Canadian Historic Sites: Occasional Papers in Archaeology and History No. 19
by Gordon Bennett
The Dawning of a New Era
Apart from such strategically inspired transportation projects as the Alaska Highway and Canol, very little in the way of local transportation development took place between 1939 and 1945. Road work, with a few minor exceptions, was confined to maintenance and improvement. In 1941 the Whitehorse airport was completely rebuilt and transformed into a "1st class" facility as part of the Northwest Staging Route, but Whitehorse's emergence as a major air centre was largely the result of the American military presence, a factor wholly unrelated to local economic conditions. The aerial division of the White Pass and Yukon Route, British Yukon Aviation, was sold to Canadian Pacific Airways in September 1941, the sale marking an important departure from the White Pass and Yukon Route's policy of involving itself in all aspects of Yukon transportation.1
The territorial mining industry escaped the full economic impact of the war until 1943. Indeed, mineral production for each year between 1937 and 1942 exceeded in value that of any year after 1917. Although the Yukon Consolidated Gold Corporation encountered "some difficulty in obtaining necessary operating parts and material" in 1941, the small production decline recorded for that year was largely attributable to a labour strike and the driest season on record. By 1943, however, the drain on the labour pool caused by enlistments and the absorption of men into wartime construction projects had reached serious proportions. According to the president of the Yukon Consolidated Gold Corporation, "labour available for 1943 [was] approximately 30% of the amount required for full-scale operations." As a consequence, gold production fell abruptly, from 83,246 fine ounces in 1942 to 41,160 fine ounces, 23,81.8 fine ounces and 31,721 fine ounces between 1943 and 1945 respectively.2
Not too surprisingly, this decline had no discernible impact on the territorial transportation system. The intensive utilization of existing transportation facilities by the military was a mitigating factor, as was the reorganization of the Yukon Consolidated Gold Corporation in the early 1930s which had created a mature regional economy based on placer mining. This economy was not dependent on new gold discoveries but on the reworking of known reserves with more efficient procedures. Local transportation needs such as roads were already in existence. The remaining transportation requirement, access to Whitehorse, was furnished by the British Yukon Navigation Company in summer and by air during the closed season of navigation. Unlike the Mayo district, where transportation was directly dependent on production because of lode mining, the transportation facilities serving Dawson from Whitehorse were dependent on the market for consumer goods. Since the population of the Dawson area remained relatively constant throughout the war, this service was not disrupted.3
Of far greater import to the territorial transportation system was the suspension of operations by Treadwell Yukon in November 1941. The collapse of the silver-lead industry brought on by the depletion of known ore reserves dealt what was tantamount to a terminal blow to river transport which for 20 years had been sustained by Mayo district ore shipments. Between 1939 and 1946, the only years for which tonnage statistics covering the period are available, the total freight tonnage handled by the British Yukon Navigation Company in Canada declined by almost 50 per cent as a result of the fall in silver-lead production.4
In the immediate postwar period a lively debate took place over the future course of Yukon transportation development. George Black, in a speech before the House of Commons, declared that the "Yukon's greatest need today is for roads. Without roads there can be no advance. In some districts . . . development is at a standstill for lack of roads." The federal government, on the other hand, no doubt a trifle wary at the prospect of another Alaska Highway, regarded road construction coolly and showed a strong inclination toward aviation improvements.5
Local clamour focused specifically on the demand for an all-weather road between Whitehorse, Mayo and Dawson. The resumption of large-scale silver-lead mining in 1946 after an hiatus of four years lent this demand a degree of urgency and resulted in a request from the Keno Hill Mining Company, Treadwell Yukon's successor, for the immediate construction of the Whitehorse-Mayo section of the proposed Whitehorse-Mayo-Dawson road. With national priorities geared to the provision of housing for returned servicemen and the conversion of industry to a peacetime footing, the Whitehorse-Mayo road found little support in Ottawa and the request was shelved by the Department of Mines and Resources.6
