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In 1883, Major Cyrus E. Graves, a retired veteran of the Union Army, sailed into Melbourne Harbor. Major Graves was most impressed with the area and decided to buy government land which was available on the barrier island across the Indian River from Melbourne. During the next four years, he bought approximately six hundred acres which comprises present day Melbourne Beach.
The year 1883 was a busy year for Melbourne Beach. The pier, bathhouse and railroad were built. The railroad consisted of a single push car which was used to transport groceries, supplies and people from the dock at the pier along Ocean Avenue to the ocean. Prior to 1920, transportation to and from Melbourne was by a small ferry boat which was a sailboat, later replaced by a motor launch. The ferry service remained the only means of transportation until the Melbourne Causeway was built in 1921.
The Town was incorporated in 1923, with a population of a few hundred residents. After experiencing several boom and bust periods, the population of the Town began to stabilize after the Second World War with growth occurring more evenly.
Source: Melbourne Beach, FL official website