Forest Hill is situated upon the divide between the Middle Fork of the American River and Shirt Tail Canon. Its altitude is about 3,600 feet above the level of the sea. The location is beautiful, the atmosphere is pure, the water good, and the people are healthy and prosperous.

The first settlement at Forest Hill was made in the fall of 1850 by M. Fannan, James Fannan and R. S. Johnson, who located there and established a trading-post. During the winter of 1850 and ’51 they- built the house now known as the ” Old Forest House.” The place, at the time they made the location, being a dense forest of pine, spruce, fir and oak timber, they gave the place the name of “The Forest House,” from which the town derived its name, Forest Hill. At the time of the building of the Forest House no mining was carried on in the vicinity, except at the gulch diggings at “the Gordons” in Yankee Jim’s Gulch, the canon diggings in the Jenny Lind Canon, the diggings at Sarahsville (Bath), and other localities at a greater distance. The Forest House being on the road leading to Bird’s Valley, Humbug, Horseshoe and Stony Bars, and the mines on the upper divide, made it a good stand for teamsters, packers and travelers to stop at, and so the enterprising proprietors added the business of hotel keeping to their mercantile business. They succeeded so well that other houses, built with a design to carry on business similar to that of the Forest House, were erected in the fall of 1851, at short intervals upon the road, the nearest of which was the Middle Fork House, by W. T. Henson, Brown & Co. Both these houses were liberally patronized by the traveling and mining communities; the proprietors made money, and their property became valuable.

The rich deposit of gold at Forest Hill, like the celebrated silver mines of Potosi, were discovered by one of those accidents that it is impossible for man to foresee, but which all are willing to take the advantage of. The discovery led to the running of the numerous tunnels which pierce the ridge on which the town of Forest Hill is built, and eventually, as the mines became developed, to the building up of the town. During the heavy storm in Dec. 1852, and Jan. ’53, (which the citizens of Sacramento and Stockton perhaps hold in remembrance), a slide took place at the head of the Jenny Lind Canon, just above the claim of Snyder, Brown & Co. Upon going to their claim in the gulch, when the storm was over, the company was surprised to find that a large part of the hill had slid down, covering up their claim and burying their tools. They were still more surprised, when walking over the mass of dirt which had thus fallen down to learn the extent of the damage they had received, to find that chunks of gold were plainly visible. in the bank and loose dirt which had slid off from it. The company procured tools and set to work removing the rubbish and washing the pay dirt in sight, and were reported at the time to wash out from $2,000 to $2,500 per day.

The discovery thus made was the cause which led to the development of the. rich deposits of gold in the hill, as, by washing up the pay-dip which had slid off the hillside and following the vein of pay-dirt into the hill, it was found to be merely an outcropping of an extensive deposit, and immediately tunnels were started along the base of the hill for miles above and below where the discovery was made. The next company which penetrated through the rock to the auriferous gravel was the Deidesheimer Company, whose claim was located about three-fourths of a mile further up the ridge, and near where Yankee Jim’s Gulch forms a flat, from which claim it is said upwards of’ $300,000 have been taken in about one year. The Independent Company was the next which reached pay dirt, which claim also proved very rich, yielding immense sums of money.

Although the rock in most of the tunnels was very hard, costing in some instances as high as $40 per foot for running the tunnels, yet the miners received fresh courage from each discovery, until the existence of an immense deposit of auriferous earth in the center of the hill became an established fact in the minds of the miners, and. each one considered the probability of his becoming a millionaire as being a question of time only; each being satisfied that the gold was in his claim, if he could only reach it. Time wore on, and at intervals the news was spread abroad of one claim after another having penetrated through the rim-rock and obtained prospects similar to those already mentioned. As nearly all of these claims are well known, to many persons at a distance from the scene of these rich discoveries, it will not be amiss to mention some of them in the order in which they were worked through the rock, and reached the gravel containing the gold. The Jenny Lind, the Northwood & Fast, the Rough and Ready, the Jersey, the Dardanelles, the Alabama, the Eagle, the India Rubber, Garden, and others of equal richness, were gradually opened, and made to add to the wealth of the country, by furnishing constantly large sums of gold to supply the wants of trade. It is needless to say that each new discovery added fresh courage to the weary miner who had toiled for years, day and night, in blasting through the rock ; and, although a large number of them have been engaged for nearly eight years in running bed-rock tunnels, at a cost in some instances of forty or fifty dollars per foot of tunnel run, yet one can read upon their countenances no signs of discouragement, all seeming confident of eventually being successful.

After the Jenny Lind, Rough and Ready, Jersey, Northwood & Fast, and Gore companies had reached pay dirt, the increased demand for laborers caused such a rapid influx of population, that a considerable town was soon built up under the hill. A store, well stocked, with miner’s supplies, and a number of saloons had been established, and the place assumed that brisk business appearance characteristic of new mining towns in the mines of California.

In November, 1856, the Forest House and Ranch, embracing the land on which the town now stands, was purchased of the original proprietors by Messrs. Hardy and Kennedy, who built a store-house near where their brick block now stands, and commenced business upon a large scale. In 1857, they sold to J. W. Phillips the old Forest House, and the south half of the ranch, who immediately laid off the ground into suitable sized building lots, and offered them for sale. In January 1858, he laid the foundation and commenced the erection of the building now known as the Forest House, which was completed the following May. At about the same time that Phillips commenced building the Forest House, other parties purchased lots and also built, and soon a considerable town had sprung up, and an extensive trade was established.

In the summer of 1858, the first fire proof building built in Forest Hill was erected by Messrs. Hardy and Kennedy; and many other buildings, though not of such substantial materials, were erected and opened as business houses.

The building of the town where it now stands, not only drew large accessions to its business population from the surrounding towns, but those doing business under the hill moved up into the new town, where the whole business of the place was soon concentrated; and soon a heavy trade was drawn to the place from the rivers and towns, and camps surrounding it; being situated on the main thoroughfare leading to Michigan Bluff, Last Chance, Deadwood, Forks House, and the whole upper divide.

We have taken considerable pains to ascertain the amount of tunneling done, and the cost of running the same upon the Forest Hill and-Michigan Bluff divides, and give the following as the result; We find that there have been 124,530 feet of bed rock tunnel run, at a cost of $1,888,300. A very large proportion of this immense outlay of capital has been made immediately in the vicinity of Forest Hill; and by far the greater proportion of those now paying, are within three miles of that place. The resources of Forest Hill are perhaps greater than those of any other mining town in the county. In addition to its vast mining resources, its extensive forests are supplying not only sufficient lumber for the wants of its people, but the mills in the vicinity are sending large quantities to Auburn, Sacramento, and the ranches in the agricultural districts. Lumber is so cheap upon the Forest Hill divide, that notwithstanding the great distance it has to be hauled to market, it can be furnished at Sacramento at prices as low as from any other part of the country.