YUKON-CHARLEY RIVERS The World Turned Upside Down: A History of Mining on Coal Creek and Woodchopper Creek, Yukon-Charley Rivers National Preserve, Alaska

POST-WORLD WAR II OPERATIONS

Gold Placers Inc. attempted to resume normal operations during the 1946 season. However, the continued fear of war with Russia, combined with the on-going military base construction throughout Alaska, competed against the mining industry for the available labor pool. Unfortunately for the mining companies military contractors continued to offer contracts that in Patty's words, "were far above the gold mining scale." Patty further commented that these conditions "forced the mining organizations to work with limited crews and to explore around the edges to find men willing to accept mining work at lower [wages] than the contractors were paying." To make up for the shortage, Gold Placers Inc. continued to hire Alaskan Natives to work for the company. Coupled with the high wages offered elsewhere, material costs were at an all time high and some supplies were difficult if not impossible to secure at any price. [1]

When the government rescinded Order L-208 and removed restrictions on gold mining operations, the Gold Placers Inc. crew made a somewhat better showing in 1946 than in 1945. The dredge worked 318,286 cubic yards of material recovering gold and silver with a gross value of $136,825.00. Because of the poor showing, Patty concluded that the company actually operated at a loss of $15,187.58. [2]

Ernest Patty, ever the optimist when it came to the operations on the Yukon, preferred to look forward to the 1947 season's potential rather than dwell on the previous two years' shortcomings. There were several factors looming on the horizon that warranted consideration in his annual report. First, according to his sources, the Federal government planned to spend fifty million dollars on military bases in Alaska during 1947. To provide a substantial labor force the contractors were recruiting 15,000 laborers from the Lower 48. Patty also learned that the Alaska railroad spent $500,000.00 on transportation costs for workers recruited in the states. With competition like this, it was no wonder that Gold Placers Inc. and Alluvial Golds Inc. had such a difficult time hiring experienced crews to work their dredges. In spite of these discouraging signs, Patty believed that the company had an "excellent chance" of recruiting a crew "equal or better" to the one they had the previous season. He based this estimate on the fact that they had already received more applications since the first of the year than they had received since the beginning of the war. [3]

One factor remained that would make a difference in whether or not the company could afford to operate in 1947. The contract between Gold Placers Inc. and the Congress of Industrial Organizations (CIO), representing the workers at both Coal Creek and Woodchopper Creek, was due to expire the following April. If the CIO agreed to renew it without a wage increase, the company would operate. If not, they could not afford to start up the dredges and the companies would shut down again. A new contract was ratified on August 1, 1947 and fortunately included only a minimal wage increase of 8¢ per hour. [4]

The war years took their toll on mining operations across Alaska. After working their first seven years making a solid profit, increased costs for wages, supplies and materials forced Gold Placers Inc. and Alluvial Golds Inc. to take a harder and harder look at their finances. The companies were faced with trying to shave what little they could from every facet of their operations. As an example, the companies charged employees $2.25 per day for room and board at the camps. Because of the heavy increase in costs, the mess hall at Coal Creek operated at a loss of $6,384.43 in 1946. Food costs and transportation charges increased dramatically during this period. In addition, the wages paid to cooks and waiters doubled between 1942 and 1946.The management feared raising charges for room and board would set off an immediate demand for increased wages. The fine line the company walked was due in part to the fact that government contractors were charging from 90¢ to $1.50 per day, between one-third and one-half of the actual cost to feed and house workers. [5] This trend continued into the 1950s when mess costs at Woodchopper Creek had risen to $1.79 per meal in 1952, a slight drop from $1.83 per meal the previous year. The company continued to charge only $2.25 per day for room and board. This resulted in taking a substantial loss each year rather than increasing what they charged workers. Charging workers more would require an increase in wages to offset the loss in take-home pay. [6]

