"The future of Ann Arbor never looked so bright as now," the Courier gloated in 1871. "From present appearances it is safe to say that the population of Ann Arbor will double in the next five years." The paper came to regret this statement. The successful Mozart Watch Company earlier in 1870 had deserted Ann Arbor for the more congenial environs of Milwaukee. The business prosperity of the post-Civil War years peaked, and in its wake came the depression of 1873. The newspapers began filling up with mortgage sales and notices of houses for sale. E. J. Johnson, hat, cap, and fur dealer, was just one of many business failures. Population figures told the story. From a peak of 7,300 people in 1870, the city dropped to 6,700 in 1874.

"Watchman, what of the hour?" the Peninsular Courier editorial asked in December 1874. Ann Arbor was at a turning point in its history. "Soon, very soon, the question is to be settled, and settled forever, whether Ann Arbor is to dwindle into a mere boardinghouse town, or whether it is to become a city of no mean proportions for an inland town, say twenty thousand inhabitants...We have allowed golden opportunities to pass. While we, Rip Van Winkle like, have slept, railroads have been built north and south of us, along the lines of which small towns are springing up, creating a market for produce which formerly came to us. This...we are willing to confess, does not tend to make the future of Ann Arbor to us a pleasing theme for contemplation...We are in a transitory state, a generation is now passing away. Shall we take the tide at its flood, or omit it?"

The greatest of these "golden opportunities" which the city had missed was the construction of a second railroad, linking Ann Arbor markets to the south. The dream of an Ann Arbor-Toledo Railroad went back to the 1840's. Interest waned during the Civil War, but beginning in 1865, local capitalists began drumming up support for the railroad. In 1866 the Toledo, Ann Arbor, and Saginaw Railroad Company was formed; and in 1870 the people of Ann Arbor voted a loan of $100,000 for the completion of the road, now christened the Toledo, Ann Arbor and Northern Railroad. This company floundered in the depression of 1873. The city waited until 1878 for the dream of a north-south railway to become a reality.

The difficulty of getting the railroad to Ann Arbor had a profound effect on the community's spirit. Without an additional railroad aspiring businessmen had only the Michigan Central to transport their goods to market. When it looked as if the railroad would never come, the Courier rationalized: "Every town cannot be a manufacturing place. Our city is a literary city, and as such we are proud of it...should we attempt to carry on all kinds of enterprises we should fail. Everything for our educational interests and nothing for outside wild speculators, is our motto."

The editorial implied that the future of Ann Arbor was forever linked to the success of the University. Ann Arbor's citizens became increasingly conscious and justifiably proud of the accomplishments of the University and its faculty. They gloated over the favorable comments of out-of-town visitors drawn to the city because of the University. Ann Arbor, one traveler wrote, "is a popular resort for the wealthy, refined and intellectual from different parts of the world"

Such compliments reflected favorably upon the leadership of the University in the 1870's. In 1871 James B. Angell commenced his thirty-eight-year tenure as president of the University. Under his direction, the University broadened the scope of its curriculum, thereby attracting a larger student enrollment. From a level of 1,100 students in 1870, the number slowly increased to 1,534 in 1880. In the first decade of his administration, Angell worked to establish a Department of Dentistry and a School of Mines; and after several years of debate, the University finally established a Homeopathic College. The University's history was not without blemish. A case of presumed misappropriation of student fees in the Chemical Laboratory in 1875 ballooned into a statewide scandal involving Angell, the Regents, Courier publisher Rice Beal, and the two central figures, Silas Douglas and Preston Rose. The matter of the responsibility for the missing funds was never really resolved and the question continued to be debated for many years to come.

The Douglas-Rose Controversy brought a bitter conclusion to the score of years which had begun with the Civil War. Although not affected as badly as some cities by the Depression of '73, Ann Arbor was slow to shake off the doldrums of economic decline. A combination of factors--depression, the snail-like development of the north-south railroad to Ann Arbor, and the bitterness engendered by the Douglas-Rose Controversy--shook Ann Arbor's faith in its future. Still a fundamentally healthy community, the city was uncertain of its direction as the 1880's dawned.