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The community of Alder on the Nisqually River above Alder Dam was relocated after World War Two from its original site which was inundated by Alder Lake. There were large groves of Alder trees in the neighborhood when the community was founded in the 1880s. The place was platted for development on December 18, 1905 by Martin Hotes from the southern part of his homestead.

The original community, since flooded, was built on a sloping bench amid logged-off lands, and served as a trading center for a community of mountaineers. In the 1930s they were dressed in mackinaws, high “tin pants,” and red hats, the men grouped about trucks, loaded with firewood and heavy logs, and chatted in drawling tones. Red-cheeked women gathered about the town’s lone store and exchanged bits of gossip. Living on mountain ranches, these people, descended from emigrants who came here from Tennessee, Kentucky, and the Carolinas, supplement a livelihood gained from their own logging efforts with a few vegetables grown on none too productive soil. A three-story frame school building sits on a little hill in the village.