Barnette used his position to grant long-term contracts for city utilities to members of his family. One of Barnette's brothers-in-law, James W. Hill, was given a 25-year contract to provide electricity, drinking water, and steam heat to the city. In 1904, Barnette arranged for regular shipments of supplies to Fairbanks, and the town continued to expand. In addition to the local telephone system, Fairbanks was connected to the outside world via the Washington-Alaska Military Cable and Telegraph System, which was expanded from Eagle to Nome in 1903 and passed through Fairbanks. Gold production increased from $40,000 in 1903 to $600,000 in 1904 and $6 million in 1905. This expansion and the accompanying rise in population drove further productivity. Barnette opened the town's first bank on September 9, 1904. One month earlier, two Catholic priests built the town's first church, Immaculate Conception Church. Also in 1904, construction of a railroad began in Fairbanks and Chena, its downstream neighbor. Low water on the Chena River prevented steamboats from reaching Fairbanks, so a railroad line was built from the Tanana River at Chena to Fairbanks and the mines north of town. Construction of the Tanana Mines Railroad (later the Tanana Valley Railroad) was finished to Fairbanks on July 17, 1905. Two new banks opened in 1905, as did the city's first greenhouse, and a new $10,000 bridge across the Chena River. In June 1905, the bridge caused the biggest flood in the young city's history when a bridge upstream of it collapsed and the resulting wreckage caught in the bridge and blocked the river's flow. The river rose, flooding the town, and the bridge had to be dynamited to halt the flood. The next year, a fire destroyed most of Fairbanks, and the damage was estimated at $1.5 million. The town was quickly rebuilt, and the town's first hospital, St. Joseph's, was built on the north bank of the Chena. Because the hospital was run by a Catholic religious order, Immaculate Conception Church was later transported across the Chena River and placed next to the hospital. In 1907, Barnette's bank was forced to temporarily close due to the Panic of 1907 and legal troubles. A new school was built, which housed 150 students. Other schools were built on the north side of the Chena River, which was separate from town. In 1908, the U.S. Army Signal Corps built a radio telegraph tower in town, replacing the cable telegraph system to Valdez and Seattle.