The Palace Saloon and Cafe in Shiner dated back at least to 1890, when a Palace Saloon managed by A. Kubitz occupied a one-story wood frame building at the corner of Ave. E and 7th Street facing the railroad tracks. Between 1890 and 1893, German immigrant Anton William Hinrichs became manager, and by 1894 the business had added a lunch stand run by Ed Ruhman that served free food to saloon patrons. A popular cock fighting ring stood behind the building, and over the next several years management changed frequently, including Ed Ruhman, Louis Richter, former mayor J.C. Blohm, Paul Stuerke, Fred Hillmer, E.J. Wangemann, Adolph Darilek, and William Zappe. Under Zappe's ownership, the original frame structure was demolished and replaced by a two-story brick building constructed by William Green. After Texas ratified prohibition in 1919, Zappe sold the business to Rudolph Chlastak, who operated a cold drink business there, and in 1921 Chlastak sold it to Hugo Pohler, who advertised it as Pohler's Cold Drink Bar or Pohler's Palace Bar while also selling candy, fruit, fireworks, and cigars. In 1934, Pohler remodeled the interior into a modern dining room and renamed it the Palace Café, which became a gathering place for Shiner residents. During that period Kamila Mikes Lee worked there as a waitress, then bought the restaurant in 1942; in 1947 she and her husband Hugo Schwabe purchased the business, and the Schwabe family operated it until 1989 before it later reopened after renovations for a new generation of Shiner residents.