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Missouri river, on terms entirely satisfactory to the Government, will be made this winter; a peace which involves neither presents nor annuities of any description, but a peace simply based upon good behavior.

With the Yancktonnais and other Sioux tribes north and east of the Missouri there will be somewhat longer delay in coming to satisfactory terms. About half these Indians desire to make peace at once, but there are many who wish to keep up the war.

live south of the British line. The hostile Sioux have for the past two years been supplied with ammunition, provisions, &c., to carry on hostilities against the United States by British subjects, both in their own territory and in ours. A state of hostility between the Sioux and citizens of the United States, of course, throws all the trade with such Indians into the hands of British traders. Hence the anxiety of these traders to prevent peace with the Sioux Indians. I have the honor again to ask attention to my These last are encouraged in their purpose by letter of February 6, 1864, to the Secretary of half-breeds and other British subjects, and as War, on the subject of our Indian system, and to they have a safe refuge in the British possessions, beg, in view of the interests of the Government and are there supplied with means to carry as well as of humanity, that such legislative or on hostilities, it will probably require the hard-executive action be recommended as will, as far ships and privations of a winter in those arctic as practicable, correct the evils therein set forth. regions to bring them to their senses. They I transmit enclosed a copy of that letter and a took refuge there after the late battles in a perfectly destitute condition, and are already beginning to rob and plunder, and in places, to commit murder in the English, settlements. They will soon become as odi,us and dangerous to the British settlements as they have been to our own. By spring most likely everything will be satisfactorily settled.

As matters stand, and are likely to stand this winter, however, with these Indians, there is no manner of danger to the frontier settlements of Minnesota or Dakota. The Indians are driven far away, and a cold, barren and bleak prairie region, many hundreds of miles in extent, and impassable in winter, interposes between them and the frontier settlements.

In Minnesota there have been no active operations, there being no hostile Indians, except a few straggling thieves, east of the Missouri river. With the small force under his command judiciously posted, General Sibley has kept everything quiet on the Minnesota border, nor is there ever again the likelihood of any Indian hostilities from Sioux on the Minnesota frontier, beyond such small thieving raids as are incident to the situation, and must always occur so long as there are Indians on our western borders. With these, should they occur, a small force will be able to deal conclusively.

For details, of which the foregoing report is a brief summary, I have the honor to refer you to the reports of Generals Sully and Sibley herewith and heretofore transmitted.

copy of trade regulations with Indians, which I have heretofore forwarded, and which I deem necessary to protect Indians and white men alike against Indian traders.

It is my purpose, by forcing all traders with Indians to locate their trading posts in the immediate vicinity of the military posts, and nowhere else, to make these military posts the neuclei of extensive Indian camps, and as far as possible to induce the Indians to make their permanent homes so near to the posts that they will constantly be under the supervision and control of the garrisons.

If there be no other places to trade except the military posts, the Indian will necessarily resort to them, and will there remain, except when he is engaged in hunting during the sum

mer season.

If fair dealing with Indians can be enforced, there never will be danger of any Indian wars. The object of these trade regulations is to secure these two results; but unless they are adopted and enforced by military authority, we cannot hope for any permanent peace with the Indian tribes. The regulations themselves are so full, and their object so manifest, that it is unnecessary to go further into detail concerning them.

The only other white men I would permit to have intercourse with the Indians are the missionaries. I trust that some arrangements will be made with the authorities of our home missionary societies to furnish to each military post good practical men, with their families, whose business shall be to teach the Indians the useful arts of life; the Indian men to cultivate the soil, the Indian women to sew and to do such other work as they are fitted for, and all to keep themselves clean and decent. These are the first lessons to be taught to Indians.

In some manner the British Government should either prevent hostile Indians who reside within the boundaries of the United States from seeking refuge in British territory, or should secure the United States against the raids of such Indians, or should permit the United States forces to pursue into British territory all Indians who belong south of the line, and who are at Religious instruction will come afterward in war with citizens of the United States. One of its natural order. The failure of our missionaries these three demands is certainly reasonable, and among Indians is due, I think, mainly to the fact will effect the desired purpose. In the same that they have reversed the proper order of inconnection it will be necessary to prohibit half-struction, and have attempted to make the breeds and other British subjects from coming Indian a member of the church while he was into the territory of the United States to trade still a wild savage. Of course, if any thing is to with Indians, whether hostile to us or not, who 'be gained by it, the Indian will profess his be VOL. XL-Doo. 26

