Oregon Historical Quarterly/Volume 7/The Oregon Central Railroad

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By S. A. Clarke.

The Quarterly for December, 1902, contains Joseph Gaston's story of the Oregon Central Railroad, that virtually claims for him credit for securing the land grant that passed Congress July 25, 1866, and for construction of the railroad to California. Mr. Gaston is mistaken in announcing that he is the only survivor of the board of directors of the companies who contended for the railway land grant.

My attention was first called to this subject by reading H. S. Lyman's account of early railroad building and his eulogy of Gaston as one of the foremost in early successful railroad enterprise in Oregon, naming him with Henry Villard. I also find that Bancroft's History of Oregon quotes as authority a manuscript prepared by Gaston on early railroad building.

S. A. Clarke still survives, who drew the incorporation papers for the company organized at Salem November 17, 1866, and was secretary of that company for three years, until it passed under control of Ben Holladay, who reorganized it to suit existing conditions, when he resigned. He had bought the Salem Statesman and had enough to do to run a daily newspaper. As Gaston does not give a clear idea of the railroad situation from 1866 to 1870, I will try to tell the story of the two companies known as the Oregon Central Railroad Company at their early organization.

I had been absent a year and was returning to Oregon by steamer, via Panama, in the fall of 1866, when I met S. G. Elliot, who had been at Washington representing the California and Oregon Railroad Company, of San Francisco. During the long voyage we became quite intimate and he explained to me the railroad situation. He went East to aid the securing of the land grant from Sacramento to the Oregon line, and as his company was interested in having a through route to the Columbia, they had also worked for the land grant through Oregon.

At Elliot's suggestion I remained a few days in San Francisco to interview with him one of the leading lawyers of that city—Mr. C. Temple Emmet—who was counsel for the California company. After consultation with its leading members he prepared and they signed a proposition, that, if an Oregon company would incorporate to build a railroad from the California line north, they would do all in their power to finance the company and assist in the construction of the road. I remember as signers of that document Mr. Ralston, then one of the magnates of finance of San Francisco, Messrs. Gallagher, Bell Brothers, and others of the leading men of that time.

Whatever railroad schemes may have been on hand before that in Oregon had died out, for there was nothing in sight. Elliot had surveyed from Marysville to Jacksonville and commanded the respect of high class business men. As ours was no scheme for mere personal aggrandizement, it was natural to infer that success would repay us in honorable ways.

When I reached Salem this proposition was presented to gentlemen of standing, who received it favorably, and agreed to incorporate as the Oregon Central Railroad Company, to build from Portland south to the California line. I am far from home and my papers are at Salem, Oregon, so this statement is made from recollection of what occurred a generation gone, but the main facts are correct.

Several of those interested with me alluded to Joseph Gaston as having tried to work up something of the kind in the past, and wished to include him in the new organization, as recognition of his efforts in that direction. So at their suggestion I saw Gaston and told him of their kindly feeling in connection with the proposed incorporation.

Soon after this, when it seemed time to organize, and prepare for Elliot's coming, I was informed by my friends that Gaston had already drawn papers that they had signed, supposing he was working in harmony with me. When I saw Gaston he promised that my signature should be added before the papers were placed on file; but never gave me the opportunity. Later we learned that Gaston took these articles to Portland and disposed of the signature of friends, who had so kindly tried to advance his fortunes, to Portland capitalists, whose intention was to build a railroad on the west side of the Willamette Valley, in direct opposition to our interests as residents and property owners on the east side.

When we learned this it was instantly determined to incorporate anew, so I drew articles under the same name—The Oregon Central Railroad Company—that were hastily signed by J. S. Smith, I. R. Moores, and E. N. Cooke, that were placed on file with the Secretary of State, on the 17th of November, 1866, while Gaston did not file for his Portland company until November 215t, four days later. These dates are given me by secretary of State, Hon. F. I. Dunbar, in a recent communication.

The situation then was, that these Salem gentlemen undertook to incorporate The Oregon Central Railroad Company, when their agent, who had the articles they signed, unknown to them turned the articles they had signed over to an opposition company. They then executed other articles that were placed on file with the Secretary of State, first of all bearing that name and for that purpose. Had not their agent betrayed their trust, this company would have had no rival; certainly no rival could have claim to priority of right to antagonize it.

In The Quarterly of December, 1902, referred to, Gaston tells how Elliot appeared on the scene later, and unfolded a scheme to his west side company, but he—Gaston—prevented its acceptance. He says that then three of his incorporators seceded and filed articles on April 22, 1867, in the same name. The facts are that those three seceders were J. S. Smith, George L. Woods, and I. R. Moores, who had signed the articles confiscated—to use a mild term—who merely demanded that their names should be removed from the purloined papers.

Gaston says the Salem company's articles were filed on April 22, 1867, but a recent letter from F. I. Dunbar, Secretary of State, tells me the first articles of that name were filed, as I have before stated, on November 17, 1866. Bancroft's history quotes from Gaston's manuscript on "Railroad Development of Oregon," which tells that ground was broken by Elliot on the east side road, on April 18, 1867, four days before he would now have us believe that company was alive.

I had intimate relations with Elliot, who came to Oregon in response to the action of our company and made a contract to build the road that he was not able to carry out; then Ben Holladay took hold with him and was virtually the "whole thing." He built part way, and found his means insufficient. It is possible that in trying to handle so great an enterprise we mistook legal rights,—as when Governor Woods as chairman of the stockholders' meeting signed for $7,000,000 of stock, but that was no intended fraud and was as consistent as for Gaston to subscribe for $2,500,000 to float his west side company.

Elliot undertook too much; Ben Holladay took hold with his million dollars, made by overland staging and pony express,—that went up like smoke. The road to California was finally finished, thanks to the genius of Henry Villard, but he worked after the initiative of that east side company that was organized by my enterprise on November 17, 1866. With this Gaston had no honorable connection nor part nor lot with anything connected therewith from start to finish.

After my day as secretary of that company it was entirely reorganized as the Oregon and California Railroad Company by the Holladay interest, and all legal complications ended. When able to command material now stored at Salem, Oregon—consisting of newspaper files and correspondence with such journals as the Sacramento Union carried on for many years, I shall try to wrest from them features and history of that time.

During the years I was secretary of the company we had offices open, negotiated various matters, made contracts, issued bonds to raise means to meet engagements, received subscriptions, and donations were made by public spirited people to help pay expenses for what was considered a public enterprise. I had very little for my services, as I drew only a few hundred dollars for the three years' time, preferring to look to future success for recompense rather than draw from our small incidental fund. In fact, my services were never paid for as Holladay ignored my claim.

It may pass for history that in the full tide of his profligate career, the Sacramento Union, at that time the most influential paper on the coast, in one of its regular letters from its long-time Oregon correspondent, contained a brief sketch of the way Holladay carried on business and "carried on" otherwise. The result was that this carried such weight that the financial magnates who bought his bonds called a halt and refused to advance more money to be wasted on profligate politics that had been borrowed to build a railroad. Holladay told his workers that this brief item cost him $100,000; so "time at last makes all things even."