V V . ' OH3K J % ■ >-v* ■ ■ -■r • r # app* The Oregon Pacific Railroad Its Present Condition and Needs With Some Suggestions as to its Future Development BY E. W. Hadley, Receiver, Return this book on or before the Latest Date stamped below. Theft, mutilation, and underlining of books are reasons for disciplinary action and may result in dismissal from the University. University of Illinois Library JUH 3U 1367 L161—0-1096 \ UH*‘ RSITY OF - URBANA 'TACKS A WEBFOOT VOLUNTEER The Diary of William M. Hilleary 1864-1866 Edited by Herbert B. Nelson and Preston E. Onstad In cooperation with the OREGON HISTORICAL SOCIETY Corvallis: OREGON STATE UNIVERSITY PRESS For nineteen months at the close of the Civil War, William M. Hilleary of Linn County, Oregon, served as a corporal in the First Oregon Volunteer Infantry. At Camp Russell (on the new state fair¬ grounds near Salem); at Fort Hoskins in Kings Valley; at Fort Vancouver, Fort Walla Walla, and Fort Boise; at camps in eastern Oregon and Idaho he took part in a little-known but significant cam¬ paign in the War Between the States. Transfer of regular Army troops from posts in the Oregon Country to the battlefields of the South and East had left the settlers and travelers in the Northwest unprotected from Indians and lawless marauders, and susceptible to revolution. Volun¬ teers stepped in to fill the gap. Three days after volunteering, Iowa-born Wm. Hilleary became engaged to Irene Cornelius, whom he affectionately called “Liebe.” Partly to acquaint his sweetheart with her future husband and partly to dispell the monotony of garrison duty, he began keeping a diary for her. He pref¬ aced it with an account of his ancestry and early life and then began a day-to-day record of his thoughts and actions. The three little pocket volumes that resulted provide one of the best glimpses into life in the Pacific Northwest in the 1860’s that has yet been uncovered. A young man of native intelligence, natural curiosity, and sound education, Hilleary wrote with keen observation, righteous indigna¬ tion, and sprightly humor. Because he felt his state and country needed him, Hilleary left his life as school teacher, student, and farmer to join a company of soldiers who saw much of the Oregon Country. Poorly equipped, sparsely clothed, and at times inadequately fed, these citizen-soldiers performed their patriotic duty in rugged terrain under adverse conditions of weather, training, and leadership. A few times they traveled by river steamer on the Willamette and Columbia, but more typically, they trudged through mountain gorges and over trackless wastes, sometimes through knee-deep snow, and rode balky mules carrying “express” between isolated posts. Bread riots at Fort Hoskins, mutiny at Camp Colfax, grim vigilante action, and roisterous enter¬ tainment in Boise added spice to army life. Order blank OREGON STATE UNIVERSITY PRESS 101 Waldo Hall, Oregon State University Corvallis, Oregon 97331 Please send . copies of A WEBFOOT VOLUNTEER: The Diary of William M. Hilleary 1864-1866, edited by Herbert B. Nelson and Preston E. Onstad, at $6.00 a copy. Send also other Studies in History in the Oregon State Mono¬ graph series as indicated below: DEBATERS AND DYNAMITERS: The Story of the Hay wood Trial, by David H. Grover $6.00 JOHN LEDYARDS JOURNAL OF CAPTAIN COOK S LAST VOYAGE, edited by James Ken¬ neth Munford $6.00 THE COEUR d’ALENE MINING WAR OF 1892, by Robert Wayne Smith $4.00 THE OPENING AND PENETRATION OF SAMOA TO 1880, by Joseph W. Ellison (paperback) $.50 Total amount enclosed $ Ordered by: Date Dalles Vancouver Portland Salem ^Turner ■ Aumsville Lebanon HILLEARY’S MILITARY TRAVELS 1864-1866 Scale Acting as clerk of Company F, Hilleary la¬ boriously copied documents and kept the records that make a military organization run. Sand some¬ times whistled over the rock he used as a desk. Ink sometimes froze in his pen as he wrote, but he carried on an extensive correspondence and kept detailed personal records. And he faithfully kept this diary, which his sweetheart preserved and which eventually fell into the hands of the Oregon Historical Society. In later years, as he returned to teaching school and as he became a successful farmer and rose to prominence as a leader of the Patrons of Hus¬ bandry (the Grange), Hilleary never forgot his wartime experiences. He wrote newspaper articles and made many speeches based on his diary. He was a member of several G.A.R. posts and became head of the Indian War Veterans of Oregon. , / < ’ Fort Hoskins* I* Albany Corvallis Brownsville progressive member of the Board of Regents of Oregon Agricultural College. He and Liebe traveled extensively, attended four sessions of the National Grange, and on one occasion were intro¬ duced to President Grover Cleveland. Editors Nelson and Onstad—faculty members at Oregon State University—have added an intro¬ duction which helps illuminate the man and place the manuscript in the perspective of the period in which it was written. Their comments through¬ out the text help identify the settings and the actors in this adventure-filled drama. In this first complete reprinting of the diary, they present an annotated, illustrated, indexed volume of lasting value in the always-fascinating story of the de¬ velopment of the American West. OREGON STATE MONOGRAPHS 1 STUDIES IN HISTORY NUMBER FIVE o o i-i g < << W < O '1-0 O-i y-/ O Z c/3 v# o 3 QTQ O 0 ffi P o CD -4 CD GO QTQ GO O H-* 0 C/D H > H W O Z c/d < p W # C/D I—i H >-< >-d W c /d c/d CD O h-*» < CD |-1 C/3 G» Um iNO c, !J to • O* :H» Vt r *3 ft* < p * o ft* la |~j * o < c *“< Q* hutmH •*■%■'* f '•' \ * #—» p».f. H* 3 Of J3 O f— (M» CO CO << 4> P |NW »*J $K*M* C. fO NONPROFIT ORG. ************* Oregon Pacific Railroad Its Inception, Present Condition, and Needs With some Suggestions as to its Future Development E. W. HADLEY, Receiver “ The location of a railroad is giving it its constitution. It may be sick almost unto death, with accidents of construction and management, but with a good constitution it will ultimately recover.”— D. //. Ainsworth. CHICAGO : Rand, McNally & Company *^*0 The Oregon Pacific Railroad. ITS INCEPTION. For the purpose of the present narrative a detailed history of the inception of the enterprise under consideration is deemed to be uncalled for, yet in order to clearly understand many of the present conditions connected with it, it is necessary to biiefly sketch the conditions under which the road was organized. Throughout this statement references will be found to vari¬ ous sources of information, consisting of maps, documents, and photographs, which the writer has been unable, by reason of lack of time, to have copied so that they might form an appen¬ dix to each copy of this report. 1 he originals of these maps, documents, and photographs form separate volumes, which aie submitted herewith. 4 u <0 J As walking goes before riding, so wagon roads precede rail¬ roads, and as in the present instance two wagon roads have an important bearing upon the organization of the Oregon Pacific Railroad, it is necessary to make some reference thereto, to aid in a clear understanding of the original inception of the railroad. “ The Corvallis & Yaquina Bay Military Wagon Road Com¬ pany ” was organized in 1864, for the purpose of building a wagon road from Corvallis, in Benton County, Ore., to tide water on Yaquina Bay. To aid in the construction of this road the State granted alternate sections of land lying on both sides of ( 8 ) 5 ! I 4 the road to the amount of about 57,000 acres. The wagon road was duly constructed and the lands earned. In 1871 and 1872, the owners of the wagon road land grant being desirous, as pub¬ lic-spirited citizens, of obtaining for the country a railroad from the Willamette Valley to tide water, and upon representations of Col. T. Egenton Hogg that if they would transfer to him their land grant he would build such a railroad, sold to him for a consideration of $6,000 fifty-seven thousand (57,000) acres of land, being the whole of their land grant. These lands extend, in general terms, from Elk City, in Range 10 west, to Wren’s Station, in Range 6 west. The Oregon Pacific Railroad follows the military wagon road very closely, and winds through these lands from east to west. The country in which the lands are located is very broken and mountainous. The major portion of the marketable timber upon these lands was burnt off by an immense fire which swept over the whole western slope of the Coast Range prior to the first white settlement. A large portion of these lands being on edge, so to speak, are practically valueless for agricultural purposes. The soil, how¬ ever, is fertile, and where the inclination is not too steep they are well suited to fruit. There are a number of narrow fertile valleys, and some isolated patches of timber which escaped the great fire. In 1877 Colonel Hogg sold to the Oregon Agricultural Com¬ pany, Limited, of London, England, for twelve thousand pounds, an undivided one-half interest in these lands. The balance of his interest in these lands is now covered by a trust deed to George S. Coe of New York City. On March 10, 1864, the Willamette Valley & Cascade Mount¬ ains Military Wagon Road Company was incorporated under the general laws of the State of Oregon, with the object of building a road from the Willamette River across the Cascade Mountains to the eastern banks of the Deschutes Rjver. To aid in the construction of this wagon road, the alternate odd sections of public lands, to the extent of three sections per mile of road, were granted to the Wagon Road Company. These lands were to be selected within six miles of the wagon road. This grant amounted in total to about 850,000 acres. Although bitterly opposed, on the ground that the lands had not been earned, the title was finally determined by a court of last resort to be in the Wagon Road Company. In 1871, having in view the construction of a railroad from the Willamette Valley into Eastern Oregon, the Wagon Road Company sold this land grant to Col. T. Egenton Hogg, Henry Weil, and associates. In 1879 the land was transferred to David Cahn, as trustee; the deed of trust showed the relative interest of the parties concerned, and set forth Colonel Hogg’s interest as Shortly thereafter the other owners of the land entered into a contract with Colonel Hogg by which he was given a two-year option in which to sell the lands at a specified price of $445,000, it being stipulated that in case Colonel Hogg made sale of the lands at the price agreed upon, Weil was to make a deed to the purchaser, and Colonel Hogg was to be allowed $25,000 for his expenses in carrying through the deal. A few days prior to the expiration of the two years, Colonel Hogg tendered to Weil a certified check for $600,000 and demanded a deed for the property, which Weil refused to give. In 1880, on the ground that he had completed the purchase of the lands from Weil, Colonel Hogg made and filed a deed of the lands to the Willamette Valley & Coast Railroad Company, and in the same year a mortgage was made by the Company to the Farmers’ Loan & Trust Company, pledging these lands in order to secure the issuance of the first mortgage bonds of the Railroad Company. So much for the wagon roads. The Willamette Valley & Coast Railroad Company had been organized in 1874. Work was commenced at Yaquina 6 Bay and at Corvallis in July, 1881, and the track was connected near Harris Station in 1884. In 1886 the track was pushed eastward to Albany, a station on the Oregon & California Railroad on the east side of the Will¬ amette River, and in the spring was carried to the Santiam River, and in the fall of 1889 the track was completed to its present terminus, near Detroit Station, in the Cascade Mountains. The Oregon Pacific Railroad was organized on the 25th day of September, 1880, and on the same day its Board of Directors resolved to enter into a contract with the Willamette Valley & Coast Railroad Company for the construction and equipment of its railroad from Yaquina to Corvallis, and thence to the eastern boundary of the State of Oregon, in consideration of the concur¬ rence of that Company in the execution of joint mortgage bonds to the total amount of fifteen millions of dollars, over the prop¬ erty and franchises of both companies. The draft of the pro¬ posed mortgage, or deed of trust, in favor of the Farmers’ Loan & Trust Company was duly approved at this same meeting. The Pacific Construction Company was organized March 31, 1884. An agreement was made by the Oregon Pacific Railroad Company with the Pacific Construction Company to construct a certain portion of its line in consideration of the transfer to the Pacific Construction Company of first mortgage bonds of the Railroad Company. I can find no trace in the minute books of the Railroad Com¬ pany of this agreement with the Construction Company, nor have I been able to find a copy of the agreement itself. The Construction Company undertook the work from mile¬ post 136 eastward, and appears to have built fourteen miles of grade. The expense of this construction, however, was paid by the Oregon Pacific Railroad Company, and charged in account in their books to the Pacific Construction Company. The 7 amount thus expended by the Railroad Company and charged to the Construction Company is $173,454.66. The present receiver of the Oregon Pacific Railroad Com¬ pany has intervened as a creditor to this amount in a suit for the appointment of a receiver for the Pacific Construction Company. The books of the Oregon Pacific Railroad Company in Oregon show no credits to the Pacific Construction Company. An ocean terminus implies steamships arriving and departing therefrom, and in order to connect Yaquina Bay and the rail¬ road with the markets of the world the Oregon Development Company was organized in 1884. It entered into two agree¬ ments with the Railroad Company, which will be explained in detail further on. Suffice it to say, that the Development Com¬ pany became the owner “in account ” of the Railroad Company s ocean terminal facilities at Yaquina City, and by the first of these contracts leased these terminal facilities back to the Railroad Company for a stipulated rental. By the second of these agree¬ ments_which appears to have been verbal, and of which no trace can be found in the minute books of the Company, but which appears to have been authorized by resolution of the Executive Committee — the Development Company undertook to provide and operate, at the expense of the Railroad Company, the neces¬ sary steamboats to carry on the business between Yaquina Bay and San Francisco. The Development Company also purchased three stern-wheel river steamboats, for use on the Willamette River between Port¬ land and the head of navigation, which it afterward transferred to the Railroad Company. The projectors of the Oregon Pacific contemplated a railroad line, commencing at tide water on Yaquina Bay and crossing the State from east to west, and in pursuance of this a survey was pushed across Eastern Oregon to the Snake River, and to Boise 8 City in Idaho, about thirty miles east of the eastern boundary of Oregon. The idea seems to have been, and was so publicly repre¬ sented, to connect the railroad of the Oregon Pacific Company at Boise City with some through line from Chicago, preferably the Chicago & North-Western Railway. A survey was also made from a point near Munker’s Station, east of Albany, in a northerly direction to Salem, the capital of the State, distant about thirty-five miles from Munker’s, and property was pur¬ chased on the water-front at Salem. Construction ceased in the fall of 1889, and the Company, getting deeper and deeper into debt, finally defaulting its October interest coupons, was on the 28th of October, 1890, placed in the hands of a receiver — Col. T. Egenton Hogg being appointed receiver by the Circuit Court of the State of Oregon. Bankrupt on the 28th day of October, 1890 — a further debt of $800,000, in the shape of various issues of receiver’s certifi¬ cates, was piled upon the property within the twenty-six months constituting the first receivership—and yet at the end of that receivership the Company was nine months in arrears with its pay-rolls. On the 6th of March, 1893, on the ground of non-residence within the jurisdiction of the Court, Colonel Hogg was removed, and E. W. Hadley of Corvallis, Ore., was appointed receiver. This brief sketch of the Company’s history is sufficient for the purpose now in view. The scheme under which the Oregon Pacific enterprise was set on foot contemplated a railroad 600 miles long, from a fine natural harbor on the Pacific Ocean, across an immense State, to a hoped-for eastern outlet on the eastern boundary of that State- This line would cross the State in an east and west direction almost midway between north and south boundaries of the State. 9 As a through line, its nearest competitor on the north would be the Union Pacific, distant at all points on an average of over one hundred miles ; in the other direction, its only competitor would be the Central Pacific, about four hundred miles to the south. Taking Chicago as a basing point, and the Chicago &: North-Western line as the most favorable one for the Oregon Pacific to connect with at Boise City, such a new through line would be 250 miles the shortest line to the Pacific Coast — an immense advantage of itself. The enterprise aimed to make use of most felicitous natural advantages for the construction of a railroad. Good harbors on the Pacific Coast are few and far between. I make the statement, without fear of contradiction, that Yaquina Bay is the safest, and, all things considered, the best harbor between the mouth of the Columbia and the Golden Gate. Starting from this harbor a line was carried over the Coast Range at the low elevation of 760 feet. The next fifty miles lies across the heart of the magnificent Willamette Valley. With grades no heavier than 2 per cent, the formidable barrier of the Cascade Mountains was to be crossed at the very low elevation of 4,600 feet. Eighty miles of this mountain section lies through one of the finest bodies of timber now standing upon the continent to-day. The pass through which the line was to be carried over the mountains, in the opinion of all competent engineers who are conversant with the entire Cascade Range, is unique. Short and easy grades carry the line to the high and level plateau of East¬ ern Oregon, an immense expanse of almost level country, equal in extent to the State of New York, almost every foot of which is wonderfully fertile when brought under cultivation. The sur¬ veyed line leaves this wonderful country of Eastern Oregon, through what has been well termed its “key” — the Malheur Canon. While the projectors of this enterprise did not appear to 10 realize all of the possibilities of the scheme, yet, viewed simply in the light in which they set it forth, that of the western end of the trans-continental line, I can not agree, as some have stated, that “ its construction as contemplated was premature and unnecessary.” Railroads, unlike newspapers, are rarely launched to “ meet a long-felt want.” The shrewdest builders of railroads are keen to reach out ahead of the actual demand and seize for their future benefit great natural advantages and an unoccupied country. Commenting upon the “ probable volume of traffic ” of projected roads, Mr. Arthur Wellington, C. E., says: “ The greatest difficulty in making such estimates is ordinarily the fact that to make them it is essential to estimate and allow for the probable future growth of traffic, since it is rarely the case that a railway is built simply and only to accommodate the traffic “ in sight,” as miners say. On the contrary, it has been and will continue to be frequently the case that the railway is relied upon not only to accommodate, but to create a greater part of the whole of the traffic for which it was built.” And if ever nature made plain the way for the building of a great railroad, she has done so in the case of the Oregon Pacific, in letters so large that he who runs may read. 'l'he failure to realize the great advantages which should have accrued to the owners of this property is, in my opinion, due to the failure on the part of the original projectors to realize three economic conditions: First, that you must learn to walk before you run; second, that it is local traffic which pays dividends; and third, that practical railroad managers are made, not born. As to the first of these conditions, when construction ceased in 1889 it was the publicly expressed intention of the management to push the line as rapidly as possible across the State. Had this intention been carried out, about four hundred miles would have been added to the mileage of the system, upon which it is extremely 11 doubtful whether the share of trans-continental business that might have been obtained would have paid operating expenses, had the desired eastern connection at Boise City been realized; nor would the local business which would have come to this line across Eastern Oregon been sufficient to pay dividends on so much mileage for several years yet to come. It would have been the part of wise judgment to have carried the line only within the boundaries of Eastern Oregon, and there waited for two or three years until the country, stimulated by the entrance of the railroad, should have developed business suffi¬ cient to have justified them in building another ioo miles, say, and thus by degrees have crossed the State, keeping pace with the development of the local business. In the second place, the money which thus would have been saved could have been most profitably spent in pushing out feeder lines into the rich territory of the Willamette Valley. There is no personal desire whatever to criticise the past management, but yet, to make clear one of the reasons for the failure of this great enterprise, it is necessary to emphasize the fact that railroading to-day is a practical science . The physical construction and management of that intricate modern machine, the railroad, can not successfully be left in the hands of those who have not served a long apprenticeship to the trade. 