BAILEY, TEXAS. Bailey is on State highways 11 and 78 eleven miles south of Bonham in south central Fannin County. Settlement began in the late 1850s, when farmers moved into the area to take advantage of the rich blackland. Cotton and corn became the principal agricultural products. As the community developed, two prominent residents competed to have it named after themselves. Doctors Josiah S. Bailey and A. J. Ray owned land that was to become the townsite. The quarrel between the two men ended in 1885, when the St. Louis Southwestern Railway used the land donated by Bailey for its right-of-way. Two years later a post office branch opened. The railroad stimulated twenty years of economic growth. By the early 1900s Bailey had 300 residents, two churches, a school, a bank, a hotel, one of the few picture shows in the county, and a dozen businesses.