Mount Rainier Administrative History

PART FIVE: CONTENTIOUS YEARS, 1945-1965

XV. THE PROBLEM OF THE PARK CONCESSION

INTRODUCTION

Visitation to national parks increased dramatically with the return of peace and prosperity after World War II. Park administrators had to contend with increasingly crowded conditions in the campgrounds, on the roads, and at the entrance stations. These new conditions caught the NPS in a double bind. First, park staffing requirements grew much faster than the Park Service's budget. The ratio of park staff to visitors declined and the parks became woefully understaffed. The situation was exacerbated by the mood of fiscal retrenchment in the new Republican Congress, and by the exorbitant costs of fielding more personnel when a deficit of personnel housing had to be made up as well.

The second problem that the Park Service faced after World War II was a crumbling infrastructure. Much regular maintenance performed by the Park Service had been deferred during the war years. Worse still, proper maintenance on many of the privately-built visitor accommodations in the parks had been deferred for even longer, going back to the Depression years. By and large the concessions were in very bad shape to meet the new crowds of tourists who were eager to use the national parks. Thus, the park concessions problem nested inside the larger problem of deferred maintenance needs, inadequate staffing, and continued budget austerity in the face of burgeoning public use. But the park concessions problem loomed large because the concessioners clamored for help from the federal government.

Mount Rainier National Park was typical; indeed, it so exemplified problems that beset the whole national park system that Director Drury profiled the park's administrative challenges by way of illustration in his annual report for 1947. [1] Assistant Secretary of the Interior Girard C. Davidson told the House Committee on Public Lands that the problem of the concession in Mount Rainier National Park was perhaps "the No. I problem of the Park Service." [2] The company was financially weak and in low standing with its investors. Its inns and lodges were old and in an alarming state of disrepair. Some of the buildings could only be described as fire traps, and were not well-suited in any case to the day-use visitor who made up a growing proportion of park visitors. The company hesitated to invest in the rehabilitation or replacement of these buildings when its contract with the NPS was nearly due to expire, giving it little security on its investment. Finally, the company was burdened by rising operating costs after the war, especially for labor. For all of these reasons, the RNPC tried to get out of the business altogether in 1948-49. It only continued because the federal government purchased its buildings, gave it better terms in a new contract, and promised certain park improvements such as the completion of the Stevens Canyon Road and a new day-use facility at Paradise (see Chapter XIV). These changes gave the struggling RNPC another lease on life, perpetuating the government's partnership with the company in a new form for approximately twenty more years, or until the RNPC sold all its assets to a successor company in 1968.

It may be helpful to think of the RNPC's partnership with the NPS evolving through three major phases in the course of its 52-year lifespan. It will be recalled that the partnership between the NPS and the RNPC dated all the way back to 1916 when both the agency and the company were born. From its inception until the onset of the Great Depression, the partnership functioned basically according to plan; the locally-owned RNPC was a model company in Stephen Mather's national park concession policy. During the Depression the partnership was transformed. The RNPC cut operating expenses wherever it could and accepted a much diminished role in the running of the park. The NPS, meanwhile, tapped into a variety of new federal programs and demonstrated a growing independence from local business interests in developing the park. This second phase in the partnership ended with the drastic reduction of the Park Service budget during World War II.

The third phase in the partnership was a long time in the making and quite politicized. Beginning in 1946, the NPS looked once more to the private sector for investment capital. But it quickly discovered a disturbing lack of confidence in park concessions on the part of businessmen. In an effort to put concession services in Mount Rainier on a sounder footing, the NPS advocated a policy of government ownership coupled with private operation of all guest facilities. The idea was neither new nor unique to Mount Rainier but it received a lot of attention in the Pacific Northwest, beginning with a visit to Seattle by the Secretary of the Interior in 1946 and followed by a congressional committee hearing at Paradise Lodge in 1947. President Harry S. Truman signed a law in 1950 allowing the government to acquire the RNPC's buildings, and a congressional appropriation in 1952 finally made the idea of government ownership and private operation of visitor accommodations a reality. Government acquisition of the RNPC's buildings crystalized the third and final phase of the Park Service's partnership with the RNPC. [3]

This chapter examines the role of the concessioner in rehabilitating visitor accommodations after World War II. (This task mostly preceded the rehabilitation of roads, campgrounds, museums, and administrative buildings under the Park Service's Mission 66 program, which is the subject of the next chapter.) The first section of this chapter traces the political dialogue and negotiations by which the NPS and the RNPC forged their partnership anew. The second and third sections of the chapter examine two sources of trouble, or at least ambiguity, in that restored partnership: the RNPC's responsibility for rehabilitation and maintenance of what were now government-owned buildings, and the precise meaning of the RNPC's exclusive privilege to provide visitor transportation. The fourth section of this chapter traces the history of that lesser Mount Rainier National Park concession, the Ohanapecosh Hot Springs Company, from the end of World War II to its dissolution fifteen years later. Finally, the fifth section looks at evolution of the mountain guide service from 1946 to 1965.

