Keystone Canyon

The old railroad tunnel in Keystone Canyon, located at about Mile 15 of the Richardson Highway. The rocky spur that the tunnel is drilled through used to extend another 60 to 70 feet toward the Lowe River. 

The Lowe River flows through Keystone Canyon east of Valdez. The canyon provides the only practicable land route out of Valdez, and was the site of one of the more regrettable episodes in Alaska railroad history.

In 1898 the U.S. sent Army Lt. William Abercrombie northward in search of an “all-American” route to the Yukon gold fields. He chose the Lowe River/Thompson Pass route — the path followed by the Trans-Alaska Military Road (Valdez-Eagle Trail) and later the Richardson Highway.

Edward Gillette, a railway engineer, accompanied Abercrombie to scout potential railway routes. Gillette’s favorable report on the Lowe River route sparked railway fever in Valdez. That fever increased with Wrangell Mountains copper discoveries in 1899 and 1900.

When mining engineer Stephen Birch acquired the Bonanza claims near Kennicott Glacier for eastern investors (who eventually formed the Alaska Syndicate) development seemed assured. Unfortunately, litigation over claim ownership (eventually decided in Birch’s favor) delayed development for several years. But according to Lone Janson’s book, “The Copper Spike,” between 1902 and 1907 about a dozen schemes were floated to build a railway northward from Valdez to the proposed mines.

A few schemes were merely pipe dreams — others just “paper” railways never progressing beyond initial planning. Numerous potential developers sent surveyors to Valdez, and several rights-of-way were filed, but it appears that only four ventures began construction.

By the end of summer 1906 only the Copper River and Northwestern Railway (CR&NW), controlled by the Alaska Syndicate, was still working. The CR&NW’s roadbed had reached 15 miles to Keystone Canyon, and laborers were hand-drilling a 200-foot-long tunnel.

However, the Alaska Syndicate was entertaining doubts about the Valdez route. Coal had been discovered at Bering River, just east of the Copper River. Locomotives ran on coal, and coal could fuel an Alaska-based smelting operation. A railroad starting at Katalla in Controller Bay would hopefully access the coal fields and proceed up the Copper River to the mines.

The Alaska Syndicate decided to gamble on the Katalla route and shifted operations to Controller Bay. It hedged its bet, however — leaving a small crew working in Keystone Canyon.

Valdezians were incensed at the betrayal and turned decidedly anti-Alaska Syndicate. In August 1907, Henry Reynolds, a Boston developer, stepped forward and proposed constructing the Alaska Home Railway. Playing on Valdez resident’s antipathy towards the Alaska Syndicate, he promoted his railway as “Of Alaska, by Alaska, for Alaska.”

When Reynolds couldn’t buy the CR&NW’s Keystone Canyon right-of-way, his workers attempted to forcibly seize it, claiming the CR&NW had relinquished its rights. On Sept. 25, 1907, about 260 Home Railway laborers approached the barricaded Keystone Canyon r-o-w armed with picks and shovels. They were met by two deputy U.S. marshals carrying rifles. and unarmed CR&NW workers.

When one deputy noticed men higher in the canyon carrying dynamite, he fired warning shots, first in the air and then at the feet of the advancing party. The bullets ricocheted, injuring several men and ending the confrontation. The Home Railway men dispersed and the wounded were transported back to Valdez. One of the wounded died five days later.

The episode’s significance was moot. Home Railway crews could have worked the other side of the Lowe River without opposition. Regardless, Reynolds enterprises, including the railway and a Valdez bank, collapsed within a month due to apparent fiscal malfeasance.

The CR&NW’s Katalla gambit also failed. The company might have returned to complete its Valdez-based railway, but Elizabeth Tower, in her book, “Icebound Empire,” speculates that Valdezian hostility played a part in the CR&NW’s decision to make Cordova the terminus for its railway.

The Valdez roadbed was abandoned and the unfinished Keystone Canyon tunnel, shown in the drawing, remains a lonely reminder of Valdez’s railroading past.

Ray Bonnell is a freelance artist, writer and longtime Fairbanks resident. See more of his artwork at


• “Icebound Empire: Industry and Politics on the Last Frontier, 1898-1938.” Elizabeth A. Tower. no publisher. 1996

• “The Copper Spike.” Alaska Northwest Publishing. 1975