Page:Memoirs of Henry Villard, volume 2.djvu/357

 Notwithstanding the apparent clearness of the horizon, Mr. Villard judged that the gravest danger the Northern Pacific had encountered up to that time was the extension of the Great Northern transcontinental line to Spokane Falls and Puget Sound, for which, it was announced early in the winter of 1889-90, the necessary capital had been secured. In spite of all the reassuring arguments of the operating officers of the company, Mr. Villard was persuaded that the Northern Pacific would be put at a great disadvantage by a competing through-line which, owing to the decline in the cost of labor, material, and equipment, could be built for about half the cost of the Northern Pacific. The danger was all the greater because, since the rupture with the Union Pacific, President Charles Francis Adams had formed an alliance with James J. Hill, under which trackage rights over the Union Pacific line from Spokane to Portland were granted to the Great Northern. This alliance shut the door even to a compromise traffic arrangement. One way, however, for the prevention of serious consequences to the Northern Pacific remained open, and that was to acquire a majority interest in the stock of the St. Paul, Minneapolis & Manitoba, which controlled all its western extensions. After ascertaining, through intimate friends of James J. Hill, that he was disposed to sell his own holdings with those of his group of friends at a reasonable figure, Mr. Villard matured a plan for raising the necessary funds, estimated at $20,000,000, by the creation of collateral trust bonds guaranteed by the Northern Pacific and secured by the stock to be purchased. Good dividends had been earned on the latter, exceeding the proposed rate of interest on the collateral trust bonds. The plan was approved by his German friends, who were willing to market the bonds in Europe. Formal negotiations for the purchase were then opened. Several sets of James J. Hill's friends failed to come to conclusions with him. Finally, Calvin S. Brice, General Samuel Thomas, and Frederick P. Olcott undertook the task. The last two appeared late one evening at Mr. Villard's residence in the