The railroad languished for several years, until Frederick Billings and a group of eastern businessmen reorganized the company in 1877. With the national economy once more on the rise, bond sales again paved the way for the revival of the dormant Northern Pacific. Billings secured the company coffers with more than ten million dollars over Jay Cooke's 1871 investment, and workmen began laying tracks simmultaneously in the east, from Bismarck, and from the west, leading out of Wallula Junction in Washington Territory, a site near the confluence of the Columbia and Snake Rivers.
There was a second rail line which branched east along the southern bank of the Columbia River. Its connecting depot was located very near to the site where work on the Northern Pacific had begun again in Washington Territory: almost at the juncture of the Columbia and Snake rivers. The Oregon Railway and Navigation Company, headquartered in Portland, owned this route; its eastward track connected with the Union Pacific's so-called Oregon Short Line, just outside of Wallula.
Oregon Railway and Navigation Co. was one of many transportation systems in the Pacific northwest which had been incorporated into a holding company known as the Oregon and Transcontinental. This holding company represented the investment capital from European financiers who had been speculating in American railroads since the end of the Civil War. The director of this holding company was Ferdinand Heinrich Gustav Hilgard, aka Henry Villard.
Villard first came to prominence in the United States as a journalist and editor. Having received his university education in Germany, this emigre from Bavaria had settled in Illinois during the mid- 1850s. He began writing for the state's newspapers, achieving some distinction for his coverage of the Lincoln-Douglas debates in 1858. During the Civil War, Villard became a correspondent for the New York papers. While visiting Germany in 1871, he came into contact with some of the European industrialists who had financial holdings in the myriad of transportation companies on this side of the Atlantic.
By the time Villard returned to the United States two years later, he was the representative of those concerns. He acted as agent for holders of Western railroad securities, engaging in financing on their behalf. With the establishment of the Oregon Railway and Navigation Company in 1879, Villard became head of his own transportation fiefdom in the Pacific Northwest. His only competition was the Northern Pacific.
Villard devised an enterprising and pragmatic scheme to gain control of the transcontinental railroad. Its expansion towards the west had continued unabated for almost three years, since Billings had taken over in 1877. Villard opened negotiations to promote his Oregon rail line as the Northern Pacific’s outlet to Puget Sound, via Portland. This would, in turn, give Oregon a direct link to the east, via the completion of the Northern Pacific. Villard sweetened the proposal by granting track rights to the NP until such time as its own line might be completed into Tacoma.
Formal accord between the two railroads was signed on 20 October, 1880. Villard immediately began to purchase land along the future path of the Northern Pacific. He also began to buy stock in the railroad. Within six months, Villard's stock acquisitions enabled him to become a sixty per-cent owner of the transcontinental. In September, 1881, Henry Villard was named president of the Northern Pacific. Having successfully co-opted the railroad, the only task which remained was to drive its railheads across Montana.
Nearly thirteen years after the first spike was driven on the shores of Lake Superior, the final tracks for the Northern Pacific were laid down in Montana Territory. A grand celebration took place at Gold Creek, with both former president Ulysses Grant and Henry Villard in attendance. These men shared in driving down the final spike which joined east to west on 8 September, 1883. Grant and Villard employed the very same ceremonial rail pin which had been used in 1870 to commence the NP's construction in Minnesota.
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