The Infamous Black Bird Southern Oregon History, Revised


The Oregon and California Railroad.

S. A. Clarke Tells of the Incorporation of the Oregon & California.

    WASHINGTON, D.C., July 16.--(To the Editor.)--Mr. Lyman's History of Oregon fails to give the correct story of the organization of the Oregon & California Railroad Co., at Salem, an organization that resulted in the construction of the railway now operated.
    In the fall of 1866, returning from the East via Panama, I met with S. G. Elliott, who had been in Washington, working for the land grants that finally aided the construction of the line from Sacramento to Portland. As we became acquainted he explained the project to me, and desired that I should organize an Oregon company to work in harmony with that with which he was connected.
    At his persuasion I remained a few days in San Francisco to meet the men he represented, chief of whom was Ralston, a famous financier at that time. Their attorney drew up a document that was signed by a number of the prominent men of San Francisco, proposing to work in harmony with the Oregon company and aid the financing of the enterprise.
    Arriving at Salem, I introduced the matter to my friends, E. N. Cooke, the McCully Brothers, Governor Woods and J. H. and I. R. Moores, who all favored it. They suggested that as Joseph Gaston had been trying to work up some railroad scheme, they would like to include him in the organization. He could do them neither good nor harm, but they wished to help him to business. Acting on their desire I introduced the matter to Gaston and told him of their kind wishes. Not long after this, when I proposed to draw up incorporation papers and organize the company, my friends told me that Gaston had already obtained the signatures of the gentlemen I named to him as incorporators. They signed supposing that he was working with me. Gaston repaid my kindness to him by stealing the business away from me and leaving me out. Then he took the incorporation papers his friends had signed to Portland, where--as I was reliably informed--capitalists gave him $6000 to let them own the company. That corporation was known as the "Oregon Central."
    I immediately drew up other incorporation papers, that were signed by the same gentlemen, in the name of the Oregon & California Railroad Company. These were placed on file with the secretary of state before the first articles were, and so had precedence, the Oregon & California being finally designated by the Oregon Legislature as entitled to the land grant, and under it the road was finally built. Mr. Gaston's part in the enterprise was the betrayal of the Salem friends who had been so anxious to assist him.
    The company was organized with I. R. Moores as president, and S. A. Clarke as secretary, and so remained for three years, when it was turned over to Ben Holladay. S. G. Elliott took the first contract to build the road, and had made some progress when Holladay bought him out.
    When Holladay came into possession I handed in my resignation, having bought the Statesman newspaper. I had business enough of my own. My faithful labors for that enterprise had no reward, as Holladay never paid even the salary that the board of directors had agreed on for the last two years. All the satisfaction I had was the kindly good will of the original incorporators, whose confidence I enjoyed.
    It is at least due that when the history is written credit be given to the one who took such active part in the organization and early management--and got so little return for the years expended.
Oregonian, Portland, July 22, 1903, page 11

Writer Shows Genesis and Development of What He Terms the "Oregon System."
    Joseph Gaston contributes to the June number of the Oregon Historical Quarterly an interesting article on "The Genesis of the Oregon Railroad System," and incidentally gives some of the early history of railroad construction in Oregon. In this article Mr. Gaston traces the development of "the Oregon System," as he terms it, from its inception in the subscription of Jackson County people to a fund to make a survey for a railroad from Jacksonville to Portland, to the completion of the framework of this system by Henry Villard in connecting the constructed Oregon road with the completion of the Northern Pacific in 1883, and gives to Mr. Villard the credit of the original idea of this Oregon system and its successful execution.
    It is exceedingly interesting to note from what small beginnings this great Oregon railroad system, now  composed of more than 2000 miles of main and branch lines in Oregon, Washington and Idaho, took its start tn what was in 1863 a remote, inland and isolated region in Rogue River Valley. And it is no more than justice to Jackson County and to its courageous and far-seeing pioneers, who contributed from their limited funds the means to start a far greater enterprise than they conceived of, that their efforts should be duly and fitly recognized in the permanent history of the state. And to this end Mr. Gaston has not only incorporated the names of the originators of the Oregon & California Railroad in his article in the Historical Quarterly, where they will be preserved for all time in honorable remembrance, but he has placed in the archives of the Oregon Historical Society the original subscription paper with the genuine original signatures thereto, a copy of which is given herewith:
    The following subscriptions are received for the purpose of paying in part the cost of making a preliminary survey for a railroad route, connecting the Pacific Railroad in California with the City of Portland, Or.
    We, the undersigned subscribers, agree to pay the amount hereunto subscribed by us, for the above purpose, to S. G. Eliot on demand by him. On the final organization of the railroad company it shall be optional with the undersigned to become stockholders in said company to the amount subscribed by each at the rate of $10 per share, with the privilege of one vote to each share, or not.
    If they choose to become stockholders as above, they each shall be credited on the books of the company for the full amount subscribed by each. If they do not become stockholders, said company, as soon as able, shall pay them back the amount subscribed by each.
    October, 1863.
Subscription List.
C. Boxlery Emerson E. Gore
John Robison M. Riggs
D. E. Stearns William Wright
G. Naylor Frederick Heber
John Houlton S. D. Vandyke
M. Michelson John Coleman
R. B. Hargadine Joseph A. Crain
E. Emery J. T. Glenn
Lindsay Applegate William Hesse
O. C. Applegate H. A. Breitbarth
John Murphy John S. Herrin
Wagner V. McCall J. Gaston
J. C. Tolman McLaughlin & Klippel
P. Dunn John E. Ross
W. H. S. Hyde Aaron Chambers
Beall & Bro. Haskell Amy
Mike Hanley Alexander French
Granville Sears Albert Bellinger
R. S. Belknap James Thornton
U. S. Hayden Woodford Reames
John Neuber H. Ammerman
Joshua Patterson E. K. Anderson
D. P. Brittain D. P. Anderson
J. V. Ammerman Wm. H. Herriman
Plymale Bros.