1 9 1 Aj CRITICAL INSPECTION OF THE PRESENT PHYSICAL CONDITION OF THE PROPERTY. OCEAN DIVISION. Prior to March 6, 1893, the Ocean Division was operated by the Oregon Development Company under an alleged contract with the Oregon Pacific Railroad Company. At various times the Development Company had from one to three steamers on the route. Two of these, the Yaquina Bay and the Yaquina City, were wrecked at the entrance to the bay; the Yaquina City by the breaking of her tiller chains in 1887; the Yaquina Bay was lost by bad seamanship December 9, 1888. The Eastern Oregon and the Farralone were chartered at different times by the Development Company. The present ship, the Willamette Valley, formerly the Annie Carroll, was built in 1883 on the Delaware, was purchased by the Development Com¬ pany, and it is reported that there was about $30,000 expended upon her in refitting and adding to her cabin accommodations. She is an iron ship, rated A 1, and will carry 1,000 tons of cargo on a mean draught of 13 feet 6 inches. On her first trip from Baltimore to San Francisco she brought 1,100 tons of coal. She has accommodations for sixty first-class passengers and fifty steerage. The dining saloon is finished in mahogany, balance of her cabin fittings in soft woods, molded and painted. The ship is sound and seaworthy, and economical of fuel, but unfitted for the service. Up to March 6th the ship had always been operated with coal, at a varying cost in San Franciscoof from $7.50 to $9 per ton. With coal the average consumption per mile run is about 144 pounds. With coal at $8 this gives an average cost per mile run of 57 T V cents. In view of the fact that fir-wood was abundant and cheap 13 in Oregon, it was believed that the ship could be much more eco¬ nomically fired with this fuel, and that if the experiment should prove successful, the considerable amounts heretofore spent in San Francisco for coal would be dispersed along the line of the road, with a resulting benefit to the Company’s rail earnings. Contracts were accordingly made for two-foot fir-wood at $2.25 per cord loaded on cars. In these figures no allowance has been made for the cost of transporting this wood to the ship’s side, for the reason that as our trains were almost invariably running light, the expense of adding a few more cars to each train was merely nominal. The experiment proved a complete success, and the / 1 ship has been continuously fired with wood, with a consumption of about one-ninth of a cord per mile run. With wood at $2.25, this is an average of 25 cents per mile run, and a direct saving over coal of 32^ cents per mile run. This amounts in the single trip from Yaquina to San Francisco of 460 miles to a saving of $150, with the added advantage above referred to of keeping the amount expended for fuel in circulation along our own line. The cost per mile run for fuel varies somewhat with the draught, speed, and weather. Following is a detailed statement of voy¬ ages Nos. 2, 3, and 4: Voyage No. 2 — Average speed of ship down, 8 T * 7 knots; wood used per mile run, one-eighth of a cord; average of ship’s speed up, 10^ knots; coal used per mile run, 131 pounds. Voyage No. 3 — Average speed of ship down, 9^ knots; wood used per mile run, one-ninth of a cord; average speed of ship up, 9 t 6 ¥ knots; coal used per mile run, 141 pounds. Voyage No. 4 — Average speed of ship down, knots; wood used per mile run, one-ninth of a cord; average speed of ship up, 8-j^f knots; coal used per mile run, 160 pounds. Below will be found details of the ship’s construction, engines, etc.: Length over all, 210 feet 6 inches; between perpendiculars, 14 205 greatest molded beam, 34 feet; depth of forward hold, 18 feet 6 inches; depth of after hold, 12 feet; size of forward ports, 3 feet by 3 feet 6 inches; size of middle ports, 3 feet by 4 feet; size of after ports, 4 feet 3 inches by 4 feet 10 inches; distance between forward and middle ports, 59 feet 6 inches. Engines built by Harlan & Hollinsworth in 1883. Direct- acting compound cylinders, 26 and 44 inches in diameter, 36- inch stroke; two Scotch boilers, 11 and 10 feet long, each with 164 3-inch tubes. Boilers built by Harlan & Hollinsworth Company. There are 40 square feet of grate surface to each boiler; working pressure, 90 pounds. Boilers were repaired in 1891, and are now in good condition. Coal bunkers contain 5,800 cubic feet, and will hold 135 tons of coal. The screw is n feet in diameter; pitch, 17 feet 3 inches. The ship has four water-tight bulkheads; hull plates are 4 , and t 9 t inches thick. The ship has handled on her south-bound trips, March 6th to October 23d: Grain, 7,795 tons; miscellaneous, 3,154 tons; passengers, 530. On north-bound trips: Merchandise, 4,150 tons; passen¬ gers, 559. The ship came off the dry-dock in December, 1892, having had her bottom cleaned and two coats of anti-fouling paint. Repairs Needed. —The general condition of the ship is good. Along the water-line on each side plates are considerably pitted, and several butts in the bottom are bad; bunker sides are bad at the bunker floors; engines are in fair condition. The high- pressure cylinders should be rebored and have new packing. Shafts should be lined up; outboard bearings refitted and some new steam-pipe put in. One of the furnaces is a little out of line, and boilers need new steam covering. Cost of the repairs needed for coming twelve months would 15 be about $1,200. This does not include docking and cleaning, which would cost $1,000. While a good vessel of her class, the Willamette Valley is unfitted for the business. At present the situation does not warrant the Company in competing for passenger business between Yaquina and San Francisco. A purely freight boat is what the present trade demands. The Willamette Valley carries but 1,000 tons on a draught of thirteen feet and six inches, and moves this tonnage with the expenses incident to a passenger vessel. A modern steam freight carrier, such as the Whaleback, or better still, the latest development of the idea, the turret ship, would move three times this tonnage on the same draught, and with no greater expense for wages or fuel. The remarka. ble earning capacity of the turret ship can not be overlooked. As a result of five months’ operation, it is reported that she has paid her owners a dividend of 23 per cent. Should the Oregon Pacific scheme be developed upon the lines which nature has evidently laid out, the time will shortly come when there will be an opportunity for the Company to compete for a large passenger traffic between Portland and San Francisco. When this time comes, however, the business will be of such proportions that it will be the part of economy to entirely segre¬ gate its ocean passenger and freight business, and provide for the former a vessel specially designed for the business. Fur¬ ther reference will be made to this later on. There is an old unsettled lien for labor on the Willamette Valley to the amount of $500, held bv John Monk of Portland. The Tug Resolute. — The tug Resolute, prior to March 6th, although the property of the Railroad Company, was treated merely as an adjunct of the Oregon Development Company. It performed no service whatever other than making daily sound¬ ings over the bar, and in piloting the ship in and out of the har¬ bor. The cost of operating her, amounting to about $580 per 16 month for wages and $65 for fuel, a total of $645, was practically a dead loss per month, no attempt having been made to utilize the tug for any other purpose. Since March 6th the tug has been operated as part of the rail line. Between Yaquina City, the terminus of the railroad, and New¬ port, a small town at the entrance to the bay, a distance of three miles, there is a considerable amount of passenger and freight business. Heretofore this has always been done by a small steamer owned by outside parties. At the date of the com¬ mencement of this receivership the steamer Volanta, owned principally by one of the conductors and other employes of the Company, was taking this business. I could see no reason why this Company should not benefit by this business, and, accordingly, I at once placed the Resolute in service between Yaquina and Newport, making two round trips per day. This in no way interfered with her efficiency in making soundings upon the bar, or in piloting the ship in and out. The owners of the Volanta at once tied up their craft and transferred to the Railroad Company their contracts for carrying the mail and express. Later on I succeeded in getting the express company to make a new contract with us, by which the pay on the route between Yaquina and Newport was doubled. The earnings from the tug Resolute for the months of March, April, May, June, July, August, and September have been $3,251.76. These earnings would have been greatly increased had the Company’s summer travel to Newport reached anywhere near its usual proportions. The financial stringency, however, kept everybody at home; and whereas in the season of 1892 we took 3,000 people from Portland and other Southern Pacific points to Newport, the business this year was less than one-third that number. The question of the maintenance of the tug Resolute at Yaquina may rightly be taken up here. With the great improve- 17 merits which have been made in the bar and channel by the jet¬ ties, there is for six months in the year no actual necessity, so far as the safe entrance and departure of the steamer is con¬ cerned, for the services of the tug. The channel is now straight from buoy to buoy, and has so remained for the year past. The bar is merely a hog-back. During the past summer the Willa¬ mette Valley has repeatedly come in without the assistance or pilotage of the tug. I consider it, however, a wise measure to maintain the tug, both as a measure of safety during the stormy months, and in view of the fact that with the development of the railroad the shipping from the port of Yaquina will largely increase, and a remunerative business develop in towing sailing ships in and out of the bay. Before proceeding to a consideration of the rail line, it may be proper here to discuss the ocean terminal facilities at Yaquina Bay. Reference should be made to the map of the bay for a clear understanding of the situation there. The subject of Yaquina Bay as a harbor will be discussed farther on. It is suf¬ ficient here to state that the bay has a tidal area of about 5* square miles. The town of Newport, with a population of 500 people, is located just within the entrance, on the north side of the bay. Yaquina City, with about 300 inhabitants, is located three miles farther up the bay, on the same side as Newport. The location of the terminus of the railroad at Yaquina City seems to have been an afterthought, or a dernier rcssort. the first intention having been to make the terminus at Newport, where it properly should be. The owners of the water-front at Newport, however, declining to make a free gift of all of it to the Company, another terminus was sought. There appears to have been a scheme at one time to form a deep-water sea harbor, by the construction of an immense sea-wall on the north side of Cape Foulweather, but the fact that an Indian reservation would have had to be crossed 2 18 to reach this point, and the high price at which the adjoining land was held, fortunately forced the abandonment of this scheme. Much bitter feeling was engendered between the managers of the railroad and inhabitants of Newport, and with a threat to make “grass grow in their streets,” the railroad retired three miles up the Bay and made Yaquina City the final terminus of the railroad. All things considered, a location more illy adapted for the purpose could hardly have been found, the steep bluffs running directly down into tide water, with not a single foot of level ground. The Company seems to have realized to a certain extent that Newport was the proper terminus, for a survey was run from Toledo, a station nine miles east of Yaquina, around to New¬ port. The present line from Toledo to Yaquina follows the tortuous windings of the Yaquina River. To maintain this track on the bank of the river miles of log cribbing were put in at large expense, and the road as now located lies for several miles at the foot of high precipitous banks, composed of soft shale, a source of constant danger and expense to the Company by reason of slides and the filling up of the ditches. The log cribbing is now decayed, and must shortly be replaced with new cribbing at an expense of about $14,000, or riprapped with rock, which last would cost about $10,000 on this section. Had the line been carried around on the first survey to Newport the present expensive location would have been avoided and a sav¬ ing made of about three and one-half miles in distance, by reason of the fact that the distance from Toledo to Newport is three and a half miles shorter than it is from Toledo to Yaquina. In addition to this saving in mileage passengers and freight would have been landed directly at the seashore, instead of three miles up the bay. By an act of the Legislature, approved October 14, 1878, 19 all of the tide lands upon Yaquina Bay had been granted to the Railroad Company. Colonel Hogg and his brother, William M. Hoag, had prior to this acquired that portion of the uplands abutting on the water-front on the north shore of Yaquina Bay for about three miles from the present end of the track eastward. By resolution of the Board of Directors of the Willamette Valley & Coast Railroad Company, passed on April 22, 1884, a contract was entered into with William M. Hoag, by which the latter granted to the Railroad Company, for the term of ninety-nine years, a right of way forty feet wide across these lands, in consideration of a deed to the said William M. Hoag of all the tide and overflowed lands lying between such uplands and the nearest boundary of the said right of way, and a strip of similar tide lands 150 feet in width along the outer boundary of the right of way. On the 18th of December, 1885, by resolution of the Board of Directors, the proposition of Col. T. Egenton Hogg to purchase from the Railroad Company for $15,000, in first-mortgage bonds of the Oregon Pacific Railroad Company, 800 more acres of these tide and overflowed lands, was submitted; bn the 18th day of January, 1888, at the request of Colonel Hogg, the Board rescinded % its previous resolution, basing its action on the rapidly increasing value of these lands and the necessity for enlarged room for track¬ age. By reference to the map it will thus be seen that this fore¬ shore and intervening tide lands are owned by Colonel Hoggand his brother, and in addition a strip of tide land 150 feet wide, lying between the right of way and the channel, is also owned bv them — the railroad has little or nothing left. And so far as any extension of its terminal facilities at Yaquina are concerned, it is entirely in the power of the owners of these tide and uplands. In 1881 and 1882 the railroad had constructed at Yaquina, at a cost of $16,924.38, a station, warehouse, and wharf, and in 1883 and 1884 a car-shop, at a cost of $1,636.36. The Oregon Devel- 20 opment Company was organized in 1884. and sometime prior to the 22dday of April of that year purchased from the Railroad Company the warehouse, wharf, and car-shops above referred to for a lump sum of $33,500. I can not find in the minute books of either the Willamette Valley & Coast or the Oregon Pacific Railroad companies any resolution authorizing the sale of these terminal facilities, but believe that such a resolution was passed by the Executive Com¬ mittee of the Oregon Pacific Railroad Company. The books of the Oregon Pacific Railroad Company show that the Oregon Development Company was charged with this sum of $33,500 in account , but I can find no record of the actual payment of this purchase price. Mr. Charles Hutchins, the accountant for the Oregon Development Company, states that he opened the books of the Development Company with this sum as assets. Now, on the 22d day of April, 1884, the famous contract between the Oregon Development Company, and the Oregon Pacific Railroad Company known as the “Terminal Contract,” was duly entered into. This contract recites that, “Whereas the party of the first part (the Oregon Pacific Railroad Company) being unable itself to provide at Yaquina Bay, for the purposes of its undertakings, docks, wharves, warehouses, car-shops, and repair-shops, has applied to and requested the Oregon Develop¬ ment Company, party of the third part, to provide at Yaquina Bay for the party of the first part such facilities as aforesaid,, which the said party of the third part has agreed to do upon the terms and conditions and for the considerations hereinafter expressed.” It is evident, of course, that the Railroad Company had pro- vided for itself at Yaquina, prior to the date of this contract, the very wharves, docks , car-shops , etc., which the contract recites it was unable to provide and had requested the Development Com¬ pany to provide. , This contract further recites, “ That under and by virtue of its powers the Oregon Development Company had acquired cer¬ tain docks, wharves, and warehouse property at Yaquina Bay," and agreed to lease them to the Railroad Company for a term of three years, briefly upon these conditions: First, that the Railroad Company was to maintain and make all additions to the property at its own proper expense; second, that the railroad was to pay to the Development Company as rental for the use of the wharf 20 cents per ton for each ton of freight passed over the wharf in either direction, and 25 cents for each passenger. For the use of the car-shops a rental of $100 per month was to be paid to the Development Company. This contract was to have currency for three years from the first day of April, 1884, and settlements between the two companies were to be made every thirty days. The rentals accruing under this agreement averaged about $600 per month, and on the books of the Oregon Pacific Railroad Company were credited to the Oregon Development Company, acting as an offset to the $33,500 with which the Oregon Devel¬ opment Company was charged as the purchase price of the property. With reference to the operation of this contract, Mr. Hutch- ins further states as follows: ‘‘Terminal contract distinctly speci¬ fied that the Oregon Pacific Railroad Company should furnish the Oregon Development Company monthly a statement of the tonnage and passenger business passing through the dock; that such settlements were never made until just after the appoint¬ ment of Colonel Hogg as receiver, which occurred October 28, 1890,’’or over three years after the expiration by limitation of the contract. “That at this time he called the attention of Mr. William M. Hoag to the fact that the terminal contract had expired three years previously; that Mr. Hoag appeared very much taken back, and excused him (Mr. Hutchins) from the office at once, but within a few moments sent for him again, and 22 gave him instructions to make a journal entry at the heading of the account in the Oregon Development books,'“ which contract has been extended.” Mr. Hutchins further states, that it was apparent from the Oregon Development Company’s books that Mr. William M. Hoag did not understand the provisions of the terminal con¬ tract, for all charges for betterments, repairs, etc., were charged on the Oregon Development books to the Oregon Development Company; that he pointed out to Mr. Hoag that under the pro¬ visions of the contract these were proper charges against the Oregon Pacific Railroad, and that shortly after the appointment of Colonel Hogg as receiver he (Hutchins) was instructed to charge back all these amounts against the Oregon Pacific Rail¬ road Company. Under the operations of this contract the rentals accumulated up to the 6th day of March. 1893, to the amount of $12,155.71 in excess of the original purchase price of $33,500, and this bal¬ ance now stands oh the books of the Railroad Company as a credit to the Development Company. The transaction, in brief, is as if you had taken my house, agreeing to pay me for it $33,500; had then rented it to me for $600 a month, and when the rentals aggregated $33,500 you owned the property; and as in this case the rentals aggregated $12,000 more than the purchase price, there would appear to be a nice little bonus due you from me for the privilege which I had of living in my own house. This terminal contract, together with another alleged con¬ tract between the Oregon Pacific Railroad Company and the Oregon Development Company, to which reference will be m^de farther on, were repudiated by the present receiver on March 8, 1893, and he took formal possession of the wharf, warehouse, car-shops, etc. The ocean terminal facilities at Yaquina consist of a piled wharf with a frontage 500 feet long, a portion of it being 125 feet deep, and the westerly portion 75 feet wide. Upon this wharf is a frame warehouse 225 feet long by 100 feet wide. There are two tracks upon the wharf, one inside of the house and one on the outer edge of the wharf. The warehouse has a tarred paper roof. Both the warehouse and wharf are entirely unsuited for the purpose for which they were constructed, and by reason of their manner of construction are costly and expensive to maintain. The whole structure rests upon piles driven in tide water, there being some 800 piles underneath the structure. By reason of the destructive action of the teredo these piles last only about three years, and to redrive them it is necessary to tear up the floor of the wharf, and where the piles are underneath the structure it is necessary to cut holes in the roof, or to remove large sections of it, in order to drive the piles. The roof being simply of tarred paper, coated with tar and gravel, and of very flat pitch, leaks like a sieve, and subjects the Company to constant claims to damage for merchandise being wet. The warehouse is barely large enough to enable us to sort merchandise cargoes, and on account of the weakness of the sub¬ structure — the fact that it is over water and being of open timber construction — is infested with rats — makes it impossible for us to store grain therein, even were the buildings of a size sufficient to afford the necessary room for that purpose. The fact that the Company has no suitable warehouse for the storage of grain at tide-water is one of the greatest drawbacks to the successful carrying on of its grain business. The present condition of the piling and caps underneath the wharf, the flooring of the wharf, and the roof of the warehouse, together with the general unsuit¬ ableness of the entire structure, renders it unwise to expend anything further upon it, although at the present moment the 24 /v J expenditure of at least $1,000 is almost absolutely required to make it safe to run an engine over. For the economical handling of its business at its ocean terminus the Company should have a corrugated iron building of not less than 400 by 200 feet long, with a concrete floor, with an elevator and cleaner, all of the structure being located upon solid ground, with pile truckway srunning out to a longitudinal wharf along deep water. Such a building could be constructed for about $9,500 — would be practically indestructible. The only portion that would be subject to decay would be the truck ways and deep-water wharf, which, being in the nature of an ordinary piled bridge, could be readily and cheaply repaired. It is believed that such a warehouse could be made a “ call house ” on the San Francisco Board of Trade, and that extremely low rates of insurance could be obtained therefor. It would give ample room for the handling of merchandise cargoes and for the storage and handling of about 4,000 tons of wheat in sacks. Such a warehouse would undoubtedly be a powerful factor in secur¬ ing for the Company its proper share of the grain traffic from the Willamette Valley, and would earn a handsome return upon its cost, through the medium of its storage charges, and at the same time reduce expense of handling cargo. As the bad con¬ dition of the ocean warehouse is such as to absolutely demand immediate action, a plan for a new warehouse on the lines sug¬ gested above is submitted herewith. RAIL TERMINAL FACILITIES AT YAQUINA. Below will be found a list of all the Company’s buildings at Yaquina, with their dates of construction and approximate costs. These costs include, in many instances, expensive betterments which have been made to the buildings. Where the costs are not given it is by reason of the fact that in the earlier accounts no attempt at distribution of accounts was made: 25 1881-82. Warehouse and depot...$ 1883- 84. Car-shops 24 x 125 ft. —. 1,636 36 1886. Machine-shops 50 x 196 ft.. 7,738 85 1886- 90. Foundry 50 x 50 ft.. 8,965 98 1885. Dwelling-house, north of Hotel, 16x32 ft.. 816 24 1886. Store building 20 x 40 ft... 1,268 84 1885-87. Yaquina Hotel, 100 x 50 ft., 3- st01 T.-. u,4i7 °5 1887. Wash-house near hotel.. 130 40 1884. Blacksmith-shop 16 x 18 ft.. 578 66 1884- 86. Six-stall round-house 58 x 108 ft. 1,872 37 1884-85. Bunk-house....__ 340 46 1884. Oil-house 13 x 37 ft_ 20 09 1886. Sand-house 16x20 ft.... 267 82 1887- 90. Various sidewalks . 371 91 1889. Hose-house .. 69 53 1886. Dwelling, southeast of car-shop, * 16 x 25 ft__ 130 00 1884. Wooden turntable.. 922 27 1886. Track scales. 1,332 73 From 1881 to 1890, $41,018.95 were charged to the construc¬ tion of and betterments to station, warehouse, and wharf — this includes the construction and cost of repairs to the passenger and freight depot and the ocean wharf and warehouse — this being ostensibly sold by the Railroad Company to the Develop¬ ment Company; $20,000 of this amount is for betterments to the property made after it was transferred in account to the Devel¬ opment Company. All the buildings listed, except the hotel, are of rough lumber and without paint. The foundry has a galvanized iron roof. The hotel is a three-story frame structure, ceiled inside in place of plastered, and of cheap construction. It contains sixty rooms. f 26 It is located on a shelf cut into the bluff, at an elevation of about twenty feet above the track, and is connected with the roadway by a long sidewalk on stilts. So far as can be learned it never paid a cent upon its cost, and the present receiver has been entirely unable to lease it to anyone upon any terms, by reason of the fact that, like the town of Yaquina itself, it is unfortunately situated. There is almost absolutely no travel to Yaquina City itself which would call for a hotel; and the summer travel to the seacoast can not be per¬ suaded to stop at a hotel three miles from the beach. If the hotel were at Newport and were properly conducted it could be made to earn a good return on its cost. The machine-shop contains the following tools: i Engine lathe, io-foot bed, fair condition..