The dilemma facing the silver-lead industry approached crisis proportions in 1947 when a substantial portion of the year's production failed to reach market for want of transportation. The failure disrupted plans to expand the Keno Hill Mining Company's operation and helped to underline the fundamental inadequacies of river transport. So long as the industry remained dependent on water transport, the vintage complaint (1929) that output could be "materially increased, but when the White Pass can only handle a certain tonnage each year, there is no advantage in increasing output beyond that figure would remain. The existing transportation system was also a major factor in the high operating costs incurred by the industry because of primitive handling facilities at transhipment points, the number of transhipments required and the seasonal nature of navigation. As well, the reduction in Stewart River traffic that followed the closing of the Treadwell mines in 1941 had allowed the main navigation channel to fill with sediment with the result that postwar transport on the Stewart was adversely affected.7
The 1947 crisis forced a reconsideration of the Department of Mines and Resources's territorial roads policy and acted as the catalyst for the Whitehorse-Mayo road. In January 1948 the department gave its approval to an all-weather truck road between the two centres. The 246-mile highway was completed in October 1950 and spelled the end of navigation on the Stewart River. Although it required a large initial investment and involved higher direct costs, the highway more than paid for itself by increasing the shipping season from four and one-half to ten months. All-season ore transport was not obtained until the early 1960s when steel bridges replaced ferries and ice bridges over the main river crossings.8
The extension of the shipping season had an immediate impact on the silver-lead industry and illustrated an interesting paradox; that cheap transportation, such as that provided by the sternwheeler, did not necessarily constitute the most economical form of transportation over the long run. Ore production for 1950 more than doubled that of 1949 and doubled again in 1953, an increase in volume that was in part attributable to the highway's construction and which more than compensated for the initial high cost of road transport.9 Road transport was instrumental in reducing the indirect costs of production, moreover, by releasing large amounts of capital previously tied up in inventories. This, combined with the elimination of the traditional holdover period associated with seasonal transportation wherein ore mined in one year did not realize a return until the year following, enhanced the industry's prospects and facilitated the refinancing of the Keno Hill Mining Company and its reorganization as United Keno Hill Mines in 1948.10 Given the particular nature of the silver-lead market, the elimination of the holdover period was a great boon. By extracting and marketing in the same year, producers were placed in a more advantageous market position and were able to avoid a repetition of the 1949 experience, when the industry lost some $130,000 on its 1948 production as a direct result of a decline in silver-lead prices.11
Ironically, the federal government acquired the British Yukon Navigation Company's Marsh Lake dam, rebuilt it at a cost of $125,000, and agreed to operate and maintain it at the very time (1948) that its reformulated road programme was in the process of rendering water transport obsolete. In 1949, in an attempt to reduce operating costs, the British Yukon Navigation Company installed a coal-fueled boiler system in the SS Whitehorse, but the "adaption in grates was not the most efficient possible" and the steamer was converted back to a wood burner. By 1950 the company's sternwheeler operation had been reduced to one trip every ten days to Dawson, occasional downriver runs to Alaska and tourist excursions on Tagish Lake.12
When the Overland Trail fell into disuse after 1937 Dawson was deprived of its only overland connection with an all-weather transportation centre. The location of the Alaska Highway and the federal government's postwar roads policy added to a growing sense of isolation evident in the community and served to focus attention on the need for improved communication. This need was given a strong impetus by the realization that overland transport was becoming an increasingly important factor in territorial transportation.
