Carbon is located on the Middle Nodaway River. This was home to the Pottawatomie, Oto and Iowa Indian tribes, until the treaty of 1851 forced their removal to Kansas or Indian Territory, now known as Oklahoma. The first settler to Carbon was Elijah Walters, who established a sawmill there in 1849. He reported seeing huts and old camp fires but stated that the tribes had moved on, only to see an occasional "red man" appear and look over old camp sites and burial sites, then move on. Elijah built a mill on the Middle Nodaway river that became a great social center of its time.