Banking On Removal

BANKING ON REMOVAL In 1832, Levi Colbert sent a petition to President Andrew Jackson signed by dozens of his fellow Chickasaw leaders. The petition concerned a recent treaty in which his nation had ceded the entirety of its remaining homelands, which spread in rolling hills and black prairie across present-day northern Mississippi and northwestern Alabama. As compensation for this cession, the Chickasaw would, like many other nations displaced during Jackson’s administration, receive yearly annuities financed by the interest raised on a trust fund. In a neat circle, this trust fund would be composed of the proceeds of the Chickasaws’ former homelands: the money that would flow in as lands sold, the Treasury Secretary would invest the growing balance, and the interest accumulated would flow out to the Chickasaw nation as an annuity. The petition listed several concerns about the late treaty, but clarified that this investment itself was not among them. As Colbert explained, it had been his “intention to vest largely, through the President in bank Stock” in order to “let the old corn stand and my generations – feed on the new, year by year.”1 By comparing financial investments to corn storage, Colbert offered a distinctively Chickasaw frame of reference for how his nation planned to survive the ordeal of Indian removal. Communal maize cultivation bore deep roots in Chickasaw history, tracing back to their precursor chiefdoms of the Mississippian era.2 Non-Native observers had since the sixteenth century misunderstood southeastern Native agriculture as merely subsistence-oriented, even as intruders relied on the plunder of Native corn stores to sustain their expeditions. In fact, across centuries of warfare and adaptation Chickasaw women deliberately produced large surpluses to 1 Levi Colbert to Andrew Jackson, Nov. 22, 1832, Letters Received by the Office of Indian Affairs, Microfilm M234 Roll 136, Frames 276-309. (Cited hereafter as LRIOA with frame # in brackets] Robbie Ethridge, From Chicaza to Chickasaw: The European Invasion and the Transformation of the Mississippian World, 15401715 (Chapel Hill: University of North Carolina Press, 2010); 2 2 sustain the nation through famine, war, and other crises.3 Collecting and storing grain had provided security to the Chickasaw economy and embodied principles of social obligation, by allowing elders, orphans, and others in need to be fed from a common reserve.4 By invoking the storage of grain at a moment when his nation faced calamitous dispossession, Colbert and the petition’s co-signatories signaled their commitment to investment as a hedge against the uncertainties that lay ahead, and as a form of protection for their most vulnerable members.5 Like other nations who had cautiously agreed to investments in trust before them, the Chickasaw chose investment to secure a future for succeeding generations. Colbert’s pursuit of security was prescient, given that the program of Indian removal advanced by Jackson and his cabinet would bring disease, dislocation, and death to the Chickasaw and to other Native nations. Removal would also cause remarkable economic disruption. A euphemism that conjured a simple change of place, “removal” in fact encompassed months of settler terror and plunder in the lead-up to departure; the extrication of a nation from resources and commercial relationships bound to homelands; the interruption of multiple seasondependent cycles of planting, cultivation, collection, and preservation; the exodus of entire populations on highly lethal journeys, spanning hundreds of miles; and the unlikely reconstruction of an economy and polity from salvaged fragments carried on the trail west. Amid 3 Ethridge, From Chicaza to Chickasaw, 26-37; James Atkinson, Splendid Land, Splendid People: The Chickasaw Indians to Removal (Tuscaloosa: University of Alabama Press, 2004), 6-7; C. Margaret Scarry and John F. Scarry, “Native American ‘Garden Agriculture’ in Southeastern North America,” World Archaeology, 37, no. 2 (Jun., 2005): 259-274. 4 Scarry and Scarry, “Garden Agriculture,”; Ethridge, Chicaza to Chickasaw, 251-52; and Clifton. This desire shaped one complaint with their 1832 treaty: that it had not assigned portions of their investments towards education or agricultural aid, a provision that – not unlike granaries – would have provided measures of security and welfare to the nation for generations to come. Chickasaws to Hugh White Jan 7 1834. 5 3 this turmoil, storing funds in trust, like grain held in a corncrib, could bring a measure of confidence to this ordeal by keeping money safe, and at a safe distance.6 This was the context in which Colbert and his co-signers petitioned Jackson for an amendment to their removal treaty. The leaders worried that placing too much wealth out of reach would deprive the nation of direly needed resources in the shorter term. In particular, the treaty as signed had assigned too much money for investment, including a clause that would keep the proceeds of individual reservation lands in the hands of the government. The treaty had set aside a portion of the land cession to be surveyed into allotments for Chickasaw families, with the understanding that no Chickasaws would actually remain on these reservations. Essentially, the arrangement created an additional layer of compensation: each Chickasaw family (or single person) would not only benefit from national annuities but receive cash from their allotment. “We wanted this money in our power,” Colbert explained, rather than kept in federal trust.7 What the Chickasaw sought, in other words, was the correct balance between security (storing wealth at a consistent value) and liquidity (the ability to convert wealth into money without losing value).8 Yet despite the best efforts of Colbert and his peers – seasoned merchants and slaveholding planters wise to the exploitative potential of modern financial instruments – federal On Chickasaw removal, see Amanda L. Paige, Fuller L. Bumpers, and Daniel F. Littlefield, Chickasaw Removal (Ada, Okla.: Chickasaw Press, 2010); Arrell M. Gibson, The Chickasaws (Norman: University of Oklahoma Press, 1971), 142-62; Atkinson, Splendid Land, Splendid People, 180-236. On Southern Indian removal more generally, see Claudio Saunt, Unworthy Republic: The Disposession of Native Americans and the Road to Indian Territory (New York: Norton, 2020); Grant Foreman, Indian Removal (Norman: University of Oklahoma Press, 1832); Anthony F. C. Wallace, The Long Bitter Trail: Andrew Jackson and the Indians (New York, 1993); Tim Alan Garrison, The Legal Ideology of Removal: The Southern Judiciary and the Sovereignty of Native American Nations (Athens and London: University of Georgia Press, 2002). 6 7 Levi Colbert to Andrew Jackson, Nov. 22, 1832, LROIA 136 [276-309]. Or, in Jonathan Levy’s recent formulation, the Chickasaw balanced “precautionary liquidity,” the choice of security over profit, with “transactional liquidity,” the ability to rapidly convert assets into cash. Levy, Ages of American Capitalism: A History of the United States (New York: Random House, 2021), xxiii. 8 4 officials under Jackson ignored their concerns. The federal government spent the removal era strengthening its administrative control over the trusts for ceded lands, overruling Indigenous leaders’ decisions about how to manage their nations’ monetary and financial resources. Instead of growing Chickasaw wealth for future generations, federal officials channeled it towards a surging sector of debt-financed state banks. This fiduciary investment implicated Chickasaw wealth in the very issuance of money and credit used to speculate in Chickasaw land. Federal officials’ investment of Native wealth in state banks occurred at the same time as the Treasury reconfigured the nation’s money markets. Prior to the Civil War, the federal government held privileged powers to coin money and experimented in chartering two national banks; meanwhile, states contributed a profusion of paper moneys by chartering banks of their own. Each level of government used these monetary prerogatives to create and curtail specific economic exchanges.9 In a settler formation like the early United States, one of the prime exchanges for which money was designed was the purchase of Native land, and Jackson’s monetary policies changed how these exchanges took place. Opposed to the publicly chartered but privately run Second Bank of the United States, Jackson withdrew federal deposits and scattered them among preferred, state-chartered institutions. This encouraged the proliferation of regional banks while situating the Treasury – rather than the Second BUS – as the entity that orchestrated capital flows across the nation’s financial institutions. Because of the Second BUS’ expansive branch network Jackson’s “war” against it had most of an impact in thinly settled and Desan, “Coin Reconsidered” 38. On federal prerogatives to issue currency see Richard Sylla, “The Transition to a Monetary Union in the United States, 1787-1795,” Financial History Review 13, no. 1 (2006): 73-95; Ronald Michener and Robert E. Wright, “Development of the US Monetary Union,” Financial History Review 13, no. 1 (2006): 19-41; Max Edling, Hercules in the Cradle: War, Money, and the American State, 1783-1867 (Chicago and London: University of Chicago Press, 2014), ch. On Hamilton; Woody Holton, “The Capitalist Constitution,” in Sven Beckert and Christine Desan, eds, American Capitalism: New Histories (New York: Columbia University Press, 2018), 35-62; Sharon Ann Murphy, Other People’s Money, 31. On monetary heterogeneity see Ch. 1 of Eric Helleiner, The Making of National Money: Territorial Currencies in Historical Perspective (Ithaca: Cornell University Press, 2003).Cut if possible. 9 5 poorly capitalized states situated on recently acquired Native land – what might be called the fiscal frontier. As the Second BUS withdrew from the West and deep South, state banks proliferated to ensure that settlers had the means to pay for Native land. Among the creditors to these state-financed banks was the Chickasaw nation. The Chickasaw found themselves at the center of swirling forms of federal- and stateengineered money. But the Chickasaw were far from passive in the eye of this storm. Since 1818, the Chickasaw had demanded the delivery of the annuities they received in exchange for enormous cessions of their eastern homelands in specie, the most liquid form of money. Chickasaw leaders deliberately negotiated for annuities in high-powered money like specie, took care to configure how this currency would circulate within their diminished territory, and as a result, prospered in the decades before their removal crisis. When that crisis arrived, the Chickasaw struggled to sustain their access to higher-powered money, while conceding to the need for longer-term value storage. At the same time, the Chickasaw became implicated in the creation of the very state-banked currencies that hastened their dispossession. Invested in branches of Alabama’s State Bank, Chickasaw wealth became capital for an institution that supplied liquidity to investors in Chickasaw land. Federal trusteeship now served state economies predicated on Native dispossession under the guise of protecting dispossessed Native peoples. With this conflict of interest lodged at the heart of fiduciary colonialism, the Chickasaw suffered through a forced migration that played out exactly how they feared. ~ The Chickasaw entered into their removal crisis with centuries of practice responding creatively to the economic destruction of colonialism. After coalescing from prior Mississippian groups, including the Summerville and Chickaza cultures, by 1715 the Chickasaw had emerged as a relatively small polity of around 2,800 persons. Organized into four major districts, each 6 divided into towns bound together by matrilineal relationships, the Chickasaw nation subsisted on homelands that spanned the Mississippi and its major tributaries, the Tallahatchie, Tombigbee, and Tennessee Rivers. Unable to mobilize a large population, the Chickasaw learned to act nimbly and inventively to contend with the many competing Indigenous and European powers seeking to transit and trade in the highly coveted Lower Mississippi Valley. In the early eighteenth century, the Chickasaw established themselves as fierce intermediaries for a burgeoning slave trade, delivering to Carolinian settlers roughly two thousand Native captives from the Lower Mississippi Valley.10 These alliances delivered the Chickasaw protection, even at the cost of predation on neighbors, and their success in slaving informed a militarized strategy that would sustain the Chickasaw through the inter-imperial tumult of the mid-eighteenth century.11 Maintaining martial capacity on outsized scale kept the Chickasaws supplied with the fruits of a violent trade in people and deerskins, with British, Spanish, and French emissaries courting the nation with gifts and goods in the hopes of gaining their martial services. But war took a toll, and the Chickasaw suffered precipitous population decline, losing almost a third of their numbers by 1760.12 Male-dominated spheres of hunting and war declined in importance after the Seven Years’ War, leading the Chickasaws to reorganize their economy and its gendered spheres. In Allan Gallay, The Indian Slave Trade: The Rise of the English Empire in the South, 1670-1716 (New Haven: Yale University Press, 2002); Robbie Ethridge and Sheri M. Shuck-Hall, eds., Mapping the Mississippian Shatter Zone: The Colonial Indian Slave Trade and Regional Instability in the American South (Lincoln: University of Nebraska Press, 2009); Christina Snyder, Slavery in Indian Country: The Changing Face of Captivity in Early America (Cambridge and London: Harvard University Press, 2010); Daniel Usner, Indians, Settlers, and Slaves in a Frontier Exchange Economy: The Lower Mississippi (Chapel Hill: UNC Press, 1992)16-17. 