Two Years in Oregon Part 22

From all that has gone before, the deduction is plain that on the solution of the transportation question in the interests of the fixed and industrious population of the State depends absolutely the growth and prosperity of Oregon. Nature has done her part.

The words of Messrs. George M. Pullman, of Chicago, and William Endicott, Jr., of Boston, in their report of August 1, 1880, to the stockholders of the Oregon Railway and Navigation Company, will be echoed by every man who is now or has been in Oregon with eyes to see.

They wrote as follows:

"Our observations afforded, in the first place, ample confirmation of all we had previously heard and read of the propitious climate, great attractions of scenery, and wonderful agricultural resources of Western and Eastern Oregon, and Eastern Washington Territory. We believe that in these respects those regions are not surpa.s.sed, if equaled, by any other portion of the United States. It can, indeed, be safely said that nowhere else in this country do rich soil and mild climate combine to the same degree in insuring such extraordinary results of almost every agricultural pursuit as regards quant.i.ty, quality, and regularity of yield.... The striking evidence of past and present growth which we found everywhere, forced at the same time the irresistible conclusion upon us that we were beholding but the beginning of the sure and rapid progress in population, productiveness, and prosperity which will be witnessed in the immediate future within the vast stretch of country watered by the great river Columbia and its numerous tributaries."

The reader of this book will, I think, admit that the facts herein detailed go far to justify the conclusions summed up in these few but carefully chosen words.

How does this transportation question now stand, and what (if any) matters are in progress or contemplation to affect it?

In the first place, the companies are all free to manage their own business in their own way; they charge what they like, favor what persons and places they choose, and load on others burdens heavy to be borne.

I have before indicated what was the purpose of the bill introduced in the Legislature of 1880, to prevent discrimination by common carriers.

"The Oregonian" commented on the loss of the measure in these terms: "We present to-day the report of the (hostile) Senate committee on this bill. The report shows why the proposed measure was both an unjust and an impracticable one. It should be apparent to every one that railways never can be operated in this way. The confusion and disorder would be endless; besides, every railroad which is undertaken and constructed as an actual business enterprise is ent.i.tled to make fair earnings.

Instead of being annoyed by straw railroads got up for speculative purposes, it ought to have protection from such annoyance."

[Sidenote: _OREGON RAILWAY AND NAVIGATION CO._]

In further ill.u.s.tration of the working of the present system, I would instance the fact that from Corvallis to Portland for about a year the freight on wheat by the river steamboats of the Oregon Railway and Navigation Company has been one dollar a ton, and of this fifty cents had to be paid for pa.s.sing the locks at Oregon City; the rate immediately previous to this was three dollars and a half. This ridiculously low rate was put on in order to destroy the traffic of the East and West Side Railroads, and is in strong contrast with the rate from Corvallis to Junction City, some twenty miles up the river, where no such reasons existed, and which stood through this period at about tenfold the one-dollar rate.

No sooner did the President of the Oregon Railway and Navigation Company think he had secured "control" of the two railroads, than steps were prepared to quadruple the previous rate. The question of "control"

stood adjourned, and the one-dollar rate was confirmed. But, having seen reason to think his acquisition secure, the rates from Portland to Corvallis (ninety-seven miles by railroad), both by railroads and steamboats, have just now (April, 1881) been raised to six dollars per ton--a rate equal to that charged in the infancy of the business, twenty years ago.

The lion's share of the carrying business of the State is in the hands of the Oregon Railway and Navigation Company, and with them are closely identified the hopes of the city of Portland. This company owns two of the steamers plying between Portland and San Francisco--the Oregon and the Columbia. With these two steamers, or with the George W. Elder as the predecessor of the Columbia, they carried from the 1st of July, 1879, to the 30th of June, 1880, 17,333 pa.s.sengers, and 101,661 tons of freight. The gross receipts were $636,888; the net profits, $286,459.

As we know from the published circular of Mr. Villard, the president, that the cost of the Columbia was $400,000, and the Oregon is a smaller and decidedly less expensive ship, the proportion of net earnings of the vessels in question to their total cost will be seen to be about enough to pay ten per cent. per annum on their cost, and to buy the vessels out and out in three years and a half. The fare from Portland to San Francisco, even while these earnings were being made, stood at twenty dollars the first-cla.s.s pa.s.senger. News has just arrived that these fares are to be raised to thirty dollars a head. If the same rate of expense is maintained as during last year, the earnings at the higher figure now put on will be increased by about $100,000, and enough will be realized to pay for the fleet in about two years and a half.

