But then on February 19, 1891, at high noon, when the school was almost completed, the fire alarm was sounded, and the terrible fact was that Saint Mary's Academy, the pride of the town, was in flames. Crowds of men and women rushed to the scene, but it was too late to save the building and nothing could be done in a heroic manner. The wind was favorable, being from the south, and as soon as the roof fell and the northeast corner burned out, the danger to the other buildings was over. It was a sickening and painful site to see that grand structure going up in smoke and there were many sad hearts in the town because of the fire. The origin of the fire was a mystery and will probably always remain one. The workmen stated that there had been no fire in any room of the building all day except in the southwest attic room and that was out by eleven o'clock. They left the building at five minutes of twelve going from the upper floor down to the basement to get out and there was no fire visible then. The men went down to the New Ogden to dinner and had just gone in to the table when they heard the cry of fire. The noon bell had scarcely ceased ringing when it was started up as the fire alarm and the smoke was seen issuing from the windows in the first and second stories on the northeast side and out of the roof at noon or very soon thereafter. It started up and got very strong headway in an almost incredibly short space of time and the whole building was burned in about ninety minutes. The loss was estimated from ten to twelve thousand dollars and the building was insured for ten thousand dollars in the name of the church. The contractors had no insurance. The walls and high chimneys, and even the cupola frame were left standing and it was thought that the greater part of the walls were still as good as new. The northeast and northwest corners were cracked and the windowsills and caps, made of red sandstone, seemed to be burned and some of them totally ruined.

It was almost certain that the damage was to be repaired and that the building was to be in shape for the fall school term. Mr. McVey was reported as saying that the loss falls upon them and that they will expect to make it good. Mr. Meals, the other member of the firm, telegraphed to Frank Campbell to know if his interests were protected. He was to be up that evening to meet with the contractors and the building committee to get the situation properly adjusted. Also, a meeting was called by the city of O'Neill at the court house for the purpose of inaugurating a scheme whereby the town would secure a system of water works for protection from fire, but the attendance was light and nothing was really accomplished except that a seed was sown for water works in the future.

Father Cassidy felt that the fire originated in the basement through the carelessness of the workmen. At the time of this appalling disaster, fourteen thousand dollars had been expended on the building and its heating plant. Father Cassidy then was informed by the insurance company that had insured the academy refused to pay for the fire damages on the grounds that the building did not belong to the parish. The insurance policy was made out in the name of the church, but the academy had not been formally turned over to the church by the contractors, hence, the grounds for the claim. There still seemed to be no question as to the rebuilding of the academy as the contractors stated they were the losers by the fire and even if the insurance could not be collected, they would have to replace the building. Still suit was instituted in the District Court of Holt County against the contractors and their bondsmen to recover the amount paid on the contract, and a judgement for fourteen thousand dollars and costs obtained. The case was appealed by the bondsmen to the Nebraska Supreme Court, which reversed the judgment of the District Court. The suit was dropped, but Father Cassidy was faced with bills and Mechanic's Liens by Frank B. Kennard Glass and Paint Company, Galena Lumber Company (a partnership of Edward F. Gallagher and Thomas F. Birmingham), the Omaha Planing Mill Company, Newell and Lamphear, A.C. Raymer. These liens amounted to three-thousand-and-thirty-four dollars and fifty-eight cents. But Father Cassidy managed to get through all of this because on February 2, 1891, he went to Omaha and mortgaged the whole property for ten thousand dollars, and Felix J. Despecher held the mortgage.

All of this, the calamity, the mortgage, shattered for the time being, the fondest aspirations and most cherished ambitions of the parish, but, severe as the shock was, it did not entirely annihilate the hopes and determination of the people to replace the beautiful structure that had been the pride of their hearts for a day.

In the spring of 1898, the chief ambition of the parishioners was to erect a school building. The great number of children in the parish in need of Catholic education rendered the building of a school an absolute necessity. The men of the parish set to work and tore down the ruins of the first convent and school that had remained since the destructive fire of 1891. The resources of the parish were dependent entirely on the harvest of the summer of 1899 but it fell below the usual yield. The hopes of the people were somewhat dampened, and it was thought best not to begin on this new building the following spring, because the parishioners did not want "debt" ranked among their possessions. But Divine Providence intervened and blessed the community of St. Patrick's in a singular manner and this is recorded in the Sisters' Chronicle of St. Mary's of O'Neill:

The country back of St. Francis Mission, in the Rosebud Agency of South Dakota, has numerous lakes that provide splendid facilities for hunting. Father Cassidy and Patrick McManus, two famous hunters of O'Neill, were accustomed to spending a week each autumn at St. Francis Mission, in order to make use of this region for their favorite pastime. It was during these visits that the Franciscans at St. Francis Mission had an opportunity of becoming well acquainted with father Cassidy. When leaving for home, he invariably begged Mother Leopoldine to permit some of the Sisters to visit O'Neill. As the result of his pleading, Mother Leopoldine, who was in Europe in 1896, wrote back to the mission that Sister Alexia with Sophie Walking Eagle, and Frances Cut Cut should come to O'Neill for a few days, meet her at the train in O'Neill on her return trip, and accompany her back to the mission. Owing to the fact that Sister had the two Indian girls with her, she did not go to the rectory but to the home of John Hunt, who with his brother Dennis had done plastering at the mission. The Hunts were hospitable and Mrs. Hunt drove to most of the homes with Sister so that she met most of the Catholics of O'Neill.

