History of Gold in Minnesota
The Vermilion Lake Gold Rush of 1865.
One of the more interesting episodes in the history of northeastern Minnesota was the gold rush following the Civil War. The site Lake Vermilion, is one of the largest and most beautiful lakes in the state, containing 365 islands and having nearly 1200 miles of shoreline. It lies along the ancient route from the head of Lake Superior to the Pigeon and Rainy Rivers, a route that has been traversed in turn by aboriginal peoples, the Sioux, Chippewa, Voyageurs, the gold and iron seekers, and the residents and tourists of today.
In 1865, the Minnesota legislature funded a geological survey of the northeastern region, and Governor Stephen Miller commissioned Henry Eames to do the job. Eames, following up on a preliminary survey done the year before, headed straight to Lake Vermillion. At the lake he gathered samples of various rocks and returned to Duluth. Most of the collections were to be shipped to St. Paul; however, Eames did send some specific quartz samples directly to New York for analysis. Interestingly, he requested that the assay results be sent to him instead of to the Governor.
The results of the assay would start the gold rush. The samples showed more than $25 worth of gold per ton of ore. When this news became general knowledge, it "created a flutter" in the financial markets of St. Paul. Envisioning another California gold discovery, hundreds of men and several companies made plans to head for Lake Vermilion and the fortune awaiting them. The mood of the times undoubtedly added to the excitement. With four long years of Civil War at an end, Americans were attempting to return to an ante bellum lifestyle. Many veterans of battles such as Gettysburg, Antietam, Cold Harbor, and Vicksburg would travel to Lake Vermilion in search of "certain wealth."
The summer of 1866 saw the zenith of the gold rush. Some estimates put the number of men near the lake at almost 500. A town, Winston City, named for the general manager of one company, was platted and by fall contained numerous houses, stores, saloons and the other necessities of civilization. The prospecting took place all over the eastern portion of the lake. A stamp mill and crusher were located as far north as the present Trout Lake portage, about ten miles from Winston City. Mining also went on at many islands including present day Ely, then called Sibley, and Gold Island, which still retains the name.
This exchange, and others in regional newspapers, clearly showed that the gold rush was not going to be California-style, where the gold could be washed from the ore. The quartz veins of the Vermilion would not easily give up their treasure.
As the summer of 1866 wore on, many prospectors ranged far from the original site on Pike Bay. They tried the islands, Trout Lake, the far eastern end of the lake, and some went nearly as far as the site of present-day Ely. Many relayed optimistic reports of their progress throughout the summer and fall of 1866, but, for all the rhetorical confidence in the gold fields, their actions belied the words. As the winter of 1866 approached, many of the companies and groups quietly returned to their homes. Obviously, most had decided that the promise of gold did not warrant another northeastern Minnesota winter.
Winston City, the town platted by the Mutual Protection Gold Miners Company of St. Paul, had so few members left that the remaining prospectors renamed the community Vermilion City. The company's vacated houses were occupied by others who braved the winter.
As spring returned, so did the prospectors, but not in nearly the numbers of 1866. The Twin Cities newspapers, huge boosters the previous year, now only carried brief notes about the happenings at Lake Vermilion and treated the dispatches as news items rather than editorials for their cities. A new gold find, in the territory of Montana, occupied the pages and touted St. Paul and Minneapolis as the logical outfitting place for the journey west. By 1868, the Vermilion Lake gold rush was over, a failed reminder of the zeal men display in their efforts to get rich quickly.
The wealth of Lake Vermilion would eventually be uncovered, but it would take nearly 20 years and three million dollars of Charlemagne Tower's fortune to do it. Tower came to realize that the true value of the region lay in its iron ore deposits, not gold-a fact that perhaps the prospectors at Lake Vermilion should have considered.