HISTORY OF O'BRIEN COUNTY

CHAPTER IV.

UPBUILDING.
TAXPAYERS ASSOCIATION.

Inasmuch as this association as an organization lasted from 1877 until 1881, a full statement of its work in the county will be given.

CONSTITUTIONAL LIMITATION.

The Constitution of the state of Iowa, in very plain language, says that any debt contracted by a county in excess of five per cent, on its valuation is absolutely void. The people in O'Brien county by this time (1877) were in quite large numbers, about two thousand seven hundred, and this, in fact, was about the time the county should have been organized. The people when once awakened became very indignant.
To the indignant and taxed voter this five per cent, limitation seemed clear and that the remedy must be sure. And truly it was a fit subject for public wrath. Many good citizens felt that there was no moral obligation to pay the unjust portion, and some legal decisions of high import seemed to indicate a fair prospect of defeating it, and its defeat was naturally agitated. The main discussion centered around section three of article eleven of the state Constitution, though lesser questions were incidental to it.

ORGANIZATION OF THE ASSOCIATION.

A well organized Taxpayers' Association was the result. It grew rapidly and at one time included a good majority of the people of the whole county. The debt question was practically settled January 4. 1881, yet the association continued its activities until about 1890. While the writer did not coincide with this effort to defeat the debt, he has always recognized that this association did a good work in the county, in assisting in and insisting that the bad work commenced in 1860 should not continue. The writer, in 1879, was asked by the members of the Taxpayers' Association to run for county auditor

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on that ticket. He, disagreeing with them on that subject, it placed him on the other side, and he was elected in 1879 to that office on the side of payment of the old debt. This organization was formed for the express purpose of defeating this old debt in whole or in part, to agitate inquiry into the matter, and to enlist, not only citizens, but nonresident land owners, to contribute in money, on the argument that if the debt were defeated taxes would be lessened. There is no doubt that the county would have been a unit on this question had there not been in the opinion of many still higher questions that they thought should control, namely:
1. The injury to the credit of the county and its later results on the county.
2. In the judgment of many, impracticable.
3. The still more serious question that the county had had its day in court, or res adjudicata, with due service of notice on the proper county officials, and this these sharpers, many of whom were good lawyers, had looked after. In other words, that the United States courts do not render serious judgments for nothing or as a pastime. By this time, 1877, about two-thirds of the whole debt had been thus rendered into judgment, and that portion that had not been put into judgment had been intermingled with the judgments and put into bonds, until it was, as was thought by many, impracticable to separate them.

BOARD OF SUPERVISORS IN LIMBO.

One humorous event happened. On one large judgment rendered a mandamus was issued, commanding the board of supervisors to make a levy of taxes to pay it. They delayed and did not act. They (in 1875) were cited to appear before the United States court at Des Moines to show why they should not be punished for contempt of court. The board, by its chairman, asked by what authority their action or nonaction could be interfered with. Judge Love replied that "It was by the authority of the United States court, and that the United States court did not act trivially." In result, the court's writ said in plain English, to the board, to make the levy or go to jail, and so the court informed them. The board made the levy. Put into common language, the decisions of the courts held that this five per cent, limitation was a defense that the county could have made, but, failing to interpose when judgment was rendered, its day in court had been had and the county closed out.

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This effort to defeat the debt (or Taxpayers' Association) was the outgrowth of a righteous indignation, and taxpayers' popular meetings were held all over the county. Attorneys were employed. The records were thoroughly searched, in which both sides of the question were discussed. It was discussed in school house lyceums. All citizens were bent on a full search to find out the situation. An injunction was issued in an equity suit in the district court of the county, entitled, "A.P. Powers and One Hundred and Ninety-nine Others, Plaintiffs vs. O'Brien County and its Officers, Defendants," to enjoin the payment of all bonds and judgments until the question of the validity of the bonds and indebtedness could be investigated.

Taxpayers' Association Picnic.

