Many pioneer Oregonians held a longstanding and deep distrust of technology and corporations. Matthew Deady railed against both (see the Trouble with Corporations
page) during debates in the 1857 Oregon Constitutional Convention. But most also recognized progress was inevitable and had to be managed to enhance rather than threaten the rural character of the agrarian ideal. In this regard, the last decades of the 1800s produced mixed results. Both technology and corporations brought marvelous advances as well as exploitation to Oregonians. And no other industry embodied the promises and bitter disappointments of the period better than the railroads.
Developing Oregon's Railroads
The influx of increasing numbers of settlers to Oregon brought the economic need for better transportation. Roads that existed were mostly primitive—plagued by mud in the winter and choked by dust in the summer. A growing number of steamboats plied the Columbia and Willamette rivers in the 1850s, but supporters of increased development called for a more comprehensive transportation system. William Watkins, for example, lauded in 1857 the "tangible modern benefits of liv[ing] in a country of plank roads and telegraphs, canals and railroads" as part of a more prosperous future Oregon. Footnote 1
Railroads in particular offered the hope of low cost year-round transportation. In 1868, bold and colorful entrepreneur Ben Holladay took up the challenge of connecting Oregon to the Union Pacific transcontinental railroad nearing completion to California. His aptly named Oregon & California Rail Road (O&C) managed to complete the route from Portland south to Roseburg by 1872 before shaky finances and high expenses halted progress. However, even without a connection to the transcontinental railroad, the Oregon economy benefited as Willamette Valley farmers finally had an efficient link to Portland's seaport. Construction on the O&C line resumed in 1882 and, under the control of the Southern Pacific Company, finally reached the California border and a connection to the transcontinental line in 1887.
Meanwhile, work was progressing on a railroad to the east of Portland in a race to get a transcontinental connection before James J. Hill and the Great Northern Railway reached rival Seattle. Financier Henry Villard led a group of investors with the Oregon Railway and Navigation Company (OR&N) in the purchase of the Oregon Steam Navigation Company and its existing tracks, giving it a partial route along the Columbia River. By 1883 Villard had gained control of the Northern Pacific and created a link with the OR&N, thus completing the first Oregon transcontinental connection. A master at the intricate chess match of railroad investment and construction, a year later Villard's Oregon Short Line Railroad made a second transcontinental connection to the Union Pacific line in Wyoming, thus branching to the southeast.
Growth Predictions Hold True
In many ways, railroads delivered the progress developers predicted. Tracks were soon carrying tons of Oregon wheat to other markets. In Linn County alone, the railroad triggered a 250% jump in wheat production from 1870 to 1877. Over time, farmers in other areas of the state responded to the enhanced access to new markets by increasing the amount of land put into production. Railroads carried new and expensive machinery from factories in the East and Midwest to Oregon farmers who in turn became more specialized and profit oriented. As a result, manufacturing in the state grew and diversified in and around agricultural communities as well. While wage laborers still represented a small percentage of the state's population, the number of Oregonians working in manufacturing skyrocketed by nearly 400% in the 1880s. Lumber mills benefited from the need for railroad ties and trestles. Railroad repair shops, woolen mills and flour mills often followed the lumber mills. Numerous spur lines carried freight and trade farther into previously economically and socially isolated areas. Footnote 2
Once the transcontinental lines were completed, more migrants from the eastern U.S. and Europe came to Oregon—enticed by railroad literature advertising cheap land prices and boundless economic possibilities. Both the Union Pacific and Northern Pacific railroads sold property along their routes to settlers and businesses who would eventually need to use the railroads to ship products. Thus, railroads dispensed countless acres of free land from Congress at a reasonable price in essence to create a growing and largely captive market. The strategy worked as Oregon's population grew from 90,000 in 1870 to over 413,000 just thirty years later. Portland exemplified the growth. From 1880 to 1900, its population soared from 17,500 to 80,871. Footnote 3
But the changes carried by the new railroad tracks did not benefit everyone. Some towns were left behind when railroad alignments bypassed them. Once thriving Jacksonville fell into economic decline after the O&C Rail Road decided to run the line several miles to the east through Medford. Eventually, Jacksonville lost the county seat to Medford, an acknowledgement of the economic and political power shift. Even the attitudes of people in those areas directly served by railroads sometimes soured as the lofty promises failed to materialize for everyone. Critics charged that railroads discriminated between communities and between large and small shippers. Many small farmers and businessmen, feeling increasingly gouged by what they considered to be monopolistic railroad practices, complained bitterly. Footnote 4
The divide between the haves and the have-nots seemed to grow in railroad towns. For example, the richest 10 percent of Roseburg residents owned 44 percent of the town's wealth in 1866. Within eight years of the arrival of the O&C Rail Road in 1872, that same 10 percent of the residents controlled 63 percent of the wealth. The proportion of people owning land in the town also dropped during the period. Indeed, quite unlike the idealistic Oregon vision of small local corporations formed for the benefit of the community, the railroads were huge entities, replete with layers of holding companies and controlled by eastern capitalists focused on the goal of extracting profit. Disillusioned by the perceived unfairness and corruption brought by the railroads, many farmers and workers organized into unions and other organizations to struggle for change. Their efforts would be part of a nationwide populist movement that would begin decades of economic and political struggle between capital and labor, a central theme of American history in the late 1800s and early 1900s. Footnote 5