When Hayes was in the White House, the northeastern quarter of the United States was entering the period of its most rapid urban and industrial development. By contrast, the western half of the country was still being staked out. Settlement by ranchers and farmers inevitably meant clashes with nomadic Indians. The annihilation of Custer's regiment at the Little Big Horn dominated the news soon after Hayes's nomination for the presidency. His first year in office witnessed the defeat of the Sioux, mostly by starvation, and the long pursuit of Chief Joseph and his Nez Percé across a thousand miles of the northern Rockies in desperate flight toward refuge in Canada. The next fall the northern Cheyenne slipped away from the army in the Indian Territory in a futile effort to return to their ancestral hunting grounds.
Hayes and Secretary of the Interior Schurz inherited the policy of concentrating the western tribes on compact reservations, but soon came to believe that more humane methods of dealing with the Indians had to be found. Their sympathies were aroused in part by the disaster Schurz unwittingly inflicted upon the eight-hundred-member Ponca tribe. The Grant administration had, by mistake, given the agricultural Ponca's land in Dakota Territory to the Sioux. Schurz ordered the forcible removal of the Poncas to a small tract in the Indian Territory. Numerous members of the tribe died en route. Upon arrival at their strange destination, the survivors found both the climate and the land unsuitable. They, too, tried unsuccessfully to return home.
Genuinely committed to better treatment of Indians, Schurz appointed a commission to investigate the conduct of the Indian Bureau (now Bureau of Indian Affairs). The commission predictably found a pattern of cheating the Indians by unscrupulous agents, compounded by sloppy accounting and inadequate supervision. Schurz moved quickly to remedy the situation. He instituted a code of regulations for bureau employees, revised reporting and accounting systems, ordered unannounced inspections, and for the first time required traders to be licensed and bonded. Because Schurz was the most vigorous of the cabinet secretaries in implementing Hayes's civil service reforms, the caliber of bureau personnel improved. Schurz also supported the experiments in Indian education conducted at Hampton Institute by Richard Henry Pratt, which led to the establishment of the Carlisle Indian School in 1879. When opponents of the new peaceful emphasis sought to transfer the bureau back to the War Department, Schurz helped organize the coalition in the Senate that staved off the move. Thereafter the Interior Department was unquestionably preeminent in determining policies toward the Indians.
In 1881, Helen Hunt Jackson published her stirring protest against American mistreatment of the Indians, A Century of Dishonor . Her interest in the subject had first been awakened by the plight of the Poncas, and Schutz fared badly in her interpretation. Her criticism was largely undeserved. Schurz had long been in correspondence with many of the eastern humanitarians who preceded Jackson in their concern. In 1879 and 1880 he undertook two lengthy inspection tours of western reservations to ascertain firsthand what he was dealing with. But it was easier to see the shortcomings in federal policies than to know how to change them. Schurz deserves credit for initiating the process of reform. President Hayes supported him throughout and used his annual messages to Congress to lobby for Indian citizenship, individual farm ownership, and the education of Indian children in American methods of agriculture. Hayes and Schurz thus pointed the way toward the positive, nonexpropriatory aspects of the Dawes Severalty Act of 1887. At the same time, they did not foresee, and probably would not have understood, the negative effects of acculturation.