In the early 1800's a group of German speaking Mennonites arrived from Pennsylvania. As with the other major communities which make up Cambridge, the land upon which they settled was acquired from the Six Nations Indians through a land speculator named Richard Beasley.
Among the first settlers to arrive in what was later to become Preston was John Erb who acquired 7,500 acres including land at the confluence of the Grand and Speed Rivers. Mr. Erb and his wife settled on his Speed River lands in 1805 and built a sawmill on the banks of the river in 1806. A grist mill followed in 1807. The sawmill has long since disappeared but the grist mill was the beginning of a flour milling business, Dover Floor Mills, which has operated continuously on that spot to the present day. The site is recognized as the oldest continuously operating industrial site in the region.
It was around Mr. Erb's mills, known locally as Cambridge Mills. That the settlement that grew into Preston began. It was not Mr. Erb's intent to create a town. He consistently refused to sell land for commercial development and it was not until after his death in 1832 that his lands to the south of the Speed River were surveyed and divided into lots.
The task of surveying the land fell to William Scollick, a surveyor, conveyancer and Justice of the Peace from Preston, Lancashire, England, who completed the survey of Mr. Erb's lands in 1834. The linear shape of the survey with virtually all the buildings in the settlement stretched out along the Great Road from Dundas is said to have reminded Mr. Scollick of his native town in England and he gave the name of Preston to the settlement.
The sale of the newly surveyed lands immediately attracted a significant number of tradesmen, artisans and craftsmen primarily young German immigrants who had recently arrived in North America. These men saw a place where German was spoken, much of the land was cleared and there was an acute shortage of skilled artisans and craftsmen. The population grew rapidly from about 250 inhabitants in 1836 to about 1,600 in 1855. Of these, approximately 70% were German in origin. Preston's location on the Great Road in the interior of the province made it a natural stop for travelers and with its eight hotels and taverns attracted more Europeans than any other village in the area.
By the mid1800's these European travelers where being joined in increasing numbers by people who were attracted to the town's mineral springs which were thought to possess remarkable curative powers in the treatment of a variety of ailments. These springs were discovered accidentally in 1837 by a member of the Erb family while drilling for salt. Instead, they found "stinky water". The water, with its high sulphur content, was well named and was initially thought to be worthless. It was not long, however, before some enterprising businessmen and medical practitioners let it be known that the mineral springs, while not heated like those of some European health spas, could offer relief if not an outright cure for the number of ailments including arthritis and rheumatism. Soon three major hotels, first the North American, later the Del Monte and finally the Sulphur Springs, sprang up to service the well-heeled clientele which began to arrive in Preston from all over North America to 'take the waters'.
While the town became in important destination for those seeking to renew their sometimes fragile health, the well being of the town itself was in question. Between 1861 and 1871 Preston´s population declined from 1,539 to 1,409 and showed only a marginal increase to 1,419 by 1881. It was not until 1891 that the population once again began to increase and it was not until 1900 that the population broke the 2,000 barrier. Part of the reason for this turnaround can be traced to the coming of the electric railway systems that began to serve the community in 1894.
The idea of an electric railway connecting Preston with Galt, its larger neighbour to the south-east, was first proposed in 1890. At first, Preston's town council was not eager to get the town involved in a potentially hazardous railway scheme and it was not until 1893 that Preston council decided to enter negotiations. In many ways, the building of the electric railway marked Preston´s emergence from its well earned identity as a "sleepy German town".
A steady growth followed and the decades of the 1950's and the 1960's saw continuing growth of Preston's Industrial base and the gradual expansion of the town toward the borders of its nearest neighbours Galt and Hespeler. By the late 1960's a move was under way to institute a new level of local government which would see the creation of a new Regional Municipality of Waterloo. Including a plan for the formation of a new city through the amalgamation of Preston, Galt and Hespeler.
The plan, proposed by the Provincial government in the name of administrative and economic efficiency, was not met with universal approval. In the end, it was common interests and the long standing relationships between the communities that finally prevailed. It was noted at the time that despite the municipalities' long standing rivalries, there was very little difference between them in areas such as type of labour force, newspaper circulation, ethnic origin and religious affiliation. In addition, problems resulting from the continued growth of all three municipalities were better solved with the pooling of resources. This, on January 1, 1973, City of Cambridge, Ontario came into being.