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Located just inland on the mid north coast of New South Wales, the town of Stroud was traditionally inhabited by the Wanaruah Aboriginal people. With a 500 000 acre land grant stretching north of Port Stephens made to the Australian Agricultural Company (AAC) in 1826 for the purposes of expanding the wool industry of New South Wales, Henry Dangar was sent to explore the Karuah Valley portion of this grant in the early 1800s. AAC superintendent Robert Dawson followed in November 1826 and was so taken with the fertile valley land reminiscent of the English countryside that he recommended a township called Stroud be established that same year. Stroud takes its name from a village in the Cotswolds, England.
By the 1830s convict labour farms had been established in the farming land surrounding Stroud and in addition to wool production, agricultural crops were trialled. With a school, churches and a hospital established within the rolling hills of the surrounding countryside, Stroud was renowned for being one of the most picturesque rural towns of the time. Yet a lack of successes with wool farming saw the AAC move most of its sheep from its farms in Stroud and by the 1850s much of the AAC land was divided into separate allotments and offered for sale.
With the failure of the AAC farms, settlement in Stroud was slow and with further failures from an attempted coal mine had the town progress very little. A railway line linking the town with the north coast railway line in 1913 and timber mills established in nearby towns saw Stroud develop as a service centre for the surrounding rural districts.
As Stroud has expanded only marginally since its most prosperous times in the late 1880s, the town has some of the best preserved examples of colonial architecture on the north coast and has become a favourite stop for tourists travelling between Sydney and Brisbane. With much of the land surrounding Stroud today incorporated into National Parkland, smaller agricultural pursuits along with cattle and poultry farming remain the primary industries of the town.