The 1946 Operating Report for Gold Placers Inc. contains an interesting cost comparison for 1942 and 1946 and is reproduced below. While labor costs rose only 9.15% since the beginning of the war, other costs, particularly parts, supplies and freight, rose much more sharply. Parts increased 71.22%, mining supplies 68.74%, freight and hauling 44.59%, mess charges (food, cooks' wages, etc.) 59.24%. Of all the costs associated with operating the dredge, those that increased most dramatically are attributed directly to the war effort and the lasting impacts of Order L-208. Although many of the costs represented in the 1946 Operating Report show marked increases, Patty felt confident that the company would be able to "shave about $10,000 from operating costs" the following season. A large portion of the increased costs, particularly in Freight and Hauling, and Repair Parts, was due to rehabilitating equipment and facilities following the two years the company shut down during the war. A new cookhouse and bunkhouse were also among the improvements made at the Coal Creek camp during 1946. [7]

While rising costs challenged the operation at Woodchopper, the dredge was having problems of its own digging through the semi-cemented layer of gravel that had plagued it during the previous four seasons. Patty noted that the dredge appeared to be gradually getting through the area because the average daily yardage was increasing slightly (in 1943 they averaged 2100 cubic yards per day as opposed to 1674 cubic yards per day in 1942). He calculated that once they cleared the problem area the dredge's average would jump to almost 3000 yards per day and the dredge would again start turning a profit. [8]

In 1946, the company decided to abandon their operations at the Chelan, Washington nickel prospects that they had started four years earlier. This enabled them to take a tax loss after spending $14,734.97 on the property during the war years. At the same time, they were involved in a number of Canadian mining ventures including Clear Creek Placers Ltd., Spruce Creek Placers Ltd. and Yukon Gold Placers Ltd. In addition, they began investing in the Zolata-Yellowknife Mines Ltd. near Gordon Lake in the Yellowknife district of the Northwest Territories. Alluvial Golds' investment in the Zolata-Yellowknife operations came on the recommendation of Mr. W.M. Archibald. Alluvial Golds put up one-quarter of the funds, Archibald one-half and Mr. Austin Taylor of Vancouver the remaining one-quarter. [9]

It appears that by the 1947 season, the companies had stemmed the tide of hard economic times resulting from World War II. Alluvial Golds turned a gross profit of $43,056.06 while Gold Placers showed a gross profit of $26,154.87. In both cases, after deducting depreciation, depletion and income taxes, the companies realized net profits of $5,832.45 and $3,130.82 respectively. Although these may seem rather low, the previous years saw the companies operate at losses. One factor that cut almost $10,000.00 from the Alluvial Golds profit was the loss of the company's airplane.

During 1946, Alluvial Golds Inc. purchased a Grumman Widgeon amphibian, twin-motor airplane. Having their own aircraft cut costs considerably and led to more efficiency in operating all of the mining interests that Patty was a partner in (Gold Placers Inc, Alluvial Golds Inc, as well as the various Canadian mining ventures). The companies no longer depended on commercial airlines for transporting their crews, a cost the CIO contract required them to pay. The company's new plane provided for bringing fresh produce and meat to camp and for transporting various management personnel between the four major mining operations at Coal Creek/Woodchopper Creek, Clear Creek, Henderson Creek and Thistle Creek near Dawson, Yukon Territory. Patty's son, Ernest N. Patty Jr., who trained as a pilot during World War II, served as the company pilot and superintendent for the Gold Placers Inc. and Alluvial Golds Inc. operations.

An example of the efficiency and money saving capabilities afforded by having a company airplane came in the spring of 1947. That year, a sudden early thaw left the runway at the Fairbanks airport too muddy to use at the time the company needed to fly crews to the mines. Ernest Patty, Jr. made arrangements with the U.S. Army to use the facilities at Ladd Field (present day Fort Wainwright). In addition to Pan American Airways and one or two other large carriers flying between Fairbanks and Seattle, Patty was the only small operator permitted to use the military runway. If the companies (Gold Placers and Alluvial Golds) had been required to wait for other commercial operators to get the crews to camp, they would have lost 10 or more days from their already short season. [10]

