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Canadian Historic Sites: Occasional Papers in Archaeology and History No. 26

Grubstake to Grocery Store: Supplying the Klondike, 1897-1907

by Margaret Archibald

The Hinterland Market

The summer of 1898 ended on a note of general confidence for the Dawson business community. While the future of the trade seemed active and profitable, effecting a reliable permanent supply system for such a remote settlement posed staggering problems. This chapter delves into the various risks and obstacles which limited and threatened a prosperous and stable supply trade during the years 1899 to 1904.

The context in which this particular period of merchandising is discussed is that of the unique hinterland relationship between the Yukon and its southern supply bases. The salient features of the hinterland may be reduced to a combination of severe climatic conditions and immense distance from the major supply bases. Together they limited extensive trade to a short season and called for an expensive system of transportation that could reliably provide the community with its yearly supplies during a four-month period. The resulting market was unquestionably high-priced, speculative and increasingly limited to those merchants who had enough capital to cope with the inalterable prob lems of such a system.

These problems can be reduced to four main categories: (1) the constant risk of loss and miscalculation in shipping; (2) the necessity of year-round storage for heavy stocks; (3) dependence on distant financial obligations which contradicted the unlimited credit prevalent in a placer gold-mining town, and finally (4) the persistently high cost of transportation. Above all, the market in general commodities was totally dependent on outside sources for its entire stock.

Joseph Ladue had chosen Dawson's location on the banks of the Yukon waterway for the obvious reason that the river had always provided for the inflow of goods and the outflow of gold. In 1899 the traffic between Saint Michael and Dawson included 32 steamers which, by September of that year, made for daily arrivals at the Dawson wharves.1 The gold-rush had opened the Chilkoot and White Pass routes as equally popular approaches to the goldfields. As long as time was of the essence, the latter routes remained important, since they were shorter and could be travelled earlier in the season than could the lower Yukon River. While statistics for 1899 show that 20 steamers linked Dawson to the upper lakes and to those passes,2 the pass routes themselves were essentially unimproved mountain tracks which could hardly bear traffic more extensive than the freighting of individual consignments. Although the upriver steamship companies (i.e., those running between Dawson and Bennett Lake) were worked to capacity,3 the lower river transportation companies maintained their favoured position among merchants and importers of large consignments.

A major achievement in Yukon transportation was the successful completion of the White Pass and Yukon Route railroad. By modernizing a hazardous transit system over the passes and by offering a reliable link in the commercial chain joining supplier and merchant, the railroad served to temper the acutely seasonal Dawson market and further the self-confidence of local businessmen. The 110-mile line linked the Pacific coast at Skagway to the Yukon River at Whitehorse, the official railhead after 30 July 1900.4 With the addition of a telegraph system between Dawson and Skagway in September 18995 and a similarly improved postal system, the north was greatly opened that year to commercial enterprise.

Despite these improvements, the constant factors of distance and climate continued to make the business of freighting of goods to Dawson a seasonal and risky endeavour. Ice left the Yukon River at Dawson on varying dates in May, and the first steamers from Whitehorse arrived in early June. Saint Michael steamers could not start upriver much before the end of that month.6 The last steamer dockings in Dawson usually occurred late in October or during the first few days of November;7 however, river navigation in autumn was notoriously difficult, for ice on the headwaters lowered the water level and exposed dangerous shoals. A boat stranded late in the season would have to spend the winter encased in Yukon River ice. Success in avoiding the hazards of transportation and in ordering the proper quantity of goods to suit the trade required a calculating and knowledgeable entrepreneur. Such a businessman had to understand the tight yearly schedule of stock-taking, ordering and shipping which became a selective and highly speculative procedure, demanding the most sensitive timing.

