'
they organized a company and secured a large farming element as stockholders and put on the river two new steamers in opposition to the Willamette Trans- portation & Locks Company, which already had twelve steamers with only busi- ness for half that number. These Granger boats were run for nearly two years, having the whole community to back them up with credit, sympathy and busi- ness. They were managed by men wholly unacquainted with the business, but who did not learn that it costs money to build and run steamboats. The man- agers finally determined to sell their boats, as no one cared to invest good money to continue the fight with all the odds against them. The result was that the Oregon Steam Navigation Company bought the two boats at their own price. By 1871, the Northern Pacific Railroad was in the zenith of its prosperity and desired to use the Oregon Steam Navigation Company facilities in con- nection with their enterprise. They proposed to purchase a control of the Ore- gon Steam Navigation Company stock, and invited an interview with an au- thorized committee from the Oregon Steam Navigation Company to meet them in New York city. Mr. Thompson and Mr. Ainsworth were appointed with authority to sell. They met the company in New York, and after much talk and frequent disagreements, they effected the sale of three-fourths of the capi- tal stock of the Oregon Steam Navigation Company, at the rate of $2,000,000 for the whole, taking one-half of the amount in N. P. R. R. Co. bonds at par and giving easy time for the money payments. The old owners of the com- pany retained one-fourth of the stock and continued in the management, so they considered that they had made a good sale, but subsequent events proved it to be a mistake. Through the failure of Jay Cooke & Company, in 1873, the Northern Pacific was forced into liquidation, and the bonds that the Oregon Steam Navigation Company directors still held and cOuld have sold for cash at about ninety cents, dropped to ten cents. The three-fourths of the capital sold to the Northern Pacific passed into the hands of the bankrupt estate of Jay Cooke & Company, and here it remained locked up for a long time. This failure served to shrink values all over the United States. The result was that Oregon Steam Navigation stock went down in the crash with other stocks. A plan was adopted by the trustees of the estate of Jay Cooke & Company to pay its creditors in kind. Each creditor accepting the proposition received fourteen per cent of his claim in Oregon Steam Navigation stock at forty per cent of its par value. This, as the creditors slowly and reluctantly came forward to accept, began to throw Oregon Steam Navigation stock on the Philadelphia and New York market. Parties taking it knew nothing about it, and offered it at once for sale, and as they were ignorant of its value, the Portland directors were not slow in improving this opportunity to buy back a sufficient amount as would again give them control. Some of it was purchased as low as thirteen cents, and the average cost of enough to give control was about twenty cents on the dollar, so in the end, covering a period of about five years, they found themselves the owners of the large majority of the stock at about half the amount that they had sold for.
In 1879, Mr. Villard came to Oregon with the avowed purpose of purchas- ing the Oregon Steam Navigation property, or commencing opposition. He asked J. C. Ainsworth whether he and his assocates were willing to sell. Mr. Ainsworth refused to take less than $5,000,000. An inventory of the company's property was made, together with a statement of the earnings for several years, with an offer to sell 50,320 shares at par. The directors thought that it was; too big a deal for Mr. Villard, but he considered it a bargain. His plan was to form a new company, the Oregon Railroad & Navigation Company, with a capital stock of $6,000,000 and an issue of $6,000,000 of six per cent bonds. He got an option till October ist, by paying $100,000 in cash, which called for 40,320 shares of stock at par, to pay fifty per cent cash, twenty per cent bonds, and thirty per cent stock. He allowed $1,000,000 stock and $1,200,000 in bonds
