Observations on the oil pipeline, written Jan 5, 2010

During all of my adult life, starting with the lease sale to various oil companies of parcels along Prudhoe Bay by the State of Alaska in 1969 for about $900 million total, oil has dominated our Alaskan economy.


In 1974 Alyeska built the roads and the camps that would accommodate 20,000-plus pipeline workers, including me, for the construction of the pipeline in 1975-77. It was the largest privately-financed construction event of the times, eclipsing anything which had ever happened in Alaska prior to that. It had long-term consequences that effected Alaska unlike any other economic event ever.


Yet those times are almost over. Every year the pipeline pushes a decreasing amount of oil. Presently, it is just under 700,000 barrels a day. As it goes by Copper Center, just 100 miles from its destination at Valdez, the oil has already dropped to about 40 degrees inside that pipe. It is getting dangerously and ominously close to the point where it can no longer function. The latest best estimate gives us ten more years. I am far less optimistic. I believe that unless ANWR is brought on line within the next six years, there will not be enough time left to save the pipeline from becoming just another large industrial remnant of better times.


Yes, I too am closely tied to it and always have been. My first real job after leaving the Army in 1974 was working on that pipeline. I knew it was a historic event at the time. I am sorry I did not take pictures while I was there. It was definitely a one-of-a-kind boom where money was practically flowing through the streets of every place even remotely connected with this project all throughout Alaska--just as it must have been during the glory days of the series of gold rushes that mark the early days of Alaska.


In some ways the pipeline will live on after its demise if our legislators are successful in enshrining our Alaskan Permanent Fund into the Constitution. This will guarantee that the investments realized as a result of our early oil revenues will always go first to the Alaskan people. That remains to be seen, but we all want it. All of us, that is, except those too closely associated with government services, that ravenous monster that knows no bounds and recognizes nothing except the justification for an increasingly expensive and ever-growing bureaucracy. Every state faces a similar fate. For some, such as California, New York and Oregon, the chips are coming due with no way to cover the bets. For us here in Alaska, we still have a chance to escape that fate.


But the days of Big Oil are very obviously in decline for Alaska as the companies lay off an ever-increasing number of its workforce on the North Slope. ANWR may be a politically dead issue. Even though we are no where close to running out of oil, politically oil production in Alaska is probably dead. If so, then the writing is on the wall. Yes it is true. It is almost over. My business is closely tied to it, as are most every one else's who operates year-round here in the interior. We Alaskans are only too fully aware that we must plan for what is coming. Most of us are counting heavily on some form of natural gas line to replace it. However, the Trans-Canada Alcan line will likely never come to be. That is because Alaskan natural gas must compete with huge fields of cheaper gas in Canada and Stateside. No way. We can't do it. Only an all-Alaska line has much of a chance of becoming reality, especially if we gain an export license so we can sell LPG to the Orient. That is where I am placing my bets, at least for now.


Ten years. Maybe more. Probably less. That's it. That's all there is.
Addenda:  Since I wrote this brief piece last year (as part of a larger thread related to pipeline construction camps) I have begun to have serious doubts that we will be building any gas pipeline. I am quite sure that the trans-Canada one is out the window, but I also see little encouraging about the Valdez line, although I remain hopeful. It is all a function of how price-competetive Alaska can be with its LNG gas, assuming it is ever delivered to Valdez. 



Alyeska Pipeline Map: click image for larger version

The FIVE-YEAR PLAN: Phase II of the Reconstruction of the CRD

The second phase of reconstruction on the CRD building will enlarge the bar itself to enable room for additional activities, mostly tourist-related. But two features will be of particular interest to locals: the inclusion of a band stage and a dance floor for special events.

In keeping with the general theme of the newest part of the model railroad, this new area is deliberately designed to resemble the Brick Tavern as seen in Northern Exposure.  The original building, which is located in Roslyn, Washington, is shown below the model plan for comparison:  

Phase I of re-construction of the CRD building

The completed structure, which will be my new residence, will look like this: This phase of construction should be completed sometime during the next summer season. Long-term plans call for a Phase II expansion which involves enlarging the bar area, principally in order to enhance tourist activities.  The red section is the existing Copper Rail Depot bar. Most of the structure you see represented here is already in place. Click any image to view a larger version. 

Ron's Introduction

Hello out there. Allow me to introduce myself.

I am Ron Simpson, born of a Native-Alaskan father and a second-generation Norwegian mother. I grew up in Ketchikan, Alaska, one of those wonderful small towns that probably no longer exists anywhere in the sense that the society that fostered that atmosphere no longer seems to exist. Thus I took with me into adulthood some very strongly-rooted small town USA values.

Ours was a town of mixed population in that it was the home of Tlingits, Haidas and Tsimpsian Indians who made their livings mainly in the fishing and timber industries that once dominated the area. Dad became the local community college director about 1964 after about ten years teaching in the local schools. He always emphasized the need to develop practical and marketable skills. The community college he oversaw represented his philosophy of making such practical educational opportunities available to all who wanted them at a very reasonable cost with the cirriculum presented in ways that fit in well with the community.

Since I first entered high school I took up an interest in politics, especially cold war politics. The communists running the Soviet Union, East Germany, China, Vietnam and North Korea fascinated me. I never could understand how such atrocious people could get away with enchaining entire nations and then proceed to capture other nations whole, such as Tibet or Hungary or Czechoslovakia. I have always viewed the communists as vicious predators and their fellow traveler supporters as either stupidly naive or, worse, evil. My opinions on far left systems, which I know understand to include the Nazis and their fascist allies, have changed little in all those years. I still regard that far left as the enemy. Even then I knew that many of their supporters existed in positions of influence and authority here in the United States. I always knew this would eventually cost us dearly. We are rapidly arriving at that point.

I graduated from "KayHi" in 1968. I was second in my class out of 77.  It was easy for me. As it turned out, college was not so easy, but that was a good thing. Life itself is not so easy. By then I had already won a full Reserved Officers' Training Corps 4-year college scholarship. I chose to take that up at Oregon State College, not far from where my mother's folks still lived. I wanted to serve my country. The ROTC seemed like the ideal means to do so. After graduation I would become an officer in the US Army. At the time it looked like the beginning of a fine career.

These details are important because they help explain how I view the world. 

More to follow. 

Me during my college years on a beach near Ketchikan. Clothing fashion was never my forte.   In fact, "fitting in" was never even a consideration and still is not. I know how to fit in well thanks to my days as a military officer. I can do it when I choose. But I have never ranked "being popular" as a particularly desirable trait. Guess I found my "karma" there.   (Click image for larger one). 

First Trip to the Klondike, Pt 5

We are very fortunate in that four of the original locomotives from the KMR, Numbers 1, 2 and 3, plus one of the Detroit-Yukon Railroad Porters, number 4, have survived and are resting not far from where they road the rails--the confluence of the Yukon & Klondike Rivers at Klondike City to a point 31 miles to the SE in a remote and long-forgotten place high in the hills known back then as Sulphur Springs.






