"I went to Jerusalem to become acquainted (Gk. istoria) with Cephas" - Paul's words from Galatians 1:18.

Who Needs Dave Ramsey When You Have the Cherokees?

I live in the middle of the historic Cherokee Outlet. This 225 miles long and 60 mile wide rectangular piece of land, sometimes called the Cherokee Strip, has been roamed by “Plainsmen” Indians (Comanche, Kiowa, Wichita, Pawnee and Osage) for four centuries. However, in 1836 the United States government “gave” this stretch of land to the 'civilized' Cherokee Indians as payment for forcibly relocating them from Georgia to Indian Territory (Oklahoma). The Cherokee Outlet was to serve the Cherokees as a perpetual “outlet” to the West from their national capitol in Tahlequah in the northeastern portion of Oklahoma. The history of the Cherokee Outlet is rich and one anecdote from the 1880's has a great deal of relevance for today's economic conditions.

After the Civil War (1861-1865) cattlemen in south Texas owned hundreds of thousands of longhorn steers that sold for $1 to $5 in Texas, but $45 to $50 in New York. These cattlemen began great cattle drives bringing millions of longhorns from south Texas, right through the middle of the Cherokee Outlet, to Kansas rail heads. The cattle were then shipped by train back east to be sold. The cattle drives were needed because trains were not yet running in and out of Texas, contruction of the railroads having been stymied by the Civil War. Some wonderful cowtowns in Kansas like Caldwell, Abilene, and Dodge City (think of the television show Gunsmoke)  became the final destinations of these Texas cattlemen during the 1870's. Some of the more entrepreneurial cattlemen noticed their steers were losing weight on the grueling trail drives from south Texas to Kansas. Seeing the glorious pasture lands within the Cherokee Outlet, the cattlemen decided it would much better to “lease” the Cherokee Outlet from the Cherokees and let their steers grow fat over the winter by grazing within the Cherokee Outlet and then drive the cattle on the short trip to Kansas in the spring.

A meeting was called at the historic cow town of Caldwell, Kansas, (60 miles north of Enid) in March of 1883 to discuss this lease proposition. Many different cattle companies were represented at the meeting, and an association was formed called the Cherokee Strip Livestock Association. These Texas and Kansas cowboys, cattlemen and businessmen joined together to convince the Cherokees to allow them to graze their cattle within the Cherokee Outlet. Representatives from the newly formed Cherokee Strip Livestock Association were dispatched from Caldwell, Kansas to the Cherokee National Capitol at Tahlequah to propose the lease agreement. On May 19, 1883, the Cherokee Council granted the lease of the entire “Outlet” to the Livestock Association for a period of five years, requiring payment to the Cherokees of $100,000 per year, payable semi-annually in advance. In short, the lease required two payments of $50,000 a year to the Cherokees, and if the lease payment was late by even one day, the lease would be considered null and void by the Cherokees.

The Cherokees Refused “Greenbacks” for Payment

There arose a problem, however, after the lease was signed. The cattlemen wished to pay the Cherokees in “greenbacks,” but the Cherokees refused to accept them. Since the Civil War, the U.S. government had experienced with printing dollar bills on paper with green ink as a “medium of exchange.” When the United States government needed money to prosecute the war against the south in 1863, but access to additional gold and silver was virtually non-existent for the government, Abraham Lincoln authorized the Union to “print” paper money to pay soldiers, buy war supplies, and fund the war against the south. Surprisingly, the paper money succeeded. Why? Northerners, in the midst of patriotic fever in the war against the south, chose to accept the medium of exchange.

But nobody else accepted the funny money. This non-acceptance of greenbacks included foreign countries, Indian nations, and of course, the Confederate States of America. After the Civil War the U.S. government went back to a gold and silver coinage medium of exchange for America. This lasted for about a decade until the 1870’s when the United States suffered two very severe economic downturns. To “spur the economy” (sound familiar) the government decided to print more paper money—in essence, to give Americans paper “cash” since the average U.S. citizen had little access to silver or gold coinage.

This time, however, the government’s attempt to create money failed. People didn’t trust the money. Notes issued by prosperous railroad companies, called “railroad currency,” were more trusted by Americans than the federal greenbacks. The U.S. government realized that the greenbacks needed the backing of silver for people to trust them so a proclamation was issued in January 1879 that “the Secretary of Treasury shall redeem in silver coinage the United States all legal tender outstanding.” This meant that if you possessed a greenback you could go into any bank and receive a silver dollar, and the banks had the U.S. government promise that the greenbacks could be redeemed by them for silver dollars from the U.S. Treasury.

That government promise of silver backing for the greenback ended quickly however. The Treasury knew that if people were to make a run on the banks, there would not be enough silver dollars on deposit. The government rescinded their “silver” promise by September of 1879.

By 1883, the Cherokees wanted nothing to do with the American dollar. Due to hyperinflation, the greenback was worthless to the Cherokees. They wanted silver bullion coins—Morgan Silver Dollars.

So in the fall of 1883 the Cherokee Strip Livestock Association sent a wagon with heavily armed escorts from Caldwell, Kansas to Tahlequah, Indian Territory with a treasure chest of $50,000 Morgan Silver Dollars for a six month lease of the Cherokee Outlet. It is said that the Cherokees, upon arrival of the armed caravan, counted out each silver dollar one by one. This practice of delivering chests containing $50,000 silver dollars to the Cherokee Indians continued for several years, until the U.S. government took the land from the Cherokees and the Livestock Association in order to open the Cherokee Outlet for white settlement in the infamous 1893 Cherokee Run, classicly portrayed by Ron Howard’s 1992 movie Far and Away, starring Tom Cruise and Nicole Kidman. The Cherokees may have lost the Cherokee Outlet, but by 1893 their decades long demand for payment in the form of silver bullion set the Cherokees up to be the most successful tribe financially of all the Indian tribes in Oklahoma during the early portions of the 20th Century.

The moral of the story?

(1). When the government is broke, it prints more money.
(2). When more money is printed, smart people begin demanding gold or silver.
(3). When gold or silver is in demand, the value of the greenback continues to fall.
(4). Hyperinflation is the natural consequence of the devaluation of the paper dollar.
(5). The paper dollar will eventually be taken off the market when it is not trusted and a new “medium of exchange” will be introduced.

It’s coming. Those who don’t know history are destined to repeat its failures. Who needs Dave Ramsey when you know the history of the Cherokees?

Smiling,



Wade Burleson