Differences arose among the directors over where to build the new fairgrounds. Gaston proposed property in East Dallas, an 80-acre tract located within the modern boundaries of Fair Park. Strong opposition was voiced by C.A. Keating, speaking for the farm implement dealers. When no compromise could be reached, Keating and his supporters secured a charter for a separate event, the Texas State Fair & Exposition, which they announced would open just north of town on Oct. 25 – one day ahead of the Dallas State Fair.
Exhibit facilities and a racetrack were built at each location, and both events attracted sizable crowds that fall. Attendance at the Dallas State Fair was estimated in excess of 100,000. But revenues for the fairs failed to meet expenses. The rival associations merged in 1887 becoming the Texas State Fair & Dallas Exposition. Despite indebtedness of more than $100,000, the directors voted to expand the fairgrounds by purchasing 37 acres adjacent to the East Dallas site.
The finest racing stock, cattle sales, concerts, balloon ascents, displays of farm machinery, contests for the ladies and appearances by such notables as John Philip Sousa, William Jennings Bryan, Carrie Nation and Booker T. Washington brought thousands of Texans to the Fair each year. But the popular success of the exposition was shadowed by repeated fires, mishaps and mounting debt. A grandstand collapsed during a fireworks show in 1900, and the main exhibit building burned to the ground two years later. When the Texas Legislature banned gambling on horse races in 1903, thereby eliminating the Fair’s main source of income, the association faced a financial crisis. To protect this valuable community asset, the Texas State Fair spurned offers from developers and sold its property to the City of Dallas in 1904 under an agreement that set aside a period each fall to hold the annual exposition.