$1,125 00 1 Engine lathe, 6 “ “ “ “ ..525 00 1 Wheel-boring engine, good condition, but needs new foundation_ 1,575 00 1 Hydrostatic wheel press, fair condition_ 1,250 00 1 Driving-wheel lathe, 79-inch swing _3,928 00 1 Wheel-grinding machine, no good, out of date 1,384 12 1 Bolt cutter, No. 1, fair condition_ 1,325 00 1 Bolt cutter, No. 2, very fair condition_ 825 00 1 Vertical drill press, 33-inch adjustment, very fair condition_ 500 00 1 Planer lathe, 26-inch swing, poor shape_ I ,5°° 00 1 15-horse-power engine and boiler, consid¬ erably the worse for wear_ 500 00 Miscellaneous tools, such as portable forges, hand drills, belting, pulleys, shafting, and so on, about_ 500 00 The Company is entirely unprovided with any wood-working tools whatever. Car repairs are therefore done at.a tremendous disadvantage. 27 Foundry Plant. —One 36-inch iron furnace, one small brass furnace, capacity, with ten men, per day, about nine tons of cast¬ ings; one small rattler, one crane, twelve large car-wheel chills, one small car-wheel chill. The foundry is fitted up with an air-hoist to the furnace, and has connected with it an air-hoist drop hammer for breaking- scrap, erected by the former master mechanic at a cost of $1,200. Up to the appointment of the present receiver the Company had made all of its own castings. A brief investigation was con¬ vincing that the castings cost the Company very much in excess of what they could be bought for in the open market. The mas¬ ter mechanic was found to be most expensive in his methods. The foundry was accordingly closed, and by an arrangement with the Albany Iron Works our patterns were placed with them, they agreeing to furnish us new castings in exchange for our scrap at the rate of 2f cents per pound for castings. The cast-iron wheels formerly made at the Company’s foundry weighed 530 pounds apiece, and averaged the amazingly low figure of 3,000 miles. Forty thirty-three-inch cast-iron wheels have been purchased from the Southern Pacific Company’s shops at Sacramento, at a cost to the Company of $12.47 apiece on the dock in San Francisco. These wheels weigh 600 pounds, and on the Southern Pacific average 60,000 miles. On this basis the wheels formerly made at the Company’s shop cost $111.85 apiece, although they were only charged at $15.30. The turn-table has been recently renewed and is good .for several years. There are 9,198 feet of side-track at Yaquina, laid with 50-pound steel and 30-pound iron. All of the yard is on made ground. The water supply at Yaquina is derived from three sources, first, a 20,000-gallon tank situated on a bench on the hillside and supplied by aspring. The water from this tank is led through 1,038 feet of two-inch pipe, and supplies the passenger depot and the ocean wharf. The second supply is from two canons lying back of the machine-shop, the springs in these canons merely running into a head-box. This source supplies a tank at the round-house for the use of locomotives. The third supply is from a dam in a canon on land owned by William M. Hoag, distant about a quarter of a mile from the main track. The water from this dam is brought down through six-inch pipe. This water is not used at any point, but is regarded simply as fire protection. This water supply requires some further explanation. The dam was built and the pipe laid and paid for by the Railroad Company, the understanding being, however, that when com¬ pleted Mr. Wm. M. Hoag should purchase it from the Railroad % Company. The dam is located on land owned by Mr. Hoag. The cost of it, not including the pipe and laying, up to 1890, was $5,861.61. The engineer who had charge of the construction of the dam states that the location was selected by Mr. Wm. M. Hoag personally. The location was faulty, being at the base of a gigantic tree, whose decaying roots furnished ready channels of leakage. While the dam held a certain amount of water, it did not by any means come up to expectations, and Mr. Hoag declined to accept the dam from the Company, but did accept the pipe laid there¬ from, and in a letter to Colonel Hogg, under date of March 4, 1891, expressed his intention of paying therefor. The books of the Oregon Pacific Railroad Company show that the cost of the pipe and laying were charged to Mr. William M. Hoag in account. No bills for water furnished to the Company at Yaquina were presented by Mr. Hoag until October 28, 1890, immediately after the appointment of Colonel Hogg as receiver. After this date Mr. Hoag instructed the Auditor to make monthly bills for the water. None of the bills, except those presented since the present receivership, show to what buildings water is furnished, none show the source of supply. Bills presented since the present receivership read, “ For water furnished to station and round-house.” Mr. William M. Hoag’s personal account was written up shortly after the appointment of Col. T. Egenton Hogg as receiver. A copy of the voucher paid to and receipted by William M. Hoag, embodying the statement of his personal account, shows that he was paid for water furnished the Com¬ pany at Yaquina $6,133. A bill was also made against the Oregon Developing Com¬ pany for water furnished to their steamships at Yaquina to the amount of $50 per month. This $50 per month was in reality paid by the Railroad Company, for by the terms of an operating contract between the Railroad Company jyid the Development Company—which will be referred to later on—the Railroad Company paid all of the expenses of operating the Development Company’s steamers. None of the bills for water furnished recited explicitly from what source the water came; and it was currently understood, and was so stated by the master mechanic who was in charge of the water supply, to Messrs. Rand & Wood, that the charge for water was for water from the dam. The fact is, however, that no water was furnished from the dam,, by reason of the fact that its pipes terminate in fire hydrants only. The pipes from the water-tank on the hill connected with the ocean wharf and the depot, and the natural supposition is, there¬ fore, that the charge was made for the water from this tank. It is difficult to understand just what water Mr. Hoag was paid for, and for which he still continues to make bills against the Company. It seems plain that it can not be for water from the dam, for the reason that the Company receives no water what¬ ever from the dam, nor can it be for water furnished to the round-house, for the two springs—above referred to — which 30 furnish this supply are located on land owned by the Company purchased from a man by the name of Weiser. This, in spite of the fact that the last bills rendered for this water in favor of Mr. Hoag say, “For water furnished to round-house.” It must be, therefore, for water furnished from the tank on the hill. Now, the only water used by the Company from this supply is a three- quarter-inch faucet at the depot, and it would seem that $40 a month for such supply would be out of all proportion. The receiver has not paid any bills for water furnished at Yaquina since March 6th. Considerable extra trackage is needed at the Company’s ocean terminus, but it is difficult to see how this can be got at Yaquina, both by reason of the natural disadvantages and the unnatural ones caused by private ownership of land. The shops are badly located, being at the extreme end of the road. It would conduce greatly to the more economical work¬ ing of the road if they were more centrally located. Albany is obviously the proper location for the shops, and there is reason to believe that that city would give a liberal bonus in land and cash to secure them. The Company already has a first-class eight-stall brick round-house there, which would only need the addition of four stalls to provide sufficient engine room. The only difficulty in the matter is the fact that the round-house is on ground owned by William M. Hoag. MAIN TRACK. The main track from Yaquina to end of track, 141^ miles,is made up as follows: Thirty miles, of 50-pound Krupp steel; 14^ miles, 50-poutid W. C. & D. steel; 20 miles, 50-pound Darlington steel; 21 miles, 50-pound Barrow steel; 56 miles, 56-pound Barrow steel. Gauge 4 feet 8|- inches. The sections of the different rails are as follows: Krupp, W. 31 C. & D., and Darlington, 50-pound, 2-inch by'4-inch by 3f--inch; Barrow, 50-pound, 2\ by 3f by 3J; Barrow, 56-pound, by 4 by 4 b A detailed statement of the location of the different brands of steel will be found in one of the books of original documents submitted herewith. The Company has no steel on hand in Oregon, with the exception of about one rail per mile for repairs. Some of the 50-pound steel is somewhat worn. That on Nashville Hill, where we have five miles of 2 per cent grade, is in perhaps the worst condition; none of it, however, is bad. The 56-pound steel is in good condition. No new steel is required with the present traffic, or with any considerable increase in traffic. The track is laid with broken joints and 23-inch angle bars east of Corvallis, but without nut- locks; steel laid west of Corvallis is laid with fish-plates. The Company has in side-tracks about four miles of new 56-pound Barrow steel, which should be taken out and relaid on Nashville Hill, replacing the 50-pound steel now there. While in any future extensions it would be wise to lav somewhat heavier steel, say 66-pound, yet the writer does not deem it necessary, or that it would be an economical policy, to change any of the steel now in the main track, except on Nashville Hill, or in a few small spots were it is exceptionally worn — certainly not with the present traffic, nor with double the traffic. And in view of the fact that ties are so much cheaper in this country proportionately than steel, I am of opinion that it would be economy, in case of a con¬ siderable increase in traffic, to get the full life out of the present steel by closely tieing, rather than contemplate the very serious expense of heavier steel. The Company has fourteen miles of side track, made up as follows: 3,878 feet of 50-pound Krupp steel; 1,373 feet of 50- pound Darlington steel; 1,226 feet of 50-pound Barrow steel; 7 , 54 ° feet of 50-pound W. C. & D. steel; 20.980 feet of 56-pound Barrow steel; 27,918 feet of 30-pound iron. Side-track facilities are ample at all stations for a consider¬ able increase in traffic. The road is ballasted as follows, commencing at Yaquina: Mile-post 1 to 42, dirt ballast; 42 to 45^, light bed of rock ballast; 45^ to 46^, mostly dirt ballast, with few scattered patches of rock; 46^ to 49a light bed of rock ballast; 49J to 71-^, mixture of rock and dirt; 71J- to 102^, light bed of gravel; 102^ to 112, light bed of rock; 112 to 113, not ballasted; 113 to 119, coarse gravel and rock; 119 to 131^, light bed of rock; 131^ to 1411%, not ballasted. Since the road was placed in the hands of the present receiver, the finances of the Company would not allow T of any extensive amounts expended in the way of ballast, yet a system¬ atic effort has been made, by using the regular section force and regular trains only, to improve the ballast on curves, with decid¬ edly beneficial results. There are numerous points along the line where excellent ballast, both sand, gravel, and broken rock, can be obtained. At mile-post 132 there appears to be an endless supply of finely broken rock of a very hard nature, which would cost about 50 cents a yard to load on the cars. CROSSINGS. There are the following railroad crossings in the track: Southern Pacific crossing over river track at Corvallis, right- angle crossing. Southern Pacific crossing just east of Corvallis, 18 degrees 27 minutes. Southern Pacific crossing over main track at Albany, 73 degrees 15 minutes. hirst Southern Pacific crossing over river track at Albany, 43 degrees 40 minutes. 33 Second Southern Pacific crossing over river track at Albany, 16 degrees i minute. These crossings are all maintained by the Oregon Pacific Railroad Company. Albany Street Railway crossing at Albany, right angle; maintained by the Albany Street Railway Company. Southern Pacific crossing at Shelburne, 27 degrees 21 min- « « utes; maintained by the Southern Pacific Company since 1892. TIES. With the exception of a short piece of track, which is laid with redwood brought from California, the track is entirely tied with 6 x 8 fir ties, with an average of about 2,700 to the mile. Ties have been put in track for repairs as follows : 1886 ____ 2,114 1887 _ 1,887 1888 _____ r, 2 89 1889 - 5,517 1890 - 4,572 1891 ____ 9,828 1892 ---32,813 1893, to March 5th. 4,388 1893, March 5th to October ist__ .26,000 Twenty-six thousand ties have been put under during the present receivership. A great majority of the ties in track are hewed, and east of Albany a good many ties were put in that were got out of second-growth timber ; having so much sap- wood, these have decayed very rapidly. The writer, while acting as superintendent, induced the Com¬ pany, about eighteen months ago, to adopt sawed ties, and since then no others have been used. The sawed tie being freed from the sap-wood lasts longer, and all being of even thickness secures more even bearing. Good 6x8 fir ties sawed from large timber cost, delivered on cars, from 17 to 19 cents 3 34 apiece. For stiffness and strength the red and yellow fir makes good tie timber. Its average life in well-trimmed ballast and under ordinary traffic is about eight years ; in mud ballast this is reduced to about five years. The comparatively large amount of ties put in during the present receivership was absolutely demanded by the necessity of making the track safe, and in view of the lack of ballast in some places the track is in very fair condition. With reference to the track, the State Board of Railroad Commissioners make the following statement in their report to the present receiver of their inspection of the Oregon Pacific Railroad : “ The road-bed was found to be in good condition, except that occasional ties were needed.” And the present chairman of the Board took occasion, on their last inspection, which occurred a few days ago, to compliment the Company on its fine track. SWITCHES. Split spring switches are the only kind in use on the road. The switch-stands have never been provided with switch-lights, probably by reason of the fact that so few trains are run at night. GRADES AND CURVES. The limiting grade between Yaquina and Corvallis going east is confined to five miles of 2 per cent grade, lying between Nashville and the summit of the Coast Range. Going west, the limiting grade is iyW per cent, lying between Philomath and the summit of the Coast Range. Going east, on the Cascade Divis¬ ion, the limiting grade is i T W per cent to the present end of the track. Beyond the present end of track, on the located line, the limiting grade is twenty miles of 2 per cent, by which the sum¬ mit of the Cascade Range is reached. On the east slope of the Cascades there are seven miles of 2 per cent grade. The location across Eastern Oregon shows nothing heavier 35 than iyW per cent. The curvature at no point exceeds io per cent, and all curves are equated. BRIDGING. The total length of all bridges west of Albany is 30,156 feet; east of Albany, 12,509 feet, making a total of a little over eight solid miles of bridging on the constructed line. There are twenty-two bridges over the Mary’s River, and fifteen over the Yaquina River. Included in the bridging are: One combination steel and wood bridge thirty-four feet long. Eighteen ioo-foot Howe Truss Spans. Three 70-foot “ “ “ Two 171-foot “ “ “ Two 147-foot “ “ “ One 130-foot “ “ “ There are nine two, three, and four deck bridges. The con¬ dition of all bridges on the line is good. Those west of Cor¬ vallis were figured for a fifty-ton engine, followed by a rolling load of 2,000 pounds to the foot. Between Corvallis and the first crossing of the Santiam River (bridge 180) they are figured for a rolling load of 3,000 pounds to the foot. From the Santiam River east the bridging is heavier, being figured for a double-header, consisting of two eighty-ton engines. A careful estimate of the repairs needed to put all bridges in good condition for next twelve months, including labor and material, foots up $10,029.06. A statement will be found in Volume 1 of original documents showing construction of each bridge on the road in detail, its present condition, and repairs needed. None of the bridges have ever been treated to a coat of paint. The principal spans should be painted. Both by reason of the demands of the State Railroad Com¬ missioners and the actual condition of the bridges, a large amount 36 has had to be expended by the present receiver on bridge repairs, amounting, from March 6th to September 30th, to $14,675.40. TUNNELS. There are three tunnels upon the line, all lying west of the summit of the Coast Range. Tunnel No. 1 is located at mile¬ post 22, east from Yaquina; total length, 750 feet; length of timber approach, 74 feet. This tunnel is 18 feet high, 14 feet wide at the bottom, and 15 feet wide at the top. Segments are composed of 12 x 12 timber, backed by a wall of 4x12; repairs, including labor and material, are needed to the amount of $929.78. Tunnel No. 2 is located at mile-post 42; total length, 460 feet. Same section and construction as No. 1. In good repair. Tunnel No. 3 located at mile-post 44; length, 700 feet; same section and construction as No. 1. In good condition. BUILDINGS. A full list of the buildings at Yaquina was given under the head of “Terminal Facilities.” Taking the stations in rotation from Yaquina east, the Company has the following buildings: Toledo. — New brick depot, 20x60 feet, Section Tool House, 10x12. This brick depot, being the only one in the State of Oregon, requires some explanation. Toledo, the county- seat of Lincoln County, is the largest town between Corvallis and Yaquina Bay. The citizens there had been very anxious, and were entitled to depot accommodations; but owing to a quarrel between the former management and some of the citi¬ zens, the matter in dispute being a twenty-foot strip of land, much ill-feeling had been engendered, and no depot had ever been provided there, although the citizens of Toledo had made a demand on the railroad commissioners asking that the Company be forced to provide reasonable accommodations there. Believ¬ ing it bad policy to have any of its patrons so badly dissatisfied, 3? the present receiver took some pains to mollify these people, and succeeded even in inducing them to subscribe $500 for the erection of a depot at Toledo. The Company has had on hand at Yaquina for many years about 400,000 brick, which were brought from San Francisco for the purpose of erecting at Yaquina a large brick depot and general office buildings. The first cost of the brick was $9,000. The purpose, fortunately, had never been carried out—for it would manifestly have been poor policy to have had its general offices at one end of the road, when it were possible to place it more midway. These brick had made so many trips to San Francisco as ballast in the years gone by that their angles had been worn round. By using these brick in the construction of the depot it was figured that the $500 subscribed by the citizens would pay for the entire cost of erecting the building. The plan was accordingly carried out and a neat and substantial brick depot has been erected without practically any expense to the Company. The citizens of Toledo are delighted with the acquisition, and harmony reigns supreme. Storrs: Section House_ 16 x 20 Old China House. 10 x 12 Tool House_10 x 12 Chitwood: Station House.. 16 x 24 Section House_ __io x 16 Tool House . .12 x 12 Nortons: China House . 16 x 19 Tool House_10 x 12 Nashville: Station Building.16 x 24 Old China House...16 x 18 38 Tunnel No. 2: Watchman’s House_ 12 x 17 Tunnel No. i: Tool House_ 8x 8 Summit: Station House_16 x 40 China House_16 x 24 Tool House_10 x 12 Harris: Station House_16 x 24 China House_ ---17 x 24 Tool House, Sec__ 10 x 12 Tool House_12 x 14 Mile-post 64: Section House_16 x 20 Tool House_10 x 12 China House_10 x 16 Wren’s: Station House_10 x 14 Freight House_12 x 16 Philomath: Station House__18 x 32 Corvallis: Station House, two-story, 40 x 65 feet, located upon land owned by Wm. M. Hoag, for which rent is de¬ manded at the rate of $40 per month. Oil Paint Shop...24 x 60 Old China House_ 9x24 Tool House ....... 10 x 12 Two-story frame dwelling on Front Street. 39 Albany: Station House__20 x 60 Battery House_10 x 12 City Ticket Office_11 x 14 Eight-stall brick Round-house_65 x 173 China House_ 10x32 China House___10 x 14 Three Tool Houses, each_10 x 12 Munkers: China House_ _12 x 14 Kings: Section House..16 x 20 Watchman’s House___10 x 14 China House__16 x 24 Tool House____10 x 12 Lyons: Section House___16 x 20 China House__........17 x 24 Tool House...10 x 12 Station House_ _ __12 x 22 Mill City: Section House _ ____..28 x 29 'Fool House . ... . 18 x 30 Niagara: Section House. .. 16 x 20 China House. . . . .16 x 24 Section 18: Section House. . 16 x 20 China House . . . . . 16 x 24 Section 19: Section House . .16 x 20 China House.16 x 24 40 * This last does not include a number of small sheds and shacks. All of the buildings listed—with the exception of the station houses at Corvallis and Toledo, and Albany round-house— are rough board, unpainted structures. Our present needs in the way of new buildings are small. At Philomath, a new passenger and freight depot should be built at a cost of about $800 to $1,000. It is believed that the citizens could be induced to subscribe a portion of this amount, and by using brick from Yaquina, which is practically useless for any other purpose, a substantial and commodious building could be erected for this figure. At Albany larger and better accommodations are needed than anything we have there. The present freight and passenger depot is so much out of the way that it was found necessary, several years ago, to lay a switch over to the vicinity of the Southern Pacific depot, as much of our travel is interchanged with them. The distance between the two depots is about a quarter of a mile, and our passenger trains now back over there to receive and unload their passengers and baggage. It is a clumsy arrangement, but under present circumstances the best that can be done. We have to maintain a small ticket office near the Southern Pacific depot. It does not seem probable that any arrangements could be made with the Southern Pacific for the use of their depot, so that at present there seems nothing to do but to keep up the present cumbersome arrangements, or procure ground as close to the Southern Pacific as possible and erect a suitable passenger station. Albany, however, is the most important town upon the road, and the Company’s general track and depot facilities there are in bad shape. The round-house is located upon ground owned by Wm. M. Hoag, for which he regularly presents a bill for rental at the rate of $42 per month. In view of all the circum¬ stances, the writer is not prepared to suggest just what should be 41 done at this point until he has had opportunity for a careful study of the situation. It may be proper to state here that the Company owns no grain warehouses along its lines. The elevators at Munkers, Philomath, and Wrens, and the flat warehouse at Blodgett’s, are claimed as the property of the Oregon Development Company ; and in order to secure their operation in the interests of the Company the receiver has had to rent these elevators and ware¬ houses from the receiver of the Oregon Development Company, at a rental of one cent per bushel for all grain passing through them. The receiver has in turn re-leased these houses to a rep¬ resentative of a San Francisco grain firm at the same rental. The necessity for the construction and the ownership by the Company of grain warehouses at various points along its lines will be more fully considered under the head of “Traffic.” Of the various buildings owned by the Company the receiver has rented a small dwelling at Yaquina for $2 per month, and the dwelling-house at Corvallis for $10 per month. The general offices of the Company are located at Corvallis, on the second floor of the building owned by the banking firm of Hamilton, Job &: Co. Exclusive of tiie hallway, 4,000 square feet of floor surface is occupied. This floor space is cut up into eight rooms. Prior to the 6th of March a rental of $71 per month was charged for these offices. The present receiver secured a reduction of this rental on March 18th to $60 per month, which, considering space and the location, is considered a reasonable rental. TURN-TABLES. Fifty-foot wooden turn-tables are located at Yaquina, Nash¬ ville, Corvallis, and Detroit. The one at Corvallis is available for use elsewhere, a “ Y ” having been put in there. 