LYON COUNTY GENEALOGY
Conditions were 'slow' in Rock Rapids at the start of 1887. The crop year preceding it had been good-but a hard winter kept people at home. Social activity in Rock Rapids was probably more important than previously-a sign of the growth of the community, the building of new homes, more interest in music, lectures and drama.
O. P. Miller and his associates put out an issue of the Lyon County Index-a promotion publication for distribution in the east to attract more settlers to the area. In this publication he called attention to the great crops which had been raised in 1886. He said that J. B. Hartson of near Doon had a large field of oats that harvested out as 108 bushels to the acre. H. B. Carter had oats that went 71 bushels to the acre. Corn yields of 50 bushels to the acre were common throughout the county, the Index reported.
When the school election was held mid-March there was quite a bit of interest and two tickets were filed. At issue was the hiring of a new principal and there was considerable controversy. George W. McQueen and E. A. Case were named to the board-one from each ticket. The voters also approved the construction of another room for the community's school-and they voted to stop payment of the interest and principal on the school bonds that were outstanding.
Eighteen hundred eighty-seven was to be the big railroad year for Rock Rapids. The Omaha was providing service through here from Doon to Luverne, and was being extended south and east from Doon to connect with service into Sioux City and the east. The Burlington was operating east and west from Sioux Falls to Chicago-through Rock Rapids-but there was interest in a better service southeast and east. This was hoped would be provided by the Illinois Central, which had been toying with the idea of building from Cherokee to Sioux Falls. Early in May a big delegation from Cherokee, Primghar, Sheldon gathered here and with Rock Rapids people, went on to Sioux Falls for a railroad meeting there-and to try and build up a head of steam for construction of the Cherokee-Sioux Falls line.
Railroad talk was rampant-everyone wanted to organize another railroad. Probably the objective was to get in on the tax bonuses, right-of-way and even cash payments that were voted to get the lines to build through a community. At this time-in addition to the Ilinois Central, lines which were interested in Lyon County included the Calliope, Burlington and Northern, the Iowa Railway Company which wanted to build a line from Des Moines to Sioux City and on toward the Sioux River and Sioux Falls. The Sioux City and Northern wanted to build north from Sioux City to Doon, Rock Rapids, Ellsworth and up to Marshall, Minnesota.
In June a mass meeting agreed to give the Illinois Central right-of-way through the county if building was done at once. In July a formal vote was held throughout the county and it was agreed that the company would be given right-of-way, depot sites, etc. Limit to be not to exceed five percent of the taxable valuation of the townships and towns involved.
The decision to build the railroad line was reached. Immediately a new corporation was chartered called the Cherokee & Dakota Railroad Company. This company was to build the line. Under the charter of the Illinois Central Railroad it was provided that the company could not 'build' railroad lines outside the state of Illinois-but there was no restriction on buying such lines. Consequently a new company was organized to 'build' the line.
The first week in August contracts for the construction of the line were let. Fifteen hundred teams were to be used with a corresponding number of workers. In all 96 miles of line were to be built. Sub-contracts were planned which would bring additional help on to the job, which was to be rushed.
John McNaughton was given the contract for grading five miles southeast of Rock Rapids-he also had a contract for grading two miles north and west of Larchwood.
On September 30, 1887 the Reporter told its readers that work of laying rails had been started at Cherokee and that big crews were employed and it was anticipated that from three to five miles of track a day could be placed.
The railroad reached Rock Rapids on November 20. Bad weather was holding up progress, but it was still hoped that the lines would reach Sioux Falls by December 15.
One of the great fears of all early day communities was that of fire. Rock Rapids had had its share of blazes over the years, but in 1887 it was pretty well decided that the community had an arsonist. Late in June a fire was set at the back of the J. R. Clark store, but it was discovered, an alarm sounded, and enough people turned out to stop the blaze before any great damage was done.
On July 29th a fire was started at the rear of the Charles Bradley restaurant. The flames got out of hand and before they could be subdued they had destroyed the restaurant with all of its contents. Also destroyed were Dr. Macnab's drug store and the living quarters over it. Here the help of people of the community made it possible for most of the furniture to be saved. The Doyle building was burned down as was a building owned by Cornell College. Also destroyed by the flames were the offices of Dr. Smith in the building owned by him and T. K. Bradley.
