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The Dakota Land Boom, Statehood, and Agrarian Reform
Although gold did not make the fortune of South Dakota, it laid the foundation by stimulating cattle ranching : herds of cattle were first brought to the grasslands of W South Dakota partly to supply food for the miners. Settlement in the east also increased and the period from 1878 to 1886, following the resumption of railroad building after the financial depression earlier in the decade, was the time of the great Dakota land boom, when the region's population increased threefold.
Agitation for statehood developed; in 1888 the Republican party adopted the statehood movement as a campaign issue, and in 1889 Congress passed an enabling act. The Dakotas were separated; South Dakota became a state with Pierre as capital. Disasters, however, rocked its security. The unusually severe winter of 1886–87 had destroyed huge herds of cattle in the west, ruining the great bonanza ranches and promoting among the ranchers the trend : dominant ever since : of having smaller herds with provisions for winter shelter and feeding. Cattle grazed on public land and were rounded up only for branding and shipment to market.
Recurrent droughts added to the difficulties of the farmers, who sought economic relief in the cooperative ventures of the Farmers' Alliance and political influence in the Populist party, which won a resounding victory in 1896. Initiative and referendum were adopted (1898; South Dakota was the first state to adopt them) and other progressive measures of the day were enacted. However, prosperity resumed, and with it South Dakota quickly returned to political conservatism and the Republican party.
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