Econ Focus

The Great Father

Since the United States signed its first treaties with American Indians, an often-contentious relationship has existed between the two sides. Tribes have fought to choose their own path while federal officials have made choices for them, sometimes with good intentions that didn't turn out as expected. Today, reservations continue to deal with the legacy of federal Indian policies.

Time to Move
For Cherokee and other tribes in the South, the removal policies of the early 1800s had the biggest repercussions. Some Indians had been migrating westward for economic and other reasons when the federal government bowed to pressure from land-hungry settlers in states like Georgia to move things along.

These efforts culminated with the Indian Removal Act of 1830. The law authorized President Andrew Jackson to negotiate the removal of tribes living east of the Mississippi to lands farther west.

The Cherokee Nation successfully fought the law all the way up to the U.S. Supreme Court, but the Jackson administration ignored the ruling and signed a treaty with a small faction of the tribe in 1835 to gain control of all of the Cherokee's land. Other treaties were negotiated under duress. Eventually, tens of thousands of Indians were forcibly relocated to what is now Oklahoma.

Some Indians adapted to their new circumstances. They created large farms either for their own use or to sublease to ranchers. Others became subsistence farmers, tending to semiarid land that was very different from what they had cultivated.

The forced relocation of Indians into artificially designated "Indian territory" and the subdivision of this land into smaller reservations during the 1850s created a mistrust of the federal government.

"In some communities, there remains enormous bitterness ... It's not old history to them," says Stephen Cornell, a sociologist at the University of Arizona and co-director of the Harvard Project on American Indian Economic Development. But Cornell doesn't want to overstate the extent of this bitterness. "There are other communities that say they're [upset] about it but they're going to try to improve things."

From Hunters to Farmers
The next stage of Indian policymaking was marked by the General Allotment Act of 1887, also called the Dawes Act. It took reservation land out of collective ownership and subdivided it into individually owned parcels to be held in trust by the federal government for 25 years. Settlers could purchase any land left over.

According to Leonard Carlson, a Stanford University economist who has studied the economic impact of federal Indian policies like the Dawes Act, allotment was supposed to enable non-Indians to move into reservations, helping to integrate Indians into American culture. It also was meant to encourage tribes to farm instead of hunt.

But the social experiment wasn't successful. Some Indians had difficulties learning how to farm or they received land that was difficult to cultivate profitably, while others didn't use their allotments because the concept of individual land ownership was foreign to them. Worse, many Indians lost their allotment for failing to pay back taxes after their land was taken out of trust and subject to state and local levies, without their knowledge.

"My take is that they were given a really messy property right," says Carlson. "You had this piece of land, but you couldn't take a mortgage out on it, you couldn't sell it, and you couldn't lease it on your own until you were declared competent." Also, since Indians weren't considered competent to write a will, their property was divided among their heirs according to a formula when they died. This made reservation land so encumbered with multiple ownership that "you couldn't do anything with it."

To Assimilate or Not Assimilate
To reverse the ill effects of allotment and deal with poor economic conditions on reservations, reformers crafted the Indian Reorganization Act of 1934. Popularly called the "Indian New Deal," the law prohibited further partitioning of reservation land. It also authorized the Secretary of the Interior to return remaining surplus land to tribes, and to obtain property inside and outside of reservations for use by Indians.

Most importantly, the 1934 law took steps to reverse past efforts to assimilate Indians. Tribes received new rights and the ability to govern themselves. They could incorporate and establish constitutions that included voting rights for tribe members and tribal councils.

But after World War II, the federal government tried again to integrate Indians into the mainstream with its termination policies of the 1950s and '60s. In the name of setting Indians free from federal control, it withdrew formal recognition of many tribes and eliminated financial support for reservations. Tribal lands were taken out of federal trust and legal jurisdiction over reservations was transferred to state governments.

"Conventional wisdom says that it was a disaster," notes Carlson. "State and county governments didn't have enough resources to support Indians." In a few cases, terminated tribes weren't allowed to retain any communally owned property. This severely harmed tribes like the Klamath in Oregon whose property had significant economic value.

Eventually, the pendulum of federal policymaking swung in the opposite direction. The Indian Self-Determination and Education Assistance Act of 1975 and other laws passed during 1970s gave tribes additional powers of self-government that they continue to operate under today.

The Aftermath
Still, past Indian policies produced a history of outsiders making decisions for Indians and a hodgepodge of land ownership on reservations. Both complicate efforts to encourage economic development in places like the Qualla Boundary in western North Carolina.

There may be an indirect consequence of Indian policies as well. The social isolation of some tribes, their wariness of outsiders, and their inclination toward self-reliance may hinder the flow of financial and human capital from outside the reservation.

The Eastern Band of Cherokee Indians has long recognized the value of working with its rural neighbors. Still, it takes awhile to gain the tribe's trust, particularly given the past history with removal.

"I think we are very cautious," notes Chrissy Arch, former economic development director for the Eastern Band and an enrolled member of the tribe. "I have to know what you're offering me and feel comfortable with who you are and how you do business before I'm willing to invest in that relationship." As a result, the tribe hasn't networked with other communities as much as it might have. "We've always tried to do things on our own."