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This city was named after U.S. Highway 411, called Rainbow Drive, which runs through the middle of the city. Some of the older citizens say it was named after the US 42nd Infantry Division, known as the "Rainbow Division".
As early as 1818, families from the Carolinas and Georgia began to migrate to the area and homestead land near the Coosa River. Hernando de Soto's troops were the first visitors to the area in 1540, and today a bridge stands where the Pensacola Trading Path crossed the Coosa River. A paved highway now traces the trail that was cut from Nashville to Horseshoe Bend by Andrew Jackson on his way to fight the Creek Native Americans in what is now known as the Battle of Horseshoe Bend.
Originally called "Coosa Bend", the area was later called "Morgan's Cross Road". It was located at the intersection of the Gadsden-Ashville Road and Gilbert's Ferry Road. The land was passed from Edmond Jones to his son Clayton, who never married. When he died, the land passed to his sister, Luvica Morgan, who was also the wife of William Morgan.
Knowing the importance of education, John Sheffield Jones, the grandson of Edmond Jones, an original settler, donated $1,000 and the land for the construction of the first John S. Jones Elementary School. Later, John S. Jones burned to the ground and a new elementary school was built and serves the Rainbow City area today. Rainbow Middle School and the Westbrook Christian School, also serve the Rainbow City students today.
On Saturday, April 2, 1831, a church was organized at the Harmony Meeting House. Thomas Morgan served as the first pastor. A few years later, the first Baptist association was organized by Rev. John Gilliland. Harmony was one of the first five members in the association. The adjoining cemetery, Old Harmony Cemetery, has been declared a historic landmark. This cemetery has black and white slaves buried in it, Native Americans, single and double interment, and most of the tombstones have poems and writings on them. They say one man is buried crosswise because he lived crosswise with the world.