Congress in 1897 and 1898 by various promoting groups to grant franchises and rights of way for railroad projects.10 These special requests Congress refused, but it passed a general law aiming to provide for railroad building.11 The enactment of this law marks the beginning of the period of railroad construction.12

Period of Private Construction, 1898-1908. The act of May 14, 1898, provided for the granting of a right of way and made due provision also for sufficient land for stations and terminals, as well as timber and stone for construction, to any railroad company "duly organized under the laws of any state or territory or by the Congress of the United States." Several companies, immediately after the passage of the act or in anticipation of its passage, made preliminary filings under the provisions of the law. In the brief period between September, 1897, and March, 1899, no less than eleven companies made filings for railroad routes totalling about 673 miles.13

Actual construction on the first railroad was begun in the summer of 1898 to furnish access to the Klondike gold fields, from tidewater at Skagway in Alaska to the navigable waters of the Yukon Basin at White Horse in Canada. By 1901, II0 miles of this narrow-gauge railroad had been constructed, of which however, only twenty miles were in Alaska. The cost of carriage over the passes was reduced by the building of this railroad from the rate of thirty cents to $1 per pound,

10 House Committee on Territories, 60 cong, I sess., Railroads in Alaska, Hearings, p. 62.

11 Act of May 14, 1898; 30 Stat. L., 409.

12 Not only does the year 1898 mark the beginning of the period of railroad construction, but also the period of federal action in the wider sphere of Alaskan transportation development. The construction of a trail was begun in that year by the War Department from Fort Liscum at Valdez on the south coast northeastwardly through the Copper River Valley to Fort Egbert at Eagle on the Yukon River near the International boundary line. (See p. 101 House Hearings on the Construction of Alaska R.R. July, 1919).

Of

13 As calculated from House Document 1201, 60 cong. 2 sess. this projected mileage only 233.4 miles was being operated or under construction on Dec. 5, 1908.

is to Alaska what the railroad train is to the people of the United States." 6 Even when the difficulties involved in the administration of so large an area brought the problem of more adequate transportation to the attention of the Governor, his perplexities in seeking to curb smuggling and "boot-legging" led only to a modest request, as late as in 1889, for a light draught vessel for the use of the civil government." Even three years later it was reported that not only had no railroads been built but that none were even contemplated seriously.8

The first real impetus to railroad construction came in the period following the discovery of gold in the Klondike in 1886. "The horde of gold seekers that swarmed through the passes of the coast range in 1897 and 1898 transported their supplies by sleds and on their backs. It is estimated that by this primitive means upward of 30,000 tons of freight were carried inland at a cost, allowing fair wages for the labor, of probably $15,000,000 to $16,000,000. About an equal amount of freight was sent to the interior by steamers up the Yukon." 999 In consequence of this gold rush, the census of 1900 reported a population of 63,592, of which 30,507 were whites. The population of Alaska was thus practically doubled in the decade of 1890-1900, while the white population in this decade increased seven fold. Another factor was the growth of knowledge of Alaska's resources and industrial possibilities, mainly as a result of governmental investigations, but also as an indirect result of the general public interest attending the discovery of gold in the Klondike. It was rapidly becoming clear at this time that aside from the long recognized wealth in the fur and mineral trade, there were remarkable potentialities in agriculture, herding, lumbering,

etc.

As a consequence of these influences, requests were made of 6 Governor of Alaska, Annual report, 1885, p. 14.

▾ Ibid., 1889, p. 26.

8 Ibid., 1891, p. 34. 9 Brooks, supra.

it to bear all fixed charges and pay large dividends on both the preferred and common stock. 16

So noticeable was the progress of railroad construction at this time that the Governor of Alaska turned from his former desire to encourage new enterprise to anxiety over the problem of regulation of existing enterprises, and asked in his annual report to the Secretary of the Interior: "Will it be a wise public policy in view of the serious questions that are now connected with railway carrying, to allow these corporations to construct these lines of road across the public domain without any restriction whatever?" 17

While there was this activity in railroad construction from 1903 to 1907, hearings were being held at intervals in Washington at the request of various promoting companies for governmental aid in their railroad projects for Alaska, either in the form of relief from federal taxation, governmental subsidies, exclusive grants and rights, or a guarantee of interest on the bonds of the companies. In these proposals may be detected the germ of the later proposals for federal construction. Although nothing was done at this time by Congress, the hearings 18 served to bring to public attention the various factors which were making successful private building and operation of railroads difficult in Alaska. There were the usual general charges of bad management, excessive promotion, unsound policies, and waste of funds. More specific allegations were to the effect that there had been many costly errors due to engineers' differences of opinion as to the most feasible routes, and that much delay in construction had followed controversies between rival railroad companies over their respective rights of way.