RESTORING THE PARTNERSHIP

The basic problem confronting the NPS and the RNPC after World War II was that the RNPC's stockholders had completely lost confidence in the company's ability to cam a profit. In the stockholders' view, either the federal government must subsidize the RNPC's operation or the RNPC must take the necessary steps to liquidate itself. This in turn presented the NPS with a choice. Either the NPS must persuade Congress to subsidize the RNPC or it must find other capitalists willing to take over the park concession. Two other alternatives, Park Service operation of the visitor facilities or termination of the visitor services that the RNPC provided, were both rejected out of hand. The problem therefore resolved itself into one of making the concession both profitable for the operator and consistent with the purposes of the national park.

In their search for a mutually satisfactory solution to this problem, the RNPC and the NPS encountered three main points of contention. The first was the concession contract, which was due to expire on December 31, 1947. The RNPC was only interested in continuing operations past that date if it could secure better terms in a new contract. The NPS, for its part, did not want to extend the RNPC's contract if a new source of private investment capital could be found to replace the 30-year-old company. The series of short-term contract extensions which were made to bridge this situation barely kept the partnership functioning during the period 1948-53. The second point of contention was the need for an act of Congress that would authorize the Secretary of the Interior to acquire the RNPC's buildings for the government. The legislation was a major hurdle which the RNPC and the NPS had to leap together. The third and final point of contention was the problem of winter use, which impinged heavily on the problem of the concession. The Park Service's requirement that the RNPC provide public accommodations during the winter was clearly a major reason why the concession had become unprofitable. Yet the one development that seemed to offer hope of making the winter season profitable--the addition of a permanent chair lift above Paradise--was unacceptable to the NPS for it would violate the fundamental purposes of the national park.

The Search for Investment Capital

On June 22, 1945, President Truman made a four-hour visit to Mount Rainier National Park, the first president to visit the park since William H. Taft. In company with Governor Mon C. Wallgren and followed by a large entourage of reporters, photographers, Secret Service agents, and state patrolmen, the President rode by car to Paradise where he "frolicked in the snow and threw snowballs," ate lunch and played the piano in the Paradise Inn. The presidential outing was perhaps nine-tenths recreation and photo opportunity, but Superintendent John C. Preston was invited to join Truman, Wallgren, and the president's aides for about thirty minutes, at which time "the President asked many questions about the National Park Service and Mount Rainier in particular." [4] Whether anything substantive came out of this meeting is unclear, but Truman appears to have been the first politician to use Mount Rainier as a backdrop and the national park as a symbol of what the federal government could do for Washington state. In the years to come, numerous Washington state senators and congressmen would follow his example.

In the late spring of 1946, President Truman's Secretary of the Interior, Julius A. Krug, travelled to Washington state to listen to residents' demands for new accommodations in Mount Rainier National Park, especially new ski facilities at Paradise. Meeting with local business leaders in Seattle on June 17, 1946, Krug acknowledged the need for new development and pledged all assistance that the Department of the Interior could provide. But he emphasized that the government was faced with spending cuts, and he expressed hope that private industry would put forward the necessary investment capital. The money, Krug argued, logically should come from local banks and railroads and airlines which served the Pacific Northwest and benefitted most directly from tourism. Krug's meetings with the local business community were reminiscent of Mather's pitch to Seattle and Tacoma capitalists thirty years earlier. Accompanied to Seattle by NPS Director Newton B. Drury and Superintendent Preston, the Secretary of the Interior sought to initiate a new partnership between the Park Service and private capital in Mount Rainier National Park. [5]

