The Oregon daily journal., February 24, 1908, Page 7, Image 7

THE OREGON DAILY , JOURNAL, PORTLAND, MONDAY EVENING,1 FEBRUARY 84, -1808.
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TO OREGON'S INTERESTS
WL RLPAIR, RL-FINISH AND RL-UPHOLSTO. OLD FURNITURE,---PHONL EXCHANGE 34
0-
LANiGRANX HARMFUL
y
r . ., . : ... .. , .. .v.1.:
h v IIow 3Ionopoly Was Created foi Benefit of Railroad Com
panies Townsend Report Says All Competi-
- tion Was Shut Out,
(Catted Press Uesed Wire.)
Washington. D. C, Feb. 24. The text
of B. D. Townsend to the attorney-gen
ral on the Oregon and California land
grant Is as follows
"Senate resolution adopted February
S, 1908. recite that 'At diver times
various railroad and other corporations'
have recolved congressional land grants.
containing provisions restricting the
sale of the lands to actual settlers In
limited quantities and at a limited
price; that 'It Is currently reported
and w de y bol eved that the depart
ment of justice has Information to the
eiieei mm, as 10 certain grams ai
fertlng lands In state on the Paclfls
slope, the provision restricting soles as
above mentioned has been flagrantly
violated and evaded. It I then
"Hesolved, That the president I re
quested. If not incompatible with the
public Interest, to inform the senate
what information, if any. ha been re
celved, nnd what action, if any, haa
been taken by the department of jus
tice with respect to the matter ana
tiling In the preamble to thl resolu
tion set forth.
"In the month of March, 1907. the
attention of the department of justice
was directed to certain charge that
the tonus and condition of the con
greedlonal land grants of the Oregon
and California - llallroad company had
been flagrantly violated. Bo far a
known, the subject was never before
brought to the attention of any de
partment or. officer of the government.
"The grants in question, involve a
large amount of land situated In the
western part bf the state of Oregon.
"After a preliminary consideration, a
representative of the department of
Justice was sent to Oregon to prose
cute a complete Investigation of the
subject. This work haa been pursued
without Interruption until the present
time, and the department Is now pre
paring to Institute proceedings to en
force and protect the rights of the gov
ernment In the premise.
"The senate resolution la general In
It term, but It 1 assumed that it
refers to the land grant above men
tioned and the work of the department
relating thereto.
"By the act of July XI, 186$. as
amended by the act of June 26, 1868,
and April 10, 1869. public lands, In al
ternate odd sections, to the extent of
10 sections per mile, were granted to
aid In the construction of a railroad
in Oregon, from Portland southerly
through the Willamette, TJmpqua, and
Rogue River valleya, to the boundary
line between the states of Oregon and
California. A similar grant was made
to aid In the construction of a rail
road In the state tending to a point
on the Central Pacific rallrorad In Cal
ifornia, a separate grant being made
In each or said states.
Granted Xallroods.
"By the act of Mar 4. 1870, publlo
lands. In alternate odd sections, to the
extent of 10 section per mile, were
granted to aid In the construction of a
railroad from the city of Portland, ex
tending westerly for a distance of 20
miles and thence southerly a distance
of 27 miles. The act also extended
aid for the construction of a further
line to Astoria, but the latter line was
never constructed, and that part of the
grant was forfeited by the act or Jan-
. . O 1 1 SDK
'The first grant above mentioned con- r
negotiation to take over the road,
which they did in the year 187. The
feneral features of the acquisition of
he road by the Southern. Pacific were
a follow: . .
"First All of the capital stock of the
Oregon California Railroad company
was turned over to the Pacific Improve
ment company, which was a develop
ment company used bv the Southern fa-
rifio syndicate composed of Huntington,
Stanford, Crocker and Hopkins.
"Second. New bonds were issued and
guaranteed by the Southern Paciflo
company, to an amount sufficient to
pay off all of the outstanding indebtedness.
