October 26, 1944
Mr. Ward Hall xxxxxxIn accordance with your instructions preliminary study has been made of the application of the Yosemite Valley Railway Company to abandon its line. During the course of this investigation I interviewed the company’s General Manager, Mr. L. A. Foster, at Merced, and called on representatives of various industries concerned and other business men, and public officials in Merced, Mariposa, Yosemite Valley, and other points on the company’s road. In the following memorandum the results of this brief survey have been summarized. History of Yosemite Valley Railway xxxxxxThis railroad was constructed between 1905 and 1907 by a predecessor company, Yosemite Valley Railroad Company, the present operating company taking over in December, 1935 after foreclosure of second mortgage. In 1936 the company filed a petition with the District Court of the United States seeking reorganization under the Bankruptcy Act and is now operated by a committee of bond holders, Mr. Howard C. Bonsall, the President of the company, acting as trustee. The Railroad xxxxxxThe line consists of 78.43 miles of road extending from Merced to El Portal, about two-thirds of this distance being in the Merced Canyon. About 1928 a considerable section of the line in the river canyon was rebuilt on a high line around the reservoir of the Exchequer Dam at a cost of about one and one-half million dollars which was borne by the irrigation district, so this portion is of newer construction. xxxxxxThe track is laid with 70 pound rail, and while no detailed inspection has been made, the state of maintenance at the few points where I had an opportunity to make observation was fairly good. Mr. Foster, the general manager, informs me that recently, because of manpower shortage, he has not been able to keep its section gangs to full capacity but he considers his track in good condition and, with normal weather, foresees no serious trouble. Revenue and Expenses - 1936 - 1943 xxxxxxTable I which follows shows the financial results of operation during the life of the present company. Yosemite Valley Railway Company Operating Income
xxxxxxThe last column shows, the company has earned a small profit during each of the eight years, with the exception of 1938. In the winter of 1937 and 1938 a considerable section of track was washed out in the Merced canyon, and the restoration of this track increased maintenance of way expenses approximately $100,000. Sources of Revenue xxxxxxTable II shows by revenue accounts the sources of the company’s revenue during the period from 1936 to and including 1943. Yosemite Valley Railway Company Sources of Railway Operating Income
xxxxxxAs will be seen, the bulk has accrued from from the handling of freight, the principal source of this revenue being derived from the operations of the Yosemite Sugar Pine Lumber Company, Yosemite - Portland Cement Company, several smaller industries, and merchandise into the Yosemite Valley. The first named company operated a large mill in Merced Falls about 24 miles east of Merced, and logs for this mill were transported by the railroad from a point in the Merced canyon about 50 miles east. The company suspended operations in 1943. The other remaining large source of revenue, the Yosemite - Portland Cement Company, was sold in June of this years to the Kaiser interests and is not operating. The company’s mill was located at Merced, but the lime rock used in its operations was quarried at Emory, 67 miles east, and transported by rail to the mill. In 1940 the shipments of these two industries consisted of approximately 13,000 carloads, producing a revenue as follows:
xxxxxxThe principal other industries served in the past and still remaining are a subsidiary of the National Lead Company, producing a commodity from barium ore deposits in the vicinity of El Portal, and the Standard Oil Company, which supplies most of the oil and gasoline used in Yosemite Valley. All of this business has in the past been transported by rail to El Portal where the company maintains a distributing plant, unloading facilities, and a heating plant. xxxxxxAnother newer industry which began production in January of this year is the Red Cloud Mines near Hornitos, which is producing zinc concentrate for the Metals Reserve Corporation and shipping from Merced Falls. Passenger Revenue xxxxxxIt will be noted from Table II, page 3, that during past years the company has enjoyed a substantial revenue from passenger operations, and at one time Pullman cars from both San Francisco and Los Angeles were moved direct to El Portal over the Yosemite Valley Railway from Merced. Regular passenger train service was maintained until June of 1943, when due to restrictions of wartime travel and other factors a mixed train was substituted. Since that time passengers arriving by Southern Pacific or Santa Fe have been moved from Merced to the Valley by buses of the Yosemite Transportation Company. This provides a faster service that that possible by mixed train. It is believed, however, that the type of travel interchanged with the two continental railroads would prefer rail transportation into Yosemite by Pullman or modern coach equipment. Mail Revenue xxxxxxIn 1943 the company also lost the mail contract which produced a revenue of approximately $17,000 per year, and no doubt paid a substantial portion of the cost of the passenger train operation. This matter was discussed with the Postmaster, J. T. McInerny, of Merced, who stated that in his opinion the service was deliberately poor, that mail connections were frequently missed, and that while the Post Office Department put up with these conditions with great tolerance it was finally necessary to arrange to carry Yosemite Valley mail by truck. He said that due to the fact that a considerable amount of cash was handled the Post Office Department would prefer rail transportation if reliable service was assured. Remaining Sources of Revenue xxxxxxThe principal sources of revenue now remaining are the barium and oil shipments from and to El Portal, and those of the zinc concentrates from Merced Falls. The first two commodities have been handled for years and this business is permanent in nature. While the barium product is essential to the war effort it is not solely a war industry, as the output has been increased only about 20% by the war. The volume of this and the oil movement and revenue derived therefrom over the past years is reflected in the following table: Volume of and Revenue From Such Commodities During Past 10 Years
