USA > Oregon > Multnomah County > Portland > History of Portland, Oregon : with illustrations and biographical sketches of prominent citizens and pioneers > Part 27
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Two general objects were now before this company; one to keep suits in court as long as possible in order to prevent decision upon tlie inooted points-since while the cases were in court the two companies seemed to, and did, stand upon the same legal ground, and neither one nor the other had the right to assume that it was the true and only company; and, in the meantime, to get an act through the Oregon Legislature, designating their company as the one to receive the grant of the United States land. They also expected to push legislation through Congress.
Upon the assembling of the Legislature at Salem in 1868, a bill was brought to thus designate this company and invest it with authority to receive the land. This was an audacious move, since in the session of 1866, two years before, the old Oregon Central railroad had been designated, and the company of which Joseph Gaston was president had been duly recognized, and had received from the acting Secretary of the Interior a certificate that its assent to the conditions of the land grant had been officially filed; while the assent of the East Side company-which was now seeking the bill-sent on later was returned without filing for the double reason that the time had expired, and that the other company had fulfilled the condition. But the bill was, nevertheless, introduced, and upon the minority report that there was no Oregon Central Railroad Company of any
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kind in existence on October 10, 1866, when the designating bill was passed by the Oregon Legislature, and that such bill was, therefore, inistaken and illegal, and the Secretary of the Interior at Washington City had been misinformed; and also that the West Side road had no more than $40,000 capital, and that $2,500,000 stock was held by the president of the company alone. The measure was passed. This was done in opposition to the majority report that in their opinion the previous Legislature had designated a company, had declared it to be in existence, and that its articles had been provisionally filed on October 6th, four days before the original designating bill was passed. To parry the force of this last statement it was contended in the minority report that the company whose articles had been filed October 6th, in pencil, did not appear to be the same as that of November 21st following-which was the genuine West Side Company-since the names of incorporators were changed or appeared with certain additions.
Soon after this J. H. Mitchell went with these resolutions of 1868, favoring the east side company, to Washington City to secure favorable legislation from the United States Congress, taking the dispute to a national arena. He brought to notice of our senators, Corbett and Williams, the state of affairs, and the latter, learning the understanding of the matter by the secretary of the interior, O. H. Browning, to be that there had not been, as yet, a legal company to receive the grant of land-the west side company having failed to incorporate in time, and the east side company having failed to file assent in time-and that therefore without an act to revive the grant the land must lapse, or had lapsed to the government; introduced a bill to allow a year's time fromn date of passage for any company to file assent. This was opposed by the west side company, who were present at Washington by their president, and by S. G. Reed, as agent, on the ground that it virtually took the decision out of the courts, where it was still pending, and by putting the two companies on the same footing gave the east side a legal hold which it then did not and could not have-since under the former act it was impossible for it to file its assent in accordance with the provision, the time having long since passed by. The west side also complained that, as they
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had taken all the first steps to comply with the conditions of the act, forming a company, spending money, and securing an extension of time of building, while the east side was for months doing nothing, and never got around to file an assent in time to hold the grant, they ought not to be put back on a par with a dilatory corporation, which since its formation had been maliciously opposing, hindering and trying to extinguish the only company that had had the address and expedition to save the grant to the State. In Senator Corbett they liad a spokesman-Senator Williams also disavowing any hostility to them, and being anxious only to save the land-and the general spirit of the Senate was in their favor; Conkling, Hendricks and Howard speaking pointedly that the equities of the case seemed to be with the west side company, and regarding the proposed bill as prejudicial to them. It was consequently re-committed; but at the next session was brought up, and after some adverse discussion by Corbett was passed. With this legislation the east side company virtually gained its point. Under the bill it became inevitable that the company which was able to complete the first twenty miles of the road within the time specified-by December 25th, 1869-would secure the land, which was the true prize and object of controversy. Both companies pushed forward with work of construction, but both met with delays. S. G. Elliott, on the east side, was found to be either incompetent, or, as asserted by his company, wilfully dilatory. On the west side the contractors, S. G. Reed & Co., who had been the main stay, became disaffected, and in April threw up their contract, leaving the road hopelessly in the lurch; and, as asserted by west side men, furnishing the necessary locomotives and iron for the completion of the rival road. Gaston applied what money was left, and carried the grading to Hillsboro. Elliott was superseded by Kidder, under order of Holladay, and by forced work the twenty miles from East Portland to Parrott Creek was completed December 24th, 1869, just in time. This consummation was appropriately celebrated.
