Excerpt from The Yukon Fact Book:

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Dawson

On August 17, 1896, on the banks of what was then called Rabbit Creek, Californian George Carmack and his Tagish partners Keish, known by whites as Skookum Jim Mason, and Káa Goox, or Dawson Charlie (sometimes known as Tagish Charlie), discovered gold. They staked their claims, renamed the creek Bonanza, and started history's most famous gold rush.

Just a few days earlier, not very far away, at a site on Sixtymile River, a somewhat less dramatic event unfolded. Prospector Robert Henderson, who had actually advised Carmack to try panning another creek near Rabbit Creek, visited Joseph Ladue, the owner and operator of a small trading post and sawmill that produced sluice boxes for the dozens of prospectors roaming the area's many streams in search of the elusive gold. Henderson showed Ladue a small amount of gold dust he had discovered on Gold Bottom Creek, a tributary of the Klondike River. A frustrated prospector himself and a shrewd entrepreneur, Ladue recognized the potential for real riches lay perhaps not in gold itself but in creating a townsite to supply the miners that were sure to pour into the region when the inevitable bonanza strike was made.

Barely five days after the strike on Bonanza Creek, Ladue arrived at the junction of the Yukon and Klondike rivers and staked out a townsite on the swampy lowland fronting the mountain that overlooks the Klondike's mouth. Although the site had long been a traditional seasonal gathering place for First Nations peoples, Canadian law did not recognize their right to the land and, consequently, Ladue was able to claim the entire area for himself. Shortly, Ladue had constructed a rough warehouse and a small cabin for himself that also served as a saloon. He named the new town Dawson, after the famous director of the Geological Survey of Canada, George Mercer Dawson.

By January 1897, the number of houses in Dawson numbered only five, but a small tent city was growing rapidly as prospectors abandoned Circle City, Alaska to make a 400-kilometre trek through winter snows to reach the site of the Klondike Gold Rush. By spring the population was about 1,400, including at least two women and a Jesuit missionary. All this time, the news of the gold strike had still not reached the outside world. Canadian government surveyor William Ogilvie, based at Fortymile Creek, had yet to find a way to get word back to the federal government in Ottawa. When the news did finally reach Ottawa later that spring, nothing more than a small pamphlet was published announcing the gold find. It was so lacklustre in its wording that the announcement failed to generate any interest.

One year after the first strike, Ogilvie estimated that $2.5 million worth of gold had already been extracted from the creeks. Ogilvie duly reported this to Ottawa by hiring two men to carry his dispatch out by birchbark canoe. By the time this message reached Ottawa, however, the news would have spread in a far more dramatic fashion.

Meanwhile, Ladue was raking in gold himself. He and other entrepreneurs who could lay hands on wares to sell the prospectors were able to get tremendous prices. A night in Ladue's saloon cost an average of $50.00, while a single egg sold for $1.00, and a five-minute bath cost $1.50. But supplies of all sorts were in short supply and at times the booming community teetered on the edge of famine.

In June, bartender Harry Ash opened the Northern Saloon in a log building and the first night raked in $30,000 and averaged $3,000 a night after that. He left three months later after making a reported profit of $100,000. Before summer's end, ten saloons were in operation and a few dance-hall girls were ensconced in the community and taking in $100 a night. Ladue was selling town lots for up to $12,000. The price of a log cabin was $200 a square foot. By summer's end, some 3,500 people called Dawson home. The community was a hodgepodge of buildings and tents haphazardly erected and linked by muddy lanes and paths. Across the Yukon River another community, known officially as Klondike City but nicknamed Lousetown, had also developed, displacing the First Nations people who had used this area for a camp as well.

June also saw the arrival of the first supply steamships from downstream. When they departed, the ships took with them word of the incredible gold strikes that were making the prospectors who had arrived in the first year into wealthy men. About 80 of the prospectors left on the ships with a fortune in gold. Soon these miners were steaming south on two ships, the Portland, bound for Seattle, and the Excelsior, en route to San Francisco. The Excelsior arrived first on July 14, 1897, so when the Portland steamed into Seattle Harbour, thousands lined the docks eagerly hoping to catch sight of the wealthy gold prospectors who had been making headlines in newspapers around the world. Even before the prospectors stepped off the ship, however, thousands of Americans and Canadians were already trying to find a way to get to Dawson and join the gold rush.

In Canada, Canadian Pacific Railway passenger trains headed west bulging with stampeders. Steamships sailing for the ports of Alaska likewise overflowed. In all, more than 100,000 people tried to reach the Klondike and some 40,000 managed the trip.

