Page:Oregon Historical Quarterly volume 25.djvu/314

 276 JOHN TDLSON GANOE m held by Ben Holladay and Company if the railroad com- pany would pay to Ben Holladay and Company the amount expended and the liabilities incurred by him in construct- ing the road so far, which he estimated to be between eight hundred thousand and a million dollars. 58 Obviously the company could not pay this. All the in- dividual members were financially pressed and the credit of the company was nihil. Holladay knew this, so sent along with this communication a proposition from the Oregon and California Railroad Company, a company organized by him on a legal basis, to purchase the entire property of the East Side Company in consideration that the Oregon and California Company assume the payment of the million dollars (or thereabouts) to Ben Holladay and Company. To this the directors agreed, so the road was placed on a legal basis under the name of the Oregon and California Railroad Company and Ben Holladay was more than ever in control. B. The Oregon and California Railroad Company. 1. Finance. Whatever may be said against the character or the methods of business used by Ben Holladay, it must be recognized that he took a company that was bankrupt, a company that had no credit whatsoever, and infused into it a new life and obtained credit from some of the leading bankers of the world. The first thing Holladay did after gaining control was to make a bond issue of ten and a half million dollars to carry on the construction. These bonds sold at seventy per cent. Obviously this was not enough to complete the road. The preliminary estimates had shown that fifteen million dollars would be needed to build the road. This would mean an average cost of about $45,000 per mile. Such a loan would only make it possible for the company to build 58 Minutes O. C. R. R. Co., Mar. 28, 1870. Vol. X, page 5072. InO.&C.R.R.vs.U.S.,