Every afternoon Sister called at the rectory, and it was chatting with Father Cassidy on his front veranda, from which point of the burnt convent was in full view, that Father Cassidy said, "Sister, if your Community will come here and rebuild the Convent, I will give them the lots and everything on them," Sister did not reply but tried to turn the conversation to another topic. After a while Father came back with, "You did not give me an answer to my proposition." Sister answered, "Father, you do not want a German community in this Irish community." But Father continued, "I don't care what they are if they are only good teachers."

On the train going back to the Mission with Mother Leopoldine, Sister Alexia told Mother all that Father Cassidy had said. Mother Leopoldine was at once taken up with the proposal and entered heart and soul into having it accepted. She wrote at once to Reverend Mother who had Mother Cecilia and Sister Leonarda, then the business manager, come to O'Neill, meet the school children at the rectory and then send her report as to the advisability of taking over the project. Mother Cecilia and Sister Leonarda came from O'Neill to St. Francis Mission where the assembled community heard Sister Leonarda's report. It was that there was no thought of their undertaking to rebuild the school, that it would be impossible, and that the Sisters would starve in such a place as O'Neill. This was the report she sent to Reverend Mother, but Mother Leopoldine did not give up hopes and continued to urge Reverend Mother to take it. The Sisters of St. Francis Mission prayed to heaven to have the Sisters accept the new work offered. Father Cassidy was so highly esteemed by Mother Leopodine and the Sisters that they left no stone unturned to remove all obstacles and comply with his wishes. Reverend Mother's answer came to Father Cassidy: "We shall take O'Neill, for I think if our Holy Father, Saint Francis, were living, it would be just such a place as O'Neill where he would want us to work -- a place as where no other religions are working."

And thus the second St. Mary's began. Mother Leopoldine sent Sister Cypriana and Sister Rosalia McMullen (later she was Sister Emily) out to Park City, Utah, to Thomas Kearns, the owner of the Silver King Mine, an O'Neill boy who had gone west with only fifty cents in his pocket. This good gentleman gave the first donation for St. Mary's, one thousand dollars. Then Mother Leopoldine borrowed another thousand dollars from Doctor De Bell, who had a store at Rosebud Agency. She raised funds from various sources to get the work on the new school started. The first Saint Mary's was built in 1890 at the cost of eighteen- thousand dollars and was to serve as a school and a residence of the Franciscan Sisters from Sinsinawa, Wisconsin. The parish was unable to raise the funds to build another convent and school, so Father Cassidy pleaded long and earnestly to have the Franciscan Sisters undertake the rebuilding at their expense, and Reverend Mother Ludmilla finally gave her consent to the erection of a Convent to serve as a parish school and boarding school, the latter to be used especially for children of the surrounding country in order to prepare them for their First Holy Communion.

The site, including eight lots and the ruins of the old convent were presented as a free gift to the Sisters and the Sisters would in return erect a new building which would be commodious and in every way suitable to the needs of the parish and would conduct a school that would give the children and education based on Catholic foundation, and at the same time embrace the regular high school course of study.

Following the progress of the construction, the February 23, 1899 Frontier newspaper published this article:

A force of men commenced tearing down the walls of the academy last Monday. The walls are so solid that considerable blasting is being done in order to get them down. It is expected that the entire structure will be down next week and as soon as warm weather comes work will begin upon its reconstruction.

In the autumn of 1899 further agreements were made and it was decided that a few Sisters should come to O'Neill at the beginning of next year, live in a rented house, and support themselves by the teaching of music and fancy work: on April 19, 1900, Sister Mathilda, Sister Catherine, and Mother Kostka bade farewell to Holy Rosary Mission and arrived in O'Neill the following day. A delegation of parishioners met them at the depot and conducted their new home for the present, a modest cottage on the hill west of the burnt convent.

On the way to the cottage, the Sisters stopped at St. Patrick's church and kneeling at the communion rail offered themselves to God reminding him that he called them and they were in O'Neill to do his bidding. On arrival at the cottage, a hearty greeting was given to the Sisters by Brother Stander, S. J., an architect from St. Francis Mission, who, in answer to a petition from the Sisters, had been permitted by his superior provincial in Buffalo, New York, to take charge of the building, the work, and the laborers needed for its erection. Brother Stander took up his residence at the rectory and had the free hospitality of Father Cassidy. The temporary home of the Sisters consisted of several small rooms with a smaller kitchen, and the furniture boasted of having three old beds, several wash tubs, a supply of bed clothing, a generous supply of baking soda and ten dollars worth of groceries on the table, all supplied by kind-hearted parishioners. Everything spoke of extreme poverty and the first cupboards, small tables, and prie-dieux were made by the Sisters out of dry-goods boxes.

In the meantime, the plans for a new Convent and the foundation itself in 1900 received approval of the highest authorities of Franciscans' Congregation in Europe and in Buffalo, New York.