The settlement of Deadwood began in the 1870s and has been described as illegal, since it lay within the territory granted to Native Americans in the 1868 Treaty of Laramie. The treaty had guaranteed ownership of the Black Hills to the Lakota people, and disputes over the Hills are ongoing, having reached the United States Supreme Court on several occasions. However, in 1874, Colonel George Armstrong Custer led an expedition into the Hills and announced the discovery of gold on French Creek near present-day Custer, South Dakota. Custer’s announcement triggered the Black Hills Gold Rush and gave rise to the lawless town of Deadwood, which quickly reached a population of around 5,000.
In early 1876, frontiersman Charlie Utter and his brother Steve led a wagon train to Deadwood containing what were deemed to be needed commodities to bolster business. The wagon train brought gamblers and prostitutes, resulting in the establishment of profitable ventures. Demand for women was high, and the business of prostitution proved to have a good market. Madam Dora DuFran would eventually become the most profitable brothel owner in Deadwood, closely followed by Madam Mollie Johnson. Businessman Tom Miller opened the Bella Union Saloon in September of that year
Another saloon was the Gem Variety Theater, opened April 7, 1877 by Al Swearengen who also controlled the opium trade in the town. The saloon was destroyed by a fire and rebuilt in 1879. It burned down again in 1899, causing Swearengen to leave the town.
The town attained notoriety for the murder of Wild Bill Hickok, and Mount Moriah Cemetery remains the final resting place of Hickok and Calamity Jane, as well as slightly less notable figures such as Seth Bullock. It became known for its wild and almost lawless reputation, during which time murder was common, and punishment for murders not always fair and impartial. The prosecution of the murderer of Hickok, Jack McCall, had to be sent to retrial because of a ruling that his first trial, which resulted in an acquittal, was invalid because Deadwood was an illegal town. This moved the trial to a Dakota Territory court, where he was found guilty and then hanged.
As the economy changed from gold rush to steady mining, Deadwood lost its rough and rowdy character and settled down into a prosperous town. In 1876, a smallpox epidemic swept through the camp, with so many falling sick that tents had to be set up to quarantine them. Also in that year, General George Crook pursued the Sioux Indians from the Battle of Little Big Horn on an expedition that ended in Deadwood, and that came to be known as the Horsemeat March. The Homestake Mine in nearby Lead was established in 1877.
A fire on September 26, 1879 devastated the town, destroying over 300 buildings and consuming everything belonging to many inhabitants. Many of the newly impoverished left town to try their luck elsewhere, without the opportunities of rich untapped veins of ore that characterized the town’s early days.
A narrow-gauge railroad, the Deadwood Central Railroad, was founded by Deadwood resident J.K.P. Miller and his associates in 1888, in order to serve their mining interests in the Black Hills. The railroad was purchased by the Chicago, Burlington and Quincy Railroad in 1893. A portion of the railroad between Deadwood and Lead was electrified in 1902 for operation as an interurban passenger system, which operated until 1924. The railroad was abandoned in 1930, apart from a portion from Kirk to Fantail Junction, which was converted to standard gauge. The remaining section was abandoned by the successor Burlington Northern Railroad in 1984.
Some of the other early town residents and frequent visitors included Al Swearengen, E. B. Farnum, Charlie Utter, Sol Star, Martha Bullock, A. W. Merrick, Samuel Fields, Calamity Jane, Dr. Valentine McGillycuddy, the Reverend Henry Weston Smith, and Wild Bill Hickok.
20th and 21st centuries
Another major fire in September 1959 came close to destroying the town. About 4,500 square miles (12,000 km2) were burned and an evacuation order was issued. Nearly 3,600 volunteer and professional firefighters, including personnel from the Homestake Mine and Ellsworth Air Force Base, worked to contain the fire, which resulted in a major regional economic downturn.
The entire town was designated a National Historic Landmark in 1961. However, the town underwent additional decline and financial stresses during the next two decades. Interstate 90 bypassed it in 1964 and its brothels were shut down after a 1980 raid. A fire in December 1987 destroyed the historic Syndicate Building and a neighboring structure. The fire spurred the “Deadwood Experiment”, in which gambling was tested as a means of revitalizing a city center. At the time, gambling was legal only in the state of Nevada and in Atlantic City. Deadwood was the first small community in the U.S. to seek legal gambling revenues as a way of maintaining local historic qualities. Gambling was legalized in Deadwood in 1989 and immediately brought significant new revenues and development. The pressure of development may have an effect on the historical integrity of the landmark district.