Shaniko: Oregon’s Most Famous Ghost Town
One of the early settlers in the Shaniko area of north central Oregon was August Scherneckau, who came to the area in 1874, after the Civil War. The spelling of the town's name reflects local Native American pronunciation of Scherneckau's name. The town was originally called Cross Hollow, and a post office by that name was established in May 1879 with Scherneckau as postmaster. Cross Hollow post office closed in 1887. The Columbia Southern Railway, a subsidiary of the Union Pacific Railroad, was built from Biggs Junction to a terminus in Shaniko, completed in May 1900, and the Shaniko Post Office opened that year.
At the time, the city was known as the "Wool Capital of the World", and it was the center of 20,000 square miles (52,000 km2) of wool, wheat, cattle and sheep production, with no other commercial center like it east of the Cascade Mountain Range in Oregon. The region served by Shaniko even stretched into Idaho, south to Klamath Falls, Oregon, and beyond, because of rail connections to the main line. The residents of Shaniko voted to incorporate Shaniko and elected a mayor, F. T. Hurlbert, and other city officials on January 1, 1902. Shaniko boasted the largest wool warehouse in the state, from which 4 million pounds were marketed in 1901. It was surrounded by sheep and cattle ranches, which produced livestock for shipment that filled 400 railroad cars that year.
By 1911, the Oregon–Washington Railroad and Navigation Company, another Union Pacific subsidiary, began using an alternate route linking Portland to Bend by way of the Deschutes River canyon. The new line, advertised as the "direct, quick and natural route", diverted traffic from the Columbia Southern, and Shaniko begin to decline. Passenger service to Shaniko ended in the early 1930s, and the entire line was shut down by 1966. By 1982 Shaniko was nearly a ghost town. Shaniko was first called a "ghost town" at the Oregon Centennial Exposition in Portland in 1959.