Thomas Francis Meagher House, Virginia City
In May 1863, a group of prospectors were headed toward the Yellowstone River and instead came upon a party of the Crow tribe and was forced to return to Bannack. On May 26, 1863, Bill Fairweather and Henry Edgar discovered gold near Alder Creek. The prospectors could not keep the site a secret and were followed on their return to the gold bearing site. A mining district was set up in order to formulate rules about individual gold claims. On June 16, 1863 under the name of "Verina" the township was formed a mile south of the gold fields. The name was intended to honor Varina Howell Davis, the first and only First Lady of the Confederate States of America during the American Civil War. Verina, although in Union territory, was founded by men whose loyalties were thoroughly Confederate. Upon registration of the name, a Connecticut judge, G. G. Bissell, objected to their choice and recorded it as Virginia City.
Within weeks Virginia City was a boomtown of thousands of prospectors and fortune seekers in the midst of a gold rush. The remote region of the Idaho Territory was without law enforcement or justice system with the exception of miners' courts. In late 1863, the great wealth in the region, lack of a justice system and the insecure means of travel gave rise to serious criminal activity, especially robbery and murder along the trails and roads of the region. Road agents as they became known were ultimately responsible for up to 100 deaths in the region in 1863 and 1864. This resulted in the formation of the Vigilance committee of Alder Gulch and the infamous Montana Vigilantes. Up to 15 road agents were hanged by the vigilantes in December 1863 and January 1864, including the sheriff of Bannack, Montana and alleged leader of the road agent gang, Henry Plummer.
The Montana Territory was organized out of the existing Idaho Territory by Act of Congress and signed into law by President Abraham Lincoln on May 26, 1864. Although Bannack was the first territorial capital, the territorial legislature moved the capital to Virginia City on February 7, 1865. It remained the capital until April 19, 1875 when it moved to Helena, Montana. Thomas Dimsdale began publication of Montana's first newspaper, the Montana Post, in Virginia City on August 27, 1864. Montana's first public school was established in Virginia City in March 1866.
Gilbert Brewery, Wallace Street, Virginia City, founded in 1866 by Henry S. Gilbert (1833-1902)
In the 1940s, Charles and Sue Bovey began buying the town, putting much needed maintenance into failing structures. The ghost town of Virginia City began to be restored for tourism in the 1950s. Most of the city is now owned by the state government and is a National Historic Landmark operated as an open-air museum. Of the nearly three hundred structures in town, almost half were built prior to 1900. Buildings in their original condition with Old West period displays and information plaques stand next to presently active restaurants, gift shops, and other businesses.
The Historic District of Virginia City and Nevada City is currently operated by the Montana Heritage Commission. The Commission operates gold panning, the Nevada City Music Hall and Museum, and the Alder Gulch Railroad.
Virginia City also has a Boothill Cemetery. The 2 ft 6 in (762 mm) narrow gauge Alder Gulch Short Line Railroad transports passengers by rail to the nearby ghost town of Nevada City, Montana, and back.
The film The Missouri Breaks (1976) was partly filmed in Virginia City.