# The Pacific Monthly/Volume 17/The Story of the Shasta Route

​The Pacific Monthly
The Story of the Shasta Route
By W. F. Bailey
THE process by which our great lines of railroads have reached their present condition of efficiency is one of the most interesting chapters in the history of the Pacific Coast.
The Indian trail, the fur traders' travoix, emigrant route, Government survey, stage line and the railroad in the order named have been the steps in the evolution of our channels of communication throughout the West.
That section of the Pacific Coast now traversed by the trains of the Southern Pacific Company, operating the Shasta Route between Portland and San Francisco, has been no exception to this rule.
Ethnologists as well as traditions tell us of migrations from the Puget Sound country to California and very probably as far south as Mexico. The Aztec tradition of a far northern origin of their race and a subse- quent migration to the south is so well authenticated as to receive commemoration in the flag and coat of arms of the republic.
Even within historic times it has been cus- tomary for the Navajoes from Arizona to go as far north as the Columbia River on trad- ing expeditions.
The fur traders were first represented, so far as we have any authenticated record, by a party of "free trappers" or "mountain men" under the leadership of Jeddediah S. Smith. This party belonged to the numer- ous unorganized trappers so interestingly depicted by Washington Irving in his Life of Captain Bonneville. In 1824 they wan- dered from their usual hunting-grounds in Utah and Wyoming to the west. Crossing the desert, they trapped along the St. Marys or Humboldt River with little success, finally reaching the Sierra Nevadas, which they crossed into the Sacramento Valley. Here they found an ideal hunting-ground. Game was plenty, the Indians inoffensive, and no trace of any competition.
Their supplies becoming exhausted. "Jed" Smith, the leading spirit among them, was selected to return to the rendezvous on Green River in Wyoming to procure additional stock of powder and lead, the only two ​things indispensable to their calling that the wilderness did not furnish them.
This he did, starting back to California with a number of others attracted by his tale of "a land where it was always afternoon." This return was made by the way of the "Old Spanish Trail" from Santa Fe, N. M., to Monterey, Cal. While in the neighborhood of the Colorado River, the party was attacked by Indians and only Smith and two others escaped to continue the journey and rejoin the party of the previous year, which they did after almost incredible hardships. They found them on the headwaters of the American River. They had been so successful in their trapping that a return trip over the mountains and across the desert with their heavy loads did not commend itself, and then a market could be found much nearer to the north among the Hudson Bay posts. Consequently in the Fall of 1825 they traveled from the Sacramento to the Columbia. They, however, followed the coast, in ignorance of the much easier route through the interior valleys.
Three years later, in 1828, a second party of trappers are known to have made the trip, this being a "brigade" of the Hudson Bay Company under the captaincy of Peter S. Ogden, one of their most noted leaders. This party, accompanied by Smith, went up the Columbia and Snake Rivers to the headwaters of the latter, where Smith left them to rejoin his friends on Green River, Ogden and his party proceeding by way of the Humboldt to California, and in the locality where the other party had trapped they were equally successful, returning home by way of the Sacramento, across the Siskiyous and down the Willamette. This might be considered as the first known expedition over the Shasta route. It proving successful the years following, it became a well and favorably known trail of the trappers.
Emigrants were next in order and not a few of them reached their new homes over this route. The movement into the Northwest preceded that into California by several years, as was only natural. California was Mexican territory, the people as well as the language foreign, while the Northwest was peopled by English-speaking settlers and was United States Territory. When the tide turned toward California a great many did find their way into the mines by
the way of the Northern route and even through Oregon. In fact, "Oregon men" constituted a class not any too popular among the miners. As a rule they were clannish and little given to the good fellowship and dissipation so prevalent in the mining camps.
Before this, however, the route was fairly well known and used by quite a few emigrants. Bancroft gives an account of one party of settlers from Oregon who had come to San Francisco by ship. Purchasing a large number of horses and cattle from the Mexicans, they proceeded to drive them to their home in the Willamette Valley, reaching there in 1837 with over seven hundred head.
The Government Survey was also duly represented in its order. Lieutenant Emmons of Wilkes' expedition traversed it in 1841, to be followed a few years later by "Pathfinder" Fremont and others of that ilk.
Then came the days of the stage lines. As early as 1850 there was a daily stage between Sacramento and Marysville, which, by the year following, had grown to five coaches each way every day.
In 1852 the California Legislature authorized one James L. Freaner to construct a wagon or stage road from Sacramento to the Oregon state line, and to reimburse him for the outlay he was to be permitted to make the following charges or tolls : For each road wagon 5 cents a mile ; each mail wagon or stage, 8 cents; pleasure carriage, 6¼ cents; horses, cattle or sheep, 1 cent a mile per head. These charges to be in addition to tolls over the bridges across the Sacramento and Pit or Klamath Rivers, which were to be extra. Freaner and four employes started to lay out the road, but were never seen again. Four years afterwards it developed that the entire party had been killed by Indians.