The buildings were located along the south side of what is now First Avenue, and a half block west of the river. A bucket brigade was organized and the efforts of these people saved the buildings on the north side of the street, although a number of blazes were started there from sparks blown across the street by a high south wind.
Advent of the two railroads served Rock Rapids and the one being promoted did not solve all transportation problems as is evidenced by a call in the paper for everyone to protest the stopping of the Rock Valley-Rock Rapids stage, which brought the mail here from Rock Valley.
It was obviously a 'dry' year and crops were suffering-but it was pointed out that the high quality of the soil in Lyon County was being demonstrated by the fact that in spite of the dry period, crops were progressing.
A Lyon County Agricultural Society had been started and it planned to hold the first county fair in Rock Rapids on September 28 and 29. Features of the two-day fair were to be the agricultural exhibits and horse races.
Reports after the fair were that it had been an outstanding success-but there was at least one 'fly in the ointment.' Rock Valley horse race fans raised quite a rumpus. It seems that the Rock Rapids people were all soundly backing a horse, 'Grey Goose' and the rules said that for the pony class horses could not be more than 14 hands high. 'Grey Goose' the Rock Valley fans said was 14 ½ hands high but he was allowed to enter the race, which he won.
Possibly it was the construction of the Central Railroad that made people realize that a newer, larger and better hotel was needed here. At any event the Commercial Hotel Company was formed. O. P. Miller was the President, W. P. Riggs, Vice President; V. G. Coe, Secretary; and F. E. Edwards, Treasurer. The company bought the Eccelson home, and when it was not picked as the location for the new depot, they decided to enlarge it, add another story, and make it into a first class hostelry. This work was started in the fall of 1887. The building still stands-the Lyon Hotel.
On November 21, when the rails were laid through Rock Rapids, the band was out to play and citizens provided boxes of apples and cigars for the workmen. The new depot was being rushed to completion and it was expected that mixed train service for Rock Rapids would become a reality in about a week. It was December 12, 1887 when the first mixed train reached Rock Rapids and service on the new line was official. The train service to Rock Rapids left Cherokee in the morning and reached here about noon. Then the train left here at 2 p.m. to return to Cherokee.
December 19, 1887 brought reports of a bad accident on the line. The surfacing crew of about 150 men was working about 15 miles northwest of here along Mud Creek. It was snowing and blowing so the work train picked them up about 5 p.m., and they started for Rock Rapids where the men were staying. For some reason, unexplained, a supply train from the south went through Rock Rapids about that time and the two trains crashed head-on-visibility being greatly impaired. The engineer on the surfacing train saw the supply train coming and jumped, but the fireman did not make it. He was caught between the cab and the tender and his leg 'crushed off.' The workmen swarmed out of the train and took him to a nearby farmhouse. Word was sent to Rock Rapids and about 9 p.m. doctors from Rock Rapids and a work train made it to the scene where the injured man was given attention. The workmen were also loaded up and all returned to Rock Rapids.
The fireman died a few days later-the engineer on the work train was bruised and cut up as well as being scalded, but lived.
Reports marveled that there was not a greater death toll. The usual practice was that the workmen rode on a flat car ahead of the engine, but for some reason on this particular run the flat car was back of the engine-or the death list might have been tremendous. No one seemed able to determine whether the work train had failed to take a sidetrack properly-or whether the dispatcher had failed to give proper orders to the supply train. At any event it was the area's first serious train wreck.
Although there was primary interest in railroads and railroading-other matters were also a part of the history of the period. For example, it was obvious that Iowa's liquor prohibitory laws were not working. Drug stores sold bitters, there were illegal saloon operations, and bootleggers were plying their trade. It was suggested as a cure that the state should go into the distilling business and thus take the profit out of making the stuff. The distillers were being blamed for most of the trouble.
It was quite a shock to the community, when early in May President Cleveland turned F. E. Barber out of the post office. Barber had
been postmaster for many years-but he was a Republican and the new president was following the old rules and giving the jobs to members of his party. In Rock Rapids S. L. Fairlamb was given the political plum.
May 20, 1887 the Reporter carried the story that petitions had been filed with the board of supervisors calling for an end to tax levy to pay bonded indebtedness and interest of the county. The claim was made that bonds had been issued in excess of the statutory 5 percent of taxable value limit and were thus invalid. This move precipitated a series of lawsuits that were notorious for years to come.