"Third. The rsllroad was then leased
to tho Southern Pacific company, wnicn
in effect acquired all of its capital
stock and then leased the road Itself.
"Fourth. The Pacific Improvement
compnny completed the construction or
the railroad to the state line in De
cember, 1887. connecting with the Cali
fornia & Oregon railroad, which at
about the same time waa completed
from the aouth.
'Through railroad transportation was
then established between Portland anil
San Francisco and the Oregon & Cali
fornia railroad haa since been operated
a Dart of the Southern Poclrlo sys
tem until taken over by the iUrrlman
line in 1801.
In the meantime the southern pa
ciflo Interests had already, as early as
1871. acquired the California 4 Oregon
Kanroau company, logemer wun us
land grant In the state of California,
provided for by this same act of July
25. 18.
"in October. 1901. the control or tne
Southern Pacific company was secured
y E. Jl. Harrlman ana tne union pa
cific Interests, and at that time the
capital stock of the Oregon fc Califor
nia Railroad company was transferred
direct to tne southern pacirio company,
and this condition still continues. In
October. 1801. Mr. Harrlman was elect
ed president of the Oregon & California I
Railroad company, which position he
still occupies, and the railroad has been I
operated as a part of the Harrlman I
line.
'The general history of the company i
may be summarised by saying that un
til 1887 It was always crippled in its
operation. Including the handling of the
land grant, by us lack of financial i
backing, and was never made a profit-,
able enterprise. Since 18H7 its conrtl-
templated a total of approximately S,
800.000 acres, computed by mileage at
the rate or 20 sections per mile. Tne
grant last described, deducting that
part subsequently forfeited, embraced
approximately 130.000 acres, the area
of the latter grant being largely re
duced by the overlapping of the former
ernnt
"Hoth of the grant named became
vested in the Oregon and California
Railroad company, a corporation under
the laws or the state or Oregon, ine
company last namod became vested
with the grant first described in April.
1 S 70. at which time only 20 miles of
the railroad had been constructed. Tho
latter grant was held by a separate
corporation for about 10 years, until
October 8. 1S80, when it likewise was
transferred to the Oregon and Call
fornla Railroad company. In the mean
time the capital stock of both com
panies had been owned and controlled
bv the name parties.
"The Oregon & California Railroad
company became recognized as the law
ful successor to both of the grants,
and all patents on account of either
Brant have been executed to the Ore
gon & California Railroad company, and
that company nas received any aumin
lstered both or the Brants
"Aot of July 25. 1880 The grant of
July 25, 18B6. as amended by the act of
April 10, 1889, contained the following
provision:
Provision of Act.
" 'Provided, further, That the lands
granted by tho act aforesaid shall bo
sold to actual settlers only. In quanti
ties not areater than one quarter sec
tion to one purchaser, and for a price
not exceeding 12.50 per acre,
"Act of May 4, 187 The act of May
4. 1870. contained the following pro
visions: I
That the said alternate sections of land
granted by this act, excepting only such
as are necessary Tor the company to re
serve as depot, stations, side tracks.
wood yards, standing ground, and other
needful uses in operating the road, shall
be sold by the company only to actual
settlers In quantities not exceeding 180
acres, or a quarter section, to any one
settler, and at a price not exceeding
12.60 dot acre. ,
"A brief financial history ofthe Ore
gon & California Railroad company will
assist in presenting tnis subject.
"Shortly after Its organization In
April, 1870, a construction loan was ne.
gotiated in Germany. The bonds wero
onstruct
ion in this respect has been complete- 1
ly reversed: it has become a very pros-
tfltable enterprise, Its
Inanclal backing has been almost un
limited, and it has become an indls-'
pensable factor of the powerful organ-
zation by wnicn it has been absorbed.
Prior to it acoulaltlon by the South-!
ern Pacific company It was a local en
terprise, oonducted with reference to
looal commercial and Industrial condi
tions; since that time It has been used
by some of the masters of the na
tion' finance as a mere instrumental
ity to further the development of a 1 1
monopoly of transportation affecting a
very substantial part of the commerce
of the nation. This fact Is of vital im
portance In following the history of the
land grants.
