Provisions of the First Railroad Bill Passed by the Oregon Legislature and United States Congress

The point of value in the bill was its land grant. Opposition to the giving of the public domain to corporations had not yet developed, and the subsidy worth $5,000,000 at the least was sufficient to induce capitalists to lend money on a work costing not more than $30,000,000. Great stress was laid in arguing for the bill on the fact that the Pacific sea-board was open to the attacks of a foreign enemy, and that to make the Union and Central Pacific railways effective in repelling invasion there should be a rail line parallel to the coast to allow the speedy dispatch of troops to any point threatened. As our relations with Great Britian were not very friendly in 1866, and France and Spain were also held as invidious, this reasoning had weight with eastern statesmen. Bankers seeking investments for the bonds and notes they held of the Government were readily led to look into the merits of such a road as that proposed.

The point of difficulty was to get means to build and equip the first twenty miles. While the matter of $15,000,000 looked indescribably easy as it rolled off Colonel Barry's facile pen, the matter of securing $40,000 in Oregon in '68 was a herculean task. Most of the farmers thought they were doing well if they could produce one hundred dollars on demand. Of the financial struggle, however, some account will appear later.

At the time of the passage of the bill by the United States Congress, in 1866, there was a company in California, already in existence, which was designated in the bill as the California and Oregon Railroad Company. But in Oregon no company had as yet been formed. The singular situation was therefore seen of a land grant of some, 5,000,000 acres to a company not yet in existence. To meet this difficulty and to secure to Oregon the advantage of having the road built by a company of her own, the bill provided that the grantee of the land in our State should be, "Such company organized under the laws of Oregon as the State shall hereafter designate." By this provision our State was left to name the association or corporation that should proceed with the work and take the land. Immediate steps were taken to organize the company and on October 6th, 1866, Governor Woods, then the State executive, sent a message to the Legislature notifying them that a company was about to be organized under the General Incorporation Act, to be known as the Oregon Central Railroad Company, "composed of some of the most responsible and energetic business men of the State." He suggested that through this the State avail itself of the liberal grant of land by the general government, and that to secure the construction of the first twenty miles of road the State pass a bill authorizing the payment of interest from the State Treasury on the bonds sufficient to construct the necessary preliminary section.

With this proposed State aid for getting the first section done, a company was provisionally incorporated with the following names: R. R. Thompson, S. G. Reed, J. C. Ainsworth, M. M. Melvin, George L. Woods, F. A. Chenoweth, Joel Palmer, Ed. R. Geary, S. Ellsworth, J. H. Mitchell, H. W. Corbett, B. F. Brown and T. H. Cox. Joseph Gaston was appointed secretary and was authorized to open stock books, and solicit subscriptions. On February 20th, 1867, he published notice of incorporation. He also explained that in consequence of the California parties having chartered the avail-able ships, no iron could be brought out for his operations that year, and that arrangements for an extension of time of building their road had been made with the Oregon delegation at Washington. Stock, he said, would be solicited so soon as positive assurances were received from Eastern capitalists of investment in the securities of the company, and as soon as one-half had been subscribed a meeting would be held to elect directors according to law. This notice was generally published in the papers, and almost universally favorably commented upon.

The company was formally incorporated November 21, 1866, with the following names: J. S. Smith, J. H. Mitchell, E. D. Shattuck, Jesse Applegate, Joel Palmer, H. W. Corbett, M. M.' Melvin, I. R. Moores, F. A. Chenoweth, George L. Woods, R. R. Thompson, J. C. Ainsworth, S. G. Reed, John McCraken, C. H. Lewis, B. F. Brown, T. H. Cox and J. Gaston. In order to get the benefit of the Land Grant of Congress, it filed its assent to the terms of the act before July 25, 1867, as provided, and was recognized as the rightful recipient of this grant, conformably to conditions, by the acting Secretary of the Interior, W. T. Otto.

After getting thus far in its way, vigorous measures were taken to obtain subscriptions of stock. The State passed a bill to pay interest on $10, 000 per mile of the first hundred miles of the road built, contingent upon the completion of twenty miles. The city of Portland agreed to pay interest on $250, 000 bonds for twenty years upon conditions as to building, etc. Washington county, likewise, would pay interest on $50,000; Yamhill was expecting to pay on $75, 000. Private subscriptions aggregating above $25, 000 in money were received, and a much greater value was donated in the shape - of land from farmers and others. Values to nearly half a million dollars were thus accumulated-not, of course, available to that amount on forced sale, but substantially so in permanent possession. The route was fixed to run from Portland to Eugene on the west side of the Willamette river, passing through Washington, Yamhill, Polk and Benton Counties.

While the road was thus pushing along with determination there appeared the shadow, or double, or, as it afterwards turned out, the antagonist of the Oregon Central Railroad. This was the Oregon Central Railroad No. 2. A formidable rival of the first, it was a company organized under the same name and claiming to be the true Oregon Central Railroad, and therefore entitled to the Land Grant from the Government. It differed from the first in working for a road on the east side of the Willamette river and in the composition of its members. It may not be worth our while to give here all the particulars of the split and division in the original corporation which resulted in the formation of two companies. It is easy enough, however, to see the leading motive. There were two sides to the Willamette Valley, and each side desired a railway, and to have it must get all the State and national aid obtainable. It was a matter of course that the moment that the road was fixed for one side (Gaston having decided to locate on the side raising the largest subsidy), there would be an attempt to divert it to the other. It was deemed idle to expect the State or Nation to grant substantial aid for building on both sides, and hence the quarrel began for the privileges. The company as originally incorporated embraced men on both sides of the river, but when the route was fixed for the west side-in truth, generally conformably to Barry's survey-members of the east side or those favoring it preferred to form another organization to be under their own control. The incorporators of this company-the East Side as it was popularly known-were John H. Moores, J. S. Smith, George L. Woods, E. N. Cooke, S. Ellsworth, I. R. Moores and Samuel A. Clark. It was incorporated April 22, 1867. Its first board of directors were George L. Woods, E. N. Cooke, J. H. Douthitt, I. R. Moores, T. McF. Patton, J. H. Moores, Jacob Conser, A. L. Lovejoy, F. A. Chenoweth, S. Ellsworth, S. P. Chadwick, John F. Miller; John E. Ross, J. H. D. Henderson, A. F. Hedges, S. B. Parrish and Green B. Smith. J. H. Moores was president and S. A. Clarke, secretary.

