HBC postBy Dr. Rhonda Telford

Do you ever wonder why the relationship between Indian Affairs officials and First Nations people is so strained?

At least one reason was that some of the front line representatives — the Indian Agents — appointed by the Department of Indian Affairs to oversee First Nation business were men not above crooked, self-aggrandizing action. Certainly nowhere in Ontario did this appear to be more of a serial problem than on Lake Superior in the last quarter of the 19th, and early part of the 20th centuries.

Just like today, many arguments between Indian Affairs and First Nations people revolve around money. Perhaps Atiwapiskat comes to mind. But, in the story I am going to tell below … just whose money are we talking about?

In the decade before the Confederation of Canada in 1867, funding for the Department of Indian Affairs underwent a staggering change.

This change was known to be coming since at least the 1820s, but was not put in place until the late 1850s with the establishment of the Indian Land Management Fund. The purpose of this Fund was to make Canada pay for the cost of administering Indian Affairs in Canada instead of Britain.

The money underpinning the Indian Land Management Fund came from the trust funds of several First Nations having discreet accounts from which Indian Affairs unilaterally skimmed various sums. This money was put into a “capital account”.

Percentages on land or resource leases and sales were also added into the capital account. The interest arising on the capital was put into an “interest account”. It was the moneys accruing in this interest account that were to fund the administration of Indian Affairs in Ontario and Quebec. How wisely did the Department of Indian Affairs spend this money, which it had taken from the First Nations to pay for itself?

Until 1874 on Lake Superior, employees of the Hudson’s Bay Company paid the annuities under the Robinson Superior Treaty of 1850. The Department of Indian Affairs placed its first Indian Agent, Amos Wright, solely on Lake Superior in 1875. Wright was stationed in Port Arthur – today included within the city of Thunder Bay.

Twice in February 1882, Fort William Chief Penasie petitioned the Governor General to stop a land deal that Indian Agent Wright and stipendiary Magistrate Robert Laird strong-armed him into signing. This concerned parts of Island No. 2 at the mouth of the Kaministiquia River which the Chief owned in fee simple, and which Wright wanted to buy even though the Chief did not want to sell.

Following an investigation in which several affidavits were taken from various members of the Fort William First Nation and others, Wright was found to: “… drive a close, if not sharp bargain with the Indians, and that the odour especially attaches to Wright …”  After the Department of Indian Affairs forced his retirement, ostensibly for old age, Wright received a $400 “retirement allowance”.

The Department of Indian Affairs asked the Crown Lands Department to intervene and stop the completion of the sale, but the latter refused, noting it was a matter to be decided in court.

On 15 February 1883, J.P. Donnelly was appointed Indian Agent to the Lake Superior Indians by Order-in-Council. Beginning in about August 1897, Department of Indian Affairs Inspector J.A. Macrae, while on Lake Superior on other Departmental business, discovered discrepancies in Donnelly’s expenses.

Following Macrae’s thorough investigation, and lengthy report, Donnelly was terminated by the Department of Indian Affairs for a number of very serious illegalities including: stealing more than $3000 from the Department through false travel accounts in collusion with Hudson’s Bay Company employees; colluding with Hudson’s Bay Company employees regarding Anishinaabek credit and debt with the Company; stealing moneys belonging to the Anishinaabek; lying on statutory declarations; and causing at least one Chief to lie about payments which had never been made.

The Department of Indian Affairs replaced Donnelly with his clerk J.F. Hodder in February 1898. But, this was not Hodder’s only job. According to a May 1903 Fort William First Nation petition, Hodder had for the last several years: “… not attended to our business …”. The petition stated that Hodder: “… worked on the Dredge and we could never find him when we wished to speak to him about our affairs”.

Shortly after the Fort William First Nation brought these charges against Hodder, he resigned in February 1904.

In the year and four months following Hodder’s resignation Indian Agent L.U. Bonin and then his son E. Bonin managed the Indian Office on Lake Superior. After the senior Bonin died, his son temporarily carried on the business. Then, in February 1906, the Department of Indian Affairs appointed Neil McDougall by Order-in-Council to run the office.

However, by at least June 1909, if not sooner, McDougall was being investigated by Department of Indian Affairs officials for appropriation of Indian moneys, and deducting expenses from labourers’ wages to cover debts to merchants who supplied goods. Instead of using this money to pay the debts, McDougall pocketed it and produced “confused and inaccurate” accounts to cover up.

Merchant complaints had precipitated the investigation into McDougall’s accounts. In addition, McDougall appeared to have appropriated moneys he claimed to pay to one Deschamps, now deceased. Settlement of Deschamps’ estate indicated that this was a lie.

Similarly, he obtained $40 to pay the physician’s bill owed by another man, but never did so. Also: “… in collusion with other persons… ”, McDougall appropriated rental expenses he had charged to the Department of Indian Affairs, but never paid to the landlord. McDougall also attempted to obtain a surrender of the Fort William Reserve from the First Nation without Departmental authority and: “… saw nothing wrong in advising that $2.00 apiece should be paid to members of the Band to vote on the surrender …” This matter had been brought to Departmental attention by Bishop Scollard and Reverend Father Lamarche. In this connection, Lamarche stated: “… The proposition was made to the Indians by a simple individual of Fort William who would easily make a small fortune by that deed.

Our Indian Agent was with him. There was whiskey brought at the council house. The Chief was made so drunk that they had to bring him to his house. And they gave $2.00 cash to all the Indians present. If that is not bribe [sic] I do not know what it is. Our Indian Agent was there but I suppose that he will pretend that he did not know anything about it. …”

Lamarche also advised the Department that McDougall kept interest and annuity money due to certain children at the Fort William Orphanage. The Department of Indian Affairs terminated McDougall’s employment in April 1910 by Order-in-Council. The Department went after McDougall to recoup losses.

Following the intervention of the Insurance company that initially bonded him, some of the Department’s claims were reduced. The Company was going to pursue the matter in court. It is uncertain how much the Department actually recouped.

Left to control large amounts of money with very little oversight, the temptation to abuse their position for personal gain was just too much for most of the Indian Agents on Lake Superior in the latter quarter of the 19th and early 20th centuries.

To its credit, the Department of Indian Affairs acted relatively quickly to remove the offending men. Yet behind all of this was a sense of Departmental entitlement so distasteful that it bears some remark.

Dr. Rhonda Telford has been researching and writing land claims since 1985; she obtained her PhD from the University of Toronto in 1996, and has been working with the Union of Ontario Indians, and others on land claims or land and Treaty issues since 1997.