Despite the death of the fur trade, commerce at the head of the lakes looked promising in the early 1850s. Many speculated that copper mining would create new industry, and construction had begun on locks and channels at Sault Ste. Marie to allow larger sailing craft to navigate into Lake Superior. All this led many fortune-seekers to flock to the obvious place of destiny, a marshy area at the head of the lakes where the St. Louis River fed into Lake Superior: the future home of Superior, Wisconsin, called Superior City in its early years.
New landowners who established Superior in 1854 thought it would eclipse Chicago in importance as a trading center. Indeed, when Congress decided to build a military road between St. Paul and the head of the lakes, Wisconsin lobbyists successfully fought to have the road terminate in Superior rather than Fond du Lac, restricting the Minnesota side of the line to native inhabitants only. But that changed after the signing of an 1854 treaty with the Ojibwe that gave native lands north and west of Lake Superior to the United States. Minnesota’s Arrowhead region had become U.S. territory and therefore open to settlement and exploitation.
By then surveyor and Superior pioneer George Stuntz had settled on Minnesota Point, becoming the Point’s unofficial first resident of European descent. He wasn’t alone for long. Speculators hoping to make it rich mining copper swarmed to the Minnesota side of the Superior Entry, and in 1856 began platting townships, including Duluth, a community that encompassed what is today the western portion of downtown (from Lake Avenue to to about Mesaba Avenue). Other townships included North Duluth at roughly the base of Minnesota Point and partof the eastern portion of today’s downtown; Cowell’s Addition, the northern half of today’s Canal Park portion of Minnesota Point; and Middleton, located on Minnesota Point from Oatka north to Portage Street, which ran along the same path as the long established “little portage” that du Lhut had crossed 177 years before (Thomas Taylor of Superior first mapped the town site in 1856, shortly after it was surveyed; Robert Reed and T. A. Markland were its first proprietors). Duluth pioneer George Nettleton owned the land between Middleton and Cowell’s Addition. Outside of George Stuntz’s trading post and the lighthouse near the Superior Entry, a small community of Ojibwe populated the rest of Minnesota Point. (The Point had been used long enough by the Ojibwe to establish several cemeteries, including one near the Superior entry; a huge storm in 1876 destroyed it, exposing bones and scattering artifacts.)
The local population grew to about 1,500. As in Superior, many speculated that Duluth would surpass Chicago as a center of trade and a destination for immigrants. In 1857, when the township of Duluth was just a year old, the Minnesota Legislature incorporated the Duluth Ship Canal Company with Duluth pioneers George Nettleton, James Ray, and Edmund Ely as directors. The state authorized them to cut a canal three hundred feet wide through Minnesota Point, but the financial Panic of 1857 put an end to the idea. By 1860 just 353 persons populated all of Fond du Lac, Oneota, and Duluth. Duluth even lost its charter.
In 1866 engineer Henry Bacon, working for harbor engineer J. B. Wheeler, suggested a canal be dug through Minnesota Point one and one-half miles north of the Superior Entry, about five and a half miles south of where Minnesota Point sprouts from the lakeshore. But, again, work on the canal never began, due to what was then considered a lack of necessity. Another engineer would later write of Bacon’s plan, “There does not seem to have been any demand for a harbor on the part of Duluth, there being no place of that name in existence.”
But that same year, financier Jay Cooke arrived, announcing he would bring his Lake Superior & Mississippi Railroad from St. Paul to Duluth. Loggers felled virgin timber throughout the region, and lumber mills sprang up on Rice’s Point and along Lake Avenue to produce the wood for the railroad’s construction.
Work on the LS&M continued over the next few years. In 1869 LS&M built DeCosta’s Dock on the west side of Rice’s Point for loading and unloading ships arriving in Duluth through the Superior Entry. The dock, named for LS&M’s chief engineer, connected by rail to the main LS&M line running along the shoreline. That same year the LS&M began building a breakwater at Fourth Avenue East running parallel to Minnesota Point, which reached into the lake to protect ships anchored at Duluth outside the bay. Cooke’s railroad was now within a year of completion, and in anticipation of the commerce that would come with it, Captain James W. Cuyler surveyed the lake and harbor to develop a plan for improvements; he came up with three.
The first involved extending the breakwater to over 2,600 feet long; the second was to dig a canal through the Point, bolstered by piers extending into the lake; the third was to simply keep using Superior Entry, but to also dredge the harbor and open a larger basin closer to Duluth. Cuyler recommended the second plan, but yet again the canal was nixed.
Harbor engineer Wheeler didn’t like the idea of the canal because he thought it would result in serious injury to “the natural entrance.” This notion, that cutting a canal would change the flow of the St. Louis River and reduce the natural scouring that kept the Superior Entry open, would be cited time and again by those in Wisconsin opposed to a canal. So in 1870, with almost no commercial activity in Duluth and without certain knowledge of how Cooke’s railroad would change that, Cuyler’s third plan would be put in motion and work would begin on improvements to the Superior Entry.
