Silver City, a farming community at the junction of State Highway 31 and Farm Road 55, two miles north of Purdon in west central Navarro County, was established before the Civil War. Supposedly, local farmers began referring to the settlement as Silver City after an incident with a German merchant who during the war refused to accept Confederate currency and demanded silver coinage instead. At its height during the 1920s and early 1930s, Silver City included a cotton gin, a church, a gas station, and two stores. In 1940 its population was reported as twenty-five, but it began to decline after World War II, and by the mid-1960s the town consisted of a store, a cemetery, and a few houses. In 1990 Silver City was a dispersed rural community. The population, however, increased to 100 in 2000.