Seeing the impossibility of his company finishing their twenty miles within the time, Mr. Gaston applied all available money, carrying the grading to Hillsboro, and went to Washington in January of 1870, to secure if possible a separate grant of land for
REluan
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his company. In this he was successful, the grant being on the line from Portland to Astoria, and also to McMinnville. In the same year the old controversy as to which of the two was the rightful owner of the name O. C. Railroad Company, was decided in favor of the West Side, Judge Deady holding that this was the rightful cor- poration, and the other be estopped from using its designation. The East Side company having gained its government land cared no further for the name, and in March formally dissolved the Ore- gon Central Co., of Salem, transferring all their franchises and interests to the Oregon and Californian Railroad Company organized but a short time before, of which Holladay became president. By this act the West Side was left to the undisputed use of the name, but this was now a barren possession. Under his new land grant Gaston made arrangements with a Philadelphia Company to build the road, but owing to the dissatisfaction of Portland capitalists upon whom he hitherto relied, he decided to sell his road-the board of directors concurring-to Holladay. This was done in the summer of 1870. The Californian thereby became the master of the entire railroad situation in Oregon. Upon the subscription of $100,000.00 by the people of Portland, he began building the road, and in 1872 finished forty-eight miles to the Yamhill River at St. Joe.
It is instructive to notice that when the East Side road had gained its end, and found it necessary to dispose of S. G. Elliott, its attorney declared its early acts as to the issuance of unassessable stock illegal; and "A. J. Cook & Co." was then admitted, or asserted to be a myth, or at least but some obscure individual whose name was irresponsibly and fraudulently used by Elliott-thus confirming the charges of their old enemy and rival.
It was a memorable conflict, that conducted by the first rival railroad companies of Oregon; with matter in it for a novelist. It would be rash to intimate that Elliott with all his mythical capitalists was an agent of Holladay all the time, the general opinion being that he was at first acting only for himself, or that the East Side Company knew the extent of his romances, which they used so well to their advantage. It would on the other hand be difficult to believe that Holladay, or the original East Side Company, were actually imposed [19]
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upon by representations as to a firm like A. J. Cook & Co., of immense wealth and standing, when any business or banking gazetteer would inform them as to the existence or non existence of such a firm; particularly as Mr. Gaston was constantly asserting in public that this company was all a pretence. To sum up the results, the West Side Company was able to prove its statements as to the irregularities of its opponent, and to come off with the original name; also to get a land grant of their own, and to make fair terms for the building of the road. The East Side Company, beginning almost without legal or legislative footing, killed the opposition of their rivals in court by so prolonging the cases as to make them of no practical injury, but rather as sort of a shield to themselves; and gained State and Congressional Legislation that gave them standing and secured for them the original land grant. Both, however, were swallowed up by the money king.
At this distance of time, it will be impossible for the great inass of the people of Oregon, coming to the State at a later day, in any wise to comprehend the character and extent of the struggle, the almost insuperable difficulties to overcome, in starting these two pioneer railroads. It is easier for Portland to raise $1,000,000 now for a railroad; than it was $10,000 in 1868.
