termination of the union of interests under the second Holladay arrangement of 1876. A dissolution of the relations established at that date was effected by mutual consent, the Steamship creditors assuming exclusive control of the line. The bondholders, however, exercised their option for the Oregon Central and raised money for its extension for fifty miles. Mr. Villard remained president both of the Oregon & California and of the Steamship Company, but it was clear to him from the beginning that these new relations would not long be maintained.
Unexpected complications also arose from his connection with the Kansas Pacific. This company had been trying for years, ever since its junction with the Union Pacific by its branch line from Denver to Cheyenne, to get a share of the Utah, Nevada, and California business, to which it asserted a title under the Act of Congress subsidizing both roads; but the Union Pacific had steadily refused to pro-rate with it. The Kansas Pacific then sought relief both in Congress and in the courts, and made such a strong fight that the stockholding interests controlling the Union Pacific, of which Jay Gould held by far the largest part, adopted the plan which he had conceived of getting control of the rival company. Jay Gould and Sidney Dillon, the Union Pacific president, commenced negotiations to that end with the group of St. Louis men who owned a majority of the Kansas Pacific stock, and with Mr. Villard as representative of the bondholders, but proposed such a reduction of the principal and interest of the bonds that their offer was rejected by the committee. Gould vainly tried to win Mr. Villard over by the guarantee of a profitable participation in the syndicate to be formed for the reorganization of the Kansas Pacific. After a pause, Gould reopened negotiations, and, after many conferences, formally accepted the terms agreed on by Mr. Villard and the New York committee of bondholders. He even went so far as to form a reorganizing pool for the securities of the company other than the first-
