About seven miles south of Thompson Pass  you drop to Keystone Canyon, one of the most gorgeous sights in Alaska, even in the rain. This four-mile section is steeped in gold rush and copper-frenzy history. At the height of Klondicitis, accounts of the heavy tax and strict regulations that Canadian authorities imposed on the stampeders (which saved countless lives) were passed down the coast, and rumors of an old Indian-Russian trail from Valdez  to the Yukon circulated simultaneously.
The vague story of an “all-American route” to the gold sent 4,000 would-be prospectors headlong to Valdez—a measure of the madness that gripped the land. Suicidally unprepared, like lemmings they attempted to cross the brutal Valdez Glacier. Also responding to the rumors, the U.S. Army dispatched Captain William Abercrombie in 1898 to find or blaze a route from Valdez to the Interior .
Abercrombie had been on the original American expedition to Copper River country in 1884. He knew the land and the conditions; when he crossed Valdez Glacier in 1898, he postponed his trailblazing assignment in order to deal with the horror that he found. Abercrombie returned in 1899 and thoroughly explored and mapped the whole area, locating and naming the Lowe River, Keystone Canyon, and the Thompson Pass  route to the Interior.
Then in 1906, during the often-violent race to build a railroad from tidewater to the Kennecott copper mines , two of the competing construction companies clashed over the right-of-way through Keystone Canyon; one man was killed. The ensuing murder trial further fanned the flames, and the “Shoot-out at Keystone Canyon” became a great issue between the opposing sides. All this is highly dramatized in Rex Beach’s novel The Iron Trail.
Today, you drive along the raging Lowe River, at the bottom of nearly perpendicular 300-foot cliffs. The entire canyon is a psychedelic green; every crack and crevice in the sheer walls is overgrown with bright lime moss. Waterfalls tumble over the walls to the river below, spraying the road with a fine mist. Bridal Veil Falls and Horsetail Falls live up to their names. And now you’re ready to enter Valdez .