On October 24th, the Woodchopper dredge shut down when weather conditions deteriorated to a point that it could no longer work. Because Ernest Patty, Jr. was busy closing out the season for both camps, he arranged for a commercial aircraft company to fly both crews back to Fairbanks. He attempted to send a wire from the camp on the 24th to have the planes come out to move the Woodchopper crew to town. Radio reception was poor and communications could not be established on either the 24th or 25th. The crew had finished a long season and was impatient to get into town. Patty agreed on the afternoon of the 25th to make a flight into Fairbanks to notify the company to send the planes out. In order to cut down on the transportation costs, Merle and Lloyd Edmundson, and Jerome "Jack" Warren, all employees on the dredge, accompanied Patty. [11]

During the ten days before Patty's flight, the area had been covered by "an ice-laden stratum of clouds" according to Ernest Patty, Sr. During the flight to Fairbanks, the clouds lowered, forcing Patty into low-level flying. The radio tower at Fairbanks reported hearing Patty call the mine announcing that conditions had deteriorated to a point where he decided to turn back. Apparently, as he turned in a mountain pass, the plane was heavily iced and unable to recover normal flight. The impact killed all of the occupants of the plane instantly and destroyed the plane when it crashed into the mountainside. [12]

The radio tower at Fairbanks heard Patty attempt to call the camp on the 25th. According to the Fairbanks Daily News-Miner, the plane was not reported missing until two days later. On October 27th, George Thorson, a Wien Airlines pilot reported seeing a badly wrecked plane near the headwaters of Birch Creek while returning from the mail run to Eagle. Weather conditions prevented search and rescue personnel from reaching the site for four more days. Rescue efforts involved pilots from several commercial carriers based in Fairbanks, among them Wien Airlines, Alaska Airlines and Northern Consolidated Airways. In addition, the U.S. Army had a rescue helicopter standing by at Ladd Field to assist. The Army also dispatched a "Weasel," a tracked all-terrain vehicle, to the site when a heavy fog settled into the region grounding aircraft. Two trappers, hearing reports about the downed plane, took their dog teams to the Palmer Creek runway to stand by in the event they were needed to access the crash site. [13]

Four days after rescue attempts began the Army helicopter was able to land at Birch Creek below the wreckage. An hour later, the two dog teams joined them. The pilot, Lt. Charles Weir, and C.A.A. inspector Don Gretzer, accompanied by the dog teams, climbed to the site. They found that the plane had apparently crashed at high speed, followed by a cabin fire. The four men died on impact. After their removal, the dog teams carried the men's bodies to the helicopter. They were then flown to Palmer Creek and onto Fairbanks. [14]

Ernest Patty, Sr. had been on his way to Toronto for a business meeting and, while in the Chicago airport, was notified by telegram of his missing son. He immediately returned to his home in Seattle. From there he took the first plane to Fairbanks to assist in the rescue efforts. He flew over the crash site three times with pilot Frank Pollack, manager of Northern Consolidated Airways, a veteran Alaskan pilot and a family friend. Ernest Patty was at Palmer Creek when the bodies were brought out. [15]

The loss of his son had a tremendous impact on Patty. Ernest Jr. had taken over as primary superintendent of the Coal Creek operations the season before his death. His father, in the 1947 Annual Report praised his son for his "close attention of the day-to-day economy and his 'drive' to keep the work running smoothly and effectively..." He continued, "It is most difficult these days to get good superintendents of this class because most of the up and coming young fellows go into the placer mining on their own account." [16]

DIMINISHING PROFITS AND INCREASING COSTS

Carrying sufficient food supplies over the winter to feed the crews the next season until the first steamer came down river was a problem that continually plagued the companies. Between the two camps, these supplies generally represented an annual investment of nearly $10,000.00. Before 1946, groceries were stored in a warehouse at Woodchopper Creek where the winter watchman kept a fire going to prevent them from freezing. This alone consumed 30 to 50 cords of firewood each winter depending on the weather.

During the summer of 1947, in attempting to cut down on the expenses associated with heating the warehouse, the companies excavated into a hillside and put in what Patty called a "warm storage room." It consisted of a log structure, heavily insulated with moss and loose dirt heaped over the roof and three sides. Because of the insulation offered by the logs, moss and dirt, the room required only a small fire to keep the temperature above freezing. According to the watchman, it worked very well. [17]

Typically, the dredge crews arrived at camp during the last week of April. The crew spent the next four to five weeks overhauling the dredges and other equipment in preparation for starting the mining season. Normally operations were ready to commence sometime around the first week of June. Although the operations at both Coal Creek and Woodchopper Creek relied heavily on naturally thawed ground ahead of the dredges, it was necessary to break up the frost from the previous winter to get the dredge started. To accomplish this, the crews could not begin driving points until the ice on the creeks broke sufficiently to make it worthwhile. This generally delayed operations until early June.

