In 1868 the tracks of the Central Pacific Railroad reached Truckee. From there a narrow gauge railroad, built from the remnants of the lumber railroads that had proliferated in the Tahoe Basin during the lumbering years, connected it to Tahoe City at the north end of the lake. This resulted in development of summer resorts at the northern end of the lake, but there was no similar railroad connection to the southern end of the lake.
The southern end of Lake Tahoe was still only connected to the outside world by the roads that had carried the emigrants into California and the freight and passengers from Sacramento to Virginia City. Because of this traffic, some inns, along with eating and drinking establishments had been built along these roads in the middle and late 1800’s. Amongst these would be one located closest to Echo Summit, a place that everyone had to pass by, no matter which of the two routes they took south of the lake. Its progressive development is in many ways typical of all others in the Tahoe Basin and worth looking at. It was known as “Yanks Station”
As mentioned before, the first white settler in the area at the southern end of the lake, a place known as Lake Valley, was Martin Smith. An real entrepreneur, he arrived in 1851 and built a simple way station at a place along the main road, seven and one half miles south of the Lake. When it burned down he, and a partner named Jim Muir, rebuilt it and added barns, a corral and stables.
When the first stagecoach crossed the Sierra into the Tahoe Basin in 1857, Smith and Muir’s way station was where they stopped. Although it was nothing more than simply a place to get minimal food and drink, a reporter of the time is said to have described it as “a spacious, well-kept hostelry…with obliging proprietors and…a respectable air about he place.”
Soon Muir would sell his interest to George Douglass, who ran another way station nearby. In 1859, Smith and Douglass would sell out to a very interesting character by the name of Ephraim Clement.