Construction begins and Anchorage is born
To understand the importance of the Alaska Railroad and its impacts on the state, look no further than the population and infrastructure situated along the railbelt, the corridor connecting Seward to Fairbanks. Home to approximately 80% of the state’s population, the influence the Alaska Railroad has had on the state’s economy since its early days as a privately owned rail service is unquantifiable, but tangible none-the-less. The irony is the railroad faced adversity nearly every step of the way. From congressional uneasiness, to natural disasters and a struggle to be financially profitable, the history of the Alaska Railroad is a tale of perseverance in the last frontier. In the last issue we explored the railroad’s early days as a mix of privately owned services around the territory. In part two we explore highlights of federal management to its current status as a state-owned corporation.
President Woodrow Wilson’s decision on April 10, 1915 to route the railroad between Seward and Fairbanks had almost immediate consequences. Perhaps the biggest ripple would be the selection of Cook Inlet as construction headquarters for the Alaska Railroad. Its central location made it ideal for managing the poor existing track between Seward and Kern Creek and the surveying needs between Broad Pass and Fairbanks to the north.
Nearly 2,000 people arrived to Ship Creek in 1915 with hopes of acquiring coveted railroad jobs at a going rate of 37.5 cents per hour. The influx far exceeded demand, and the Alaskan Engineering Commission issued a notice informing prospective employees that those arriving with the idea of finding “ready employment… will be largely disappointed.” Nonetheless, a tent city was quickly born at Ship Creek (it would eventually move to higher ground a bit south of Ship Creek). Early editions of the Cook Inlet Pioneer had advertisements for movie theaters, restaurants, meat markets, barbers… many of which were housed in tents. The only thing lacking was an official name.
Interestingly, the name both the Territory’s Governor, John Franklin Alexander Strong and the Alaskan Engineering Commission’s Lieutenant Frederick Mears preferred was Matanuska because of the town’s proximity to the Matanuska coal fields. They were overruled. In a town vote, Anchorage received nearly twice as many votes as Matanuska. The name stuck.
In total, construction would take a turbulent eight years to complete. Work was finished sporadically in part due to the way Congressional appropriations were distributed. Funds were only allocated one year at a time. When the money ran out, there was no choice but to stop working. A second impediment to construction would be the United State’s decision to enter World War I.
Construction employment peaked in 1917, with about 4,500 laborers, dropping sharply to 2,500 by 1919. As of 1920, 456 miles of line were operational but the daunting bridges at Riley Creek and the Tanana River were yet to be completed. In addition to a dwindling workforce, the impacts of WWI were also felt with spiraling project expenses. One mile of line in 1915 cost $9,680 to complete. By 1920 that figure had almost doubled, and the initial $35 million requested from Congress to complete the project had been exhausted.
Despite its hurdles, the federal project would forge on, racking up a final tab of $65 million. On July 15, 1923 President Harding (the first President to visit Alaska) made a short speech in Nenana congratulating the Alaskan Engineering Commission’s construction efforts. He offered an optimistic view of what the railroad would mean for Alaska, “It is not possible to liken a railway to a magician’s wand, but the effect to me is the same.” With a few swings, he drove in the golden spike. The gesture signaled the ceremonial completion of the Alaska Railroad.
A more entertaining account of the event is a report by Charles Ross in The Forty Ninth Star. He notes that attendees visiting from the lower 48 had been warned about Alaska’s adverse weather and mosquitoes. On this July day; however, the temperature in Nenana rose to over 90F, and guests were uncomfortably hot in heavy long underwear, sweaters, leggings and more. Three guests fainted from overheating.
The struggle to be profitable
While Congress assumed the now operational railroad would be profitable, two years after construction was complete the Alaskan Engineering Commission’s chairman, Colonel James G. Steese, was still requesting congressional appropriations, “A great deal of additional work is still required to bring the entire line up to standard,” he reasoned. Furthermore, the wealth assumed to be attained by accessing the Matanuska Valley coal mines never came to fruition. Exports would not exceed 7,000 tons. As early as 1925 legislators were advocating to abandon the railroad.
A change in management would, in part, help the Alaska Railroad shift towards profitability. Colonel Otto F. Ohlson, took over as general manager on August 1, 1928. It would take a decade of effort, but in 1938 the railroad attained its first year of profits - $76,703 (depreciation was not calculated against operating expenses during this time).
That same decade, colonists would arrive to the Matanuska Valley as part of President Franklin Delano Roosevelt’s New Deal program, a hotel hoping to entice tourists was constructed at the entrance to Mckinley Park (Denali National Park), and the railroad added steamship operations to its business activities. Alaska was slowly developing, but World War II was around the corner and would mark another pivot in the railroad’s history.
