Confederate Gulch and Diamond City
Its small stream drains westward into Canyon Ferry Lake, on the upper Missouri River near present-day Townsend, Montana.
In their frantic efforts to get at more gold, the miners built ditches and flumes that extended for miles, and employed high pressure hydraulic mining methods which washed down whole hillsides and ate up the gulch floor.
The hydraulic mining process left huge spoil banks in the gulch and eventually consumed the original site of Diamond City, which had to be moved to a new location.
By 1870, the gold supply at Confederate Gulch had been exhausted, the boom was over and the residents of Diamond City simply picked up and left.
[6] Pleasanton hoped that his policy for prisoners of war would also convince the remaining free-roving units to disband and prevent them from becoming partisan bushwhackers living off the land like Quantrill's Raiders and the James boys.
Whether due to Pleasanton's policy or in spite of it, in 1864 and 1865 these ragtag Confederate units faded away, and a tough breed of Missourians began to show up in the Montana Territory.
News had come down the river that a new gold strike had been made at Last Chance Gulch (present-day Helena, Montana), at the foot of Mullan Pass, but by the time Barker and Dennis walked there from Cow Island, the good ground was taken, no jobs were to be had, and the cost of living was high.
[6] Smoke from prospectors' camps could be seen all along the foothills and so Barker and Dennis set out up the Missouri from Last Chance Gulch, prospecting here and there, living off the country.
At one place near the mouth of the gulch, east of the creek, Thompson sunk a hole and found the first pay dirt, a piece of gold about the size of a grain of wheat.
Eventually they established a modest discovery of placer gold in gravels of the little creek, where a day's hard work could produce enough to pay for a few pounds of beans.
[6] The initial strike of Barker, Dennis and Thompson on the gulch in the Big Belt Mountains was small, but hard work produced enough gold so that word spread.
According to the popular account, the Germans were greenhorns, and did not know the habits of gold (being heavier than dirt and loose rock) to sink to the lowest levels of bedrock in a gulch due to the forces of erosion and gravity.
In response to their earnest, repeated (and annoying) requests to the more experienced Confederate boys for directions to "the good claims", they were told (with a wave of the hand at the sides of the gulch) to "go up yonder".
The surface of these hillside benches were littered with large boulders even though underneath were well sorted stream gravels with streaks and pockets of gold.
[6] Within a few months after the Montana Bar strike of 1865 Confederate Gulch and its tributaries were an anthill of activity with gold miners swarming over the ground, digging and working on their claims.
They produced more gold than comparable claims of the fabulous Montana Bar, though requiring movement of a much larger tonnage of gravel, boulders and dirt.
Gold production from the Confederate Gulch mining district started at a high level in 1866 because of the sheer opulence of the Montana Bar strike.
The water was then released from the high ditch down through several hundred feet of pipe, and emerged through huge nozzles that resembled small cannon.
The gravel tailings produced by hydraulic mining were left behind as spoil banks, piled along the bottom of the gulch for long intervals.
Hydraulic mining methods and the resulting spoil banks obliterated all the remains of the original Diamond City, as well as the other small communities in the gulches.
The most important mines, including the Hummingbird, Slim Jim, Schabert, Baker Group, and Three Sisters, are all located along the divide between Confederate Gulch and White Creek, principally on Miller Mountain.
Lode mines produced only $100,000 in gold, while the placers of Confederate Gulch yielded this sum one hundred and fifty times over.
From a small collection of cabins and shacks Diamond City was instantly transformed into a crowded boom town that roared along both night and day.
A roster of Confederate Gulch citizens could include names like Wild Goose Bill, Black Jack, Nubbins, Roachy, Steady Tom, Workhorse George, Dirty Mary, Whiskey Mike, and Lonesome Larry.
[9] Such deposits required no special processing, except the hard grueling work to dig out and sort through tons of gravel, dirt, sand and boulders.
Newly discovered deposits like Confederate Gulch attracted young footloose men, motivated by a desire to get rich quickly.
[9] Towns that sprang up at placer gold strikes were jerry built, ephemeral and hectic places and Diamond City and the other Confederate Gulch communities were no exception.
[17] It provided entertainment and commercial goods for the miners and for the crews that labored night and day to build a 7-mile-long (11 km) ditch/flume for hydraulic work.
Eventually the stilts reached fifteen feet,[17] and finally the town was simply removed to a nearby location in Confederate Gulch where it roared on with business as usual.
Confederate Gulch is unlike other boom and bust mining districts in Montana, because no ghost town was left at the site.
