The Oregon And California Railroad (1978)

Horner Museum Tour Guide Series

The Oregon and California Railroad

By Kenneth Munford

(Originally published in the Horner Museum Tour Guide Series, 1978)

Congress and President Lincoln encouraged the building of railroads during the Civil War, both for military and civilian uses. To cross the continent, they authorized the Union Pacific to build west from Omaha and the Central Pacific to build east from Sacramento. They provided grants of public land as a subsidy for the Northern Pacific to build west from the Great Lakes to Puget Sound.

As early as 1853-54, the Oregon Territorial legislature had authorized four companies to organize to build railroads in the Willamette Valley, but nothing came of these projects, primarily because of lack of capital.

In 1863, while a bill was pending in Congress to grant lands for construction of a railroad from California to the Columbia River, Simon G. Elliot, a California promoter, and George H. Beldon, a Portland civil engineer, conducted a survey from Marysville, California, north to Jacksonville, Oregon. In southern Oregon, Elliot and Beldon had a disagreement over who should decide the route to be followed through western Oregon. Also, their l2-man crew had received no pay for six months. Elliot and Beldon agreed to disagree, abandoned the project, and went home, leaving the unpaid crew and their equipment stranded in Jacksonville.

Southern Oregon businessmen came to the rescue. Under the leadership of Joseph Gaston, a lawyer/journalist who had come to Oregon from Ohio in 1862, 60 subscriptions of money, wheat, or oats (including donations by Lindsay and O.C. Applegate) made possible continuation of the survey in the spring of 1864. The new leader, Colonel A.C. Barry, was a wounded Civil War veteran who had been a member of the original party.

Eager farmers along the way housed and fed the party. Barry's survey followed in general the old Applegate trail west of the Cascades and the west side of the Willamette Valley through Corvallis, and Forest Grove and over the Tualatin Mountains to Scappoose and St. Helens, which would be the terminus on the Columbia River. A branch line would connect Portland with the main line at Dayton. Barry finished the survey and reported to the legislature in the fall of 1864.

Barry and Gaston printed a report of the survey, complete with maps, profiles, and an account of the state's resources and Barry took it to Washington, D.C., to lobby for federal assistance. Newly elected Senator George W. Williams of Salem did not support their proposal and nothing was done in that session of Congress. In the next, however, with the support of Oregon's senior Senator James W. Nesmith (of Rickreall) and Williams, Congress enacted a bill (July 25, 1865), granting lands to aid in the construction of a railroad and telegraph line in California. The Oregon legislature was to designate the company to build the road and receive the land grants.

The Oregon Central Railroad Company was organized in Portland on October 6, 1866. Four days later, the legislature named it as the company to receive the land grants. The incorporators of the Oregon Central included Jesse Applegate, Joel Palmer, W.S. Ladd, S.G. Reed, Joseph Gaston and 15 others, most of whom favored building on the west side of the Willamette Valley.

Earlier, in July 1865, Elliot and other Californians concerned in the promotion of the rail line into Oregon had filed articles of incorporation as the Oregon and California Railroad Company with headquarters in Jacksonville. This company tried to take over the Oregon Central. Failing to do so, they reincorporated as the second Oregon Central Railroad (1867) with Oregon Governor George L. Woods as chairman. This company, with the same name as the 1866 company, became known as the "Salem Company" or the "East Side Company."

Portland in its early years was confined to the west bank of the Willamette where it had access to the fertile Tualatin Plains and the Chehalem and Yamhill valleys. Supporters of the first Oregon Central, the "West Side Company," strongly believed that the rail line should run through these areas on the west side of the Willamette.

The Salem Eastsiders on the other hand, wanted it to run from the small settlement at East Portland through Milwaukie and Oregon City, across French Prairie to Salem, and on to Albany, crossing the Willamette at Harrisburg to the west bank and on across to Eugene City.

Jesse Applegate, among others, sought compromise. "From the Calapooya Mountains to Portland," he wrote to Senator Nesmith in Washington, D.C., "there should be two roads ... And if Congress will not aid both roads ... let whatever can be obtained be equally divided between them." (Carey, p. 688.)

