The early settlers of the city were German and Dutch immigrants. Founded in 1886, the city was named after the Roman Catholic mission for refugees of the Huron Indians in Canada called Lorette. Interestingly, it was also named after the village of Loretto in Kentucky , where the “Sisters of Loretto at the Foot of the Cross” society was established in 1812. Early businesses in the city included a saloon, general store and a meat market. Incorporation into cityhood was gained in 1940.