The present twin cities of Toledo and Tama were, until the end of the nineteenth century, separated from one another by a mile or more of open farmland. By the early 1900s the two communities had blended into one another, although they did retain their separate identities. Toledo was selected in 1854 as the site for the county seat, while Tama was platted to the south in 1862 in anticipation of the arrival of the railroad. By the 1890s the joint cities of Toledo and Tama were served by both the Chicago and Northwestern Railroad and the Chicago, Milwaukee, and Saint Paul Railroad. An electric suburban railroad went into operation between the two cities in 1894. With the construction of paved highways in the years 1910 through the 1920s, Toledo and Tama were traversed by the Lincoln Highway (US 30). One of the most interesting early public projects of the city of Tama was the formation of the Tama Hydraulic Company in 1874. This company constructed a dam across the Iowa River, creating a large lake that could be used to provide water to the community as well as to generate power.
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