In 1896 Herman Velguth secured a large tract of land from George Wakefield east of Chicagoan. He constructed a sawmill on the south shore of Lake Velguth (now Indian Lake) and the site, first called Frederich's Ruhe became known as Pentoga. Velguth sold his interests to Hood and Mahoney who dismantled the mill and moved the equipment some two and one-half miles further south to a site near the railroad and river. they also took the name of the original mill site.

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