[4] The area around present-day Walden was purchased in 1736 by Alexander Kidd, and settlers of Scots-Irish, English and German descent started arriving not long afterwards.

[4] He convinced some of his business partners to finance the construction of wool mills on the river, attracted by the Great Falls as a source of power and the railroad connections at nearby Maybrook.

[citation needed] He dammed the Wallkill above the falls, creating a power station that remains in use today, and his mill was a success.

[4] Most of Walden's wool industry failed a few decades after it began, and people in the village sought to replace the mills with a different source of employment.

[citation needed] The village began encouraging knife manufacturers to relocate from nearby Dutchess County to vacant mills.

[citation needed] In the early 1890s, President Grover Cleveland lowered tariffs on many imported goods, including knives.

[citation needed] Competitively priced German cutlery began to flood the American market, and together with the Panic of 1893 and the economic slowdown that followed for several years, the knife companies and their owners went heavily into debt and it looked for a while as if they might not survive.

[citation needed] The knifemakers returned to profitability and were able to pay off their debts; and in gratitude Bradley had a statue of McKinley erected that remains in Walden today.

[citation needed] Walden's Main Street was the site of an active retail trade which included Millspaugh's Furniture as well as Roosa's Jewelers, both still in business.

[citation needed] However, after World War II they gradually became less prominent and moved as the rail connections they had depended on were replaced by trucking on the growing Interstate Highways.

Within the eastern portion, Tin Brook, the Wallkill's major right tributary in New York, meanders across as well, forming part of the northern village boundary.

Walden's growth began near the mills and later the knife-making plants, particularly the New York Knife Company, located on the steep east bank of the river just south of the Veterans' Memorial Bridge; the building's footings are still visible on the slope.

East Main Street, the section of 52 from the 208 junction to the village line, has seen many newer businesses locate there, including a small strip mall.

There is also some scattered commercial presence along Orange Avenue (208 south of the junction), primarily professional office space.

This parallels the village's remaining industrial presence along the railroad line to the east, which at its northern terminus abuts downtown to the southeast.

Much of the remainder of the village is residential, with houses tending from modest and small near downtown, the river and railroad, to more expansive homes (such as the Victorians along the west side of Ulster Avenue) being found on the hills, newer development near the southwestern and eastern borders with the town, and 6 small apartment and townhouse complexes.

A small area between McKinley Avenue, South Mountgomery Street and the river remains open, used for NYSEG's purposes.

He located his manufacturing facilities in Walden to serve the district steam heating loops in the northeast, especially ConEd in New York City.

The opening of Thruway Markets in 1955 filled the need not only for a supermarket but the entire big box sector, long before it existed in the country at large.

While it eventually drove smaller stores from Main Street, it remains a substantial part of the village's tax base and a major draw for consumers from outside not only Walden but the Town of Montgomery (particularly the nearby hamlet of Wallkill, which has no large retailers of its own), despite the openings of chain supermarkets in several nearby communities.

The Thruway complex also boasts an outdoor-recreation store, tire-repair shop and the oldest of the village's three Chinese restaurants.

Millspaugh Furniture, founded in Walden (but with another outlet in Poughkeepsie), is another popular draw for out-of-town shoppers due to its long history in the area and reputation for quality merchandise.

The nearby interstate and its associated "Golden Triangle" (with the New York State Thruway/I-87 and NY 17 (the future I-86) provide many jobs in transportation and distribution, particularly at Maybrook's Yellow Freight facility and the large Staples warehouse just north of I-84.

More recently, residents of the newer housing have been commuters traveling to jobs in New York City or other areas close to it.

Route 52 crosses the town from east to west, providing connections to Newburgh, 12 miles (19 km) in the former direction and Pine Bush, the Shawangunks and the Catskills in the latter.

The remaining spur of the old Wallkill Valley Railroad, now operated by Norfolk Southern, serves several businesses in the village and ends just short of East Main Street.