AD Main Menu

Crew will attempt to recover millions from Southeast Alaska shipwreck

Ben Anderson
Courtesy Dave McMahan

The Alaska Office of History and Archaeology estimates there could be as many as 3,000 shipwrecks lining the state’s 44,000 miles of coastline. Now, the multi-million-dollar mystery behind one of those wrecks may finally be answered, when a Seattle-based company attempts to salvage the remains of the SS Islander, which sank in 1901 while carrying Klondike gold rushers – and, reportedly, lots of their gold -- from Skagway to the city of Victoria in British Columbia.

A federal judge in April declared that Ocean Mar, Inc. and its president, 62-year-old Theodore Jaynes, could move ahead with plans to survey and possibly salvage the more-than-century-old shipwreck. The decision ended more than a decade of legal wrangling over the salvage rights to the ship, and could finally answer the question of just how much -- if any -- gold remains on the sea floor where the SS Islander sank in Southeast Alaska.

But there’s more to this story about how a luxury ferry -- built in Scotland and considered “unsinkable” by some -- found its way to Alaska, and then to the seabed off of Alaska’s Admiralty Island. Along with the ship, about 40 people met their fate on an August night at the beginning of the 20th century.

The night in question

A 1992 report by the Community Development Department of the Borough of Juneau recounts in detail the life and sinking of the SS Islander. Built in 1888 in Glasgow at a cost of about $200,000, the 240-foot-long vessel was a model of late 19th-century luxury, built specifically for northern waters.

Like the more famous Titanic, many presumed the ship to be “unsinkable,” constructed with airtight compartments that could flood individually without the entire ship sinking.

The Islander operated during the peak of the Klondike Gold Rush in the late 1890s, plying the waters of Southeast Alaska as the region saw a huge influx of hopeful prospectors seeking their fortunes. The treacherous waters of the Alaska Panhandle, combined with the heightened shipping traffic, claimed more than a few vessels.

“There are a lot of wrecks in Alaska from that date -- from the Gold Rush Era,” said Dave McMahan, an archaeologist with the state Department of History and Archaeology. “During the Klondike Gold Rush, there was just this massive migration of folks to Alaska.”

On the night of August 14, 1901, the Islander departed Skagway with 180 people aboard and made its way down Lynn Canal. At about 2 a.m., the ship was positioned between Douglas and Admiralty Islands when it struck what was likely either an uncharted rock or a sizeable iceberg. The 1992 report says that a former captain of the vessel believed it was likely an iceberg, which first punctured the hull before being submerged and rising to punch another hole in the vessel toward the stern.

The ship reportedly sank a mere 20 minutes after initial impact. About 40 people went down with the ship, though that number may be higher due to a reported 11 stowaways on board who weren’t accounted for. Others rowed lifeboats to Douglas Island, walking to the mining community of Treadwell to inform the world of the tragedy.

Rumors of riches

Given the timeline of the vessel’s sinking and the origin of its passengers, speculation began immediately that the Islander had gone down with a substantial quantity of gold aboard. Numbers vary, but if there were any truth to them, the value of the gold would be extremely high, then and now.

One estimate from the “Inventory and Survey of Historic Shipwreck Sites” reports:

It was rumored that the steamer’s purser had $275,000 in his safe and that the passengers had another $100,000 with them. Other rumors were that over a quarter of a million dollars in gold went down with the ship. This was at a time when gold was worth $20.67 an ounce. Fifty ounces of gold were found on one body. Another passenger was reported to have taken aboard about 600 ounces of dust.

Some $250,000 worth of gold at $20.67 per ounce breaks down to 12,100 ounces of gold rumored to be aboard the Islander when it sank. At today’s prices of around $1,500 per ounce -- a conservative number -- there could potentially be more than $18 million of gold somewhere on Southeast Alaska’s sea floor.

And that was at the absolute lowest end of the estimates. In his book “Sunken Klondike Gold” -- an excellent resource on the sinking and salvage of the Islander -- author Leonard Delano cites numerous passengers aboard the Islander who claimed that there was an estimated $2-$3 million aboard when it sank. One Canadian Klondike Mining Company engineer said that there were millions in gold bullion on the vessel.

Another Bonanza Creek miner, J.C. Dumbolten, declared, “It was the general belief there was at least $3 million in gold aboard the Islander.”

Worth $260 million today?

