The stake was driven in December 1886 for the new town of McCracken, located at the western edge of Rush County along the soon to be completed Missouri-Pacific Railroad. The town was named in honor of J. K. McCracken, one of the first trustees. The same day the town was organized, a few lots were measured and sold to investors who had faith that the project would grow into a real community.
The founders of the town knew that Eastern newspapers were promoting the new railroad town sites, and that settlers and businessmen from the East would come to McCracken and build their businesses in town, or set up their farms nearby. Within the first year, McCracken boasted a bank, two grocery stores, a newspaper, drug store, theater, and numerous other businesses. Soon after, two physicians moved to town and set up practice. One of the earlier churches in Rush County was the Evangelical United Brethren Church of McCracken established in 1887 by members of the Society of Friends.
McCracken's business section was twice destroyed by fire. In 1905, half of the business section of the town lay in ashes after a fire swept through the east side of Main Street. A second fire struck McCracken in January 1909, wiping out most of the buildings and businesses on the west side of Main Street.
One of Rush County's most unusual industries was the production of the "wonder mud", from shale quarries near McCracken, discovered by oil engineers in 1939. The product was widely used by drilling companies throughout the United States.
McCracken was a prosperous and busy town until the Missouri-Pacific Railroad removed it from its depot list for passenger and freight trains.
In 1909, Frank Burch constructed a three-story, 40-bed hotel known as the Eagle Hotel (pictured above). Hattie Nash later took over the hotel operating it as a first-class hotel and family style restaurant renaming it Hotel Nash. Grace Owen and her husband purchased it in 1952 and changed the name to McCracken Hotel. It remained open until Owen passed away in 1978. In 1972 and 1973, the hotel was used extensively in the filming of the motion picture, “Paper Moon.” The hotel was razed in 1988.
Today, McCracken is home to the McCracken Historical Museum and Paper Moon Museum housing a collection of memorabilia from the 1973 motion picture.