After completing his road to Roseburg and St. Joe at a cost of about $5,000,000, and incurring a debt in Germany of about twice that suin, Holladay found himself unable to pay interest on his bonds. The country was new, the people were unused to travel by rail. Earnings scarcely inet expences, and a remark inade long before by a Salem gentleman that the railroad would on its first trip carry all the passengers, on its second all the freight of the Willamette Valley, and, on the third would have to pull up the track behind it, seemed not so immeasurably far from realization. Some of the interest as due was met by drauglits upon the capital itself. Then the avails of the steamship lines to San Francisco were turned in, but even then there was a deficit. The road was therefore claimed by the bond- holders and the rights of Holladay were won.
Efforts for a road to the Atlantic States began with Oregon as well as in the East. In our State there were two who had their own
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plans and routes in view, and there happened to be two Surveyor- Generals of the State, W. W. Chapman, who served under appointment of Buchanan, and B. J. Pengra, who served under Lincoln. Chapman was a Portlander, one of the fathers of the place, and although a man of wide sympathies, naturally desired the transcontinental line to terminate at his city. He had passed a life of almost constant political activity in and about legislative halls, having been the first delegate of Iowa to Congress, and from his knowledge of parliamentary tactics was most admirably adapted to lay the foundation of a road. He, of course, only aimed to determine the lines, to secure necessary legislation promised and then interest capitalists. Without large means, he nevertheless applied from his private means enough to make a provisional running of the road, and to send an agent to London to investigate financial condi- tions. The route of his line he laid by The Dalles, up the Columbia and Snake Rivers, and to connect with the Union Pacific at Salt Lake. About 1869 and '70 was the period of his activity, although for a long time before this he had cherished the plan, and was making preparation. Before Congress he was indefatigable in bringing the claim of his road to notice, but met with very hostile influences. One of them was that of the Northern Pacific, which saw no occasion for a road to the Pacific Northwest other than their own. The contest in Congress narrowed down to a fight between him and them. In this emergency he was left without assistance by even the delegates from his own State, but proved amply able to at least prevent the passage of a bill that would have left Portland without a road. This was the ineans authorizing the Northern Pacific to construct their road via the Valley of the Columbia to Puget Sound, the conditions of which would have been fulfilled by laying the rails on the north side of the river, as was shown to have been preferred by their map filed with the Secretary. By his timely protest the bill was defeated, and although unable to go forward with his own plan the way was left open for the O. R. & N. Co., without hindrance from the Northern Pacific, or any other party. The road, earnestly advocated and agitated by Mr. Pengra, was what was known as the Winnemucca line. It was to extend from some point on the Central Pacific in
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Nevada, preferably Winnemucca, to Oregon, and down the Cascade Mountains, by the passes of the Willamette, coming to Eugene City, and thence via the West Side road to Portland, and also to Astoria. From this point on the Central Pacific it was no farther to Portland than to San Francisco, and the people of Nevada was very much in favor of the plan, being fully seconded by their Congressman Fitch. The road was defeated, however, by an amendment inade in the Senate that instead of coming to Eugene it unite with the Oregon & California in the Rogue River Valley. By this change it was effectually killed, as no company cared to build a road which must be working to Holladay's line, as this would be.
HENRY VILLARD AND THE NORTHERN PACIFIC.
In July, 1874, Mr. Henry Villard inade his first visit to Oregon. He was vested with full powers as agent for and to represent the German bondholders. His purpose in coming was to make a careful investigation of the general condition of the roads then built and equipped, and to inquire thoroughly into the financial affairs of the Oregon & California Railroad Company. Prior to this Mr. Richard Koehler arrived in Portland as a resident financial agent for the German bondholders. Mr. Koehler reached Portland July 25, 1874. He was installed as agent for the syndicate, the members of which obtained, by previous agreement with Holladay, a supervisory right over the management of the road in reference to operation and construction [matters and a representative in the board of directors. Holladay still remained in nominal control of the roads as president; the active and actual management, however, was retained by Villard under the powers and privileges conferred by the bondholders. This condition of affairs continued until April 18, 1876, when Holladay retired altogether from the management of the road. On the following day, April 19, Mr. Villard assumed full control. On the retirement of Holladay the following were the officers of the company: President, H. Villard; vice-president and treasurer, R. Koehler; secretary, A. G. Cunningham. At that time the bondholders bought ont Holladay's interest and became the owners of all the stock. At the regular elections following for several years there were 110
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changes in the officers until April, 1882, at which time A. G. Cunningham retired as secretary and George H. Andrews was elected in his place. Since that date Mr. Andrews has held that position, and, like his predecessor, has proved a most active and efficient officer.
