Minerals were first discovered here in 1871 by Joel Mullen, Albert Mead and Henry Henson. Two years before, the Brunot Treaty removed the Ute Indians from the San Juan Mountains and opened the area up to prospectors and settlers.
In 1874, Joel Mullen, Albert Mead, Henry Henson, and Charles Godwin staked formal claims on the site and performed some initial development. The mine was named in honor of Chief Ouray. Ulay is how the Ute Indians pronounced his name. The Ute-Ulay claims along Henson Creek were the first registered mining claims in Hinsdale County.
However, the initial owners of the claim lacked financing to fully work the site and they sold it to the Crooke Mining and Smelting Company for $125,000 in the summer of 1876. This company was based in London, England, with offices in New York. Comprised of brothers, John J. Crooke and Lewis Crooke, the company was more commonly referred to as the Crooke Brothers. They also had holdings at Summitville and in Lake City.
In addition to the Ute-Ulay, the company also bought up several other area mines and constructed a smelter just south of Lake City. The Ute-Ulay mine soon began serious production and spurred the growth of nearby Lake City, which had a population of 1,000 by November 1876.
Otto Mears built a toll road through the area in 1877, which ran from Lake City to Silverton and Ouray.
By 1878, Crooke Mining had constructed quarters for the miners, a shaft, ore houses, and a concentrating mill. The camp that grew up around the Ute-Ulay mining complex was called Henson for one of its discoverers.
The town of Henson was officially laid out in 1880 on the north side of Henson Creek. Most of the people who lived in Henson worked at the Ute-Ulay or Hidden Treasure mines. The town was never incorporated
In 1882, the new owners built a concentration works, but transportation was a severe and costly problem without a railroad. At about the same time, a dam was built on Henson Creek to meet the rising energy needs of the site.
The Henson post office was established in May 1883, but the same year the mine was temporarily shut down. In the winter of 1884, Henson Creek froze entirely, cutting off the Ute-Ulay’s energy source. At that time, the mill ceased operation and the Crooke brothers defaulted on their mortgage. The post office was discontinued in April 1884. The closing of the mine also threw nearby Lake City into a full-scale depression.
The site was then sold to the Lake City Mining Company, which over the next three years invested heavily in the Ute-Ulay mining complex. In 1887, the Ute-Ulay mine was reopened and began shipping ore. However, the price of ore was so low and shipping costs so high, the mine wasn’t profitable.
It wasn’t until the Denver & Rio Grande Railroad reached Lake City, that Henson and the other area mining towns, would begin to prosper.
But, for the Lake City Mining Company who owned the Ute-Ulay Mine, it was too late. In 1890, the company defaulted on its mortgage and went out of business. Production continued, however, under the Ute and Ulay Mines, Ltd., another British group. At that time, a new 118-foot high dam was built on Henson Creek with a hydroelectric power plant to supply the mill.
Henson flourished in the early 1890s, boasting a population of about 300 people, three saloons, a school, a barbershop, several grocery stores, and a branch of the Western Federation of Miners, a labor union that counted many San Juan miners as members. The post office was re-established in November 1892.
In 1893 when the U.S. Government demonetized silver, the Ute-Ulay was forced to halt production in early August. In dire financial straits, the owners leased the mines to the Ute and Ulay Mines Leasing Company and production resumed. During this time, much of the area’s population and the economy continued to grow because the local mines produced a variety of valuable minerals.
In February 1896 the Ute and Ulay Mines, Ltd. made a last-ditch effort to attain profitability by purchasing the Hidden Treasure Mine, located just uphill from the Ute-Ulay site. But the effort didn’t pan out and the owners were unable to pay their debt. The mine was then leased to the Auric Mining Company, of Leadville, Colorado.
During this time it took a lot of men to run the mine and relatively cheap labor was available in the form of immigrants. The town of Henson quickly became very diverse as many of the miners hailed from Europe, including England, Ireland, Norway, Sweden, Russia, Germany, and Italy.
Many of the Italians had earlier worked on the railroad and stayed in the area to work in the mines. One of the largest foreign groups, they kept to themselves, lived in a separate community south of Henson Creek called “Little Rome,” and published their own newspaper, La Verita. The Italian workers were members of the Western Federation of Miners (WFM) and promoted unionization of the mine.
However, the Auric Mining Company had little patience for the collective demands of their workers, probably because they had dealt with the WFM a few years earlier in Leadville. In response for demands for unionization, Samual Nicholson, one of the men who ran the Auric Mining Company, declared that all single men working at the Ute-Ulay and Hidden Treasure Mines must live in company boarding houses. During these busy mining years, the town of Henson had become rather lawless and shootings were common. Nicholson blamed most of this on the single men and generally perceived that WFM members had a reputation for lawlessness.
There had been tension at the mines for weeks, but this declaration immediately provoked the ire of the union members. For many of the single men, the forced move meant higher rents, deplorable living conditions, and longer commuting distances.
On March 14, 1899, about 100 well-armed miners, most of which were Italian, went on strike, blocking the entrances to both the Ute-Ulay and Hidden Treasure Mines and made every attempt to intimidate other miners who showed up for work.