The following history of McDade is taken from The New Handbook of Texas published by The Texas State Historical Association.
McDade, on U.S. Highway 290 eight miles southeast of Elgin in northern Bastrop County, was established in 1869 in anticipation of the arrival of the Houston and Texas Central Railroad. Two years later the first train reached the site, and the town was officially platted and named after James W. McDade, who lived in Brenham. In its early days McDade was also called Tie City or Tie Town. Two explanations for the name are given, the first being that ties and logs cut for the railroad were gathered at the site. The other story is that it was known as Tie City because of its status as a regional freight and cotton shipping center.
The first business in McDade was a tent saloon, where a tin cup of whiskey sold for 10 cents. With the coming of the railroad McDade became a shipping center for cotton and freight going to and from Austin, Bastrop, and Smithville. By the time the town was incorporated in 1873 it had a post office, a cotton gin, and a twelve-member Baptist congregation. The next year the first school was established. In 1879 McDade was called a "thriving depot town" of 150 people, but following the Civil War lawlessness and violence in the area had become a serious concern. The area was a stronghold for a group of outlaws known as the "Notch Cutters," and county law enforcement was far away and ineffective. By 1875 local citizens took the law into their own hands and hung two suspected outlaws, provoking retaliation with the murder of two vigilantes, which led to the hanging of a third outlaw. Early in 1876 two men were caught with a skinned cow, and the skin showed the Olive brand. Both men were shot on the spot. Five months later 15 men, believed to have been led by the son of one of the men shot, attacked the Olive ranch headquarters, killing two men of the ranch and burning the ranch house. On June 26, 1877, vigilantes stopped a dance, took four men out and lynched them. For five years after there was little crime or trouble. However, in November 1883 two men were murdered in Fedor, and in a separate incident another man was beaten, robbed and left for dead. Shortly afterward the deputy sheriff investigating these crimes was shot to death in McDade. A vigilante committee hung four of the suspected perpetrators. But the violence continued with the McDade Christmas hangings on Christmas Eve 1883, when three more suspected outlaws were executed. This event led to a gunfight in front of a McDade saloon on Christmas Day that left three more men dead. This ended the vigilante "justice," but violence and gunfights continued until 1912.
McDade had a district school and a church in 1884. It also had a thriving broom factory, which employed ten workers in 1881, the first year of operation. Matthew Dunkin started a pottery called Randolph Factory east of Bishop. When he died Milton Stoker moved it to McDade to be near clay deposits. In 1890 Robert L. Williams became owner, and he and his son operated the business until World War II. Called McDade Pottery, it caused the town to become well known throughout the state. Williams also invented and patented a charcoal cooker that became a large seller.
There were also several coal mines in the area, and the coal was used by local businesses. In 1890 the McDade Mentor, a weekly newspaper, was founded, and the population stood at 250. Six years later the town had 400 residents, a graded school, and Baptist, Christian, and Methodist churches, as well as businesses that included two blacksmiths, two milliners, and two doctors. McDade reached a population of 500 by 1914 and 600 by 1925. By the 1930s, though, the community was declining. McDade Pottery closed during World War II. In the mid-1950s the town's population fell to 220, and the four-block business district was reduced to less than a block. However, the town remained an agricultural center particularly noted for the melons produced in the surrounding sandy soils. By the late 1960s the population had taken a turn to 300, and in the mid-1970s it moved to an estimated 345, where it stabilized through through 1990. In the mid-1980s McDade remained a primarily agricultural community with two rated businesses. The population remained at 345 in 2000, but the number of businesses had increased to 26.
Bastrop Historical Society, In the Shadow of the Lost Pines: A History of Bastrop County and Its People (Bastrop, Texas: Bastrop Advertiser, 1955). Luckett P. Bishop, Sr., "Shootout on Christmas Day," Frontier Times, July 1965. Mary Ficklen, "McDade's Christmas Murders," Cattleman, December 1967. Bill Moore, Bastrop County, 1691–1900 (Wichita Falls: Nortex, 1977).