Jim, My understanding is that the line to Prairie City was closed and removed in 1937 for many reasons I suppose. Passenger traffic to PC was down, and the main freight traffic was cattle, which don't travel very much.
If you look on a map you will see that Prairie City and John Day are about 16 miles apart. The main line dropped into PC, but I understand had no plans to move down the John Day River to John Day itself. They did of course consider going through the Aldrich Mts via Summit Prairie, Logan Valley, Bear Valley (where Seneca is located) then down to Burns. If that worked out, then they would have built onto Lakeview and connected somewhere with the ONC.
There was a line from Bates/Austin down the Middle Fork of the John Day River to just shy of Galena and used for logging. A rumor was that they would build the line on down to Mt. Vernon, back up river to John Day, and then South to Seneca and Burns. However I have seen a letter wherein the railroad said that would not happen. It would have been a more circuitous route than going through PC.
Finally, the John Day has several forks many miles apart. The main stem, South Fork, Middle Fork, and North Fork. The Middle Fork is head watered at Bates/Austin and connects into the North Fork 50 ~ 60 miles northwest of John Day City.
Did that all make sense? I think I am confused.
dan