Kelso was created as the basis of a massive confidence scam by George G. Wright to sell an 80,000-acre tract of XIT Ranch land 25 miles northwest of Hereford.
Wright constructed a fake town which included a hotel, a general store, and a schoolhouse, none of which were occupied by permanent settlers.
Wright's fraud was so successful that the United States Postal Service briefly established a post office in Kelso that operated from 1907 to 1908.
Wright and his associates, by misrepresenting the quality and value of the land, its distance from towns and stage of development, successfully sold parcels at prices from $8 to $40 an acre.
Dryland farmers, who made up the preponderance of the buyers, realized too late that the town was fake and that deep-well irrigation was necessary to grow crops.