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The county seat of Jefferson County, Nebraska, Fairbury was the location of the Western Division headquarters of the Rock Island Railroad for eighty years. In 1868, James B. Mattingly built a sawmill on the banks of the Little Blue River, and Woodford G. McDowell, who had come from Fairbury, Illinois, platted a town along the route of the St. Joseph and Denver City Railroad, naming it for his former home. In 1871, Fairbury was chosen as the county seat, and it was incorporated as a city in early 1872. The St. Joseph and Denver City Railroad was acquired by Union Pacific and operated as the St. Joseph and Grand Island branch, and the Chicago, Rock Island and Pacific Railroad reached Fairbury in 1886, and Fairbury was designated as the headquarters for its Western Division. The conversion of the Rock Island to diesel locomotives in 1952 made portions of the Fairbury yards obsolete, and its headquarters was moved to Des Moines in 1965, and service to Fairbury ceased in 1980. Fairbury is east of Gladstone and southwest of Jansen.


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