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Fairmount incorporated in 1897 and chartered as a city in 1927. Throughout the 1930s, the rail industry grew in the area, as simultaneously the demand for agricultural products declined. In 1938, these two trends prompted the establishment of Fairmount Chenille Co., a major employer for textile production. Fairmount Chenille remained a prominent industry until the late 1960s.
The area also boasted the state's first independent dial system thanks to the Fairmount Telephone Co.