Most arrived in the spring of 1898, via the various routes that became collectively known as the Trails of '98. Along with the miners came more entrepreneurs, further bolstering Dawson's commercial district. On May 27, 1898, the town's first newspaper, The Klondike Nugget, published its first edition. The next day the town was flooded by spring runoff that only subsided about ten days later. On June 8, an armada of roughly hewn boats arrived from upstream, the first great onslaught of stampeders who had travelled the Chilkoot Trail.

By now, building lots in Dawson sold for $40,000, a single room rented for $100 a month, and a log cabin's rent was $400. By comparison, a four-bedroom apartment in New York City rented at the time for about $120 a month.

Dawson celebrated Dominion Day on July 1, 1898 with the status of having become overnight the largest Canadian city west of Winnipeg and the largest western community north of San Francisco. It had a telephone service, running water, and steam heat connected to some of its buildings. There were two banks, two newspapers locked in a circulation war, five churches, and many more saloons and dance halls. Among these was the Palace Grand with a seating capacity of 2,200. Twelve sawmills were cranking out millions of boards to be joined with nails that sold for almost $20 a kilogram. For those with money it was becoming possible to buy almost anything desired. "If you have money, spend it; that's what it's there for," one prospector advised his recently arrived nephew.

Approximately 16,000 people lived in Dawson itself, with about another 15,000 working and living on the nearby creeks. Elsewhere in North America, boomtowns linked to gold rushes had become lawless and violent places. But the presence of the North West Mounted Police ensured that the mostly American throngs of prospectors kept the peace. In 1898, there was not a single murder in Dawson and very little theft. No doubt this was the result of a law that forbade the carrying of sidearms. This peacefulness existed despite a great deal of drunkenness, as prospectors and Dawson residents alike consumed more than 545,000 litres of alcohol during 1898.

The consumption of alcohol served particularly to capture the attention of the federal government in Ottawa, which realized it was losing a great deal of revenue in the form of a liquor tax. The Yukon had been a part of the Northwest Territories at the time and the liquor taxes paid in Dawson flowed into the territorial government coffers. Ottawa, anxious to divert the funds to itself, undertook the creation of a distinct territory that would be subject to federal administrative control. On June 13, 1898 the new territory was declared and Dawson became its first capital.

No sooner was Dawson being called the "Paris of the North" than its fortunes started to decline. By 1898 most of the viable claims on the creeks had been taken up and some of these were already exhausted. For the majority of the 40,000 prospectors who reached the Klondike, there was little chance of striking it rich by staking a new claim and the claims already discovered were too expensive to buy up.

By the spring of 1899, word arrived of another great gold find on the beaches by Nome, Alaska. Here, it was said, the sand speckled with flakes of gold. Prospectors started looking westward, even as Dawson rebuilt from two fires that had collectively destroyed the most expensive parts of the community. In the first fire, which broke out near the end of 1898, more than $500,000 in real estate was lost. The second, on April 26, 1899, destroyed 117 buildings valued at more than $1 million. As the town started rebuilding that summer, more than 8,000 people departed Dawson, most headed for the new gold rush at Nome.

The town that rose out of the ashes less resembled a boomtown than it did a relatively prosperous and increasingly conservative southern Canadian town. Sewers were installed. Streets were improved. Houses were built of sturdier materials. The number of saloons declined rapidly while the numbers of formal parlours in homes increased. Dawson continued to prosper as a mining city, but it was a prosperity based on more advanced mining techniques than placer mining on creeksides. By 1902, the same year Dawson was incorporated as a city, the population had dropped to fewer than 1,000. Many houses and businesses were boarded up and their owners moved away forever. Yet the community continued to prosper despite its dramatic population decline. In 1903, for example, Andrew Carnegie donated $25,000 to the community for the building of a library.

In 1911, gold mining operations around Dawson yielded an all-time high but the outbreak of the Great War in 1914 resulted in most of the mines closing. They would remain closed until the mid-1930s when higher gold prices caused a minor boom, but the last gold mining dredge closed in 1952. The following year, the territorial capital was shifted to Whitehorse.

By the end of the 1950s, many of the historic buildings in Dawson were in such bad shape that it was feared they would either rot away or collapse. In 1960 Parks Canada rebuilt and reconstructed the Palace Grand Theatre. Since then, Parks Canada has restored a number of the buildings as part of its Klondike National Historic Sites project. The restoration is largely responsible for Dawson's emergence as undoubtedly the largest tourist attraction in the Yukon. Approximately 60,000 people, most arriving in the summer, come to Dawson annually to get a taste of the world's most famous gold rush.

The permanent population of Dawson numbers about 2,000 people. It is situated 536 kilometres northwest of Whitehorse on the Klondike Highway. Exhibits of the gold-rush era and Dawson's social history can be found in the Dawson City Museum and Historical Society building. Several of the Klondike National Historic Sites buildings also house displays. On the shore, the steamer Keno--one of the last sternwheelers to ply the Yukon and Stewart rivers--may be found.