Frontiers of Ambition: Alaska's Quest for Economic Independence

From: "Ernest Walker Sawyer and Alaska: The Dilemma of Northern Economic Development"

Walter J. Hickel's Political Comeback and Ideological Stance

When Walter J. Hickel , a millionaire hotel developer, former Republican governor, and former secretary of the interior, entered the 1990 Alaska gubernatorial race at age 71 under the banner of the extremist Alaska Independence party - a party that advocates the 49th state's peaceful secession from the Union - he and his running mate were ridiculed as "two old dogs who want to bay at the moon one last time." Nonetheless, their campaign against alleged federal mismanagement in Alaska, which they claim has stifled economic growth there, won the three-way election with 39 percent of the vote. That victory demonstrates that the old-time Alaskan religion Hickel espouses, of big construction projects and complaints about federal neglect, still appeals to many people in the state. [1]

Alaska's Historical Grievances Against Federal Management & The Ambitious Proposals of Governor Hickel

Ever since the United States purchased Alaska in 1867, residents have charged that the distant federal government squelched the growth of population and industry. The complaint is common in other western states and territories but especially pronounced in Alaska. Hickel believes that his state, lacking federal assistance, needs to take the lead in its own development.

Like a latter-day De Witt Clinton, the governor has proposed several massive state-sponsored construction projects, hoping that they will do for Alaska what the Erie Canal did for the state of New York. His idea for a 2,000-mile-long suboceanic freshwater pipeline from Alaska to California, a project he compares to the Panama Canal, the Great Wall of China, and the pyramids of Egypt, has generated much publicity. "We can go to the moon . . .," he says, "why can't we get the water to California?" But Hickel's favorite multibillion-dollar development project, which he has been promoting for years, is the extension of the Alaska Railroad, perhaps to the Yukon River, the North Slope oil fields, or the city of Nome on the Bering Sea. "Though old-fashioned as it comes," he wrote in 1971, the railroad is "as modern and as necessary as tomorrow. The iron trail is still the best way to open the Arctic for conservation and for the greatest enjoyment of people." [2]

Ernest Walker Sawyer: An Early Advocate for Alaskan Development

Though Ernest Walker Sawyer served in Herbert Hoover's administration from 1929 to 1933, he would probably feel right at home in Walter Hickel's administration 60 years later. ?Sawyer, the first U.S. official specifically hired to promote Alaskan economic development, also believed that the Alaska Railroad was the key to expanding the northern economy.? Yet the results of his four-year campaign to increase business for the government-built railway illustrate that even a sympathetic federal government had little success making trade follow the tracks across the tundra. Sawyer's little-known efforts also indicate that the economic torpor of the North is a far more complicated matter than a simple case of federal neglect.

Ernest Walker Sawyer was born in Illinois in 1886 and graduated from 美国斯坦福大学 in 1909 with a degree in civil engineering. ?Combining his talents as an engineer and an entrepreneur, he pioneered in the development of radio-telegraph communications in the U.S., Canada, and Great Britain. Over the years Sawyer served as a radio consultant for some of the major American firms and both manufactured and sold radio equipment. He built one of the largest radio companies in England and installed the first radio transmitters on the Eiffel Tower. His company established radio-telegraph stations at hundreds of locations around the world, including San Francisco, London, Rome, Lyons, Cairo, Constantinople, and Saigon. [3]

Sawyer's Contributions and Challenges in Promoting Alaska

In the 1928 presidential election, Sawyer took charge of the radio-advertising campaign in southern California for one candidate, another Stanford engineering graduate, Herbert Hoover. Apparently, the young radio engineer had first met Hoover while working in London during World War I. At that time, Hoover, famous as "the Great Engineer," was the wartime chairman of the Commission for Relief in Belgium. Quite familiar with the radio industry and Sawyer's work, he had, as secretary of commerce in the 1920s under Presidents Warren G. Harding and Calvin Coolidge, formulated the basic policies for the development and regulation of "voice broadcasting" in the United States. [4]

When Hoover became president in 1929, he brought a new spirit of reform to Washington, D.C., a spirit that harked back to the days of the progressive movement.? David Burner, his biographer, says this reform impulse characterized the true essence of Hoover’s early administration, before the picture was distorted by the effects of the Great Crash and the Great Depression.? “His early tenure,” Burner writes, “Was a remarkable experiment in developing new approaches to old problems.” [5]

One of the oldest problems that the federal government faced in Alaska was the inexplicably slow pace of economic development there, despite nearly all authorities agreeing that the territory contained incalculable natural resources.

