*

41.

P. T. Keene to T. F. Oakes, April 15, 1081. Gill Collection. 1881. Keen© was the General Superintendent at Portland.

42.

Henry Villard to Henry Thielsen, May 10, 1881. Gill Collection. 1881.

43.

The Oregonian. May 28, 1880.

44.

Henry Villard to Henry Nielsen, December 30, 1880 Gill Collection. I860.

45.

The Oregonian

46*

Ibid.. December 14, I860.

47.

Ibid.. January 19, 1881.

48.

Ibid.. May 9, 1881.

49.

Ibid., November 7, 1881 •

November 17, 1880.

*

32.

335

50.

P* T, Keene to Henry Thielsen, March 3, 1881. Sill Collection. 1881.

51.

The Oregonian, April 6, 1881.

52.

Henry Thielsen to Henry Villard, April 18, 1881. 01X1 Collection. 1881.

53.

The Ore&onlan. April 1, 1081.

54.

Ibid.. February 23, 1881.

55.

Ibid.. June 4, 1881.

56.

Ibid.. October 5, 1Q81.

57.

Ibid.. June 4, 1881.

58.

C. H.Prescott to Henry Villard, June 22, 1882. Gill Collection, 1882. Prescott 'was General M an a g e r o f the Oregon Railway & Navigation Company.

59.

Henry Villard to Henry Nielsen, December 31, 1881. Gill Collection. 1881.

60.

The Oregonian. March IS, 1882.

61.

Report to Stockholders of Oregon Railway & "" ifavlgation Soaipany~(1883 . j fell! doll ec^tIon. 1883.

62.

Henry Villard to C. H. Prescott, March 17, 1882. Gill Collection. 1S82.

63.

Henry Thielsen to Henry Villard, April 29, 1882. Gill Collection. 1882♦

64.

The Oregonian. May 22, 1882.

65.

Ibid., !«3ay 27, 1882.

66

.

67.

Henry Thielsen to C. H* Prescott, July 9, 1882. Gill Collection. 1882. The Oregonian,

October 4, 1802*

336

63.

Aid*.

69.

C. H. Prescott to Henry Villard, November 20, 1882. Gill Collection. 1882. *

70.

C. H. i rescott to Henry Villard, November 21, 1882. Gill Collection, 1882.

71.

Jfop.gjft to Stockholders of Oregon Hallway & Naviga­ tion company (1880). Gill Collection, leaff.

72.

The Oregonian, May 26. 1880.

73.

Henry Villard to T. F. Oakes, September 20, 1880. Gill Collection. 1880.

74.

Henry Villard to Henry Thielsen, September 28, 1880 Gill Collection. 1880.

75.

Henry Villard to T. If. Oakes, October 28, 1880. Gill Collection. 1880.

76.

Henry Villard to Henry Thielsen, December 7, 1800. Gill Collection. 1880.

77.

The Oregonian, November 23. November 13. 1880.

78.

T. F. Oakes to Henry Villard, January 3, 1881. Gill Collection* 1331.

79.

Henry Villard to T. F. Oakes, March 5, 1881. Gill Collection. 1881.

80.

Henry Villard to T. F.Oakes, March 3, 1881. Gill Collection* 1331.

81.

J, H. Mitchell to T. H. Tynsdale, August 27, 1881. Gill Collection. 1881* Tynsdale was Assistant Secretary of' Oregon Hailway & Navigation Company,

82.

Henry Thielsen to Henry Villard, March 30, 1881, Gill Collection* 1881.

83*

Report to Stockholders of Oregon Hallway & Naviga­ tion Company (1881) * Oi'll Coll ection, 1881.

84*

October 4, 1882.

Oregonian, August 31, 1881.

