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Snyder was founded in 1881 as a stop on the Texas and Pacific Railway. It is named for John R. Snyder, who owned most of the town site at that time. The city was incorporated in 1884; by 1890 it had a population of 1,000 and several businesses including two hotels, three general stores, two drugstores and four saloons. By 1900 its population had grown to 2,500; by 1910 it reached 3,400 (including 300 African Americans). The discovery of oil nearby caused another boom period during the 1920s when its population grew to 7200 people with 75 businesses operating within city limits including five banks which were located along Main Street between First Street (now Avenue A) and Fourth Streets where they remain today as part of what is now known as "Old Town".