USA > Oregon > Multnomah County > Portland > History of Portland, Oregon : with illustrations and biographical sketches of prominent citizens and pioneers > Part 26
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With the close of this address, the shower that had been falling passed over, the sun beamed out warin and the crowd moved to the grounds and began a frolic of digging, pitching and wheeling. A lady, the wife of Judge David Lewis, an engineer of the road, was among the first to lift a shovelful, and all present were eager to be at least able to say that they personally had a part in breaking the first ground. As the afternoon waned the crowd dispersed, and the workinen began with regular steady stroke and heave to move the yellow brown loess.
It was through a chequered career that the advancement thus begun continued to come on.
The East side road was ready to break ground two days later. A clipping from a Portland daily paper gives the following account of the event:
Thursday, April 16th, 1868, was a gala day in the history of Oregon, for it wit- nessed the practical inauguration of the work of the construction of a railway through the great Willamette Valley. The occasion was the formal breaking of the ground for the east side railroad, and the important event was celebrated in a befitting manner. The place selected for commencing work was an open field about three-quarters of a mile from the Stark street ferry landing, at East Portland, and about 500 yards from the east bank of the Willamette river. The spot where the sod was first dis- turhed was not far from where the old asylum for the insane then stood.
In honor of the event, flags were flying from every available flag staff in Port- land. A procession was formed in the city and marched to the spot selected, where ground was to he broken. This procession was preceded by the Aurora brass band. The first division consisted of the Washington and Fenian Guards, the mayor and members of the council of Portland, the chaplain, orator of the day, the president and directors of the Oregon Central Railroad Company, the chief engineer and corps of employees. In this division was borne the shovel to be presented by Samuel M. Smith to the president of the road, and to be used in breaking the ground. The second and third divisions consisted of the fire departments of Portland and Vancou- ver, and citizens on horse hack, in carriages and on foot. Prior to the arrival of the procession an immense crowd had assembled at the grounds to witness the cere- monies.
The assemblage, numbering not less then 5000, was called to order by Dr. A. M. Loryea; Rev. A. F. Waller, the chaplain, then offered prayer. The sliovel mentioned was then formally presented to the president of the road, Col. I. R. Moores. The shovel bore on it a heautiful silver plate attached to the front of the handle, with the
your
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following engraved inscription: 'Presented by Sam M. Smith to the Oregon Central Railroad, Portland, April 16, 1868. Ground broken with this shovel for the first railroad in Oregon.' The presentation speech was made at some length by John H. Mitchell and fittingly responded to by Col. I. R. Moores.
At the conclusion of the address and response President Moores then descended from the platform with the shovel in his hand. He proceeded to the center of the square, where was driven the "first stake," and threw out the first sod in the construction of the Oregon Central railroad. This was accomplished amid the loud acclamations of the multitude. The breaking of the ground was followed by three rousing cheers for the road, for the directors and contractors, during which the band discoursed "Hail Columbia." After this, all the laborers, at a given signal, fell to the work of grading. The remainder of the ceremonies consisted of addresses by Judge W. W. Upton and Hon. J. N. Dolph. Short addresses were also made in conclusion by J. H. Reed, Joel Palmer and others.
Work was pushed on both sides all the spring and summer, and by the middle of September the west side had the main grading along the face of the mountains finished some three miles out from the city. This road was very much in the nature of a work by the people, and to incite them to effort the President made to them extensive appeals through the newspapers. In his report of May 25tl 1868, officially to the Board of Directors, really to the people of the State, he reached a remarkably fine strain, reminding one of a imilitary appeal, and well calculated to awaken enthusiasın. He says "Oregon has not yet done all that it may easily do to aid this great work, and especially those along the line who are inost benefitted by the road. Every man can help some. Let every inall do so and failure will be utterly impossible. Laborers must be fed and the farmers along the line can contribute flour, bacon, vegetables and all the necessaries of life, when they have no cash to spare; and this they would not feel. Teams must be supplied and supported; horses and their provender are everywhere abundant; let them be freely supplied and the work will not lag. The right of way ought to be cheerfully donated in every case. Cross ties can be easily furnished by people along the line, each furnishing a few, and taking their pay in stock or lands. In this way let a railroad spirit be aroused and stirred up to a deeper depth, and the railroad will be eminently the people's, and an Oregon enterprise, and will be pushed rapidly up the Willamette, through the Calapooiahs on to Rogue River and spreading its iron arms out on either side, will infuse new life into
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the whole country; make your wheat of uniform current value from Jacksonville to Portland, take out every brush, reconstruct every farm, quadruple its value, erect comfortable houses everywhere, give the farmer the full value of his labor and produce at his own door, create new towns and cities, and finally supply and serve the wants of a million of people, prosperous and happy in the enjoyment of one of the most favored spots and climes beneath the sun."
