 Fairbury prospered with the Rock Island, and lost business and residents as the railroad declined.In 1868, James B. Mattingly, a freighter originally from Kentucky, established a sawmill on the banks of the Little Blue River.Shortly thereafter, Woodford G. McDowell, a capitalist from Fairbury, Illinois, came to Nebraska to plat a town along the route of the St. Joseph and Denver City Railroad, which was to follow the Little Blue.