Page:The History of Oregon Bancroft 1888.djvu/719

 sessor of millions. A transfer of all the stock, bonds, contracts, and all property, real and personal, of the east-side company was made to him. The struggle, which had before been nearly equal, now became one between a corporation without money and a corporation with millions, and with the support of those who wished to enjoy the benefits to be conferred by this wealth, both in building railroads and in furnishing salaried situations to its friends. The first thing to be done was to get rid of the legislative enactments of 1860, designating the original Oregon Central company as the proper recipient of the land grant and state aid.

On the convening of the legislature, Holladay established himself at Salem, where he kept open house to the members, whom he entertained royally as to expenditure, and vulgarly as to all things else. The display and the hospitality were not without effect. The result was that the legislature of 1868 revoked the rights granted to the Oregon Central of 1866, and vested these rights in the later organization under the same name. The cause assigned was that at the time of the adoption of the said joint resolution as aforesaid no such company as the Oregon Central Railroad Company was organized or in existence, and the said joint resolution was adopted under a misapprehension of facts as to the organization and existence of such a company. ''Or. Laws'', 1868, 109–10. It was alleged that the original company, in their haste to secure the land grant by the designation of the legislature, which meets only once in two years, had neglected to file their incorporation papers with the secretary of state previous to their application for the favor of the legislature, the actual date of incorporation being November 21st, whereas the resolution of the legislature designating them to receive the land grant was passed on the 20th of October, a month and a day before the company had a legal existence. In his Railroad Development in Or., MS., 15, Gaston says that the Oregon Central filed its incorporation papers according to law before the legislative action, but withdrew them temporarily to procure other incorporations, and it was this act that the other company turned to account. By the terms of the act of congress making the grant of land, the company taking the franchise must file its assent to the grant within one year from the passage of the act, and complete the first twenty miles of road within two years. The west-side company had filed its assent within the prescribed time, which the other had not, an illegality which balanced that alleged against the west-side, even had both been in all other respects legal.

And now happened one of those fortuitous circumstances which defeat, occasionally, the shrewdest men. The west-side management had sent, in May, half a million of its bonds to London to be sold by Edwin Russell, 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 disposed of 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 pecuniarily, he referred the matter to Ainsworth, to whom he felt under obligations for past favors, and whom he regarded as a more experienced financier than him self, and the latter, after deliberating two days on the subject, cabled a refusal of the proposition.

Ainsworth had not intended, however, to reject all opportunities, but a contract was taken by S. G. Reed & Co., of which firm Ainsworth was a member, to complete the twenty miles called for by the act of congress, of which five of the most expensive portion had been built, and Reed became involved with Gaston in the contest for supremacy between the two companies, while at the same time pushing ahead the construction of the road from Portland to Hillsboro, by which would be earned the Portland subsidy of a quarter of a million.

To prevent this, Holladay's attorneys caused suits to be brought declaring the west-side company's acts void, and to prevent the issuance to it of the bonds of the city of Portland and Washington county, in which suits they