FROM ROSEBURG TO ASHLAND.
During the time Villard represented the German bondholders, 206 miles of the additional road were constructed. This embraced the distance between Roseburg and Ashland (145 miles); the west side road from St. Joe to Corvallis (50 miles); and the short branch line from Albany to Lebanon (11.5 miles). In May, 1881 a reorganization of the"affairs of the company was effected by which the original, or Ben Holladay stock, was wiped out, and the old bonds were converted into stocks, and a new mortgage made to provide funds for the extension of the lines. Work on the extension of the road beyond Roseburg was commenced in December, 1881, under the management of Villard, and operations continued with but little interruption until the completion of the road. On the 25th of May, 1883, the road then constructed between Portland and Roseburg was leased to the Oregon & Transcontinental Company for a terin of 99 years; and, on the same date, a contract was entered into between the Oregon & Transcontinental Co. and the Oregon & California Railroad Company for the construction of the incompleted portion- through to the California Line. The Oregon & Transcontinental Company constructed the road between Roseburg and a point 100 miles south of Ashiland, and had let contracts for, and partially com- pleted the Siskiyou tunnels. The Oregon & Transcontinental Company after consummating the lease, continued to operate the road until June, 20th 1884. But upon the failure of Mr. Villard, the lease and construction contracts were canceled, and the road surrendered to the Oregon & California Railroad Company, and mutual releases between the two companies executed. After this, the Oregon & California Railroad Company continued to operate its roads until December, 1884, when, at the suit of Lawrence Harrison, brought against the corporation, Mr. R. Koehler, the former vice-president
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and manager of the company, was appointed receiver. The road has been operated by him ever since his appointment to the receiver- ship, which was made January 19th, 1885. The condition under which Mr. Koehler was appointed was to assume entire personal charge of the property, and to manage and operate the roads under the direction of the United States Court. This trust Mr. Koehler has faithfully and efficiently discharged, and the affairs of the road have been managed with due regard to every consideration of economy, compatible with the demands of the public, and the adequate facilities for general transportation.
May 5th, 1884, the road was completed to Ashland, 145 miles south of Roseburg, and 340.8 miles from Portland, and the event was the occasion for an entlinsiastic celebration and of general public congratulations. Work beyond Ashland was discontinued in August, 1884. Between Roseburg and Grant's Pass the natural difficulties of construction were great as compared with most of the distance previously traversed. These obstacles rendered progress necessarily slow, and the building very expensive. For the distance mentioned, the route lay through a mountainous region, necessitating sharp curvatures, and for a length of about thirty-five miles (between Glendale and Grant's Pass) grades as heavy as 116 feet to the inile had to be overcome. For the remainder of the line between Rose- burg and Grant's Pass, and also between Grant's Pass and Ashland, the maximum grades do not exceed 52 feet to the mile. Nine tunnels had to be cut in constructing that portion of the line, aggregating about 7,325 feet.
THE SOUTHERN PACIFIC.
The present condition of the road is said to be excellent which speaks well for the general efficiency of the management. Notwith- standing the period of financial embarassinents through which the road has passed, its condition has been gradually improved. New bridges have been built wherever and whenever the safety of the public required; the bed improved, new ties laid, and the road thoroughly ballasted. On the main line between this city and Ashland, only about 100 miles of iron rails remain, steel rails of the
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most improved and durable kind having been substituted. New steel rails will be laid for the 100 miles just as rapidly as the material can be procured. Already during the past season about 85 iniles of road have been ballasted. At present the rolling stock of the company consists of the following property: 43 locomotives, 26 passenger coaches, 14 mail and express cars, 582 box, flat and stock cars.