It is not every picnic which could be dignified to a place as an historic item, even county wide. This was, however, one of the most important public gatherings ever held in the county. The writer attended. There were about four hundred people there, mainly from the eastern part. The meeting was serious. Grasshoppers had eaten everything up. It was held in July, 1878, on Waterman creek in Grant township. Taxes were high. Many were refusing to pay taxes, and had done so for four years. It was indeed a righteous wrath. The question was discussed quite a portion of the day, and very earnestly. The writer was then a very young man, and was somewhat loth to be too positive, though he had looked it up and came to the conclusion, for reasons stated above, that defeat of the debt was out of the question, as had also decided many others who were there. The writer was called upon, and stated that he did not come to interfere with the meeting, but had come to the aforesaid conclusion, and sat down without discussion. Later it was insisted that he go into the question. Colonel Hepburn was expected to speak. He had delivered the Fourth of July speech there that year, and, as a sentimental question, gave a very fervid opinion that it should be beaten. He later on looked it up and came to the same conclusion that it was not practical. Many took part, each speaking at length, Messrs. Schee, J.L E. Peck and Harley Day in favor of payment and Messrs. Huse Woods, Ralph Dodge, Thomas Steele and others in favor of defeating it in the courts. It is too long to enter into the discussions of the day. One item will suffice to show the fervidness of the meeting. As stated, many had not paid taxes for several years. Mr. Steele jumped up and said, "that the farmers of O'Brien county would camp out on their farms, and would not pay a cent of taxes, and that they would hang to the

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nearest wagon tongue the first county officer who would attempt to collect a cent of tax for the purpose." This expression came from an honest heart and was in essence a righteous condemnation of a great moral wrong that had been done. On moral lines and as applied to Bosler, Cofer & Company it was unanswerable. But the argument on the side of payment prevailed, namely, that, whether right or wrong, the county had been in court and judgments rendered; that they were closed out; that it was impracticable; that in the future judgment of O'Brien county and its future citizens that they would feel a higher sense of honor in having paid even an unjust debt, even a fraudulent debt, which it was, than to have a prolonged fight for years, and that the future people would be the better satisfied. At that meeting Mr. Steele's statement was cheered to the echo. Still the day's discussion drew the lines sharply throughout the county. The people began to see that there were two sides to the question, and articles were written in the papers, and discussed in many ways. Mr. Steele's statement voiced public indignation.

THE TWO SIDES.

The leaders and prime movers in this Taxpayers' Association were A. P. Powers, W. H. Woods ("Huse"), Thomas J. Steele and hundreds of others, and including E. Kindig. Ralph Dodge and Joseph Rowland, members of the board. On the other side were Thomas Holmes, Ezra M. Brady, Jacob Wolf and William Oliver, members of the board, and a solid delegation of the then county officials, George W. Schee, then county auditor, and J.L.E. Peck following him in the office, T. J. Alexander, treasurer, Hubert Sprague, recorder, Harley Day and David Algyer, county superintendents, and William N. Strong and Frank N. Derby, each clerks and later treasurers. These men each threw their weight on the side of payment, as did many others in the county. But the majority sentiment of the county finally settled to this policy, as the only way out of the dilemma. It is a curious fact that this main suit brought by A. P. Powers was never tried in court, as a court trial. In all reality it was tried by the court of public opinion and discussion. The Taxpayers' Association served its purpose and a useful mission. Its agitation aided in bringing order out of chaos. Many meetings were held in various parts of the county.
This important and far-reaching suit was brought in the district court of O'Brien county, as stated, by A. P. Powers and one hundred and ninety nine others as plaintiffs and landowners to stop and enjoin the county treasurer by injunction from paying these bonds or county debt. It was taken