By January the astute merchant could give his attention to the first catalogues and price lists to arrive at his store.8 Orders which were intended for the first spring shipments had to be sent out by March, even though winter was far from over and business at that time was traditionally poor.9 Until a through telegraph connection to the outside world was completed in 1901, the order itself took one to two weeks to reach Vancouver.10 The spring ordering procedure also included travel by company representatives. Drummers or salesmen from Vancouver, Seattle and the east came north to scan the Dawson situation, and Dawson buyers went south to check the available stock in those centres. The first outbound boat of the season usually carried local merchants and agents going outside to solidify contacts for the rest of the year.11

Another spring phenomenon of the Dawson supply business was stocking up scows at the north end of Lake Laberge during the month before breakup. Since the ice on Lake Laberge broke almost a month before that on the rivers, the enterprising early-birds who capitalized on this route were the first to offer the winter-weary Dawsonites those perishable luxuries (cream, oranges, lemons, hams, honey, apples, eggs, etc.) that they craved.12 After the initial rush had subsided in early July, a second very important round of orders was sent out, taking into account the long-term needs for heavy goods and staples for the winter market.

The theme of the summer shipping season was undoubtedly "ship it now while you can." It was possible that an order sent out as late as mid-July could arrive too late in the season to continue down the Yukon River. Goods so delayed were left in the warehouses in Whitehorse, and when these were full, the consignments came no farther than Skagway.13 Goods rushed through to Dawson at the last minute risked being caught part-way along the river at freeze-up. In 1899, for instance, local merchants lost an estimated $700,000 on 1,400 tons of unprotected meats, groceries, general merchandise and machinery abandoned between Selkirk and Dawson.14 Again in 1903 a particularly high number of shipments was caught along the river in this way. While a winter recovery service by sleigh (such as the one operated by the White Pass Company) did restore some goods to the consignee, high rates made the service worthwhile only on the most saleable articles such as perishable fruit and dairy products, which would otherwise succumb immediately to the effects of frost. Hardware and dry goods were often left where they stood until later in the winter when the market for them would be more lucrative.15 The fact that these articles were expected to survive such a rigorous winter, if stranded, gives weight to the reputed insistence of Dawson merchants on goods of the highest quality and the best pack.16 A potential wholesale supplier might well have been asked to describe his packing procedure before any commitment was made on the part of an interested Dawson purchaser.17

The danger of winter storage through non-arrival of goods was gradually overshadowed in this period by the upsetting possibility of overstocking the market. For this reason, the winter of 1901-02 was a particularly unprofitable one. The brisk commercial activity of the previous summer had deceived even the most astute merchants into overestimating the needs of the winter to follow. The result was a glutted and sagging market, at its worst in the weeks before the renewal of the shipping season.

The plight of the general merchant with volumes of slow-moving stock to clear is forcibly brought home by such plaintive advertisements as

Special inducements on large lots.

and "Groceries free! We mean it!" An interesting case of one man's miscalculation turning to another's profit is related in the Canadian Grocer. Prices declined so far on an overstocked market of well-known brand tobacco that one speculator was able to buy up a huge quantity of the stuff in Dawson, reship it to Vancouver and Seattle and there undercut local prices to his own profit.19

Every summer the Dawson buyer faced the same dilemma: whether to ship in immediately by relying on a long-term estimate of the winter market situation, or to risk the perils of fall shipping in order to predict the winter needs more closely. For the produce dealer, there was the added temptation to ship late and obtain the freshest possible goods for advertisement as leaders in winter stock.20 Dealers in perishable products also had the option of buying goods throughout the winter and freighting them in over the ice. Overland rates were high; consequently the only shipments consistently worth the risk were perishables which would find a ready market on arrival. On these trips, oil-heated sleighs covered with heavy tarpaulins were used to protect loads of butter, eggs and meat packed with unusual care. The merchant who could sell off his cold storage stock just in time to meet one of these convoys from Whitehorse could realize profits of up to 600 per cent.21 By 1903, this winter trade in fresh products warranted fortnightly steamer trips from Vancouver, connection by rail to Whitehorse, and then travel along the overland road from that point to Dawson.22

Defined and perpetuated by the many factors of geography, Dawson's supply system was an expensive one to run, smoothly or otherwise. These costs were borne first by the shipping companies, then by the wholesaler, then by the retailer and finally by the consumer himself. Such a capital-intensive industry best served those trading concerns which could afford to participate in all phases of the commercial process and could, therefore, presumably offset losses in one field with gains in another. For the purposes of this chapter, the financial obligations of the merchant alone have been broken down to show the extent of his overhead in terms of buying and transporting the commodities required. Very basically, the costs included the following: the expenses of communicating with outside wholesalers; compliance with their methods of payment in order to maintain this contact; high overhead in terms of storage costs; rent and insurance, and lastly, the consistently high freight rates on both major routes into the territory.

