French traders had contact with the Anadarko people in the area around Dallas in the 1700s. In 1841 John Neely Bryan founded a trading post on the east bank of the Trinity River, near the junction of two Native American trails. Bryan was unaware that he had settled on land granted by the Texas republic to an immigration company, but he eventually legalized his claim. The extensive promotion efforts of the company brought settlers to the area, and in 1844 a townsite was laid out. The town was incorporated in 1856, and in the late 1850s, the collapse of a nearby cooperative community, La Réunion, augmented the population and added skilled European craftspeople to the workforce. In March 1861 Texas seceded from the Union and joined the Confederate States of America. During the American Civil War (1861-1865), Dallas served as a supply and storage post for the state. After the war ended, freed slaves flocked to Texas and founded a freedmen's town on the outskirts of Dallas. By 1870, the year Texas was readmitted to the Union, Dallas had a population of about 3000.
Dallas grew steadily for the next 30 years. The successful lobbying for two railroads, the Houston and Texas Central in 1872 and the Texas and Pacific in 1873, initiated this growth. As a rail crossroads, Dallas became a regional transport center for products headed to Northern and Eastern manufacturing centers. Cotton became the principal source of income, but the city also attracted merchants and banking and insurance companies eager to exploit available transportation and communication facilities. Throughout this period, business and political leaders forged close ties, thus shaping the character of the city and guiding its economic direction. By 1890 Dallas had 38,067 residents and was the largest city in the state.