The Economics of the Klondike
by: Jack London
Now that the rush to the northland
Eldorado is a thing of the past, one may contemplate with sober vision
its promises and their fulfillment. Who has profited? Who has lost? How
much gold has been taken out of the ground? How much has gone into it?
And finally, what will be the ultimate outcome of this great shifting of
energy, this intense concentration of capital and labor upon one of the
hitherto unexploited portions of the earth's surface?
In 1897, between the middle of July and the first september,
fully 25,000 argonauts attempted to enter the Yukon country. Of these the
great majority failed, being turned back at the head of the Lynn Canal
by obstacles of the Chilcoot and White Passes, and at St. Michaels by the
early advent of winter and the consequent closing of navigation on the
Yukon. The spring of 1898 found 100,000 more on the various trails leading
to the Klondike, chief among which were Skagway and Dyea, the Stickeen
route, being at Fort Wrangell, the "all-Canadian" route via Edmonton, and
the all-water route by way of the Bering Sea. To all of these had been
iterated and reiterated the warning of the old-timers: Don't dream of venturing
north with less than $600. The more the better. One thousand dollars will
be none too much.
A few bold spirits were not to be deterred by the fact
that they did not possess the required amount, but in the main $600 was,
if anything, under the average sum buckled about each pilgrim's waist.
But taking $600 as a fair estimate of individual expense, for 125,000 men
it makes an outlay of $75,000,000. Now, it is unimportant whether all or
none of them reached the goal - these $75,000,000 were expended in the
attempt. The railroads, the ocean transportation companies, and the outfiting
cities of Puget Sound received probably $35,000,000; the remainder was
dropped on the trail. The majority of those who succeeded in getting through
had barely the $10 necessary for a miner's license; a few were able to
pay the $15 required for the recording of the first claim they staked;
many were penniless.
Since the transportation and outfitting companies certainly
profited, the question arises: Did the Yukon district return to the gold-seekers
the equivalent of what they spent in getting there? This may be decided
by a brief review of the gold discoveries which have been made. In the
fall of 1896 the first news of MacCormack's strike went down the
Yukon and across the border to the established Alaskan mining camps of
Forty Mile and Circle City. A stampede resulted and the Eldorado, Bonanza,
and Hunker Creeks were staked. That winter the news crept out to "salt
water" and civilization. But no excitement was created, no rush precipitated.
The world proper took no notice of it.
"Gold-rocking" on Skookum Hill
In the summer of 1897 a stampede from the three creeks
mentioned went over the divide back of Eldorado and staked Dominion Creek,
a tributary of the Indian River. At this very moment the first gold shipments
were reaching the Pacific coast and the first seeds of the gold rush being
sown by the newspapers. During this period and early fall Sulfer,
Bear, and Gold Run Creeks were being staked in a desultory fashion - as
of course were many others which have since proven worthless. Regardless
of glowing reports and the ubiquitous "wild-cats," and with exception
of a very small number of bench claims, there have been no more paying
creeks discovered in the Klondike. And this must be noted and emphasized:
All the paying creeks above named were located before the people arrived
who were hurrying in from the outside.
It is thus clearly demonstrated that those who participated
in the fall rush of 1897 and in the spring rush of 1898 were shut out from
the only creeks which would pay expenses, but the stay-at-home at once
exclaims, were there other ways of playing even? How about the benches
and the "lays"?
Let the "benches " be first considered. A bench claim
is a hillside claim as distiguished from a creek claim. The Skookum bench
strike was made prior to the influx from the hillside, and subsequent to
it came the discovery of the French Hill and Gold Hill benches, situated
between Skookum and Eldorado. These last two are the only strikes in which
the newcomers could have taken part. But at this point two factors arise
limiting their participation. In the first place, not more than a score
of French Hill and Gold Hill bench claims are rich, and not one will turn
out more than $100,000. In the second place, these benches were right in
the heart of the old workings, where the old-timers were on the ground,
not five minutes' walk away. If the newcomers succeeded in possessing one
claim out of each twenty staked they did well; and since not one claim
in twenty developed paydirt, the amount of dust taken out by the newcomers
is practically nil.
Returning miners waiting for a steamer at St. Michaels.
Now as to "lays." In the winter of 1896 the lay men did
well. But at that time conditions were entirely different from those of
the following winter. The importance of the Klondike strike was not appreciated,
the value of the gold in the gravel problematical, grub was scarce, and
the demand greatly in excess of the labor supply. Under these circumstances
it was easy for men to obtain profitable lays. But in 1897 these favorable
conditions had disappeared. The owners knew the true worth of their holdings,
grub was plentiful, and the labor market was stocked. Now, no mine owner
was silly enough to let a lay to a man which would clear that man $50,000,
when he (the mine owner) could work that same man on wages the same length
of time for $2,000. However, many newcomers, with ignorance really pathetic,
took such lays as were offered, used their own tools and "grub," worked
hard all winter, and at the wash-up found they would have been better off
had they idled in their cabins. It is a fact that hundreds of lay men on
the various creeks refused to put their winter's dumps through the sluices.
It is thus evident that the Yukon district returned no equivalent to the
gold-seekers who expended $75,000,000.
It is an old miner's maxim that two dollars go into the
ground for each dollar that comes out. This the Klondike has not failed
to exemplify, and a startling balance-sheet may be struck between the cost
of the effort and the value of the reward. On the one side legitimate effort
alone must be considered; on the other the actual gold taken from the earth.
Scores of new transportation and trading companies, formed
during the excitement with an enterprise only equaled by their ignorance,
lost in wrecked river and ocean-going craft and in collapse several millions
of dollars. The men in the country before the rush - the mine owners, middlemen,
and prospectors - between their expenses and their labor form and important
item, as do also the expenditures of the Canadian and American governments.
