The history of Delray Beach effectively begins with the construction of the Orange Grove House of Refuge in 1876. The house derived its name from the grove of mature sour orange and other tropical fruit trees found at the site chosen for the house of refuge, but no record or evidence of who planted the trees has survived. Indians presumably lived or passed through the area at various times, and hunters, trappers, and run-away slaves may also have lived or passed through the area in the 18th and 19th Centuries, but there is no record or evidence of them.
Settlement began around 1884, when African-Americans from the Panhandle of Florida bought land a little inland from the Orange Grove House of Refuge and began farming. By 1894 the African-American community was large enough to establish the first school in the area.
In 1894 William Seelye Linton, postmaster of Saginaw, Michigan, bought a tract of land just west of the Orange Grove House of Refuge, and began selling plots in what he hoped would become a farming community. Initially, this community was named after Linton. In 1896 Henry Flagler extended his Florida East Coast Railroad south from West Palm Beach to Miami, with a station at Linton.
The Linton settlers began to achieve success with truck farming of winter vegetables for the northern market. A hard freeze in 1898 was a setback, and many of the settlers left, including William Linton. Partly in an attempt to change the community's luck, or leave behind a bad reputation, the settlement's name was changed in 1901 to Delray, after a suburb of Detroit, Michigan.
By 1910, Delray had a population of 250. In 1911 Delray was chartered by the State of Florida as an incorporated town. In the same year pineapple and tomato canning plants were built in Delray. Pineapples became the primary crop of the area. This is reflected in the name of the present day Pineapple Grove neighborhood near downtown Delray Beach. By 1920 Delray's population had reached 1,051.
In the 1920s drainage of the Everglades west of Delray lowered the water table, making it harder to grow pineapples, while the extension of the Florida East Coast Railway to Key West resulted in competition from Cuban pineapples for the markets of the northern United States.
The Florida land boom of the 1920s brought renewed prosperity to Delray. Tourism and real estate speculation became important parts of the local economy. Delray issued bonds to raise money to install water and sewer lines, paved streets, and sidewalks. Several hotels were built. At that time Delray was the largest town on the east coast of Florida between West Palm Beach and Fort Lauderdale. The collapse of the land boom in 1926 left Delray saddled with high bond debts, and greatly reduced income from property taxes.
Delray was separated from the Atlantic Ocean beach by the Florida East Coast Canal (now part of the Intracoastal Waterway). In 1923 the area between the canal and the ocean was incorporated as Delray Beach. In 1927 Delray and Delray Beach merged into one town named Delray Beach.
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