The City of Dalton Gardens was incorporated in 1960 and includes the area from Prairie Avenue south to Dalton Avenue and from Government Way to 17th Street. However, the name and settlement date back to the time of Fort Sherman, when Oscar F. Canfield settled in the area in 1878. The origin of the name Dalton is unknown. Dalton Gardens and Hayden Lake were known for orchards and produce. In the 1920s, a large packing plant was built and the electric line railroad provided freight and passenger service. A severe freeze beginning October 31, 1935, killed all the cherry and many of the apple and pear trees (tons of apples were frozen on the trees). Only a few farmers managed to survive. In 1907 the Spokane and Inland Empire Railroad (the electric line) built a small depot at 4th Street and Hanley Avenue. Passenger service was discontinued in 1929 to 1930; freight service was discontinued in 1937.