The early ridicule of "Seward's Folly" by those who had opposed the purchase of a frozen wasteland gave way in the late 19th and early 20th centuries to glorious appraisals of Alaska's resource potential. Prophets of progress could see no limit to economic development. "Alaska has more gold than ever had California, Australia, or South Africa," one booster wrote in 1908. "It has more copper than twenty Buttes; it has more hard coal than Pennsylvania, and it has more tin than Wales. The hay that rots on its tundras and plains would fatten all the cattle that roam upon the prairies of Kansas, Oklahoma, and Texas." [6]

?Benjamin B. Hampton, the owner of Hampton's Magazine, a leading New York muckraking journal, actually tried in 1910 to calculate the total dollar value of Alaska's resources. By means of wild arithmetic and creative extrapolations he came up with the figure of $1.5 trillion, a sum, he said, that would give every U.S. voter an "Alaskan estate" worth $80,000. But such reasoning went too far, even for the most optimistic forecasters. On the floor of the House of Representatives, Congressman James R. Mann of Illinois responded to Hampton's article with a farcical tabulation of the value of resources Hampton had failed to include, among them salt from saltwater and natural aluminum. Mann told his laughing colleagues that these two resources alone were worth $126,997,757,346,480,000 and no cents. [7]

Widespread belief in the territory's untold treasures, exaggerated or otherwise, blinded many Alaskans to some basic truths about the free enterprise system. Alaskans generally refused to admit that investing in an isolated, relatively inaccessible frontier was a high-risk venture, despite the availability of resources that might elsewhere be profitable to develop. They failed to see that private capitalists would invest their money in development projects only if they were certain of huge profits. Greater risks and costs had to be offset by the promise of far greater returns. Yet if a business or an industry failed to thrive for whatever reason, it was always simpler and politically more popular to claim that federal bureaucracy, rather than the free market, had stopped the growth of commercial enterprise once again.

The Legacy of the Alaska Railroad in Economic Development Efforts

?In reality the federal government did a great deal to promote Alaskan economic development, especially considering the huge size and isolation of the territory. One of the most ambitious projects in the entire nation was the nearly 500-mile-long Alaska Railroad between the North Pacific port of Seward and the interior gold-mining town of Fairbanks. Constructed in 1915-23, the $35 million road was a unique enterprise in American history. It was the only federally built, owned, and operated railroad in the American West. Never before had the government itself actually stepped in to lay rails, always preferring to subsidize western railway construction with generous land grants to private companies. The failure of private enterprise to construct a major trunk railroad in Alaska, however, combined with the progressive era fear that a trust - such as the Morgan-Guggenheim Alaska Syndicate, owners of the Copper River & Northwestern Railway - would monopolize the resources of the territory, led the government to build its own railroad there. [8]

The government saw this venture as the engine that would drive northern development. When he hammered in the golden spike in 1923, Warren G. Harding, the first chief executive to visit the region, predicted that the railroad would, like a "magician's wand," transform Alaska into a prosperous land of farms, villages, and thriving commercial enterprises. Officials were puzzled when construction of the railroad did not lead to the expected growth and expansion of industry and when it did little to stem the economic decline that had begun during the First World War. In fact, the railway proved to be so unprofitable that in 1925 a California congressman seriously suggested that the rails be torn up and the route turned into a highway. By the time President Hoover took office, the deficit from the government's Alaskan white elephant amounted to nearly $1 million a year. [9]

?Faced with this dismal picture, Hoover's newly appointed interior secretary, Ray Lyman Wilbur, another Stanford graduate and president of that university, hired the engineering entrepreneur Ernest Walker Sawyer as an executive assistant in March 1929, shortly after Hoover's inauguration. As the secretary's designated troubleshooter for engineering problems, Sawyer covered a wide range of depart- mental issues from oil leases to Boulder Dam; at the top of his list of assignments were the affairs of the Alaska Railroad and "various other Alaskan problems." [10]

Sawyer's Comprehensive Plan for Alaskan Development

To learn about "all phases of Alaskan administration,"

Sawyer arranged a month-long tour of the territory in June 1929, which was probably one of the fastest and most extensive surveys of Alaska ever conducted.

By steamship, railroad, automobile, and small airplane, he visited 30 communities, and "about thirty glaciers," during "thirty days of concentration of about 20 hours each." He talked to anyone with an opinion about the region's problems, including government officials, businessmen, newspaper editors, and virtually every chamber of commerce in Alaska. "I conversed with all classes with an open mind and in private interviews obtained first-hand information," Sawyer wrote. [11]

Sawyer's Vision for Alaskan Economic Self-Sufficiency

By late July, Sawyer, back in Washington, submitted a detailed report outlining five basic policies that he thought the Interior Department should adopt for Alaska; he had 9 major recommendations and, to carry them out, 32 secondary recommendations. His proposed reforms emphasized that Alaska needed to become economically self-sustaining. "The Territory should be permitted to benefit by its natural wealth up to a point where it is self-supporting," he wrote. "Some of the rules, regulations and tendencies of various departments and bureaus today are restrictive, detrimental and against the best interests of the territory." He advocated a 20-year plan stressing "constructive development" of industries, which would culminate in "some form of Provincial Statehood in 1950. " [12]

Ernest Walker Sawyer was the first federal official charged with promoting the economic development of Alaska.

