STATE WANTS CASH

Government to Be Asked to Pay Canal Contribution.

$200,000 TO BE SOUGHT

Oregon Will Try to Get Back Money Given Long Ago to Build Willamette Locks When Sale Is Consummated.

 

Willamette Falls Locks

The Willamette Falls Locks, circa 1915

 

That an effort will be made by the state to collect $200,000 of the $300,000 appropriated by the Legislature for its share in the purchase of the Oregon City locks is evidenced from communications which passed between Attorney-General Crawford and Governor West today. Governor West writing as a representative of the State Board of Canal Commissioners.

Under an opinion of the State Supreme Court it was inferred that the state would have an equity of $200,000 in the locks at such time as the locks were disposed of but whether this construction would hold is disputed in connection with the sale to the United States Government as the act provides for this amount of money to be turned into the school fund in event the state ever wished to purchase the locks.

Distinction is Made.

The argument is made that this sale is to the United States Government and not to the State and consequently the state would be unable to collect its equity.

In writing as to the recovery of the money the Attorney-General says: ‘I notice by published statements that the Federal Government has come to an agreement with the Portland General Electric Company, now the Portland Railway, Light & Power Company for the purchase of the canal and locks at Oregon City, and I wish to call your attention to the fact that when said canal and locks were built in 1870 to 1872. the State of Oregon contributed $200,000 towards the construction and that the act authorizing the contributing of money by the state for that purpose and authorizing the canal and locks to be built provided. among other things; as follows;

“And it is further provided that the issuance and payment of said bonds shall be made upon the express condition that said Corporation shall pay to the State of Oregon 10 per centum of the net proceeds arising from the tolls collected for passing freights and passengers through said canal and locks. which said sum of 10 per centum of the net proceeds shall be paid into the common school fund of this state:

“This law came under the inspection of the Supreme Court of this state in the case of Board of Commissioners vs. Willamette Transportation Company, 6 Or. 229 in which the court says, relative to the rights of the state: ”In fact it may be said (referring to the transportation company) to have been placed in the possession of a valuable property, standing in the very gateway of commerce, which not only affects a. great public interest but in which the public has a priority interest, as part owner.”

Past Payments Cited.

The transportation company paid its 10 per cent of the net profits In 1874 since which date, it and its successors failed to pay, until the Supreme Court again directed the payment of the 10 per cent, in the case of the State of Oregon vs. Portland General Electric Company, reported in 52 Or. Page 502, in which case the court compelled the Company to account for several years back, but held that up until about 1897 the statute of limitations barred the state from collecting. However, a decree was given for more than $7000.

‘The state has an interest in the canal and locks to the extent of $200,000, which amount of money was, in case the canal and locks were taken over by the state, to have been raised and put into the school funds of the State of Oregon. The Legislature of this state has provided by law for the collection of $300,000 to be donated to the Federal Government towards the purchase of said canal and locks. “

I respectfully call your attention to the foregoing facts. that you may consider the question as to whether you should, as the Board of Canal Commissioners of the State of Oregon, insist on the payment of the $200,000 into the school funds of the State of Oregon or whether that sum should he considered lost to the school funds of the state and donated to the purpose of securing free transportation on the Willamette River.”

Canal Board Determined.

In response Governor West wrote: “This is to acknowledge receipt of yours of the 24th inst., in reference to recovery of the $200.000 contributed by the state toward the construction of the locks around the falls at Oregon City, and to say that the Board of Canal Commissioners has no intention whatever of donating this, or any other sum, to the present owners of the locks or to anyone else. The board has given this matter its careful consideration not when it is officially notified by the Federal Government as to the purchase of these locks, your office will be notified promptly and a request made, that you take such steps as are necessary to protect the interests of the school fund.”

Morning Oregonian, February 29, 1912

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