Dyea was a launching point for the Choolkoot Pass route to the
Klondike Gold Rush. Steamers landed passengers and freight headed
for Dawson on the flats at Dyea.
In 1898 Dyea had a population estimated at 5-8,000 people, served
by 48 hotels, 47 restaurants, 39 saloons and 19 freighting companies.
Competition between Dyea and neighbouring Skagway had been intense,
but a single project turned the tide in Skagway's favour and led
to the abandonment of Dyea. That event was the construction of the
White Pass & Yukon Route railway.
Although aerial tramways had been built across the worst part of
the Chilkoot Pass and a railway was on the drawing board, the first
WP&YR train to leave Skagway, on July 20, 1898, signalled that
the race between the two towns was almost over. By that time, business
had already started to decline as the gold rush waned, and only
one of the towns could survive. The winner would of course be the
one with the best transportation across the granite barrier of the
Dyea's status as an American town was very much in dispute during
its heyday. The wording of the 1825 treaty that set the boundary
between Russian and British territory was not clear, and it was
not until 1903 that the issue was finally settled. In February 1898,
the North West Mounted Police set up machine guns at the summits
of both the Chilkoot and White Passes to enforce Canada's claim
to the region at least that far south.