WWII and post-war rehabilitation
After two decades of operations with minimal maintenance, the Alaska Railroad had accumulated a long list of upgrades needed. It made due with thrifty solutions that helped it survive up until this point, including the acquisition of second hand equipment from the recently retired Copper River and Northwestern Railroad which replaced the aging locomotives brought north from the Panama Canal 25 years previously. Colonel Ohlson saw these as short term fixes and continued to advocate for Congressional appropriations. As he explained in his 1944 annual report, “Although it is not economical to purchase second hand stock due to high maintenance costs, the immediate necessity for equipment would not permit delays.”
If the railroad was in need of maintenance prior to WWII, the increased demands of the war left the railroad even more neglected. Freight tonnage increased significantly between 1940-1944, with net income reaching over $5,000,000 in 1944 according to some accounts. A five mile spur was built to connect the railroad in Fairbanks to Ladd Air Force Base outside of town, and tunnels were completed in 1943 to open Whittier as a year-round railroad port.
Thanks to Alaska’s strategic importance during the war, Congress’ sentiment towards the railroad was improving. New incoming general manager, Colonel J.P. Johnson, benefitted from the reputation shift and was fortunate to inherit the financial nest-egg generated from wartime revenues. By the end of 1946, extensive improvement efforts were underway. Upgrades would continue over the next few years with Congress appropriating roughly $100 million to rehabilitate the railroad.
Statehood and natural disaster
The next several decades were marked by milestones including upgraded passenger service between Anchorage and Fairbanks, Alaska’s shift to statehood and the implementation of a train-ship service which allowed rail cars from the lower 48 to be shipped anywhere along the Alaska Railroad. Some of the struggles facing the railroad during this time included the possible closure of the Matanuska coal mines which accounted for $700,000 in annual revenue, the abandonment of Army operations at the port of Whittier, labor disputes and the construction of new highways as a freight competitor. While the years leading up to the 1964 earthquake were not void from issues; the railroad had progressed. Then disaster struck.
The 9.2 magnitude Good Friday earthquake on March 27, 1964 was felt throughout most of mainland Alaska, and the railroad was not immune. The earthquake and subsequent tsunamis were responsible for an estimated $30 million in damage to the Alaska Railroad. In Seward, the earthquake generated underwater landslides that destroyed shore-side terminal facilities. In Anchorage, a landslide swallowed an equipment storage facility, ruining most of the machinery. The most extensive damage was south of Anchorage with sections between Potter Hill and Portage completely destroyed.”
Amazingly, within three weeks of the earthquake, a train was able to transit (although slowly) from Anchorage to Whittier. It was a collaborative effort to get things operational including support from private railroad companies in the lower 48, the Army, the Navy, and of course the employees of the Alaska Railroad. Repairs were two-fold. There was a short term need to make things functional, but also long term reconstruction efforts which proved to be quite extensive. It would take over two years to complete all repairs. The railroad would go on to receive an Award for Meritorious Service from the Department of the Interior for its diligence during the aftermath of the earthquake.
Alaska owns a railroad
The next major shift would be the railroad’s move from federal to state oversight. In 1985, the state of Alaska purchased the Alaska Railroad for $22 million. Initially the state had no intention of maintaining a state owned railroad. A primary goal of acquiring the railroad was to sell the railroad to the private sector, but the legislature ultimately had concerns that private ownership may eliminate less profitable business functions like passenger service to rural communities. In addition, the state would have no voice in railroad decisions that may economically impact Alaska. The solution was a railroad housed in both worlds, a hybrid.
Today, the Alaska Railroad Corporation (ARRC) remains state-owned, but under the Alaska Railroad Corporation Act (1984) is operated as a private corporation. The ARRC manages rail lines with passenger and freight services throughout Southcentral and Interior Alaska and is responsible for generating enough revenue to cover operating expenses. In contrast to other independent state owned corporations, the ARRC is able to keep all revenues ensuring sufficient funds are available for high maintenance costs and improvements associated with managing a railroad. Its three main revenue generating activities include freight service, passenger service and real estate. ARRC revenues continued to grow, but history tells us there are no guarantees. In 2019, the railroad generated nearly $200 million in revenue, but operated at a loss just a year later due to the Covid-19 pandemic. Since then, the ARRC has recovered, reporting a net income of $30.9 million in 2021—a far cry from its humble beginnings as a pioneer railroad without a home.