Probably the best summary of the Lyon County bond situation was written by J. M. Parsons in 1904. He had been an early day lawyer in Rock Rapids and also published a newspaper for a time. He later went to Des Moines where he had a law office and was later appointed to the Supreme Court of the State of Iowa, becoming Chief Justice.
Here is the Parsons account of the Lyon County bond scandal:
THE DEBT AND LITIGATION CONCERNING THAT OF THE COUNTY AND SCHOOL DISTRICTS
Whenever in legal and financial circles the name of Lyon County is mentioned it calls to mind the litigation over various phases of county and school district indebtedness that began with the beginning of the county and has lasted until now, though happily the last case is being brought to a finish and the amount involved in this is but small. This litigation has occupied the attention at times of every court having original or appellate jurisdiction over the territory of the county. Practically all of the debt which furnished this vast amount of litigation, resulting in the trial of hundreds of cases and in the using of about a thousand pages of the official reports of the courts filing opinions and the filing of upwards of forty opinions by these courts, originated in fraud and was without consideration and represented no value received by the county corporations against which the debt was created. Not only that but the debt was the result of deliberate and downright acts of parties calculated to the very end achieved, with no concealment of the purpose of the acts, and many times with an open and shameless avowal of the purposes of the actors.
The county was set off from Woodbury and held its first election in the fall of 1871 and the officers of the new county took charge on the first of January 1872, with not a dollar of debt against either the county or against any of the school corporations into which its territory was divided. But so fierce for spoils was the board of supervisors, and others profiting by the frauds that before six months had elapsed the row in the courts over the county and school district debts had begun, and before one year was over several cases in which men sought to block the plunderers were on their way to the supreme court of the state. That court did what it could to stop the shameless plunder, but without avail, for a drunken and profligate district judge, in utter disregard of law and over the protests of the honest citizens and upright district attorney, C. H. Lewis, refused to let that official defend actions on fraudulent claims against the county, and so hampered the work of those who attempted to compel honest government, that, discouraged, and thinking resistance useless, after a few ineffectual attempts, they stood to one side and let the work of graft go on till the influx of new settlers brought about a new order of things.
The first case from the county in the supreme court of the state, Clark & Grant vs. Lyon County, reported in vol. 37 of the state reports at page 469, illustrates some of the troubles that may be caused to the reformer who undertakes to stop public graft when the court is against stopping it. In that case the county had been sued on a lot of void and worthless warrants, that were fraudulent and issued without any consideration and that in reality belonged to the members of the board of supervisors and others who had formed a combine to plunder the county. C. H. Lewis, the District Attorney, at the insistence of several citizens, attempted to appear and defend, but the attorneys for the county, who were in the scheme, as well as the attorney for the plaintiffs, objected and the court refused to permit the district attorney to appear and defend, though the law said it was his duty so to do. Mr. Lewis appeal to the Supreme Court was reversed to the district court, but in the meantime several other cases that stood in the same position were put through the courts and when the judgment was entered the board of supervisors would issue bonds and take it up. If the case was reversed or if it was affirmed the result was the same and the grafters won, for the bonds once issued were sold and the proceeds divided among the gang and afterwards an innocent purchaser of the bonds could collect them.
Notwithstanding that the first board of supervisors of the county had as members some men about as crooked as ever sat around one table, had the district court of the district at that time been presided over by an able, honest and fearless judge instead of by the one it was, the game of graft would have been stopped in the beginning, for without judgments at that time bonds could not be issued in great amounts and warrants not being negotiable, their issuance would have done comparatively little harm as at the first offense they would have been wiped out and the next set of officials would have probably been not so greedy for plunder. But with such a judge, one who instead of trying to assist in stopping the steals made his every ruling against the law and so as to compel appeals to the supreme court to correct it, by those honestly trying for good government, the burden of fighting the grafters was too great for the settler, poor as he was, to bear.
The first board of supervisors met at Beloit on the first day of January 1872, and started the machinery of the county government in motion. There was present J. S. Howell, H. T. Helgerson, and Chas. H. Johnson, members of the board, and Chas. E. Goetz, the county auditor. The board organized the election of J. S. Howell as chairman and from that time for a couple of years the debt of the county was piled up at a rapid rate. All sorts of pretexts and excuses were made for the creation of the debt.
