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 were to furnish whatever new steamers necessary for the steamship line, but in return they would become owners of the company as soon as the creditors of the steamship company were paid off; and towards this some had al- ready been paid. Likewise, they obtained an option on the claim of the creditors against the Oregon Central for which they were to pay twenty-five per cent of the amount of the creditors' claims. This not only gave the bondholders control over the three companies, but brought the companies under one ownership and management so they could be managed as a unit.

Villard's plan was to attract immigration to Oregon and thus build up the railroad to a paying proposition. He had been struck with the wonderful prospects of the country. It was only his emphasis upon the possibilities of the country in his report to the bondholders that made the agreement acceptable to the bondholders.

Villard, however, had overestimated the prospects the same as all others who had attempted an estimate be- fore him. Even his attempts to aid by immigration were of no avail. The following table compiled from Poor's Manual gives some indication of the operations of the company up to the time of reorganization.

Operating Ratio Net Earnings including taxes $194,844.99 63.33% 237,665.35 72.59% 137,843.30 83,426.33 Earnings Expenditures 1876 1878 1879 1880 $576,791.42 648,116.38 503,053.02 405,219.54 $356,701.12 410,451.03 365,209.72 321,793.21

The bonds were supposed to bring seven per cent, but it will be seen that taking all the net earnings of the road they brought at no time more than three per cent, and in 1880 the net earnings amounted to less than one per cent.