Robert E. Hayes
The first non-native activity in the Keystone area of the Black Hills was the discovery of placer gold two miles east on Battle Creek in 1876, which led to the settlement of Harney, named after Mount Harney. Placer gold was known to exist in abundance during the first two years of mining activity, but the great depth of the deposits made them difficult and impractical to reach.
The first permanent settler in the area was Fred J. Cross, who settled in a cabin one mile north in Buckeye Gulch in 1877 and throughout the years collected many rich specimens of gold from his mining properties. The settlement was called Crossville.
In 1883, the Harney Peak Hydraulic Gold Mining Company was organized to employ hydraulic mining methods to reach the deep gravel beds. This was done on a gigantic scale along six miles of property on Battle Creek. Two flumes were built to carry water from both Grizzly Bear Creek and Battle Creek. A trestle was built 200 feet overhead at the confluence of the two creeks for a span of 700 feet. The main flume was designed to carry water to the main diggings downstream. Over a period of one and a half years, considerable gold was taken from what was known as the Mitchell Bar.
In that same year, 1883, the Etta Mine was located one mile south as a mica mine. Soon after the location of the mine, a black ore was discovered and identified as cassiterite (tin dioxide), an ore of tin. The Harney Peak Tin Company, comprised of American and British stockholders, spent over two million dollars in the area acquiring over 1100 mining locations and constructing three reduction plants during the next ten years. Interest in gold took a back seat because the company paid good wages.
In 1891, William B. Franklin, Thomas C. Blair and Jacob Reed located the Keystone Mine and named the new community which emerged after the mine. Jacob Reed platted the original town site on the placer claim named for him. The town grew slowly until the discovery of the rich ledge of gold-bearing quartz at the base of Mount Aetna. This new claim was discovered by Franklin and his adopted daughter, Cora, in 1894. Many of Franklin's friends suggested he name the new mine after his wife, a fairly common practice at the time. Franklin quite often frequented the many saloons in Keystone and his wife, Jenny, would end up having to drag him home by the arm. Franklin would wink at his friends and say, "Ain't she a holy terror?"
The new Holy Terror Mine turned out to be one of the richest gold producers in the country. The Holy Terror and the Keystone Mine later merged, their shafts connected by horizontal tunnels, but they continued to operate two separate mills.
These mines, along with several others, caused Keystone to "boom" until its population reached over 2,000 people and was considered to be the largest community in Pennington County, larger than Rapid City at the time. The railroad reached Keystone on January 20th, 1900, which proved to be a big factor in the further development of the mines and the later carving of Mount Rushmore. In 1927, electrical power was brought to Keystone by railroad in the form of diesel fuel for diesel engines to drive electric generators. The electric power was used for carving Mount Rushmore, operating mines and the Town of Keystone.
The Holy Terror Mine reached a depth of 1200 feet by 1903. After several years of successful operation, the mining company was plagued with excessive underground water, litigation due to numerous fatalities in the mine, and claims from previous locators. The mine ceased operation in 1903, allowed to fill with water, and Keystone was soon in a state of economic depression which continued for many years. Gigantic fires in 1908, 1917, 1921 and 1937 virtually destroyed the business section on 1st Street, from which it never really recovered. The last major fire in 1937 marked the establishment of the present Keystone Volunteer Fire Department.
It was not until 1924 that the economy of Keystone took an upswing. Reduced freight rates contributed to the commercial mining of feldspar and led to the construction of a grinding plant in 1928 near the confluence of Grizzly Bear Creek and Battle Creek. In 1924, gold mining flourished for a time because the gold ores contained sufficient arsenic to warrant construction of a reduction plant near the railroad for the purposes of removing both gold and arsenic. Arsenic was shipped to the South to combat the boll weevil infestations in the cotton fields. In 1924, over 100 men were employed in the production of arsenic at the Bullion Mine.
The carving of Mount Rushmore commenced in 1927, annually employing an average of 25 to 30 men until its completion in 1941. The initial work was seasonal but was attractive to the Keystone miners because the wages were considerably higher than the mines were paying and sometimes it was the only work available during the Depression.
In the 1920s, the production of rare minerals from the pegmatite mines in southern Keystone began to expand. The major producers for many years were the Peerless, Etta, Hugo and Bob Ingersoll Mines. In addition to feldspar, the other commercial minerals mined were mica, beryl, cassiterite, tantalite, columbite, amblygonite, lepidolite, spodumene and quartz. The production of these rare minerals reached a peak during World War II.
Keystone made a major contribution to the war effort and the miners were often "frozen" to their jobs by a wartime government order which also ceased all gold mining operations. If it became necessary to terminate a miner for just cause, his fellow miners referred to him as being "defrosted."
The last major gold production in the Keystone District was from the famous Holy Terror Mine, which had a short revival from 1938 to 1942. The gold ore was mined from the adjacent Keystone Mine out of the 500 and 700 foot levels and hoisted to the surface through the Holy Terror shaft. The old Keystone Mill was rebuilt to extract the gold from the ore. There was no production from the Holy Terror veiin at this time.
Keystone has seen a gradual decrease in pegmatite production over the years. The feldspar grinding plant was destroyed by fire in 1957. The railroad to Keystone was destroyed in the flood of 1972 and the line was only rebuilt to within one mile of Keystone. Today, the railroad has been completely abandoned except for the "1880 Train," maintained by Black Hills Central Railroad. The production of quartz is still a viable industry in Keystone and the lumber industry continues to contribute to the local economies.
For more than a century, several million dollars in gold, feldspar and other rare minerals have been extracted from the earth around Keystone. As the mining industry fell into decline, the ever-increasing tourist industry has provided a boost to the local economy. Over the past 50 years, the tourist industry has become the predominant and staple industry of Keystone, although tourism has failed to nourish the local community the way mining and carving did. Winter Street is now referred to as "The Strip," lined with businesses on both sides of Highway 16A, wall to wall. The Strip has been saturated and now Keystone continues to grow beyond its original dimensions by removing chunks of mountain side to create level turf in the narrows of Grizzly Bear Gulch.
While many mining towns emerged with the discovery of gold and rare minerals in the Black Hills, few have survived to the present day. Keystone has always managed, however, through the versatility of her people, first mining and logging, then carving, now catering to tourists. It is probably safe to conclude that Keystone is here to stay.