Sawyer's Alaskan tour convinced him that the territory was so large, and its geography so diverse, that it should be divided eventually into at least two states or provinces, with capitals in Juneau and Fairbanks. Many southeastern residents had long been eager to separate themselves from the rest of Alaska. At that time the Alaska Panhandle was the richest and most populous part of the territory and the center of its leading industry: salmon canning. "As a suggestion," Sawyer wrote, "I would say that by 1950 Juneau should have one Senator and at least one Congressman, and Fairbanks Province should also have similar representation in Washington." Under his plan, each province would have a locally elected governor and board of supervisors "something like the county government of Los Angeles County." [13]

?Like scores of politicians who in later years fought for Alaska statehood, Sawyer recognized the pernicious influence on Alaskan affairs wielded by Seattle cannery operators and other outside interests. They paid virtually no taxes in the territory and hired few local residents, relying instead on seasonal migrant workers from the States. Changes were necessary, Sawyer declared; the territory should reap some of the benefits from this government-regulated monopoly. Rules intended to protect the salmon stocks had frozen out the small operators, leaving only about five large canners in business. New taxes plus new regulations designed to increase local hire and boost local firms could "give Alaska thirty per cent of the value of the catch instead of less than five percent and would go a long way to putting the territory on a self-supporting basis." [14]

?Above all, Sawyer's blueprint for the future suggested a totally new conception of Alaska's relationship to the federal government.

"The territory should be operated now as a commercial entirety," Sawyer wrote, "and a good business manager or director-general would very soon show that it can be operated legitimately and economically, like any commercial enterprise."

Instead of a governor, the chief executive should be a business manager, "who, in turn, would report to the President or the cabinet as [to] a board of trustees." [15]

Innovative Projects and Proposals for Alaska's Growth

E. W. Sawyer spent much of the next four years trying to build up Alaska's agricultural and industrial base in order to make the territory economically self-sufficient. During the Hoover administration he became the federal government's most visible advocate of Alaskan development. He led the cheers for the growth of the territory: "I see a great future for Alaska," he told the New York Times in 1929. "I see a new era where the doors of the icebox are to be opened and within the box, I see the cream and cheese of hundreds of prosperous dairy farms, wonderful cuts of reindeer meat, fresh vegetables, luscious berries." On another occasion he wrote, "There is more coal up there than there ever was in the State of Pennsylvania. The timber of Southeastern Alaska . . . can produce continuously, each year, to the end of time, one million three hundred thousand tons of newspapers." [16]

?Never before had such a high-ranking federal official with cabinet-level access made Alaskan concerns a priority. "More constructive aid is being given Alaska by Ernest Walker Sawyer," one Juneau newspaper editor wrote in November 1929, "than by any man, any dozen or 50 men that ever visited the Territory in an official capacity." The editor urged the government to "send more Sawyers" to Alaska and cut back on the number of junketing congressmen. An editorial in the Fairbanks Daily News-Miner written by the associate editor, E. L. (Bob) Bartlett, who later became Alaska's delegate to Congress and one of its first two U.S. senators, praised Sawyer as the territory's highest placed friend in the federal government. "As personal assistant to Secretary of the Interior Ray Lyman Wilbur . . .," Bartlett wrote, "Mr. Sawyer is in a position to spread the gospel that Alaska is a good land in which to live and a land which is to grow in importance as the economic development which he urges is realized." [17]

?While serving as the secretary of the interior's official liaison for Alaskan affairs, Sawyer was transferred to Anchorage in 1930 as the special representative of the general manager of the Alaska Railroad, responsible now for "the industrial development of the area contiguous" to its tracks. Sawyer interpreted his mission in the broadest possible terms, realizing "that any improvement anywhere in Alaska benefits indirectly the railroad." He tried, however, to focus his energies on projects that would provide the most immediate return and enable the railroad to "live up to its promise" as quickly as possible. [18]

?Starting an industrial revolution in Alaska from scratch was a daunting task. Sawyer's job, as one reporter stated, was "to produce so much business for Alaska that the Government's railroad from Seward to Fairbanks will be lifted out of the red." During hearings on the 1932 Interior Department appropriation bill, a top official admitted that promoting Alaskan industry as Sawyer was doing "has never been attempted on this scale before." He defended Sawyer's high salary of $10,000 a year and warned against expecting immediate benefits. Sawyer's assignment "is one that cannot produce results in a day or in a year. It is a longtime job." [19]

