Oregon Improvement Company completes purchase of Seattle & Walla Walla Railroad Company and Seattle Coal & Transportation Company on November 26, 1880.

  • By John Caldbick
  • Posted 10/09/2014
  • HistoryLink.org Essay 10920

On November 26, 1880, the newly formed Oregon Improvement Company (OIC) completes the purchase of the Seattle & Walla Railroad & Transportation Company and the Seattle Coal & Transportation Company. The purchase of the railroad gives the OIC direct rail access from Seattle's waterfront to the coal mines at Newcastle in southeast King County, which are included in the Seattle Coal purchase. Founded by Henry Villard (1835-1900), the Oregon Improvement Company is one component of an ambitious, multipronged attempt to dominate the economic development of the Pacific Northwest. Part of that effort will include construction of two imposing piers and appurtenant facilities on Seattle's waterfront. The ships that dock there will contribute to the creation of Ballast Island, among the last homes in that era for Native Americans in the city. Both OIC docks will be destroyed in the Great Fire of 1889, but will be rebuilt and go on to serve the company for many more years.

Railroad Blues

Every new town in the West with ambitions for greatness needed a railroad link to the rest of the country. The first transcontinental line, a collaboration between the Central Pacific and Union Pacific railroads, was opened on May 10, 1869, with its western terminus in San Francisco. In early 1870 Congress gave the Northern Pacific Railroad a charter to build its proposed transcontinental route down the path of the Columbia River, and required that a branch be run north to serve Puget Sound. Several cities, including Olympia, Tacoma, Seattle, Port Townsend, and Bellingham vied to become the railroad's northernmost terminus. All, in one way or another, were to be disappointed.

Seattle, with its fine harbor and nearby coalfields, thought itself a cinch for the honor and offered generous waterfront concessions to the Northern Pacific. The railroad did nothing to discourage these hopes, while keeping its options open. The city was stunned on July 14, 1873, when pioneer Arthur Denny (1822-1899) received a terse telegram: "We have located Terminus on Commencement Bay" (Beaton, 37). Tacoma, not Seattle, would be the first Puget Sound city to benefit from a rail link to the outside world. (No one knew it at the time, but it would be a decade before the Northern Pacific completed its transcontinental line.)

Discouraged but not defeated, the citizens of Seattle decided to build their own system, to be named the Seattle & Walla Walla Railroad & Transportation Company. They started with a hopelessly optimistic plan to breach the Cascade Mountains at Snoqualmie Pass and open a direct rail route between Washington Territory's geographical halves. Work began on a bright May Day in 1874 when nearly the entire population turned out at the Duwamish River south of the city to clear a roadbed. After an enthusiastic start carried on in a party-like atmosphere, reality set in. Work progressed rather slowly after that; by October, a right-of-way had been laboriously cut as far as Renton, a distance of about five miles from the starting point, but no track was laid.

Another and older enterprise, the Seattle Coal & Transportation Company, had since 1871 been moving coal from its mines in southeast King County to Seattle on a tortuous route that took the cargo first across Lake Washington, then by tram across what is today the Montlake Cut, then to South Lake Union on barges, and on from there by a small-gauge railway to a dock and coal bunkers on Elliott Bay at the foot of Pike Street. The mines produced good, high-grade coal and there was a ready market, but transportation costs consumed much of the profit.

In 1877, Seattle Coal's bunkers and wharf collapsed into Elliott Bay, victims of pile-eating teredo worms. Fortunately, in early 1876 James M. Colman (1832-1906), who since 1861 had been building a career in Puget Sound's lumber-mill industry, had taken charge of the Seattle & Walla Walla operation. Using much of his own money and mostly Chinese laborers, he built a railroad trestle that scribed a wide arc over the tideflats of Elliott Bay to the line's original starting point on the Duwamish River, then laid track on the prepared right-of-way from there to Renton. After the collapse of the Seattle Coal facility, Colman pushed the tracks another 12 miles to the mines of Newcastle and began transporting that company's product under contract. A new wharf and related facilities were built on the waterfront at the foot of King Street to receive, store, and deliver the coal. The railroad went no farther than Newcastle, but was a financial success. Historian Kurt E. Armbruster summed up its contributions, and its one large limitation:

"Though it fell far short of its eastern terminus, the Seattle & Walla Walla Railroad proved itself eminently useful as a vehicle of local growth ... . Mining, logging, manufacturing, machining, and a multitude of service industries all benefited directly from the railroad ... .

"Still, the Seattle & Walla Walla was a dead end road" (Armbruster, 58).