Ibid., December 6, 1881. Ibid., September 2, 1B8S. 0. H. Prescott to Henry Villard, September 11, 1882. Gill Collection. 1882. Henry Thielsen to Henry Villard, May 7, 1882. Gill Collection. 1882. C. H•Prescott to Henry Villard, May 7, 1882. 8111 Collection. 1382. C. H. Prescott to Henry Villard, June 22, 1882. Gill Collection. 1882. R* B. 0 fBriem to T. Is. Gafins, September 18,1882. C H I Collection. 1882* 0 fBrien was an engineer m p l o y e d by Oakes to report on the progress of th© construction during 1832. Henry Thielsen to C. H. Prescott, February 6, 1883. Cl11 Collection. 1883; Frank B. Gill, Construc­ tion Ba ta * R. E. O ’Brien to Henry Villard, Pune 10, 1883. Cill Collection. 1883. A. P. Rush to William Cleburne, June 13, 1883. G U I Collection. 1883. This appraisal may be open to s"om© liiuestion as Rush was an Investi­ gator for the Union laclflc sent to Oregon to report on the progress of the Oregon Railway & Navigation Company to Cleburne, the chief engineer of the Union Pacific. It is prob­ able conditions were not so bad as he pictured them. G. H. Prescott to Henry Villard, November 9, 1883. Gill Collection. 1883. C. R. Thielsen to Bditor, Railway Age. December 5, 1883. Gill Colleotlo£ 1883. The Oregonian. .April 23, 1881. Kenry Villard to C. H. Prescott, August 3, 1881. Gill Collection. 1881.

338

99.

0. H. Prescott to Henry Villard, August 21, 1881. Gill Collection, 1881.

100 •

Henry Villard to C. H. Prescott, December 27,1881. Gill Collection, 1881.

101

. HenryGillThielsen to Henry Villard, Collection, 1882.

April 5, 1882.

. Henry

102

Villard to T. L. Kimball, April 24, 1882. Gill Collection. 1882.

103.

R. B. O ’Brien to T. F. Oakes, September 18, 1882. Gill Collection. 1882.

104.

Henry Thielsen to Henry Villard, October 6, 1882. Gill Collection. 1882.

105.

Henry Villard to C« h . Prescott, December 19, 1882. Gill Colieot ion. 1882.

ioe.

Henry Villard to 0. H. Prescott, February 23, 1883. Gjll Collection. 1883.

107.

Henry Villard, Memoirs of Henry Villard (New York, 1904), Vol. 2, p. 515.

108.

T, J. Coolidge to C. H. Prescott, March 20, 1884. Gill Collection. 1884.

109.

T, J. Coolidge to August Belmont, April 5, 1884. Gill Collection. 1884.

110

. G.

111

Superintendent’s Office, Oregon Railway . Circular. & Navigation Company, June 18, 1884. Gill

H. Prescott to G. 0. Manchester, May 29, 1884. Gill Collection. 1884. Manchester was assist­ ant to T . J ♦ Coolidge•

Collection.1884. 112.

G. 0. Manchester to C.H. Prescott, July 3, 1884. Gill Collection, 1884.

339

113*

C. H* Prescott to Elijah Smith, August SO, 1384* Gill Collection* 1804* Smith became president or ike union Pae if lc Railroad Company in July of 1884 following the resignation of T. Jeffer­ son Coolidge*

114*

C* H. Prescott to Elijah Smith, September 18, 1884* Sill Collection. 1384*

115.

J. B1 icfcens der f er to S. R. Galloway, November 15, 1884* Gill Collection, 1884* Blickeasderfer was Chief::Engineer and^’Ga 11oway was General Manager of the Union Pacific Railroad Company*

116.

C. H. Preseott to Elijah Smith, November 25, 1884* Gill Collection* 1884*

340

ai pjmmk

i

BATES OF OPENING LIKE

i

jfeftgon Central {West Side) and. Western Oregon Railroads Portland to Corvallis Oregon Gent m l FROM

(West side)

TO

BATE

Portland

Hillsboro

24

Hillsboro

Cornelius

2

January 29, 1872

Cornelius

Gaston

6

September 23,1872

Gaston

St* Joseph

15

December 18, 1871

November 3, 1872

Western Oregon Railroad St* Joseph

McMinnville

McMinnville Amity Amity

1*

Corvallis

3

February 22, 1879

6

September 30, 1879

40

January 25, 1880

Corporate History of the Oregon and California Ballroad Company as of June 30, 1916> Southern Pacific Company {San Francisco, 1919{, pp. 25, 26