About the first start of the debt was in the building of the bridges, but it had no bridges and was run in debt on the pretense of building them. The favorite amount for a bridge in those days seemed to be the sum of five hundred dollars. The board would make an appropriation for a bridge and award the building to some person who would go out and lay stringers across a stream and perhaps cover the same with planks and the bills would be allowed and the same bridge would be hauled from place to place and made the means of getting more warrants out of the county. It is within bounds to say that more bridges were ordered and paid for in the first two years of the county's existence than were built in any 10 years in the history of the county.
Another fruitful source for bills against the county were the 'swamp land' propositions. Some genius conceived the county had only to claim that about the whole area of the county was a swamp and that the general government would either give all that was claimed to be swampy to the county or would indemnify it for that portion which had been patented by the government to others. This being suggested to the supervisors they at once hunted up lawyers and prepared to take in the swag that could be gotten that way. That the land nor the indemnity could be gotten made no difference, the lawyers could be hired with an agreement to 'cut up' and owing to the elastic nature of the bills which can be charged by the profession, there would be good pay for the lawyer and some besides, for it is as easy to write out a bill for six thousand as for six hundred, only taking one more cipher, and besides it left a nice margin to divide. So the first bill for attorney fees in the swamp land matter was made six thousand dollars and though allowed on the 19th of June 1872 on the 19th of July following the same had been reduced to judgment and the judgment had been bonded. Bonds were necessary in order to realize the money. They could not be defended against and brought in the market near their face value. When they were sold the division would take place and the different ones in the deal received their share of the swag. These men kept books of the proceeds of the bit and little steals and insisted on a division all around.
But the steals were not confined to swampland contracts and bridges. Everything was made the subject of a graft. The sale of an article to the county at a legitimate price was an impossibility. If offered at that no sale was made and the seller would be given to understand that to make a sale he must make it at from two to ten times its value and then the excess would be divided and the seller would come in for his part of the extra profit. The iron safe in the clerk's office, worth then at the outside, about one hundred dollars was bought at twelve hundred dollars. A set of the Iowa reports, then about forty volumes worth about one hundred dollars cost the county one thousand dollars. A quarter section of land for a poor farm, of the value of four hundred dollars, with a contract to erect buildings worth not over eight hundred dollars went to the county at even five thousand dollars and the board paid all the money on the deeding of the land and before the buildings were erected and in fact never got them at all. The newspaper wanted a lift and the board appropriated seven hundred and fifty dollars for an emigration pamphlet. A man wanted to bore a well and the board allowed him five hundred dollars to prospect for coal. An attorney was hired at a salary of nine hundred dollars per year, payable quarterly and the board then ordered the whole of his bill allowed, and consented that a judgment might be rendered on the warrants and issued bonds to fund the judgment before he entered on the discharge of his duties under the contract.
The district attorney, C. H. Lewis, was a source of disquietude to the boodlers, for he not only annoyed them by trying to defend the county against the steals when the cases on the warrants came up in court. A resolution was passed allowing the county to be sued in any county in the district, as it was found to be inconvenient for the purposes of the boodling to await the regular sitting of the courts in the county. After the passage of this resolution, it coming to the ears of the board that Lewis was about to make trouble, to head him off a resolution was passed employing attorneys for the county. As the members of the board with the attorneys, had a pecuniary interest in all the warrants in suit, expecting a division of the money, the resolution is a good example of how wrong doers can often put up a plausible reason for action they want taken, and often thus shift the talk from a discussion of the real point at issue to an immaterial matter.
Thus the Lyon County supervisors finding their schemes liable to be frustrated by Lewis, on April 17, 1873 passed the following: "Resolved, that this board feels itself confident to defend the county against all suits now pending in the district court of this county, and having instructed J. F. Eccelston and H. B. Wilson, the attorneys employed by the board, what defenses we desire made to these suits and each of them, and believing that the district attorney of the fourth judicial district is seeking, at the instance of certain ill disposed persons, to interpose defenses to said suits, that in our judgment if interposed, will work great and irreparable injury to this county, we hereby protest against said district attorney being permitted to control the defenses to said suits, and the auditor is hereby instructed to forthwith place a copy of these resolutions in the hands of the judge of said court."
