- W.W. Skinner is elected mayor and will serve two years.
- Joseph Drake is convicted of murder. The majority of public opinion felt the young black man had only been guilty of being "in the wrong place at the wrong time", but his attorney failed to convince the Oregon Supreme Court of the need for a new trial after prosecutors used "malicious innuendos". Petitions were circulated in his favor signed by many of the leading citizens including W. D. Claggett, Thomas Patton and six members of the jury. Governor Moody did not respond favorably. Joseph Drake persisted in asserting his innocence and told a reporter, "If I die, I will die with the truth in my mouth." He was hanged on gallows just north of the east entrance to the courthouse. A temporary fence for privacy enclosed the scaffold but the upper rooms of the courthouse offered ringside seats for the "grewsome spectacle". Two days after his death, a procession of both white and African American residents went to his graveside funeral.
- There were two fires this year: Salem's first railroad station was completely destroyed as was the Rector Building on South Commercial Street, originally built as a town hall. This large wooden building had deteriorated over the years, finally serving as a Chinese wash laundry.
- R.S. Wallace purchases the Salem Water Company and builds a pumping station at Trade and; Commercial Streets with a suction line in the Willamette Slough. Drinking water is improved. This is only one of the many services he provided the city and to Salem residents during his residence here. Wallace Road and Wallace Marine Park in West Salem commemorate his family.
- Two residences built in 1885 survive. The Stratton House at 1588 State Street was built for Charles C. Stratton, Methodist minister and Chancellor of Willamette University (1892-1900). Rev. Stratton was married to the daughter of Alvan Waller and this house was constructed on the site of the Waller house that had been moved. By 1894 it had been sold to William Lord who served as governor (1895-1900) while he lived here. His daughter was Elizabeth Lord, the landscape garden and designer. It was also the home of Congressmen (1907-1933) W.C. Hawley, a former Willamette president. The structure is now listed on the National Register of Historic Places.
- The Burton House, eight blocks east at 2319, was built by the firm of Burton Brothers, a brick making business in Salem. Additions have obscured the original integrity of the building. Other buildings constructed of Burton brick included "The State University at Eugene", the Chemawa Indian school, the Salem City Hall, the Odd Fellows building and the Bayne building. The house continued as a residence up to the early 1950s. In 1962 a restaurant called "The Garden of Eat'n" occupied the building; it now houses apartments and office space. It is designated by the city as a Local Landmark.
- A residence built this year, but since demolished, was the Krause home on the northwest corner of Court and Winter Streets. Otto A. Krause and his wife, the former Lizzie Dalrymple, lived there until 1891 when it became the home of Robert Fleming. It was razed during the expansion of the Presbyterian Church and Oregon State buildings along Court Street in the 1950s. This city lot was originally part of the Holman family property: John Albert, Joseph Holman's son-in-law had his home there (next door) in the 1870s. Later, that residence was "moved over the trees of Willson Park" to a new location across from the Deaconess Hospital. (In the photo linked here, the Albert house is on the corner at the right.)
- Samuel Adolph sells his 1866 brewery to two employees, Maurice Klinger and Seraphin Beck, who establish Capital Brewery.