John Watson
History of Railway Development.
    Mr. Gaston shows in his article in the Historical Quarterly how this original agreement and subscription was followed up by connected and continued efforts by parties connected therewith, until the land grant was secured from Congress and companies organized in pursuance thereof and the railroad built from Portland through Rogue River Valley to the state line. His article contains also interesting notices of the leading men from time to time connected with this railroad development--Ben Holladay, Henry Villard, Richard Koehler, Colonel Chapman, B. J. Pengra and others.
Oregonian, Portland, August 26, 1906, page 11

By Fred Lockley
    "It's work--not education--that makes men," said Joseph Gaston, pioneer railroad builder, a day or two ago. "Education will help a man if he will make use of it, but education without capacity and energy won't take you very far.
    "I was born in 1833 in the country in Belmont County, Ohio. I think a boy is fortunate to be born and raised in the country. My father died before I was born so I was raised by my grandparents. Our people came from France, the family being Huguenots. From France, they went to the north of Ireland and from there came to America.
    "In 1862 I was living in Jacksonville, Or., where I was engaged in mining. As the mining did not prove very profitable, I entered into partnership with John H. Reed in his law business.
    "Early in 1863 S. G. Elliott, a promoter from California, decided that Oregon was an open field for railroad work. He believed that if he ran a survey from Marysville, California, to Portland, Or., Congress would give him a land grant, which he could dispose of at a good profit.
    "He entered into arrangements with George H. Belden, a civil engineer who lived in Portland. They started from Marysville in May, and by October they had reached Jacksonville. Mr. Elliott had been in command of the expedition from Marysville to Jacksonville, and at Jacksonville Belden claimed that he should take command of the expedition from Jacksonville to Portland. He said that this had been the verbal agreement at the time the original arrangement was made. As their ideas of where the road should be located differed widely, and neither of them would yield, the enterprise was wrecked and left stranded at Jacksonville. The surveying party, consisting of 12 men, had not been paid so they seized on the outfit to secure their payment.
    "Colonel A. C. Barry, who had served in the Civil War and had been discharged for disability, had helped finance Elliott and Belden, and at his request I endeavored to save the enterprise from complete wreck. I persuaded the men to stay in Jacksonville that winter, and as we had no money to board them at the hotel, I got permission from the county officials to allow them to stay in the county hospital, where there were good, comfortable beds.
    "I visited the farmers throughout the Rogue River Valley and told them how valuable a railroad would be in developing Jackson County and the entire district. I told them how necessary it was to have their cooperation and help, and to keep the surveying party there all winter so they could be ready for work in the spring. They brought in donations of flour, fruit and meat and other products, and so we were able to keep the party there without expense through the winter.
Farmers Are Interested.
    "The first man to give me a donation was Bill Hanley's father. He subscribed $10 to be paid in wheat at Allen's mill. The subscriptions ranged from $2.50 to as high as $25, most of it being paid in wheat. I remember John S. Herrin promised ten bushels of wheat to be delivered at Foudray's mill.
    "Elliott had thrown up the thing in disgust and gone back to California the preceding fall. Colonel Barry came up to Jacksonville and helped inspire the men with confidence. I kept busy that winter, getting subscriptions from everyone that I could interest throughout the entire Rogue River Valley.
    "The agreement in each case was that for the supplies furnished, each subscriber would become a stockholder at the rate of $10 per share with the privilege of one vote for each share. If they did not wish to become stockholders, I promised that we would pay them the amount subscribed at some time when we were able.
    "Colonel Barry told me that he had considerable influence in Congress, and if we could get the survey put through to Portland he felt sure that he could get a land grant. During the winter, the engineers and transit man worked up their notes of the survey.
    "When spring came we were ready to go to work, but we had no money and no outfit. I induced a young rancher to loan us four horses and his wagon, and Colonel Barry and my brother went ahead and ran the level.
    "I prepared petitions to Congress asking it to give us the land grant and as Barry visited the various ranchers he secured their signatures to the petition. He also lived on the country, almost everyone taking the surveying party in without charge and furnishing supplies. Colonel Barry was a good forager, having had experience during his service as an officer in the army.
    "Colonel Barry discovered that the people of the west side of the Willamette were more anxious to support the road than those on the east side so the survey was made from Eugene to Portland on the west side, our original survey going through Monroe and Corvallis and on through Holmes Gap in Polk County, opposite Salem.
    "Our surveying party finally reached Portland where we raised money enough to pay the men off. I moved from Jacksonville to Salem where I opened a law office so that I would be nearer the scene of operations.
    "The subscribers to the fund of wheat, provisions, supplies and cash authorized me to endeavor to secure further subscriptions and to organize a company and apply to Congress for a grant of land to aid in the construction of a railroad from the Columbia River to San Francisco which was to pass through the Willamette, Umpqua and Rogue River valleys.
Railroad Company Is Organized.
    "We organized a company under the name of the California & Columbia River Railroad Company. I was made the secretary and Colonel Barry chief engineer.