In Sawyer's opinion many of Alaska's problems were simply due to its poor public image. "Mr. Sawyer has no sympathy with the propaganda that pictures Alaska as a land of blizzards and auroras, polar bears and white foxes and in the Summer mosquitoes," one news report stated. In dozens of press releases, public speeches, tourist brochures, departmental memos, letters, newspaper articles, and interviews, he repeated the theme that Alaska was more than just glaciers, ice, and snow. Advertising had become a powerful tool of American industry in the 1920s, and Sawyer applied to the selling of Alaska the new lessons corporate America had learned. He aggressively marketed Alaska to tourists and businessmen as a recreational destination and a place to do business. "I am a believer in advertising," he wrote to the Haines Chamber of Commerce in 1931, "because I personally have successfully spent hundreds of thousands of dollars in advertising and selling merchandise. California's continued prosperity is because she spends millions annually in advertising. Your community should advertise and let the rest of the world know you have both scenery and opportunities."20

Sawyer had demonstrated his sensitivity to good public relations soon after he arrived in Washington in 1929. In a private memo to the secretary of the interior, he urged his chief to stop using the word conservation. "In view of the resentment of a great many westerners to the word 'conservation,'" Sawyer wrote, "I respectfully suggest we hammer on the trademark constructive development and drop the word 'conservation.'" As he explained, "Our publicity department could be instructed accordingly and could prepare [a] release, e.g., 'Secretary Wilbur in press interview today stated he is not a simon pure conservationist but is a firm exponent of the idea of constructive development of our natural resources.'" [21]

Sawyer viewed himself as the number one exponent of constructive development in Alaska. Not a bureaucrat chained to a desk and bound by tradition, he was an idea man and an entrepreneur who gave free rein to his imagination. He was willing to consider anything. Sawyer delighted in the challenge offered by new plans to develop any sort of industry in the region served by the Alaska Railroad, even those with the remotest chance of success. " One gets very little out of life except the pleasure of doing things," he once wrote. Rather than scoff at new proposals simply because they had never been tried before, he embraced new schemes, the bolder the better. [22]

The first high-level U.S. government official to advocate construction of a highway to Alaska through Canada, Sawyer recommended to the interior in 1929 that “every assistance should be given to effect early completion, which would permit thousands of Los Angeles auto tourists to travel direct by auto 4000 miles to Fairbanks and the Arctic Circle." In part because of his efforts, Congress created an international commission to study the feasibility of the highway, and in 1930 President Hoover appointed Sawyer to it, marketing the start of federal involvement in an intermittent campaign that eventually culminated in construction of the Alaska Highway during World War II. [23]

The Reality of Economic Development in Alaska

Besides a route to Alaska, Sawyer’s 1929 plan for the territory included construction of thousands of miles of feeder roads off the Alaska Railroad; he proposed 10 primary highways to be built as soon as possible, and another 7 to be started within five years.? The spider web of roads he envisioned, the vast majority of which were never constructed, stretched over an area the size of Texas, reaching as far north as the Brooks Range, west to the Bering Sea, and east to the Canadian border. Sawyer argued that the railroad, the trunk of Alaska's transportation system, could not survive without healthy highway branches spreading throughout the country. The territory had fewer than 500 miles of highways. The government spent on roads less than 1/14th of what it spent on the railway. Failure to fund road construction, in Sawyer's opinion, doomed the railroad to continual deficits. "Congress sends the railroad like a sick man into a wilderness," he wrote, "and to make it easier for him to exist, he is deprived of his right arm." [24]

Even though he bemoaned Alaska's shortage of roads, Sawyer praised the airplane as a viable transportation alter-native. Commercial aviation was still in its infancy in 1929, but he called the air- plane the territory's "ace in the hole." Alaskans, the most "air-minded" people on earth, had more than 74 airfields, more per capita than any place in the world, and additional fields were being cleared every year. Thanks to the air- plane the territory was no longer "out-side the Union," Sawyer said. "The airplane puts Alaska within a few hours of the great cities of the mountain States and the Pacific Coast, and a matter of only a few days from those of the East and the Atlantic seaboard." [25]

According to Sawyer, aviation was one of the keys to the territory's development, and it led him to modernize Horace Greeley's famous dictum: "Young man, fly West." He pointed out that Alaska sits atop the globe "like a huge spider" ready to "trap that new commerce of the skies and oceans which will bring the trade of Siberia and China to New York and London." [26] [Ironically, E.W.'s son Richard would serve in the U.S. Air Force during WWII and become a POW in Germany after surviving a crash in a B-17. That story story is linked here .]

?For the more immediate future, Sawyer thought that reindeer herding offered the most promising solution to Alaska's economic crisis. That enterprise had been supported for nearly four decades by the Bureau of Education as a means of providing Alaskan Eskimos with a reliable source of food, clothing, and shelter. Not native to Alaska, reindeer, or domesticated caribou, were originally imported from Siberia and Scandinavia. Their numbers had grown quickly, and by 1930 the herds totaled more than 1 million animals. Sawyer believed that reindeer in Alaska, like cattle on the Great Plains, could become a thriving industry with the help of the railroad.? On his recommendation, supervision of the reindeer industry was transferred in 1929 from the Bureau of Education to a commission headed by the governor of Alaska. Sawyer proposed that the next step toward "commercialization" would be construction of a large slaughterhouse on the Alaska Railroad near Cantwell, from where the carcasses could be shipped by freight cars cheaply to the States. He argued that such a development would aid the natives by give them a market for their animals and would provide the railroad with the paying commodity it needed to become a profitable operation. [27]

Speaking at a meeting of the Los Angeles Area Chamber of Commerce in July 1929,

Sawyer announced his slogan: "Eat Reindeer Steak and Support Uncle Sam's Alaska Railroad."