Shunning cooperation, both Oregon Central companies plunged ahead. On April 15, 1868, with due ceremony on Portland's southwest Fourth Street, at the foot of Marquam Hill where the Medical School now stands, the West Side company broke ground for its road. The next day, a parade led the way to Gideon Tibbet's farm on the east side (near Southern Pacific's present Brooklyn yards) to witness Chinese laborers breaking ground for the East Side rail line.

By September, the West Side Company, stimulated by contributions of local supporters, had partially graded 5 miles of right-of-way, but the East Side Company had run out of money and grading had ceased. The battle for the right to use the Oregon Central name--and to obtain the land grants--went into the courts, each side suing the other.

At this juncture (September 1868), promoter S.G. Elliot brought in Benjamin Holladay, a San Francisco businessman who had helped operate the pony express and had made a fortune in overland stages and shipping.

"With ready cash Holladay pushed the work of construction on the east side grade," says Joseph Gaston, whose West Side road was devastated by Holladay's ruthless methods. He "subsidized newspapers on all sides to do his bidding, and treated with imperious contempt the rights of all who dared question his career. At the ensuing session of the legislature he appeared at Salem as the host of a large establishment, dispensing free 'meat and drink' to all corners, and otherwise equipped with all the elements of vice and dissipation." (Gaston, p. 522.)

Holladay persuaded the legislature to rescind its previous action designating the West Side company to receive the federal land grants and instead naming the East Side company. He formed a partnership with Elliot, took over management of the East Side company, and soon gained control also of the West Side line. He reincorporated his holdings as the Oregon and California Railroad Company (the O&C) in 1870.

If the O&C could fulfill the requirements of the federal act, it would fall heir to approximately 3.8 million acres of land scattered over the full length of western Oregon. The promised land, however, did not provide working capital. Holladay used various schemes to raise money, among them a 7 percent bond issue of $10.5 million, most of which was sold to German investors at 70 percent of its par value.

These funds made possible construction of the O&C to Salem and Albany in 1870, to Harrisburg and Eugene in 1871, and to Oakland and Roseburg in 1872. There construction ceased for nearly a decade. The funds had been exhausted and the new line did not generate nearly enough income to pay the bonds. Holladay and associates faced bankruptcy and their financial empire collapsed.

To investigate the conditions of their investments, the German bond holders sent Henry Villard to Oregon. As a young man, Villard had pursued several careers, including being a foreign correspondent during the Civil War. He was a man of ability, imagination, wide experience, and many acquaintances. After trying to work with Holladay for four years, he finally ousted the western entrepreneur and gained control of the O&C. Villard put the line on a sounder financial base and in 1881 resumed construction southward--to Grants Pass in 1883, to Ashland in 1884, and to a connection with the Central Pacific in the Siskiyous. The first through train between California and Portland ran over the O&C in December 1887.

By that time, however, Villard, who had extended his transportation empire to include the Northern Pacific Railroad, also had run into financial difficulty and his holdings had been split up among other lines. The Southern Pacific Railroad, which had gained control of the Central Pacific and other lines in California, took over the O&C--its rights-of-way, its rolling stock, and its land grants.

With the same sort of arrogance that had characterized the other holders of the O&C land grants, the Southern Pacific continued to ignore the federal requirements. The stipulations under which title to public lands were given to the O&C were rather restrictive and Congress had included safeguards which kept the grants from being the bonanza which they at first appeared. In the 1869 legislation, Congress specified that the company would be granted 20 square miles (12,800 acres) of public land for each mile of railroad completed. The land was to be selected from the odd-numbered sections within 20 miles on either side of the right-of-way, and if necessary, from two additional 10-mile strips on either side. In all, the area in which the selected lands might lie were in a band 60 miles wide extending from Columbia County to the California border. Congress had stipulated: (1) that grants could be sold only to "actual settlers," (2) in tracts no larger than 160 acres, and (3) at prices no more than $2.50 an acre.

At first glance it would seem that by selling 3,800,000 acres at $2.50 an acre the O&C or its successor SP would reap $9,500,000. Most of the land, however, was heavily timbered and on steep slopes and there was little market for it. By 1890 less than 300,000 acres had been sold. For a time the railroad sold some of the land illegally for its timber value, then decided not to sell any more but keep the O&C lands as its own timber reserve in violation of the 1869 act.

