By Daniel C . Munson

The Dakota War , or “ Sioux Uprising ” of 1862 , was the bloodiest event in the long and bloody history of warfare between the US government and Native Americans . Although much has been written about that very unfortunate event , its connection to the monetary and financial history of the country is seldom mentioned or analyzed .

In the spring and early summer of 1862 , the Dakota tribes of Minnesota were living on a reservation along the southwest side of a 150-mile-long stretch of the Minnesota River . The north side of the river was being settled by white farmers who were taking advantage of the provisions of the Homestead Act that was signed into law

Illustration depicting the execution of 38 Sioux Indians at Mankato , Minnesota , in 1862 . by President Abraham Lincoln on May 20 , 1862 . That August , many events conspired to cause a large group of Dakota men to begin attacking the whites in the area : the farmers farming the north side of the Minnesota River , the traders who traded with the Dakota near the Indian Agencies on the south side of the river and the US Army installation at Fort Ridgely near the little village of New Ulm . The attacks went on for a few weeks , hundreds died and 38 Dakota men were found guilty of having killed defenseless settlers — many of them women and children — and were hung in a large public mass execution in Mankato , Minnesota on December 26 , 1862 .

Historians have since busied themselves with showing how those terrible events of August 1862 might be seen as part of a long chain of events . A popular narrative is to review the entire 200 + year series of conflicts between white Europeans and the Indians of North America . This huge span of time , if compressed sufficiently , takes on the feel of inevitability and what some historians have called “ Manifest

Destiny .” While a phrase summarizing events far apart in time and space can be useful , a close study of these individual conflicts — the special circumstances , chance occurrences , different governments , different weaponry , etc .— is often much more interesting than such a bland , summary judgement .

The Dakota War of 1862 is a case in point . Certain facts are different in 1862 than they were in the 17th , 18th and early 19th century clashes between Native Americans and the British and US governments , as well as the white settlers ; namely , industrial development and fearsome government artillery power . Some of the historical factors that are known to have influenced those 1862 events are well documented , such as the treaties of 1851 that moved the Dakota Indians to that reservation along the Minnesota River and the corruption and petty thievery surrounding the implementation and operation of the treaties and the Civil War , with its commandeering of so many of the able-bodied men .

28 FINANCIAL HISTORY | Spring 2023 | www . MoAF . org