In the 1860s the townsitess adjacent to Minnesota Point had gone from near extinction to boomtowns. On March 6, 1870, Duluth became a city, at the same time annexing Rice’s Point, Portland, and Endion. It stretched from Twenty-First Avenue East to Thirtieth Avenue West, from from roughly Fifth Street to the shores of Lake Superior and the St. Louis River, including Minnesota Point to Thirty-Eighth Street South and all of Rice’s Point. In April Duluth’s population reached 3,130.
Duluth’s booming population was about sixty percent foreign-born laborers. The other forty percent was American-born, mostly professionals and businessmen from New England, Maryland, Michigan, Illinois, and Wisconsin. Many of the original pioneers had connections in Ohio, and Jay Cooke’s agents hailed from Philadelphia. Most of these were of British or German ancestry and nearly all practiced some Protestant religion: Methodists, Episcopalians, Presbyterians, Congregationalists, and even a few Baptists.
Duluth’s foreign-born majority came for the most part from western and northern Europe. Half of them were Scandinavian (Swedes, Norwegians, and Danes), the rest primarily Irish, German Catholics, and Canadians (many of French heritage). Over one hundred were English or Scottish, followed by a handful of Swiss, French, Luxemburgers, Belgians, and one Australian. Austrians Bernard and Nettie Silberstein were two of Duluth’s first four immigrants of Jewish descent.
The West End would welcome most of Duluth’s immigrants for the next forty years, although many would also begin to populate the ram-shackle “No Man’s Land” in what is today’s Canal Park Business District. Upon first arrival, many of these people found temporary housing in the Immigrant Houses established by Northern Pacific Railroad.
All the promise of Duluth anticipated by early pioneers was finally starting to materialize. In 1871 the initial cut of the Duluth Ship Canal—which would allow the land west of the point to develop into the world’s largest inland port—was completed. With a railroad, a canal, and a safe port, Duluth sat poised to become a major center of commerce in the United States. Giant warehouses began popping up along the waterfront and, now that the canal had cleared the way, on Rice’s Point.
In the spring of 1873 came the loss of an entire townsite in a single day. A large storm had hit the region, and the St. Louis River swelled. The two-year-old canal had shifted currents in the bay, and much of the loose vegetation that made up what had been platted as Fremont in 1856 broke loose and floated out through the canal. This included a large portion of Fremont Island, 1,200 feet long by 400 feet wide when platted. Fremont was no more.
The loss of Fremont was of little consequence compared to what happened that September: Jay Cooke ran out of money, and all of his businesses failed. This sent the entire nation into a depression known as the Panic of 1873; no community was hit as hard as Duluth. With no money, much of the business in the Zenith City came to a screeching halt and building stopped. The population dropped, and debts mounted.
In 1877 Duluth’s leaders allowed its city charter to expire, then reorganized the community as a village.
The plan refinanced Duluth’s debt. As incentive to pay bondholders its borders were retracted to between Third Avenue East and Fourth Avenue West from Fifth Street to Oatka Beach: as the village paid its debts, it would regain its 1870 borders. As part of the reorganization, Duluth ceased being a city, and became the District of Duluth, on March 4, 1877 and officially became a villageon October 22, 1877.