In May 1863, prospectors were traveling through Beaverhead County in Montana to the Yellowstone river to pan for gold. They were challenged by members of the Native American Crow tribe and had to retreat to the town of Bannack. On May 26, Henry Edgar and Bill Fairweather discovered gold near Alder Creek. The prospectors were unable to keep their strike private and were followed when they returned to their site.

To regulate the staking of individual gold claims, a mining district was set up. On June 16, 1863, the township was created a mile south of the gold strike. The miners named the town Varina after the wife of the President of the Confederate States of America, Varina Davis. Although Montana was located in the North, the town was founded by men whose loyalties were with the Confederacy. Connecticut Judge G. G. Bissell objected and assigned the name Virginia City when the town was being registered.

Virginia City underwent rapid growth due to the influx of prospectors during the gold rush. As with many early territories in the West, Virginia City had no law enforcement other than miners’ courts. Criminal activity was rampant in the late 1860s, especially the robbery and murder of travelers. Road agents were believed to be responsible for up to 100 deaths in the region between 1863 and 1864, the final years leading up to the end of the Civil War.

Because of this, the Montana Vigilantes was formed; the first superintendent of Yellowstone National Park, Nathaniel Pitt Langford, was a member. The Vigilantes captured and hanged many road agents without the benefit of a trial at the end of 1863 and into early 1864, including the sheriff of Bannack, Henry Plummer, along with his two deputies. Plummer was believed to be the leader of the road agents.

Congress carved the Montana Territory out of the already established Idaho Territory, and on May 26, 1864, its establishment was approved by President Abraham Lincoln. Bannack was the first capital of the territory, but on February 7, 1865, the territorial legislature changed the capital to Virginia City. It stayed as the capital until April 19, 1875, when Helena, Montana, became the permanent seat of government. Montana’s first newspaper, The Montana Post, founded by Thomas Dimsdale, began in Virginia City on August 27, 1864. The first public school was started in Virginia City in March of 1866.

Charles Bovey, a member of the Montana House of Representatives and a founder of the Historic Landmark Society of Montana, along with his wife, Sue Ford, began buying the buildings in the town in the 1940s, with the intent of restoring what had become a ghost town. Most of the town’s buildings were bought by Mr. and Mrs. Bovey from their own funds to speed up the process of restoration. The ghost town was planned to open for tourism in the 1950s.

The state now owns most of Virginia City, and it has become a National Historic Landmark, operating as an open-air museum. Almost half of the structures in town were built before 1900. They stand in original condition, near contemporary Old West displays and information plaques and alongside modern diners and hotels.

The Montana Historic Commission currently operates the Historic District of Virginia City and Nevada City; the towns are included with the most popular state-owned tourist attractions in Montana.

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They offer gold panning, a historic hotel, the oldest live summer theater company in the western United States and the Alder Gulch Short Line Railroad for taking passengers to Nevada City and back.