The RNPC's president, Paul H. Sceva, injected a note of skepticism into the meetings with the Secretary of the Interior. Private capital could not "pay out" in Mount Rainier National Park, Sceva insisted. Public accommodations could only be rehabilitated and expanded with the help of the government. The RNPC had thirty years of experience and was uniquely familiar with the many adversities facing the park concession. A few of the original 200 capitalists who had formed the company in 1916 were still on the board of directors; Sceva himself was appointed assistant to the general manager in 1923, general manager in 1928, and president of the company in 1944. Speaking from personal experience and on behalf of many old investors, Sceva said that the RNPC could not afford to borrow any more capital with which to make the necessary repairs and improvements in lodging facilities. Any investors who thought they could do better would be destined to disappointment. [6]

Sceva presented the RNPC's position in greater detail in a letter and memorandum addressed to Drury on June 5, 1946--probably in anticipation of the Secretary's June 17 visit. The RNPC president began by observing that the company's twenty-year lease was to expire a year and a half hence. Thus, he was laying out the terms under which the RNPC would enter a new concession contract with the government. The RNPC wanted the Park Service to build new facilities for the company to operate them under lease; it wanted the Park Service to purchase the company's buildings, the proceeds to be invested by the company in new transportation equipment; and it wanted the Park Service to recognize that the new arrangement would be of an experimental nature and subject to fair adjustment, especially with regard to winter operations. Sceva avoided the term "concession" altogether, calling his plan an "operating lease." [7]

The RNPC's twenty-year concession contract was one of several national park concession contracts that were soon to expire. These contracts dated from the late 192 Os, when the NPS had had the foresight to renew, years before their expiration dates, the several twenty-year contracts which had originated under Mather's new concession policy in 1916. The uncertainties brought about by the Depression and World War II prevented a repetition of this smooth procedure in the early 1940s. Now with this second generation of contracts beginning to lapse, Drury found himself in a tight spot not only with the RNPC but with several other park concessions as well. In his annual report for 1946, Drury provided a sketch of concession policy, including this comment on the twenty-year concession contracts:

Existing law forbids concession contracts exceeding 20 years in duration. Since the useful life of such substantial structures as concessioners are expected to provide is normally more than 20 years, and since Internal Revenue regulations in many cases preclude writing off the investment in this period, this limitation, instead of being for too long a period, as is sometimes claimed, is in reality too short from the standpoint of the investors of private capital on these Federal lands. It compels either an unreasonably high allowance for depreciation, which usually cannot be allowed, or an implied understanding either that the concession contract will be renewed at the end of the 20-year period or that the Government will give the concessioner an opportunity to recover the remaining value of his investment when the contract. [8]

Drury went on to explain that to accede to the RNPC's demand that the government purchase the old buildings from the concessioner would require one of two assumptions. Either the operating lease would produce a sufficient return during the expected life of the structures so that the government would recover its investment, or the government would absorb a financial loss in the public interest of providing accommodations. The latter assumption amounted to a government subsidy, Drury stated, and did not seem justifiable when only a small percentage of the whole public actually utilized the facilities. [9]

Pacific Northwesterners generally had no such qualms about federal aid. Skiers observed that nearly every ski area in Washington and Oregon was located on federal land; therefore, they said, it was incumbent upon the federal land managers--chiefly the Forest Service and Park Service--to plan and provide for ski resorts in the region. Boosters in the Puget Sound cities' chambers of commerce argued that Portland had its Timberline Lodge at Mount Hood, so the Park Service should provide the same kind of facility at Mount Rainier. Timberline Lodge had been built by the WPA at government expense, and since then the Forest Service had leased the development to a private operator for a modest annual fee without any expectation of making back what the government had put into it. The RNPC's investors and their supporters pointed out again and again that the government had invited Puget Sound area businessmen to form the company and build the park's hotels in the first place; now the government should do the right thing and assume the equity in those aging structures. With these arguments circulating in the local press and in public meetings, it was the unusual Pacific Northwesterner who quarrelled with the idea of a government subsidy for visitor facilities in Mount Rainier National Park.