The city, stung by what its citizens saw as the Northern Pacific's perfidy, remained without a rail connection to the rest of the country. The fact that Tacoma did too may have occasioned some gloating, but little comfort.

Enter Henry Villard

Meanwhile, the Northern Pacific was itself struggling. By January 1874 it had run rails from Kalama on the Columbia River to Tacoma, but the transcontinental line remained far from finished. The badly mismanaged and overextended company was in bankruptcy, at risk of missing construction deadlines imposed by Congress, and facing forfeiture of valuable land grants. Competent receivership under Frederick Billings (1823-1890) returned it to viability the following year, but it would remain a sitting duck for a man with the ambitions of Henry Villard.

Born in Germany as Ferdinand Heinrich Gustav Hilgard, Villard changed his name when he came to America in 1853. He spent several years living hand to mouth, working odd jobs, mastering English, and eventually studying law. He then embarked on a career as a journalist, and within a few years seemed to be everywhere and know everyone. He covered the famous Lincoln-Douglas debates in 1858 and came to know Lincoln personally, was at Pike's Peak for the gold rush there the next year, rode on the train that carried Lincoln to his first inauguration in 1861, reported from major battlefields throughout the Civil War, and in 1866 married Fanny Garrison (1844-1928), a leading woman-suffrage campaigner and the daughter of America's most famous white abolitionist, William Lloyd Garrison (1805-1879).

With his command of English, sharp mind, and wide-ranging acquaintanceships, Villard in 1874 was asked by a consortium of German investors to investigate what had become of money they had entrusted to Ben Holladay (1819-1887), a man of questionable ethics who had parlayed a California Gold Rush stage line into a transportation empire centered in Portland. Villard quickly determined that Holladay's businesses were severely distressed. He convinced his German clients to invest even more, and by June 1879 he had bought out Holladay's assets, together with those of the Oregon Steam Navigation Company, which did a roaring business carrying cargo and passengers on the Columbia River. Villard merged the various enterprises into the Oregon Railway & Navigation Company (ORNC), named himself president, and set out to monopolize the Northwest's rail and sea transportation and much of its natural-resource development. He very nearly succeeded.

The Oregon Improvement Company

On October 21, 1880, Villard created another enterprise, one designed to gather together most of his assets in Washington Territory under one umbrella as a subsidiary of the ORNC. Although its major activities would be concentrated around Puget Sound, he called it the Oregon Improvement Company. Within days, Villard had arranged to purchase all the assets of both the Seattle & Walla Walla (which included three-quarters of a mile of waterfront south of Yesler's Wharf) and the Seattle Coal & Transportation Company. The deal was finalized on November 26, 1880. To better reflect the breadth of his ambitions, Villard soon changed the name of the Seattle & Walla Walla line to the Columbia & Puget Sound Railroad.

The Northern Pacific, now out of bankruptcy, was still obliged to finish the transcontinental line to Tacoma, and Villard saw this as a direct threat to his plans for the region. Drawing on eager German and East Coast money, by early 1881 he had raised $16 million for what newspapers called "The Blind Pool" (so named because investors were not told exactly what they were investing in). Villard used the funds to buy up 60 percent of Northern Pacific's common stock and took over as company president. With the purchase, he also assumed the railroad's transcontinental obligations and announced that he would complete the link between St. Paul and Tacoma within two years. He promised Seattle's citizens that he would extend the line north to their city, although retaining Tacoma as the official western terminus. Villard never denied that he was seeking monopoly (not yet illegal), but insisted that his would be a "benevolent" one (Dorpat, 10). He was greeted by many as a savior, but by others as just another in a parade of railroad men who promised much and delivered little. He would prove to be a bit of both.

Villard started with a bang. He hired 25,000 workers, and the long-delayed transcontinental line was completed with a gold-spike ceremony at Gold Creek, Montana, on September 8, 1883. His railroad did not cross the Cascades (that was deemed too expensive), but ran along the south bank of the Columbia River, turning north at Portland. Train ferries were necessary to cross the river to Kalama in Washington Territory. From there the line ran north to Tacoma on the route that had been finished in 1874. On September 14, 1883, Villard arrived in Seattle (by ship), a long line of dignitaries in tow, and received a hero's welcome.