In 1860 the California Stage Company operated a line of stages between Sacramento and Portland, 710 miles, having sixty stations en route, using thirty-five drivers and 500 horses. The fare was $45.00.
The railroad period was ushered in by the arrival on the North Pacific Coast of Governor I. I. Stevens in 1853. He came in the three-fold capacity of Territorial Governor, Indian Commissioner and heading a Government survey for a Pacific railroad between the Mississippi River and the mouth of the Columbia.
Enthusiastic over his arrival and the consequent railroad talk, the Oregon Legislature granted charters for four different projects. One known as the Cincinnati Company which proposed building a line from the town of that name to some coal fields adjacent. Another, the Clackamas Company, covered a portage railroad around the falls of the Willamette River near Oregon City. A third was the Willamette Valley Railroad, local lines in the valley of that name, and the fourth the Oregon & California Railroad, which was to he built from Eugene City, Oregon, on the south to a point on the Willamette River on the north. None of these projects materialized, there not being either population or funds in the territory to carry on the undertaking.
The first actual railroad construction on the Pacific Coast was the Sacramento Valley Railroad, between Sacramento and Folsom, Cal., beginning operation in 1858.
An extension of this road from Folsom to Marysville (forty-four miles) was commenced the same year by the California Central Railroad Company, the idea prevalent at that time being that eventually the Overland Trunk line would he built from San Francisco east by way of Niles, Stockton, Folsom and Placerville, and in the prospectus of the California Central Railroad Company, published in 1860, a map is shown on which appears this line, joined by another at Folsom, which runs north to Marysville, thence to Oroville up the Feather River and across the Sierra Nevadas, which it skirts on the east side until it reaches the Columbia River.
Largely through the energy of Mr. H. R Judah, a civil engineer who had been induced by the prospect of railroad construction to come from Florida to California, the California Central was duly built from Folsom to Lincoln, crossing the line of the Central Pacific at what is now Roseville.
Owing to the inauguration of this latter line. Mr. Judah surrendered his connection with the California Central, and with him went the energy mid vim that had built the line.
Failure to realize anticipated earnings and a consequent financial stringency put an end to construction for the time being. Several efforts were made to extend the line, the first by the Yuba Railroad Company, chartered in November, 1862, and which did get the line built to within seven miles of the Yuba River, across from Marysville. In November, 1867. a new company, the Marysville Railroad, was chartered, which finally completed the line into the City of Marysville. In the meantime the California Central had met with many vicissitudes. Its earning power had been greatly overestimated and the expense of construction and operating just as much underestimated, with the result that in May, 1862, it was sold at Sheriff's sale, to be bought in by the same interests as were building the Central Pacific Railroad. The purchasers were at swords points with the Sacramento Valley Company, and for this reason, and also for lack of traffic, took up the rails between Roseville and Folsom, leaving the line from Roseville north to become the first section of the Shasta route constructed.
In connection with the California Central two extensions were projected, the one along the line of the originally planned route. Marysville to Oroville. To construct this the California Northern Railroad Company was incorporated in June, 1860, and completed the line to Oroville, twenty-six and five-tenths miles, in 1864. The other was incorporated at Marysville, October 13. 1863, to build a railroad from there to some point on the Columbia River. This was known as the California and Columbia River Railroad Company. A surveying party under the charge of S. G. Elliot started out to locate the line and did so as far north as Jacksonville, Ore., when the funds of the organization were exhausted and the engineering party disbanded.
Mr. Elliot, who seems to have been a man of great energy and resources, endeavored, unsuccessfully, to interest the residents along the proposed road with a view of their furnishing the necessary funds to complete the survey through to the Columbia River.
Among others whom he approached on ​this errand was a lawyer from Ohio, named Joseph Gaston, at that time residing at Salem, Ore. Mr. Gaston was a natural promoter. He possessed great energy and enthusiasm, a man of action, coming of good stock, his cousin being Governor of Massachusetts, one uncle a member of Congress and another Chief Justice of the Supreme Court of North Carolina. Being deeply impressed with the value of the proposed railroad, he entered into the project with a zeal that carried with it conviction not only to others but also to himself.
The completion of the survey was the first step. While in comfortable circumstances, he was not able to furnish the amount necessary himself, neither was he able to raise it. In its absence, a rather unique expedient was adopted. Among his neighbors was a Captain Barry, an ex-army officer and an engineer competent to conduct the survey. Between him and Gaston an engineering party was organized. For their salary they agreed to await the completion of the survey and the financing of the line, while for their expenses and subsistence Gaston agreed to arrange. This he did by getting the residents along the survey to entertain and transport the party while in their vicinity. In this he was entirely successful. Not only was the party fed and housed, but in most cases their entertainers dropped all other work and gave their time and assistance.