Congressional authorization was needed for the government to purchase the RNPC's buildings. Sceva had been working on this problem for years. The first bill providing for government acquisition of all public accommodations in the park had been introduced in Congress prior to World War II. Representative John Coffee and Senator Homer T. Bone, both of Washington, introduced companion bills in the House and Senate in the spring of 1939. Both bills were tabled in committee. [10]

On February 28, 1947, Representative Thor C. Tollefson of Tacoma introduced a similar bill providing for the acquisition of the RNPC's buildings and the completion of new facilities by the government. This time Sceva was determined to secure the Park Service's and the Department of the Interior's support for the bill. A month after the bill was introduced, Sceva wrote to Drury complaining that Superintendent Preston was giving public statements to the effect that the NPS was neutral toward this bill. Drury responded by ordering Tomlinson to instruct Preston that as a general policy, the NPS was in favor of government ownership of concession buildings. [11] Later, when asked by the House Committee on Public Lands to report on the Tollefson bill, the Department of the Interior gave it a favorable report. Assistant Secretary Oscar L. Chapman informed the committee that experience had shown that public accommodations could not be built and operated by private capital at a profit in Mount Rainier National Park, and further, that it was the Park Service's duty to ensure that public accommodations were provided there. [12] Sceva's efforts on behalf of the bill were now paying off. Although the bill did not finally pass Congress for five more years, Sceva had won two points in principle: (1) that the federal government would stand behind new developments at Paradise even at government expense, and (2) that it favored government ownership and private operation of visitor accommodations at Mount Rainier.

On September 15, 1947, a subcommittee of the Committee on Public Lands held a hearing on the Tollefson bill at Paradise Lodge. The subcommittee's composition was indicative of new regional and party alignments in Congress; of the nine members of the House subcommittee on public lands who came to Paradise, seven were Republicans and eight hailed from western states. Representatives Thor C. Tollefson and Russell V. Mack of Washington were also present. The central issue of the hearing was whether or not visitor facilities in Mount Rainier National Park should be purchased by the government, thereby granting what amounted to a subsidy.

The hearing began with a long and forceful presentation by Sceva on the history of the RNPC. The congressmen questioned Sceva on the RNPC's rates, the value of its buildings, the costs of rehabilitation, the paltry amount of cash spent per capita by park visitors. There was this exchange between Sceva, Representative Wesley A. D'Ewart of Montana, and the subcommittee chairman, Frank A. Barrett of Wyoming:

Mr. D'Ewart. I am amazed at your average spent per person [for RNPC services]. From the testimony that has been presented to this committee at other hearings, the average person who goes on hunting trips spends--if he is a local person, $50, and if he is an out-of-State person, a hundred dollars. You have 72 cents according to the table here.

Mr. Sceva. Last year it was 55. It was 55 last year.

Mr. D'Ewart. Fifty-five in 1946.

Mr. Sceva. Yes.

Mr. D'Ewart. I am amazed, considering the testimony that has been presented by the various groups to this committee in the past.

Mr. Barrett. The other groups don't have a way to put it down to a mathematical certainty, but Mr. Sceva does, I take it.

Mr. D'Ewart. I believe this would be interesting, in considering other testimony, what has been presented.

Mr. Barrett. I agree with you.

Mr. D'Ewart. Have you any alternative to suggest? This committee, at least I, would hesitate to do away with a private enterprise and establish a Federal agency for ownership of hotels and this operation. Have you any alternative to suggest?

Mr. Sceva. I am thinking right along the same lines with you on the matter of capitalistic system or private enterprise. And almost all of our directors think the same way. But this is one thing we cannot surmount and I don't--we do not believe anyone else can surmount it. We do not believe you can put invested capital in here, in permanent buildings, and operate it 60 days in the summertime and pay out for 12 months' investment. We don't think it can be done. Maybe someone else smarter than we are can do it. But we haven't any way to suggest. The only way we can suggest is a subsidy. [13]

Following Sceva's testimony, the subcommittee gave shorter allotments of time to Fred H. McNeil of the National Ski Association, Art Ganson of the Seattle Chamber of Commerce, Elmun R. Fetterolf of the Tacoma Chamber of Commerce, and Leo Gallagher of The Mountaineers, all of whom supported Tollefson's bill. The hearings closed with the testimony of Assistant Secretary C. Girard Davidson, who reaffirmed the department's support for the bill while cautioning that the purchase of the buildings would be a mere stopgap measure pending a much greater congressional appropriation for new visitor facilities.

Davidson also alluded in his testimony to a review of the whole national park concession problem by an advisory group to the Secretary of the Interior. This important service-wide review was currently underway. Asked why the Park Service had not yet assessed the value of the concessioner's buildings, Davidson explained that the Secretary was awaiting the recommendations by the concessions advisory group. Apparently the existence of this group was a revelation to most members of the subcommittee. Tollefson would later assert that the subcommittee's anticipation of the advisory group's report influenced its decision to table the bill. [14] This was understandable, for it was likely that the bill would in some way set a precedent, and it seemed prudent to await the Secretary's own policy review before addressing a particular situation such as that which occurred in Mount Rainier National Park. In any case, the findings by the concessions advisory group were crucial for the RNPC and Mount Rainier.

