Steamboat monopoly’s ‘clever coup’ was mistake

By Finn J.D. John
March 16, 2025

THE EXECUTIVES IN charge of Henry Villard’s Oregon Railway and Navigation Co. no doubt thought they’d played their cards very cleverly when they bought the little screw-driven riverboat Gold Dust in 1881.

They could not have been more wrong.

The Oregon Railway and Navigation Co. was the company Henry Villard had formed to play for a monopoly on transcontinental railway access to Portland. As part of that play, Villard had bought out the old Oregon Steam Navigation Co., the almost-monopoly that ran steamboats up and down the Columbia River.

The railways, of course, were the real prize; and everyone understood well that railways were the future, and would eventually make riverboats obsolete.

For the time being, though, there was no better way to get people and freight back and forth to The Dalles and points east, or out to Astoria for a beach trip. So ORN’s boats, being almost the only option on the river, did very well indeed, and set their rates accordingly.

“Almost” was the key word there, though, because there were a few independent operators on the river.

One in particular was a real thorn in the company’s side. Because ORN owned the portage railroad that carried passengers and freight around the Cascade rapids, they effectively owned the Portland-to-The Dalles run for freight. In those pre-Sherman Antitrust Act days, ORN felt perfectly free to refuse to carry freight on the 4.5-mile-long railway run around the rapids unless it was being offloaded from, and back again onto, one of its own ships.

But turning passengers away was a different matter. It could legally be done, but not without some public-relations trouble. And if necessary, a competitor could always hire a stagecoach or two.

That meant there was an opportunity for a passengers-only service to The Dalles, if one of those pesky independent operators wanted to take it.

And by the end of the 1870s, the peskiest of those indie boat lines was looking for just such an opportunity.

Captain Uriah B. Scott was the Ohio native who had, half a decade earlier, come to Oregon with nearly-empty pockets, slapped together a janky junkyard sternwheeler that could run freight in water less than a foot deep, and used it to basically take over the upper Willamette River passenger-and-freight runs. (Here's a link to that story in last week's Offbeat Oregon article.)

But when railroads started being built to service those customers more cheaply than any riverboat could, Scott had to start looking for a new opportunity.

Scott didn’t write memoirs, and famously was as taciturn in front of reporters as he was loquacious in the pilothouse when something or someone needed to be cussed at. So we don’t know what his thought process was; but we can make some educated guesses.

First of all, as Scott well knew, shallow-draft riverboats were basically done. The City of Salem, Scott’s Willamette boat that he liked to joke drew so little water that it could run on a heavy dew, was still in service, and would be till 1895; but its trade was already starting to dwindle.

The best runs, he would have known well, were in deep water: the Portland to Astoria run, certainly; the Portland to The Dalles run; and, of course, Puget Sound was showing great promise as well.

The other thing Scott could plainly see was that ORN was neglecting the interests of the passengers in favor of freight, which of course was where the bulk of its revenue came from. He decided a fast passenger service would be just the thing. A boat built for speed, with no cargo carrying capacity at all, concentrating on getting people up and down the river in speedy luxury, without ever having to worry about being delayed for freight.

Again, this is somewhat speculative; but it appears Scott planned to basically take over passenger service on the Columbia entirely, leaving freight service to his competitor. Freight was not an option on the upriver run for anyone who was not ORN, because the locks had not yet been built. To get freight upriver, it had to be unloaded from the downriver boat, portaged to the upstream side, and re-loaded on the upriver boat. And, as noted, ORN owned the portage railway.

So Scott leaned into that limitation and built a riverboat to do one thing and do it well — carry passengers in speedy luxury.

The boat, when complete in 1881, was christened the Fleetwood. It was well named; the Fleetwood was the fastest thing on the river, and would be until the next Scott-designed boat, the Telephone, was launched. Scott, it was clear, was really good at designing hulls.

The Fleetwood was built specially for the run upriver to the foot of the Cascades rapids — the location, today, of the town of Cascade Locks.

It was an immediate huge hit. Taking the Fleetwood shaved quite a bit of time off of a trip upriver.

A couple years later, another screw-driven steamer was launched in the river above the Cascades rapids to provide a connection for the Fleetwood’s passengers and bring them the rest of the way to The Dalles. This was the Gold Dust, and it was owned by Scott’s friend and fellow Ohio steamboat captain Ernest Spencer, the former skipper of Scott’s City of Salem.

