In 1878, Tom Mullen, along with a man named S.M. Simpson from Lawrence, Kansas laid out a townsite and when it gained a post office on July 2, 1878, it was called Terra Cotta, meaning “colored earth” for the red clay in the surrounding hills. In 1885, large stockyards were built at Terra Cotta and between 1886 and 1912, more cattle were shipped from Brookville and Terra Cotta than from any other place between Kansas City and Denver. But, Terra Cotta’s life would be short. In 1887, a prairie fire swept through the area and burned down the hotel. The following year, a recession hit and several families and businesses left. The elevator was moved to Shady Bend, in Lincoln County, some 30 miles to the north. Mr. Bliss moved his Blacksmith Shop to Venango, about nine miles south of Terra Cotta, Mr. Fletcher moved his grocery store to Kanopolis, and Tom Mullen ceased a large part of his clay operations.
By the early 1890s, almost all the businesses had left. However, the post office remained open and Mrs. Tom Mullen became postmaster in 1897, running it until it was discontinued in 1913. In 1889, though the businesses were gone, the Union Pacific Railroad built the new Terra Cotta Depot. By 1910, there were only 20 people living in the town and on March 31, 1913, the post office closed its doors forever.
Though Terra Cotta showed much promise, the town was short lived and today, nothing is left of the old townsite except the railroad tracks. The 1900 depot now stands in Ellsworth as part of the Hodgden House Museum complex.