    "The field notes were worked up and the results of the survey were laid before the Oregon legislature. I had prepared a bill providing for the granting to our road of the proceeds of the half million acres of public lands which had been granted to Oregon for internal improvements. My bill, however, was not accepted, and the legislature in lieu of it passed an act levying a tax of one mill on the dollar on all taxable property in the state, the proceeds to be applied to the payment of the interest on the construction bonds of our company.
    "To put the matter in proper shape before Congress I wrote to every farmer I knew as well as other prominent men throughout the state, asking them to give me the facts about the resources of their particular section. I issued a booklet of about 50 or 60 pages entitled "The Resources of Oregon," and, by the way, this was the first booster booklet issued in the state of Oregon.
    "In this booklet I spoke of the vast body of standing timber in Oregon and referred to it as one of the resources of the state. Timber was regarded as a detriment rather than an asset, and people then in Oregon thought I was crazy for referring to the timber as a resource. This booklet, accompanied by the report of our survey, with maps and profiles of our proposed road which were prepared by Colonel Barry, was sent to every congressman.
    "Some time before, George H. Williams and Governor A. C. Gibbs had visited my home at Jacksonville. Governor Gibbs, as well as Judge Williams, was a candidate for the United States Senate. I told Judge Williams about our proposed bill and he said, 'If you will help get me elected to the United States Senate, I will work for your bill.' He also met Colonel Barry and asked him to help secure his election, promising that he would get the bill through Congress if he was elected United States Senator.
    "He told Colonel Barry that the aid he wanted was to have him visit the various members of the Oregon legislature and get them to pledge their support to him for Senator. Colonel Barry had used every cent he had in working for our road so he struck out afoot and walked over 150 miles, visiting different members of the legislature and securing their pledges for Williams.
    "Williams was elected. When Colonel Barry went back to Washington to secure the promised help of Judge Williams, Judge Williams told him that he had heard from the people in Salem and that it would hurt him politically to advocate this land grant.
    "Colonel Barry interviewed each member of Congress and each Senator. C. Cole, a member of Congress from California, came to our rescue and introduced a bill which was passed and became a law on July 25, 1886. This granted 20 alternate sections of public land per mile from Portland to the California line.
    "Judge Williams, influenced by the people on the east side of the Willamette River, who wanted the road to run on the east side in place of the west side, had an amendment passed to the bill providing that the land grant should go to the company that should be designated by the Oregon legislature. Cole suggested that we change the title of our company so we changed it, making it the Oregon Central Railroad Company. The Oregon legislature in the '60s used to meet in the fall. It met in September, 1866, about six weeks after Congress had given us the land grant.
Articles of Incorporation Filed.
    "Our articles of incorporation were signed by John H. Mitchell, W. S. Ladd, H. W. Corbett, S. G. Reed, J. C. Ainsworth, C. H. Lewis and other well-known citizens of Portland and Oregon.
    "A joint resolution, introduced by E. D. Foudray of Jacksonville designating the Oregon Central Railroad Company as the company to which the land grant should be given, was passed by the legislature.
    "We opened our books to take subscriptions to the capital stock of our road, or the Barry survey, as it was known, and of all of those whose signatures were attached to this prospectus I am the only one now alive.
    "We received no subscriptions whatever from Salem or elsewhere on the east side, as they were opposed to the Barry survey, but the west side subscribed generously to the stock.
    "S. G. Elliott of California, who had abandoned the railroad plan in disgust, found that we were making progress, so he came up to Oregon. He planned either to secure control of our company or to organize a new one. Elliott, almost a year before, had taken out articles of incorporation for the Oregon & California Railroad Company, the principal offices to be in Jacksonville. The incorporators were Californians, but nothing was ever done with it. When he came up to Salem he came to me and offered me a large amount of stock in the new company and also a position if I would throw the other company overboard, which, of course, I refused to do. He took it up with the incorporators of our road and they realized what I had already discovered--that he was an unscrupulous promoter, pure and simple, and they refused to have anything to do with him.
    "Being unable to drive us out--on the 22nd of April, 1867, he incorporated the Oregon Central Railroad Company of Salem. He incorporated it for $7,250,000 and had the proposed company itself subscribe for $7,000,000 worth of bonds. This was a sort of scheme to lift yourself over the fence by pulling at your own bootstraps.
    "We were up against it for funds. Mr. Ainsworth had advanced nearly $40,000. S. G. Reed had done everything he could for me. Multnomah County gave us all the money they had in the treasury, which had been voted to be paid as interest on our bonds; so did Washington County. Just about when we were at the end of our resources, Edward Russell, an Englishman, who was manager of the Bank of British Columbia here, called on me and said, 'I am going to London on a visit. If you will give me power of attorney, I think you can sell half a million dollars' worth of your bonds.'
    "I went to the directors of our road and they said it was preposterous to think that he could sell them to London, nevertheless, it wouldn't cost us anything to give him power of attorney and let him try, so we did so. To our utter surprise, within 30 days after he had got to London we received a cablegram saying, 'I can sell half a million dollars' worth of your bonds at 65 cents on the dollar. Answer if you will accept.' You can imagine how elated I was, for this meant $325,000 with which we could push the road. I went to Captain Ainsworth with the message, and he said, 'Let me have a day to think it over.' I went back the next day and he said, 'I have cabled to Russell declining his proposition.' It was the one great mistake we made.
    "Russell held the matter open for us for 30 days. When he returned he told me all about it. He had met a representative of the Turkish government in London who was trying to raise money. This man could not raise the money on his Turkish bonds, but thought by combining with some other bonds he could secure money. He finally went to one of the big bankers and told him he could sell him a million dollars in Turkish bonds and a half million dollars' worth of Oregon Central Railway bonds at 65 cents on the dollar for the lot. This offer was accepted, but we made the error of our lives and turned the offer down. Well, that settled it for us.