10 David Nichols, “The Enterprise of War: The Military Economy of the Chickasaw Indians 1715-1815,” in The Native South: New Histories and Enduring Legacies, eds. Tim Alan Garrison and Greg O’Brien (Lincoln: University of Nebraska Press, 2017), 33-46. 11 12 Ethridge, From Chickaza to Chickasaw, 65-76; Nichols, “Enterprise of War,” 34-40. 7 their homes and nearby fields, Chickasaw women had long grown and processed corn, beans, and squash, cultivars that rounded out a diet of game, fish, berries, hickory nuts, walnuts, pecans, persimmons, wild plums and grapes.13 Reserves of grain and other harvests permitted the nation to survive the tumult of near-perpetual war. In the nineteenth century, Chickasaw men moved into a previously feminized sphere of agriculture, freeing women to work on the nation’s nascent ventures in cotton processing and cloth manufacturing.14 Grain and lumber mills sprouted alongside manufacturing workshops, while farms grew, acquired a widened array of stock animals, and fanned out from once-fortified and densely clustered towns.15 The Chickasaw entered the nineteenth century no longer reliant on war, at peace with their neighbors, and with a population on the rise.16 Lessons learned from these adaptations would directly inform their decisions in the removal era. When the United States sought to gain footing in the Gulf South after acquiring New Orleans from Spain in 1795, the Chickasaw were poised to take advantage. In particular, the Chickasaw assisted the federal government by providing military and infrastructural services that brought financial rewards to their nation. Leading the charge here were the Colbert family, H. B. Cushman, History of the Choctaw, Chickasaw, and Natchez Indians (Greenville: Headlight Printing House, 1899), 392; Atkinson, Splendid Land, Splendid People, 143. 13 14 Jesse D. Jennings, ed. “Rush Nutt’s Trip to the Chickasaw Country,” Journal of Mississippi History 9, no. 1 (Jan. 1947): 34-61, esp. 46; Gibson, Chickasaws, 131; Atkinson, Splendid Land, Splendid People, 143; Memorial of the Chickasaw, Feb. 10, 1817, Secretary of War, Letters Received, vol. 1817; James Carson, “‘Dollars Never Fail to Melt Their Hearts’: Native Women and the Market Revolution,” in Neither Lady nor Slave: Working Women of the Old South, Michele Gillespie and Susanna Delfino, eds. (Chapel Hill, 2002), 15-33; Jeffrey Washburn, “Directing Their Own Change: Chickasaw Economic Transformation and the Civilization Plan, 1750s-1830s,” Native South 13 (2020): 94119. 15 Atkinson, Splendid Land, Splendid People, 183; Gibson, Chickasaws, 131; Thomas McKenney to Secretary of War, Oct. 10, 1827, LROIA 135 [320-23]. 16 Atkinson, Splendid Land, Splendid People, 100. 8 descendants of a Scottish trader and his Chickasaw wife.17 Brothers Levi and George Colbert acted as civil statesmen and diplomats for their nation and displayed ingenuity as entrepreneurs, opening a ferry at the mouth of Bear Creek, where federal officials had planned but failed to establish a trade post. After the United States military extended the Natchez Trace, an Indigenous thoroughfare, travelers came in a thickening stream, with the road serving as a route home for vendors who had rafted their produce down the Mississippi River. To capitalize on the flow of travelers, the Colberts relocated their ferriage and tavern to the juncture of the Natchez Road and the Tennessee River. There, the Colberts’ post enriched its owners while providing critical logistics to the United States, conducting mail and the Tennessee militia when called to arms.18 As collaborators, the Chickasaw were seeking more than friendship. By planting commercial nodes in the United States’ budding fiscal-military frontier, the Chickasaw sought access to the higher-powered money that coursed through the federal government’s expanding infrastructural network. In lands claimed but thinly occupied by the United States, banks were few and their paper currencies could be unreliable. On this fiscal frontier the federal government possessed direly needed and far superior money, either in the form of specie or in drafts – promises to repay – that were ultimately backed by the government.19 At sites like military forts, 17 On the Colbert family see Guy B. Braden, “The Colberts and the Chickasaw Nation,” Tennessee Historical Quarterly 17, no. 3 (Sept. 1958): 222-49; Braden, “The Colberts and the Chickasaw Nation (Continued,” Tennessee Historical Quarterly 17, no. 4 (Dec. 1958): 318-35; Atkinson, Splendid Land, Splendid People, 198-206. For a more critical reading of the Colberts’ political power, see Gibson, Chickasaws, 134. 18Atkinson, Splendid Land, Splendid People, 130-31; George S. Gaines, The Reminiscences of George Strother Gaines: Pioneer and Statesman of Early Alabama and Mississippi, 1805-1843, ed. James P. Pate (Tuscaloosa: The University of Alabama Press, 1998), 78; Cushman, History of the Choctaw, Chickasaw, and Natchez Indians, 390; Braden, “Colberts and the Chickasaw Nation,” I, 230-36. 19 Jane Ellen Knodell, The Second Bank of the United States: “Central” Banker in an Era of Nation-Building, 1816-1836 (London and New York: Routledge, 2017). 9 post offices, land offices, and Indian agencies the federal government received and emitted higher-quality currency in a locale where money was otherwise scarce and discounted. The Chickasaw recognized this, and approached military and civilian outposts as founts of funds that could enhance their own economic development. Chickasaws procured money from forts and their Indian agency by peddling meat or produce or working for wages as couriers, guards, interpreters, cooks, or laborers.20 But the most important way that the Chickasaw procured cash from the government was by negotiating treaties. Chickasaws had received annuities since 1795, when Secretary of State Timothy Pickering offered an annual “gift” of $3,000 in the hope of currying a military alliance and eventually procuring Chickasaw land.21 As early as 1805, the Colberts had demanded portions of their annuities delivered in specie. But when the federal government began pursuing land cessions more aggressively in the late 1810s, the Chickasaw pushed to receive entirety of their treaty payments in hard money.22 Specie became a standard since, like many Native nations, the Chickasaw were often frustrated by the quality and selection of annuities paid in goods. In 1811, an Indian agent warned the Secretary of War that the Chickasaw as “usual… complain very much of their blankets in their last annuity not being Good, two small and some of them very ratten” and noted that “they wish you to send them more blankets and less calico, less thread and no more scissors James R. Atkinson, History of the Chickasaw Indian Agency East of the Mississippi River (Starkville, Miss., 1998), 2; Atkinson, Splendid Land, Splendid People, 200. 20 21 Washburn, “Directing Their Own Change,” 100-101; Daniel H. Usner, Jr. “American Indians on the Cotton Frontier: Changing Economic Relations with Citizens and Slaves in the Mississippi Territory,” Journal of American History 72, no. 2 (Sep. 1985): 299; Atkinson, Splendid Land, Splendid Peoples, 166-69. 22 Atkinson, Splendid Land, Splendid People, 199. 10 nor cotton balls, Handkerchiefs and Russia sheeting.”23 In exchange for lands ceded in 1816, the Chickasaw demanded annuities in “cash,” as stated in the final treaty. This preference for money over merchandise was firm. When Indian agent Robert Nicholas pushed to implement the treaty’s terms by purchasing livestock and merchandise on the Chickasaw’s behalf – in line with the aims of civilization policy – Levi and George Colbert refused, insisting that “the money belongs to individuals & they have a right to do with it as they please.”24 Over $35,000 in specie was delivered to the nation the following year.25 Aside from their inadequacies as consumer items, annuities in goods also thwarted effective internal redistribution according to the laws, customs, and social geography of Native nations. In a Cherokee annuity disbursement witnessed by a missionary in 1807, towns each received a small bundle containing goods of widely varying quality, including strips of flannel, blankets, combs, scarves, brass kettles, or knives. Although each town brought a census recorded on notched staffs of wood, the idiosyncratic value of goods prevented an equitable apportionment, and many Cherokee individuals received items that did not meet their wants. After the distribution, one Cherokee woman “cried bitterly that she did not receive a blanket,” a missionary recalled.26 As a nation composed of four districts, dispersed towns, and diverse households with their unique material needs, the Chickasaw were, much like the Cherokee, eager to receive cash in order to allocate annuities’ value.27 23 J. Neilly to William Eustis, Dec. 13, 1811, Letters Received, Secretary of War, Vol. 1811, p. 107 of PDF. 24 Atkinson, History of the Chickasaw Indian Agency East of the Mississippi River, 27. 25 Henry Sherburne to John C. Calhoun, Nov. 28 1818, Secretary of War, Letters Received, vol. 1818. Rowena McClinton, ed. The Moravian Springplace Mission to the Cherokees, Abridged Edition (Lincoln: University of Nebraska, 2010), 22. 26 27 Andrew Jackson and Isaac Shelby to John C. Calhoun, Oct. 30 1818, Secretary of War, Letters Received, vol. 1818; “Treaty with the Chickasaw, 1818,” in Kappler, Indian Affairs, II, 176. 11 Finally, cash annuities also permitted the Chickasaw to take advantage of differentials in qualities of money on the United States’ fiscal frontier. As recipients of tens of thousands of dollars in specie in a region lacking banking capital the Chickasaw acquired enhanced purchasing power and benefited from the premiums of superior currency. A financial panic that tore across the country in 1819 disrupted Chickasaw annuity distributions: when their Indian agent drew on the federal land office at Natchez, Mississippi for the more than $35,000 owed to the Chickasaw, the receiver promptly informed him that he could not possibly procure specie to that amount.28 But the nation continued to refuse goods, and specie payments eventually resumed. In 1824, for instance, the nation received $70,000 in specie, owed for two years’ annuities.29 Rather than allow this specie to flow out from their hands by trade – a concern that had informed Native leaders’ interest in trust investments since the Seneca nation’s treaty in 1797 – the Chickasaw continued to build out a fiscal regime that would channel specie wealth within their territory, to their nation’s benefit. A council house built at Pontotoc, the nation’s center, hosted annuity distributions, allowing national leaders to manage who could – and could not – attend these important transactions.30 Controls on money annuities reinforced older regulations that banned unauthorized traders, tavern-keepers, and ferry operators who might compete with Chickasaw entrepreneurs and capture the nation’s high-powered money. In case of violations, the Chickasaw impounded and auctioned offenders’ goods, with the proceeds divided between the John C. Calhoun to Henry Sherburn, April 1, 1819, Secretary of War, Letters Sent, vol. D, p. 280; L. Edwards to Henry Sherburn, April 9, 1819, Secretary of War, Letters Sent, vol. D, p. 283. 