Archives West Finding Aid

The Southern Pacific Railroad was founded in San Francisco in 1865, and in 1868 it was purchased by the "Big Four" railroad tycoons of California, Collis P. Huntington, Leland Stanford, Mark Hopkins, and Charles Crocker. In 1870, during the construction of the first transcontinental railway, the company merged with the Central Pacific to form the largest railroad company in the western U.S. By 1876 the railroad had opened service between Oakland and Los Angeles, and by 1883 a second transcontinental route had been built from Los Angeles to Chicago. In 1885 the Southen Pacific assumed control over all operations of the Central Pacific, and in 1913 the U.S. Supreme Court forced the Union Pacific Railroad to sell its stock in the Southern Pacific Company. In 1988 the Southern Pacific Company was taken over by Rio Grand Industries, and in 1996 the Southern Pacific was purchased again by the Union Pacific Railroad.

In 1887 the Southern Pacific assumed control of the Oregon and California Railroad, which had been established through a reorganization of the California and Oregon Railroad in 1865. The Oregon and California came to be known as the "East Side Line" since it competed with the Oregon Central, or "West Side Line," to build the rail link between Portland and San Francisco. In 1870, magnate Ben Holladay assumed control of the Oregon and California, although later financial losses led to his displacement by Henry Villard and the Northern Pacific after 1873. In 1887 the line from Portland to Oakland, California, was completed and the Oregon and California came under the control of the Southern Pacific Railroad.

In the following decades the Oregon and California Railroad became the focus of a notorious land-fraud litigation. This was the result of the U.S. Government's method of subsidizing railroad construction through the grants of alternating parcels of property along the routes. As a condition of these land grants, the railroad was required to sell the parcels to "settlers" at $2.50 an acre. However, the Oregon and California evaded this requirement and sold properties to large land developers at high prices. These fraudulent practices became a public issue, in part through the investigative reporting of the Oregonian newspaper in 1904. A Federal investigation, instigated by President Theodore Roosevelt, was launched around that time, and the case reached the U.S. Supreme Court in 1915. The following year, Congress voted to repossess the railroad lands, with compensation to the company at the $2.50 per acre originally intended for settlers. The controversy continued throughout the 20th century, however, as questions arose over revenues from timber sales and other issues.

In 1927 the Southern Pacific bought the Oregon, California, and Eastern Railway, which was begun by R. E. Strahorn in the early 1900s. The line ran eastward from Klamath Falls, Oregon, to Sprague River, and eventually reached the town of Bly. It was operated jointly by the Southern Pacific Railroad and the Great Northern Railroad after 1928.

The Northen Pacific Terminal Company was founded in 1882. It was owned jointly by the Oregon and California Railroad, the Northern Pacific Railroad, and the Oregon Railroad and Navigation Company. In 1886 it purchased 14 blocks in Portland from the Oregon Central Railroad, and between 1890 and 1896 the company constructed the present Portland Union Station. In 1965 the name was changed to the Portland Terminal Railroad Company.