On March 18, 1858, the Minnesota Territorial Legislature established the borders for Otter Tail County and proclaimed “the county seat is hereby temporarily established at Otter Tail City. A failed attempt in 1870 to move the county seat to Tordenskjold Township prompted the state to amend the 1858 by permanently placing the county seat at Otter Tail City.

Otter Tail City’s future appeared bright. It had a growing population, the county seat and the Northern Pacific railroad was set to run their line through town – with just one hitch. Thinking he could get more money from the railroad, one landowner refused to grant the Northern Pacific a right of way through his property. Rather than haggle with the recalcitrant landowner, the railroad simple moved the track’s path to bypass Otter Tail City and through Perham instead.

Otter Tail was devastated, no railroad meant economic isolation. People and businesses left Otter Tail City in droves making it a veritable ghost town. Realizing it was no longer a suitable county seat, state representative E.E. Corliss proposed moving the county seat to Fergus Falls. Voters approved the move in November 1872.

Moving the county seat created one of the most enduring controversies in Otter Tail County. Legend has it that under the cover of darkness agents from Fergus Falls slipped into Otter Tail City and stole the county’s records. Corliss countered these accusations by writing:

“I have often heard it claimed that county auditor Ole Jorgens went to Otter Tail City in the night and unlawfully carried away those records, all of which is maliciously false. I was not there but I do know that the moving of the records was orderly and under the direction of the county commissioners. The county seat was located in two rooms over Jacob Austin’s store on Lincoln Avenue. The first courthouse opened in 1879.