"When acquired by the Southern Pa
cific company, not only did the Oregon
& California railroad become a part of
that a 1 rap H v fnrmtHahlo mv at am hut Its I
idiiu n ' l. nan ruiuou Ail i lie nun laif - ,
er land grants or the Southern Pacific
system, all of which were handled by
a single department, with a common i
ollcy, which was quite foreign, and
some respects opposed to, local com
mercial conditions, to promote which
the grant was originally created. The
subsequent acquisition of the Southern
Pacific by the Union Pacific interests
intensified this condition.
Under the act of May 4. 1870. the
railroad was constructed westwardly
from Portland to Forest Orove, and
thence In a southerly direction to the
terminus named In the act a total of
about 47 miles during the years 1871
and 1872, within the time required by
the act. The line to Astoria was never
constructed, and that port of the grant
was forfeited as above stated.
Under the act of July 26, 1866, as
amended, during the years 1870, 1871
and 1872, the railroad was constructed
from East Portland to Roseburg, a dis
tance of about 107 miles. Work of con
struction whs then suspended until 1881. j
The balance of the line, a distance of i
approximately 176 miles, was construct
ed during the years 1881. 1882. 188S and
1887. The act. as amended, required the
completion of the road on or before July
1. 1880, but congress failed to assert
forfeiture on account thereof, and the
default was waived.
Selecting Patents.
Through a misunderstanding of the
law by the interior department, upon
the filing of maps of location in 1870
to 1873, all lands within the grants
were withdrawn from the public do
main, Including those situated within
tho indemnity limits. In 1885 the su
preme court of tho United States ren
dered an opinion correcting this con
struction of the law. and the order re
ferred to was finally revoked in 1887.
under the errant or July 25. 1866.
selections for the northern part of the
grant were filed an rapidly as the road
was constructed, ana patents therefor
were Issued from 1871 to 1877. During
those years there was selected by and
patented to the railroad company on ac
count of the grant of July 26, 1866, 323,-
184. (is acres.
"Taking advantage of the erroneous
ruling of the interior department above
referred to, no further selections were
made by the railroad company, and
therefore no further patents were is
sued. One of the reasons for this con
duct was unquestionably the financial
condition of the railroad company. By
this method taxation was avoided and
the payment of the fees for tho pat
enting of the land was postponed.
"one or tne first steps taken bv the
Southern Pacific system after acquir
ing control was to make selections as
secured by mortgage
t deed cove
cuted with considerable vigor until Jan
railroad and by trust
land grant.
upon the projected rapidly as possible for the entire grant
deed covering the 'The Issuing of Patents was resumed,
ctlon was prose- 'n 1893 and continued without Inter-
uarv. 187S. when the funds became ex
hausted and construction was suspended
at Roseburg, a distance of 197 miles
from Portland and a little more than
one-half the entire road.
"Interest payments were defaulted:
the German bondholders formed a bond
holders" committee composed of bank
ers of Frankfort on the Main, and the
latter sent Henry Villard to Oregon as
their representative. In July, 1874, Vll
Inrd secured control of the funds and
finances or the company and foreclos
ure proceedings were postponed. In
February. 1876. tho bondholders com
rnlttee acquired all of the capital of the
railroad. The stock was held by trus
tees, who elected officers and con
ducted the affairs of the railroad com
nanv for the benefit of the bondholders
"In 1881 Mr. Vfilard reorganlied the
company; the, old capital stock was can
celed, the former bonds were surren
dered and new capital stock accepted In
lieu thereof, preferred stock to tho
nmmint nt 112 000 000 nnrMnn(lno thn SerlOO ana
nrlnclnal. a.d common Tstock to the suspended, as explained.
runtlon until ISOfl.
