The Indiana Dunes and Pressure Politics

WILLIAM PEEPLES

ATER making a quick change into walking shorts, Senator Paul Douglas of Illinois joined the other dignitaries before the cameras and reporters in the hot, crowded room in the superintendent’s house at Indiana Dunes State Park. The senator spoke briefly and to the point. He would not falter, he said, in his fight to save what is left of the Indiana dunes on the shore of Lake Michigan from destruction, for they are a priceless natural and recreational asset, serving an area of some seven and a half million people, and serving also as a magnet for natural scientists from the nation as a whole. His sympathetic audience cheered. They knew he meant it, knew that for three years he had stood against the efforts of Indiana officials, both Democratic and Republican, to build a deepwater harbor in the midst of the very finest dunes, primarily for the benefit of two steel companies — or three, if you count Inland’s holdings some distance from the proposed port site.

Douglas was no longer fighting alone. Joining him in the tour of the dunes that day were Secretary of the Interior Stewart Udall; Mayor Daly of Chicago and the mayors of Gary, Whiting, East Chicago, and Hammond, Indiana; U.S. Representative Ray Madden, the only congressman from Indiana working to save the dunes; as well as some uncommitted congressmen from other states open to persuasion. It was an impressive display of political muscle. With Douglas and Udall, both enthusiastic hikers, leading the way, the assorted officials and their respective entourages walked the shining beach, climbed the sand hills, saw firsthand the remarkable natural phenomenon of the Indiana dunes, all to the astonishment and delight of vacationing constituents. This was July, 1961.

Subsequently, the Department of the Interior endorsed the Douglas bill to make the dunes area in dispute a national preserve. In his conservation message to Congress, President Kennedy also called for congressional approval of “a national lakeshore area in northern Indiana.” Other congressmen, representing states in every section of the country, have said they will fight down the line to save the dunes.

Yet this incomparable area, with its excellent beaches, is still in imminent danger of being ravished, and behind this threat lies a tangled tale of land speculation, of the cozy relationship between certain business interests and public officials, of big names in the Democratic and Republican parties working for a common objective, of wheels spinning within wheels — a classic illustration of why, even more than a half century after Theodore Roosevelt and Gifford Pinchot, it is so difficult to reserve in the public interest our dwindling natural resources.

At one time the Indiana dunes marched in dazzling array for twenty-five miles along Lake Michigan between East Chicago and Michigan City. Today only about seven miles of lakefront dunes remain unspoiled — two and one half miles of them in the Indiana Dunes State Park (whose beaches, according to the National Park Service, would probably be polluted if any industrial-port complex were built nearby), and four-odd miles in die Burns Ditch area just to the west of the park. The remaining stretch of Indiana dunesland is prized not only by vacationers but by biologists, botanists, ecologists, geologists, zoologists, and ornithologists. Wildlife and more than one thousand species of plants and trees, including twentysix members of the orchid family, thrive there.

“There are few places on our continent where so many species of plants are found in so small a compass,” wrote the late Professor Henry C. Cowles of the University of Chicago, a pioneer ecologist. “Here one may even find the prickly pear cactus of the Southwestern desert hobnobbing with the barberry of the Arctic.”

WHY is such a widely recognized natural asset threatened with destruction? The story begins in 1929, when Midwest Steel purchased 750 acres astride Burns Ditch, which drains the Little Calumet River into Lake Michigan. From that day to this, Midwest Steel has been a driving force behind the attempt to build a deepwater port near Burns Ditch in the heart of the finest dunesland left on the shore.

In 1931, the Army Corps of Engineers made a “preliminary examination” of the practicality of a proposal that the federal government build breakwaters for the harbor sought by Midwest Steel. The report was a disappointment to the company. The engineers pointed out that the benefits from such a port would be limited to Midwest Steel, and therefore they would not recommend its construction with tax money. The steel firm tried again in 1935, but once more the Army Engineers refused to endorse the proposal. In 1937, Congress authorized a preliminary examination of the entire Indiana shoreline to pick the best harbor site. However, without waiting for the results of the examination, the Indiana State Planning Board rushed in and singled out the Burns Ditch area as “the only desirable and available location.” It was not until 1944 that the Army Engineers reported on the study authorized by Congress in 1937, and they recommended against exploring the matter further because, they concluded, existing harbor facilities at Chicago, Calumet, and Michigan City were adequate for the area.

