 Henry Hastings Sibley built the first stone house in the Minnesota Territory in Mendota in 1838 , along with other limestone buildings used by the American Fur Company , which bought animal pelts at that location from 1825 to 1853 . Another area of early economic development in Minnesota was the logging industry . Loggers found the white pine especially valuable , and it was plentiful in the northeastern section of the state and in the St. Croix River valley . Before railroads , lumbermen relied mostly on river transportation to bring logs to market , which made Minnesota 's timber resources attractive . Towns like Marine on St. Croix and Stillwater became important lumber centers fed by the St. Croix River , while Winona was supplied lumber by areas in southern Minnesota and along the Minnesota River . The unregulated logging practices of the time and a severe drought took their toll in 1894 , when the Great Hinckley Fire ravaged 480 square miles ( 1 @,@ 200 km2 ) in the Hinckley and Sandstone areas of Pine County , killing over 400 residents . The combination of logging and drought struck again in the Baudette Fire of 1910 and the Cloquet Fire of 1918 . 