Construction begins and Anchorage is born
To understand the importance of the Alaska Railroad and its impacts on the state, look no further than the population and infrastructure situated along the railbelt, the corridor connecting Seward to Fairbanks. Home to approximately 80% of the state’s population, the influence the Alaska Railroad has had on the state’s economy since its early days as a privately owned rail service is unquantifiable, but tangible none-the-less. The irony is the railroad faced adversity nearly every step of the way. From congressional uneasiness, to natural disasters and a struggle to be financially profitable, the history of the Alaska Railroad is a tale of perseverance in the last frontier. In the last issue we explored the railroad’s early days as a mix of privately owned services around the territory. In part two we explore highlights of federal management to its current status as a state-owned corporation.
President Woodrow Wilson’s decision on April 10, 1915 to route the railroad between Seward and Fairbanks had almost immediate consequences. Perhaps the biggest ripple would be the selection of Cook Inlet as construction headquarters for the Alaska Railroad. Its central location made it ideal for managing the poor existing track between Seward and Kern Creek and the surveying needs between Broad Pass and Fairbanks to the north.
Nearly 2,000 people arrived to Ship Creek in 1915 with hopes of acquiring coveted railroad jobs at a going rate of 37.5 cents per hour. The influx far exceeded demand, and the Alaskan Engineering Commission issued a notice informing prospective employees that those arriving with the idea of finding “ready employment… will be largely disappointed.” Nonetheless, a tent city was quickly born at Ship Creek (it would eventually move to higher ground a bit south of Ship Creek). Early editions of the Cook Inlet Pioneer had advertisements for movie theaters, restaurants, meat markets, barbers… many of which were housed in tents. The only thing lacking was an official name.
Interestingly, the name both the Territory’s Governor, John Franklin Alexander Strong and the Alaskan Engineering Commission’s Lieutenant Frederick Mears preferred was Matanuska because of the town’s proximity to the Matanuska coal fields. They were overruled. In a town vote, Anchorage received nearly twice as many votes as Matanuska. The name stuck.
In total, construction would take a turbulent eight years to complete. Work was finished sporadically in part due to the way Congressional appropriations were distributed. Funds were only allocated one year at a time. When the money ran out, there was no choice but to stop working. A second impediment to construction would be the United State’s decision to enter World War I.
Construction employment peaked in 1917, with about 4,500 laborers, dropping sharply to 2,500 by 1919. As of 1920, 456 miles of line were operational but the daunting bridges at Riley Creek and the Tanana River were yet to be completed. In addition to a dwindling workforce, the impacts of WWI were also felt with spiraling project expenses. One mile of line in 1915 cost $9,680 to complete. By 1920 that figure had almost doubled, and the initial $35 million requested from Congress to complete the project had been exhausted.
Despite its hurdles, the federal project would forge on, racking up a final tab of $65 million. On July 15, 1923 President Harding (the first President to visit Alaska) made a short speech in Nenana congratulating the Alaskan Engineering Commission’s construction efforts. He offered an optimistic view of what the railroad would mean for Alaska, “It is not possible to liken a railway to a magician’s wand, but the effect to me is the same.” With a few swings, he drove in the golden spike. The gesture signaled the ceremonial completion of the Alaska Railroad.
A more entertaining account of the event is a report by Charles Ross in The Forty Ninth Star. He notes that attendees visiting from the lower 48 had been warned about Alaska’s adverse weather and mosquitoes. On this July day; however, the temperature in Nenana rose to over 90F, and guests were uncomfortably hot in heavy long underwear, sweaters, leggings and more. Three guests fainted from overheating.
The struggle to be profitable
While Congress assumed the now operational railroad would be profitable, two years after construction was complete the Alaskan Engineering Commission’s chairman, Colonel James G. Steese, was still requesting congressional appropriations, “A great deal of additional work is still required to bring the entire line up to standard,” he reasoned. Furthermore, the wealth assumed to be attained by accessing the Matanuska Valley coal mines never came to fruition. Exports would not exceed 7,000 tons. As early as 1925 legislators were advocating to abandon the railroad.
A change in management would, in part, help the Alaska Railroad shift towards profitability. Colonel Otto F. Ohlson, took over as general manager on August 1, 1928. It would take a decade of effort, but in 1938 the railroad attained its first year of profits - $76,703 (depreciation was not calculated against operating expenses during this time).
That same decade, colonists would arrive to the Matanuska Valley as part of President Franklin Delano Roosevelt’s New Deal program, a hotel hoping to entice tourists was constructed at the entrance to Mckinley Park (Denali National Park), and the railroad added steamship operations to its business activities. Alaska was slowly developing, but World War II was around the corner and would mark another pivot in the railroad’s history.