In 1949, the Army Engineers’ district office in Chicago came up with a preliminary report favorable to the Burns Ditch harbor. Though the way was now clear for a survey in depth of the site, this was delayed by the Korean War. Finally, in 1960, Colonel J. A. Smedile, the army district engineer, announced that a port at Burns Ditch could be justified economically, and later issued a detailed report to support this conclusion. Still, the report made no judgment on whether the Burns Ditch project was more in the public interest than the preservation of the dunes, or whether another site might also be suitable. Seizing upon the report, backers of the Burns Ditch site implied that it ruled out any other location and settled the issue once and for all. Gordon Englehart, the Indiana capital correspondent for the Louisville Courier-Journal, asked Colonel Smedile if the Army Engineers had ever studied alternative sites for a deepwater port in Indiana. “The Burns waterway area,” the colonel replied, “is the only site on the Indiana shore of Lake Michigan sponsored by a public [Indiana] agency as suitable for a public harbor development. Studies of alternative sites by other agencies have not been brought to the attention of this office.”

Small wonder, considering this sequence of events.

Shortly after he took office in 1953, Republican Governor George Craig threw his political influence behind the Burns Ditch project. That year, at Craig’s request, the Legislative Advisory Commission recommended that the legislature appropriate $3.5 million to buy 1500 acres for a harbor near Burns Ditch. A bill incorporating this request was introduced at the 1955 legislative session, but it died after critics attacked the speculative nature of the proposal. Stymied in his move for public funds, Craig turned to private sources to underwrite the construction of the port. Perhaps coincidentally, this move came at the same time a favorable engineering report was issued by a private firm. This private report was financed jointly by Midwest Steel’s parent company, National Steel, whose boss is George Humphrey, Secretary of the Treasury in the Eisenhower Administration; the New York Central Railroad, whose main New York-Chicago line borders the disputed dunes area; and the Murchison family of Texas, who owned lakefront land just east of Midwest Steel’s holdings.

The Murchisons are an integral part of the story. In 1954, Clint W. Murchison, the Dallas multimillionaire, controlled the Consumers Company of Chicago, which was sand-mining land it owned in the Burns Ditch area. About this time the firm became interested in real estate, and especially dunes real estate.

In order to sell land in Indiana, a company must be incorporated in the state. Thus, on September 23, 1954, Consumers Company officials duly incorporated the Consumers Dunes Corporation in Indianapolis with the stated purpose of speculating in dunes land. This was two months before Indiana’s Legislative Advisory Commission and Governor Craig started beating the drums for the Burns Ditch harbor appropriation.

Now the wheels began spinning faster. The Consumers Company traded 1100 acres of its land near Burns Ditch to Consumers Dunes in exchange for 31,000 shares of Consumers Dunes common stock with a par value of $10 a share. Consumers Company stockholders got one share of Consumers Dunes stock for each Consumers Company share they held. Consumers Dunes also borrowed $77,500 from a bank and bought another 100 acres of dunesland. To repay the loan it issued 7750 more shares at $10 par and offered them to Consumers Company stockholders. It is interesting to note who was handling these series of financial transactions between the Consumers Company and its newly incorporated subsidiary, Consumers Dunes. The C. T. Corporation was acting as a financial agent for Consumers Dunes, and the C. T. Corporation was located in the office of Governor Craig’s former law firm of White, Raub, Craig & Forrey. Craig had resigned from the firm when he became governor.