42 TELEGRAPH LINE. The telegraph line is the property of the Railroad Com¬ pany. That portion from Yaquina to Corvallis was built in 1882 and 1883; from Corvallis to the Britenbush, 1886 to 1889. The line is strung from standard No. 9 wire, with fir poles, averaging thirty to the mile. The total first cost of the line was $11,655.12, and the average annual charge for repairs has been about $1,225.- 04, this including $900 per annum fora lineman. The Company does some commercial business, gross receipts from which amounted in 1892 to $1,483.09. This showed so smali a net earning, amounting to only about $250, that the present receiver has endeavored to lease the line to the Western Union Tele¬ graph Company, or to the Pacific Postal Telegraph Company. The terms of the agreement proposed to the telegraph com¬ panies were briefly as follow\s: 1. The lessee to maintain the plant and furnish all labor and material for repairs and operation, on requisitions to be approved by the General Superintendent of the Railroad Com¬ pany. 2. The lessee to pay one-half the salary of the line repairer. 3. All receipts for commercial business to be remitted direct to the lessee, 30 per cent of so much of the receipts as apply to the Railroad Company’s wire to be repaid to the Rail¬ road Company by the lessee. 4. The lessee to allow the Railroad Company, as monthly rental for the use of its wires and facilities, $250 worth of free telegraphing over the lines of the lessee in the States of Cali¬ fornia, Oregon, and Washington, and $50 of free telegraphing per month between any of the offices of the lessee in the States named above and the cities of New York and Philadelphia. 5. The Railroad Company to have full use of its wires for the transaction of its business and the discharge of its trains. 6. Should the Railroad Company extend its telegraph lines \ 43 during the life of the agreement, the extended line shall be con¬ sidered as coming within the terms of the agreement. Under the present conditions it seemed to be useless to ask for a cash rental, and as the Company’s business is scattered from Portland to San Francisco, requiring a considerable use of com¬ mercial wire, practically the same consideration would be received by the Railroad Company by the payment of the rental in free tel¬ egraphing. On the basis of the Railroad Company’s payments for telegraphic service over commercial lines, and the saving to the Company in repairs and maintenance contemplated in the agreement, it was calculated the proposed contract would save the Railroad Company $2,700 per annum over and above the net earnings of the line as operated at present. The largest incent¬ ive to the lessee was considered to lie in the last proposition of the agreement. The Western Union Telegraph Company has declined to take the lease of the line, on two grounds; first, that no permanent agree¬ ment could be made with the receiver; and second, that their infor¬ mation led them to believe that extensive repairs would be needed to enable them to handle the business according to their standard. Negotiations are still pending with the Pacific Postal Telegraph Company, with a fair prospect of being successfully carried through. The line is in fair condition, but about $600 should be expended in setting new poles. WATER SUPPLY. The Company’s locomotive water supply is raised by gravity at all points except Albany. Following is a list of the water sta¬ tions: Yaquina: Size of tank, 11 x 18 feet. Capacity, 20,000 gallons. Length of supply pipe, 1,038 feet. 44 Diameter of supply pipe, two inches. Source of supply, spring. Name of owner of ground on which supply is located, Ore¬ gon Pacific Railroad. Mile-post 12^: Size of box tank, 5x5x7 feet. Capacity, 1,000 gallons. Tank supply through 32 feet of trough. Source of supply, spring, located on ground owned by Austin Rosebrook. Chitwood: Stave tank, 11 x 18 feet. Capacity, 20,000 gallons. Length and diameter of supply pipe, 190 feet 2-inch pipe. Source of supply, spring, located on land owned by M. F. Whitney. Nashville: Box tank, 5 x 5 x 14 feet. Capacity, 2,500 gallons. Length and diameter of supply pipe, 1,016 feet 2-inch pipe. Supply from spring on ground owned by James Hamar. Pyburn: Box tank, 5 x 5 x 14 feet. Capacity, 2,500 gallons. Length and diameter of supply pipe, 103 feet 2-inch pipe and 325 feet 3-inch pipe. Source of supply from spring on ground owned by Charles McCollough. Mile-post 64: Box tank, 8 ft. x 8 ft. 6 in. x 12 feet. Capacity, 6,000 gallons. Length and diameter of supply pipe, 400 feet 2-inch pipe. Supply from spring on land owned by William Wyatt. 45 * Ale any: Until within the last two months the water supply at Albany was taken from two box-tanks, 5 x 5 x 12 feet, which were fed by pipe from the City Water Works, otherwise known as the Albany Canal Water Lighting & Transportation Company (one of whose principal stockholders is William M. Hoag), at a cost of $35 per month. As the Company had in stock a 30,000-gallon stave tank, the receiver had this tank set up at the side of the track leading to the round-house, dug a twenty-foot well, eleven feet in diameter, at the round-house, securing an abundant supply of good water. The Company owned two toy engines, the Corvallis, and No. 5, too small to be of any use whatever. The Corvallis was accordingly blocked up in the round-house in the stall nearest the well, and used to furnish steam to a small pump by which water from the well is delivered to the tank through about 400 feet of two-inch pipe. The round-house foreman runs the pump two or three times a week personally, and gives us an abundant supply of water, thus doing away with the $35 a month rent paid to the City Water Company. Lyons: Stave tank, 11 x 18. Capacity, 20,000 gallons. Length and diameter of supply pipe, 1,470 feet, 2-inch pipe. Source of supply, spring on land owned by Miles Rainwater. Toward the eastern end of the road, springs are so abundant close to the track, that no further water stations have been pro¬ vided. Whenever it has been necessary to take water on the east end of the track, a spring has been found at a sufficient ele¬ vation to enable it to be turned into the tank through a few feet of board trough. Such sources of supply are found at mile-posts 129^ and 138J, situated on Government land. The entire water supply is of phenomenal purity, being almost entirely free from mineral of any kind, or scale-producing substance. 46 The supply at Nashville usually fails toward the end of the season, but it is possible to substitute for this a tank at the near¬ est crossing of the Yaquina River, which could be supplied by a ram in the river. The writer has been unable to find any agreements with the parties owning the above sources of supply; but, so far as he is aware, no claims have ever been presented by the parties for the water furnished The water supply at Yaquina has been discussed before, under the head of “Terminal Facilities.” TRACK SCALES. The Company has track scales only at Yaquina. Scales are badly needed at Albany, and would quickly pay for themselves. FUEL. The only fuel used for firing locomotives is two-foot fir wood, which is cut and put out by farmers and ranchers living along the line. The Company is now paying for this wood on the line east of Albany $2.00 per cord racked up on the right of way, or $2.25 per cord delivered on cars. Between Albany and Yaquina, where the supply is not so large, we pay $2.50 per cord delivered on the right of way. The following statement will show the number of miles run by engines to a cord of wood for the past five months: April---44 tVo May- 45 AV June-46 yW July-48 -tVV August .. 4 9l Vir It will be noted that there has been a steady increase in the number of miles secured to a cord of wood. This has been due to two causes: First, a more rigid supervision of firemen by the master mechanic and superintendent; second, a considerable increase has been secured by the adoption on one of our pas¬ senger engines of a single-cone diamond stack in place of the 47 usual funnel stack used on most wood-burners. As speed is not a prime requisite with us, further economy has been secured by opening up the nozzles of our engines. Reference has been made elsewhere to the fuel consumed on the steamship Willamette Valley. The tug Resolute is fired with four-foot fir wood, consuming on an average a cord a day. This four-foot fir wood costs $2.00 per cord delivered on cars. The Company has on hand at present 250 cords of two-foot wood — a very small supply. EQUIPMENT. Motive Power. —The Company owns sixteen engines as below: No Maker. Year Built. Size Cylinders. Weight including Tank. First Cost including Freight. Condition. 16 Danforth & Cook. 1881 17 x 24 62 tons, 1,444 pounds $14,000 Good. 2 Rogers, _ 17 x 24 62 tons, 1,444 pounds 7,728 Good. 3 t 4 — 17 x 24 62 tons, 1,444 pounds 7,728 Needs light repairs. 4 4 4 — 17 x 24 63 tons, 1,850 pounds 7,728 Needs general overhauling. 5 Danforth & Cook, 1886 10 x 18 About 30 tons.. 7,210 Fair, but too small to be of use. 6 D. & C. 1886 15 X 22 56 tons, Soo pounds 7,210 Needs general overhauling. 7 4 4 1886 15 X 22 56 tons, 800 pounds 7,210 ( t 8 < ( 1886 15 X 22 56 tons, 800 pounds 7,210 ‘f 9 < 4 1886 15 X 22 56 tons, 800 pounds 7,210 t 4 10 4 4 1886 15 X 22 56 tons, 800 pounds 7,210 4 4 . 11 4 ( 1886 15 X 22 56 tons, 800 pounds 7,210 4 4 Needs light repairs. 12 4 4 1886 15 X 22 56 tons, 800 pounds 7,210 13 1886 15 X 22 56 tons, 800 pounds 7,210 Needs general overhauling. 14 4 4 1886 15 X 22 56 tons, 800 pounds 7,210 Good. 15 4 4 1886 15 X 22 56 tons, 800 pounds 7,210 Needs light repairs. “Corvallis” 10 x 18 About 30 tons_ Too small to be of use. All are fitted with air-driver brakes. The writer can offer no explanation of the excessive cost of 48 Engine No. 16 (formerly No. i). The figures are as shown on the master mechanic’s books. The total first cost of the engines, exclusive of the Cor¬ vallis, of which we have no record, was $116,494, including freight. The power was in poor shape when the present receiver took charge, in spite of the fact that there had been charged to “ locomotive repairs in 1892, $3,790.54, and in 1891, $4,538.02. Charges to “ locomotive repairs ” since March 6th to October 1st have amounted to $2,673.68. No attempt has been made to put the power in first-class condition, but simply to do such work as was needed to keep the portion used in good running order. None of the engines were furnished with sight-feed lubricators, and the mileage obtained to a pint of lubricating oil was so low — being only about forty miles — that it was considered economy to equip a number of engines with sight-feed lubricators. Two have been purchased each month, on ninety days’ time. In the month of April, 1893, the mileage to a pint of lubricating oil was but 39 T 1 o 2 o miles; in the month of September this average has been raised to 263 miles by the use of these lubricators, and when the engineers have been schooled in their use a further increased saving is expected. With the present traffic, it is expected that the lubricators will pay for themselves in about three months. It will require $13,000 to put the present motive power in good shape. A detailed statement of the repairs required on each engine will be found in the book of Original Documents No. 1. With reference to the hauling capacity of this power, it may be said that the 17 x 24 engines take ten loads up Nashville Hill, which is five miles of 2 per cent grade. The ten 15 x 22 engines were rather light when purchased in 1886, and in view of the tendency to heavier cars and tonnage they have not grown any better suited to modern requirements. 49 The power, however, if rightly handled, is sufficient to take care of a very largely increased traffic. The 17 x 24 engines will handle on level track or light grades any traffic that the Company is likely to get for several years yet to come, and in case of extreme necessity trains could be double-headed. With a large increase in traffic, great economy would be realized by the use of a pusher on the limiting grade. Taken as a whole, while not as heavy as it would be economy to purchase to-day, it is quite sufficient to take care of the prob¬ able traffic for several years to come. No. Maker. Seating Capacity. First Cost. Condition. 1 __ Wasson .... 52 $5,500 ) Very poor, cheap coaches in 2_ Wasson .... 52 5,500 > the first place; brought out 3- Wasson_ 52 5,500 ) in sections by water. 4- Pullman_ 60 4,409 Ail Recently had heavy re- 5 - Pullman_ 60 4,409 A 1 \ pairs. Comb. 6_ Pullman_ 38 3,809 Needs heavy repairs. Comb. 7_ Pullman_ 38 3,809 Needs heavy repairs. Bag. 1- -Mail and Wasson .... . - - 4,000 Very poor. Exp. 2 _ _ Ohio Falls.. 3,405 Good. Recently had heavy repairs. Bag. 3- Ohio Falls.. 2,876 Needs heavy repairs. Bag. 4- Ohio Falls.. 2,876 A 1. Recently had heavy re¬ pairs. When the present receiver took charge of the property, the passenger equipment was found to be in very bad repair. The paint and varnish had almost disappeared from some of the coaches, and in places the siding was greatly weather-worn. Several of the roofs leaked so badly that the head-lining had become warped, and all of the coaches needed new wheels. A careful investigation proved that coaches 1, 2, and 3 and baggage car 1 were beyond repair. They were of exceedingly cheap and light construction in the first place, and had been brought to this coast in sections by water. Coaches 4 and 5, combination cars 6 and 7 were good cars, but had been shamefully mistreated. Mail and express 3 and baggage cars 3 4 50 and 4 were of fair construction, and under existing circumstances would pay for repairs. It was determined to repair only the equipment used in our passenger trains, as the finances would not permit any further expenditure in this line. Accordingly coaches 4 and 5, baggage car 3, and combination 6 were given a complete overhauling, being repainted, lettered, and varnished in the best manner known to the art. It was found that long neglect had allowed the weather to wear off the paint entirely in many places, and the siding itself was so badly fuzzed that it was found necessary to resurface the whole of it before painting. These cars were all furnished with new 600-pound 33-inch cast wheels. The expense of repairing, painting, and furnishing new wheels for these cars amounted to $2,617.06. FREIGHT EQUIPMENT. The freight equipment consists of the following cars: Kind of Car. Built by Cost. Cost of repairs needed. Caboose No. 1. O. P. R. Co. $1,247 50 $250 Stock Car No. 501. 0 . P. R. Co. 627 00 Condemned. 200 15-ton box cars. Pullman Co. 411 70 each. $T2o each. 58 14-ton box cars. 80 flat cars, intend- 0 . P. R. Co. 544 34 each. ed for 15-ton. O. P. R. Co. 469 34 each. $175 to $250 each, not including wheels. Of the box cars enumerated above, eighteen are without trucks, the trucks having been taken for use in building flat cars. These box cars are in use at various points along the road for warehouses, Lool-houses, etc. Stock Car No. 501 is condemned by reason of the fact that the roof is rotted; posts, side and end sills are rotted. The entire freight equipment had been allowed to run down although $10,705.92 were charged to repairs on freight cars in 1891 and 1892. The 200 Pullman box cars are in very poor condition. The 51 estimated cost of repairs will give a new roof, second set of brakes, repaint and air, and new wheels where needed. It is considered economy, in view of our grades, to furnish our freight equipment with air. In view of the long rainy season, characteristic of this country, the very bad condition of the roofs of our box cars, and the absolute necessity of repairs in this direction to avoid heavy claims for damages, the receiver has arranged to reroof ioo of these cars with Hutchins’ patent roofing, at a cost for material laid down at our shops at Yaquina of $12.50 per car. The following roads: Michigan Central, Wabash, Eastern Tennes¬ see, Virginia & Georgia, Chesapeake & Ohio, and Chicago & North-Western used 5,000 of these roofs last year. The fifty-eight box cars built by the Oregon Pacific Railroad Company were out of date when built. They were marked fourteen tons’ capacity, but have only ten-ton trucks; they are not in good proportion and have no truss rods. They were intended to be twenty-eight feet long, but are of varying lengths. It is a serious question what to do with these cars, for they are not worth the repairs needed to make them serviceable. The eighty flat cars built by the Oregon Pacific Railroad Company were marked fifteen tons’ capacity, but are on ten-ton trucks. They were intended to be twenty-eight feet long, but are of varying lengths, and not of proper proportions. They are all in poor condition, and practically need rebuilding. The estimated cost of above to repair does not include new wheels, which are badly needed on most of them. Attention is called to the fact that the box cars built by the Oregon Pacific Railroad Company cost $132.64 each more than the box cars purchased from the Pullman Company—freight to the Coast being included in the first cost of the Pullman box cars given above; also to the fact that the fiat cars built by the Oregon Pacific Railroad Company cost $57.64 more than the Pullman box cars. 52 The proper course to pursue with these flat cars would seem to be to furnish them with new wheels where needed, make light repairs, and then wear out the bodies and trucks in construction service. The Company has now in stock at Yaquina 162 axles in the rough, which will finish up with 3}-inch by 7-inch journals, good for 25-ton cars; 61 axles fitted for use with journals 3J inches by 7 inches, and 5 axles fitted for use with journals 3^ inches by 6 inches, good for 20-ton cars, and castings for fifteen flat cars. Of the 258 box cars above referred to, five are fitted for caboose cars, and one is in use as a tool car with a wrecking out¬ fit. Of the eighty flat cars, one has been built over into a steam pile-driver. The Company has also one hand-power derrick car, with steel mast; this is new and in good condition. With reference to the passenger equipment, it is ‘'recom¬ mended that three new coaches be bought to replace coaches 1, 2, and 3, and that these should be fitted for eating and sleeping cars in construction service. The three new coaches would cost about $5,000 apiece. To replace the eighty flat cars, which it has been suggested could be used up in construction, I would recommend that, as a starter, fifty new 25-ton flatcars be purchased in the East. These flat cars should cost, built to specification and equipped with air brakes, about $350 to $400 apiece in Chicago. If put in repair as suggested, and especially if the ocean warehouse which has been recommended is built, the 200 good box cars which we now have will handle any probable traffic for some time to come. The road has never owned a steam shovel, and it would be a decided economy to purchase one as soon as any construction or ballasting should be entertained. It would cost about $4,500. When the line shall be extended into Eastern Oregon, it will be necessary to provide, as a starter, probably eighty single and double deck stock cars to take care of the large cattle and sheep trade now awaiting the entrance of a railroad. These cars would cost in the neighborhood of $500 each. 53 FORCE. Prior to the 6th of March, the commencement of the present receivership, the road was operated with the following force: New York: A president, a third vice-president and treasurer, an account¬ ant, a stenographer, and one or more clerks. The Oregon books do not show' salaries paid to these officials. The annual expenses for rental of the New York office was $2,300. A lease of these offices expired May 1, 1892. The rent up to May 1, 1892, amounting in total to $3,275, was paid to the owners of the Liverpool and London and Globe Insurance Company by receiver's certificates Nos, 88, 108, and 128, issued by the late receiver. Officials in Oregon: First vice-president and general manager, salary per annum_$5,'000 Second vice-president, salary per annum_ 3,000 Assistant to general manager, salary per annum 3,600 Superintendent, salary per annum,_ 3,000 A combination of auditor, general freight and passenger agent, and purchasing agent, sal¬ ary per annum. . .. 3,000 Roadmaster.•_. 1,500 Superintendent of bridges and buildings, salary per annum.. L5 00 Master mechanic, salary per annum... 2,400 An attorney, salary per annum ... . 1,200 Trainmaster, salary per annum_ _ _ 1,500 Assistant treasurer, salary per annum . . 600 Traveling freight agent, salary per annum _ 1,500 The present receivership has not found it necessary to main¬ tain a New York office, and the services of a general manager, a second vice-president, an assistant treasurer, an assistant to 54 the general manager, and a salaried attorney were found needless in Oregon. Under present circumstances it also seemed need¬ less tq maintain a separate head to the Bridge and Building Department, and the superintendent of bridges and buildings was accordingly dispensed with, and the department placed under the supervision of the roadmaster, a moderate addition being made to his salary. The auditor at $3,000 per annum was replaced by one at $1,500; and the duties of the general freight and passenger agent and purchasing agent, which the auditor had formerly performed, were transferred to the superintendent, it being believed that better results would be achieved in this line by reason of the fact that the superintendent’s duties kept him out in the road’s territory a large portion of his time. To insure good service with the added work, a moderate addition was made to the salary of the superintendent. The former master mechanic, at $2,400 per annum, proved to be a very expensive man, and was promptly replaced with a Suc¬ cessor at $1,800 per annum. The force in the auditor’s office, which had formerly con¬ sisted of five clerks and a stenographer, was reduced to two clerks, at an annual saving of $3,540. The superintendent had been formerly allowed a clerk at $1,200 per annum ; and a combined car accountant and operator at the general office had been maintained at $960 a year. The duties of superintendent’s clerk, car accountant, and operator were added to those of the train dispatcher, who was accorded a moderate increase in salary, and a net saving was thereby accom¬ plished of $360 per annum. It will be remembered that under the verbal contract with the Oregon Development Company, all of the expenses, both of the ship and of the offices, at San Francisco and in Oregon were in reality paid by the Railroad Company. At San Fran¬ cisco an office at 34 Montgomery Street was occupied by the Development Company at an annual rental of $3,300, and the following force maintained : * An agent, at an annual salary of_$2,400 A purchasing agent, at annual salary of_ 1 _ 1,800 A cashier, at annual salary of____ 800 Stenographer, at annual salary of_ 800 Freight solicitor, at annual salary of.. 1,320 Watchman, at annual salary of__ 720 Clerk, at annual salary of___ 720 Making a total aggregate expense, including rent, of $11,460 per annum. In addition to this the Development Company paid $1,200 per annum for a dock. The dock in reality was the prin¬ cipal place of doing business, and contained good and ample office room ; the uptown office was accordingly discontinued. 