The Concessions Advisory Group

Secretary Krug went entirely outside the government for advice on park concessions. The group of five comprised a certified public accountant, a representative from the hotel industry, a member of the American Automobile Association, a representative of the traveling public, and a member of the National Parks Association. The group's report was nearly a year and a half in the making, and was finally submitted to the Secretary on February 19, 1948. Ironically, the fact that the Secretary requested this review caused some speculation that there would be a fundamental reverse of policy, that Mather' s basic concept of the single concession or regulated monopoly in each park would be rejected in favor of free enterprise. Far from making that recommendation, the concessions advisory group reaffirmed the basic idea that free enterprise would despoil the national parks. Indeed, NPS officials construed the report as a ringing endorsement of existing policy. This tended to mask the fact that the concessions advisory group did recommend a few significant changes. Most notably, it recommended that the government purchase and maintain the concession buildings in all national parks where they had been built by private capital. On the pivotal issue raised by Drury in his annual report for 1946--whether government purchase and maintenance of concession buildings should be in the form of a subsidy--the concessions advisory group suggested that it could.

It is the opinion of the advisory group that Government ownership of the physical plant which provides facilities for housing, feeding, merchandising and incidental services to the public is in the long run in the public interest. The group is therefore in accord with the announced long-range policy of the National Park Service in this respect. In approving the philosophy of such ownership, however, the advisory group does not include Government operation of these facilities, but it is of the opinion that operation may be performed more efficiently and economically and with better service to the public by private operation under contract with the Secretary. The opinion of the advisory group is based on a careful study of the advantages and disadvantages of the Government ownership of basic facilities, and takes into account the history of development within the parks. In order to implement the policy here approved the group recommends to the Secretary and to the Congress that provision be made for a uniform annual appropriation for the purpose of acquiring basic facilities in the national parks, which in a certain number of years to be determined by Congress, would complete the acquisition of all such properties and most important of all, is a definite policy regarding upkeep that will assure adequate funds for that purpose. Without this Government ownership would be unwise. [15]

This finding by the advisory group was crucial, for it implied that visitor facilities did not have to be economically sound in order to be justified on the basis of public need; the free market relationship between supply and demand did not pertain to national parks. Therefore, in providing for the public use of national parks, the NPS could not only enlist the help of private enterprise, it could give private enterprise some assistance in its endeavors, too. This actually strengthened the hand of investment capital in the emerging new development plan for Mount Rainier National Park for it enlarged the meaning of public demand. When Secretary Krug later that year adopted the advisory group's recommendations as policy, it was good news to the RNPC and the company's backers in the Seattle and Tacoma chambers of commerce.

The RNPC's Contract Expires

By the time Secretary Krug enunciated his new policy for national park concessions, the RNPC's twenty-year contract had already expired. If the RNPC had been alone, this circumstance might have placed the company in a weak bargaining position. But many other concession contracts had expired during the past two years, too. All had been replaced with interim one-year contracts. Conferring with other concessioners and testifying jointly at congressional hearings, the RNPC now acted as if the NPS were the supplicant.

Rather than being satisfied with the Secretary's statement of policy, concessioners were emboldened by it to demand more. In particular, they desired more security from their longterm contracts. They argued that the NPS should return to its past policy of negotiating new contracts several years in advance of the expiration dates of its current contracts, and they demanded the right of first refusal when the NPS offered new or additional concession contracts in each park. [16] Concessioners presented these and other demands to the Subcommittee on Public Lands in hearings held at the Capitol in May and June 1948. Sceva went to Washington with prepared testimony, although the subcommittee did not call him as a witness. In Sceva's place, Representative Tollefson testified on the difficulties faced by investment capital in Mount Rainier National Park. Other witnesses included a representative of the Union Pacific Railroad Company's interests in Grand Canyon, Zion, and Bryce Canyon National Parks, a representative of the Western Conference of National Park Concessionaires, the president and general manager of the Lassen National Park Company, and NPS Director Drury. The concessioners expressed frustration and even a willingness to shut down their operations unless NPS concession policy was modified on their behalf. [17]

Despite the tenor of the hearings, however, neither Krug nor Drury were willing to yield much ground to the RNPC. They still held out hope that new investors could be found, either for the company itself or for a new franchise that would buy out the RNPC. In the meantime, the RNPC must be induced to make preparations for the following year. On May 28, 1948, in the very midst of the hearings, the NPS offered the RNPC a one-year contract for 1949. It called for the company to make various repairs and improvements to its buildings, including the installation of sprinklers in Paradise Inn in order to bring the building up to code. The sprinkler system had been under discussion for the past two years.

