Free Market

The Feds versus The Indians

The Free Market

The Free Market 16, no. 1 (January 1998)


History books and the popular culture are full of stories about how “the white man” brutally mistreated the American Indians during the latter half of the nineteenth century. Greedy capitalists are usually portrayed as the villains, killing Indians by the thousands to make way for the railroads in particular and economic development of the West in general.

But it was neither all white men nor all capitalists who brutalized the American Indians. The dispossession of the Indians—culminating in the late 1880s with the surviving tribes of the West being herded onto reservations—was the result of a corrupt and immoral relationship between certain Northern industrialists, particularly government-subsidized railroads, and the federal politicians whose careers they financed and promoted.

The eradication of the Plains Indians by the Union army was an indirect form of corporate welfare for politically connected railroad companies who enlisted the coercive powers of the central state to steal Indian property while engaging in a genocidal policy. Like many citizens today, the Indians were victims of governmental power, not of capitalism or European culture, as today’s politically-correct historians insist.

In July 1865, barely three months after Robert E. Lee’s surrender at Appomattox, General William Tecumseh Sherman was put in charge of the Military Division of the Missouri, which included everything west of the Mississippi. Many historians have sugarcoated Sherman’s actions during this period by writing that his assignment was to help the U.S. achieve its long sought-after “Manifest Destiny.”

In reality, Sherman’s assignment was to provide a segment of the railroad industry, which heavily bankrolled the Republican party, with veiled corporate welfare in the form of eradicating the Indians of the West. In Sherman’s own words: “We are not going to let a few thieving, ragged Indians check and stop the progress of the railroads.... I regard the railroad as the most important element now in progress to facilitate the military interests of our Frontier.”

“We must act with vindictive earnestness against the Sioux,” Sherman wrote to Ulysses S. Grant (commanding general of the federal army) in 1866, “even to their extermination, men, women and children.” The Sioux must “feel the superior power of the Government.” Sherman vowed to remain in the West” till the Indians are all killed or taken to a country where they can be watched.”

“During an assault,” he instructed his troops, “the soldiers cannot pause to distinguish between male and female, or even discriminate as to age.” He chillingly referred to this policy in an 1867 letter to Grant as “the final solution to the Indian problem,” a phrase Hitler invoked some 70 years later.

Sherman viewed the Indians, writes biographer John F. Marszalek, “as he viewed recalcitrant Southerners during the war and newly freed people after: resisters to the legitimate forces of an ordered society.” Many other Union officers “such as Philip Sheridan, George Armstrong Custer, John Pope, Benjamin Grierson, and others” helped Sherman achieve his “final solution” by the late 1880s.

The great triumvirate of the Civil War,” biographer Michael Fellman writes, referring to Grant, Sherman, and Sheridan, “applied their shared ruthlessness, born of their Civil War experiences, against a people all three despised.”

Marszalek writes that in the Fall of 1868 Sherman instructed Sheridan to “act with all the vigor he had shown in the Shenandoah Valley during the final months of the Civil War,” and he did. The two men popularized the phrase “a good Indian is a dead Indian,” and Sherman promised to lead interference with the press if there was any talk of “atrocities.”

Such talk would certainly have been appropriate, for the “final solution” was accomplished by hundreds of sneak attacks on Indian villages filled with women and children, which were wiped out by massive artillery and rifle fire. These “campaigns” were especially frequent in the winter months, when Indian families would be together.

It was also official government policy to slaughter as many buffalo as possible as a means of eventually starving out the Indians. It was not just the “tragedy of the commons” that was responsible for the near extinction of the American buffalo; it was official U.S. government policy.

Ironically, ex-slaves were recruited into the federal army to ethnically cleanse the American West. Movies have been made and books have been written in recent years celebrating these black “buffalo soldiers” by people who are apparently unaware (one hopes) that the black soldiers were taking part in genocide.

Sherman’s ultimate objective “which he did not quite achieve” was murder of the entire Indian population. Just before his death in 1891 he bitterly complained in a letter to his son that if it were not for “civilian interference” by various government officials, he and his armies would have “gotten rid of them all.”

Sherman’s (and Lincoln’s) close friend and former business associate, Grenville Dodge, was in charge of building the government-subsidized transcontinental railroads that were “protected” by Sherman’s armies, and he did so in a thoroughly corrupt and inefficient manner.

Per-mile subsidies provided incentives for bilking the taxpayers by building winding, circuitous routes. Dodge even laid track on top of several feet of snow in the winter months, and then rebuilt them after the spring thaw, collecting twice the subsidies. The entire enterprise was so marred by corruption, inefficiency, and fraud that at one point (1893) all of the government-subsidized railroads were bankrupt.

In his rush to collect subsidies Dodge invaded private farms, forcing the owners to defend their property with rifles. When Indians acted in a similar way to protect their property, the army was called in.

Yet the great railroad entrepreneur James J. Hill built the Great Northern Railroad without a dime’s worth of subsidies and no land grants. “Our own line in the North was built without any government aid,” Hill boasted proudly in 1893. Unburdened by government regulation (in contrast to his subsidized competitors), Hill chose the best routes, built the sturdiest tracks, and paid the Indians and other landowners free-market prices for rights-of-way across their property.

But Hill was in the minority. The government-business partnership Lincoln established had turned its attention to the West after conquering the South, employing “the great triumvirate of the Civil War” for ethnic cleansing on behalf of government power and its corrupt corporate clients.

FURTHER READING: S.L.A. Marshall, Crimsoned Prairie: The Indian Wars (New York: Plenum, 1972); John F. Marszalek, Sherman: A Soldier’s Passion for Order (New York: Vintage Books, 1993), esp. chap. 17; and Roy Morris, Jr., Sheridan: The Life and War of General Phil Sheridan (New York: Vintage Books, 1992), esp. chaps. 9-10.


DiLorenzo, Thomas J. “The Feds versus the Indians.” The Free Market 16, no. 1 (January 1998).

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