Discovery Claim on Bonanza Creek is seen in August 2009.
In August 1896, a party led by Keish (Skookum Jim Mason), a member of the Tagish First Nations, headed north, down the Yukon River from the Carcross area, looking for his sister Kate and her husband George Carmack. The party consisted of Skookum Jim, his cousin, known as Dawson Charlie (or sometimes Tagish Charlie), and his nephew Patsy Henderson. After meeting up with George and Kate, who were fishing for salmon at the mouth of the Klondike River, they ran into Nova Scotian Robert Henderson who had been mining gold on the Indian River, just south of the big dike.
August 16, 1896, the Skookum party discovered rich placer gold deposits in Bonanza (Rabbit) Creek, Yukon. It is not clear who made the actual discovery, with some accounts saying that it was Kate Carmack, while others credit Skookum Jim. George Carmack was officially credited for the gold discovery because the actual claim was staked in his name. The group agreed to this because they felt that other miners would be reluctant to recognize a claim made by an Indian, given the strong racist attitudes of the time.
The news spread to other mining camps in the Yukon River valley. Gold was first discovered in Rabbit Creek, which was later named Bonanza Creek. The Bonanza, Eldorado, and Hunker Creeks were rapidly staked by miners who had been previously working creeks and sandbars on the Fortymile and Stewart Rivers.
News reached the United States in July 1897 at the height of a significant series of financial recessions and bank failures in the 1890s. The American economy had been hard hit by the Panic of 1893 and the Panic of 1896 which caused widespread unemployment. Many who were hurt by the financial crises were motivated to try their luck in the gold. The first successful prospectors arrived in San Francisco, California on July 15 and in Seattle, Washington on July 17, setting off the Klondike stampede. In 1898, the population in the Klondike may have reached 40,000, which threatened to cause a famine.
Men from all walks of life headed for the Yukon from as far away as New York, South Africa, the United Kingdom, and Australia. Surprisingly, a large proportion were professionals, such as teachers and doctors, even a mayor or two, who gave up respectable careers to make the journey. For instance, the residents of Camp Skagway Number One included Frederick Russell Burnham, the celebrated American scout who arrived from Africa only to be called back to take part in the Second Boer War; and W. W. White, author and explorer. Most were perfectly aware that their chance of finding significant amounts of gold were slim to none, and went for the adventure. As many as half of those who reached Dawson City kept right on going without doing any prospecting at all. Thus, by bringing large numbers of entrepreneurial adventurers to the region, the Gold Rush significantly contributed to the economic development of Western Canada, Alaska and the Pacific Northwest.
Most prospectors landed at the Alaskan towns of Skagway and Dyea, both located at the head of the Lynn Canal. From these towns they traveled the Chilkoot Trail and crossed the Chilkoot Pass, or they hiked up to the White Pass into and proceeded thence to Lake Lindeman or Bennett Lake, the headwaters of the Yukon River. Here, some 25 to 35 miles (40 to 56 km) from where they landed, prospectors built rafts and boats that would take them the final 500-plus miles (800-plus km) down the Yukon to Dawson City, near the gold fields. Stampeders had to carry a year's supply of goods — about a ton, more than half of it food — over the passes to be allowed to enter Canada. At the top of the passes, the stampeders encountered Canada's North-West Mounted Police (NWMP and now the Royal Canadian Mounted Police) post that enforced that regulation, as well as customs and duties. It was put in place to avert shortages like those that had occurred in the previous two winters in Dawson City, and also to restrict the entry of guns, particularly handguns, into British territory. Another reason was to keep out of Canadian territory the criminal element under the leadership of Soapy Smith which had established itself in Skagway and the other Yukon Ports (then still claimed as British territory), as well as the fears by British and Canadian authorities about a possible armed takeover of the goldfields as an American territory.
Once the bulk of the prospectors arrived at Dawson City, most of the major mining claims of the region were already established. However, any major potential unrest with the idle population was averted with the firm authority of the NWMP under the command of Sam Steele.