At the same time Gaston was using his utmost endeavors to secure the financial aid necessary to carry on the work. Through personal appeals, letters and circulars, he approached every one in the Willamette Valley whom he thought could help. So successful was he that, when the Oregon Legislature convened in the Fall of 1864, he was able to present Captain Barry's complete report of the survey in printed form. This gave a favorable view of the practicability of the proposition, showing it was entirely feasible to build a railroad from Jacksonville on the south to St. Helens on the Willamette on the north, it being considered advisable to make that point the terminus, although Barry's survey was extended through to Portland.
The report met with favorable consideration on the part of the Legislature. A bill was introduced and passed, granting what was considered ample aid from the state, namely, $200,000, to the company that should construct a railroad of not less than one hundred miles in Length in the Willamette Valley.
The following November (1864) an organization, known as the Willamette Valley Railroad Company, was formed with a view of taking up the proposition. Neither Barry nor Gaston were interested in this and, lacking their co-operation and on account of the inadequacy of the grant, nothing came of it.
Joseph Gaston
These gentlemen had other plans in view. In their joint interest Barry proceeded to Washington, D. C., and, with the assistance of Gaston and the Oregon members of the House and Senate, was enabled to procure the passage of an act of Congress granting aid towards the construction of a railroad between some point in the Sacramento Valley, California, on the line of the Central Pacific Railroad to Portland, Oregon.
The California and Oregon Railroad Company, being already in the field with a line part of the way, was designated as the recipient as far as the Oregon-California state line, and an organization to be chartered by the Oregon Legislature was to receive it for the line thence to Portland.
This aid was to be in the form of the grant of alternate sections of land lying ​adjacent to the line—twenty sections to the mile—and was to become available as each twenty miles of railroad was accepted by commissioners appointed by the President.
Having thus secured aid from the National Government, a further appeal was made to the Oregon Legislature and with his usual success. The Oregon Central Railroad Company was duly designated by it as the one to receive the land grant, and further a bill was passed by which the State of Oregon was obligated to pay the interest at seven per cent for twenty years on one million dollars of the bonds of the company.
This action of the Legislature took place in October, 1866, and when the company was incorporated and organized, as was done the month following, Mr. Gaston was elected secretary and authorized to solicit subscriptions for stock. Funds to build the first twenty-five miles were soon pledged, and all preparations made that were necessary for the commencement of actual construction.
At this stage of the work, S. G. Elliot, the engineer who had made the survey from Marysville to Jacksonville, reappeared on the scene with a proposition from the promoters of the California and Oregon Railroad, to give to each and every one of the incorporators of the Oregon and California fifty thousand dollars in the stock of the California Company in consideration of their turning over to them all the rights, franchise, land grant and state aid of the Oregon and California Railroad Company, and to permit his people to build the line.
Mr. Gaston and his friends, who constituted a majority of the incorporators, opposed the proposition, and it appeared as though nothing would come of it. Elliot, however, by playing upon the self-interest of the different parties interested, succeeded in creating dissension and finally an open rupture. The Gaston-Barry survey favored the west side of the Willamette, while Elliot was able to persuade those living on the east side that the line should be built on their side of the river.
Gaston and his friends refused to recede and, as they were in the majority and held all the assets of the company, there was nothing left for the Elliot faction hut to accept defeat or to organize a new company. This they did and, with the evident intent of diverting the subsidies from the original company to their own, they organized a second "Oregon Central Railroad Company."
Both parties proceeded energetically with their plans, which included the defeat of the other, one result of the rivalry being the scaring of the parties who had subscribed to Gaston's project, resulting in withdrawal of their pledges, leaving him without the funds on which he had been counting to construct his first twenty-five miles, twenty miles being necessary before he could avail himself of the land grant from the Government, as well as the aid from the state.
Out of the duplication of the name grew the custom of designating them as the West Side and East Side Companies, respectively. By the commencement of the year 1868 both organizations had their lines located. The West Siders had pledges from the City of Portland, the Counties of Washington and Yamhill, and private parties, subscriptions and guarantees to the amount of $375,000, the City of Portland's being in the shape of interest on their bonds for twenty years.
The East Siders had also succeeded in raising a very considerable amount, largely by the sale of their securities in the East and in California. They issued announcements that they would inaugurate the work of construction on the line, Portland to California, at a point near East Portland, April 16, 186S, for which occasion they had arranged for an address by the Hon. W. W. Upton, a parade by the state militia, bands of music, etc., etc.
The West Siders, headed by Gaston, who, by the way, had been elected president of their company, were not to be outdone. Waiting until April 13, they put out posters inviting the public to attend the ceremonies to be held at "Carruthers' Addition," April 14, incident to the breaking ground for the ONLY BONA fide Oregon Central Railroad that was to be constructed, Portland to California. This came off with due eclat—and the West Siders threw the first shovelful of dirt for the first railroad in Oregon.
Two days later the East Siders carried out their program, their celebration being held on "Tebbit's Farm," near East Portland.
Construction work was now under way on both sides of the river, and it would be hard to decide which of the two companies found it most difficult to secure the necessary funds to carry it on.