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to the supreme court of the state. The question was raised that each plaintiff must bring his own suit. Two hundred resident and nonresident landowners had united in the suit on the belief that they could thus join. The supreme court decided on October 6. 1880, in effect that they could not so join. (See case of A. P. Powers and One Hundred and Ninety-nine Others vs. O'Brien County, in 54 Iowa Supreme Court Reports, page 501, for the decision.) This decision also held that it would not enjoin that part of the debt or those parts of the debt given for actual necessities. These bondholders had mixed these parts of the debt for necessities, the good with the bad. until it was seen that an endless chain of litigation was to follow. This decision practically paralyzed further proceedings. The board had refused to bring the suit. The United States court had held that the board only could bring it in that court. Add to this the further outlook that even after such an injunction was fought through and even sustained, that the bondholders, not yet made parties, could go into court each separately and test out these several rights and questions, and the still further fact that it was tying up the county business—all contributed to its final dismissal. Both sides agreed that the debt as such was unjust. It was simply a question whether to fight it was practical. The court's decisions thus far seemed to sustain the contention of the side advocating payment as the best road out of the bad matter. The meshes of the law seemed too intricate to practicallv contest out such complications. A. P. Powers, "Huse" Woods and many other leaders in this large movement spent much time in this earnest effort to defeat this unjust debt. Three months after this, on January 4, 1881, the county, by its board of supervisors, rebonded the whole debt, as shown elsewhere, and followed up with the policy of payment of the debt, and the last bond was paid off in 1908. The Taxpayers' Association employed the legal firm of Miller & Godfrey, of Des Moines, the chief members being Judge William E. Miller, prior chief justice of the supreme court of Iowa. The firm of Joy & Wright, of Sioux City, represented the other side of the question.

RESUMPTION OF CASH PAYMENTS.

During these years it also occurred that thousands of dollars of worthy county warrants were issued for necessities and supplies, and presented and marked "Not paid for want of funds." Up to 1876 not even a list of the items of debt or list of bonds or judgments had been prepared. The speculators, however, had looked to it in each set of bonds issued that a resolution ordering this and that bond was drawn up in legal shape and recorded in

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the supervisors' record. George W. Schee was elected in 1875 to quality January 1, 1876, on the conditions that these debts and judgments and bonds must be looked into, made of record and the public informed of the results. Mr. Schee made the first tabulated list of the indebtedness; indeed it was an exhaustive search of every possible debt, bond and judgment, rendered in the various courts, and tabulated them in a record purchased by the board expressly for that purpose. Therein Mr. Schee rendered the county a very great service in putting matters into shape where the people were informed of the real condition and what the county was up against. The more the search, the deeper and more deplorable it was found. The debt as finally summed up (and his tabulation stood the test of the later years of examination), showed a total debt of two hundred and forty thousand dollars in 1876 and two hundred and thirty thousand dollars in 1880. All that had been bonded bore ten per cent. The annual interest, therefore, reached above twenty thousand dollars. As this was not being paid, it was simply adding itself to the unfortunate situation.

ANOTHER NOTABLE MEETING.

It was perhaps ten days after the above taxpayers' picnic in Grant township that a meeting, not of the mass, but of perhaps fifteen men, met in the hardware store of Ezra M. Brady, including, as nearly as the writer can from memory give them: Mr. Brady, George W. Schee, J.L.E. Peck, William W. Johnson, Isaac W. Daggett, Harley Day, George Hakeman, Hubert Sprague, C. Longshore, Thomas Holmes and perhaps others. They all agreed that something had to be done. It was not a called meeting, but the discussion brought them together. The one theme was to see what could be done to put the county on a cash basis where it could resume cash payments of its outside obligations. At that meeting it seemed to be conceded that the policy proposed by the Taxpayers' Association was impracticable, and that something more substantial must be the final policy of the county. In addition to the twenty-three thousand dollar interest on the public debt, there was the regular annual running expenses, which required three dollars in county warrants for each dollar needed. It was insisted that the public finances could not stand up under such a strain, that the county must be put on a cash basis. The tax lists were carefully examined and the amount that was likely to be collected from taxes determined. Then it was urged that for a trial year that the expenses of the county must be kept within the sum. (6)

