This company — the second of that name — was formed in March 1894 by many of the original bondholders of the Portland Cable Railway Company to retake control of the cable lines (and their heavy investment in it). They purchased the road at foreclosure from the City Cable Company in September 1894, and began operating the line immediately. While they paid wages owing to their employees, they also instigated a strict regime where no further capital would be injected into the line — it had to pay for itself.

The company soon set about converting their lines from cable operation to electricity, mainly because of the cost savings that could be realized. The massive cable power house was over-engineered — originally designed to power a system that was envisioned to travel over the hills to Beaverton — and had to always be running in order to keep the endless cables running, whereas electric cars only drew current when they were actually running. The line from Union Station down Fifth and Jefferson to the City Park was converted to electric trolley on May 1, 1896 and the cable road up to Portland Heights switched from steam to electric power about a week later. The entire system was electrified in June 1896 with the conversion of the short Alder Street branch to a trolley wire. However, the cables were left in place underneath the electrified segments, just in case it ever became financially viable to revert back to cable propulsion (it never did).

Not much changed after this until the Portland Traction Company merged with the Portland Railway Company in April 1900. In a convoluted deal, the latter name was kept, but all of the management came from the former – in many respects, the new company was the Portland Traction Company in all but name.

Lines

• Alder Street (1890–1896)
• City Park (1892–1901*)
• Fifth Street (1896–1909*)
• Portland Heights – Cable (1890–1904)

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