    "Holladay and his bunch got their 20 miles of poorly constructed road built, put an engine and two cars on and it was recognized as the official company to whom the land grant should go.
    "Just about here, though, Holladay got a jolt that nearly put them out of business. Judge Deady declared their acts fraudulent and said they had no right to the use of their corporate name--that they could not come into court in any condemnation suit and that they had no legal existence and all their acts were void and they could not hold the lands granted by Congress. They were up against it good and plenty now and they decided not to send a boy to the mill to get the meal. They secured the services of William M. Evarts, one of the keenest lawyers of the country. Evarts refused to get back of the legality of the road, but said that inasmuch as the franchise was a grant from the state it could be questioned only by the state, and as it had not been so questioned, it could exercise any rights until so questioned and that inasmuch as the land grant was from the federal government the right to the grant could be disputed only by the grantor, and not having been questioned, that the grant could be assigned and transferred by the Salem company.
    "Holladay immediately organized a new company called the Oregon & California Railroad Company and transferred all of the assets of the Oregon Central Railroad Company of Salem to this new corporation. He then sold ten and a half million dollars of the bonds of the land grant in Germany.
    "This company later came to grief, as you know, and Koehler was sent over from Germany to represent the interests of the German stockholders. We built our road on the west side from Portland to the Yamhill River. I also built 40 miles of a narrow-gauge road from Dayton to Sheridan, with a branch to Dallas.
    "I will be 80 this year. All of my associates in the building of the first railroad in Oregon have taken the one-way trail."
Oregon Journal, Portland, March 30, 1913, page 20

How It Is Done on This Coast.
Pretty Pieces of Engineering That Were Not Worked Out in a Day.

    To run a railroad over a high mountain range to pull heavy trains over it would in the early days of railroading have been considered a marvel. Even in this day of daring railroad construction, wonder at the triumphs of engineering skill is hardly to be suppressed by the fact of their commonness. An English tourist who came into San Francisco last week over the Mount Shasta route said to a Chronicle reporter:
    "In coming to your coast I set out with the intention of not being surprised at anything. On the line between St. Paul and Portland I had my determination shaken a little, but in coming down from Portland to your city and passing over those giant mountains, where the railway makes such ascents and descents, twisting in and out along the sides of canyons of such immense depth that the passenger almost loses his head in looking down the dizzy height; when one travels for miles to gain a hundred yards in his direct journey, so circuitous is the route, I felt myself willing to go any length to express my wonder, and even awe, at the marvelous sights of which I had been a witness."
*    *    *
    By the newly constructed Oregon line one gains a better idea of the roughness of the country lying between San Francisco and Portland than if he were to make a balloon voyage. In sympathy with the wonderful power that is exerted in his behalf the rail passenger participates, as it were, in the labor of climbing the heights interposed by nature in the pathway of the engineers. From Redding, the head of the Sacramento Valley, which is at an altitude of 550 feet, the railroad contorts itself upward to an altitude of 3002 feet in a distance of eighty-six miles. It may be truly said that there is not a more pretentious piece of engineering work on this continent when it is considered that the line built is not a narrow but a broad gauge and that the sharpest curves are under sixteen degrees. It is to the courtesy of Chief Engineer William Hood of the Southern Pacific Company, the man who planned this successful invasion of nature's mighty ramparts, that the Chronicle owes the opportunity of presenting [illustrations of] the alignment of the California and Oregon road over the steepest portions of its route.
    The diagram representing a section of the line between Dunsmuir and McCloud, along the Sacramento River, is intended to illustrate how a gain in an elevation of about 1000 feet in ten miles was made by the engines. The road here describes a double horseshoe, of a most elongated form, the line doubling upon itself three times. From the southern end of the section shown to the point marked as the eighteenth crossing of the Sacramento River is a distance of about four miles. The road proceeds to the crossing and then turns directly around and runs toward the starting point, thus covering an apparently useless stretch of another four miles, the doubling process bringing the line back within 100 yards of the lower track, though it is over 200 feet above it. In an air line the distance from Dunsmuir--just below the southern end of the section shown--to McCloud is only six miles, but by the railroad it is nearly fifteen.
    Railroad and river part company at an altitude of 2800 feet, and the "Big Bend," a detour of necessity, by which an additional elevation of 200 feet is reached, interposes its graceful curves. This bend was made to scale one of the foothills of Mount Shasta. The grade is a severe one, being what the engineers call a "2-2" grade--2.2 feet to the 100. The station immediately south of McCloud is only one-half a mile distant from it on an air line, and yet eleven times that distance, or five and one-half miles, must be traversed, so rugged is the country over which the railway is built.
    Having invaded old Shasta's kingdom, a process which required much labor, the work of the engineering force was really only just begun, for there was the great Siskiyou chain to cross. There was positively no getting around this immense barrier, which casts its huge bulk along the northern line of the state. Chief Hood and his band of engineers fought their way upward inch by inch, and, at last finding themselves in a country where climbing was out of the question, plunged their line through the mountains by boring tunnel after tunnel at frequent intervals--in some places at nearly a mile above sea level. But this is not the first tunneling experience met with on the route, for there are twelve tunnels and for that matter eighteen river crossings in eighty miles of the line south of Delta [in Shasta County, 38 miles from Redding].