In the case of the first two areas mentioned, the advantages of the large companies are clear. These firms could afford to maintain permanent purchasing offices in the major cities as well as to buy in sufficient bulk to earn discounts and special terms from their wholesale suppliers. These firms in turn became the prosperous "wholesale-retail" merchants who could profit from supplying smaller traders. At the turn of the century, the AC Company, the NAT&T Company, the Alaska Exploration (AE) Company, McLennan and McFeely, the Ames Mercantile Company, the Seattle-Yukon Trading Company and the Dawson Hardware Company were some of the Dawson businesses which maintained head offices, permanent buyers or yearly agents outside. In some cases (such as the Dawson Hardware Company and Lilly's Gun Store) two smaller firms might co-operate by sending a common agent outside.23

The standard methods of payment for the early 20th century were hardly conducive to the success of any merchant in a placer gold-mining camp. The small retailer, whose income was entirely based upon the peculiar institution of open credit extended to miners and mining companies, was expecially hard hit. Whether his customers' spring cleanup was good or not seemed of little consequence. Summer invoices from Seattle and Vancouver (or at least from Dawson wholesale firms) arrived with unfailing regularity, since the supply houses themselves were hounded by creditors. The nearly universal practice of allowing 30 days for the invoice and 90 days to pay was incompatible with northern commercial practices. Given the normal shipping delays, it was possible, under this standardized system, for the invoice to demand payment before the goods had materialized on Dawson's wharves.24

The only recourse available was acceptance of the most extended terms of payment available at the sacrifice of discounts on the price. Spot cash, a common way of getting reduced prices, was out of the question for buyers whose own income came from a credit system. Drafts on local banks could be made while the bank held as collateral the bill of lading,25 equivalent to the consignee's receipt and claim of ownership in case of loss or damage. But with bank interest rates reaching as much as 10 per cent per month in 1900, the cost of loans put them virtually beyond the reach of borrowers.26 Another problem was that terms of payment in the comparatively fast-paced grocery trade (as opposed to the dry goods or hardware business) were more pressing and discounts less inviting.27 This must have been an especially depressing consideration for the Dawson food merchant; his goods did not necessarily move quickly, and payment for what amounted to nearly a year's stock was demanded in a few large cash outlays in late spring and early summer. Some Dawson merchants felt that the only equitable method of payment would be one which was arranged on a two-year credit basis. As long as the prevailing system held, Dawson merchants were subject to the demands of larger moneyed corporations, whether these were banks or trading companies.

A natural consequence of the short purchasing season in the Yukon was the need for year-round storage. Indeed, a most prominent feature of the Dawson skyline after 1898 was the sprawl of long, low corrugated iron warehouses which held the larger part of eight months' supplies for the city. By the summer of 1899 the prerogative of providing public storage, warm and cold, for the many individuals and merchants who could not afford the costs of their own warehouses was shared by nine large firms.28 For most of them, warehousing represented only one segment of a multi-faceted trading operation. The season of 1900 left the White Pass and Yukon Route railway, probably the largest of the storage concerns, being owed $225,000 for its public storage facilities.29 This fact certainly suggests that the need for storage on a continuous basis was a yearly financial embarrassment for many Dawson merchants. Rates charged by the Yukon Dock Company in 1900 were $7.50 a ton per month for warm storage and $15 a ton per month for artificial cold storage.30 While storekeepers might have found the rent high, the dock company felt justified; land rents along the river where warehouses were located were especially high, and insurance rates on cargo as precious as the city's yearly supplies were exorbitant. After the city's incorporation in 1902, steep storage rates were further justified in the light of higher land taxes.

