OREGON AND CALIFORNIA RAILROAD

333 The freight instead of increasing began to decrease The following table gives a view of distribution of earn- ings and shows the marked fall in the amount of freight carried. Year 1876 1878 1879 1880 Passenger Traffic $187,773.53 232,860.76 198,336.50 174,069.95 Freight Traffic $338,036.84 345,482.17 247,650.52 179,832.03 Mail and Exp. Service $29,385.01 30,414.60 31,746.72 26,959.04 Minor Sources $21,596.04 39,359.35 25,319.28 24,358.52 With a fall in the traffic and consequent fall in earn- ings the company thought to gain traffic by building on through to California. But they did not have the capital, so it was decided to reorganize and force Holladay out altogether, and then issue bonds and complete the road to the state line. The reorganization was made in May, 1881. By this reorganization all of the old Holladay stock was wiped out and the bonds converted into stocks. Common stock was issued to the amount of seven million dollars and preferred stock (7%) to twelve million. To build more road, six million dollars worth of bonds were issued. These bonds were first mortgage, six per cent, forty year gold bonds and were to be due July 1, 1921. On May 25,1883, the Oregon and California Company entered into a contract with the Oregon and Transcon- tinental Company under which the latter was to complete the line from Roseburg to the Southern boundary of the state and from Corvallis to Junction City. The Oregon and Transcontinental Company was a company organized by Mr. Villard to gain control of the Northern Pacific Railroad Company. Mr. Villard's suc- cess in the railroad business had led him to greater under- takings. He had asked his friends to loan him eight mil- lion dollars for an unnamed purpose. Within twenty-four hours he had the eight million. He then called a con- ference and laid before them his plans of a new company ill >-