It took almost 20 years for the Northern Pacific's competition to arrive on Gray's Harbor. In the case of the Union Pacific Railroad, it was a two pronged strategy.
It all started with a small-time railroad entrepreneur named George Hunt. George W. Hunt entered the northwest railroad picture in 1887 as a sub-contractor building the Oregon and Washington Territory Railroad.His vision was a railroad serving a seaport, in this case, the newly platted town of Gray's Harbor City. Citizens there, and those of the surrounding communities of Aberdeen, Hoquiam and Montesano had dreams as big as Hunt's, and had pledged $750,000 for the building of a rail link to the Northern Pacific at Centralia. And it certainly did not hurt that Hunt was a landowner in the seaport to be. If he could build a line from Gray's Harbor City to Centralia, Portland, the powerhouse of the Northwest, was just a hundred miles away. The Hunt System would rival the size of the Northern Pacific's main line mileage in western Washington, if it could just be completed.
As Hunt's Centralia and Gray's Harbor crews were grading towards Gray's Harbor City from Centralia, the Northern Pacific was using the recently completed Gray's Harbor and Puget Sound Railroad to steal a nine mile march on Hunt into the Chehalis River valley. The Northern Pacific's construction crews building south to Olympia bogged down, and Hunt's Centralia and Gray's Harbor put its first train into Montesano in January, 1891. The Northern Pacific then blocked Hunt by claiming he owed the road $135,000. An attachment soon followed against Hunt's Centralia and Gray's Harbor. Progress on Hunt's railroads ground to a halt as he became locked out of financial markets.
Construction restarted in 1906 when Hunt's Centralia and Gray's Harbor was purchased by the Union Pacific and its name changed to the Oregon and Washington Railroad. Edward Henry Harriman, the UP's President, who just as quickly pigeonholed it. What was slowing Harriman down was the fact that he had no main line into the area to connect this potential branch to – his rail head was 100 miles to the south in Portland. The Northern Pacific already had one which was more than up to the job, all Harriman needed was a way to get the Northern Pacific to let his trains run over it.
Harriman believed as early as 1901 that he could gain entrance to the Puget Sound region from Portland by way of the Northern Pacific's rails. Surveyors mapped out a route that closely paralleled the Northern Pacific main line as far north as Wabash, Washington, just north of Centralia. The line then ran east towards Tono and Roy. From this latter point it followed the Northern Pacific's Prairie Line, its original main line between Kalama and Tacoma built in the early 1870s. To ease the grade the Union Pacific projected a tunnel from South Tacoma to downtown Tacoma, where it again followed the Prairie Line, until finally connecting with the Milwaukee Road. The line would use Milwaukee Road trackage for the next 26 miles, to Black River Junction, then diverge again to carry Union Pacific trains on their own rails the final ten miles into Seattle.
Harriman's construction efforts on this proposed line were enough to make the Northern Pacific begin negotiations about trackage rights for the Union Pacific into Tacoma. What the Northern Pacific finally conceded to was “full trackage rights between Vancouver and Tacoma would be granted for a yearly rental plus a proportionate share of expenses.The Northern Pacific and the Union Pacific put ink on paper in the fall of 1909 – the trackage rights to commence on January 1, 1910.
While Harriman was maneuvering his way onto the Northern Pacific's rails, he finally began the process of building the Gray's Harbor and Puget Sound, shelved since 1906. As part of the cooperation with the Milwaukee Road in western Washington, the Milwaukee was sold a half interest in the line in January, 1909. By 1909 the UP finally arrived on Grays Harbor. The Oregon and Washington Railroad, a subsidiary of the UP, shared a line with the Milwaukee Road to Grays Harbor The UP, however, learned from the NP blunder in Ocosta and ran their line directly to Aberdeen. Joint facilities were constructed in both Aberdeen and Hoquiam with a small engine-servicing facility in Hoquiam. Construction continued through Hoquiam towards the Pacific.
References
Grays Harbor Railroads by Mike Davidson http://www.wagenweb.org/graysharbor/railroads/ghrr.html
Tempest in the Timber by J. A. Phillips, III http://pw2.netcom.com/~whstlpnk/harbor.html
OR&N operated from 1896 as a consolidation of several smaller railways initially as an independent carrier, but Union Pacific bought a majority stake in 1898. It became a subsidiary of UP named the Oregon–Washington Railroad and Navigation Company in 1910 and in 1936 UP absorbed the system.
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