Jacob M. Funk was a major driving force in the history of Webster City. He arrived in Hamilton County in 1856 and claimed 200 acres of government land in Boone Township, just south of Webster City. He worked this farm for ten years, expanding his holdings to about 1000 acres before he died.

In 1866, he moved into Webster City, platted West Newcastle, and started in the real estate and building business. During this time, he also engaged in a private banking operation with B. F. Miller. He became a very close friend and business associate of W. C. Willson. Funk, a bachelor, moved into the Willson Hotel, when it was first built, and stayed there the rest of his life. He became one of the organizers of the Hamilton County State Bank and became its first vice president. The bank was located directly across Second Street, north from the Willson Hotel.

He promoted the building of the business district along Second Street. One of the blocks was called the Funk Block, because he was closely involved with most of the buildings located there. Before 1890, he was associated with most of the business district building along Second Street.

When Willson organized the Crooked Creek Railroad and its coal mine at Lehigh, Funk was one of the directors. Willson served as president until his untimely death in 1900. Then Funk assumed the presidency.

At the turn of the century, Funk began to think about what he could do to create a gift to his city similar to Kendall Young's contribution of a library. In 1902 he came up with the idea of building the first hospital for Webster City. He donated 3 acres of land at the southwest corner of Ohio and Des Moines Streets and arranged for the construction of a $25,000 hospital there. The building was a three-story brick structure with a full basement. It had 25 beds for the accommodation of its patients. An article in the Freeman Journal stated that it had a most modern and fully equipped operating room. The building had electric lighting and a steam heating plant. Funk set up a board of directors which included himself, L. A. McMurray, and Cyrus Smith. McMurray was president of the Hamilton County State Bank, and Smith was the cashier.

To operate this fine hospital Funk searched widely and found the Northwest Conference of the Methodist Episcopal Church willing to take it on. Funk conveyed the hospital and grounds to the Methodists with a deed that provided that "…the grantees should equip, use, operate, and maintain the hospital for the care and treatment of people requiring medical or surgical aid, without regard to sex, color, nationality, or religion." It further stated, that "… one-fourth of the privileges and accommodations of said hospital, to be designated by the management, to provide free care for those unable to pay." This deed was dated Feb. 23, 1903.

It was assumed by friends of Funk that he intended to endow the hospital in his will to perpetuate the hospital, since he had no direct heirs. At this time, the hospital was simply called the Webster City Hospital. On Nov. 29, 1903, Funk returned to the hotel after working at his farms and other properties. A card game was in progress in the lobby, so, as was his custom, he sat down to observe the game. After a short time, he made a small noise and slumped over and died in his chair.

At the end of 1903 the Methodists gave up the hospital because they had operated it for the year at a loss and determined that it could not be operated with the one-fourth free care. According to the deed, the property reverted to the board of trustees. The hospital sat vacant for a period of over a year while the trustees searched for another organization to take over the operation. Finally, on October 30, 1905, the Sisters of Mercy of St. Joseph's agreed to assume the deed and the operation. From that day on, the hospital was called Mercy Hospital. During this time the board of directors consisted of L. A. McMurray, J. L. Kamrar and Frank E. Willson.

The hospital was never a money-making operation. In those days, people were likely to use the services of the hospital only when they were very ill. The operation had only five patients in the remaining two months of 1905 and only 556 patients from 1905 through 1909. The need for additional donations was soon obvious. The residents of Webster City realized that, without the services of the six Sisters of Mercy, who served without pay, the hospital would again have to close.

In 1919, W. F. Cole, president of the Chamber of Commerce, made an appeal for the contribution of funds to the hospital. The Sept. 26^th edition of the Freeman Journal, reported that $1,000 donations had been secured from E. F. King, R. E. Jones, G. T. McCauliff, W. W. Wyatt, Mrs. L. L. and Tressa Treat, Arch Foster, and L. A. McMurray. By this time the hospital had served 4,137 patients, 287 of which were charity cases.

In 1923, the hospital received a boost when John McCarley, of Williams, died and left the hospital upwards of a quarter million dollars. The gift was subject to a life estate given to his wife, Annie McCarley, a member of St. Mary's Catholic Church in Williams. It was stated in the Daily Freeman-Journal that the gift of Mr. McCarley would go far to erect a badly needed addition to the hospital. Two years later, after extensive litigation by the heirs, it was learned that only one-fourth of the estate would be given to the hospital. The court found that state laws prohibit the leaving of the entire amount to a charitable institution if any of the heirs of the deceased are living. Mercy Hospital did receive about $60,000 of the $326,357.75 will. In 1925 it was announced that C. J. Pitcher, a resident of Webster City from 1869, left his estate of about $20,000 to Mercy Hospital.

By this time, however, the old hospital needed an addition. Since nothing had been done during the past 20 years, the Sisters of Mercy, announced the plan to abandon the hospital. They stated that they would stay if a new modern building was built. At a meeting presided over by Dr. G. T. McCauliff, Rev. Mother Daniel stated that the current building was lacking in modern facilites, was inadequate in size, and was not fireproof. A general discussion brought out the estimate that a new 40- to 50-bed hospital was needed to meet the needs of Hamilton County, and would cost an estimated $100,000. By this time the only living trustee was Judge J. L. Kamrar He appointed J. E. Burnstedt and W. J. Zitterell to the board, completing the membership for the first time since the death of McMurray.

The Sisters of Mercy announced that they were leaving Mercy Hospital on May 1, 1930. An article in the Daily Freeman-Journal reported that "Webster City and Hamilton County owe these fine women more than it can ever repay and the community regrets very much seeing them leave. Their lives were devoted to caring for the ill and injured, for which each receives the merest pittance." The hospital was abandoned, and its demolition was delayed for a long time, because it became the home for 40 persons from eight families during the Depression. None of the residents knew who owned the building. Families moved in whenever there was a room, with no questions asked. There was no landlord. The city disconnected the electricity and heat to the building but left a water tap connected so the residents could get water. Each resident paid 15 cents each month for water. The Des Moines Sunday Register reported in the Oct. 15, 1939 edition a two-page spread about the families. One family pictured was the C. R. Abbott family. It reported that the elevator, rusted and broken, was at the bottom of the shaft. Deteriorating steps made it difficult for people to get into the building. Some children were pictured on the fire escape. A sign was posted by the Fire Chief stating that Further Occupation of This Building WILL NOT BE PERMITTED. Finally, the condition of the building deteriorated to the point that the city had to raze it.