The destructive fires that raged yearly in Dawson's business section during its early history explain both the high insurance rates (they ran between 5 and 7 per cent in 1902)31 and the location of many of the city's warehouses five or six blocks from the core area, which was bounded by Front Street and Third Avenue. While warehoused goods were insured, goods on display in shops as merchandise were in virtual tinder-boxes. Insurance for places of business (stores and hotels) on Front Street and Second and Third avenues was unobtainable.32

The trend in real estate values in Dawson from 1900 onward was an unequivocal downward plunge, with rents for both land and storage reluctantly following suit. Nevertheless, the rents charged by boom-town landlords did not reflect the economic slump very closely; the reduction in rents was neither large nor frequent enough to keep up with the gradually declining profits experienced by most merchants.33

The largest single item of capital outlay for any Dawson merchant, beyond the initial purchase of goods, was transportation. With the completion of the White Pass and Yukon Route railway (the WPYR) in 1900, the shipping monopoly was shared out between that company on the upper river and the competing AC and NAT&T companies on the lower river route. While improvements in both river and rail transportation gradually lowered rates from 1900 to 1902,34 the fact remained that

the companies employed in freighting goods to Dawson went to large capital expenditure firmly convinced that they were taking great risks and under the impression that the life of their business would be very short and that the only chance of getting any profit from their investments was by charging rates that would bring back such capital and profit within a very short period.35

As far as clients were concerned, there seemed to be no end in sight to this period of high transportation costs.

S. Morley Wickett, in his 1902 article "Yukon Trade,"36 claimed that the Saint Michael to Dawson (lower river) route rates were to tally out of line. His objection was that, while these companies were capable of landing goods at Dawson for only $30 per ton, their rates were on the average much greater — over three times greater, according to an agent of the AC Company in 1900.37 Exceedingly high as these rates were, the WPYR was unable to compete with them at first. Clients found it profitable to ship by rail only those perishables and goods that required faster delivery than the cheaper river steamers could provide. After a summer of verbal dissent, led by the Nugget and an actual boycott of the railway by many merchants, the government finally intervened on the issue in November 1901.38 The rail monopoly was threatened by this action, and the WPYR lowered its rates.

Dealing with either rail or steamer transportation companies demanded a certain knack on the part of the shipper or merchant. He was required to interpret the rates in terms of their relative advantages to his own particular circumstances. As Wickett pointed out, a railway contract worked out by an astute merchant might cost him $30 less per ton than the rate obtained by a less calculating negotiator.39 More serious accusations of out-and-out favouritism toward large shippers on the part of the WPYR were never actually substantiated,40 but merchants felt themselves at a disadvantage in dealing with the railroad. The small dealer in food products was a most unhappy client. While rail was the obvious way to import perishables, such heavy items as fresh butter were among the most expensive to ship in lots of less than one carload. Other goods on which freight charges were almost prohibitive were hay, lumber and furniture.41 Adding to the ill will which many Dawson traders felt toward the freighting companies was the notorious reluctance of both river and rail companies to reveal their new rate schedules each spring. Their April announcements came weeks after the first orders had been sent out.42

While increased competition between rail and steamer services did precipitate a so-called "rate war" in 1902,43 price-cutting hostilities were of neither a degree nor a duration to encourage customers to any great extent. At least one client shipping shelf hardware (the most expensive category in the WPYR schedule)44 felt that the rail tariff was still too high, and turned his business over to the river trading companies.45

On the issue of freight rates, the editor of the Dawson Daily News spoke up in defence of the business firms and consumers who ultimately bore the brunt of transportation policy:

There is an unfortunate opinion prevailing on the outside to the effect that in Dawson people will pay any price for anything and everything sent in there, and that, therefore, there would be no need for transportation companies reducing their high freight tariffs.46

The editorial reveals a certain unfortunate truth. High prices were inevitable to some degree, yet they were foisted on consumers by large companies as an unfair reflection of a commercial boom which had come and gone. To a certain extent the cost of living in Dawson was eternally doomed to be an inaccurate reflection of an earlier prosperity.

The working relationship between Dawson trader, transportation company and outside supplier has been discussed largely in terms of the problems encountered by the northern merchant. A shift in emphasis from the inside to the outside centres which served its needs brings forth a certain aspect of Pacific coast-Klondike trade, one that attracted the concern of both local and national press after the turn of the century. The issue is one of nationality; more precisely, of American versus Canadian control of the Yukon market.