He told anyone he could corner about the delicious taste of reindeer meat. It would not compete with beef, he said, because "it has a distinctive flavor something akin to the dark meat of the Thanksgiving turkey. It can be produced and placed on the market several cents under the present price of beef, and its vitamin content, because of the nature of the feed, will undoubtedly be found to be exceptionally high." [28]

Not everyone agreed with Sawyer's taste buds when it came to reindeer meat. In October the New York Evening World decried the "present campaign to make reindeer meat popular in New York" and stated that "if any meat is worse ... we are at a loss to think what it is, unless it would be mule meat." Restaurants could make it palatable only by grinding it like hamburger and making it "so seasoned with onions that you cannot smell it. Reindeer meat is so bad that there ought to be a law against it." [29]

?Since the reindeer industry was among the dozens of ideas that Sawyer was promoting, harping critics did not diminish his enthusiasm. In fact, the sale of reindeer meat was one of his more practical schemes. Others were less so. In 1929, for example, volunteers assisted by the Alaska Road Commission and spurred by Sawyer constructed a landing field in Fairbanks for zeppelins. Fridtjof Nansen, the Norwegian explorer, and his International Association for Exploring the Arctic by Means of Airships, or Aeroarctic Society for short, believed that a zeppelin based there part of each year would be the ideal craft for northern exploration. The "Zepp flights," as Sawyer called them, were just another indication that Fairbanks was destined to be the center of aviation in Alaska. Plans to host the Graf Zeppelin were abandoned by year's end, however, because the Aeroarctic Society was apparently unable to procure the necessary insurance. Fairbanks 's zeppelin landing field was never used. [30]

?In addition to serving as the hub of Arctic zeppelin traffic, Fairbanks could also become one of the centers of worldwide radio communication. People in that town, Sawyer observed, "listen to the radio programs of Berlin with the same ease as those of Los Angeles." He promised one radio executive to prepare a map that would "show how Fairbanks, Alaska, is, from a radio point of view, the center of the Northern Hemisphere and perhaps a logical location for a radio exchange such as R.C.A. now operate[s] on Long Island, except better."31

Sawyer tried numerous other unusual promotions. He recommended (without success) that the post office create a series of 24 special stamps honoring the 65th anniversary of the purchase of Alaska. "An Alaskan stamp issue in commemoration would do more to help Alaska travel and spread information on Alaska than anything else I know." Determined to increase the population of the territory, Sawyer recommended that a Mormon settlement be encouraged in the interior, "possibly forty miles down the Yukon from Tanana." He also urged the government to modify immigration rules in order to "permit free entry of Scandinavian families to Alaska." To start the tourist traffic flowing northward, he contacted at least 70 universities, colleges, and normal schools in 10 western states, suggesting that they hold traveling summer school sessions in Alaska. He arranged for window displays of Alaskan scenes and curios in major American department stores, such as Bullocks in Los Angeles, Wanamakers in Philadelphia, and Marshall Field in Chicago. He tried to set up an Alaskan lecture bureau, an organization intended to coordinate tours for northern speakers. [32]

?Sawyer himself frequently spoke before chambers of commerce, particularly in southern California, and his visits prompted the organization of several businessmen's excursions to Alaska, trips he hoped would build a network of commercial contacts and political supporters in the States. He tried to entice "cranberry experts" from New England to vacation in Alaska, certain that they would locate processing plants there once they saw the millions of acres of highbush and lowbush cranberries on the tundra. He contacted 杜邦 , the United States Rubber Company, and Firestone , recommending the territory as the ideal place for a factory to produce synthetic rubber. Alaska also offered an excellent opportunity for development of a large-scale chemical industry; he claimed in an article he wrote and mailed to 10,000 chemists across the country. The Los Angeles Times , which planned to build a pulp mill in south-eastern Alaska, got Sawyer's direct encouragement. [33]

?While being stung by mosquitoes at the Delaware seashore, Sawyer thought of a use for the estimated 2-million-ton deposit of peat moss located near Fairbanks. "At many beaches," he wrote, "people carry long sticks of Chinese punk, which has a peculiar odor which the mosquitoes avoid. I believe such sticks can be produced in Alaska from Alaskan peat scented with a special odor which could be used locally as well as exported." When he read about a Washington cannery owner who put up a pack of "boned and fried chinook salmon processed in tomato sauce," he dashed off letters to several Alaskans alerting them to the new process. Convinced that certain parts of the territory were devoid of all wildlife, he recommended that yaks be introduced to graze in the interior north and east of Fairbanks. He liked the idea of growing rare commercial plants in Alaska. Pressing President Charles Bunnell of the Alaska Agricultural College and School of Mines (now the University of Alaska ) to experiment with a few varieties, he wrote: "I am a great believer in specialties as money-makers, and some of these items run into big money." Instead of raising ordinary crops like potatoes, Alaskan farmers should produce "a more valuable product where freight rates become immaterial." [34]

