Page:History of Willamette Railroad.djvu/5
The Narrow Gauge Railroad
himself brought suddenly by the unexpected call of the editor of this magazine for "copy."
The initial credits for financing the railroad were supplied by Yamhill and Polk county farmers. The San Francisco firm that furnished the rails took mortgage security, and had to resort to foreclosure for collection. Other credit came from Joseph Gaston, who had promoted the Portland-Forest Grove railroad in 1867–70, and who, though possessing but small means in cash, owned lands which he offered as pledges. These financial resources were so inadequate that the project soon fell into receivership, from which it was extricated by Scotch capitalists headed by William Reid, who in 1878–81 invested some $2,500,000 in the property. This capital of the Scotchmen also proved insufficient, a further expenditure of more than $400,000, borrowings by the Oregon receiver in 1885–89, failed to place the railroad on a sound financial basis, and finally the property passed to the Southern Pacific for less than half its original cost, netting to the Scotchmen an apparent loss of some $1,300,000.
So much for the general survey of the history. Now for details.
Farmers of Yamhill and Polk counties had been waiting many years for promised railroad construction, when, in 1877, a narrow gauge scheme was proposed, to extend from steamboat connections at Dayton to Sheridan, twenty miles. The farmers had grown impatient. Joseph Gaston had promised them a railroad in 1867–70, and Ben Holladay in 1870–73. The latter had opened the west side railroad from Portland to Saint Joseph, near McMinnville, in 1872, and then had collapsed financially. Residents of Yamhill and Polk had expected big things from the west side line, and had seen
- By way of Forest Grove. At this time the Oregon and California Railroad, operating between Portland and Roseburg, and between Portland and Saint Joseph, could not finance the extensions demanded by the people of Willamette Valley, and the best that it could do was to extend fifty miles in 1878 from Saint Joseph to Corvallis. This period of popular clamor for railroads, which resulted in the narrow gauge project, was a period of depression in the earnings of the Oregon and California lines, brought about partly by low rates, which were due to river competition and by the need of stimulating wheat production, and partly by high cost of replacement construction of trestles, bridges and rails. "The net earnings," writes Mr. Richard Koehler in a recent letter to the writer, "dwindled down to less than was necessary to pay one per cent on the bonds outstanding."