The New City Free Library was founded in 1936 and was originally housed in the New City School. Books were provided primarily by the school and by public donation. The library received $100 in state aid, and matching funds were raised by Library Committee bake sales, tea parties, book sales, and fashion shows.
In 1942, the New City Library Committee, "an unincorporated association of citizens" offered New City School District #5 the books it owned in an arrangement whereby the School Board would support the New City Free Library, and the Committee would continue to handle library business and select books.
By 1950 the school district could no longer support the library due to centralization and the need to convert the spaced used by the library into a classroom. A request was made to the Town Board of Supervisors for a $500 annual fee to support the library. A local attorney donated his legal services to incorporate the Library Committee as the New City Free Library Association, and applied for a charter with the State Education Department.