What is presented here is a condensed version of the events in early Alaska by which the conservationists, who were also the great “trust-busters,” successfully closed down an entire industry to conserve resources and prevent a monopoly. Yet a monopoly is exactly what they got—for only the single richest mines could survive the high cost of freighting in Alaska—and that meant the Alaska Syndicate who were to become the Kennecott Corporation. Lesser companies, lacking the vast financial resources would never have a chance. Is this really all that different from what is happening today in the name of environmentalism?
Each of the political muckrakers in this story: Gifford Pinchot, James Wickersham, Louis Glavis and Louis Brandeis all had their own personal agendas and the banner of conservation (environmentalism) and anti-monopoly (anti-big business) provided a handy forum for selling themselves as heroes protecting the public interests. Like the modern day environmentalists, these men were early advancers of a form of socialism that gave maximum control of the lands to the federal government.
I am not defending the Alaska Syndicate, for they were certainly capable of underhanded deeds, and were, of course, operating in their own exclusive best interests. Yet without them, the development which did occur, and the rich historic legacy they have left us, could not have happened. The Alaska Syndicate were indeed the boogeymen of the day. For they were bigger than life and so highly visible as to be easy targets. May God save us all from those self-appointed protectors of the public good—the political inheritors of the conservationists of old.
The early history of anti-development forces and radical environmentalism in Alaska may correspond with the discovery of the Bonanza copper ore deposit from which developed the Kennecott Copper Corporation and Alaska’s second largest privately financed construction project—the Kennecott mines and the Copper River & Northwestern Railway.
At the height of the Klondike gold rush in 1898 the U.S. Army became engaged in attempts to find a route into the interior of Alaska which would provide an “all-American” route to the Yukon River and the Klondike gold fields.
Captain W.R. Abercrombie headed a military reconnaissance party known as the Copper River Exploring Expedition based in Valdez. One of the civilian guides attached to the party was Stephen Birch who would later become president of the Kennecott Corporation.
Birch was assigned to Lieutenant P.G. Lowe’s expedition which successfully worked out a route over the Valdez and Klutina glaciers to the Klutina River, eventually reaching Copper Center in July 1898. This tent town became a jumping off point for prospectors heading to places ranging from the Klondike to the Nizina River. This glacier route had been abandoned by area Natives years before as too difficult and would soon be replaced by a military road over Thompson Pass. But it was through this early trail that the McClellan group would enter the Copper valley—and among these were the locators of the Bonanza claims.
The McClellan group and another party led by B.F. Millard sought out Chief Nicolai at Taral, across the Copper River from present day Chitina. They were seeking the source of copper bullets that Chief Nicolai had shown to Lieutenant Allen in an earlier expedition. This led to the acquisition of the Nicolai Mine, which in itself, though somewhat spectacular, was to prove economically insignificant —but which would lead to the discovery by Clarence Warner and Jack Smith, of the McClellan group, of the Bonanza copper outcropping. Chittyna Exploration Company, which was formed to develop the Nicolai Mine, would later claim that it had grubstaked Smith and Warner, bringing on one of many lawsuits which would plague the Kennecott developers.
The McClellan group lacked capital to develop the Bonanza and other nearby claims, including the Jumbo. Knowing that Stephen Birch, recently of the Abercrombie expedition, was still in Valdez and that he was associated with monied interests who were seeking mineral investments, Jack Smith contacted him seeking money for development.
Those potential investors were Henry Havemeyer and James Ralph. The Havemeyer family had used connections to get Birch assigned to the Abercrombie expedition, but Birch was also sent to seek investment opportunities. Birch had enough confidence in the McClellan group reports to begin negotiating with the prospectors before even investigating the claims. One of the eleven claimants, Dan Kain, contacted Birch to sell him half of his part of the interest immediately. Kain would later locate gold placer claims for Stephen Birch on a tributary of the Nizina River which would then be named Dan Creek in his honor. Dan Kain also assisted Birch in his negotiations with the other members of the group. The investors formed the Alaska Copper Company with Birch as its head in 1901 to pursue and purchase the 45 claims and to assess the mining potential in the upper Chitina and Nizina River areas for both gold and copper.
