As legend has it, in 1851 or 1852 a prospecting party consisting of two Irishmen and German discovered a rich deposit of gravel on the North bank of Humbug Creek, about 3 miles from its juncture with the South Yuba. After a short time their supplies began to diminish and it was decided that one of the Irishmen would go to Nevada City for food and equipment. Before departing, the Irishman pledged total silence to his friends as to the whereabouts of their claim. When he arrived in Nevada City with several hundred dollars worth of gold dust, many of the townsfolk took notice at the size of the Irishmanís poke. After procuring the necessary goods, the miner stopped at a local tavern and discussed his good fortunes with local miners, but would not tell the location. Even free liquor could not pry the information from the miner. The prospector left town before sunrise, however his leaving did not go unnoticed. He was tracked and followed by more than a hundred eager miners, waiting for him to show the way to these well hidden riches. When the miners arrived, a tent city arose on the banks of the creek and expectations of untold wealth were envisioned. The pickings were disappointing and the disgruntled miners labeled the area as a "Humbug", meaning a lousy claim. Many of the prospectors returned to Nevada City, however a few remained and referred to their settlement as Humbug City.

Shortly thereafter, a rich strike was discovered nearby and the population soared to nearly 300 overnight. By 1855 we find Humbug City beginning to appear as a town with houses on either side of the main road and many residences found scattered about, just off the beaten path. In the records of Nevada County a canvas roofed hotel is mentioned. This was called the Hotel de France and was the first hotel in Humbug City. Shortly after the Hotel was established, Esche and Franz constructed the first saloon which was incorporated into the North Bloomfield Hotel in 1856. Two general stores were in existence, one owned by Mayhew & Pettijean, the other Johns & Taylor. Creeganís sawmill was also established in the vicinity of Marten's. Ranch circa 1855.

As the town grew a school was needed. So in 1857 a schoolhouse was built and a teacher hired. R. D. Skidmore arrived in 1857 and took over a bakery business from a previous unknown entrepreneur. The population was now 500. In 1858 North Bloomfield officially incorporated and the town became the cultural and industrial center for Relief Hill, Lake City, Derbec and as far away as North Columbia. Stages were making daily trips from San Juan and Nevada City and connecting with stages from other towns. In the year 1859 Samuel Irwin built the Irwin House in the lower part of town. He also erected a large stable for the use of the California Stage Co.

In 1863 the town began to decline. It was no longer profitable to work the claims as the creeks and ravines were filled with tailings, and there was a drought and not enough water was present to carry the debris away. Then came the boom in Nevada and many moved to greener pastures. During these lean years things were quiet. A few men were working the Diggins when there was water, managing to make a meager living. In 1866, Julius Poquillion purchased several small mining claims at depression prices and succeeded in getting financial backing from investors in San Francisco. The North Bloomfield Gravel Mining Company was established. The company soon owned 1,585 acres and began preparations for hydraulic mining on 8 large scale. Crude water cannons (Monitors) were brought in to work the claims. Recognizing the necessity for a large and continuous supply of water, the directors of North Bloomfield Gravel Mining Company purchased Bowmans Ranch at Big Canyon Creek as a site for a reservoir. The dam was constructed in 1869 with an initial storage capacity of 400,000,000 cubic feet of water. A 40-mile ditch was constructed by 800 Chinese and 300 white laborers to convey the water to North Bloomfield, on September 15, 1870, water from the Bowman Dam and ditch first reached the mining ground. The dam was engineered by Hamilton Smith, Jr. and was 65 feet high and 215 feet in length.