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It was further decided that the board of supervisors be asked to pass a resolution, in effect, discarding for the time being all back debts, so far as any present effort to pay same. This resolution was finally adopted to apply to the year 1879, the resolution reading that all county warrants for that year should have endorsed thereon in red ink the words: "Issued on the levies of 1879." which meant that all expenses of that year should be paid out of the taxes collected for that year. When once a man could get one hundred cents on the dollar for his warrant, it became at once worth one hundred cents. The plan worked immediately, and for all time thereafter. The total expenses on the county fund for this last year of the term of George W. Schee as auditor was just a little over five thousand dollars, and for 1880, the first year of J.L.E. Peck as auditor, about six thousand dollars. Later on, when the county got a surplus of funds, the older and then discarded warrants outstanding were paid in full, and O'Brien county established on a cash basis. It was hardly a case of resumption, as the county had never been on a cash basis since its organization. It was rather a case of establishment of that condition. The real credit for the originating of this plan must largely be given to George W. Schee, Ezra M. Brady and Thomas Holmes, and to its fulfillment, to the board, then composed of Thomas Holmes, Ralph Dodge, J. H. Wolf, Ezra M. Brady, William Oliver, Emanuel Kindig and Joseph Rowland, who were among the members of the board during the following two years. It was not simply in the policy thus adopted, but the principle was carried out in the details of public expenses. For instance, the board insisted that the auditors, George W. Schee and J.L.E. Peck, should serve for seven hundred dollars per annum salary, this being later on enlarged to eight hundred and twenty-five dollars. All other officials and expenses were put on a similar basis.

TAX SALE OF l880.

As we have shown, the citizens quite generally for four years up to 1880 had refused to pay their taxes, on the line of the picnic speech by Thomas J. Steele, candidate for county auditor. The statutory penalties had added largely to the amount of taxes due. At the tax sale held October 7, 1880, conducted by T. J. Alexander, treasurer, and J.L.E. Peck, county auditor, these delinquent lands were sold for these four or less years as per the facts, for full taxes and penalties. A tax sale purchaser under the then law got a penalty at once added of twenty per cent, as an inducement to purchase, and then ten per cent, interest on the whole amount. This, in connection

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with the fact that the values of land had risen somewhat, and the further fact that the county had at this date been on a cash basis for one year, and the people were getting heart again, brought out a large number of bidders and was the largest tax sale ever held in the county. The sale, together with funds from a prior sale, amounted to thirty thousand dollars. In the regular course of funds, this sum should have been distributed to the several county, poor, bridge and school funds, as per levies, and in theory of law it could have been enforced. The board, however, took the bull by the horns, as it were, discarded the question of funds, and applied the whole thirty thousand bodily on the debt of two hundred and thirty thousand dollars. This, as can be seen, reduced the debt to even two hundred thousand dollars. While in a sense it was illegal, yet as the four years were past, and even the schools needed only the coming current year's taxes, the people justified the board's action. It was one of the very few cases where a direct violation of law proved a crowning success. At all events, this payment and reduction of thirty thousand dollars of the public debt gave new heart to the people. It was the first lifting of a dark cloud.

REBONDING OF JANUARY 4. l88l.

On January 4, 1881, on the opening of the second year of the term of J.L.E. Peck as county auditor, a further decisive action was taken by the board. Ten per cent interest on this debt still loomed up as a hard fate. On that date a resolution was passed to rebond this remaining two hundred thousand dollars of the debt by an issue of new bonds to take up all outstanding matters and to bear seven per cent, instead of ten per cent, thus reducing the annual interest six thousand dollars. This also revived the spirits of the people. The grasshoppers had quit, which had also lifted further the clouds. The reduction of the annual expense on the county fund to five thousand dollars, and even as late as 1883 to eight thousand dollars, broke loose still more clouds, for the blue sky and the sun to shine through. The effort to defeat the debt vanished entirely, and this fact gave the county, as well as individual obligations and land loans, a better credit. Land began to be quoted as a thing of real value, though even then at only from five to eight dollars per acre, and the people began to realize the dream of a home in O'Brien county. It took seventeen thousand signatures for the county auditor to sign those bonds and the coupons of interest attached, which still said that the county had a yoke on its neck. The railroads were in the meantime being actually built, the Milwaukee in 1878 and the Northwestern in

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1881, and the people began to conclude that we might even yet amount to something. New settlers were added and people began to talk of the grasshopper times as a past calamity. Still later on this debt was again rebonded and the interest this time reduced to five and still later to four and one-half per cent, and the people began to see the clear sky clear down to the horizon. But even then the people were exclaiming that if their land ever got up to twenty-five dollars per acre it would be the top, and they would sell at once, which many of them did, little dreaming that right here in O'Brien county was a soil unequalled anywhere on earth, and that in this year of grace 1914 it would actually sell for one hundred and fifty dollars per acre. The last thousand dollars of the debt was paid off in the year 1908.

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