''Beginning with the yeaf 189S pat
ents have been issued on account of
the grant of July 25: 1866. to the
amount of 2.442.448.45 acres, making a
total amount patented to date on ac
count of that grant 2.765.597.1 3 acres.
In addition to this the railroad company
has filed selections claiming cpproxl
mately 800,000 acres more.
"No patents were issued on account
of the grant of May 4, 1870, prior to
the year 1895. Commencing with the
year 1895, patents have been Issued to
the amount of 128,618.18 acres.
The general land office has sus
pended action upon all pending selec
tions because of the contemplated ac
tion of the department of Justice.
"Under the two arrant s there have
been patented 2.894.215.26 acres, of
wnicn tnere nas been sold 813,908.83
acres, leaving still in the hands of the
railroad company 2,080,806.44 acres, and
in add'tlon thereto approximately 300,
000 acres to which claim has heen as.
sorted and Issuance of patent has been
amount of '$7,000,000 representing the
deferred interest. A new construction
Joan was negotiated. At the time of the
surrender of the former bonds and the
acceptance of preferred stock therefor,
. . ... a n ,r I'll. ,. , yi-iot t n u rn.n., .
II 1 O I . V t. I H.V. 1-1 It'U QUI' ft
should have a preferred interest in the
land grant in case of a liquidation of
the compnny. and this agreembnt was
secured by a trust deed.
"Mr. Vlilard resumed construction
work and, with the old of a second loan
aecured by mortgage upon the railroad,
ronducted the , work until December,
18RS, the rsllroad being extended to
Astilanu, about 30 miles from tho state
line.
"The construction fund again became
exhausted. The road was placed In the
hands of a, receiver in January, J885,
because of non-payment . of Interest.
,The receivership was continued until
the Southern Pacific system concluded
Significant Fact.
The following facta are significant:
The present transportation facilities of
western Oregon are taxd to their full
capacity in handling the products of
the country. If the railroad comoanv
should abandon its present policy and
dispose of its land errant to thnsn vim
would develon it and subleet it to nm.-
ductive Industry, It la certain that the
Increased production of the country
would be so greatly in excess At fh
present transportation facilities that
competing transportation lines would
bo attracted to that state. It I enuallv
certain that, with the Southern Pacific
Interests controlling substantially one
half of the land, no other transporta
tion company, however formidable, i
likely to venture into that territory to
engage in competition with a system
wnicn virtually controls not only tran
portatlon, but also production. Mora1
; TWENTY PATTERNS IN
IRON BLDS SPECIALLY PRICED FOR
THREE DAYS' SELLINi
bplendid assortment of styles and in thfe most ap
propriate colorings; plain enamels and color-bronzes,
including several in the rich Vernis Martin finish.
This lot is comprised almost entirely of sample pat
terns, which we desire to close out for new designs
now awaiting display space on our floors. Sale com
mences tomorrow. Mail orders and out-of-town inquiries will be given careful and prompt attention
Pattern No. 819 In the popular
Vernis Martin finish; regular
price $18.00, special $12.25
Pattern No. 833 In preen bronze
and gold ; regular price $18.50,
special $11.50
Pattern No. 603 In pea green;
regular price $3.50, special $2.25
Pattern No. 501 In white en
amel; regular price $4.00, spe
cial $2.75
Pattern No. 499 In pea green;
regular price $5.00, special $3.50
Pattern No. 505 In cream and
gold; regular price $6.30, spe
cial $4.10
Pattern No. 635 In cream and
gold; regular price $8.50, spe
cial $4.90
Pattern No. 671 In cream and
gold; regular price $8.75, spe
cial $5.00
Pattern No. 635 In the Vernis
Martin and old gold; regular
