railroad. Valdez subscribes for stock. Financing a Trans-Alaskan line.
Asking Congress for a subsidy. The wild goose chase to Butte. Broke on the
seeing with my own eyes the enormous deposits of copper in interior Alaska, it
was simply impossible for me not to make an attempt to open up the country so
that such resources could be developed. In surveying the situation, it was clear
to me that Valdez was the natural gateway to the interior of Alaska, being many
miles shorter than any other route and the only town of consequence on Prince
William Sound. Therefore, I decided to make Valdez the terminus of a railroad to
the Yukon River – a trunk line that could throw out its branches on both dies
and draw business from every point in Alaska.
conceived the idea that I was the man to build such a road, and shortly after my
return from the expedition to the White River and my convalescence from my
broken leg, I lost no time in starting the enterprise. George Baldwin, a
prominent railroad engineer, was selected to survey the line through to Eagle,
on the Yukon River, and a company was organized to have a capital of
$25,000,000, with dummy officers, who contracted with me to build the road. I
was to receive $250,000 for each miles built, in stock, and 30,000 a mile in 6%
bonds. The details of organization completed, I applied to the Secretary of the
Interior for a franchise and right-of-way through Keystone canyon on the Lowe
River, which I obtained, and the town of Valdez granted me a right-of-way
through the streets. I already owned the wharf, the income from which would pay
the interest on the bonds for the first ten miles. I bought ten thousand ties at
fourteen cents each, and built a railroad trestle paralleling the dock,
following that with eight miles of grading.
started and paid for this work with my own personal funds, it dawned upon me
that I could not build the road myself, and would have to get outside money.
With this in view I called a mass meeting, and that evening the town hall was
filled with the citizens of Valdez. I laid my plans before them, offering the
railroad stock at par, payable in quarterly installments on the completion of
each five miles of road. This proposition took like wildfire, and before the
meeting broke up they had subscribed for 276,000 shares. Still, I was getting no
cash to pay for five miles of rail and some rolling stock, a matter of $14,000.
Now, $14,000 was not much money to put into the construction of a railroad, but
it would have completed the five miles, after which twenty-five per cent of the
stock subscription would be due. On the whole, the proposition was sound. It was
the first railroad in western Alaska, and no other project of the kind had been
this furor about a railroad from Valdez was going on, the town started to boom.
Houses began to go up on all sides, and at once there was an occupant for every
vacant lot in the town. The steamers were coming in crowded with passengers and
heavy with cargoes. Inside the range there was the Bonanza mine with trainloads
of high-grade ore waiting for transportation, with freight, passengers, and mail
all along the line, offering a business for the road that would pay for it in
determined to try Seattle for the money I needed. There, though it is possible
that many wealthy men would have been glad to give me the funds if they could
have been reached. I could get in touch with none of them. In Seattle I put my
plan before the Chamber of Commerce, which appointed a special committee, and
these gentlemen obtained additional subscriptions for 700,000 shares, but not a
dollar in money, although Seattle was the greatest beneficiary of the Alaskan
trade. The same thing happened in Portland: plenty of stock subscriptions but no
$14,000! From Portland I continued my pilgrimage to Whatoon and then to
Bellingham, but the best the latter would do was to offer me free wharfage for
my steamer. One shipbroker offered me three steamers, then in the Eastern fruit
trade, in return for my bonds, but I had no money to take them over and bring
them around the Horn, so the deal fell through.
time when I was commuting between Alaska and the States, my wife stayed in
Seattle, as she was not well. During my railroad affairs she was taken
dangerously ill from anemic poison, and I dropped everything to attend to her.
As soon as the physician permitted, I secured a drawing room on the Burlington
and removed her to Washington D.C. there some doctors took her in charge,
declared her trouble to be cancer of the liver, and carried her to Dr. fry’s
hospital on Connecticut Avenue for an operation. As soon as she could be
removed, I brought her home, and with careful nursing she recovered, much to the
astonishment of her physicians.
York I resumed my railroad activities, and put my proposition up to Mr. Willard
P. ward, Dan Guggenheim, and Sam Untermeyer. These gentlemen were very dubious
concerning the feasibility of building a railroad in Alaska. They said I was
years ahead of time, and that it was impossible at that time to buy railroad
iron. I told them I had an option on the steel at Vancouver, and if they would
give me the money, I would show them. With such powerful men as these refusing
to come in, what chance had I with smaller fry?