With twenty-five steamboats (stern-wheelers) navigating the Columbia and Willamette Rivers, and twelve barges and two scows (several of the boats being old, and laid up in ordinary much of the time, reducing thus materially the fleet in real service), the company earned $1,992,836 gross, and $1,101,766 net profit. If $50,000 is deducted for the earnings of the barges, it will be seen that the average net earnings of the twenty-five river-steamers are positively $44,070 each.

The fleet could be replaced for less than the sum of the net profit of one year. Like Oliver, "asking for more," they are positively raising these freights also!

[Sidenote: _RAILROAD ALONG THE COLUMBIA._]

The railroad possessions of the company for the year in question consisted of but forty-eight miles, and of these the line from Walla Walla to Wallula on the upper Columbia, a distance of about thirty miles, was the longest; the other two being short strips of portage railroad round the Cascades or rapids on the Columbia. The pa.s.sengers carried were 12,588; the tons of freight, 72,149; and the net profits, $269,004, or $5,604 a mile.

The company is engaged in constructing a line of railroad along the south bank of the Columbia; the portion from Celilo (the upper end of the rapids, at the lower end of which the town of the Dalles is situated) to Wallula, just over the Washington Territory border, a distance of one hundred and fifteen miles, is just completed. The line is being extended to the city of Portland, the works between the Dalles and the western end of the pa.s.s through the Cascade Mountains being of the most severe and expensive character. At least two tunnels and mile after mile of blasting and cutting through solid rock, where the mountains tower perpendicular above, would inspire dismay in the soul of any ordinary railroad-man.

But the word has gone forth that the road has to follow what is facetiously called the pa.s.s of the Columbia through the Cascades, and doubtless it will be done. Several thousand Chinamen are at work; steam-drills are busy perforating the rocks; scows have to be moored alongside in the river (there not being even room for the track between mountain and water), while the perpendicular faces of the cliffs are being tormented and torn. And thus about seventy miles of construction of this nature have to be got through. When completed, of course, the result will be at once to transfer nearly all of as many of the 117,000 pa.s.sengers as traveled in the company's boats on the Columbia, to the cars; and a vast quant.i.ty of the freight must follow the same route.

[Ill.u.s.tration: Columbia, above the Lower Cascade.]

But another factor is intended shortly to come into play. The Northern Pacific Railroad is vigorously at work, and in a year or two will compete with the Oregon Railway and Navigation Company for the Washington Territory and extreme Eastern Oregon trade. The pa.s.sengers and freight intrusted to the Northern Pacific line will be carried from Wallula, the Columbia River point above referred to, to Tacoma, on Puget Sound. By this route a saving of one hundred and fifty-one miles in actual distance will be effected, and the traffic will reach the deep and still waters of Puget Sound, far away from the troubles and stickings of the Willamette and Columbia mouths, and the delays, dangers, and expenses of the Columbia bar. It is true that before this result is gained the line must cross the Cascade Mountains, but it is well known that a pa.s.s at less than thirty-four hundred feet exists, and the engineers have no doubt whatever that this piece of road will keep pace with the rest to the port.

[Sidenote: _HOW TO GET "CONTROL."_]

Mark now another feature in the case. The East and West Side Railroads on either side of the Willamette River compete with the boats of the Oregon Railway and Navigation Company for the trade of the Willamette Valley. The railroads naturally divert the pa.s.senger traffic almost entirely, and carry a large quant.i.ty of freight. They would carry more and earn a fair profit for their owners, the German and English bondholders, but, instead of a fair compet.i.tion, the Oregon Railway and Navigation Company, as I have said, put down the freights from Corvallis downward to Portland on grain to one dollar per ton--of course, an impossible rate for either river or railroad to profit by.

Why is this? Because what Mr. Villard calls the "control" of these railroads is vitally necessary to the future continuance of the Oregon Railway and Navigation Company's stocks in their exalted dividends and consequent enormous market value. Therefore, it is sought now to destroy the earning powers of these railroads, to force the owners into succ.u.mbing to the "policy of control."

