The Ingalls family had been living in Burr Oak, Iowa following the death of "Little Freddie", the only boy born to Charles and Caroline. Charles Frederick (Freddie) Ingalls had only lived a little over nine months.
Charles had made a deal to manage the Masters Hotel in exchange for room and board for his family. But, being next to the town saloon, the accommodations didn't suit the family. Also, the deal went sour, when Charles didn't receive the money he was promised for his work.
So, the family found better living quarters over the grocery store. But, even that was too near the saloon to make for quiet and peaceful living. The owners of the grocery lived on the first floor. One night Charles was awakened with the owner yelling and arguing below, in his quarters with his wife. He was drunk and was threatening to burn the building down! Charles was able to calm him down, but it lead to the Ingalls family seeking new living arrangements.
While staying at the hotel, they had met Mr. Bisbee, a border. He taught Laura to sing with musical scales. This connection with Mr. Bisbee proved providential. The family was finally able to find a more suitable home, when Mr. Bisbee offered them rent in a red brick house at the edge of town. It was there that Grace was born.
It was a wonder that Grace and her mother came through the pregnancy without ill effects! Just months after Grace had been conceived, there was an outbreak of measles in the town! Mary, Laura and Carrie were exposed to it by playing with children in their home. But, it seems that there was no trouble for either Caroline or Grace. Perhaps this was a contributing factor to the naming of Grace.
Charles had started a feed-mill. He used his team horses to operate the mill stone. But there wasn't much money to be made in the small town. As as result, he longed to move again.
In Charles and Caroline's minds, Burr Oak had turned out to be a "Less than desirable" place to raise a family. For them, Grace's birth was about the only good thing that they took away from their time in Burr Oak. Shortly after Grace's birth they moved again; this time they returned to Walnut Grove, Minnesota.
The family owed money to the doctor and were finding it difficult to pay the rent to Bisbee. Charles tried reasoning with his creditors, but they were callus and demanding. He told Bisbee that he would relocate and then send him the money for the owed rent. But Bisbee refused the offer. When Bisbee threatened to have the law take Charles' horses, that was all it took for him to make a quick decision. So, he packed up the family in the middle of the night and left town in the morning. Charles, being a man of his word, knew that he would send the money owed to Bisbee. I'm sure he was relieved to put the whole experience behind him!
In Laura's "Little House" books, she didn't give much detail of the time her family spent in Burr Oak. She did, however, hold some sweet memories of those days, despite what trouble her parents had there. In correspondence, she later spoke fondly of her school days there. She would always remember the loud, lawlessness of the town saloon and the time it caught fire. She simply remembered that time as part of her growing up and the birth of her sister Grace.
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