This proposal was still on the table when the Secretary announced, on July 26, 1948, that all national park concessions must comply with the department's labor initiative instituting a 40-hour work week. The Secretary's order met with strong protest from concessioners, who had traditionally subjected their employees to 48-hour work weeks. They objected that they could ill-afford to hire the necessary employees when feeding and housing more employees would add to their operating costs. Sceva calculated that the 40-hour work week would cost his company $10,000 per year. Discouraged by the department's new labor ruling and its insistence on a sprinkler system for Paradise Inn, the RNPC's board of directors voted to reject the one-year contract offer. On August 25, 1948, Sceva sent Drury a counterproposal, which called for an interim five-year contract. The longer term was necessary, Sceva insisted, to protect the RNPC's investment in the sprinklers and other improvements. Drury rejected this proposal on September 10, indicating that the department would soon issue a new type of concessioner contract for the RNPC's consideration. Not waiting for this, Sceva wrote to the Secretary of the Interior on September 30, 1948, that the members of the board had voted not to seek another contract with the government after the current one expired on December 31, 1948. [18]

Relations between the RNPC and the NPS had reached a low ebb when a meeting took place that fall which had disturbing implications for the Park Service. In late November, Acting Superintendent Harthon L. Bill informed Drury that a number of organizations involved in Washington's tourist industry had come together to reconstitute the Rainier National Park Advisory Board. The Advisory Board, it will be recalled, had been an important agent in the allotment of federal funds for park road construction during the 1920s. Finding its influence much diminished by the Depression and New Deal, the Advisory Board had gone out of existence in 1936. Now it was back, called into being by the excitement over the Tollefson bill and recent press reports that the RNPC might be forced out of business at the end of the year. Precisely what role Sceva played in its restoration is unclear; he informed the acting superintendent that he had attended the first meeting of the new Advisory Board in an "unofficial capacity." [19]

On the surface this seemed like a throwback to an earlier era. Like the first Rainier National Park Advisory Board, the new Advisory Board was animated by a desire to secure federal aid for the development of Mount Rainier National Park. But the first Advisory Board had focused on roads, while the new Advisory Board concerned itself with public accommodations. Arguably there was not much difference. In a resolution in support of the Tollefson bill, the Seattle Chamber of Commerce commented,

To date the Government has spent many millions of dollars in Mount Rainier National Park for access roads, trails, bridges, administrative buildings, and facilities. The additional ownership of the tourist facilities is a small matter when considered with the over-all program and is believed to be fully in accord with the purposes for which the National Park Service was established. [20]

But this overlooked the fact that roads were a public enterprise almost anywhere they were built, whereas tourist accommodations were not. Road construction contractors did not have a vested interest in commercializing the park, but the tourist industry did. Giving federal assistance to the concessioner carried the risk of binding park administration too closely to commercial interests. Park development could then be pushed too far.

On December 31, 1948, Secretary Krug sent another one-year contract proposal to the RNPC. Sceva replied, on January 4, 1949, that the RNPC would accept no less than a two-year contract, that the contract must preserve the present labor agreement of a 48-hour work week with payment of time and one-quarter for all overtime, and that any infringement of that agreement would enable the RNPC to terminate its contract after 30 days notice. Krug then replied on January 17 that the controversial labor ruling would not now take effect until January 1, 1950; therefore, if the RNPC would accept a one-year contract, the labor issue could be dispensed with for the time being. The company accepted an interim contract on these terms. Both parties expressed hope that Congress would act on the Tollefson bill in the course of the year.

