The demographics and economics of Lincoln County changed significantly between 1880 and 1900. More and more Anglo settlers moved into the region, bringing new industries, including mining, large-scale cattle ranching, and timber harvesting. Before the 1880s, most Lincoln County residents resided near the agricultural communities along the Bonito and Hondo valleys. In 1860, around 350 individuals lived in the area surrounding Lincoln, including the Hondo and Ruidoso River valleys.  By 1900, more than 800 people lived in White Oaks alone—with more than half of the household heads working as miners.  Then, in 1899, the El Paso and Northeastern Railway extended their established rail line from Alamogordo north to Carrizozo and east to the coal fields near a new town named Capitan.  Almost overnight, the populations of Carrizozo and Capitan exploded, reaching more than 1,500 combined residents by 1910.

Meanwhile, Lincoln’s population was shrinking as residents moved from their farms to these new population centers. By 1901, citizens in Lincoln County began debating moving the county seat to White Oaks or Capitan. Leaders in White Oaks were even willing to accept a move to Capitan if the El Paso and Northeastern Railway funded the construction of a new courthouse and jail.  In 1903, the territorial legislature discussed possibly splitting Lincoln County into two counties. At this point, local discussions began regarding a more centralized county seat should boundaries be moved, with residents suggesting both Carrizozo and Capitan as possibilities.  In July 1909, citizens presented a petition—signed by more than 1,200 residents—to the Board of County Commissioners. The petition requested an election to determine whether Lincoln would remain the county seat or relocate to Carrizozo. The petition met all requirements, and the commissioners set the special election for Tuesday, August 17th, 1901.   

There were numerous arguments from both sides regarding why the county should or should not move the seat of power to Carrizozo, with the fate of the old county courthouse in Lincoln chief among them. The cost of building a new courthouse in Carrizozo was at the heart of the arguments. Those in favor of the move argued that repairs on the old building in Lincoln cost taxpayers more than the interest on any bonds issued to construct a new building.  The Carrizozo Chamber of Commerce printed daily arguments in the Carrizozo News about the benefits of moving county operations from Lincoln. Many of the leading citizens of Lincoln—including Dr. John Laws, merchant J.J. Aragon, and lawyer George Barber—wrote counter editorials leading up to the election.  
Ultimately, the simple fact that Carrizozo and nearby White Oaks had larger populations guaranteed the move. Following certification of the ballots, county commissioners confirmed that citizens cast 899 votes to move the county seat to Carrizozo and 614 for leaving it in Lincoln—a difference of 285 votes or 18.8%.  Unsurprisingly, the smaller communities in the eastern sections of the county voted in favor of Lincoln, while the larger population centers on the western side voted for Carrizozo. In line with state law, Carrizozo became the official county seat as soon as the Board of County Commissioners certified the vote, but the fight over the decision would drag on for four long years.

Immediately following the election, a group of prominent lawyers, led by George Barber and Thomas Catron, filed suit in the district court, arguing that the vote to move the county seat was illegal because the county commission failed to appoint a registration board sixty days before the election. The County Commission argued that this law did not apply to a special election, ordered to occur sixty days after a petition's presentation. Catron and Barber’s argument was weak, but the savvy litigators kept the issue bogged down in the district and territorial courts for several years. 

Finally, the United States Supreme Court received the case In January of 1913—officially submitted as Gray v. Taylor. On January 20, 1913, Justice Oliver Wendell Holmes, Jr. issued the court’s decision, siding with the Board of County Commissioners. Their ruling certified the election as legal and that relocating the county seat from Lincoln to Carrizozo was official and binding. In the fall of 1913, the remaining county officials and staff relocated their offices to the new courthouse in Carrizozo, along with all county records. This move included hauling the massive vault door from Lincoln and reinstalling it at the new courthouse in Carrizozo. The halls of the courthouse in Lincoln went silent, marking the end of another era for the building. 

The courthouse stood empty between 1913 and 1919, and the structure deteriorated significantly. The county commission attempted to sell the building into private hands, but no one offered bids above the legal threshold of two-thirds of the building’s appraised value. As early as 1917, preservation advocates began calling for restoring the old Courthouse and transforming it into a museum.  Lincoln County State Representative Ira O. Wetmore introduced a bill in the state legislature, recommending that the county convey the old courthouse in Lincoln to the state for use as a “Museum and repository of the pioneer days of the Southwest.” Wetmore’s House Bill 117—including $10,000 earmarked for the courthouse renovation—passed the house by 40 votes to 3 in February 1917.  Despite support for the bill in the House of Representatives, a Senate sponsor never came forward, and the bill died without further debate.

State and county leaders put the courthouse’s transformation into a museum on hold—instead, turning their attention to utilizing the building to support the growing educational needs of the Lincoln Community. In October 1919, Lincoln County School District No. 1 offered a solution to the county’s challenge of maintaining an empty and deteriorating building. The school board needed property in Lincoln to build a new schoolhouse, and the courthouse property to the east of the existing building was a perfect location. In addition to the land for the new construction, the school district would have access to the large courthouse building itself as additional classroom space, extracurricular activities, storage, and more.