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Rh for 25 per cent above cost. The balance of the amount received for this wool, after reserving an amount sufficient for the purchase of supplies, along with $5,000 borrowed at 1 per cent, paid off the Watt note and interest amounting to about $11,000. May, 1861, found us better prepared to receive the wool, the store being well supplied with an assorted stock of goods and the factory goods found to be more serviceable and giving better satisfaction than the imported and the rapidly increasing confidence in the company relieved to a great extent the anxiety of myself and the company.

Again in August of this year ('61) I found that we would have a surplus of about 55,000 pounds of wool and run the machinery day and night. The directors not complying with my wish to ship it East it was sold to the same firm in San Francisco for about 30 per cent above cost. The proceeds paid all the indebtedness of the company, except the claim of Mr. Waldo, who preferred to let his remain by the interest being paid and at 10 per cent per annum instead of 2 per cent a month. This was thought advisable, as it was now evident that to increase the machinery to five sets might be advisable and this was being considered.

In the early spring of 1862 it was evident that the wool clip would be increased this year fully 100 per cent and we had it all secured and partly paid for, and our surplus would be about 100,000 pounds. Renewing my urgent advice and insisting upon it, the directors finally consented for me to ship this year's surplus East. I accordingly shipped 100,000 pounds to Boston—the first shipment of wool direct from Oregon to the East. About August 1, 1862, all the wool was taken from Salem. It reached Boston in February, 1863.

Immediately after shipping the wool I ordered three sets of machinery complete. Made a draft of the new