One more step. The Oregon Railway and Navigation Company owns practically no land--that is to say, it is interested speculatively in the rise of value in property in Portland by having invested a large sum (I believe $199,000) in the purchase of 484 acres of land in and near the city. But, outside this and its railroad-track, the company owns altogether about 3,055 acres of land in scattered pieces, only about 850 acres of which lie in Oregon; the rest in Washington Territory, and a bit or two in Idaho. We will not omit to mention its wharves at the various stopping-places of the boats, as they represent the expenditure of a considerable sum. Once again: if anything at all is clear, it is that the inflated value of this company's securities depends solely on the continuance of their monopoly. I have shown that on the Columbia River this is threatened by the Northern Pacific, and also by themselves in effect, by the subst.i.tution of the costly railroad line for the inexpensive boats, and the consequent devotion of both investments, namely, that in the boats and that in the railroad, to the same traffic, which the compet.i.tion of the Northern Pacific is certain to reduce in gross volume.

Now turn to the Willamette Valley traffic, and scrutinize the position there. Not only is there the existing compet.i.tion of the railroads, which is fatal, so long as it is genuine, to the earning of large profits from the north and south traffic of the valley, both in pa.s.sengers and goods, but here come in two compet.i.tors more.

The Scotch narrow-gauge system also centers everything in Portland, and has succeeded, after a hard fight with the city authorities, in securing a large tract of land for depot or terminal purposes. It had the audacity to claim a right of way right through the tract purchased by the Oregon Railway and Navigation Company, and, under the law of eminent domain as it exists in Oregon, it would have got it, ay, and used it, too, with but scant regard for the feelings of the high and mighty corporation which had marked it for their own. But a working arrangement was with much difficulty made, by which the Scotch line runs, free of charge, alongside the other, right through its land, to the terminus of the narrow-gauge.

This Scotch line has put boats on the Willamette also. They ply between Ray's Landing, about seventeen miles up the Willamette, and Portland.

The narrow-gauge also has an East-side and a West-side line through the Willamette Valley. The East-side line runs north and south a short distance from the foothills of the Cascades, and has now got as far as Brownsville, about one hundred and twenty miles from Portland. Their West-side line runs through the rich farming country in Polk County by Dallas to Sheridan, and a junction with the Western Oregon broad-gauge near by. This is also an ambitious company, who are pushing surveys across the Cascade Range.

The narrow-gauge system is yet by no means complete, but, when it is, it will become at once a very dangerous rival both to the East and West Side roads, and also to the boats of the Oregon Railway and Navigation Company on the Willamette.

So seriously did Mr. Villard feel the impending danger that it is no secret in Oregon that a confidential agent was dispatched by him to Scotland, to endeavor to put the Scotch investors out of conceit with their property, and, failing that, he attempted to secure some of their stock, so as to gain a footing inside their camp. But there also he failed.

[Sidenote: _THE "BLIND POOL."_]

Shortly before these pages were written, occurred the episode of what is known in financial circles in America as "the blind pool." Mr.

Villard caused it to be known among his circle of followers that he desired the use of eight million dollars. According to statements made on his authority, he not only secured it, but in all fifteen millions were offered him. Quietly and secretly he used the eight millions in buying up stock of the Northern Pacific Railroad in the New York market, nor did he show his hand until he had thus secured twenty-seven millions par value of the stock of that road. When his great gun was thus loaded, he discharged it full at the head of Mr. Billings, the president of the Northern Pacific, and those directors who had loyally cooperated with him in the reorganization of the company and the redemption of its securities from the chaos into which they had fallen following the Jay Cooke failure. And the invader boldly claimed that he had secured the "control" of that company too, and proposed to oust the president, to install a representative of the "blind pool."

But an unexpected check was met. It seems that part of the reconst.i.tuted stock of the company, amounting to eighteen million dollars, was as yet in the treasury of the company, but was the property of divers persons who had cooperated in or a.s.sented to the reconstruction. This being issued, as Mr. Billings and his friends claim, in fulfillment of engagements long since entered into, displaced the center of gravity, and caused it to incline heavily toward the Billings section. A vociferous outcry was of course heard; the courts were appealed to; and the result of what promises to be a long and costly litigation remains to be seen.

Even without the entrance on the field of the new forces I am about to describe, the position of the Oregon Railway and Navigation Company appears to be a very perilous one.