'The agent at $2,400 was replaced by one at $1,500 ; the purchas¬ ing agent, cashier, and stenographer were dispensed with, being replaced by an additional freight solicitor, whom it was deemed good policy to hire, to counteract any possible loss of business by the change of location of offices. The total annual saving by this move amounted to $4,500. The Development Company had also maintained a separate agent at Yaquina at a salary of $1,200 per annum. This was deemed purely ornamental, and he was dispensed with, his duties being added to those of the Company’s rail agent at that point. The loading and unloading and the coaling of the ship at San Francisco had been done by the Development Company by contract, at the rate of 25 cents per ton for cargo in and out of the ship and 35 cents per ton for coaling — this amounted, on a full down cargo of 1,000 tons and a return cargo of 200 tons, to about $300 per trip. The contract was found to be exor¬ bitant, and the loading and unloading were accordingly placed under the charge of the first officer, who hires his own men. This has resulted in a saving of about 40 per cent in cost of loading and unloading at San Francisco. 56 The loading and unloading at Yaquina had formerly been handled by a boss stevedore, to whom the Company paid a salary of $1,200 per annum. The boss stevedore was discharged, and the first officer of the ship instructed to superintend the loading and unloading at this point. This resulted not only in the sav¬ ing of the boss stevedore’s wages, but also has reduced the cost of loading and unloading per ton to about one-half of what it formerly was. The average cost of meals served on the steamship under the Oregon Development Company’s management was about 40 cents per meal. Meals of equal quality are now served at an average cost of 14 cents each. Reference has already been made to the large saving result¬ ing from the substitution of wood for coal in firing the ship. The total annual saving effected by reductions of force and salaries — of officials and clerks at general office only — amounts to $20,900. This does not include the saving effected by abolishing the New York office. Exact figures can not be given for this, but it is believed that the total expense of the New York office amounted to about $26,000 per annum for the items of rent and salaries alone. THE RESOLUTE. As the tug is now operated as an extension of the rail line between Yaquina and Newport, on Yaquina Bay, a distance of three miles, it is here included as part of the equipment of the rail line. The Resolute was built at Mill 4, on Yaquina Bay, in 1887, particularly for use as a bar tug, and is a first-class boat for that purpose. Her official number on the register is 110,747; her greatest length is 104 feet; greatest breadth, 23^ feet; depth of hold, 10 feet; gross tonnage, 9ij D V to 115 ; draught, 9 feet 3 inches aft, 7 feet 9 inches forward; capacity of bunkers, six cords of wood, forward hold not included. Engines built by Neafie 26 5 - 42 . The Wm. M. Hoag was built by the Oregon Pacific Railroad Company at a total first cost of $20,494.49, her machinery and boilers aggregating about half of this cost. 'The advisability and manner of operating the River Division will be discussed under the head of “ Traffic.” For the use of the River Division the Company owns at Cor¬ vallis a rough board warehouse 20 x 80 feet, with a connecting- open shed 15 x 38 feet, and an engine-house 7 x 25 feet. These buildings are located upon the banks of the Willamette River, about thirty feet above low water. An incline with two cars, operated by a drum and wire cable, are used to hoist freight from the steamboats up to the warehouse. The drum is operated by a small engine in the engine-house, which takes steam from the boat’s boiler by means of a connecting steam hose. The engine will lift about 9,000 pounds to the car. At Independence the Company owns a piece of ground on the river front for a landing four rods square. This was purchased by Colonel Hogg in 1886 for $100. The Company had at one time a wharf upon this ground, but high water took it out in the fall of 1889, since which time it has never been replaced. A landing is badly needed at this point, which the receiver has arranged to supply by towing up there the wharf-boat now in use at Salem. 60 At Salem the Company owns a piece of ground on the water front, 230 feet 4 inches front by 212 feet deep, lying at the foot of State Street, and but two blocks distant from the main business street of the city. In 1891 the Company built at Corvallis a wharf-boat, 90 feet long by 32 feet 6 inches in width, and 5 feet 10 inches in depth, upon which was erected a freight house 19 feet wide by 67 feet 6 inches long, and 10 feet high at the plates, with shingle roof, at a cost of $1,900. This wharf-boat has two shore aprons, and was towed to Salem and anchored on the Company’s frontage, where it has since been used as a dock. By reason of the diffi¬ culty of managing the wharf-boat, owing to the rapid rise in the river, and the extreme difference between high and low water, it is not well suited for the purpose, and should be replaced with a permanent wharf. The receiver has, however, leased from the Salem Improvement Company, who are lessees under the Oregon Short Line, a wharf and warehouse, owned by that Company at Salem, for one year at $50 per month. With a joint agreement with the steamer Eliwood, running between Salem and Portland, that steamer bears one-half of the expense of the dock, and it is the intention to move the wharf-boat to Independence. This is the extent of the Company’s holdings on the river. The Company’s rail agent at Corvallis acts as its river agent also. At Salem the Company maintains a river agent. At Portland the Company has a general agent, who, in addition to looking after its general business to and from that point, especially with reference to its through passenger travel between Portland and San Francisco, looks after its river business. The agent at Salem has an office in the warehouse on the wharf-boat. The general agent at Portland is provided with an office, No. 84 First Street, at a rental of $30 per month. He 61 has sublet desk room in this office, so that the rental is reduced, to $20 per month. RIGHT OF WAY. The Company holds eighty-seven right of way deeds between Yaquina and Corvallis, and 120 deeds for right of way from Corvallis east, in addition to deeds for a sixty-foot right of way through the cities of Corvallis and Albany. Outside of these deeds the receiver has been unable to find any map or other con¬ secutive record of the Company’s right of way, and until these deeds shall have been plotted and a proper right of way map prepared, it is impossible to speak with accuracy as to its condi¬ tion. The receiver is having this work done as rapidly as circum¬ stances will permit. A consecutive examination of the deeds, however, justifies the opinion that the right of way will be found practically complete. PURCHASING DEPARTMENT. When the present receiver assumed charge, the accounts of the Company’s storehouse at Yaquina showed that material to the amount of $40,000 was being carried on hand. A careful and accurate inventory, at current prices, revealed only about $16,000 worth of material. The discrepancy seems to have been caused by loose methods of keeping accounts, and by exorbi¬ tant valuations placed upon material. It was found that the Company was carrying in stock a considerable amount of ma¬ terial for which it had no use whatever; this was accordingly sold, and an endeavor has been made to keep the amount invested in material as small as possible. The value of stock on hand September 30th was $14,574.01. There seems to have been formerly a lack of systematic effort to obtain the best market prices on material purchased; this has been entirely reformed, and by careful attention to the business the superintendent, acting as purchasing agent, has effected a sav- mg of 20 per cent on almost every article purchased since March 6th. For example, the price formerly paid for No. 2 varnish brushes was 60 cents, we are now buying these for 50 cents; lantern burners formerly cost 11 cents, now 8-J cents; light brooms cost formerly 33^- cents, now we buy the same for 30 cents; heavy brooms formerly cost 48 cents, now 354 cents; rolled brass cost formerly 28^ cents, now 24 cents; brass castings cost formerly 25 to 30 cents, now they are purchased for 20 cents; long-spout oil-cans cost formerly 90 cents, now 75 cents; 16-inch flat files cost formerly 58 cents, now 39 cents; hickory pick-handles cost formerly 30 cents, now 27 cents; brush hooks cost formerly $1, now they are purchased for 63 cents. Even in the most staple articles, which are sold on small mar¬ gins, considerable saving has been effected. Five-sixteenths-inch common round iron formerly cost $3.84 per 100 pounds; we now buy. it for $3.60. The same proportionate reduction has been obtained in all the other sizes of iron. Concentrated lye for¬ merly cost 15 cents a can; now we buy it at 8 cents. Six-penny nails formerly cost 3xVo" ceQts P er 100 pounds; now we buy them at 2 t -|-q cents. The same proportionate reduction on all styles of nails. Signal oil cost formerly 53 and 55 cents per gallon, now 49I cents; head-light oil cost formerly 30 cents per gallon, now 15 cents; valve oil cost formerly 75 cents, now 54 cents; manilla rope of all sizes 15 cents per pound, now 10 to 10F cents; turpentine cost formerly 60 cents per gallon, now 46 cents; i-inch globe valves cost formerly 63 cents, now 45 cents; 2-inch globe valves, $2.07 former cost, now $1.60; rubbing varnish cost for¬ merly $4 per gallon, now we purchase it for $2.50 to $3.20 per gallon. An itemized comparative statement of the prices paid on all principal articles of material will be found in one of the books of original documents. These reductions have been obtained in the face of the fact 63 that dealers know that the day of payment is indefinite. Con¬ siderable further reductions could be made if the Company could buy supplies for cash, or on the usual thirty days. TAXES. By an act of the Legislature, approved October 24, 1874, all of the property of the Willamette Valley & Coast Railroad Com¬ pany was exempted from taxation for twenty years, inconsidera. tion of the Railroad Company carrying for that period all of the troops and munitions of war of the State without other charge than the taxes levied or assessed upon its property. This act has since been declared unconstitutional. The taxes now due on the Company’s property, are as follows. Lincoln_ $4,334 00 Benton.. 4,410 65 Linn _____ 3,216 27 Marion_. 6,822 67 $18,783 59 This does not include the levy for 1893, not yet made. INSURANCE. When the present receiver took charge of the property no insurance was in effect upon any of its property in Oregon, the policies having been allowed to lapse some time previous. The insurance heretofore had been effected in New York City. No funds were available for the insuring of this property, and in view of the extra risks incurred upon some of it, it was deemed proper to carry a reasonable amount of insurance. It was only after long negotiations and with great difficulty that the insurance was effected. The rules of the Pacific Insurance Union, which controls all business on the Coast, forbid of the acceptance of anything except cash for premiums. The receiver finally induced the companies to accept receiver’s certificates for premiums, the certificates 64 being made payable July 10, 1893; the idea being that they could be paid out of the fund arising from the expected sale on July 28th. These certificates, to the amount of $15,081, were made a prior and first lien upon all of the Company’s property. Without this provision the insurance companies refused to touch them. The following insurance is now in force: Steamship Willamette Valley.. Tug Resolute.,.. Steamer William M. Hoag_ Steamer Three Sisters_ Steamer N. S. Bentley... Depot at Corvallis___ Material at Yaquina Depot ... Foundry and contents at Yaquina_ Round-house and contents atYaquina__ Machine-shops and contents at Yaquina, Hotel building at Yaquina_ Roundhouse and contents at Albany_ $75,000 at 9 per cent. 25,000 u 9 15,000 a 2 — <« 13,000 u 2 - 3 - z 2 u I3, 000 u 2 - 3 - a 5,000 a 2 - 3 - z 2 u 2,000 a 3-2 5 a 4,000 u 5.80 u 34,000 u 5 u 28,000 u 0 00 10 u 5,ooo i fc 2.80 u 5, 200 i i 2.25 a These policies expire April, 1894. The Albany bridge was formerly insured, but as the Company keeps a bridge-tender thereon night and day, it was not considered necessary to rein¬ sure this. receiver’s certificates. Receiver’s certificates have been issued by the present re¬ ceiver to the amount of $81,389.76. $40,000 of these certificates were issued to employes as a payment of 46 per cent of the unpaid rolls of the previous receiver. These certificates bear date of April 10, 1893, payable December 31, 1893. $15,081 of the preferred certificates have been issued for the payment of insurance premiums, and were dated June 5, 1893, payable July 10, 1893. 65 $14,081.31 of receiver's certificates have been issued to employes in payment of August rolls, dated September 1, 1893. $12,227.45 of receiver’s certificates have been issued to em¬ ployes for the payment of September rolls, dated October 1,1893. The certificates issued in the payment of August and Sep¬ tember rolls are made payable, in whole or prorata, by the order of the Court, out of any moneys that the receiver may have over and above necessary expenses of his trust on the first day of each month. These certificates were issued in order to comply with the law passed by the last Legislature, making it obligatory on receivers and assignees to issue such certificates of indebted¬ ness for all labor claims unpaid after thirty days. STEEL RAILS IN SAN FRANCISCO. Up to a short time previous to the 6th of March the Com¬ pany had in bond in San Francisco 4,043 tons of 56-pound steel rails. These had been shipped to San Francisco by ships Troupe, Iron Duke, Yeoman, Helenslea, and Garfield. The storage charges on these rails were paid by the Oregon Pacific Railroad Company. The Oregon Pacific Railroad Company gave to the Bank of California two notes, secured by these steel rails, upon which the bank advanced $90,000 to the Company. The first note was dated June 17, 1889, for $50,000, payable ninety days after date, with interest at the rate of 7 per cent, and states that as collateral security for the payment of the note the Company has deposited with the said bank 3,030 long tons of new steel rails, made by the Barrow Hematite Steel Company of Barrow- in-Furness, England. Failure to pay the note at maturity gave the bank authority to sell all or part of the rails. The note was signed by the Oregon Pacific Railroad Company, T. E. Hogg, president. The note bears the following notation: $15,000 paid on account September 1, 1889; $4,863.50 paid on account 6 66 December 6, 1889, reducing the principal sum to $30,136.50, and interest paid in full to October 1, 1890. The second note was dated July 22, 1889, and was for $40,000, payable in sixty days, with interest at the rate of 8 per cent. The note states that as collateral security for the payment of same the Company has deposited with the said bank 2,250 tons of the same brand of steel — the same stipulations as in the previous note as to the right of the bank to sell the rails. The note was signed by the Oregon Pacific Railroad Company, T. E. Hogg, president; Norman S. Bentley, treasurer, and bears the notation that interest was paid in full to October 1, 1890. The rails were stored with Bode & Haslett, North Point U. S. Bonded Warehouse, San Francisco. A notice was served upon these parties under date of October 12, 1889, signed by T. Egenton Hogg, stating that he had purchased from the Oregon Pacific Railroad Company all of the claim and interest of that Company in the steel rails deposited in their warehouse, subject to the claim of the Bank of California. On November 25, 1890, Colonel Hogg, as receiver, wrote to William M. Hoag, authorizing him to offer the Bank of Cali¬ fornia receiver’s certificates for the amount of the loan and interest. On December 26, 1890, Mr. William M. Hoag,’as manager, wrote to Col. T. E. Hogg, as receiver, stating that the Bank of California had notified him that if the Railroad Company did not pay their notes the bank would sell the steel rails now in their custody, they having had an offer upon them for $41 per ton; that he had offered to pay the amount of the Oregon Pacific Railroad notes in receiver’s certificates, which offer the bank had refused. On April 17, 1890, Mr. William M. Hoag wrote to the Bank of California that he had just learned that the steel rails in Bode & Haslett’s warehouse were still standing in their books in the 67 name of the Oregon Pacific Railroad Company; that he had just written to Bode & Haslett requesting them to transfer the rails on their books to Colonel Hogg’s name, ‘‘the first object being to have the rails taken out of the Railroad Company’s name.” He also asked the bank if they would prefer to have the rails trans¬ ferred to their name, “ they having already been assigned to you by Colonel Hogg by way of security.” On January 30, 1891, Mr. William M. Hoag wrote to Messrs. Bode &: Haslett, in reply to their request for the payment of storage on steel rails, that he expected shortly to receive some money, and would then make them a payment on account. Copies of these notes and correspondence referred to will be found among the original documents. The only evidence which would appear to substantiate Colonel Hogg’s claim to the ownership of these rails is em¬ braced in a journal entry of which the following is a copy : “For payment by T. Egentoti Hogg, $10,000, credited on note dated February 12, 1889. This amount was payment in full for the purchase, October 12, 1889, of 4,130 tons of steel rails, stored in bonded warehouse in San Francisco. This sale was made subject to a lien in favor of the Bank of California.’* Sometime about October, 1888, 596 tons 523 pounds of these rails were withdrawn from bond and shipped to Oregon. They were piled at the Front, but later on were brought to Corvallis and piled there. The writer, while acting as superintendent, was on several occasions told by William M. Hoag that these rails were the property of T. Egenton Hogg. On two occasions, by direct permission of Mr. William M. Hoag, Manager, about seventy tons of these rails were used in track. On January 20, 1892, this 596 tons 523 pounds of steel rails were sold by the sheriff to the highest bidder as a separate lot of property, at the same time when he sold to Zephin Job the property of the Oregon Pacific Railroad Company for one mill- 68 ion dollars, although the rails had previously been advertised as part of the original property for sale. The rails were bid in by William M. Hoag at $30 per ton, no other bids being made. In the journal for April appears the following entry: “To T. Egenton Hogg, Dr., $17,887 to material account rails. For 596 tons 523 pounds steel rails sold to the highest bidder, January 20, 1892, at $30 per ton, and amount applied on notes, for which lien was given.” And in journal for October, 1890, there appears charged to T. E. Hogg, receiver, $28,796.28, being the value of this 596 tons 523 pounds of rails, together with freight from San Fran¬ cisco to Yaquina, cartage, insurance, commissions, duty, and storage to October 30, 1888. On the same date there is charged to general construction account, “material account rails, $38,- 971.99,” which appears to have been all of the charges formerly paid for keeping these rails in bond. These charges had been paid by the Railroad Company; but as the Company did not actually have the rails in possession it became necessary to close the account, and to charge up these large expenses to some final account. Just prior to the appointment of the present receiver the balance of the 596 tons 523 pounds of steel rails, amounting to about 525 tons, which had heretofore been piled at Corvallis, was hastily removed to San Francisco and stored with Haslett & Bailey. The rails were billed to W. Laird Law, San Francisco Supplies and bolts for about seven miles of rails, which had been piled with the steel at Corvallis, were not removed, the impression having been given out that these fastenings belonged to the Rail¬ road Company. The receiver was in San Francisco on March n, 1893, and having been duly advised by counsel that the Oregon Pacific’s claim to the ownership of these rails was a good and valid one, duly served notice upon Messrs. Haslett & Bailey, and upon the \ I 69 Bank of California, also upon the Anglo-Californian Bank, Limited—to whom it is understood the Bank of California had transferred its claim—that the receiver claimed full possession of all of the rails. Messrs. Haslett & Bailey were at the same time notified to hold the rails subject to the order of the receiver of the Oregon Pacific Railroad Company. Later on Messrs. Haslett & Bailey filed their complaint against E. W. Hadley, receiver, William M. Hoag, and W. Laird Law to determine the ownership of the rails. The receiver has filed his answer. Up to date Mr. William M. Hoag has not answered. The receiver has filed a suit against the Anglo-Californian Bank, Limited, to determine the Company’s interest in the rails, and it is understood that Colonel Hogg will intervene. LITIGATION. In addition to the two rail suits above referred to, the follow¬ ing suits are pending: In the case of Coe vs. Pacific Construction Company, the receiver has intervened as a creditor of the Construction Company. A suit has been filed entitled Charles Altschul vs. The Oregon Pacific Railroad Company and Willamette Valley & Cascade Railroad Company, E. W. Hadley, receiver, and others, in the matter of the land grant to the Willamette Valley & Cascade Mountains Military Wagon Road Company. The receiver has until October 30th to file an answer. Papers have been prepared, but not filed, in a proposed suit of E. W. Hadley, Receiver, vs. Geo. S. Coe, Trustee, to determine the terms of his trust. GENERAL ASPECT OF OREGON. The State of Oregon stands ninth in area among the United States — having 96,030 square miles — equal in area to the States of New York, Pennsylvania, and Massachusetts. 70 The State is naturally divided into four parts: “Willamette Valley;" “ Eastern Oregon,” being everything east of the Cascade Range; the “ Coast,” being everything lying between the Coast Range and the sea; and “Southern Oregon,” comprising a mountainous portion in the extreme southern part of the State. The Willamette Valley, with a length of about one hundred and fifty miles and an average width of forty miles, is one of the garden spots of the world. The greater portion of it is level, finely watered by small streams running into the Willamette River, with a soil of wonderful fertility and richness. The limits of its productions are very wide. The finest wheat in the world is raised in this valley, and all of the cereals reach their greatest perfection. Fruits — from those verging upon the tropical to those more characteristic of the Temperate Zone — are grown in large quantities throughout the valley. The tem¬ perature is mild and equable. The Coast country consists of a strip lying between the Coast Range and the ocean, of about twenty miles in width. It is much broken up by spurs running out to the sea from the mount¬ ains, but between these are narrow valleys of great fertility. It is timbered to a greater or less extent, but a large portion of the merchantable timber on the western slope of the Coast Range was destroyed by an immense fire which swept down on this side of the mountains, tradition says, about one hundred and fifty years ago. On the coast side of the mountains the climate is mild and moist, and the grass is ever green. Snow or frost is of very rare occurrence, but owing to the low average tempera¬ ture, cereals do not do particularly well in this part of the country. Clover and the natural grasses flourish even better than in the Willamette Valley. The country is especially adapted to dairy¬ ing. Salmon in immense numbers enter all of the rivers that water this part of the country, and canneries are situated at arious points along the coast. 