acres of Northern Pacific land along the Palouse line to the Oregon Improvement Company.
Mr. Villard and his friends were exultant, and the Navigation stock rose considerably on the announcement of the signing of the contract, to which the Northern Pacific would not have assented if the negotiations had been protracted a little longer. Its management had not found it easy to raise money for the resumption of construction east and west, and would not have been able to command the means to build along the Columbia. Moreover, it had shrunk from a contest with a young and vigorous concern like the Oregon Railway & Navigation Company, with apparently unlimited financial resources, under a bold and aggressive leadership. Its defensive position was entirely changed within a month of the execution of the contract by the sale of $40,000,000 of its first-mortgage bonds to a powerful syndicate headed by Drexel, Morgan & Co., Winslow, Lanier & Co., and A. Belmont & Co. The transaction, then unparalleled in its magnitude, assured to the company $36,000,000 of money, which was then generally assumed to be sufficient for the completion and equipment of the entire main line.
Mr. Villard heard of this portentous operation only a few days before its consummation. He now understood why his own offer during the negotiations with President Billings to raise $10,000,000 for the Northern Pacific against its mortgage bonds was at first warmly received but afterwards declined. He perceived at once distinctly what damaging consequences the great financial strength thus secured to the other company might have for the interests represented by him. The fear, indeed, was justified that his company would be struck in its vital part by the continuance of the Northern Pacific main line down the Columbia. He knew that the mere threat of this would greatly affect the market value of his company's securities, and much impede the raising of additional capital for it. In a short time he decided upon the adoption of a radical remedy for