WWII and post-war rehabilitation
After two decades of operations with minimal maintenance, the Alaska Railroad had accumulated a long list of upgrades needed. It made due with thrifty solutions that helped it survive up until this point, including the acquisition of second hand equipment from the recently retired Copper River and Northwestern Railroad which replaced the aging locomotives brought north from the Panama Canal 25 years previously. Colonel Ohlson saw these as short term fixes and continued to advocate for Congressional appropriations. As he explained in his 1944 annual report, “Although it is not economical to purchase second hand stock due to high maintenance costs, the immediate necessity for equipment would not permit delays.”
If the railroad was in need of maintenance prior to WWII, the increased demands of the war left the railroad even more neglected. Freight tonnage increased significantly between 1940-1944, with net income reaching over $5,000,000 in 1944 according to some accounts. A five mile spur was built to connect the railroad in Fairbanks to Ladd Air Force Base outside of town, and tunnels were completed in 1943 to open Whittier as a year-round railroad port.
Thanks to Alaska’s strategic importance during the war, Congress’ sentiment towards the railroad was improving. New incoming general manager, Colonel J.P. Johnson, benefitted from the reputation shift and was fortunate to inherit the financial nest-egg generated from wartime revenues. By the end of 1946, extensive improvement efforts were underway. Upgrades would continue over the next few years with Congress appropriating roughly $100 million to rehabilitate the railroad.
Statehood and natural disaster
The next several decades were marked by milestones including upgraded passenger service between Anchorage and Fairbanks, Alaska’s shift to statehood and the implementation of a train-ship service which allowed rail cars from the lower 48 to be shipped anywhere along the Alaska Railroad. Some of the struggles facing the railroad during this time included the possible closure of the Matanuska coal mines which accounted for $700,000 in annual revenue, the abandonment of Army operations at the port of Whittier, labor disputes and the construction of new highways as a freight competitor. While the years leading up to the 1964 earthquake were not void from issues; the railroad had progressed. Then disaster struck.
The 9.2 magnitude Good Friday earthquake on March 27, 1964 was felt throughout most of mainland Alaska, and the railroad was not immune. The earthquake and subsequent tsunamis were responsible for an estimated $30 million in damage to the Alaska Railroad. In Seward, the earthquake generated underwater landslides that destroyed shore-side terminal facilities. In Anchorage, a landslide swallowed an equipment storage facility, ruining most of the machinery. The most extensive damage was south of Anchorage with sections between Potter Hill and Portage completely destroyed.”
Amazingly, within three weeks of the earthquake, a train was able to transit (although slowly) from Anchorage to Whittier. It was a collaborative effort to get things operational including support from private railroad companies in the lower 48, the Army, the Navy, and of course the employees of the Alaska Railroad. Repairs were two-fold. There was a short term need to make things functional, but also long term reconstruction efforts which proved to be quite extensive. It would take over two years to complete all repairs. The railroad would go on to receive an Award for Meritorious Service from the Department of the Interior for its diligence during the aftermath of the earthquake.
Alaska owns a railroad
The next major shift would be the railroad’s move from federal to state oversight. In 1985, the state of Alaska purchased the Alaska Railroad for $22 million. Initially the state had no intention of maintaining a state owned railroad. A primary goal of acquiring the railroad was to sell the railroad to the private sector, but the legislature ultimately had concerns that private ownership may eliminate less profitable business functions like passenger service to rural communities. In addition, the state would have no voice in railroad decisions that may economically impact Alaska. The solution was a railroad housed in both worlds, a hybrid.
Today, the Alaska Railroad Corporation (ARRC) remains state-owned, but under the Alaska Railroad Corporation Act (1984) is operated as a private corporation. The ARRC manages rail lines with passenger and freight services throughout Southcentral and Interior Alaska and is responsible for generating enough revenue to cover operating expenses. In contrast to other independent state owned corporations, the ARRC is able to keep all revenues ensuring sufficient funds are available for high maintenance costs and improvements associated with managing a railroad. Its three main revenue generating activities include freight service, passenger service and real estate. ARRC revenues continued to grow, but history tells us there are no guarantees. In 2019, the railroad generated nearly $200 million in revenue, but operated at a loss just a year later due to the Covid-19 pandemic. Since then, the ARRC has recovered, reporting a net income of $30.9 million in 2021—a far cry from its humble beginnings as a pioneer railroad without a home.
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Kierre Childers is an outdoor enthusiast based outside Denali National Park. She has been calling Alaska home since 2015 and has a soft spot for Willow, where she spent her first summer volunteering as a trail crew member for Nancy Lake State Recreation Area. She loves learning about the Last Frontier from its history, to its people, to its flora and fauna.
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