railroad in the three years ensuing the lease went to wreck as an earning property. Finally, the Oregon Railway and Navigation Company, after retirement of Villard from its affairs, abandoned the narrow gauge and repudiated the lease, May 14, 1884, as null and void. Consternation ensued. Bonds of the narrow gauge at once fell from 120 to 40. Stock shares which had brought $40 fell to $2. Without terminal connections, tracks and rolling stock dilapidated, the plight of the railroad was sad, indeed. A receivership ensued under Charles N. Scott, who was appointed by the circuit court of the United States, Judge Deady, March 30, 1885, and took charge of the property April 14, 1885. The receiver was named in the lease suit against the Oregon Railway and Navigation Company and not in foreclosure for the creditors. Under the receiver's management bridges, track and equipment were restored as well as available borrowings would avail until the railroad was taken over in 1890 by the Southern Pacific.
The Scotch owners sought remedy in the United States circuit court of Judge Deady to bind the Oregon Railway and Navigation Company to the ninety-six year term of the lease and were victorious in that court by winning judgments for the rental dues, but the supreme court of the United States on March 5, 1889, held the lease void because it had not been validated by the Legislature of Oregon. Judge Deady, on March 18, 1885, and at intervals thereafter awarded judgment against the lessee for accruals of unpaid rent. The supreme court of the United States held that the Oregonian Railway Company had no power to execute the lease and the Oregon Railway and Navigation Company no power to accept it. For success of the narrow gauge system, after the lease fiasco in 1884, it was clear that these several things must be
- The Oregon Railway and Navigation Company continued to operate the lines until November 15, 1884. See The Oregonian, November 12, 1884.
- See article by William Reid, The Oregonian, March 6, 1889.
- Charles Napier Scott proved himself an efficient railroad man and an able administrator of the narrow gauge. Before coming to Oregon he had many years' experience in railroading. He was born April 16, 1846, at Hamilton, Ohio. He is a resident of Portland, Ore. He was finally discharged as receiver August 12, 1891. (Portland Evening Telegram, August 12, 1891.)