OT Zeev,
I was once told this story that may very well be a "rural legend". There was a ghost town in Eastern Oregon called Shaniko. It used to be a rail head for the sheep shippers in the region. After all the native bunch grasses were stripped from the desert, the town went belly up.
Anyway, some folks got the idea to turn this ghost town into a community for mentally retarded folks. Volunteers rebuilt some of the stores and houses. A doctor and two or three nurses set up shop and soon there was a community of retarded folks living there. One ran the store, another the barber shop, hardware, bakery etc. They even had their own currency. The clients were productive and happy. This situation went on for over a year until the state (Oregon) stepped in and said the client/nurse relationship was too low. There were no funds to add nurses and the whole shebang closed down. The clients were institutionalized and it was rumored that several committed suicide. I believe this happened around the end of WWII.