In 1904 construction began on a project to build a railroad line, which would run from the sea to Fairbanks in the Interior of Alaska. This privately funded venture, called the Alaska Central, was the predecessor of the Alaska Railroad. The railroad would provide the mechanism for delivering much needed supplies to the interior from the ocean ports, and in addition, furnish access to the various mineral resources that had been discovered, yet unearthed along the route.
During this time, a gold rush was transpiring around Fairbanks and hills laden with coal deposits in the Matanuska Valley and near Healy was ready for extraction.Seward was selected as the beginning of the railroad because of its location on Resurrection Bay, which remains ice-free during the long cold winters of Alaska.
A route for the line was surveyed as far as the Tanana River and track was laid up the Kenai Peninsula towards present-day Anchorage.However, during this time the company suffered from a series of unfortunate controlling factors the most important of which was the federal government withdrawing all Alaska coal fields from private access.
This proclamation was so devastating to the company because it meant that, even the coal used to fuel the locomotives had to be imported.Alaska Central filed for bankruptcy in 1909; the company afterwards became reorganized as the Alaska Northern Railroad.
Construction continued on the railroad until in 1912, when the company finally closed its operations for good. By this time, 71 miles of track were laid down from Seward to Kern Creek, which lies between Portage and Girdwood junction.
A short time later in that same year, a government-subsidized commission journeyed to Alaska, and after subsequent surveying of the quandary, concluded that only the government could afford to build and operate a railroad through Alaska.On March 12, 1914, President Woodrow Wilson was given congressional authority to fund the construction and operation of the Alaska Railroad, which was to run from Seward to Fairbanks.