Proposals for a highway to Alaska originated in the 1920s. Thomas MacDonald, director of the U.S. Bureau of Public Roads, dreamed of an international highway spanning the United States and Canada. In order to promote the highway, Slim Williams originally traveled the proposed route by dogsled. Since much of the route would pass through Canada, support from the Canadian government was crucial. However, the Canadian government perceived no value in putting up the required funds to build the road, since the only part of Canada that would benefit was not more than a few thousand people in Yukon.
However, some route consideration was given. The preferred route would pass through the Rocky Mountain Trench from Prince George, British Columbia to Dawson City before turning west to Fairbanks, Alaska.
In 1929 the British Columbia government proposed a highway to Alaska to encourage economic development and tourism. American President Herbert Hoover appointed a board with American and three Canadian members to evaluate the idea. Its 1931 report supported the idea for economic reasons, but both American and Canadian members recognized that a highway would benefit the American military in Alaska; the Great Depression and the Canadian government's lack of support caused the project to not proceed. When the United States approached Canada again in February 1936, the Canadian government refused to commit to spending money on a road connecting the United States.
The Canadians also worried about the military implications, fearing that in a war between Japan and North America, the United States would use the road to prevent Canadian neutrality. During a June 1936 visit to Canada, President Franklin D. Roosevelt told Prime Minister W. L. M. King that a highway to Alaska through Canada could be important in quickly reinforcing the American territory during a foreign crisis. Roosevelt became the first American to publicly discuss the military benefits of a highway in an August speech in Chautauqua, New York. He again mentioned the idea during King's visit to Washington in March 1937, suggesting that a $30 million highway would be helpful as part of a larger defense against Japan that included, the Americans hoped, a larger Canadian military presence on the Pacific coast. Roosevelt remained a supporter of the highway, telling Cordell Hull in August 1937 that he wanted a road built as soon as possible.
The attack on Pearl Harbor and beginning of the Pacific Theater in World War II, coupled with Japanese threats to the west coast of North America and the Aleutian Islands, changed the priorities for both nations. On February 6, 1942 the construction of the Alaska Highway was approved by the United States Army and the project received the authorization from the U.S. Congress and Roosevelt to proceed five days later. Canada agreed to allow construction as long as the United States bore the full cost, and that the road and other facilities in Canada be turned over to Canadian authority after the war ended.