Barre's first settlement and town center stood in South Barre, then called the Upper Village, where the town's two main roads met, but as water power sites were developed, additional villages grew in what became Barre City, known as the Lower Village, and East Barre. One of the first settlers in East Barre was Winthrop Jackman, who built the first mill, and the village was then known as Jackman's Mills. In the 1860's Nathaniel Carnes became East Barre's dominant economic force, and the village became known as Carnes Mills. Along with his son William, Carnes operated mills and other businesses and became a major figure in the granite industry developing at Millstone Hill, opening and purchasing quarries and starting a teamster operation to move stone off the hill. In 1896 the Carnes family built a Victorian home on the corner of Church and Mill St. East Barre boomed in the late 1800's, with new house construction doubling the village's size every year, largely because the Barre and Chelsea railroad arrived in 1893 and placed the village in an excellent position to benefit from rapid growth in the granite business at Millstone Hill, a half mile away. Although the railroad was meant to connect Barre City to Chelsea, it never extended beyond East Barre and its businesses. Also in 1893, during the first of several granite strikes in unionized Barre City shops over the following decades, William Carnes invited idle granite workers to work in his non-unionized sheds, leading to the construction of several additional finishing sheds in East Barre, where such sheds had previously been mostly concentrated in Barre City. At the same time, many new businesses opened in East Barre, including grocers, a feed store, a furniture store, a hardware store, a blacksmith shop, a jeweler, a drug store, restaurants, a movie house, and other retail businesses. The major flood of 1927 badly damaged businesses along the Jail Branch River and the roads leading to them. East Barre's granite industry never fully recovered, and with rail service to the village ending in the 1920's and other sheds lost to fire, the granite finishing business disappeared from East Barre and moved back to Barre City. Other businesses that had flourished because of that growth likewise gradually vanished.