341

APPENDIX II STATION OPENINGS'1 Qgegoft Central Clast Side), Oregon and California and Southern Pacific Lines Portland to California State Line Oregon Central (East Side) FROM East Portland

TO

MILES

New Era

20

DATE December 24, 1869

Oregon and California New Era

Waoon&a

40

September 5, 1870

Waeonda

Salem

12

September 29, 1870

Salem

JeffersoB

19

November 27, 1870

Jefferson

Albany

9

December 25, 1870

Albany

Harrisburg

25

June 2 5, 1871

Harrisburg

Eugene

18

October 15,1871

Eugene

Oakland

58

July 7, 1872

Oakland

Roseburg

17

December 2, 1872

Roseburg

Myrtle Creek

22

August 14, 1882

Myrtle Creek

Riddle

Riddle

Glendale

36

May 13, 1883

Glendale

Grants Pass

34

December 2, 1883

Grants Pass

Phoenix

37

February 25, 1884

Phoenix

Ashland

@

6

September 24, 1882

May 4, 1884

348

APPENDIX II (continued) Southern Pacific FROM

TO

State line

Siskiyou

Siskiyou

Ashland

^•

MILKS 9 19

BATE' October 5, 188? December 17, 1807

Corporate History of the Ore :on and California Railroad Company as of Tune""30V 1916,Southern Pacific Company (San~ranc I sc o , 1919), pp. 85, 26*

343

APPENDIX III DATES OF OPENING LINE1 Qrsgpn Railway and Navigation Company Portland to Huntington FROM

TO

MILES

Portland

Bonneville

38

November £0, 1882

Bonneville

The Dalles

46

May 21, 1882

The Dalles

Celilo

14

April 20, 1863*

Celilo

Blalock

33

November 23,1800

Blalock

Umatilla

53

April 16, 1881

Umatilla

Pen&let on

44

September 12, 1882

tendleton

Gibbon

22

July 22, 1803

Gibbon

Meaoham

ze

October 3, 1883

M© acham

La Grande

25

July 20, 1884

La Grande

Baker

51

September 7,1884

Baker

Huntington

48

December 1, 1884

DATE

* The five-foot gauge portage railroad of the Oregon Steam Navigation Company was altered to standard gauge on February 7, 1880* 1.

F. B.G111, Compiler, Ore&on-Waghim ton Railroad & Nav N a t i o n Company Report to the Interstate Commerce Commisgion. Corp or ate Hi st or y » as Required by Valuation Order N o - 20 (Portland. Oregon, l'$16}, sheet 4^"*'

344

B XBLIOGBAPHV Sources A.

Manuscript Frank B» Gill Collection. This is in the possession of Mr. Frank B. Gill of Portland, Oregon. It is com­ posed of correspondence, construction contracts and reports, freight rate agreements, copies of annual reports, and financial reports of the Oregon Hailway and Navigation Company and its predecessors. The Items in this collection are classified as follows: !•

Yearly Files. Material assembled chronolog­ ically which contains the bulk of the corres­ pondence and the annual reports of the companies.

2.

Company Documents. Filed by the name of the company and composed of copies of contracts, agreements and financial reports.

3.

Construction Bata. Reports of mileages, dates of opening of stab ions, and standards of con­ struction, prepared for use of the Valuation Department of the Union Pacific Railroad Company.

4.

Unfinished History of Transportation in the Northwest. This manuscriptof fiftytypedpages was written by Mr. Gill as the introduction to his projected study of Northwest steamboat and railroad history. He was forced to abandon this work because of ill health after covering that section dealing with steamboat operations prior to 1860 on the Columbia and Willamette rivers.

Gill, Frank B., Compiler. Oregon-Washington Railroad & Navigation Company, Report to the Interstate Commerce Commission. Corporate History as Required by Valuation Order No. s6V 3nne 30. 1916. Portland, Oregon,""Union Pacific Railroad Company offices.

