organized under the laws of Oregon as the legislature of the state should designate, twenty alternate sections of land per mile, ten on each side of the road, to aid in the construction of a line of railroad and telegraph from some point on the Central Pacific railroad in the Sacramento Valley to Portland, Oregon, through the Rogue River, Umpqua, and Willamette valleys, the California company to build north to the Oregon boundary, and the Oregon company to build south to a junction with the California road. Cong. Globe, 1865–6, ap. 388-9; Zabriskie's Land Laws, 637; Veatce's Or., 12–21. This bill, which was introduced in December 1804, did not become a law until July 25, 1866, and was of comparatively little value, as the line of the road passed through a country where the best lands were already settled upon. The bill failed in congress in 1865 because Senator Conness of California refused to work with Cole. It passed the house late, and the senate not at all. S. F. Bulletin, March 8, 1865; Eugene Review, in Portland Oregonian, April 1 and 26, 1865. The California and Oregon railroad had already filed articles of incorporation at Sacramento, its capital stock being divided into 150,000 shares at $100 a share. When the subsidy bill became a law the Oregon Central Railroad Company was organized, and the legislature, according to the act of congress, designated this company as the one to receive the Oregon portion of the land grant, at the same time passing an act pledging the state to pay interest at seven per cent on one million dollars of the bonds of the company, to be issued as the work progressed on the first hundred miles of road. This act was repealed as unconstitutional in 1868. Or. Laws, 1866, 1868, 44–5; Deady's Scrap-Book, 176; S. F. Bulletin, Oct. 25 and Nov. 2, 1866. See special message of Gov. Woods, in Sac. Union, Oct, 22, 1866. Articles of incorporation were filed November 21, 1866. The incorporators were R. R. Thompson, E. D. Shattuck, J. C. Ainsworth, John McCracken, S. G. Reed, W. S. Ladd, H. W. Corbett, C. H. Lewis of Portland, M. M. Mclvin, Jesse Applegate, E. R. Geary, S. Ellsworth, F. A. Chenoweth, Joel Palmer, T. H. Cox, I. R. Moores, George L. Woods, J. S. Smith, B. F. Brown, and Joseph Gaston. Gaston's Railroad Development of Or., MS., 15–16.
The incorporators elected Gaston secretary and general agent, authorizing him to open the stock-books of the company, and canvass for subscriptions, which was done with energy and success, the funds to construct the first twenty-live miles being promised, when Eliot, before mentioned, suddenly appeared in Oregon with a proposition signed A. J. Cook & Co., whereby the Oregon company was asked to turn over the whole of its road to the people of California to build. The compensation offered for this transfer was the sum of $50,000 to each of the incorporators, to be paid in unassessable preferred stock in the road. To this scheme Gaston, as the company's agent, offered an earnest opposition, which was sustained by the majority of the incorporators; but to the Salem men the bait looked glittering, and a division ensued. A new company was projected by these, in the corporate name of the first, the Oregon Central Railroad Company, with the evident intention of driving from the field the original company, and securing under its name the land grant and state aid. A struggle for control now set in, which was extremely damaging to the enterprise. Seeing that litigation and delay must ensue, the capitalists who had contracted to furnish funds for the first twenty-five miles of road at once cancelled their agreement, refusing to sup port either party to the contest. Gaston, who determined to carry out the original object of his company, in order to avoid still further trouble with the Salem party, located the line of the Oregon Central on the west side of the Willamette River, and proceeded again with the labor of securing financial support. The Salem company naturally desiring to build on the east side of the river, and assuming the name of the original corporation, gave rise to the custom, long prevalent, of calling the two companies by the distinctive titles of East-Side and West-Side companies.
While Gaston was going among the people delivering addresses and taking subscriptions to the west-side road, the east-side company, which organized