After that, passengers on the Fleetwood no longer had to use ORN riverboats for the second leg of the journey. They could make the whole trip on fast, luxurious Scott-designed boats.

A fare war ensued. Passage to The Dalles got as low as 50 cents on ORN boats. But still passengers packed the Fleetwood. Apparently it was worth the extra money it cost.

Scott then turned his attention to the Portland-Astoria run, which was very much the most popular and lucrative run on the river. And because there was no ORN-controlled chokepoint on that run, the boat on that run could also carry freight. So he started work on the sternwheeller that would become the Telephone.

But before the Telephone was ready, something rather interesting happened. ORN reached out to Captain Spencer and made him an offer that was too generous to ignore. Their goal, clearly, was to get Scott off the river so they could return their pricing to “normal” levels.

Doubtless they thought this was a clever coup. They’d leave the Fleetwood in place on the Portland-to-Cascades run, but they’d jack up fares from Cascade Locks to The Dalles so that they would make their money anyway. Plus, they could negate the Fleetwood’s speed advantage by arranging their schedule so that its passengers had to wait around the docks for several hours. They wouldn’t like that; there were very few amenities there, just docks and the portage road.

Scott was very unhappy about this development, but he doesn’t seem to have blamed his old friend for taking the deal, so it must have been a pretty sweet one. But it did force him to make a crucial business decision.

The default decision would be to do nothing, and continue trying to provide passenger service as far as Cascade Locks. The problem was, if he did that, he would be operating entirely at ORN’s mercy.

Or ... he could abandon the upriver service entirely and put the Fleetwood on the Portland-Astoria run immediately, instead of waiting a year for the Telephone to be ready.

It’s clear that ORN did not think this through. No successful entrepreneur would be satisfied with providing a service that’s entirely dependent on the charity and goodwill of his biggest competitor.

But by this time, the decisionmakers at ORN probably weren’t entrepreneurs themselves; they were company men. They probably thought Scott would run his boat for a few marginally profitable months and then give up and sell the operation to them at a fire-sale price, which would give them free reign on the river and a really superior boat to boot.

They must have been really dismayed when he made what to any entrepreneur would be the obvious choice to move the Fleetwood. It was clear almost immediately that they had made a very expensive mistake.

Soon the Fleetwood was making the run from Portland to Astoria. This was a run for which ORN charged passengers $5 — this at a time when many working Oregonians made less than $5 a month. Scott priced his service at $2.

Crickets started chirping in the Oregon Railway and Navigation Co. ticket booth.

Not only was the Fleetwood far cheaper than the competition, it was more luxuriously appointed and considerably faster. Passengers shaved several hours off their travel time by choosing Scott’s boat. In fact, Scott probably could have charged $6 a head and still packed ’em in, because the Fleetwood represented a premium service.

The competitors settled into a new equilibrium on the lower river, in which ORN was for once the junior player. The erstwhile monopoly had to console itself by squeezing the farmers and traders who rode its boats and trains back and forth from The Dalles and points east.

But the Portland to Astoria route was the biggest and most profitable direct run on the river, and ORN probably found itself wishing it had left Scott alone on his Cascades run.

That was especially the case after the Telephone was ready — the sternwheeler Scott was building specifically for that run. Scott put it on the line immediately, and it made the run even faster than the Fleetwood, plus it could carry freight. Of course, that left the Fleetwood available; but rather than going back to squabbling over the upriver run, Scott sent it around to Puget Sound and started making speed runs between Seattle and Tacoma. It was a very successful line, and Scott soon expanded his operations in Puget Sound to a level that dwarfed his Oregon offerings.

As the era of the sternwheel riverboat came to an end, Scott’s company operated the most famous riverboat on the Columbia — the enormous, plush and speedy Bailey Gatzert, known to those who found its wake excessive and annoying as the “Daily Bastard,” the only Oregon riverboat that’s actually had a piece of music written for it.

The Bailey Gatzert made its last run in 1917, by which time the Columbia River sternwheeler era was definitely over and had been for several years, replaced by freight and passenger service on the rails.

(Sources: “Captain Uriah Bonzer Scott,” an undated article by Jerry Canavit accessed March 9, 2025, at steamboats.com;  Lewis & Dryden’s Marine History of the Pacific Northwest, a book by E.W. Wright published in 1895 by Lewis & Dryden; Pacific Steamboats, a book by Gordon Newell published in 1958 by Superior Publishing; archives of the Portland Sunday Oregonian, November 1906; redgreen.com)

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