71 Southern Oregon has a warmer climate, and although some¬ what mountainous and broken, raises a large amount of wheat. Many varieties of fruit are produced with great perfection in this section. Mining of both gold, silver, and nickel is carried on extensively. Eastern Oregon, equal in area to the State of New York, is very different in every particular from the balance of the State. The northern part is very mountainous and broken, being cov¬ ered by the Blue Mountains. Many rich mines have been worked in this section for years. The balance of Eastern Oregon consists, in a general way, of a vast elevated plateau, shut in on the north by the Blue Mountains, divided from the Willamette Valley by the Cascades, and shut off from Idaho by the Stein Mountains. Some portions of this vast territory of Eastern Ore¬ gon are more adapted to the production of cereals than others, other portions again being covered with nutritious bunch-grass, affording natural feeding ground for immense herds of cattle and sheep. RAILROADS. The State of Oregon, though as large as the States of New York, Pennsylvania, and Massachusetts combined, has but 1,483 miles of railway within its boundaries. Of this mileage the Union Pacific operates 547 miles; the Southern Pacific 653, of which 28 miles is narrow gauge ; the Northern Pacific 38 miles ; the Oregon Pacific 142 miles ; and the balance is made up by six small roads, operating from 2 \ miles to 24. The Union Pacific’s line follows the Columbia River from Portland to near the eastern boundary of the State, and its prin¬ cipal Oregon business, outside of Portland proper, is drawn from Eastern Oregon, produce from that part of the country being teamed to stations on the Union Pacific — much of it from 100 to 200 miles. % The Southern Pacific has a line from Portland, on the west 72 side of the Willamette River, running up the Willamette Valley to Corvallis. On the east side of the river the Southern Pacific’s main line from Portland south traverses the entire length of the valley, crossing the line of the Oregon Pacific Railroad at Albany. The Southern Pacific has also a branch line from Woodburn, through the valley in a south-easterly direction, crossing the line of the Oregon Pacific Railroad at Shelburne, east of Albany. The Portland & Willamette Valley Railroad, a narrow gauge operated by the Southern Pacific Company, runs from Portland, on the west side of the river, in a southerly direction to Airlie near the Coast Range. RESOURCES OF THE STATE. The State of Oregon has a total population, according to the census of 1890, of 313,767. Its population almost doubled in the ten years from 1880 to 1890. Sixty-six thousand of this population is centered in Portland; 10,000 in Salem; 6,000 in Astoria; 4,000 in Eugene; 3,000 each in Albany, The Dalles, and Oregon City. Of the 60,000,000 acres within the boundary of the State, less than 1,000,000 are under cultivation. In 1891, in the thirty-one counties of Oregon there were 634,894 acres under wheat, which produced a little over 15,000,000 bushels, the average yield being twenty-four bushels per acre. Agriculture in Oregon is by no means confined to raising wheat. Every cereal, root, and pro¬ duct of the temperate zone, and many verging upon the tropical, is grown to great perfection in some part of the State. The ten counties which constitute the Willamette Valley produced, in 1891, 6,148,767 bushels of wheat, 5,248,847 bushels of oats, 234,081 bushels of barley, and 130,892 bushels of corn. Oats are a very heavy crop, the average yield being from forty to seventy-five bushels to the acre, and although thirty-six pounds is the standard weight of a bushel, forty and forty-five pounds is not an uncommon weight. Hops are a most important product, and as the rich valley soils are yearly proving their greater adapt- ability to this product, the acreage % rapidly increasing. The average yield is from 2,500 to 3,000 pounds per acre. Sheep, cattle, and horses are raised to a large extent all over the State, but owing to the drier climate and the presence of immense natural-grass cattle ranges, Eastern Oregon easily takes the lead in these productions. Owing to the isolated condition of Eastern Oregon accurate statistics embracing the whole of this section are not readily obtainable, but the following figures will give some idea of this branch of agriculture. In 1891 the assessor’s returns show that there were in Lake County, Eastern Oregon, 30,000 horses, 75,000 cattle, and 250,000 sheep. In that year there was exported by Eastern Oregon’s only railroad, “the freighter’s team,” 6,000,000 pounds of wool. A close estimate of the wool clip for 1892 in Crook County, made by the county clerk of that county, foots up 1,100,000 pounds. He further states that there is sold annually from that county alone 50,000 mutton sheep, 3,000 beef cattle, and 2,000 horses. The assessors’ returns from the five counties of Lane, Linn, Benton, Marion, and Polk in the Willamette Valley for 1891 show 125,645 sheep in those counties. Almost every mineral known to the geologist is found within the State, but its mineral resources have only been scratched on the surface. For the past five years the annual gold product of the State averaged $850,000, of which about $575,000 per annum was produced from Eastern Oregon. Only in one or two places have the coal resources of the State been developed, although there are good coal prospects all over the State. The coals are mainly lignitic in their character. While Oregon coal can not well be classed with Eastern or Australian bituminous coals, yet they are as good as the average Pacific Coast coal. Attention is just now being turned to the development of the coal resources of the State. A systematic exploration of the coal prospects which have been found at Yaquina Bay is now being carried on. One 74 of the best prospects of the State is located on the line of the Oregon Pacific Railroad Company’s survey to Salem. Twenty-five thousand square miles of the mountainous and coast lands of Oregon are covered by a growth of timber, the like of which, in diversity and size, no other similar space on the earth’s surface can boast. So far as the present generation is concerned, the supply is inexhaustible. The varieties of chief economic value are the Douglass or red fir, yellow fir, black spruce, hemlock, sugar pine, broad-leafed maple, dogwood, and cottonwood. The wood of the red and yellow fir possesses rare and exceptional qualities; for bridge building and for frame tim¬ ber it surpasses oak, possessing the same strength, but with lighter specific gravity. The perfection to which the tree attains, even reaching 200 and 300 feet in height, renders it peculiarly valuable for exceptional uses. Masts and spars sent to the Tou¬ lon dock yards were reported to be “ rare and exceptional for dimensions and superior qualities, strength and lightness, absence from knots, and possessing great torsional strength.” The timber in the Cascade Mountains in many places grows so close together, averaging an immense fir every twenty feet, that it furnishes the acme of pile timber. In the spring of 1890 the writer had cut for the use of the Oregon Pacific Railroad forty-five ninety-foot fir piles. These piles were every one felled within one hundred feet of the right of way, measured accurately eighteen inches at the butt, twelve inches at the point, and were as straight as a lead pencil. It will be noted that these tremen¬ dous sticks only varied six inches in diameter in ninety feet. The following statistics of merchantable timber, estimated from the best authorities in townships directly tributary to the Oregon Pacific Railroad line, excluding what might go to market in other ways, is of great interest: Marion County, 12 townships, 2,500 feet to the acre, 6,912,000,000 feet; Linn County, 12 townships, 25,000 feet to the acre, 6,912,000.000 feet; Crook County, 50 townships,. 10,000 feet to the acre, 11,520,000,000 feet; Harney and Grant counties, 32 townships, 10,000 feet to the acre, 7,373,000,000 feet; Malheur County, 1,350,000,000 feet; total 34,066,000,000 feet. No mention whatever is made of Benton or Lane counties, which would certainly furnish no inconsiderable amount. These figures are furnished by Mr. H. A. Smith of Portland, who states that he is personally quite familiar with all of this timber, with the exception of that in Malheur County, and that he has had an experience of over thirty years in- the timber and lumber mill business. To transport the above timber to market, carrying 10,000 feet to a car and moving 100 cars per day for 313 working days per year, would require 109 years. Mr. Smith adds that he is quite positive that this estimate is under rather than over the facts. This is proven by the very low estimate per acre at which he has made his figures, and he is substantiated by a carefully prepared statement of the standing timber of Oregon and Washington, by counties, recently published by the Puget Sound Lumberman , which, adding Benton County to the above list and deducting Grant County, figures up a total of 53.513,- 000,000 feet. COMPETITION AND TRAFFIC. The Oregon Pacific enterprise, except so far as Eastern Ore¬ gon is concerned, was not initiated to take possession of any competitive territory. The intention evidently was to construct a line which, by means of its natural advantages and strateget- ical position, should be able to successfully divide the business of a large territory with powerful rivals. That it is well destined to accomplish this purpose a short inspection of the map can not fail to convince anyone. To make this entirely clear, however, let me briefly sketch the traffic conditions of Oregon. Until the completion of the Oregon Short Line, connecting Portland by rail with the Eastern world, San Francisco was the general distributing point for this coast, and controlled the trade of the Willamette Valley. The completion of the Oregon Short Line to its connection with the Union Pacific changed all this. Portland was enabled to buy goods laid down at her doors as cheaply, if not cheaper, than San Francisco. The completion of the Southern Pacific all-rail line from California over the Siski¬ you Mountains into Oregon, and its connection with the Oregon &: California Railroad in this State, did not prove of material advantage to San Francisco, for the reason that the rail line ■over the Siskiyous and the immense spurs of Shasta, while a wonderful engineering feat, is perhaps one of the most expen¬ sive pieces of mountain railroad to maintain and operate in the United States. Its twenty-five miles of 31 per cent grade is to a great extent prohibitive of freight traffic. Rail rates, there¬ fore, are very high from California to Oregon points, so that San Francisco is placed at a great disadvantage in competing with Portland. In addition to this the Oregon & California Railroad, appreciating the disadvantages under which its rail line labored, has endeavored by means of its rates to build up the trade of Portland, in Oregon, as against San Francisco. It is, however, upon the natural advantages of San Francisco as a world’s market that the strength of the Oregon Pacific’s posi¬ tion has so far relied. It should not be forgotten that the Oregon Pacific’s line is the shortest line from San Francisco to all valley points. The distance, for instance, from San Francisco to Albany, Ore.— the crossing of the Southern Pacific’s main line and the Oregon Pacific Railroad—is 164 miles shorter than over the Southern Pacific all-rail line. It is 150 miles shorter from San Francisco to Salem, and seventy miles shorter from San Francisco to Eugene, and even fifty miles shorter from San Francisco to Portland itself, via Yaquina Bay, than it is by any other route. In addition to these short-distance advantages the Oregon Pacific’s scheme opposes to the Southern Pacific’s tortuous and heavily graded rail line of 772 miles its dead-level sea route of 460 miles, with all of the economics accruing from water trans¬ portation versus rail. The Southern Pacific Company, more espec¬ ially its leased line in Oregon, the Oregon & California, has ever been the most bitter opponent of the Oregon Pacific Railroad Company. It has refused in many ways to acknowledge the Oregon Pacific as a railroad, insisting upon treating the Oregon Pacific Railroad, so far as joint business goes, the same as any other shipper. In addition to this it has lately promulgated a tariff by which its rates from points upon its line to junction points on the Oregon Pacific Railroad are raised from 40 to 50 percent, while its rates to Portland are lowered. One example will indicate the principle. The rate on grain from Southern Oregon points to Albany is $5 per ton. The rate on grain from the same points to Portland—a haul of ninety miles farther—is $5. The imposition of this new tariff has raised a howl from one end of the valley to the other, and the merchants at points along the Southern Pacific lines, who had heretofore benefited by means of the Oregon Pacific’s through rates on merchandise from San Francisco, being shut out by the new tariff, have resorted to extraordinary means to avoid this unjust discrimina¬ tion. For instance, the town of Eugene, on the Southern Pacific line forty miles south of Albany, organized a wagon-road freight¬ ing outfit, and has for months been hauling its merchandise from Corvallis to Eugene, forty miles by wagon road, paralleling the Southern Pacific Company’s line; the goods having previously been brought from San Francisco to Corvallis by the Oregan Pacific Railroad. To hold its grip upon this business, the receiver stripped the upper works from the river steamer Three Sisters, obtaining thereby about three inches lighter draught, good for ten tons to the inch, and by this means was enabled to carry its own traffic to many points on the river at dead low water. 78 The entire stretch of the Willamette Valley crossed by the Oregon Pacific Railroad line is strongly competitive. There is another phase of the situation which needs explanation: First, all of the grain in this country is handled in jute sacks, not in bulk; wheat being handled in sacks weighing on an average ten stone, English, or 140 pounds. These sacks cost from 7 to 8 cents apiece, and are sold to the farmers by the wheat buyers, and are figured into the price of wheat at all times. Here the valley mills step in. There are a number of these mills, and they are a strong competitor with the wheat buyer for wheat. By reason, however, of two facts—first, the value of the sacks, and second, the profit on the manufactured flour—the mills are always in a position to take wheat as against the wheat buyer, for they do not sell the sacks to the farmer, but loan them to him over and over again, and when the sack is worn thin thevfill it with chop and sell all for a price covering the original cost of the sack. This gives the mill, therefore, an advantage of about 4 cents a bushel, and if this is not enough they can always add a few cents, trusting to get it back from the profit on their flour. Reference is made in another part of this statement to the fact that the Oregon Development Company owned the various grain warehouses along the line of the Oregon Pacific Railroad. These consist of a small elevator at Munker’s Station, a similar one at Philomath, another at Wren’s, and a flat warehouse at Blodgett, all upon land owned by the Oregon Development Com¬ pany. The elevators are provided with elevators and cleaners run by steam power. Capacity of each elevator about 40,000 bushels. In view of the stiff competition for grain, it may, 1 think, be taken for granted that the ownership of grain warehouses along the line by outside parties in no way controlled by the Railroad Company is bad in policy. The writer is also of opinion that the plan of handling the grain crop along the line of the Oregon 79 Pacific Railroad, by means of elevators and cleaners of principal grain stations, is far from being the correct one, so far as the Railroad Company’s interests are concerned. First, it is not economical, for the reason that it requires a complete and expen¬ sive plant at each of such stations. Second, it results in a loss of freight on every pound which the cleaner takes out of the grain. Reference was made elsewhere to the need of a large storage warehouse at tide-water, and therein is believed to lie the most economical and remunerative solution of the problem of hand¬ ling grain. With this large tide-water warehouse, the needs of the Railroad Company at each receiving station would be limited to a small flat house, with a capacity of, say, 3.000 bushels, the receipts at these small houses being regularly shipped to the tide-water house for cleaning and storage, the railroad gaining a haul on every pound of the product. The economy is gained in interest on plant, maintenance, repairs, and is plainly appar¬ ent. It is believed that the San Francisco Board of Trade would make such a warehouse a “ call house,” so that its receipts would be negotiable. This would give the house a standing that would add greatly to its power to draw grain to it. In addition to the ability to negotiate his receipts, the producer would see an added advantage in storing his grain at tide-water in the fact that such storage would make the grain available to any market, which it is not when stored in a merely local warehouse. It should be stated here that the wheat raised in Oregon is of two kinds. Willamette Valley wheat, while the finest in the world, is what is known in the trade as “soft wheat.” The flour made from it bears the same appellation. The wheat grown in Eastern Oregon and California, being grown in a drier and hot¬ ter climate, is “ hard wheat.” Both hard wheat and the flour made therefrom command a premium for export purposes. This to a certain extent operates against the taking of Valley wheat 80 or flour to San Francisco for export, although exporters have so far been able to find a foreign market for all Valley wheat sent to San Francisco. For all practical purposes Valley wheat flour is just as good as hard wheat flour, and large amounts of it have sold in San Francisco for local consumption. With proper encouragement an immense amount of this flour trade from the Willamette Valley could be turned to San Francisco. There is a steady demand in San Francisco for oak and ash lumber from Oregon. Since the 6th of March the receiver has worked up a considerable business in four-foot fir wood for fuel in San Francisco. There is a large market in California for fir piling, but just at present the competition introduced by shipping piles in great cigar-shaped rafts from Coos Bay does not permit of our entering the field at remunerative figures. There are large amounts of hemlock timber along the east end of the line, for which there is a steady demand at fair prices, by the paper pulp mills at Oregon City, who use several million feet per annum. Their contracts are made a year ahead, or the receiver would have secured this business alreadv. Good building stone in Oregon is extremely rare. The receiver had the road carefully inspected, with the result of dis¬ covering a first-class silver-gray sandstone quarry near Elk City, twenty-one miles from tide-water. Practical quarrymen were induced to take hold of it; capital was found for them; a side-track 1,500 feet long was laid from the Oregon Pacific Railroad to the face of the quarry, the grading, ties, and cost of labor being paid by the Quarry Company. Contracts were next secured for the stone, and the Corrlpany is now getting the first portion of a lot of 100 cars for the new city hall at Salem. The stone is of excellent quality, and can be laid down in San Francisco at about 60 cents per cubic foot, as against 96 cents for Santa Rosa stone, now principally used there. Active efforts are being made, both by the Stone Company and by the receiver, to extend the trade in this stone. 81 Coal is now being prospected extensively at Yaquina Bay, with every prospect of good veins being developed. The impor¬ tance of this subject to the Railroad can not be overestimated. A careful personal investigation was made by the receiver in San Francisco to determine the possibilities of the lumber market in San Francisco so far as it concerned the timber along the Cascade Division of the Oregon Pacific Railroad. The prin¬ cipal supply of San Francisco now comes from Puget Sound, being controlled to a large extent by one large corporation—the Pacific Coast Pine Lumber Company. The price of dimension timber in San Francisco at the present ranges from $12 to $14 per 1,000. It was not deemed good policy by the receiver to attempt to break into the San Francisco lumber market, both by reason of the probable cost of obtaining a footing there, and, second, the prices to be obtained for lumber were not consid¬ ered sufficient to justify the operation. The lumber now shipped to San Francisco comes from streams emptying direct into tide water on Puget Sound, and for the present the writer does not consider it good policy to attempt to compete for the San Fran¬ cisco lumber trade, by reason of the fact that the lumber over the Oregon Pacific’s territory must be hauled upon an average of 130 miles to tide water. It is believed that the best interests of the Oregon Pacific Railroad will be conserved by refraining for several years from pushing its timber into coast markets. The immense area of timbered territory controlled by the Oregon Pacific Company, the writer believes, should be regarded as a reserve, to be marketed on the Pacific Coast only when the timber in Washington, now more available to tide water, has been cut off. The construction of the Oregon Pacific Railroad eastward will at once furnish a large and remunerative market for such lumber as the develop¬ ment of the country may demand. The receiver has made a traffic agreement with the Union 6 Pacific Railway by which that Company has agreed to refrain from operating steamboats on the Willamette River south of Salem, in consideration of the Oregon Pacific Company agree¬ ing not to compete for San Francisco-Portland business. Here it is proper to say that in former years it has been the policy of the Company to operate its river business to a great extent for the strictly local business on the river. The present receiver has not considered this a proper policy, and is of opinion that the service on the Willamette River should be regarded solely as a feeder to the rail and ocean line. With this in view he has also entered into an agreement with the Elwood, the principal com¬ peting boat on the river, by which the Oregon Pacific is given the full control of the river from Salem south, agreeing on its part not to run its boats between Salem and Portland, where the business is to a great extent local to the river. Business taken by either party for territory operated by the other is inter¬ changed at Salem, where a joint wharf is made use of. Traffic arrangements have also been made with the owners of the Bandorille and the Robarts, steam schooners in the coasting trade between Coos Bay and Astoria, by which these boats turn over to the Oregon Pacific Company at Yaquina business for San Francisco which they may pick up, in return for business for local coast points which the Oregon Pacific Railroad Company can procure for them. Sixty-five tons of canned salmon were turned over to the Oregon Pacific Railroad at Yaquina, a few days ago, by the Robarts, for shipment to San Francisco. Every effort has been made to arrive at an amicable under¬ standing with the Southern Pacific Company in Oregon, by which the Oregon Pacific Company would receive and inter¬ change business with the Southern Pacific Company, but so far our efforts have been barren of success. Nor is it hoped that any measure of success may be achieved in the future until the Oregon Pacific shall be further extended, and it shall be in a position to demand and not supplicate. 