?On one visit to the Matanuska Valley, Sawyer was astonished to find thousands of small frogs and "almost a total absence of local mosquitoes." His fertile mind immediately formed two schemes based on frogs. He had never seen frogs in the Tanana Valley and asked that 50 be sent to the Agricultural Experiment Station at Fairbanks for observation relating to mosquito eradication. After returning to the States, he sent a treatise titled "Commercialization of the Bullfrog," written by a commercial frog farmer in Lakeside, California, to several of the leading newspapers in the territory and asked them to reprint it in their columns. "I hope this will develop an interest in bullfrogs in Alaska which I believe could eventually be put up in cans or quick frozen at a very large profit." [35]

Ernest Walker Sawyer could readily imagine that one day Alaska might surpass Louisiana as the nation's leading source of frog legs, just as he could picture Alaska producing more coal than Pennsylvania, more meat than Texas, more cranberries than Massachusetts, and more cabbages than California. The frontier spirit of entrepreneurship, the willingness to dream big dreams, and the freedom to act on them have traditionally been great strengths of the American eco- nomic system. Though Sawyer found few individuals willing to invest in the projects he proposed, some of his dreams eventually came true. The Alaska Highway, Alaska statehood, construction of pulp mills, increases in tourism, and Alaska's development as an international air crossroads - all became reality within 30 years, and today Alaska is also America's leading producer of oil, the lifeblood of the modern industrial world. In the short term, however, virtually all of Sawyer's development schemes, including fur farms, coal mines, chemical plants, and hydroelectric dams, failed to materialize on the grand scale he envisioned. Some of his overoptimistic ideas made no economic sense given the realities of Alaska's rugged climate and isolated location. Furthermore, his entire Alaskan development campaign took place against the backdrop of the worst economic collapse in American history.

?The crucial stumbling block for most of Sawyer's schemes was Alaska's endemic shortage of capital, a shortage typical of most frontier or otherwise undeveloped regions. Enthusiasm alone would not pay the bills or make a losing proposition a profitable enterprise. In December 1931 the Ketchikan Chamber Of Commerce praised Sawyer for his effort to attract capital. "Alaska, we feel needs capital, not people," the secretary of the chamber wrote, because with the placement of capital come industries which in turn furnish jobs for those of us who are here as well as for those who want to come. It is no trick to get people up here, our mail is flooded every day with letters from those who want to come, but it is a very real job to present our crude frontier opportunities in attractive and business-like form to those who have the means for their development. [36]

?Finding investors willing to risk money on the frontier is always difficult, but it would have been miraculous, given the 1929 stock market crash and the Great Depression, if any of Sawyer's proposals had found financing. The Hoover administration's insistence on volunteerism and publicity as the main tools to fight the depression made new public funding also out of the question.

?When Franklin D. Roosevelt took Hoover's place in the White House in 1933, Sawyer returned to private life, leaving behind barely a trace of the numerous projects he had envisioned to aid the development of Alaska. Not until the massive military buildup for World War II, when government defense spending sparked the biggest economic boom up to that time in the history of Alaska, did the Alaska Railroad finally start earning regular profits. Only with the large infusion of government capital in the 1940s did the rail belt from Anchorage to Fairbanks become the political and economic heartland of the territory, as Sawyer predicted it would. [37]

?Hickel's Vision of the "Owner State" and Economic Development

The dilemma of economic development in Alaska, as on other frontiers, has always been the extent to which independent pioneers require government assistance in order to succeed. Walter Hickel's vision of Alaska in the 1990s is what he calls the owner state, in which state government would play an unprecedented role in financing and constructing billions of dollars of basic infrastructure such as roads, ports, and railroads. This demand for "internal improvements" is one of the oldest themes in western American history. The first thing a trailblazing frontiersman did after chopping down a few trees and starting a log cabin was to ask the government to help fund the necessary internal improvements. Hickel's plans for Alaska to finance its own echo Ernest Walker Sawyer's proposals 60 years ago for the government to run Alaska like a commercial enterprise; under the owner-state arrangement, however, the governor, and not the president, serves as the chairman of the board, and public money, not private, is the prime source of development capital. Governor Hickel's new chief of the Alaska Railroad, Robert Hatfield, recently said that the extension of the railroad was probably the "most efficient and environmentally friendly way" to develop Alaska's resources. He admitted, however, that the state would no doubt have to subsidize any construction since it was unlikely that most Alaskan resources could compete in a global market "if traditional private enterprise investment tactics" were followed. [38]

The Challenge of Diversifying Alaska's Economy

In theory the strength of capitalism as an economic system is that competition weeds out those who cannot meet the demands of the market. The law of the free market system, like the law of the jungle, provides for the survival of only the fittest. To a certain extent government involvement can bend the rules and so encourage the growth of desirable industries. But all the subsidies in the world cannot make an untenable economic enterprise tenable. If the government invests in too many unprofitable ventures, it can drown itself in a sea of its own red ink. The danger is that government bankruptcy, unlike personal or corporate failure, threatens disastrous consequences for the entire population.

