Page:Memoirs of Henry Villard, volume 2.djvu/294



CHAPTER XXXIX

—1873–1879

HE Frankfort Committee had sent a delegation to Oregon, during the summer of 1873, for a thorough investigation of the railroad and the prospects of the State, and it was only after it had returned and made a report, and default had actually taken place in the payment of interest, that the labors of the committee began in October. There had been nearly eleven millions of the Oregon & California bonds sold at a little over 70 per cent. in Germany and England, of which the former country had absorbed by far the greater portion. The report of the delegates showed that only half of the nominal amount of the bonds had been received by the company in money; that, instead of 375 miles from Portland to the California State boundary, only 200 miles had been completed and were in operation, and that, owing to the small population and limited development of western Oregon, the road was producing only about one-third of the interest charge and could not well be expected to yield more for some time to come.

The first question before the committee was whether it should exercise the rights of the bondholders under the mortgage and take possession of the road by foreclosure proceedings, or compromise with the company, which was controlled by Ben Holladay, well known to the past generation as the owner of overland stage lines to California and of steamship lines on the Pacific coast. The latter course was decided upon after long deliberation. This necessitated the preparation of an agreement with the company for funding the interest and other purposes. As none of the other members of the committee knew 272