28 29 Atkinson, History of the Chickasaw Indian Agency East of the Mississippi River, 30; Citing M221. 30 Atkinson, Splendid Land, Splendid People, 215; Atkinson, History of the Chickasaw Indian Agency East of the Mississippi River, 30. 12 nation and the federal government.31 Spearheaded by the Colberts, these fiscal strategies successfully controlled the circulation of high-powered annuity money to the Chickasaws’ advantage. […] The Chickasaw negotiated their first removal treaty in the fall of 1832. John Coffee, a seasoned land surveyor and speculator, represented the United States, and to assure a robust attendance from the Chickasaw timed his arrival in their territory to coincide with Indian agent Benjamin Reynold’s payment of the yearly annuity.32 After Reynolds completed his work, Coffee outlined a proposed agreement that would relocate Chickasaw families immediately onto reservations carved from their territory, allowing the bulk of their land to be surveyed and marketed as soon as possible.33 Once the nation had located a suitable home west of the Mississippi, the Chickasaw would sell off their reservations directly to interested settlers.34 Taking their experiment with the Ohio nations even further, the Jackson administration modified McCoy’s model by stipulating that the entire costs of Chickasaw removal – even the clerical labor needed to process their cession and resulting wealth – would be drawn out of this land proceeds fund. Federal officials would then invest whatever remained of the land proceeds after covering 31 Atkinson, Splendid Land, Splendid People, 199-200, 209. 32 Chickasaw Treaty Journal [1832], box 22B-C4, 23rd Cong., Records of Early Select Committees 1789-1921, Record Group 46: Records of the United States Senate, National Archives Building, Washington, DC. John Eaton was also appointed by Jackson as a treaty commissioner, but did not arrive in time for negotiations. Chickasaw Treaty Journal, Records of Early Select Committees. Eaton would later explain to commissioner of Indian affairs Elbert Herring that he had received “no written instructions” from Jackson, and neither did he believe Coffee received any. “On this subject we knew fully his desires.” John Eaton to Elbert Herring, Dec. 30, 1832, LROIA 136 [265]. See also Mary E. Young, Redskins, Ruffleshirts, and Rednecks: Indian Allotments in Alabama and Mississippi 1830-1860 (Norman: University of Oklahoma Press, 1961), 27-41. 33 34 Chickasaw Treaty Journal [1832], Records of the Early Select Committees. 13 the costs of removal, and deliver the interest accrued to the nation as an annuity.35 When he learned of the treaty’s details, McCoy proudly recognized his theories in the agreement.36 Fig. 1 Henry M. Lusher, “Lands in Mississippi Ceded by the Chickasaws to the United States in 1832 and 1834,” Boston, Pendleton’s Lithography, 1835. Reservations are denoted in green ink, on the western portion of the cession. 35 In those agreements, the federal government promised grist and saw mills for the relocated polities, but the Shawnee and Seneca discovered later that the costs of these mills were to be deducted from their own land sales. Working with Quaker missionaries, the Shawnee and Seneca disputed the agreements and won some measure of redress. Message of Jan. 12, 1832, re: Treaty of Aug. 8, 1831 with the Shawnees, box 22B-C4, 23rd Cong., Records of Early Select Committees 1789-1921, Record Group 46: Records of the United States Senate, National Archives Building, Washington, DC. See also Lori Daggar, “Cultivating Empire: Indians, Quakers, and the Negotiation of American Imperialism, 1754-1846,” (PhD Dissertation, University of Pennsylvania, 2016); Sami Lakomäki, Gathering Together: The Shawnee People through Diaspora and Nationhood, 1600-1870 (New Haven: Yale University Press, 2014), 16063; Stephen Warren, The Shawnees and their Neighbors, 1795-1870 (Urbana and Chicago: University of Illinois Press, 2005), 63-66. 36 McCoy, History of Baptist Missions, 459. 14 By avoiding a need to rely on Congressional expenditures for compensation or removal costs, the treaty’s design clearly suited Jackson’s interest in eliminating the public debt. Yet Chickasaw leaders had also closely observed how their Choctaw counterparts negotiated their removal treaty.37 Despite widespread opposition to removal, Choctaw leaders had drafted a proposed treaty would have created a half-dozen purpose-specific funds, mainly for education. The Choctaw treaty would have built upon the nation’s years of experience using funds held in federal trust to finance education, and generated $53,000 per year for schooling alone – but Eaton had rejected the proposal, leaving the Choctaw with only a fraction of this sum to rebuild their schools and wider society once resettled in Indian Territory.38 By agreeing to accept the proceeds of their own land sales as compensation, Chickasaw negotiators correctly anticipated that their lands’ market value would yield far more than what Congress would allow.39 The Chickasaws had also nurtured plans for investment and expanded social infrastructure for over a decade. Like the Cherokee and Choctaw, in earlier treaties the Chickasaw had worked with missionaries and pledged regular support from their annuities in order to incubate schools that would better equip the nation to defend their homelands.40 By 37 In one potentially apocryphal story, Levi Colbert calculated the Choctaw nation’s rate of return for investments received from their land cession to prepare for the Chickasaws’ removal negotiations. Notably, the story inaccurately represents the Choctaws’ compensation: they had not been paid for their lands in bonds in the 1830 treaty, but rather received uninvested annuities alongside other payments (only in 1837, when the Chickasaw purchased lands from the Choctaw nation, did the latter begin to draw income from trust investments). The story nonetheless suggests that Levi Colbert had discussed with the missionaries who recounted it the terms of Dancing Rabbit Creek, and weighed carefully the up and downsides of investment. Cushman, History of the Choctaw, Chickasaw, and Natchez Indians, 428. 38 Choctaw Prospectus of Treaty, Folder SEN 21B-C4, Records of Early Select Committees 1789-1921, Record Group 46: Records of the United States Senate, National Archives Building, Washington, DC. 39 Paige, Bumpers, and Littlefield, Chickasaw Removal, 39. 40 Evangelicals inspired by the successes of the American Board of Commissioners for Foreign Missions in Choctaw and Cherokee nations arrived in Chickasaw territory by early 1821, when the Synod of South Carolina founded Monroe mission. The ABCFM would absorb this mission into its network by 1827. Chiefs in council appropriated $5000 to establish two more schools, and procured $2500 for their support. E. T. Winston, ‘Father’ Stuart and the Monroe Mission (Meridian: Tell Farmer, 1927). 15 1824 the Chickasaws had decided to implement prudential investment models employed by their missionary partners, and approached Secretary of War John C. Calhoun with a plan to vest their $35,000 annuity “into a Bank so as to be Drawing interest, and the interest to be put to the support of our schools.”41 But investment was more elusive than federal officials had expected. Commissioner of Indian Affairs Thomas McKenney discovered after inquiring at the Bank of the United States that federal 6 percent securities were only available at a premium of up to 10 points, which would lower the bonds’ yields to around 3.5 percent.42 After another fruitless conversation with the Farmers and Mechanics’ Bank of Georgetown, 43 McKenney concluded that the investment could not have been made “unless indeed it had been invested in stocks producing too small an interest to be of much value.”44 By the time the Chickasaw were forced to abandon their homelands, however, federal officials would have little difficulty finding securities in which to invest the considerable funds raised by their ceded homelands. At Pontotoc, discussions about the merits of investment consumed the nation’s attention. After requesting Coffee’s treaty in writing, the Chickasaws convened in council to “have the proposals read again, and again, and interpreted until it was well understood by the whole nation,” as interpreter Benjamin Love explained.45 In order to ensure that all understood the Chickasaw Delegates to John C. Calhoun, Dec. 15, 1824. The Chickasaw identified an education fund as one of their two purposes in visiting Washington – the other being a guarantee of their remaining lands – but Calhoun also took the opportunity to encourage the Chickasaw to invest the education funds. Calhoun to Chickasaw delegation, December 9, 1824, Letters Sent by the Office of Indian Affairs 1828-1880 (National Archives Microfilm Publication M21, Roll 1, Frames 258-59), Records of the Bureau of Indian Affairs, Record Group 75, National Archives Building, Washington DC. 41 Thomas McKenney to Richard Smith, Dec. 28, 1824, Letters Sent by the Office of Indian Affairs 1828-1880 Roll 1, Frame 274; Richard Smith to Thomas McKenney, Dec. 28, 1824, LROIA 135 [107]. 43 Thomas McKenney to Clement Smith, Jan. 3, 1825, Letters Sent by the Office of Indian Affairs, Roll 1, Frame 278. 42 Thomas McKenney to Thomas Stuart, 31 Oct. 1826, Letters Sent by the Office of Indian Affairs, Roll 3, Frames 204205. 44 45 Chickasaw Treaty Journal [1832], Records of the Early Select Committees. 16 mechanics of investment, Love used the metaphor of a “hen laying eggs” to illustrate interest, according to one observer. “That one hundred dollars would lay six dollars in twelve months,” he recalled, “they at once fully understood.”46 Weeks of arduous deliberation followed. After slightly less than a month of negotiations, Coffee escalated his pressure on the Chickasaw, reminding them that the state of Mississippi would soon extend its jurisdiction over their territories. The nation was forced to decide between two evils: parting with homelands, or losing their political autonomy as a nation. Choosing the former, the nation signed a final draft of the treaty on October 20, 1832. When he reviewed the treaty, Jackson singled out the “stipulation” that the Chickasaw “remove at their own expense and on their own means” as “an excellent feature.”47 Yet soon after the treaty council dispersed, many Chickasaw began to regret the terms of their compensation, which they feared may not have struck the optimal balance between longerterm security and liquidity for the journey to come. The Chickasaw clearly desired to plan for the succession of their national wealth through the mechanism of investment. The problem, as Levi Colbert and others understood it, was that the treaty in its current shape stored too much of their wealth in federal hands. A $20,000 annuity dating to a treaty signed in 1818 would expire in 1833, leaving the nation to face removal without a steady stream of income.48 In recognition of the nation’s need for cash, the Chickasaws protested the treaty’s stipulation for the investment of reservation land sales proceeds in addition to those raised from the national cession. 46 Cushman, History of the Choctaw, Chickasaw, and Natchez Indians, 429. Andrew Jackson to John Coffee, Nov. 6, 1832, in Daniel Feller et al., eds. The Papers of Andrew Jackson, Volume X: 1832 (Knoxville: University of Tennessee Press, 2016), 554. 48 Unlike other polities who insisted on receiving their annuities as a whole sum, for collective distribution the Chickasaws allowed their high-powered annuity money to be distributed per capita, a technique the Jackson administration deployed in other contexts – notably, that of Cherokee removal – to compel compliance by treating annuity shares as bribes. Secretary of War, “Indian Annuities,” H. Doc. 242, 22nd Cong., 1st sess., May 23, 1832. 