Failure by the Department of Mines and Resources to counsel a Dawson-Whitehorse road was partially ameliorated by the possibility of linking Dawson with the Taylor Highway in Alaska. Construction of this highway between Tok Junction on the Alaska Highway and Eagle, Alaska, began shortly after the war. By 1948 the road had been completed as far as Chicken, Alaska, 20-some miles from Poker Creek, the Canadian terminus of the Sixty Mile road which ran west of Dawson. As the special commissioner of the Northwest Highway System observed, "it appears that a little more construction and some betterment on the Alaska side of the border could result in Dawson City having an all-year-round access to the Alaska Highway at Tok."13
Access to the Alaska Highway by way of Chicken and a corollary scheme to supply the Dawson area from the port of Valdez, Alaska, met stiff opposition from the White Pass and Yukon Route which saw in the proposed Sixty Mile road extension and the opening up of the port of Valdez a threat to its monopoly on transportation to and from the Dawson region. More importantly, the scheme presented a challenge to Whitehorse's traditional function as the territory's supply centre and distributing point. Despite strong support for the scheme in areas adjacent to Dawson, the Sixty Mile road extension, which entailed very little in the way of new construction, was not completed until 1951. In the meantime, a winter trail connecting Dawson with Stewart Crossing on the Whitehorse-Mayo highway had been built in 1950.14 This diminished to a large extent the need for developing the Sixty Mile-Taylor Highway access to the Alaska Highway. Since the Sixty Mile extension was opened to traffic during the summer months only, it failed to develop as an important commercial artery for it could not compete with the Whitehorse-based British Yukon Navigation Company.15 The absence of an all-season overland link between Dawson and Whitehorse was finally remedied when the federal government decided to build an all-weather road between Dawson and Stewart Crossing in 1951. Construction of this 120-mile road was begun in 1952 and completed in 1955.16
The decade 1946-55 was one of great change in the territorial transportation system. The transition from water to overland forms of transport, begun with the construction of the Whitehorse-Mayo highway and completed with the construction of the Dawson-Stewart Crossing road, was but one of these changes. No less important was the remarkable reversal in the economic fortunes of the White Pass and Yukon Route. These fortunes, which entered a period of protracted decline at the time of the First World War, dropped to a low ebb during World War II with the suspension of production by Treadwell Yukon and the transfer of the railroad to the United States Army. When the railroad was returned to the company on 1 May 1946 following cancellation of the army lease, the company was, in the words of one official, "very near to the end."17
While the White Pass and Yukon Route has since made much of the claim that the army left the railroad "in a virtually tumbledown condition" and "did not pay . . . much rent," the army can not be held responsible for the difficulties which beset the company after 1946.18 Instead, the company's postwar plight should be seen as the climax of years of neglect. By 1950 the unpaid interest on the company's debentures had grown to $2,458,000, while dividends, the lifeblood of any successful enterprise, had not been paid since 1912. Although the company did manage to show a nominal book profit, this was achieved at the expense of necessary maintenance and repair work, an expedient that might have been justified over the short term, but which, because of local economic conditions and foreign control, had become a long-term characteristic of the operation.19
Just as the company appeared to be slipping into the morass of insolvency, an English financier by the name of Norman D'Arcy, backed by the Hambros Bank, quietly acquired all the bonds, debentures and stocks of the White Pass and Yukon Route. On the advice of C.D. Howe, minister of Trade and Commerce, D'Arcy formed a new Canadian corporation in 1951, the White Pass and Yukon Corporation, and installed Frank H. Brown as president. To finance the takeover, the new company sold 3.7 million dollars worth of bonds on the London market.20
A basic shift in managerial outlook followed the company's reorganization. Whereas the company had previously been forced to temporize in semipermanent fashion with a multitude of difficulties, the new corporation undertook an ambitious programme which had as its goal the elimination of problems at the source. This new outlook was given cogent expression by Frank Brown at the company's 1953 annual meeting. Operating on the assumption that "all Canadian railways face the same problem of low earnings through the high cost of running long distances through sparsely settled country," Brown concluded that "modernization and mechanization to the fullest practicable extent and a firm determination that each subsection of operations shall pay its own way" was the key to extracting the company from its moribund state.21
Modernization proceeded rapidly under Brown's stewardship. New rolling stock was acquired, heavier rail was laid down and obsolete equipment and buildings were sold or written off. To avoid backtracking, the railway repair shops at Skagway were relocated, new ones were built and at Whitehorse the roundhouse was remodelled. For the first time in decades the company's physical assets were adequately insured. Beginning in 1954 the company gradually replaced its steam locomotives with specially designed diesels capable of operating under conditions of extreme temperature (from 95°F above zero to 65°F below zero). As early as 1955 Brown was able to report that the diesels "fully measured up to expectations." Far more efficient than the conventional steam engine, diesel-powered locomotives effected an immediate 60 per cent reduction in fuel costs and increased hauling capacity by a corresponding amount. Additionally, they were easier to maintain and did less damage to the permanent way. By 1963 diesel conversion was complete and the steam engine, once the proud workhorse of the White Pass and Yukon Route's transportation system, joined the sternwheeler in retirement.22