xxxxxxDue to wartime conditions the oil shipments into Yosemite Valley have, of course, been materially reduced, but they still average about 20 cars per month. The shipments of the barium product are increasing, and during the first nine months of 1944, 445 cars, compared with 274 during the same period of 1943, were moved. The number of cars handled by the three remaining principal sources of revenue during the first nine months of 1943 and 1944 are shown in the following table. In addition there is some L. C. L. and Express movement into the National Park. Principal Commodities Still Moved By Yosemite Valley Railway Company and Volume of Movement During 1st Nine Months of 1943 and 1944
xxxxxxWith the closing of the cement mill in June of this year and the loss of the lime rock revenue considerable adjustments in the operations of the company were necessary. During the first two months under these conditions an operating loss resulted, but in September due primarily to reduction in service consistent with the traffic to be moved, a small profit was earned. The results from these three months of operation of operation are shown in in Table V. The figures shown include an allowance for depreciation and rentals accruing from three locomotives leased to Southern Pacific Company. The company plans to make further changes in its train schedules which it is hoped will result in a further small savings in transportation expense.
Results from Operations Subsequent to Closing of Yosemite-Portland Cement Company in June 1943
Effect of Substitute Transportation By Truck xxxxxxIf the railroad is abandoned it will be necessary to provide substitute transportation by truck over the State Highway from Merced to El Portal. This highway decends into the Merced canyon over the Bear Creek grade, a winding, steep grade several miles in length. The introduction of truck traffic, particularly that ascending the grade, into the other highway traffic will probably cause great congestion and add to the hazards of general traffic. At present, during war conditions, this is probably not too serious, but in normal times, with a great volume of recreational travel in and out of Yosemite the truck movement will be highly objectionable. The present output of the barium plant is 100 tons a day, and even during normal times the movement is substantial. The management stated that they had made a study of the number of trucks required or the loads they would be able to move over the grade. xxxxxxSimilarly, the inbound movement of gasoline and oil by Standard Oil Company would require several trucks daily. In so far as the moving of the zinc concentrate from the mine near Hornitos, this would be over comparatively level highway between Merced Falls and Merced, a distance of 24 miles. No attempt has been made to estimate the total additional truck miles required in the event the railroad is abandoned. Other Certificated Carriers xxxxxxYosemite Transportation Company has a certificate from this Commission for transportation of passengers and property between Merced and Yosemite Valley over the so-called All Year Highway, but at present its operations are restricted in the Merced Canyon between Briceburg and El Portal. In the event the railroad is abandoned an application to remove this restriction will be filed. xxxxxxIn its “Return to Questionnaire” filed on October 23rd, the Yosemite Valley Railway Company claims that this territory is also served by Fortier Transportation Company and Miles and Son Trucking Service. I am informed by our Truck and Stage Division that neither of these operations is certificated by the California Commission in the territory served by the railway. Attitude of Business Men and Civic Bodies xxxxxxDuring the investigation the following representative business men, officials, and other parties were interviews:
xxxxxxMost of these gentlemen advanced a realistic view of the matter, stating that while they were hopeful that the railroad would continue to operate they realized that if the company were consistently losing money it would not be practical to require them to continue operation. Mr. Murcheson expressed the view that if the railroad quit it would probably put his operation out of business, that his product was extremely essential to the war emergency, and his company was being pressed by the War Production Board to increase its output all possible. Incidentally, the product is used in connection with deep oil well drilling, and he made the statement that approximately 70% of such drilling was dependent upon the output of this plant. xxxxxxIt may also be stated in passing that there seems to be a general opinion in the community that the company has not made any great effort in the past to develop additional business or even hold that which it had. Some of those interviewed even went so far as to imply that in their opinion the owners were more interested in the salvage value of the property than its operating potentialities. Signed, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||