Sometimes locomotive number four is mistaken for one of the KMR engines because its number is in sequence with the others. This is just one of those odd coincidences. The other three porters, Nos. 1, 2 & 3,  were removed years ago.  The real KMR No. 4  was picked up by the WPRR at the site of the old KMR engine house to be resurrected for use elsewhere. It now sits in Oklahoma.


Here they all were back in the 1970s in a place called "Minto Park" in Dawson City, adjacent the old administration building, which is now a museum.  These wonderful old narrow gauge steam locomotives from the glorious Klondike Gold Rush days will hopefully forever rest here in the public view where all can appreciate this significant part of Klondike history.


 Since this photo was taken (click for larger image) these engines have been placed under cover and are in the process of being restored as static displays. 
I will deal in more detail with each of these locomotives, but for now I wanted you to see them all lined up. Quite a sight are they not? Where else would one be so fortunate as to find four of the original steam engines still sitting close to where they once operated?

Bob Haldeman Interview--background notes

Here is a brief background before we continue: Salvador Isabelino Allende Gossens June 26, 1908 – September 11, 1973) was a physician and the first democratically elected Marxist socialist to become president of a state in the Americas.Allende's involvement in Chilean political life spanned a period of nearly forty years. As a member of the Socialist Party, he was a senator, deputy and cabinet minister. He unsuccessfully ran for the presidency in the 1952, 1958, and 1964 elections. In 1970, he won the presidency in a close three-way race (about 39,000 votes. There is evidence that the Marxists found a way to rig the election just enough to get Allende installed into office --RS)





Chilean postage stamp honoring Marxist President Salvadore Allende

Allende established a Marxist regime in Chile.His economic policy resulted in inflation which exceeded 300 percent a year. He adopted the policy of nationalization of industries and collectivization. His policy of collectivization resulted in seizure of lands and crop production dropped. Protests were held in Chile against Allende's rule. The Supreme Court criticized Allende for subordination of the judicial system to serve his own political needs and the Chamber of Deputies requested the military to restore laws in Chile. After this request by the Chamber of Deputies, General Augusto Pinochet removed Allende from office in an U.S.-backed coup d'état on September 11, 1973 and this ended the Popular Unity government. During the air raids and ground attacks that preceded the coup, Allende gave his last speech where he vowed to stay in the presidential palace. He gave his last speech from the presidential palace with the sounds of gunfire and explosions clearly heard in the background. A dedicated Marxist to the end, these were his words:
"Workers of my country, I have faith in Chile and its destiny. Other men will overcome this dark and bitter moment when treason seeks to prevail. Keep in mind that, much sooner than later, the great avenues will again be opened through which will pass free men to construct a better society. Long live Chile! Long live the people! Long live the workers!" (September 11, 1973). He was found dead in the palace. His death was officially ruled a suicide.





Salvador Allende and the general who would ultimately depose him, Augusto Pinochet


Index to Haldeman Interview

First Trip to the Klondike, Pt 4

It was the summer of 1978.  The three of us, Florence Dicob, Virgil Katchatag and I,  had proceded over ten miles up the Bonanza Creek Road. The hills are close and relatively steep as one follows the creek. It was mid-afternoon, but it would be easy to see how quickly the late afternoon shadows would overtake this narrow place with those rocky hills peering down upon us from all directions, throwing the small creek valley into dark and probably somewhat cold shadows. Around here when the sun went down, it could get very chilly indeed. In the steep valleys, sunlight did not have much of a chance to establish its presence before moving on.

It was fascinating. The creek was surprisingly small for such a world-famous place. It was readily fordable almost anywhere by the time we got this far up.  Mostly we had seen pile after enormous pile of tailings--large rocks nearly evenly distributed in a wave-like fashion extending sometimes hundreds of yards wide and going on it seemed for miles.  In an odd sort of way, though, the whole place seemed understated. It was as if a world event had happened right here--which it did--but nobody remembered or cared.

There was all that old iron--pieces of old mining machinery. Indeed, except for the occasional operating dozer, everything up this creek valley looked positively ancient but often still usable. There were old dredge buckets piled everywhere in places on both sides of this narrow hard pan road.  In fact, some of the historic claim markers were sprayed in white on these old buckets.  They usually appeared as a claim name like "Lowe's Fraction" and a number, Like "Bonanza 15."

Occasionally there would be a small log cabin. But these were relatively rare. Mining was still in progress, although apparently on a relatively small scale anymore--and this ongoing activity seemed to extend almost everywhere up and down Bonanza Creek. Imagine that! Eight decades later and  people were STILL mining around all these old tailings.

Somewhere along the north wall of the valley I had spotted carefully-placed lines of flat, sharp rocks reinforcing some kind of roadbed. I later figured out that this was part of an old railroad line.

Then there were those hills near the confluence of the creek with the Klondike River. Entire hills were still being taken down by these things called "giants"--hydraulic mining still in progress. One of these hills had been reduced to a fine white sand-like substance that seemed to cover everything while defying flora to grow on it. In fact, plant life was relatively sparse in this part of the creek for some reason, although there was an abundance of mostly small deciduous growth lining the small, clear creek that trickled through this strange and growing ever-stranger valley.

These hills strongly resembled the ones we had passed just east of Chicken on the way to Boundary. They were rounded with lots of almost uniform sharp rocks that seemed to fit together in some kind of gigantic puzzle. The round rocks were the ones in the tailings piles.  The only color seemed to be orangish to tan. There were no shades of green or anything else that I was used to seeing elsewhere, just variations on yellow--except for the bright white sandy hill that had been mostly pulled down by decades of hydraulic mining.

The trees which existed just beyond the main areas of mining activity appeared to be black spruce. They were uniformly small, obviously adapted to an extremely frigid environment. And they were often not all that close together, indicating that life here even for plant life really was an ongoing struggle.  They were dark but not exactly lush. If anything they  had a kind of spindly quality. They tended to be short--seldom reaching more than thirty feet.

Occasionally, especially along  the south wall, another smaller creek valley would intersect this one. These often deep valleys usually showed recent signs of mining activity. In places the rocks appeared to be piled up close to a hundred feet above the road. Bulldozers had obviously pushed through a number of access roads up these rock piles going back to the mining claims.

Then we rounded a turn and came upon a monstrous dredge that was partly buried in the muck in a wide spot on the creek bottom. Mostly it was dry there. The creek water around it had receded, leaving only that unpleasant wet mud interspersed with marsh grass.

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In those days everything was open to the public. We stopped and checked it out. What a thrill that was! The machinery on board this mammoth dredge was itself gargantuan.  Everthing about that long-abandoned piece of machinery was enormous.  We would come back and explore it more. But right now, something seemed to be pushing me to continue on.  Beside, I wanted to avoid the late afternoon shadows that would soon be overtaking this valley.