The disappearance of the river boat preceded that of the steam engine by seven years and perhaps more than anything else signified the passing of an era in Yukon transportation. A fixture for 86 years, the sternwheeler was the victim of Brown's "firm determination that each subsection of operations shall pay its own way" and the new highways that siphoned off the trade that had once been the sternwheelers exclusive preserve.23 Before 1950, river and road transport had been complementary; construction of roads had, in point of fact, "meant more business for the sternwheelers, and also, a more varied schedule."24 But the completion of the Whitehorse-Mayo highway in 1950 and the Stewart Crossing-Dawson road in 1955 brought the river and these highways into direct competition, a competition that the river was fated to lose because of its seasonal nature and rigid capacity.
In a last-ditch attempt to perpetuate the sternwheeler, the British Yukon Navigation Company converted the ore-carrying SS Klondike into a tourist vessel. Under an arrangement with Canadian Pacific Airlines which chartered the Klondike to ferry passengers from Whitehorse to Dawson, an extensive refurbishment was carried out during 1953-54. The dining room was enlarged, a new lounge and bar were added, and the number of staterooms was increased (the fueling system had been changed from wood to oil in 1951). In spite of these changes, however, the experiment was not a success. Operational expenses exceeded revenues and low water on the Yukon resulted in the cancellation of a number of tours.25
On 18 August 1955 SS Klondike No. 2, the last sternwheeler on the Yukon River, steamed into Dawson for the last time.26 The following day it started on the return run to Whitehorse where it shortly joined its fellow craft in permanent retirement, thus bringing to a close one of the longest chapters in the history of the Yukon territory.
Containerization was clearly the most important and unique aspect of the modernization programme outlined by Brown in the White Pass and Yukon Corporation's 1952 annual report.27 It evolved out of the persistent problems created by breakages, shortages, loss of time and general freight disorder, all of which contributed to the high operating costs and economic malaise that plagued the company.28 Company legend has it that the system was developed in Archimedes' fashion "on the banks of the Yukon River near Whitehorse by three worried White Passers sitting on a log."29 Be that as it may, the decision to go ahead with containerization transformed the Yukon transportation system, or at least that portion of it under the White Pass and Yukon Corporation, from one of 19th-century vintage into what was perhaps the most modern in the world.
Because ship holds on the Vancouver-Skagway run were not suitable for container handling, the White Pass and Yukon Corporation organized a wholly owned subsidiary, British Yukon Ocean Services, in 1954. The following year the company launched the first container ship in the world, the four-thousand-ton Clifford J. Rogers.30
What distinguished the White Pass and Yukon Corporation's container system from that of any other in existence was its integrated character. The basic principle underlying the concept was "uniform procedures and methods."31 Every aspect of the company's transportation establishment was designed specifically for container handling: the coastal vessel, the railroad and the highway trucking division. The original containers, coloured variously to designed merchandise, bulk loads, refrigerated products and explosives, measured seven feet by eight feet by eight feet. Unitized pallets called trays were used for ore transport. All freight handling at transhipment points was done with straddle carriers or fork lifts and the ship was equipped with a gantry crane.32
Since 1955 when the Container Route, as it is called, was inaugurated, a number of refinements and improvements to the original system have been effected. In 1965 the Clifford J. Rogers was retired and a new container ship, the Frank H. Brown, was launched. To accommodate the increased capacity of the Brown, the company tripled the size of its containers to 25 feet 3 inches by 8 feet by 8 feet. As well, a "tear" or parabolic container was developed to handle ore. In 1969 a second ship, the MV Klondike was placed in service. To complete the modernization programme, a new Vancouver terminal and the Skagway Bulk Storage and Loading Terminal were built.33
Today the White Pass and Yukon Corporation operates at a profit.34 This complete turnabout in the economic fortunes of the enterprise is in large measure attributable to the implementation and refinement of the integrated container system. That system has "lifted White Pass from the doldrums as regards ratio of out profit to sales," a recent presidential report has stated, "to a ratio more in keeping with the ratios which prevail in the case of numerous successful Canadian companies." Containerization has practically eliminated loss and breakage, reduced paper work to a minimum, done away with expensive and unnecessary handling and given the company a margin of operational flexibility never before imagined.35
For the Yukon the benefits derived from the integrated container system have been no less significant. The Container Route has meant faster and more efficient service as well as substantial reductions in freight rates.36 This last is of vital importance in view of the territory's remoteness and its economic base.