47 17 Colbert’s petition outlined several needs for which the Chickasaw would require cash, including the payment of debts, which as he explained, “must be done before we go.”49 Certainly, the prospect of clearing large commercial debts loomed larger for affluent planters than ordinary Chickasaw. As in neighboring southern nations, the Chickasaw entered into their removal crisis as a society with widening inequalities and slaveholders at the helm. By Jackson’s entry as president, a small but considerable class of slaveholders had taken a leading role in economic reforms. Removal rosters counted a staggering 1,156 slaves among 4,914 free Chickasaws, although only 20 individuals owned more than 10 slaves. Significant members of this elite were white men who had married into the matrilineal nation, attracted in part by the prospect of planting on land unburdened by property taxes.50 These slaveholding elites, with their commercial savvy and close ties to neighboring traders, were also poised to capture prime reservation lands, and bore a strong interest in resuming large-scale cotton planting and adjacent manufacturing activities immediately upon resettling in the west. Chickasaw planters G. M. Long, Sloan Love, James Wolf, and J. A. Perry predicted that a failure to place the profit from reserves in household hands would impede Chickasaw economic recovery, warning “that for the ensuing twenty years there would not be found within the limits of our nation twenty looms,” and “a total prostration of industry and improvement would be the result.”51 But even less affluent Chickasaws would require seed money to establish their farms in Indian Territory, or as 49 Levi Colbert to Andrew Jackson, Nov. 22, 1832, LROIA 136 [276-309]. Gibson, Chickasaws, 123-131; Paige, Bumpers, and Littlefield, Chickasaw Removal, 3-4; John H. Moore, The Emergence of the Cotton Kingdom in the Old Southwest: Mississippi, 1770-1860 (Baton Rouge: Louisiana State University Press, 1988), 7; Barbara Krauthamer, Slavery, Emancipation, and Citizenship in the Native American South, (Chapel Hill: University of North Carolina Press, 2013), 39-40, 128; Duane Champagne, Social Order and Political Change: Constitutional Governments among the Cherokee, the Choctaw, the Chickasaw, and the Creek (Stanford: Stanford University Press, 1992), 127. 50 Representatives of the Chickasaw Nation to Gen. John Coffee, John Coffee Papers Relating to Negotiations with Cherokee, Creek, Choctaw and Chickasaw Nations, Beinecke Library, Yale University, New Haven, CT. 51 18 Colbert’s petition explained, “to feed and sustain my people on their new homes untill they can again build houses clear farms and get stock about them.”52 Without cash, these purchases would inevitably be made on credit, skimming off out a growing share of future annuity payments towards servicing avoidable debts. The Chickasaw also faced a collective need for cash to “meet expenses in the search and payment for a country west,” as Colbert noted.53 A year after the publication of his Remarks, none other than Isaac McCoy had accompanied a delegation of Chickasaws, Choctaws, and Creeks on a federally-funded expedition to Arkansas Territory. Counting interpreters, advisors, servants, and Levi Colbert’s Black slave, forty-two men and over sixty horses set out from St. Louis with the mission of locating suitable homes in the west.54 Colbert found the only suitable region to be lands claimed by Mexico, between the Red and Sabine Rivers, which belonged to the Osage and Caddo peoples. But in a region already stricken by the raiding economies of powerful Indigenous polities like the Comanche, allowing Indigenous defections to competing republics registered as a threat to security. Agent Reynolds abandoned the delegation in protest, the Indian department refused to approve the Chickasaws’ wishes, and the treaty lapsed unratified.55 Now, after another 52 Levi Colbert to Andrew Jackson, Nov. 22, 1832, LROIA 136 [276-309]. 53 Levi Colbert to Andrew Jackson, Nov. 22, 1832, LROIA 136 [276-309]. 54 U.S. Congress, “Indians Removing Westward,” H. Rep. 87, Feb. 18, 1829. 55 Jackson had openly feared a Chickasaw alliance with Mexico since the Franklin negotiations, when the Chickasaws had been offered $15,000 in annuities that would “cease, if the Chickasaw nation at any time become enemies of the United States.” United States Commissary General of Subsistence, Correspondence on the Subject of the Emigration of Indians…, vol 3. (Washington: Duff Green, 1835), 250. The treaty of 1834 similarly included a clause stipulating that the Chickasaw pledged never to make war on any other people “unless they are so Authorized by the United States.” “Treaty with the Chickasaw, Oct. 20, 1832,” Kappler, Indian Affairs, II, 418. Brian DeLay, War of a Thousand Deserts: Indian Raids and the U.S.-Mexican War (New Haven: Yale University Press, 2008), 61-85; Pekka Hämäläinen, The Comanche Empire (New Haven: Yale University Press, 2009), 181-238; David La Vere, Contrary Neighbors: Southern Plains and Removed Indians in Indian Territory (Norman: University of Oklahoma Press, 2000). Atkinson, Splendid Land, 227. Muriel Wright, “Notes on Events Leading to the Chickasaw Treaties of Franklin and Pontotoc, 1830 and 1832,” Chronicles of Oklahoma 34, no. 4 (1956): 477; “Unratified treaty with the Chickasaw, 1830,” in Charles J. Kappler, ed., Indian Affairs: Laws and Treaties, vol. 2 (Washington: Government Printing Office, 1904), 1035-42. 19 treaty negotiation, Chickasaws continued to contemplate emigration from the United States, and requested cash to keep that option viable. The Cherokee nation would attempt a similar strategy two years later, during the peak of their removal crisis. In 1834, after years of refusing outright any form of removal, John Ross and fellow Cherokee delegates visited Washington and offered their territories for a $20 million lump sum.56 Ross had quietly reached out to Mexican chargé d’affaires Joaquin Maria del Castillo y Lanzas, and tendered a proposal to relocate the Cherokee nation to Mexico if granted citizenship and title to their soil.57 Ross’s request was denied, and neither the Cherokee nor Chickasaw nation ultimately succeeded in defecting to Mexico. Nevertheless, their efforts reveal how cash – in ample sums – struck Indigenous leaders as a ticket to a wider geography, one that could allow dispossessed nations to escape the United States’ bounds. Despite the Chickasaw’s vocal protests, the Senate ratified the Pontotoc treaty in 1833. The following May, a Chickasaw delegation parted for Washington, ignoring discouragement from federal officials.58 In a stroke of misfortune, Levi Colbert died while journeying to Washington, leaving the remaining delegates to carry on in his stead. After days of negotiation the Chickasaw won several concessions, including allowing individuals to keep the proceeds of their reservations rather than have them placed in trust. Reflecting delegates’ concerns about post-removal economic development, a portion of the national land proceeds would also be John Ross, R. Taylor, Daniel McCoy, Samuel Gunter, and William Rogers to Lewis Cass, Feb. 14, 1835, in Gary E. Moulton, ed., The Papers of Chief John Ross, vol. 1 (Norman: University of Oklahoma Press, 1985), 321-23. 56 57 John Ross to Friedrich Ludwig Von Roenne, March 5, 1835; John Ross to Joaquin Maria del Castillo y Lanzas, Mar. 22, 1835, Papers of Chief John Ross, I, 335. 58 Lewis Cass to C. C. Clay, March 6, 1834, vol. 1, p. 23, Letters Sent Concerning Chickasaw Removal, 1832-1861, Records of the Bureau of Indian Affairs, Record Group 75, National Archives Building, Washington, DC. 20 withheld from investment in order to provide immediate funds for “schools, mills, blacksmiths shops… the education of their children; and for any other needful purpose, which their situation and condition, may make.” Finally, the Chickasaws placed a twenty-year cap on the maturities of the bonds federal officials could invest in.59 This shorter investment horizon would enable the nation to withdraw their funds in case of crisis or disagreement with federal trust management.60 Their revised treaty demonstrated the care and deliberation with which Chickasaw negotiators planned their economic survival. But there were limits on what the federal government would concede. Prior to signing, the Chickasaws had demanded that the “United States will save the nation from any loss of any part of the principal, or interest of their money.”61 But despite the delegates’ prescience, the revised treaty offered no protections against loss on investments. The risk would be borne by the Chickasaws themselves. ~ The Chickasaw treaty immediately struck executive branch officials as an opportunity. Treasury Secretary Amos Kendall volunteered himself to President Jackson for the duty of investing the “large sum of money…about to accrue to the Chickasaws.”62 Jackson obliged. Kendall secured a promotion to Postmaster General before the Chickasaw land sales began, but his maneuver ensured that his successors at the Treasury would play a pivotal role in directing the flow of Indian trust fund investment. Kendall’s replacement, Levi Woodbury, found himself 59 “Treaty with the Chickasaw, 1832,” in Kappler, Indian Affairs, II, 356-62. 60 Chickasaw delegation to Andrew Jackson, March 7 1834, Box SEN23B1-3, Records of Early Select Committees. 61 George Colbert, Pitman Colbert, Ishtomotutka to Thomas Hart Benton and Theodore Frelinghuysen, Box 22BC1, Records of Early Select Committees. 62 Amos Kendall to Andrew Jackson, July 19, 1834, forthcoming AJ Correspondence. Thank you to Tom Coens for this reference. 21 charged with investing a growing pool of Indian trust fund money. In late 1835, a pro-removal faction led by John Ridge usurped the Cherokee national council to sign the Treaty of New Echota, which set aside $200,000 for the nation as a whole, $50,000 for orphans, and $150,000 for school, all of which was managed by Woodbury. A year later, Woodbury also began investing the proceeds that had accrued from sale of lands ceded by the Seneca and Shawnee a half decade earlier. By the end of that year, Woodbury had invested over $1,054,000 of Indian trust fund money.63 In the 1810s and 20s, lagging land sales and a paucity of government-issued securities with sufficient yields had prevented the Office of Indian Affairs from investing education trust funds. Much had changed over the course of a decade. As Indian removal campaigns accelerated, state governments began issuing millions of dollars in debt, embarking on a borrowing boom without precedent since the war financing of the American Revolution. Some established states increased their debts, but more pronounced was a trend toward first-time borrowing among newer states and territories, which lacked the taxable incomes and property values needed to finance the sort of institutions and improvements boasted of in the northeast. As Michigan’s Governor Stevens T. Mason informed his legislature in 1836, “the heavy expenses of the state, in the completion of important and essential state improvements, must be sustained and accomplished by loans on the credit of the state” rather than “immediate taxation” which, he explained, which would only be viable “as our population and wealth increases.”64 States Exact sum $1,054,333.33. Statement of Bonds Received by Treasurer for Various Tribes, Dec. 26 1836, p. 14041, Vol. 1, MS Correspondence of the Secretary of the Treasury Relating to the Administration of Trust Funds for the Chickasaw and Other Indian Tribes (“S” Series), 1834-1872, General Records of the Department of the Treasury, 1775- 2005, Record Group 56, National Archives Building, Washington, DC. 63 Message of Governor Stevens T. Mason, Feb. 1, 1836, in George N. Fuller, ed., Messages of the Governors of Michigan, vol. 1 (Lansing: Michigan Historical Commission, 1925), 171. 64 22 planting themselves on freshly ceded Native lands – states like Michigan – could only a taxable prosperity that would be achieved with settler immigration. Months later, the Secretary purchased $64,000 in Michigan Territory bonds from New York City broker Joseph D. Beers for the Cherokees. This meant the nation’s trust now held nearly two thirds of the Territory’s entire debt. Woodbury purchased the bonds at an 8 percent premium, which Beers presented as a bargain. But Michigan would struggle to find a market for its subsequent bond issuances, and soon enough, Governor Mason pressured the Office of Indian Affairs for another round of Indian trust fund investment, this time from the Sauk and Mesquaki.65 Mason had been handpicked by Jackson to serve as the Michigan Territorial Governor when Lewis Cass vacated the post to head the War Department.66 Partisan ties appeared to be decisive in dictating trust fund investments. Of the seven states Woodbury selected as recipients of Indian trust fund investment, only one – Maryland – had not voted in favor of Jackson in the 1828 election, and that state had split its electors. Given Jackson’s popularity in newer states in the South and Midwest, Woodbury’s discretion favored market-making infrastructural projects that would turn Native lands into economically viable assets.67 As the first direct fiduciary for the Indian trust funds, Woodbury coordinated investment of Chickasaw wealth in an infrastructural project especially critical to the settler states abutting Chickasaw homelands: the Bank of the State of Alabama. Banks in the early United States Statement of Bonds Held for Various Tribes, Dec. 26 1836, p. 140-141, vol. 1, Chickasaw Treasury Correspondence; J. D. Beers to Levi Woodbury, July 14, 1836, p. 78, vol. 1, Chickasaw Treasury Correspondence; Levi Woodbury to J. D. Beers, July 21, 1836, p. 79 vol. 1, Chickasaw Treasury Correspondence; Levi Woodbury to C. A. Harris, Aug 3, 1836, p. 85-86, vol. 1, Chickasaw Treasury Correspondence. 