Carlsbad, on U.S. Highway 87 in the North Concho valley fifteen miles northwest of San Angelo in northwestern Tom Green County, began in 1907, when T. J. Clegg, Ed Perry, and others organized the Concho Land Company and purchased the 60,000-acre Hughes Ranch. They divided the land into lots, laid out a townsite, built a hotel, named the town Hughes, and advertised free land to anyone who purchased a farm tract. The surrounding area was settled by farmers from Illinois, Indiana, Kentucky, Missouri, and Tennessee. Within two years the land company had attracted a population of 600. Growth was stimulated after the drilling of a deep well revealed medicinal properties in the local water; a bathhouse and efforts to advertise the town as a health resort resulted. The community was required to choose a new name for a post office in 1908. Residents selected Karlsbad, after a spa in Bohemia. The Hughes Headlight, first published in 1908, was renamed the Carlsbad Headlight. Around 1910 the Panhandle and Santa Fe Railway established a spur to Carlsbad, but a three-year drought decimated the community and most residents moved away. By 1914 the settlement was reduced to 200 residents and a general store. The population declined to 150 by 1925, then rose to 400 by 1932, when the community had eleven businesses. The local school had four teachers in 1931 and an enrollment of eighty-four in 1933. The Great Depression reduced the population to 150 by 1934, but growth resumed, and by 1944 the population reached a high of 700. State highway maps in 1936 showed three churches, a post office, two stores, and scattered dwellings at the townsite on the Gulf, Colorado, and Santa Fe tracks, near a mining operation. After World War II the Carlsbad freight station served a local pipe line and cattle shippers; the McKnight State Sanatorium was established in 1950 on acreage to the north donated by the land company. From 1950 to 1972 the population declined to 100, where it remained through 2000. In the 1980s Carlsbad had five churches, a post office, several businesses, and multiple dwellings. By 1990 only two businesses remained, but in 2000 Carlsbad reported thirteen businesses.
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