Early during the present year a meeting was held in London, the result of which was the transfer of the stock and control of the corporation of the Oregon and California Railroad to the Southern Pacific Company. At that meeting an arrangement was entered into between the first mortgage bondholders of the Oregon and California railroad company, the stockholders of the same corpora- tion, duly authorized representatives of the Pacific Improvement company, and also of the Southern Pacific company. Under this agreement the stockholders of the Oregon and California company sold out to the Pacific Improvement company of California. Very briefly stated, the conditions of the sale were as follows: The Oregon and California railroad company's stockholders were to receive for every two shares of preferred stock delivered, one share of C .P. stock, and for every four shares of common stock surrendered and delivered, one share of Central Pacific stock; also, a cash payment of four shillings, sterling, for every share of preferred stock, and three shillings for every share of common stock. The first mnort- gage bonds of the Oregon and California were to be exchanged for new five per cent. bonds guaranteed by the Central Pacific at the rate
of 110 per cent. of new bonds. They were also to pay four pounds sterling for each $1,000 of the old bonds so exchanged. According to the agreement entered into, the amount of the new bonds to be issued and $30,000 per inile of standard guage railroad constructed or acquired, and $10,000 per mile of narrow guage railroad con- structed or acquired. Under this mortgage there is not to be issued more than $20,000,000 of bonds in all. Under and in pursuance of this agreement, the stock and bonds were exchanged so that the corporate organization of the Oregon and California railroad com- pany was transferred to the management. This formal transfer took place during June, 1887. While the possession and ownership of
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the stock and bonds of the old organization has passed into the hands of the Southern Pacific, still the custody of the property belonging to the former-rolling stock, road, depot, depot grounds, etc .- remains iu the hands of Mr. Koehler, the receiver, and the United States Circuit Court. Conjointly, the receiver and the court manage all the operations of the road the same as before the formal transfer was effected. This condition of affairs will continue until some definite action has been determined upon by the several parties to the agree- ment. The above is the present status of the Oregon and California Railroad, but what new phase affairs will assume depends upon the future action of the corporation into whose hands the control of the old organization has passed. For that reason, for the present the result remains entirely in conjecture. As yet there has been no actual transfer of the corporation's property. Since the transfer the annual election of the Oregon and California railroad company has been held, when the following officers were chosen: Leland Stanford, president; C. P. Huntington, vice-president; R. Koehler, second vice-president; George H. Andrews, secretary and treasurer; J. E. Gates, assistant secretary.
There have been but very few important changes among those officials who have had to personally superintend the actual and practical operations of the road during the past twelve or fourteen years. Mr. E. P. Rogers enjoys the distinction of being the "Pioneer of the road." Most of those prominently connected with the early organization of the road are dead. Among those may be imentioned J. H. Moores, I. R. Moores, E. N. Cooke, Joel Palmer, J. S. Smith, S. Ellsworth, James Douthitt, J. H. D. Henderson, Greenberry Smith, A. L. Lovejoy, A. F. Hedges, W. S. Newby, J. P. Underwood, Gov. Gibbs, and last, but by no ineans least, Ben Holladay. To Mr. Rogers belongs the distinction of being the eldest officer now connected with the operating department of the road. He first came to Portland in 1870, and assumed the position of general freight and passenger agent, and the exacting duties of that position he has for the past seventeen years discharged with strict fidelity to the best interests of the corporation, and to the satisfaction of the general management.
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Mr. John Brandt is also an old and efficient officer of the company. Mr. Brandt came to Portland in 1873, and in July of that year assumed the position of general superintendent of the road. This position he lias filled proficiently for the past fourteen years. The fact that Mr. Brandt has been retained as superintendent through all the changing fortunes of the road, and under the different inanage- ments, is the highest evidence of his competency and thorough experience in the practical operations of a railroad.
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