BAY CITY, TEXAS. Bay City, the county seat of Matagorda County, is an incorporated city at the junction of State Highways 35 and 60, in the north central portion of the county ninety miles southwest of Houston. The community is named for its location on Bay Prairie, between the richly productive bottomlands of the Colorado River and Caney Creek.
It was established in 1894, when David Swickheimer, a Colorado mining millionaire and participant in a promotional organization called the Enterprise Land and Colonizing Company, formed the Bay City Town Company in partnership with G. M. Magill, N. M. Vogelsang, and Nicholas King. Planning that Bay City would one day supplant Matagorda as county seat, the men selected two cow pastures on Bay Prairie as the site for a new community. The company bought 320 acres from D. P. Moore and another 320 acres from the Mensing brothers of Galveston. One square mile was given to the townsite, on which the promoters laid out wide, regular streets. Elliott's Ferry (see elliott, texas), two miles away, provided transportation across the Colorado River.
In 1901 the Cane Belt Railroad reached Bay City, the first
of several lines to serve the town. Also in 1902 the New York,
Texas and Mexican Railway came into Bay City. Oil was discovered
in the county in 1904, and that year the St. Louis, Brownsville
and Mexico Railway arrived. By 1914 Bay City, with 3,156 residents,
was a thriving community at the center of the largest rice-producing
area in the nation and was served by three railroads: the St.
Louis, Brownsville and Mexico, the Galveston, Harrisburg and San
Antonio, and the Gulf, Colorado and Santa Fe. In 1914 the town
had four cotton gins, three banks, two rice mills, a brick and
tile factory, a nursery, a creamery, an ice factory, a municipal
waterworks, and a large cooling station for fruits and vegetables.
By 1915 residents had built a library, and Bay City Business College
offered the community's first higher education.
Text from the Handbook of Texas Online