Swindling Dakota Prisoners: Franklin Steele and the Fort Snelling Concentration Camp

Franklin Steele provisioned the 1862-63 Dakota Concentration Camp and managed to coerce prisoners to give up valuable land rights.

The names of Minnesota’s early political and business leaders dot our landscape. While they often are held up as heroes, some did truly horrific things.

Today we look at Franklin Steele, the namesake of Steele County. Steele arrived in the region in the 1837 and is credited with launching the lumber industry, organizing the water resources and building mills. He held the post of “sutler” at Fort Snelling for a time, a plum job selling provisions to the Army.

His business dealings and connections grew. In the aftermath of the Dakota-U.S. War of 1862, Steele got the government contract to provide food to the Dakota prisoners held at the Fort Snelling concentration camp. The conditions were horrible during the winter of 1862-63. Between the cold and disease, hundreds of prisoners died, including young children.

One of the horrors at the camp has remained nearly invisible. Some “mixed blood” prisoners held valuable paper “scrip,”a form of land grant promising them up to 640 acres. History does not record how he did it, but Steele connived to get his hands on the scrips at very little if any cost. While prisoners left the camp broken, destitute, and hungry, Steele used the scrips to help build his fortune.

This narrative of Steele’s misdeeds comes from a powerful article titled The Great Treasure of the Fort Snelling Prison Camp by William Millikan, published  in the Minnesota History magazine, Spring, 2010. (Thanks to Alisha Volante for sharing this article.)

Here is the kicker at the end of article. Steele, his partner Henry Welles, and a corporate partner would later create the Northwestern National Bank of Minneapolis. According to Millikan:

The bank that became the backbone of the financial empire of the northwestern United States could trace its initial capital to the inmates of the Fort Snelling prison camp.

What happened? I highly recommending reading the entire article. It runs 14 pages. If you want a quick summary first, continue reading.

The 1830 Treaty at Prairie du Chien plays a pivotal role in this story. As a part of that treaty, Chief Wabasha insisted that the Sioux be allowed to “give a small piece [of land] to our friends the half breeds.” The treaty set aside an area 15 miles by 32 miles west of Lake Pepin, some 320,000 acres, for “mixed-blood” people.

Not surprisingly, white businessmen and politicians made repeated efforts over the ensuing decades to get their hands on this very valuable land. It took until 1854, but they finally succeeded:

… territorial delegate [Henry] Rice introduced legislation in the Senate to issue scrip certificates, granting the “half breeds or mixed bloods of the Dakota or Sioux nation of Indians” up to 640 acres on unoccupied, unsurveyed lands not reserved by the federal government in exchange for relinquishing all rights in the Half Breed Tract.

Rice claimed publically that the law protected the recipients of the scrip “in every respect”—it specified that “no transfer or conveyance of any of said certificates or scrip shall be valid.” Privately, he told friends in Minnesota that the “Half Breed Bill” would create an opportunity for considerable profits.

[Note: Rice County, just north of Steele County, is named for Henry Rice.]

The article does not explain how legislation could unilaterally change a treaty. But instead of getting land west of Lake Pepin as the 1830 treaty promised, the “mixed blood” peoples now got these scrips, a guarantee to an equivalent amount of land elsewhere.

Before the U.S. Dakota War broke out, speculators had already begun buying up scrips. Still, some mixed bloods held onto theirs. And some of them were in the concentration camp. Steele eventually got scrips for more than 8,000 acres from prisoners.

Steele also worked with other investors to buy scrip from other dealers. (Millikan says that after the Dakota-U.S. War, one of Steele’s business partners, George Brackett, “bought cattle at low prices from the destitute settlers who had abandoned their burned-out farms. Brackett and Governor Ramsey’s nephew Alexander Ramsey Nininger drove the herds to Camp Pope for a tidy profit” to help pay for more scrips.)

The scrips were good for “unoccupied, unsurveyed lands not reserved by the federal government” — the land didn’t have to be in Minnesota. Eventually, Steele and his partners used the scrip to buy rich mining lands in Nevada and valuable tracts of California red woods,  lumber being in high demand for the area’s settler population boon.

Millikan connected the scrip once owned by individual “mixed blood” Dakota to the lands Steele and others eventually bought. For example, some 640 acres of prime redwood forest were bought with Elizabeth LaBathe’s scrip, “obtained by Steele at the Fort Snelling prison camp.” Scrip 516B once owned by Henry Milor was used to buy a nearby tract of redwoods. Milor (also written Milord) was a “French mixed blood” hung in Mankato on Dec. 26, 1862, along with 37 other Dakota men.

The article notes:

The financial benefits of the half breed scrip had flowed almost entirely to white  Minnesota businessmen, just as the 1854 legislation that created it had intended.

This summary leaves out many important and stunning details. Please read the entire piece.

Post Script: The Minnesota Historical Society (MHS) is preparing for the bicentennial of Fort Snelling in 2020. (See earlier blog.) MHS is in the early stages of trying to figure out how to improve the historic interpretation there. How will it tell the story of Franklin Steele and the scrip?