​The West Siders relied largely on local aid. While the subscriptions made them were all good, collections were slow and ready cash woefully scarce.
The East Siders were in fully as great straits. Elliot had gone East as their agent and had succeeded in placing a limited amount of their bonds, and had also purchased considerable construction material. including two locomotives, when information was widely disseminated by circulars, issued by Gaston, recounting "the unfair rivalry," including the duplication of names, with the result that Elliot found the bottom had dropped out of his market. He. how- ever, gol his material on the ground, but ins two locomotives he was obliged, or rather, let us say. he found it expedient to sell to the ( Vntral Pacific.
These financial difficulties did not, how- ever, deter them in their aggressive warfare on each other. The West Siders appealed to the courts to declare their rivals illegally con- stituted and to enjoin them from using the name Oregon Central Railroad Company, which they claimed was their property through their having been duly incorporated before the East Siders, and further to al- low them damages for the trouble and loss caused by the illegal use of their corporate title. The state courts, to which application had been made, refused to give a definite decision on the first 1 wo of their allegations, and holding on the third that no damages had been proven. Failing in this, the West Siders induced a landowner, through whose property the Fast Siders had located their line, to refuse them a right of way, and when the attempt was made to secure it through condemnation proceedings to resist, setting- up the plea in court that the Fast Siders, not being a lawfully constituted corporation, hail no standing in court and therefore could not legally condemn land. Rather than meet this issue, the East Siders relocated their line, going around the property in dis- pute, thus foiling the plans of the Wesl Siders.
The City of Portland as well as a pre- ponderance of settlements were located on the Wesl Side. The Gaston party had, to al! appearances, the land grant and the aid from the slate, and it seemed as though it
was only a question of tiring out the East Siders. when they would he compelled to
give up the fight, especially as the West Siders had public sympathy to a large and growing extent.
Elliot, the moving spirit of the Fast Sid- ers, was not a man to give up. His affilia- tions wvw originally with the parties who were building the California (portion of the line, and in this, the extremity of his com- pany, he turned to them for assistance, which was duly forthcoming.
Through the efforts of these parties a new factor was introduced -one man whose prestige and fighting qualities were to com- pletely reverse the situation.
In August, 1868, Ben Holladay put in an appearance in Portland. Up to this time he had been widely known as the proprietor of the overland stage from the Missouri to the Pacific, and which he had hut recently disposed of at a very large figure. He also was largely interested in steamship lines out of San Francisco — both north and south- ami rumor gave him credit of being the pos- sessor of millions.
Soon after his arrival in Oregon it was announced that he had purchased a control- ing interest in the Fast Side Company, and that consequently it had been raised from the verge of bankruptcy to where it had the backing of all of Holladay's millions. Hol- laday made no secret id' his intention to down the "West Side Company, to secure the subsidies which they so confidently claimed, and of rushing the Fast Side Com- pany through to the Califoronia line and a connection with the California and Oregon Railroad, which his friends were building north to meet him.
His lirst move was to rid himself of his troublesome rival. To do this he availed himself of a serious oversight mi their part. When the incorporators of the lirst Oregon Central Railroad Company organized, the
requisite papers were presented to the Seciv taiy of State. October 6, 1866, for filing in his office, as was necessary under the law to render their incorporation valid. Conse quently Gaston presented them on the date named, had the Secretary endorse them and then asked the privilege of withdrawing them for the purpose id' having additional signers whom he was desirous of having ap- pear among the list of incorporators, 'flu 1 action of the Legislature, naming his com
Ben Holladay.
Benjamin Holladay—or, as he always signd his name, "Ben Holladay," dropping the last two syllables—was born in Kentucky in 1826, of Scotch-Irish ancestry. His parents were tillers of the soil, and young Ben was brought up to the same pursuit. Quite early in his life his parents went to Missouri, but did not live long thereafter; hence the young man was thrown out upon the world to shift for himself. He was a likely young fellow and had the quality of making friends wherever he went, and was recognized as an indefatigable "rustler," abuunding in animal spirits, and pushing with great vigor any enterprise which he undertook to promote. He was married when about twenty years old, and settled down in Boonville, Mo., it is believed, and opened a little country store. Through the influence of friends he secured the appointment of postmaster by President Polk, and thus managed to "get on" fairly well until about 1847, when his home, including his store—his family lived in rooms over the store—was destroyed by fire, throwing him penniless upon the world with a wife and two children. The late John C. Bell, an honored Oregon pioneer of 1850, was a business man of the same town at that time, and started out at once after the calamity, and very quickly secured $500.00 and offered it to Mr. Holladay, in order to aid him to supply the necessities of life. This he refused point blank, saying: "I'm no blankety-blank pauper." Mr. Bell urged him most strongly to take the proffered sum, on account of his wife and children: that they were in distress, and that the amount tendered was not given because he was looked upon as a pauper, but as an evidence of the esteem in which he was held by his neighbors. But he refused the money in spite of everything.
