Before passage of the sixteenth amendment and the establishment of the income tax in 1913, federal government funding came from tariffs. That is the narrative of the day. But, once again, we seem to have forgotten the place of Native America in our Euro-American history. How did Native America finance the US?
From the first, Europeans settled on and exploited Native lands. Sometimes it was diseases which had ravaged Tribes and left the land vacant or with such a diminished population that the Indians were quickly overwhelmed with numbers; sometimes it was by treaty (even before the US was a country, there were treaties); and at times lands were even purchased from Indian Tribes or Tribal peoples.
The gradual takeover of Indian lands as the country was established and continued to move west, across the continent, was facilitated by important legislative maneuvers, from the aforementioned—and later—treaties to The Removal Act of 1830; the Donation Land Claim Act of 1850; the Homestead Act of 1862; The Morrill Land-Grant Act, also of 1862; the Dawes General Allotment Act of 1887; and the Termination Act of 1953.
The judiciary had its role as well, especially with the “Marshall Trilogy” of the 1820s and 30s, which, using the ancient Doctrine of Discovery, declared that Indian lands—all lands not held privately, or, I imagine by towns and cities—were owned by the Federal Government. Indians were “occupants” of the lands, but did not own them, until individual Indians bought or gained them by allotment (at which point they paid taxes). As the country marched west, “public lands” were transferred into private hands by the Donation Land Claim Act, and then the Homestead Act. There were fees, which the government collected. I could not in my cursory exploration, find any dollar amounts associated with these land transfers, but we know that the government collected fees.
In Claudio Saunt’s book on Indian Removal of the 1830s, he says that the federal government kept meticulous records on how much it paid for oxcarts to move the displaced Indians, how much it paid in bargain sale prices for the land when Indians were forced to leave, and how much the government gained from land sales. Without going back to the text, I remember that income and expense figures were closely matched in the $70 millions, with income a million or two more than the expenses. This was in the 1830s, before the DonatIon and Homestead acts.
In the 1862, during the Civil War, the Homestead Act and the Morill Land Grant Act were passed. We’ve talked Homestead, but the Morill Act had been largely forgotten by historians of Indian displacement until High Country News did an extensive investigation. It turns out that Indian lands were given to each state to start “land grant” universities, Sometimes the lands were built on—I believe Washington State University was built directly on Morill lands. At other times allotted lands were sold to help finance the universities! Rutgers got land in the Midwest which helped establish its endowment.
It is widely known—and stated explicitly in government and academic publications, that the Allotment Act resulted in the loss to Tribes of 90 million acres. These lands were called “surplus” after allotments were not taken by all Tribal members, and the earlier calculation that there would be lands left over, “surplus,” to the allotments. Those Indians who took up allotment lands could then begin paying taxes (I’m not sure where those tax moneys went), and the sale proceeds of surplus lands was to go into a trust fund to be used for educational and other benefits to Tribal members. A century later, several court cases worked to find out what exactly had become of these trust funds. There were settlements, but not every Indian benefited, and I could find no accounting for the actual size of the trust fund or what happened to the funds over decades.
In the 1950s, in a last attempt to fully “assimilate” American Indians, the “Termination Act” allowed the federal government to buy Tribes out—and released the same government from treaty responsibilities for health and education services. Oregon Governor Doug McKay resigned to be Eisenhower’s Secretary of Interior, where he led the Termination charge. Of the 109 tribes and bands terminated nationwide, 62 were in Oregon!
The most famous termination was of the Klamath, who supposedly held the largest mature pine forests in the West, Timber giant Crown Zellerbach ended up with 90,000 acres, and much of the rest of Klamath Tribal lands went into national forests, where there was presumably more timber harvest. Many but not all Tribal members took the buyout, and the Klamath Tribes were reinstated in 1975, but not with their ancestral lands. Overall, Termination was a dismal failure, but I could not easily find a financial accounting of the money lost to Tribes, or that burned up in the administrative exercise, or that gained by Crown Zellerbach.
The idea that the development of the United States and the operation of our government was largely financed by tariffs is a lie. I will argue that the greatest fueler of the country’s early growth across the continent, of that thing we call “Manifest Destiny,” and the continuing education of thousands of students across the country all owe to the displacement of Native Americans.
The graph above does not indicate this. Indians forgotten again.
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Graph from Wikipedia