CHAPTER XXVIII JAY COOKE BITTERLY DENOUNCED AFTER CRASH HE LIVES FOR PERIOD IN RETIREMENT-REAPPEARS AND REBUILDS HIS RUINED FORTUNES-COAL DISCOVERED NEAR TACOMA-NORTHERN PACIFIC RAILWAY IN RECEIVER'S HANDS-WRIGHT, WITH HIS OWN MONEY, HASTENS RAILROAD BUILDING "FINANCING" NEW RAILROADS RISE OF HENRY VILLARD STEAMER IDAHO'S INTERESTING HISTORY AS HOSPITAL SHIP-VILLARD DRIVES "LAST SPIKE"-RAILROADERS GIVEN MILD RECEPTION BY RIVAL COAST CITIES THE FERRYBOAT "TACOMA." Jay Cooke, following the collapse of his bank September 18, 1873, was denounced as a hot-headed visionary who, in his attempt to build a railroad from "Nowhere through No-Man's Land to No Place," had brought the country to financial ruin. By others he was charged with being a cold-blooded schemer who had lined his own nest to the hurt of many innocents. Smalley, historian of the Northern Pacific, says: “The firm of Jay Cooke & Co. made about three millions of dollars out of its agency for the first Northern Pacific loan. Before the financial crash of 1873, Mr. Cooke regarded himself as one of the richest men of the country. He built in the beautiful suburbs of Philadelphia a palace which, for size and costliness, had scarcely an equal on this side of the Atlantic. In this palace, called 'Ogontz,' he dispensed a lavish hospitality. He had also a summer residence, 'Gibraltar,' on a rocky cape at the entrance to Sandusky Bay on Lake Erie, which, for the larger part of the year, he placed at the disposal of numbers of clergymen who recuperated their health by boating and fishing, and breathing the pure air of the lake. Mr. Cooke was a generous patron of churches and charities, and had a strong religious bent. After the crash he lived for a time in retirement in a little cottage in the country, near Philadelphia, to all appearances a broken man. But after getting through the bankruptcy courts, he reappeared in business circles in Philadelphia, occupied his old office on South Third Street, and began to build up a second fortune. Stock transactions and the successful sale of a silver mine to English capitalists gave him a large sum of money which he so increased by other ventures that he is now currently reported to be worth $2,000,000. His career offers the rare instance of a man losing one fortune and making another when past the meridian of life.” Earnings of the Northern Pacific were far below interest charges on its $33,000,000 of debt. April 16, 1875, bankruptcy proceedings were begun and General Cass was appointed receiver. Frederick Billings then proposed a plan of reorganization whereby the bonds would be taken up in exchange for preferred stock. By the end of September this was carried through and the Northern Pacific placed where it again could become a borrower. Business was beginning to revive and plans for new construction were laid. About thirty miles east of Tacoma in 1875 coal was discovered along the line of the proposed railroad over the Cascade Mountains. Benjamin Fallows, a Pittsburg coal expert, was sent out from the East, made an investigation and filed a report that caused the company to place a surveying party in the field. May 6, 1876, the line formally was adopted by filing with the Interior Department a map showing the route to be followed. The coal mine station was given the name of Wilkeson, in honor of the secretary of the company. Wilkeson's son, Samuel, Jr., came to Washington in 1873 as an employe of the company, married a daughter of Elwood Evans in 1877 and became a resident of Tacoma. He had assisted in the coal explorations. When the railroad company decided to build the line to the coal mines, it was proposed to finance the enterprise with borrowed funds. Citizens of Seattle and of Eastern Washington were carrying on a campaign having for its object the forfeiting of the unearned portion of the company's land grant. Delegate Jacobs introduced in Congress a bill to take the Cascade Division grant away from the Northern Pacific and give it to the Seattle & Walla Walla line. Senator Mitchell, of Oregon, was attacking the company's interests along the Columbia River and its affairs were in a critical condition. Something must be done. President C. B. Wright met the situation by ordering the construction of the first extension eastward from Tacoma towards the mountains. The money used in building this line came from surplus earnings of the eastern section between St. Paul and Bismarck. Wright, using money from his private purse, bought a cargo of iron rails and sent them to Tacoma via Cape Horn. This prompt action undermined the argument against the company and saved its charter. The coal road was completed early in 1878 and almost immediately became a revenue producer. The steamer Alaska carried the first 140 tons of Wilkeson coal to San