The defenses that were about to be interposed to the suits by the district attorney were that the warrants sued on were all steals and that the board members were interested in them. The great and irreparable injury that would have been worked to the county and which was feared by the members of the board was the killing of the infant industry of grinding out fraudulent bonds.
From July 29, 1872 to July 28, 1873, $55,000.00 of judgment bonds were issued under a statue then in force. The bond industry of the county then stopped for a while and no more bonds were issued till October, 1874, when a ten thousand dollar issue of funding bonds was made and from that time to June 4, 1879, $55,000.00 were issued. July 1, 1879 an issue of $100,000.00 of refunding bonds was made and these were used to take up nearly all the outstanding bonds of previous issues. This issue was known as the Shade issue, from the fact that Jeremiah Shade was then the treasurer of the county and sold the bonds. These bonds did not in any way increase the debt of the county and reduced the interest from ten to eight percent. After the issue of the Shade bonds, from time to time as the county warrants accumulated they were put into funding bonds there being a total of these issued from January 8, 1880 to July 1, 1885 of $60,000.00. On May 1, 1885 the county issued, for the purpose of taking up the outstanding bonds of the Shade and other issues an issue of $120,000 of refunding bonds and these were exchanged for old bonds, or sold at par and the proceeds used to pay off the old bonds. This issue did not increase the debt of the county and reduced the interest on about all the outstanding debt to six percent. These operations left the county with a debt of about $167,000.00 when the litigation over the debt began by the filing of a petition in the case of Anderson vs. Bowers, an action to restrain the payment of the county debt. This suit was begun in the district court of the county on the 12th day of May, 1887 by A. VanWagenen as attorney for the plaintiff and was defended by Henderson, Hurd, Daniels & Kiesel, of Dubuque, and Cummins & Wright, of Des Moines, as attorneys for the defendant bond holders. It was carried through to the Supreme Court and is there reported as Anderson vs. Orient Fire Insurance Company. The case resulted in a declaration that the bonds were void, but as the court had no jurisdiction of any of the bondholders it was useless as a means of defeating any of the bonds.
Holders of the $120,000 issue they assigned their coupons, past due, to the Aetna Life Insurance Company, of Hartford, Connecticut, which commenced an action in the United States Court at Sioux City. This case was tried before Judge Shiras with Cummins & Wright and Henderson, Hurd, Daniels and Keisel, attorneys for the bondholders and Kauffman & Guernsey, of Des Moines, and Van Wagenen & McMillan for the county, and resulted in a victory for the county, the Court holding in its opinion in the 44th Fed. Reporter, page 329, that the bonds having been issued at a time the county was indebted in excess of 5 percent of the assessed value of the property, could not be enforced as legal obligations and that the suit must be dismissed without prejudice to the right of the bondholders to begin proceedings in equity to determine what, if any part, of the bonds were legal. The decision on this case was made in December 1890 and was taken to the Supreme Court of the United States and affirmed by a divided court, four judges holding one way and four another and no opinion was filed.
A suit in equity was then begun on the $120,000 issue by the non-resident bondholders in the Circuit Court of the United States at Sioux City, in which the holders of these bonds residing within the state intervened and that suit was pushed to a conclusion and finally resulted in the Court holding that something over $30,000 of the original amount of bonds with enough interest added to more than double the amount, should be paid by the county on this issue.
While the suit in equity was pending and after the decision by the Supreme Court of the United States of the law case on the $120,000 issue, the Asheulot National Bank of Keene, New Hampshire, began an action in the United States Court of Sioux City to collect $2,400 of funding bonds which were issued on the 12th day of November, 1880. J. M. Parsons appearing for the plaintiff and Kauffman & Guernsey and Van Wagenen & McMillan appearing for the county. This case was tried to Judge Shiras without jury and on the first day of June 1897 he rendered an opinion which reported in the 81, Fed., page 127, holding the county liable and entering judgment on bonds for about $5,000. The grounds upon which the county was held liable were, that, as the Shade bonds of $100,000 issued July 1, 1879, were themselves in excess of the limit and were issued at the time that the county was otherwise indebted in excess of the limit, they were void and hence could not be counted by the county to throw the bonds of the suit beyond the limit of debt as fixed by law, and that it made no difference if the Shade bonds had been paid by the county as to this phase of the case. These grounds were considered at the time, somewhat novel as they introduced the principle that the holder of municipal bonds in litigation to determine the validity of the bonds had the right of any prior issue, if necessary to bring his bonds within the limit of indebtedness. This case was affirmed by the Circuit Court of Appeals for the 8th circuit.
