f the Oregon Steamship
and Navigation Company with several short railway lines in Oregon and
Washington, under the name of the Oregon Railway and Navigation Company.
These railroad lines extended east from Portland to the Oregon state
line, and north to Spokane, and they finally made connection with the
new Northern Pacific. At the same time, another road, known as the
Oregon Short Line Railroad, was built from Granger, Wyoming, on the
line of the Union Pacific to a junction with the Oregon Railway and
Navigation Company at Huntington, Oregon, on the Snake River. The Oregon
Short Line came under the control of the Union Pacific and was opened
for traffic in 1881. Later a close alliance was made with Henry Villard,
the controlling spirit in the Oregon Railway and Navigation Company.
Ultimately the entire system of Oregon lines passed under Union Pacific
control, to be lost in the receivership of 1893, but later recovered
under the Harriman regime.

When, after ten more years of expansion, the great Union Pacific
property went into the hands of receivers in 1893, it had grown to a
system of more than 8000 miles. It completely controlled the Oregon
railway and steamship lines, the lines to St. Louis, and also an
important extension known as the Union Pacific, Denver and Gulf
Railroad, running from a point in Wyoming across Colorado to Fort Worth,
Texas. The financial failure of the system was due to a variety of
causes. Its management had been extravagant and inefficient, and
construction and expansion had been too rapid. The policy of building
expensive branch lines where they were not needed and of obligating
the parent company to finance them had been a grievous mistake and had
contributed largely to the downfall of the company. Further than this,
the credit of the Union Pacific was steadily growing weaker because
the time was drawing near when its heavy debt to the United States
Government would fall due. In all its history of more than twenty years
the company had never paid any interest on the government debt nor
had it maintained a sinking fund to meet the principal when due.
Consequently, the accruing interest had mounted year by year and, should
the Government enforce payment at maturity in 1897-99, the company
would be doomed to bankruptcy. This government debt, including accrued
interest, amounted to the sum of $54,000,000.

Attention should not, however, be diverted from the fact that during all
these years a