Under the chieftainship of Mr. Villard, who was no novice at the art of playing with railroad companies as counters in the game of "beggar-my-neighbor," a vast amount of Eastern capital was taken up by the aid of the enormous profits earned by the previously existing Oregon Steamship and Oregon Steam Navigation Company. Then followed naturally an era of really delusive prosperity, while the expenditure of this capital in subst.i.tuting the new lamps of costly railroads for the magical old lamps of stern-wheel steamboats was going on.

But, in order to secure this capital, it was necessary to publish to the world the enormous profits the earlier companies were making. The effects were twofold and immediate. One was to open the eyes of the farmers of Oregon to the fact that they were paying for the transport to market of their crops sums utterly disproportionate to the cost and risk of the services rendered. And thus it was certain that ere long measures would be taken in the Legislature of Oregon, similar in purport to those adopted in other States, to check and curb the power of discrimination, which was the engine used to force the traffic on to the boats and trains of the Oregon Railway and Navigation Company. The measure to that end introduced in the session of the Legislature of 1880 was, it is true, defeated by the strenuous efforts of the company, aided by their Portland friends. But that success was dearly bought, and the process was so patent as to awaken the farmers, with whom the real power dwells, in a fashion that will soon be felt.

[Sidenote: _YAQUINA BAY._]

The other result, equally inevitable, was to call into active life plans, long in preparation, for constructing an east and west line across the State, relying on Yaquina Bay as the outport, and on the trade of the Willamette Valley as the mainstay of the road.

But the enterprise had other features to recommend it. The Willamette Valley and Coast Railroad Company had been originated four or five years back by the farmers of the valley to construct a railroad between Corvallis and Yaquina Bay. It had obtained a charter from the Legislature giving it authority to extend its line across the State to the eastern boundary, at a point directly _en route_ to Boise City, Idaho.

This had been long ago marked out as the probable limit where connection either with a branch from the Union Pacific Railroad, or with some other road pushing westward to the ocean, might be made.

The Willamette Valley and Coast Railroad received in its charter from the State immunity from taxation for twenty years, and also a grant of all the rich tide and overflowed lands in Benton County, amounting to probably upward of one hundred thousand acres.

Not content with this, the framer of this scheme had obtained the right of purchase, on the basis of value of land in Eastern Oregon ten years ago, of the grant of lands in aid of the construction of the Willamette Valley and Cascade Mountains Military Wagon-road, amounting to eight hundred and fifty thousand acres. A sketch of the history of this road has been given before in these pages, and of the character of the country through which it runs.

The vital force of the Oregon Pacific Company, which was formed and brought before the world in the autumn of 1880 to complete and operate the Willamette Valley and Coast Railroad, lay in the advantage of position in its central line, cutting Oregon in half, and thereby attracting traffic to it from both sides, and also in the solid backing of about nine hundred and fifty thousand acres of land, stretching across the State from east to west, and which was certain to rise four-fold at least in value by the construction of the railroad through it.

The first hundred and thirty miles of the road pa.s.s through Benton and Linn Counties, which together produce about one half, and, with the adjoining counties of Polk and Marion on the north and the county of Lane on the south, fully three quarters of the wheat-crop of Oregon.

It was estimated by a committee formed in these counties, who investigated the subject thoroughly, that not less than one hundred and eighty thousand tons of grain, and other freight to the amount of fifty thousand tons or more, would seek an outlet over this road, from these valley counties, on the basis of the crop of 1878. The subsequent increase in acreage under crops would give not less than three hundred thousand acres instead of two hundred and fifty thousand, at a very moderate estimate. The inward freight may be taken at one half of the outward bound, thus giving four hundred and fourteen thousand tons which the new road would be called on to transport.

These figures raised the ire of the Oregon Railway and Navigation Company and of some of its Portland friends, and their abuse called forth a reinvestigation of the whole subject, which resulted in thorough confirmation of the estimates.

[Sidenote: _OREGON PACIFIC RAILROAD._]

The Oregon Pacific proposed, as soon as open for business, to lower the seven dollars a ton, the previous average charge of the other company on valley freight to San Francisco, to three dollars and a half, and the twenty-four dollars for first-cla.s.s pa.s.sengers and fourteen dollars for emigrant pa.s.sengers to one half of those figures. And it showed a very large probable dividend on its capital, on those reduced figures.

The reasonableness of this will be seen by reference to the enormous earnings of the other company.

The whole question turned, of course, on the practicability of so improving the entrance to Yaquina Bay that heavy-laden ships of deep draught could enter to deliver and receive cargo.