On March 4, 1881, the Pensacola and Atlantic Railroad was incorporated by an act of the Florida Legislature. The purpose of the act was to construct a 70-mile road from the northwest corner of Florida, near Flomaton, Alabama, where it would join the trackage of what started as the Pensacola and Selma Railroad. This was later in the control and ownership of the Louisville & Nashville, to a connection with the existing Seaboard.
Along with the charter, the State of Florida granted to the P & A four million acres of land. It actually took title to 2,830,065 acres extending from fertile cotton country of what is now Escambia, Santa Rosa, Okaloosa, Walton, and Holmes Counties into the more rugged and wilder country of Washington and Jackson Counties.
Colonel Chipley, in an address delivered in 1896, noted that he had been a member of the 1881 surveying party and that they had camped on the shore of a large pond in Walton County. Being enamored of the spot, Chipley ordered that the area be preserved and that a station be built there.
With the establishment of the station of Lake DeFuniak people moved up from Euchee Anna and Alaqua and built homes near the lake. The Town quickly grew from a hundred or so inhabitants in 1887, to approximately 800 in 1890, to 900 in 1893 - a growth rate of about 25 percent per year.
The L & N actively promoted and advertised the Chautauqua Lotus Land and the Town. It offered low cost round-trip fares from such northern cities as Cincinnati for $30.55, St. Louis for $30.05, Louisville for $29.25 and Nashville for $22.50.
The L & N railroad is now known as CSX Transportation. The City of DeFuniak Springs is the current owner of the refurbished depot station. The depot is now used as a museum.