65 66 Lawton T. Hemans, Life and Times of Stevens Thomson Mason: The Boy Governor of Michigan (Lansing: Michigan Historical Commission, 1920), 54-55. 67 Levi Woodbury to Andrew Jackson, June 30, 1836, p. 67, vol. 1, Chickasaw Treasury Correspondence; Statement of Bonds Held for Various Tribes, Dec. 26 1836, p. 140-141, vol. 1, Chickasaw Treasury Correspondence. 23 operated largely as issuers of money. When lending or discounting commercial paper, banks did so by emitting notes. Unlike specie or the notes of the more conservatively governed Second Bank of the United States, however, state bank notes’ value varied wildly. The liquidity of bank money depended, among other factors, on the relative location of issuing bank and bearer, the flow of trade between these locations, and the willingness of a partner in trade – or another bank – to accept the note in question.68 Given the uncertainties that attended state-chartered bank money, other banks or commercial partners accepted notes from distant (or dubious) issuers at a discount, taking a cut from the note’s face value. And yet, despite their pitfalls, notes issued by state banks remained essential to ordinary people clearing debts – to banks or other lenders – or borrowing further, including for the purpose of purchasing Native land.69 The greater the supply of bank notes fluttering through the hands of state citizens, the more likely settlers possessed the currency needed to purchase Native lands into settler property. States understood this, and considered expanding the money supply integral to realizing the economic potential of lands they inherited from a process of treaty expropriation handled by the federal government. Alabama’s state banking began on the eve of the Panic of 1819, and its rise was from the outset tied closely to the arc of Chickasaw dispossession. Cotton prices had steadily risen over the decade, and lands ceded by the Chickasaw in 1816 and 1818 became a focal point of speculation. More than a million acres in the western Tennessee River Valley sold in 1818 Joshua R. Greenberg, Bank Notes and Shinplasters: The Rage for Paper Money in the Early Republic (Philadelphia: University of Pennsylvania Press, 2020), 26-32; Sharon Ann Murphy, Other People’s Money: How Banking Worked in the Early American Republic (Baltimore: Johns Hopkins University Press, 2017), 10-22; Fritz Redlich, The Molding of American Banking: Men and Ideas, vol. 1 (New York: Hafner, 1951), 96-181. See also Howard Bodenhorn, State Banking in Early America: A New Economic History (Oxford: Oxford University Press, 2003). Steven Mihm, A Nation of Counterfeiters: Capitalists, Con Men, and the Making of the United States (Cambridge: Harvard University Press, 2007). 68 69 Greenberg, Bank Notes and Shinplasters, Ch. 2. Cite Sharon Ann Murphy, Other People’s Money. 24 alone.70 So relentless was the land office business that money grew scarce; local interest rates rose as high as forty percent.71 Federal land law had established a $2 minimum price for public lands at auction, but permitted purchasers to deliver payments in four annual installments, at a charge of six percent interest.72 Only bank notes that traded at par with federally designated deposit banks would be accepted – hence the vernacular category of “land office money.” Obtaining paper money higher on the hierarchy of liquidity – or better still, specie – ensured that purchasers could keep their investments.73 To access land office money, Affluent investors could collateralize land, slaves, or both to secure loans from southern banks, which were increasingly willing to underwrite speculation.74 Others tapped Mississippi Stock, a non-interest bearing bond issued by the federal government to settle claims by an earlier generation of land speculators in the Yazoo River Valley. This boutique form of federal money contributed 45 percent of payment for Alabama lands between 1816 and 1820.75 Whether drawing on state-chartered banks or federal scrip, investors had by 1818 committed to purchase $7 million in newly acquired Native 70 Malcolm Rohrbough, The Land Office Business: The Settlement and Administration of American Public Lands, 1789-1837 (New York, 1968), 137-41; William Brantley, Banking in Alabama, 1816-1860, vol. 1 (Birmingham: Privately Printed, 1961), 13; Daniel Dupre, “Ambivalent Capitalists on the Cotton Frontier: Settlement and Development in the Tennessee Valley of Alabama,” Journal of Southern History 56, no. 2 (1990): 221; Daniel Dupre, Alabama’s Frontiers and the Rise of the Old South (Bloomington, 2018), 249-69. 71 Dupre, Alabama’s Frontiers, 265. 72 Rohrbough, Land Office Business, 23. Andrew H. Browning, The Panic of 1819: The First Great Depression (Columbia: University of Missouri Press, 2019), 94-95 73 74 Sharon Ann Murphy, Banking on Slavery, cite ch.; Dupre, Alabama’s Frontiers, 264-65; Rohrbough, Land Office Business, 137-38. 75 Franklin Sammons, “The Fruit of the Yazoo Compromise,” Journal of the Early Republic, 40, no. 4 (2020): 671–676. 25 lands in the Tennessee River Valley – although more than three quarters of that sum remained to be paid.76 By the time the bubble burst, investors in Alabama owed half of the entire federal land debt.77 After the financial panic of early 1819 set in, speculators scrambled to make installments and meet their interest payments. The Tennessee Valley was particularly hard hit. In 1820, the only bank in northern Alabama suspended specie payments, setting off a monetary contraction that caused thousands of purchasers to default on their payments to the land office.78 Three years later, the Alabama legislature chartered the State Bank of Alabama and capitalized it with a $100,000 bond issuance with the explicit purpose of providing land office money to debtors.79 A state bank was necessary, according to Alabama Governor Israel Pickens, because ceded Native lands “must not only be paid in cash, but in such kind as will answer the expenditures of the United States.”80 By issuing bonds that served as its state banks’ equity, Alabama could engineer a growing circulation of currency, ultimately backed by the creditworthiness of the state, which could serve as land office money. Alabama’s decision to borrow in order to finance its banking system conformed to a larger pattern of infrastructural development in newer, less capitalized states. By 76 Daniel Dupre, “Ambivalent Capitalists on the Cotton Frontier: Settlement and Development in the Tennessee Valley of Alabama,” Journal of Southern History 56, no. 2 (1990): 221. Rohrbough, Land Office Business, 137-40; Daniel Dupre, “Ambivalent Capitalists on the Cotton Frontier: Settlement and Development in the Tennessee Valley of Alabama,” Journal of Southern History 56, no. 2 (1990): 221; Payson Jackson Treat, The National Land System, 1785-1820 (New York: E. B. Treat & Co., 1910), 157. 77 78 J. Mills Thornton, Politics and Power in a Slave Society: Alabama, 1800-1860 (Baton Rouge: Louisiana State University, 2014), 15. The bulk of the Huntsville Bank’s capital came from its service as a depositary to the Land Office. William Brantley, Banking in Alabama, 1816-1860, vol. 1 (Birmingham: Privately Printed, 1961), 13. 79 Alabama General Assembly, Acts Passed at the Fifth Annual Session of the General Assembly of Alabama (Cahawba: William B. Allen, 1823), 3. 80 Alabama, House of Representatives, Journal of the House of Representatives of the States of Alabama… Fifth Session (Cahawba: William B. Allen, 1824), 9. 26 investing in bank stock, requiring banks to subscribe to turnpike or canal companies, eliciting charter fees and bonuses, or taxing banks in more straightforward ways, state governments could extract public revenue while leavening the incidence of taxation on their recently-settled citizens.81 Bank-fueled public finance especially appealed to southern state lawmakers designing economies ruled by a planter class averse to taxation for its potential to undermine their rights to human property.82 Just as planters hoped, by 1836 Alabama’s state banking system had sufficiently flourished for the state to abolish direct taxes on landed property and slaves.83 Alabama’s state banking system was David to the Goliath of the Second BUS, which rose to the height of its powers in the years after the Panic of 1819. As the federal government’s chief depositary, the Second BUS was especially prominent on the fiscal frontier, where it handled funds related to Indian diplomacy, military campaigns, and public land sales. But it also faced the Atlantic, where it paid the federal government’s international creditors and carried accounts for overseas merchants.84 To fulfill these functions the Second BUS required sizable specie reserves, and it procured a much of this stock by demanding that state banks settle their accounts in hard money rather than their own notes.85 The Second BUS’ specie demands constrained state- 81 Richard Sylla, John B. Legler, and John J. Wallis, “Banks and State Public Finance in the New Republic: The United States, 1790-1860,” Journal of Economic History, 47, no. 2 (June 1987): 391-403. Brantley, Banking in Alabama, I, 320. Robin Einhorn, American Taxation, American Slavery (Chicago and London: University of Chicago Press, 2006), esp. 220-225; John Majewski, “Why Did Northerners Oppose the Expansion of Slavery? Economic Development and Education in the Limestone South,” in Sven Beckert and Seth Rockman, eds. Slavery’s Capitalism: A New History of American Economic Development (Philadelphia: University of Pennsylvania Press, 2016), 277-98. 82 83 Brantley, Banking in Alabama, I, 319-20. Jane Ellen Knodell, The Second Bank of the United States: “Central” Banker in an Era of Nation-Building, 1816-1836 (London and New York: Routledge, 2017), 16, 84, 107-10; Ralph Catterall, Second Bank of the United States (Chicago: University of Chicago Press, 1902); Stanley L. Engerman, “A Note on the Economic Consequences of the Second Bank of the United States,” Journal of Political Economy, vol. 78, no. 4, pp. 725–8. 84 85 Knodell, Second Bank of the United States,. 27 chartered banks from issuing more notes than they could honor in specie and thereby diminished liquidity for their surrounding communities. Meanwhile, BUS branches appearing in the cotton South stole the most lucrative commercial accounts from state banks.86 Together, these factors pitted state banks and their stakeholders against the Second BUS. President Jackson capitalized on these resentments when prosecuting his so-called bank war. In 1832, Jackson vetoed the renewal of the Second Bank’s federal charter. The following year, he withdrew the federal government’s deposits, scattering them among dozens of favored state-chartered banks. Jackson cast this policy as a populist takedown of an aristocratic institution, but the end result preserved centralized control. With the “pet bank” system, Jackson’s Secretary of the Treasury personally directed the flow of federal funds, including specie, across the network of depositaries.87 In 1835, with the Second BUS facing its final year on a federal charter, the Jackson administration repaid the final installment of the federal debt. Stripped of federal deposits, demoted to a Pennsylvania charter, and now devoid of one of its original purposes, the Second BUS branch system atrophied. States legislatures eagerly filled the void, planning ambitious expansions to their banking operations. Many would eventually be anointed as federal depositaries, inheriting the Second Bank’s privileges.88 Between Jackson’s veto of the Second Bank’s recharter in 1832 and the end of his second term in 1837, the number of banks in 86 Brantley, Banking in Alabama, I, 207-213. Remini, Andrew Jackson and his Bank War, 168-69; Larry Schweikart, Banking in the American South from the Age of Jackson to Reconstruction (Baton Rouge and London: Louisiana State University Press, 1987), 17-23; Larry Schweikart, “Jacksonian Ideology, Currency Control, and Central Banking: A Reappraisal,” The Historian 51, no. 1 (Nov. 1988): 78-102; David A. Martin, “Bimetallism in the United States before 1850,” Journal of Political Economy, 76, no. 3 (MayJune 1968): 428-42. 87 88 Jane Knodell, “Rethinking the Jacksonian Economy: The Impact of the 1832 Bank Veto on Commercial Banking,” Journal of Economic History 66, no. 3 (2006): 546-47. 