In 1932, the state built a highway through Sheridan from McMinnville to the Oregon Coast, which became Oregon Route 18 or the Salmon River Highway. With funds received through the Works Progress Administration, the current steel bridge across the South Yamhill River was built and opened in 1939. By 1940, agriculture was still a major industry, and the timber industry was growing in importance to the local economy. At that time the city had grown to a population of 1,008 people.