Derby is on the Missouri Pacific line at the intersection of Interstate Highway 35 and Farm Road 1583, nine miles southwest of Pearsall in south central Frio County. Englishman John Bennett, an engineer for the International-Great Northern Railroad, moved to the site in 1879 and helped manage the construction of the I-GN extension through Lenore from Melon to the Mexican border in 1882–83. In 1882 a post office called Lenore was established in the developing community. The post office and a rail depot at the site on lands owned by Bennett were eventually renamed Derby in honor of his English birthplace. In 1883 Bennett constructed a dam, known as Derby Dam, in the area, and shortly thereafter he had a town surveyed into lots, including lots for a church and a school. Sometime before 1885 he expanded the depot with a spur for loading vegetables and changed the name of the community to Otley, in honor of his wife's home in England. By 1906 the community was again called Derby and had several schools with a total of three teachers and fifty-five students. Derby was an emerging farming center in 1935. Eight large artesian wells in the community were used to irrigate fields of cotton, as well as onions, spinach, carrots, beets, and a variety of other vegetables. In 1936 the community had an estimated population of fifty, three businesses, and a church. No businesses were reported in Derby by 1971, though its population remained an estimated fifty. In the early 1990s its population was still reported as fifty and the Derby Cemetery was located southeast of the townsite. The population remained at fifty in 2000.
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