Villard's promise to connect Seattle to Tacoma by rail was fulfilled, sort of, but not before he had overextended his empire so badly that it teetered on the edge of collapse. He was forced to step down as the Northern Pacific's president in January 1884. The railroad did complete the route from Tacoma in June of that year, but service was so sporadic and intentionally poor that it became known as the "Orphan Road" (Armbruster). Not until 1887, with Tacoma stagnating and competition looming from other railroad lines, did the Northern Pacific recognize Seattle as the logical site of its western terminus and begin operating the link in a competent manner. For his part, Villard would soon stage a comeback, cobbling together another complex empire, and from 1888 to 1893 he returned to the Northern Pacific, serving as chairman. It was the financial Panic of 1893 that brought his entrepreneurial activities to a final and disappointing end.

On the Waterfront

While the transcontinental link was finally being stitched together, the Oregon Improvement Company began expansive development on Seattle's waterfront. In 1881, spurred by Villard's promise that he would connect Seattle and Tacoma by rail within one year, the Seattle City Council gave the OIC development rights to a mile-long, 30-foot-wide strip of land running north along the waterfront from King Street to Clay Street just south of Broad Street. The grant was conditioned on the Tacoma rail link being completed within two years and specifically required that the waterfront land be available to any other railroad companies that got there first. The latter condition did not please Villard, but he had little choice but to accept.

In early 1881, the OIC expanded and improved the existing King Street Coal Wharf, constructing a new trestle that ran in a graceful curve to shore. Work also began on two new docks and large warehouses that lay side by side between the King Street Coal Wharf and Yesler's Wharf, which was some 900 feet long and resembled a small and slightly ramshackle village. The two new docks would be known as the City Dock, lying between Washington and Main streets, and the Ocean Dock, just to the north between Main and Jackson. There the trains of Villard's Columbia & Puget Sound Railroad would meet the trading ships of the world, including many owned by one or another of his sprawling empire of companies.

Ballast Island

In 1865, Seattle had passed an ordinance that prohibited Native Americans from residing anywhere within the young city's limits unless they were employed and housed by a non-Native. While it does not seem to have been enforced with draconian rigor, it cleared the city of much of its remaining indigenous population, a continuing injustice that began with forced relocations during the Indian Wars of the mid-1850s. But it remained a stubborn fact that Indians were willing to perform work, including harvesting hops in the river valleys southeast of the city, that non-Indians did not have the will or the numbers, or both, to do. They also gathered foodstuffs and made handicrafts that found willing buyers among the city's residents. Despite the law, Indians remained a significant presence on Seattle's waterfront for years, with most eventually living on an artificial island along the city's downtown shoreline just off Washington Street.

Henry Yesler's (1810?-1892) sawmill and other waterfront businesses had been dumping waste materials into Elliott Bay since 1854 and had managed to fill some marshy areas along the shore with scrap lumber and other industrial detritus. Before the widespread appearance of steel-hulled vessels and the invention of powerful means of pumping water for ballast, ships traveling without cargo or only partially filled carried sand, rocks, and other heavy material in their holds to provide stability and distribute the stresses on the hull. This solid ballast had to be laboriously taken aboard when the ship was empty and then laboriously disposed of to free the space for cargo. Ballast that was no longer wanted was simply dumped overboard, and because of the need to maintain stability this most often did not occur until a ship was at or very near its mooring place.

When multiplied by hundreds of ships, the jettisoning of ballast presented a considerable disposal problem. For some time, it was illegal for ships to do so in Seattle's harbor. More than one captain was prosecuted, but commercial necessity prevailed and an area just offshore at Washington Street was set aside for such dumping. At first slowly and then more rapidly, an island began to appear in 1881 that was composed of rocks and other materials taken on as ballast from locations around the world, including 40,000 tons from San Francisco's Telegraph Hill.

When completed, the Oregon Improvement Company's City Dock and Ocean Dock could accommodate four ships simultaneously, and with their contributions, Ballast Island began to grow rapidly. At its peak, it reached 400 feet into Elliott Bay and provided a place where Native Americans could reside without fear of eviction. Many were Duwamish who were understandably reluctant to live on the reservation of the Suquamish Tribe across Puget Sound, to which they had been consigned in the mid-1850s, or that of the Muckleshoots to the south, where they were later sent. Longhouses they had built near the mouth of the Duwamish and on the beaches of West Seattle had been burned by white settlers, and together with other Natives, the Duwamish set up shop on Ballast Island, which eventually took on the appearance of a tent city:

"Duwamish families and other Native Americans came by canoe to the Seattle waterfront. Some were seasonal visitors, seeking work. Native Americans harvested and sold shellfish, and sold woven baskets and carvings, catering to the Whites' demand for souvenirs. Some were traveling to harvest the hop fields upriver. For some Duwamish, Ballast Island became a year-round residence by 1885" ("Exile to Ballast Island").