*    *    *
    The section of the California and Oregon line from Gregory to Colestin, shown in one of the accompanying diagrams, is another tortuous piece of road. For two miles above the state line the road runs along the Cottonwood Valley and is comparatively straight. It runs almost due north to a point where the valley is abandoned, and the ascent of the high Siskiyou Range is begun. Then it proceeds westerly for about two-thirds of a mile, then due south for nearly the same distance, afterward running southwesterly and then making a grand circuit in a ten-degree curve nearly back to the point at which it took its sudden turn southward. There is a fourteen-degree curve a mile below Gregory and another near Colestin. Running north of Colestin two miles, the Siskiyou tunnel [Tunnel 13], about 3000 feet in length, is reached. This tunnel is at the summit of the ridge, which is more easily attained from the south than from the north, though the grades on the southern side are quite steep, running about 150 feet to the mile.
    The diagram of the section of the same line between Siskiyou and Steinman shows the most difficult piece of engineering found on the whole line. To get down into the Bear Creek Valley, and to reach Ashland without too precipitous a descent, it was found necessary to make long swings back and forth down the mountainsides. An idea of the waste of time and distance imposed by the law of gravitation may be gained by comparing the comparatively straight alignment of the stage road, now abandoned, with that of the railroad, which may be easily done by reference to the sketch. The distance from Siskiyou to Steinman by the stage road is two miles, while by rail it is eight. The diagram shows four tunnels in a distance of less than ten miles. A peculiar feature of the first elongated horseshoe north from Siskiyou may be observed by close references to the diagram, though it cannot be fully appreciated except by an actual view of the road itself. This horseshoe is six miles long from end to end, and near its turning point are two tunnels. Just as the train passing toward Portland is about to enter the first of these yawning clefts in the rocky hill, the passenger, by putting his head out of the car window, sees almost directly below him, at a distance of about 100 feet, the mouth of another tunnel on the opposite bend of the road, and about half a mile further down the canyon still another. In passing over the six-mile detour above Siskiyou Station the train goes back to a point directly on a line with Siskiyou, not having made any actual progress on the air-line distance to Portland, though nearly an hour is consumed in that part of the journey, and there is a difference of over 500 feet in elevation. By getting off the train at Siskiyou and walking down the North Fork of Carter Creek to the other end of the great curve, the passenger may reach that point ahead of the train. As may readily be seen, however, by the diagram, there is still another wide detour from the tunnel at the end of the bend around to Steinman and beyond that station. This stretch of road is about the same length as that last mentioned--six miles--but the tracks are closer together at the ends of the horseshoe. For this reason onward progress is very slow, the gain being less than five-eighths of a mile for the whole distance. But, lest the remarkable fact might escape the reader, it will be well to mention that in this double horseshoe there are nearly ten miles of track which have been laid to gain an actual distance of only two and one-half miles.
    So closely are the two ends of the upper horseshoe to each other that a man may walk back and forth from track to track three times before the train can run around the long circuit between the points to and from which he has gone afoot.
    There are many other remarkable pieces of engineering on the California and Oregon line, but it should be stated that the specimens presented are those of the toughest nuts which the engineers of the Southern Pacific Company were called upon to crack.
San Francisco Chronicle, July 22, 1888, page 6

Discrimination Against Portland and Oregon Considered.
The Law Cited That Provides an Adequate Remedy--History of the Act.

PORTLAND, Oct. 22, 1888.
    Having observed the discussions going on in the board of trade and through the columns of the Oregonian respecting discrimination by the Southern Pacific Railroad Company against Portland, I have concluded to submit a few thoughts upon the subject.
    The idea of discriminating against Portland, as Oregon's commercial metropolis and shipping point, is not a new one; it was manifest as early as 1863, when a company was organized in California to construct a railroad from the Central Pacific Railroad in California to the Columbia River or Portland, Or., and a bill was introduced in Congress to make a land grant in aid of its construction. Without any thought by the Oregon people of antagonism to Oregon interests everybody seemed to favor its passage. Different places were spoken of as the terminal point of the road in Oregon, and such was the interest left in having railroad connection with the outside world that the general feeling was: "Give us a railroad, no odds where the terminal point shall be."
    The bill was pending in Congress giving the land grant to the California company; the surveyors had reached Eugene City, creating great enthusiasm, and a public meeting was called to endorse the enterprise.
    On the day this meeting was to be held, I happened to reach Eugene City on business, perhaps in attendance upon court, and the great interest manifested in the endorsement of the enterprise attracted my attention to the extent that [it] gave rise in my mind of the thought that if the bill should pass in its then shape, giving the grant to the California company to build the whole road, they would begin at Sacramento, and build towards Portland as fast or as slow as they pleased, and as they built towards Portland the trade would necessarily run to California, even till they would be in sight of Portland, and that it would be an irresistible antagonism and discrimination against Oregon and her commercial metropolis, whatever that might be. I determined upon a remedy, and immediately prepared, and when the meeting was organized submitted and procured the passage of the following preamble and resolutions:
    "WHEREAS, we learn that the surveying party on the contemplated route for the California and Oregon Railroad has arrived in the Willamette Valley, and that the chief engineer, Mr. Elliott, is now on a tour in the lower counties for the purpose of learning facts respecting the route and the means to be obtained in aid of the survey and improvement, therefore
    "Resolved, That all grants of land, and other aids by the government of the United States, and means to be appropriated should be expended in equal portions in Oregon and California, and commencing the work in Portland, Oregon, and progressing southwardly, and at Sacramento, Cal., progressing northwardly, so that each state and section may derive equal advantages therefrom, while the road shall be in process of completion."
    The preamble and resolution were unanimously adopted.
