Thomas Bean, a wealthy Bonham landowner and surveyor, donated fifty acres of land in southeast Grayson County to be used for a branch railroad line from Sherman to Commerce. Bean died in 1887; in that year the city of Tom Bean was established. Nearby Whitemound, which was bypassed by the railroad, lost its post office to Tom Bean's city in 1888; many Whitemound settlers moved to the new town. Mr. Bean's estate began to sell town lots surrounding the railroad in the 1890s. The city school was moved in 1891 from a one-room structure to a two-story building with an auditorium. Several Christian denominations, including the Church of Christ, Baptist, Presbyterian, and Methodist, established churches in town. The city charter was signed in 1897 and the first mayor was Ice B. Reeves.