Known for its fertile ground, Paoli was originally established in August 1887 but was not officially incorporated until August 6, 1929. Even then, the move was controversial; in 1931, a lawsuit was filed in court requesting that Paoli's incorporation be overturned. A trial followed, and a decision upholding the incorporation was handed down on March 26, 1931.
The early homesteaders dug wells, built windmills, and took advantage of the rich native grass to raise small herds of cattle. Over the years, the town also weathered several floods caused by runoff from Frenchman Creek.
Paoli was officially named by one of the railroad’s Chief Engineers after the Corsican/French patriot Pasquale Paoli (who also lent his name to Paoli, Pennsylvania).
However, colorful local lore offers a different story: it says the town was named after a Swedish tracklayer named Ole. Following a heated argument with his supervisor, Ole allegedly stormed into the timekeeper’s office and shouted, "I quit, pay Ole!"
In 1908, a railroad line known as the “Highline” was built from Sterling, Colorado, to Holdrege, Nebraska. With towns springing up every 8 to 10 miles along the tracks, a wooden shed, stockyard, and small siding were soon built south of the rails in Paoli. Initially, a simple boxcar was set off the main track to serve as a depot.
The Highline train passed through Paoli twice a day—once from the west at 9:00 AM and again from the east at 4:00 PM. Later, a permanent two-story depot was built; the station agent lived upstairs, while the downstairs housed his office, a waiting room, and freight storage. Livestock—including cattle, hogs, and sheep—was regularly shipped from Paoli to major markets in Omaha and Chicago.
The Post Office & Stores: In 1909, C.J. Peters ran a general store and post office. The post office originally opened in 1888, closed in 1890, and reopened in 1910, serving the community ever since (including a stint inside the Koerner Store south of the Co-op elevator). Cole & Co. opened a general store in 1916, which later transitioned into a hotel.
Local Commerce: Newell Porter opened a blacksmith shop, and the Central Lumber Company arrived in 1910. The Paoli Grain and Trading Post opened in 1916, and the Paoli State Bank was established, which later served as the Town Hall.
Entertainment & Power: From 1912 to 1979, Harry Johnson ran a billiard hall and restaurant. Because Johnson owned the first power source in town, the single electric streetlamp in Paoli was located right in front of his pool hall.
By 1917, Paoli's population peaked at around 300 people. The bustling community boasted three grain elevators, two creameries, an implement store, a hardware store, a land office, a telephone company, and a community building. Two churches were also established: the Presbyterian Church in 1917 and the Trinity Methodist Church in 1918. The very last traditional business in town closed its doors in 1976.
Before modern utilities, Tom Guernsey owned a well, a windmill, and a livery near the center of town. He regularly filled a galvanized water tank fastened to the running gears of a wagon and delivered water to local residents for 50 cents a load.
On warm summer days, town children would run barefoot behind Tom’s wagon, playing in the cool water that splashed over the sides. Tom’s property also served as a vital watering stop for farmers hauling goods into town.
Several country schools originally operated in the surrounding area:
Sunnyside School: Located 3 miles south and 1 mile west of town.
Broadway School: Located 3 miles south and 1 mile west of Paoli.
Wild Duck School: Located 2½ miles north of town.
In 1918, a three-room schoolhouse was built in the southern part of town, which temporarily served as a two-year high school. The final local school closed its doors in 1960.
As automobiles grew in popularity and the need for better roads arose, U.S. Highway 6 was established, officially routing traffic through Paoli in 1933.
Paoli as listed in the 1911 Business Directory
Post office in Phillips county and station on C., B. & Q. Ry., 40 miles northeast of Sterling.
Farming the chief industry.
Population 20.
BERG CHAS, postmaster.
Central Lbr Co, L Q Welty mgr.
Lasher W J, auctioneer.
Lay C C, express & transfer.
Mitten Grain Co 0 L.
Paoli Hotel, Mrs P J Peter prop.
Porter Newel, blacksmith.
Paoli

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Coordinator - Rebecca Maloney
State Coordinator: Rebecca Maloney
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