The Chittyna Exploration Company filed suit against Alaska Copper Company in 1903 for an interest in the claims. This slowed development, especially of the railroad which would be absolutely necessary for access to the mines. Judge James Wickersham of Alaska’s third judicial district ultimately decided the case in favor of Alaska Copper, thus gaining favor with Stephen Birch. Birch had already become a power in his own right and was able to influence the reappointment of Wickersham to the judgeship in 1904 despite significant U.S. Senate opposition.
Now it became necessary to determine a route and line up financial support for a tidewater to interior railway. Believing that the Childs and Miles glaciers blocked access to the Copper River, Birch chose the port of Valdez in the summer of 1904 as the start of the proposed line.
There were four applications for authority to build railroads using Valdez as the tidewater. These had nothing to do with the mines, but were proposals into the interior. The following railroad companies filed for construction permits from the port of Valdez under the Act of May 14, 1898 prior to the Copper River & Northwestern Railway: Akron, Sterling and Northern Railroad Company, to build from the head of Valdez Bay via Marshall Pass to Eagle City (1900); the Valdez, Marshall Pass & Northern Railroad Company, to Eagle City (1904); and the Valdez-Yukon Railroad Company, also to Eagle City (1906). All of these routes had to be relinquished before the Copper River & Northwestern Railway could gain access to the Keystone Canyon right-of- way. It was the last of these, the Valdez- Yukon RR which had brought in the 4-6-0 Rogers locomotive which was later sold to Michael Heney, the builder of the CR&NW from Cordova to Kennecott, to become engine number 50—the oldest engine on the line and the one shown in the famous photo of the driving of the copper spike.
The Copper River & Northwestern Railway filed for two construction permits in 1906. The first, known as the Tonsina route, basically followed the government trail from Valdez. This route had the most difficult grades, crossing Thompson Pass and then Ernestine divide, then on to the Tonsina River, finally on down to the Copper River. The second and chosen route followed Lowe River to its head, crossed Marshall Pass and followed the Tasnuna River to the Copper.
In lining up the financial support, Stephen Birch succeeded in combining the financial and railroad interests of the J.P. Morgans with the mining and smelting interests of the Guggenheims into a mega- partnership known as the Alaska Syndicate. The Syndicate began with an agreement to invest ten million dollars, and with this capital obtained the Kennecott mines, the CR & NW Railway, the Alaska Steamship Company and other interests which eventually included the only other significant copper mine in Alaska, the Beatson on LaTouche Island in Prince William Sound.
The Alaska Syndicate had barely begun development of its Valdez line when its attention turned to a small fishing village on Controller Bay named Katalla. In 1905 a coal rush of sorts had occurred as a result of a new coal law designed for Alaska which enabled individual claims of 160 acres and combinations of claims to 640 acres. Although this legal limitation was far too small, many illegal claim combination agreements developed, including the Cunningham claims. The lure of nearby coal for railroad and copper mine developers was obvious. The Syndicate abandoned its rockwork in Keystone Canyon, leaving deputy Marshall Edward Hasey in charge of protecting the right-of-way should it be needed in the future.
Valdez was left abandoned without a railroad and was ripe for the likes of the con artist H.D. Reynolds who encouraged the town people to place their own savings and credit into an ill-conceived Alaska Home Railroad. Reynolds actually raised $106,000 locally. The first railroad equipment for the proposed narrow gauge arrived in September 1907, and crews began working toward Keystone Canyon where CR & NW men still occupied the right-of-way. Reynolds thought he could deal with the Syndicate, believing they would pay him a substantial sum to halt work rather than face lengthy legal proceedings. The Syndicate was already involved in the Katalla operation and refused to deal with Reynolds.