Washington I had a bill introduced in both houses asking for a subsidy of $5000
a mile, for which I agreed to carry the army and munitions in case of war and
the mail free in time of peace. For a time the bill had a favorable reception,
but the knockers heard of it, and one man, who would have been largely benefited
if the road had been built, appeared before the Senate committee and declared
that I had no financial backing. Senator nelson of Minnesota, who I knew was a
great friend of Alaska, talked with me in the Marble Room of the Senate, and
said: “Tell me who your backers are, Mr. Iles, and if they are satisfactory we
will put this measure through for you!” I
replied, “Senator, I have no backers except the subscribers to more than a
million shares of stock. If the Government gives me this subsidy, I shall need
no backers.” The news of my application for a subsidy soon brought opposition
from various promoters, who were preparing, on paper, railroads for Alaska, with
the result that my bills went into that bourne form which there is no return.
closest I ever came to financing my road and putting it through as originally
planned was when a telegram was handed to me in Washington from James Murray,
president of the Miners & Merchants Bank of Butte, Montana, which read:
“Will take two hundred fifty thousand bonds Valdez & Northern
provided I am president of the road. Come to Butte and close deal.
“Conditions accepted. Send guarantee for trip.
To which I
received the following reply:
“Alfred B. Iles
“You don’t need any guarantee. Come on and get the money.
telegrams I boarded the Pennsylvania Limited at the old Sixth Street Station in
Washington the next morning. The car was empty and I took the first chair in the
aisle. The next passenger was a lady, who took a seat about the middle of the
car. A newsagent next appeared on the scene and the lady bought a magazine,
handing him a ten-dollar bill, and turn to me for change. In my pocket was a
folder used for letters of credits, etc., and in it was $192.00 in bills, cards,
and my railroad ticket from Chicago to Seattle. In my vest pocket were my
railroad and sleeper tickets from Washington to Chicago and some silver. I took
the folder from my inside coat pocket, gave the boy two fives, and returned the
flap to its place. That was the last I saw of it.
filled up, and the conductor changed my seat. I had a buffet lunch on my way to
Harrisburg and paid for it from the silver in my vest pocket. On the main line
platform I sent a telegram to a friend in Seattle and also paid that from my
silver, Dinner in the dining car cost me $2,40, and I reached for my pocket
book. It was gone! I was on the Pennsylvania Limited going to Butte, with the
capital of about ten cents! I called the conductor of the diner and told him of
my loss, and asked him if he would take a check for my dinner, to which he
agreed, and accepted a draft on the Boston National Bank of Seattle.
late in Chicago, and the Pioneer Limited was waiting to pull out. I rushed up to
the Chicago, Milwaukee & St. Paul office and there met Mr. Southy, the
passenger agent. I told him of my loss, showing him my telegram, etc., and asked
if he would take a check for a ticket to St. Paul. He said: “Certainly! And I
am something of a sport myself. Take this – you will need it to eat on!”
handing me a five dollar bill. He then stepped to the telephone and held the
Pioneer Limited until I could get on to the train. The Milwaukee road had never
lost anything through that kindly act.
Milwaukee I telegraphed my Seattle bank to have money for me at St. Paul on my
arrival. When we pulled into the station I hurried to the Western Union Office.
“Have you any money for me?” I inquired, giving my credentials. “Yes,”
the operator replied, “but you can’t get it tonight. The cashier has gone
home, and we haven’t the combination of the safe.” I said it was of the
utmost importance that I got the money at once, but it resulted in nothing, so I
went to a hotel to wait for the next day’s train. In the morning I reported
the loss of my ticket at the Northern Pacific offices, and a year afterward
received a check for the amount. The lost ticket was never presented.
I had a
presentiment that the delay meant no good to me. When the train stopped at Butte
and I saw Jim Murray on the platform with a telegram in his hand, I knew that my
fears were well grounded. After a perfunctory greeting, Murray said that the
deal was off, as his partner had decided to go into a streetcar line in Los
Angeles. Without further words I stepped on the train again and went on to
episode ended the first phase of my attempt to construct a railroad in Alaska. I
had built the trestle from the ships’ landing, completed five miles of
grading, and had ten thousand ties ready to lay. Yet I could not raise the few
thousand dollars that would have completed the five miles and furnished me with
plenty of funds for the next section, made my bonds marketable, and insured the
building of the road. Had I succeeded, the history of that part of our Northern
territory would be vastly different from what it is today.