The Supreme Court Case

In part because of the influence of corruption, the Dakota Southern Railroad became a source of disputes and disappointments soon after its completion. Yankton County found itself the victim of alleged fraud and breach of contract. A series of lawsuits ensued. At the Dakota Territorial Supreme Court, Yankton County prevailed after the court ruled that Congress did not have to the power to validate the invalid action of the territorial legislature when it authorized Yankton County’s railroad bond issue. However, when the bondholders appealed this decision, the U.S. Supreme Court overruled that lower court decision. In its opinion, the Court reaffirmed the supreme authority of Congress within the territorial system. But this was only the beginning of Yankton County’s woes. The bondholders then used the bond episode to argue that Dakota Territory, under the leadership of Yankton residents, did not have the requisite character for statehood. And in a final blow, Yankton lost the territorial capital in 1883 under the corrupt Governor Ordway.