Then we came upon it.  Whatever it was, I knew we had reached the turn-around point. It did not really look like anything where we had stopped. There was a wide spot on the road and a panoramic photo that Parks Canada had placed on a sign that overlooked the creek. Directly across the creek, which was right there, was an open area, then a gradual hill hidden by heavier growth I had not seen down the creek. We had reached a point where one small and undistinguished creek flowed into the other.  These creeks were quickly separated by a hill.  Behind us the hill was steep. It seemed that the thing was peering down upon us. This was a strange spot indeed.

There wasn't much to see, but I sensed something really big here.  I waded into the clear creek. It was colder than I had thought, but I made my way across it. I found myself not wanting to go any further, and re-crossed the creek.  Over in the distance where I had crossed I could see some kind of road, a couple of old deserted cabins and more of those carefully placed rocks that helped keep the road in place. Upstream was yet another small cabin that appeared to be in use.  It looked dark and forbidding even though it was small. I would not be going in that direction. It was at the base of the hill which divided the two small creeks.

All was remarkably quiet here except for the clear creek gurgling through as it wound its way  to the Klondike and thence to the mighty Yukon River.  I kept sensing something peculiar at this spot.   Something was definitely here, but I could not see it. I climbed back up the creek bank to the parking lot and took a good look at that picture. There it was. I was looking at a very impressive historic photo of the  town of Grand Forks. The sign said that 10,000 people had once lived here. But where? I had spotted only three very small cabins--nothing more.

There was so much more in that panoramic photo, including some impressive two-story structures that were obviously commercial buildings.  But what really stood out were the three churches. These frame buildings faced each other--each one taking a corner of the town except for the approach side on the western end. Upon closer examination it seemed to me that one of those church buildings might  have stood directly behind me.  There was, in fact, a kind of natural bench to my rear that looked like it might have been in about the right spot.  I climbed up there and looked around: nothing. There was nothing there. It was a sad and disappointing feeling. I felt that something really valuable and even irreplaceable had been lost here.

I kept looking around not quite believing what I was seeing. What I was looking at was nothing--absolutely nothing at all. What had happened here? The Parks Canada sign clearly indicated that this was the correct spot. I could see from the hills in the background that it probably was, although the exact positioning of the town in the photo was somewhat difficult to determine because something about the angle was wrong.

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A Part of Grand Forks: Eldorado Creek in the foreground. (Click for larger image)

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Then I began to get this creeping sense of spirits everywhere around this place. They were there, all right. Their town was gone but some of these people evidently had never left. This had become their final destination.  That feeling of eyes looking down on me was becoming more real.

It was not all that pleasant a feeling--not a sense of peace at all underlying whatever was still here.   I began to distinctly feel like an intruder. Whatever had happened here was absolutely fascinating to the point of being consuming.   I wanted to see more. Before leaving I needed to  cross that  creek one more time. We headed out of there and  doubled back to find the bridge that crossed Bonanza Creek about half a mile down the creek. Following that narrow road we soon returned to where we had been, but facing the other side. It sure looked like there was room on this side for a town of the size I had seen in that historic panoramic, but once again I could see nothing.

We checked out the remains of those two cabins. Not much there, but they sure felt like they were still alive in an odd sort of way.  But that was all there was. I was once again disappointed to find no signs of any of the other buildings that once dominated the creek at this very spot.

It was only later that I learned that the bulk of the old town was just up the creek another hundred yards or so. The town had been built along Eldorado Creek with a small part of it along Bonanza Creek which had split off to the south. The main part of town was built to the north side of the hill which separated the two streams.  Those two fallen-in cabins actually marked the entry point for the town and were thus only the beginning part of Grand Forks. But there was no more town, no more buildings, no more of anything. It really was all gone. I keep repeating this because I had a hard time absorbing this obvious fact back then and to a certain extent even now. This was an experience that would haunt me years later. Even as I write this that experience comes back as a kind of shock. To me it was as if someone or something had taken my own home town away from me in the dead of the night--leaving nothing behind but bare ground.

Then I thought about that dredge we had passed about a mile downstream and I began to suspect I knew exactly what had happened here.

Klondike Gold Rush & the All-American Route, conclusion

Map of the CRNW Railway

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Showing the relative positions of Valdez, Fairbanks and Dawson

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This early CRNW map detail shows the military telegraph route to Eagle on the Yukon River, from there one had to take a paddle wheel to Dawson City.  The start of the telegraph line was Valdez.  As you can see, it was still a considerable distance to Dawson even after one had reached Copper Center (not viewable because of lines in the way but just below Tazlina on this map). Click for larger map version.

Klondike Gold Rush & the All-American Route, Pt 4

Copper Center circa 1911

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In the early days freight came up the CRNW to Chitina where it was transferred to horse-drawn freight wagons. One of the prominent stops was Copper Center.

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Of the roughly 350 prospector-hopefuls who made it to Copper Center, almost all ended up leaving for Valdez following a scurvey epidemic. In the end, the "All-American Route" to the Klondike was a bust.

This turned out to be a dead-end  for gold-seekers: too far to continue on to the Klondike and almost no gold in the Copper River valley.  I have often referred to Copper Center as not a destination, but a brief stop on the way to somewhere else.  It began as a trading post in 1896 and with the end of the All-American route, it returned to being just a trading post. Although within a few years a small government experimental farm was located here along with a Blue Fox farm and a U.S. Army telegraph station, Copper Center never became a town--or a destination. 

And now we return to the Klondike. 

Klondike Gold Rush & the All-American Route, Pt 3

The All American Route: Copper Center: The End of the Line--and the start of a new era

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Map showing Klutina River route from Klutina Lake to Copper Center, confluence of the Copper & Klutina Rivers.  (Click).

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As tough as ascending the Valdez Glacier only to encounter the forbidding Chugach summit was, and then continuing over yet another hazardous glacier to reach Klutina Lake, it is said that the Klutina River was even more dangerous to the unwary travelers who evidently had no idea what they were doing when they entered that river from where Klutina Lake empties.

Probably more lives were lost along this roughly 25 mile stretch of river than anywhere else. Almost every boat built overturned or was busted up on the many rocks in that incredibly fast moving white-water current. Because this is a glacier stream, the river is barely above freezing. Persons who fall in the river have only minutes to get out, if that, before the river takes them. 

Many, upon word of how treacherous this river really was, turned back toward Valdez. But a few brave souls actually took the plunge--literally.  Of the 3,500 who attempted this incredibly arduous journey from Valdez on their quest of the All-American Route, only about a tenth of that number actually made it to the confluence of the Klutina and Copper Rivers--Copper Center

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The Landing at Copper Center:  This shot was taken on what is now my riverfront property  on the Klutina River. (Click). 

Klondike Gold Rush & the All-American Route, Pt 2

The All-American Route: Klutina Lake

The old map: "Lake Abercrombie" is actually "Klutina Lake" (click)

This map is a continuation of the previous one. The trek over the two glaciers and the Chugach Range summit involved stopping at a number of camps the sprang up along the way. The last of these were at the end of the Klutina Glacier and at various points along this lake.

historic Klutina Lake map (click image for larger version)

Someone managed to haul a complete sawmill over the pass. This became sawmill camp. It was used to build boats to cross the lake and then begin the journey down the Klutina River.