28 operation more than doubled.89 In order to capitalize their multiplying army of banks, states borrowed, issuing securities backed by legislatures’ power to tax. By borrowing from creditors and then investing that borrowed money in banks, states succeeded in swelling bank credit by $337 million between 1830 and 1836, with the money supply growing at a stunning average rate of 30 percent for the last two years of that period.90 Banks multiplied fastest on the fiscal frontier, where the Second Bank was forced to close its once sprawling network of branches, and where settlers’ purchases of Native lands created the greatest demand for an expanding money supply. In the newer states of the south – states like Alabama – the number of banks grew more than three and a half times between 1832 and 1837.91 Alabama had founded its state bank system in the aftermath of the first boom in Chickasaw lands. But it began borrowing in earnest to expand this bank system after the bank war and during the Chickasaw removal negotiations, as the Second Bank of the United States’ branches receded from the South. In the early 1830s Alabama’s legislature approved a relocation of its inaugural branch to the new state capital, Montgomery, and the founding of new branches in the Gulf commercial entrepôt of Mobile and in the Tennessee River port of Decatur, on territories ceded by both the Chickasaw and Cherokee nations in 1816. Neglected by the state banking system thus far, the Tennessee River Valley’s rising class of planters had spent the prior decade lobbying the state for better access to currency and credit.92 By December 1832, 89 Van Fenstermaker diss p. 100, gives 321 reporting (vs. chartered) banks in 1832 and 667 in 1837. Replace with 1965 book eventually. 90 Knodell, “Rethinking the Jacksonian Economy,” 546, 542. In the newer states of the South, chartered banks grew from 14 in 1832 to 50 in 1837. In other western states, banks grew from 23 to 67 over the same period. Joseph Van Fenstermaker, “The Development of American Commercial Banking, 1782-1837,” (PhD Dissertation, University of Illinois, 1963), 134, 139. On the Second Bank in the cotton South, see Richard H. Kilbourne, Jr. Slave Agriculture and Financial Markets in Antebellum America (London: Pickering & Chatto, 2006). 91 92 Schweikart, Banking in the American South, 50. Brantley, 230 on planters. 29 Alabama had issued $3.9 million in bonds to support its fledgling banking system, with all but $500,000 remaining unsold.93 Unlike richer and older seaboard states, Alabama relied on the promise of future prosperity to market its bonds. Yet this prosperity was projected onto tracts that settlers could scarcely purchase until the banks had accumulated the capital – from bond investors – needed to open their doors. In November 1832, newly minted Mobile branch president George S. Gaines confronted this dilemma head-on with his first official task: marketing $3.5 million in Alabama state bonds, issued to finance the Mobile and Decatur branches. Gaines had recently concluded a stint as removal agent for the Choctaw, stewarding the nation’s expulsion from central Mississippi to Indian Territory. As he prepared for his trip to court New York City financiers, Gaines compiled a prospectus that included the bank’s charters, favorable correspondence from New York City brokers, and a description of recent treaties that had transferred vast acres of Creek and Choctaw land to the United States. In his own pen, Gaines explained that once settled, these prime lands promised to increase his state’s cotton crop by twenty percent, an increased output that would undoubtedly swell bank profits. After several rejections, Gaines finally struck an agreement with the same broker who had sold Michigan bonds to the Treasury, Joseph D. Beers.94 Four years later, Treasury Secretary Levi Woodbury prepared to invest the first wave of proceeds from the Chickasaw lands. In January 1836, Woodbury wrote to Philadelphia broker U.S. Congress, House of Representatives, Report of William Cost Johnson, 27th Cong., 3rd sess., 1842, H. Rep. 296, 70; J. H. Fitts, “History of Banking in Alabama,” Banking Law Journal, 12 (1895): 348-49. 94 Gaines’ influence on the purchases of stock for the Indian trust fund was not documented, but neither is it difficult to imagine. Gaines stopped in Washington, D.C. on his way home from his trip to New York to discuss the settlement of his accounts as agent with Secretary of War Lewis Cass. Alabama Senator William R. King sat in on the conversation, where he or Gaines could easily have mentioned the sale of their states’ securities at the time. Regardless of Woodbury’s prior awareness or sympathies towards Alabama’s banking project, King would go on to negotiate a sale of $300,000 Alabama bonds for the Huntsville branch bank to the Indian department in 1837. Gaines, The Reminiscences of George Strother Gaines, 111-12, fn121; C. A. Harris to William R. King and F. S. Lyon, March 6th, 1837, Letters Sent by the Office of Indian Affairs, Roll 21, Frame 131. 93 30 Charles Macalester, who offered bonds of the state of Alabama.95 Macalester buyers in London and Philadelphia had passed on the bonds, since the bonds of slaveholding states “do not stand as high either abroad or at home.”96 If Woodbury was willing to tolerate the risk, the broker suggested, a bargain could be made.97 He was. That March, Woodbury purchased a whopping $500,000 in Alabama bonds directly from the Decatur branch of the Alabama State Bank (Macalester, incensed, demanded and ultimately received a commission for his role in the transaction).98 But Woodbury did not exactly cut a deal for the unwanted securities. Even though the state had struggled to find creditors, the bank’s president asked for a 4.5% premium, enclosing assurances from a “mutual friend,” Alabama Senator William R. King, that “a better stock is not to be found in our country.” Woodbury accepted.99 The next month, Woodbury Levi Woodbury to Charles Macalester, January 28, 1836, vol. 1, Jan. 15, 1834-Dec. 19, 1872, pp. 11-12, MS Correspondence of the Secretary of the Treasury Relating to the Administration of Trust Funds for the Chickasaw and Other Indian Tribes (“S” Series), 1834-1872, General Records of the Department of the Treasury, 1775- 2005, Record Group 56, National Archives Building, Washington, DC. 95 Macalester to Woodbury, Feb 2 1836, p. 13-14, MS Correspondence of the Secretary of the Treasury Relating to the Administration of Trust Funds for the Chickasaw and Other Indian Tribes, vol. 1. 96 Brantley, Banking in Alabama, I, 313. Charles Macalester to Levi Woodbury, February 2, 1836, pp. 13-14, vol. 1, Chickasaw Treasury Correspondence. Macalester added a caveat, “that the securities of the slave holding states do not stand as high either abroad or at home, as those of the non-slave holding states.” Foreign commentators claimed to avoid southern state bonds, since they were used to provide banking capital to slaveholders. As Macalester pointed out, since risk entailed profit, if Woodbury was “satisfied with the security” offered by southern bonds “they of course are the most productive.” In an attempt to underbid Alabama for Chickasaw trust investments, Isaac Coe, canal fund commissioner for Indiana, argued that if “other circumstances being equal,” European and northeastern investors “favored the stocks of non-slaveholding states.” Coe to Woodbury, August 13th, 1836, p. 113, vol. 1, Chickasaw Treasury Correspondence. 97 98 J. W. Garth to Woodbury, March 25, 1836, p. 27, vol. 1, Chickasaw Treasury Correspondence; Woodbury to Edmondson, March 31, 1836, p. 34, vol. 1, Chickasaw Treasury Correspondence. Interestingly, Macalester claimed responsibility and insisted on a commission for the Decatur branch sale despite thin evidence for his securing the offer to purchase bonds from the branch. After an awkward review process in which Woodbury and Macalester each solicited opinions on the contract from a broker of their choice, Macalester won a commission of nearly $300. Levi Woodbury to W.D. Lewis, Philadelphia, January 9, 1837, vol. 1, pp. 192-97, Chickasaw Treasury Correspondence. 99 JW Garth to Levi Woodbury, Mar 25 1836, MS Corr., p. 27; WR King to Woodbury, March 28 1836, MS Corr., p. 28-29. 31 bought another $65,000 in Alabama state bonds for the Chickasaw trust at a 4.5% premium, this time from Beers.100 Through Woodbury as their fiduciary, the Chickasaw became substantial investors in Alabama’s banking system. Two more rounds of Alabama state bonds brought the nations’ investment in the southern state to $1,295,000 by 1837. In that year, in aggregate, the Chickasaw owned roughly ten percent of the state’s debt – sixteen percent if one counted only long-term issuances.101 Even more striking, at the granular level, the Chickasaw owned a quarter of the Decatur Bank branch’s $2,000,000 capital stock.102 By investing Chickasaw wealth in bonds used to provide the State Bank of Alabama with capital, Woodbury channeled Chickasaw wealth towards the expansion of Alabama’s plantation economy. As the state’s main fiscal engine, the State Bank of Alabama enabled the state to deploy militias and back pretensions to Native lands by force. When Governor Clay called in militias to suppress Creek militants in 1836, the Alabama State Bank lent the legislature $70,000 to pay soldiers’ wages and furnish supplies.103 Banks also provided credit to traders who supplied rations and transportation services to agents in charge of removal. The Huntsville branch of the State Bank, to give one example, extended loans to the land speculator John W. Sanford’s Alabama Emigrating Company.104 100 Levi Woodbury to J. D. Beers, April 2, 1836, vol. 1, p. 25, Chickasaw Treasury Correspondence. 101 Alabama debt figures drawn from U.S. Congress, House of Representatives, Report of William Cost Johnson, 27th Cong., 3rd sess., 1842, H. Rep. 296, 70-71; U.S. Congress, House of Representatives, Indian Trust Funds, 25th Cong., 2nd sess., 1838, H.R. Rep. 892, 2-3. “Exhibit of the state and condition of the Banks of the State of Alabama, on 1st June 1837,” app. in Brantley, Banking in Alabama, II, 294. 102 103 John G. Aikin, ed., A Digest of the Laws of the State of Alabama, 2nd ed. (Tuscaloosa: D. Woodruff, 1836), 55-76. Resolution adopted January 11, 1837, Folder 5: Resolutions of the Board of the State Bank, 1837, Box # SG3296, Bank of the State of Alabama at Huntsville, Miscellaneous, Records and Resolutions, 1820-1848, Alabama Department of Archives and History, Montgomery, Alabama; Calvin Schermerhorn, “‘The Time is Now Just 104 32 By investing in the Decatur branch of the State Bank of Alabama in particular, Woodbury channeled Chickasaw funds towards an institution several speculators in the Chickasaw cession relied on for loans, bank notes, and to transfer funds with their northeastern counterparts. State banks supplanting Second BUS branches on the fiscal frontier adopted more accommodating lending practices to enable the territorial expansion of slavery. The Second BUS had adhered to a more conservative “real bills” doctrine, primarily accepting collateral attached to merchant transactions. In order to cater to an expanding cotton kingdom, however, rural state-chartered southern banks took on riskier loans secured by land and enslaved people. Bank credit in the form of short term notes were regularly renewed, providing liquidity to borrowers purchasing and planting on lands so recently in Native possession.105 The Decatur branch of the Alabama State Bank opened shortly after Gaines’ successful bond sale in New York City. Located on the southern bank of the Tennessee River, the Decatur Bank was easily accessible from Pontotoc by following Chickasaw roads to the recently completed Tuscumbia, Courtland, and Decatur Railroad.106 To land company agents who had rushed to subscribe to the Decatur branch, Alabama’s state bank system provided the liquidity that could convert capital into purchasing power at the auction block. While northern capital broadened the scope of their operations, land companies preparing to speculate in the Chickasaw cession desperately relied on financial intermediaries in the South. In April 1835, for example, the New York and Mississippi Land Company’s agent, Robert Bolton, visited the State Bank of Arriving when Many Capitalists Will Make Fortunes’: Indian Removal, Finance, and Slavery in the Making of the American Cotton South,” in James F. Brooks and Bonnie Martin, eds., Linking the Histories of Slavery in North America and Its Borderlands (Santa Fe: SAR Press, 2015), 158. Knodell, “Reconsidering the Jacksonian Economy,” 552-53, 563; Bodenhorn, State Banking in Early America, 57-63; Sharon Ann Murphy, Banking on Slavery, cite. 105 106 “The Tennessee Valley Railroad,” American Railroad Journal (July 1852), 490. 