RECOVERING FROM THE WAR YEARS

After having what appeared to be a slow recovery from the war years, 1948 hit with a comedy of errors. Both dredges suffered catastrophic breakdowns requiring weeks to repair. First, while the crew carried out their annual overhaul on the Woodchopper dredge, the dredgemaster discovered a crack running through a large steel plate at the upper end of the digging ladder. At first, the company thought they could repair the problem simply by cutting out the damaged plate and welding a new one in its place. Upon further inspection inside the digging ladder, they found the damage was much more extensive and actually involved broken parts. Repairs required removing the entire digging ladder (this was no easy task since it weighed many tons) and completely rebuilding the upper end. The machine shop at the camp fabricated many of the large steel pieces needed for the repairs. Because of the tremendous stresses placed on the ladder, the opportunity to work inside it was used to reinforce it as a safeguard against future problems. Consequently, the dredge did not start work until June 21, fully three weeks later than normal. [18]

In addition to the mechanical breakdown, within the first month of the season one of the winchmen quit to take a higher paying job elsewhere. Shortly after starting the dredge, a second winchman aggravated an old back injury and was laid up for the remainder of the season. This left only one experienced winchman for the three shifts. According to Patty, "It was simply impossible to replace these men in Alaska." The company was finally able to hire a man in San Francisco who had just come from a dredging operation in South America. After paying his way to Alaska, the company found that he was "a poor workman, but we had no choice except do the best we could with him." Therefore, the daily yardage for the dredge was down dramatically owing to the inexperience of the key workers. [19]

Finally, in August, the crankshaft broke on the main diesel engine on the Coal Creek dredge. The company always prided itself on its advanced planning and the fact that it carried a complete line of replacement parts, thus cutting down on lost time due to repairs. Unfortunately, no one had considered the possibility of something like a crankshaft breaking. They did not have a spare one on hand at the camps. They immediately ordered a replacement from San Francisco, but as luck would have it, the Atlas factory did not have one in inventory either. The new part, which cost $3,600.00 from the factory was air freighted to Coal Creek, but still required shutting down the dredge for nearly two weeks in the middle of the season. Because of the acute labor shortage in the Alaskan mining industry in 1948, it was necessary to hold the dredge crew while repairs took place. Had they let any of them go it was unlikely that the company could have replaced them in time to finish the season.

In order to bring the dredge back on line, the company used the engine from the stripping pump to operate the machinery. This permitted the dredge to operate at roughly 80% capacity. The new crankshaft did not arrive until September and it took several weeks to get it installed and the big engine reassembled. Rather than effect a changeover between the two power plants, possibly adding an additional delay of several weeks, Patty decided to finish out the season using the smaller engine. Patty estimated that had the crankshaft not broken, the dredge would have processed 380,000 cubic yards of material. In spite of the breakdown they were able to work 325,000 cubic yards, a loss of less than 15% for the season. [20]

Exclusive of the diesel engine breakdown, the dredge only lost 26 hours and 50 minutes out of the total elapsed time of the season (2741 hours 26 minutes). This represents a loss of less than one percent (0.99%) of the season's workable time, a factor that was consistent with both Gold Placers Inc. and Alluvial Golds Inc. throughout their history on Coal Creek and Woodchopper Creek.

Late in 1947, the crew at Coal Creek built a dam 300 feet downstream from the dredge and flooded the area with three to five feet of water. This, they hoped, would prevent the underlying gravels from freezing over the winter. Sometime after the ice had formed to approximately 24 inches thick, the water between the gravel and ice seeped out leaving an airspace. When the ice finally melted the following spring, the miners found that very little of the already thawed gravels had actually refrozen. The only gravel that required thawing was a small area that had not been flooded. Consequently, the company was able to reduce its thawing costs from $11,316.82 in 1947 to $6,022.08 in 1948, a savings of 46.8%. During the post-WW II period of inflated operating costs, a substantial savings like this was a welcome benefit to an operation struggling to turn even a small profit.