But Duluth and Cooke ran out of patience before that work began. Conditions had proved too difficult for ships on their way to DeCosta’s Dock from the Superior Entry: the passage was too shallow, and many ships ran aground or had to lighten loads to pass. In order to make a more accessible harbor, work on extending the breakwater had begun in the fall of 1869, almost as soon as its first segment was complete (it was planned to eventually reach 2,200 feet into the lake, but never stretched more than 950 feet over the water). That fall, construction of Cooke’s adjacent Elevator A, a towering grain terminal along the outer shore at Fourth Avenue East, also began. Cooke’s company then built docks to reach Elevator A, connecting the waterfront to the railway.
Cooke’s rail line and rumors of gold at Lake Vermilion north of Duluth spawned another land rush in 1869, and the population soared. In January 1869 just fourteen families lived at the base of Minnesota Point; by the middle of 1870, the population of Duluth would grow to 3,130 people. The gold rush proved a bust, but it did turn up a sample of something much more valuable: iron ore, evidence of a vast deposit that would later change the face of northeastern Minnesota. The shipbuilding industry blossomed, and commercial fishing thrived.
When the first telegraph line reached the region in November 1869, it connected St. Paul to Duluth, not Superior. Cooke, continuing to invest in the region, convinced the Northern Pacific Railroad— financed by Cooke’s bank—to begin a line from Carlton, Minnesota, about twenty miles west of Duluth, to Moorhead, Minnesota, on the Red River bordering the Dakota Territory. Groundbreaking took place on February 15, 1870. On March 6, 1870, the township of Duluth—joined by Rice’s Point (including land extending to about Fortieth Avenue West that would become known as the West End, today’s Lincoln Park neighborhood), North Duluth, Cowell’s Addition, Middleton, Portland (roughly today’s East Hillside neighborhood west of Chester Creek), and Endion (roughly east of Chester Creek to Twenty-first Avenue East)—became the city of Duluth. The city’s charter, written in April 1870, granted the City Council power to “construct or authorize any individual or corporation to construct canals connecting Lake Superior with Superior Bay.”
Back in June 1871, the outer breakwater had been extended to 950 feet and stood six feet above the waterline. A “great storm” on November 16, 1872, caused severe damage to the structure, leaving Elevator A, warehouses, and docks vulnerable. Workers had made repairs and added heavy stones to the breakwater’s exterior in an effort to fortify the structure. But after that, Duluth spent no more time or money attempting to keep it in place. The canal was in full operation, and with access to the safety of the bay, the breakwater was becoming more a burden than an asset. Besides that, at the time Duluth had a dike to build and further lawsuits to discourage if it wanted to keep its operational canal. By the time Northern Pacific helped settle the dike issue by the summer of 1873, traffic on the canal was in full swing and nearly all shipping commerce in Duluth had moved to the bay inside of Minnesota Point, rendering repair to the breakwater much less important. A gap of between seventy-five and one hundred feet had been made in the dike in July, opening traffic once again to both sides of the bay. More importantly, with the canal in operation Duluth’s future success looked more and more assured.
But then September 18 rolled around. The bottom had ripped open on Philadelphia financier Jay Cooke’s wallet; Jay Cooke & Co. announced its failure. Cooke had arrived on the shores of Duluth in 1866 tossing gold pieces to the Ojibwe and sporting a silk top hat. It was an unintended metaphor: the use of silk had ended the demand for beaver pelts used to make hats in Europe. The Ojibwe had benefited from this fur trade for almost two hundred years and lost a large income stream when the trappers left. Then Cooke, dressed as a thoroughly modern man, had arrived to finance Duluth’s future, behaving as if all he had to do was reach into his waistcoat and toss out his extra cash. But now those pockets had finally emptied. Cooke and his bank had vastly overextended loans to railroads— especially Northern Pacific—and the “Great White Father,” as the local Ojibwe had dubbed him, went bankrupt and closed his banks. The whole nation felt the loss—historians refer to it as the “Panic of ’73.”
While the entire nation suffered from its trickling effects, Cooke’s failure would hit Duluth particularly hard. Within two months nearly half of Duluth businesses disappeared; many of Duluth’s commercial ventures had begun with financing from Cooke’s bank. Not the least among their ranks was the Northern Pacific Railroad. At the time only 424 miles of operational track stretched west from Duluth, far from the railroad’s goal to reach the Pacific Northwest as the country’s first northern transcontinental railway; without Cooke’s money it couldn’t keep laying track, and it certainly wasn’t going to invest in Duluth’s battered breakwater. Built to secure the city’s future by protecting the docks serving Cooke’s grain elevator, each day the breakwater fell ever closer to ruin; the symbolism must have been painful for the people of Duluth.
Cooke’s failure also threatened the canal: Northern Pacific wouldn’t be able to build Superior’s bridge, rail line, and grain elevator, called for in the agreement that ended litigation over the canal and dike. Failing to get the infrastructure promised, Superior would be within its rights to seek some reparation. Perhaps even another injunction.