The east side road being of a less popular character, and looking more to acquisition of capital, and use of modern railroad methods, was already seeking for an alliance with some capitalist ready to run their road through. They seemed to have had a wholesome distrust of popular enthusiasm in matters financial, and to count but little upon supplies or money raised in tidbits, and dependent for its cheerful delivery upon a large variety of people, many of whom were likely to be miffed or chilled by reason of the most trival or personal circumstances. They knew that promises to the people in order to be at all impressive or productive of results, must be highly colored or even extravagant; and such promises, before fulfilled must inevitably seem to many exaggerated and perhaps spurious, and even in the fulfillment would to many of sanguinary temperament seem to fall far short of their intent. They preferred to rely upon a railroad king, who, even if he ate up some of his subjects, would at least see that he got back interest upon his investments by carrying his work through to completion and would have his financial stakes well set, and thereby assure a road. With the generous and frank methods of the west side road it is impossible not to sympathize, at the same time doubting the efficiency of their plan to interest the people in their work enough to be anything like a reliable aid. The more calculating, less open, and extraordinary measures of the east side company commend themselves much less to our approbation, but nevertheless took account of some things not provided for in the other. It may seem a useless thing to revive the story of old struggles, especially as both sides got their road and things are now serene. But there are certain obligations on the historian to explain how things have come to be as they are, and hence we give the thread of the story. It is no part of our work to award praise or
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blame. Errors are always to be set down as evil, and unscrupu- lousness is to be reprobated wherever or by whomsoever practiced. In this case, however, the reader is to sit as judge. Both companies wanted a road, and took the shortest cut to get it.
S. G. Elliott, the original engineer, came up and took charge of the working measures and forces of the east side. He was under- stood to represent a large amount of capital, and through him and others, Mr. N. P. Perine and Mr. James P. Flint of San Francisco, arrangements were made with a certain "A. J. Cook & Co." to construct one hundred and fifty miles of the road. Said Cook was declared to be immensely rich and fully able to carry the work through. In a circular issued by the company it was stated that the capital stock was $7,250,000, which was the represented cost of construction. The actual cost of the road would, however, be but $5,250,000-at $35,000 per mile. This latter was to be known as common stock, and was to be sold at ten cents on the dollar, bringing in something over $3,000, to be applied upon every mile. The other ninety per cent. was to be raised by a mortgage. Anyone buying a share was to pay $10 and receive a share marked $100, but designated as unassessable and not to be subject to any further demands for
payment. It was charged by the other party that the $2,000,000 of unassessable preferred stock -- the difference between the $7,250,000, or the represented cost, and the $5,250,000, or the actual cost-was for gratuitous distribution among the directors of the company and to buy the favor of prominent men in the State. In a manner as a confirmation of this charge, the statement of Col. J. W. Nesmith, that he had been offered, but refused, $50,000 stock to become a director of the east side road and to deliver the speech at the breaking of ground, was widely circuluted. A letter from James P. Flint, from San Francisco, to N. P. Perine, with reference to his mission to Oregon, advising the liberal use of stock, common rather than preferred, to secure the good will and co-operation of influential men, was afterwards made public. It was further said that of the whole stock but $700 had been subscribed by actual signature of responsible men; that the rest had been subscribed by the company to itself, and the incorporators had expressly disavowed any further liability than
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of the seven original shares. The organization of the company, by which they had elected their president and directors, was said to be contrary to the State statute, which provided that half of the capital stock must be subscribed before the officers were elected.
A spirited public contest began almost from the first between the two companies, each making copious use of the newspaper press, and warning the people of the other. The president of the west side road issued circulars not only in our State, but throughout the East, declaring that the Oregon Central Railroad, whose principal office was at Portland, was the only true Oregon Central Railroad; that the other, doing business from Salem, was a sham and fraud; that they had no legitimate existence, no substantial bottom, no claim to public lands or franchises of any kind. He asserted that A. J. Cook & Co. was a myth; that their methods were fraudulent, their repre- sentations false, and their bonds worthless, except as made good by subscriptions of innocent and unsuspicious parties who took the ten per cent. unassessable stock, and might be compelled to pay one hundred per cent. to redeem their promises according to statute. His statements were curt and positive and in the East broke up a loan that Elliott was contracting.
The east side replied by denouncing him as one whose irregular methods had disintegrated the first company and mnade necessary the formation of a new. They said that he had been originally invested with power by them to form and incorporate a company, but he abused his trust by enlarging the number of incorporators without their knowledge, and making a secret agreement with a certain portion, principally those additionally obtained by him, to divide among themselves the profits of the road, to the injury of the others; and, worst of all, that he failed to file with the Secretary of State and the clerk of Multnomah county the records of incorporation in time for the State legislature to legally designate the company as the one entitled to the donation of government land, as provided by the United States congressional bill. They also said that in this last particular he had deceived the other incorporators and the State legislature, having affirmed that he had filed the articles.
