Located at the Great Falls of the Contoocook River, which drop over , Bennington provided water power for mills. The first gristmill was built in 1782, with a cotton mill in 1810. A tannery and tool manufacturing industry would follow. A factory with paper-making machinery was established in 1835, located at or near the site of the present-day Monadnock Paper Mill. In 1858, the town's industries included a cutlery manufacturer, a gristmill, two paper mills and a sawmill. Bennington also had quite a number of farms.