The earliest settlers arrived in the Loyalton area in the late 1850s and stopped in the lush valley on their way to the Sacramento Valley. Founded in the 1850s as Smithneck, the community changed its name to Loyalton after raising a great amount of money for the Union cause during the Civil War, reflecting union sympathies to Loyal (town). With the construction of the transcontinental railroad, mail increased, and a postoffice opened in 1867. Farming and dairy were the primary businesses and produced renowned cheese products. In the 1880s timber grew in importance, with five lumber mills in Loyalton and several more nearby. After the Boca & Loyalton Railroad was completed in 1901, the town incorporated to support the lumber industry. Incorporation also brought the power to outlaw activities seen as harmful to the industry workforce, such as alcohol consumption, so the city limits were extended deep into the surrounding forests, making Loyalton one of the largest cities in area in California at some 50 square miles until the boundaries were redrawn in the 1930s to the modest one or less square mile limits of today and the largely ignored liquor restrictions were lifted. As gold mines declined, the lumber industry slumped in 1915 and all mills closed except Robert’s, which moved across the valley. In 1917 Clover Valley Lumber opened at the former Robert’s site and later operated under different owners before eventually becoming Sierra Pacific Industries. Lumbering remained an important part of the local economy and culture, changing from logging camps and logging trains to timber transport by trucks, and by the 1990s much of the operation was automated and a Cogen power plant had been added. After World War II, the dairy industry gave way to beef cattle on surrounding ranches, and the last two dairies closed in the 1950s. Founded as a farming community and strengthened by a century of lumbering, Loyalton has survived as the largest and only incorporated city within Sierra County.