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OREGON AND CALIFORNIA RAILROAD 275 ulently misrepresented the value of the stock and had thus induced him (Holladay) to enter into the partner- ship. Elliott claimed that the stocks and bonds did have value and that a settlement should be made. The truth of the matter seems to be that Elliott did not misrepresent the stocks and bonds for he had been able to dispose of about $38,000 worth of bonds at par for locomotives. Neither he nor Holladay knew that the bonds would be- come practically worthless, so Holladay on these pros- pects entered the partnership. The reason for the decease in the value of the bonds is very evident. Immediately when the East Side Company issued their bonds, Gaston started a systematic campaign against them, stating that this company was not the Oregon Central Company, but a fraud. Articles were sent to railroad journals and pamphlets distributed in financial circles, so it is little wonder that the bonds were not salable. By this time Holladay saw clearly the trend of events. The facts as to the organization of the company had been revealed; the truth concerning A. J . Cook and Company had been heralded throughout the state; he knew that the company had no corporate existence although this was not finally decided until 1879. 57 He saw here his opportunity or his ruin. In his communication to the directors he said that the failure to negotiate any of the bonds of the com- pany was due to the fact»that the management of the company was not known in financial circles in the East. He now decided to reorganize the whole company and make himself the dictator of the whole railway syestem of the Northwest. On March 28, 1870, Ben Holladay and Company, in a communication to the Oregon Central Railway Company, made a proposition to the effect that Ben Holladay and Company would turn over to the company all the stocks and bonds, all the railroad lines, materials and property 57 Oregon Reports, Vol. VIII,, Holladay vs. Elliott. iff