The outraged public demanded that Congress take action, and it eventually did so by passing the Chamberlain-Ferris Act in 1916. Nearly 3,000,000 acres of the land that had been granted to the O&C were "re-vested," that is, returned to federal ownership. The act provided that timber on the lands was to be sold by competitive bid and cut-over land sold at $2.50 an acre. Income was to be shared with the counties in which the lands lie. Money was appropriated to pay delinquent taxes and to pay the railroad at the rate of $2.50 an acre for lost land.

Management of the O&C lands has gone through several phases. At first they were a burden to state and federal governments; they had to be protected from fire but returned little income. In 1937, Congress provided a new policy for such lands as these. The act provided for conservation of land, water, forest, and forage on a permanent basis and sought, through sustained-yield logging, to guarantee perpetual forests to support industrial communities indefinitely.

In 1946 the Bureau of Land Management was formed to administer the O&C lands and several other tracts of re-vested lands and continues to be the managing agency. The O&C lands provide an important source of revenue for 18 western Oregon counties. In 1973-74, for example, they received $57,789,348. In Benton County, the $1,623,881 received that year constituted 35 percent of the county's income. In Douglas County the amount received was 50.5 percent of its revenue, and in Lincoln County only 3.7 percent. (See Wm. Loy, Atlas of Oregon, 1976, p. 11.) In 1978 the 18 counties will receive about $83.5 million, Benton County more than $2 million, Douglas nearly $20 million.

At a time when the principal aim of the federal government was to hold the Union together, Congress had little money to spend on settlement of the West. It used its rich resource of land in lieu of cash to assist in the development of the country industrially, educationally, and politically. In granting title to public lands, they included restrictions and safeguards to protect the public interest. Grants frequently were made in alternate sections so that no grantee could amass large areas of contiguous territory, as was possible, for example in the Spanish land grants in California.

Congress tried to put the land on the market through the railroads in such a manner that it would go to homemaking settlers at a reasonable price. Many Oregon farmers can trace ownership of their property back to federal educational, road-building, or railroad grants. Excesses in speculation among the financial tycoons brought instant fortunes--and instant ruin--but at the same time their accomplishments benefited the general public. The railroads brought the main arteries of transportation up out of the mud and over difficult obstacles. As Stewart Holbrook sums up the situation, "Uncle Sam proved himself a Yankee bargainer of the first class." (Story of American Railroads, Crown, 1947, pp. 160-l62.)

Stations on the O&C

East Portland to Siskiyou
(See Time Schedule below)

East Portland. In 1870 station was in vicinity of the present approach to the Morrison bridge.

Milwaukie. This community grew rapidly at first when founded by boat-builder Lot Whitcomb in 1847 as a rival to Oregon City. Henderson Luelling arrived in 1847 with his wife, 10 children, and 700 fruit tree rootings packed in earth-filled boxes. With son-in-law Wm. Meek and brother Seth, Luelling pioneered in nursery and milling ventures. Milwaukie had 500 people by 1850, almost as many as in 1930, eighty years later.

Marshville. Old name for Clackamas where Oregon National Guard's Camp Withycombe is now located.

Oregon City. At the Falls of the Willamette, this location--settled by a few French-Canadians in 1829 and platted by Dr. McLoughlin in l842--was the first industrial center of the State and Provisional and Territorial capital 1846-1851.

Rock Island. Now called Coala, a mile north of New Era.

Canby. A station on the O&C that grew to incorporation in 1893. Sam Barlow's son, William, whose farm was a mile southwest, had a $100,000 contract to help build the O&C. His house, built in 1885, is now a private museum. The town of Barlow he platted in 1891 failed to rival nearby Canby.

Aurora. Established in 1857 by Dr. Wm. Keil and 500 German-Dutch followers as a communal colony, Aurora Mills was a regular stop on the Portland-Sacramento stage line. Passengers learned to look forward to sumptuous meals, which colonists continued to serve to railroad crews and passengers until the trains added dining cars.

Waconda. The tiny settlement was a short distance from the railroad. When Gervais--named by Rev. Neill Johnson for Joseph Gervais--was founded nearby on the railroad in 1871, Waconda faded out. Present station by that name is 1/2 mile southwest on the Oregon Electric.

