Thompson's Island Homeplace. Dr. William Alexander Thompson (1803-1879) made an agreement with neighbors in 1850 to use the San Marcos River for irrigation and as a source of energy. He and his sons William A. and James used slave labor to build a gristmill, sawmill and cotton gin. The land masses formed by digging a ditch for the waterwheel and a sluiceway from the river were called "Thompson Islands." The Thompsons directed the business until 1911 when John Matthew Cape (1861-1933) bought the mill. The use of electricity in 1942 ended the mill's need for water power. #10332