In 1873, the new schoolhouse was built with all improvements for $3,700. This money was raised by subscription. There was a fine library and two teachers were employed. Around 1873, North Bloomfield Gravel Mining Company realized that part of the gold being washed down was being lost at the exit point of the Hiller tunnel and that the richer gravels were at a depth below the existing drainage tunnel. Hamilton smith, Jr. was called upon to design the North Bloomfield drainage tunnel which would be located approximately 200 feet beneath the Hiller tunnel, permitting the company to wash the richer gravel. The tunnel also possessed a complex sluice system which further separated the gold from the tailings before being dumped in the Humbug Creek. The tunnel was completed on November 15, 1875 and was 7,878 feet long. The tunnel featured eight vertical shafts with hoisting mechanisms over each shaft. The shafts allowed accessibility bo the tunnel for monthly clean-up operations. The tunnel alone cost $550,000.

In 1876, Mr. A. A. Smith built what is now known as the Smith-Knotwell Drugstore. By this time the North Bloomfield Gravel Mining Company and the Malakoff were in full operation, utilizing up to 7 Craig monitors, 24 hours a day. Miners were working 12 hour daily shifts for just about 21 cents an hour.

In 1878 Ed Cummins built a large hall (now the park museum). The front of the building (now the park office) was a saloon, while the rear of the building was a hall complete with a portable stage for travelling thespian groups. Dances were the social gatherings with guests coming from all the nearby towns as well as from Nevada City. North Bloomfield was noted for itís hospitality.

In 1878 the North Bloomfield Gravel Mining Company and the Milton and Eureka Ditch Company built the first long distance telephone line in the United States under the name of the Ridge Telephone Company, stretching from French Corral up the San Juan Ridge to the various ditches and dams of the three companies. Telephone communications led to more efficient mining practices and in later years, after the Sawyer Decision of 1884, proved its value.

In January 1880, the North Bloomfield Gravel Mining Company made the first use of the industrial arc lamp run by a water powered generator. The lamps were purchased in San Francisco, shipped to Nevada City by the Narrow Gauge Railroad and freighted to the mine where they were installed for night use. They were a vast improvement over the old method of lighting the faces of the cliffs with pitch pine fires and later kerosene lamps. A monitor could now operate for 24 hours and in doing so used approximately 25 million gallons of water.

Toward the end of the 1860's. tailings started to become a serious problem, especially to farmers. At Marysville, the river bottom was higher than the town. The silt reached all the way to the Golden Gate, impairing navigation of the Carquinez Strait and the Sacramento River. In 1875 the town of Marysville was surrounded by levees and that year a flood filled it as if it were a giant bowl, bringing serious loss of life and property damage.

In 1878 the Anti Debris Association was formed and soon petitions were submitted to legislature requesting laws affecting mining be changed. On January 7. 1884. Judge Lorenzo Sawyer issued a permanent injunction against dumping tailings into the Yuba River. This decision started a new order of procedure in so far as hydraulicking was concerned.

The industry refused to die as too much money had been invested. Then came into vogue the Anti Debris Associations' spy system whereby secret agents were hired to conduct unannounced inspections insuring compliance with the Sawyer decision. Subterfuge and cunning would be the role henceforth. The Ridge Telephone Company now proved its worth. As soon as spies appeared at any hydraulic pit, immediate word was sent to all the mines so that water could be turned off, and the evidence was lacking. This surreptitious approach worked on a short term basis, however by 1886 enough evidence and witnesses were garnered to bring another suit against the company known as the Woodruff vs North Bloomfield Gravel Mining Company litigation. The result was the fining of the company of $1,500, for contempt of court as there had been too much camouflaging by the company when dumping debris into the river. The indefatigable member of the Board of Directors, L. L. Robinson, adopted a new procedure, using elevators and restraining dams to keep tailings out of the river systems, thus satisfying the intent of the court decision.

The hydraulic mining controversy was revived in 1891, when Congress enacted the Caminetti Law, permitting hydraulic mining upon approval and licensing by the California Debris Commission. The North Bloomfield Gravel Mining Company eventually complied with the new regulations, and continued hydraulicking behind restraining dams for several more years, but such small scale mining was unprofitable. By 1910, the era of hydraulic mining was over. Between 1866 and 1884 the Malakoff operation excavated about 41 million yards of earth which yielded $3.5 million in gold.