16 President of the Alaska Central Railway Co., Annual report, Seattle, Sept. 29, 1903, p. 2.

17 Governor, Annual report, 1905, p. 26.

18 House Committee on Territories, Railroads in Alaska, Hearings, 59 Cong., I sess., 1906; Senate Committee on Territories, Railroad and Telegraph and Telephone Lines in Alaska, Hearings 1907; also House Committee on Territories, Railroad Transportation in Alaska, Hearing of the Western Alaska Construction Co., March 11, 1904.

It was pointed out, however, that the greatest handicap to railroad development in Alaska lay in the general misunderstanding in the states of conditions in the territory, so that the successful negotiation of securities was difficult if not, at times, impossible. Often it was necessary to sell the securities on a basis of a considerable discount, thus imposing an excessive initial indebtedness on the enterprises. One company spent a considerable sum in advertising and publicity; its representative stating before the House Committee on Territories in 1905:

When the Valdez, Copper River and Yukon Railroad Company attempted to negotiate its securities it found that nobody knew anything about Alaska. They all supposed it was a place almost of solid snow and ice, and therefore, in the East especially, nobody would take notice of any proposition. The Valdez, Copper River and Yukon Railroad Company went on and spent nearly $40,000 in photographing that country. We found no interest in this subject anywhere in the United States and the result was that we paid agents and solicitors to go before Chambers of Commerce and Boards of Trades throughout the United States, and I believe we succeeded in getting passed in the various centers of trade throughout the United States something like two hundred petitions and resolutions addressed to Congress imploring Congress to do something for the people of Alaska. All that cost a great deal of money. 19

It has been pointed out also 20 that the federal annual railroad tax of $100 a mile, though much less than the lowest tax in the states, was still a serious problem for pioneer lines with heavy expenses and light traffic. Moreover, most of the railroads which were in operation were but stubs that did not reach the possible sources of traffic.

As a consequence of all these difficulties, several of the railroad companies were in a vulnerable position when the panic of 1907 came. The Alaska Central Railroad went into

19 House Committee on Territories, Hearings, 1905, p. 29. 20 Brooks, supra.

the hands of a receiver in 1908 21 and the Alaska Home Railway suspended work. A few years later it was reported 22 that none of the existing lines were earning interest charges, while some were not even paying operating charges. Yet it must be remembered that rates were already almost prohibitively high. In 1909 the per capita transportation charge for every inhabitant in the placer districts of Alaska was estimated at $350 and the total charge was equal to approximately half the value of the entire gold output of the year.23 Any further construction by private enterprise and capital to develop the interior resources of Alaska without some subsidy or guarantee by the government was therefore beyond the range of possibility.

Movement for Construction of a Government Railroad. The year 1908 may be taken as marking the first year of this period, since it was then that the Governor of Alaska urged the appointment of a government commission to study available routes for a railroad from the coast to the interior, part of the cost of operation of which was to be assumed by the government.24

After this date the movement for federal assistance gathered momentum until the mere probability of its success was in itself sufficient to discourage new construction by private companies. 25 The lack of definite federal policy concerning the

21 The Alaska Central resumed construction under a receivership in 1909 only to be sold by order of the district court in 1910. 22 Governor of Alaska, Annual report, 1912, p. 22.

23 Brooks, The mining industry (Alaska) 1909. U. S. Geological Survey Bulletin 442, pp. 26–7 (1910).

24 Federal action on the general transportation development of Alaska began much earlier. The construction of a trail was begun by the War Department in 1898 from Fort Liscum at Valdez to Fort Egbert at Eagle (see footnote 12). In 1902 a wagon route was surveyed over this route and in 1904, following the recommendation of a Congressional delegation which visited Alaska in 1903, the appointment of the Alaska Road Commission was authorized. In 1906 survey of a land route was authorized from Fairbanks to Council City. These surveys made by the Alaska Road Commission were anticipatory of later trans-Alaska railroads.

25 House Committee on Territories, Hearings on Alaska Short Line R. R. in Alaska, April 1, 1910.