Transportation
In Germany, while living at Wiesbaden, he engaged in the negotiation of American railroad securities. After the Panic of 1873, when many railroad companies defaulted in the payment of interest, he joined several committees of German bond holders, doing the major part of the committee work, and in April 1874 he returned to the United States to represent his constituents, and especially to execute an arrangement with the Oregon and California Railroad Company.
Villard first visited Portland, Oregon in July 1874. On visiting Oregon, he was impressed with the natural wealth of the region, and conceived the plan of gaining control of its few transportation routes. His clients, who were also large creditors also of the Oregon Steamship Company, approved his scheme, and in 1875 Villard became president of both the steamship company and the Oregon and California Railroad. In 1876, he was appointed a receiver of the Kansas Pacific Railroad as the representative of European creditors. He was removed in 1878, but continued the contest he had begun with Jay Gould and finally obtained better terms for the bond holders than they had agreed to accept.
The Pacific Northwest was the booming sector of American expansion. European investors in the Oregon and San Francisco Steamship Line, after building new vessels, became discouraged, and in 1879 Villard formed an American syndicate and purchased the property. He also acquired that of the Oregon Steam Navigation Company, which operated fleets of steamers and portage railroads on the Columbia River. The three companies that he controlled were amalgamated under the name of the Oregon Railroad and Navigation Company.
He began the construction of a railroad up Columbia River. On failing in his effort to obtain a permanent agreement with the Northern Pacific Railway, which had begun its extension into the Washington Territory, Villard used his Columbia River steamship line as his railroad's outlet to the Pacific Ocean. He then succeeded in obtaining a controlling interest in the Northern Pacific property, and organized a new corporation that was named the Oregon and Transcontinental Company. This acquisition was achieved with the aid of a syndicate, called by the press a “blind pool,” composed of friends who had loaned him $20 million without knowing his intentions. After some contention with the old managers of the Northern Pacific road, Villard was elected president of a reorganized board of directors on 15 September 1881.
With the aid of the Oregon and Transcontinental Company, his railroad line to the Pacific Ocean was completed, but at the time when it was opened to traffic with festivities, in September 1883. The project had cost more than expected, and some months later these companies experienced a financial collapse. Villard's financial embarrassment caused the collapse of the stock exchange firm of Decker, Howell, & Co., and Villard's attorney, William Nelson Cromwell, used $1,000,000 to promptly settle with creditors. On 4 January 1884, Villard resigned the presidency of the Northern Pacific. After spending the intervening time in Europe, he returned to New York City in 1886, and purchased for German capitalists large amounts of the securities of the transportation system that he was instrumental in creating, becoming again director of the Northern Pacific, and on 21 June 1888, again president of the Oregon and Transcontinental Company.
Read more about this topic: Henry Villard