these things about, but right there all and undoubtedly with legal advice, he differences vanished. and two of his friends ver quietly or— The case at issue is of such aramount ganized another “Oregon ‘entral Rail importance to the proper deve o ment of road Company,” a cor oration identical
road companies in general rather than toward the lands, which were still re
garded as of small value. The re uired extension, with the trou
blesome :‘lause appended, was passed by Their articles of incorporation were se Congress April 10, 1869. It has been the resume of the early history of the case cretly spirited into the office of the Sec railroad company's disregard of this seems justified. retary of State and inconspicuously clause that precipitated the recent litiga As early as i86i there was agitation in placed on record. The second com any tion and saddled Congress with a prob Congress for a land grant to encourage selected a route on the east side of) the lem that is severely taxing its patience. the construction of a railroad from Port Willamette valley, through Salem, the land, Oregon, to California. This agita state capital. Christmas day of '69 the first tion finally took the form of a roposed When it was found that there were two twenty-mile unit of Holladay's road amendment to the Union Pacific Bill, claimants for the land rant, the uproar was completed. This was properly re which passed July 1, 1862, though the dwarfed all other state issues. The Gas garded as a great achievement and en amendment was lost. ton company based its claim on priority thusiastically celebrated. It required all In 1865, the year that marked the close and justice; the Salem company was of Holladay's financial and executive of the war and the commencement of the strong for regularity of procedure. On genius to interest Eastern capital in a era of expansion all over the country, the its side it had a tremendous public senti road through a country which was com passage of the Oregon and California land ment in the capital and other east side monly regarded as a howling wilderness. grant of 4,000,000 acres became certain. cities ignored by the route of the Gaston The completion of this unit meant formal With the spoils virtually within sight road. recognition from the Department of the there arose all manner of con'ecture as to As the fight progressed the feeling on Interior and the commencement of is what group of capitalists would take home both the east and the west sides became suance of patents to the railroad company the bacon. As Oregon's three repre intensely bitter. The three originators for the grant lands. To avoid confusion sentatives in Congress fell into a violent of the east side road were soon shouldered with the west side line, the name of the squabble over the division of the s ils, aside, leadership was assumed b the Holladay road was changed to the Oregon Congress relieved them of the pro lem most powerful men in the state. hese and California Railroad Compan ; it is by attaching to the bill an eleventh-hour new leaders took up the fight with re this company, the stock of whic is all amendment which provided that such of sourcefulness and great vigor. owned by the Southern Pacific Company, The case was carried into the courts that is the owner of the grant today. the grant as fell within the boundaries of and the original company, which had Oregon would go to the corporation desig Just as things looke'd most propitious nated by the state le islature of Oregon. commenced actual and feverish construc for Holladay and his associates, the coun The passage of this bi l, on July 25, 1866, tion on the west side, was declared the try felt the first symptoms of the financial was the signal for one of the most pic rightful beneficiary. Nothing daunted, crisis of the early seventies. Holladay turesque exhibitions of graft and chican the east side company began construction managed to hold things together, but his ery that ever occupied the Northwestern at an equally prodigious rate of speed. west side competitors went to pieces and portion of the national sta e. How its management hoped to complete by salvaging their wreckage he increased The first bidder for the pfunder was the the road without the grant as a basis for his already heavy burdens. Progress was slow. Only by squeezing ever town on Oregon Central Railroad Company, or credit is a mystery. anized and dominated by the late Joseph At that stage of its development the the line for heavy subsidies did he manage Villamette valle could not support two to complete the west side line 2 miles to iaston, which filed articles of incor ora tion with the Secretary of State on cto railroads, and neither company possessed McMinnville and the east side road to ber 6, 1866. The instant these articles the necessary strength to crush the other. Roseburg, a distance of 198 miles. At had been recorded the originals were The e for atonew leader to these points both lines were overtaken bringtime the was rival riflzictions their senses, by the anic of 187. Construction taken from the Secretary’s office by Gas ton, and rushed to‘the legislature, which and Ben Hollada came to the front. ceased. olladay foun himself a ruined was then in session, where they were “'ith the shrew ness that afterwards man. The holders of the bonds he had placed in friendly hands for action. The won him distinction in railroad affairs, fioated took over both properties and whole affair was handled so expeditiously he measured the political strength of the operated them until 1880. that just four days later the legislature two roads, determined which route was Turning their attention to the rant, passed a bill recognizing the Oregon Cen most feasible and went to the legislature they commenced to sell offthe lands. They underRailroad the terms of tfile asCongressional tral Compan beneficiary of 1868 with a proposal that it repudiate soon realized, however, that the l‘Set its former action, as having been taken tlers’ Clause," which Congress had tacked Grant. With this asset as a basis for his under false representations, and designate on as a condition of the extension granted operations, Gaston experienced little difii the east side company as the rightful to Mitchell, was not going to work out at culty in interesting the foremost bankers beneficiary. To the consternation of the all to their satisfaction. As though to and capitalists of the Northwest in his Gaston interests the legislature lent a question the sincerit Y of Congress on this projected railroad. On November 23 the willing ear to Holladay’s arguments and subject they proceeded to put through a articles were returned to the ofiice of the granted his request, freezing out the few sales in direct violation of the terms of the Settlers‘ Clause. This was in 1872, Secretary of State. Gaston company completely. Gaston and his associates were jubilant. Had the terms of the original grant and the details of these sales, including The ice was smooth and their skates were been adhered to, the present com lex the amount received by the railroad com ground to a fine edge. With the grant in situation would have been averted. he pany in excess of $2.50 per acre, were re their pockets they turned their attention original grant required an acceptance of orted to Congress with all regularity. to the important matter of the route. its terms by the beneficiary within one ‘here appears no record of a single voice They decided on the wart side of the year of its passage by Congress. The raised in protest. Quick to recognize the Willamette valley along the line of the Gaston company had filed such accep tacit consent of Congress, the company present Portland, Eugene 6: Eastern, tance, and it now devolved on Holladay began selling grant lands in tracts larger recently completed by the Southern to procure from Congress an extension of than the stipulated acreage, and to other Pacific Company as far as Eugene. This time to enable his com any to do like than actual settlers. Several such sales decision was received by citizens along wise. To accomplish this he delegated were recorded in 1874. Neither the De the proposed route with great rejoicing—— John M. Mitchell, a young attorney who partment of the Interior nor Congress which was rather premature, considering afterwards became United States senator, seemed to have any objections to these the things that befell the road and its to present his case to Congress. Mitchell sales. Up to and including 1885, when the obtained the extension, but had to accept backers. an amendment in the form of a so-called Southern Pacific Com any acquired a PRECOCIOUS oung man em loyed "Settlers’ Clausen which specified that controlling interest in the O. 61 C. Com in the office of t e Secretary 0 State the land was to be sold only to actual panv, land sales were being constantly evolved the idea that the Gaston articles settlers in parcels not exceeding 160 acres ma e in utter disregard of the conditions of incorporation, having been removed at a maximum price of $2.50 per acre. imposed by the Settlers’ Clause. And from the office after filing, were not legally This amendment resulted from a change for emphasis let it be repeated that (Continued on page 82) recorded. Acting on this assumption, in the attitude of Congress toward rail the Pacific Northwest, and so ittle un derstood outside of Oregon, that a brief
in
name
with
the O’aston
company.
