In the early 1900s, few people would have accused the Southern Pacific Corporation of acting in the public interest, much less of working to preserve the natural environment. The much more popular view was that of “The Octopus,” a 1901 novel by Frank Norris that presented a thinly disguised Southern Pacific as a giant, greedy, self-serving enterprise with its tentacles into everything. But in 1925, Southern Pacific’s self-interest coincided with that of protecting our natural treasures.

‘Resort and Pleasure Interests at the Lake will Have to Yield’

In 1902, the U.S. Secretary of the Interior established the U.S. Reclamation Service to undertake water development and irrigation projects throughout the West. One of their early projects was the Truckee-Carson Irrigation project, which diverted water from the Truckee River below Reno to irrigate desert land in the area around present-day Fallon, Nev.

From the start of that project, the Reclamation Service had its eyes on Lake Tahoe as a controllable water supply, and by the early 1920s had acquired control of the low dam at Tahoe’s outlet and considerable lakeshore acreage.

A proposal was developed to build a much larger dam to raise the level of the lake as much as 20 feet, blast a channel below the rim to control another 20 feet, and manage Lake Tahoe as a reservoir for irrigation. The project would inundate much of the low-lying land around the lake, create an ugly “bathtub ring” in late season when the water was drawn down, and periodically flood the Truckee River canyon and the town of Truckee with up to three times the river’s natural flood threshold.

Landowners in the Tahoe basin and businessmen engaged in the nascent tourist industry at the lake were opposed, but the Reclamation Service was determined to secure Tahoe’s water storage for irrigation.

As John Truesdell of the Reclamation Service wrote in 1918, “To the extent that we have a prosperous farming community in Nevada dependent upon increase of Tahoe storage, the summer resort and pleasure interests at the Lake will have to yield.”

The Lake Tahoe Railway and Transportation Company Would Have to be Condemned

While the Reclamation Service had the authority to seize land needed for its water projects and to condemn improvements on that land, it was obligated to compensate owners for the market value of condemned property. One of the major properties that would have to be condemned was the Lake Tahoe Railway and Transportation Company, a narrow-gauge railroad established in 1900 by D. L. Bliss to transport tourists from the Southern Pacific station at Truckee to his Tahoe Tavern resort and steamship operations at Tahoe City. After Bliss died in 1907, his children carried on the business, but by the early 1920s, the freight business in the Truckee canyon (mostly logging) that had helped support the railroad had dried up, and the railroad was no longer profitable.

Costs to condemn the Bliss properties, including the aging narrow-gauge railroad, were significant, but not insurmountable, and the Service was poised to move ahead with the project.

A Bold Proposition

Southern Pacific was generally an enthusiastic supporter of agricultural development and irrigation projects in particular, since the transportation of agricultural products provided reliable revenue for the railroad. In this case, however, Southern Pacific saw that the Reclamation Service project would destroy the tourism industry at Lake Tahoe, and would also force relocation of their yards and service facilities at Truckee, which would periodically be flooded.

The idea of upgrading the Lake Tahoe Railway and Transportation Company line to standard gauge had been discussed for years, but costs were beyond the capabilities of the Bliss family. Confronted with the prospect of their properties being condemned and their beloved lake turned into an irrigation reservoir, however, the Blisses approached Southern Pacific with a bold proposition. Southern Pacific would purchase the railroad for $1 and upgrade the tracks to standard gauge, thereby increasing its capacity, comfort, and convenience (travelers would not have to change trains at Truckee), and also greatly increasing the value of the railroad and the costs of condemnation.

Southern Pacific Saves the Lake

Southern Pacific leased the railroad from Bliss in 1925, then purchased it outright in 1926. They completed the project to standard-gauge the tracks in a matter of weeks in early 1926, ran the first standard gauge train up the Truckee canyon on May 1, 1926, and began offering through-trains to Lake Tahoe from San Francisco and Los Angeles in 1927.

The Reclamation Service, faced with higher condemnation costs and strong opposition from Southern Pacific, abandoned the Lake Tahoe reservoir project, scaled back the Truckee-Carson Irrigation Project to about one fourth the planned size, and turned over most of its operations to the local Truckee-Carson Irrigation District. The Lake and the Truckee River Canyon were saved, and Southern Pacific continued to operate the railroad to Lake Tahoe until 1943, when WWII austerity and America’s love affair with the automobile forced its closure.

Sources: Sunset Limited, by Richard J. Orsi, and Lumber Baron of the Comstock Lode, by Jack Harpster.

Daniel Cobb is a railroad modeler, amateur historian, and volunteer with the Truckee Donner Railroad Society. He lives in Tahoe Vista.