345

Hodges, J. l-•» Notebook of J . >. . Hodges* Hodges was one of the engineers with Genera 1 Dodge in surveying the routes of the Union Pacific. It is in the Leonjjfd Collection, state University of Iowa Library, Co se I, Drawer 4* Southern Pacific Company, Corporate History of the Oregon and California Railroad Company as of June 1919^ * ^aii ^ro^cisco, Soutliern Pacific Company, Yaluation Pile E-66. Oregon Steam ■Navigation Company of Oregon. Union Pacif ie Railroad Company offices,' Portland, Oregon. Yaluation Pile E 66, Oregon Steam Navigation Company of Washington Territory. Union la oifie Ra i lroa d Comp any off ie es, Portland, Oregon. B.

Books Adams, Mrs. Cecelia E. McMillen, M a r y , in Proceed­ ings. 32nd Annual Reunion of Oregon Pi oneer As so cia tion, 1904, Portland, Oregon, Oregon Pioneer Associa­ tion, 1904. In Oregon State Library, Salem, Oregon. Benny, Arthur A ., Pioneer Bays on Pu^et Sound. Alice Barriman, edltor, Se at tie , Washington, Alice Harriman Company, 1908. Gaston, Joseph, Centennial History of Oregon. Chicago, 8. J. Clarke Publishing Company, 19l*T, 3 vols. Gaston, Joseph, Portland. Oregon. Its History and. Builders. Chicago^ Portland, The s T T .Clarke Publishing Company, 1911, 3 vols. Villard, Henry, The Early History of Transportation in Oregon. Oswald Gar: Ison Villard, editor, Eugene, Or ego n, University Press, 1944. Yillard, Henry, Memoirs of Henry Yillard. New York, Houston, Mifflin Company, 19047 2 vols. Winthrop, Theodore, The Canoe and the Saddle. John H. Williams, editor, Tacoma, Washington, John H. Williams, 1913.

346

C.

Pamphlets Anonymous, Documentary History of the Oregon Central and Oregon and California I^ilroadCybmpany. n.p., n.d., Barry, Charles, Report of Colonel Charles Barry on the Preliminary Survey,Tost of Construction. a n F Estimated Revenue of a Branch of"tEe 'Central Pacific Railroad from MaFysylTle, C a l i f o r n i a t h e ^olumbia Rlver oregon, Sa 1eta. Oregon, Statesman ];ower Press, 1864• Xn Oregon Historical Society Library, Portland, Oregon. Elliott, Simon G*, Report on the Preliminary Survey of the California and Oregon Railroad by the Chief Engineer, Bo s'tbn 7 Geo, c . R a n d and Avery,-1^641 In Oregon Histor'Ia 1 Society Library, Portland, Oregon. Gaston, Joseph, The Inside History of the Oregon Centra1 Railroad Company with the Reasons Showing ihe Portland (or West Side) Company to be Entitled to the U . S . Land Grant, Port land. Oregon, a . ~G. Walli: g, l36 9~ In Portland Public Library, Portland, Oregon. Mitchell, John H., Brief and Synopsis of an Oral Argument before the C o y it t e e o f P u b l ic Land s of the Senate and House~of the first Session of theEorty-Eighth Congress. January 15 and 22, 1884, Wa shlngton Government Printing Ofi ice, n.d. £1884?/ In Portland Public Library, Portland, Oregon. Oregon and Transcontinental Company, First Annual Report of the Bcard of Directors to the Stockholders for the "Year Ending June 30, l^QST^New York, E.Wells, Backett and Rankin, 1882. In Portland Public Library, Portland, Oregon. Oregon and Transcontinental Company, Second Annual Report of the Board of Directors to the Stockholders for the Year Ending ilune 30» 1885. New York, E • Wells Sackett and Rankin, 1&83. In Portland Public Library, Portland, Oregon• Smith, William A., Report of the Consulting Engineer, n. p., n. d., / T 8 8 4 ? / . I n Oregon Historical Society Library, Portland,