A Law Passed, A New Contract Signed

Tollefson reintroduced his bill in the House on January 18, 1949. The Committee on Public Lands delayed its second hearing on this bill until July, at which time Tollefson made yet another plea for government ownership of the buildings on the grounds that the public was entitled to adequate facilities in the national park even if private enterprise refused to invest in them. Opponents of the measure asserted that Tollefson's bill would only be a means of "bailing the Rainier National Park Company out of a losing business," for the RNPC had used poor judgment in developing facilities at such high elevations in the first place. The committee took no more action on the bill in that session. [21]

In the absence of this law, RNPC and federal officials went through nearly the same posturing as the year before. On August 30, Sceva sent notice to the Secretary of the Interior of the company's intention to discontinue service after December 31, 1949, and demanded to have the RNPC's buildings appraised. Krug replied, on September 13, that the RNPC would have to remove all saddle stock and equipment from the park, and advised that the NPS "at this time does not contemplate the use or demolition of any of the buildings or appurtenances...formerly used by the Company." Sceva then wrote a conciliatory letter to Superintendent Preston on September 21, proposing five ways in which operating costs could be trimmed under another one-year interim contract. On Drury's recommendation, the Department consented to two of these: the RNPC could raise the rates it charged employees for room and board, thereby recovering some of the added labor costs which it would incur under the Secretary's new labor directive; and it could suspend winter operations. Hastily, the park made alternate arrangements for a winter season centered at Cayuse Pass instead of Paradise. [22]

Meanwhile, efforts continued on behalf of the legislation. Sceva lined up support from Senator Warren G. Magnuson and the freshman congressman from Everett, Henry M. Jackson, as well as the backing of the new Secretary of the Interior, Oscar L. Chapman. Secretary Chapman reported favorably on the bill when the House Committee on Public Lands considered it again in 1950. After the House passed the bill that summer, Drury expressed hope that Senate approval would follow quickly and "end the agony" during the current session. [23]

In the final version of the bill, the section that would authorize the Secretary to repair, reconstruct, and build new facilities was stricken out; the bill's purpose was narrowed to purchasing the RNPC's buildings. A limitation of $310,000 was placed on the purchase price. Truman signed the measure into law on September 21, 1950.

The fact that the law carried a virtual government subsidy for private enterprise led everyone to minimize the law's significance for public policy. Both the House and Senate committee reports emphasized that government ownership of the facilities would not require that they be operated by the NPS. The House report went further, insisting that the circumstances at Mount Rainier were peculiar and that the bill was "not intended to set a precedent or pattern for Government acquisition of concessions in any other national park or monument." But this pronouncement was followed by the contradictory statement that the bill was "in accord with the 1948 report of the Concessions' Advisory Group to the Secretary of the Interior." [24] That 1948 report clearly advocated a policy of government acquisition of concession facilities throughout the national park system. In reality, the act constituted an important turning point in the relations of government and private capital in national parks. Three weeks after Congress passed the Tollefson bill, on October 13, 1950, the Secretary of the Interior issued a new statement on national park concessions, reiterating and strengthening the principle of federal subsidization of visitor facilities in national parks. [25]

A year and a half after passage of the act, the government agreed to pay the RNPC $300,000 for its facilities. This was equal to one-third of the company's total investment of $884,000 exclusive of automotive equipment. [26] RNPC and federal officials settled on the figure after one full day of negotiations in Tacoma headed by Sceva on the one side and the new director of the Park Service, Conrad L. Wirth, on the other. [27] Final payment and transfer was made in August 1952, following another six months of negotiations over the finer points of the deal. [28]

NPS officials maintained that a fair financial settlement and a new concession contract were strictly separate issues; to combine them into a single negotiation would be to give the RNPC a competitive advantage over other prospective concessioners. Yet the new contract was so contingent upon the success of the legislation that it was hard to separate the two issues. Mainly for this reason, the longterm contract was delayed even further. From January 1, 1951 through December 31, 1952, the RNPC operated under a two-year interim contract. During this time the NPS produced a 21-page prospectus that purported to seek competitive bids for a new concession. This was virtually pro forma; it had become clear by now that no other capital was interested and the RNPC would continue under a new operating lease. But the RNPC had to accept still another one-year interim contract for the calendar year 1953 in order to give the parties time to negotiate a new longterm contract to begin January 1, 1954.

In the course of these discussions, NPS officials concluded that the development of overnight lodging and ski facilities and the changing visitor use pattern at Mount Rainier contained too many variables to allow the granting of a twenty-year concession contract. Instead, the government concluded a five-year contract with the RNPC for the term January 1, 1954 to December 31, 1958. In negotiating and carrying out the new five-year contract, the NPS and the RNPC found two main points of contention: (1) how to structure the company's obligation to plow excess profits back into maintenance of what were now the government's properties, and (2) how to define the company's exclusive privilege for providing transportation to and inside the park. These two problems are discussed in the following sections.