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is a city in Dodge and Jefferson Counties in the U.S. state of Wisconsin. Most of the city's population is in Jefferson County. Division Street, several blocks north of downtown, marks the county line.
The population of Watertown was 21,598 at the 2000 census. Its 2007 estimated population was 23,301.
Watertown is the largest city in the Watertown-Fort Atkinson micropolitan area, which also includes Johnson Creek and Jefferson. The 2005 estimated population of the micropolitan area was 79,328.
Watertown was first settled by Timothy Johnson, who built a cabin on the west side of the Rock River in 1836. A park on the west side of the city is named in his honor. The area was settled to utilize the power of the Rock River, which falls in two miles (two dams). In contrast, the Rock River falls only upstream from Watertown. The water power was first used for sawmills, and later prompted the construction of two hydroelectric dams, one downtown (where the river flows south) and one on the eastern edge of the city (where the river flows north). The Watertown economy remains heavily reliant on light industry.
In 1853, a plank road was completed from Milwaukee to Watertown. After plank roads were no longer used, the route was replaced by highway (Wisconsin Highway 16) and a railroad. A street named "Watertown Plank Road" survives in Milwaukee. It is referred to in the "Plank Road Brewery" family of beers, produced by Miller Brewing Company in Milwaukee.
The city grew slowly at first, but an influx of German immigrants increased the population to over 10,000 in the late 19th century. The city is the home of the first kindergarten in the United States, started in 1856 by Margaret Meyer Schurz, wife of statesman Carl Schurz; the building that housed this kindergarten is now located on the grounds of the Octagon House Museum in Watertown.
Growth of the city was substantially hampered when Watertown issued almost half a million dollars in bonds to support the building of two railroads to town to encourage further growth: the Chicago & Fond du Lac Company and the Milwaukee, Watertown & Madison Road. The success of the plank road convinced residents that a railroad would be even more beneficial, and bonds were issued from 1853 to 1855. The Milwaukee and Watertown Railroad, as it was called before it extended to Madison, was completed in 1855, only the second line in the state.
Soon after, the two railroads went bankrupt in the Panic of 1857. The bonds were sold by the original investors to out-of-town speculators at a small fraction of their face value. Since the railroads were never built and did not produce revenue, the city was unable to pay off the bonds. Moreover, the city did not feel compelled to do so because the creditors (those who held interests in the bonds) were not only from out of town, but weren't even the original holders. Yet the creditors exerted so much pressure on the city to pay off the bonds that Watertown effectively dissolved its government so that there was no legal entity (the government as a whole or officers) that could be served a court order to pay or appear in court. The case was not resolved until 1889, when it had risen all the way to the Supreme Court of the United States, which essentially dismissed the case of the creditors. A small amount remained to be paid, and this was not paid off until 1905, half a century later.