With the 1876 Battle of the Little Big Horn vividly in mind, legislators honored General George A. Custer when they created this county in 1877. Settlement has always been concentrated in the Wet Mountain Valley, framed on the west by the Sangre de Cristo Range and on the east by the Wet Mountains.
Rosita, the county's first large mining camp, blossomed briefly during the 1870s and withered quickly after a silver strike gave birth to nearby Silver Cliff. Silver Cliff, third largest city in the state by 1880, demanded that it be made the state capital. As a consolation prize, in 1886 Silver Cliff captured the county seat from fading Rosita.
Silver Cliff's failure to establish successful ore processing facilities led to its demise. It lost even the county seat to nearby Westcliffe, which the D&RG made its Custer County terminus. After the D&RG abandoned rail service in 1937 and mining activity diminished, farming and ranching became the mainstay of this small, sparsely populated county. Among the many ghosts is Colfax, a colony (1870–1879) of the German Colonization Society of Chicago, led by Carl Wulsten, a temperamental idealist. The county's population peaked in 1880 with 8,080 residents and had sunk by 1990 to 1,926 residents.
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