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To these personal charges Mr. Gaston at first gave little attention, preferring to continue his warnings against the rival company and his analysis of their financial standing; but when it became neces- sary to explain the matter before Congress, he was able to show by the affidavit of the clerk of Multnomah county and by statement of the Secretary of State that he had actually presented for filing the articles of incorporation on October 6tl1, 1866, and such was recog- nized in pencil on the articles; but upon his desire to retain them for a time to get additional names attached to them, he was permitted to do so, and they had eventually been filed formally on a date more than a month later and after the legislature had adjourned. The assertion that he had delayed filing the articles for the sake of work- ing up a secret scheme hostile to the interests of the company, was thereby shown to have been at least misapprehended.
On the part of those who left the first company and organized a second, it may be very fairly said that looking as they did in the office of the Secretary of State for the articles in order to be sure that they were there, and finding no account of them-the Secretary having forgotten the circumstances of their withdrawal after their presentation-they might well have felt solicitous and looked with suspicion upon agreements that they had heard were going on withi- out their knowledge in Portland. Thus the whole disruption and contest arose in a measure from a clerical error and a misunderstand- ing. This at least, gave a certain edge and bitterness to the controversy that would have been absent from a mere question of rivalry or pecuniary interests; for gentlemen of each party felt that their personal integrity was assailed.
The sharp and wordy battle in public print was speedily carried to the court room. After making public statements of the fraudulent character of their rivals, complaint was made on the part of the West side road and suit was brought in the Circuit Court for Multnomah county, through the prosecuting attorney of the Fourth Judicial District, to dissolve the East side company, and forbid their using the name Oregon Central Railroad on the ground that their organization had not been made in accordance with Statute-only $700 of the $7,250,000 having been subscribed when the Board of Directors was
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first chosen; and that it was a public fraud and statutory illegality to put unassessable stock on the market. Suit was begun also in the Circuit Court for Marion county, May 1st, 1868, on the same ground to the same purpose.
In the United States District Court at Portland suit was brought by James B. Newby, of California, to dissolve the East side company and forbid the use of their name O. C. R. R. Co., on the ground that his stock in the West side road was depreciated in value by the fraudulent use of the corporate naine of the company whose stock he held. Another case was brought up from Clackamas county, relative to right of way, in which the same assertions were made as to the invalidity of the East side organization.
On the other hand, in April, 1868, the East side company brought suit through the prosecuting attorney of the Fourth Judicial District to dissolve the West side company on the ground of a secret fraudulent agreement between certain of its incorporators, and of many other irregularities; but withdrew it before a decision was reached. .
These cases worked their way very slowly across demurrers and other legal obstructions from court to court, producing little but expensive litigation, retarding the sale of lands, wasting force and means, and impairing public confidence. A decision dampening the West side company was reached in the United States District Court about this time, that the City of Portland was barred by the clause in its charter limiting the indebtedness of the city to $50,000, from paying the interest on $250,000 for twenty years on the West side bonds, since this created a debt of more than $300,000. It does not appear that this suit, which was brought in the name of a citizen of California who owned taxable property in Portland, was instigated by the East side company, yet it may be imagined that it was; and at all events, it had the effect of a great victory for them, and a great defeat for the West side, since it knocked a quarter of a million dollars security upon which they were greatly relying, from under their feet.
In the meantime work of grading from East Portland to Pudding River was energetically prosecuted, the heavy grading, and certain
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spots denied right of way being ommitted for the time. The rep- resentations of Elliott as to a contract with A. J. Cook and Company, were found to be no longer serviceable. Dr. A. M. Loryea, of East Portland, a bluff, gnarled oak sort of a man, naturally opposite to fine work, then Vice President of the company on his side the river, was allowed to go east on a fruitless search for the contractors, finding them neither east nor west, and in no way a connection of Jay Cook & Co., as they had become to be considered by the public. The blind had, however, allowed time for the completion of arrange- ments with Ben Holladay, of California, (if not at first prepared by him in order to keep the name and machinery of the east side company in the hands of Oregonians until the land grant should be declared theirs, or to keep up so hot a fight against the West Side as to kill it, or to compel it to sell its franchises at a nominal price to its rivals); and in 1868, Holladay's money began to flow into the exchequer and to energize the work of construction.
