Reptilian Humanoids conspiracy theories

Brian Dunning has suggested that a 1934 Los Angeles Times article may have actually been the origin of the modern day reptilian theory. The article said that a geophysical mining engineer named G.Warren Shufelt had found subterranean labyrinths beneath Los Angeles that led to an underground city.The city had been built by an advanced race of “Lizard People” to escape surface catastrophes some 5000 years ago.

You can see the article reprinted here at Reptoids.com: http://reptoids.com/Vault/Schufeltsearch.htm
They even have the original map there.

It's noteworthy that Shufelt convinced the City of Los Angeles to allow him to dig a tunnel straight down to find the underground city. The shaft hit 250 feet, but nothing was ever found.

So was there no underground city?
Did they not dig deep enough?

The City of Los Angeles must have gotten tired of it, because on March 5th 1934, the tunnel was filled in and the contract with L.A was canceled. But the city never came out and said the theory was hog-wash.
As a matter of fact, in December of 1947, Mr. Arche Dunning of the Los Angeles Chamber of Commerce made a statement that would suggest no cover up or government conspiracy was at work here.
He said; "It is quite possible, of course, that the supposed labyrinth really exists. But in view of the fact that the overlaying area is the immediate Civic Center area where an important building program is to be carried out, including federal, state, county and city building, there is little probability of any further excavations."