Not long after this event he managed to secure contracts, through the influence of Mr. Bell, who was well known both in Kentucky and Missouri, to supply the Government with beef. In this way Mr. Holladay accumulated money at a rapid rate, and when the great Overland Stage Line, which was originated by Mr. William H. Russell, of New York, about 1859-1860, and carried on for a year or so by Messrs. Russell Majors & Waddell, failed in the year 1862, he, as chief creditor, took possession of the line. Mr. Holladay improved and extended it, until it reached Salt Lake City, a distance of twelve hundred and fifty miles from Atchison, its starting point. The total mileage of Mr. Holaday's stage lines, including all branches, was two thousand seven hundred and sixty miles. It required six thousand horses and two hundred and fifty Concord coaches, besides a small army of men, to handle the business. For carrying the mails throughout the region traversed by his stages, Mr. Holladay received $650,000.00 per year. In addition to this, Mr. Holladay had steamship lines up and down the Pacific Coast from Mexico to Alaska, and had many trusty lieutenants to transact his business. In 1865 he was a resident of New York City and was reputed by good authorities there to be worth easily $5,000,000.00
Mr. Holladay died at St. Vincent's Hospital in Portland, Or., July 8, 1887, and was buried in the Catholic Cemetery on July 11. His second wife and two children survived him.
—GEO. H. HIMES.
was taken early in November, while Gaston did not return his papers and consequently consummate his incorporation until subse- quently, or on November 21.
Holladaj^'s content ion was that the Oregon Central Railroad Company (the West Sicl- ers) did not come into legal existence until the consummation of the incorporation, and that consequently the action of the Legisla- ture of 1866, in designating a corporation that had no legal existence as the recipient of its bounty, was necessarily null and void.
In reprisal, the AVest Siders went to the United States Circuit Court, asking that their opponents be enjoined from the use of their (the West Siders') corporate title.
When the Legislature of 1S68-69 con- vened, Holladay went to Salem, the state capital, opened up headquarters with a splurge and, by lavish entertainment and ex- penditures on a royal scale, ingratiated him- self with the members. The result was all he could ask. The act of 1866, designating Gaston's company as the recipient of the subsidies, was declared invalid, and a grant made to the East Siders (Holladay's com- pany) of practically the same character.
The West Siders appealed to the Secre- tary of the Interior to confirm them in their possession of the land grant by Congress, on the grounds that they had acted in good faith ; that they had hied their acceptance of the terms of the grant within the year, as prescribed by the act of Congress; that they had expended large sums of money in the construction of their line, and that they were in a position to complete the required twenty miles within the two years desig- nated by said act.
The decision of the Interior Department was against them. It was to the effect that there was no company in existence that had a legal right to the land grant in question, and that as no properly-constituted organi- zation had complied with the act of Con- gress by tiling its acceptance of 1 lie terms of the grant, that same had lapsed and could only be revived by new legislation.
Judge Deady, of the United Slates Court, gave as his decision that the East Siders had no legal rights to the name Oregon Central Railroad Company. This was little consola- tion to Gaston and his friends, in the face of losing their subsidies. In fact, it proved a
barren victory, for Holladay immediately proceeded to incorporate a new organization under the title of the Oregon and California Railroad Company, transferring to it all rights, property and franchises held by the East Side Company. He also was instru- mental in having a further act of Congress passed, in 1869, reviving the land grant by extending the time in which acceptance of the terms of the grant could be filed for one year from the date of the supplementary act. This practically meant that the first company completing twenty miles would get the land, and it was a foregone conclusion that this would be the Holladay outfit.
The loss of their subsidies greatly im- paired the credit of the West Side Company, so much so that S. G. Reed & Company, who had the contract for the construction of the line, threw up their contract, leaving Gaston and his friends in extremities, a land grant being regarded as an absolutely essential adjunct to the successful financier- ing and operation of a railroad. Accordingly Gaston went to Washington in December, 1869, arriving there just in time to see his opponents confirmed in the possession of the land which, through his exertions, had orig- inally been granted to the Oregon Central, this being accomplished by the Holladay in- terests through filing of the required papers covering the completion of the requisite twenty miles of track.
Still hopeful, he started in with his usual vim to secure a new grant for his company, meeting with partial success, Congress pass- ing an act in 1S70 granting the customary alternate sections of land — twenty to each mile — to aid in the construction of a railroad from Portland to MeMinnville, Oregon, with a branch to Astoria, the Holladay influence being sufficient to prevent aid being given to his line south of MeMinnville, with a view of heading off the construction of a compet- ing line, the Astoria branch being thrown in as an added incentive to the West Siders to confine their projects to local territory.
