Since 1792 there had been much suspicion as to what Great Britain would do to make good her claim on the Puget Sound region, for it was on June 4th of that year that Captain George Vancouver, at a point near the present location of Everett, formally laid claim to the entire North Pacific Coast on behalf of King George 3rd. Distrust of the motives of the British and the Hudson's Bay Company regarding boundary lines, and because it was believed there was great danger of Indian outrage, forts were established at Steilacoom on the south and Bellingham to the north.

After placement of these military outposts, it was necessary to have some means of communication between them. The natural and least expensive way to establish this communication was by water; nevertheless, it was thought necessary to open an overland route. Although this route would be through dense woods and exposed to attack by hostile Indians, it was planned and adopted because it was protected from the British naval attack.

Captain Pickett, in command at Fort Bellingham, received an appropriation used entirely in building a bridge and clearing a road a short way in Whatcom County. From Fort Steilacoom, the road was pushed through Thurston, Pierce, King, and well into Snohomish counties, and because of the Road crossing the Snohomish River where this town now stands, E.C. Ferguson and E.T. Cady from Steilacoom, saw great possibilities. They were foresighted enough to realize that the Military Road Crossing would be an ideal location for taking up land and planning a townsite.

Thus it was that in 1859, three men, E.T. Cady, Egbert Tucker, and Heil Barnes came to take up claims as near as possible where the Road crossed the Snohomish River. It appears that Tucker and Barnes were acting for E.C. Ferguson and associates. Tucker took a claim on the south side of the river while Cady and Barnes located on the north side. In April 1860, E.C. Ferguson came and took possession of the Barnes homestead claim.

The townsite was called Cadyville for some years and Cady made a living freighting supplies up and down the river with his flat-bottom scow, "The Minnehaha." The only customers he had at the time were a few white settlers and the Indians scattered along the river banks.