PROFITING FROM ALASKA GOLD RUSH HARDER THAN MANY THOUGHT
One of the accepted myths of the Western mining boom is that businessmen like Levi Strauss made all the money, while the prospectors and miners did all the work. That, however, is far from the truth. The fact is that many men who went to the Alaskan gold fields to make a fortune selling to the miners went home just as busted as the most amateur prospector.
While some people back east listened to the stories of fabulous gold finds, another class listened to the stories of high prices and seemingly easy money in selling to the miners. While gold dust was priced at $17 an ounce, stoves would cost $40 to $50 dollars. A bath was one dollar, a cigar $0.50, and a cord of wood, $25. Doctors were charging up to $500 in gold for house calls in the Yukon.
No wonder so many potential storeowners and professional men headed north to the Yukon and Alaska over 100 years ago. They had dreams of making a quick killing selling their services or goods. In many ways there were just as naive as the prospectors and miners who headed north.
Professionals who assumed that the growing mining towns would need their skills often made the biggest mistakes. Amongst those were the lawyers who overestimated the miner’s need for legal advice. In 1897, during the Yukon gold rush, several lawyers, who rushed to Dawson to offer their services, were forced to take passage on the last boat to leave Dawson before the winter froze the river. These lawyers, who gave fictitious names lest others discover their failure, came north in hopes of setting up lucrative mining litigation practices. However, according to a writer of the time their, “only practice up to the present time had been an occasional exhibition of their knowledge of the rules of order and parliamentary procedures at miners’ meetings.”
Ironically, even doctors often went home in defeat. Physicians, who were often used to the comforts of medicine in a large city practice, were shocked to see conditions in the mining community. Miners were more interested in occupational medicine - keeping the body together in order to keep mining. Minor complaints were often ignored or dosed with a liberal swallow of the local “red eye.”
One writer said, “It would require a population of 20,000 to assimilate the lawyers, physicians, dentists, electrical engineers, etc., now on the ground. Most of them are spending the winter in idleness, consuming their substance and cursing the country.”
There were, however, some professions that were in demand in the north. Amongst these were bookkeepers. The Alaska Commercial Company would pay bookkeepers in the far north $125 a month in gold; equivalent to nearly $100,000 a year at current gold prices. A barkeeper who was known for making several types of drinks could earn up to $500 a month in gold (Over a third of a million dollars a year today today).
It wasn’t any easier to make a living as a retailer in the North. In addition to the capital to make purchases, it took quite a bit of effort to get goods across the wilderness to Dawson and Circle City. Moving the goods required a large number of horses and men, who while often hired at a reasonable wage at a port, were often likely to desert when they reached the gold fields. The retailer was then forced to hire new help at much higher wages.
The trip itself often broke the perspective entrepreneur. Alaskan Gold Strike chronicler Sam Dunham tells of a drover who was moving a heard of cattle to Dawson in hopes of making a fortune selling meat to miners at $1.00 a pound. “One drover reports that in crossing the Chilkat River, he was forced to sit helplessly on his horse and see his herd of 85 cattle disappear in the quicksand until in many cases only their heads were visible. Fortunately, the quicksand was shallow, and the cattle were rescued by means of lariats, but in an exhausted condition, which rendered it necessary to allow them several days rest.” About a third of the herd died before he reached his destination.
In some cases, the trip was so long and the uncertainty of making it so great that many sold their goods short of the mining communities. Dunham tells of another cattle herder who reached Fort Selkirk and began selling meat at $0.50 a pound to people passing down the river rather than risk the remaining 160 miles to Dawson in order to sell the meat at $1.60 a pound.
The best chance for a quick profit was transporting small stocks of goods that brought high prices. Diamonds and watches yielded profits of 100 to 150 percent, while cowboy hats could bring a 400 percent. Yet even this was risky. Some peddlers brought in cheap jewelry in hopes of making a quick profit, only to learn that there was a demand for the best grades. Dunhill had this to say about the risks of selling to miners, “A large number of men have gone out over the trail this winter (1897 - 98) for the purpose of bringing in goods of various kinds, but as it is impossible for anyone to foresee what lines will be scarce, this species of gambling is about as uncertain as speculating on the stock exchange.”
Some businesses, however, seemed to do well. Dunhhill noted, “There is one line of commerce, however, that offers vast opportunities to American enterprise, as the power of the community to consume the commodity involved is so great that it is not likely there will ever be an oversupply.” Of course, that commodity was alcohol. Although at the time alcohol was only allowed into the Yukon for, “medicinal, mechanical, or scientific purposes,” consumption was about 12 gallons per capita per year. “It must be admitted that the traffic offers great attractions to the man who wants money so badly as to render it immaterial to him how he makes it,” said Dunhill.