Pelly, thirty miles east of Houston in southeastern Harris County, received its name from its first mayor and principal landowner, Fred T. Pelly, a native of London. Pelly and his wife, Lucy (Wiggins), owned a seventy-one-acre tract of land near the Goose Creek oilfield. On his land oilfield workers and their families settled after a number of gas explosions and oil-well fires in late 1916. Unable to buy land because of oil leasing activities, the oilfield squatters became renters, and the new community adopted the typical look of a rough and temporary oilfield boomtown. The original settlement along Tabbs Bay was known as Old Town, and the new inland village became Middle Town (later Pelly) in 1917, after Ross S. Sterling, founder of Humble Oil and Refining Company, began developing New Town a mile north alongside his railroad project. When New Town residents decided to incorporate on January 28, 1919, they took the name Goose Creek and asked for a post office. One night they jacked up and moved by wagon the small frame post office in Middle Town, which had been moved there by residents of Old Town. The move was planned and approved but carried out overnight to minimize business interruption. The story was circulated, however, that New Town "vigilantes" had stolen the post office, and over time the story became legend. Fearing it might be devoured by the new settlement, Middle Town incorporated as Pelly on January 19, 1920. At the time of its incorporation, Pelly had its peak population of 7,500. By 1929 the population dropped to 4,000, due to a decrease in oil production. Those who stayed went to work at the new Humble refinery in nearby Baytown and built a permanent community. Reluctant oil companies and landowners finally sold lots to homeowners and businessmen, streets were laid out, and city services furnished. Pine-boarded, single-walled shacks yielded to neat cottages and brick homes, and timid bond issues built schools and paved streets. The oilfield town gained some respectability through the organization of a housing authority, which cleared a slum and provided low-cost housing to its citizens. The community also built a brick two-story city hall and developed a volunteer fire department.
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