Magic City, on the North Fork of the Red River in west central Wheeler County, developed when oil was discovered in the area in 1926. The name came from the fact that after the discovery, oil derricks multiplied as if by magic. In 1930, after the boom declined, a population of only 150 remained at the community. In 1932 the Fort Worth and Denver Northern Railway arrived, and Magic City became a shipping point for cattle and wheat. The post office, established in December of that year, was originally named Exum, after local pioneer Frank Exum. By 1935 the oil derricks had disappeared almost as quickly as they had appeared because the wells were shallow and easily exhausted. A drop in the price of oil and the discovery of the East Texas oilfield also contributed to this sudden decline. In 1947 the settlement had a school, a church, two stores, and a population of 100. Over the next thirty years the town was gradually abandoned. Its post office closed in 1954, and in 1970 the railroad line through Magic City was discontinued. A year later only the church and one business remained.