    On my return to Portland the subject was brought before the people of this city; two public meetings were held and the proceedings of the Eugene meeting endorsed, with memorials and petitions to the same effect forwarded to Congress. The result was that the measure was modified as we requested. Senator Nesmith in his later days told me that he well remembered the circumstances and that upon the receipt of the proceedings in Oregon he did just as we had suggested, and on the 25th day of July, 1868, the act of Congress passed. It will be found in the 14th vol. of the statutes at large, page 230.
    Independent of the advantages that have accrued to Portland, to Oregon, and, indeed, to the whole Pacific Northwest, through the modified provisions of the bill as it became a law, causing the immediate and early construction of the railroad from Portland southerly through the Willamette, Umpqua and Rogue River valleys, facilitating transportation, infusing new life and increased energy into our people, inaugurating new and important enterprises, developments and prosperity in Oregon, surpassing the most sanguine expectations of our people. So that instead of the last spike in the construction of the entire road being driven at Portland, it was, to our great joy, recently driven and celebrated at Ashland, near the southern boundary of the state.
    I say independent of these advantages which have accrued to Portland and Oregon under the present act of Congress, it does not stop at this, for in the letter and spirit of the act ample provision had been made for their protection and preservation even against discrimination in freights and fares.
    This will be considered:
    First--As it relates to the line of road between Portland and the junction with the Central Pacific Railroad in California.
    Secondly--As to the line of transportation between the ports of Portland and San Francisco, and
    Thirdly--As in the right of the company to remove its office from Portland to San Francisco.
    In respect to all three of these questions the law is plainly on the side of Portland and Oregon.
    As the act of Congress providing for the construction of the road is lengthy, I will quote only two sections bearing particularly upon these questions:
    "Section 1. Be it enacted, That the California & Oregon Railroad Company, organized under an act of the state of California to protect certain parties in and to a railroad survey to connect Portland in Oregon with Marysville in California, approved April 6, 1863, and such company organized under the laws of Oregon as the legislature of said state shall hereafter designate, be and they are hereby authorized and empowered to lay out, locate, construct, furnish and maintain a railroad and telegraph line between the city of Portland in Oregon and the Central Pacific Railroad in California, in the manner following, to wit: the said California Railroad Company to construct that part of said railroad and telegraph within the state of California, beginning at some point to be selected by said company on the Central Pacific Railroad in the Sacramento Valley, in the state of California, and running thence northerly through the Sacramento and Shasta valleys to the northern boundary of the state of California, and the said Oregon company to construct that part of said railroad and telegraph line within the state of Oregon; beginning at the city of Portland in Oregon, and running thence southerly through the Willamette, Umpqua and Rogue River valleys to the southern boundary of Oregon, where the same shall connect with the part aforesaid to be made by the first-named company. That the company completing its respective part of the said railroad and telegraph line from either of the termini herein named to the line between California and Oregon before the other company shall have likewise arrived at the same line, shall have the right, and the said company is hereby authorized, to continue in constructing the same beyond the line aforesaid, with the consent of the state in which the aforesaid part may lie, upon the terms mentioned, until the said parties shall meet and connect and the whole line of said railroad and telegraph shall be completed.
    "Sec. 7.--That the said companies named in this act are merely required to operate and use the portions or parts of said railroad and telegraph lines mentioned in section 1 of this act for all purposes of transportation, travel and communication, so far as the government and the public are concerned, as one connected and continuous line of road, and in such operation and use to afford and secure to each other equal advantages and facilities as to rates, time and transportation, without any discrimination whatever, on pain of forfeiting the full amount of damages sustained on account of such discrimination, to be sued for and recovered in any court of the United States or for any state of competent jurisdiction.
    "Sec. 9. And be it further enacted, That said 'California & Oregon Company,' and the said 'Oregon Company' shall be governed by the provisions of the general railroad and telegraph laws of their respective states as to the construction and management of the said railroad and telegraph line hereinbefore authorized in all matters not provided for in this act.
    "Whenever the word 'company' or 'companies' is use in this act, it shall be construed to embrace their 'associates, successors and assigns,' the same as if the words had been inserted or thereto annexed."
    Now we see that by section 7 of the act that the California company and the Oregon company are each, so far as the public is concerned, to operate and use said roads for all purposes of transportation as one continuous road, and to afford and secure to each other equal advantages and facilities as to rates, time and transportation without any discrimination whatever.
    Therefore taking the two roads operated as one line between Portland and the junction with the Central Pacific, affording equal advantages and facilities to each in either direction, the point of equality in charges in opposite directions would necessarily be at a point equidistant between Portland and the junction with the Central Pacific, and as the point of shipment should vary from the said equidistant points, so would the charges vary, diminishing in one direction as they increased in the other.
    The entire distance from Portland to the California junction is 664 miles; the point equidistant is 332 miles from either end of the entire line, which point is six miles southerly from Medford, in Jackson County, Or.
    Now suppose a shipper at a point fifty miles south of the point of equal distance before mentioned ships wheat north to Portland, and at the same time and from the same point ships wheat to the Central Pacific junction. On the first his charges are increased by the fifty-mile rate, while his charges on the latter would be proportionately diminished.
    Now if managers of the entire line, to benefit Portland or for any other reason, should make the rates to Portland in such case as cheap or cheaper to Portland than to the California junction, it would be an unlawful discrimination against the public and the California road and its point of junction.
    On the other hand, suppose a shipper from a point fifty miles north of the dividing point ships wheat to the California junction and also to Portland. On his shipment to California junction his charges would be increased by the distance of fifty miles, while on his shipments to Portland his charges would be proportionately diminished.