Patty reported, almost braggingly, that:

During the past years we have pioneered the development of natural thaw but have never been able to avoid one thaw in the spring to break up the winter frost. Now it appears that we may be able to omit artificial thawing entirely. The winter of 1947-48 was comparatively mild. We flooded ahead of the dredge again last fall and this winter Alaska is having one of the coldest winters on record so the experiment is now being subjected to an acid test and we should have reliable information next Spring. [21]

Comparing the Years 1946-1949:

In 1949, Patty decided to work the dredges on alternate years rather than try to hire enough men to work both. This was primarily due to the difficulties they faced with hiring two complete crews to operate the dredges. It proved more feasible to simply concentrate one a full crew and move them from creek to creek. In addition, by stripping the overburden from an area and letting it lay exposed to the summer sun, the company was able to completely by-pass hydraulic thawing. This included the early spring thaw to break up the initial frost from the previous winter.

Additional reasons for concentrating on each creek in alternate years had to do with the declining values in the gravel they dredged. The pay streak at Woodchopper appeared to be "pinching" out as the last five cleanups of the year averaged only $0.346 per cubic yard of gravel. At this rate, the company could barely afford to operate. Operating on a hunch (and knowing that the ground outside the left dredge limit was covered by only a few feet of overburden that could be removed relatively cheaply) Patty decided to turn the dredge to the left. He was pleasantly surprised to find the ground richer than the paystreak itself. Working carefully and constantly panning the sluices to check the values, the crew moved the dredge a full 130 feet beyond the left limit of the original prospects. This area proved to contain values of $0.70 a yard as compared to the $0.35 they were getting inside the paystreak. Thus is the luck of the placer miner. [22]

The company's work with natural thawing was coming along quite well. By September of 1949, areas ahead of the dredge on Woodchopper where the crew had stripped to gravel three years earlier had thawed almost 30 feet deep. In early October, the dredge encountered an area that drilling tests had shown to be some of the deepest gravel on the creek. Bedrock, where the gold was naturally concentrated, was over 30 feet below the surface. According to his annual operating report, Patty anticipated that this area most likely would remain frozen when the dredge reached it. Owing to the lateness of the season, the fact that driving points into the frozen area would add between 7¢ to 1O¢ per yard to the cost of processing the gravels, and the very small profit margin the company was operating on, Patty recommended that the Woodchopper Creek property remain idle in 1950. This would give the deep gravels a chance to thaw naturally. [23]

Late in the summer, Patty reached a deal with Henry H. Wheeler of Compton, California, to purchase "natural" gold at $38.00 per fine ounce, fully $3.00 over the market price paid by the U.S. Mint. Wheeler apparently had $300,000 in cash he wanted to convert into gold as a speculation. He was also considering re-packaging some of it into 100-ounce containers, selling it at a higher price still. In order to be classified as "natural," the gold could not be processed using mercury or other chemical means to separate it from the gravels and sand. To accomplish this, the company eliminated mercury from the upper sluices on the dredge, using it only in the lower gold saving tables. The upper sluices trapped the bulk, almost 75%, of the gold during the dredging process regardless. The company shipped the gold amalgam as gold sponge to the U.S. Assay Office in Seattle. The "natural" gold recovered from the upper sluices was carefully cleaned by hand and weighed it at the mine. It was then shipped to the Seattle First National Bank where workers removed a sample and assayed it to determine its fineness. After a Seattle laboratory certified both weight and fineness, the bank then determined its value based on $38.00 per fine ounce, and notified the buyer in California. The buyer would then forward a cashier's check for payment and the bank would send him the gold via special messenger. [24]

Initially, Wheeler was reluctant to accept the Seattle certification and required a California lab to perform the same tests. When the two tests resulted in similar findings, they did away with the second tests and the process continued smoothly.

