Perhaps the most popular lost treasure in the whole of Eastern Idaho at least in terms of numbers of people who know of it and have tried to find it is Kelly’s Canyon Gold. It is just off an oiled road leading to a prevalent ski lodge and is very easy to get to. The gold lost in Kelly’s Canyon originated in Virginia City, Montana. When gold was discovered in the Alder Gulch in 1861, the nearest railroad for transporting the gold to banks and supplies back for the mines were in Utah.
Stagecoaches, freight wagons, and mule trains made their way northward loaded with supplies and people and returned southward with gold and people. One of the more popular areas for the robberies were in the Portneuf Canyon south of Pocatello. Here, near McCammon, occurred one of the more unique robbery episodes which resulted in this, the most noted of the lost treasure stories in Eastern Idaho.
Bill James and his partner, Jim Hall, were hidden behind a large boulder in the Portneuf Canyon. Several times they had heard the wheels and plodding horses of a freighter coming down the road, but they were waiting for the more measured trotting of the stagecoach horses.
They knew that the stages often carried gold as well as wealthy mine owners and they had determined to relieve the passengers and the stage of any gold or currency. They had picked their site because it was at the top of a small rise. Soon the stagecoach appeared coming over the hill with its horses laboring. The stage stopped to allow the horses a breather. At this point, James stepped into the road and Hall let himself be seen behind the boulder with his rifle pointed at the stage. Both men wore masks.
Shortly after the two outlaws disappeared a freighter showed up from the south. The stage drive persuaded the freighter to cut out one of his horses so that he could go back to Blackfoot to report the robbery and to obtain new horses for the stage. By the time the stage driver got to Blackfoot, it was getting dark and so a posse was organized to leave at first light. The two outlaws had been observed crossing the Snake River to the north of town and it was felt that they would not get too far during the night.
Early the next the morning the posse set out for Eagle Rock to see if their quarry had been seen there. Their inquiries found that two men with mules fitting the outlaw’s the description was about two hours ahead of them and headed in an easterly the direction towards where the South Fork of the Snake River enters the plain. James and Hall were soon spotted as the posse had nothing to slow them down.
They were on the north side of the Snake River near the Heise bridge. The outlaws saw the posse at the same time and whipped the mules to their top speed. The mules were to be the undoing of this pair. They could not outdistance the horses even if they were not loaded with gold. James had the line that was leading the mules and Hall decided to make it every man for himself. He left James on the flat just east of Heise and struck out on his own.
Near the mouth of Kelly’s Canyon, the two disappeared from their pursuers as a heavy rain shower obscured them from view. The posse rode through the shower and spotted a rider disappearing around the bend of the river. They gave hot pursuit. The Snake River Canyon past this bend begins to narrow and eventually the north side ends in a solid rock wall. At this point, Hall decided to take a stand. It was an unwise decision and in the ensuing shootout, Hall was killed.
The posse was puzzled for a time as they knew there were two outlaws and some mules involved. They retraced their steps looking for a hiding place that James might have turned into. Then they decided they would have noticed anyone turning into any opening past the turn of the river. They moved quickly back to the flat east of Heise and discovered Kelly’s Canyon branching to the north.
Then they moved carefully up the canyon for a few miles where they discovered the two mules and a saddle horse feeding quietly. Since it had just rained, they felt they would be able to find the outlaws tracks easily. They studied the ground and could find no sign. Then they have decided that the rain had destroyed any tracks. They searched the rest of the day and then made camp for the night. They resumed their search the next day and then decided that he had escaped.
There just was no trace found of James or the gold. The posse returned to Blackfoot with only the horse and the mules to show for their efforts. James had turned into the canyon in the middle of the storm. He had not gone far before he decided to try to hide the loot. He knew the posse might be delayed for a short time by the rain, but he also knew that with the amount of gold involved they would shortly be with him. At the mouth of a small canyon that branched onto Kelly’s Canyon from the left, he stopped his horse and the two mules.
He did not know how much time he had before the posse would arrive, so he did most of the hiding of the gold the packs to a nearby pile of rocks chased the mules and the horse up the at a steady pace before he decided to himself in great haste. Then, he dragged and covered them and he is then canyon.