The lake is not far away from Copper Center--about two dozen miles over a very rough trail. For a brief time in Alaska's history, this area was populated with many prospectors with hopes of striking it rich either by continuing on to the Klondike gold fields or by finding gold in the valley. Rumors of massive gold fields in the Copper Valley were prevalent but false.

Klondike Gold Rush & the All-American Route, Pt 1

The Yukon Territory and the old Territory of Alaska were tied together primarily by gold. The first major population surge into the north country was spurred by the Klondike gold rush. This in turn brought about the White Pass and Yukon Railway and the short-lived Klondike Mines Railway.

More than that, the rush brought about the push that resulted in the "All-American route" into the interior. This was the infamous Valdez Glacier-to-Klutina Glaicer route to what is now Copper Center where I live. It was probably the toughest gold route ever, lasting only one season--long enough to kill off plenty of people and discourage many more.

But among the handful that finally made it into the Copper Valley, some of those went on to seek out Chief Nicolai and eventually secure the famous Nicolai copper lode claim that ultimate resulted in the formation of the world-wide copper conglomerate known as Kennecott--the theme of my Phase I project.

The Yukon remains prime mining territory in its own right, but because of its relative isolation and lack of infrastructure, including a first class railroad line--or any railroad line for that matter--it languishes to this day, almost wholly dependent now upon summertime tourism. 

Early Map Showing the Path up the Valdez Glacier:  The "All-American Route"

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The 45 mile route up the Valdez Glacier required ascending the Chugach Summit at nearly 5,000 feet, then ascending another glacier before reaching  Klutina Lake.   Travel on the glacier was only safe during winter when snow cover over the glacier was packed and hard, but it also meant the traveler was subject to frequent storms and the occasional avalanche. Additionally, those ever-present exceedingly deep crevices meant certain death for any who fell through.  Three thousand five hundred attempted the trip. Less than a tenth of that number actually made it all the way through to Copper Center, and many of those died of survey. Most of those who attempted the glacial crossing turned back and returned to the states. (Click map for larger image).

Klondike Mines RR, Pt 1, Background

The Yukon Territory is a fascinating piece of ground.  It has a very rich history and it is also strategically important.  As you can see from the map in the previous post, to get to Alaska by land, one MUST go through the Yukon.  A century ago the only large "city" there was Dawson, which was once referred to as "the Paris of the North."  

It was also the intended destination for a number of railroads, as you see from the map below, plus a pass-through for a very serious proposal that would have created an entirely new trans-world railroad that would have stretched from New York to Moscow and then Paris.

This proposal actually had serious financial backing, but is rumored to have been killed by the shipping industry.  Regardless of what happened, what is clear is that at one time, Dawson City and the Klondike was considered to be a major destination.

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Dawson City became the territorial capital of the Yukon. A large administration building and the commissioner's residence still stand to attest to this important historic aspect of Dawson.

Unfortunately for the railroad which finally did emerge within the Klondike, it came too little and too late. It was built long after the intial strike had brought all that activity into this desolate area.  It was now competing with newly-built roads and the existing rather extensive water way system along the Yukon River. Even worse, with the strike over, the boom had become a bust. 

With the advent of the large companies that would take over the many small claims, the population dropped drastically.  The Klondike Mines Railway would become nothing more in then end but a hauler of wood for the various steam engines used in the Klondike to thaw the ground. Even that would prove to be a very limited venture.

And with the steady drop in local population the need to connect this line with the White Pass was now over. Thus the KMR would never go beyond the original 30 miles that brought it up to the headwaters of Eldorado and Bonanza Creeks.

It would take many more years, but eventually the capital was moved to Whitehorse. Whitehorse became important in its own right with the advent of the Alcan Highway built by the US Army in 1942-43.  By then Dawson had become nearly a ghost town--and a very isolated one at that. It was over 300 road miles from Whitehorse to Dawson where even large-scale mining was now on a long slide into oblivion.

First Trip to the Klondike, Pt 3

This is a historic panoramic photo of Dawson City at its zenith, probably about 1912.  To the right is the confluenceof the Klondike River. Just across the river was Klondike City, a small "town" which served as the railroad yard for the KMR.  Nothing remains there to indicate there ever was a railroad save a few pieces of iron if one knows where to look.

On the top left is The Dome--a very prominent backdrop for historic Dawson City.  The view is looking east. Click for a much larger image.

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(click above photo for larger image)
I took this picture with my polaroid from on top of the Dome. You are looking up the Yukon River with a view of a part of Dawson City as it was in 1978-79.  Across the Yukon River is the Top of the World Highway winding its way to the top of the hills.

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First Trip to the Klondike, Pt 2

Dawson City is "way out there" even by Alaskan standards.  It is well off the beaten path, although accessible by plane, boat and road. My access to this very historic town was by means of the "Top of the World Highway."  That, in turn, is reached by means of the Taylor Highway, which intersects the Alcan Highway twelve miles east of Tok.  Tok is approximately 155 road miles NE of Copper Center, or 328 road miles from Anchorage.

In the late seventies I was operating a coin-operated music, pool, video game route in the southcentral area, including some of the villages around Tok, such as Northway, Tanacross and Tetlin, along with a few choice highway roadhouse locations.  One of these was Chicken Creek Saloon, which was 66 miles up the Taylor Highway.  That is a long drive because the Taylor in those days was a gravel road with heavy grades and many rough segments.  It was also either dusty or muddy, depending on whether or not it had recently rained.

Somehow I was talked into going into Dawson City by the owner of Chicken Creek Saloon to see the owner of one of the hotels who wanted to purchase some video games. When I finally did go, it turned into the beginning of many years of a very rich experience because that area is so steeped in history, it is impossible to ignore. And above all else, I appreciate historic structures, be they old western buildings, minesites or remnants of old railroads.  I was not a railroad fan, but I appreciated the history of what they represented even back then.

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The Klondike area: Click for larger version

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There is something about that trip. Chicken Creek Saloon itself sits amidst an old gold mining camp complete with an abandoned dredge. There were still individual miners in the area working right along the road on claims that stretched from Chicken to Boundary, about forty miles up the road.

One of the old camps along the way is obviously the remants of a small town known as Jack Wade Camp. It has its own dredge abandoned along the road. One follows a series of creeks that all have been historic mining areas for the entire distance to the border. The hills are rolling with black spruce and the creeks are dark and mysterious looking with the sense of old spirits everywhere.

The "Top of the World" is almost exactly that. It is a road that is allowed to close in the winter because it is nearly impossible to keep open due to heavy snow drifting. The road literally runs along the tops of those old rounded hills, in some cases well above the tree-line.  In the winter the snow drifts up, not down, filling in   that road and soon encrusting it in a heavy snow-ice meld that requires heavy machinery to remove in the late spring when it is finally opened. That is an event that many eagerly anticipate because driving to Dawson is like entering the past.