price $10.25, special $6.50
Pattern No. 581 Green bronze;
regular price $12.50, spe
cial $7.75
Pattern No. 859 Green bronze
and gold; regular price $13.00,
special $8.00
Pattern No. 578 Green bronze;
regular price $13.75, spec'l $8.50
Pattern No. 588 Green bronze;
regular price $15.00, spec'l $9.50
Pattern No. 578 In the Vernis
Martin; regular price $15.00,
special $9.50
Pattern No. 578 In cream
and burnt old gold;, regular
price $16.00, special $9.75
Pattern No. 588 In cream and
burnt old gold; regular price
$16.00, special $9.75
Pattern No. 586 In the Vernis
Martin; regular price $13.50,
special $8.9Q
Pattern No. 578j In green
bronze; regular price $16.00,
special $9.75
Pattern No. 589 In cream and
burnt old gold; regular price
$16.75, special $10.25
Pattern No. 815 In cream and
burnt old gold; regular price
$21.00, special $13.75
HIGH-CLASS INTERIOR DECOR
ATIVE, WORK OUR SPECIALTY
WL SHOW AN EXCLUSIVE
LINE OF FINE WALL PAPER
Harmonious and therefore correct effects in interior decoration
of the home can be produced only where a thorough knowledge
of this class of work exists, together with the most artistic and
up-to-date materials and skillful workmanship. With these in
view, our Decorative Dept. has reached that state of efficiency as
enables the most harmonious and pleasing results in the treat-
ment of all rooms to be attained. We carry in stock the most
exclusive and artistic of hangings and coverings, both paper and
fabric, domestic and foreign, and can furnish original designs that
convey the proper idea in the decorating of any or all rooms. In
conjunction with this work, we do tinting, enameling, staining
and finishing, therefore insuring correct and harmonious effects.
MANY NEW AND AT
TRACTIVE FEATURES
in This SEASON'S GO-
C ARTS and CARRIAGES
Each successive season marks the intrp
duction of many new and important fea
tures in the construction of Children's Vehicles. This season's pat
terns promise to display more advancement, both as regards style
and construction, than those of any previous season. Among the
many new styles which we are now displaying, we mention particu-
larly the new metal folding go-carts, which show a decided improve
ment over many styles shown heretofore can be folded instantan
eously, including the hood. These are shown in various popular en
amel colorings. The handsome new hood sleeping coaches embody
style and comfort never before displayed in the, larger vehicles.
number of new styles are' now displayed and await your inspection.
m THL CROCKXRY DOT.---THR1LIL DAYS
SALE, OF DINNER SETS Commencing Today
Another of the many popular sales of the Basement Crockery Department, in which
)
is offered for today, Tuesday and Wednesday, eight attractive patterns in Dinner
Sets, in the semi-porcelain and Haviland, consisting of 50 pieces and 56 pieces.
Thrifty housewives should take advantage of this three-days' sale.
50-PILCE, DINNER SET, $7.50
56-PILCL DINNER SLT, $7.50
Regular
celain; "
rice $9.50; Maddock's English semi-por-t.
Louis" pink and gold decoration.
56-PIIXE, DINNER SLT, $7.50
Regular price $9.25 "Allerton" Blue conven
tional decoration.
Regular price $9.50 semi-porcelain green and
gold conventional decoration.
50-PIECE DINNER SET, $9.25
Regular price $11.50 semi-porcelain royal blue
and gold decoration white centers.
56-PIECE DINNER SET, $10.00
Regular price $13.25 "Elite" white and gold
semi-porcelain a new and dainty pattern.
50-PIECE DINNER SET, $12.75
Regular price $16.25 semi-porcelain quaint
"Iris" pattern in green, gold and brown. ,
50-PILCL HAVILAND SLT FOR $21.50
Regular price $26.00 pink and gold decoration.
50-PILCL HAVILAND SLT FOR $28.50
-dainty rose designs, pink
'
Regular price
and green.
$36.50
MAIL ORDLRS and
OUT-Of-TOWN
INQUIRILS will be
GIVLN Our CARL
FUL and PROMPT
ATTLNTION
YOU credit!