33 Alabama’s Decatur branch. To Bolton’s relief, the bank allowed the investor a $150,000 subscription, which would afford him thirty to ninety days credit, at six per cent, on Delafield’s Phoenix Bank.107 With competitors rushing to the scene, the capacity to convert large sums of capital into cash at hand proved essential to capturing as much of the Chickasaw cession as possible. […] Prospective speculators began forming land companies targeting Chickasaw lands soon after the 1834 treaty at Washington.108 Northeastern merchants and bankers brought much of the capital, purchasing shares that regularly cost more than $1000. Local power brokers rooted in the Chickasaw cession’s adjacent states capitalized on public office, with its endowments of personal contacts, privileged information, and regional authority, to advance land company interests on the ground. One firm, the Chickasaw Land Company, was headed by Alabama congressman David Hubbard and John Tindall, the president of the State Bank of Alabama’s Tuscaloosa branch.109 In 1835, the ambitious Chickasaw Land Company decided to enhance their purchasing power by drawing in financing from a group of New York City bankers, including John Delafield, president of the Phoenix Bank, and Joseph D. Beers, a well-known broker who had handled bond issuances from Alabama, Louisiana, and Mississippi. The Dennis East, “Land Speculation in the Chickasaw Cession: A Study of the New York and Mississippi Land Company, 1835-1889,” (MA thesis, University of Wisconsin, Madison, 1964), 13-14; Claudio Saunt, Unworthy Republic, 188-91. 107 In July, only two months after the treaty’s signing, a jealous observer wrote to Cass to report that “agents of a recently formed Company are now Traversing the southern States… for the purpose of Monopolising the Country and no doubt at the Cost of poor Aborigines.” Thomas M. Barker to Lewis Cass, July 17, 1834, LROIA 136 [482]. 108 109 East, “Land Speculation in the Chickasaw Cession,” 6-7. 34 resulting New York and Mississippi Land Company formed as a joint venture of the Chickasaw Land Company and their northeastern counterparts.110 With their cohort of merchant planters, broad experience in trade, and keen awareness of the market value of their lands, the Chickasaw had fully anticipated a rapacious land sales process that would likely devolve into fraud and exploitation. In the months leading up to land sales, Chickasaw leaders sought to establish guardrails, forming a land commission of six Chickasaw head men to oversee the process of selling the allotted reservations. 111 At least two land commissioners’ signed approval would be required on all deeds of sale. To protect against speculators’ predations, the land commission would decide whether a given Chickasaw allottee could handle the reservation sale on his or her own. If not, commissioners would categorize this individual as “incompetent,” and thereby subject his or her sale of a reservation to their approval. The Chickasaw land commissioners would oversee the sale, and the proceeds would be kept in the Indian agent’s hands for safekeeping. Similar provisions extended to allotments set aside for Chickasaw orphans.112 Despite these precautions against fraud, the Chickasaw suffered from precisely the vulturine treatment they had anticipated. Their Indian agent, Benjamin Reynolds, was easily captivated by speculators’ enticements and grew determined to maximize his own pecuniary benefit from the public duties vested in him. When the reserved lands went up for sale in March 110 East, “Land Speculation in the Chickasaw Cession,” 9-10; Claudio Saunt, Unworthy Republic, 188-91. 111 “Treaty with the Chickasaw, 1834,” Kappler, Indian Affairs, II, 418. “Treaty with the Chickasaw, 1834,” in Kappler, Indian Affairs, II, 418-25; C. A. Harris to William Armstrong, Aug. 8, 1838, Chickasaw Agency, LROIA 137 [233-35]. Precisely why 374 Chickasaws were deemed “incompetent” is unclear. Daniel Kurtz, an Office of Indian Affairs clerk who handled the Chickasaw reservations, would later define “incompetents” as “those who have not arrived at years of discretion, and uneducated females and others.” U.S. Congress, House of Representatives, Retrenchment – Reorganization of Executive Departments, 27th Cong., 2nd sess., 1842, H. Rep. 741, 67. 112 35 1836, Reynolds, charged with overseeing the process, protected these original claims against competing offers that often doubled, tripled, or quadrupled the price. In the words of one observer, Reynolds refused to acknowledge any but the original, pre-emptive agreements. At the auction block, if a Chickasaw reservee tried to accept higher bids, Reynolds would deny the claim and order him or her “to ‘sweat awhile.’” Next, according to this witness, the Chickasaw “would retire brow-beaten and dispirited,” only to be “beset by the interpreters of this company taunting him with the prospect of losing his money.” Ultimately, he or she “would at length be brought to sell” at the depressed price.113 Levi Colbert’s own grandson, Robinson James, wrote a petition to Andrew Jackson protesting a speculator’s usurping of his own prime lands. “I am unaccustomed to the Laws & customs of the whiteman,” James admitted, “but, having some of the benefits of education, I have some advantage over many of my country men.” This advantage had failed to safeguard James against fraud, and he demanded redress since his land was “of great value + would have made me rich.”114 On January 17, 1837, urged along by their respective Indian agents, a Chickasaw delegation brokered an agreement to purchase their new territory from the Choctaw nation. The Choctaw permitted less populous Chickasaw – roughly a third of the Choctaw in population – to create a fourth district within their territory, but offered only their westernmost lands, which the Chickasaw complained were “sterile,” and which were crowded by refugee Cherokees, Delaware, and Shawnee, as well as Kickapoo, Caddo, and Comanche hunters.115 For these R. C. Barker to Jonathan Bell, June 25, 1841, LROIA 147 [203-204]. See also “A friend of the Indian” to “My Excellent Sir,” Oct. 1835, LROIA 136 [564-65]. 114 James Robinson to Andrew Jackson, June 23, 1836, LROIA 145 [138-40]. 113 Gaston L. Litton, ed., “The Negotiations Leading to the Chickasaw-Choctaw Agreement, January 17, 1837,” Chronicles of Oklahoma 17, no. 4 (1939): 424; Angie Debo, The Rise and Fall of the Choctaw Republic (Norman: University of Oklahoma Press, 1961), 71-72. 115 36 objectionable lands, the Chickasaw would pay $30,000 in specie and $500,000 in bonds to the Choctaw nation. By subjecting the Chickasaw to the laws and the overriding governance of the Choctaw national council, the arrangement carried discomfiting parallels to Mississippi and Alabama’s extension of state jurisdiction over their homelands years before.116 But as they agreed to a partial integration with the Choctaw, Chickasaw negotiators carefully protected their nation’s fiscal resources. As the 1837 compact stated, the Chickasaw reserved the “sole right and privilege of controlling and managing the residue of their funds.”117 With their new territory secured, the Chickasaw now faced the long-dreaded journey west. The nation sought to conserve as much control over their migration as possible, and rather than allow a centralized, federal control over the process, preferred to purchase provisions and transport themselves with the cash proceeds of their reservation lands. The Chickasaw were especially wary of the federal government’s outsourcing of transport and provisioning to southern companies formed by speculators specifically to tap Indian removal funds. Removal contractors’ determination to widen profit margins resulted in especially lethal forced migrations: the Alabama Emigrating Company’s 1834 coordination of a Creek removal carried a twenty-two percent fatality rate.118 Aware of the Creek nation’s experience, Chickasaw leaders warned that relying on contractors, “whose object it must generally be to make their contract profitable… under circumstances of scarcity and high prices” will “stint the allowance and comforts of those Chickasaw Chiefs to John Eaton and John Coffee, January 15, 1832, Folder 1832, Correspondence and other Records, Records of the Cherokee Agency West, Record Group 75, National Archives and Records Administration; Gibson, The Chickasaws, 163. 116 117 “Treaty with the Choctaw and Chickasaw, 1837” Kappler, Indian Affairs, II, 486. Calvin Schermerhorn, “‘The Time is Now Just Arriving when Many Capitalists Will Make Fortunes’: Indian Removal, Finance, and Slavery in the Making of the American Cotton South,” in James F. Brooks and Bonnie Martin, eds., Linking the Histories of Slavery in North America and Its Borderlands (Santa Fe: SAR Press, 2015), 158 118 37 under their charge.”119 Ignoring the Chickasaws’ protests against the use of contractors, the Indian department collected bids from private contractors who, according to the terms of the Chickasaw treaty, would be paid out from the proceeds of the nation’s ceded lands. Chickasaw removal began in early July 1837, with the first emigrating parties moving at a crawl through Arkansas’ swamps and bogs. Small pox, horse thieves, and liquor vendors besieged the migrants, causing diversions and delays that drove up the cost of the operation.120 By the end of July, the late summer heat threatened to spoil rations housed in depots across Arkansas. Harris made a halfhearted effort to cut the Chickasaws’ losses, urging removal officers to sell off or swap out supplies of pork and corn on the cusp of rot.121 But according to the terms of their selffinancing removal, any waste, spoilage, or corruption would be borne by the Chickasaw themselves. Chickasaw groups continued to migrate for more than a decade, with most traveling west between 1837 and 1839. Some Chickasaw elites successfully navigated the land sales process, sold their lands for $5 to $10 per acre, and accumulated sizable fortunes.122 A number of merchant planters and other aspirants sold reserved lands to investors offering a combination of cash and human chattel. Overall, the conversion of wealth from land to money that attended removal Memorial to President Andrew Jackson signed by Ishtehotopa, Tishomingo, William McGilvery, Pistalatubby, Isaac Albertson, and others, in presence of J. M. Lish and Pitman Colbert, Pontotoc, Feb 17th, 1837, LROIA 137, [145-47]. 119 120 Journal of Emigrating Chickasaws, John Millard, LROIA 143 [110]; John Millard to [Commissioner of Indian Affairs], Sept. 17, 1837, LROIA 143 [121-27]; Paige, Bumpers, and Littlefield, Chickasaw Removal, 102. C. A. Harris to A. M. M. Upshaw, April 5, 1837, pp. 143-46, vol. 1, Chickasaw Letters Sent; A. M. M. Upshaw to C. A. Harris, July 4, 1837, LROIA 143 [310-11]; C. A. Harris to R. D. C. Collins, July 6, 1837, Letters Sent by the Office of Indian Affairs, Roll 21, Frames 81-82; A. M. M. Upshaw to C. A. Harris, July 7, 1837 LROIA143 [316]; C. A. Harris to A. M. M. Upshaw, June 13, 1838, pp. 263-65, vol. 1, Chickasaw Letters Sent; Phillips to Harris, July 4, 1837, LROIA 143 [149-151]; C. A. Harris to J. A. Phillips, July 7, 1837, p. 179, vol.1, Chickasaw Letters Sent. 121 “AG” to Lewis Cass, received October 28, 1835, Folder Office, 11/3, 1837, Correspondence and other Records, Records of the Cherokee Agency West. 122 38 deepened a financial commitment to enslaving among a small number of affluent Chickasaws.123 Their enslaved migrants bore the brunt of deprivation during the Chickasaw’s trek west, and many perished before reaching the Choctaw district.124 Yet while select Chickasaws could deflect the burdens of dislocation onto the enslaved, most ordinary Chickasaw experienced removal as a crisis compounded by a lack of liquidity. As another Indian agent reported in the fall of 1837, poorer Chickasaws were arriving in Indian Territory “quite destitute,” and requesting that money be released to them so that they might purchase livestock and other articles needed to establish their farms.125 Just as the Chickasaw had anticipated, removal required cash – but the Commissioner of Indian Affairs Carey A. Harris decided how much of their wealth would be kept in investments, and how much would be disbursed. At the outset of their removal negotiations, Levi Colbert had pushed for a prohibition on federal investments of more than three quarters of the Chickasaw land proceeds at one time. But with land sales booming in the lead-up to removal, Woodbury had invested the entirety of the land sales revenue pouring in to the Pontotoc receiver. A month before removal had even officially begun, Commissioner Harris realized that the Chickasaw national fund would not cover their costs of emigration, given that “the whole has been invested in stocks.”126 Woodbury assumed, as did many of his contemporaries, that land sales would continue at the same rate, and supply sufficient income to cover removal costs. Woodbury was wrong. 