At Boundary was the Boundary Roadhouse. In those days an old codger known as "Action Jackson" ran the place. He himself had operated several mining claims down in the creek beds hundreds of feet below Boundary, which is well up in the hills just west of the Canadian boundary.  He had one of those old style glass bulb gas pumps in front of a very old log cabin that served as the cafe. Another building held the small bar and then there were a series of small log cabins that were for overnight visitors. They were very primitive but somehow quite comfortable.

All of this simply added to the allure of the entire trip. Jackson was quite the character, literally a creature from an era that was rapidly disappearing. His Boundary Lodge stop was a must for anyone traveling this lonely route because Boundary represented the Alaska of the gold rush frontier days.

Then there was Dawson itself. One first sees it from a high hill overlooking the city and then the massive Yukon River. The moment one sees it, what is obvious is that this is a very special place. 

First Trip to the Kondike, Pt 1

In 1978 I made my first trip to Dawson City in the Yukon Territory. In those days I had no particular interest in trains, but the area I visited, as it turned out, was rich in railroad history.  I am fortunate to have visited the Klondike region when I did, which involved a series of both winter and summer trips over the next fifteen years. During that time I was particularly fascinated with the Bonanza and Eldorado Creek areas which include the original claim that sparked the world-famous Klondike Gold Rush.

Bonanza Creek enters the Klondike River just upstream from the Klondike's confluence with the Yukon River. That area consists mainly of massive gold dredge tailings intertwined with remnants of hydraulic mining operations on some of the upper hills, including one called "Gold Hill."  Although the original claims were all small placer operations, some of which rewarded the miners with unbelievably rich placer, it was not long before the really rich claims played out. At that point the only economic way to mine these areas was either by dredging the creek bottoms or using massive hyraulic giants to take down the hillsides. This meant large companies with impressive financial means had to enter the scene, buy up the many small claims, and then invest in the expensive machinery and manpower required to continue mining the area.

It was apparent even as late as I first saw this area that some kind of railroad had once run through here. I couid see the kind of heavy rockwork alongside some of the hills on the north side of the Bonanza and Eldorado Creek valleys that obviously was put there to handle some kind of heavy load.

Of course, there was also the obvious clue within the town of Dawson itself. Outside the old administration building which now serves as a museum sat four derelict locomtives, numbered one through four.  In those days they were simply parked there the way they were found when they were moved from their original sites. They were unprotected and showed no signs of restoration on any of these engines. But there were four of them, big as life. 

---

---

This is a 1978 polaroid shot of me on "The Dome," which is the hill above Dawson City. In the background  you can clearly see Bonanza Creek and the hydraulic activities of Gold Hill. 

---

I made my last visit to Dawson City in 1995--the same year I began putting together my  first large-scale model railroad--the beginnings of the Chitina Local Branch of the Copper River & Northwestern Railway which ran between Cordova on the coast to Kennecott along the southern slopes of the Wrangell Range well within the interior. The CRNW was a standard gauge railroad completed in 1911. It's construction was overseen by Erastus Cornelius Hawkins. He was the same engineer who was in charge of the White Pass construction project--a narrow gauge railroad. And it was E.C.Hawkins, as it would turn out, who put together the intial design for the narrow gauge Klondike Mines Railroad with terminals in Dawson CIty and Klondike City, across the Klondike River from Dawson. 

Panoramas Sewell - Chile

Contained herein are some breath-taking images of the ghost town of Sewell, Chile, formerly Kennecott's city on the hill known as the Braden Mine



Panoramas Sewell - Chile

Mirabal performs here: My kind of music

Next up: The Communists Take Over in Chile

Next Up:  Salvadore Allende &

The Communists Take Over in Chile

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Bob Haldeman interview (49)

Inaugurating the New Operation, August 8, 1970




Haldeman: In August we had the inauguration of the new operation, and we
organized a big show. The president just loved it. We had
buses in front of the La Afoneda in the central plaza downtown,
and we had four or five hundred people invited, all the
dignitaries in all sectorspolitics, business, church.


Swent: And you bussed them all the way out to Rancagua?


Haldeman: We bussed them all in a big convoy with a police patrol in front
of it, and we went up and had a big lunch in the warehouse at
the smelter. We took the president and a group, and even the
archbishop of the Catholic Church went along, too.


Swent: To give it a blessing.


Haldeman: Yes, that's right. We took him underground and showed him


around, and we took him up in a cage with the brand-new hoist,
where you could lift two railroad cars loaded up to the levels.
He was very impressed, and he enjoyed it--oh, gosh, the ribbons
and all that kind of stuff.


Swent: It must have been a great day for you, too.


Haldeman: Yes. On the way back on the bus, here was the head of the
church, the members of the board, senators, deputies, and
representatives of the area. All of us were tired. It was
about six o'clock in the afternoon, and we were coming down the
hill on the new highway. We were just about into the central
valley, and the president stood up on the bus, turned around,
and said, "I make a motion that we all give a big round of
applause to Bob Haldeman for the wonderful job he's done." A
good politician. [laughs]





Viewing a main tunnel in the Braden copper mine
(click for larger image)  



Index to Haldeman Interview

Bob Haldeman interview (48)

By this time, 1970, we had, not including the construction,
which were mostly foreigners--in our operating organization six
expatriates, and all the rest were Chileans. The general
manager of operations, the general manager of the service
department, the manager of personnel, purchasing, and all down
the line were Chileans. A top-flight team, really doing a
wonderful job.


Do you want to say who did get the bid? It's a matter of
record.


Haldeman: McKee, Bechtel, and Utah [Mining and Construction Company) had
to split it up because of their specialties.


Swent: So they had a consortium.


Haldeman: Yes. One didn't have smelting experience, and the other one
didn't have mining experience; so we decided we would pick out
those things, and they would have to get together on it. It
turned out excellently. We were under time and slightly over
budget, but financing came very easy.





Index to Haldeman Interview

Bob Haldeman interview (47)

Nobody said anything, so I said to Mr. Simian, "Mr.
President, do you think we could have a break now?"


"That would be wonderful, if you don't mind, Bob."


I got up, high-signed all of my people, walked into the
other room, and closed the door. I left him with his
representatives. An hour and a half later he came out and said,
"Bob, these guys want to have the meeting tomorrow."


I said, "Ed, it would be a dead dog. By that time they'll
get to La Moneda (the presidential palace)."


He said, "I know it. They wanted me to come out and ask
you if you are absolutely sure that you are willing to stake
your reputation, blah, blah, blah, and aren't you making a
mistake?"


I said, "Ed, you can tell them, or do you want me to go in
and tell them?"


He said, "Well, no, I'll tell them." He went back in the
room, and later someone said to come back in, and the meeting
went on. You can imagine the faces in there. But they awarded
the bid.


Oh, boy, the flak flew the next day all over the place.
Mr. Simian went over to see the president, and he said, "Mr.
Frei, I want to tell you what happened. We went over the
numbers, and I go along and share the responsibility with Mr.
Haldeman. You don't always get the best job at the lowest
cost."