Patty discussed the plan with Mr. Wheeler several times. Apparently, other Alaskan miners were taking advantage of similar offers. The following tabulation shows how much gold Alluvial Golds Inc. sold to private investors during the 1949 season: [25]

The only work accomplished at Coal Creek the 1949 season was to continue stripping overburden downstream from the dredge. Again, they tried new techniques that proved effective both in terms of cost and in accomplishing the task at hand.

For many years, the companies had been using a technique called ground sluicing to flush the overburden off the underlying gravels. This called for diverting water from the ditch well above the camp and running it through ever-decreasing diameter pipes to build up a head of pressure. The water was forced through hydraulic giants (large swiveling nozzles, similar to those found mounted on modern fire trucks, only much bigger). The stream of water was directed onto the ground where it broke up and washed away the overburden and muck.

During the summer of 1949, the crew at Coal Creek diverted the creek out of its channel onto the area they wanted to strip. By using the force of the flowing stream, they cut a channel through the muck. Again, the crew diverted the stream into a new area where it cut another channel. They managed to cut a number of parallel channels through the area after which they used a bulldozer to divert the stream flow against the standing blocks of muck pushing it into the path of the creek. This technique proved very successful, not to mention inexpensive. They were able to strip approximately 140,000 cubic yards of overburden at a cost of $5,176.00 or 3.7¢ per cubic yard. This is approximately one half of the cost of using traditional hydraulic stripping techniques. [26]

As the season ended, it was obvious that the operations at Coal Creek and Woodchopper Creek were facing difficult financial times. Again this resulted from the intense competition the mining industry in general faced with the post-World War II military construction in Alaska. The company planned on hiring only 18 crewmen in 1950, eliminating the hydraulic stripping operations entirely and using a tractor and ground sluicing for removing muck to prepare the ground ahead of the dredge. Patty continued to maintain the equipment on both creeks because he felt that the price of gold would rise within the next several years. At which point he said optimistically, they were "ready to throw both properties into full production." [27]

In 1950, the company's directors took Patty's advice and only operated at Coal Creek.

The dredge worked almost to the maximum season possible in interior Alaska, a period stretching around the clock from 9:00 AM on May 26th until 7:00 AM on the morning of October 28. Sub-zero temperatures forced the dredge to cease operations for the season.

During 1950, the dredge processed 401,400 cubic yards of material and recovered $127,822.60. This resulted in a net profit, after deductions and adjustments, of only $10,549.49. Although this was one of the company's longest seasons, the ground the dredge was working carried an average value of just 31.8¢ per cubic yard, barely within the tolerances that allowed the company to continue operating. This was in part due to the dredge diverting from the ground within the paystreak into areas to the east of the established limits onto the Adamick Claim at the mouth of Boulder Creek. Because of the very poor values realized on this claim, they abandoned future work and the dredge worked its way back onto the paystreak. From there, the last two cleanups showed marked increases to 36¢ and 45¢ respectively. [28]

Camp #1 located across from Cheese Creek. The machine shop is the large building in the center rear of the photograph. The tractor garage and parts warehouse is the second building to the right (with the large white garage doors). The blacksmith shop sits between the two. The dredge is visible in the far right near the base of the hill. (Photo courtesy of Glen Franklin).

On June 9, 1950, while working with an electric arc welding machine, a spark ignited a fire in the Coal Creek machine shop. Consequently, the shop burned to the ground destroying everything in it. The company rebounded by immediately purchasing a used Butler Building (a quonset hut covered with galvanized iron) and located it near Beaton Pup, approximately one half mile below where the dredge was working. Gold Placers Inc. received an insurance settlement of $18,550.00 on the shop and equipment, and Alluvial Golds, Inc. received $3,972.04 to replace equipment stored on Coal Creek. [29]

This is the only known photograph of the machine shop showing the crew and the interior of the shop. It was taken in the late 1930s. (NPS Collection, photo by Bill Lemm).

During the winter of 1950-51, the company purchased the following equipment to replace what they had obtained from the Walter W. Johnson Company and used for assembling and maintaining the dredge in 1936. The result was a thoroughly modern machine shop for working on both dredges. This equipment remains on site in the machine shop today. Dan Coben, a later owner of the Coal Creek dredge commented on the quality of the new equipment during an interview in 1997. [30]