Back in the 1920s, the newly created (1902) US Bureau of Reclamation had a problem. It had created the Newlands Project in Nevada to convert desert to irrigated farm country, but the water available from its dams on the Truckee and Carson Rivers (Truckee-Carson Project) was insufficient to provide enough water to the new homesteaders promised water for the land they bought. The Bureau of Reclamation had an easy solution. Just turn Lake Tahoe into a giant reservoir by building a huge dam. It would still be a big body of water, but would function as a reservoir, not a lake. The environmental implications (which we can now see) would have been catastrophic.
The little Lake Tahoe Railway & Transportation Company and its owner Duane Bliss rallied local landowners to resist the Bureau of Reclamation. The Bureau saw its main opposition was the Lake Tahoe Railway- a narrow gauge line that took tourists from the Southern Pacific Railroad in Truckee to the lake at Tahoe City. The Bureau thought it could easily condemn the little railroad (not making money), end the pesky opposition, and build their dam and reservoir.
Not so fast. Be it for commercial purposes, not as an environmental crusade, the Southern Pacific Railroad in the mid 1920s still considered passenger service vital, and Lake Tahoe a great vacation area. A big reservoir might still bring boaters, but for natural beauty- that would be gone. With their deep pockets the Southern Pacific leased the Lake Tahoe Railway & Transportation Company. In 1926 the Southern Pacific rebuilt the tourist railroad into standard gauge, which made the condemnation price beyond the Bureau of Reclamation's budget. With a legal team and money, the Bureau of Reclamation finally had to back down. Alas, some Southern Pacific offficials pushed for a national park, but that was not to be.