The Town of Federalsburg is located on the Marshyhope Creek in the southern-most part of Caroline County, the heart of the Eastern Shore of Maryland, which has long been known for being a land of hospitable and gracious living.
The Nanticoke Indians were the first known inhabitants around Federalsburg. In 1682, James and William Wright came from England with one of William Penn's colonies and settled on the Marshyhope Creek, the headwaters of the Northwest Fork of the Nanticoke River. When the forming of Caroline County was completed in 1774, this land fell within its boundaries. By an act of the General Assembly in 1792, the southern boundary was extended to Northwest Fork Ford because of the newly erected bridge at that spot, which was the division line between Caroline and Dorchester counties.
Already, the possibilities of this point were foreseen, where cross-country traffic forded the river, and a store was built there around 1789. This was the nucleus of a small village, which so greatly owed its growth to the bridge, that the town was called the "Northwest Fork Bridge", or "The Bridge" until early 1812, when politics took its naming in hand.
The Federalist Party was strong on the Delmarva Peninsula, and a rousing mass meeting was held at "The Bridge." People came from far and near, the Militia drilled with all the pomp and ceremony of military glory, replete with drums and fife. Prominent speakers of the day used all of the gifts of oratory to foster pride and rekindle the enthusiasm of a dying party. Such emotion of that day demanded an outlet, and out of this, the Town was given a new name, Federalsburg.
Probably Federalsburg's earliest industry and certainly its most picturesque one was shipbuilding. The surrounding white oak forests supplied all of the necessary building materials. As the water was too shallow for these ships to be launched at Federalsburg, keels were laid at many different points in the southern part of the town. Upon completion, they were conveyed to Brown's Wharf, a landing four miles farther down the river. From there, they were launched, laden, and began their career as bay and river trading vessels. This industry ceased at Federalsburg sometime before the Civil War.
River traffic began with Baltimore, as with some other small towns on the Chesapeake. Heavy scows were loaded with goods and pushed down the river by four or five muscular men using long poles. At Brown's Wharf, they were reloaded onto schooners and other sailing vessels and sent up the bay.
Besides shipbuilding, work in the town centered around the mill dam at its northern most extremity. The saw mills there, later known as the "Idlywild Mills," converted logs, floated upstream on high tide, to lumber and then sent it downstream and on to Baltimore. Fleece from the countryside was processed into yarn and wheat was ground and eventually made into "Maryland Biscuits." As a means of furnishing power for grinding wheat and corn and for generating electricity, the dam was used continually until the last mill burned in 1916.
Before the Civil War, there was little cross-country travel except to deliver mail and transport passengers to their destination, and these trips were done by stagecoaches. After the Civil War, daily trips were scheduled from Bridgeville to Federalsburg and then from Cambridge to Easton. The Seaford and Cambridge Division of the Pennsylvania Railroad was opened for traffic on October 12, 1868. This date marked a new era for Federalsburg, for it is the railroad, with its refrigeration accommodation, which has made Philadelphia, New York, and other northern cities the markets for the perishable produce of our fine gardens and orchards.
Today, agriculture is a major portion of the industry in the area. However, Federalsburg is rapidly being discovered and there is a noticeable influx of people, expansion and development. New industry growth is fast becoming a reality. The town has planned for controlled growth, and its citizens are dedicated to see Federalsburg prosper. Amidst this growth however, old-fashioned traditions and hospitality prevail. Federalsburg is known as the "heart" of the heart of the Eastern Shore.