    But in the latter case the manager of the entire line of road steps in, and makes it cheaper, vastly, to ship from the point fifty miles north of the dividing point to the California junction than to Portland on the shorter line. This would be unlawful and gross discrimination against the Oregon road, against this Oregon public, and against the city of Portland, and in violation of the letter and spirit of the 7th section of the said act of Congress.
    The difference in the two cases supposed is that the former does not exist, while the latter is true even to a greater extent than has been stated.
    "II. As to the line of transportation between Portland and San Francisco: It will be borne in mind that Portland is a commercial depot and a shipping point as well as San Francisco, and so far as the two roads--the California and the Oregon--are concerned, entitled to equal facilities and protection against discrimination. Under the act of Congress neither road can lawfully become a factor with other lines to the prejudice of the other. But the Southern Pacific Company has become the associate or assignee of both roads, and claims to dictate their management and regulation of their charges for freight and fares without respect to the obligations imposed upon each of the two roads by the act of Congress, but section 9 of the act declares that the 'associates,' 'successors' and 'assigns' of either or both roads shall be bound by the same obligations that bind both the Oregon and California companies towards each other and the city of Portland, so that this question is not determined by considerations of equity alone, but also by the positive provisions of the act of Congress."
    Take Roseburg as a point of shipment of wheat in both directions; the Southern Pacific Company as the associate successor or assignee of both roads dictates the charges for freight on grain from Roseburg, in Oregon, to San Francisco, 1.434 cents per ton per mile. Now, upon this basis, to afford equal facilities to the Oregon road and the city of Portland, as provided by the act of Congress, the same rates per mile must be given in the opposite direction, from Roseburg to the city of Portland, a distance of 197 miles, which, at 1.434 cents per ton per mile, would be little less than $2.88 per ton from Roseburg to Portland, instead of $6 per ton now charged.
    This is unlawful discrimination against Portland. It is the grossest and most intolerable of anything of the kind that has come to my knowledge. But fortunately the law has provided a speedy and complete remedy, not only in this case but in others liable to occur in the not distant future, of the approach of which our people should beware.
    "III. The right of the Southern Pacific Company to remove the office of the Oregon Railroad Company to San Francisco."
    The Southern Pacific cannot do with the Oregon company what the Oregon company could not of itself do. As we have already seen, the act of Congress provides that the two roads shall each be constructed and managed under railroad laws of their respective states. The Oregon Railroad Company was organized under the laws of Oregon, and as such designated as the company to receive the land grant, and construct and manage the road. As provided by the state law the Oregon company in their articles of incorporation designated Portland as the place of their principal office. The office in the sense of this law is not an empty building. It is the place where all the officers pertinent to the corporation transact their business, and keep their books and official papers, and where at all seasonable hours they may be found. Among the officers of the corporation are the president, vice-president, secretary, treasurer and auditor. They may not all be located in the same room or building, but they must be located in the city of Portland, unless by an amendment of their articles of incorporation, and even in such case cannot be located out of the state.
    The Southern Pacific Railroad Company was cordially welcomed to our state, and it was to be hoped that it would not, either as associate or assignee, or successor of either or both of the two roads referred to, or of any other road within the state be guilty of any acts of unlawful discrimination against Portland or any part of the state.
Oregonian, Portland, October 23, 1888, page 6

    C. C. Hockley, state engineer in Oregon for PWA, was told last week by Jackson County commissioners that a nice little subway could be punched through the Siskiyou Mountains for anywhere from $3,000,000 to $10,000,000.
    Hockley was in Medford to get ideas of projects that would be financed under the $4,880,000,000 measure now before Congress.
    Among the things he heard was the proposal for the tunnel, which would be a nice thing for those in a hurry to get from California to Oregon, or vice versa.
    The tube would be ten miles long and take from five to seven years to build. When it is completed those who now "go over the hump" would be able to go through the hump by train in three hours or less or in one hour less if by automobile.
    In the dim dark days [during Prohibition] going over the hump was a popular pastime for many in Southern Oregon, the journey always ending at Hornbrook, Cal., whose chief industry was catering to the thirsty ones from arid Oregon. The proposed subway would have drainage, ventilation lights and all modern fixin's.
Arthur Jones, "The Week in the Northwest," Oregonian, Portland, February 10, 1935, page B1

O&C Wealth Actually Began with
Jacksonville Man's Uncomfortable Ride

Mail Tribune Staff Writer

    It all began with a Jacksonville farmer's uncomfortable ride--the wealth that comes to 18 Oregon counties from the resource management of revested Oregon and California (O&C) railroad grant lands.
    At least that's the impression gained from reading a bit of history brought from the family files by Mrs. Charles Risse of Medford. As the former Gertrude Haskins, she has become possessor of written documents, clippings and photographs treasured by her father, the late Leon B. Haskins, and other relatives.
    The railroading history seemed to gain more pertinence recently with announcement of addition of 243,000 more acres of land to the management of the Bureau of Land Management under the same treatment afforded the O&C lands. From O&C lands $57,789,348.30 was realized by 18 Oregon counties during fiscal year 1974, and more than $9 million by Jackson County in calendar year 1974.
    The farmer's discomfort, riding on the Oregon-California stage between a fat man and a hoop-skirted woman, provoked his remark: "Dadgum, we need a railroad." A number of farmers agreed and Jacksonville got the first survey under way which led to some colorful railroading activity and competitive battles, followed many years later by the Revestment Act of 1916 which returned to the government title
to lands granted to the Oregon and California Railroad.
    It wasn't as simple as it may sound.
