Palacios: A Rice Townsite That Became a Texas Shrimp Port
The Handbook of Texas traces Palacios from a 1902 rice-company townsite on Tres Palacios Bay to a Gulf shrimp and seafood port, later near the South Texas Project.
Palacios is a Matagorda County town on Tres Palacios Bay, an arm of Matagorda Bay, along State Highway 35 in the county’s southwestern corner, roughly midway between Houston and Corpus Christi. That geography, and most of what follows, comes from the Handbook of Texas entry by Mary L. Griffin, last revised April 24, 2019.
Tres Palacios is Spanish for “three palaces.” One story, which the Handbook labels apocryphal, has sailors from a wrecked Spanish ship mistaking something on the shore for palaces that vanished as they drew near. The bay and the Tres Palacios River are instead thought to take their name from José Félix Trespalacios.
From a cattle pasture to a planned rice town
The Handbook places the future town, in 1901, on a bull pasture then being sold by the estate of Abel H. “Shanghai” Pierce. The Texas Rice Development Company acquired the property and cut it into 160-acre farms. A subsidiary, the Palacios City Townsite Company, sold a square mile on the bay at Hamilton Point. Lots were surveyed in 1902 under the name Trespalacios. A nearby post office already used Tres Palacios, so the new place was renamed Palacios. The developers paid a bonus to get a Southern Pacific branch extended to the site.
A post office, a first church, settler excursion trains and Hotel Palacios all arrived in 1903, the entry says. The next year a pavilion went up on a T-shaped pier at the south end of town, beside the hotel, with bathhouses and room for swimming, dancing, fishing, picnics, skating and dominoes. Fish and oyster houses opened, and fishing was still a significant local trade into the 1990s, according to the Handbook. Promoters sold the climate for peaches, figs, oranges and truck crops. Cotton mattered in the early years; rice was being grown nearby by 1910.
The townsite company deeded thirteen acres on Hamilton Point to Baptists on the condition that the Baptist Young People’s Union hold its encampment there. The first gathering was in 1906. By 1915, the Handbook says, Palacios had about 2,000 residents, more than 100 businesses, a weekly paper called the Beacon, and Baptist, Methodist, Presbyterian and Lutheran churches. A Texas National Guard training camp opened in 1926 as Camp Palacios and was renamed Camp Hulen in 1930, for John A. Hulen, who commanded the Thirty-sixth Infantry Division.
Neighbors’ factories, a shrimp fleet, and a Depression-era seawall
Writing as of 1990, the Handbook said Palacios itself had not developed heavy industry, but had grown because large plants were close by: Aluminum Company of America in the 1950s, Celanese Chemical Company in the 1960s, and the South Texas Nuclear Project — later the South Texas Project — in the 1970s. The nuclear plant had more than 10,000 workers in 1985, the entry says, and more than 1,000 permanent jobs remained after construction. The plant sits inside Palacios Independent School District. In 1989, the Handbook said, that district served 1,700 students and drew tax revenue from the plant.
In 1990, according to the same entry, marine work and seafood processing were the largest local industry, with plants sending fresh and frozen shrimp and crabmeat around the country. At that time the area included what the Handbook called the largest blue-crab-processing plant in the United States and the only instant-individual quick-frozen shrimp plant on the Texas coast. Those are 1990 descriptions, not a claim about conditions today. Agriculture ranked second then, with cattle, rice, maize, cotton, soybeans, corn and turf. Oil and gas were part of the mix, and aquaculture was described as the newest line of work. Matagorda County Navigation District No. 1, based in Palacios, had three turning basins that in 1990 were home port to about 380 vessels and sixteen seafood firms, with access to the Matagorda Ship Channel, the Gulf Intracoastal Waterway and the Gulf of Mexico.
A seawall built in 1935 had, by the time of the Handbook’s account, been repaired, leveled and capped, with sidewalks, guardrails and nighttime lighting along the shore. The entry’s population table lists 2,802 people in 1930, 2,288 in 1940, 2,799 in 1950, 4,418 in 1990, 5,153 in 2000, 4,718 in 2010 and 4,395 in 2020. A mid-1930s narrative figure of 2,288 matches the table’s 1940 count, not a separate 1930s census line; the table is used here.
The Handbook describes Palacios as an incorporated city with a mayor-council government. The city’s official Mayor and Council page lists City Hall at 311 Henderson, Palacios, Texas 77465, phone 361-972-3605. Regular council meetings are on the second and fourth Thursdays at 6 p.m. in Council Chambers at that address.
Related reading: Port Lavaca: The Bay Town That Outlasted Indianola.