It may very well be supposed that the two rival companies thus formed, each aiming to secure a land grant worth $5,000,000 and to build a road which should not only bring millions of money to its constructors, but be a great and famous achievement and bring benefit to the whole State, and particularly to those portions traversed, began to fight each other to the death. It was war to the knife, and the knife to the hilt. The spirit of the combatants as most earnest and serious, while some of the attending circumstances were very diverting. Before. the people, the west side road was able to stand on the defensive and as within the forms and requirements of law. It also maintained the position of financial integrity, and carefully eschewed and stigmatized any " wildcat " schemes. It was for the most part favored by Portland, which, being situated upon the west side of the river, rather feared the east side arrangement, as, if not actually building up a rival upon the opposite shore, at least withdrawing value from the property in the city. She was then a place of less than ten thousand people, and the injury of having the seat of value even a mile from her principal streets was thought to be considerable. Those living upon the original square mile looked with distrust and opposition even upon "Couch's Portland," and spoke freely against the inconvenience of walking a mile to the depot-let alone a voyage across the river to Wheeler's farm, in the woods. Washington county, always warmly attached to Portland, and enjoying many favors from her close proximity, raged against' the idea of being left without a road while Congressional aid was extended for a track through Clackamas and Marion. There was also much said about the inutility and the general impropriety of a dog's having two tails-the Willamette river being averred to be good enough for the eastsiders, upon whose bank their road was to be built. A broader view was expressed by some, as the Oregonian, which, seeing that a valley fifty miles wide could not and never would be accommodated by one railway, expressed a desire that both lines be built, speaking as follows: "We must not be understood in any way as taking sides in the controversy or supposed rivalry between the east and west side lines. We want both roads built, and the people want them, and, from the fact that there is as much need of the one as the other, we prefer to think there is or should be no rivalry between them." (May 26, 1868).

Such pacific counsels had, of course, no influence in disposing of the real difficulty, and so long as the existence of each company depended upon getting the grant of land, and each company was using every possible form of address to fulfill the conditions, the dispute had to be carried to a conclusion-either one or the other getting the prize.

During 1867 surveys were projected on both sides. A board of directors was chosen for the west side road May 24th, composed of Captain J. C. Ainsworth, Thomas R. Cornelius, Win. T. Newby, J. B. Underwood and Joseph Gaston, of which Mr. Gaston was elected president and W. C. Whitson secretary. Mr. Hart was secured as superintendent of construction. Financial arrangements were busily canvassed, but there was no ground broken that year.

The spring of 1868 was bright and fair, and April blessed with the usual showers. The 15th day of that month was a jubilee in our little "clucking-hen of a city," as someone called it about that time, for the first shovelful of railroad earth was to be thrown that day. The scene of the first labors was at the then head of Fourth street, in Caruther's addition. Hither in the morning of the 15th repaired the board of directors of the Oregon Central Railroad (west side), the contractors, Messrs. Davis, Thornton & Co., and a very large and enthusiastic assemblage of citizens. At half past eleven the ceremonies began. Mr. Gaston, the president of the board, made a speech, embodying the history of the company and a statement of its franchises and finances. He outlined the general policy of the company to be to obtain enough in the way of subscriptions within the State to build the first twenty miles, and secure the government land, and upon this, and the completed work, to get loans of outside capital. He said that it was confidently believed that by the time subscription lists were closed in Portland-having referred to municipal, county and State subsidies, and to gifts of real estate by farmers and others-the required sum for the first twenty miles would be in hand. Hiram Smith, of Portland, was loudly cheered for being the first to pay his subscription of $1,000.

Concluding his speech in the hope "that the work now to be formally inaugurated shall, in its completion, be made the servant and promoter of years of future growth, prosperity and wealth until here, upon the banks of the beautiful Willamette shall arise a city, holding the keys and being the gateway of, and hand-maid to, the commerce between the Atlantic and the Indies, shall rival Venice in its adornment and Constantinople in its wealth," the president of the company descended to the spot where shovel and barrow were in readiness, and amid much cheering dug the first earth.

Colonel W. W, Chapman followed in a speech, setting forth the value of the road to induce immigration, and the effect it would have to stimulate the building of a branch of the Union Pacific to Portland. The financial basis he considered exceptionally good, footing up to about two and a quarter million dollars, while the cost of construction to Eugene would not exceed two millions. He spoke with great approval of the policy of the company to employ only white men -or, at least, no Chinese-as laborers, believing that the laboring population ought to be of a permanent character, with interests common to the rest of the people. Ex-Governor A. C. Gibbs continued the speech-making, alluding to the rise in the value of land from $2.50 an acre to $50 under railway influence; and to the immense export of wheat that Oregon would soon arrive at.

With the close of this address, the shower that had been falling passed over, the sun beamed out warm 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 workmen 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 witnessed 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 disturbed was not far from where the old asylum for the insane then stood.