Bryce Canyon Historic Resource Study

OPERATIONS OF THE CONCESSIONER

Contracts

The contract for concession rights at Bryce Canyon was concluded on September 15, 1928, between the Department of Interior and the Utah Parks Company acting on behalf of Omaha. Since the railroad's land in Section 36 had been deeded to the Federal government to promote the Zion-Mt. Cannel road, the Utah Parks Company asked for and received a 20-year lease on all of the deeded parcels. This lease went into effect on December 31, 1928, and would thus not expire until January 1, 1949. Provisions were written into the September 15, 1928, contract, so that if the Utah Parks Company fulfilled the terms of its lease, an additional 20-year lease would follow. Union Pacific's subsidiary was guaranteed an annual 6 percent profit on its investments in the park. If the company did not receive its allowed profit in any given year such profit was cumulative. That is, the deficiency (without interest) would be added to the 6 percent priority of the following year or years until it was liquidated. Any profits in excess of the 6 percent were to be split with the government. If the profit split was chosen, the government was to receive 22-1/2 percent, the company 72-1/2 percent. If profits in excess of 6 percent were invested in park improvements, only 72-1/2 percent of such excess was allowable to the Utah Parks Company. [305]

On behalf of Union Pacific the Utah Parks Company retained ownership of Bryce Lodge, the cabins and other structures erected at the railroad's expense. [306] Concessioner privileges paralleled those granted the Utah Parks Company at Zion, by virtue of the June 9, 1923, contract (see the section on Absence of Contractual Agreements). Basically, these included the right to provide accommodations and food to the general public, as long as charges for these services were reasonable and had been subjected to the approval of the Secretary of the Interior. [307] Transportation and livery concessions at Bryce were an extension of those already granted the Utah Parks Company at Zion and the North Rim. [308] Article II of the September 15, 1928, contract stipulated that if the Park Service took over operation of the public campground, the Utah Parks Company would furnish a "reasonable amount of water" to the government. It was understood that the government would, "at its own expense connect, furnish and install . . . additional pipelines" necessary for its activities. In later years this agreement was to cause problems for both parties.

How well did the concessioner fulfill its obligations? Fortunately, a detailed report filed in May 1935 by W. B. Burt, special agent for the Department of Interior's Division of Investigations, sheds light on the issue. Burt conducted his investigation at Bryce early in the spring of 1935. His basic conclusions summarized the quality of the Utah Parks Company during the early 1930s.

Burt assessed rates for lodging at Bryce Canyon as reasonable, "considering the seasonal operation." Premises were described as of "attractive appearance" with "adequate fire protection." Burt lauded the food: "Meals of excellent quality and sufficient to appease the most vigorous appetite are served." [309] Then, as now, Ruby's Inn, which is just outside the park's northern boundary, offered the nearest competition to the Utah Parks Company facilities. In the special agent's opinion, the rooms at Ruby's did not compare with those at Bryce Canyon. As for food, Burt said:

I had lunch at the inn. It was not as good or as well served as the meals at Zion cafeteria and was more expensive. Bryce Canyon cafeteria is no doubt as good as the one at Zion. [310]

Burt's complex assessment of the company's transportation service was generally favorable. He did point out that the fleet of buses and touring cars was obsolete, but "in excellent condition and comfortable." [311] All vehicles had been painted and repaired for the coming 1935 tourist season. [312] The Utah Parks Company had reduced rates since 1932, in keeping with the country's gloomy economic climate. Visitors to Bryce Canyon could conveniently take their automobiles to the company's garage for minor repairs, parts, washing and greasing, or a battery charge. [313]

During the first few years of Bryce Canyon's operation, then, the Utah Parks Company was fulfilling its concessioner obligations in accordance with the contract of September 15, 1928. [314] Despite difficult operating conditions, some of its services were outstanding. This is all the more surprising when the company's huge operating losses for the period are taken into account. Utah Parks Company's annual reports showed losses for the southern Utah loop totaling $267,212.77 in 1932 and $160,396.12 in 1933. For the 8 months ending on August 31, 1934, profits at North Rim and Bryce Canyon totaled $6,299.16, but all other facilities showed losses. [316] The Utah Parks Company claimed it had suffered heavy deficits ever since its incorporation. Available figures do not contradict this, but as Burt logically observed, the company was probably claiming unduly heavy depreciation charges." [315]