Hubbard and Woodburn. Between Aurora and Gervais, these towns owe their location largely to arrival of the O&C.

Salem. New passenger coaches of "elegant design" with seats upholstered in crimson velvet plush were put into service when the O&C was opened to the State Fair Grounds on September 29, 1870. Service extended to Salem on October 11.

Turner and Marion. O&C officials planned a station named for Marion County on Mill Creek southeast of Salem. The materials shipped from East Portland to build it were erroneously unloaded 7 miles south of the intended location. Rather than reshipping the materials, officials decided to build the Marion station at the new location and to build another, called Turner, on Mill Creek.

Jefferson. Mary Conser, daughter of ferryman Jacob Conser, stood on the front platform of the locomotive waving a flag as the first train crossed the Santiam bridge, Nov. 27, 1870.

Albany. 300 invited guests came to celebrate the opening of the O&C to Albany on Dec. 8, 1870. Passenger service of 4 1/2 hours to East Portland began on Christmas Day, 1870.

Tangent. Named for the straight line the right-of-way takes for 20 miles after coming off the curve through Albany.

Shedd. Post office established in 1869 at nearby Boston Mills was moved to Captain Frank Shedd's property when the railroad came through in 1871.

Halsey Named for Wm. L. Halsey, vice-president of the O&C, not for J.C. Halsey, the Astorian who explored the Willamette Valley in 1812.

Harrisburg. Trains began running to this long-used ford of the Willamette in June 1871. On October 5, the first locomotive passed over the 770-foot bridge which carried the O&C to the west bank of the Willamette.

Junction City. Selected as the site for junction of the East Side and West Side Oregon Centrals but instead became the junction of the Pacific Highways 99W and 99E.

Eugene City. From the cabin Eugene Skinner built in 1846 the settlement grew, with a post office in 1850 and steamboats corning up the river this far in 1857; became important trading post on north-south wagon road. Arrival of the O&C in October 1871 gave impetus to industrial development. The stage coach run from here to Red Bluff, California, took 4 1/2 to 5 1/2 days. Name changed to Eugene in 1889.

Natron. This station 9 miles southeast of Eugene was not on the O&C but is important in the history of this line because the rerouting of the main line of the Southern Pacific from Weed through Klamath Falls and over the Willamette Pass to Eugene was called Natron Cut-off.

Goshen. Named for the pastoral region in lower Egypt occupied by the Israelites before the Exodus. Post Office in 1874.

Creswell. Named by Ben Holladay for the U.S. Postmaster General of 1869-74, even before post office was established here.

Cottage Grove. Big local controversy about where this settlement should be and what it was to be called was settled by where the O&C built its station.

Divide. On the watershed between Willamette and Umpqua rivers, near boundary of Lane and Douglas counties.

Anlauf. Former site of large sawmill on the O&C.

Drain. Charles Drain came to Marion County in the 1850s and removed to Douglas County in 1860. He and his son, John C. Drain, both of whom at various times served in Oregon legislatures, donated 60 acres of the land they had bought to the O&C to lay out the town.

Boswell Springs. For the convenience of guests, the O&C train stopped in front of the resort hotel operated by Captain Benjamin D. Boswell, who had formerly been the first Professor of Military Science at Corvallis State Agricultural College.

Yoncalla. Home of Jesse and Charles Applegate and their families after 1849.

Rice Hill. McArthur (Oregon Geographic Names, p. 615.) calls this steep grade--rising 325 feet in 3 miles--"the bugaboo of pioneer travelers and even presented a problem in railroad construction." From the Rice Hill junction of I-5 and U.S. 99, the rail line winds nearly 4 miles to cover the 3 miles to Rice Hill station at the top of the hill.

Oakland. This early settlement on the old Hudson's Bay pack trail was the terminus of four mail routes in the 1850s--from Jacksonville, from Scottsburg, from Eugene via Cottage Grove, and from Corvallis via Yoncalla. Mail was carried on saddle and pack horses, but it could hardly be called a pony express. O&C reached Oakland July 7, 1872.

Sutherlin. Fendel Sutherlin and parents moved here in 1851. He spent 50 years developing the valley and irrigating fruit lands. A branch rail line once ran into the Cascade foothills, where a mercury smelter was located.

