Seattle daily post-intelligencer. [volume] (Seattle, W.T. [Wash.]) 1881-1888, 1884-06-18


his friends cleaned ~ nearly 5000. 90,
by some scaiy operations in Oregon
railroads:
The public 10 1887 could not then IN.
cers'and what prompted Willard to
iease ana stop the narrow gauge roads
At point twenty eight miles frsn Port
isho- lne sole reason il nov discoy.
cred Willard, the Sulzbscks and other
GERMANS owned $1,000 600 bonds OF
". Y. X. K, which were acquired Al
10 TO 10 cents on the dollar. AZ the t4s,i
nony In the Elliott case against o. & G.
d, II. In the Supreme Court demon.
strated- They purchased from Ben
hoiisdav the stock of the Oregon
steamship Co., q. IL G. Railroad and
oregon Central Railroad and paid hin
$1,000 In bonds. The actual cost of
tnat line to Rossburg (l93 miles was
t5,3s9.O69, although the first MORTGAGE
oouds we're $40, $50. 900 over that portion
issued at 90 cents on the dollar. real,zed
Sb.5O,OO. Between the issue in 1863
and the LIST of April, 1888, when the O.
Il y. Railroad detaulted in paying utter
est on ITS bonds, that company had paid
from the $6.570,o0O of proceeds of bonds
Si,loO,0l as interest; consequently the
actual sum invested in the road 10
kosebnra was the difference OF s. 3ss.
o55. These items are taken from tbs %.
d @. X. Il. Co.'S books.
Between September, 1870. when the
y. d q. road WAS opened to Salem (52
niies), to December l. 1879 (some years
after II was opened to koseburej, the
net receipts were $l,8l9. us for nine
years and three months, or x2O2. 1871 Der
year, equal to 4 per cent. per year net
earnings upon the actual cost, but only
10 per cent. per year spon the first
mortgage bonds, which were then $I2.
OU,OOO. Now, IL is seen that Willard
and his German friends owned the
bonds for 81 so. 900 and had paid Hol-
laday 100000 additional to secure the
other properties. The o. & @. rail
road books shsv the average net re-
ceipts were 500, 1911, or above 10 per
cent. per year on the actual cost to
Willard and his German friends
OF their enterprise. What does he
now do? He proposed after he had
secured the narrow-Ra9e roads in 1881
to convert these $l2,OO0,0OO of bonds
into per cent preferred stock, and the
interest on the bonds. which had &C.
cumulated to zoo 600, he proposes to
convert into common stock-altogether
$4,000. 000-and then makes a new
Issue of frat mortgage bonds of So
100000. To do what? To purchase
the West Side road from the Western
Oregon Railroad Company to Corvallis
and the Lebanon Branch and fund the
floating debt, alleging, as his published
statement to March 3lst, 1882, shows,
that the actual cost of construction,
equipment and supplies of these united
roads, then 1861 miles, " $l3, lis, 1871.
These are Wizards own figures.
Before the narrow gage lines we're
constructed, il has been shewn above
that he aud his German friends were
earning over 10 per cent. per year upon
the cost of their investment in Oregon
and California railroads "a far "a Rose
burg. Bot finding in 1881 that these
narrow gage lines are to bs his great
competitors when they reach Portland
with their East and West side divisions
between his lines and the mountains,
and their river divisions in the canter,
the latter sharing with him the traffic AT
towns Of Salem, Albany, Harrisburg,
Independence and Corvallis (ths valley
wheat oenters) and taking thas wheat
traffic by steamers to Rays Landing
and marrow gage to Portland, thus saw
ing fifty cents per ton of lockage aud
ten cents per passenger, Willard be-
comes alarmed at these results, and
forthwith dispatches Vice President
Bretherton. of the Oregon and Califor-
MIA Railroad, and J. Is. Montgomery, to
Dundee, Scotland, to buy up the mar
row gage and stop IL at Dundee, - miles
from Portland.
The evidence taken in the Branson
case before the Supreme Court, in 1873,
showed clearly that William Reid op-
posed Wizards lease, and warned the
Scotch directors that the result would
be to break the lease within four years,
and he earnestly beseeohed them to
take the road TO Portland first and
then lease it to Willard. and two and q
half years afterwards the lessees of the
Oregon Railway Il Navigation Company
repudiate Wizards lease, declare il lie
gal and VOID, and leave the Scotch CON-
panv with it's incompleted road, its
traffic on the East side broken in three
places for want of three bridges, two
on the North and South Santiam rivers
and the third on the Willamette River
at Hays Landing. and its traffic on the
West side, and operated by the Oregon
aud California Railroad Company lines
without even carrying freight or pas
sengers to the Willamette river. What
was the object of Mr.. Willard in all
this ? As WAS said before. he and his
German friends owned in 1881 $4,000
600 Of preferred stock. and 100000
of common stock of the d. Il Q. Rail-
road. These were valu less. however.
because the net earnings for the year
1881. as his published statement proves,
we re- 1911, 2o5, aud although these Weld
ed over 10 per cent interest upon the
actual cost of tseir investment, yet he
and they wanted to make few mill
ions by the transaction, and they did IL.
too.
Finding that the common and pre-
ferred stock would not sell IN Wall
strest, London, Glasgow and Germany,
unless il had guaranteed dividends, he
leases the .. 4 @. Railroad lines to the
Oregon 4 Transcontinentai at guar.
antee of 2iS per cent. upon the preferred
stock. and borrows 20, 600, COO additional
from Transcontinents VI on first mortgage
bonds TO exte nd the .. 4 @. Railroad 70
the Oregon and California State bound
ary lines Now one can see the success
of his scheme by picking up the Lon
don and Glasgow newspapers and fiud'
ing q. 4 q. Railroad preferred stock
selling in 1883 at $50 to $H per 500
share, and his common stock At go to
$50 per share. and when Willard RESIGNS
his management of the frsnscontinent
Al and Northern Pacific. he and his Ger
man friends are found 10 be no longer
large owners of either common stock
or preferred stock in tue o. 4 G. Rail.
road. Taking the common stock sold
al SIS per share would realize $l,55O,oO
and the preferred at $50 per share would
realize thets &c, 10000, while the stocks
cost them. a. has been shown above
only <l.s0o,0o0.
Willard and his German friends have
thus netted clear profit of nearly -,
0O0.0 90 upon their Investment OF xl,'
so. 900, all because they had secured
lease of the narrow gage lines anc
stopped the latter from reaching Port
land In 1880. before they sold out theii
common and preferred stock IN the Ut
eeon 4 California Railroad. Not only
| has Willard thus wrecked the narrow
gage lines completely, but We are sorry
TO SAY be has proved unfaithful 90 ths
Oregon Railroad 4 Navigation Com
pany. which first gave him notoriety
| The Oregon Railroad 4 Navigation