    The first survey for a railroad from Portland to California was started in 1863. On the original subscription list financing the survey were such well-known names as Lindsay Applegate, O. C. Applegate, Wagner & McCall's mill, J. G. Van Dyke and R. S. Belknap. Some paid cash, up to $25 (more of them $10) and others donated supplies and grain.
    In addition to the small amount of money, there was a federal grant in sight. The surveys were made and presented to the Oregon Legislature. in 1864. Senate Bill No. 14, according to an article in the Oregonian, proposed to grant this railroad one-half million acres of public lands granted to Oregon for internal improvements, 20 alternate sections per mile of railroad.
    The railroad was to be constructed through the Willamette, Umpqua and Rogue River valleys.
    Representative M. C. Cale of California had introduced a bill in Congress granting these lands to the California and Oregon Railroad Co., which would construct the road from Portland to the California line.
    The Jacksonville survey reached Portland, and a corporation was formed called the Oregon Central Railroad Co. In the list of incorporators were W. S. Ladd, H. W. Corbett, J. C. Ainsworth, Joseph Gaston and Jesse Applegate, all names still familiar in Oregon history; and others whose family names still appear in Portland landmarks if not in the telephone books.
    This line was to be built on the west side of the Willamette River. Competition soon arose. S. G. Elliott of California, backed by considerable capital, came along to incorporate another Oregon railroad company to build a line on the east side of the river. It was incorporated in Salem for $7,250,000 and the promoters proposed to sell shares at $100 each. It, too, expected to get the federal land grant.
    By April 15, 1868, both of these million-dollar corporations were ready to break ground.
    The west side Central Oregon railroad moved dirt first. Ceremonies were held in Portland and according to the Oregonian report everyone, "old men, middle-aged men, even ladies, vied with each other to throw dirt into the first car."
    The following day the east sideline held groundbreaking ceremonies perhaps 500 yards from the east bank of the river. "A monster procession" marked this endeavor. At the close of the ceremonies, Chinamen went right to work.
    The west side line hired white help. Stock was sold, bonds issued and sold on the London market. The company came into $300,000.
    Among the shareholders were Ladd and Tilton, Joseph Teal, F. Dekum and Samuel Lowenstein.
    Before the legislature convened in September, 1868, Ben Holladay appeared and lined up with the east side venture. He had lots of money and traveled to Salem to spend much of it on the legislature, at least $35,000, which was "big money" in those days.
    The legislature disqualified the west line and designated the east side line as the proper one to receive the grant Oct. 20, 1868, history reports.
    Promoters of the west side line, however, did not surrender. Battle lines were drawn to get the grant by getting the work done. Washington, Yamhill and Polk counties stayed loyal. Portland contributed $150,000 in cash and lands, Washington County $25,000 and Yamhill $20,000.
    Both sides engaged in a race against time, convinced that the government would honor the line which got the most work done. Railroad jobs were offered; work proceeded at top heat. Each side envisioned over a million dollars a year to be gained from mining freight alone, according to the newspaper report.
    The outcome was that Congress, pressured by agents, extended the time of filing acceptances and provided that the company which put 20 miles of road into operation should receive the land grant.
    Holladay put a "dinky" engine on the east side tracks and the line was first to go into operation for 20 miles. It got the land grant.
    The west side line had been pushed as far as Hillsboro and its promoters didn't give up. In December, 1869, Joseph Gaston was sent to Washington for a west side grant. His efforts and those of Sens. Corbett and Williams obtained 200,000 acres for the line with the sale price limited to $2.50 per acre. (It was the last railroad land grant made by Congress, according to a review of the events made in 1939.) Gaston took over and built the line to Forest Grove and southward 47 miles.
    Holladay titles were attacked in the court, but he continued to fight and changed the name of his company to "Oregon & California Railroad Company." He was accused of disgracing the lines [sic--lives?] and ruining the political fortunes of "more men in Oregon than all other events in state history." But he pushed the railroad line to Roseburg before he quit.
    It took 19 years from the first groundbreaking ceremonies for an Oregon to California line to make the grade. In 1887 the Southern Pacific took over both lines and made them part of its system.
    In 1916, as previously mentioned, the Revestment Act returned to the government title to lands granted to the Oregon and California Railroad.
    In 1926 the Stanfield Act provided relief to the O&C counties in which these revested lands are located. A total of $7,140,000 was paid to the 18 counties for back taxes covering the years of 1916 through 1926.
    From 1927 to 1937, however, the receipts had been sufficient only to meet the counties' tax obligation from 1927 through 1933. The combination of the depression of the '30s and an unsatisfactory financial arrangement "again spelled chaos in the western counties" and there was an appeal for a revision of the "basic policy for the administration of the O&C lands," according to a history issued by the state office of the BLM. The O&C Act of 1937 changed the basis for payments to counties from tax equivalency to a percentage of the gross receipts.
    In fiscal year 1952 the counties received 75 percent of total receipts ($6,053,458) over five times the estimated tax equivalent.
    The 1953 Interior Department Appropriation Bill altered the effect of the 1937 Act by providing that the U.S. Treasury be reimbursed for construction of access roads from 25 percent of the receipts. Without changing the formula of 50 percent to the county treasuries the counties' support to the O&C program approximated $10,000,000 annually in recent years.
    Efforts still are made to change things more as other counties look with covetous eyes at the funds coming to the 18 O&C counties.
    But some residents of the Rogue Valley point out that with all that O&C wealth they are just as deprived of railroad transportation today as was that Jacksonville farmer more than a century ago.
Medford Mail Tribune, April 4, 1975, page B8

Last revised August 3, 2020