Lava Hot Springs developed at a strategic crossroads between the Rockies, the Great Basin, and the West, where year-round natural hot and cold running water drew people to the area. In the early 1800s, the beaver trade brought trappers and traders, and some mountain men remained, becoming farmers, miners, and merchants. By the late 1800s, homesteaders arrived under government free-land offers, and the railroad's arrival in 1882 linked farms to markets while also bringing tourists to the hot springs. The community, first called Dempsey and then Hall City, was renamed Lava Hot Springs in 1915 as it grew into a resort town. Bob Dempsey, an Irish trapper, and his Lemhi Indian wife Margaret camped on a creek about 1-1/2 miles west of Lava Hot Springs in 1851, and he also traded horses to Oregon- and California-bound pioneers. By 1896, Hall City had businesses, farms, families, and a log schoolhouse, which was replaced by a brick school in 1905. Train passengers and goods moved through town on the Oregon Shoreline Railroad, and by 1905 Lava Hot Springs had become a popular destination for rail travelers. In the twentieth century, fire and flooding repeatedly damaged the town, but residents cleared away ashes and mud and rebuilt. On November 20, 1936, a fire destroyed half of a city block and left six businesses in ashes; blocked access to the local fire engine and the breakdown of help coming from Pocatello delayed the response, and after four hours the flames were controlled. On February 9, 1962, rain and unseasonably warm temperatures melted snow and sent the Portneuf River over its banks, and after three days of sandbagging by citizens and the National Guard, the worst flood in the town's 100-year history caused millions of dollars in damage.