Mr. Frei said, "If you people are responsible for it, and
that's what you want, so be it." He stood up for it. Imagine!
No political pressure on me. You couldn't have asked for any
better relationship.


Swent: It wasn't a Chilean versus gringo split on the board, was it?


Haldeman: The four directors from the government were all Chilean.
Swent: Were the three others non-Chileans?


Haldeman: No. There was myself, Mr. Grant, and Carlos Tolosa, the Chilean
business manager. And the replacement was a Chilean, too.


Swent: So it wasn't a strict gringo-Chilean split?
Haldeman: No.


So we got off to a very good start. We started to build a
plant, and it went along just like clockwork. We had a really
fine team of people there, and the contractors complied up to
the last comma and dot. Everything went excellently.


Swent: Were you able to get your production up to what you had
predicted?


Haldeman: Well, now we come up to '69, and elections are in '70. We get
back into the same atmosphere of political things, and we are
about 70 or 80 percent along on our construction job. All the
pressure we were putting on was all we could do to get this
inaugurated before Frei left office. Of course, that's what he
wanted for his candidate, Mr. Radomiro Tomic, the Christian
Democrat and ex-ambassador who was running.






Index to Haldeman Interview

Bob Haldeman Interview (46)

Selecting Bids for the Mine Expansion 


Haldeman: We had to choose an engineering construction company, and we had 
three companies bidding. (I won't mention the names of the 
companies.) Each of them was associated with local Chilean 
companies . 

Swent: That was for this new half-Codegua plan? 
Haldeman: Yes. 

Now came the big political pressure through the Chilean 
associates of these companies to try and get the job. We got 
the bids in, and all my people evaluated it. I called Mr. 
Simian and said, "Before we have a board meeting, Ed, 1 want you 
to go over all these numbers with me." He's an engineer and 
understands all this. I had two of my staff there, and we went 
over and over it. The lowest bid was not the best. The highest 
bid was the best. 

Swent: Best in what sense? 

Haldeman: It had better people. Their way of determining their costs was 
absolutely crystal clear. The other one had all these hidden 
costs and threw charges on this and that; it was vague. You 
went through it, and you couldn't find out exactly who was going 
to be responsible for something and if there were overhead. 
They included things in general overhead, which shouldn't have 
been in overhead, at 60 percent. Right off the bat you know 
you're going to have to sit there and go to arbitration and 
chisel all the time. 

The highest bidder had a super team of professionals in the 
business of mining, smelting, concentrater, and electrical, 
which were the principal components. We were getting an awful 
lot of flak from the lower bidder. He had a lot of political 
clout with the president and the Congress, and he was in the 
Christian Democrat Party. He put a lot of pressure on the 
government members of the board. He said, "We know we have the 
lowest bid." I knew we were going to have fireworks. 

We went over the bids for a couple of days, and Ed finally 
became convinced that the [higher] bid we were going to take was 
the proper bid to have. I said, "After all, too, I have to be 
responsible for it, because I have the management contract. And 
Kennecott is responsible; it's not just me alone." 

Ed said, "All right, let's have the board meeting." 

At six o'clock that afternoon we had all the board in, and 
my project manager, Mr. B. B.. Smith, made the presentation. He 
was an excellent chap. We put all the numbers up on the board, 
and his number-two man, Mr. Samuelson, went through the details 
on it. I said, "So the management recommendation to this board 
is to pick Group A." Silence. 

Then, "What was that cost again?" 

The Chilean board for El Teniente Mine, 1967. Bob Haldeman is third from the left, front row seated in front of the table.  (click for larger image)

Index to Haldeman Interview

Bob Haldeman Interview (45)

How much difference did it make in your management? 

During the period from '64 to '67, I had to sit down with 
Mr. Saez. Raul was a very, very busy man, and we'd meet a 
couple or three times a week, or maybe jump a week, and meet for 
an hour or two. He said, "Bob, I'm going to talk to you, and 
you have to draft it and write it up. Then send it to me, and 
I'll call you when we can meet again to review the draft." 

I said, "I have done some work on it myself with my 
lawyers, so I'll give you a framework." 

He said, "That's fine and dandy. Let me take a look at it. 
But I want you to have one thing clear. When I was general 
manager of Endesa," which is a government-owned company, "I 
wanted to do several things in the company, things that a 
general manager should do, because it was in all my powers-of- 
attorney vested to me as I took over the job. I couldn't do 
them because I had political restraints on me. So I want you to 
draft this up so that you don't have any restraints; you will 
have all of the full powers of the general manager, because 
you'll be responsible in front of the board, and you can be 
fired if you don't do it properly. I don't want you to be able 
to duck out and say, 'I couldn't do it because I had restraints 
on me'. That's what I wish I could have had when I was manager 
of Endesa." 


So we drafted it up that way. We never took it out of the 
file in the short time from '67 to '71 that I managed the 
company. It never was referred to once. When you have a good 
agreement between the parties and you draft it up, you don't 
have to go back and look at the files on the thing. 

And it worked out absolutely fine, though many things 
happened to it. We had to present our budget the following 
year, in "68 and the rest of '67. I had a contributions and 
public relations budget, which all American companies had-- 
donating books to libraries, making pictures of the company, 
radio time, and all that stuff. The first thing that was 
criticized on the budget was when one of the members on the 
board said, "Bob, what are you doing with all this money? The 
government controls the TV station and the radio station; we get 
free time, so take it. Don't spend the money on that. The 
library? We have a budget for libraries; there's no need for us 
to give our money to them. We want the cash in here; we want it 
as dividends." 

So there were no contributions, no public relations, and no 
donations budget; we ran a mining company for profits! It's 
entirely different when you put it on the other shoe [put the 
shoe on the other foot]. [laughter] 

Simian and I became an executive committee. The board just 
decided that they wanted Ed and me to make the major decisions. 
They told us that we could let them know; they had trust in both 
of us. They knew perfectly well that Simian would not give 
anything that was not good for them, and I wouldn't give 
anything that was not good for us. So they decided that was a 
pretty nice way to have major decisions made. 

Ghost town of Sewell, abandoned barracks

Index to Haldeman Interview

Bob Haldeman Interview (44)

MANAGING A CHILEAN COMPANY

April 12, 1967. Legal Constitution of the Company

Haldeman: Mr. Simian, the minister of mines, who got the legislation

through from '64 to "67 to be able to make the joint ventures,

resigned as minister.

Chilean legislature

The president said, "Mr. Simian, you can't leave me. I

want you to be president of the company. You know Bob, and

he'll be vice president. I want the two of you to run the

company. "

That's the way the thing was structured. On April 12,

1967, the company was legally constituted. We had the first

board meeting, and all of the transfer of titles, shares, and

assets were made. [looking at photo] You have here Mr. Simian

at the head of the table. On his right is yours truly, on his

left is Mr. Grant, and these are all the board of directors and

the alternates.

Swent: Eleven people. Maybe we can get a copy of that picture.

Haldeman: I'll get a copy for you and send it to you.

