Alaska Syndicate facts for kids

Imagine a time when a few very rich and powerful people controlled almost everything in a huge place like Alaska. This happened in 1906 when a group called the "Alaska Syndicate" was formed. It was created by two incredibly wealthy men, J. P. Morgan and Simon Guggenheim. They wanted to control Alaska's valuable resources from far away. They also hoped to stop Alaska from becoming a state with its own government.

The Syndicate quickly bought the rich Kennicott-Bonanza copper mine]. They also took over most of the ships and trains in Alaska. A big part of the salmon fishing business also came under their control. This gave them a lot of power over how goods and people moved. It also controlled how much money was made from Alaska's natural wealth.

The Alaska Syndicate: A Powerful Story in Alaska's Past

Who Were the Guggenmorgan?

The Alaska Syndicate faced a lot of anger from Alaskans. These Alaskans wanted more control over their own lives and land. The Syndicate's ownership was split equally between the Guggenheim family's company and J.P. Morgan & Co.. They kept buying huge amounts of wilderness. This made people say that Alaska was "First a Colony of Russia, then a colony of Guggenmorgan." This nickname combined the names Guggenheim and Morgan. It showed how much power these families had.

A famous conservationist named Gifford Pinchot led the fight against the Alaska Syndicate. A conservationist is someone who works to protect nature. Pinchot also spoke out against their supporter in Washington, Secretary of the Interior Richard Ballinger. Pinchot believed Ballinger was against protecting natural resources. Ballinger had looked into whether some coal mining claims were legal. These claims were made by Clarence Cunningham. Cunningham was a business partner of J.P. Morgan and the Guggenheims.

Cunningham was accused of claiming land for many different people. But he really planned to give it all to the Alaska Syndicate. This was against a new law called the Alaska Coal Act. President Theodore Roosevelt protected this land in 1908. It became part of the Chugach National Forest.

The Ballinger-Pinchot Controversy

Ballinger first said Cunningham's claims were okay. He even had help from Senator Simon Guggenheim during a government investigation. But Ballinger eventually resigned in 1911. He faced a lot of pressure from Pinchot and other politicians. His replacement, Walter Fisher, soon rejected Cunningham's claims.

This controversy greatly helped people who wanted Alaska to govern itself. At the same time, many Americans were starting to dislike very wealthy bankers and powerful business leaders. The public image of the Morgans and Guggenheims suffered greatly. Political cartoons often showed them as a single, greedy monster. Newspapers, conservation groups, and small businesses targeted the Syndicate. They believed Alaska's lands should be used carefully and regulated by the government. Not just for the profit of a few powerful people.

Stephen Birch: A Key Player in the Syndicate

In 1901, a young mining engineer named Stephen Birch was in Valdez, Alaska. He was looking for good mining opportunities. He met two men who wanted money to develop a mine called the Bonanza claim. Birch was very excited about this. In 1902, he started buying parts of the Bonanza claim. He used money from wealthy New York financiers Henry Osborne Havemeyer and James Ralph.

After getting the original claims, Birch realized he needed a lot more money. He needed it to build a railway from Valdez to the Bonanza mine. This was almost 200 miles away. In 1905, he got support from John Rosene. Rosene agreed to build the railway. Construction started in June 1905.

But Birch soon saw that even more money was needed. It was needed to finish the railway and develop the copper mines. Birch met with J.P. Morgan Jr., William Peter Hamilton, and Charles Steele from J.P. Morgan & Co. in March 1906. He was searching for investors. Two months later, he met with Daniel Guggenheim. Guggenheim was already interested in supporting the railroad.

Because of Birch's hard work, Guggenheim and Morgan joined together. In June 1906, they formed the Alaska Syndicate. Their goal was to develop Birch's copper mine. Birch became one of the three main managers of the Syndicate. With their financial support, the railway was built. Birch developed the Kennecott copper mines. These included the Bonanza and Jumbo mines. In 1915, the Kennecott Copper Company was created by the Alaska Syndicate. Birch became its president.

Building the Railway: The Copper River and Northwestern Railroad

Once the copper deposits were acquired in 1906, transportation was essential. People said, "without transportation, the world's richest copper deposits were valueless." Building roads in the challenging northern environment was difficult. But the promise of huge profits from copper attracted railway companies.

Michael Heney: The "Boy Contractor"

Michael James Heney (1864-1910) was a Canadian who loved building railroads. He started working on the Canadian Pacific Railway (CPR) at just 14 years old. By age 21, he was an independent contractor. He earned the nickname "the boy contractor" after building the Seattle Lake Short and Eastern Railroad. He became known internationally for his work on the White Pass and Yukon Route.

Heney was very interested in the Alaska copper claims. These were in the Copper River valley. He surveyed a route that would be perfect for serving the mines. He started the Copper River Railway Company. Heney chose Cordova as the port for his railroad. He began construction in April 1906.

At the same time, the Alaska Syndicate was trying to build a railroad from Valdez. It went through the Keystone Canyon. But they gave up on that route. In 1906, the Alaska Syndicate bought Heney's surveyed route. It went through the Abercrombie Canyon. They paid $250,000 to his company. After hiring Heney and buying the rest of his company's assets, the project was renamed the Copper River and Northwestern Railway.

The Syndicate also considered Katalla as a port. Katalla had oil and coal. However, Katalla was hit by violent storms. These storms destroyed its dock and much of the town. In the end, Heney's 195-mile route from Cordova to Kennecott was completed in 1911. Many workers in Katalla hoped for a side railroad. They wanted to use their coal as fuel. But the Guggenheims eventually switched their engines from coal to oil. This made the coal unnecessary.

