At the hearing of the abandonment application of the Company, held in Merced on December 1st, 1944, evidence presented "by the applicant indicated the road was dire circumstances and financially embarrassed, that future did not warrant continued operation.

         In this connection we quote a portion of their balance sheet as submitted at the hearing and apparently made a part of the record, the statement is as of October 31st 1944, the latest date it could be prepared prior to the hearing.

         It is admitted the statement shows the Company is carrying a very heavy bonded indebtedness which apparently cannot be paid out either through abandonment or continued operation.

         The Income statement as of October 31st 1944 submitted at the hearing which apparently Is the basis upon which the Commission determines certain facts concerning the abandonment application, shows a Net Railway Operating Income of $15,736.76, indicating the Company did not operate at a loss. Instead shows a profit from a strictly operating standpoint, for the ten months of 1944.

         Was the stage set for abandonment about two years ago when the Sunday train was discontinued effective June 1st 1943 which very shortly resulted in the cancellation of the U S Mail agreement thereby the road lost the U.S. Mail and approximately $14,000.00 annual income.

         The Engineer for the State Railroad Commission testified at the hearing that the road and bridges were in very good condition for a short line railroad.

         The road serves the Yosemite National Park, The Yosemite Park and Curry Company, The U.S.Navel Hospital at Yosemite, The Standard Oil distributing plant at El Portal, the National Lead Company, shippers of barytes ore, the Pacific Mining Company at Bagby and the Red Cloud Mine shippers of zinc concentrates consigned to an agency of the Government.

         At the hearing for abandonment Mr. C. F. Aylebrand stated he had intended establishing a mill at Jasper on the line for the purpose of making red colored granules used for roofing paper, that the annual shipments would be approximately 20,000 tons annually, but his plan had been deferred due to the application for abandonment.

         With the continued operation of the line serving the industries mentioned, and the equipping the road with modern passenger equipment such as diesel electric, and no doubt again secure the U.S. Mail, the Yosemite National Park would remain on a railroad and continue to be served by Pullman Sleeping cars after the war.

         Should the road be abandoned loosing another industry for Merced no doubt northern interests would bring about the construction of a highway from the vicinity of Modesto to the railroad grade about Bagby, thereby creating a shorter route to the Valley from the north and with the highway in and out of Fresno, Merced would cease to be the gateway to Yosemite National Park, and the question would be how much tourist business would pass through Merced.