Old Clayton was established about 1877 by John Cameron and sons 1 mile north of the present site of Clayton. It consisted of the Cameron Store, a post office, and the Seymour Salisbury Hotel. A sod house used for church services was erected in 1879. A Presybterian minister from Oberlin was the first pastor to preach in the sod church. The first school was held in this same sod church. During 1881- 1884 several frame houses were built. E. L. Pease built a store room used as a variety store and later as the Post Office. A well was dug in the center of the main street intersection. During the summer of 1888 the Rock Island Railroad completed the railroad west to Colby. It followed along the south side of the Prairie Dog Creek. It was considered advantageous to move Old Clayton south to the railroad in the Prairie Dog valley. The plat for the new town of Clayton was filed on March 7, 1888 by the Kansas Town and Land Company, M. A. Low, president, on land purchased from John Pathamor. The first residence was built by John Diemer, Sr., a section foreman. The second house was built by Frank and Robert Vessey and used for a time as a boarding house and hotel. Seymour Salisbury built a large square hotel which was a popular hostelry for several years. The first store building was erected by Frank Castle and Dr. John W. Thomas. One side was used for hardware and the other side for drugs. Hebrew and Hebrew operated the first general store and Mr. McKee the first bank. L. B. Hixon opened a blacksmith shop. E. L. Pease moved the post office from Old Clayton. A United Brethren Church and also the first school building in New Clayton was erected in 1889. Businesses in Clayton in 1916 included G. W. Bressler Real Estate and Insurance; Clayton Co-Operative association, N. G. Kelley Mercantile; Dr. Don Smith, physician & druggist, oculist and aurist; B. Rowh, harness shop; Perry Norris, photographer; J. O. Murry, hotel and livery; Harley Greenlee, barber; F. A. Rice, restaurant; J.E. Rule, grain & coal; W. C. Bracken, grain & livestock; Chicago Lumber & Coal, managed by Vern Yount; The State Bank of Clayton, Jake Brooks, president; and Eakin Brothers, Pioneer Store (general mdse). Clayton was incorporated as a city of the Third Class on February 4, 1907. Clayton's population in 1941 was 124.