The town that is now called Cool began as a disappointment for the miners that explored for gold there. There were no rich gold deposits to be had in the area. However, there were limestone caverns in the canyon of the nearby river confluence that attracted many people to the area for decades. The numerous caverns were scattered along the river canyon from the confluence of the North and Middle Forks of the American River nearly to neighboring Pilot Hill. In the early days, the town of Cool was known as Cave Valley.
The largest of the natural caverns was called the Alabaster Cave and was over l00 feet in length, 30 feet wide and nearly 30 feet high. The little community of Cave Valley prospered somewhat due to the tourism to visit the cave. The Alabaster Cave was used as a dance hall and place for a series of grand balls during 1856 and 1857. Eventually, the caves became a commercial source of limestone and were finally closed to the public. They are no longer available for viewing.
Cave Valley was also a crossroads for merchants, miners, families, and travelers because it was located on the Gold Country Road that later became highway 49. It was also the intersection of the road that led to Georgetown and other smaller Gold Rush communities to the east. That road is now Highway 193. Cool offers residents and visitors alike the opportunity to enjoy a peaceful, rural residential environment, including small restaurants, as well as the Auburn State Recreational Area, which is open to the public for hiking and horseback riding.
The current location of the Pilot Hill Grange No.1, the first Grange in California, is just beyond Cool on Highway 193. The Grange was moved from Pilot Hill to this location in the 1930’s and is located on donated land. The lumber used in its construction was harvested from the surrounding forestland and was milled in a local mill. The building was completed by Grange members. It continues to operate today and is a popular local meeting hall.
The first post office in the area was established in 1885.  Penobscot Public House, established in 1850, was a way station and stage coach stop during the days of the Gold Rush. The famous Penobscot Ranch still exists today. Today the historic site, including the house built during the days of the Gold Rush and the barn built in 1923, can be viewed by driving down Highway 193 four miles outside of the business center of Cool. It is now private property so public access is very limited.
There is no clear record of how the town came to be called Cool. Some local historians claim that the town was named during the days of the Gold Rush after a man named Aaron Cool. In truth, there was no real Aaron Cool. The most likely answer is that it is named after a Reverend Peter Cool that lived in the area for a time.
Brother Peter Yawger Cool was born in Cayuga County, New York on May 20, 1830. He was raised under the Methodist brand of Christianity. In 1850 young Cool joined some fellow New Yorkers and travelled to St. Louis to catch a wagon train west. None of them knew the journey west would be as difficult as it was. After his arrival, he tried his hand at gold mining for less than two years where he dug, panned, washed pay dirt in a cradle, tunneled and even operated a quartz crushing machine.
While working the 
area, Peter met Father Owens, a well known Methodist missionary. Brother Cool received his license to preach from Father Owens and this scrap of paper was preserved to the day of his death as one of his most precious treasures. Reverend Cool served as an itinerate preacher in El Dorado and Amador counties. In 1855 he married Sarah Mahala Aram, and they bought a 10-acre ranch in Cave Valley and lived comfortably until his assignments to churches came. The love, support and companionship of Sarah was very important to Peter Cool’s successful ministry of nearly 30 years.
On his last trip through Cave Valley, the people told him there would soon be an “official†post office, but Cave Valley’s name was already in use and another must be chosen. It was nearly 3 years after his death, on October 20, 1885, that it was finally named Cool, CA.
So, where did the name Aaron come from? It is quite likely that it was simply a nickname given to Peter Cool by a preacher from Placerville named Reverend Caleb C. Peirce. The name Aaron in Hebrew means “of the mountains†so it is thought he called Reverend Peter Y. Cool, Brother Aaron, hence the name. It is nearly certain that Aaron and Peter Cool were one and the same!