The forerunner of Cayuga was a settlement called Wild Cat Bluff. It was located along the Trinity River, which served as a shipping point for area farmers. In 1894, the postmaster named the town Cayuga in memory of his hometown in New York. He operated a steam barge on the Trinity River for several years. G. W. Tuggle and his wife donated land for the first community school in 1860. Cayuga was a small farming community until 1934, when oil was discovered. Cayuga became an oil boomtown and its population increased to 1,000. World War II arrived and Cayuga was back to less than 200 residents.
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