The Lake Superior and Mississippi Railroad, created in 1863, was the first rail link between the Twin Cities and Duluth. Financier Jay Cooke had selected Duluth as the northern end of the new railroad. Lyman Dayton, a local businessman put up $10,000 of his own money to do the original surveying work and served as the railroad's president until his death in 1865. It was completed in 1870, running through the city of Carlton and along the path of the Saint Louis River to Duluth. Later that year the first passenger trains started running between the Twin Cities and Duluth.
The Lake Superior and Mississippi was a victim of the Panic of 1873, as Jay Cooke's company was overextended and burdened with financial commitments to the Northern Pacific Railway. It was reorganized in 1877 as the St. Paul and Duluth Railroad.