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In 1751, Robert Harper was given a patent on 125 acres at the present location of the town. In 1761, Harper established a ferry across the Potomac making the town a starting point for settlers moving into the Shenandoah Valley and further west. In 1763, the Virginia General Assembly established the town of "Shenandoah Falls at Mr. Harper's Ferry."
George Washington, as president of the Patowmack Company (which was formed to complete river improvements on the Potomac and its tributaries), traveled to Harper's Ferry during the summer of 1785 to determine the need for bypass canals. In 1794, Washington's familiarity with the area led him to propose the site as the location for a new federal armory and arsenal. Some of Washington's family moved to the area; his great-great nephew, Col. Lewis Washington, was held hostage during Brown's raid. The United States Armory and Arsenal was established in the town in 1799 and the town was transformed into an industrial centre. Between 1801 and the outbreak of the American Civil War in 1861, the Armory produced more than 600,000 muskets, rifles, and pistols. The inventor John H. Hall pioneered the use of interchangeable parts in firearms manufacture at his Rifle Works in the town between 1820 and 1840.
The Civil War was disastrous for Harper's Ferry. Given the town's strategic location on the railroad and at the northern end of the Shenandoah Valley, both Union and Confederate troops moved through Harper's Ferry frequently. In fact, the town changed hands eight times between 1861 and 1865.
According to the United States Census Bureau, the town has a total area of 1.6 km² (0.6 mi²). 1.5 km² (0.6 mi²) of it is land and 0.2 km² (0.1 mi²) of it is water. The total area is 9.68% water.
As of the census of 2000, there are 307 people, 153 households, and 89 families residing in the town. The population density is 211.7/km² (552.2/mi²). There are 189 housing units at an average density of 130.3 persons/km² (339.9 persons/mi²). The racial makeup of the town is 89.90% White, 9.12% African American, 0.33% Native American, 0.00% Asian, 0.00% Pacific Islander, 0.00% from other races, and 0.65% from two or more races. 0.65% of the population are Hispanic or Latino of any race.
There are 153 households out of which 17.6% have children under the age of 18 living with them, 45.1% are married couples living together, 11.8% have a woman whose husband does not live with her, and 41.8% are non-families. 36.6% of all households are made up of individuals and 9.8% have someone living alone who is 65 years of age or older. The average household size is 2.01 and the average family size is 2.56.
In the town the population is spread out with 17.3% under the age of 18, 2.0% from 18 to 24, 28.0% from 25 to 44, 30.9% from 45 to 64, and 21.8% who are 65 years of age or older. The median age is 47 years. For every 100 females there are 90.7 males. For every 100 females age 18 and over, there are 92.4 males.
The median income for a household in the town is $52,344, and the median income for a family is $70,313. Males have a median income of $45,417 versus $22,708 for females. The per capita income for the town is $29,638. 2.2% of the population and 3.2% of families are below the poverty line. Out of the total people living in poverty, 2.8% are under the age of 18 and 0.0% are 65 or older.