From the earliest days in which surplus agricultural production existed in Oregon's Willamette Valley, producers desired a transportation system to allow their output to reach outside market through ocean ports. The size and fruitfulness of the valley seemed vast, including as it did some 3 million acres of land, of which 1 million was well adapted to grain production. The valley's mild climate and fertile soil made commercial production of other crops practicable, if only transportation difficulties could be resolved.
The early settlers of Benton County, Oregon were proactive in seeking to create such a railway line across the Coast Mountain Range running from the county seat of Corvallis to the Pacific port at Yaquina Bay, part of today's Newport through a natural gap in the mountains near Mary's Peak. A trail first established by Native American peoples followed the route, used as well by the European American pioneer settlers who followed them.
Commercialization of the path began in 1863 with the organization of a toll road company called the Wagon Road Company, headed by local doctor J. R. Bayley, to construct and maintain a wagon road through the gap. This toll road company's ranks were expanded in 1865 with additional investors.
On August 15, 1867, Articles of Incorporation were filed for a new entity called the Willamette Valley and Coast Railroad Company, with a group of 14 Benton County citizens listed as incorporators. This initial group failed to construct a railroad and gave way in October 1871 to a second company which included J. R. Bayley, Ben Simpson, and A. B. Meacham. This second group similarly failed to construct a railroad, although Messrs. Bayley and Simpson would soon return for the third iteration of the WV&C Railroad Company.
In 1871 members of the Wagon Road Company, taking advantage of a liberal land grant policy, filed for grants from the United States government which claimed staggered land sections running for six miles on either section of the road, thereby locking up the valuable path for future development and exploitation.