The town was originally called Red Oak Junction, so named in anticipation of the community's being at the junction of north-south and east-west railroads (which eventually it was). The first buildings were erected on the site at the end of the 1850s, and it became the seat of Montgomery County in 1865. Its location at the confluence of the Nishnabotna River and Red Oak Creek meant that adequate water power was available for the operation of mills.
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