As a result of this case, several others were started on the bonds which were issued subsequent to the Shade issue, July 1, 1879, and resulted in practically all the bonds of the county, other than the $120,000 issue of May 1, 1879, being legal and judgements being rendered on them against the county. The result of the litigation was such that in 1900 the county issued $145,000 of bonds which were sold to Cincinnati parties and the proceeds used to pay off the judgement on the old bonds. In all the cases of the county after the decision of the Asheulot National Bank case of Sioux City, E.C. Roach and E. Y. Greenleaf appeared and conducted the litigation on behalf of the county and J.M. Parsons for the bondholders.
Another case of considerable interest for the nicety of the legal proposition presented, growing out of these bonds, was tried in the State Court of Iowa, being entitled 'Reynolds vs. Lyon County' and was on $2,500 of bonds at one time owned by the Equitable Life Insurance Company of Iowa and by it transferred to the plaintiff the cashier of the Chicago Bank. Reynolds had been the plaintiff in one of the suits against the county in United States Court at Sioux City and in that suit had recovered a judgment on some bonds issued in March 1885, the suit standing in the United States Court on the question of whether or not the Shade bonds were valid. If valid the plaintiff's bonds would be within the limit. The United States Court had made the finding that the Shade bonds were void and in the State Court the plaintiff pleaded that fact as what is known in law as 'res adjudicata' along with other matters relied on by him as reasons why the county should pay. The case was tried in the Lyon County District Court by Judge F. R. Gaynor, who held the bonds good without reference to the res adjudicata plea. Upon appeal to the Supreme Court that body held that the bonds were in fact void when issued, but by reason of the former litigation in the United States Court the matter had been put at rest and the plea of res adjudicata was good and the county was held to pay the bonds.
As a result of this litigation over the county indebtedness the county paid out, in settling with the bondholders, about $160,000 in money. In settling with its various attorneys the county paid out in the neighborhood of $60,000. Of the amounts recovered by the bondholders the sum paid out in attorney's fees must have exceeded the sum of $100,000, and the litigation extended over a period, from the filing of the petition in the Orient Fire Insurance Company to the final affirmance in the Reynolds case, of over eighteen years.
The history of three of the School Districts of Lyon County presents a record of graft unparalleled in the annals of any locality. These three school districts were the District Township of Doon, the Independent District of Rock Rapids and the Independent District of Riverside.
The District Township of Doon furnished a case entitled 'Cummins vs. District Township of Doon' and decided originally by Judge Shiras in May 1890, and reported the 42, Fed. Reporter, page 644, and subsequently decided by the Supreme Court of the United States, in the 142, U. S. at Page 366, January 1892, which has perhaps been criticized, doubted, directly affirmed and otherwise mentioned in the opinions of courts on bond cases, more than any other one case concerning bonds within the last twenty-five years. The case was by a divided Court, Justices Brown, Harlan and Brewer dissenting. The District Township of Doon had a debt out-standing in excess of the constitutional limitation and issued bonds which were sold on the market to raise money necessary to pay the outstanding debt, and these refunding bonds the Supreme Court of the United States held to be void although there was no evidence of the invalidity of the debt which they were really issued to take up. The holding was on the ground that as the District already had a debt exceeding the limit the floating of a new issue, otherwise than by trading bond for bond, for the time being doubled the debt, and hence, without reference to whether or not the money realized by the sale of the last issue was used to retire the former issues, the last debt was void being created at the time the District was indebted in excess of the limit. As a result of the debt of the old District of Doon, the District Township of Garfield, carved out of Doon, has been held to pay about $30,000 of indebtedness which it inherited by reason of its connection with the old Doon District.
