Page:Portland, Oregon, its History and Builders volume 1.djvu/407

Rh represent Oregon in congress who would not labor to secure another grant of land in aid of their road.

A GREAT BLUNDER.

"And now," says Bancroft's History of Oregon, 2d Vol. p. 701, "happened one of those fortuitous circumstances which defeat occasionally the shrewdest men. The west side (Original Oregon Central Co.) had sent in May, 1868, half a million dollars of its first mortgage bonds to London to be sold by Edwin Russell, then manager of the Portland branch of the Bank of British Columbia. Just at the moment when money was most needed, a cablegram from Russell to Gaston informed him that the bonds could be sold so as to furnish the funds and iron necessary to construct the first twenty miles of road, by selling them at a low price. Gaston had the power to accept the offer, but instead of doing so promptly, and placing himself on an equality with Holladay primarily, he referred the matter to Capt. J. C. Ainsworth, a director of the company, to whom he felt under obligations for past favors, and whom he regarded as a more experienced financier than himself, and the latter, after deliberating two days on the subject, cabled to Russell a refusal of the proposition."

But to make amends for this blunder, for such it was, Ainsworth organized a syndicate under the name of S. G. Reed & Co., to construct one hundred miles of the Oregon Central Railroad from Portland south in the Willamette valley for the sum of thirty thousand dollars a mile to be paid for with the com- pany's first mortgage bonds on the road issued at the rate of thirty thousand dollars a mile.

Under this contract Reed & Co. proceeded with construction work until they had expended thirty-three thousand dollars, and then stopped work, for the alleged reason that the company v/ould lose the land grant, to save which the contract had been given and accepted. But on intimations from Gaston that Reed & Co. would be held for damages, they furnished Gaston funds to go to Washington city in 1869-70 and solicit a new grant of lands to the company.

Speaking of the condition of the railroad enterprise at that time, Bancroft's History above quoted, p. 702, says : "The action of congress in practically de- ciding in favor of the Holladay interest, caused S. G. Reed & Co. to abandon the construction contract, leaving the whole hopeless undertaking in the hands of Gaston. Without resources, and in debt, he resolved to persevere. In the treasury of Washington county were several thousand dollars paid in as inter- est on the bonds pledged. He applied for this money, which the county offi- cers allowed him to use in grading the roadbed during the summer of 1869, as far as the town of Hillsboro. This done, he resolved to go to Washington, and before leaving Oregon made a tour of the west side counties, reminding the people of the injustice they had suffered at the hands of the courts and legislature, and urging them to unite in electing men who would give them re- dress.

"Gaston reached the national capital in 1869, Holladay having completed in that month twenty miles of the Oregon & California Railroad, and become entitled to the grant of land which Gaston had been the means of securing to the builder of the first railroad. His business at the capital was to obtain a new grant to the Oregon Central ; and in this he was successful, being warmly supported by Corbett and Williams ; the latter, however, refusing to let the road extend farther than McMinnville, lest it should interfere with the designs of Holladay."

This was not what was desired, but it was the best that could be secured at that time. And in the partition of Oregon, local interests then seeking rec- ognition at Washington city, it was agreed by the Oregon delegation in con- gress, that at the next session of congress this grant should be extended from McMinnville to Eugene. And upon this basis it was further agreed that Mr. B. J. Pengra of Eugene, then also at Washington, and representing the pro-