A pioneer wagon road passed through this area to Fort Apache, established in 1870, and hay delivered to the fort was one of the few cash crops in the early years. That road is now covered by Rainbow Lake. Early sheepmen used this country for grazing until the financial crisis of 1905 made sheep practically worthless, and that, together with the drought that followed, forced them to sell out to the Mormons. In 1905 Niels Hansen purchased property and Adair Spring from Will Amos, and Lakeside was settled near the spring, its water source, in 1906. John Lazelle Fish was the first postmaster. In the fall of 1906, the first school met in Niels Hansen's home and bunkhouse, and later in the Rhoton Store. On June 24, 1912, Lakeside Ward of The Church of Jesus Christ of Latter-day Saints was organized with Alof Pratt Larson as bishop. Lumbering, with five sawmills, was important to the town's economic life.