Smith Valley was settled in 1859 by a party of herdsmen; among them were Timothy B. Smith, R.B. Smith, and Cyrus "Adobe" Smith, and the valley was so named due to the prominence of the name. A station, called Smith's Station, was established, and the area grew as a lush agricultural hub, which it remains today. Smith along with its neighbor Wellington form what is colloquially referred to as "Smith Valley", with a shared population of about 1600. Numerous historic ranches remain in the valley, while a few businesses comprise what is sometimes known locally as "Central" Smith.

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