A group of sailors were the first to find rich diggings near this ridge in 1848. The next year, hundreds of miners trekked over the rugged mountain trails. Rich discoveries were found in El Dorado Canyon and along the bars of the Middle Fork of the American River—so in 1850, a general stampede to the area began. Michigan Bluff clings to the steep slope of the Forest Hill Divide from 1,500 to 2,000 feet above the gorges of the American River and El Dorado Canyon. The town was founded in 1850 on a narrow mountainside shelf by miners who wanted to grade out enough level ground to build their cabins on. They grandly named the place Michigan City. The town enjoyed great prosperity, shipping out $100,000 in gold per month. Future railroad mogul and California governor Leland Stanford operated a general store there from 1853 to 1855. However, in 1858 the land beneath the buildings began to slip down the mountainside, threatening to send the entire settlement into the canyon. In 1859 the settlers moved en masse to the present site of Michigan Bluff, one-half mile higher up on the side of the mountain. Hydraulic mining had already begun in the vicinity, and during the 1860s and 1870s the town was one of the most prosperous centers on the Forest Hill Divide. After hydraulic mining was outlawed in 1884, Michigan Bluff quickly declined. A few homes, a steep-sloped cemetery, a small store and several historical markers are all that remain of this once prosperous town—but the views are awesome.