To many North Americans in 1898, the golden words of "Klondike" and "Alaska" were synonymous. Some west-coast Canadian advertisers at the time of the rush had obviously encountered such ignorance on the subject that they felt compelled to advertise bluntly that the Klondike was indeed in Canadian territory.47 Despite the town's location, the population was solidly American — in 1900, 62 per cent of Dawson's inhabitants came from the United States.48 A discussion of the Americanization of Dawson is far beyond the scope of this report. One aspect of American influence in the Yukon, however, is definitely relevant to the matter at hand: the influx into the territory of American goods and their eventual displacement by Canadian products. (See also "Satisfying the Sourdough Appetite" and Appendix B.)

The struggle between American and Canadian Pacific ports for hegemony in the northern market has already been discussed. As the issue developed, Vancouver and Seattle assumed roles representative of two opposing national thrusts. Seattle's position had been particularly strong in the days before Canadian customs regulations were actively enforced49 (i.e., prior to the sending of the first detachment of customs officers from Victoria to the passes at the end of July 1897). Even the application of these tariffs, which averaged between 25 and 30 per cent on general merchandise, was not enough to knock the American port cities out of competition.50 Cheaper goods and a legitimate headstart had won the battle for Seattle, Portland and San Francisco. Nevertheless, their lead on the British Columbian ports was widened by less honourable means, namely by capitalizing on the general ignorance of customs procedure at the passes51

Long after it became clear that Canadian customs duties would be exacted on all American outfits entering the Yukon, the United States port cities could depend on one overriding advantage. Their agricultural outskirts, including luxuriant California, were more productive, more varied and closer to hand than anything the British Columbian ports could draw from. Even the British Columbian home market itself was within the sphere of rival distribution centres to the south. In the case of such products as lard, ham and bacon the Canadian alternative had to be brought all the way from Ontario. Once this general condition of the western Canadian market is recognised, the preponderance of American goods in the Yukon comes as no startling discovery. British Columbia market reports in the Canadian Grocer as late as 1904 reveal that the local sources were in heavy competition with suppliers both from the east and from the American west coast.

The process of "entering" American imports at Vancouver or Victoria was customary among many Dawson shippers. When the tariff was paid in British Columbia rather than in the Yukon, the goods were shipped north on Canadian vessels, passed through Alaska in bond, and were brought into the Yukon as duty-paid goods. The rationale for this process was as follows:

since Canadian customs were based on a percentage of the original cost, freight and middleman's profit, customs could be as much as 50 per cent higher at a Yukon border point than at Victoria.52 Any means of avoiding this added tariff burden was understandably popular. One significant implication of this manner of importation was that, while Canadian customer reports showed a relative increase in duty-paid or "free" goods entering the territory, the figures could easily be misinterpreted to indicate that this was an increase in Canadian goods reaching the Yukon.53 (The same cautionary remark must be made about any table showing an increased number of Canadian vessels plying the route between British Columbia and northern ports.)54 Word came from the Skagway docks in 1900 that most shipments accepted as "B.C. goods" were in fact prepaid American products — canned meats and hams from the east, fruits from Oregon and California and milk from Illinois were cited as typical examples.55

Another consideration, reasonable in the light of the outfitting rush among west-coast dealers and the ensuing struggle to gain a permanent hold on the Dawson market, was the lasting popularity which could be earned by a brand which had won a foothold in the Yukon. According to S. Morley Wickett, "a name of a brand counts for much. A few Canadian houses in their Yukon trade appear not to have been sufficiently jealous of their name.56 The collective security of such American brands as Carnation or Borden's Eagle Brand condensed milk, Agen's butter, Rex meats or Germea breakfast cereal must have presented tough competition to any Canadian supplier.

