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The bay's name comes from the Noquet (or Noc) Native American people (thought to have been related to the Menominee of the Algonquian language group), who once lived along the shores. Douglass Houghton came to Sand Point (in Escanaba) in 1844 with his party of government surveyors to chart the land to the north.
Escanaba has a deep harbor, which made it a lumbering center. The first sawmill was built there in 1836. The bay also shipped iron ore from the rich iron ranges in Michigan's upper peninsula, with the first ore dock built at Escanaba in 1864. Escanaba was incorporated in 1866. A bit further north, Gladstone was founded in 1887 by U.S. Senator from Minnesota, William D. Washburn, to serve as a rail-lake terminal for lumber products.