While waiting for Congress to act. Gaston succeeded in arranging with Philadelphia parties for the extension of the Oregon Cen- tral lor 1") miles, or about to Eugene City, Oregon, lie also entered into negotiations with the projectors of a line from Win- nemucca. New, on the line of the Central Pacific Railroad, to the Columbia River, and ​in connection with them made a further ap- plication for a land grant from McMinnville to "Winnemucea. When this came up in Congress it was so changed through the Holladay influence as to the Winnemucea line tieing up with the Oregon and Cali- fornia (the Holladay line) at some point to be determined later, instead of with the Ore- gon Central, Gaston's company. This ren- dered it unsatisfactory to the projectors, who were working with the Central Pacific inter- ests, and resulted in the project being aban- doned. Gaston had been so sanguine over its going through as to use it as an argument with his Philadelphia people, who, upon its being eliminated, refused to carry out the arrangement for the 150-mile extension.
Alarmed over the narrow margin by which they had prevented Gaston from upsetting their plans, and also convinced that he could not be bottled up as a local Oregon line, the Holladay interests decided that self-protec- tion demanded their control of the Oregon Central. This was obtained by the purchase of outstanding obligations and subsequent pressure for their payment under threats of foreclosure proceedings. To avert this, Gas- ton and his associates were obliged to sell out to the enemy, upon assurance that all obligations would be met and the plans for the extension of the line carried out, Gaston, for himself, accepting service with the Hol- laday interests as freight and passenger agent of the line, which position he held until 1S75, when he retired to again come to the front as the projector of a system of narrow-gauge lines in the Willamette Valley.
The effacement of Gaston left Holladay supreme in railroad affairs in Oregon. Un- der his administration the Oregon and Cali- fornia Railroad was constructed on south. Rails were laid to Albany in 1871, Eugene in 1S72 and Roseburg in 1S73. During the same time construction was going along on the Oregon Central, Cornelius being reached in 1871 and St. Joe in 1872. The funds for the prosecution of this work as well as for his enormous private expenditures were raised by Holladay largely through the sale of the bonds of the two companies to Ger- man and English parties.
As yet the two lines had but a compara- tively small earning power. Their territory was but sparsely settled, and their business purely local. As a consequence the revenue
of the lines proved insufficient to meet the interest charges.
A slight divergence from the thread of our story is here necessary to introduce a new character, who was to become an important factor, namely, Henry Villard. Of German parentage, collegiate education, he reached Illinois as an emigrant in his teens, becom- ing a student of law, newspaper writer and war correspondent in the order named. His success in the latter capacity was marked, and he became a man of note. After the war he entered into the study of sociology. In 1871 he went to Germany on account of ill health, and while there made some in- vestigations into German methods of bank- ing with a view of their introduction in America. This brought him into contact with some of the holders of Oregon and Californa bonds, who asked his opinion re- garding the securities and the cause of the failure to receive their interest. Through his advice a "protective committee" was formed of the holders of these bonds, of which he was a member.
At this time there were outstanding some eleven million dollars of the bonds of the two companies, the Oregon and California and the Oregon Central. The majority of this was held by the Germans. Under the auspices of the protective committee, an agent was sent to Oregon to investigate and his report was very unfavorable as to the prospects of the earning power of the prop- erties. The roads were only 200 miles long instead of 350, as they had been given to understand; the gross earnings but about one-third of the interest charges and, in view of the restricted territory and limited popu- lation, there being but little probability of any material increase in earnings.
The question with the bondholders was, should they foreclose and take possession of the properties or would it be better to com- promise with the Holladay management and. by pooling their interests, reduce the fixed charges to a point within the earnings. The latter course was decided upon. Owing to his familiarity with America and American customs, Villard was selected to conduct the negotiations for the committee. This neces- sitated a trip to Oregon by him. Proceed- ing to America, Villard was met, upon his arrival in New York, by Holladay. To the Westerner, Villard was "a fool Dutchman," ​and to the keen analytic German, Holladay, according to his published memories, was "illiterate, coarse, pretentious, boastful, false and cunning," and his reputed wealth fic- titious, he being "in financial extremities."
The two opposite natures did not readily harmonize, and it was consequently agreed that further discussion should be postponed until Villard had made an examination of the properties. Accordingly Villard, accom- panied by Richard Koehler, a German civil engineer, who was to aid him in investigat- ing the two roads, proceeded to Oregon, be- ing met at Roseburg by Holladay. An ar- rangement satisfactory to Villard was soon consummated, he accepting for his clients a lower rate of" interest for the future, and new securities for that in arrears.
Villard then made a flying trip to Ger- many. where his report was approved by the protective committee. On his return to America he was met with advice from Koeh- ler, who had remained at Portland as finan- cial agent for the committee, that Holladay had failed to observe the agreement, that the first interest due under it had been defaulted and that Holladay alleged financial inability to carry it out.
This resulted in the Germans, acting through Villard, buying out Holladay, who, for a comparatively small consideration, sur- rendered control (if his several transporta- tion interests. This included the Oregon Steamship Line as well as the two railroad lines, the Oregon and California and the Oregon Central. With this there passed from the center of the stage one of the most interesting characters identified with the de- velopment of the West.
