The New State

In January of 1959, the first Alaska state legislature convened. Two months earlier, in the first state governor election, Alaskans chose Democrat William Egan, who had presided over the constitutional convention, as the first elected governor. 

The optimism of statehood and promise of self-government soon gave way to the difficult realities of governing. The state had to take over management of road building, the court system, law enforcement, public lands, and regulating fish and game, among many other new responsibilities. All these things that had previously been administered by the federal government now had to be managed and paid for by the state. By 1961, the state's expenditures had tripled from those of the territorial days to over $100 million annually.

As many opponents of statehood had earlier pointed out, Alaska desperately needed economic development to support itself. Federal defense spending, Alaska's most important industry since World War II, continued to bring in hundreds of millions of dollars, but that spending was steadily dropping. The other major economic activities were a few lumbering operations, one large mine, and a salmon fishery facing continued population decline even after the abolishment of fish traps.