olicy of expansion and
development. The business of the system developed rapidly. The main line
through to the Pacific coast was now in operation, and the entire system
amounted to about 2300 miles of road. But Villard followed a financial
policy which was not sound and paid dividends without justification.
In a short time the company consequently found itself financially
embarrassed.

As a result of financial losses in 1884, Villard was obliged to retire
from active control of the properties. But in 1887 he once more got
possession of the Northern Pacific with German capital and succeeded in
arranging a lease of the Oregon Short Line, which had been developed
by the Union Pacific interests, embracing a cross-country road from its
main lines in Wyoming northward into Oregon and Washington. At the same
time the interest of the Transcontinental Company in the Oregon Railway
and Navigation Company was linked with the Oregon Short Line Company.
These transactions, however, still left the Transcontinental Company
in control of the situation, as it retained its majority ownership of
Northern Pacific Railroad stock.

For the next few years the Northern Pacific did not follow a policy
of rapid expansion. Other trunk lines, such as the Union Pacific, Rock
Island, Santa Fe, Burlington, and North Western, were all growing and
keeping pace with the rapid settlement of the West; but the Northern
Pacific in these years simply rested content with its position as a
single track transcontinental route having but few branches. Its
only important extension was made by acquiring the Wisconsin Central
Railroad, which gave the company a line between St. Paul and Chicago and
a valuable and important entrance into the latter city. It was
expected that, with this accession, the affairs of the company would be
permanently established on a sound basis, but the overliberal policy of
paying out practically all the surplus in dividends was continued in the
face of large increases in fixed charges.

Early in 1892 it began to be rumored that the Northern Pacific was not
in so easy a financial position as had been assumed. The stockholders
took alarm; and the committee which was appointed to investigate the
situation discovered a deplorable state of affairs. As a result of the
severe criticism of Villard's policy, steps were at once taken to oust
him from control, but without success until June, 1893. Two months
later, receivers were appointed who d