Matador was the designated county seat when Motley County was organized in 1891. The county was named for Dr. J.W. Mottley (name was misspelled in the law), signer of Texas Declaration of Independence who was killed at San Jacinto. The city was named for the Matador Land and Cattle Co., originally organized in 1882 by a Scottish syndicate. The area was founded and settled by cowboys of the Matador Ranch. The historic ranch house, with 26 rooms, was built in 1918 using native rock at a cost of $26,000. It is not open to the public. Today, the local economy is still based on livestock, cotton, wheat and grain sorghum.
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