Francisco and the fact that some of the output of this district was coking coal, and would make gas-a thing impossible with any other coal at that time mined in the Sound-created a sharp and increasing demand for the product of the mines. In addition to coal the new road found profitable business in the Puyallup Valley which already had become famous for its hops. Frederick Billings, in December, laid before the board of directors a plan for extending the eastern end of the line to the Yellowstone River. He proposed to bond the division for $2,500,000, to sell preferred stock of an equal amount and with each $100 subscription to the stock include a $100 bond. The plan was adopted, the stock subscribed and early in the spring of 1879 construction began. For each $100 of money used in construction $200 of securities were issued. No wonder railroad companies, in appeals for increased traffic rates, tell public service commissions they are not paying dividends upon their stock. The building of the Pen d'Oreille division of 225 miles was achieved by giving $170 in stocks and bonds for each $100 in cash and the mortgage filed was for $4,500,000. Work on the Pen d'Oreille division began in the fall of 1879 and was followed soon after by the division from Wallula to a connection with the Pen d'Oreille. This latter brought a traffic arrangement with the Oregon Railway & Navigation Company and introduced into Northern Pacific affairs Henry Villard, of the Oregon company, and the man under whose guidance the last link in the Northern Pacific line was to be built. Henry Villard, Bavarian by birth, came to America in 1853, following the completion of a course of study in French and German universities. After a year spent in New York, Chicago and St. Louis, Villard, in November, 1854, went to Bellville, Ill., to visit a kinsman. That winter he began writing short articles for a German paper, meeting with such success that in a short time he was contributing to a number of eastern German papers. Mastery of the English language opened a broader field for his writings and sent him into. the Lincoln-Douglas political campaign of 1858 as a reporter. His rise in the journalistic field was rapid. In 1866 he married a daughter of William Lloyd Garrison and the next year went to Europe as the representative of a number of American newspapers. On a second trip to Europe in 1874 he laid the foundations for his railroad career by becoming acquainted with some of Germany's leading capitalists and was sent back to America as their representative. August, 1874, found him on the Pacific Coast investigating some of the Ben Holladay properties. The result was the reorganization of the Oregon and California Railroad Company with Villard as president. In June, 1879, he brought about the organization of the Oregon Railway & Navigation Company, which absorbed the properties of the Oregon Steamship Company and gave him control of transportation on the Columbia. To this company came the Northern Pacific for an outlet for its Wallula-Pen d'Oreille line and Villard, in 1881, became its president. Villard's triumph was achieved only after a bitter battle. At the head of Oregon's principal transportation line he naturally commanded the support of Portland, then exercising every influence toward bringing the Northern Pacific down the Columbia. Had this been accomplished Portland would have become the western terminus. On the Sound Villard's Oregon Improvement Company obtained control of the Seattle & Walla Walla Railroad. His Oregon Railroad & Navigation Company in May, 1881, bought the Starr line of steamboats, including the North Pacific, George E. Starr, Annie Stewart, Isabel, Alida, and Otter, to which it added the Welcome from the Columbia River run. In 1882 the Railroad & Navigation Company completed its railroad up the south bank of the Columbia and sent to the Sound the steamers Idaho, City of Quincy, Emma Hayward and the Gazelle. Bitter competition was the result, passenger rates were cut until at one time the fare between Seattle and Bellingham was down to 50 cents. The Idaho became famous as the Wayside Mission Hospital, of which C. B. Bagley says: "The Wayside Mission Hospital had a beginning so unique, and so paved the way for the present City Hospital, that it deserves mention in this history. In the late '90s Dr. Alexander de Soto became a resident and citizen of Seattle. He was of Spanish extraction, his father being, according to his account of himself, a general in the military forces of Spain. He had received a good literary, as well as a medical and surgical education, and was a physician and surgeon of skill and experience and possessed a naturally bright and resourceful mind. He here practiced his profession, doing a good deal of charity work. |