Page:Oregon Historical Quarterly volume 25.djvu/303

 OREGON AND CALIFORNIA RAILROAD 265 man subscribe for the company 70,000 shares. Obviously there was no money with which to finance construction since there had only been $600 in bona fide stock sub- scriptions made. The company, as we have shown, had been practicaly instigated by Elliott and it was to him the construction was entrusted. Elliott presented to the company an offer by A. J. Cook to construct the road. A. J. Cook was supposed to be an eastern capitalist. Elliott had been given the power of attorney by A. J. Cook. Accordingly on April 23, 1867, the day following the organization of the company, a contract was made between the Oregon Central Com- pany of Salem and A. J. Cook. A. J. Cook was to con- struct one hundred and fifty miles of the road from Port- land south through the Willamette Valley for which he was to receive five million, two hundred and fifty thous- and dollars, which was to be paid in first mortgage bonds of the company at 7%, which were to be payable in twenty years and which were to be taken by A. J. Cook at par value. The railroad company was to make pay- ments of eighty per cent, payable monthly, as the work progressed. Not only this, but the company agreed to issue two million dollars worth of preferred stock and give it to A. J. Cook immediately after the signing of the contract. The common stock was to be offered for sale to the people of Oregon at ten cents on the dollar. The company issued the two million dollars worth of unassessable preferred stock, but in accordance with a private understanding, one million dollars worth of the stock was given back to the^ directors to be used in ob- taining the necessary legislation. This gave A. J. Cook one million dollars worth of unassessable preferred stock and an agreement by which he would receive bonds upon completion of the road as assets with which to build the road. A. J. Cook was a man of no means himself and Elliott had merely obtained the use of his name. I I i)