The eastern border of South Dakota was the population, agricultural, and trade center of South Dakota until the discovery of gold. Prospectors flocked to the Black Hills , first to Custer , then north to Deadwood  and Lead . For about two years, the rush was on as prospectors filed claims and began a frenzied search for the metal that would make their fortunes.
As the search for gold turned into the industry of mining, commerce and government expanded to serve the emerging communities. Freighters brought provisions, timber companies provided building materials, and farmers produced the food. Mining expanded from gold to other minerals including silver, galena, mica, feldspar, tin, lithium, and beryllium.
Recognition of the increased population and impact on Dakota Territory came in 1883, when the legislators voted to move the state capital to Bismarck, a central location that could serve both the eastern and western corners of Dakota Territory. By this time, efforts were already underway to admit Dakota Territory to statehood.
The selection of Bismarck as the new capital of Dakota Territory, however, caused much resentment in the southern parts of the Territory, and a divisionist movement began, with the desired outcome of the establishment of a separate state of South Dakota. This proposal was rejected in 1883, but voters in southern Dakota Territory approved a state constitution and elected state officers, even choosing Senators for the new state. This effort was also rejected at the nation’s capital.
The northern sections of Dakota Territory, much less populous than the southern sections, were initially anti-divisionist because they were concerned that separating the territory would result in the southern sections becoming a state and the northern sections being doomed to Territorial status. The two sections began to work together, however, with the southern sections willing to share the Dakota name and promising to actively promote the admission of two states to the Union at the same time.
This was the winning strategy and North Dakota became the 39th and South Dakota became the 40th state admitted to the Union in 1889. The city of Pierre was appointed the temporary new capital of the state of South Dakota until 1890, when its status was finalized, and Bismarck retained its position as the capital of the state of North Dakota.