some fifty miles. In 1881 the Oregon and California Railroad Company was reorganized. The new corporation absorbed the Western Oregon and its leased line, the Oregon Central. The construction of the line from Roseburg south to the Oregon state line and a connection with the line coming up from the south proved a very slow and expensive proposition, far exceeding the estimate as to cost.
In 1883 the Villard interests had grown to such an extent that it was deemed advisable to form a "holding company" to act as guardian for the different lines. These included not only the Oregon and California, whose history we have been following, but also the Northern Pacific Railroad, the Oregon Railway & Navigation Company, and the Oregon Steamship Company. This holding company was known as the Oregon and Transcontinental Company. It was intended it should own a controlling interest in the several operating companies, should finance them, dictate a uniform policy, prevent in- judicious competition, etc. One of the first moves was to effect a lease to the Oregon and California of the Willamette Valley Railroad. This was a narrow-gauge, three-foot width, which had been built by Gaston under the corporate title of the Dayton, Sheridan and Grande Ronde Railroad. It was a local line, commenced in 1878, constructed, financed and operated by local interests. Failing to earn enough to meet its fixed charges, it had been reorganized as the Willamette Valley Railroad Company, the stock of which was largely held in Scotland.
This consolidated all lines south of Portland under the one name, Oregon and California Railroad, and this was in turn leased to the new holding company, the Oregon and Transcontinental. About this same time a company, called the Northern Pacific Terminal of Oregon, was formed. This was to construct the necessary freight and passenger terminal facilities at Portland, including a bridge across the river, to accommodate the business of the different lines centering there. Affording, as it does, an entrance into the city for the Oregon and California Rail- road from East Portland, it is one of the constituent parts of the Shasta route.
Villard was now, 1883, the whole thing in transportation affairs in Oregon. Under his jurisdiction were all lines, both rail and wa- ter. The Northern Pacific was being rapidly completed from St. Paul to the Coast. The lines of the Oregon Railway and Navigation Company were reaching out in every direc- tion, and the extension of the Oregon and California well advanced. Twenty-five thousand men were on the pay rolls of his various companies and their monthly dis- bursements four million dollars.
Caught in the collapse of the West Shore Railroad Company, an enterprise building a railroad from Hoboken to Buffalo, in com- petition with the New York Central, and which failed about this time, and in which he had largely invested, adversely affected by newspaper comments over the lavish expen- ditures in connection with the completion and opening ceremonies of the Northern Pa- cific, Villard found increasing difficulty in securing funds to carry on his numerous en- terprises, reaching finally such a point, De- cember, 1883, as to bring him and his hold- ing company, the Oregon and Transconti- nental, to the verge of bankruptcy.
The newspapers of December 16 an- nounced his retirement from the presidency of the Oregon Railway and Navigation Com- pany and the Oregon and Transcontinental, to be followed the first of the year by his resignation as president of the Northern Pa- cific, and his practical effacement as a con- trolling factor. It is true he retained the presidency of the Oregon and California Railroad Company, this at the urgent re- quest of his European friends, who remained staunch and loyal to him, but his power had gone for the time being, and in 18S5, on ac- count of alleged bad health, he resigned this.
The Oregon and Transcontinental Com- pany being unable to provide for the interest due on the Oregon and California securities, January 1, 1SS4, an arrangement was effect- ed by which the lease of the latter company was cancelled, the Oregon and California as- suming all obligations and reimbursing the Oregon and Transcontinental Company for expenses incurred in building its extension from Roseburg south. Even though they were now freed from their connection with the Villard regime, they were not through with their troubles. Unable to meet interest charges due January 1, 1885, the line was thrown in the hands of a receiver. Richard Koehler was named by the court as such. It remained in his charge until July, 1886, when
