The story of Diamond City and Confederate Gulch is the story of the Montana Bar, and the Montana Bar is one of the most extraordinary placer gold discoveries in the history of the American West. In the fall of 1865, a group of German prospectors led by Carl Joseph Friedrichs sank a prospect hole in a clearing on a shelf above the gulch floor, at the foot of a small tributary, and found gold so thick in the gravel that it could be seen from a distance as glowing metal. The gravels of the Montana Bar were, by any reasonable measure, among the richest ever washed anywhere. A single pan of dirt yielded a thousand dollars in gold at a time when gold was worth less than twenty dollars an ounce. The record pan, witnessed by multiple observers, produced $1,400 in gold, roughly seven pounds of metal in fifteen pounds of gravel. One week's production from the Bar netted $115,000. From 1866 to 1869, Confederate Gulch equaled or outstripped every other mining camp in the Montana Territory in gold production, yielding an estimated $19 to $30 million in total. Diamond City, the town that served the gulch, was for a brief and spectacular moment the third-largest city in the Montana Territory.

History

The gulch took its name from the Confederate soldiers who first prospected it. A group of men who had served in the Confederate Army and been paroled at the end of the Civil War made their way west and into Montana Territory in 1864. They made a minor gold discovery in the gulch that fall, enough to encourage further prospecting but not enough to trigger a rush. The gulch was named for their political sympathies, a naming that was not unusual in a territory where the population was roughly divided between Union and Confederate sympathizers and where place names often reflected the loyalties of whoever arrived first.

The real discovery came a year later, when Friedrichs and his group, newcomers who did not know the established conventions of placer mining, were directed by the more experienced Confederate prospectors to "go up yonder" when they asked where the good claims were. The Germans took the advice literally, climbed the side of the gulch, and found the Montana Bar. The popular account of this discovery, which circulated widely in the mining districts, was that the Germans were greenhorns who had inadvertently done what the experienced men had not thought to do, looking at the sides of the gulch rather than the bottom. Whether the story is entirely accurate is less important than what it reveals about the character of the discovery: it was unexpected, it was spectacular, and it made the men who found it rich almost immediately.

Diamond City grew up to serve the miners working the gulch. By 1866, when gold production was at its peak, Montana had a total population of approximately 28,000 people, and about 10,000 of them, roughly thirty-five percent of the entire territorial population, were working in Confederate Gulch. Diamond City became the county seat of Meagher County, a designation that reflected its size and importance during those years. The town had hotels, saloons, merchants, and the full commercial apparatus of a major mining center. Men came from across the territory and from the eastern states to work the gulch, and the wealth that flowed through Diamond City during the peak years was real and substantial.

The technical problems of the district were also real. The gold in the Montana Bar was not on bedrock at the bottom of the gulch but in a shelf of gravel on the side, and extracting it required water, which had to be brought in through flumes from considerable distances. Hydraulic mining, which used high-pressure water to wash down entire hillsides, was eventually employed across the gulch, and the hydraulic operations left the landscape permanently altered. The spoil banks from the hydraulic work were so extensive that they eventually consumed the original site of Diamond City, and the town had to be moved to a new location.

By 1870, the gold was gone. The supply of easily accessible placer gold in the gulch had been exhausted in four years of intensive mining, and the population of Diamond City fell from its peak to 255 people in a single year. The residents simply packed up and left, as miners did when the ore ran out, and the town that had been the third-largest in the territory became a near-empty settlement almost overnight. Lode mining was attempted in later years, and some production continued into the twentieth century, but nothing approached the scale of the original placer rush.

What Remains Today

Today, Confederate Gulch is accessible by an unimproved road that winds up from the Missouri River valley through the Big Belt Mountains. The hydraulic mining operations of the 1860s left the gulch floor permanently scarred, with spoil banks and disturbed ground that are still visible more than 150 years later. Barely a trace of Diamond City itself remains; the hydraulic operations that consumed the original town site left nothing standing, and the relocated town was itself abandoned long ago.

The Montana Bar, the site of the discovery that started everything, is identifiable in the landscape by the distinctive topography of the shelf above the gulch floor where Friedrichs and his group sank their prospect hole. The scale of the hydraulic disturbance in the gulch gives some sense of the intensity of the mining that followed.

Visiting

Confederate Gulch is located in the Big Belt Mountains east of Canyon Ferry Lake in Broadwater County. Access is via an unimproved road from the Missouri River valley; the road is passable in dry conditions with a high-clearance vehicle but becomes difficult in wet weather. The site is remote and receives few visitors. No facilities exist at the site. The town of Townsend, the Broadwater County seat, is the nearest service center. Canyon Ferry Lake, which lies between Townsend and the gulch, is a major recreational area and provides context for the geography of the district.