Governor Craig’s efforts to get private financing for the Burns Ditch project also were frustrated, and soon afterward Consumers Dunes moved to sell its dunesland, by approaching the Lake Shore Development Corporation of Indianapolis. Lake Shore had been incorporated May 6, 1956, as a land-buying agency for Bethlehem Steel. Thus, another steel company entered the dunes picture, and before long Bethlehem owned 4000 acres of dunesland, including tracts between the Midwest Steel acreage and the state park to the east. On June 3, 1956, Consumers Dunes sold its 1200 acres, valued on its books at about $300 an acre, to Lake Shore (Bethlehem) for $3,326,500, or about $2770 an acre. Its job now done, Consumers Dunes was liquidated on June 21, 1957. Holders of its $10 par shares reaped the tidy profit of $85 a share.

AT THIS point, the financial threads branch off in several directions, but they all are tied, directly and indirectly, to the Burns Ditch project.

In Indiana, the largest holder of Consumer Dunes shares was Thomas W. Moses, executive vice president of Consumers Dunes and president of the Indianapolis Water Company; his 1000 shares brought him $85,000. In 1956, Clint W. Murchison, Jr., and John D. Murchison owned 336,448 of the 556,490 shares of the Water Company’s stock. As for Moses, he wore yet another hat. He also was a director of the American Fletcher National Bank of Indianapolis. The bank’s board chairman is Frank McKinney, former national chairman of the Democratic Party and patron of Indiana’s present governor, Matthew Welsh, who has worked as hard as his Republican predecessors for the Burns Ditch project. McKinney, furthermore, is associated with the Murchisons. He was a Murchison lieutenant in that family’s successful campaign to capture control of the Alleghany Corporation, a mammoth holding company whose assets included the New York Central Railroad. The New York Central has tracks skirting the Burns Ditch area and is interested in leasing warehouses within the proposed port complex. McKinney was named a director of the New York Central. His bank also acted as transfer agent for the St. Lawrence Seaway Corporation. This firm, headed by former Indiana Senator William Jenner, was incorporated in Indianapolis in 1959 to speculate in real estate “in areas influenced by the completion of the St. Lawrence Seaway.” The new corporation’s prospectus referred to the proposed Burns Ditch port, “which is almost certain to be built.”

In August of 1959, two months after the Seaway Corporation got approval for its stock sale from the state, the Republican governor, Harold Handley, named Seaway’s stock dealer, Durward E. McDonald, to a newly formed Northern Indiana Lakefront Study Committee. For chairman, Handley picked John Van Ness, who had been appointed assistant to the president of Midwest Steel several months earlier. As a former state senator, Van Ness had worked assiduously in the General Assembly in behalf of the Burns Ditch project. He did yeoman service for the cause in 1957, the year that Bethlehem gave Indiana an option to buy about 260 acres it owned at $2062 an acre. Together with 68 acres to be purchased from Midwest and 110 acres from other landowners, this would comprise the harbor site. Van Ness was instrumental in getting a $2 million appropriation through the legislature that year for land purchases. There was one string attached — the Army Engineers must give final approval to the project. This stipulation could be viewed as evidence of a proper concern for protecting the public interest; but there also was an element of self-interest, for the port combine knew that the approval of the Army Engineers was a vital first step toward acquiring federal funds.

The year 1959 was, all in all, a banner one for the port promoters. Midwest began building a $103,000,000 plant to process semifinished steel into finished products alongside the proposed harbor site; and the St. Lawrence Seaway opened, prompting port backers to wax eloquent about a great industrial and commercial explosion at Burns Ditch, where the port would serve as a terminal for ocean vessels.