lief in anything whatever, without the slightest knowledge or concern as to what it all means. What is needed to civilize and Christianize Indians are practical common-sense men, who will first teach them to be human and to acquire the arts of civilized life; who will educate, as far as can be done, the children of the Indians, and who will be content to look to the future, and not to the immediate present, for results. Such missionaries could be of incalculable benefit to the Indian and to the Government; and I would recommend that whenever such men are sent to the military posts on the frontier, the Government furnish them with quarters and with rations, at the rate of two small families for each one of the larger posts, and for one small family for each smaller post. I have no doubt that these small missions at each post, if conducted by practical and earnest men, would greatly add to the hope of permanent peace with the Indians, and contribute to a healthy and increasing improvement in the moral and physical condition of the Indian tribes.

I intend, in settling a peace with Indians in this department, to do away entirely with this system, which, aside from its effect in stimulating and encouraging breaches of treaties of peace, is always attended with fraud upon the Government and upon the Indians.

I shall send up, in the spring, some companies of cavalry to make a cantonment for the summer, at some point on the lake, and to remain there until the last possible moment in the autumn, with the view of drawing the various tribes of Indians to that point, and furnishing them with facilities of trade during the summer and autumn. Such a cantonment, kept up for two or three seasons, will have a most beneficial effect upon the Indians, as all whites, except authorized traders acting under the supervision of the military authorities, will be prohibited from going into that region.

It is proper to remark that extensive strata of excellent coal have been found at Fort Rice, one vein six feet thick. This coal-field extends toward the south-west, and it is supposed outThe military commanders will be instructed crops on the slopes of the Black Hills. How to give every assistance and encouragement to far north it extends is not yet known. The exsuch missionaries, and to enjoin upon the of-istence of this great coal-field, half-way between ficers and soldiers under their command that they exhibit toward the missionaries every respect and kindness.

The peace which will be made with Indians, under the instructions I have given to Generals Sully and Sibley, is based simply upon the understanding that the Indians on the one hand behave themselves and do not molest the whites, and on the other hand that the whites shall be made to deal fairly with the Indians, and not molest them in any way. The military authorities undertake to enforce good conduct on both sides, and will have the power, if not interfered with, to do so thoroughly. As such a peace involves neither annuities nor presents, and holds out no prospect in violating it, except hostilities, it will probably be lasting. Hitherto it has been the practice to accompany every treaty of peace, made by Indian agents, with expensive presents of goods and supplies of various kinds, and the Indians naturally understand that these are given them as bribes to keep the peace, and because the whites are afraid of them; and, of course, they observe such treaties only as long as they find it convenient, or until they need a further supply of presents, (ammunition, goods, &c.) In fact, it has been for years a saying with the Sioux, along the great mail-route to California, that whenever they became poor and needed blankets and powder and lead, they had only to go down to this great mail and emigrant route, and kill a few white people, and there would be another treaty of peace, which would supply all their wants.

It is beyond question that such a system of treaty-making is, of all others, the most impolitic, whether negotiated with savage or civilized people, and leads, in either case, to constant and increasing hostilities.

the Great Lakes and the Rocky Mountains, is a fact, the value of which cannot well be overestimated. Aside from furnishing fuel for the navigation of the Upper Missouri river, it is a controlling element in the location of a railroad across the great plains to the Pacific.

Its extent and character will soon be developed by the troops from Fort Rice and other points on the Missouri river.

I may state finally, that the Government may safely dismiss all apprehensions of Indian wars in the North-west. Small Indian raids there doubtless will be, as there always have been, for stealing horses; but no hostilities, on any considerable scale, are likely again to occur. A small force, such as is designated in this report, will be quite sufficient to protect the frontier and the emigration.

I only ask, now, that the military authorities be left to themselves to deal with these Indians, and to regulate the trading with the Indian tribes without the interposition of Indian agents, and I will cheerfully guarantee peace with the Indian tribes in this department.

The department has been administered, so far as its relations with the State and other civil authorities are concerned, in accordance with the views and principles laid down in the accompanying letter from me to Governor Saloman, of Wisconsin. I am gratified to say that there have been entire harmony and success. The draft and all other laws of the United States have been promptly and fully executed in the department, without difficulty or trouble of any kind whatever.

I desire to bear testimony to the hearty cooperation and zeal of the district commanders in the department in the discharge of the various and perplexing duties which have devolved upon them.

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