The town of Allegany was formed from Great Valley on April 18, 1831. It was originally called Burton, and its name was changed to Allegany on March 28, 1851. Humphrey was taken off in 1836. It lies on the south border of the county, and includes part of the Allegany Indian Reservation. There are 3 streams, Four Mile, Five Mile and Mill Creeks, which are tributaries of the Allegany River. Much of the town was covered by lumber in 1860, and lumbering was an important industry. Allegany, (p.v.) is located upon Allegany River, and in 1862 contained a tannery, door factory, and blind factory. It had 3 churches and 70 houses, and was a station on the NY and Erie R.R. A college, run by the Franciscans was located near the village. Five Mile Run is a p.o. that was first settled by Ebenezer Reed from Connecticut, who located near the mouth of Five Mile Creek in 1820. Other early settlers include: Andrew Allen, Hiram Wood, James Strong, Isaac Eggleston, and Amos and David Orton, who settled along the creek in 1821. The first child born was Nathan Reed on 2 Oct, 1820. William B. Fox and Sally Strong were the first couple to marry, in 1825. The first deaths were to children of Isaac Eggleston in 1823.

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