Arriving in Texas in the mid 1840s, German farmers became the first settlers of what is now known as Gruene, Texas. Ernst Gruene, a German immigrant, and his bride Antoinette, had reached the newly established city of New Braunfels in 1845, but acreage was scarce. Thus, Ernst and his two sons purchased land just down river, and Ernst built the first home in Gruene in early fachwerk style. His second son, Henry D. Gruene, built his home (now Gruene Mansion Inn) and planted his surrounding land with cotton. Having become the number one cash crop, the cotton business soon brought 20 to 30 families to Henry D.’s lands.
Henry D. built houses in various styles — a Victorian cottage (now Lone Star), a large brick home, and a frame house (now Gruene Haus) for the foreman of his farm. The first mercantile store (now Gruene General Store) was built in 1878 and a cotton gin (now Gristmill River Restaurant and Bar) powered by the Guadalupe River was added soon after. Further construction during this profitable time included a dance hall and saloon (Gruene Hall), which became the center of the community’s social life.
As the town continued to prosper, a new mercantile building (now Gruene Antique Company) sprang up in 1904. However, the death of Henry D. in 1920 marked the downfall of Gruene’s development and good fortune. In 1922, the original cotton gin burned and was replaced by a modern electric model down the road (now Adobe Verde). Yet, the economic disasters of the boll weevil and the Depression were too much for the family businesses and they went under, except for Gruene Hall, which never closed.