George Lee suffered from the same disease that characterized so many of the pioneers—a compound of boundless optimism and grandiose ambition. He pictured his remote town as the capital of the state and his home as the governor’s mansion. Perhaps it was an idea spoken in jest; perhaps it was his sincere dream. Folklore leans to the latter version—but he never campaigned for his idea nor introduced any bill into the legislature.
The name of his town is equally confusing. After Lake City was started in 1874 and platted in 1875, prospectors streamed up Henson Creek, and a town was built at its forks. The newspapers of 1876 and ’77 referred to the town as Capital City, and the Colorado Business Directory for the late 1870’s used interchangeably the two spellings of Capital and Capitol. Yet in 1961 the Postmaster General’s office in Washington wrote that “a search of the records for 1876 and ’77 reveals that the spelling of the town referred to was Capitol City.” To confuse matters still further the Colorado State Archives office has recorded a communication, dated May 2, 1887, from the county commissioners of Hinsdale County in which they petition for permission to change the name of Galena City to Capitol City.
Why is this petition eleven years late? Poor Capitol City—the whole situation seems as confused as George Lee’s dream! And who was it did not know that “capitol” is a building, not a town?
According to the historians, Jean and Don Griswold, Capitol City had two prosperous periods when mining and smelting were booming—a silver boom in the mid-1880’s and a gold boom around the turn of the century. Two factors prevented Capitol City from attaining any major growth. Early litigation discouraged and slowed up the first business activity of the late 1870’s and early 1880’s, and later the gold deposits of the 1900’s were not very large. The population of around three hundred in 1880 became discouraged and drifted away. In 1885 there were but one hundred people residing there, and in 1900 there was the same number again.
In 1960 there were not many remaining signs of human habitation in Capitol City. Above the junction of North Henson Creek with Henson Creek there were some log cabins in what used to be the upper end of town. On the townsite proper there was only the derelict mansion which was being destroyed from every angle. Henson Creek had altered its course and was eating away the embankment on which the Lee house stood while at the same time human hands were carting away souvenirs. At the lower end of town only the foundations could be seen of the smelter on which George Lee had based his great dream.....
Continuing up Henson Creek in the direction that the stagecoach used to travel from Lake City to Ouray, the visitor will come to the ruins of Rose’s Cabin. Henson Creek was named for Henry Henson who prospected the valley in 1871 prior to the Brunot Treaty of 1873 which took the land away from the Utes. Rose’s Cabin was named for Corydon Rose who built it in 1874. It was a hotel and bar with outlying stables and shed and served as a welcome stage stop on the hard ride over Engineer Pass, the most spectacular pass in Colorado, the road now altered to another ridge to make a popular jeep ride....
Returning to Lake City the visitor will pass the Ute and Ulay mine. At one time this was such a large operation that a town grew up around its workings. The mill is disused and defunct, and the dam which supplied its water power is broken. But the superintendent’s house is occupied by a caretaker who guards the property summer and winter.
From “Colorado” by Frank Fossett, 1880; D.P.L.
THE GRANDEUR OF CAPITOL CITY IS DUST
The elaborate layout of George S. Lee was depicted in Frank Fossett’s 1880 publication. The outlying barns, pastures and corrals are now gone. It is evident from this sketch that the course of Henson Creek must have been at the southern limit of Capitol Park. Today Henson Creek is flowing so close to the mansion that it is about to undermine the foundation. The 1960 view looks up the valley toward Rose’s Cabin.