The permanent settlement of Clay County began in 1859 directly after the treaties with the Yankton and Ponca Indians were signed, by terms of which about 16,000 acres of rich land in southern Dakota were ceded to the United States.
New homes (most of them one-room log cabins), were promptly established in Vermillion valley and in Vermillion village. A number of families lived in dugouts the first winter. Food and supplies were hauled from Sioux City, the nearest source. A letter written at Vermillion, Dec. 15, 1861, by an early pioneer to relatives in the east describes conditions: "I will now let you know the whole truth as to our circumstances. It was so late when we got here that I could do little trapping as the river froze over. We have had all we do to make a living but have managed to get some provisions for our mules and horses. There is no money here so we cannot get money for our work. Our claims are all save. The boy's boots are nearly worn out and no prospects of any new ones. No person gets any credit, here in the stores. They have regular hoedowns every week or two in town and nearly everybody attends. I will go to Sioux City tomorrow or some day soon, partly for ourselves and others to get flour. They may want cornmeal. The corn cracker here has refused to grind corn. We will have pretty hard times here for one year or two years until we get to raising enough to live on. Claims are worth but little and will be as long as there are so many claims vacant. Many have left Nebraska to come over here either for speculation or to make themselves homes. The capital will be located here or at Yankton but I think it will be here. This place will make a big town whether the capital is here or not."
The federal census of 1860 gives the population of Dakota Territory as 2376, and of this number 202 lived in Clay County. A local census in 1861 showed the county had a population of 482. Vermillion was the largest settlement in the territory in that year.
A sawmill was set up on the Vermillion River in February 1860 by Duell and Compton, who also opened a small store in the village. Compton was appointed the first postmaster for Vermillion when the office was established in 1860. Two hotels were in operation in Vermillion in 1860, the "Mulholland House," a log building about 20'x30' on the bank of the Missouri River, and the "Miner House."
Copied from the Yankton Press & Dakotan dated June 6, 1936 issue.
2009 will mark the 150th birthday of the city of Vermillion. Each week until the sesquicentennial celebration, this column will present notable historic information pertaining to the city and surrounding areas.