He got them moving to try to find a place to hide He was feeling quite proud of himself as the gold was hidden and the transport was far away from him. All he had to do now was to find a place to get out of the rain and wait. A little way up the canyon (Little Kelly’s) he spied a cave through the trees.
He had to climb up a rock slope and then lift himself up to the opening which came to his waist. Once inside the cave, he felt secure. He could see through the trees where the gold was hidden but it would only be by chance that anyone saw this cave. He settled down to wait, shivering in the cold, soaked to the skin, but feeling satisfied. The click of a shoe against stone brought him to his feet to peer out of the cave. It was a few minutes before the posse came into view and then it was through the leaves.
The outlaw had a momentary panic as he wondered if he had left any sign on the trail that would suggest that he had stopped. The posse did not slow down and it was evident from their conversation that they were tired of the pursuit and wanted to get back to Blackfoot. He watched them slowly move up the canyon and disappear. One of them glanced his way and he shrank back from the cave opening. He was not seen, and the posse made its meticulous way of searching for signs. James huddled throughout the discovery.
He did not dare leave, canyon and then decided that he was a cave and made his way down to where the gold was buried, that without horses or mules he was not going to be able it. He looked around for a better burial spot as he had the gold in haste the day before. It took about an hour to uncover the gold, move it to a more secure place, bury it again, and then take note of the landmarks to ensure that he would then be able to find it in a year or so. night in the cave fearing the next day he studied the alone.
He climbed out of the He knew to move covered Now it was time to leave. And he was not too sure of the country around him but to his knowledge the only town anywhere nearby was Blackfoot. He was not going back there. He looked up Kelly’s Canyon. It rose dramatically and it was obvious that going that way would take him into the higher mountains.
He looked down the canyon and wondered if the posse had left a couple of men around a corner to see if he would emerge. He looked up Little Kelly’s and knew that it went towards the west tapering to the north. We do not know which way he went out of Little Kelly’s, but we do know that his goal was to get to civilization and to lay low for a period. There he could have paid a he went up to Little Kelly’s, and then joined the north- It is quite possible that in the town of Market Lake freighter to take him to Virginia City.
He stages passengers. still had some cash that he had taken from the From Virginia City we know that he made his way to the state of Washington. He wanted to place as much distance between himself and his pursuers as possible and yet still be not too far from his treasure. In Washington, he finally began to relax and quit looking over his shoulder. He arranged for room and board and began to contemplate his future. He also needed time to rest from his nervous exhaustion and to recuperate from the steadily worsening cold he was developing.
His cold progressed over the days into severe lung problems. His landlady fussed over him constantly and finally called a doctor. The doctor could not arrest the illness and felt that James was steadily deteriorating. The landlady spent several hours a day taking care of him and tried to supply for his every need. It is felt that the rain and exposure in Kelly’s Canyon and the subsequent escape had done him in.
Finally, James called her in and told her that he felt sure that he was going to die. She had taken such good care of him that he wanted to share his wealth with her. She sent for the doctor and then sat by his bed to listen in fascination as he related his story in a sort of death-bed confession. He told her of several landmarks that would pinpoint the location of the treasure. As he was about to tell her how to line up the landmarks to lead right to the treasure, the doctor arrived.
He took one look at the ailing outlaw and asked the landlady to depart. Shortly afterward the doctor came out and announced that James had passed away. James’ landlady was not sure whether to believe the story or not. It was now several months since the robbery had taken place. She inquired of the local press and discovered that a robbery had taken place in Idaho in the vicinity described by James.
She also noted that the loot from the robbery had not been found. Travel from Washington to Eastern Idaho was not a small chore in the 1860 ‘s and 1870s. She promptly put the story out of her mind to attend to more serious matters. Several years later her fortunes took a turn for the worse. She needed some cash to make repairs on her boarding home and for other purposes. The story of the lost treasure kept coming back into her mind.
Lastly, she made the decision to investigate. She put together a small stake and accompanied by a few friends, set out for Idaho. The Idaho she came to now have several settlements. There was a small resort as the site of the hot springs being operated by Richard Heise, who had homesteaded the area in 1894.