All the stops were pulled out. Indiana would issue revenue bonds to pay for its share of the ,$70 million port project, and Congress would appropriate at least $25 million in federal funds. Nothing, it seemed, could now save the dunes. For the conservationists, the prospect was gloomy, but they took some heart in 1960 when Democrat Welsh won the governorship. He had straddled the issue in the campaign, promising to defer a decision on the location of the port until a thorough study could be made of the entire shoreline. Any hopes entertained by the conservationists were quickly dashed. After Welsh became governor, no thorough study was made. Instead, he promptly began pressing for action on the Burns Ditch project. First he created an Indiana Port Commission, whose stated objective was to build the port at Burns Ditch. Its function was threefold: to issue revenue bonds, to acquire land for the port, and to lobby for federal funds. It also tried to persuade Midwest and Bethlehem to make firm commitments about future plans and to agree to foot some of the cost of building a public harbor. The steel firms, however, could not be pinned down to definite pledges.

While all this was going on, those who wanted to save the dunes were not idle. In 1952, the Savethe-Dunes Council, a citizens’ group, was organized. It in turn encouraged the support of the Izaak Walton League and other conservation forces. Even so, by 1958 their cause seemed hopeless, and they appealed in desperation to Senator Douglas to intercede in their behalf.

The senator was familiar with the dunes, having vacationed there frequently. In short order he introduced legislation that would take 5000 acres, including the proposed port site and the flanking Midwest and Bethlehem tracts, for a national preserve. This countervailing pressure had its effect. The drive for the Burns Ditch port lost some of its momentum, and gradually the conflict came to a stalemate. At each session of Congress, the port backers pushed for approval of their project and their opponents countered with the Douglas bill.

For his pains, Senator Douglas has been pilloried by Indiana officials and their allies in the port combine. He has been accused of meddling in the affairs of another state and of trying to block the Burns Ditch harbor to protect Chicago port interests. The first charge has a hollow ring in view of the fact that the Burns Ditch backers are seeking federal funds. The other charge glosses over the repeated assertions of Senator Douglas and others working for preservation of the dunes that they are not opposed to a deepwater harbor for Indiana. It is question of where, not whether. Douglas has said he would favor a port in already industrialized Gary or Michigan City, or anywhere else along the Indiana shore that is suitable. Nevertheless, the Burns Ditch forces still proclaim publicly that those opposed to their plan are either “bird-watchers” or enemies of Indiana’s economic development.

Governor Welsh is so committed to the Burns Ditch site that he rejects out of hand any suggestion that alternative sites be considered, and he is extremely sensitive to references to land speculation and ties between public officials and industrial interests working for the Burns Ditch port.

Despite the governor’s demurrers, certain facts are devastatingly clear. No real studies of other sites have ever been made, although port backers imply they have been. What they cite are “preliminary surveys,” to use the language of the Army Corps of Engineers, or cursory inspections of the Indiana shoreline. The Senate Interior Subcommittee, which held hearings on Senator Douglas’ bill in 1962, asked backers of the Burns Ditch project to produce detailed surveys of alternate sites. They were not forthcoming.

Now, at long last, we may get one. An appropriation passed the House last year, with the support of Representative Ray Madden, to finance a detailed study of the Lake County area as a possible site for a deepwater port. This area is away from the dunes and has been industrialized for years. The move, however, may be coming too late. For it seems that if the combine cannot have the port at Burns Ditch, it is willing to destroy the dunes out of sheer spite. Take the case of the Northwestern University landfill.

Last spring, Clinton Green, the secretarytreasurer of the Indiana Port Commission, announced that Bethlehem Steel had contracted for the removal of 2,500,000 cubic yards of sand from the dunes area in dispute. A dredging company was to take the sand from Bethlehem’s holdings near Burns Ditch across the tip of Lake Michigan to Evanston, Illinois, where it would be used as fill in Northwestern’s campus expansion. Senator Douglas charged that Northwestern was conspiring with Bethlehem to destroy the dunes. Northwestern officials replied that the Douglas charge was directed at the wrong target, that his fight was with Bethlehem instead. Douglas insisted that Northwestern could not escape moral responsibility for the deed. University spokesmen then said they had looked into the possibility of getting out of the contract but were held to it by the dredging company.

