This work involved the grading of New Era Hill, just south of New Era, and some heavy rock excavation from New Era north. After the work had started, it was decided to pave between Oregon City and Canby, and the contract for this paving let to the Oregon Hassam Paving Company. The most feasible place to secure the crushed rock necessary for this paving was from the rock being excavated under the grading contract with the Warren Construction Company, and the Highway Department entered into an agreement with the paving company, whereby the state would crush the rock from a big cut at New Era, and furnish the crushed rock for the paving upon certain agreed terms, the crushing to be done under the cost plus contract with the Warren Construction Company. On this basis the work was carried on by the Warren Construction Company until March 1, 1918, at which time it was deemed advisable by the Highway Commission to take the work over and complete it with State forces. The total cost of the grading and rock crushing was $66,000.00, and the amount received for the crushed rock furnished for the paving was $19,850.00. Clackamas County co-operated with the State on this work, the total amount paid out of County funds being $15,009.91. [Illustration: AT THE TOP OF CANEMAH HILL ON THE PACIFIC HIGHWAY IN CLACKAMAS COUNTY. GRADED AND PAVED IN 1918] Grading--Canemah Hill Section To complete the grading of the Pacific Highway between Oregon City and Canby preparatory to the paving of this section, Clackamas County agreed to appropriate $25,000.00 toward the grading between Fly Creek and Oregon City, known as the Canemah Hill Section. On December 10, 1917, the Highway Commission received bids for this grading and the lowest bid having been submitted by Clackamas County, the contract was awarded to the County. This piece of work was about one and one-half miles in length and involved some very heavy rock excavation. There has been expended on this work to date the sum of $24,037.20, of which amount Clackamas County has paid $22,092.53. The work complete will cost approximately $27,500.00. Mr. M. E. DeWitt was the resident engineer in charge. DETAILED STATEMENT OF EXPENDITURES TO NOVEMBER 30, 1918 GRADING--CANEMAH HILL (Work in progress) Engineering $ 1,944.67