Winchester. Founded 1850 by an expedition from San Francisco led by Heman Winchester; became seat of Umpqua County until 1854 when the county government and some of the buildings were moved to Roseburg.

Roseburg. Settled in 1851 by Aaron Rose, whose house served as a public tavern for many years for travelers on the California trail. After reaching Roseburg on Dec. 3, 1872, the O&C stopped on its southward course for nearly a decade. Stage coach connection with the railhead at Redding took 3 1/2 days--by day and night travel.

Myrtle Creek. After construction resumed in June 1881, the O&C reached this already-settled community on August 14, 1882.

Glendale. Instead of following the steep old wagon road (now I-5) up Canyon Creek, the O&C took a longer loop to the west up Cow Creek, an area that had severe slides in later years. Solomon Abraham, right-of-way agent for the O&C named the new town he platted here for his wife Julia, but residents changed the name to Glendale. O&C was opened this far on May 13, 1883.

Wolf Creek. Two hotels called Six Bit House at this stage stop preceded the Wolf Creek Tavern now being restored.

Grants Pass. Workmen grading on the hills north of this stage station chose the name when news that General Grant had captured Vicksburg reached them. Present town developed after the O&C arrived on Dec. 2, 1883.

Central Point. The California trail and the road from Jacksonville to Table Rock and Sams Valley crossed here.

Medford As the O&C moved up Bear Creek Valley, it bypassed Jacksonville, the southern Oregon metropolis five miles to the west. David Loring, a construction engineer, saw a fine location for a new town at the middle ford of Bear Creek and suggested the name Medford. In the years since the O&C arrived in December 1883, Jacksonville, whose people at first referred to the new town as "Chaparral City" has basked in its past glory while Medford has become the fifth largest city in the state.

Phoenix. Originally called Gasburg, because of the loquacity of the woman who served meals at the stage station. O&C arrived on Feb. 25, 1884.

Ashland. Immigrants coming west over the Applegate Trail and later gold seekers reached the California trail at Ashland Mills, where flour and saw mills were built and a post office established in 1850s. A toll road, for a time operated by Lindsay Applegate, ran over the Siskiyous.

The O&C arrived on May 4, 1884. Grading continued for a few miles farther and work was started on the Siskiyou tunnel. Work ceased, however, when Villard's enterprises collapsed in August 1884 and his connection with the O&C came to an end. In the meantime, the Central Pacific was building north through California--intermittently--reaching Red Bluff in 1871, Redding in 1872, Delta (near present Shasta Lake) in 1884, Dunsmuir and McCloud in 1886, Hornbrook in 1887, and the Oregon border on June 1, 1887. A month later on July 1, the Southern Pacific took control and joined the tracks a few months later.

The ceremonial driving of the last spike by SP President Charles Crocker took place in Ashland on Dec. 17, 1887, and the first train from California reached Portland two days later, giving western Oregon a new connection with the rest of the country. By this time, Portland also had transcontinental connections via the Northern Pacific (1883) and the Union Pacific (1884).

Siskiyou. The station at the north portal of the Siskiyou tunnel gained world-wide notoriety in 1923, when the DeAutrement brothers, Ray, Roy, and Hugh, held up a passenger train, killed four crew members, dynamited the mail car, and got away--without any loot. Railroad detectives learned the identity of the bandits and conducted an international search. Photos to newspapers, the 2.5 million WANTED circulars printed, and offers of rewards brought results. The twins, Roy and Ray, were arrested in Ohio and Hugh in the Philippines. They were tried in Jacksonville in 1927 and sent to the Oregon State Penitentiary (see Bert Webber, Oregon's Great Train Holdup, Ye Galleon, 1874).

Further Reading on the O&C

Edwin D. Culp, Stations West. Caxton, 1972: Bonanza, 1971.

George B. Abdill, This Was Railroading, Superior, 1958.

Joseph Gaston, Centennial History of Oregon, Clarke, 1912. Vol. 1, pp. 511-538.

Leslie M. Scott, History of the Oregon Country, Riverside Press, 1924, Vol. IV.

Robert C. Clark, History of the Willamette Valley. Clarke, 1927, Chapter 17.