83 In the earlier part of this statement reference was made to a former traffic agreement between the Railroad Company and the Oregon Development Company. When the present receiver took possession of the property, he promptly declined to be bound by the terms of this agreement — the agreement is quoted and explained so that its former workings may be understood. This agreement, in so far as some of its terms are concerned, was verbal, although it was authorized and generally outlined in a resolution by the Board of Directors passed on August 8, 1884. Mr. C. C. Hogue, who was at that time general freight and pas¬ senger agent of the Oregon Pacific, states in his testimony before the referee, in answer to question 225, that the agreement was verbal, and was originally made by himself with Mr. Toby, who was general freight and passenger agent of the Oregon Develop¬ ment Company in 1887. Quoting from the minute book, “ The president stated that the Oregon Development Company had represented that as their business for a considerable time was likely to be wholly confined to the service of the Oregon Pacific Railroad, which would require expensive offices and considerable expense for clerical, officials’, and agents’ service, wholly unnecessary for the other purposes of the Oregon Development Company, it was only just that the Railroad Company should bear this expense when in excess of the receipts of transportation. It was accordingly resolved that this the Oregon Pacific Railroad Company shall guarantee to the Oregon Development Company, that the busi¬ ness receipts of the said Company from transportation shall equal not only all the expenses of the steamship Yaquina and other steamship service, but that the said receipts shall equal the entire expenses of said Oregon Development Company for said steam¬ ship line, including office and clerical expenses therefor.” And should there be any deficiency the Oregon Pacific Railroad Com¬ pany agreed to pay and make good on demand such deficiency. 84 This contract had currency until twelve months after notice from the Railroad Company to the Development Company that the former desired to terminate such arrangement and guarantee. Mr. C. C. Hogue further testified that the terms of the agreement between himself and Mr. Toby were that the Oregon Pacific Company should receive 50 per cent of the freight charges on freight from rail points to San Francisco, with one or two exceptions. On lumber the through rate was 16 cents per 100, of which the Oregon Pacific Railroad Company received 6 cents and the Oregon Development Company 10 cents. Under the workings of this contract, $74,953.25 were drawn from the earnings account of the Oregon Pacific Railway and transferred to San Francisco, to account of the Oregon Develop¬ ment Company, between January 6, 1891, and February 23, 1893. From October 29, 1890, to March 5, 1893, the sum of $80,475.93 was charged to the receiver of the Oregon Pacific Railroad as losses in operating Oregon Development Company. YAQUINA BAY AS A HARBOR. So much has been said pro and con of Yaquina Bay that it should be added right here that the development of that harbor, the same as the development of the whole Oregon Pacific scheme, has been made the subject of all the malignity and depreciation that could be heaped upon it by its opponents and competitors in Oregon. There is also reason to believe that deliberate and systematic efforts have been made to poison the sources of official information with reference to Yaquina Bay; but the writer is firmly of opinion that no intelligent and unprejudiced mind can examine the harbor itself without arriv¬ ing at the conclusion that it is an exceptionally safe one, both as to its land-locked character and the easy security of its entrance. The writer will quote simply from the best official sources, the reports and statements of the engineers who have been in charge of the Government works at this point. They 85 will be found in the files of original documents herewith. First, the report of Thomas W. Symons, captain corps of engineers, U. S. A., on “Jetty Harbors of the Pacific Coast/’ read before the American Society of Civil Engineers on March 15, 1883. Captain Symons is in immediate charge of all harbor work in Oregon, has resided at Yaquina for months each year, and should be presumably the highest authority upon Yaquina Bay. A copy of an article in the Engineering News of July, 1883, on the construction of jetties at Yaquina Bay, Oregon, by Gwynn A. Lyell, formerly assistant engineer in charge, is filed herewith. Careful perusal of both these documents is recom¬ mended. It is needless here to go into engineering details; suffice it to say that the entrance to Yaquina Bay, Oregon, is in latitude 44 degrees 41 minutes north, longitude 124 degrees 5 minutes west. A rocky height projects on the north side, and on the south side low sand dunes stretch far away. The entrance is protected by a rocky reef about a mile from shore; the reef is about a quarter of a mile long. The heaviest of the ocean swells are broken by this reef before they reach the entrance to the bay. In reference to this, Captain Symons says: “ This reef has a very important bearing on the importance of the entrance, coming as it does as a breakwater, protecting the entrance and the jetties.” The tidal area here on Yaquina Bay is about five square miles. The average height of the tides above the plane of refer¬ ence is seven feet, with an average range as high as eleven feet. The south channel, before the commencement of the Govern¬ ment work, showed a least depth of seven feet at low water. The maps attached to the report of Captain Symons will show the condition of the bay and bar both before and after the improvement. 86 Referring to the results obtained in obtaining water on the bar, Captain Symons says: “ Now there is and has been for the year past a least depth of fourteen to fifteen feet on the bar. This is at times increased to eighteen feet. This depth, with an ordinary tide of seven feet, gives twenty-one feet least depth to the entrance.” Again, “It is hoped that the final results of the jetties will be to increase still further a permanent depth on the bar to a depth at the mean of the low waters of eighteen feet. - ’ Mr. Lyell says: “ The Yaquina Bay jetties in an unfinished state have more than fulfilled the conditions required of them.” Captain Symons states that the total amount that has been appro¬ priated for the work is $635,000. Colonel Mendell, United States Coast Engineer in charge of all harbor improvements on the Pacific Coast, and an acknowl¬ edged authority on harbors, recently visited and spent several days at Yaquina Bay. He was so thoroughly satisfied with the value of the harbor and the success of the Government works there in improving its entrance that he stated personally to the writer that he would favor an appropriation fora 2,000 feet exten¬ sion to the south jetty, and a considerable extension to the north jetty, which would carry them to deep water. Quoting from Major Lyell: “In 1885 the Oregon Pacific Railroad was completed from Yaquina to Corvallis, and a part of the wheat crop of that season from the Willamette Valley was exported via Yaquina Bay to San Francisco. This was regarded as a great achievement, as it afforded the Willamette Valley producers a market at San Francisco in competition with Port¬ land, reducing rates, making a saving in time over existing routes of two days, or in distance of 250 miles.” It is believed that at the next session of Congress the im¬ provement of Yaquina Bay will be recognized, and that a large appropriation will be made for the carrying on of the important works. Quoting from Captain Symons: “The Pacific Coast of the United States is generally high and rocky with few good harbors.” Lying as Yaquina Bay does about midway north and south of the Oregon coast, providing a safe entrance to the land-locked harbor; the nearest seaport to the heart of the Willamette Valley and to Eastern Oregon, backed up by the statements quoted from the United States engineers that eighteen or twenty feet depth at mean low water can be obtained on the bar, the writer firmly believes that Yaquina Bay is a most valuable adjunct to the Oregon Pacific Railroad, and that there is no good reason why a large proportion of the cereal production of Oregon should not be exported from Yaquina Bay direct to Liverpool. I can.not leave this subject without making some reference to an official state¬ ment made to the War Department by Major Huer on the improvements of Yaquina Bay. Major Huer’s report was based on an examination of a few hours one afternoon in October, and is so totally incorrect, and so entirely at variance with the public reports of Capt. T. W. Symons, the engineer in charge, who has spent years of careful study, assisted by competent engineers who have been continually on the ground, that I do not think it worth while to discuss Major Huer’s report in detail. He was fully and completely answered in the Oregonian, on February i, 1893. A copy of this answer will be found among the original documents. It may not be amiss here to quote the face that as compared with Portland, for instance, Yaquina Bay is not burdened by the heavy charges for pilotage and towage, which amount in many instances to from $500 to $600 for a ship from the sea to Port¬ land and return, and which amounts to 50 cents per registered ton for towing vessels from the Pacific Ocean from Portland and return to the sea. A copy of the towage rates will be found among the documents offered for inspection with this report. EXPRESS BUSINESS. Up to March 6, 1893, the Company had been carrying the business of “ Wells-Fargo’s Express Company” on a tonnage basis, which netted the Railroad Company only an average of $80 per month. Investigation proved that the figure was much too low for the service rendered. The Express Company readily met the request for a new deal, and after some negotiation a contract was made by which the Express Company agreed to pay a lump sum of $200 per month for use of the present trains, in addition to half the salary of a combined baggageman and express mes¬ senger. This new deal netted the Company $1,890 per annum more than had formerly been realized from the business, in addi- tion to which the Express Company agreed to pay $20 per month for use of the tug Resolute between Yaquina and Newport. They had formerly paid $10 per month to the Volanta. This makes the entire amount now realized from express business aggregate $3,090 as against about $960 previous to March 6th. UNITED STATES MAIL. The Company carries U. S. mail between Newport and Yaquina as a sub-contractor, realizing $480 per annum for the service. Routes Nos. 173,006, Yaquina to Albany, and 173,014, Albany to Halsted, pay $7,880.16 per annum. June 12th last the receiver succeeded in getting service on Route 173,014 extended to Detroit, 10.33 miles. Payment on this, at the rate of $42.75 per mile, will be made when next regular weighing- takes place in 1894. YAQUINA BAY AS A SUMMER RESORT. The comparative proximity to the seashore of a large part of the population of the Coast States has gradually strengthened their migratory instincts, and every summer now sees heavy travel to seaside resorts. With the exception of Yaquina Bay, Oregon 89 practically possesses no seaside resorts except Clatsop and Long- Beach. These offer nothing but a bare strip of sand beach, and what popularity they have enjoyed has been gained by their prox¬ imity to Portland, together with fairly good hotel accommoda¬ tions. Neither of them can compare for a moment with Yaquina Bay in picturesqueness of location and scenery, or in variety of attractions. The writer has taken occasion to question several hundred people whom he has in different years met at Yaquina, and who had been to both other resorts. The general concensus of opinion was unanimously in favor of Yaquina — the only com¬ plaint being that hotel accommodations were deficient, and the facilities for getting to' the bay from points on the Southern Pacific lines were inadequate. So thoroughly is the fact of Yaquina’s attractions as a summer resort acknowledged, that, in order to participate in the business, the Southern Pacific Com¬ pany has made with the Oregon Pacific Company the only joint rate that the writer is aware of their having made with this Company. In 1892 this resulted in our taking over 6,000 people to Yaquina Bay from points off of our line, besides several thou¬ sands from along the line of the Oregon Pacific Railroad. The land-locked bay, with its unexcelled opportunities for boating, fishing, and bathing in perfect security—its miles of magnificent ocean beach affording miles upon miles of the finest driving beach that the writer has ever seen—the opportuni¬ ties for beautiful and interesting drives to near-by places of interest—Seal Rocks ten miles to the south; Cape Foulweather, with the Government light-house, ten miles to the north; the sur¬ rounding country heavily timbered, and teeming with deer and smaller game; the opportunities for deep-sea fishing on the Company’s tug; the horizon bounded by snow-capped peaks, and the nearer mountains, grand and picturesque in the extreme, combine to make up an ideal spot for summer wanderers. But the summer visitor cun not live on scenery alone, and this is 90 the obstacle at present to Yaquina’s full development as the resort of the Northwest. Hotel accommodations are limited to two small ones, which in ordinary seasons are overrun; would- be visitors learn that all accommodations are full, and perforce, they go elsewhere. Again, a large amount of the summer travel to the Bay origi¬ nates at Portland, Salem, and other points on the Southern Pacific Company’s lines. To properly accommodate this, joint arrange¬ ments are needed with the Southern Pacific Company by which a through sleeper could be attached to their night trains leaving Portland and run through to Yaquina Bay. The receiver endeavored to effect such an arrangement the past summer, and failed only through the scarcity of sleepers, due to their concen¬ tration on World’s Fair lines, by reason of which the Southern Pacific Company were unable to furnish the cars for the joint run. The opportunity is open at Yaquina Bay to build up the one summer resort on the Pacific Northwest — and with that a heavy and remunerative passenger traffic — a traffic which will return every summer in rapidly increasing numbers. As soon as the road shall have been built into Eastern Oregon, a large inland population will be tapped, which will greedily avail itself of the opportunity to reach the ocean. The requisites for obtain¬ ing this business are: First. A hotel at Newport having accommodations for not less than 300 guests, attractively designed and with well laid-out grounds. An expenditure of $50,000 should provide both grounds and building complete. Second. The purchase and operation, between Portland and Yaquina Bay, of two sleeping cars. These need not be expen¬ sive— the nature of the travel does not demand luxurious accom¬ modations. The hotel should preferably be owned and operated by the Railroad Company. The writer estimates that with the above arrangements at least 18,000 people would visit the Bay 91 the first year. This should give the Railroad Company gross earnings on this business of at least $45,000. The hotel should earn 10 per cent net on the investment. EASTERN OREGON AND THE EXTENSION OF THE OREGON PACIFIC RAILROAD. There is probably no equal extent of country in the United States to-day about which the general public knows so little as Eastern Oregon; nor do I know of any equal area which has been so thoroughly maligned and misrepresented. Equal in area to the State of New York, it is to be expected that it will present different and varied aspects in its different sections, as to adapt¬ ability for the various branches of agriculture. It is impossible to dismiss this great country with the brief statement that it is “ largely arid or semi-arid, and mostly covered with sage-brush; part sandy desert.” In fact such statements as this are in themselves self-contradictory, for it is now coming to be known that it takes good land to grow sage-brush; and he is a bold man, indeed, who will in these days condemn any land as “ sandy desert.” The counties of Wasco, Gilliam, Morrow, Umatilla, and Wallowa form the upper tier of Eastern Oregon counties. In so far as these counties the proposed extension of the Oregon Pacific Railroad into Eastern Oregon is not particularly con¬ cerned, for while such an extension would undoubtedly draw a large amount of business from some of these counties, yet the bulk of it would probably seek the Union Pacific’s line, which skirts their northern boundary. It is particularly with the counties of Crook, Grant, Baker, Klamath, Lake, Harney, and Malheur that we are concerned. The necessity of giving close personal atten¬ tion to the details of his trust has prevented the receiver from making a personal examination of this country; but he has sys¬ tematically gathered from every available source a mass of 92 written information bearing upon this country. In getting this together careful watchfulness has been exercised to avoid the col¬ lating of any facts or information which did not rest upon a reliable foundation. It is believed that the sources from which this information has been derived have been such that reliance can be placed upon the facts adduced. The original statements, letters, etc., from which this information is taken will be submit¬ ted among the original documents. It should be remembered, in connection with the facts which will be given below, that we are treating of a country isolated to a very great extent by immense mountain ranges, undeveloped and unserved by any railroad, and which reaches the outside world only by hundreds of miles of staging or teaming. The county clerk of Crook County states, under date of August, 1893, that the number of bushels of wheat raised in 1892 in Crook County was 100,000; oats, 130,000; rye, 20,000; barley, 6,000; and 1,100,000 pounds of wool. In a letter to the writer, under date of April 29, 1893, Mr. Virgil G. Bogue, late chief engineer of the Union Pacific Rail¬ way, a man of national reputation, says: “ Several years ago I made a trip for the Union Pacific Company from Ontario, via Harney Lake, Goose Lake, and Pitt River, to Redding, Cal., pre¬ paratory to preliminary surveys which followed, and which were completed some months afterward. About Harney Lake is an extensive basin, which is sub-irrigated, the water standing at a depth of three to four feet below the surface. I believe this region will be found valuable and that most of the land will be brought under cultivation. In all the countrv which would be tributary to your line between Vail and Boise great progress is being made in irrigation and in the cultivation of fruits and farm products. It is well supplied with water from the Owyhee, Weiser, Payette, Boise, and Snake rivers. Population is growing rapidly and will eventually become large.” 93 Charles A. Clark, secretary of the Boise Central Railway Company, writing to Mayor James A. Pinney of Boise City, under date of March 30, 1893, says: “The present annual imports into Malheur County are 600,000 pounds merchandise, and there is exported therefrom 100,000 pounds ore, 200,000 pounds of wool, 500,000 pounds hay and grain, 3,000,000 pounds live stock, and 1.000,000 pounds lumber.” J. C. Sumner, county clerk of Crook County, under date of April 13, 1893, says: “ The annual shipment of freight north¬ ward from this county toward The Dalles is 2,000,000 of pounds, all of which would be shipped from the Deschutes. The price paid for freight both ways between Prineville and The Dalles is i-J to 2 cents per pound. There is shipped into this county annually not less than 4,000,000 pounds of freight. There are sold annually from this county about 50,000 mutton sheep, 3,000 beef cattle, and 200 horses. If the Oregon Pacific Railroad Company were built to the Deschutes, I believe it would get all the freight from Lakeview, Klamath County, Bruns, and the western part of Grant County, and, of course, all from Crook. The soil in the Deschutes Valley is what we call sage-brush land, and it produces good and sure crops of rye without irrigation, and with irrigation, would produce abundant crops of wheat, oats, barley, etc. I think that on every ten or fifteen miles of the line of the road through the Deschutes Valley there is not less than 300 sections of land that can and will be irrigated when the road is built to the Deschutes. There will also be shipped from the Deschutes and Squaw Creek large quantities of pine lumber to be used for finishing purposes; for there is no such lumber in the valley counties. In giving the foregoing estimates, I have placed them below, rather than above, what I believe to be the true figures. I delayed a reply in order to get as much information from the business and stock men of the county as possible, with whom I have counseled and agreed in giving or fixing amounts.” 94 Mr. E. H. Test, county clerk of Malheur County, under date of September 12, 1893, says that he has no accurate statistics to furnish, but thinks that 50,000 bushels of grain would be a fair estimate of last year’s crop. Continuing, he says: “We have no mills, neither do we, nor can we, ship any wheat; therefore only enough is raised for home consumption. Five million pounds is a conservative estimate of the wool crop this year. Our principal product is hay, which is fed to the cattle in winter, and our larger shipments are live stock. Of course, should we get a railroad through our county, more grain would be raised, and 1 think as much per acre can be raised here as any place on earth.” Dr. Dumonth Lotz, chemist to the United States Experi¬ mental Station, connected with the State Agricultural College, in an interview with the receiver, states as follows: In July and August, 1892, I made a trip to Crater Lake, Klamath County, Ore. This trip was made in a wagon, and the distance traveled approximated one thousand miles. In October and November of the same year I made a trip to Lakeview by the way of Ager, Cal. On this trip I traveled by stage and horseback through the county of Modoc, Cal., and the counties of Klamath, Lake, and Crook in Oregon. I went to Lake- view as the representative of the State Superintendent of Public. Instruction, to make an investigation as to the probable future of that portion of Oregon. Q. What is the nature of the soil of that country; is it suited to wheat growing? A. The origin of the soil east of the Cascades is volcanic. It is very rich in those elements necessary to plant life. Almost all of the tillable soil is well adapted to wheat growing, some very fine wheat being grown in Lake, Harney, and Klamath counties. Q. How does the wheat grown there compare with that of the Willamette Valley? 95 A. The wheat grown in the Willamette Valley is deficient in gluten, one of its most valuable constituents, while that grown in the counties mentioned is rich in this compound; but owing to the great difficulty in getting the wheat to a railroad, very little of it reaches a market. Flour manufactured at Paisley, Lake County, brings a much higher price in the San Francisco market than Willamette flour. Q. Is the soil of Eastern Oregon adapted to fruit raising? A. In Goose Lake Valley, and also in the valley of Sumner and Harney lakes, very fine fruit is grown, considering that there is no market for it. Apples, peaches, grapes, plums, and pears do exceedingly well. Q. What is the general lay of the land around Lakeview? A. Lakeview lies on the east side of Goose Lake Valley, eight miles north of the lake. To the west, north, and south stretches a beautiful valley, very level, and covered with vast fields of grass, native or timothy. Timothy is being grown quite extensively in this valley, averaging three tons to an acre. The valley is probably sixty miles in length, and ranges from ten to twenty miles in width. In traveling from Lakeview to Paisley we cross a low range of hills about twelve miles north of Lake- view. These hills are covered with bunch grass. From here the country generally becomes level until we reach Paisley. Here are the Paisley Roller Mills, doing as good work as any in the State, run by w’ater the year round. Fine fruit, vegetables, and hay are the products of this valley. About three miles from Paisley, Ennis Brothers have opened two ledges, one of which proves to be very good silver ore, and the other very rich in lead. Sheep and horses in great numbers range over this valley and the surrounding hills. From Paisley to Silver Lake is about sixty miles of rolling prairie, covered with bunch grass and sage¬ brush. Q. What is the nature of the country around Klamath Lake ? 