The town was proclaimed in 1878, the year the railway line from Adelaide via Kapunda was opened, and was named at that time after Sir William Morgan, then Chief Secretary, later Premier of South Australia. A large wharf was built, and Morgan, being the railway terminus (hence the name of a local hotel), became one of the busiest ports on the Murray. It handled nearly all the goods that were being imported and exported (particularly wool) to and from a vast region upstream from Morgan along the Murray and Darling rivers. At its peak, Morgan was the second busiest port in South Australia (behind only Port Adelaide), with six trains a day carrying freight from the Murray to the sea at Port Adelaide. As road transport improved through the early part of the 20th century, river transport declined. The railway to Morgan finally closed in 1969.