The perpetuation of this monopoly was not simply the result of Seattle's commercial ambitions. The facts that the Fourth of July was as much a holiday in Dawson as Dominion Day, that a large number of stores shut up shop on Washington's birthday,57 and that in 1899 Parson's Produce Company was known as the only Canadian firm doing business in its field in the Yukon,58 lead to one inescapable conclusion: what really determined the nature of the Dawson market was the national makeup of its population. A thorough search of the backgrounds of merchants in the city has yet to be done (see Appendix C), but a list of "foreign companies licensed by the Commissioner of the Yukon Territory to carry on business other than mining"59 shows a preponderance of American firms among the larger trading companies. The list includes the Northern Commercial (NC) Company, the Joseph Ladue Mining and Development Company, the Ames Mercantile Company, the Pacific Cold Storage Company, the NAT&T Company, the Yukon Storage Company and the Dawson Hardware Company.60 Investment in the NAT&T Company by the large Chicago meat firm of Cudahy is a prime example of connection between shareholders in Dawson enterprise and American big business. Governor General Lord Minto, in his tour of the Klondike in 1900, was well aware of this, and was asked to request some of the largest mercantile firms to furnish an estimate of their Canadian purchases for that season. In a protestation of good will and of an acquired interest in Canadian industry, the NAT&T Company replied that the company preferred to buy Canadian goods, and endeavoured to seek out those Canadian commodities not readily available to their American headquarters.61 "For many reasons" only one-third of their stock was actually found to be of Canadian packaging or manufacture.

According to a Canadian Manufacturing Association representative, the prominent foreign imports to Dawson in 1901 were as follows:

coffee, baking powder, canned fruits and vegetables, honey, condensed milk, potatoes, tobacco and cigars, fine confectionery, boots and shoes, leather belting, rubber hose, gloves and mitts, cotton duck, copper wire, wire nails, cordage, wire rope, spades and shovels.62

Admitting that Canadian houses had made considerable sales on their own that year, he offered valuable advice to those Canadian businessmen who wanted to increase their share of the trade. In all lines of general trade — hardware, dry goods and food — quality was an essential factor. Canadian clothing, especially flannel shirts and woollen underwear, was apparently unpopular because of poor tailoring. Likewise, Canadian rubber boots were thought to be far too cumbersome. In this case, Goodyear Rubber Company's "Gold Seal" boots (made in San Francisco) maintained the unquestionable popularity they had earned in the first year of the outfitting rush.63

American successes in this matter were popularly thought to be due to their advanced techniques in packaging, which made their products both more durable and more attractive. Canadian fruit tins, for example, were considered heavy and unappealing at a glance. Similarly, Canadian methods in packaging butter, cheese and bacon were held to be inferior to those used in American products.64

Lest the situation for Canadian commodities seem too bleak, it should be noted that the Canadian part of the trade in 1902 was conservatively estimated at 60 per cent and was growing. This was indeed an effective, if not a startling, reversal of the American monopoly of approximately 90 per cent of the trade in 1898.65 The ambitious efforts of Vancouver wholesale and shipping concerns had finally paid off, so they thought, in 1901, with the establishment of a long-awaited government assay office in that city. Seattle had previously monopolized the process of exchanging Yukon gold for American dollars. Now Vancouver believed that it could channel both the gold and its consequent credit away from those American businessmen who for too long had been "waxing fat and insolent ... when the golden millions of the Yukon were poured into their waiting laps."66

Ironically, the market that British Columbian merchants and shippers finally won was a sagging one; it was no longer the limitless prize which the ambitious Seattle and San Francisco outfitters had jumped at in 1897. It was "a Pyrrhic victory," according to one historian, reviewing the scene of the battle some 60 years later.67 But whatever the factors governing their choice, Dawson buyers in 1902 exhibited what seemed to be an admirable preference for domestic products. By May of that year, the purchasing agent for the NC Company (which had succeeded the AC Company) admitted that most canned fruit, all canned vegetables, 90 per cent of the flour and much of the hardware in his warehouses came from Canadian sources.68

After the enforcement of Canadian customs on the upper river route in 1897, the AC Company, like all others with wholesale liquor permits, was forced to buy its wares in Canada. (Beer, however, continued to be imported until 1905, when the O'Brien Brewing and Malting Company of Klondike City entered the field.)69 By 1904, a reporter of the British Columbia market in groceries could finally crow triumphantly that of 900 tons of merchandise going north on board the Olympia, 95 per cent was of Canadian origin. "The whole of the groceries, flour, feed and similar goods were from Canadian factories."70

