Lake City, Colorado is the Hinsdale County seat and got its start as a supply camp for the area mines. It is located in the San Juan Mountains in a valley formed by the convergence of Henson Creek and the headwaters of the Lake Fork of the Gunnison River
Before the flood of American miners entered this region, it had long been the territory of the Ute Indian tribe. The area was first explored by Lieutenant John C. Fremont and Captain John W. Gunnison. After the Colorado Gold Rush of 1858, a number of men pushed westward into the area but were pushed back by the hostile Ute Indians.
The first white men to travel into the immediate region of Lake City were Joel K. Mullen, Albert Mead, Charles Goodwin, and Henry Henson, who passed through in August 1871 and located minerals where the Ute-Ulay Mine would later be developed.
In September 1873, American officials met with Chief Ouray of the Ute tribe and finalized the Brunot Treaty. The treaty placed the Ute on a reservation in Utah and opened up the San Juan Mountains to white settlement.
In the winter of early 1874, Alfred Packer and five other men made an ill-fated trip through the area and nearly froze to death. Parker was the only one to make his way out safely and was accused of cannibalism. He was later tried, convicted and sentenced in Lake City. The massacre site is located about two miles south of Lake City on Colorado Highway 149, indicated by a historic marker.
That same year, Joel K. Mullen, Albert Mead, Charles Goodwin, and Henry Henson returned to develop the Ute-Ulay Mine along Henson Creek four miles west of Lake City.
In connection with Otto Mears, Enos Hotchkiss, a wagon road builder, constructed a thoroughfare from present-day Saguache to Lake City in 1874. In August, Hotchkiss discovered and staked a great lode above Lake San Cristobal. The Hotchkiss Mine would later become the Golden Fleece Mine.
Enos Hotchkiss built the first cabin in the area of what is now Lake City and became one of the first county commissioners of Hinsdale County.
Lake City was platted on 260 acres in the fall of 1874 and by the end of the year, reduction works were operating there. The town was named for nearby Lake San Cristobal. Early on, the town boomed as a supply camp for the mines that were developed in the area.
News of the mineral discoveries spread quickly bringing hundreds of miners and prospectors to the area in 1875. In February 1875, Hinsdale County residents voted to move the county seat from San Juan City to Lake City.
The post office was established on June 18, 1875, and the first newspaper, the Silver World, began the same month. The town was officially incorporated in August. By the end of the year, the town boasted 67 buildings and 400 people. All mail for northern Hinsdale County came through Lake City, carried by the Barlow & Sanderson Stagecoach Company until the railroad finally arrived in the late 1880s.
In 1876, two ore processing plants operated at the south edge of town – the Crooke Brothers Mining and Smelting Company and the Van Gieson Lixiviation Works. In July, the first stagecoach arrived in Lake City and began three trips weekly between Lake City and Saguache. By the end of the year, the population reached about 1000 and the town had two banks, six restaurants, seven saloons, a Presbyterian church, and several stores.
Before 1877, most of the houses were built of logs and the business buildings were wooden frame structures – small and hurriedly erected. Afterward, more substantial buildings were constructed of brick and stone, including several hotels and larger and more pretentious stores, residences, schools, and churches.
The 1878 State Business Directory reported that Lake City’s population peaked at 3000. By that time, Lake City was well laid out with wide, shaded streets, and boasted a number of substantial buildings constructed of frame, brick, and stone. Stagecoach service was expanded to connect Lake City via Capitol City and Engineer Pass to Animas Forks and other mining camps in the San Juans.
During Lake City’s heydays, the city was often described as one of the most attractive in the San Juan Mountains, spurring one historian to describe it:
“The visitor is lost in wonder at the variety and general magnificence of the scenery, the fantastic rock formations, the marvelously picturesque contour of the ranges on either side and the loveliness of the entire valley… There are pictures here well calculated to set a great landscape painter wild with desire to reproduce them on canvas.”
The Hinsdale County Courthouse was built in the summer of 1879 and continues to be utilized today. It is Colorado’s oldest courthouse which continues to be used for its originally intended purpose. It is located at 317 Henson Street.
Despite its promising start, the mining district lacked year-round transportation, abundant ores, and capital to finance development, and the initial boom subsided by 1879. To make matters worse, the town suffered a destructive fire in November, which swept away the better part of the business center.