Challenges and Conflicts

Building the Syndicate's railroad was not easy. There was also competition. They used various ways to discourage rival railways. There were even violent incidents. One famous event involved the shooting of a worker from a rival company. This company, the Alaska Home Railroad, wanted to use the Valdez route. The Syndicate had abandoned this route. The person who led the group that shot the worker was put on trial. The Syndicate's reputation was damaged. This was because of accusations of dishonest behavior.

The land itself presented huge difficulties. They had to build bridges over the powerful Copper River. They also had to work around glaciers. They carved into the rocky sides of two canyons. The railroad cost a massive $20 million. This included $1.5 million for the famous "Million Dollar Bridge." This bridge crosses the Copper River between the Miles and Childs Glaciers.

When the Great Depression hit, the Alaska Syndicate was also affected. The price of copper dropped greatly. Mining stopped in the summer of 1935. The Copper River and Northwestern Railroad was last used in November 1938.

The Birth of Kennecott Copper Corporation

The Alaska Syndicate officially formed in 1906. This was when the financial power of JP Morgan combined with the mining interests of the Guggenheims. Stephen Birch was a main manager. Stephen Birch also helped the Syndicate expand into other businesses. Eventually, it bought an important trading company. It also bought Alaska's second-largest business, its biggest steamship line, and its longest railroads.

The discovery of very rich copper ore at Kennecott caught the attention of the mining world. Stephen Birch was one of the first people to buy claims in the Kennecott area. This was when the ore was found. He convinced JP Morgan and the Guggenheims to invest in the Kennecott deposits. The mining and development of the Kennecott ores were managed by two main groups. These were the Alaska Syndicate and later the Kennecott Copper Corporation. Both groups had the same goals. They wanted a steady supply of copper, reliable transportation, and good markets to sell their product.

Changing Times and New Tactics

The Alaska Syndicate, like many big businesses in the early 1900s, sometimes used promises to gain political favors. However, their methods were strongly challenged by James Wickersham. He led the Alaskan people against their powerful control. The famous Ballinger-Pinchot Affair involved the Syndicate. It eventually changed the political situation. For example, it led to the resignation of Ballinger, who had supported the Syndicate. Also, the negative feelings towards the Syndicate contributed to President Taft not being re-elected.

His successor, President Wilson, brought in many political reforms. These reforms made the old ways of the Alaska Syndicate less effective. As a result, the Alaska Syndicate decided to allow more public involvement. A new company, the Kennecott Copper Corporation, was founded. Essentially, the same people still controlled the Corporation. But they used different strategies and methods to manage the organization in these new times.

James Wickersham: Fighting for Alaska

James Wickersham was a very important figure in Alaska's history. He served as a district judge. Later, he was a delegate for the Territory of Alaska. A delegate is a representative who can speak but not vote. He served in the U.S. House of Representatives for many years between 1909 and 1933.

James Wickersham was a strong opponent of the Alaska Syndicate. He stood up for the people and the land of Alaska.

He believed that Alaska's resources should benefit the entire country. Not just be used by a few large, powerful companies. These companies were controlled by people who did not even live in Alaska. Wickersham argued that if Alaska had "home rule," its natural wealth would be used more fairly. Home rule means the ability to govern itself.

The 1910 Ballinger-Pinchot affair brought Alaska into national headlines. It involved the transfer of federal coal land claims in Alaska to the Guggenheim interests. This led to a Congressional investigation. In the midst of all these challenges, James Wickersham made a huge contribution. This helped Alaska eventually become a state.

Kennicott and Kennecott: A Tale of Two Spellings

The town of Kennicott was once home to over 500 miners and their families. It was a "dry" company town. This meant alcohol was not allowed. Most miners lived in company housing. Life revolved around the mining operation. The Kennecott Copper Mine was once one of the largest copper mines in the world. It operated from 1911 to 1938. It was in the town now known as McCarthy, Alaska. This town is located within Wrangell–St. Elias National Park and Preserve.

In the spring of 1915, Guggenheim and Morgan officially formed the Kennecott Copper Corporation. The total value of copper produced from the mines was over $200 million. This would be like about $3 billion today! After all the rich copper deposits were mined out, the Kennecott mines and the railroad stopped operating.

The Alaska Syndicate was first formed to develop this mine. But it eventually expanded into coal, salmon, and transportation throughout Alaska. Their powerful influence even helped prevent Alaska from becoming a state as early as 1916. While the Kennecott Mining Company was still active, they developed other properties that still exist today.

The different spelling between Kennicott (the glacier and original area) and Kennecott (the mining company) was simply a mistake. One of the mine owners accidentally spelled it wrong and never corrected it!

Robert Kennicott and the Glacier

The Kennicott glacier was named after Robert Kennicott. Robert Kennicott was part of the Western Union Telegraph Expedition. He arrived in San Francisco in April 1865. The group then moved north to Vancouver. Kennicott became ill for a while there. After he recovered, they moved north again to Alaska in August 1865. Sadly, Kennicott died in May 1866. This was likely from heart failure. He was traveling up the Yukon River.

The historic Kennecott Mine buildings today.

Today, tourism is the main part of the local economy. People from all over the world visit the remains of the Kennecott mines. Even though Kennicott is no longer a copper mining town, it's still a "company town" in a way. It hosts the headquarters for the National Park Service. You can still reach McCarthy by the McCarthy Road. This road follows the old rail bed of the Copper River and Northwestern Railway from Chitina to McCarthy.