One of the scandals involving men and moneyed interests in Alaska’s history climaxed on Sept. 25, 1907, in Keystone Canyon, outside Valdez.
On that date, three men among a crowd of employees of the near-bankrupt Home Railroad advanced toward a barricade on the abandoned grade of the Copper River and Northwestern Railroad. Deputy Marshal Edward C. Hasey crouched behind the barricade. Hasey fired several rounds, wounding three men among those carrying clubs and tools. One of the wounded, Fred Rhinehart was to die later.
The incident exposed a sordid affair involving an alcoholic United States Attorney, Alaska’s governor, the deputy marshal, officials of the powerful Alaska Syndicate and the promoter of a failed railroad.
It also inspired a best-selling novel by Rex Beach titled “The Iron Trail,” joining his book “The Spoilers,” another Alaskan legend dealing with the claim-jumping scandal at Nome of 1901.
It all started with the discovery of rich copper deposits above the Kennicott River northeast of Valdez, now inside Wrangell-St. Elias National Park and Preserve. R. F. McClellan formed a party of Minnesotans to investigate the area where Army explorer Robert Rhon had found copper float. A pair of prospectors named Smith and Warner were looking for the source of the float when they spotted a patch of green high above on the mountainside. Climbing 150 feet up, they found a large vein of dark gray chalcocite ore, which turns green after long exposure to sunlight due to its high percentage of copper.
That discovery brought interest from Meyer Guggenheim and sons, financiers who had worldwide mining and smelting ventures.
The Guggenheims partnered with banker J. P. Morgan to form the Alaska Syndicate which was to be significantly involved in shipping, mining, mercantile and other businesses, becoming a major financial and political power in the Territory.
Developing the rich copper find involved a huge financial investment. Just to get men and equipment to the mine and then the ore to market required a railroad. Its track would have to be laid over challenging terrain, across deep rivers and atop glacial moraine. The port at Valdez was seen as the starting point for the Copper River and Northwestern Railroad. Michael J. Heney, the man who had successfully pushed through the White Pass and Yukon Railway from Skagway to Dawson in just 13 months seized on the opportunity. By the time he reached Keystone Canyon and began tunneling, however, he realized that was not the most feasible route. He sold his startup to the Alaska Syndicate. They moved their terminus to Orca Inlet, now known as Cordova, and built piers there. Tracks would go from that point to the Kennicott settlement.
Also recognizing an opportunity, an enterprising promoter named Henry D. Reynolds jumped on the chance to start a competing railroad by extending the Syndicate’s Valdez route.
Reynolds had been successful with mining in Southcentral Alaska since 1901 and convinced Valdez businessmen that his venture would be worthy of investment. He also gained the backing of Gov. John Brady who enthusiastically backed Reynolds’ Home Railroad. That conflict of interest was to cause Pres. Theodore Roosevelt to remove Brady, who had been appointed by William McKinley in 1897.
Although facing a powerful opponent, Reynolds used bluster and salesmanship to push his plans to continue the railroad from Valdez. He taunted the Syndicate at every chance, claiming that their railroad’s initials meant “Can’t Run and Never Will.” Looking for workers to lay his track, he even sent a ship to the Cordova terminus and hired away 300 men from the CR&NW construction crew.
Planning to lay track from Valdez, Reynolds found a barricade of rock in Keystone Canyon. Intending to go beyond and knowing that the Syndicate had abandoned its route, Reynolds sent his workers out to take possession and remove the obstacle.
Anticipating trouble, the Syndicate hired George Hazelet, a determined man whose resume included school teacher, principal, real estate developer, entrepreneur and city official before heading for the Klondike at age 37. Since 1898, he and his partner, Andrew Jackson “Jack” Meals, prospected around various northern creeks until Hazelet settled in Valdez, then moved to Cordova where he soon was to be elected mayor. Hazelet had assisted Stephen Birch in forming a corporation that was to be affiliated with the Syndicate. Birch was put in charge of the railroad operation, aided by Hazelet.
Hazelet is said to have asked U.S. Marshal George Perry to appoint two Syndicate employees, Edward C. Hasey and Duncan Dickson, as deputies.
Hazelet reportedly armed the men and told them to “look after my interests.” He apparently hoped that they would intimidate Reynolds’ men and slow their efforts.
When Hasey opened fire on the oncoming workers, wounding three, the others retreated. One of the injured, Fred Rhinehart, died sometime after the shooting.
Considerable controversy arose following the affair. Newly-appointed Alaska Gov. Wilford Hoggatt went to Valdez to investigate. A grand jury was quickly convened and indicted Hasey for murder. His trial was moved to Juneau because feelings were running high in Valdez. With Pres. Roosevelt taking a close interest in Alaskan affairs, and having replaced Gov. Brady because of his involvement with the Home Railroad, Secret Service Agent M. P. McAdams was sent to assist prosecutors.
McAdams was appalled at the attitude of Alaskans, telling his superiors that “It would take a Constitutional Amendment to purify Alaska.” He found there was deep resentment toward the Alaska Syndicate’s presumed monopoly as well as interference in local affairs from the nation’s capital. Valdez residents had supported Reynolds in his effort to compete with the CR&NW and most locals felt the Home Railroad workers were wrongfully fired upon when attempting to clear the barricade.
While former Gov. Brady had supported Reynolds’ Home Railroad, his replacement strongly defended the Syndicate. Hoggatt felt that Reynolds’ men should have been charged with inciting a riot and that Hazelet should also have been indicted for manslaughter in Rhinehart’s death.
As it turned out, Hasey was acquitted of murder in the second degree when the jury found he was in fear of his life and fired in self-defense.
To avoid a double jeopardy defense, the government then tried him on new charges of assault with the intent to kill. He was found guilty and sentenced to 18 months at McNeil Island Penitentiary in Puget Sound, near Steilacoom, Washington. Hasey’s attorneys planned an appeal but were dissuaded when the Syndicate agreed to pay Hasey his full salary and other benefits while in prison.
The trial itself emitted an odor of rotten fish.
The chief witness for the defense was one M.B. Morrisey, a Home Railroad employee who had initially been subpoenaed by the prosecution. His testimony that the workers were armed was corroborated by others. The others’ statements, however, were tainted by the fact that Morrisey had frequently entertained them and “loaned” them cash from the large bonus he was suspected to have received from the Syndicate. Hasey’s attorney, John Ostrander of Valdez, had publicly called presiding Judge Royal Gunnison “the most ignorant fool that ever sat on this or any bench.” He felt Gunnison had been antagonistic throughout the trial. The U.S. Attorney who was in charge of the prosecution was accused of frequent drunkenness and widely condemned among the citizenry.
Frontier jurisprudence was not always prudent. Lawyers were kept busy then, as now. Gunplay was rare, but was not unheard of. Big money also played its part.
There is an old adage that those who ignore history are doomed to repeat it. Alaska’s history is rich with valuable stories that well deserve heeding. Much is to be learned from Elizabeth Tower’s “Icebound Empire, Industry and Politics on the Last Frontier 1898-1938.”