By the time the copper speculators stopped speculating, about 2500 people lived in Superior and nearly 1500 more had begun building homesteads from Endion to Oneota. Then came the Panic. In the 1850s, despite increasing development, the US economy was declining. Europe, home to many investors financing America’s growth, also suffered from unstable economies. Banks powered western expansion by investing in railroads, but they were short on cash. In September 1857 worried investors hoped the California gold rush would rescue the United States. Indeed, the SS Central America was on its way to New York with thirty thousand pounds of gold, deposits of which would stabilize the nation’s banks. Then, on September 12, the ship sank near Havana, Cuba, taking 425 lives—and the American economy—to the bottom of the Gulf of Mexico. The fallout was called the Panic of 1857.
The ensuing depression struck a considerable blow to the increasingly industrial North, hitting the Great Lakes region hard. In fact, while most of the country recovered within a year, towns along the lakes took longer. The farther west a community sat, the longer it took to recover. With no industry to support its population, people fled the Head of the Lakes in droves. James Bardon, who arrived in 1854, recalled that “lake steamers were overcrowded carrying people away,” and by the time the Soo locks closed for the shipping season, three-quarters of the population had left. Even George Nettleton abandoned his claims, and along with an army of others walked the Military Road to St. Paul.
Except for the town of Beaver Bay and a handful of hopeful copper prospectors, the North Shore was all but abandoned. A few stores remained open in Superior; none in the Minnesota townsites. No flour that first winter meant no bread. Those who remained fished and trapped and grew a few potatoes. Jerome Cooley, who arrived in Duluth in 1870, would later refer to these hearty souls as the “Ancient and Honorable Order of the Fish Eaters.” Local trade was handled on a barter system. When Orrin Rice offered to give two lots on Rice’s Point to John Carey in exchange for a pair of boots, Carey refused—the footwear would be worth much more in the winter to come.
Sidney and Harriet Luce, farmers from Ashtabula County, Ohio, had arrived less than a year earlier. The Luces had been encouraged to invest in Portland by former neighbors who arrived before them, and they wanted to see their property. The Luces did not intend to stay, but when the panic struck and nearly everyone else fled, they remained to protect their investment and those of their friends.
Before the panic, Sidney Luce had built a wharf and a warehouse at the foot of Third Avenue East, the border between Portland and Duluth townsites and adjacent to the very spot at which Lake Superior’s north shore met the base of Minnesota Point. Copper mining would certainly attract a railroad, Luce surmised, and a building boom along with it—and his facilities would be ready to receive the necessary supplies. The copper bust and the panic forced Luce’s building into a completely different role, described by the Duluth Minnesotian in 1873 as the “artery through which the pulsations of the coming city beat.” Luce’s warehouse, technically Duluth’s first commercial building, became home to the Federal Land Office, the post office, and more. John Carey, St. Louis County’s first judge, called it the county’s first court house as well as the home of the “register of deeds office, county auditor’s and treasurer’s office, annual township [sic] meetings, school district meetings, and other public and sometimes private meetings.” The Luces lived on the top floor, which had one window.
Luce—whose motto was “Do it for Duluth!”—and others worked to retain the population, in part by creating jobs for unemployed men. In 1859 he staked German cooper Gottlieb Busch and three Yankee carpenters with land, lumber, and a brew kettle, and Busch began making beer along a stream they named Brewery Creek. The same year Henry Kiichli began brewing in Superior. Thanks to Luce, Busch, and Kiichli, even if those hanging on at the Head of the Lakes had only fish and potatoes to eat, at least they could wash them down with beer.
It would take a lot more than fermented hops to help Duluth and Superior survive. The 1860 census shows Douglas County with only 812 residents, down from 2500 in Superior alone three years earlier. The St. Louis County townsites, home to 1560 people in 1857, dropped to 406. That included 102 in Fond du Lac, 161 in Oneota, and just 80 in what the federal census bureau counted as Duluth: every settlement between and including Rice’s Point and Endion. Ojibwe residents far outnumbered the immigrants, particularly in the summer; Luce noted that in August 1861, Minnesota Point was lined with Indian camps housing hundreds of Ojibwe woman and children, as it was “the huckleberry season and they are very plentiful.”
The Civil War further decimated the population, as Judge Carey later explained: “Many of those that yet remained departed, some with the patriotic spirit to enlist in the Union army . . . and others to their old homes in Canada (not being citizens).” Many prominent residents volunteered, including Joshua B. Culver. Sexagenarian Doras Martin had so much patriotic spirit he dyed his grey hair and whiskers black and lied about his age to fight for the Union.
During that period, historian Walter Van Brunt, who had moved to Duluth in 1869, would later write that, “A few remained on duty at Superior, and George R. Stuntz, [William] Nettleton, [J. D.] Ray, [Horace] Saxton, [John] Carey, [Sidney] Luce, and [Luke] Marvin kept vigil over the lifeless corpse of Duluth.”