Tow, which is the oldest community in Llano county, began with the arrival in 1852 of David and Gideon Cowan and their mother, Ruth, originally from Tennessee. The Cowans were directed by local Indians to a salt bed near the Colorado River, which they developed into a successful saltworks. Significant not only in the local economy, the Bluffton-Tow Salt Works was also known as the Confederate States of America Salt Works for its contribution to the Confederate cause. The operation was destroyed by the "salt works cyclone" in 1871. John F. Morgan arrived in the area with his family in 1853 and soon established a hat business, using beaver and other fur trapped locally. When the Tow brothers, William and Wilson, arrived with their families in 1853, they named the nearby area in which they settled Tow Valley. A post office was established there in 1886 as Tow with Mathew B. Clendenen as postmaster. Tow grew rapidly in the 1970s and 1980s with the addition of retirement and recreation to its economic base. From a population of 50 before 1950, the lakeside town had grown to 305 by 1974, when it had a post office and numerous businesses. In 2000, the population was still 305; 31 businesses were reported.