In April, just before this was signedalmost

simultaneously--Kennecott was in OPIC offices and the Eximbank,

and their loan agreement was signed by U.S. government agency.

Swent: Where were those offices?

former Chilean government building

Haldeman: In Washington, D.C. The Chilean ambassador at that time,

Radomiro Tomic, was present and signed for the Chilean

government at the same time we were down here signing. At that

meeting, the head of Eximbank gave a little speech, the Chilean

ambassador gave a speech, OPIC gave a speech, and Mr. Milliken

gave a speech in which, among other things, he said, "The man

who is responsible for the whole idea of this joint venture is

not with us today, and that's Bob Haldeman. He's in Chile at

this moment, signing the papers and setting up the first meeting

of this company. It was his idea."

Swent: So he did give you the credit

Haldeman:

But never to my face. [laughs] I don't care,

perfectly fine by me. We got what we wanted.

Index to Haldeman Interview

Bob Haldeman Interview (43)

So we figured maybe twelve years. It was now '64, and

during the twelve years we figured the legislation would get by

in two years, '66, but it took three years. To build a plant

would take three or four years and would be done before Frei was

finished; we'd have the first six years and get our money out.

After that, if we made a profit, fine. We'd get $80 million in

cash for the assets--51 percent of the assets which is better

than nothing. Anaconda didn't get anything out of their assets.

OPIC [Overseas Private Investment Corporation] , who insures

United States investments abroad, gave guarantees of

expropriation exchange and all of that stuff. Kennecott had

been talking to Eximbank, and they put up $100 million. We put

up the $80 million that they paid us and reinvested it back into

the company. They had to print the money to do it, but we

didn't put up any fresh cash.

Then the Copper Corporation put up the other $20 million,

so that made the $200 million. Later on it inflated up to $240

million, and I had to go and get some loans from the Japanese.

Then we went over and got a loan from the French-Italian Bank in

Italy. They were selling against copper contracts futures

contracts. It finally cost $270 million, but it was completely

financed.

Index to Haldeman Interview

Bob Haldeman Interview (42)

Haldeman:
The next day we met at ten o'clock, and I took the notes 
down. It didn't quite fill two pages, double- spaced, and that 
was the agreement we struck for a $240 million business. We 
sold 51 percent of the company, and I was managing it for them. 

Swent: When exactly was this, Bob? 

Haldeman: It was between January and February of 1964. That memo was 
given to the president, and they immediately made a press 
release of the results of the agreements with the three 
companies. He said, "I have drafted legislation that I needed 
enacted to make these things become effective." 


Swent: These three companies were all announced simultaneously? 

Haldeman: Yes. The word leaked out a little bit, but then the president 
went over national radio. 

Swent: And you had heard what the results of the other two meetings 
were? 

Haldeman: The next day, when the president went over the radio, the phones 
started to jingle. Anaconda called up: "You s.o.b.'s. You 
dirty so-and-so's." 

Bob Koenig called up and said, "Congratulations. I think 
it was brilliant. I should have thought of it myself; I could 
have gotten some cash out of this investment." [laughter] 
Anaconda was furious. 

Swent: Had you been aware of what Anaconda and Koenig had done? 

Haldeman: Yes. Chile is a large country, relatively speaking, but it's a 
small one--Peyton Place; you know what that means. 

Swent: How had you heard? 

Haldeman: There are leaks of information all over the place. It's very 
hard to keep a secret in Chile. I knew in general what they 
were talking about. 

Swent: Was there a club where you met people and this sort of gossip 
was circulated? 

Haldeman: No. A fellow like Mr. Illanes and some of the Chilean 

supervisors that I raised up into key positions have an awful 
lot more information sources than a foreigner. They pick it up 
at cocktail parties. It leaks around. Then they can report to 
me. I needed those; I didn't have the ears. My intelligence 
service. Everybody had it. 

Swent: I was just wondering if there was a country club or a downtown 
club. 

Haldeman: No, nothing like that. Oh, there are, but usually they don't 
leak it to you there. They wouldn't have said anything to us. 
Of course, it took them by surprise; it took everybody by 
complete surprise. It was very bold and very good. 

At that time Michaelson and I were talking, and we came to 
the conclusion that this would probably last two 
administrations- -Frei and the following. Twelve years. 


Swent: They never gave you credit for having thought of this? 
Haldeman: Let's wait until a little later to talk about that.

Abandoned barracks at the ghost town of Sewell, Chile

Index to Haldeman Interview

Bob Haldeman Interview (41)

Swent: He wanted an advisory contract? 

Haldeman: An advisory contract with Kennecott sales [division] to help 

them for the first couple or three years until they could get an 
organization set up. 

Frank said, "Fine, Raul. Any other questions?" 


Raul said, "No." Mind you, we started at ten o'clock, and 
it was now eleven-twenty. 

And you've sold $80 million. [laughter] 


Haldeman: Raul said, "Frank, I'm sorry; I've got a meeting downtown at 
noon. Can we get together tomorrow at the same time here?" 
Sure, that would be fine. "Would you mind if we make Bob 
recording secretary? You and I will talk our agreements, and he 
will write them up. You type them out for me, we can both look 
at them, and I will take them over to the president in the 
afternoon." 

Frank said, "Fine. Bob, set up the meeting for tomorrow." 
I said, "Yes, sir." 

Lagarrigue said, "I have to go; I have to get to town." He 
decided he didn't know what to do, so he went out, got his car, 
and went right down to the La Woneda, the presidential palace. 
He walked in and said, "I have to talk to the president." 

The president was told that Lagarrigue was there and said, 
"Have him come in right away." 

Lagarrigue went in and said, "Mr. President, we've finished 
with Kennecott." 

The president said, "Oh, God, what happened?" 

Lagarrigue said, "They offered us and we bought 51 percent 
of the company." 

Frei looked at him and said, "This is my viga maestra, my 
master beam of my structure--the copper business." That famous 
phrase is in history books. 

Abandoned Kennecott barracks, ghost town of Sewell, Chile

Index to Haldeman Interview

Bob Haldeman Interview (40)

Saez said, "Frank, let me congratulate you. This is 
absolutely breathtaking. We never thought of this. It's 
brilliant. Two things come to my mind. Because of the bold 
move you have taken, I think you should have a tax rate lower 
than the others. And $100 million is just like a $100 suit; a 
$99 suit is much cheaper. I'll lower the tax rate so that we'll 
put the price of this down to $80 million, and you'll pick it up 
in the first two years of operation in your profits with the 
lower tax. Is that all right?" 

Frank said, "Fine." 

Raul said, "We're not set up to operate the property. 
Would you have a problem if we let Bob run it?" 

Frank said, "What do you want?" 

Raul said, "I'll tell you what. I have full confidence in 
Bob. Why don't you let Bob and me work out a management 
contract?" 

Frank said, "Anything you guys work out is fine by me. 
It's approved ahead of time." 

Lagarrigue was staying in the background, and Frank said, 
"Javier, do you have something to say?" 

Javier asked, "Who's going to sell the copper?" This was a 
great thing who sold the copper. That politically was the 
thing. 