But disregarding these items and many minor ones, the result will still
be sufficiently striking. Consider only the 125,000 gold-seekers, each
of whom on an average, in getting or in trying to get into the Klondike,
spent a year of his life. In view of the hardship and the severity of their
toil, $4 per day per man would indeed be a cheap purchase of their labor.
One and all, they would refuse in a civilized country to do the work they
did do at such a price. And let them be granted 65 resting days in the
twelvemonth. Still the effort expended by these 125,000 men in the course
of the year is worth in the aggregate $150,000,000. To this let there be
added the $75,000,000 they spent in cash, and we have for one side of the
balance the sum of $225,000,000 - or roughly, $220,000,000.
The other side is easily constructed. The spring wash-up
of 1898 was $8,000,000; of 1899, $14,000,000. In the absence of the
full reports this latter is a liberal estimate, allowing an increment of
$4,000,000 and considering the fact that no new discoveries have since
been made. The figures stand for themselves: $220,000,000 have been spent
in extracting $22,000,000 from the ground.
Such a result would seem pessimistic were not the ultimate
result capable of a reasonable anticipation. While this sudden and immense
application of energy has proved disasterous to those involved, it has
been of inestimable benefit to the Yukon country, to those who will remain
in it, and to those yet to come.
Fort Selkirk, one day's journey from Dawson.
Perhaps more than all other causes combined the food shortage
has been the greatest detrimant in the developement of the region. From
the first explorer down to and including the winter of 1897 the land has
been in a chronic state of famine. But a general shortage of supplies is
now a thing of the past. About 1874 George Holt was the first white man
to cross the coast range and the first man to penetrate the country avowedly
in quest of gold. In 1880 Edward Bean headed a party of twenty-five from
Sitka to the Hootlinqua River, and from then on small parties of gold-seekers
constantly filtered into the Yukon valley. But these men had to depend
wholly upon what provisions they could carry in with them by the most primitive
methods. Consequently throrough prospecting was out of the question, for
they were always forced back to the coast through the lack of food. Then
the Alaska Commercial Company, in addition to maintaining its trade posts
scattered along the river, began to freight in provisions to sell to the
miners who wished to winter in the country. But so many men remained that
a food shortage was inevitable. With every steamer that was added more
men hurried over the passes and wintered; and as a result demand always
inreased faster than supply. Every winter found the miners on edge of famine,
and every spring, with the promise of more steamers, more men rushed in.
But henceforth famin will be only a tradition in the land.
The Klondike rush placed hundreds of steamers on the Yukon, opened the
navigation of its upper reaches and the lakes, put tramways around the
unnavigable Box Canyon and White Horse Rapids, and built a railroad from
salt water at Skagway across the white Pass to the head of steamboat traffic
on Lake Bennett.
Looking up Bonanza Creek from Discovery Claim.
(Showing the flumes used for washing out the gold.)
With the dwindling of population caused by the collapse
of the rush, these transportation facilities will be, if anything, greater
than the need of the country demands. The excessive profits will be cut
down and only the best-equipped and most efficient companies remain in
operation. Conditions will become normal and the Klondike just enter upon
its true developement. With necessaries and luxuries of life cheap and
plentiful, with the importation of the machinery which will cheapen many
enterprises and render many others possible, with easy traveling and quick
communication between it and the world and between its parts, the resources
of the Yukon district will be opened up and developed in a steady, busisness-like
Living expenses being normal, a moderate wage will
be possible. Nor will laborers fail to hasten there from the congested
labor markets of the older countries. This in turn, will permit the employment
on a large scale of much of the world's restless capital now and seeking
investment. On white River, eighty miles south of Dawson, great deposits
of copper are to be found. Coal, so essential to the country's exploitation,
has already been discovered at various places along the Yukon, form "MacCormack's
Houses" above the Five Finger Rapids down Rampart City and down the Koyukuk
in Alaska. There is small doubt that iron will eventually be unearthed,
and with equal certainty the future gold-mining will be mainly in quartz.
Cattle for the Dawson market on the Dawson Trail.
As to the ephemeral placers, the outlook cannot be declared
bad. It is fair to suppose that many new ones will be discovered, but outside
of this there is much else that is favorable. While there are very few
"paying" creeks, it must be understood that nothing below a return of $10
a day per man under the old expensive conditions has been considered "pay."
But when a sack of flour may be bought for a dollar instead of fifty, and
all other things in proportion, it is apparent how great a fall the scale
of pay can sustain. In California gravel containing 5 cents of gold to
the cubic yard is washed at a profit; but hitherto in the Klondike gravel
yielding less than $10 to the cubic yard has been ignored as unprofitable.
That is to say, the old conditions in the Klondike made it impossible to
wash dirt which was not at least two hundred times richer than that washed
in California. But this will not be true henceforth. There are immense
quantities of these cheaper gravels in the Yukon Valley, and it is inevitable
that they yield to the enterprise of brains and capital.
View of Klondike City, with Dawson City in the distance.
In short, though many of its individuals have lost, the
world will have lost nothing by the Klondike. The new Klondike, the Klondike
of the future, will present remarkable contrasts with the Klondike of the
past. Natural obstacles will be cleared away or surmounted, primitive methods
abandoned, and hardship of toil and travel reduced to the smallest possible
minimum. Exploration and transportation will be systematized. There will
be no waste energy, no harum-scarum carrying on of industry. The frontiersman
will yield to the laborer, the prospector to the mining engineer, the dog-driver
to the engine-driver, the trader and speculator to the steady-going modern
man of business; for these are the men in whose hands the destiny of the
Klondike will be intrusted.
source: London Jack, The American monthly Review of Reviews,
, 1900, p.70-74
Jack London Directory
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