The Middle Years

Given Bryce's harsh climate, the lengthy period of inactivity imposed by the war took its toll on the Utah Parks Company's facilities. Late in the spring of 1945 the Utah Parks Company's maintenance staff was asked to estimate how much money was needed to reopen the southern Utah parks. On July 18, 1945, Omaha received the total figure, with breakdowns for each park. Exclusive of transportation the total was $325,849 [316] with approximately a third—$107,751—earmarked for Bryce Canyon. [317] This was, of course, discouraging news for the Utah Parks Company and its corporate parent in Omaha, and prompted speculation that the Union Pacific would attempt to completely sellout its interests in Zion, the North Rim, Cedar Breaks, and Bryce Canyon. [318]

W. P. Rogers, who then managed the Utah Parks Company, vigorously opposed a sellout. On May 21, 1945, he directed detailed correspondence to Omaha, whose sole purpose was to dissuade the railroad from implementing the idea to liquidate the Utah Parks Company. Rogers believed the Utah Parks Company would "undoubtably pay good dividends in the future." It was Rogers' contention that, discounting depreciation charges, the Utah Parks Company had at no time lost money during the 1930s. It only suffered real deficits when forced to close its doors during the war. Rogers supported his case with figures:

During the depression years 1929 to 1935 our losses including depreciation averaged $186,217.39 per year.

When business revived during the years 1936 to 1942, inclusive, our losses decreased to a yearly average of $23,905.02 including depreciation.

During the war period 1942 to 1944 inclusive the loss yearly increased to $189,467.39 per year including depreciation. [319]

In other words, if the Union Pacific's highest total investment in the Utah Parks Company is taken into account, between 1929-44 profit exclusive of depreciation was 11.2 percent.

Utah Parks Company Financial Recap 1929-44

A return of 11.2 percent on the original investment was good, if one takes into account the period spanned the Depression and World War II. Rogers, then had every reason to believe that in the coming decade of postwar prosperity, annual profits would easily exceed those for the previous peak year of 1941. Following this line of reasoning, it made no sense to sell a company if the profits it earned over a relatively short period of time equaled or exceeded the sale price. There was also the issue of corporate prestige to consider. The Union Pacific was the only railroad in the world serving three national parks (four including Yellowstone), a national monument and three national forests. [321] Rogers conceded that Omaha had "probably" made an "unwise move" in the original Utah Parks Company project, but in his opinion the worst had been weathered, and it was incumbent on the progressive leadership of the railroad to capitalize on the future.

Rogers also wanted the Utah Parks Company to stay in the public transportation business. He again played on the profit motive, and furnished the following statistics for the last 5 years of the Utah Parks Company travel operation:

The annual profits Rogers gave had been arrived at after every item of expense, such as depreciation, taxes, licenses, labor, and insurance had been charged against revenue. These figures were promising, but the Utah Parks Company could go back into the transportation business only after spending an estimated $206,900 as a capital investment to update its motor fleet with lighter, more economical buses. [323]

Rogers was an intelligent man. But he, like the promoters of the Utah Parks Company in the early 1920's, failed to realize the ominous character of private automobile traffic into the parks—in particular, its long-term implications for the future of a concessioner operation like the Utah Parks Company. Americans vacationed on wheels, and increasingly preferred them to be attached to the family car, rather than a train or concessioner's bus. Statistically, it has been demonstrated that after 1929 the Utah Parks Company's carriage trade never captured a significant chunk of tourism to the Utah park loop. After World War II the carriage trade would prove to be out-of-date. Rogers also seems to have conveniently ignored that during the first 20 years of its operation, Utah Parks Company depreciation allowances constituted an attractive financial safety valve for the Union Pacific. Yet, these would be largely written off by the end of 1948. After 1948 it would make little sense for the railroad to keep sustaining an unprofitable subsidiary.

The Road to Liquidation

Utah Parks Company Manager W. P. Rogers correctly anticipated the postwar boom, and its favorable effect on the company's business. Available evidence from Bryce Canyon's Monthly Reports indicates the lodge area served maximum crowds during the 1947 tourist season. [324] In June 1949 the lodge area continued to operate at full capacity. [325] These were good business years for the entire loop. In fact, the Utah Parks Company reduced the sum of its total losses since incorporating in 1923 from $1,960,446.13 through 1944 to $1,066,773.62 through the 1948 season. [326] In 1947-48 Utah Parks Company's transportation division brought in more than 6,000 people each year to Bryce Canyon (see the section on Joint Administration With Zion)—enough traffic to at least warrant optimism. In 1948, when it came time to renew the company's September 15, 1928, contract for an additional 20 years, Utah Parks Company officers were eager to do so.