A new manifestation of federal interest in the North occurred coincidentally with the transportation changes initiated by the White Pass and Yukon Corporation in the early 1950s. While federal interest in the Yukon was certainly not a novel phenomenon, past government activity had tended to be of a reactive and ad hoc nature. What distinguished this new manifestation was that it became an integral part of national policy.
Out of this qualitatively different government interest in the North emerged the concept of "northern development." "It has been said," Prime Minister Louis St. Laurent told the House of Commons on 8 December 1953, "that Great Britain acquired her empire in a state of absence of mind. Apparently we have administered these vast territories of the north in an almost continuing state of absence of mind." To remedy this situation, the government proposed reorganizing the Department of Resources and Development and renaming it the Department of Northern Affairs and National Resources. "We think that the new name is rather important," the prime minister declared, "it is indicative of the fact that the centre of gravity of the Department is being moved north." The shift in thinking that accompanied the change in name was substantive. For the first time in Canadian history a minister was charged "to promote measures for further economic development" and "to develop knowledge of the problems of the north and the means of dealing with them."37 Northern development, fostered by the federal government, was to become a reality.
A review of what has taken place since 1954 demonstrates clearly that successive governments have tended to regard northern development in terms of accretions to the transportation system. John Diefenbaker, perhaps the archetypal advocate of northern development, has given this understanding its clearest expression in stating that "transportation is the key to the development of the North."38
More specifically, this emphasis on transportation has focused on road construction, especially as northern development policy has been applied in the Yukon.39 A significant departure from the post-1945 but pre-northern development policy of encouraging aviation, this approach to northern development can be said to represent a vindication of a half-century of agitation in the territory for new and better roads.
The Diefenbaker government's "Development Road Programme," the territorial adjunct of the more familiar "Roads to Resources Programme," provided the first real impetus to "development" road construction in the Yukon. The Roads to Resources Programme was actually an amplification of a policy outlined by the previous Liberal administration, under which the federal government agreed to pay the entire cost of approved development roads. Development roads, as distinct from conventional roads, were roads that were designed to serve or to create a potential transportation market by opening up new areas for exploitation and as such introduced an element of risk that had previously been assiduously avoided.40 This fact was not lost on critics of the policy, who pointed out that a development road could be built for which traffic might never materialize. In practice, however, the theoretical distinction between development roads and other roads has not been so clear cut. Modern mining companies with an abundance of new technologies relating to exploration, location and testing bear little resemblance to turn-of-the-century gold companies, let alone the individual prospector who scoured the creeks during the early days. As a result, the risk factor has been largely anticipated during an earlier phase of development. For this reason such northern development projects as the Dempster Highway between Dawson and Fort McPherson or the reopening of the Canol road between Johnsons Crossing and Ross River for Anvil mines have not been inordinately high-risk ventures.