At various times basic extractive industries in Alaska, such as the fur trade, salmon fishing, gold mining, copper mining, lumbering, and oil production, have paid immense dividends, but Alaskan businessmen and politicians have continually yearned for development of natural resources that would produce a diversified and stable economy. Like those in other western states and territories and on other isolated frontiers, unsatisfied residents have long believed that the root cause of the region's small population, slow economic growth, and lack of local manufacturing has been government neglect. Why else, they ask, would a region so rich in resources not be more fully developed?

Those who have suggested that Alaska's nearly $12 billion Permanent Fund be used to build internal improvements need only consider the dismal record of the Heritage Fund in Alberta, Canada, which has squandered its capital in a failing campaign to diversify the provincial economy. Government attempts to diversify the Alaskan economy have fared just as poorly. A realistic analysis of economic potential, and a knowledge of past federal development efforts like those of Ernest Walker Sawyer, indicate that economic development in Alaska, even with government support, is still a high-stakes gamble with no guarantee of success. [39]

Terrence Cole is associate professor of history at the University of Alaska Fairbanks . A former editor of the Alaska Journal, he earned a Ph.D. at the University of Washington in 1983. He has written numerous works on Alaska history, including Crooked Past: The History of a Frontier Mining Camp, Fairbanks, Alaska (1991) .

?

ENDNOTES

?1. Anchorage Daily News, Sept. 20, 1990. For a succinct summary of the "neglect thesis," see William H. Wilson, "Alaska's Past, Alaska's Future: The Uses of Historical Interpretation," Alaska Review, Vol. 4 (1970), 1-11; for a further discussion of this idea in Alaska's historical literature, see Terrence Cole, "The History of a History: The Making of Jeannette Paddock Nichols's Alaska," PNQ, Vol. 77 (1986), 130-38.

?2. Daily News, June 18, 1991 (1st qtn.); Rex Beach, The Iron Trail (1911; New York, 1972), i (2d qtn.).

?3. Interior Department Appropriation Bill, 1932, "Hearings before Subcommittee of House Committee on Appropriations," 73d Cong., 3d Sess., 1930, (73JH556-0, pp. 639-40.

?4. "Record of Ernest Walker Sawyer," April 27, 1929, Office File of Ernest Walker Sawyer (EWS), 1929-31, Personal, RG 126, National Archives (NA); David Burner, Herbert Hoover: A Public Life (New York, 1979), 138, 74; Herbert Hoover, The Memoirs of Herbert Hoover: The Cabinet and the Presidency, 1920-1933 (New York, 1952), 139-48.

?5. Burner, 212.

?6. Frederick H. Chase, "Alaska's Railroad Development," Review of Reviews, Vol. 38 (1908), 693.

?7. Benjamin B. Hampton, "The Vast Riches of Alaska," Hampton's Magazine, Vol. 24 (1910), 453; Congressional Record, 61st Cong., 2d Sess., 1910, pp. 5076-77.

?8. William H. Wilson, Railroad in the Clouds: The Alaska Railroad in the Age of Steam, 1914-1945 (Boulder, Colo., 1977), 27. One complaint was that the Alaska Railroad was a necessary first step in Alaskan development but "no second step, or other step, was taken." See Ernest Gruening, The State of Alaska (New York, 1954), 228.

?9. James W. Murphy, comp., Speeches and Addresses of Warren G. Harding, President of the United States (Washington, D.C., 1923), 315; Edwin M. Fitch, The Alaska Railroad (New York, 1967), 67-68.

?10. Ray Lyman Wilbur, The Memoirs of Ray Lyman Wilbur, 1875-1949, ed. Edgar E. Robinson and Paul C. Edwards (Stanford, Calif., 1960), 409; "Record of EWS," April 27, 1929 (qtn.).

?11. Report of EWS to Wilbur, July 22, 1929, Alaska File of EWS, Secretary Wilbur-Memos on Alaska, RG 48, NA (hereafter cited as EWS 1929 report).

?12. EWS memo to Wilbur, July 30, 1929, Office File of EWS, 1929-31, Original Memos to the Secretary, RG 126, NA.

?13. In 1923, the year the Alaska Railroad was completed, residents in southeastern Alaska sent a memorial to the president and Congress requesting the creation of a separate "Territory of South Alaska." See Ronald Lautaret, comp., Alaska Historical Documents since 1867 (Jefferson, N.C., 1989), 90-97; EWS 1929 report (qtns.).

