The abundance of iron ore for use in manufacturing prompted a commission appointed by Gov. Richard Coke in 1875 to select this region for a state penitentiary. In 1877 this 19,000-acre tract was purchased form T. Y. T. Jamison and his wife. Contractors Kanmacher and Denig of Columbus, Ohio, built this structure the following year. The walls are of two-and-a-half foot thick sandstone. The administrative offices, a hospital, chapel, dining area, and cells were housed here. The prisoners helped construct the Texas State Railroad from Rusk to Palestine. They built the "Old Alcalde" iron ore smelting furnace adjacent to this structure. The furnace produced iron products for construction throughout the United States and for use in the erection of many state buildings. Convict labor was used in the area at contract prices. In 1917 the Texas Legislature changed the facility to a state hospital for the mentally ill. The building was renovated and ready for occupancy by 1919 and operated under the name of Rusk State Hospital. The Department of Mental Health and Mental Retardation was designated as the governing body in 1963. This structure became the administrative center for the hospital. (1979)