Hon. James M. Graham,
      Acting Chairman,
            Committee on Public Lands,
                  House of Representatives.

My dear Sir:

       Your letter of January 13th has been received, enclosing with request for report thereon H. R. 27548 entitled "A Bill providing for a right of way for the United States from the Yosemite Valley Railroad Company, and for payment therefore". The bill in question is substantially as follows:

       "Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Treasury be, and he is hereby, authorized and directed to pay to the Yosemite Valley Railroad Company the sum of $80,158.73, the same being the amount expended by said company in the construction of a wagon road in the Yosemite National Park, California.

 Sec. 2. That the said sum shall be paid to the said company when the Secretary of the Interior shall certify that perpetual right of way and easement free of cost, has been granted to the Government of the United States, its officers, employees, agents, over the road owned by said company from the end of its railroad line at El Portal, in the county of Mariposa, State of California., to the Yosemite National Park boundary line."

       In response I have to state that by the Act of Congress approved February 7, 1905 (33 Stat., 702), the boundaries of the Yosemite National Park were changed, 542.88 square miles being excluded from the reservation and made a part of the Sierra National Forest, and 113.62 square miles formerly outside of the park were included therein.

       By this act the Secretary of the Interior was authorized to require the payment of such price as he might deem proper for privileges on the lands segregated from the park and made a part of the Sierra National Forest, granted under the act of February 15, 1901, or other acts relating to rights of way over the public lands. All moneys received from such source to be expended in the management, protection and improvement of the park.

       On July 7, 1905, regulations were promulgated for the purpose of carrying into effect the provisions of the statute.

       Subsequently, an application was filed by the Yosemite Valley Railroad Company for permission to construct a railroad through the lands of the Sierra National Forest to the western boundary of the park which received favorable consideration. Thereafter, on September 5, 1905, the department entered into a contract with said railroad company, copy herewith. ( Exhibit "A" ) providing, among other things, for the payment of such privilege at the rate of $1,000 per annum, the fight being reserved, after the expiration of 3 years, to fix and establish such other rate in lieu thereof as might be deemed equitable and just. It was further provided that when, in the judgment of the Secretary of the Interior, the convenience of the public required it, the company should, upon notice to that effect, permit the use of its tracks, sidings, switches, and right of way and furnish necessary power and aid, and furnish all things needful to transport over its lines the cars of such other person, firm or corporation as might be designated by the Secretary of the Interior. Attached to the above mentioned contract is a copy of resolutions adopted August 26, 1905, by the Board of Directors of the Yosemite Valley Railroad Company, authorizing N. C. Ray, the Chief Engineer of said corporation, to enter into such contract with the Secretary of the Interior, for and on its behalf, and also providing:

       "that the said N. C. Ray be and he is hereby authorized and empowered, for and on behalf of this corporation and in its name, to make application for the privilege of constructing a wagon road from the easterly terminus of this company's proposed railroad at or near the present westerly boundary line of the Yosemite National Park by a practicable route to a connection with the pubic highway leading into the Yosemite Valley, and to make and execute on behalf of this corporation and in its name any and all contracts, agreements and stipulations which may be required by the Department of the Interior in the premises".

       On August 28, 1905, prior to the execution of a contract for the right of way, and in pursuance of the above authority, N. C. Ray, Chief Engineer of the Yosemite Valley Railroad Company, submitted a proposition in writing, copy herewith ( Exhibit "B" ) to build, at the expense of that corporation, a wagon road, at an approximate cost of $80,000 from the terminus of the company's railroad at El Portal, on the western boundary of the Yosemite National Park, for a distance of 4 miles along the Merced River, to the intersection of the Coulterville toll road and the California State road leading directly into the Yosemite Valley, such road to be built to conform to such requirements as might be imposed by the Secretary of the Interior, and generally, to the conditions outlined by the report of the Chittenden Road Commission in 1904, wherein the cost was estimated at $20,000 per mile, for the 4 miles of wagon road to be constructed. The railroad company, if required, to execute such bond as might be necessary to protect the reservation from injury and to complete .the work in accordance with the requirements of the Department within such time as might be fixed, provided it was not less than 8 months from the date of the grant of the application for the construction of the road. The proposition submitted on behalf of the railroad company explicitly provided that the wagon road was to be constructed by the company "at its own cost and expense" -------- "and the road upon completion to be a free public highway subject to the control of the Government of the United States."

       Afterwards, on January 29, 1908, Mr. Thomas Prather, of Oakland, California, one of the directors of the Yosemite Valley Railroad Company, addressed a communication to the department enclosing a statement showing the total cost of the wagon road constructed by the company as being $80,084.59 (copy herewith, Exhibit "C"), and requested that the railroad be reimbursed for the cost of construction, and that the Government assume control of the repairs thereon.

       The matter was referred to Major H. C. Benson, who submitted a report on February 6, 1908, in which he clearly pointed out that the railroad has no claim to be reimbursed for any of its expenditures upon the road, but indicated that he regarded it as fair to return $50,000. It does not appear upon what theory the return of this sum could be justified, unless it would be that the railroad company had found that it was not getting a profitable return from its investment as it originally anticipated. Major Benson pointed out that the railroad built the wagon road to make profitable use of its own railway, that the railroad officials had stated that they had included the cost of the wagon road in their estimates of the cost of the railroad, and that it was upon this representation that he, as acting superintendent of the Park, had urged the granting, by the department of the privilege to construct the road. He states positively that it was understood by him that there was to be no claim against the government. He says:

       As to my views concerning the refunding to the railroad, there are reasons both for and against it, with, I take it, the preponderance against it and certainly against paying more than $50,000.00 in any event. In favor of refunding the $50,000.00, it can be urged that the road is in the park; is a public road for the use of all persons; that it was recommended to be built by the Chittendon Commission and that an appropriation was made by Congress for said construction. That, without this road, thousands of people could not see the Valley.

       After receiving this report from Major Benson, Secretary Garfield, by letter of March 30, 1908, copy of which is enclosed herewith, declined to recommend any reimbursement, calling attention to the terms of the original agreement with the railroad, and saying "When we discussed the matter last summer I was not aware of the terms of the contract originally made and supposed that it was merely a question of presenting to Congress a claim for repaying to the railroad the cost of the road which the Government itself later would have built." I find myself in the same situation as Secretary Garfield and unable to recommend the passage of the pending bill.

       The road (heretofore discussed) within the limits of the Yosemite National Park is connected at the park line with a road owned by or in the interests of the Yosemite Valley Railroad Company, and a little over a mile in length. This extension is the road to which reference is made in Section 2 of the pending bill. The use and control of this section of road belonging to the railroad company is important in connection with the future development of the Yosemite National Park and of the transportation facilities from El Portal to and from park hotels and camping grounds. It may be that in working out the larger transportation problem and in securing the effective control of the road from the terminus of the railroad to and into the park consideration should be given to the expenditures made by the railroad company upon the wagon road within the park limits. An adjustment of these matters, however, should proceed upon very different lines from those laid down in this bill or in Section 2 thereof. An adjustment of these matters should include the future improvement and maintenance of the entire road from El Portal, and the effective control by the Government of its use either by private parties or by persons operating vehicles over it for hire.