?14. EWS memo, "Alaska Fishing," to Wilbur, July 30, 1929; EWS 1929 report (qtn.).

?15. EWS 1929 report.

?16. New York Times, Sept. 22, 1929; EWS, "Alaska: Her Position and Resources" (n.d.), Office File of EWS, 1929-33, Alaska File, General, RG 48, NA.

?17. Stroller's Weekly (Juneau), Nov. 30, 1929; Fairbanks Daily News-Miner, March 9, 1931.

?18. EWS memo, Nov. 3, 1930 (1st qtn.), and EWS memo, "Alaska Operations," Jan. 22, 1930 (2d, 3d qtns.), both in box 12, entry 794, RG 48, NA; Wilbur, 409.

?19. Los Angeles Examiner, July 16, 1929 (1st qtn.); Appropriation Bill, 1932, "Hearings," 636-37 (2d, 3d qtns.).

?20. "Airways to Open Alaskan Wilds," unidentified, undated clipping, Office File of EWS, 1929-31, Clippings, RG 126, and EWS to Haines Chamber of Commerce, Feb. 20, 1931, Office File of EWS, 1929-33, Alaska File, "C" Misc., RG 48, NA.

?21. EWS to Wilbur, March 25, 1929, Office File of EWS, 1929-31, Original Memos to the Secretary, RG 126, NA.

?22. EWS to Robert (sic) Bartlett, April 1, 1931, Office File of EWS, 1929-33, Alaska File, "B" Misc., RG 48, NA.

?23. EWS 1929 report; "Alaskan Road Planned," unidentified clipping, July 24, 1929, Office File of EWS, 1929-31, Clippings, RG 126, NA; News-Miner, Feb. 28 and March 7, 1931; British Columbia-Yukon-Alaska Highway Commission, Report on Proposed Highway through British Columbia and the Yukon Territory to Alaska, August, 1941 (Ottawa, 1941), 7-10.

?24. EWS memo, "Alaska Resources," to Wilbur, May 4, 1931, Office File of EWS, 1929-33, Alaska File, Secretary Wilbur-Memos on Alaska (General), RG 48; EWS memo, "Alaska Surveys," to Wilbur, Oct. 29, 1929 (qtn.), Office File of EWS, 1929-31, Original Memos to the Secretary, RG 126, NA.

?25. New York Times, Sept. 22, 1929 (qtns.); United States Daily (Washington, D.C.), Oct. 28, 1929 (hereafter cited as US Daily with appropriate date).

?26. EWS, "Alaska: Her Position and Resources."

?27. EWS 1929 report.

?28. Los Angeles Examiner, July 16, 1929 (1st qtn.); Alaska Weekly (Seattle), Jan. 31, 1930 (2d qtn.).

?29. New York Evening World, Oct. 11, 1929.

?30. US Daily, Oct. 21, 1929; "Graf Zeppelin Arctic Flight Is Abandoned," unidentified, undated clipping, Office File of EWS, 1929-31, Travel, RG 126, NA. For more about the proposed zeppelin flights, see Terrence Cole, "'As the Landing of a Zeppelin Is No Easy Matter . . .'" Alaska Journal, [Vol. 11] (1981), 209-12.

?31. EWS to A. Y. luel, Nov. 18, 1929, Office File of EWS, 1929-31, Personal, RG 126, NA.

?32. EWS memo, "Alaska Commemorative Stamps," to Wilbur, Feb. 20, 1932 (1st qtn.), Office File of EWS, 1929-33, Alaska File, Secretary Wilbur - Memos on Alaska (General), RG 48, NA; EWS 1929 report (2d qtn.). For a summary of his activities, see Sawyer's memo, "Alaska Operations," Jan. 22, 1930.

?33. EWS to Frederic S. Snyder, March 14, 1932, Office File of EWS, 1929-33, Alaska File, "S" Misc., and see Office File of EWS, 1929-33, Alaska File, Chemical Plant (Alaskan), RG 48, NA; EWS memo, Nov. 3, 1930.

?34. EWS to News-Miner, Sept. 9, 1931 (1st qtn.), and to William L. Neeley, Feb. 26, 1932 (2d qtn.), Office File of EWS, 1929-33, Alaska File, "N" Misc., and to Charles Bunnell, Dec. 31, 1931 (last qtns.), Office File of EWS, 1929-33, Alaska File, "Bunnell"- all RG 48, NA.

?35. EWS to News-Miner, Oct. 11, 1931, Office File of EWS, 1929-33, Alaska File, "N" Misc., ibid.

?36. Frank S. Shelton to EWS, Dec. 3, 1931, Office File of EWS, 1929-33, Alaska File, "K" Misc., ibid.

37. Wilson, 238.

38. News-Miner, Feb. 8-9, 1991.

39. Toronto Globe and Mail, June 1, 1991

* ?? Barron S. is the great-grandson of E.W. Sawyer.