I U 0000 J
C0MPL1HI-H0U5E-FUR11I5HER5
A
''"''"yI "NLW process n
gUy GAS RANGLS k '
ffs-dSESZ UNSURPASSED
SSj FOR ECONOMY T
HSgv AND EFFICIENCY
than four flfth of the land grant now
held by the railroad company la situat
ed in southern Oregon. At the time
the railroad company withdrew Ha lands
from sale,- in 1902, Southern Oregon waa
developing rapidly. It was largely this
development which taxed the capacity
of the existing transportation facilities.
The sale of land was stopped and the
development of southern Oregon was
checked.
Question of Taxes.
"It may possibly be urged that' the
railroad company has for many years
paid taxes in laree amounts, and la
U erefore entitled ti equitable consider
ation. It will be stated tliat Including
the year 1907 the railroad company has
paid approximately J 1.000,000 In taxes.
An examination of tnis question, how
ever, disposes of all apparent equities in
favor of the railroad company.
"Prior tq the year very little of
the land had ever been assessed or listed
for taxation. But a small portion of
the land grant had been patented; the
railroad company had postponed the
procuring of patents to avoid taxation.
The total taxes paid by the' railroad
company ,down to that time did not ex
ceed 176,000. Surely this did not pal
liate the violations of law which oc
curred at that time. Several large sale
were made In the years 1891, 1892 and
1893, In each of which the excess price
charged and received by the railroad
company was greater than the total
amount of taxes which it had paid to
that time.
"Since 1891 the rreater part of the
lands hav beon listed for taxation;
but, until the year 1902. when the rail
road company for the first time asserted
an absolute unqualified ownership of
the lands, with no obligation as to the
disposition of the same, and permanent-1
ly withdrew Us lands from sale, the as
aessed valuation of the land was based
upon the assumption that the Interest
or tne rauroaa company was limited to
(2.60 per acre, and therefore the lands
were assessed at a nominal valuation
averaging approximately 60 cents per
acre. eo mai, aown io ine year ios,
the amount of taxes paid by the railroad
company was still a comparatively small
item. After the company adopted its
present policy, the county officers of
each county instituted the practice of
assessing the railroad lands the same
as the lands of other proprietors. The
various counties have had the lands
cruised and the value estimated and as
sessments made accordingly. The total
assessed valuation of the land grant
for the yea 1907 was approximately
$18,000,000, whereas prior to the year
1901 the assessed valuation bad never
exceeded $2,000,000.
"Of the total taxes paid by the-rallroad
company on account of its land grant,
from 1870 to the present time, more
than one half has been paid since the
year 1902. In other words, the greater
portion of the taxes paid by the rail
road company down to the present time
have been incurred by it as a direct re
sult of its own violation of the law. It
is difficult to see how any equities can
be predicted upon these facta. Even as
it Is, the total taxes paid by the rail
road company does not average to ex
ceed 40 cents per acre, and but for tho
Increased taxation brought about in tho
manner heretofore stated would havo
been but about IS to 10 ena n
for the whole S7 year alneo it acquired
the grant. . ,
If thO OOndltfona nf tha .,, v. A
been observed, under no circumstances
could tho railroad comnanv km h.
Joyed a bounty exceeding; approximately
J8.ooo.ooq from tho disposition of tho
lands, which It hu received." It his
J&edy. realed approximately 14,50,"
000, and now asserts absolute ownership
i : , ,T,;.,yii
Mansfield Art Collection, on Salt.
Tt'KT?- M.-Tho art objects
collected by tho late Richard Mansfield,
tho actor, were placed on exhibition at
tho American Art Galleries today, pre
paratory to bolns? dispersed at auction
next week. Tho collection include vM
uablo portraits and paintlngn I f li .
garth, Komney, Sir Thomas iMwrmum,
Gainsborough, Sir Godfrey KntuM, J.v
nesa and other famous artists. .
? For any pain, from top tt t, f
ny cause, apply tr. Thorn' i
Oil. JPaia oaa't otay wUie i . : t.
I
f