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296 ooo, one-half cash and the 'balance in bonds and stocks in a new company to be organized. For this option for six months, Villard paid Ainsworth $100,000 in cash, and then immediately returned to New York to finance the deal and carry out the first move in his great scheme of concentrating the trade of all the region west of the Rocky mountains and north of California, at Portland, Oregon. _ He presented the proposition first to Jay Gould and other large stock- holders in the Union Pacific Railroad, with a view to constructing a branch of the Union Pacific from Salt Lake to Portland on the Chapman route. After considering this for months, the Gould party declined to go into the scheme, and Villard at once organized the Oregon Railway & Navigation Company, raised the money to take up the Ainsworth option, and immediately commenced the construction of the road eastwardly from Portland. The Oregon Railway & Navigation Company's roads in Oregon, Washington and Idaho are the children, the lineal decendants of the old Oregon Steam Navigation Company, owned and operated by Captain J. C. Ainsworth and associates. After getting possession of the Oregon Steam Navigation Company, Villard proceeded to in- corporate and organize the successive corporation. The Oregon Railway & Nav- igation Company was incorporated June 13, 1879. Its first board of directors consisted of Artemus H. Holmes, William H. Starbuck, James B. Fry and Henry Villard of New York city. George W. Weidler, J. C. Ainsworth, S. G. Reed, Paul Schulze, H. W. Corbett, and C. H. Lewis of Portland, Henry Vil- lard being elected president. And Villard at once set to work with all his char- acteristic energy to construct the railroad up the south bank of the Columbia river to the mouth of the Umatilla river, and from thence via Pendleton over the Blue mountains to La Grande, Baker City, and on to Huntington, where it was met by the Oregon Short Line. Subsequently branch lines were run oflf to Spokane and various other points in Oregon and Washington, and to Lewis- ton, Idaho.

To this bold movement of Villard, wholly unexpected by the Union Pacific people, they promptly replied by organizing the Oregon Short Line Company, to build a road from the Union Pacific line to the Columbia river, and at once commenced construction. Villard had thrown down a challenge for possession of the short line route, it had been promptly accepted, and now the race was on as to see which of these parties should win the game. It was the first great test of Henry Villard's ability as a financier. He was opposed by Gould, Mor- gan and some of the ablest and wealthiest capitalists in the world, and yet his talents and energy were such that he pushed his road eastwardly with such force and rapidity as to meet his rivals at Huntington, near the eastern boundary of the state, and efifectually hold his chosen field of enterprise.

But brilliant in conception and rapid in construction as had been the great road to control the Columbia River valley, Mr. Villard had in his fertile brain a still greater scheme of finance and development to astonish the railroad world. The Northern Pacific Railway, with the largest bounty of public lands ever granted in aid of the construction of any road, had been making but a snail's pace in spanning the continent with money raised on ' piecemeal mortgages at high rates of interest. The line from Portland to Tacoma had been built, and the eastern division of the road pushed west to the crossing of the Missouri, and some work done on a section from the Columbia toward Spokane. The outlook was ominous. In the hands of a more energetic managenient Villard could foresee that his grand scheme of an Oregon system might be crippled, and so, maturing his plans, he made the great venture of his career. Quietly ascertaining the amount of money necessary to secure a controlling interest in the Northern Pacific Company, he addressed a circular (May 15, 1881) to his financial friends asking for the temporary loan of $8,000,000 for a purpose not named, "and no question to be asked," assuring his friends that in due time he would account to them for the money intrusted to him with such profits as would be satisfactory. Such a proposition was unheard of in the world of