Terrell, the largest city in Kaufman County, was founded in 1873 when C. C. Nash and John Moore purchased land along the route of the Texas and Pacific Railway between Longview and Dallas. Named for Robert Terrell, an early settler and landowner, the town thrived from its railroad connections, attracting agricultural industries to serve the area’s Blackland Prairie farms. In 1885, the North Texas Lunatic Asylum (now Terrell State Hospital) began operations northeast of the town to supplement the state’s only other psychiatric treatment facility in Austin. In 1892, the Houston and Texas Central Railroad was purchased by Hetty Green of New York, whose son, Edward H. R. Green, renamed it the Texas-Midland Railroad and completed an extension from Terrell to Paris. Terrell was selected by Green as the headquarters and maintenance base for the newly expanded railroad, assuring the city’s economic preeminence over the nearby county seat of Kaufman.
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