In 1911, the Clackamas Southern Railway was formed. The organizers projected an electric railway line south from Oregon City to Molalla and Silverton. Some grading south of Oregon City was accomplished, and some operation with steam locomotives between Oregon City and Beaver Creek might have occurred under this name. The process of obtaining franchises to operate into Oregon City and Portland were time consuming. For a while, the line was used by Stephen Carver as a way of gaining franchises for his proposed Clackamas Southern.
In 1914 the Willamette Valley Southern was incorporated to take over the line and the franchises into the cities. The Portland Railway Light & Power (at the time, operator of the majority of the streetcar and interurban lines out of Portland) took over this company as a subsidiary. Carver did not want to associate with PRL&P, and left the company completely.
In October of 1915, the line was declared complete, including electrification, and was opened to traffic between Oregon City and Mt. Angel. Trains actually operated all the way into Portland over the PRL&P line between Oregon City and Portland. (That line is abandoned now too) The line may have also operated trains over a short distance of Southern Pacific track in Oregon City. A unique crossing existed on a trestle where the two lines crossed in Oregon City.
For nearly 12 years, the line remained nearly unchanged. The line survived on a little passenger traffic as well as some local agricultural shipments, but Molalla and Mt. Angel were also being served by the Southern Pacific. Both Southern Pacific and the Spokane Portland & Seattle considered purchasing the line and adding it to their respective electric railroad systems in the Willamette Valley. SP was particularly annoyed at the WVS / PRL&P habit of sending loaded freight cars over its own lines to and from Mt. Angel or Liberal before exchanging them with the SP, forcing the SP to move the empty car for the entire return trip.
The automobile brought on problems, and traffic on the line was never substantial to begin with. In the late 1920's the line appeared to be on its last legs.
In 1927, new hope appeared for the line. The Eastern & Western Lumber Company opened up timber operations near Molalla, and built a logging railroad that connected to the line at Kaylor, on the south side of Molalla. Also, the Silver Falls Timber Company was extending its railroad towards Mt. Angel. During this period of optimism, a group formed a company called the Willamette Valley Railway and purchased the line for $250,000 at a sheriff's auction.
A 1929 forest fire in the Eastern & Western timber stands, as well as a world wide economic decline, eliminated future hope for the line, but Eastern & Western operated some clean-up timber operations as late as 1937.
In 1930, with the Silver Falls Timber Company successful in forcing concessions from the Southern Pacific, operations of the Willamette Valley were cut back to Kaylor.
It is not clear how much longer the line continued to exist after the forest fire. The rails may have still been down in 1939, when Ostrander Timber Company considered rebuilding the line for logging service. They determined it was more economical to use trucks over a privately built logging road between Molalla and Canby, and dump the logs into the river there, rather than run trains to Oregon City. Southern Pacific in Oregon reports the line abandoned in 1933, and the rails removed in 1938. Only a few pieces of this railroad remain visible. In Oregon City, there was about a 1/4 mile part that was untouched until the flood of 1996 washed out the hillside. Elsewhere, southwest of Molalla some bridge approaches still exist but the line has been tilled over for agriculture.
Towns on the line from Oregon City were Beaver Creek, Ingram, Spangler, Mulino, North Liberal, Liberal, Molalla, Kaylor, Yoder, Monitor and into Mt. Angel.
Thanks to Brian Edwards for contributing information about this route.