In the late 1920s, the Southern Pacific Railroad was in a disarray locally, while they fought against the Western Pacific/Great Northern’s Inside Gateway link between Keddie and Klamath Falls. The Southern Pacific had a monopoly on the region and were in a constant flux to combat its proposed competition.
Take for instance in 1929, Southern Pacific greatly reduced its freight rates on timber products. In November 1929, Southern Pacific sent a survey crew out east of the town of Madeline. The surveyors job was to locate a possible line from Madeline eastward through Red Rock Valley and Tuledad Canyon with the ultimate goal towards Gerlach. This officials concluded that this 72 mile route, would save 120 miles to the Klamath Basin. Of course, it was never built, and in 1930 the ICC approved the competitor’s route.