Annuities, Scrip and the Indian Trade

Indians Trading at Trading Post

The treaties themselves created opportunities for Indian Affairs bureaucrats and their connections to make livelihoods and even fortunes.

Blacksmiths, mill operators, teachers, missionaries, farmers and other personnel were given positions paid by the government through various treaty articles. These employees joined Indian agents, subagents, special agents, supervisors and commissioners in an extensive bureaucracy that controlled -- and often diverted -- federal funds. Other individuals were paid to transport goods and money to treaty sites and to annuity payment meetings. And traders maintained posts near Indian reservation to capitalize on the availability of cash that was delivered to Dakota and Ojibwe people in compensation for ceding land.

The situation that resulted from treaties was ripe for fraud and abuse. Ojibwe and Dakota people, including mixed-blood descendents of American Indians and white traders and politicians, held individual allotments of land, and scrip for timber rights; they also received annual payments of cash and goods. These resources, retained by Dakota and Ojibwe people through intensive negotiation, were intended for the sole benefit of American Indian people. Indian agents, however, often diverted annuity payments for their own enrichment. Scrip was often purchased fraudulently by timber companies and land speculators. As a result of this abuse, Dakota and Ojibwe people were defrauded of many of the resources that the treaties promised.

Several examples among many of the abuse of the treaty system:

"I found that Agent Webb and four or five others were bribing boys and children to come in and swear that they were entitled to an eighty acre piece of land that the Treaty of 1854 provided for half-caste and mixed blood people, and were paying them from ten to twenty dollars apiece for their scripts, as circumstance required. I made up my mind that I would be drawn into the rascally scheme by implication, if I remained in the employ of the government under General Webb, so I threw up my position and left Bayfield going to the copper mines."

—Memoirs of B. G. Armstrong, referring to Indian agent Luther Webb (who signed the Bois Forte treaty of 1866)

"On March 11, 1870, William P. Dole [who signed an 1863 Ojibwe treaty], United States commissioner of Indian affairs, sued Joseph P. Wilson of St. Cloud, Minnesota, to recover the sum of $6,720 for twenty-eight pieces of half-breed scrip sold by him to Wilson. To the complaint answer was made that twenty-four pieces had been delivered, but that they were of no value, because the commissioner had received them for services in issuing like worthless certificates from parties not entitled to them, in violation of his duty as commissioner and with the intent to defraud. The investigating commission reported that it was "well advised that the averments of Mr. Wilson's answer are correct and true."

—William Watts Folwell, A History of Minnesota

"I hope that the time of payment will be kept a perfect secret. No one excepting those whom we want or need to assist ought to know anything about it... You nor I want any one here but them who can render us assistance."

—Chippewa Indian agent Lucius Walker, writing to Clark W. Thompson in an attempt to divert undistributed annuity payments in 1861.