In 1906, 40 acres were set aside for a townsite and in 1907 Circle City was established on what is now known as Nine Mile Road, close to the ghost town of Nine Mile, which was established in 1906. Circle City got it's name from a loop in the railroad tracks which were nearby. This loop helped trains climb from an elevation of 920 feet to 3,700 feet on their way to Molson. The loop was twenty eight miles long, nearly twice the length of the wagon road to Molson at the time. It took 1 1/2 hours to make the trip and cost .99 cents.