Gold was worth $17 per ounce at the time of sinking, according to Delano. That means there could have been as much as 176,000 ounces of gold on the Islander, which would total more than $260 million at today’s prices.

The reliability of these rumors, and how much of that gold ended up on -- or made it off -- the ship is the big unknown. But rumors like that are certainly enough to spur interest. Salvage talks came fast and furious in the wake of the sinking, despite the ship being in water too deep for any traditional methods of recovery.

It took until 1921 for the Islander to be officially located an estimated 300 feet below the surface.  That was too deep for diving equipment, and the ship’s carcass could only be viewed from a diving bell in 1929.

Raising the Islander

Finally, in 1934, a massive salvage effort was launched with the help of two other ships, the Griffson -- an old schooner barge -- and the Forest Pride, a sailing vessel. The Griffson was outfitted with winches on either side, and at low tide a team of divers would swim down to the wreck of the Islander, and string cables in a cradle beneath it. At high tide, as the Griffson rose on the water, the Islander would be lifted from the sea bed and moved toward shore. They would repeat this process numerous times, tightening the cables at each low tide and moving during high tide. Eventually, the Islander reached shore, and the Griffson was beached along with it in the process.

The search for gold may not have turned out the way the recovery team expected. “Salvagers were very close-mouthed about what they found,” the Borough of Juneau reported. “It has been estimated that it cost $200,000 to beach the Islander and they only got $50,000 for the effort.”

About $6,000 in currency, but no gold, was found in the purser’s safe. A sizeable quantity of gold was recovered from a urinal, likely shifted there during either the sinking or the transit to shore. Gold and gold dust was reportedly found at various other locations in the remaining husk of the ship.

Despite the middling results from the 1934 salvage effort, rumors persisted that the Islander’s gold was still out there. The ship’s bow had broken off during transit to shore, and some speculated most of the ship’s gold was stored there.

Author Delano, who was part of the Griffson salvage effort (he died in 1989, but his son saw “Sunken Klondike Gold” through to publication in 2011), speculated that the sinking and transit may have displaced the gold along the sea bed.

“Looking at the crumpled mass of what used to be the foundation of the cabin structure, we could see that the contents of any strong room could have easily gone overboard after the room’s collapse,” Delano writes, adding that the recovery effort may have caused the purported boxes of gold bullion to be scattered underwater during the movement of the ship -- ”Irony indeed after so much effort!”

Though parts of the Islander were eventually moved to Seattle, a portion of its hull remains on a northern beach of Admiralty Island, a skeleton of a once-great vessel.

Modern-day efforts

Twelve years ago, the Juneau Empire reported that Ocean Mar -- the recovery company interested in taking another shot at recovering gold from the remaining wreckage of the Islander -- might soon begin a salvage effort.

That optimism proved to be short-lived, as more than a decade of legal wrangling ensued over Ocean Mar’s right to claim the remaining cargo of the SS Islander. Now, again, the long journey appears to be at an end. In April, a federal judge authorized a plan to examine and recover cargo from the SS Islander.

Ocean Mar’s recovery plan isn’t immediately clear -- because of the sensitive nature of the effort, much of the information has been filed under seal in court, unavailable for public viewing. Neither Jed Powell, a Seattle attorney representing Ocean Mar, nor John Baker, a Senior Assistant Attorney General for Alaska, were able to comment on specifics.

Powell filed a declaration in March noting that Ocean Mar had joined with MK Salvage Venture to help finance the expedition. Additionally, Ocean Mar had “engaged the services of one of the world’s foremost deep sea science and technology companies -- Tetratech”.

In that same declaration, Powell said that Ocean Mar hoped to have an operation in Juneau by mid-May in order to devote the whole summer season to the recovery. That didn’t happen, though.

The Puget Sound Business Journal reported in May that Powell estimated the recovery effort could cost between $3-4 million. That same article reported that Jaynes and Ocean Mar will likely use an imaging system to scan the sea floor for possible gold located under the immediate sea floor. Twenty-five percent of the price of any “insured gold” recovered from the site will go to insurers who had already paid out claims to those who lost gold when the Islander went down.

Whatever the case, if Ocean Mar finally gets its way and is able to search the remaining wreckage of the SS Islander, it could answer, once and for all, century-old questions about the wreck and how much gold -- if any -- was left behind.

Contact Ben Anderson at ben(at)alaskadispatch.com