This resort made a great cover for the treasure hunt. They could appear to be riding or hiking from the resort while they hunted for the gold. Since there were occasional people around, they had to be quite cautious in what they said and did. Several thought the daily trips into the canyons around Heise by the group from Washington suggested they were on a big game hunt. The area described by James as the burial place for the gold was easily identifiable.
His former landlady went right to Kelly’s Canyon. She led the group up the canyon and turned into Little Kelly’s Canyon, they spread out and quickly found the landmarks that told them they were in the right spot. She went to the left the landlady returned several summers to the Kelly’s Canyon area.
Her success was the same each year. In frustration she blew up several cottonwood trees which had been mentioned as landmarks by James. After a few summers she was never seen in the vicinity again. The story of what she was looking for did come out. Perhaps her frustration with the labor and no discoveries caused her to talk. Bit-by-bit the story came out and the landmarks were discussed.
Listed below are the landmarks which the landlady obtained from James and which she used in her efforts to find the treasure.
Large rock balanced on a larger base.
The creek crosses the old worn trail.
Nearby stood alone cottonwood tree.
Beyond that small canyon branches with cottonwood tree in the center.
At the cottonwood tree in the slope of the smaller canyon is a hole in a small enough to crawl in.
The junction of the two canyons, the two cottonwoods, the old trail where it crosses the creek, and up the entire slope of the draw looking east.
The treasure will be found at the two imaginary lines drawn from the four landmarks. It is estimated that the original theft came to fifty thousand dollars in gold plus whatever the passengers were carrying.
Hence, assuming James and Hall split the cash and incidentals, the treasure would still be intact. Fifty thousand dollars at fifteen dollars an ounce, as the price was in the days of the robbery, would suggest the gold weighed about two hundred and seventy pounds. This is using twelve troy ounces to the pound.
The prices of about three hundred and sixty dollars per ounce, the treasure would have increased from the fifty thousand to about one million, two hundred thousand dollars. Sounds like enough to cause one to want to look for it. If you can get yourself into the Heise Hot Springs area east of Ririe, Idaho, getting to the treasure site is easy.
You drive past Heise until you come to a split in the road. Take the left hand, paved fork and continue up the road. Today there is an oiled road going up against Kelly’s Canyon with a ski resort just a few miles up from the mouth of the canyon. There is a stream flowing on the right side of the road for most of the canyon.
As you drive up the canyon watch on the right side of the road for the rock formation described above. Not too far up the canyon you can see a large rock balanced on a smaller base. The large rock almost resembles an ice cream cone balanced the way that it is. This rock suggests that you are in the vicinity of the lost treasure. Just past the rock a smaller canyon branches to the left. This is called Little Kelly’s Canyon.
There is a large grassy area at the mouth of this smaller canyon with a little stream flowing down through the middle of it. The grassy area has been used for picnics and the parking of vehicles. There is a grove of trees on the southwest side of the stream. There is also a cliff on the left side of the canyon and a lesser sloped rise on the right. Straight ahead the canyon narrows and then it opens again. Walk to the large canyon wall that appears in front and to the right forming the narrow opening. Cross to the left and jump across the stream.
You will be in the grove of trees. If you look to the left and up, you will discover a small cave in the wall of rock on the left canyon wall. Don’t go beyond the narrow part of the canyon. Climb up the trail leading to the cave. James says that he could see where he buried the gold from where he was inside of the cave. You can climb into the cave or just stand near the front of it and see what can be observed.
There is not a large amount of land in your vision. Looking from the cave entrance enables you to see the many landmarks mentioned and supposedly the spot where the gold was covered up. You can see where the trail probably went, and the creek probably crossed the trail although it may have wandered from spot to spot over the years. There are several Cottonwood trees around the area.
Put yourself efforts in trying had the foresight the gold may be canyon. in James’ position and you can almost imagine him to hide the gold. Many have searched for this treasure in vain. Rumors suggest that it may have been found years ago, it would be extremely hard to keep such a find secret for this long of a time. It does create a good story.
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Originally posted 2019-12-22 20:31:37.