Gold and government: Fairbanks comes full circle.

• Author: Holland, Jonathan
• Position: Includes related article

A search for economic survival takes this Interior town back to its roots.

Fairbanks is a town that was born of expediency, nurtured on gold, raised on government and matured on oil revenues. Now that the oil boom is over, Fairbanks is returning to its roots: gold and government.

The city of Fairbanks was born 93 years ago when a riverboat captain, unable to travel any farther upstream on the Tanana River, dumped E.T. Barnette and his load of supplies at the mouth of the Chena River. Barnette had originally been bound for Tanacross, the halfway point on the Valdez to Eagle trail, to set up a trading post.

Legend has it that, stuck in the middle of nowhere and desperate for business, Barnette sent a messenger overland to Dawson to spread rumors of a gold strike near the confluence of the Chena and the Tanana rivers. In an incredibly fortuitous coincidence, by the time the stampeders got to Fairbanks, a wandering prospector named Felix Pedroni had discovered a rich placer deposit 16 miles north of Fairbanks. The gold rush of 1903-1904 was on.

Fairbanks' long and intimate relationship with the government had begun when Barnette's friend, Judge James Wickersham, moved the headquarters of the Third Judicial District from Eagle to Fairbanks in 1903. The move made Fairbanks the governmental and judicial administrative center for the Interior.

In 1917, the University of Alaska, a land-grant college, was established in Fairbanks. Although it wasn't ready to receive students until 1922, it would eventually grow to be one of the mainstays of the local economy.

A GOLDEN FOUNDATION

From 1903 on, Fairbanks grew rapidly as its gold fields were developed. By 1910 it was the largest city in Alaska, with a population of more than 3,500. Another 7,500 miners lived in the outlying areas of the Fairbanks mining district at that time.

By 1909, $9 million in gold (at $20.67 per ounce) had been recovered in each of the three previous years in the Fairbanks mining district. The average value of gravel washed by the miners in 1908 was $5.60 a cubic yard.

Production figures began to drop off after 1909. The gravy had been skimmed, and the remaining gold, while abundant, was buried deep under alluvial gravels and glacial loess. Recovery of the remaining minerals would require more than hand-mining techniques. A substantial capital investment in dredges and large blocks of ground would be required for further mining.

In the years between 1910 and 1920, the Fairbanks Exploration Co. (FE Co.), a gold-extraction firm, was quietly buying blocks of mining claims. FE's interest in Fairbanks was made possible by a massive government investment known as the Alaska Railroad, which allowed FE Co. to bring in heavy equipment and ship ore out. FE went into business in earnest in about 1920, and Fairbanks became, in essence, a one-company town.

"Fairbanks was just another mining camp," says University of Alaska Fairbanks historian Terrence Cole. "Without enormous government investment (the railroad), it could have become another Flat or Iditarod."

The FE Co. received another boost from the federal government when the Roosevelt administration raised the price of gold from $18 per ounce to $35 per ounce.

"It was a huge shot in the arm for the mining industry. The peak year for dredging was 1940," Cole says.

The mining boom, however, was relatively short-lived.

"The (federal) government shut mining down as a 'nonessential industry' in 1942," Cole says. "But they (FE) were in trouble by then anyway because of inflation."

By 1942, a new boom, the federal military presence at Ladd Field, had arisen to take mining's place as the economic foundation of Fairbanks. Established in...