The District of Rock Rapids was organized in 1872 and it immediately began a career of getting into debt and by the time the old District went out of existence in 1884 it had collected in taxes about three times as much money as was needed to pay its current expenses and pay for all improvements made, and had incurred an indebtedness in excess of $50,000, this on a valuation at no time exceeding $130,000. However, the litigation over this debt was such that it resulted in not over about $20,000 of the original indebtedness being paid, the balance being defeated by the Courts.
Last, but not least, in the iniquities of the bonding periods of the county, came the Independent District of Riverside, organized in 1872 and continuing its organization until 1885, never at any time having an assessed valuation of taxable property exceeding $160,400. Many of these bonds, by the records at least, purport to have been issued for old bonds of the district at the rate of ten cents on the dollar and from that up. The writer once made a calculation, and if the record in reference to this were true, the district must have during the course of its existence, issued over one million dollars of bonds. There was but little consideration, even nominal, for any of these bonds. The first school house which was built in the district, probably worth $500. was made the occasion for issuing $5,000 of bonds to build it. Another $5,000 was issued for the claimed purpose of digging a well and no well was ever sunk; and another $5,000 of bonds was issued for the purpose of putting trees and shrubbery about the premises and nothing was ever planted. The balance of the old bonds of this District, other than the refunding bonds, were issued by the Martin family. When the District was first organized one of the Martins was president of the board and another was secretary, and for years Martin bonds kept turning up from every quarter. The Martins, it seemed, made them up in bales and scattered them everywhere. But notwisthstanding, they were responsible for the issuance of so man fraudulent bonds, none of the Martins seemed to have profited by their fraudulent doings, for when last heard of they were next door to the poor house and still on the frontier of civilization.
The pressure from the old Martin bonds on the District of Riverside was so great that in 1877 the Board of Directors of the district began issuing refunding bonds and from July 12, 1877 until March 11, 1882 issued $160,000 of refunding bonds. A great many suits were tried in the courts and generally resulted in the refunding bonds being held void by reason of being in excess of the constitutional limitation of indebtedness.
In the case of Eleanor G. Fairfield vs. the two Districts, Allison, and Jackson, into which Riverside was divided in 1885, Judge Shiras of the United States Court at Sioux City, held in November 1901 in a suit on some of the refunding bonds issued June 21, 1881, that the bonds were void as they exceeded the constitutional indebtedness and a like entry was made in several other cases being tried at the same time. This case was taken to the Circuit Court of Appeals and tried at St. Paul, Minnesota, and Judge Shiras was there reversed on the ground that the bonds, reciting that they were issued to refund valid outstanding indebtedness, the district could not contest its liability and on a proceeding brought to reverse this decision the Supreme Court of the United States held likewise and refused to disturb the decision of the Circuit Court of Appeals. This case was conducted on the part of the plaintiff by Parsons and Riniker and on the part of the defendants by E. C. Roach and O. J. Taylor, of Sioux City, and it resulted in the district being held liable for the payment of something over $30,000. Luckily for the districts involved the opinion of the Circuit Court of Appeals in the Fairfield case was not filed until after the statue of limitations had run on all of the bonds of he district of Riverside not then in suit, else it might have resulted in a practical confiscation of about one township and a half of land originally embraced in the Riverside District.
Such, in brief, is the record of the inception of and the litigation over the bonded indebtedness of Lyon County and its school districts. No attempt has been made to enumerate the hundreds of suits which were pending in the various courts at from shortly after the organization of the county up to the present writing; nor to go into details of the creation of the debt, but happily that day is past and the last of the suits has been tried, although one against Garfield District is still pending on appeal in the courts.
The history of this county and its municipalities should serve as a warning to legislators making laws for the creation of debts by counties and municipalities, to make it impossible for new communities like Lyon County was at its organization, to create any incontestable debt whatever, for a period of several years after its organization and until the county was fairly well settled. The great debt of the county and the school districts was created while the county was yet new, while there was less than 2,000 people in the county; in fact the major part, while there was less than 1,000 people and a few grafters and designing men under those conditions were enabled to get possession of the machinery of the government and practically do with it as they pleased, and this they did by using the fraudulent bonds, by the county and school districts far in excess of the value of all the property in the county. It may be asked why were not the officers punished criminally. The reason was that no jury, grand or petit, could be called, without containing in its membership men who were mixed in the steals.
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Webization by Kermit Kittleson - Aug. 2006