Indiana politicians quickly sprang to the defense of the contract. Representative Charles Halleck, in whose district Burns Ditch lies, declared: “If we get a harbor there, the sand has to be dredged up anyway.” Halleck and Green of the Port Commission took the line that the dredging would save the state money. What they did not say was that it is by no means settled that the port will be built at Burns Ditch. Senator Douglas was convinced that the transaction was a thinly disguised pressure play to influence Congress to kill his legislation setting aside the dunes as a national preserve, and to push through federal approval of the port project. If this was the intent, it failed at the last session of Congress. This will be the year of decision.

Governor Welsh and Indiana’s Senator Vance Hartke have been using the same sort of technique in insisting that no matter what Congress does, a port will be built at Burns Ditch. The only choice, they say, is between a public and private port. They claim that Midwest Steel will build its own port in any event. However, neither Midwest nor Bethlehem has made any firm commitments to do so. After all, railroad facilities now serve Midwest’s finishing plant and can serve the similar plant Bethlehem may construct. The need for a deepwater port would not be pressing unless these plants are expanded and converted to fully integrated (basic) steel-producing operations. Both are vague about when they plan to do this. Of course, if the taxpayers will build a deepwater port for them, that would be something else again.

Furthermore, the governor’s assertion that a port will be built at Burns Ditch under any circumstances ignores the fact that if the dunes area were made a national preserve, it would be impossible to build a deepwater port at Burns Ditch.

ANYONE who has seen the nearly seven miles of beach front, with the dunes ridges fading inland behind it, knows that this area is well worth preserving. The greatest pity is that this is all that is left to preserve. The recreational and scientific value of the Indiana dunes has been long recognized. In 1916, Stephen Mather, the first director of the National Park Service, recommended their preservation as a national park which would have taken in the entire twenty-five-mile shoreline from East Chicago to Michigan City at an estimated cost of $3 million for the land.

No other coastline in the country boasts dunes so remarkable. They are migrating dunes, kneaded like gigantic piles of dough by the prevailing westerlies that blow off the lake, and they shift as much as sixty feet in a year. Dunes on other shores are often mere hills of earth covered with a veneer of sand, but the Indiana dunes are all sand. They are the creation of the lake’s currents and waves, which erode shores far to the north, then grind the residue into sand, and in time deposit it on the Indiana shore, making a low ridge, or storm beach, along the water’s edge. The wind’s action carries on the construction by swirling sand from the storm beach inland. Some of this flying sand is snared by the vegetation just beyond the beach, and foredunes are formed. These give wind protection to the older pine dunes behind them. On the pine dunes, decaying plants fertilize the accumulated soil, and jack pines and other plants thrive. Next come the older oak dunes, with more soil, plants, and trees. At the inland extremity of the dunes, about a mile and a half from the lake, the beech-maple belt stands. This is the richest of all, heavily forested with trees and vegetation that may be as much as 10,000 years old. Between the dune ridges, water has been trapped, forming ponds, lakes, and bogs where plants, trees, and a variety of wildlife abound.

From spring through fail the dunesland is a prism of beauty. The naturalist Donald Culross Peattie described the magic the seasons work on these dunes in loving fashion: “There spring, stepping tardily and shyly, brings hepaticas, anemones, violets, lupine, and phlox; after them troop buttercups, Jack-in-the-pulpit and blue flag . . . Crab-apple and dogwood flower, and with the coining of early summer an abundance of wild roses bloom, and the strangely beautiful dune cactus appears. Autumn is a triumph of foxglove, of more than a dozen kinds of sunflower, of the stately purple blazing star, of the wild asters that some call ‘farewell summer.’”

This gift of nature is within an hour’s drive of the homes of seven and a half million city dwellers. Last year the Outdoor Recreation Review Commission of the Rockefeller Foundation reported to Congress on the nation’s recreational resources and needs. In its report, the commission declared: “Highest priority should be given to acquisition of areas located closest to major population centers and other areas that are immediately threatened. The need is critical — opportunity to place these areas in public ownership is fading each year as other uses encroach.”

No area in the country fits this description more precisely than the Indiana dunes.