John L. Graham, a prominent landowner in the area in 1884 along with his wife and six children lived alongside Jim Ned Creek. In the mid-1890's Mr. Graham offered free land to anyone willing to establish a business to serve the public. In response to his offer, Isham Wright and R.C. Malone constructed a cotton gin and David H. Cole opened a general store and was appointed the town's first postmaster. Tuscola's name was proposed by Dr. C.M. Cash, in honor of his birthplace in Illinois, and the town came into existence as a recognized community on April 6, 1899. Dr. C. M. Cash began a medical practice in the town the same year and this was followed in 1900 by a blacksmith shop opened by W.A. Henderson and later the addition of a school building. By this time, Tuscola had become an important center of activity in the Jim Ned Valley, populated by more than a dozen families along the upper stretches of the east and west forks of the Jim Ned Creek. In 1907, the Abilene Southern had been built through the valley and in 1910, the Santa Fe crossed the valley, both railroads had depots with loading docks and the Santa Fe built stock pens. The Townsite Company gave 5 acres for a school. About 1909 the Pecos and North Texas Railway, a construction subsidiary of the Santa Fe built four new brick buildings in the new town, one of them was the old Tuscola Hotel, which is still here today.