The first diminishing blow to the company's euphoric vision of postwar prosperity came in the summer of 1949. At the time the subcommittee of the House Public Lands Committee had convened in Washington, D. C., to examine the Park Service's policy toward park concessioners. The subcommittee was especially interested in adherence by park concessioners to the Fair Labor Standards Act of 1938. One of its provisions ordered that within 8 years of the act's passage, the maximum work week be established at 40 hours, with additional compensation for overtime. Following the war, national park concessioners registered protests with the government. These had the effect of postponing the application of Fair Labor regulations to January 1, 1949. [327] The Utah Parks Company, however, did not implement the regulations in its 1949 employee payment schedule and the subcommittee wanted to know why.

During the third week of July 1949, W. R. Rouse, "Assistant Western General Counsel" for the Union Pacific System, defended the Utah Parks Company's policy before the subcommittee. Rouse pointed out that in recent hearings held in San Francisco and Denver between the Secretary of the Interior and park concessioners, no evidence was introduced showing the need for regulations. Furthermore, no showing was made "that the working conditions of the concessioners' employes [sic] in the national parks were in any way substandard or oppressive." [328] Rouse quoted a statement by F. H. Warner, who was then W. P. Rogers' principal assistant. Warner had said that:

The imposition of the 40-hour week will result in a burden to the Utah Parks Company by way of added expense which the present schedule of rates charged will not permit and additional revenue will be required to absorb the additional expense. [329]

Figures cited by Rouse showed that implementing the 40 hour work week throughout the Utah Parks Company loop would result in additional expenditures of $15,251.15 per month, or $59,143.08 for an operating season. [330] The cost for additional dormitory facilities throughout the loop was calculated by Warner at $195,900. [331] Figures given to the subcommittee by Rouse probably made the situation look worse than it really was. It is important to recognize, however, that for the first time a serious difference of opinion had surfaced between the National Park Service and the Utah Parks Company. While the implementation of time-and-a-half for overtime did not begin until January 1, 1952, and did not poison relations between the two parties, Omaha began to realize that further major investments in the Utah Parks Company might not be worth the risk.

H. H. Hoss, Attorney for the Western Conference of National Park Concessioners, testified before the subcommittee shortly after Rouse. Hoss carefully explained how a park hotel operator had to provide "a high capacity in order to meet peak needs," even though in the off-season levels of occupancy were low or nonexistent. Hoss strenuously objected to the annual 6 percent limitation on investments by concessioners. His clients did not feel this was a fair return, given the risks involved. [332] It is a fact that any profit deficiency added to the 6 percent priority of the following year or years derived no interest. Despite the current boom, postwar inflation did not make this an attractive proposition for a large-scale concessioner.

Between 1950-54 Utah Parks Company's passengers taken into Bryce Canyon by stage accounted for an average of 2.36 percent of the park's annual visitation—down from the 3.28 percent established in the postwar years 1946-49. In terms of actual volume, the years 1950-54 showed an average of 5,399 passengers—only 50 above the 1946-49 average. These were discouraging figures, since after the war the company had spent well over $500,000 to update its park facilities and transportation service. This inactivity did not justify such expenditures, and when coupled with markedly increased postwar labor costs, certainly inclined the railroad to drag its heels on the Utah Parks Company's further modernization.

After 1956, less evidence is available for gauging the state of the Utah Parks Company's operations in Bryce Canyon, but the park's monthly report for June 1957 did have this to say:

Business for the concessioner has been below that for June of last year even though park travel has increased. Bus tours have decreased considerably. [333]

In his July 30, 1955, article on the park Don Howard of the Salt Lake "Tribune" had reported:

As in other operations of the Utah Parks Co., Union Pacific's subsidiary, facilities at Bryce have not been allowed to deteriorate as have those in Yellowstone. They are simply inadequate . . .

By the late 1950s three major problems afflicted the Utah Parks Company's operation: (1) expensive labor, (2) obsolescence of facilities and transportation service, and (3) declining passenger traffic. The Union Pacific professed passenger traffic to be the most pressing of the three and acted decisively to cut its losses. After April 24, 1960, Union Pacific's summer season train, the "309," ceased operating between Lund and Cedar City. [334] In lieu of the rail service, Omaha ran buses into Cedar City from Salt Lake City and Las Vegas. [335]

Continuation of Utah Parks Company's concessioner and transportation service for another decade was in no small measure due to the competence of Tom B. Murray. On July 12, 1960, Murray replaced Fred Warner as Utah Parks Company's General Manager—a position Murray held until the company's dissolution in 1972. [336] As the Utah Parks Company's facilities required increased maintenance, Murray's managerial insight was severely tested during the 1960s. In December 1969 it became common knowledge that the Union Pacific wanted out of the park concessioner business—publicity that did little to make Murray's last 3 years with the Utah Parks Company any easier. [337]