123 Krauthamer, Black Slaves, Indian Masters, 42. 124 Atkinson, Splendid Land, Splendid People, 234. 125 William Armstrong to C. A. Harris, Sept. 29, 1837, LROIA 137 [112]. C. A. Harris to S. Cooper, June 29, 1837, p. 175, vol. 1, Chickasaw Letters Sent. See also Levi Woodbury to S. F. MacCracken, May 31, 1837, p. 239, vol. 1, Chickasaw Treasury Correspondence. 126 39 In March 1837, cotton brokerage firms in New York City started to collapse, dragged down by factors in New Orleans. 127 Pressure on merchants had mounted after the Bank of England raised the discount rate on loans to American debtors, a factor compounded by Jackson’s specie circular and the redistribution of the federal surplus to its multiplying constellation of depositaries. Soon a commercial panic radiated to each corner of the transAtlantic cotton kingdom. Prices for land, slaves, goods and stocks plummeted. By the summer, the United States found itself in its first great depression.128 Once spirited, sales in the Chickasaw cession withered, falling from over 1.3 million acres in 1836 to less than 200,000 acres in 1837. Declining demand pulled down prices. While most elite Chickasaws had sold their coveted tracts early on, tracts that remained unsold plummeted from an average price of around $1.70 per acre in 1837 to $0.69 in 1838.129 The Panic of 1837 arrived at a peak of removal activity, as multiple nations were winding their way on compelled journeys west. The monetary disarray that ensued only augmented the suffering of these already agonizing journeys. Banks closest to the removal route across Tennessee and Mississippi suspended the conversion of their notes into specie, leaving military Jessica Lepler, The Many Panics of 1837: People Politics, and the Creation of a Transatlantic Financial Crisis (New York: University of Cambridge Press), 110; Peter Temin, The Jacksonian Economy (New York: W. W. Norton & Co., 1969), 82; Peter Rousseau, “Jacksonian Monetary Policy, Specie Flows, and the Panic of 1837” The Journal of Economic History, 62, no. 2 (2002): 457-488; Knodell, “Reconsidering the Jacksonian Economy”. Political historians have traditionally interpreted the panic in partisan terms, weighing Andrew Jackson’s fiscal policy against the rebuttals from Bank of the United States’ president and Whig supporter Nicholas Biddle. For an example of an argument sympathetic to Jackson, see Sean Wilentz, The Rise of American Democracy: Jefferson to Lincoln (New York: W.W. Norton & Co., 2005), 396-400. A balanced summary can be found in Daniel Walker Howe, What Hath God Wrought: The Transformation of America, 1815-1848 (Oxford: Oxford University Press, 2007), 498-505. 127 Alasdair Roberts, America’s First Great Depression: Economic Crisis and Political Disorder after the Panic of 1837 (Ithaca: Cornell University Press, 2012). Financial historians have demonstrated that the London market for American state bonds slackened considerably after the panic. Namsuk Kim and John Joseph Wallis, “The market for American state government bonds in Britain and the United States, 1830-43,” Economic History Review 58, no. 4 (2005): 756. 128 129 86. James W. Silver, “Land Speculation Profits in the Chickasaw Cession,” Journal of Southern History 10, no. 1 (1944): 40 disbursement officers unable to procure rations.130 The panic also impacted the distribution of annuities at a time when nations needed them most. Transmitting annuities in high-powered money, especially specie, had always posed a challenge to the Indian department, even during periods of economic health. In 1833, one agent charged with distributing over $28,000 in specie to northwestern nations complained of the “considerable undertaking to have it brought by wagons to the place of payment in Indiana – The distance is great – the roads bad – and a part of it a wilderness country.” These conditions necessitated the employment of a guard and two teams of oxen.131 Along the route the Chickasaw were compelled to travel, fiscal networks were especially sparse: the nearest major node of Treasury draft and remittance was New Orleans, and no federal deposit bank existed beyond Arkansas Territory, near the end of the Chickasaw’s route to Indian Territory. By June, Indian agents reported to then-Commissioner of Indian Affairs Carey A. Harris that since federal deposit banks across the West had received orders to ship specie surpluses to Washington, and sales had plummeted at federal land offices, where specie usually collected, they found it impossible to furnish that season’s annuities.132 Because the vast majority of their wealth had been invested in state bonds – despite their precautions – the Chickasaw were dealt a body blow by the Panic of 1837. After the panic, the nation’s nearly $1.5 million in state bonds began plummeting in value, mirroring the deflating J. D. Searight to C. A. Harris, April 15, 1837, LROIA 143 [208-09]; D. Vanderslice to C. A. Harris, May 12, 1837, LROIA 143 [351-52]; J. A. Phillips to Harris, Nov. 17, 1837 LROIA 143 [186-87]; Paige, Bumpers, and Littlefield, Chickasaw Removal, 76. As Ronald Satz notes, Indian removal agents encountered enormous logistical challenges after Jackson’s withdrawal of deposits from the Second Bank. Satz, American Indian Policy, 77-78. 130 131 George B. Porter to Elbert Herring, April 15, 1833, LROIA 421 [342-44]. John Garland to C. A. Harris, June 15, 1837, LROIA 422 [463-64]; John Garland to C. A. Harris, June 26, 1837, LROIA 422 [470-71]; C. A. Harris to John Tipton, June 22, 1837 and John Tipton to C. A. Harris, June 25, 1837 in The John Tipton Papers, eds. Nellie Armstrong Robertson and Dorothy Riker, vol. III (Indianapolis: Indiana Historical Bureau, 1942), 410; John Garland to C. A. Harris, July 24, LROIA 422 [488-89]. For the use of land offices as banks see C. A. Harris to James Adams, November 7th, 1837, Letters Sent by the Office of Indian Affairs 22 [512-13]; Annual Report of Commissioner of Indian Affairs for the Year 1839 (Washington: G.P.O., 1839), 123-24. 132 41 prices of cotton, slaves, and land.133 With a number of emigrating parties still on their journeys west, the Indian department reported that the dwindling inflow of Chickasaw land sale proceeds could no longer cover the costs of removal. Since their securities could only be sold at a deep discount, in June 1837 Commissioner Harris urged that President Martin Van Buren offer to the Chickasaw an “advance on a pledge of their Stocks.”134 The following month, President Martin Van Buren approved a Treasury loan of $100,000 to the Chickasaw nation.135 Because their federal fiduciary had chosen to sink so much of their wealth in investments without anticipating a collapse in the market, the Chickasaws became both creditors to several states, and debtors to the federal government. Worse, the Chickasaws still lacked access to cash, leaving many poorer families unable to clear land and begin cultivating food for their own subsistence upon arrival in Indian Territory. In a petition sent to President Van Buren in 1838, the Chickasaw pled for provisions, explaining that “since our emigration we have suffered severely, by sickness many of our people have died,” with those surviving struggling from hunger. Penned by James Colbert, Isaac Alberson, Stone Love, and others, the petition asked for a loan to cover their urgent needs, adding that “our situation so obviously requires further subsistence that we deem it unnecessary to say more.”136 That the nation richest in capital had ranked among the most impoverished in cash did not strike federal officials as a sign of their own failures as trustees. Indian agent William Armstrong instead doubled down on a precept that increasingly core to the administration of fiduciary colonialism: 133 C. A. Harris to J. R. Poinsett, Sept. 1, 1837, pp. 202-03, vol. 1, Chickasaw Letters Sent. 134 C. A. Harris to S. Cooper, June 29, 1837, p. 175, vol 1., Chickasaw Letters Sent. Woodbury to Martin Van Buren, July 5, 1837, vol. 1, p. 244, Chickasaw Treasury Correspondence; Statement, pp. 284-85, vol. 1, Chickasaw Treasury Correspondence. 135 136 Chickasaw Chiefs to the President, Sept. 9, 1838, Sen 25B-C10, Record Group 46, Papers of the Senate, NARA. 42 the notion that placing cash in Native hands, even when that cash belonged to them, only impeded orderly economy and drained the federal purse. “A large portion of the Chickasaws are disposed to be idle,” Armstrong reported, “and if gratified in their wishes, would expose every dollar they had.” Given the large sums of interest that would accrue on their securities held in trust, Armstrong recommended “to keep invested as much as possible,” since “it is a waste of money to pay such large sums to Indians.”137 ~ Money made Indigenous dispossession possible: force without capital could not have accomplished the transformation of the Native South into the cotton kingdom. The federal government’s superior stores of specie and national bank notes flowed out as annuities, military spending, and remuneration for contractors, accomplishing the process of taking, surveying, and commodifying Native land. State governments worked in the federal government’s wake, borrowing in order to erect banks that provided the credit and means of payment needed to make a market for these lands. Completing the circuit, federal officials swayed by agents of upstart states invested Native wealth in these same financial institutions. Homelands once held in common became privately held property and the terrain for a stunning expansion of cotton slavery. Southern banks that lubricated the expulsion of nations like the Chickasaw also enabled a second forced migration, that of the enslaved people driven to work the plantations and farms now quilted onto Native land. This was the project engineered in part through the governance of money. Trust funds financed by land proceeds augured an economically efficient and pliable mode of conquest. Yet by expanding trust investments, Cass and his underlings succeeded not 137 William Armstrong to C. A. Harris, June 29, 1838, LROIA 137 [229-31]. 43 only in creating a more lightweight form of compensated dispossession. His department also gained widened discretion over an accumulating pool of wealth promised to dispossessed nations. Nations like the Chickasaw became investors without control over their portfolios, and the assets held on their behalf – state bonds – allowed states to expand the currency in circulation and provide prospective purchasers the liquidity needed to make Native lands into settler patrimony. As banks sprouted around their homelands and supplied the means of placing their homelands into private possession, federal improvidence – a quality projected onto colonized nations – caused the Chickasaw nation to face removal strapped for cash, indebted to the federal government, and inhibited in the task of rebuilding their home on western ground. The Chickasaws waited for years after their arrival in Indian Territory to receive their annuities. Sales of their cession flattened during the economic depression that set in after the Panic of 1837, and the federal government garnished any earnings as repayment for its emergency loan to the nation. The Chickasaws had anticipated this crisis, and even though their best laid plans failed to avert it, they did not acquiesce. By the spring of 1840, Chickasaw leaders began petitioning the Office of Indian Affairs for “a statistical account of our sales, expenses, balances, stocks, &c.”138 It would be a struggle to gain access to information about their investments, and to challenge the federal government’s control on the basis of what they learned. But it was a struggle that the Chickasaw were willing to wage – and one that would only become more critical in the years to come. Within a year of the Chickasaws’ petition, a nationwide bond crisis caused Alabama and a dozen other states to default on their debts, forcing the federal government to decide whether it would continue to pay annuities at all. 138 Petition from Chickasaws to A. M. M. Upshaw, April 1, 1840, LROIA 138 [8-9]. 44