Both population and gold production figures reveal that, not surprisingly, the 20th century marked a widespread and inalterable turning point.71 Exact landmarks of Dawson's "rise and fall" or "life and death" lie in the disputed territory between memory and myth; there are as many histories of the Yukon as there are chroniclers. "Commercial development" is an arbitrary category of analysis in itself, for in keeping with the boom town's tradition of putting up false fronts, Dawson's business community was slow to admit the wrinkles of old age. The discovery of fresh gold in the Tanana district of Alaska in 1903 and the inevitable rush of "never-say-die" miners which followed it were in some ways the death knell of Dawson as a boom town. In established business circles, on the other hand, a plateau of economic stability followed as the transient fringe of customers and traders moved on. During this period of belt-tightening, the morale of the surviving merchants was maintained by a special brand of frontier booster spirit, characteristic of the age. Large doses of civic pride in brick warehouses, paved streets, telephone networks and loyal clubs and brotherhoods were registered in annual "Golden Clean Up" newspaper editions and glossy company catalogues. There the dream of northern prosperity, now realized, was broadcast.

The commissioner's introductory remarks to his 1902 report for the Department of the Interior are a fair indication of the prevalence of the spirit of renewed northern confidence. "Not only does a general air of prosperity and confidence pervade the whole business community," he wrote, "but the surest steps are being taken to insure a continuance of good times."72 A remarkable contrast exists here between the overextended confidence which buoyed up the merchant community in 1903 and the realistic symptoms of chronic reduction that came in its wake.

In the context of Dawson's development as a commercial hinterland, these symptoms could no longer be concealed after 1904. In the first place, the peak volume of trade between Vancouver and the Yukon, belatedly achieved in 1903, was never to be repeated.73 A second feature was the effect of financial stringency on the Yukon credit system. That enduring symbol of the extension of commercial methods to meet community needs was snapped in 1904 by the largest trading companies.74 Spot cash was now demanded on purchase so that short credit terms from outside might be honoured — a reflection of both the decreased margin of profit and the skepticism of outside investors and creditors of risks in a tottering gold town. A third, very significant result of the general commercial slump was felt in the transportation field. In 1904, the WPYR railway was finally forced to reduce its rates in the form of a general summer discount because of acute dissatisfaction during the previous summer. The mercantile community could no longer manage the high overhead for rail transport. 75

The next seven years were marked by incessant hostilities between merchants and the WPYR, as the former launched a hard-fought attack to compel the latter to adjust its rates in keeping with the economic decline. Strong protests by the Dawson Board of Trade in 1905 and 1906 did not force an appreciable cut in rates until 1909 and 1911. Tables of rates given by H.A. Innis for the year 1910 show that the WPYR's rates were (perhaps understandably) five times higher than those of the CPR76 (see Appendix D). It is not difficult to imagine the attitudes of merchants dealing in any one of the commodities quoted (beef, pork, cheese and potatoes). On these items the rail rates from Skagway to Whitehorse ranged from 121 to 139 per cent of the price of the article itself as it landed on the Skagway docks.

The most blatant effect of decline on the commercial community was the steady consolidation of capital over the years 1901-06 (see Appendix G). Evidently the "continuance of good times" which Commissioner Ross hoped for in 1902 only applied to a decreasing number of Dawson businessmen. One can readily understand the depressing effects of a reduced economic base on such a proportionately large occupation group. While the table shows a seemingly healthy and gradual contraction in all fields of merchandising, a comment by the manager of the NAT&T Company in 1909 indicates that there were still some who had not adjusted to the trend:

The commercial conditions of the territory at the present time do not warrant the encouragement of a single individual; every line of business is represented and in fact many are overdone. This condition however will doubtless improve with the increase of investment capital in placer mining and the development of quartz and the renewed activity of the prospector.77

This mixture of realistic adaptation to declining economic circumstances, combined with a continued belief in some variety of immediate upswing, characterized the business elite in Dawson over these years. In spite of this optimism, the chronic problems of serving an aging gold town remained a source of depression.

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