In the spring of 1837, Robert M. Eberts and John P. Arndt, with several workmen, arrived at Two Rivers and proceeded to erect a saw mill. This mill, which was later purchased by H.H. Smith and Co., was "on a site on the northern bank of the Neshoto River, a few feet west of Washington Street bridge." It was completed during the summer and began operations in the fall. A large log house was built the same year.

Simultaneous with the establishment of lumbering was the start of Two Rivers' second most important industry in the early days - fishing. In the summer of 1837, Captain Joseph Edwards constructed a seine, and with the help of his sons and of P.P. Smith, he landed the first seine of whitefish near Two Rivers Point. The first haul brought 10 barrels of fish. It is interesting to observe that several shacks now house fishermen who still seine at this identical spot. Captain Edwards went into partnership with J.P. Clark of Detroit, who, in 1838, came with a crew of 20 men, a complete outfit of fishing apparatus, and the schooner "Gazelle." They caught 2,000 barrels in the season and shipped most of the fish to Detroit, where it was sold at $12 a barrel. J.P. Clark carried on the business until 1853. Other settlers, especially the French, began fishing on a commercial scale as soon as vessels began to call at Two Rivers. In those days, the fishermen used rather heavy open boats called mackinaws, which were rigged up with sails; but when the wind died, the fishermen had to row into the harbor with their catch. Now, fishing is still an important industry, but powerful little gasoline tugs are used.

The Frenchman, Lougrine, ran the saw mill until it was forced to close y the panic of 1837. In 1843, Andrew J. Vieau took possession under Judge George Lawe. Regarding the mill, Vieau stated, in an article, "A part of the time I ran the mill myself, but leased it for most part to Bascom and Wail in 1844, to Daniel Smith in 1845, and to H.H. Smith of Milwaukee, who finally bought the plants in 1847. I also did some trading with the Indians while at Two Rivers."

With H.H. Smith - the "Deacon" who figures so large in Two rivers history - came many New England lumbermen who really started the community on its prosperous future. From 1847, the population began to grow by immigration. The population of Manitowoc County in 1837 was 180.; Manitowoc had 60 people, Two Rivers 40, Manitowoc Rapids, 40 and Thayer's Hill 40. The panic of 1837, following upon the period of rash speculation, hit the new settlement hard. The Two Rivers mill, as well as every other one in the county, including Conroe's at the Rapids, closed and most of the workmen left. The newly-made settlement of Kewaunee was completely abandoned. The total population of the country dropped to 80.

With the resumption of operations in the mills, however, after 1843, immigrants began to come in, most of them on foot from Milwaukee. In 1850, the county had 3,720 people of whom 1,378 were Germans, 246 Norwegian, 175 Irish, 129 British, and 165 Canadian. Manitowoc Rapids had 966, Two Rivers 924, Manitowoc 766.

The first election in the county was held at Manitowoc Rapids on March 4, 1839 and 33 votes were cast in the one precinct which constituted teh entire county. On March 8, the territorial legislature established a polling place at the steam mill in Two Rivers. At the next election, W.T. Sheppard, Samuel C. Chase and John Glass were judges of election.

So ar as can be ascertained, the polling list for the election of December 14, 1839 included Robert M. Eberts, John Lynn, John E. Sheppard, Alexander Gasgo, Alexander Richardson, Alfred Woods, Joseph Edward, Peter Allie, James Young, Alexander Bovrardy, Brigham Vansaw, Samuel C. Chase.

In 1839, the county voted $250 to be expended in building a road from Manitowoc to Two Rivers and J.W. Conroe was appointed construction inspector.

The first record of poor relief being administered by the county was made in October 1839 when Robert M. Eberts was paid $22.50 "for the care of a pauper."

In 1844, the Two Rivers school district (district one) was created, comprising the territory now included in the towns of Maple Grove, Franklin, Kossuth, Two Rivers, and that part of Mishicott in Township 20. In April 1844, the county board discontinued the precinct of Two Rivers, but restored it in January 1845.

In 1849, the board divided the county into four towns: Two Rivers, Manitowoc, Manitowoc Rapids, and Meeme. The first town meeting was held at the home of Sebastian Boldus at Two Rivers in 1849. Of the total county assessment of $423,254.27 in that year, Two Rivers was assessed $50,701.34.

In March, 1850, Gibson, Mishicott and Two Creeks were added to the Town of Two Rivers, but in November 1852, the present towns of Mishicott and Gibson were detached and made into the separate town of Mishicott. The four eastern sections of the present Town of Kossuth were detached, leaving Two Rivers as it now outlined.

On Sunday, August 5, 1850, the Indians had a big celebration in the village. The next day, many were sick and six of them died of what was found to be cholera or "the Asiatic plague." six more died the next day and fifty were dead before the week ended. When the schooner which stopped regularly at Two Rivers arrived, three days late, there was a great stampede for its deck and a general exodus for Sheboygan. It has been said that "in  proportion to its population, Two Rivers suffered more than any other place in the United States" from the plague. It took several years for the village to regain its population and prestige.

When Cyrus Whitcomb and Rufus Allen organized the Wisconsin Leather Company in 1850, there began the inscription of a page of Two Rivers history that merits a special niche in this sketch.