96 A. The valley of the Klamath Lake contains about three- fourths of a million acres of tillable land. It lies on the eastern slope of the Cascades, and is as level as the valley of the Goose Lake. The soil is black loam, mostly alluvial, very fertile, and one that will “ wear ” for many years. Grains of all kinds do well, except corn. The fruit is not excelled in the State. The land about Lower Klamath Lake has recently been settled, and much attention is given to the growing of alfalfa, which produces three crops a year without irrigation. I do not believe that I have seen a more ideal agricultural and manufacturing locality than is the valley of the Klamath lakes. Q. Did you see anything of the belts of sugar-pine timber, of which we hear so much talk just now ? A. On the Eastern slopes of the Cascades I saw immense forests of sugar and black pine.* These trees grow to an enor¬ mous size, and produce the most desirable lumber for building purposes than any in the State. Large forests of pine, spruce, and cedar are found in Lake and Harney counties. It is needless to quote further from this interesting state¬ ment, of which only a part has been given above. It is com¬ mended as good reading to those who have any idea that East¬ ern Oregon is an “arid or semi-arid country.” Mr. W. N. Sutton, county clerk of Lake County, under date of August 22, 1893, writes as follows: “ Your favor of the 17th inst. received, and in reply send you the published statement and report for the year 1891, as there ft was no report made up for 1892. This simply represents what was done in this county without any market other than the local demand. There is not to-day one-quarter of the land under cultivation.” Following brief statement gives an estimate of the products of Lake County: Beef cattle, 8,420; horses and mules, 500; mutton sheep, 32,000; pounds of wool, 1,140,000; * See photographs of this timber. 97 grain, 207,000 bushels; hides and pelts, etc., to the value of $10,000. Mr. Joseph McKay, clerk of Baker County, states under August 22, 1893: “So far I have been unable to get any statis¬ tics. I think we have about 350,000 pounds of wool. Last }^ear we had close to 50,000 head of sheep, at an average of $7 per head. Baker County’s principal resource is mines.” Mr. P. S. Hanson, civil engineer, in an interview states as follows: Q. What has been your professional experience ? A. Five years civil engineer on the government railways in Norway ; three years with the Northern Pacific Railroad, and five years with the Oregon Pacific Railroad reconnaissance and location, and four years with the Southern Pacific Railroad. Q. What portion of the Oregon Pacific location were you engaged on ? A. On the location from Corvallis to the Deschutes River, and also from Harney Valley, through the Malheur Canon to Boise City. Q. Do you know anything of the Deschutes River ? A. I have traversed the Deschutes River 'from its head water to The Dalles, where it enters the Columbia River. Q. What is the chief industry of that district ? A. The lower part of the valley is the finest and earliest fruit¬ raising country in Oregon, and it is also a beautiful wheat country. There is a large amount of sheep-raising on the upper plateaus on either side of the river; and the lower stretches of country are being devoted to wheat and fruit raising, more par¬ ticularly the former. In fact the whole country from the foothills of the Cascades to the farther side of the John Day Valley is one continuous wheat belt. Q. What is the nature of the Harney Valley country ? A. It is settling very fast; and, in the intervals of two and 7 98 three years between my visits, I was surprised at the rapidity with which the people were coming in, considering there were no railroad facilities. The huge stock ranges are being laid off into wheat and mixed farms, wherever irrigation is practicable. Q. What is your opinion of the country from Harney to the Snake River ? A. Through the Malheur Canon, for sixty miles, the country is suitable only for stock ranges ; then opens up the Malheur # River Valley, extending to the Snake RiVer. This country is all settled up, and by irrigation anything and everything can be raised. There are two or three irrigation ditches in progress. Q. Have you been up the Crooked River, and how far? A. I have walked from the Deschutes up Crooked River Valley, as far as the city of Prineville. There is an abundance of water, and the valley gives rich promise of fertility. Climb¬ ing out of the valley, I came on what is called the Summit Prai¬ rie, a stretch of country about fifteen miles long and two miles wide, the whole of it constituting a settlement of very fertile farms. The country abounds in similar stretches. Q. I gather, then, from what you have said, that you con¬ sider Eastern Oregon is far from being a barren and unprofitable country, and that when opened up by railroads it could support a fair number of people to the square mile ? A. I do. To-day what part is not under cultivation is one huge stock ranch. You see large bands of horses, cattle, and sheep roaming over the whole length and breadth of it. I con¬ sider that this would give an immediate and considerable traffic to any road that enters, and it will be gradually supplemented by a more varied and rapidly increasing traffic as these great ranges are fenced off into farms. I would add that one of the greatest hindrances, hitherto, to the development of the country has been the total lack of timber for building, fencing, and stock- 0 shelters 99 Mr. F. E. Habersham, in an interview, states : Q. What is your professional experience ? A. About twenty-five years general civil engineer. The last fifteen years of this time I have spent in locating and construct¬ ing railroads in Oregon- Q. I believe you have done considerable reconnaissance for various railroads ? A. I have. Q. Did you not develop the Stampede Pass of the Northern Pacific ? A. Yes. After some further conversation, Mr. Habersham was asked to give a brief idea of the country about Lakeview. He says from Lakeview to Lookout is no miles, through an agricultural country thoroughly well settled, with a vast stretch of country flanking the valley on either side. Indeed, the whole country here has been settled for forty years. The soil is rich, the farm buildings are substantial, and there is much evidence of wealth and prosperity. Mr. A. W. Gowan, a reputable attorney at law at Burns, Ore., has gathered and forwarded to me a large amount of statistical information. These facts and figures so gathered are supported by letters from the parties who actually shipped the goods. I need only quote a few figures from Mr. Cowan’s letter. In 1892 he states that 500,000 pounds of merchandise was hauled to Burns, Ore., from The Dalles. The names of two firms in Burns are given, whose shipments of merchandise for the coming- year will be 125,000 pounds. He adds, “This is not a full show¬ ing of this class of traffic, as all the great cattle ranchers and corporations ship and buy direct from the wholesaler. The P., L. & S. S. Co. consume not less than two train-loads of barbed wire annually; and Peter French uses not less than one train-load each year.” 100 A careful estimate, Mr. Gowan states, places the number of stock and beef cattle in the Harney Valley at 75,000 head, which number he says will be increased 25 per cent the coming year, losses for the past four years in this line of property having been merely nominal. Thirty thousand head were driven to railroad points for shipment during the previous year, Peter French shipping alone 9,850 head, and the P., L. & S. S. Co. 16,000 head. These cattle were all driven to Baker City, Hun¬ tington, and Ontario, on the Union Pacific, and to Winnemucca, Nev. Farther on he states that there are 25,000 head of horses on the range. The agricultural products are amply abundant, and the range extensive enough to permit the cattle industry to be increased to 200,000 without crowding the natural cattle ranges. With regard to sheep he states: “ The lowest estimated number of sheep is placed at 750,000, and all come out of winter quarters in prime condition. The wool product is hauled out to points on the Union Pacific Railroad.” Fie also states: “The cutting of our natural grasses for hay is the main harvest for the rancher, and hay is really the staple crop of the valley, the amount put into stack last fall being 100,000 tons, which has a nominal value of $1.50 to $2.50 per ton.” It may be said here that Eastern Oregon hay, of which a lit¬ tle reaches Portland, is esteemed by liverymen, who use it as a conspicuous advertisement for their stables. It sells for $10 per ton in Portland. It is impossible to quote Mr. Gowan’slong letter in extenso . Several other statements bearing upon the condition of East¬ ern Oregon will be found in the file. It seems sufficient to close these brief tributes to the magnificent fertility and varied prod¬ ucts of what is truly a great inland empire with a short letter from the Hon. Binger Hermann, who so ably represents the State of Oregon in Congress. Under date of April 17, 1893, he says: 101 “ Your esteemed favor is at hand — your inquiry as to the Harney Valley, in Eastern Oregon. If I had time I should be pleased to write you an extended account of my observations as to that section. The soil is fertile, and I feel sure from produc- , tions I have seen that wheat, rye, barley, and oats can be made a yielding industry. The entire valley impresses the beholder as one of the most picturesque spots on the Pacific Coast. The area is extensive, not arid, and the climate adapted to cereal growth.” Mr. Hermann has personally visited all of the country re¬ ferred to. To those unacquainted with so-called “ sage-brush ” lands, or as they are often misnamed “arid” and “ semi-arid ” lands, a little explanation may not seem uncalled for. First. Sage-brush lands are found only in very dry climates, where the natural rainfall is light. A light rainfall argues a large majority of unclouded and sunny days, and it takes no argument to prove that sunshine is the principal factor in plant growth. Again sage-brush lands and their connected light rainfall are in every instance associated with a country whose soil is of volcanic origin, and, as State Chemist Lotz has well said, such soils are rich in the elements of plant life. You have then, in case of all sage-brush lands, two of the most important factors of agriculture — abundant sunshine and a fertile soil. But to make the ele¬ ments of the soil available for assimilation by plants, they must be presented in a solution — hence we must have water upon such lands — and this leads us to the subject of irrigation. For present purposes it is needless to enter into any discussion of irrigation, any further than is needed to correct the popular impression that irrigated lands are at a disadvantage as compared with those upon which rainfall is sufficient to raise the crop. Exactly the opposite is the truth. It has already been pointed out that lands which demand irri¬ gation are, by that very fact, blessed with at least 50 per cent 102 more sunshine than lands which lie in a more rainy, and, there¬ fore, a cloudier, climate. Now if we can but put water on such lands we have ideal conditions of agriculture. This conclusion is borne out by the facts. Where is the land in the choicest por¬ tions of the Central or Eastern States which will produce from* 100 to 115 bushels of wheat, or nine tons of hay, to the acre, as is being done on irrigated, sage-brush lands in Idaho and Eastern Oregon to-day? And, in addition, it should be remembered that these irrigated lands are growing richer, not poorer, for the irri¬ gating water carries with it a measure of sediment which more than compensates the soil for its immense output. Those who have ridden over the Union Pacific Railway to Portland will viv¬ idly remember the hundreds of miles of monotonous sage-brush lands—apparently a dry and arid waste. To such I would say that could water be got upon these lands, as doubtless it will be in coming years, there is not an acre but will grow anything that the States of Ohio or New York will produce — grow at least 40 per cent more of it to the acre — and grow it of better quality. The finest lands in California, which to-day bear mar¬ velous crops of the finest fruit, and sell for $1,000 an acre, were in the beginning “ sage-brush ” lands, the same as these. Net earnings and dividends most certainly await the road that will adopt the modest sage-brush as its guerdon. To further make clear the situation in Eastern Oregon, and to present, in so far as possible, that great country to the view of the absent eye, the receiver has had prepared a large number of photographic views, covering the various sections of this coun¬ try, and submits them herewith. This is an age of pictures— they talk more eloquently than words—and I think that it may be granted that the camera does not misrepresent, but, on the other hand, is sure to confirm what the writer most deeply feels to be the fact, that Eastern Oregon is a rich and fertile country, and that there does not exist on the American Continent to-day 103 an equal area of such country so entirely neglected by railroads. The present development of that country, great though it is, is but meager compared to what the least sanguine may expect will cer¬ tainly follow the entrance within it, not only of a railroad, but of the railroad which possesses the keys to this wonderful country, both from the west and from the east, and which will form the most direct and shortest possible line to tide-water. Nor can this great expanse of country much longer remain without railroad facilities. Several different railroad companies have prospected it and run lines through it, and would now doubtless be blowing their whistles in Eastern Oregon were it not for the fact that from the east, west, and south there are but two practicable ways to get into and out of Eastern Oregon. They consist of the Minto Pass, from the Willamette Valley into Eastern Oregon, which the Oregon Pacific Company now holds by means of ten miles of grade and 300 feet of steel; and the Malheur Pass, from Eastern Oregon to the Snake River, which is similarly held by eleven miles of grade and 300 feet of steel in crucial points. This fact is so well known that it is here only necessary to quote samples of evidence in support of it. Mr. Hanson, the engi¬ neer, who was quoted a short distance back on this point, states: Q. How does the Cascade Pass location of the Oregon Pacific compare with that of other routes of your acquaintance ? A. There is no other of such easy grade and light curvature as that of the Oregon Pacific. It is remarkable that a line should be gotten through the Cascade Mountains without any tunnels and without curvature to exceed ten degrees. The length of 2 per cent grade is only thirty miles altogether, ten miles of that being against the westward ocean traffic. It is also remarkable that on the west side of the Cascade Mountains no snow-sheds will be necessary, and next to none, if any, on the east side. It is also largely in favor of the Oregon Pacific location that it lies entirely on the sunny side of the canon, so that snow goes off 104 much earlier than on the shad)' southern and western sides. The Northern Pacific Pass labors under the disadvantage of being on the shady side. This means that the track is open to inspection and repair some six weeks earlier than on the shady side of the mountain. Mr. W. Z. Earle, a general railroad engineer of long and varied experience in the heaviest mountain work, and who is thoroughly familiar with the Cascade Mountains, testifies on this point as follows: “The Oregon Pacific Pass is, in my judgment, the lowest and easiest pass in the whole Cascade Range of mountains, the summit being only 4,600 feet, something unique through so remarkable a barrier. For a mountain road the main grade-line is remarkably short and light, not exceeding 2 per cent maximum.” Mr. Earle was for four years the engineer in charge of the work at the summit of the Cascade Mountains for the Oregon Pacific Railroad Company. His full testimony, with references not only to this particular portion, but covering the entire road, will be found among the documents submitted. Farther on he states, with reference to the Malheur Canon, in which lies the pass of the Oregon Pacific from Eastern Oregon eastward: Q. You evidently consider this Malheur C^fion the key to the situation. Is there another pass from the Snake River to the Harney Valley ? A. This particular work was constructed by the Oregon Pacific Company. The Malheur Canon is the only eastward pass from Central Oregon to the Snake River country. To the north lies a broken and mountainous countrv, and to the south the gorge of the Owyhee River. The Malheur Canon is narrow, with precipitous sides, and in places there is just sufficient room, with heavy rock excavation, to place a line. These strategetic points have been kept as a safeguard. My own examination of the locality convinces me that this is the only practicable route. 105 It is nature’s own key between the rich plains of Central Oregon and the neighboring State of Idaho. From the present end of the track to the Deschutes River is a distance of sixty-five miles. The estimate of Mr. J. M. Stewart, made February 28, 1891, at which time he was chief engineer of the Oregon Pacific, to complete the work and carry the track to the Deschutes River, is $1,000,000. He gives the following estimate of the quantity of materials to be moved : Earth.....874,271 cubic yards. Loose rock___105,301 “ “ Solid rock___^ 65,820 “ “ Cement gravel__28,657 “ “ This estimate is practically confirmed by* Mr. Earle, who states : “To extend the road to the Deschutes River would cost not to exceed $1,250,000. This estimate is based on prices paid when I had charge of the summit. I consider, however, that under a better system of management this estimate might be considerably reduced.” It should be remembered that beyond the present end of track there is eight miles of track ready for the ties. At the summit there is ten miles of grade, on which one-fourth of the total work has been done. Six months should suffice to put the track to the Deschutes River. FORMER FINANCIAL HISTORY. The writer has not ventured upon any reference to this sub¬ ject, for two reasons: First, it did not seem germane to the object in hand, which is the setting forth of^the present physical condition of the property, its surrounding conditions and needs, and immediate future development; and, second, he understands that that subject is now undergoing separate investigation at the hands of other parties. 106 VALUE AND INDEBTEDNESS. Mr. D. H. Ainsworth has aptly said: “The location of a railroad is giving it its constitution. It may be sick almost unto death with accidents of construction and management, but with a good constitution it will ultimately recover.” Now the writer ventures to say that the Oregon Pacific Railroad has a good constitution. If the law of the “ survival of the fittest ” applies to railroads, certainly the Oregon Pacific is destined for great things. The location of the road was commented upon in the early part of this narrative. The writer can but reiterate his opinion there expressed, that such location is entirely good, both from a strategic and from an operative point of view. The road is then good per se. Enough has been said to show that with a moder¬ ate extension and capable management, a remunerative future is before it. The writer desires, however, to go much further than this, and to express in the strongest terms his conviction that in this property the owners have the nucleus of one of the most profitable roads in the United States to-day. This is not the place to discuss the full development of the Oregon Pacific scheme, further than to say that to-day the enterprise is in the condition of a great woolen mill which yet lacks its engine and shafting. It is useless to expect returns from the investment in building and looms until we complete the enterprise by a further expenditure for something to make the “ wheels go round.” It is the same with the Oregon Pacific scheme—you can not expect net earnings until you have co?npleted the project, and this can only be done by further extension; and if you are not prepared to extend, then, emphatically, don’t buy. The total liabilities of the Company, leaving out of account the certificates issued by the late receiver, are: f Pay rolls.'--- — $148,084.87 Voucher accounts_.. 45,626.23 Sundry persons’ accounts_^_ 9,057.43 Legal expenses of T. E. Hogg, receiver._ 38,528.50 Preferred insurance certificates..__ 15,081.00 Unadjusted stock claims___ 1,500.00 Total- 1 -'--$257,877-03 To this will have to be added the costs of court, which are now unknown. Much has been said as to the value of the Oregon Pacific. To the writer it would appear to have three values: First, its present value as a railroad; second, its abstract replacement value; and, lastly, its present value in view of its future devel¬ opment. As to the first value, the writer, with an intimate acquaintance with the circumstances and conditions of its operation, must say that such value is practically nil . Bringing to bear upon the problem the experience gathered in almost twenty years of rail¬ road work, assisted by the best available talent, after seven months of the most painstaking labor, the total result is just about an even balance between earnings and operating expenses. As to its replacement value: The statement filed with the State Board of Railroad Commissioners by the Oregon Pacific Railroad Company shows that $-was expended in con¬ struction and equipment. There is good reason to believe that much of the work cost much more than it should have done; cer¬ tainly more than the works could be duplicated for to-day. 'The writer believes that the entire plant could be duplicated to-day for $3,500,000, possibly less. It is extremely difficult to assign in cold figures a value to the property under the third proposition, for the reason that such value must, in the nature of things, be merely a personal 108 estimate, colored one way or the other by personal valuations. But yet this property, or any other in process of development, has such a value—manifestly one could pay too much for a diamond in the rough, for its value lies in the cut; nor can the policy of paying $21 for double eagles be defended on ordinary financial grounds. But, in the opinion of the writer, this question is hardly liable to arise ; and he therefore dismisses it without further argument. YAQUINA BAY. The Company's shops, docks, etc., its floating equipment, both ocean and river, various views along its constructed, graded, and projected line; a series of views of the Willamette Valley, and with various of its towns and productions and a large num¬ ber of views of Eastern Oregon. There are also submitted books of original documents bearing upon the facts set forth in this report ; a specially prepared bird’s-eye view of the State of Oregon and parts of surrounding States, worked up from official maps, and a collection of the various cereal, mineral, and arboreal products of the State. z'' .-..A* f '-r i /