Happy, on U.S. Highway 87 in northern Swisher County, derived its name from nearby Happy Draw, so named because cowboys were elated to find water there. In 1891 Hugh Currie established a homestead and post office on the trail by the draw, and a stagecoach exchange station also operated at this location. In 1906 the Santa Fe Railroad extended its line south from Canyon and bypassed Happy. Promoters laid out a town by the tracks two miles to the west, and their efforts attracted settlers from the Midwest. At the new site, Plains Lumber and Grain Company was the first business to be established, J. F. White opened the first general store, and the Happy News began publication. By 1907 the post office had been moved to the new town, and a one-room dwelling had been rented for the first school. The First State Bank of Happy was chartered in 1908. Telephone service was ushered in, originally from a switch at the Currie farm and later from a telephone exchange in town. The first brick building was Mose Wesley's auto repair shop, erected in 1913. In August 1925 Happy was incorporated with P. J. Neff as mayor and Tom Bandy and William F. Miller as commissioners. During the 1920s new school facilities were built and a volunteer fire department was organized. By 1940 the town reported a population of 576, and two grain elevators constituted the skyline. In 1984 Happy had a population of 674 and twenty-seven businesses, most of them related to farming. The number of businesses dropped to fourteen and the residents to 588 by 1990. In 2000 the population had increased to 647, and there were forty-eight businesses in the town. Happy uses the slogan "the town without a frown."