King of the Klondike

Antigonish’s Big Alex McDonald was called the King of the Klondike, but the good times did not last.

According to Pierre Berton’s book, Klondike, “Because of his size and awkward movements McDonald was known as the Big Moose from Antigonish. He spoke slowly and painfully, rubbing his blue jowls in perplexity, his great brow almost hidden by a shock of sable hair, his heavy lips concealed by a moustache of vaudevillean proportions. The effect was primeval, but Big Alex in spite of his Neanderthal appearance, was one of the shrewdest men in the North.”

Big Alex worked in several in Nova Scotia gold mines, including at Goldenville, before deciding to move out west in search of his fortune. He went to Colorado where he worked for about 14 years in silver mines. He later moved to Juneau, Alaska, where he worked at the Treadwell Mine. He also worked for the Alaska Commercial Company buying land and mining claims.

His interest in buying land inspired him to start the “lay” system in the Klondike, in which he let a section of a claim out on lease, or “lay,” as it was called, and let others mine it.

It started when Big Alex traded a sack of flour and a side of bacon to Russian John Zarnowsky for claim #30 on Eldorado Creek. (Some records say Alex only got half the claim.) Alex then had two other miners work the site. It turned out to be one of the richest claims in the Yukon. In just 45 days, $33,000 worth of gold was extracted and Alex got half of it without ever lifting a shovel. It was later said that a man could pan $5000 worth of gold in a single day on claim #30.

This one claim gave Big Alex enough gold that he could have been rich the rest of his life, but he did not rest easy. Instead, he used the money to buy more claims. According to Berton, “His policy was to make a small downpayment and give a note for the balance, payable at the time of the spring clean-up. To raise enough money for these downpayments he borrowed funds at exorbitant interest rates, and in some cases he paid as much as ten per cent for a ten-day loan, which is a rate of 365 per cent per annum.”

(Spring clean-up was when the ground became too wet to continue mining so miners “washed” gold out of previously extracted gravel in sluice boxes. It was then that the real value of claims became apparent, for better or worse.)

In spring 1897, Big Alex’s approach was either going to make him incredibly rich or bankrupt as his debts came due. In the end, he did very well, though sometimes just barely. He often paid off debts with gold still wet from the sluice boxes.

In one case, he owed $40,000 to two brothers who were demanding repayment, but Alex did not have the money. At the eleventh hour, one of the brothers died – from natural causes, as far as we know – and litigation delayed repayment until Alex had enough money to pay off the debt.

By summer 1897, Big Alex had an interest in 28 claims and he was estimated to be worth about one million dollars. He became known as the King of Klondike. It was said that if Big Alex stopped to look at a property, its value immediately increased.

As a result of his success, others copied the lay system and it became widespread.

He continued to make deals, many of them extremely complicated, and everyone pitched him. He increasingly could not resist offers and he got involved in so many projects that when he was introduced to a newcomer, he would often ask, “Are you a partner of mine?”

The Bank of Commerce opened a branch in Dawson City and when Big Alex opened an account, it is said that it took hours for him to tell bank staff about all his business affairs. Berton wrote, “Each time he was about to sign a deposition listing his assets he would drop the pen, rub his chin, and exclaim that he had just remembered another claim he owned. The list, when it was at last completed, showed fifty mining properties.” McDonald then borrowed from the bank to buy another property which, like so many others, paid off handsomely.

In 1898, the New York Times said Big Alex was worth $3 million and “is rated the biggest claim owner in the Klondike and the richest man that ever came out of the Yukon country.” An 1899 article in the Times said he worth anywhere from $25 million to $30 million. No one really knew how much Alex was worth, including Alex himself.

In the winter of 1898-99, Big Alex went to Europe, first to Paris and then to Rome where, as a devout Catholic, he was given an audience with the Pope. He was also made a Knight of St. Gregory for donations he made to rebuild Dawson’s Catholic church after it burned down and to the town’s hospital, which was built by its Catholic priest. He then visited London where he met and married Margaret Chisholm before returning to Dawson.

Back in the Klondike, Big Alex was commonly seen with a train of 15 mules and wagons that carried his gold around. He built his own building, the McDonald, and lived on the first floor. He was known for his generosity. In his apartment he kept a bowl of large gold nuggets and encouraged guests to help themselves, as though it was a box of chocolates.

He kept buying land, which was really his passion. He thought gold was “trash.” It was just a way to pay for more and more land.

His obsession with owning land was ultimately his undoing. He kept buying it even as claims were worked out and the gold rush faded. His land holdings were eventually worthless, and his debts overwhelmed him.

In his final years, he lived alone in a little cabin on Clearwater Creek, prospecting for gold. A prospector found him there one day in 1909, dead from a heart attack where he had been chopping wood.

Big Alex, once the King of the Klondike, died penniless and alone.

Alex thought gold was trash but you use it every day. For example, it is in the device you are reading this on and in rapid Covid tests. See more examples at https://notyourgrandfathersmining.ca/you-use-gold-everyday