One may look in vain for his story in the numerous histories and biographies covering the Pacific Coast. Perchance a new Park- man or Bancroft may arise to do him jus- tice. From his obituary notice in the Port' land Oregonian of July 11, 1887, may be learned the following facts:
Born at Blue Lick Springs, Kentucky, De- cember, 1819, his youth was spent in driving cattle from Kentucky to Richmond, Va. Re- moving, at about the age of fifteen, to West- ern Missouri, he became interested in fur- nishing cattle and horses to the United States Government through the quartermaster's of- fice at Leavenworth, Kan.
In 1850 he became imbued with the West-
ern fever. Purchasing a stock of merchan- dise, he hauled it overland to Salt Lake City. where he entered the mercantile business with marked success. Selling out to advantage, he moved in 1852 to San Francisco, where he became interested in many undertakings, from furnishing the Pacific Mail Company's steamers with fresh meat to stage lines and banking, all of which, by good judgment and energy, were made to increase his capital.
Through loans made to the firm of Russell, Majors & Waddell, the owners of the Over- land Stage and Pony Express, he was obliged, on their failure, to take over their business. Holladay's Overland Stage be- came a household word, the only dependence of the Pacific Coast for its Eastern mail. When the construction of the Pacific Rail- road was begun, Holladay, with his usual acumen, sold out. clearing up, according to general report, a million and a half from the transaction.
He then entered the steamship business on the Pacific Coast, for years being a very large factor in it from San Francisco to Central America on the south, to the Puget Sound country on the mirth. In 1868 he became interested in railroads in Oregon.
What with steamships, railroads, mining on a large scale, together with farming propositions in Westchester County. New York, which included the construction of a house alleged to have cost over a million dol- lars, he was a busy man. Unable to give interests (he personal attention necessary, he became badly involved financially, so much so that in TS7li he "went broke." never again to occupy the prominent place he had. filled SO long, and to "cross the range" in the City of Portland, July 8, 1887.
Upon assuming control, in 1876, the bond- holders elected Villard as president of the Oregon and California and Oregon steam ship Companies, leaving Holladay the nom- inal head of the Oregon Central. The new administration, while less spectacular than that of Holladay, was more businesslike. Politics were eschewed, construction resumed and an earnest effort made with consider- able success to build up the population of the territory tributary to the lines. The Oregon Central was leased in 1879 to a new company, the Western Oregon, which latter had been formed to build the extension of
From a Photograph by C. R. Miller.
Climbing Out of Sacramento River Canyon Near Mott.
California Railroad Company was reorganized. The new corporation absorbed the Western Oregon and its leased line, the Oregon Central. The construction of the line from Roseburg south to the Oregon state line and a connection with the line coming up from the south proved a very slow and expensive proposition, far exceeding the estimate as to cost.
In 1883 the Villard interests had grown to such an extent that it was deemed advisable to form a "holding company" to act as guardian for the different lines. These included not only the Oregon and California, whose history we have been following, but also the Northern Pacific Railroad, the Oregon Railway & Navigation Company, and the Oregon Steamship Company. This holding company was known as the Oregon and Transcontinental Company. It was intended it should own a controlling interest in the several operating companies, should finance them, dictate a uniform policy, prevent in- judicious competition, etc. One of the first moves was to effect a lease to the Oregon and California of the Willamette Valley Railroad. This was a narrow-gauge, three-foot width, which had been built by Gaston under the corporate title of the Dayton, Sheridan and Grande Ronde Railroad. It was a local line, commenced in 1878, constructed, financed and operated by local interests. Failing to earn enough to meet its fixed charges, it had been reorganized as the Willamette Valley Railroad Company, the stock of which was largely held in Scotland.
This consolidated all lines south of Portland under the one name, Oregon and California Railroad, and this was in turn leased to the new holding company, the Oregon and Transcontinental. About this same time a company, called the Northern Pacific Terminal of Oregon, was formed. This was to construct the necessary freight and passenger terminal facilities at Portland, including a bridge across the river, to accommodate the business of the different lines centering there. Affording, as it does, an entrance into the city for the Oregon and California Rail- road from East Portland, it is one of the constituent parts of the Shasta route.
Villard was now, 1883, the whole thing in transportation affairs in Oregon. Under his jurisdiction were all lines, both rail and wa- ter. The Northern Pacific was being rapidly completed from St. Paul to the Coast. The lines of the Oregon Railway and Navigation Company were reaching out in every direc- tion, and the extension of the Oregon and California well advanced. Twenty-five thousand men were on the pay rolls of his various companies and their monthly dis- bursements four million dollars.
Caught in the collapse of the West Shore Railroad Company, an enterprise building a railroad from Hoboken to Buffalo, in com- petition with the New York Central, and which failed about this time, and in which he had largely invested, adversely affected by newspaper comments over the lavish expen- ditures in connection with the completion and opening ceremonies of the Northern Pa- cific, Villard found increasing difficulty in securing funds to carry on his numerous en- terprises, reaching finally such a point, De- cember, 1883, as to bring him and his hold- ing company, the Oregon and Transconti- nental, to the verge of bankruptcy.