As Holladay came here as a railroad king, and for about ten years carried all public matters with a high hand, becoming autocrat of all lines of transportation and well nigh political dictator and trans- forming the visage of the country not only, but inaugurating a new system of politics and of public proceeding generally, it will be in place here to indicate something of his aims, methods, and previous history. He was one of the marked men of the age, of keen fore- sight, and an ambition and self-confidence that hesitated not to seize every opportunity of self-promotion. He belonged to the second order of potentates who have sprung up in America. Our system of government holds public servants to so rigid an account, and the public press so scrutinizes their actions, that it is not the office holder who wields the power. He is hampered by constitui- tional restrictions, and public espionage, and by party pledges so that his work even in the legislative hall or the executive chair, becomes little more than perfunctory, or that of a factor. But behind his sphere, clothed with unlimited power, which laws have been unable to specify or courts to define, is the money king. It is popularly believed that his power is actually unlimited, except by his own mistakes, by the opposition of rivals, or by the integrity of influential
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men who will not be bought. But these restrictions upon his autocracy-like that of assassination as to the limit of the Czar's absolutism-he of course refuses to recognize.
At the close of the war great opportunities were offered by the financial situation for immense speculations. That great conflict, in which men were organized and massed by the hundreds of thousands, and money was moved by the millions, had taught the country how to operate on a large scale. A spirit of daring and recklessness was also fostered. Those accustomed to risk their lives, or to see platoons of inen hurled to deatlı before long rows of cannons and bayonets, felt no hesitancy in risking so tame a thing as money, by the million dollars. A new confidence in the nation sprung up, and, as a sort of reaction from the inoral strain, an intense eagerness for material advancement took possession. Money, as a power to control human action, was valued as never before, and, as is usual with new endeavors, was invested with a potency far beyond its real limit. Men of ambition, instead of following in the steps of Clay or Webster, and aiming to mould events by argument and eloquence, figured themselves as at the fountain head of the stream of gold, and by its flowing creating and transforming. It was towards railroading that the most brilliant conceptions were turned, and the West was to be the theatre of the vastest schemes. A patriotic and humanitarian feeling was mingled with these ambitious ideas, since the loyal part of the nation saw the advantage of bringing out of the wilderness States loyal to the government which had just emerged from an almost fatal struggle with secession, and setting the nation upon a granite foundation. Furthermore, the idea of renovating and popu- lating the earth, as in old migrations, but by new improved methods of civilization, became once more fascinating to men of reflection.
Holladay was a Kentuckian by birth, had grown up in the West, had learned every foot of country between St. Louis and San Fran- cisco upon his pony express, had breathed the California spirit of gold and adventure, and imbibed the western idea of the immensity of the future of the Pacific shores. Not exactly a disciple of Bishop Berkeley, he had, nevertheless, a practical notion that the star of empire was about nearing its zenith over the Golden Gate, and was
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as quick as anyone to see the opportunities for dominion as the national government was once more restored. He had had practical opportunity to see the workings of a railroad era in the Central and Union Pacific, and as by these roads his inail contracts were suspended, he very naturally turned elsewhere for a field. He had kept careful watch of the great line that had been projected into ' Oregon, and, keeping fully up with the operations of the companies managing it, he bided his time to seize their work when the best chance came. As an American, he was not devoid of ideality. He had in mind the development of a new empire. The pyrotechnic editorial flashes in all the papers about the seat of population being soon transferred to the strip of country between the Rockies and the Pacific were more or less present to his mind. He thought out some scheme of colonization. He was, nevertheless, a man whose selfishness dominated all else, and his practical incentive was to use the power of wealth to control a State, and perhaps a much larger area, in his own name. He showed no love for Oregon, or for the people of Oregon, but no other field was so inviting, or so well within his means.
From his subsequent actions, it may well be doubted whether his purposes were absolutely clear to himself, or that he followed them unswervingly. If his aim was simply to build a railroad, he might have done it with less trouble and expense, and for far greater returns. If his idea was to make himself the autocrat of the State, to own legislatures and United States senators, and perhaps to extend his operations over adjoining Territories and control transcontinental lines, he never followed it with consistency. Upon rigid examination we apprehend that he would be found a man of strong intentions, but of unstable will, of deep schemes, but of feeble convictions, of large aims, but incapable of sustained endeavor or sacrifice, and subject to passion and prejudice. It may also be said that, although in the strength of manhood when he came to our State, an excessive luxury of life and diet broke his vigor long before he reached old age.
As a working scheme of morality, he let nothing stand in way of his aims, recognizing no right except the shortest way to his object. He had one, and but one, means of attaining his end and that was
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the use of his money. To buy an attorney, a judge, a city, a legislature, public opinion, was all one to him. He made no appeals to the people, neither addressing them on the side of self interest or generosity. Upon occasion he published a message something after the style of a manifesto or edict. The public new nothing of him except that he was a nabob living in unapproachable magnificence, and was at the head of all that was going. He paid his agents and let thein work their way, allowing them to use profanity or religion to reach the object that he named. This was the man that appeared in his true form above the stormy rail road horizon of Oregon in 1868. J. H. Mitchell, one of the first incorporators of the original Oregon Central Railroad Company, but also an incorporator of the second, or East Side Co., and their attorney, rendered very efficient service to Mr. Holladay.
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