Frank said, "The board of directors is going to call the 
shots, and you have the majority." 

Javier asked, "You'll be responsible for sales?" 

Frank said, "The board will; it's not 'we'; it's 'you.'
You are going to be a shareholder on this thing." 

Index to Haldeman Interview

Bob Haldeman Interview (39)

A Bold Proposal for Chileanization 


Haldeman: Frank said to Mr. Saez, "Raul, we've been thinking it over and 
we come with the following in mind. Twenty- five percent to us 
is just the same as 1 percent; in the same analogy, 49 percent 
is a minority and is just the same as 1 percent or 25 percent. 
We just don't think that solves any problems for you, much less 
for us, because that will always be a bone of contention. And 
50-50- -we don't want to have an arbitration court to manage the 
company. So we would think that the best thing for you, for the 
country, and for us is that you buy 51 percent of the company." 

Saez never flicked an eyebrow, and Javier Lagarrigue 
fumbled for his cigarettes and couldn't get one lit. Michaelson 
was smoking and gave him his Zippo lighter. Raul said, "Fine. 
How much do you put the value at on the property?" 

Milliken said, "We had American Appraisal assess this and 
it was assessed at $200 million; so 51 percent would cost $101 
million. Call it $100 million. We have the appraisal, and it 
does not include the value of the ore." Okay; fine. Yes. 

Frank said, "Furthermore on that, Bob has engineered a 
program. Bob, you explain it," and I explained what it 
involved this tunnel and so on--in very few words. I didn't 
have any maps or anything like that. I said it would increase 
production by 60 percent. 

Raul said, "That's wonderful. How about the corporate 
structure?" 

Frank said, "I don't think we should have a big, numerous 
board. We should have- -not an executive committee but, say, 
seven or nine on the board, of which you would have the 
majority." 

Raul said, "I think nine is too much; seven is better. 
When you get nine, you get a lot of political hacks who want to 
get in. Four will be enough for us, because we can fill them 
with people who are capable and know the business." 

Okay, so we would have three, and maybe we would have one 
alternate each. "Yes, that would be fine." 

Saez said, "Frank, who's going to manage the company?" 
"The board, and you have the majority." 

Presidential Palace, Santiago, Chile

Index to Haldeman Interview

Bob Haldeman Interview (38)

Our Mr. Milliken and Mr. Michaelson came down. I was 
called by Mr. Saez, who said, "Bob, we'd like to have a meeting 
with your men next week," so I set it up. He said, "I don't 
want to have it downtown; the reporters are all over the place." 

I said, "I'll take care of it. Don't worry." So we went 
way out to Las Condes and rented a house. We brought the cooks 
from our director's house in Sewell, two girls who had worked up 
there for forty years and could cook the most wonderful meals. 
Nobody knew. We had a telephone put in, and nobody knew the 
number. So we were to meet. 

My bosses came down, and I met them at the airport and got 
them to the hotel on the morning before the day of the meeting. 
We had lunch, and they hemmed and hawed. Then everybody took a 
little rest, and in the afternoon Frank called me in. He said, 
"I want to let you know what we're going to do tomorrow. We've 
come to the conclusion that 25 percent is just the same as 
having 1 percent, and 49 percent for them is the same as having 
1 percent; they'll always be a minority. At 50-50 you can't run 
a company. So we're going to sell them 51 percent. And this 
project of yours, going to a tunnel out there"--! called this 
the 280 Project; it was 280,000 tons of copper a year, and we 
were producing 180,000 tons. 

He said, "That idea, 280,000 tons per year, are you sure 
it's going to work?" 

I said, "Yes, it's going to work." 
Swent: This was the half-Codegua plan? 
Haldeman: Yes. He said, "We're going to propose that." 

They had done their homework and had never told me a single 
thing about what they were doing. I said, "That's fine, Mr. 
Milliken. Go right ahead." Here was this guy who told me that 
if he took it to the board they would fire him, and now he was 
telling me we were going to do it but in a spectacular way. 
Fine. 

We got to the meeting the next day at ten o'clock. We sat 
down and had a coke and a cup of coffee and so on. Raul Saez 
was master of ceremonies. He knew Milliken and Michaelson from 
before, as did Lagarrigue, so we were all on first names. Saez 
made a little pitch about what had happened before with Andina 
and Anaconda and what the president wanted, that he was not 
asking for something for nothing, blah, blah, blah. 

Javier went on about, "If you incorporate yourself, 
hopefully we could get some sales to be made by the companies in 
Chile, and they become Chilean companies. And we have your best 
interests at heart," and all this stuff and so on.

Center of cultural activities during the hey-day of copper mining at the ghost town of Sewell, Chile     (click for larger image)

Index to Haldeman Interview

Bob Haldeman Interview (37)

Anaconda Company; Chuquicamata Mine. Charles Brinckerhoff

Haldeman: Now they called on number two, Anaconda. Well, Anaconda just

couldn't pay dividends if they didn't have 100 percent of the

cash flow from Chuquicamata and El Salvador. 1

Swent: Who was here with Anaconda at that time?

Haldeman: Charles Brinckerhoff , who had been here for years as the head of

Anaconda, had just moved up to be president, not chairman of the

board of Anaconda in New York. Another fellow, Richard Sims, a

controller, came down. He had been put in to operate it until

they got somebody else the Chuqui mines and so on. Actually,

Brinckerhoff didn't really relinquish too much control over the

operations of the property.

The Chileans started to talk to them. Anaconda couldn't

afford to give 25 or any percent of those two mines, but they

had this ore body which was called Exotica, about ten kilometers

away from Chuqui. Chuqui was leached over the years, and part

of the solutions trickled, ran under the gravel blankets,

deposited out in the basin, and formed this secondary enrichment

body, Exotica. They had grades of 2, 3, or 4 percent copper,

but they were all exotic minerals all acid solubles, no

sulfides, nothing primary. They had stumbled across the darned

thing when they were digging a shaft in a drift to drain the

tailings deposits, and they found this ore.

They started to work on the metallurgy of the thing, and,

along came Mr. Frei. So they said, "Well, we have a new ore

body here; we'll open it up. It's high grade, and you'll have

25 percent in that. And we will pledge to increase the

production at Chuquicamata by X percent,

Anaconda Copper's Chuquicamata mine

El Salvador by

Y percent, and we will help build new port facilities at

Tocopilla. We'll open an exploration program down in the

southern part of Chile to satisfy a couple of senators down

there." All of these things were window dressing and icing on

the cake, and Chuqui and El Salvador were still 100 percent in

Anaconda's hands, and the tax rates on the companies who went

along were reduced to be 50 percent maximum tax.

After a lot of fuss, the government accepted that. So we

were called. Of course, Frei had pretty well been convinced by

this time that he didn't want to force this on us and become an

enemy of the United States for investments, and in the world of

copper, too. He probably figured he would try and get the best

he could, and the next round, when his party was elected six

years later, he could take another whack at the companies.

Index to Haldeman Interview