The newspapers of December 16 an- nounced his retirement from the presidency of the Oregon Railway and Navigation Com- pany and the Oregon and Transcontinental, to be followed the first of the year by his resignation as president of the Northern Pa- cific, and his practical effacement as a con- trolling factor. It is true he retained the presidency of the Oregon and California Railroad Company, this at the urgent re- quest of his European friends, who remained staunch and loyal to him, but his power had gone for the time being, and in 18S5, on ac- count of alleged bad health, he resigned this.
The Oregon and Transcontinental Com- pany being unable to provide for the interest due on the Oregon and California securities, January 1, 1SS4, an arrangement was effect- ed by which the lease of the latter company was cancelled, the Oregon and California as- suming all obligations and reimbursing the Oregon and Transcontinental Company for expenses incurred in building its extension from Roseburg south. Even though they were now freed from their connection with the Villard regime, they were not through with their troubles. Unable to meet interest charges due January 1, 1885, the line was thrown in the hands of a receiver. Richard Koehler was named by the court as such. It remained in his charge until July, 1886, when ​the Central Pacific people purchased a con- trolling interest, advanced the necessary funds and the road was taken out of the re- ceiver's hands and leased to the Southern Pacific Company.
The new owners resumed construction and the line was soon completed to the Oregon- California line, the rate of progress being forty-three miles to Riddle, Ore., in 1883 ; ninety-nine miles to Fort Lane in 1884, to Ashland in 1885, and completed in 1887.
Having thus followed the history of the line in Oregon, we will return to the Cali- fornia portion of it. We have already seen how the line from Roseville to Lincoln and Marysville was built and absorbed by the Central Pacific, under the corporate title of the California and Oregon Railroad Com- pany, but operated as the Oregon division of the Central Pacific. The line from Marys- ville north to Redding was built by the "Con- tract and Finance Company," that had done the construction work on the main line of the Central Pacific, reaching there in 1878. North of there the work was done by the Central Pacific Company itself. The rate of progress was slow. Delta was reached in 1885, McCloud in 1SS6 and the Oregon line and a connection with the line from Portland December, 18S7.
As previously stated, the Oroville line was completed by the California Northern Rail- road Company in 1861. Failing to meet the interest on its bonded indebtedness, it was sold at mortgage foreclosure sale January, 1881, being bought in by N. E. Hideout. The price paid was $10,000, although the original cost of road and equipment was nearly $1,- 000,000. Rideout and his associates contin- ued to operate it until 1SS5, when it was sold to the Northern California Railroad Com- pany, who in turn leased it to the Southern Pacific Company in 1S89.
The eighteen miles from Roseville to Sac- ramento was a part of the Central Pacific and, in fact, the very first part of that line that was constructed, it having been com- pleted in 1S61. It has the distinction of be- ing the only section of the line between Port- land and San Francisco that has remained in the hands of its original owners, considering the Southern Pacific Company and Central Pacific Railroad as one and the same.
Originally the line from San Francisco to Sacramento was a part of the Central Pa- cific Railway of California, the original charter calling for the construction of a line from a point near San Francisco to the Cali- fornia-Nevada state line — that is. the state charter — National legislation covering a line from a point on the Pacific Ocean, near San Francisco, to a connection with the Union Pacific Railroad. Early in 1861 the rights of the Central Pacific Company, so far as the line west of Sacramento was concerned, were sold to the Western Pacific Railroad Company, who constructed the line via Niles and Stockton, and which later on was ab- sorbed by the Central Pacific. The direct line, by way of Benicia, was of later date and of complicated origin.
A traveler over the ninety miles in ques- tion goes over portions of what was orig- inally eight different roads. The line from Suisun to Sacramento is a part of the Cali- fornia Pacific. This company, formed in 1869 by the consolidation of the California Pacific, the San Francisco and Marysville. incorporated in 1S57. and the Sacramento and San Francisco, incorporated in 1S64, was originally operated as a San Francisco- Sacramento line in competition with the Western Pacific Railroad, the route via Niles. and Stockton. Originally the line was made up of steamer from San Francisco to Tal- lejo, thence the rails of the California Pa- cific Railroad to Sacramento, commencing operations in 1870.
The cut-off from Davisville to Knight's Landing was built by the same parties, un- der the corporate title of the California Pa- cific Extension Railroad Company, the line being leased by the Central Pacific in 1876. This same company also built the line from Woodland to Tehama, one hundred miles, in 1883. In 1870 the Central Pacific of Cali- fornia, the Western Pacific, the San Fran- cisco, Oakland and Alameda, the San Fran- cisco and San Joaquin Valley and the Cali- fornia and Oregon were all consolidated into the Central Pacific Railroad Company, and this in turn leased, April, 1S85, to the com- pany that has ever since operated it — the Southern Pacific Company.
Two years later, or in December. 1SS7. the through line between Portland and San Francisco was inaugurated, the first trains, leaving their terminals December 17.