In 1889, the City and Ocean docks were destroyed in the Great Fire, and along the entire waterfront south of University Street only Ballast Island remained unscathed. The Oregon Improvement Company soon built two even larger facilities on the ruins, which would be designated, less descriptively, as Docks A and B. They were eventually replaced by today's Pier 48, built in the mid-1930s and taken over by the Port of Seattle in 1950 to serve a variety of shippers. Between 1967 and 1989, Pier 48 was the Seattle terminal for the ferries of the Alaska Marine Highway System, and later accommodated summer steamship service to Vancouver, B.C. In 2014 the pier was home to the King County Water Taxi maintenance barge and served as a temporary staging area for the tunnel being drilled to replace the Alaskan Way Viaduct.

Before the nineteenth century ended, Ballast Island was subsumed in the landfill used to create Railroad Avenue (now Alaskan Way). The Oregon Improvement Company lived on for many years as a cog in a number of different conglomerate empires, the complexity of which make it almost impossible to trace with great accuracy. It was finally stricken from the State of Washington's corporate roster in 1923. At a date that seems to have been unrecorded, the Yukon Club and Propeller Club installed a historical marker on shore near the former site of Ballast Island, providing a reminder of the thousands of years of Native American presence on what is today one of the leading waterfronts of the world.


Sources:

"James Murray Colman," in Rev. H. K. Hines, D.D., An Illustrated History of the State of Washington (Chicago: The Lewis Publishing Co., 1893), 332-333; Welford Beaton, The City That Made Itself (Seattle: Terminal Publishing Company, 1914); Kurt E. Armbruster, The Orphan Road (Pullman: Washington State University Press, 1999); "Henry Villard (1835-1900)," Mr. Lincoln & Friends website accessed August 14, 2014 (http://www.mrlincolnandfriends.org/inside.asp?pageID=58); "Notable Oregonians: Henry Villard -- Railroad Builder," Oregon Blue Book website accessed August 14, 2014 (http://bluebook.state.or.us/notable/notvillard.htm); "A Reputation for Cross-Cultural Business: Henry Villard and German Investment in the United States (1835-1900)," Immigrant Entrepreneurship website accessed August 16, 2014 (http://www.immigrantentrepreneurship.org/entry.php?rec=26%22); Thomas W. Prosch, "A Chronological History of Seattle from 1850 to 1897," The Seattle Public Library website, accessed August 19, 2014 (http://cdm16118.contentdm.oclc.org/cdm/ref/collection/p15015coll6/id/1392); "Exile to Ballast Island," Duwamish Tribe website accessed August 20, 2014 (http://www.duwamishtribe.org/ballastisland.html); "Washington Street Boat Landing," City of Seattle Parks & Recreation website accessed August 21, 2014 (http://www.seattle.gov/parks/park_detail.asp?ID=4165); Lynn Thompson, "Seattle's Waterfront Park to Reflect Region's Rich Tribal Heritage," The Seattle Times, August 21, 2014 (http://seattletimes.com/html/localnews/); Paul Dorpat, Seattle Waterfront: An Illustrated History (Seattle: Seattle City Council, 2005); HistoryLink.org Online Encyclopedia of Washington State History, "Seattle & Walla Walla Railroad and Navigation Company" (by Heather Graham), "Colman, James Murray (1832-1906)" (by James Warren), "Port of Seattle, Founding of" (by Kit Oldham), "Northern Pacific Railroad's Orphan Road," (by Greg Lange), and "Railroad Development in the Seattle/Puget Sound Region, 1872-1906" (by Heather M. MacIntosh and Walt Crowley) http://www.historylink.org/ (accessed August 19, 2014).


Licensing: This essay is licensed under a Creative Commons license that encourages reproduction with attribution. Credit should be given to both HistoryLink.org and to the author, and sources must be included with any reproduction. Click the icon for more info. Please note that this Creative Commons license applies to text only, and not to images. For more information regarding individual photos or images, please contact the source noted in the image credit.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License
Major Support for HistoryLink.org Provided By: The State of Washington | Patsy Bullitt Collins | Paul G. Allen Family Foundation | Museum Of History & Industry | 4Culture (King County Lodging Tax Revenue) | City of Seattle | City of Bellevue | City of Tacoma | King County | The Peach Foundation | Microsoft Corporation, Other Public and Private Sponsors and Visitors Like You