When Clay County was established in 1851, it had no local government and official business was done out of Sergeant's Bluff, nearly 100 miles away on the Missouri River. In 1859, Judge Hubbard of Iowa's 4th Judicial District authorized a committee to find a site for the county seat. This committee selected "Section 20 of Spencer Township", located roughly in the center of the county near the confluence of "Sioux River and Ocheydan Creek", as the site for the "seat of justice". County Judge Charles Smeltzer approved their plan and began signing documents with the location "Spencer, Clay County, Iowa", even though he was not physically there. A small group of land speculators had cleared the area and laid out a town plan, but there were no people living in that area at the time. Most of Clay County's residents were living in Peterson Township, in the far southeastern corner of the county. Put to a vote, Peterson was chosen as the County Seat and a courthouse erected there. The site of the proposed town languished, uninhabited, for many years, the area coming to be called "Spencer Grove".