Although an important aspect of northern development policy has been the recognition of the significance of transportation to expansion and the federal government's obligation in fostering its development, it must be noted that the central government participated in a number of Yukon transportation projects long before the concept of northern development was articulated. In varying degrees, road building as well as aids and improvements to navigation were considered as falling within the proper sphere of federal responsibility as early as 1900, as federal grants to the territory for road construction and maintenance, and the work performed by the Department of Public Works on navigable waterways bear witness.41 These examples of participation, however, differed from transportation projects undertaken for northern development purposes in two respects. In the first place, they were designed to serve existing, not potential, transportation needs and second, the demonstration of an actual transportation need, as was the case after the abandonment of the Overland Trail, provided no guarantee of federal action.
Despite efforts by the federal government to meet the increasing territorial demand for roads, many regions of real or suspected economic potential remain unserved by any form of transport other than the airplane. This constitutes a major problem because most of these regions require surface transport in order to be developed. Because the public sector has neither the capacity nor a legitimate obligation to satisfy this need, private enterprise has come to play an increasingly important role on supplying ground access, usually in modified form, to remote locations in which it has an exploitive interest.
An excellent example of this type of participation was the formation of Arctic Oil Field Transport by the White Pass and Yukon Corporation and the Proctor Construction Company of Whitehorse. The company was organized to move supplies and heavy equipment to proposed drilling sites in the Bell River area of the northern Yukon in the late 1950s. Instead of employing the conventional technique of transporting freight by tractor-drawn sleighs over roadless wilderness, the company decided to build a winter truck trail over the snow between Elsa and the testing site, 45 miles inside the Arctic Circle. Working from an aerial survey, the company bulldozed a 385-mile road, known as the Wind River Trail, during the winter of 1959-60 that was capable of handling large diesel tractor units. Rivers were crossed with the aid of ice bridges.42
The Wind River Trail was an ingenious expedient that satisfied the immediate problem of short-term ground access into a remote region at minimum cost. Within the brief period of five months Arctic Oil Field Transport not only provided a serviceable freight route into an hitherto inaccessible location (except for the 19th-century fur trade), but completed its delivery schedule of three thousand tons.43 More importantly, the Wind River Trail showed that private enterprise can and should accept some responsibility for the building of roads in the Yukon, especially those of an exploratory and highly speculative nature.
Another area in which the private sector has made an important contribution has been in the development of vehicle technology. Before 1960 most of this technology was developed "south of 60," and the North in general and the Yukon in particular were in direct beneficiaries. This was especially true of railroads, sternwheelers, trucks and tractors, most of which were imported with little or no modification. Since 1960, however, private enterprise, in league with such establishments as the Muskeg Research Institute at the University of New Brunswick, has shown an increasing willingness to address itself to the peculiar problems of northern transport and to develop vehicles specifically designed for the northern environment.44
Air transport continued to develop at a steady pace after 1945 and by 1957 an estimated seven hundred aircraft were in service in the territory. The helicopter, which was substantially refined during the war, was introduced during the late 1940s and proved a boon to prospecting and exploration especially in rugged, unpopulated country where mobility was crucial and where operations were confined to the summer months. Other aviation improvements such as modern airports and aircraft resulted in bush flying being rapidly superseded on the main air routes although it continued to play an important role on the frontier. In 1968 Canadian Pacific Airlines, the principal carrier flying into the Yukon, inaugurated jet service between Vancouver and Whitehorse and followed this by the establishment of jet service on the Edmonton-Whitehorse run.45
Although air transport became an integral part of the Yukon transportation system after 1945, it failed to escape the functional limits which had been set for it during the prewar period. Except for prospecting and exploration as well as passenger and lightweight, high-revenue freight movement, traffic functions which the airplane performed without serious competition, the airplane's role in the territorial transportation system continued to be an auxiliary one. Despite attempts by the federal government to foster aviation in the immediate postwar period and the present-day efforts of critics of the ground transport orientation of northern development, it appears unlikely that the airplane will be responsible for a spectacular breakthrough in the Yukon transportation problem.46 In an area where cheap and efficient bulk transport remains the most persistent need, the airplane's horizon is restricted.