I acknowledge your letter of the 20th referring to an advance in price for convict labor. It will not be objectionable to the Watauga and Yadkin River Railroad Company to pay $1.75 a day for convicts providing this is the price that every one else pays and I have instructed our Auditor that this rate will go into effect on April 1st.

Will it not be advisable at this time to increase our squad of convicts to 50? As you are aware we have recently completed financial, arrangements pending our permanent financing and are now in position to protect the interests of all concerned in this section until, such a time as the permanent plan can be worked out.

I have been advised by our Bankers that they expect to have a permanent plan worked out so that we can start our work toward the mountain within the next 90 days. They have investigated the situation here and until railroad conditions in the country in general are in such position that the road can take care of itself and do its own financing, they have agreed to make an advance of sufficient funds to build from Darby to Rogers Mill and buy about 50 extra cars and some other equipment. This will take about $125,000.00 to $150,000.00. This will give us sufficient time to work out the most economical route over the mountain, which is giving our engineers considerable work as to which will be the most advantageous and economic route from Rogers Mill to Boone. Rogers Mill will open up the back country so that Watauga County will have railroad facilities in the meantime. Rogers Mill is two miles from Cook's Gap. There is a good highway there at the present time and the suggestion relative this feature was suggested by our friends in Watauga County.

I have taken the matter up with our Bankers, which will bring the results above stated. We do not expect to do this work with the convicts alone. We expect to put on sufficient force with the convicts we can obtain to complete the line and have it in operation in 90 days from the time we start work. While the convicts have been a great help to us during our shut down, we have hardly enough in the camp to work them as economically as if we had 50.

Will you please advise me what we can expect on this situation?

With kindest personal regards, I am,