Throughout the 1960s, Murray's most difficult problem with Bryce Canyon was the water supply. The September 15, 1928, and October 1948 contracts between the Department of Interior and Utah Parks Company expressly required the latter to furnish the government a "reasonable amount of water" (see Contracts). By July 1964 culinary water consumption was 75,000 gallons per day by Utah Parks Company facilities, and 29,512 gallons by the National Park Service. This total approached the maximum delivery of the company's pumps. [338] In 1965 all available sources of water, including Trough and Shaker Springs within the park, and shallow wells on East Creek outside it, were needed to satisfy the year's total of 300,311 visitors—a new park record. [339]

The construction of more spacious water storage facilities and the elimination of defective supply lines enabled the Utah Parks Company—with National Park Service cooperation—to bear its contractual burden. National Park Service personnel, however, were becoming nervous. In October 1965 Bryce Canyon's Master Plan recommended that:

The present system of depending on sources of water owned and controlled by the concessioner should be changed at the earliest opportunity. These sources should become government property by gift or sale through negotiation. [340]

The October 1965 Master Plan was critical of the relationship between the concessioner and National Park Service in two additional ways. Utah Parks Company's Bryce facilities were evaluated as "substandard," not meeting "present day expectations." The plan thus called for the gradual elimination of the Utah Parks Company's units. Space made available would be used for "public campground development." Bryce Canyon's October 1965 Master Plan also called the Utah Parks Company's transportation service a "preferential franchise . . . obsolete in present day operations." The plan characterized this service as disadvantageous and inconvenient to park visitors who were "trapped by the existing arrangement." [341]

In retrospect the October 1965 Master Plan appears a callous, narrowminded document. Its authors naively believed in the sacred right of Americans to see their national parks from the comfort of bucket seats and captains chairs. Little thought was given to the future supply of fuel for these numerous vehicles.

The goal is the elimination of overnight accommodations in Bryce Canyon. Outside facilities have indicated an interest in expansion and Panguitch (27 miles distance) is not too far to drive with modern transportation. [342]

It is true the railroad had become interested in the southern Utah parks for its own reasons. Not the least of these was profit. Yet, the Union Pacific's record at Bryce Canyon stands up well under scrutiny. Omaha had contributed enormously toward making Bryce Canyon a great national park. The October 1965 Master Plan might, at least, have recognized this fact.

Despite its superabundance of ill-conceived ideas and offensive tones, the plan did serve a purpose. It made clear and inevitable the imminent dissolution of the long partnership between the railroad and National Park Service. Omaha had already begun its retreat in 1960, and it is the case that throughout the 1960s the Union Pacific continually strove to sell off the Utah Parks Company rather than give it away. Negotiations for a sale to General Host Corporation did take place in 1969. Late in that year meetings were held in Washington, D. C., between members of the House Interior Committee and Harris Ashton, President of General Host. While in Washington, Ashton also conferred with National Park Service Director George Hartzog. [343] There is some evidence General Host was not able to convince Pennsylvania Congressman John P. Saylor—a key member of the House Interior Committee—that it could do a good job. In particular, Saylor did not want the corporation to take over another operation until it had cleaned up its backyard in Yellowstone Park. [344] Since 1966 General Host had, in fact, posted a dismal record as the concessioner in Yellowstone. [345] Saylor prevailed. Early in 1970 the proposed General Host buy-out of the Utah Parks Company was cancelled. [346]

Few prospective buyers had General Host's financial resources, and the next 3 years would show the railroad had lost its last real opportunity to sell the Utah Parks Company. On March 10, 1972, the Union Pacific officially recognized the situation, donating all of the Utah Parks Company's facilities and equipment to the Park Service. This property included the lodges, cabins, service stations, and curio shop facilities in Zion, Bryce Canyon, the North Rim, and the lodge and cabins located at Cedar Breaks. In addition, the railroad donated a laundry at Kanab, the Utah Parks Company complex at Cedar City, and the entire transportation fleet. In one fell swoop, more that $2,000,000 worth of property was given over to the National Park Service. [347] Park Service Director Hartzog accepted the massive donation with the following statement:

We know that concessioners, like the Service itself, are facing new conditions and new demands. When a concessioner whose role has been so prominent for so long leaves the ranks, it underscores the changes which are taking place. [348]

Under the terms of the donation, the Union Pacific allowed its subsidiary to continue in existence through calendar year 1972. This was principally done to give the Park Service enough time to select a concessioner for the 1973 season. [349] Tom Murray affirms he spent much of his time in the spring and summer of 1972 showing prospective concessioners about the loop. In September 1972, TWA, a subsidiary of Trans World Airlines, was selected. [350] This company is the current concessioner for Zion, Bryce Canyon, and the North Rim. [351] Tom Murray officially stepped down as Manager of the Utah Parks Company on December 18, 1972. [352]